Good morning. Welcome to Carpenter Technology's 2023 Investor Day event. My name is John Hewitt. I Lead Investor Relations for Carpenter Technology. On behalf of the Management Team, I wanna thank you for joining us this morning, both here in person in New York City and around the world via the webcast. Before we begin, a couple important points to cover. First, a word on the caution on forward-looking statements. Forward-looking statements made by management during this presentation are based on current expectations. Risk factors that may materially impact actual outcomes are listed here and can be found in Carpenter Technology's recent SEC filings. Second, a recording of this presentation is going to be posted on the website, Carpenter Technology's investor relations website, alongside the materials that you'll see. We've got a great agenda for you today. You'll hear from Tony R. Thene, President and CEO, and members of the management team on various aspects of the business. You'll learn about our strategic priorities, the markets that we serve, our operations across our business segments, and additional detail on our financial outlook. Following the prepared remarks, we will have a Q&A session. For those of you in the room, that'll be your chance to ask questions of the management team. For those of you joining via the webcast, you can enter your questions into the chat function throughout the presentation. I'll collect those questions and ask a selection of them during the Q&A session. All right. With that, I think we're ready to get started. I'll hand it over to Tony. John. Good morning, everyone. Certainly, it's an exciting time for Carpenter Technology as the markets are accelerating and obviously the products and solutions that we provide. Over the last year, there is one question that we get all the time, and that is, "Tell us more about the compelling story of Carpenter Technology." Today, that's what we hope to tell you. When I answer that question, I always break it up into four buckets. As you walk out of here today, hopefully these four buckets will resonate with you, and you'll keep that in mind. Number one, we have a clear vision and a robust strategy. We're a capabilities company. We provide and supply only critical materials and to only attractive end-use markets. We're a high-growth, high-value markets. That's the only place we play. As you know, the underlying demand fundamentals are very strong. It's accelerating as we speak right now. We have pricing opportunities and mix optimization opportunities that we're fulfilling right now. Bucket number three, we have world-class capabilities and unique assets. On top of our current portfolio, we are always looking to expand and accelerate some of those capabilities and those assets, as we've done with next-generation electrification and additive. We're also driving productivity across all of our sites. You'll hear me say this a couple times in the presentation. We do not need any more capacity to hit the FY 2027 numbers we put out there. We're always looking to add incremental capacity here and there to take advantage of this very strong market right now. The most important point of bucket three is that our unique assets, our capabilities, are extremely difficult to replicate. Bucket number four, through all these activities, the earnings acceleration and the cash flow generation will be significant over the next four years. It's important to note that to date, we have hit every target that we have communicated externally over the last year. We have a path to doubling our operating income by FY 2027, and that's versus FY 2019, which was one of the highest earnings years in the history of Carpenter Technology. We have volume, price, and mix opportunities. That's what's driving this margin expansion. The cash generation that will come for this will be significant and drive shareholder value. Let me take a step back before we get into some of the details and just let you know a little bit about Carpenter Technology. As I said earlier, we are a solutions provider of critical only materials. 50% of our revenue is from aerospace and defense. We purposely operate in other high-value markets as well. For example, medical, which has margins as high as aerospace and in some cases higher than aerospace. We participate in other markets as well. We 134 years of innovation leadership. We exhibit that through 500+ alloys, nickel-based, cobalt-based, stainless steel, titanium, soft magnetics, and we provide that in multiple product forms, whether that's billet, strip, wire, bar, powder, and as you'll hear later on in the presentation as we move further and further down the supply chain, components as well. We have a global footprint. The majority of our manufacturing operations are in North America, and we have approximately 4,000 employees worldwide. As I noted earlier, we have a very clear vision. We will be the preferred solutions provider, mission-critical, never-fail parts, and we will be the irreplaceable partner in the supply chain for our customers. We do all of this, we operate every day by adhering to our core values. Number one being our commitment to a zero-injury workplace. I think it's important to note that our ESG program also supports our strategic vision. A couple highlights that you may not be aware of, we set targets to reduce our Scope 1 and Scope 2 CO2 emissions by 30% by 2035, and that's already off a very low base compared to the industry. We source more than 90% of our electricity from carbon neutral sources. More than 75% of our feedstock during production is recycled scrap, and we recycle more than 80% of the waste from our manufacturing operations. It's also important to know that we're a very key component to our customers' sustainability journey through lightweighting and electrification and other means. Our distinct product and process capabilities that I spoke about, that's what drives our strategic vision. From technology development, where we're working on and developing proprietary and breakthrough materials and products to help our customers with the challenges they see in front of them. Through operational excellence, where our focus is on safety and driving productivity across the workforce. As we brought on a lot of new employees over this last year, we're gonna do that safely and with the highest quality in mind. To strategic marketing, where we're always looking to the future of how to solve that next problem. Again, we are a solutions provider, we're not a product provider. Lastly, talent engagement, where we fully understand that our richest and best asset are our employees. Let me bring it all together before the colleagues, my colleagues come up on stage. Over the next four years, as we look forward to that FY 2027 goal, we are focused on four strategic priorities one. To maximize the market demand. We are in an environment now where demand outstrips supply. It is our job to make sure we do everything we can do to fulfill that demand to the best of our ability. Every extra ton we produce, we can sell. As I said earlier, we do not need any more capacity to hit that FY 2027 number. We always wanna find a way to accelerate our growth. We are looking at other ways to expand our capabilities, to expand our offerings, as I said earlier, through the next generation electrification or additive. Also, as I said, even though we don't need any more capacity to hit that goal, we are looking at other ways that we can add incremental CapEx to different parts of our production flow to get out those next incremental tons. We're gonna optimize our operation. This has been a challenge for us and many in the industry as the workforce had a massive turnover during and after COVID, right? We need to make sure we onboard them in a safe manner, and we wanna make sure we engage our employees to take our productivity to the next level. The outcome, certainly in our fourth trategic priority, is to generate cash, right? Through this profitability improvement, through volume, mix, pricing, we see that as a major driver of shareholder growth. We're gonna manage tightly our working capital, our inventory levels, and we have a balanced capital allocation approach going forward. Let me bring it back to what I said at the very beginning. The number 1 question we get is: tell me more about the compelling case for Carpenter Technology. Today, my colleagues here in the room are gonna take you to the next level, right, and give you some more color on exactly how we're gonna do that. I'm happy to introduce and welcome to the stage Marshall and Suniti. Good morning. Tony said my name is Marshall Akins. I'm Carpenter Technology's Chief Corporate Officer. I'm Suniti Moudgil, Carpenter Technology's Chief Technology Officer. This morning, Suniti and I are gonna spend some time talking to you about Carpenter Technology's products and markets. When we're done, we hope to leave you with three main points. First, as Tony mentioned, while we provide significant support to the aerospace and defense markets, we're diversified across a wide range of end markets. In all these markets, we see very positive growth outlooks in the near and long term. In all these markets, we see increasing application trends that continue to favor the type of material solutions that Carpenter Technology provides. The second main point is that the type of material solutions we provide are high-value, highly engineered products produced by Carpenter Technology due 134 years of product and process excellence that is not readily found elsewhere in the market. Third, due to the combination of points one and two, our commercial outlook is very robust. Demand, as Tony mentioned, is higher than capacity, and this is reflected in a growing backlog of orders for us, which is increasing in attractiveness as we continue to pivot our capacities to where they'll add the most value and price to realize the value that we bring. With that, let's dive in further. I wanna start by providing a general overview, and setting the stage for our conversation, hitting a point that you're gonna hear from me over and over again as I go market by market. That's that, as Tony mentioned, we're currently in a very positive demand environment. Both the demand trends and application trends within each of our markets are positive. For example, within aerospace and defense, underlying demand is quite positive as we're in the midst of a historic aerospace re-ramp. Aerospace OEMs are looking to build as many planes as possible. I'll say more about that and our other markets here in a moment. In the medical space, as another example, we see a global aging population with increasing rise in incidents in medical procedures and surgeries. Again, strong, very strong and positive underlying demand. Again, I'll go market by market. As you see from our other markets, we also believe and see strong demand in the near and long term. In terms of application trends or what's happening within each of the markets that we serve, trends there are also very positive for Carpenter Technology. Within aerospace and defense, as an example, next generation airplanes need to be more lightweight, more fuel efficient. This requires higher value material solutions. Within the medical space, there's a focus on better patient outcomes, longer lasting implants, finer tools and surgeries. Again, this is very positive for the type of material solutions that Carpenter Technology provides. The main point of the slide here at the outset is that we're operating in a very positive demand environment. There are a lot of green arrows, and that's how we see all of the markets that we serve in terms of unit demand and application trends. We see this very positive demand environment coming through in a key data point that we monitor, which is our backlog of orders. As Tony mentioned, demand is currently higher than capacity, and our customers are increasingly looking to secure a place in line to ensure they have availability of materials to meet their operating needs. As you can see, our backlogs are now well above their pre-pandemic rates and continue to grow. As I mentioned, the backlog is also increasing in attractiveness. By that we mean that the value of our backlog is increasing faster than the volume. Average sales prices for many of our products are now over 50% versus their pre-pandemic levels. Again, as I mentioned, we're focused on allocating our capacity most wisely where it adds most value and pricing for value. I'll further note that there are substantial portions of our backlog that are wanted much earlier than we have promised. Customers in general are saying they'll take material as soon as we can provide it to them. Lastly, the positive trends I'm referring to, increasing value, increasing sales price, urgency for material, these are trends that occur and exist across each of our end markets. These aren't isolated just to one end market like aerospace. Let's go now a bit deeper market by market and starting with our aerospace and defense portfolio. Within aerospace and defense, Carpenter Technology supports virtually any platform that flies, whether that's in Earth's orbit or beyond. Some of the applications we support on things like space or electric vehicles are cutting edge, and you'll hear more about those from Suniti and David. I'm gonna focus our conversation on our commercial aerospace business, as that's the bulk of our business within aerospace. We think about that business as you see represented here, in terms of engines, structural avionics and APU systems, and fastening systems. I'll say more about each of these areas, here in a moment. First, to highlight a few commonalities across each of these. First, across each, our materials are being used in high-performance areas. They're generally designed in or specified into the application or system that they are supporting. They're there for a reason. The application or system can't work without them. What our materials are being used to do are help the applications that they're supporting go