Okay, we'll get started. Good morning, everybody. Welcome to Spirit AeroSystems 2022 Investor Day. I'm Aaron Hunt, Director of Investor Relations. We've got a lot of good information to share with you today. Before we do that, I need to remind you that any forward-looking statements, goals, and objectives we make may include in our discussions are likely to involve risks, which are detailed in our news release and our SEC filings. I have a few logistics to cover with you before we get started. Presentations will be available on our investor relations website, as well as a replay of this event. We'll have a question and answer session today. In-person questions will be taken live, so please wait for a microphone before asking your questions. Ryan and Jessica will run a microphone to you. Virtual participants can submit questions any time during the event using the question and answer box on your screen. The virtual questions will be asked by a moderator during the session. Finally, technology exhibits, as well as lunch, will be available in the room next door for our Wichita participants after the event. Let's take a quick look at the agenda. First, Tom will get up and talk about our business and strategy. Mark is gonna get into some details about our segments and our financial outlook. Sam, Duane, and Kailash will go over some of their key priorities. Kevin will give you some details about how we're thinking about research and technology, as well as our quality journey. We'll finish the day, as I mentioned before, with a question and answer session and closing comments from Tom. With that, I'll turn the podium over to our first speaker, President and CEO, Tom Gentile. Tom. Okay. Well, thank you, Aaron, and good morning, everybody. Welcome to Wichita. We're thrilled to be able to have an in-person meeting and actually a hybrid event where we have a lot of people who are joining us digitally. But we appreciate the effort that so many of you made to get here to Wichita because part of what we wanted to show and communicate are some of the changes to our factory, which have taken place over the last couple years. We're proud of those, but also wanted to be able to highlight how much impact that they'll have as we start to go up and rate as we start to emerge from this pandemic. You know, an event like this obviously takes a lot of planning, and so thank you to our investor relations team, our audiovisual team for pulling everything together. Timing, of course, is not great. Right now we're still emerging from the pandemic. We knew we would be where we are on that. We, of course, couldn't anticipate the events in Ukraine, which is really a humanitarian issue. It's a military issue. We couldn't anticipate those events, but we decided to go forward with our in-person event anyway. We have a lot to talk about in terms of some of the changes that have happened to Spirit, where we're going in the future. The presentations this morning will give you a much better sense of that. I thought what I would do is start off by really going back and looking at the challenges that we faced the last two years. There have been two major crises. The first was the MAX grounding and then the subsequent halt in production, which occurred at the end of 2019. There were the two tragic crashes in Indonesia and in Ethiopia. What that resulted first was the plane got grounded. Boeing kept building, as you recall, at 42 aircraft per month. Eventually, they had 470 aircraft that were stored at different locations around Seattle and other places. We kept producing at 52 aircraft per month, thinking that it would be a fairly short-lived grounding and that everything would resume again and we would be able to burn off any inventory. We ended up at one point with about 140 shipsets that were stored. You can see the pictures of the fuselages stored right across the street on Air Capital Flight Line, which is adjacent to McConnell Air Force Base. Coming at the end of 2019, when Boeing made the decision to really stop production for a period of time, that was already a major crisis for us. MAX represented half our revenue. We make 70% of the structure of the MAX. We're a proud partner on the MAX. It's a great aircraft, but obviously, that created a lot of challenge for us. Really just a couple of months later, we were in the middle of the pandemic. I mean, the early signs of the pandemic were already apparent at the end of January 2020. The Singapore Airshow was almost canceled. It wasn't canceled, but attendance dropped precipitously in 2019 in February. Then in mid-March, everything shut down. It was about March 13 or so when all the lockdowns started. You can see the decrease in air traffic. It dropped 96% by the end of March 2020, which is the biggest drop in the history of the aviation industry. Even after 9/11, air traffic only dropped about 15 or 20%, and it recovered in about 3 months. As you can see, it's been almost 2 years, and we still have not recovered to the levels that we were at before. In fact, domestic traffic has recovered faster. It's about 85% recovered to 2019 levels. International traffic is still far below where it was. The overall is still down. The picture at the bottom shows some of the things that we did. We had to take a lot of precautions. These are some employees making masks. In fact, this picture is of a factory we set up at the end of March and into April 2020 to produce ventilators. That's Governor Laura Kelly of Kansas on the far right. We produced over 20,000 critical care ventilators, which we shipped around the world to help fight the pandemic and also to leverage some of the excess capacity in the workers that we had. At one point, we had over 1,000 workers trained, working in the factory, three shifts. When we started, Vyaire, our partner, was building 3 ventilators a day. We got it up to 500 or 300 ventilators a week. We got it up to 500 per day and ended up shipping 20,000 around the world. That was the two crises that we faced throughout 2020, and it had a big impact on us. Our deliveries overall fell 48%, but the MAX went from 606 units in 2019 to 72 units in 2020, a drop of 90%. That, of course, had a big impact on our revenue. We were at about $8 billion in 2019, dropped to $3.4 billion in 2020. Our free cash flow went from about $690 million in 2019 to negative $870 million or so in 2020. It was a big drop. Liquidity was very important. Because of that, obviously, we had our credit rating downgraded, and we went from an investment-grade credit rating to something far less. We had three separate drops, and we had to renegotiate our covenants with the banks on three separate occasions. Very challenging time. We responded aggressively. The first thing we did is we had to keep employees safe. We kept producing right through the pandemic. Yes, deliveries were down, but even the MAX, there were still some deliveries, and on our defense customers, there were a lot of deliveries. We never missed a single delivery during that time. We put in place protocols. We had people wear masks. Some people worked remotely when they could, but the vast majority, 85% of our people, were here the entire time. We did in fact get all of our U.S. workers back by June 2021, and we've been there ever since. We managed to get through the pandemic, keep delivering, but kept our employees safe. We also had to align our costs to lower levels of production, and we did reduce our commercial headcount by more than 8,000 people, and we took out over $1 billion of cost, about 40% of our total cost. We had to make some very difficult decisions under very tight timetables, but we had to do that in order to stabilize the company. Of course, the last thing was liquidity. We had to take a lot of liquidity actions to ensure that we had enough cash to weather the entire storm. Part of that was raising bonds in the debt market. Our partners here from Bank of America really led the charge with us on