Good day and welcome to the RTX third quarter 2025 earnings conference call. My name is Desiree and I will be your operator for today. As a reminder, this conference is being recorded for replay purposes. On the call today are Chris Calio, Chairman and Chief Executive Officer, Neil Mitchill, Chief Financial Officer, and Nathan Ware, Vice President of Investor Relations. This call is being webcast live on the Internet and there is a presentation available for download from the RTX website at www.rtx.com. Please note, except where otherwise noted, the company will speak to results from continuing operations excluding acquisition accounting adjustments and net non-recurring and/or significant items, often referred to by management as other significant items. The company also reminds listeners that the earnings and cash flow expectations and any other forward-looking statements provided in this call are subject to risks and uncertainties. RTX SEC filings, including its Forms 8-K, 10-Q, and 10-K, provide details on important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. Once the call becomes open for questions, we ask that you limit your first round to one question per caller to give everyone the opportunity to participate. To ask a question, you will need to press Star one on your telephone. You may ask further questions by reinserting yourself into the queue as time permits. With that, I will turn the call over to Mr. Calio. Thank you and good morning everyone. We delivered a very strong quarter of results in Q3, which reflects our intense focus on execution, the broad utilization of our core operating system, and the durable demand for our products on the top line. Sales were up 13% organically year over year with double-digit growth in each of commercial original equipment (OE), commercial aftermarket, and defense. Adjusted segment operating profit was up 19% year over year with growth and margin expansion across all three segments, and free cash flow was robust at $4 billion in the quarter, keeping us on track for the full year. Underpinning these results is the continued strength in the global demand for our products and services in commercial aerospace. Passenger air travel has remained resilient with global RPKs on track for approximately 5% growth this year. We continue to see positive OE production trends, which drove a significant increase in production at Collins in the quarter, as well as at Pratt, which saw a 6% growth in large commercial engine deliveries. Commercial aftermarket also remained strong, supported by our large and growing installed base, including over $100 billion of out-of-warranty content at Collins and heavier shop visit content across our MRO activities. Aircraft retirements have remained low, with only 1.5% of the V2500 fleet retired so far this year, and Pratt Canada, with nearly 70,000 engines in service, has seen over 15% growth year to date in commercial aftermarket. On the defense side, we continue to be exceptionally well positioned to meet the growing needs of our U.S. and international customers, in particular with respect to munitions and integrated air and missile defense, both core capabilities of our company. On the orders front, our book to bill in the quarter was 1.63, resulting in a backlog of $251 billion, up 13% year- over- year. The activity in the quarter included $37 billion of new awards, with $23 billion of defense and $14 billion of commercial orders. On the commercial side through Q3, our book to bill this year is 1.71, and our backlog has grown 18% since the end of 2024, showing the exceptional demand for our products and technologies at both Collins and Pratt. At Raytheon, we booked over $8 billion of orders for munitions, including approximately $2.5 billion for GEM-T to support multiple international customers and $2.1 billion for AMRAAM, the largest order in the 30-year history of that program. Raytheon was also awarded a significant counter drone contract for Coyote production from the U.S. Army. Coyote has proven to be extremely effective in the field, and we've recently developed a lower cost non-kinetic Coyote payload to combat drone swarms. Pratt was awarded over $3 billion to support the F135 engine, including the Lot 18 production contract. Overall, our end markets and operational performance remain strong as we enter the fourth quarter. Based on this, we're raising our full year outlook for adjusted sales and EPS and maintaining our free cash flow outlook of $7 billion - $7.5 billion. Neil will take you through the details in a few minutes, but before that let me provide an update on our strategic priorities on slide 4. Starting with executing on our commitments, our focus on driving performance improvements through our core operating system has continued to generate productivity across RTX. Through Q3, we have delivered 10% organic sales growth this year while keeping headcount flat across the organization. This has been a key enabler in driving six consecutive quarters of year-over-year adjusted segment margin expansion. With respect to the GTF fleet management plan, our financial and technical outlook remains on track. PW1100 MRO output was up 9% in the quarter and is up 21% year to date. We continue to work with our supply chain partners to increase the flow of critical value stream material to ramp MRO output. In Q3, we saw another quarter of solid progress with growth in isothermal forgings up 16% and structural castings up 29%. Year- over- year. Exiting the third quarter, this material flow has supported a record high number of PW1100 gate three starts, which is where we reassemble engines during a shop visit, putting Pratt in a position to deliver about 30% MRO output growth for the year. Across the company, we continue to focus on increasing critical manufacturing capacity to support growth, including investing over $600 million this year in expansion projects. For example, Raytheon is on track to invest $300 million in capacity expansion to deliver the growing backlog. This includes the Redstone Missile Integration facility in Huntsville, Alabama, which