further, faster, last longer, etc.. They're increasing the performance of the application. For example, in jet engines, allowing jet engines to run more fuel efficiently and hotter. As you'll hear from Suneeti, we have a large pipeline of products and ongoing engagement with our OEM partners and continue to look for new ways to push boundaries of performance in commercial aerospace. The last point that's common across each of these areas is that there are a few qualified suppliers globally. What that means for Carpenter Technology is that we work around the world with our aerospace supply chain partners wherever manufacturing occurs. Let's go a bit deeper now into each of our commercial aerospace sub-segments, starting with engines. The first point to note in our engine business is that Carpenter solutions aren't found just in one place in the engine, but they're found throughout a variety of applications within the engine. Things like rings, which contain the hot section of the engine, to disks, bearings, gears, shafts, other areas like that. As I mentioned, our material solutions are being used to enable the performance profile of the engine, the temperature needs, the wear needs, the strength needs, things of that nature that are critical for the engine's performance. We maintain broad OEM qualifications with all engine primes. This is an important point for many of our customers who buy material that's multi-specified. This allows them to maximize their operations and working capital. In many cases, our solutions are the industry standard for the problem that they're addressing. It's rare, but we do have cases where we also work specifically with an engine OEM to design materials specific to their engines if they have some type of specific problem that they look to help us address. Moving to our fastener portfolio, our fastener customers manufacture a very wide range of end products. There are a lot of fastening systems that are used on a plane, and as a result, our fastening customers require from us a very broad portfolio of inputs, a broad portfolio of alloys, forms, sizes, finishing requirements, etc.. Carpenter Technology is unique in the world in terms of our portfolio of offering, and that's why we're preferred by our fastener customers globally. Moving last to our structural and avionics business, again, here our solutions are found throughout the plane, from things like landing gear to flaps and slat tracks to APUs. Our solutions are being used to maximize performance of the applications that they're supporting. For example, in APUs, allowing them to be the most power-dense APU possible. Especially in this area, we have a lot of engagement with our OEM partners on next generation needs and large focus on increasing performance of these types of products. Because we get asked this question a lot, I want to emphasize that our solutions are not just found on a one platform, one engine, but are rather used commonly across virtually every airplane being made. That means commercially, we're generally indifferent between the type of plane being produced, whether it's old gen, next gen, Boeing, Airbus, wide body, narrow body. Of course, some planes do have more material content than others. In general, our focus is more on total unit demand of the industry and how we can best support that. Because of our breadth of solutions across the aerospace industry and depth of expertise that we provide in each of the application areas where we support, we believe we're a very powerful partner to the aerospace OEM community. Demand, as I mentioned, the aerospace OEM community is very strong. The aerospace industry was in a period of ramp prior to COVID. Obviously, COVID disrupted air traffic travel and disrupted the industry as with other industries. Global air travel is still in a recovery period, not yet fully recovered too, but gradually recovering to pre-pandemic levels. Aerospace OEMs are likewise looking to ramp their production to pre-pandemic levels and then targeting to exceed pre-pandemic levels. That's to, again, to support rising air traffic around the world. If you've listened to an aerospace OEM publicly, you'll have heard them talk about this aerospace ramp and how the supply chain is struggling to keep up, and how production output is limited by supply chain output. As you're hearing me describe, Carpenter Technology is a key player in the aerospace supply chain, so we're certainly also a part of this ramp. We continue to ramp our operations and are not yet fully satisfying demand, but continue to increase our output to satisfy as many customers as possible. Altogether, it's a very positive time for the aerospace industry and especially for Carpenter Technology and our participation in it. I mentioned at the beginning that we provide high-value solutions. I'm gonna turn now to Suniti to describe a bit more from the science standpoint about what it takes to make our solutions. I think when you're done, listening to her, you should conclude that our solutions are definitely not commodity solutions. There's, a lot of science and expertise that goes into producing these products. Thank you, Marshall. Before I go into a couple of examples, I'd just like to take a step back and reflect on the legacy of capabilities that has led to this strong legacy of innovative solutions that Carpenter Technology has provided over the years and how we continue to innovate to support the growth of our world-class portfolio and to accelerate even additional opportunities for growth. From our beginnings in 1889, Carpenter Technology has worked closely with our customers to solve some of their toughest material challenges. The foundation of those material solutions is really the innovative spirit of our people and our strong technical capabilities. Our global technical organization consists of highly talented metallurgists, material scientists, and engineers across a wide variety of disciplines. Our people leverage capabilities like world-class computational modeling to guide alloy and process design, product and process development capabilities at the lab scale to iterate and experiment on new material solutions, and ultimately, very specialized manufacturing capabilities to produce these difficult-to-manufacture products at the scale that our customers require. We don't stop once a new product or process is developed. We continue to improve upon it, push the boundaries of performance, as Marshall mentioned, and continue to look for other applications where our material solutions may serve an emerging customer need. This careful customization has resulted in a portfolio of over 500 alloys and over 15,000 product SKUs. I'd like to now take a step back and talk about a couple of examples where we've demonstrated and utilized our technical leadership to address some key customer challenges. The first is in the area of lightweighting solutions. Airframe OEMs are continually seeking high-strength solutions for lightweighting of structural parts. High strength allows for lower component weight, and it allows for additional design flexibility in the aircraft. For those customers that require extremely high strength, high toughness alloys, Carpenter Technology has developed a portfolio of solutions, several of which you see on the top half of this slide. For example, AerMet 100, which was developed in response to a request by the US Navy, is one of the strongest and toughest steels ever created. The way Carpenter Technology developed this is by carefully combining different alloying elements and heat treatment processes to deliver the desired performance and the manufacturability of this difficult to manufacture product. We've continued to expand on that alloy through multiple families. Moving to the bottom of half of this slide, some airframe OEMs not only seek high strength, but also corrosion resistance as part of their lightweighting strategy. The reason is because some of the traditional corrosion-resistant solutions involve environmentally hazardous coatings, and this can lead to greater inspection difficulty and downtime in service. Actually balancing high strength and corrosion resistance is very technically challenging because the microstructure that's generally needed for high strength and the chemistry that's required for the corrosion resistance, often combining those two can result in unstable alloy systems. What Carpenter Technology has done is actually cracked that code and struck that balance between high strength and corrosion resistance for a variety of products. In particular, Custom 465 is one of the strongest corrosion-resistant steels available on the market today. Carpenter Technology has promoted the adoption of this product in multiple applications that you can see listed here. Custom 465 has also found a home in applications outside of aerospace where similar properties are required. Another area where we've demonstrated technical leadership is in high-temperature wear solutions. Jet engine and rotorcraft transmission OEMs are continually pushing the limits of performance and making systems with even higher, more aggressive operating conditions and with more power density. What this requires is materials that can withstand harsher, hotter conditions and also higher wear in the case of gear and bearing solutions. What Carpenter Technology has done is developed a portfolio of solutions that exhibit very high hot hardness, high core toughness, and fatigue resistance for these advanced wear-resistant solutions. For example, when the US Army experienced helicopter failure and tragically loss of life due to the puncture of helicopter transmission cases by enemy fire, this resulted in ultimately, loss of transmission oil and failure of the gears. What the Army did was that in order to prevent a similar situation from occurring in the future, they selected Carpenter Technology's Pyrowear 53 alloy as their solution of choice because it was the only alloy available that could meet the required oil out conditions and performance resulting in safe return of passengers. Carpenter Technology has continued to innovate in this area. For example, in response to recent requests by OEMs for even higher operating requirements, our material scientists and engineers have taken a look at the entire portfolio and optimized melting and re-melting parameters to develop an even higher purity version of Pyrowear 53 to meet these higher operating requirements. You can see that they continue to Carpenter Technology has secured its position as a leader in this space. You heard a couple of themes in my presentation so far that many of the innovations in aerospace have actually had their origins in defense and some of the innovation needs there. I'm now going to hand it back to Marshall to talk more specifically about our growth in the defense area. Thanks, Suniti. Moving over to defense. Our defense portfolio is also a very important portfolio for us and also a very important area that we support. Our solutions in the defense world, again, are highly valued by our defense customers. Defense platforms clearly have a focus on performance. As you're hearing us describe, our solutions provide high performance, they're especially important in the defense areas that we serve. Just as with our commercial aerospace business, our solutions are found in a range of areas within defense, as you see from areas like air, land, sea, and missiles and munitions. As with our commercial aerospace business, our solutions also aren't found just in a single platform within each of these verticals, but are rather used, commonly across many platforms within these verticals. Again, as I mentioned, we're providing solutions that address things like strength, wear, temperature, corrosion, critical issues that affect the performance of the platform. Unlike in our commercial aerospace business, in the defense business, R&D cycles, especially on unmanned defense platforms, can be faster. We're in constant conversation and communication with our defense community about next-generation needs and have ongoing innovation there. We're proud to say that we have several solutions recently introduced or newly specified into next-generation defense platforms, assisting with those platforms' key performance requirements. Given the unfortunate global environment in which we live, we believe our defense portfolio will continue to be a source of growth for us, but we're quite proud to be able to supply the stronger, tougher mission-critical solutions that are needed for our defense customers. Let's move now to our medical business. As you recall, our medical business is around 15% of our business but as you'll see, has been a fast-growing part of our portfolio. Our medical solutions are found in a range of areas, from things like dental to cardiology, orthopedics, and various other medical end uses. If you've had an invasive surgery, or especially one involving an implant, there's a good chance you've interacted with a Carpenter Technology solution. What we are focused on and passionate about with our medical business is improving patient outcomes, and we get very excited when we're able to do that in conjunction with our OEM partners. For example, the creation of next-generation stents, which are stronger, smaller, easier to implant, and last 40% longer than prior generations and can now last the full span of the patient's life. As another example, stronger, smaller, precise tools being used by robots to accomplish minimally invasive surgeries. Again, both of those enabled by Carpenter Technology solutions. As with our commercial aerospace business, the body is an extreme environment. Anything interacting with it or in it clearly has to be ultrapure, biocompatible, and made to exacting quality specifications. Of course, Carpenter provides all of those. Additionally, we have what we believe to be the most expansive portfolio of metal alloy solutions across forms and sizes, and so are preferred by our customers. We see the benefits of our position coming through in growth. As I mentioned