that, and we appreciated that. We had two different offerings, both ended up being oversubscribed substantially, so that was good. We also mutually terminated our acquisition of Asco, which was a $450 million acquisition, and we negotiated a significant discount with Bombardier to reflect the different environment that we faced in the pandemic. In total, along with reducing capital expenditures and cutting our dividend, it was about $3 billion worth of liquidity actions that really put us in a stable position while rates were down. Our focus coming out of the pandemic is really to come back as a stronger company and a more diversified company. The three key issues, first is this diversification. I'll show you some of the concentration levels that we had, but it was imperative for us to think about how do we get a broader base set of customers coming out of the pandemic so that we could really be in stronger position. What we've talked about is a vision of where we are 40% commercial, 40% Defense and Space, and 20% aftermarket. The second big priority is delever. We took on an additional $2.1 billion of debt during the pandemic. That took our total debt up at one point to about $3.8 billion, and we lost our investment-grade credit rating. One of our focuses is to pay down debt. We've said we wanna get $1 billion out between 2020 and 2023, and we've paid down $300 million already. Mark's gonna talk a little bit more about this. With the goal of getting our investment-grade credit rating back and reducing the interest rates that we pay, and so therefore lowering the total interest expense so that we free up cash flow for innovation and growth. The last thing is to drive margins, is to get back to margins where we were back in 2016 when we were stable, producing one type of major aircraft on the MAX side and we're at 42 aircraft per month. To get back to 16.5% margins, once the MAX gets back to a level of 42 aircraft per month. These are the three major strategic objectives that we have. Let's go through these a little bit more. In terms of diversification, going into the pandemic, it was very clear we were too concentrated. We were too concentrated in terms of original equipment, 98%. We were too concentrated in terms of commercial aerospace, about 95%. Boeing represented 79% of our revenue in 2019, and the MAX was 50%. This level of concentration meant that we traded at a discount to our peers. You know, structures is by definition lower margin than some of the other segments of aviation, and we don't have as much aftermarket typically. I always like to say we build things right the first time. We don't need as much aftermarket. Nevertheless, the concentration did cause us to trade at a discount to our peers, and you all know the numbers very well. It was an objective for us to say, how do we start to diversify? Yes, it was difficult in 2020 when the market was so low for us to think about diversification, but it was that important strategically that it was worth making the effort. The biggest thing that turned this around was the acquisition of Bombardier's assets, their aerostructures assets. In Belfast, Ireland, this was the old Short Brothers, which has a huge legacy, goes back to 1908 when the three Short brothers built the first Wright Flyers in Europe in partnership with Orville and Wilbur Wright. They also were very active during World War II, building aircraft for the U.K. war effort. It also had an operation in Casablanca, a low-cost country, very competitive, very highly skilled, and then an aftermarket operation in Dallas. It came with a significant amount of assets, but what it really did strategically is help us along our strategic journey as we thought about how we can continue to grow and diversify. First, it gave us a lot of Airbus content. On the A220, we build the entire integrated composite wing. It's plug-and-play. When we ship it to Airbus in Montreal now and in Mobile, they simply connect it. All of the hydraulics, everything is in working order, very active thing. That made us one of Airbus's top 10 suppliers and their biggest structure suppliers, even bigger than Airbus Atlantic and PAG. It also gave us a lot of business in terms of business jets, four times the size. Bombardier becomes one of our biggest customers. We have now significant work packages on the Challenger and the Global Express, and business jets is gonna become a big market for us and a very profitable one. In addition, we got a lot of aftermarket. It doubled our aftermarket content and gave us significant maintenance repair and overhaul, and I'll take you through it, but more on Airbus, but similar things in terms of flight control surfaces, nacelles, and thrust reversers.. It gave us a significant base in terms of aftermarket, and it even gave us some defense. We didn't know it when we were first started doing the due diligence, but they were bidding in Belfast, the Project Mosquito with the U.K. Ministry of Defence, which is an attritable drone, a loyal wingman, so it's similar to the Skyborg program in the U.S. Fundamentally, it gave us a much broader portfolio and a foundation for future diversification. As I said, it made us one of Airbus's largest customers. It gave us growth opportunities in business jets and a significant aftermarket capability. It was really a transformative deal for us. What it allowed us to do is to think differently about our business. Previously, we reported, as you all well know, in terms of the structures we built, fuselages, which is about 50%, then wings, which is about 25%, and propulsion, which included things like the pylons that hold the engines to the wing, the thrust reversers, and the nacelles. That's how we presented ourselves, and that was really how Spirit did operate once, when we separated from Boeing back in 2005. Over time, as we started to shift, it became less and less the way we operated. Certainly, after the Bombardier acquisition, we could think of our business differently, very differently, in fact. We shifted to these new segments: Commercial, Defense and Space, and Aftermarket. In our last call, our fourth quarter earnings call, we now present our results with these segments. We fundamentally have changed the way we look to the market and the way we operate and the way we are organized, in fact. We changed our organization, and we aligned around these three segments. Sam Marnick, who you'll hear from a little bit later, leads our Commercial group. Duane Hawkins, you'll also hear from Duane today. He leads our Defense and Space group, and Kailash Krishnaswamy leads our Aftermarket group. They'll each describe their businesses, but this was a fundamental shift in terms of how we present ourselves externally and how we're organized internally to go to market. Let's just talk about commercial, because growth is important there. Of course, Boeing and Airbus remain critically important. The other thing that remains critically important are narrow bodies, because our backlog is still $35 billion, 85% of which is narrow bodies. As domestic travel recovers, and it's recovering first and fastest, it favors narrow body aircraft. Boeing has said they're gonna increase their rates. They've said they'll be at 31 aircraft per month in early 2022. Airbus has also committed to increasing their rates. They remained at about 40 through the pandemic. They're now at about 50. They're saying they'll be at 65 by mid-2023. Even the A220 is gonna go up from about 4 today to 14 by mid-2025. But in addition, there's a lot of other growth opportunities that Sam will talk about. I mentioned business jets. We have a significant relationship now with Bombardier. We also still have our relationship with Rolls-Royce on the BR725, which is the engine for the 650 at Gulfstream, and we make the entire nacelle and thrust reverser. We won the nacelle and thrust reverser on the RB3070, which is the engine that's gonna go on the Falcon 10X. We have a significant