Textron Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter 2022 Textron Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you have a question, please press 1, then 0. Once again, for questions, please press 1, then 0. If you should require assistance on the call, please press star, then 0. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Vice President, Investor Relations, Mr. Eric Salander. Please go ahead.

Thanks, Greg, and good morning, everyone. Before we begin, I'd like to mention we will be discussing future estimates and expectations during our call today. These forward-looking statements are subject to various risk factors, which are detailed in our SEC filings and also in today's press release. On the call today, we have Scott Donnelly, Textron's Chairman and CEO, and Frank Conner, our Chief Financial Officer. Our earnings call presentation can be found in the investor relations section of our website. Revenues in the quarter were $3.6 billion, up from $3.3 billion in last year's fourth quarter. Segment profit in the quarter was $317 million, up $7 million from the fourth quarter of 21. During this year's fourth quarter, we reported income from continuing operations of $1.07 per share. Manufacturing cash flow before pension contributions totaled $368 million in the quarter, up $70 million from last year's fourth quarter. For the full year, revenues were $12.9 billion, up $487 million from last year. In 2022, segment profit was $1.2 billion, up $89 million from 2021. Income from continuing operations was $4.01 per share, compared to $3.30 in 2021. Manufacturing cash flow before pension contributions was $1.2 billion, up $29 million from 2021. With that, I'll turn the call over to Scott.

Thanks, Eric, and good morning, everyone. Our business closed out the year with another strong quarter. In the quarter, aviation grew revenue and segment profit, reflecting higher aircraft deliveries, increased aftermarket volume, and strong pricing net of inflation as compared to last year's fourth quarter. Also in the quarter, we continue to see solid order flow, customer demand across our aircraft product portfolio, ending the year with $6.4 billion of backlog. For the year, we delivered 178 jets, up from 167 last year, and 146 commercial turboprops, up from 125 in 2021. Texturing Aviation Defense delivered 10 T-6 aircraft for the year, up from five a year ago. Throughout 2022, strong aircraft utilization within the Texturing Aviation product portfolio resulted in a 16% growth in aftermarket revenues. At Bell, as expected, revenues were down slightly in the quarter on lower military revenue, reflecting the continued wind down of the H-1 program, partially offset by higher commercial revenues. In December, the U.S. Army announced that Bell's V-280 Valor was selected as the winner of the future long-range assault aircraft program competition. This award is a testament to the hard work of the Bell team that designed, built, flew the V-280 prototype over the last 10 years in support of this win. The initial Florida contract award of up to $1.3 billion over the first 19 months, with an initial funding of $232 million, for engineering and manufacturing development-related activity is currently on hold pending the outcome of a protest that was filed at year end by the competing vendor. On the commercial side of Bell, we delivered 179 helicopters in 2022, up from 156 in 2021. Moving to Textron Systems, revenues were essentially flat with last year's fourth quarter. During the fourth quarter, Systems awarded another anti-vehicle munition contract from the U.S. Army. The award is valued at $162 million over a five-year period of performance. In December, systems announced the delivery of the Cottonmouth to the U.S. Marine Corps for testing through 2023. This vehicle was purpose-built for the Marines' Advanced Reconnaissance Vehicle Program. Also in the quarter, systems delivered the sixth ship-to-shore connector to the U.S. Navy after its successful completion of its acceptance trials. Moving to industrial, we saw higher revenue in the quarter driven by higher volume at both Caltechs and specialized vehicles and favorable pricing principally at specialized vehicles. Moving to e-aviation, we delivered six VELOS Electro aircraft in the fourth quarter, including the first unit into Canada. For the year, Pipistrelle delivered 61 aircraft following the completion of the acquisition in April 2022. In summary, we saw strong demand across our commercial product lines, and the teams executed well despite supply chain and labor constraints. At aviation, the team executed very well with a full-year segment profit margin of 11.5%. It was above the high end of our original guidance range. Aviation's backlog grew 55% to $6.4 billion at year-end on strong order activity and customer demand. On the new product front, we received FAA certification for the Cessna Skycarrier and delivered six units to our launch customer, FedEx, during 2022. At Textron Aviation and Defense, the light attack AT-6 Wolverine achieved military-type certification from the U.S. Air Force, enabling the first international sale of eight aircraft. At Bell, the December 2022 FLIR contract Award has solidified the long-term outlook for the segment and should provide an increasing revenue stream that we expect will drive growth well into the future. On FARA, the 360 Invictus is nearly complete, and we expect first flight in 2023, pending delivery of the ITEP engine. At Techshon Systems, we advanced our weapons programs with the award of our anti-vehicle munitions programs, continued work on the robotic combat vehicle and armed reconnaissance vehicle development programs. Systems also obtained airworthiness certifications for four additional F-1s at ATAC, bringing the total operational F-1 fleet to 23 aircraft in support of increased demand across U.S. military tactical air programs. At Textron Specialized Vehicles, the company continued its leadership in the development and production of zero-emission golf vehicles, turf maintenance equipment, and ground support equipment markets. At Caltex in 2022, we were awarded contracts on 14 hybrid electric vehicle programs for our fuel system. At eAviation, the Pipistrel VELS Electro continued to receive certifications from around the world and is now certified in more than 30 countries. Looking to 2023, at aviation, we are projecting growth driven by increased deliveries across all product lines and higher aftermarket volume. At VEL, we're projecting revenue growth in 2023 on higher military revenues from the FLORA program and higher commercial revenues. At systems, we're expecting mid-single-digit revenue growth across our businesses. At Industrial, we're expecting revenue growth at specialized vehicles and Caltechs. At eAviation, we plan to continue investments in the development of technologies and products supporting sustainable flight solutions for unmanned cargo, next-generation electric trainers, eVTOLs, and general aviation. With this overall backdrop, we're projecting revenues of about $14 billion for Textron's 2023 financial guidance, projecting adjusted EPS in the range of $5 to $5.20, and Manufacturing cash flow before pension contributions is expected to be in a range of $900 million to $1 billion. With that, I'll turn the call over to Frank.