in my opening comments, the underlying medical market is seeing very positive growth. It's driven by an aging global population, increasing incidence of surgeries, focus on better patient outcomes and higher value solutions. Carpenter Technology has been realizing growth in excess of this already positive market rate, we attribute that to two key reasons. First, share gain with key market players who increasingly value the portfolio of solutions that we provide, as well as the supply stability and security that comes with Carpenter Technology. Additionally, as you'll hear from David, we've invested in key capacity to support our medical customers' growth. Second, ongoing additions to our product portfolio. We continue to be pulled by our medical customers to fill out portfolio needs to find ways to meet new unmet needs in the market. As you'll hear now from Suniti, again, we continue to innovate with our OEM partners and have ongoing focus on expanding our product portfolio. Turn back now to Suniti for some further description on our medical involvement. As Marshall mentioned, you heard about our focus on improving patient outcomes. One of the areas where we've done this through next-generation material development is through our BioDur® line of alloys. These are high-strength, corrosion-resistant materials for biocompatibility for some of the implant applications that you heard Marshall just talk about. There are a couple of challenges that have inspired next-generation material development in this area. The first is the changing regulatory landscape for cobalt. Recently, the European Union Medical Device Regulation requires that devices containing more than 0.1% of cobalt have to be labeled to indicate the content of cobalt as a potential carcinogenic, mutagenic, and reprotoxin substance. The second challenge is there's a growing awareness in the medical community around nickel sensitivity. The Center for Devices and Radiological Health estimates that approximately 10%-15% of the patient population exhibits sensitivity to nickel. They can experience adverse side effects in nickel-containing implants due to the release of nickel ions that occur due to the normal wear of the implant in the body. To address the cobalt challenge, our team of material scientists has looked at melting parameters, optimizing scrap reuse, and recycling parameters to minimize the content of cobalt in several of our stainless steels and provide essentially cobalt-free alternatives. You can see, for example, BioDur 734 is an essentially cobalt-free material that provides the mechanical strength that's required for hip and knee applications in medical implants. In addition, to address the nickel challenge, our scientists have also further leveraged our alloy and process development capabilities to develop BioDur® 108 alloy, which is an essentially cobalt and nickel-free alloy solution and with even further optimized strength. In addition to this, we've developed a powder analog of BioDur® 108 for additive manufacturing applications. We continue to partner with our medical device customers to determine avenues for next-generation material development to address to improve patient outcomes. I'm now gonna hand it back to Marshall to talk about advances in some of our other markets. Thank you, Suniti. Let's move now to our transportation and energy markets, starting with our transportation business. Our solutions in transportation are found across a variety of platforms, from things like light-duty, heavy-duty, marine, and specialty vehicles, performance vehicles like Formula One. Our solutions are being used in applications from things like valves, gaskets, fasteners, turbochargers, other things of that nature. As with the other markets I've described so far, our solutions are being used to fulfill some key requirement that can't otherwise be met, so meeting some type of requirement like temperature, strength, or corrosion performance. In terms of demand outlook, we see very solid near to medium-term demand, especially driven by light-duty vehicles, where global inventories are still at record lows and supply chains are working to replenish inventories. In addition, trends within this industry are also positive. There's an ongoing focus even in legacy vehicles for increasing fuel efficiencies. Manufacturers are focused on inclusion more and more of subsystems like turbochargers, which require more of the type of high-value material solutions that we supply. Altogether, we view our transportation business as a stable and attractive long-term market. Moving to energy, our energy solutions are found in a range of applications also, from onshore and offshore oil and gas, industrial turbine, nuclear, and wind. The applications we support range from things like drilling equipment, pumps, fasteners, gears, turbines, just to name a few. Especially in our energy business, the applications we're supporting are critical never fail. Failure within these type of platforms clearly would have catastrophic environmental or safety consequences, and our solutions are especially valued. Demand trends are quite positive here also due to increasing global energy needs as well as the current search for global energy security and new sources of energy as a result. Trends are positive for our types of solutions. For example, within oil and gas exploration, oil and gas reservoirs are increasingly difficult to access, and operators have to work in increasingly harsh environments. That means they need hardier tools that last longer, and to have those tools, they'll use Carpenter Technology solutions. Within both our energy and transportation businesses, as with our other businesses, we supply to stringent quality requirements and under approvals from our OEM partners and the supply chain. Let's move now to our industrial and consumer businesses. Within our industrial business, our solutions here also are found in a range of end applications, from things like semiconductor fabrication, chemical manufacturing, and energy infrastructure build-out. Our solutions here are being used also in high-value areas, for example, where there's harsh or high-pressure environments and failure of the tool system, subsystem is not an option. As an example, within semiconductor fabrication, our solutions are enabling things like fluid delivery, measurement systems, and shielding throughout semiconductor fabrication. The semiconductor end market is one where we see especially high growth as the industry is forecasted to need to double its capacity to support an ongoing increase in semiconductor use in consumer electronics and advanced industrial applications. Carpenter Technology is well-positioned to support this growth as we offer a very broad portfolio of solutions specifically designed for and used in semiconductors. In fact, we were involved in creation of the industry standard specification. Within our consumer business, we supply to things that range from sporting goods to consumer electronics. Our solutions are used to enable things that we all enjoy within our consumer electronics, like haptics, shielding, and battery management. Our solutions that are being used here are part of our soft magnetics portfolio of products. That's also the portfolio that's involved in supporting growing electrification trends. I'm gonna turn back now to Suniti for some more discussion there. As Marshall mentioned, we're leveraging our innovation in soft magnetic materials to support the electrification revolution. Just taking a step back, unlike permanent magnets that exhibit a stable magnetic field like the magnets that you see on your refrigerator, soft magnetic materials can be easily magnetized and demagnetized. This ability to turn on and off lends their use to applications that require that require control or manipulation of a magnetic field. Think things like sensors as well as electric power conversion equipment like motors and generators. Carpenter Technology has a broad portfolio of soft magnetic materials, and these materials are very high performance, typically exhibiting higher magnetic flux and, which translates to higher power density, higher torque, depending on the application, with lower weight and space. Again, you know, more highly power dense types of applications. As Marshall mentioned, with our soft magnetics, we're already in a market leadership position for the use of these materials in auxiliary power units or APUs, which basically take advantage of that value proposition of highly power dense materials where weight and space savings is a key design requirement. We're expanding that value proposition to other applications that have similar needs, like electric airplane motors, Electric Vertical Takeoff and Landing, and drone applications, again, where high thrust power and weight and space savings is a key design principle, as well as the upper end of high performance vehicles, like race cars and hypercars. In addition, we also have offerings that are used in sensors and shielding and electromagnetics for consumer electronics. Again, these are applications that require high magnetic performance in with a space-constrained environment. You can imagine that as consumer electronics, the miniaturization trend continues to grow, we expect that to be favorable for the use of our materials in that market. Finally, we're also looking at other emerging opportunities, particularly taking advantage of this high power, highly power dense enabling material like applications where small motors, high-powered motors in small spaces are required, like surgical tools, as well as certain energy applications where operating expense and reduction of size is key. As we leverage our portfolio, we're continuingly continuing to look at how to accelerate growth. What we're finding is that in this area, we're actually being pulled downstream by several of our customers to not only manufacture the strip material for which we have a leadership position today, but also manufacture stacks out of our materials. These stacks actually go into the rotors and stators of high-performance electric motors. What we're doing is that by now linking material performance of the strip to ultimately the stack design and performance of the stack, we're helping our customers optimize their end motor output by providing these components to them. Again, we're continuing to optimize stack manufacturing and design parameters that actually are tailored for very specific application and tolerance needs that our customers require for their end-use application. This integration, again, with building on and leveraging on our capability to produce and our material know-how around the strip is being leveraged to the stack area as well. With that, what I've hoped you can take away today is that Carpenter Technology is continuing to leverage our strong legacy and history of innovative capabilities to again support our growth with our world-class portfolio and also accelerate growth through adjacent capabilities like we just described in electrification. With that, I'm gonna hand it back to Marshall for some closing comments on growth. All right, let me try to wrap up our time here so far together. If you've been listening to Suniti and I for the last half hour, your head may be spinning. We've talked about everything from jet engine manufacturing, medical implants, magnetic induction of portfolio products, semiconductor fabrication. We've covered a broad range of topics, and that's because Carpenter Technology is key to many of the facets of our modern-day life. What should you be taking away? First, all the markets that we're describing that we participate in have very strong end-use demand trends. Unit demand outlook is very strong across all these markets. We're in the middle of a historic aerospace re-ramp. We've got growing global energy needs, an aging population, etc.. Unit demand is very strong. Second, each of these markets we participate in requires more and more of their variant of, "I need higher performance. I need more lightweight planes. I need more fuel-efficient engines. I need longer-lasting implants," etc.. All of these application trends and needs are solved by the type of high-value products that we provide. Our high-value products are being used and specified in to meet these application needs. They're technically challenging to produce. They're critical to the applications that we serve, and there simply are no substitutes for the performance that we are providing. There are few qualified suppliers that are able to provide these types of solutions globally. In fact, we don't believe there's any one provider globally that can replicate Carpenter's full breadth of solutions. We maintain extensive qualifications, as you've seen in each of our end markets. We overcome key scientific hurdles to produce the products that we provide. In fact, some products our customers want us to produce haven't even been invented yet. We manufacture to exacting quality requirements. Lastly, we come into all of this as a preferred supplier globally with our customer base. You've heard us say many times across each of the areas that we participate, we offer a very broad portfolio of solutions to meet all of our customers' needs. We operate globally wherever our customers need us to operate. In addition, we maintain close communication and coordination with our direct customers, as well as the end OEMs who are designing our products into their end use. All this together means that we have an extremely robust commercial outlook, and that's represented by, as I mentioned at the beginning, a growing backlog of orders, and conversations with customers where they're increasingly focused on security of supply over price. Altogether, a very positive time for Carpenter Technology. I'm gonna turn now over to Brian Malloy to describe how easy it is to manufacture a very broad portfolio of exacting quality requirement product. Thank you, Marshall. Good morning, I'm Brian Malloy, and I'm Carpenter Technology Group President for our Specialty Alloys