opportunity to continue to grow business jets to $500 million by 2023 at very good margins. There's other emerging opportunities in commercial, like electric vertical takeoff and landing. Even our fab business, as we continue to grow that for rate with 737, we have one of the biggest fabrication businesses in the world. We make more than 38,000 parts, 3-, 4-, 5-axis machining, skins, chemical processing. We have a very significant opportunity to continue to grow fabrication. Commercial has a lot of growth opportunity. We also have a very big opportunity in defense and space, and DuaneDuane will go through this. We see five areas that are natural adjacencies for us as we go forward. The first is next-generation aircraft programs. We already build aircraft like the P-8 and the KC-46. Those are military derivatives of Boeing commercial aircraft, the 737 and the 767. Going forward, we're bidding on work with Bell for the FLRAA, the Future Long-Range Assault Aircraft, for the Army's future vertical lift. That would replace the Black Hawk helicopters. We're also working on the B-21. We are one of seven suppliers that was named to that program. In addition, we've been able to grow a number of other programs in defense. Next generation effects. Missiles in effect are big structures, and there's opportunities for us to contribute to that. Hypersonics. When we bought FMI in the first part of 2020, we became one of the leaders in a high-temperature material called 3D woven carbon-carbon, which is used in high-temperature applications like hypersonics, so we can play a significant role there. Unmanned aircraft systems, attritable drones, loyal wingmen, these are structures. What we're doing with Project Mosquito in the U.K. will play very well for what we can do in this area. Then lastly, space. The vehicles that they're talking about to go into space and even come back, again, are structures and play very well into the core strengths for Spirit. We have a lot of growth opportunities here. In aftermarket, this is also a big opportunity. I would say we have a very strong niche position on some high-margin repair activities as well as spare parts. Before we did the Bombardier deal, we had our Wichita operations, and we could repair flight control surfaces like slats and flaps and elevators and rudders, as well as nacelles and inlets and thrust reversers, but for Boeing products primarily. When we did the deal with Bombardier, we got those same capabilities on flight control surfaces, nacelles, inlets, and thrust reversers, but on Airbus products in Europe. We were able to start cross-pollinating those capabilities immediately. We then were able to do a partnership with EGAT in Taiwan so that we had an Asian base of operations where we could do those same repairs. We were able to do an acquisition, a small acquisition of Applied Aerodynamics, and they repair radomes. A very specialized structure, which is at the nose of the aircraft, and it tends to be what is at the nose, and behind it are all the communication and radar equipment. It's a very important structure, and as you can imagine, because it's at the front of the nose, it gets damaged a lot, bird strikes, things like that, and they need constant repairs. We were able to put that in the U.S., in Europe, and in Asia. Where we go from here is we keep adding repairs and capabilities, and we keep adding geographies like China, Latin America, eventually the Middle East. This is how we think we can continue to grow our aftermarket business and maintain steady growth to get to $500 million by 2025 at margins in excess of 20%. This diversification effort is starting to pay off, and we're starting to see some results. When we go back to 2019, Boeing was 79% of our revenue, and everything else was 21%. This year, as we reported in our 10-K and in our earnings result, commercial was 79%. Of that, Boeing was about 56%, and Airbus was about 23%. We've already seen some significant diversification there. Defense is already 15% of our business,a nd aftermarket is 6%. Now, the defense, Duane's gonna go through this. Unfortunately, a lot of the work that we're doing is classified, so we can't go into details. What we can say is that we've been able to win a lot of new work because we have capacity available. Now, it's true that domestic travel is recovering first. That favors narrow body. International travel is taking longer to recover. That is gonna impact wide body production. Wide body production may not ever get back to the levels that it was. In other words, the 787 was at 14 aircraft per month, unlikely to return to that. 777 at one time, back in 2016, was at 8 aircraft per month. It may not return to that. We've been taking a lot of that excess wide body capacity and shifting it to defense. Back in 2016, we had just 1 program above $1 million. Today, we have 24. Today, we have about 500,000 sq ft in our plants that are dedicated to defense work. In a couple of years, it'll be 1 million. That gives you a sense of the growth that we're experiencing with just the programs that we're on as they get into production. Going forward, as we continue to win new work, that organic growth will continue to grow. Ultimately, our vision is 40, 20. It's gonna take us some time to get there. It won't all be organic, but that is what we would like to see Spirit have a very broad-based business with multiple customers and different revenue sources coming from these different areas, which will help us be a more solid, stable company and one that is ultimately more valuable to all of our stakeholders, our customers, our employees, our suppliers, our investors, and the communities in which we operate. In terms of delevering, what we wanna do is pay down the debt that we took on during the pandemic, and we said we want to pay down $1 billion over 3 years. We started off in 2020. We paid off a $300 million note. We have another note in 2023 for $300 million that we'll pay down. The goal really here is by paying down debt, we can re-regain our investment-grade credit rating and ultimately get better interest rates to lower our interest expense. In 2021, as we reported, our interest expense was $240 million, which is significant. Obviously, we would like to drive that back down to where it was a few years ago with investment-grade credit rating. This is the objective here. Mark will go into a lot more detail, but this is the idea on the delever. In terms of driving margins, we wanna get our margins back to where they were in 2016 when we were much more stable. Back then, we were producing one form of the 737. It was the NG. We were at 42 aircraft per month. What we'd like to do is get back to those levels. Now, lots has changed. We have more headwinds with wide-body production, but we've also made a lot of progress. Let me just go through some of the things that will help us drive our margin. First, we're redoing the flow of some of our factories. So you got a chance to see Plant 2 yesterday, where we build the 737 fuselage. When we started back in 2019, we were going up to 57 aircraft per month. It had been built up over 50 years. Things had just been put where they fit, and it wasn't coordinated, it wasn't lean, it wasn't linear. What we've done since is we've completely changed the flow of Plant 2. We've moved a lot of the big intermediate sections out, I'll show you that in a second, and we streamlined and made the flow more lean so that we can improve quality, delivery, and productivity. One of the things that we did is we took out the Section 41, the forward fuselage, that used to be built in Plant 2. There were a lot of crane moves associated with it. We moved it across the street to what we call the Northeast Manufacturing Facility. We are now extending that so that we can go up in rate over time. This is adding about 120,000 sq ft of new capacity. We've also moved out Section 11, the wing box. A part of it has gone to one of our suppliers, Horsch in