Good morning, everyone. My name is Peter Arment, Senior Aerospace Defense Analyst here at Baird. We are delighted to have RTX joining us this morning. From RTX, we have Neil Mitchill as the Chief Financial Officer and Executive Vice President. Neil, welcome. Thank you, Peter. Neil's going to make a couple of opening comments, and then we're going to jump into some Q&A. Thanks again, Neil. Welcome. Yeah, thank you, Peter. I'm looking forward to it. Good morning, everybody. First, I want to make a statement here. I'm going to make some forward-looking statements, as I usually do. There's plenty of risks and uncertainties in our business, so please refer to our SEC filings for more information on that. I think most of you probably know RTX, but just a quick reminder, we are a premier aerospace and defense company. We have three industry-leading segments: Pratt & Whitney, Collins Aerospace, and Raytheon. Coming off of a really strong third quarter, Peter, we had 13% top-line organic sales growth, double-digit growth in sales across all three of our channels. Aftermarket was up 18%. Defense and OE were up 10% each, so really, really strong third quarter. Good execution across the entire business. That converted to margin expansion at each of the segments and at the RTX level. Really happy with that progress and the momentum. Free cash flow was a bright spot. We had $4 billion in the third quarter, putting us well on track for our full year. All of that momentum that we saw in the third quarter and had been building throughout the course of the year allowed us to take up our top line, take up our earnings per share, adjusted earnings per share, and maintain our $7 billion-$7.5 billion of free cash flow. Our sales today, we see between $86.5 billion and $87 billion, and our adjusted earnings per share, $6.10 and $6.20 in between those two numbers. I'm sure we'll talk a little bit more about the fourth quarter, but feel really good where we are coming out of the third quarter. Maybe just a couple of other comments before we get started, if you don't mind. Sure. Demand story remains really strong across all of our businesses. In fact, as we sit here and look at our $251 billion backlog, I would say that does not even include yet some of the significant defense demand that we are seeing here in the U.S. as well as globally. I think there is a lot more to come there. We really like the portfolio. As I said, it is performing pretty well. We have a lot of opportunity ahead of us, I think, on the U.S. government side. It is great to see the government reopen last night. That is a really important milestone here for us in the quarter, obviously for the country. Pleased to see that happen. That takes a fair amount of risk off the fourth quarter that we were starting to monitor. I think maybe one more topic I wanted to cover up front. Sure. Most of you probably saw Secretary Hegseth's comments last Friday on acquisition acceleration efforts. I want to say that we're extremely excited to support the secretaries and the defense department's transformation efforts here. We certainly agree with the need to increase the pace of delivering products to the warfighter. It's critical, especially in these times. I think that we at RTX are particularly well positioned to support this successfully. As many of you know, we're about 50/50 commercial and defense today. We know what the commercial model looks like, and we know that we can move with speed, and that's just what the Department of War is looking for. In fact, we have plenty of examples already where we've taken commercial products and put them into military missions. I think we can do more of that for the customer going forward. Overall, absolutely support these well-needed transformation initiatives, and we're looking forward to supporting that on the Secretary's objectives in that regard. Again, off to a good start this year. Nine months in, we just have about a month and a half to go, and we're feeling pretty good. Terrific. Back to you. That's great. Thank you. You mentioned you clearly had a strong Q3 performance. You've increased your full-year outlook. As you move through the fourth quarter and you close out the year, maybe what are some of the items or end markets activity that you're really watching closely as we think about the year-end? A few things here, Peter. Obviously, a lot is behind us already, so that's been a good thing. The backlog is really strong, so we don't have a challenge with kind of what are we going to sell to deliver the fourth quarter here. I think everything is tracking. We've seen October results. Obviously, we've been watching the government shutdown impact. That was a key watch item. I'd say we've seen a little bit of slowing down on the awards, new contracts, and a little bit of slowing down on customer payments. We're optimistic that we'll see a return to normal pretty quickly here in the fourth quarter. We could see a little bit of risk there on the collection side. Of course, that's just timing for us. Sure. Whether it's this year or next year, it's not a collection issue. It doesn't change anything about the underlying business. I'd say in terms of OE, aftermarket, we're on track to deliver to the outlook we provided a few weeks ago. I think all of that is in check. We did file an 8-K this morning. Maybe I'll just provide a little clarification around what we announced this morning. We have been on a path for a number of years to de-risk our pension plans. Yes. Our plans are well-funded, well over 100%. One of the transactions that we announced this morning is an opportunity to transfer $2.5 billion of our pension obligation to an insurer. That will come with an accounting charge. It's a one-time