Operations, or SAO business. Now that you've heard about the innovative solutions that we've been providing to our customers, along with the robust outlook for growth that Marshall provided, I wanna take some time to demonstrate that how we make our products is a meaningful differentiator in the industry. As I go through the SAO business, I'd like you to keep three points in mind. First, our a broad portfolio of products is very technically challenging to make. Someone just can't pick up a recipe and be able to make our products. Okay? Secondly, we built our unique and differentiated set of assets and capabilities over our 13four-year history, right? It would be very, very difficult and very time-consuming to replicate or even try to match these capabilities. Third, our culture, performance mindset, and operating model have us driving to continually improve safety and improve productivity, all while continuing to maintain providing our customers with the highest quality products. Let me start with the high-level overview and some facts and figures of our business, right? You've heard these, but I want to just bring them all together. We make over 500 different alloys that generally fall into 13 different product categories. Most of those alloys have multiple versions, as you can see with some of Suniti's examples. Take Alloy 718, for example, right? This is a nickel alloy used across all jet engines, right? Just by itself, has over 100 different variations within our portfolio. Okay? We manufacture these alloys into different end products, including forged billet, bar, wire, strip, across a wide range of sizes. The net result is that we have this 15,000 SKU portfolio that we offer to our customers. Each one of these has a different routing across different assets to manufacture, right? We have 4 key manufacturing sites, each with their own satellite operations, right? Nearly 750 production work centers across those 4 sites. Last year, in FY 2022, we conducted over 600,000 quality tests to ensure that we met customer or industry specifications. Not on here, but we also logged over $900 billion, that's with a B, $900 billion product and process variable markers while we manufactured these products. Okay. How do we manage all this portfolio and technical complexity, right? As we said, we have a system of unique assets and know-how that can't be found anywhere in the world, right? We've developed this over a century of time. This advantage can't be replicated or built quickly or easily. As you can see, we've got four key facilities centered in the United States, right? Each of these facilities has its own collection of assets and capabilities, right? Some of them overlapping. We use this as an entire system, and the vast amount of capabilities across the system, along with those redundancies across facilities, allows us to optimize flow and maximize profitability. Our largest facility is in Reading, Pennsylvania. This is a can-do-it-all facility, right? From high purity melting to hot working to cold finishing to advanced testing and analytics. Essentially, our toughest alloys can be made here and serve across all of our end markets, right? Our Latrobe, Pennsylvania facility, which we acquired roughly a decade ago, has similar capabilities to Reading. We have our state-of-the-art facility in Athens, Alabama, and this was built to provide incremental high-value capacity for the aerospace industry. Since it was a greenfield project, it has a very lean and efficient rifle shot layout that allows us to have shorter cycle times and lower operating costs. It's also highly automated, so high speed data collection facilitates advanced problem-solving and machine learning improvements. Finally, we have our Hartsville, South Carolina facility. Great workforce out there. And that has hot finishing capabilities all the way through finishing testing that nicely complements what we do in Latrobe, Athens, and Reading. Of course, we've got these great assets, but they wouldn't be anything if we didn't have the capability and the talent and the know-how to be able to produce our materials at these facilities. As Suniti alluded to, we have hundreds of world-class PhDs, metallurgists, material scientists, process engineers, testing engineers. A lot of our commercial leaders have formerly held key roles and are similarly degreed in the technical side. We have all these teams driving our very skilled operators to drive our product for our customers. Now I wanna take a closer look at some of our unique capabilities. For us, it all starts with high purity melt, right? Essentially, what we've got to do is melt raw materials into a big block of metal called an ingot. Okay? A key differentiator for Carpenter Technology is our large capacity of high purity melt capabilities at Latrobe, Pennsylvania, at Reading, Pennsylvania, and at Athens, Alabama. Right? We'll often melt the material multiple times, each time improving the purity as you go through production. Reason why this is important is because we need to remove those impurities, right, because they can have an impact on the material properties and eventually the performance of our customers' products. As we do this, you know, our customers rely upon us to manage our melt to very tight tolerances and very tight specifications. They trust that our materials won't fail in those mission-critical applications. Which is why in many cases, specific furnaces are qualified or tied to the end-use products. Our experience also allows us to push the boundaries of current alloys, which is why you can see so many variations, that Suniti showed and that I referenced amongst those 500 alloy families to the 15,000 plus SKUs, right? It also lays a nice foundation for how we're developing next generation alloys. At the end of the day, consistently producing high quality, high purity melt upstream allows us to minimize downstream waste and ship more high margin volume to our customers. It doesn't stop just with the high purity melt, right? Next, we've got to actually put mechanical work into the parts, right, into the metal to actually achieve the desired properties, right? Things such as strength and heat resistance. For today, I'm just gonna simplify these activities into hot working and cold finishing, right? Hot working, it's kind of self-explanatory. Hot working requires that you take the metal to an elevated temperature and impart a force into it, so you're working a hot piece of metal. Okay? The reason why we do this is that we wanna rearrange its internal structure to make sure you get the metal's desired properties. Okay? There's a lot of ways to do this, and each alloy is gonna have its own unique combination of steps to develop its final form and properties. Just stepping back and looking at some of our major assets, some of which you may be familiar with. We have the 4,500-ton press in the Reading facility. This is used primarily to produce nickel billet that's used in aircraft engines. Okay? We have the large radial forge press in Athens, Alabama. It's the largest of its kind in the world, right? It's similar to the Reading press in that it's focused primarily for the aerospace alloys. One note I wanna make here is that this press is the only additional significant qualified capacity to come online for the aerospace industry in recent years, right? This is important because as we see these ramps and these growth rates, right, it's really not easy to bring this type of capacity, and you certainly can't do it in a short amount of time. Another example is our more recently commissioned hot strip mill in Reading, Pennsylvania. It's one of my favorites. I'll get to a little bit more in a minute here. After the materials go through hot working, right, then they go through cold finishing, which is really getting it into the condition that the customers need to be able to take it through their manufacturing process. Things like grinding, cutting, polishing. Again, it's critical that we get this right for the customers because the customers need it to be ready and to take the next steps to do machining or chemical treatments or whatever to ensure they get the properties of their final material. Let me now talk a little bit more of our most recent hot working addition, the hot strip mill in Reading, Pennsylvania. Okay? In 2018, we made the investment to upgrade the equipment that was processing some of our highest value product solutions. This was a really good investment for us. Saw solid returns based solely on the cost savings from moving off of our older equipment. Also, as you heard from Suniti and Marshall, given the attractive outlook for electrification and electronics, we also see the increased capacity and capabilities as a really great opportunity to serve this growing space. This is a highly automated mill that can make literally miles of thin strip, very thin strip to very tight tolerances. Okay? A lot of the material that goes through it is the soft magnetic material that Suniti described. It's very difficult to process given the material composition. Matter of fact, if you run this outside of its control limits in terms of feeds, speeds, or temperatures, the product you'll end up with is not only unusable, the metal actually shatters like glass when you drop it on the ground. Okay. We're one of the few companies in the world who can actually make this product. With our hot strip mill capability, we're positioned uniquely to take advantage of volume ramps as electrification applications come to bear. It's not just about the soft magnetic alloys here. We're also able to process a lot of other different alloys, right, through these great capabilities. One instance a couple of years ago now, it seems like it was more recent, but it's been a couple of years now. We were the only company that was able to manufacture at scale an alloy to very tight tolerances. They were not tolerances that were conventional. These were interesting other features, but allowed a new customer's flagship product to be operable. Right? This is a great example of one of many that we've had in our history where you have, you know, great customer collaboration, technical know-how, and the manufacturing assets to really come together and develop mutually beneficial growth. We do a lot of difficult stuff, right? Hopefully you're getting a feel for that, right? Obviously, we need to have a comprehensive and very advanced quality management system to make sure that we meet our customers' critical requirements and also the industry requirements. Our quality management system spans the entire value chain of what we provide, starting with monitoring, supplier quality, our manufacturing processes, product testing and compliance, all the way through shipping to our customer. The actual certifications that we send with our product are as important, if not more important than the product themselves, right? Because without those, our customers can't use those products. Every piece we ship goes through multiple rounds of testing to ensure the highest quality, and we use the latest testing techniques and technologies, some of them actually developed by Carpenter Technology, to actually monitor and identify discontinuities in the surface and the interior structure to make sure we address them in line rather than waiting for them to compile to the end of a process, which as you can imagine, could be very costly. Our labs also simulate our customers' next processing steps, right? This ensures the material will maintain its properties through their manufacturing steps, whether they do thermal, chemical, or machining, you know, or some other kind of manufacturing. We make sure that we're able to withstand that, along with ensuring that we maintain the end properties after the product is manufactured. Carpenter Technology also drives a human performance focus on quality, which starts at the hiring stage. From onboarding forward, Carpenter trains all of its employees to become quality ambassadors through all roles and responsibilities. Okay. The net result of that is that we've got a basically company-wide focus and workforce that's hyper-focused on ensuring that we continue to deliver the highest quality materials to our customers. Each one of us here from Carpenter Technology and all of our organizations, we're empowered to exercise the Carpenter Operating Models, don't take, Don't Make, and Don't Pass philosophy, which is really a strong systems and people-focused approach supporting the need and the drive to eradicate waste and to continually exceed customer expectations. In the center of this slide, you'll see some representative industry certifications like NADCAP, ISO. There are a whole bunch of others that are customer specific. You can see them on our website. They're all up to date. We're constantly updating those, re-qualifying those to the latest standards to make sure that we continue to meet the highest quality standards. Before we move on here, I'd also like to take a moment to walk through customer qualifications. This is a really important part of our business. It's often misunderstood. Qualifications are required by our customers for their most critical needs, their most critical applications, right? You got never fail applications. They've got mission-critical, right? The reason why they do that is they need their suppliers and their partners to be able to meet very, very tight tolerances and specifications repeatedly and consistently, right? The qualification process is very rigorous. For all of us who fly, or if you know someone who has a medical implant, we all can take great comfort knowing that the manufacturers have very, very high standards to protect our safety. The qualifications themselves involve certifying each piece of equipment, the overall manufacturing process, each step of the manufacturing process along the way, each piece of testing equipment, the associated technicians and inspectors, among other things. It's very rigorous, right? They require manufacturing materials that are tested from the coupon level all