Cheney. The other part of it is going to our facility down in Tulsa. The 747, we built the wing box, many components of the wing box in Tulsa. That building, about 120,000 sq ft, is now being repurposed to Section 11 for 737. We've been able to free up over 125,000 sq ft in that Plant 2 to make it more lean by adding these additional facilities to build the subsections of the fuselage. We've also put in place a lot of automation. One of the things you saw yesterday is what we call Tar Heel, but it's our 737 floor beam automation. There are about 45-48 floor beams in every 737 MAX -8. But there are as many as 400 different configurations. What the automated line does is it automates that so that we can improve quality and productivity. You can see our flow time reduces, our touch time reduces, our work in process inventory reduces, significant benefits on the core perating metrics. We also put in place a new global digital logistics center. You had a chance to see that. It's a state-of-the-art warehousing system. It's the same type of Dematic system that Amazon uses in its fulfillment centers. It's got 26 stories. It's different levels. Things fly through there at about 25 miles an hour. We can store 2 million pieces, more than 90,000 individual parts, but very importantly, we have 8,000 unique kits now that we can retrieve, stock, and send right to the factory floor. It significantly increases our efficiency. We've also put in place a lot of robotics. One of the things on our A320 program over in Prestwick, Scotland, we put in place a new state-of-the-art resin transfer molding production system for spoilers. There are 10 spoilers on each line. We can go up now to rate 80 on this new line. A highly automated and really state-of-the-art production system as well as control system. In addition, we just put in place a new thermoplastic clip line in our Kinston facility. You can see 1,500 individual clips, 500 different part numbers on every A350. We've now pulled this in-house. It's highly automated and a lot of robotics to produce these thermoplastic clips. In addition, digitization. We've put in place a factory floor digitization, which we call Floorsight, and this helps us track the flow of all of our goods as they go through the factory, and we can manage it in a centralized way. We've got a labor optimization program, we call it Opticrew, and we're able to get the right worker assigned to the right aircraft at the right time, and make sure that they have the right training and the right certifications. We've also put in place visual work instructions. Every task that our mechanics do now, they can go to their computer terminal, and they can see not just written work instructions, but they can see visual work instructions, pictures, diagrams, even videos to help them do the job that they do. This improves quality and productivity. We've also put in place new tools, like this torque methodology that we have, where we have stored all the torque values for every single fastener on the 737 in the cloud, and mechanics can pull that off before they do their job, so they know exactly what torque value they need and confirm that the tool they have has the correct torque value. These are some of the digitization methods that we put in place. 65% of our cost comes from supply chain, and supply chain is very important. We have a six-pillar program that we've been using to drive supply chain efficiency. The first is clean sheets. We've reverse engineered virtually every part we buy, over 125,000, so we know what every part should cost in terms of labor, material, overhead, profit. What we do is we have a process to help the suppliers get to those costs. We call it our strategic sourcing process, S3P. We have teams that meet every week and go through a very disciplined rhythm. We have an operating mechanism with these meetings. We have scorecards and we drive execution to get to those clean sheet values. We've also provided a lot of supplier support to help suppliers get to these levels. During the pandemic, we provided direct support to about 600 suppliers worth $2 billion. A lot of that was contract extensions, but it was also inventory purchases, raw material purchases, processing, engineering, quality, logistics. We provided help across a lot of different mechanisms to help them get to the clean sheet values. We also put in place centers of excellence where we have capability to produce our own products. This is our fabrication division that Sam oversees. We make 38,000 different parts, 3- and 4-axis centers of excellence, 5-axis centers of excellence, skins, stretch pressing, chemical processing, very comprehensive. In addition, we use a process that we call Waves, where we bring in groups of suppliers and they bid on different work packages. We start this on a Monday, by Thursday, we're awarding the work, and we've been able to see some significant reductions and also improvements in quality and delivery. We have a very rigorous transfer of work process. We've transferred over 26,000 parts in the last few years, again, to get to the right parts with the right suppliers, with the right cost, and the right quality at the right time. This is how we have been able to drive supply chain savings. Now when you add it all together, our strategy is this. This is how we summarize it. Our vision is to be a diversified design and manufacturing champion in aerospace. The strategic priorities in terms of where we wanna compete are commercial, defense and space, and aftermarket. Then we have very focused emphasis on execution requirements. How do we get there? It's about having a very strong make-buy, a world-class supply chain, the digitization that I talked about, continue to invest in innovation, and you'll hear some more about that, and build a world-class team. Within that, we have a very strong set of values, transparency, inspiration, and collaboration. The core elements of our DNA, which are customer service, safety, quality, and delivery. That's how we think of our business, and as I talked about the three strategic objectives, diversify, delever, and drive margin. Just to summarize, Spirit is emerging from this MAX crisis. It's been a tough two years, but we're a stronger, more diversified company. Domestic travel is recovering faster, and that's good for Spirit. 85% of our backlog is narrow bodies which serve domestic routes. We're also able to really turn a potential challenge into an opportunity. Our wide body capacity is something now we can repurpose to defense work and win new defense work. As we think about our business going forward, obviously, we wanna get back to positive cash flow, but we wanna do that by paying down our debt and reducing our interest expense, getting back our investment-grade credit rating, and then getting back to the 16.5% margins through all the initiatives that I just described, and ultimately helping to diversify us to a 40/40/20 business in the future. That's how we wanna emerge stronger from the pandemic, and we'll go through a lot of the details this morning, and then we'll have some opportunity for question and answers a little bit later. With that, I'll turn it over to Mark to go through the financial details. Mark? Well, thanks, Tom, and good morning, everyone. It was great to have you guys out to visit our plant yesterday and spend some time and see the things that we've been working on over the last couple years. It was also great to have an opportunity to meet with folks last night. We were at Doc's Hangar. I hope you guys enjoyed the event. It's a wonderful place to visit. It has a lot of aircraft history, and it was just good for me to connect with some folks and meet with you face-to-face. We haven't been able to do a lot of this over the last couple years. You know, really from my standpoint, we really appreciate you guys coming out, your interest in Spirit as a company, and we think we've got a really exciting story to tell here as we move forward in our overall recovery. I'm gonna talk to financials, but my big focus is gonna be around, you know, how are we diversifying, what are we gonna do to delever, and how are we gonna go and drive margins. As Tom talked earlier, you know, big focus for us is how do we go diversify? We understand where we were pre-pandemic, heavy concentration with Boeing and the 737 program. Boeing's a great customer, right? It's our number one customer. It's our largest customer. They've got great airplane programs, and we're very, very excited to support them. As you can see, you know, our aspirational goals here, you know, as we move forward, both from an organic and an inorganic standpoint is how do we get to 40% commercial, 40% defense, and 20% aftermarket? We've made a lot of progress even through the tough times over the last 24 months, right? You know, we are gonna need as we move forward here, to look at potential acquisitions to meet our overall growth objectives. On our revenues, as you can see, and Tom talked about it previously, you know, in 2019, $7.9 billion of revenue, that's pre-acquisition of the Belfast, Morocco, and Dallas sites. 