will increase site capacity by 50% and support the growing demand for our naval programs, including the Standard Missile franchise. Shifting to innovating for future growth, Pratt Canada was selected by the EU Clean Aviation Program to design and integrate a hybrid-electric propulsion demonstrator for regional aircraft. This system integrates a 250 kW electric motor and advanced propeller technology from Collins and is expected to improve fuel efficiency by approximately 20%. Additionally, Collins is nearing final certification of its next-generation braking system for the A321XLR aircraft. The design incorporates proprietary carbon technology and is expected to extend brake life and drive improved profitability in our maintenance support portfolio. Raytheon recently demonstrated two significant effector technology achievements. The AMRAAM team successfully completed the longest ever air-to-air shot from a fifth-generation fighter, and the StormBreaker team, in just 50 days, designed, developed, and tested a new ground launch demonstrator version of this air-launched effector, which will expand the capabilities and future applications for this product. We remain focused on leveraging the breadth and scale of RTX. As we've highlighted before, we continue to develop and deploy our data analytics and AI tools to improve productivity and the speed and quality of decision making in our business. We're strategically using these tools to support the highest impact opportunities across the company, including increasing munitions and OE production rates, growing GTF MRO output, and improving sales and inventory planning and management. For example, the Raytheon AMRAAM team has deployed multiple proprietary digital AI tools to proactively identify production bottlenecks and reduce rework, which has contributed to output more than doubling year to date through Q3 on the program. These examples highlight the progress that we continue to make across our strategic priorities, and I'm pleased with the results they are yielding throughout the company. With that, let me turn it over to Neil to take you through the third quarter results and our updated outlook for the full year. Neil, all right, Chris, thanks. I'm on Slide five. In the third quarter, adjusted sales of $22.5 billion were up 12% on an adjusted basis and 13% organically. As Chris mentioned, this was a very strong result in the quarter with commercial aftermarket up 18% and commercial original equipment (OE) and defense both up 10%. Adjusted segment operating profit of $2.8 billion was up 19%, and we saw 70 basis points of consolidated segment margin expansion with contributions from all three segments. Adjusted earnings per share of $1.70 was up 17% from the prior year, driven primarily by segment operating profit growth. In addition, the quarter also benefited from several tax items, including legal entity reorganizations, which impacted EPS by approximately $0.12. These items more than offset a $0.04 headwind from the recently enacted tax legislation. On a GAAP basis, EPS from continuing operations was $1.41 and included $0.29 of acquisition accounting adjustments. Free cash flow was very strong at $4 billion, driven by working capital improvement, including strong collections and some advanced payments tied to contract awards in the quarter that were accelerated from Q4. Cash flow for the quarter also included approximately $275 million for powder metal related compensation and $220 million of tariff related impacts. With respect to capital allocation, we returned over $900 million to shareowners through dividends in the quarter, and with our focus on further strengthening our balance sheet, we paid down $2.9 billion of debt in the quarter. Finally, during the quarter we completed the sale of the actuation business, and earlier this month we also completed the sale of Collins Simmons Precision Products business for $765 million. Okay, turning to Slide six, let me provide a few details on our updated outlook for the full year. As you've seen with our third quarter results, execution and momentum across all three segments continues to be strong. Given this operating performance along with the strength of our end markets, we are updating our outlook for the full year. On the top line, we are raising our full year adjusted sales outlook to a range of $86.5 billion - $87 billion, up from our prior range of $84.75 billion - $85.5 billion. This now translates to between 8% and 9% organic sales growth for the year, up from our prior range of 6% - 7%. By channel at the RTX level and adjusting for divestitures, we now expect commercial aftermarket sales to grow mid-teens year- over- year, up from our prior outlook of low teens, primarily driven by heavier shop visit content that we saw in Q3 at Pratt. On the commercial original equipment (OE) side, we expect sales to grow around 10% for the year, up from our prior outlook of high single digits year over year. On defense, we continue to expect sales to grow mid-single digits. On the bottom line, given the performance across all three segments, we are increasing adjusted earnings per share $0.30 on the low end of our range and $0.25 on the high end. At the midpoint, the increase is primarily driven by approximately $0.20 of improved segment operating profit, with the rest coming from a few below the line items. Within this updated outlook, there is no change to the net tariff headwind we discussed on our last earnings call. All in, we now see adjusted EPS at a new range of between $6.10 and $6.20 for the full year, up from our prior range of $5.80 - $5.95. Specific to Q4, we expect another quarter of strong operational performance at the segment level, with segment profit up around 10% year- over- year, excluding the impact of tariffs and recent divestitures at Collins. Below the line, the Q3 $0.12 tax benefit I mentioned will not repeat. We expect a higher effective tax rate in the fourth quarter. On free cash flow, we are on track to achieve our outlook of between $7 billion and $7.5 billion for the year. The primary drivers of our fourth