the way to full-scale production lots. A lot of testing, a lot of interaction with OEMs, customers, and primes, right? You can imagine this is a really long journey in many cases, in some cases taking upwards of 10 years. We recently went through this with multiple customers at our Athens, Alabama facility. Here's the key point that I wanted to make about qualifications, right? This is why it's so difficult and so rare for the industry to bring on additional capacity. Your investment in certain key manufacturing assets won't start creating value for 5-10 years, let alone start providing return. Let's take all this and go through a full-scale example. I'll walk through the key elements, right? In this example, this is a Triple Melt Alloy 718. Again, a very important grade used in aerospace engines. This is one that's processed at our Reading facility, but could easily be done at our Athens facility 'cause they're qualified at both sites, right? You start with VIM, which is Vacuum Induction Melting, right? We go through a test where we actually check for compositional quality or chemistry, and then you prepare it for the next melt process, right, which is ESR, Electroslag Remelting. Again, similarly, prepare it for yet the next remelt process, which is VAR, vacuum arc remelting. Remember I said the high purity melting, we melt multiple times to remove impurities. That's what you're seeing right here, and obviously now you can understand the Triple Melt Alloy 718. As you go around the bend here, we get into hot working. Remember, hot working is taking something up to an elevated temperature and then imparting the mechanical force, the work into it. This was done with our 4,500-ton press in Reading. A very capable press, right? It could also easily be done at our radial forge press in Athens, Alabama. The reason why I reinforce this is that redundancy both in the remelt that can be done at Athens or Reading, and the hot working that can be done at Athens or Reading, gives us the redundancy to optimize flow and be able to create more capacity and drive more profitability. From here, we go through some testing, mechanical testing, grain inspection, a lot of other things that are very critical. You go into cold finishing here, which is grinding, turning. That's getting the material in the condition that the customers need to take it through their manufacturing processes. All told, you can see in kind of the blue shade here, each billet has to go through over a dozen very rigorous tests before it can actually be certified and released by senior metallurgist to be able to ship to our customers, right? When you look at this, I simplified the flow here. Again, to give you appreciation, this is actually one of our fewer step processes, believe it or not. Think about doing each one of these processes differently for 15,000 SKUs, and each time we initiate a different production run. Lots of opportunity, right? We manage everything we do. You've heard a reference to our Carpenter Operating Model, right? Which is really grounded in safety and lean manufacturing and is focused on quality and reliability. You may recall, as discussed in our quarterly earnings calls, Tony referred to it earlier, you know, we're specifically and specially focused on increasing productivity and throughput, right? It's a great opportunity where we have the demand and everything that we can make, our customers will take. During the pandemic, we saw turnover in our frontline employees, right? Even though we've been aggressive in hiring talent, there's a steep learning curve that hopefully I've given you a flavor for with some of my overview today, right? We're doubling down on really heavily investing on additional deeper and wider training for our employees. Ultimately, what it comes down to is our heritage has always been about the know-how and the capabilities of our employees. We wanna make sure they have that, but we also wanna make sure that they have the confidence to continue to increase productivity, push the boundaries in a safe manner without sacrificing quality. I'm gonna share a quick example from a month ago. Well, it's probably a month and a half ago by now, on our reading shop floor where we had a constraint at one of our major billet saws. Actually, so much so that I heard about it more than I wanted to, and I think even Tony knew about it, right? Our shop floor employees actually came up with a know-how-based solution on a completely different type of saw by making modifications on that saw in a completely different flow path. Not only did they remove the constraint, we were able to draw down a significant amount of WIP inventory, right? Now both flow paths are actually able to handle higher volumes and without sacrificing safety or quality. Okay. We're also focused on kinda longer-term efforts to increase productivity and capacity. For example, you hear everyone saying that we're deploying digital. Well, we're not doing the digital twins. We're really being laser-focused about our digital capabilities onto the shop floor. As you can imagine, our manufacturing processes, as complex as they are, they generate a lot of data. I referenced 900 billion, you know, markers, product, and process. I guarantee you in FY 2023, it'll be over $1 trillion, right? By using advanced analytics and machine learning, we're finding even more ways to really control quality and improve the facility performance at our plants. This is a really exciting area where we've actually banked a couple of really nice wins, so we see huge upside potential here. Okay. Bringing it all together, right? You've heard about our large and a complex portfolio of products that we've been providing for years to meet our customers' critical needs. Our collection of unique assets allows us to be doing that along with our capabilities and our employees that really drive that customer connection. We've been providing these critical needs, these solutions to critical needs for over a century. We have our qualifications that we've had in place, our incumbent qualifications to serve the medical, the aerospace industry, and we've recently brought on incremental capacity through our aerospace qualifications at Athens. This is at a time when the industry really doesn't see any new capacity coming online soon. Okay. Finally, we're driving performance with a focus on safety and increasing productivity, all on the backbone of our advanced quality management system. This all comes together and really fuels the optimism that we have behind the positive growth outlook and the really difficult to replicate system of qualified assets and capabilities that's gonna allow us to continue to support our customers' most mission-critical needs. With that, I'll turn it over to David Graf. Thank you, Brian. Well, good morning. I'm David Graf. I'm the group president for the Performance Engineered Products division of Carpenter. This consists of three different value-generating businesses, and I'll walk you through those in one minute. First, I wanted to talk about the three different aspects of takeaways that I want you to have. Following up on what Marsh and Brian talked about, these three businesses provide a portfolio of unique solutions to critical applications and high-growth end-use markets. Many, as you'll see as we go through this, there's a broad portfolio of applications that fit the market drivers. These are differentiated businesses that leverage and advance metallurgical knowledge and process capabilities. These two strengths are what we build on. There's a very diverse portfolio of products that we bring to the market, and they tie back to these two pieces. Finally, we provide opportunity for high-growth value, both in the near term and the long term across these businesses. When you look at the three businesses, they're really brought out across a range of types of materials. I'm going to start with Carpenter Additive. Carpenter Additive is focused on being a solution provider for the additive manufacturing industry. Now, we've been a provider of high-quality metal powders for many years now. Specifically, in this case, we are working with customers in the additive manufacturing area. This is a smaller area with a high growth potential, but it's focused on developing parts by Powder Metal Deposition technology and creating parts that you can't create today by traditional technology. The customers who are very interested in this tend to be aerospace, defense, and medical because they're after these unique properties of parts that you can't get today. They partner with us as Carpenter because we bring the metallurgical knowledge of both the metal composition and the powder specifics. The powder is very important to how the AM product is built in the machines. Today, we provide powder to several commercial applications. Our powder is found in jet engines, spacecraft, and medical implants. We see that outside these markets, we're continuing to see growth. Both our customers today are expanding their footprint into new applications. We see new customers going into new markets adjacent to that. We see the OEMs that are developing the AM platforms going into the next generation for bigger and better parts. Ultimately, Carpenter Additive is tied into the growth markets, both on our powder solutions and our powder management solutions. The next business is the Distribution Solutions business. This is a value-added master distributor designed to supply to the industrial and transportation markets. We supply a range of alloys into this market, including tool steels, high-speed steels, and a range of stainless steels. We don't just supply the materials, we actually value add to them. As Brian showed in his slides, a lot of capabilities, we basically cut, grind, mill, and finish materials, and also machine the parts into a finished specifications that the customers require. That materials then fit directly into our customer's supply chain and into their applications. We really are a value supplier to the industry. This business is a profitable cash-generating business for us today. We see opportunities for growth as this comes out of the pandemic. When we look at Carpenter Titanium by Dynamet, that's the biggest business of the three within the PEP envelope. I'm gonna go into a little more detail onto it. You'll see a lot of similarities in the titanium business to what Brian Malloy just talked about in the SAO business. There's a lot of capabilities that are similar, but tailored towards titanium versus other alloys. I'll go into this in a little more detail. There it goes. All right. When you think about titanium, you should think about a couple takeaways. One, titanium is a high-strength alloy that's corrosion resistant, and that allows us for lightweighting. That ties directly to what Marshall Souve and Sandeep Singh talked about earlier today for some of the other alloys that they just talked about. In the sense of titanium, we really are tied heavily into the medical market. Medical and aerospace is our primary two sources or solutions, they're high growth, high value use markets for these materials. In fact, when you look at some of these customers, the same customers will source materials from us and SAO. For example, aerospace fastener companies will source titanium alloys from us and the high-end alloys that you saw Sandeep talk about, they'll use them to make different fasteners for different parts of an airplane. We also have a lot of differentiated set of hot working and finishing capabilities. A lot of what you saw on Brian's slides are the same kind of capabilities we have, tailored towards titanium working. The titanium we work with is across a broad range of titanium alloys, and we primarily finish them into bar and wire at very tight tolerances on their sizes. Furthermore, our processes are qualified to customer specifications. Again, we have site equipment and other qualifications and rigorous accreditation to the same level that Brian had alluded to. We manufacture small sizes enabling OEM product development into new space. I'll hit on a case study in my next slide that pulls some of this together. I think the key thing for everyone to take away is we're solving our customers' titanium challenges. We are providing materials that fit seamlessly into their crushing capabilities or into their growth areas. One of the things is we have invested in capability and capacity. We now have that capability and capacity, and we're using it, especially in the medical area for the post-pandemic demand and backlog that we've got. We're running hard, and we're doing the same thing on the Carpenter Operating Model. We are applying that today because we're seeking to get more capacity and more productivity out of our existing assets and driving that to meet the continuing growth in the market. I'll double-click on titanium, one example that I think will help pull together some of the things we do. Titanium UltiBar is a solution that we created focused on high tolerance needs for medical and aerospace. When you think about this, it's just really designed to be an exceptional dimensional accuracy for high precision products. What does that really mean? If you take a 3-millimeter bar, our tolerance is specified to be 90% tighter than the AMS standard. For a 3-millimeter bar, our tolerance is actually about 10% the width of a human hair. We provide material that's really tightly specced into the customer. That allows us to, this be specified into really tight applications such as bone screws and spinal implants for medical and in some very critical aerospace fasteners for the aerospace companies. This kind of ties together what the capabilities are that we have for titanium and what we provide to our customers. In the end, I'll give you some takeaways on the different, three different businesses. A lot of this overlaps with what Marshall talked about before and Brian had talked about. When you look at Additive, we are tied into aerospace, defense, and medical markets. Those are growing. This is where AM is