non-cash charge, pre-tax of about $300 million here in the fourth quarter. It will change a little bit based on the finalization of the actual assumptions there. We will take that charge. It will not affect our adjusted earnings per share because charges like that, we would measure out of that metric. A really good economic transaction for us, particularly in the position that the plans sit today. As we look to 2026, just a little bit of forward-looking information here, it will create a little bit of headwind on our non-service pension income. We're seeing about a $200 million year-over-year decline in that line item in our income statement. Again, that's not a cash item for us. Right. Just so folks are aware, about 1/3 of that $200 million relates to this transaction. Overall, a really good transaction as we continue to de-risk the pension plans and strengthen our balance sheet a little bit further. That is how we see the fourth quarter. It is really heads down, focus on execution so we can deliver the outlook that we provided on our earnings call. Terrific. Yeah, anytime you can reduce pension, we're big fans. It's always something. As are we. Yeah. Specifically on cash flow, maybe some of the cash and working capital trends to think about as you finish this year on inventory. I know this has been kind of a big focus of the company. Can you talk a little bit about the progress you're making there? Sure. We've obviously built up a number of our working capital account balances and inventory being the largest, contract assets as well, mostly because we've been dealing with significant growth in the business, really across every single part of RTX. We've had huge initiatives to try to drive that down to improve our turns. We've seen some progress. Frankly, we've done a lot to protect the supply base over the last year and a half. We are continuing to make progress there. I think the good thing, if you will, the bright side to maybe not making as much progress as we had originally set out, is that opportunity still lies ahead of us, and we're still delivering cash. Yeah. There is plenty of work to do. It's a top priority of our company. We're employing a lot of digital tools now to help us better allocate our material throughout the operation system and to get a better look inside of our suppliers as well. As we look to the end of the year here, I think we're going to continue to see inventory burn down from where we were in the third quarter. We'll also see our payables probably lengthen a little bit, which is all volume-related. Right. I think as we look longer term, still more opportunity to take net assets off the balance sheet and improve the turns as we continue to see a little bit more stabilization in the supply chain and then better tools and visibility that we're employing across our manufacturing sites. Yeah, it's great that you still have that opportunity in front of you. I mean, it just adds to the momentum that you've kind of been building over time. Beyond thinking about really 2026 or beyond this year, and I know you're not giving a 2026 outlook. I get that. Is there anything you can share with us on next year expectations for the company, broad brush? Yeah, maybe there's a couple of things. You're right. I'm not going to provide the guidance today. I want to finish the year strong first. With a $250 billion backlog, as we sit here today and look out to next year, we feel pretty confident that what we need to deliver is pretty well known. There's not a lot of selling. As we look at the commercial aerospace side of the business, revenue passenger miles continue to grow. They're moderating, as we all expected, but we still see that in the mid-single-digit range next year. The installed base continues to grow on OE deliveries. The defense, I think we're starting to see—we saw that in the Raytheon numbers really across RTX. We had 10% defense growth in the fourth quarter. We'll see strong defense momentum as we continue to increase our capacity and then start to deliver that to our customer. Material receipts have gone up 10 consecutive quarters at Raytheon. Obviously, that's a huge driver of getting something out there. Amen. Amen. Amen. Yeah. We are looking for number 11. Even still, this supply chain is getting a lot healthier, and we are seeing that momentum build so we can deliver next year. If you just step back, we are going to see top-line growth. I will not put a number on it today. We are going to see that convert to margin expansion at each of our three businesses. We expect the free cash flow to grow as well. We are continuing to make powder metal payments this year and in 2025. We expect that to be a tailwind as we head into 2026. That, combined with working capital, we expect to see our free cash flow grow. I will leave it at that for now. No, that's great. We're sitting in a really good position, and we're really just focused on executing. Yeah. You guys have been executing across the board, and it's great to see. Maybe just below the line for 2026, anything we should keep in mind about modeling below the line as we think about next year? You mentioned pension already, but just the things that we should think about. Yeah, that's a good question. I think a couple of things maybe to focus on. First is we do a lot of joint venture work, and so we have non-controlling interest that'll probably rise as volume goes up. The other area is our digital investments. We are making a concerted effort to prioritize our investments in areas where we get the biggest bang for the buck, as you'd expect us to. The deployment of digital technology, AI, and data analysis—I'll give you an example. In our GTF MRO network, we've deployed data analysis that allows us