quarter free cash flow will be the same as we saw in the third quarter: segment operating profit growth and working capital improvement. As we look beyond this year, we feel good about the momentum we're seeing across our business, including our growing backlog and end market strength that continues to position us well for continued top line growth, margin expansion, and solid free cash flow conversion. Like we do every year, we'll be back on our fourth quarter earnings call in January with our detailed outlook for 2026. With that, let me hand it over to Nathan to take you through the segment results for the third quarter. All right, thanks Neil. Starting with Collins on slide seven, sales were $7.6 billion in the quarter, up 8% on an adjusted basis and 11% organically, driven by strength across all three channels. Adjusting for divestitures by channel, commercial OE sales were up 16% versus prior year, driven primarily by higher volume on narrowbody platforms. Recall last year included the impact of the Boeing work stoppage in the quarter. Commercial aftermarket sales were up 13%, driven by a 17% increase in mods and upgrades, a 13% increase in parts and repair, and a 10% increase in provisioning. Defense sales were up 6% versus the prior year, driven by higher volume across multiple programs and platforms including the Survivable Airborne Operations Center program. Adjusted operating profit of $1.2 billion was up $98 million versus the prior year as drop through in higher commercial aftermarket, defense, and commercial OE volume along with lower R&D expense was partially offset by unfavorable commercial OE mix and the impact of higher tariffs across the business. Turning to Collins full year outlook, we continue to expect sales to grow mid single digits year over year on an adjusted basis and high single digits organically. We now expect operating profit growth between $325 million and $375 million versus 2024, up from our prior expectation of between $275 million and $350 million, driven by drop through in higher commercial aftermarket volume. Keep in mind this updated profit range includes an approximately $60 million year- over- year headwind associated with the business divestitures completed this year. Shifting to Pratt on slide eight, sales of $8.4 billion were up 16% on both an adjusted and organic basis, driven by strength across all channels. Commercial OE sales were up 5%, driven by increased volume in large commercial engines and favorable mix. In Pratt Canada, commercial aftermarket sales were up 23%, driven by higher volume in both large commercial engines and Pratt Canada. In military engines, sales were up 15% in the quarter, driven primarily by the F135 program including higher volume associated with the Lot 18 contract award. Adjusted operating profit of $751 million was up $154 million versus the prior year, driven by drop through in higher commercial aftermarket and military volume. This growth more than offset increased large commercial OE deliveries, higher SG&A expense, and the impact of higher tariffs across the business. Turning to Pratt's full year outlook, we. Now expect sales to grow low to. Mid teens on an adjusted and organic basis, an increase from our prior range of up low double digits driven by strength in commercial aftermarket and favorable commercial OE mix. We now expect operating profit growth between $350 million and $400 million versus 2024, up from our prior expectation of between $200 million and $275 million, driven by drop through and higher commercial aftermarket volume and favorable commercial OE mix. Now turning to Raytheon on slide nine, sales of $7 billion in the quarter were up 10% on both an adjusted and organic basis, driven by higher volume on land and air defense systems including International Patriot and higher volume on naval programs including multiple classified programs, SM6, and the Evolved Sea Sparrow Missile. Adjusted operating profit of $859 million was up $198 million versus the prior year, driven by favorable program mix including International Patriot, improved net productivity, and higher volume. Net productivity improved $57 million year- over- year. Recall Q3 of last year included an unfavorable impact of $53 million related to a classified program. Bookings in the quarter were $15.9 billion, resulting in a book to bill of 2.27 and a record backlog of $72 billion. International backlog represented 44% of Raytheon's total at the end of the quarter and was up 18% on a dollar basis year- over- year. Other key awards in the quarter included $1.5 billion for LTAN's production and over $500 million for Stinger production. These awards will support both domestic and international customers. On a rolling 12 month basis, Raytheon's book to bill is 1.43. Turning to Raytheon's full year outlook, we continue to expect sales to grow low single digits year- over- year on an adjusted basis and mid single digits organically. We now expect operating profit growth between $400 million and $450 million versus 2024, up from our prior expectation of between $225 million and $300 million, driven by the favorable international program mix we saw during the third quarter. With that, I'll hand it back over to Chris. Okay, thanks Nathan. We have great momentum across RTX. We delivered strong top and bottom line growth this quarter, and our end markets remain robust as seen by our recent customer wins and 1.63 book to. Bill in the quarter. Our backlog now stands at $251 billion, and we remain focused on our strategic priorities across the company, giving us confidence in our ability to deliver strong growth in sales, earnings, and free cash flow well beyond this year. With that, let's open it up for questions. In the interest of time and to allow for broader participation, you are asked to limit yourself to one question. To ask a question, you will need to press Star one on your telephone. The first question will come from the line of Rob Stallard with Vertical Research. Your line is open. Thanks very much. Good morning. Good morning. Morning, Rob. This is brief, Neil. You've raised the