playing, we're actually enabling that. If you think about what we're supplying and how we're supplying, we're helping the industry grow. Distribution Solutions, we are tied into industrial and transportation market end uses, we supply critical elements directly to the supply chain. It's a very profitable cash-generating business that we're managing, we see opportunities to continue to grow it. Dynamet is a lot like an SAO, but in titanium world. It's a value add. It's got a high value end use market formulation. We have qualified, diversified assets that are hard to replicate, we're driving performance through the Carpenter Operating Model to get what we can out of existing assets and to make sure we have the capability to meet the strong demand we see in the medical markets. That's a short summary of the PEP business, and I'm gonna turn it over to my colleague, Tim. I won't drop it. Okay, thanks, David. Good morning, everybody. I'm Tim Lane. I'm Carpenter Technology's Chief Financial Officer. To start, I think it's worth taking a look back, taking a step back to look at where we've come from, but even more importantly, our progress over the last several quarters to better frame the discussion for where we're headed. Prior to the pandemic, namely in 2018 and 2019, and the better part of fiscal year 2020, we demonstrated a trajectory built on solid demand from our customers. At that time, we were in the midst of a pretty broad commercial aerospace build rate increase. We had demonstrated success in growing our medical sales above market growth rates, as Marshall talked about, and we were progressing with obtaining additional qualifications for the Athens capacity. At the same time, we were implementing and executing on the Carpenter Operating Model. Brian talked about the Operating Model being based in the principles of lean manufacturing, we are adopting those principles across all our operations, aimed at improving productivity and throughput. As a result, in our SAO segment in particular, we demonstrated we could achieve 20% operating margins. We did so in the fourth quarter of fiscal year 2019 and the first and second quarters of fiscal 20. During that time, we also saw the vision for what Carpenter could be, via the execution of our strategy and our market opportunity. We seized that opportunity and identified areas where we thought we could potentially accelerate growth in our core business. We'd already made the significant investment in capacity at Athens, and we're working again towards obtaining additional qualifications. We invested in capacity in our Dynamet business to capitalize on the near-term demand in the medical markets. We made selective acquisitions and investments to expand our presence in additive manufacturing. With the introduction of tax reform, we pulled forward the cash tax savings we expected to realize and invested in the state-of-the-art hot strip mill in our Reading campus that Brian talked about earlier. This brings us to the pandemic. In March of 2020, our earnings were significantly impacted by a sharp decline in demand, especially in aerospace, as we're all familiar with. The impact to our operating results was significant at that time, given our asset and cost base. We, as many companies, were forced to make some difficult decisions. I will say at that time, although the pandemic was significant to our overall operations, we as a company never lost sight of the long-term fundamentals in our markets. We were confident that the long-term trends underlying demand in our key end-use markets were unchanged and our solutions portfolio was necessary for our customers to meet their long-term needs. With that long-term view in mind, we did make some difficult decisions, yet strategic, to deal with the impacts of COVID-19. Those strategic actions included reducing our salary positions by about 20% across the organization at that time. We also took strategic portfolio actions. Namely, we divested an oil and gas business that was highly exposed to a change in oil prices, the volatility related to oil prices. Further, we took targeted actions in our additive business to streamline the operations at the same time, maintain a leadership position and reduce costs. From a cash flow perspective, we took action to generate cash with a focus on protecting liquidity. While the pandemic conditions persisted, we refinanced debt and extended our credit maturity profile to ensure our capital structure remained solid. With that recent history as the context, we have seen what we expected to see, a significant recovery in demand across most of our end-use markets. That's evident in our backlog, up 2.5 times, roughly 2.5 times what it was relative to pre-pandemic levels. It's led by our largest end market of aerospace and defense. With the strong demand, we've done what we said we would do over the last several quarters. Our results have been consistently improving. In Q2 of this fiscal year, we returned to profitability in terms of EPS, we took another step forward in our recent Q3 results. The improving operating results are primarily the result of increasing volume and higher prices. The increase in volume is a function of the work we have done to first increase hiring to more fully staff the operations. Secondly, most important, more importantly, is bringing the staff in, training them safely to perform their jobs and at a rate that we demonstrated back in fiscal 2019. There's still work to be done there for sure, we're seeing steady progress against our targets in that area. In addition, we continue to increase prices on our products and drive an improving mix of products across our assets. Over the last several quarters, a big part of our story has been talking about returning to our fiscal 2019 run rates in the fourth quarter of our fiscal 2023. This is what we view a pretty important milestone, not the end game for sure, but it demonstrates our commitment to do what we say we will. With that view of where we've come from, in terms of our improving results over the last several quarters, we'll shift the conversation more where we're headed over the next several years in particular. I will say the outlook discussion we're gonna talk about is a long-term view. We're not gonna talk about our fiscal 2024 outlook specifically. We'll cover that on our next quarterly earnings call. A little over a year ago, we announced our goal of doubling our fiscal 2019 operating income on a run rate basis during fiscal 2026. This means that on a full year basis, our fiscal 2027, our goal is to double the $243 million of fiscal year 2019 operating income, which as Tony talked about earlier, was one of Carpenter Technology's most profitable years on record. Given where we are today, this goal means significant growth over the coming years. The target operating income represents roughly a 40% CAGR from where we expect to end fiscal year 2023. I talked about on the previous slide that we're already in the process of accelerating that growth. We expect to see another significant step forward in our fiscal 2024 results. Our ability to achieve our goal is based on our outlook for strong demand across our markets, especially aerospace and defense and medical, our key end-use markets. Marshall talked about that earlier. Our confidence is driven by the end-use market demand conditions, but also the overall current and future pricing environment and our ability to optimize profit or mix on the capacity we have. Keep in mind, I think this is important, this view considers the current capacity we have and does not require any significant additional investment. We also believe there's upside to these views, based on some opportunities in electrification and additive. Let's dive into the full details by segment. You heard Brian spend a lot of time talking about SAO's capability. Marshall talked about the underlying market demand. Taken together, we think that we can increase net sales in SAO by approximately 50% from 2019 levels. A little bit more context on that. That represents a roughly 11%-13% CAGR from where we expect to end 2023, or fiscal 23. 30% of that growth from 2019 is coming from incremental volume growth. That incremental volume is driven by the productivity and throughput initiatives that we're working on in addition to the investments we've made since 2019, as well as the incremental capacity or the incremental qualifications we've gotten for the capacity in Athens. The remaining 70% is attributable to pricing gains and an improving product mix. Over the last 18 months, we've raised prices, at least announced price increases on our transactional business 6 times. At the same time, we've also been consistently raising prices on our contract business. Some portion of those price increases were certainly necessitated by the historically high inflation, but longer term, we expect to see opportunities to increase prices further. I talked about price, but in addition to that price, we also see some opportunities to optimize the mix of products across our capacity. With the backlog of higher prices and improving product mix offset by inflation, we expect we can deliver in SAO adjusted operating margins in excess of 20%. I talked earlier about our ability to deliver those operating margins prior to the pandemic. Thinking about PEP, which David just covered, David covered the individual businesses that make up the PEP segment. We continue to see strong demand in PEP just as we do in SAO. The PEP top-line growth is gonna be driven by the Dynamet titanium business that David talked about, where we see strong demand trends in aerospace and defense and medical. It may be just worth noting we don't tend to talk a lot about Dynamet. David probably did cover some more details. Given Dynamet's solutions portfolio, the markets it serves in aerospace and defense and medical, it's difficult to replicate capacity and capabilities. Dynamet is capable of producing margins similar to SAO. Additive continues to be a growing opportunity for the PEP portfolio. I mentioned earlier, we've taken some significant actions in the additive business, again, focused on maintaining a leadership position while reducing costs. As we look ahead, we expect additive to drive ongoing positive operating income as opposed to fiscal 2019, where the additive business was an investment in the future and was generating negative operating losses. Finally, distribution, where we expect to see steady growth and a healthy contribution to the overall PEP segment. Taken together, as we look at PEP, we think the PEP opportunity is similar to SAO, an opportunity to grow sales in a strong demand environment. We also see the opportunity for PEP to drive a meaningful improvement in margins. Moving from low single digits in fiscal 2019 of just over 6%, to roughly 13%-15% adjusted operating margins in 2027, which is a little bit more compelling than where we were in 2019. Now that we've framed out profitability, let's talk a little bit about cash flow generation. In Carpenter's history, long history, we have demonstrated that Carpenter we can generate significant cash flow in the cycle in a strong demand environment. In terms of working capital, we've ramped up operations over the last several quarters. We've invested in working capital, particularly inventory. Over the next several years, as we work our way through the productivity and throughput improvements, we as you would expect, would manage inventory very closely. As we see the increases that we expect to see in productivity and throughput, we anticipate there to be a more optimal flow of the material across our assets, and that represents a significant opportunity to bring down inventory relative to increases in revenue. In terms of other working capital, we'll manage those closely as you would expect. At a minimum, keep them in line with historical days. I think it's important here to say that we've made modest assumptions about what the forward view on working capital could be. I talked a little bit about inventory. There are some other areas where I believe our assumptions are relatively conservative based on what we think we can do, and we believe we have an opportunity to increase working capital. working capital metrics over and above what's in our current plan. Lastly, in terms of cash provided from operations, we don't expect any significant pension contributions until fiscal year 25. As we talked about earlier, we have gone through a cycle where we invested heavily in capacity and expansion. With those large scale investments behind us, we expect to spend roughly $125 million per year of capital over the next four years, which equates to about $500 million for the period. This covers the normal maintenance CapEx that we would spend to keep the equipment in good working order given the high demand environment. It also includes opportunities where we could look at projects to potentially expand capacity in certain constrained flow paths. We could improve throughput where we may think there's value or potentially expand capabilities in select areas. Between the cash from operations and the capital expenditures, that looks to be about $600 million-$800 million of cash generation before dividends over the next four years cumulatively. In our definition of free cash flow, we do include dividends. We think that's an important return to our stockholders, and we expect to continue to pay that dividend at current levels. All in, after deducting the dividend, we expect to generate a significant amount of free cash flow in the next several years, $400 million-$600 million as shown on the slide. We also expect to convert roughly 80% of the net income in our anticipated FY 2027, albeit before the dividend. That's also a significant goal for us. From a capital structure perspective, I mentioned the work we did to refinance the debt and push out the debt maturities. We don't have any debt maturities until fiscal 2029. Okay. We've got a significant outlook for free cash flow generation. Of course, it makes sense for us and for us