to optimize where material is directed across the MRO network. I expect us to have a little bit of a step up in that spend as we get into 2026. Other than that, I think not a whole lot of other moving pieces of significance to talk about today. Okay. Terrific. That's great. Maybe let's just talk defense a little bit. It's half your company. What are you seeing right now? I think the U.S. has a very change, I think, in the U.S. pace of government contracting. You mentioned a little bit. I mean, covered Raytheon for a very long time before it became part of RTX. And it's 80 countries, I think, or it used to be 80 countries. It's probably more now. Your presence globally is impressive. Maybe talk a little bit about what you're seeing. Yeah. Thank you. The defense business today is really firing on all cylinders. We've seen significant stabilization, as I'm sure you've observed in the Raytheon portfolio. It's not just the Raytheon portfolio. Collins and Pratt have very substantial defense contribution as well. As I think about our priorities right now, it's really about, first and foremost, capacitizing to execute on the backlog. We're making hundreds of millions of dollars of investments in capacity. We'll make $300 million just at Raytheon this year. A lot of that's around the United States: Alabama, Florida, Arkansas, Texas. We can go Tucson, Arizona, for example, Connecticut, pretty much everywhere we are doing defense business. The demand remains very, very, very strong there. It's really all about getting the supply chain in sync with our delivery profile. We're seeing substantial increases in the capacity that we've created for munitions. As I look a little bit forward, and I'll start with the United States, the demand for enhanced munitions output is very, very substantial. What we've seen to date is a lot of the international orders coming in, some U.S. But I think as we look forward, we see a lot of opportunity ahead of us. Now, there's a lot of work to do to get our rates up even further, and a lot of investment we'll need to make to do that. The return on that is very, very strong. We're optimistic about that. Sticking with the United States, you've got Golden Dome. Right. Integrated air and missile defense. Protecting the homeland here in the United States is right in the wheelhouse of what Raytheon does quite well. That is the radar systems. That is LIDS, which couples with our Coyote effector. It is NASAMS. It is Patriot. Then we had a significant $1.5 billion order for LTAMDS, the next generation of Patriots. All of that, most of that, translates to the international markets as well. In Europe, you are seeing substantial upticks in defense spending. We have seen that come through in orders for GEM-T, for example, in the third quarter. We are expecting more orders for integrated air defense systems and the munitions that go along with that. To do that and to ensure that the European countries are comfortable buying from Raytheon, we have got a lot of partnerships that we have. I was going to say, yeah. Been working through there. In Spain, Kongsberg, and other places where we've partnered to make the product or source parts that go into the product locally. Middle East, same story. A lot of opportunity sits in the Middle East, and we're seeing that level of activity increase as well. I think our book- to -bill in the third quarter for defense was 1.94. It's very, very substantial. Now it's just really about focusing on execution and making sure everything synchronizes in the supply chain to deliver. Yeah. General Guetlein's architecture is not out yet. Maybe it was expected this month, but obviously shutdowns, things. It's probably maybe year-end or something. It seems this administration wants a win. It appears like it's just going to be a lot of existing systems and just a lot more. It just seems like you guys are so well set up to kind of capitalize on that. Is that kind of a view that you guys share? It is, Peter. We've got 35 of our systems at Raytheon that are actually deployed and in use today. Wow. I think when you think about the importance and the criticality of bringing a timely set of defenses to the U.S. homeland, you've got to go with products that are battle-tested and certainly the ones that Raytheon manufactures fit that bill. I think in order for us to set up systems like this around the United States in a very quick manner, we're going to have to use products that we have today. Now, these products that we have today have been developed and improved upon for decades. They're better and better every single day. We're continuously bringing new technology to the platform. I do think that Raytheon's products are certainly going to play a big role in that architecture. Yeah, for sure. You mentioned just capacity before, just about in defense and the investments, just in not knowing what the architecture is, but everyone's kind of somewhat informed. How do you feel about the capacity kind of to meet this? Because there is just the demand signals really are off the charts in defense. Yeah. You know, we are capacitized to a certain level of Patriot, for example. I'll talk about that in Andover, Massachusetts. Back in its peak, we were producing about one per month. When you look ahead and you look at both the U.S. and the international demand for a system like that, we could see that certainly creep up. We would want to expand our capacity. In fact, we are doing that already in anticipation of both U.S. and international orders. LTAMDS is another one where we're already making investments to get up to similar rates of production for that system, which is much, much larger than a Patriot system. As we do with every investment, we make a very