2020, the pandemic hits, MAX is grounded, revenues are $3.4 billion. We see a slight recovery in 2021, okay? $4 billion. As we think about our growth over the next several years, one is the commercial aerospace recovery. We're poised to support that. There's really not a lot of work that we need to do to achieve that growth. Single aisle is our backbone to our backlog. Boeing and Airbus are driving higher production rates on the 737 program and on the A320. Those volumes will be driven to Spirit, and that will drive a significant amount of revenue growth over the next several years. We know that over the next couple years, the twin-aisle markets are gonna continue to be challenged, right, with international travel. As we think about where we're going between now and 2025, right, we feel confident about our Defense growth, the programs that we're on in achieving $1 billion of revenue in 2025. Aftermarket is on track, and Kailash will talk about some of the growth initiatives in the area of Aftermarket to get to $500 million. We also have our business jets that are included in our commercial business with goals to achieve $500 million on that book of business by 2025. If you look at that growth, along with the growth that we will see from Boeing and Airbus as commercial aerospace recovers, we're looking at more than a 20% compounded annual growth rate between now and 2025. Now, obviously, there's a lot of upside between now and then. There's a lot of things that could happen, okay? But if you look at where we're at, we're on the backside of the pandemic. We obviously see the geopolitical challenges that are going on with the situation with Russia and Ukraine. You never know. But we have a line of sight. Narrowbodies are gonna recover, and we're gonna see that growth. And we're excited about that, and we believe that we're on track to meet those initiatives. You see where the revenue growth is, right? That growth does not include potential inorganic opportunities, right? We have a strong growth profile over the next several years. What is that gonna mean? You generate more revenue, you generate more earnings. You see over the last several years where our, what we'll call is our segment margins. Simply put, it's gross margins. In 2019, if you normalize that for cumulative catch-ups and forward losses, we generated about 14.5%. We know that we had some operational challenges in 2019 as we were going up in rate on the single-aisle platforms. We generated 14.5% margins, right? We know what happened in 2020 and 2021. A lot of challenges there. We've worked really hard to adjust our costs with the lower levels of production while investing in the business to prepare, right? Tom talked about some of the things that is gonna enable us to continue to grow our margins over the next couple of years. First and foremost, it's revenue growth, absorbing your fixed costs, right? We've got to execute. Then the initiatives that Tom talked about, and Sam will talk a lot about those as it relates to, the commercial side of things, right? Aftermarket, 20+% margins, that's steady. Defense, typical margins. Where our opportunity is on the commercial side, the largest portion of our business. Those production rates, the productivity initiatives, and all the cost takeout that we've done is ready for the taking, right? That really gives us an opportunity to hit the 16.5% margins, even with a lot of inflationary pressures. I'll let Sam talk about some of those initiatives because they're exciting, and I think you guys got to see some of those in the factory yesterday. I'm gonna spend a little time over the next couple of pages just going into the segments a little more, right? At the end of the day, Sam, Duane, and Kailash will talk about that. But if you look at the commercial segment back in 2019, right? You're looking at revenues in the area of $7 billion, 14.5% margins. We saw what happened over the last couple of years. But we're gonna be looking at growth rates in excess of 20% over the next several years. With that, you know, we're targeting approximately 16% margins on the commercial side of the business, right? Where's the revenue coming from? We talked about it. You guys are industry experts here. You guys follow our business. Narrowbodies, right? By 2025, we feel as though the twin aisle should start to recover. Probably not to the levels that we saw pre-pandemic, but higher production rates than what we're seeing today, right? We're seeing business jet demand grow, and we're really focused on growth there. We're Bombardier's largest supplier. We continue to look at other opportunities, next generation EVTOLs, and Sam will talk a little bit about that. That's gonna drive the commercial revenue. It's in front of us. It's ready for the taking, right? We've got to prepare for the rate. We've got to execute, right? We talked about the digitization, the automation projects that we have, and the focus on continuing to improve our overall business. We've got the facilities, the capital tooling in place to support the production rate climbs over the next several years, right? When we look at Defense and Space, right? Great business for us. We have come a long way. As Tom said, in 2016, it was a very, very small part of our business, one program over $1 billion. You know, we're looking at $1 billion of revenues. That's just based on our current programs that we're on today. Tom talked a little bit about the five areas that we're gonna go focus on growing in defense, and Duane will talk about that. We're looking at about a billion-dollar business by 2025 at typical defense margins, 12%-14%. Aftermarket is a great part of our business. Although it's smaller, it gets overlooked to a certain degree, but very good, strong profitability. I will tell you, there are lots of opportunities for us to grow in the area of aftermarket. As you can see in 2019, margin stable over the last three years, somewhere between 18% and 20%. In 2021, we were 21% margins, and we've got a line of sight to growth rates in excess of 20% between now and 2025, which will lead us to $500 million of revenues just organically. We're expanding our global footprint, right? We're entering new markets. We're developing new repairs. We've got that nice new business that we acquired in Dallas on the radome repairs. It's a good new book of business, and we'll continue to add, right, and drive this growth at 20%+ margins. Free cash flow. Well, one of my favorite topics, cash. Cash is really important. Obviously, we've had some challenges over the last two years as we look at our business and the declines in our overall revenues, right? We've worked hard, very hard over the last several years to adjust our costs to address our liquidity position and put us in a position to be ready for the