aerospace OEM guidance for the year, so I was wondering if you could dive into the details below that and probably in conjunction with for Chris, I suppose. How confident are you in delivering those new LEAP engines to Airbus with regard to their target for the full year? Thank you. Thanks, Rob. Let me start on the guidance and then I'll hand it over to Chris. Again, really strong quarter here in the third quarter. What we've done with our outlook is we've dropped through that goodness for the full year. Also taken up the top line. If I kind of focus that around the midpoint at the top line at the RTX level, we'll see about a $1.6 billion increase. Commercial aftermarket is a large portion of that. Commercial original equipment (OE) is about $200 million there. I'd say that $50 million of that is coming from Collins. The rest of it is at Pratt & Whitney. What we're seeing there is continued delivery strength on the Collins side, particularly as we get into the last quarter of the year here on increased rates on 737 and 787. On the Pratt side, I'd attribute that to the engine mix. On the aftermarket side, a lot of that sits at Pratt & Whitney. About $1.1 billion of the $1.6 billion that we're talking about on the increase sits inside of Pratt & Whitney, with the majority of that in the aftermarket. We had a really strong third quarter. As you heard Chris talk about, the increase in MRO output is driving GTF aftermarket. We're also seeing strong V2500 mix and heavy shop visits there. Again, letting that drop through for the full year. You'll see that both on the top and the bottom line. Finally, there's a couple hundred million dollars at Raytheon. On the defense side, we've got 10 consecutive quarters here of material receipt growth and we're continuing to get ready for the delivery of that large backlog and a backlog we expect to continue to grow. Those are the big moving pieces on the top line, of course, dropping through on the bottom line. You see the profit there. We've had some favorability on below the line items as well. We're letting that kind of come through as we stare at just 90 days to go. Hey, Rob, I'll pick it up from there. On the second part of your question on deliveries, overall we feel pretty good about how we've executed this year and supported the production ramps. Both the aircraft, for all the aircraft. You know, OEMs, we're going to continue to work very closely with Airbus to make sure that they have what they need down the stretch of the year, while also continuing to balance the allocation of material as we've talked about before, because we've got to continue to support the fleet. That's going to continue to be a focus. I'll remind folks that we're up over 50% versus our 2019 production levels. We've continued to ramp production pretty robustly and again going to work very closely with our airframe customers to make sure they have what they need so they can hit their deliveries for the end of the year. That's great. Thank you. Our next question comes from the line of Myles Walton from Wolfe Research. Your line is open. Thanks. Good morning, Neil. Maybe just a clarification first, and then. Maybe Chris, a question on Raytheon segment on the clarification, the 30% output for the full year. Just want to make sure that's 30% output for GTF and so a. Pretty steep 4Q MRO output improvement you're looking for there. Chris, on the Raytheon outlook, could you just comment on the limitations to growth? It's clearly not a demand situation here that you're poor on and would expect that the Raytheon segment revenue would start. To accelerate pretty meaningfully. Obviously, we saw some of that here in the third quarter, but raised the full year, and so maybe what are the limitations there? Yeah, thanks, Myles. Maybe your question on the GTF MRO output. I'll start there. You're right, through the year to date up about 20%. We need to get to that 30% level. MRO output, as I've said pretty consistently, is the key to continuing to push down our AOG levels. I think we're in a pretty good position to be able to hit that 30% for the full year. There are several factors that put us in that position. First, we exited September with the record number of gate restarts. As I said previously, that's the reassembly and then the testing process. I feel good about how we've come out of the gate here, no pun intended. Material flow in the critical value streams was pretty strong. Isothermal forgings were up 16% year- over- year. As I mentioned, structural castings 29% year- over -year. Another piece here is our repair network demonstrated some strong increase here in Q3, 30% year- over- year. That helps lessen the demand for new parts, which should again help the flow in gate two. We've continued to see progress with productivity in our shops and exited Q3 in September with about 80% of our MRO completions on the GTF averaging 110 day turnaround time in the shop, and that's on heavier work scopes. Those are the things that I think put us in position to go drive here in the fourth quarter on MRO output ultimately to support the fleet. On your questions on Raytheon, I'll invite Neil to come in as well if he wants to talk about some of the puts and takes in the quarter. Overall, the headline story here is just continued exceptionally strong demand. The book to bill in the quarter at 2.27, $16 billion of new orders. The demand is there, and we're continuing to invest in capacity to ensure that demand can be met. You heard us talk about the $300 million this year. If you just think about since 2020, just at Raytheon alone, it's been about $1 billion on capacity expansions and automation. For us, it's looking at the supply chain and making sure that it continues to be healthy. We're seeing our 10th consecutive quarter of material receipts growth, which is great. We've got to continue to see that accelerate upwards across all of our critical value streams, whether that be microelectronics, rocket motors, and the like. While performance has stabilized and been good, we need to continue to see that accelerate 2026 and beyond because the demand is