to start thinking about how we deploy that cash. On the slide, we laid out a spectrum of opportunities to deploy that cash. Starting from the left-hand side, I mentioned the $125 million of annual spend for the next several years. We do have an established framework for how we look at incremental projects based on return metrics, ROI, and payback. We'd evaluate those metrics on every significant incremental project. As I said, our focus on those incremental projects will be areas where we could incrementally expand capacity, but also potentially expand our capabilities that would complement our existing portfolio. In that regard, as we look at M&A opportunities, we could accelerate these capabilities by looking at more of a build versus buy analysis on some of those capabilities. At a minimum, as we look at M&A, those would be likely. They would have to fit our strategic criteria for sure, but they would also likely be bolt-on type acquisitions and at a minimum would need to be accretive from day one. I'll pause here and just make the point again. Our outlook doesn't rely on M&A or additional investment. If we did M&A or increased our capital expenditures, it's more about accelerating the vision we have for Carpenter. Outside of growth investments, we'd also look at potentially de-levering the balance sheet via debt reduction. Given our outlook, in terms of increased profitability, we would expect our leverage ratios to return to more normalized historical levels. There may be opportunity to reduce some debt and reduce the interest cost. In addition, there may be opportunities to de-risk the pension liabilities that we have. Our largest plan has been frozen for quite some time, but is an opportunity for us to look at. Lastly, in terms of providing a return to shareholders, I talked about the dividend. We view that as an important return of capital to our shareholders, and we expect to continue that. Something that we're proud of. We've got a long-standing commitment to providing that direct return to our shareholders through dividends. In fact, fiscal 2023 marks our 116th year, straight year of uninterrupted dividend payments. With that, I'll turn the call back over to Tony. Thanks, Tim. Let me take what Tim said there. A lot of slides, a lot of numbers, I put it into this one graph right here to hopefully bring it home for you. Tim talked a lot about the doubling of operating income versus FY 2019. Let's think about how does that look compared to where we're at right now in FY 2023. Right? Remember, our FY 2023 ends on June 30. That is a 40% compounded annual growth rate over those four years. I would guess to say that that would put us in a limited universe of the amount of companies that are going to provide a 40% annual earnings increase over the next four years. You can see by the depiction on the graph, it's not gonna be perfectly linear. I mean, we have to make some assumptions primarily on input costs. I can tell you right now that that is a meaningful step forward in FY 2024. This is not a back-end loaded goal we have. Right? Not 100% linear, but pretty close over those four years. Another important point here, the capacity and the capabilities are in place today to hit those numbers. As many of my colleagues stated today, we're looking at other things, maybe incremental CapEx, you know, that we can unlock more capacity that would be a boost to this number. We have not included that in our goal, right? Those would have to be quick return, less than 1-year paybacks. As I said earlier, we can sell every ton we make. If there's 1 slide out of the 56 today, this is the one that you take with you today. This is how we answer what is the compelling case for Carpenter Technology. One, we only operate in high growth, high value, high margin markets. As you see, as we continue to optimize our mix, we see products with very strong margins being pushed aside by others as we continue to be able to exercise an increased price. Only high value, only high growth, only high margin. That's all we do. Every one of those products are difficult to make, they're mission-critical, and it's extremely tough to replicate what we do. Number two, leading capabilities and capacity. Again, many of my colleagues have stated it will take 5-10 years to bring on capacity, to order it, to build it, to install it, and to qualify it. We have found with our Athens facility that we brought online in 2014, took almost 10 years. That's what it takes in this market today. You have the capacity that you have in the market today. Two very important points. As you see in the middle, the result for Carpenter Technology is a 40% annual growth rate over the next four years. That is not an overly aggressive goal for us. It's not easy, but it is not overly aggressive. The market is there, and our ability to perform is there. As Tim just talked about on a cash flow standpoint, over $1 billion from cash from operations over the next four years. Gives us a lot of opportunities to decide what we're going to do with that. I hope that brings it all together. When you ask what is the compelling case for Carpenter Technology, I think it puts us in, as I said, a limited universe of the amount of companies in our industry over the next four years that can deliver that type of earnings growth. I appreciate your time today. I appreciate your attendance. Please stay safe. Okay, this concludes the prepared remarks this morning. We're gonna take a short break here in the room and get ready and get set up for the question and answer session. I'd like to remind those who are tuning in via the webcast, you still have some time to submit your questions in the chat function. I will be collecting those and asking a selection of them during the question and answer session. Thank you for the time. We'll come back in just a few minutes. Love free, don't listen back. I know a place where you don't need protection. 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We're gonna be passing a microphone around, so if you do have a question, just raise your hand just so we know where the questions are coming from. We'll hand you the microphone so that the people who are tuning in via the webcast can hear the question. Once you're done with the question, you can hand it back, and I'll turn it over to the team. Okay. Hey. Thank you. Michael Leshock, KeyBanc Capital Markets. Appreciate the long-term targets that you laid out today, and wanted to ask on the pricing side, given that 70% is pricing and mix in your guidance to meet those targets, how much of that price do you have today, and how much more is to come? Yeah. Thanks for the question. A good portion of the price we have today. obviously, we continue to see pricing opportunities. I think as Tim mentioned, you know, the overall outlook is more conservative in nature. certainly we think there's more opportunities for price but it's well on hand, I'd say. Thank you. Marko Hokkanen, Balyasny. A couple themes today. One, Tony, I think you mentioned a few times we can sell every pound we make. You know, Tim highlighted multiple times, like, we're not capacity constrained on the fiscal 27 target. Tony, maybe you could kinda just run through resource allocation as you think about the skyline and the significant demand you have across multiple end markets where you wanna prioritize your, your resources and your facilities. Yeah. Thanks, Mark. Right now, I mean, everything is up for debate. I mean, when we're talking to our customers now, it's all about the highest value. Marshall might have mentioned to you, look at some of these other markets, you're seeing pricing in markets such as energy, for example, that you've never seen before because they wanna get time on the mill as well. For us right now, we're very selective. We're going with the highest value. We're going with the highest margin. We continue to cut off the tail, if you will. There's some products that we just are not going to make any more going forward. From that standpoint, it is a constant evaluation. Thank you. Brian, I think you mentioned in your portfolio 15,000 products. Yep. Maybe kind of just run through, like, you know, four years from now, is it still 15,000 products? Given capacity constraints and the demand you're seeing, is it 12,000 because resetting the lines? Yeah ... rejiggering the flow is disruptive, so kinda cut off that tail? Yeah. No, thanks for the question. Yeah, I think, you know, high level, when you look at where we are and you see, it obviously depends a lot on where the demand comes from, which markets come from, but we could easily see, you know, 15% of that being addressed over that timeframe. Scott Blumenthal from Emerald Advisors. Tim, can you talk maybe a little bit about the backlog? I think you reported that it was 2.5x where it was pre-pandemic. I'm presuming this is measured in dollars. You've increased price meaningfully, 50% on your transactional business. I'm presuming it's probably a little bit less in your contracted business. Conversely, you report pounds. Can you kinda square what a 2.5x backlog increase means in pounds along with your capacity and give us an idea as to what the backlog really means from a volume perspective rather than a price perspective? Yeah. I mean, to relative to the 2.5 x in terms of $ sales ex surcharge, the backlog's up 2xi in terms of weight or volume, tons, I should say. You wanna talk a little bit about what the trends you're seeing in the backlog? I mean, ultimately it's up across the board. The backlog mix represents a mix that's consistent with our historical portfolio. I don't know, Marshall, anything else to add on backlog? I think I'd just add, you know, we're very focused on value and not volume. Right? That's how we think about where we're gonna add the most value. So that's what our focus is from a commercial standpoint. Can I go again? Sure. Thank you. This one would be for David, I think. Mm-hmm. There was a comment that there was a meaningful increase in Dynamet capacity. Mm-hmm. Can you maybe contrast that to where you were, you know, pre-pandemic or even 5 years ago? you know, is the increaseKind of, you know, 25%, 50%, 80%? I have a follow-up for Tony on the additive thing. Yeah. Thanks for that question. It really kind of depends on how you look at it. We had put in capacity for both bar and wire. The capacity increases on those have different volume equipments. I would just call it meaningful. We're not to the point where we're maximizing that. It's really down to labor to get it fully where it is today. It was all put in pre-pandemic. In post-pandemic, we're ramping up. Got it. Tony, I'll leave you guys alone after this one. What do you envision the end game for additive? Because that's, you know, to many of us has seemed kind of a science project. We understand the technology is, you know, kinda state-of-the-art here. You're still talking about Dynamet being the primary driver in that segment. You know, when should we expect as investors to really see some traction and maybe see that business start to approach the potential of a Dynamet? Well, thanks for all the questions. Prior to the pandemic, as you know, we invested in some additive assets. Tim said we restructured those. We've been making additive grade powders for decades. If you think about any of the commercialized additive applications today, whether those be in aerospace or medical, more likely than not, it's our powder that they're using, right? We have a very strong presence now. We've been able then to take that business, where as Tim said, FY 2019, it was a operating loss business because we bought like everyone else. To get into the market, you were buying businesses that were negative EBITDA at the time. The pandemic hit, so really stalled all that out. The good news is that going forward in that four-year outlook, we are not putting anything on additive. There's no meaningful place that additive has to have in that four years. Anything we do in additive, as I said, as well as the next generation electrification, will be on top of that goal. Hey, Josh Sullivan, The Benchmark Company. You know, just looking at the 2027 guidance targets, historically Carpenter Technology's been exposed to some macro cycles. How do we think about 2027? You're gonna have aerospace starting to potentially peak out at that point. How are you positioned to extend that cycle, so we don't think of 2027 as any sort of peak? There was nothing special. That's a good question. There's nothing special about FY 2027 that we think that's the peak. I mean, we operate in 5-year cycles when we do our long-term planning. We started this 1 a year ago. We started talking about being at doubling our operating income at a run rate by FY 2026 and full year by FY 2027. FY 2027 just happened to be the fifth year in our normal planning. We certainly don't see that as the peak. As I talk to different people in the industry, whether they're an OEM or a supplier somewhere in the supply chain, I will tell you 99%+ will tell you they see this as a 10-year ramp. FY 2027 would be just the one of the way points along the way. During that time, you could see us again add some incremental capacity. Maybe we do some bolt-on M&A during that time as we utilize the cash we're gonna generate. Certainly, we don't see FY 2027 as the top. Just as we think of the soft magnetics opportunity, what contribution was it providing in 2019? Maybe what do you think in 2027? I can give you a rough idea. We were, prior to COVID in FY 2019, about $100 million in revenue. As we look in this four-year journey, we think we'll double that. We got an opportunity to double that. There's still opportunity on top of that as well. I mean, I can tell you this. We take goals seriously. When we communicate something externally, we hit it. This isn't a pie in the sky, goal. That's why I say for the next generation electrification, we haven't put all that we think is possible. A lot of that depends on FAA approvals. We didn't assume any of that. Additive, we have very little, if any, in there, right? We've