recovery. As you can see, historically, 2018, 2019, Spirit drove free cash flow of 7%-9% as a percentage of revenues. Fundamentally, we're the same business we were pre-pandemic from a cost structure standpoint. We're a better company as we move forward than we were back then. That gives us a lot of confidence on our ability to continue to drive 7%-9% free cash flow margins, right? Production rates, our cost initiatives, right? We'll continue to focus on delevering, and I'll talk about that in a minute, and that will help us reduce our overall interest costs and our borrowing costs. Cash and debt balances over the last several years, right? We've got good liquidity, right? We've got a good amount of cash on the books. I think we've done the right things over the last couple of years to put ourselves in the position to control our own destiny as it relates to cash. We have taken on some additional debt, but over the next couple of years, right, if you look at where we've been historically, we typically, when we look at a normalized capital structure, we'll have somewhere between $500 million and $700 million of cash on the balance sheet. We'll be looking at less than 2x net debt to EBITDA. We have a line of sight when we think about our debt pay down over the next between now and the end of 2023, taking down $1 billion. We look at our revenue growth in 2023, we look at where our EBITDA is. We have a line of sight to get there. you know, we're working very hard as we get through and get more confidence that the pandemic is behind us and commercial aero is on a sustained recovery. We'll be working on a more normalized capital structure, right? Which will be beneficial to us as we move forward. Debt maturities. You know, we've had some challenges that relates to our credit rating. We were investment grade. I can tell you that I've been at Spirit for 15 years and in finance for quite a few of those years. Going back to Jeff Turner, our first CEO, one of our big goals in the area of finance was to be investment grade. Not every company wants to be investment grade. We think it's a huge goal for us. We've been there before. We know the benefits of being investment grade, and we're focused on returning to those levels. As we look forward over the next couple of years for growth, diversification, and execution, you see here from a maturity stack, we have a lot of space between now and 2025. We don't have a lot of maturities. That helps us make sure that we're doing the right things to invest in the business. You know, our big maturities don't come up until 2025, and we feel very, very good that we will be far down the recovery path, and we'll be an even stronger company to deal with those maturities in the future. Really, we'll be focused on paying down debt between now and 2023, right? We're gonna look at some opportunistic refinancing. Markets are a little choppy now with what's going on, but I think there's some opportunities for Spirit as we look at some of our debt and refinancing that in the current interest rate environment, and then focused as we move into 2023, getting back to a more normalized capital structure. Capital allocation, get this question a lot. You know, first and foremost, we're gonna use our cash and the cash that we generate to support our growth initiatives, to focus on innovation, focus on our business. Second component, right, is we need to delever the balance sheet. We need to reduce our overall debt. We wanna get back to investment grade, okay? Two big priorities. Once we achieve check that box, check the second box, the next focus is focusing in on inorganic growth. What are we gonna do to continue to allow us to move closer to 40/ 40/ 20 from a diversification standpoint? We've done 3 acquisitions during challenging times. We've got experience in that. We've been able to incorporate those businesses, fit rather seamlessly into our business and execute it quite well. We're confident that as we move forward and look at opportunities that meet our strategic and our financial goals, that we can take advantage of that. Then at that point in time, we'll have a healthy balance sheet, a strong business. We can look at opportunities to return capital back to our shareholders. As we look ahead, we talked a lot about revenue growth. With revenue growth comes strong earnings. When you generate earnings, you generate cash. For me, getting back, generating free cash flow from my seat is a very, very important goal for us, and we're making a lot of progress, right? We need to continue to be very, very disciplined in capital allocation. We'll continue to focus on that. As we think about 2022, right, it is. 2021 for us was a bridge year. 2022, we're not recovered yet. We're on the road to recovery, right? There's still some uncertainty in our business. You know, when is the 787? When is Boeing gonna start delivering on the 787? We're supporting them, right? Decisions Boeing has to make on going higher than 31 a month or 31.5 a month on 737, right? We see some of the challenges due to the Ukraine and Russia situation on raw materials. We've got inflation. We've had some challenges. We're on the backside of the pandemic, right? As I said in our earnings call back in February, first quarter will be the slowest financial metrics or the lowest financial metrics that we have for the year. We expect, as we move through the course of the year, to move past some of the uncertainties and look at meaningful financial metric growth and improvements as we get through the rest of the year. We feel good about as we get to the back half of the year and as we move into 2023, that some of these uncertainties will be behind us. Once that happens, what you'll see is the financial performance that you saw from Spirit in 2017, 2018, and 2019. A company that is in the $7-$8 billion revenue range. A company that generates in excess of 15% margins, with goals of hitting 16.5%, and a company that has historically generated very, very strong free cash flow. That's what our goals are, right? We believe all the work that we've done over the last couple years, lots of challenge that we've had at, from a business standpoint, we've grown closer as a company, that we are going to emerge even stronger, more diversified, with lots of opportunities for growth. I think Sam and Duane and Kailash will talk about some of those things. Now, with that, we're gonna take a break now. We're gonna next door in Rosebud C, we have a technology exhibit, right? Some of our teams will be over there with some small exhibits for you guys. So take a break, relax a little bit, check up on some emails, make some calls, but go see the exhibits. There's some really cool things, right? We'd like to have brought more to the hotel, but I think you guys got to see some of it in the factory yesterday. So take a few minutes look at that, and then when we come back from the break, Sam's gonna talk a whole bunch about our commercial business and all the things we're doing to grow, diversify, and generate a lot of profit, right, Sam? Oh, yeah. Okay. Thank you. I'm going to talk to you this morning about the commercial piece of Spirit's business. As Mark showed you and Tom talked about before, we're the largest part of Spirit's business today. In 2019, as a segment, we were a little over $7 billion. Obviously, as Tom described, we then dropped to $2.7 billion in 2020 after the MAX grounding and with the COVID implications. In 2021, we're back up over $3 billion, and we represent most of the revenue today. As we move forward and we look forward to the returning of narrow-body rates, in particular, we're looking forward and very optimistic to about somewhere north of a 20% growth CAGR. When you think about what's the kind of work that we do in the commercial segment, it's really in kind of three areas. You've got Airbus, we're on the A220, the A320, and the A350. That purchase of the Bombardier Aerostructures business really put us on