calculated business case about the return on that investment and the payback. I think we see a very clear line of sight to favorable returns and the benefit of having a stable and long-term commitment from our customers on the volumes around those kinds of products. We have not yet fully, obviously, signed any contracts or gotten that far, but we do see a huge opportunity here. It will take some investment, but we are confident in investing in ourselves and products that are battle-tested and we know how to make and a supply chain that we are familiar with. Yeah, that's terrific. Let's switch over to maybe commercial. RTX has been keeping pace with the OEM kind of rate ramp that we're all looking at, and particularly on A320. How do we think about maybe 737 MAX? Touch upon that. Sure. Yeah, I'll start with Collins. We certainly, I think, have done a decent job of predicting what that rate was going to look like when we entered the year. We knew there was a little bit of inventory in the channel with Boeing, but we're really pleased to see the progress that Boeing's making on the ramp rate for 737. I think we're synchronized with what their needs are. We are coordinating very closely to make sure we are able to support their continued ramp on the 737 program. That's been a well-executed plan for this year. I think you saw that in the Collins numbers. I think they were up 16% in sales. Q3, obviously, a little bit of benefit from the timing of the strike last year, but on track on the Collins side. Similarly, Collins is aligned with Airbus on programs that they support. On the Pratt side, it's been another really good story on production for OE. We are going to be up about 8%-10% this year in output of production for Pratt on new engines. For Pratt, it's a little bit more of a balancing act, trying to support both Airbus on the A320 as well as support the fleet to get the fleet off the ground as we execute those fleet plans, which are on track as well. Of note, I would kind of point out that when you look back to 2019 and compare 2019 to the end of Q3 2025, our production for GTF engines is up 55%. Yeah, it's incredible. We've really, really put a lot of new engines out there. Interestingly, when you look at that output compared to our market share on the A320 program in particular, we're about four points ahead of our firm order market share in terms of delivery. At this point, we really need to make sure we continue to balance what we supply to Airbus as well as to the rest of the fleet in the form of the material as we look ahead for the MRO output next year. MRO output this year, it's not an OE item, but really, as we've talked about, the key ingredient to lifting the fleet is material into the overhaul and repair network. We've talked about getting the PW-1100, which powers the A320, up about 30% year- over- year in terms of output. I would say we were 21% through the first nine months. Right. We've closed October, and October's output was in line with our full-year expectations. Terrific. Continuing to see good progress on that front, and we want to see that continue the rest of this quarter and into next year. Yeah. Yeah, you guys have stayed right on track, I mean, with the plans you've outlined. One area, though, is destocking run its course at Collins. Can you maybe talk a little bit about that? Because they've been such a strong supplier and they were ahead. Yeah. That is where I was saying that I think when we started the year, we had a pretty good insight and line of sight, if you will, to what Boeing had. That is why I think our outlook started on the lower side a little bit because we were letting that, it had to work its way through the system. As we got about halfway through the year, I would say a lot of that is behind us. Okay. It's not easy to paint a broad-based brush across the entire program with the number of systems that we provide there. We certainly are on track and in sync with Boeing to deliver for this rising rate. I think at least at Collins, most of that slack in the system has been taken up. Yeah. You mentioned earlier in your opening kind of comments about everything's just still tracking on plan with GTF, with powder metal kind of, and you said a little bit of a tailwind as we think about 2026. Maybe just touch upon that because I think when we think back to when that issue first came up, everyone was concerned. You guys have stayed right on plan as we think about, as we go into kind of year three of this whole thing. Sure. Yeah. You know, I'll kind of start at the top. Scientifically, we understood the issue. We've been able to verify that through lots of inspections over the last two years. We laid out an aggressive plan. We have seen and overhauled a lot of engines. It continues to be a balancing act, but we're confident because we see structural castings, and we see forgings, and the important materials continuing to rise in output year-over-year sequentially. It's not been easy on our customers. We recognize that. We have agreements with the vast majority of our customers to compensate them for that. So our financial and our operational outlook remains the same as it has all year and as recently as the last quarter. Looking forward, we do continue to expect the AOG situation to improve. Again, it's all about balancing the material between OE and aftermarket and continuing to see that output in the shops. We're seeing turnaround times for the engines in the shop come down quarter over quarter. We have the capacity in the MRO network, and we're adding the capacity where we need it in the powder metal and the forging value stream to support not just this year, but multiple years forward as the aftermarket continues to grow. I mean, one of