Textron Inc.

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Textron second quarter 2026 earnings release conference call. Please note that today's call is being recorded and will be available for replay later today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star then the number one on your telephone keypad. To withdraw your question, press star one again. I'd now like to turn the conference over to Scott Hegstrom, Vice President, Investor Relations. Please go ahead.

Thanks, Regina. 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 Lisa Atherton, our chief executive officer, and David Rosenberg, our chief financial officer. Our earnings call presentation can be found in the investor relations section of our website. With that, I'll turn the call over to Lisa.

Thanks, Scott. Good morning, everyone. In the second quarter, tech's stronger revenue by 3%, continuing a strong start with growth in each of our manufacturing segments, contributing to higher revenues of $500 million, or 7%, through the first half of the year. Thank you for joining us. These milestones reflect the strength of our teams and our ability to design, develop, manufacture, sell, and support products that remain highly valued by customers over many years. Before I turn to the segment level comments, I'd like to reiterate my key priorities that I laid out at the start of the year. First, portfolio focus. We quickly took action last quarter when we announced our intent to separate the industrial segment, putting us on the path to be a pure play aerospace and defense company. Second is our execution and resilience. I will talk more about this as I go through each of the segments, but there are two fundamental themes here. First of all, customer demand remains very strong. Simply put, people want our products, and we have multiyear backlogs in many areas. With that, we must become more efficient at meeting that demand. We need to more fundamentally address productivity, and that is where I'm focusing the organization. When we assess our production challenges, I see opportunities both externally and internally. Externally, while the supply chain has improved in most areas, we still experience issues with some key components. At the same time, the issues are not just external. They are internal as well. We have a much newer workforce and we must utilize our engineering team to improve producibility for that workforce. We recognize there is more work to do in order to improve our execution and I'll touch on that more in the segment discussion. Now, moving to the segment results. Sector on Aviation had 1.5 billion of revenue in the second quarter, up 1% from the prior year, reflecting higher revenue for both aircraft and aftermarket. Demand across jets and turboprops continued to be robust during the quarter, supporting a backlog of $8 billion. We delivered 40 jets and 44 commercial turboprops in the quarter, compared to 49 jets and 34 commercial turboprops in last year's second quarter. In terms of our operational efforts at Aviation, Our focus is centered on three areas, investing in the workforce, improving factory execution, and strengthening the supply chain. Developments in these areas include, on the direct labor front, attrition has improved materially aided by our investment in Textron Aviation's Career and Learning Center. After spiking during COVID and remaining elevated, attrition has now returned to more normalized levels, with the improvement even more pronounced among early career hires. In addition, hiring levels have returned to a more normalized pace. As our workforce gains experience and stability improves, we expect to see corresponding gains in productivity and efficiency. In factory execution, we are investing in both our people and our capacity. On the factory floor, we have significantly increased engineering production support as we prioritize engineering resources to improve producibility. Within operations, we are adding targeted capacity in areas such as landing gear, milling, and paint to support improved throughput and execution. We are also investing in producibility and process improvements across the King Air and light jet production lines. In supply chain, we are expanding dual sourcing initiatives to strengthen supplier resiliency and support more consistent parts availability in the factory. At the same time, supply chain conditions continue to improve. While we are still managing a handful of pain points, parts availability has improved significantly in recent years leaving us with a more finite set of issues. We remain actively engaged with these key suppliers. Alongside our operational focus, aviation continued to advance its product portfolio and sales momentum during the quarter. In terms of new product development, our Gen 3 light jet development programs continue to move toward Federal Aviation Administration certification. The CJ4 Gen 3 and M2 Gen 3 are currently in the flight test phase of development and the CJ-3 Gen 3 is expected to achieve first flight in the third quarter, with all three aircraft expected to enter service next year. Also, the Denali continues to advance through its final phases of flight testing and is pacing to enter service in 2027. From a customer perspective, we entered into a multi-aircraft fleet purchase agreement with Platoon Aviation that positions it to become the largest Citation Longitude fleet in Europe. Textron Aviation also entered into an agreement with SD Aviation for two M2 Gen 3 jets and a CJ3 Gen 2 jet with options for three additional light jets. We delivered the first sky couriers into both the Philippines and the Republic of the Marshall Islands. In both cases, customers took the 19-passenger variant equipped with the optional passenger-to-freighter conversion kit, enabling the aircraft to transition between full passenger and full cargo configurations. In addition, we expanded our global service footprint, highlighted by the opening of a new Melbourne service facility and continued ramping deliveries of the Ascend with NetJets, taking its first five aircraft in the quarter. Moving over to Bell, we had another quarter of solid growth with revenue up 6% from a year ago, driven by increased military and commercial revenue. We continue to make progress on the MV75 Cheyenne program, which remains a key long-term growth driver for our company. This includes completing the first two wing structures, representing an important step forward in the program's build and development progression. Building on decades of experience with the V-22, the first wing was fabricated with 90% fewer labor hours compared to the initial V-22 wing build, and the second wing build was produced with an additional 40% reduction on that, highlighting the team's focus on affordability and production readiness. As we previously disclosed, the U.S. Army is pursuing an above-threshold reprogramming request for an additional $350 million of government fiscal year 2026 funds for the MB-75 program. We anticipate Congress to complete this process within the third quarter. Absent these funds, Textron has made the determination to move forward on a self-funded basis to support the program through the remainder of the government's fiscal year. We believe that it is the best long-term interest and underscores our firm commitment to the U.S. Army and the MV-75 program to continue working during this period. We remain confident in the Army's commitment to the MV-75 Cheyenne as evidenced by the ATR process and their robust funding request in the FY27 budget, and we continue to stay closely engaged with our customer in support of program execution. Bell's other military and commercial businesses delivered solid performance in the quarter. We continue to drive advancements across our installed base, including progress on our V-22 Nacelle Improvement Program, which has produced a 75% reduction in maintenance hours, resulting in a significant boost in operational readiness and maintainability. On the commercial side, Bell delivered 36 helicopters, up year-over-year from 32 in last year's second quarter. From an operational perspective at Bell, our focus is centered on two critical areas. Thank you for joining us. We also have a new AI-enabled shop floor scheduling tool that was born in Bell's Manufacturing Technology Center, which has completed testing and started to roll out across Bell's fabrication centers. Alongside our operational focus, Bell continued to see demand across its portfolio, including an order for three additional Bell 407s by Life Flight Network, the largest not-for-profit air medical program in the country, which currently operates 35 Bell aircraft. At Systems, Thank you for joining us. Thank you for joining us. while its core easy go golf business has stabilized as the lease renewal cycle normalizes. Caltech secured another new business award for its pentatonic battery systems representing progress in supporting electrification and future growth opportunities within the segment. I'd also like to thank the teams at Caltech and TSC as they continue to successfully operate the businesses while also supporting the work associated with separation process. We recently launched the process to pursue a sale of industrial and are proceeding according to plan. This is an important step as we advance on the path of becoming a pure play aerospace and defense company. As we look ahead, I am encouraged by the enthusiasm our customers have around our products and the commitment our employees have as we continue to work to improve operational performance. We are clear-eyed about the future and we are committed to executing on our strategy. With that, I'll turn the call over to David.