the map in terms of being an Airbus supplier. We're doing the wings and the fuselage on that A220. In the Boeing platforms, our flagship is the 737. You got to look at a lot of that, those of you that were on the tour yesterday, and we make about 70% of the content on the 737. We also do the fully integrated 787, which I think you also saw yesterday. In the regional and business jet market, this is a growing area for us, and it really grew significantly with the acquisition. We're now Bombardier's biggest structure supplier. We've got the Challenger series, we have the Global series, as well as we're doing nacelles, thrust reversers, horizontal stabilizers, fuselages on really good business jet platforms, and we're seeing a lot of growth opportunity in that area. There are also other areas that we're working on. I'll cover that in a little bit more detail in a moment. In terms of footprint, where's the commercial work done? Well, a lot of it's done here in Wichita. You got to see a lot of it yesterday. Then we also have our Tulsa operations, which feeds Section 11 and also wing components as well. We have our state-of-the-art facility in Kinston, which produces the composite Section 15 center panels of the fuselage for the A350. They go across the water to Saint-Nazaire, where they're put together and they're rolled across to Airbus. Over there in Europe, we have Prestwick. If you think back, that was our first acquisition and that got us on the Airbus supply chain. Our Belfast acquisition with the Bombardier Aerostructures, that gave us that fully integrated wing on the A220, as well as the regional and business jet work. Along with that Belfast operation, we got another low-cost operating facility with Morocco. Morocco is working on the A220 fuselage, but we see lots of opportunity and development opportunities for more work to go into Morocco. Morocco gives us a second low-cost country manufacturing site in addition to the site that we already have with Malaysia. Malaysia already supplies significant parts to the 737 and the A320. We have two low-cost operating regions as well. Overall, we have 19 million sq ft of manufacturing, a little over 10,000 employees, and that includes a significant make-buy organization. When we think about demand, as we know, GDP is up to 5.9%, and the OEMs are pretty consistent in what they're saying. Between 2021 and 2040, they see a demand for 40,000 aircraft, 80% of which they're saying narrow body. Narrow body for us is 737, A220, A320, and 737. When you think about the specific backlogs that are in existence today for both of the OEMs, you see Boeing's got a little over 5,700. 83% of their backlog today is narrow body. Airbus, on the other hand, is a little over 7,000, and 89% of their backlog is narrow-body. For Spirit, it's 85% of our backlog. What are the indicators? Well, we think the indicators are pretty strong as we're seeing travel come back. You see the reduction there in 2020, that 99% reduction in travel. Where are we today? Domestic travel is back to 80% of the peak, and that pertains mainly to the narrow-body aircraft. Twin-aisle aircraft, 52%. International travel is only at 52% of the peak of where it was. In terms of OEM production, we're talking about rate 31 on the 737. Airbus is talking about rate 65 on the A320 by 2023. On the A220 aircraft, getting to rate 14 by 2025. What are the priorities for the commercial business for Spirit then? It really comes down to three areas. First is execution above all else. We've got to execute on these rate increases, these rate rounds. We've got to drive the company back to that 16.5% margin that both Tom and Mark talked about. It's about where are we gonna grow for the future? We'll talk about execution first. While it goes without saying safety, we've got to keep our employees safe, and we've got to have our products safe. Safety is paramount, but quality is too. It goes without saying in our industry. Second, with this, coming back from the times that we've been in, our customers, quite rightly, and their customers have a much higher bar in terms of the quality expectations. That means a lot of new thinking around what are the processes and technologies that we can apply to ensure that rate executes flawlessly. We spent a lot of time during the downturn getting ready for these next lot of rate increases. Frankly, we learned a lot from before when we had the NG and we had the MAX cutting in, we were in high 50s rate. We learned a lot of lessons in terms of the state of our factory, the gaps in our factory, what would it take to get to high rate, and what things could we do, like Tom outlined a few of them, in order to set us up well for this next journey. The plant two redesign, it's really kind of like a spaghetti map when you look at it on the left-hand side, and when you look to the right-hand side, you can really see what an improved flow does for you. When you've got less moves, you've got less work in progress, you've got less opportunity for quality issues, for work being done out of station, but also you have opportunities in terms of labor hours, taking costs down. Also, if you when you were doing the tour yesterday and you looked above, you probably saw the cranes up above. The fewer crane moves that you can do, the more efficient that factory can be. How do we get to that improved flow? It's about technology, it's about moving work out, and it's about reorganizing and redesigning that flow. Ultimately, quality and safety improves with a reduced flow. One of the things that you saw yesterday, those on the tour was the Northeast Manufacturing facility. This is one area of work that we took out of the main factory. That Northeast Manufacturing facility was originally built for the 767 forward that Section 41 integration work. This last year, we also moved the 737 Section 41 work into that building, and this created a center of excellence. It's about using the common tools. It's about looking at the feeder lines. It's about thinking about that whole flow of Section 41 and making that as efficient as possible. Tom talked about the expansion now of that facility for rate, and not only rate, but also adding in of automation. In that Section 41, there's about 14,000 fasteners that need to be installed. About half of those fasteners are on the skin fasteners, right? The drilling of the skin fasteners. Automation will bring much more accuracy, higher quality, less labor hours, less rework. That really kind of makes that Section 41 much more efficient. Another area of work that we took out of the Plant 2 main factory was a part of the process called Section 11. We had a dual strategy here. It's a very complex piece of the build. We wanted to have a backstop. We took a dual approach here. Half of the work's going into Tulsa, but half of the rate is going into Tulsa and half of the rate into one of our suppliers called Horizon, one of our lead suppliers. This helps us use empty capacity in Tulsa, and we've got a readily available workforce with the right kind of skill set. Our Horizon supplier, and they're going hand in hand here. You've got competition against each other as they're coming up to speed. That's going. That's working really well. It's freed up very valuable floor space in plant 2. Another area of work has been digitization. Big lessons learned from before is we need to see the problems before they're coming. We need to see real-time data and be able to act on it in real time. That's really what digitization is. Supply chain control tower is something I'm really excited about. This is something that, Terry George, if you met him, really put our energy behind. This is about not just going out there and visiting suppliers, right, and seeing what they want you to see or taking their word for it. This is about looking into the system, into the supply chain, seeing if they've hired the people, ordered the material, if the jobs have started on time, where are the jobs