made, as Tim said, some arguably conservative calls on input cost, you know, because over a four-year period, I'm not sure where that's gonna go, especially around labor, that we've increased our labor wages considerably over the last couple years. It's not easy, but it's certainly doable. Josh, just in terms of contribution too, if you remember when we talked about when we invested in the strip mill, we talked about it really being two benefits. The first is just the capability. We use those assets to produce materials what we had historically been producing. In 19, we're producing those assets on older equipment. We had to outsource certain process steps. The first wave of contribution from the strip mill is you're only being about to produce that equipment all in-house cheaper because we can do it all ourselves. As Tony said, there's the next opportunity is about capacity expansion into other areas, especially as electrification initiatives take hold across the markets. Hi, Timna Tanners with Wolfe Research. Thanks for the presentation. Just high level, I wanted to know if you could go through your products end market, and talk to us about vulnerability to the extent there is any from higher interest rates and deeper recession if we have one around the corner. I'd say that, absent a global event like a pandemic, right, something of that nature, our customers really aren't talking to us about concerns of recession outlooks or a desire to pull back or anything in that nature, right? Our customers are taking a very long-term view of their needs, even things like semiconductor fabrication, right? That's a cyclical business with semiconductor use. It's been up and down. The long-term outlooks are for increased capacity it needs, as I mentioned, and our customers have that view. We really don't see any customer talking to us about concern in short-term. They're more talking about urgency of needing to get more orders in, urgency for material deliveries, desire for material more quickly. Okay. If I look at your end markets, aerospace and defense looks pretty strong, medical, you made a case for. Generally speaking, in these kinds of companies, industrial and consumer is where you tend to see the vulnerability into a downturn or higher interest rates. Could you switch that product to other end uses if you needed to? Can you talk a little bit about that and/or like contract duration? Do you have min-max? How do we think about your visibility and the, you know, vulnerability within those parameters? Sure. Some of what you're saying is certainly true. Some of our products that support consumer goods, as an example, go into other end applications like aerospace. There is some fungibility of supply and switching on our manufacturing. Other things like within industrial, right, I think, you know, you're right to point out cyclical impacts. A lot of our industrial business, as an example, back to semiconductor fabrication, right? Even though the end market is cyclical, the view is for very long-term positive growth and needs, and our customers have that view in place. You know, a lot of our inter-industrial business is also tied to energy infrastructure build-out, right? I talked about the need for global energy demands increasing and new sources of energy like LNG infrastructure, those type of things. We really believe the underlying demand trends are quite positive. Again, that's what we're hearing from our customers regularly. Okay. Final one for me then. If you could quantify or give us ballpark about benefit from some of the federally funded programs, IIJA, CHIPS Act, IRA. Separately on the titanium side, I was surprised you didn't mention the VSMPO opportunity. If you could also address that. Thanks. Yeah, I think I'd say for us and our customers, CHIPS as an example, right? There's certainly expectation for positive benefit there. It's still unclear and being sorted out. Of course, the focus on North America manufacturing is positive because we're certainly based in North America. As you heard me say, we produce and sell globally. Certainly there's a preference for North American producers for some of those type of events. I think it's still a little bit early for us to say, but the feeling is positive with our customer base. Your second question about VSMPO benefits. Certainly as you heard, we participate in the titanium space. We see opportunities for share gain there. It's maybe less so than other producers or others who are stepping to try to replicate that. We don't melt titanium, and that's really the largest set of disruption in the market currently from that set of events. Certainly some opportunities, but not quite at the scale of others who are participating in that supply chain. Hi, Brian Gelfand at SPX Capital. My question on capital allocation, it's been a tough earnings road since 2019. We hope to get to those earnings levels next fiscal year. The stock price is just back to 2019. Why not increase the importance of share repurchase at current levels and prove to the market the execution of this nice plan is there before opening the door to something else that could complicate it, like M&A? I mean, you have plenty of growth here. You're not getting credit for it because, you know, we're just at the cusp of it. Just comment on capital allocation there. Yeah. I'd say a couple things. I understand your point, and it is valid, and it's not as if we don't think as that as a potential opportunity in the future. Right now, given where we are and our ability to potentially accelerate growth, there are some areas where we take that cash and invest it in other areas. We also talked about potentially delevering. I think there's a range of opportunities that we could do. Buybacks may be one that we would think about. It's something we've done in the past. I will say that with 48 million shares outstanding, I don't... I mean, we have a relatively low float as it is. I don't wanna be flippant about it. It's something that we would look for, in the future if we couldn't do the other things that we talked about today. True, though it is helpful in the opposite side of the low float if there's dislocations in the market and if you had an opportunistic share repurchase, it would, I think, be helpful. My other question just on the operational side is, what do you see as the biggest operational risk in the plan? We've had the questions on the recession, just from an internal standpoint, without knowing all that you go through day after day, what should we look at as the biggest risk? From an operational standpoint, this makes it really easy. Our operational risk is just like everyone else that participates in this market. Every one of our competitors have the same operational risk that we do, and that is we're running our assets 24/7. You have to make sure you're always doing your appropriate preventive maintenance. You can't replace these assets. If one of them went offline, there is not another one to come online, right? There's not another one to go build, there's not another one to go buy. Those operational risks that we have are exactly the same across all the other competitors in this industry. Okay, a question that came in online, going back to a previous discussion. Can you provide a little more color on the aerospace ramp? What does it look like over the next 10 years? I think, again, I go back to my comments around if you listen to aerospace OEMs publicly, right, they're talking about need to produce more and more and more. Right, that's fairly well-established. The focus really is on the supply chain as a limiter to output, right? Aerospace OEMs are saying they can sell everything that they have. Their backlogs are 7+ years long with current production rates. You know, we certainly believe that there's an ongoing focus for more, there's an ongoing push in the entire supply chain, including to Carpenter Technology for increased output. As I mentioned, the supply chain continues to work to ramp up. Just like we're ramping up, our customers are also working to ramp up from their pre-pandemic levels. They're also focused on the same things we're focused on: hiring, training, getting their skill sets up to speed. As with any ramp, right, there may be bumpiness, quarter to quarter, of the industry. Again, the ongoing push and focus is on acceleration. Okay, another question that came online. How are incentives tied to these targets provided today? I'll take that one. We have two incentive programs. We have a short-term, and we have a longer-term program. Every one of our employees participate on basically the same platform, myself, the executive team, the people that run our plants, and the people on the shop floor. It's really basic. For the short term, it's all about operating income and free cash flow. We set these targets like they are here. This is what goes into our annual plans. They get approved by our board of directors. That's how we get paid. You hit these numbers, up about roughly 50/50 operating income and free cash. We have a very small safety component, 10% of that. On the long range incentive, it's around, again, EBITDA generation and return on capital. They're all tied to this flow right here. There's not a separate incentive plan outside of this that uses different numbers than what's in this four-year outlook. Just looking out to 2027, when do you expect kinda normalization in the aerospace supply chain as far as lead times? You know, historically, the OEMs would pulse lines before build rate increases. Do you expect that to come back? Just kinda your thoughts on kinda normalization timelines? Let me give an overall comment, and I'll let Marshall clean it up maybe. As I talk to people in the industry, the phrases that I hear is that this is different than any other. People are going to have to change the way they do business going forward, right? I started talking about this actually prior to the pandemic, saying, "As you look forward to what these rates are, and for our specific industry in nickel billet and the amount of time it takes to bring on more capacity, there's gonna be a point that this is not gonna work. There's gonna be more demand than there is supply." We were at 52-week lead times prior to the pandemic. If you remember me saying, I go, "We will get back to those types of lead times quickly," which we're there, and we've exceeded. I don't see this easing anytime soon. I think we're going to be, as the customers that we talk to, as Marshall has said, that come to us, all they talk about is surety of supply. What can we do to get in front of the line? There is relatively zero discussion on price. I think I just echo what you said. I mean, in terms of your question on normalization of lead times, as long as we continue to see ramp in rates and expectations, right, there's increasing urgency for supply and deliveries, and that drives lead time extension. As Tony said, our lead times are already now beyond where they were pre-COVID, and look where we are in our current ramp, right? We're not, we're not yet back to build rates prior to COVID. We're still focused as an industry on getting there. If I had to guess, Josh, I would tell you if you had to make me think, "What do you think lead times will be over the next four years?" I would tell you that they'll stay at those 52-week or more levels. I don't see those pulling in- Yeah ... during that four-year period. I mean, that's just evidence of the strong demand. It's just not gonna ease up. That's relatively short compared to the lead time for getting a new plane of 7+ years. Yeah. Yeah. Another question that came in online. Can you provide a little bit more clarity around how electrification and the soft magnetic materials will or are tied to our performance in the transportation end-use market? Yeah, I think, as Tim mentioned, I think that question's related to our hot strip mill investment, which, as we've talked about, is electrification-focused. That ROI, as Tim mentioned, has already been quite positive. Not really related to our transportation business. We described and Tony answered, right, we provide already a strong portfolio of soft magnetic materials that are being used across that asset, that are going into aerospace applications, consumer electronics, etc.. Our soft magnetic portfolio, the way to think about it, is already a strong base of business supporting our aerospace business, as Tim mentioned, investments in that space already quite attractive for us. Other questions in the room? Okay. I think that's it. Okay, we're done. Oh. Tony, one of the first things that you said during the presentation, you talked a little bit about your ESG goals sourcing 90% of your electricity from carbon neutral sources and, you know, the CO2 emissions comments. Understand that you need to make those types of comments in the current politically charged environment, but how do these things help you make more money? Listen, we talk about that at the board all the time. We're not a political organization. We're here to make money. We don't do any of those things that don't improve the bottom line. In many of those cases, they are not mutually exclusive. Every one of those items there is a positive to us to the bottom line. Using recycled scrap is much better than using virgin material, right? We wanna increase that amount. You know, the electricity coming from 90% carbon neutral, that's good for us. We've got long-term contracts with solid providers. The fact that 80% of the waste is recycled through our operations, that's a major plus. We wanna reduce the amount of water that we use, not necessarily because there's some NGO group out there telling us to do that, because it makes more money for us. We have this discussion across our team and on our board all the time. We wanna be part of the sustainability movement, and we will do that, and every action we take will improve our bottom line, period. Thanks for the question. All right. This concludes Carpenter Technology's 2023 Investor Day. Thank you so much for joining us this morning. Take care.