there. Chris, I'll just add to that a little bit. You know, Myles, you alluded to it. The third quarter is seeing a very substantial 10% organic growth at Raytheon. If you look under the covers there, just a couple anecdotes. Our Naval Power business is in line with that level of growth, but our Land and Air Defense Systems business is significantly higher than that. That growth that you're talking about, we're seeing come through in that side of the business in particular as it relates to Patriot and GEM-T output. The business is very diverse, as you know. When you look at it at the Raytheon level, I still think we're going to see very strong aggregate organic growth going forward. Certainly within the areas of munitions and air defense systems, we're seeing growth that's well above what we're reporting at the Raytheon level. Thanks. You're welcome. Next question comes from the line of Peter Arment from Baird. Your line is open. Yeah, thanks. Se. Good morning, Chris and Neil, nice results. Thanks, Peter. Maybe, just maybe we just stick with. In Raytheon, it's not just been a top line story or the backlog. You've also had really good performance on the margin side of things. You continue to show really good margin expansion. How should we think about that? This continues to see growth accelerate. You've got higher international mix. Maybe just walk us through your thinking around Raytheon's margins, but longer term. Thanks. Yeah, Peter, you're absolutely right. When we talk about the backlog at RTX. Raytheon, which is substantial, huge orders in the quarter. If you think about the international portion of that backlog, it now sits at about 44%. Our top three programs in that backlog are international. That certainly provides a tailwind. I would also tell you the team continues to focus heavily on our core operating system and driving productivity and efficiency in our shops to take costs down and to drive productivity. I can give you a number of examples this year where Phil and the team have used our core operating principles to drive increased production and to drive down cost. If you just think about some of our top programs, we're going to have significant increases in production this year. Just think AMRAAM, you think GEM-T, Coyote. Significant production ramps again enabled by more efficiency in our shops, which again drives down cost and provides some margin tailwind. Peter, I'll add that during the third quarter, really pleased to see positive productivity on top of significant year over year productivity. Obviously we had a one-time item last year, but year to date it's about $75 million or so of productivity improvement. That's on top of $160 million last year. The business is getting back to its formula of driving efficiencies and driving productivity. Clearly the growing backlog creates more opportunities for us to do that. Those are significant items here in the quarter. The mix was heavily international focused, particularly on the Patriot deliveries. We'll see that change a little bit in the fourth quarter. Long term, as Chris said, the mix of the backlog supports an expanding margin and we're happy to see the productivity continuing to develop in the business. The only thing I would add to that, Peter, just to build on Neil's comment, is it's not only the mix of international and domestic, it's the mix in terms of the product that you're seeing in there. In terms of the $16 billion in orders this particular quarter, $8 billion in factors. Those are things directly in the core capabilities of Raytheon where we've got mature processes, where we've been able to historically yield productivity. Another piece of good news on that front. Appreciate the caller. Thanks, guys. You're welcome. Next question comes from the line of Scott Deuschle with Deutsche Bank. Your line is open. Hey, good morning. Morning, Scott. Hey, Scott. Neil, looks like Pratt Commercial OE revenue. Was up 5% on 6% higher shipments. The GTF spare engine ratio was. Down year over year this quarter? Are these spare engines just being. Heavily discounted for the customers that are. Impacted by the powder metal issue? Just trying to understand. Yeah, I wouldn't say, you know, thanks, Scott, for the question. I would not say that our spare engines are being heavily discounted. As you all know and as Chris has talked about earlier today, we're balancing the output of installs, spares, and material to the MRO network, and we're doing the same thing here in the third quarter. I would not say there's any major difference in the level of mix between OE and spares that we saw in the quarter. As we've talked about in the past, we expect that to continue. There's a lot of demand for all of these engines, whether they're going to Airbus, whether they're going directly to an airline customer, or material heading into the MRO network. Nothing unique there in the quarter. As we look at the fourth quarter, we do expect continued OE step up there on a year- over- year basis. There'll be a little bit more headwind from that higher negative engine margin in the fourth quarter, but again, still expect reasonable balance of spares and the typical fourth quarter aftermarket performance from Pratt. Great, thank you. You're welcome. Next question comes from the line of Kristine Liwag from Morgan Stanley. Your line is open. Hey, good morning everyone. Maybe touching base on the Boeing 737 Max and 787, can you level set us regarding the run rate you're currently producing and how we should think about incremental margins on these programs as volumes continue to ramp up? Ultimately, how does that expectation relate to your overall Collins margins expectations? Yeah, thanks, Christine. As it relates to Boeing ramp, first of all, really pleased to see the approval on ability to go to a higher rate on 737. I would say we are at this point aligned with Boeing on the rates that they're at now and where they want to go across Collins. As we've said before, Collins. Has delivered at a higher rate in the past. We have the capacity to support the volume ramp and feel good as this continues