the things that's really neat about this program today is that it's 3x larger than what we thought it was going to be when we originally set out to make the investments around the GTF. If you get, once we get to the end of this year, the number of engines that are GTF will overtake the V2500 in size. Unbelievable. It has been a very rapid, obviously, with its challenges, but from those challenges come a lot of learnings. I think the team has done a really nice job incorporating those learnings back into the product as we flip into the GTF advantage when it comes to market, really in earnest next year. Terrific. Thank you for that. How do we think about the impact of aircraft retirements, like thinking about the aftermarket at both Collins and Pratt? Think about as we go forward. As everyone knows, retirements have been really, really low, in part because of OE constraints, supply chain constraints, the GTF issue that I talked about. Notwithstanding that, we still believe there's a lot of life in the V2500 powered aircraft. I mean, I think retirements to date are about 1.5%, which is pretty much in line, a little better, frankly, than what we had calculated. As we see OE rates go up, we're going to see more retirements, but we still have about 55% of the V2500 powered fleet has seen one or fewer shop visits. There's a lot of life left there. Even as the number of shop visits comes down over the back end of the decade, the content per shop visit, because these are much heavier, continues to go up. The profitability there is obviously very good. I still see a pretty strong tail on the Pratt side on the V2500 legacy fleets. At Collins, the same applies there for the legacy fleets that they're part of, but even more importantly, their installed base continues to grow rapidly. Our content there is twice what it was on the old fleet. By definition, we'll continue to get more access, if you will, to the aftermarket. We have about $170 billion that's installed. $100 billion of it is off warranty. As it comes off warranty, and you think about the growing volumes over the last four years, more and more is going to come off warranty each of the next three or four years. We see some tailwinds there as well. Not a lot of introductions of new aircraft to new customers, so provisioning will start to normalize a little bit. As long as there's not a significant economic downturn, we see no reason why we won't see mid-single digit RPK growth, continued growth in the installed base, continued growth in the magnitude of the aftermarket in the next few years. Terrific. Last Last couple of minutes, I want to get in two questions on, obviously, you've got a lot of volume going, but obviously, you're making a lot of productivity enhancements to help with your margin expansion. Touch upon that, and then I want to just end with capital output. I'll make this quick. We have a relentless focus on cost reduction and productivity at RTX. It's backed by our core operating system. To summarize it at a very, very high level, we're focused on driving the manufacturing cost down. We're connecting tons of our factory equipment to digital data collection so we can analyze it and preemptively deal with issues. We're continuing to work hours out of the system. We're moving work from high-cost locations to low-cost or best-cost locations. We're employing a ton of digital technology. We're in the middle of a, I guess we're at the beginning of an upgrade of our SAP system. That'll take place over the next five years. All of those things, a very sharp focus on SG&A. The Collins team has launched a transformation effort to substantially reduce, simplify, eliminate waste in their back offices. Across the whole portfolio, we've got a lot of activity going on to continue to drive productivity, to offset the inflation and the global trade issues that we've taken on board this year. Terrific. It is good to hear. Lastly, on capital allocation, how do we think about that as we go forward into next year? I know, are we doing further debt reductions, your buybacks? How are you thinking about that? Sure. I think what you're going to see from us, Peter, is the same playbook that you've seen from us over a number of years. I will talk about it more in the short term, I guess. First and foremost, we're investing in the company. We spend over $2.5 billion in CapEx every year, almost $3 billion of our own money on research and development, more than that from a customer perspective, collectively $10 billion a year investing in RTX. We know that there's a ton of demand for our products, and that's a really smart investment. We will start there. All of that is before you get to what's left, free cash flow. We will continue to prioritize our dividend. That's an important, critically important part of our share return model. As you pointed out, we did the ASR a couple of years ago. We've paid down about $5.8 billion, $5.78 billion worth of debt so far. We have about $4 billion more to go. Our goal is to get back to that level before we return to our other forms of returning capital to share owners. I think what's important here is that as we look forward and we look at the cash generation capability of RTX, we're going to be able to do both. By both, I mean invest in our business and return capital to share owners in the way that you would expect us to do and that we've done over the last number of years. Yeah. You guys do not get enough credit for how you leaned in on that ASR because it shows the confidence in your future cash generation. Neil, thank you. We are out of time. Thank you, everyone, for joining us. Neil, thanks again, as always. Thanks for supporting the conference. Of course. Thank you. Have a great day. Thank you.