to go to higher rates that we're going to be prepared to support Boeing in their effort to do that. Like everything else, it's going to come down to the continued health of the supply chain. We've been very, very transparent with kind of where we are with the supply chain and what we need. That's continued to bear fruit and feel like we're in a good position to continue to support Boeing as they move forward. If I just pick up there, obviously when we set the outlook at the beginning of the year, we had a set of assumptions and we were delivering to that. There was a little bit of inventory in the channel. Now that we're almost, we're more than three quarters of the way through the year, a lot of that is behind us. We're pretty synchronized with Boeing and their delivery schedule. Obviously, the mix of higher 787, as you all know, on the Collins side comes with some margin challenges. Longer term, as Chris alluded to here, these rates are increasing back to levels that we've capacitized for. We'll get better absorption. That will contribute to the continuation of margin expansion in the Collins business as it relates to the OE business. As you get more and more of these new aircraft out there, along with that comes provisioning and the aftermarket that goes along with all of that. I think it's right on track. We'll be back January with a little bit more precise outlook for next year, but we see growth ahead on the Collins front. Great, thank you. Next question comes from the line of Gautam Khanna from TD Cowen. Your line is open. Yeah, thanks. Good morning, guys. Hey, Gautam. Was wondering if you could just update us on your expectations through 2026 on the GTF compensation payments. Has there been any change to the timing of when we get down to a much lower level of AOGs and the like. Is the provision still adequate? Thanks, Gautam. I'll take that one. Today we sit here and the financial outlook remains consistent with the outlook that we've had for now a couple of years. The team continues to be disciplined with our compensation payments to our customers. I'd say we're right on track with where we expected to be this year. We have some more to go, a little bit heavier fourth quarter payments. That was all planned and contemplated in our outlook. We said between $1.1 billion and $1.3 billion for the year, so the residual falls into next year. I'd say right now, no change to that outlook, it seems on track. Thank you. You're welcome. Next question comes from the line of Ron Epstein with Bank of America. Your line is open. Hey. Yeah, good morning, guys. Can you speak a little bit to the margins in Collins? It seems like the incremental margins might have been a little bit weaker than what we were thinking. Is that tariff related, or how should we think about that? Hey, Ron, good morning. Yeah, definitely tariff related. During the quarter, Collins saw about $90 million of headwind from year- over- year tariffs, actually the same number that Pratt saw for the quarter. I think if you put that aside, the team's doing a great job making that a smaller number as we move forward. A number of mitigations have been identified, but that's really the key driver there in what's dragging down the margins. I think as we go forward, we continue to do a lot of work to continue to support our products and qualification for USMCA treatment or bonds as we re-export material outside of the United States, and of course, pricing. There's an opportunity there to continue to mitigate the headwinds. That's what you saw in the third quarter and you'll see that again in the fourth quarter, obviously, for both Collins and Pratt, too. Got you. Thank you very much. Yeah, you're welcome. Next question comes from the line of Sheila Kahyaoglu with Jefferies. Your line is open. Good morning, guys, and thank you for the time. Maybe if I could go back to Pratt and if we could just talk about the moving pieces for the top line and also the bottom line just on commercial. We raised commercial OE revenue guidance by $150 million. Pratt pointing to mix. How do we think about, you know, is that just the GTF advantage coming in? So higher revenues per engine and the spares mix and then how that factors into the bottom line with the negative engine margin headwind, is it still $150 million - $200 million in 2025? How do we think about the higher MRO output into the fourth quarter and into 2026? Sure. Let me take that, Sheila. As I said earlier on the call here, the Pratt uptick in the revenue outlook is about $1.1 billion at the midpoint of our guidance. About $150 million of that is on the OE side. I would say it has nothing to do with the GTF engine advantage at this point. It's really just finalization of the year, the mix of spare engines versus installed engines, and the volumes that we see there. That's what's driving the top line there. Frankly, we're also seeing about $100 million on the defense side of Pratt & Whitney. We were happy to get the Lot 18 production contract executed in the third quarter. That drove most of the growth that Pratt saw on the military side in the third quarter. As we play that forward, the material receipts coming in, we expect a little bit of upside there. The rest sits in the aftermarket. If you think about the third quarter and the fourth quarter, MRO output that we've just talked about comes with revenue. There's a heavy mix of that towards the GTF engine. Obviously, that comes with some profit, but not the same kind of profits that we see on the V2500. That said, on the V2500, I talked about 800 shop visits for the full year. I'd say we're right on track. It's been pretty linear throughout the first three quarters of the year, so expect another quarter of about the same level of volume. On the V2500, those shop visits are getting a little bit heavier, and that's what you're seeing in the top line. Of course, that's dropping to the bottom line as it relates to full year negative engine margin. No change to the outlook from the beginning of the year. Still within that $150 - $200 year-over-year headwind. I expect it's going to land somewhere in the middle of that at the. End of the year. Great, thank you. You're welcome. Next question comes from the line of Seth Seifman with JP Morgan. Your line is open. Hello. Hey, good morning. Just a quick clarification and question. Just following up on Sheila's question at Pratt & Whitney. Given negative engine margin outlook still the same, are we still thinking about 14% growth in GTF deliveries for the year, which implies a very, very strong Q4? As a question, I guess as we think about where the company is going to exit this year, balance sheet should be getting into better shape. How do you think about capital deployment as we go forward and maybe balancing the ability to start returning some cash along with maybe some of the investment requirements that might be ahead, especially on the defense side? Yep, thanks. Appreciate the question there. As it relates to GTF engines, as it relates to that, when we started the year, I talked about growth that was similar to last year. Didn't put an exact number on it. As I sit here today, I think we're going to end up in the high single digit rather growth rate. So think about 8% - 10% kind of range so that you could do the math on the fourth quarter there. Broader thinking about capital return, we were really pleased with the level of debt pay down that we've made year to date. As you all know, we did some buyback a number of years ago. We took some debt out. We've been repaying that over the last couple of years. Continue to do that as we move into next year and get back to the levels that we enjoyed of debt before executing that transaction. I think as we step back, we're prioritizing the dividend as we always have and we expect that to continue to grow with earnings over the next couple of years and then making sure that we're making the right investments in the business for the future. Research and development capital, we've got a healthy level of CapEx invested expected this year, $2.5 billion - $2.7 billion. Similar amounts of company funded R&D throughout the business this year and I expect that to continue as we look forward. Yeah, no, just to emphasize something that Neil said there, which he's spot on, and that's, you know, as the need for investment in defense potentially continues to grow, those are things that historically we've been able to do in addition to our capital deployment and allocation strategy. If you just look at our average investment, it's about $1.5 billion a year company-funded investment in defense capacity, automation, R&D. We've been able to continue to invest where the business cases make sense. For us, Seth, it's really a conversation with the government around long-term demand signal. How do we build a business case around investing when we can have visibility into the long-term demand, when we've seen it and when we feel good about it, you know, we've invested. I think in terms of the capital deployment strategy, it's an and not an or. We can do both. Great, very helpful, thanks. Next question comes from the line of Scott Mikus from Melius Research. Your line is open. Morning Christopher and Neil. Scott, good morning. Chris, you mentioned V2500 retirements have been low and that's a trend we've seen coming out of COVID. We're kind of at a point where ASK, at least domestic ASK, are growing below the pre-COVID trend. Next year Boeing and Airbus will probably deliver 1,300 narrow bodies. We'll have potentially hundreds of GTF-powered aircraft returning to service. When you think about V2500 shop visibility into next year, are you requiring customers to put down deposits to reserve shop visits just to make them a little bit more sticky? Yeah, thanks for the question, Scott. Neil said this up front. The demand for the V2500 continues to be strong, and that's separate and apart from what you just mentioned. That's because, frankly, it's the dynamic of what's going on in the fleet. Obviously, people need to continue to use their V2500s, but it's also the characteristics of that fleet. It's still a relatively young fleet. Average age is 15 years. 15% haven't seen a first shop visit. 40% haven't seen a second shop visit. There is just natural, significant aftermarket runway ahead on that program. Customers love the application, and we feel good about the demand on this going forward, frankly, above where we thought it would be a year, two years ago. It continues to have runway. All right, thank you. Next question comes from the line of Doug Harned with Bernstein. Your line is open. Good morning. Thank you, Doug. On Raytheon, you talked some. About margins before this quarter. You got over that 12% level. I know you've been looking at for some time. When you talk about the opportunities. Here, higher volumes, more international, more mature. Fixed price work. Are you kind of Where you want to be already, or can we see more upside from here on margins as you go forward over the next few years? Because it does set up well. Yeah, you know, Doug, we're really pleased again with where Raytheon is. I mentioned before, demand is the big headline. If you think about the composition of that backlog, the growing piece, that's international at 44%, that's up from a year ago. I feel really good about the mix and the tailwind that it can provide. I'll also remind folks that when you think about the $50 billion in the reconciliation for munitions replenishment and Golden Dome for America, those things are not in our backlog today. Those are potentially additive to the backlog. Again, Doug, we're going to need to continue to see supply chain health to get to these levels. As you know, it's a very interconnected supply chain within defense. If you want to raise production on a number of programs, you've got to make sure that you're deconflicting some of those suppliers, making sure we're bringing new suppliers to bear to be able to meet the ramp here. That's going to be the critical piece here in our ability to convert this into upside. It's not going to be the demand and it's not going to be the composition of the backlog. It's are we going to get the supply chain in a healthy enough place to be able to deliver at these higher rates? I will tell you that that's been a focus area of ours. Next question comes from the line of Ken Herbert with RBC. Your line is open. Yeah, good morning. Thanks, Chris and Neil, I wanted to see if you can talk about the up 13% in the Collins aftermarket and specifically the pieces within that and what you're seeing on the retrofit side. I also wanted to see for both Collins and Pratt for sort of catalog pricing. Have you, are you getting similar levels on spare parts this year to last year or are you seeing any incremental pushback on the catalog pricing this year from customers? Yeah, thanks, Ken. Maybe just briefly on Collins and then Neil can add some additional color again. Collins double digit organic growth in all three of its aftermarket channels, parts and repair, provisioning mods and upgrades. Very good about the strength we're seeing in the Collins aftermarket. As you know, it's got over $100 billion of out of warranty installed base. An incredibly strong position to work from from an aftermarket growth perspective on the pricing for both Pratt and Collins. Again, given what's going on in terms of tariffs and given the demand in the marketplace, I think both have been appropriately aggressive in pricing this year. As we look towards next year, got to see how things shake out on the tariff front. We're going to continue to be aggressive in terms of catalog pricing because of the value that we bring and because of the demand that's out there. To add some color on the quarter's aftermarket performance, I think what was notable was the parts and repair. We're seeing 13% organic growth there. That's indicative of aircraft that are flying that need sort of the break fix type of aftermarket that Collins has, which comes with very good margins. I think that was encouraging to see on the mods and upgrades, up 17% organic. If you look a little bit into that, you're going to see that the interiors business was up significantly during the quarter. Top line growth, really, really strong. Still working through some older contracts there. I would tell you on the top line, delivering that backlog, positioned for continued growth as well as expanding margins on the interiors business, which is one of the items that will fuel next year's margin expansion for Collins. Our last question comes from the line of Gavin Parsons with UBS. Your line is open. Thank you. Morning. Morning. Hey, good morning, guys. I wanted to ask about 2026 free cash flow conversion. You made some recent comments, and there's A little bit of market confusion or investor confusion around that. If you could bridge some. Of the major moving pieces as we go into 2026, why reiterate the 2025 free cash guide while raising everything else? Thank you. Thanks. Let me start with 2025. You know, we set out the year with a goal of $7 billion - $7.5 billion of free cash flow. As we sit here today, we're very comfortable with that for the full year. There's been some moving pieces. I'll remind you, back in the second quarter, we had some tariff headwind that we onboarded, about $600 million. We offset that with lower cash taxes for the year, so that sort of neutralized. As you kind of roll forward to where we sit today, obviously we're getting stronger operating profit and we're seeing a little bit of growth in the inventory, or I'd say less reduction in the inventory. We were pleased to see inventory come down a couple hundred million dollars sequentially, Q2 to Q3. Things are moving in the right direction. I think we'll see another few hundred million dollars of inventory reduction as we exit the year. There's been some stocking there to prepare for this continued growth. We're making sure that we balance our sales and inventory and ops planning, using the core operating system to do that. That was one of the things that sort of offset a little bit here in the fourth quarter. That said, really strong collections in the third quarter. We had catch up from the Pratt & Whitney work stoppage in the second quarter. That helped bolster the results. We also had some advances that the Raytheon system in particular, as well as the execution of the Lot 18 contract at Pratt, brought some cash into the third quarter, things that were planned in the fourth quarter. As we sit here and you look at the implied fourth quarter, very achievable, positioning us, I think, for a nice start to 2026 as well. I'm not going to get into the specifics of 2026, but if you look at 2025 and you think about the $7.25 billion at the midpoint, you also think about the level of powdered metal compensation embedded in that, you can see that our baseline free cash flow is in the $8 billion - $8.5 billion range. Next year, as we look forward, obviously we expect powdered metal payments to come down. Working capital still remains an opportunity for us. We have very heavy levels, but we have very heavy growth plans ahead of us. We'll be balancing that as we move forward. I'll be back in January to provide a more detailed walk on that front. Yeah, maybe just to add to it, Gavin. I think long term, we think the 90% - 100% of free cash flow is where this business is positioned to sit. If you just step back, you've got some momentum around that with some of the fundamental attributes in this business. A $251 billion backlog in place to drive growth. Commercial OE production is ramping. Air traffic has been resilient. Of course, we've got large installed base, Collins and Pratt, which have long aftermarket tails. We've talked a lot today about the growth in defense spending. Put all those things together and that's where we get to that, you know, longer term, 90% - 100%, you know, conversion. Thanks a lot. With that, there are no more analysts in the queue, so I will now turn the call back over to Nathan Ware. All right, thank you, Desiree. That concludes today's call. As always, the Investor Relations team will. Be available for follow-up questions. Thank you all for joining us and have a good day. This now concludes today's conference. You may now disconnect.