and have the jobs dispatched, right? You actually can see. We're piloting this now in 737 on certain suppliers. This is a big opportunity for us in the future as we look about the health of the supply chain through rate. Second area, Tom mentioned Floorsight. Floorsight's also part of our management, overall management operating system. This is where our managers on the floor can get very quick access to work with their crews on data real time right there and then. You may have seen that on the tour yesterday. That visual work instruction, so as well as updating and making the work instructions available, and Kevin Matthies can talk more about this, it was an opportunity to improve the instructions. Also, if you think about it, as we think about this next generation of workers that we're trying to attract into aerospace, they're not thinking blueprints. They're not thinking about walking up 300 yards to a computer to go into a database to look up a drawing that kind of looks alien to them. They're looking for this kind of technology where it's visually very easy to see and you can pull it up straight away and it looks like what I'm looking at, right? Visual work instructions is a big deal on the factory floor. Opticrew. If you're somebody like Kristin Robert, who runs the 737 program, she loves nothing better than to sort of walk around and see real-time allocation of crews. Before, the old method is, okay, what's your champion time to get something done? But this is kind of a reactive look. What Opticrew does is you're actually watching where every piece of work is, so you know where the crews are. In real time you can go, "Okay, this is done. Let's move this piece of the crew over here." That's gonna. We'll see how this helps us to get massive value and faster champion times that Tom's always pushing us on, but Opticrew are a significant advancement. You talk about automation and robotics. That A320 spoiler line, Sean in our technology area in the break there was really showing it. This is a fantastic opportunity. This is going from a in autoclave, very complex, multi-cure type of process. You'll have to talk to Sean about the technical details. But it's going to an out of autoclave with less parts. It's about maintaining the width, but taking about 30% of the costs out. This is high rate composite production. Right now, this line can produce over 650 units a month. A ship set takes about 10 units, 10 spoilers. That's a great example. You saw the automated floor beam line, the 5 fully automated stations, the 5 semi-automated stations. This is a phenomenal area for us to look at. If you think about that floor beam assembly, where in a ship set and floor beam, you have 45 to 50 floor beams of about 300 different configurations, and you're able to put that down a line, improve takt time, you improve your width, you improve safety, ergonomics, all of those things, and you take hours out. You probably heard some of the savings that we're expecting there. The question on that is where else can it be applied? This is a scalable solution. Today, it could go up to 70 aircraft per month on a three shift, but where else could it go? It's a scalable system. You saw our global digital logistics center, our own Amazon for our delivery. If you think about in the past, the Wichita campus is between, I don't know, 11.5-12 million sq ft, and all of those parts were all over the campus. They've all been brought into one location. There's 28 levels over 9 acres, and they're all in one place. That's one thing. The other thing is all the parts are then tracked. You can see where everyone is. You can hit them much more efficiently. You can watch the ordering and the pulls from production. One of the things that often happens in operations because the logistics were slow is, "Let me order an extra kit," right? You got more width in the system. This takes all of that out of it. There's a guaranteed hour delivery. On a daily basis, like Tom mentioned, we're handling about 60,000 pieces. 20,000 that make up 20,000 parts. There are about 800 kits of one type that go out to the floor. There are 750 firm kitted arrangements that go out as well on a daily basis. This is gonna really, as we get up into rate, streamline the delivery of our parts to our operations. Supply chain. Looking externally, that was a lot about internal. Our supply chain, we buy about 80,000 part numbers across 900 suppliers. As Tom said, in the downtime, it was really important to provide assistance to keep that supply base healthy. That was done in a number of ways. It was extending contracts. It was inventory. It was a number of things, payment terms. I think that set us up well for as we're coming back now for rate increases. Keeping the supply chain healthy as possible is paramount. One of the other things that we've done, as well as supply chain control tower and bringing, introducing technology, is we've really beefed up the team that just looks at supply chain re-readiness. They look at not only through the system, they're out there visiting, they're doing lots of assessments, but they're also doing our three lines of defense. Getting ahead, seeing indicators of what's happening, what would we triage, what would be our plan B? Where are our multiple sources of cover or even to move work? We've also assembled a very experienced operational team that will back up this rate readiness team that we can deploy on the site by region. One of our secret advantages, it's not really secret because it's, like Tom said, the largest aerospace fabrication unit in the world, is really our capabilities on this front. It gives us an advantage from a number of angles. Number one, today we actually are fabricating 41,000 parts, and that's a little bit different than what Tom said. What that tells you is we can bring parts in and out. If one of those suppliers is in trouble, we can bring it in, and we can blue streak, or we can produce, we can do cover, and we can push it back out. That's one. Why that varies from time to time. One of the things that we did, we put the fabrication team together with the supply chain team to make it a make-buy team. What this does for you is it gives you untold benefits, not only from a cover and a safety standpoint to protect rate, it also gives you a competitive advantage, which I'll talk to you about in a little while here. Driving the company to the 16.5% margin, what are we doing around that? Well, it's a lot around the technologies and implementing those technologies. We'll talk a little bit more about that. This make-buy and where, so do we do it internally? Do we do it externally? What region in the world do we do it in? What total landed cost? All of the clean sheeting, the Waves process, the cover, how does all of that work? The fabrication strategy, the ability to bring it in and pivot and push it back out, and using that 90 million sq ft and those assets in the best way. Lean manufacturing, in a manufacturing environment, you'll never get away from lean. We've taken a renewed energy, so we've done all of the work that we've done so far while rate was down, but we're renewing our efforts on the lean side of things. Industry 4.0. Another technology to mention, you probably saw SPIFFI, those of you that went on the tour to the Fuselage Center of Excellence. SPIFFI is Spirit's Fastener Inspection System, and it automatically inspects and correlates with the engineering, and it provides trend data. This is a real great piece of technology. If you were listening to the video last night at the dinner where Connie said she was really proud of her riveting, and she said the inspector ran his hand across. That's how it was done. Basically, inspection, you kind of run your nail across, and then you go, "That feels a bit high," and you go look at the engineering. This takes all of that out of that. This is much more accurate. This is much more deterministic. Then our R&T team, remember what I said at the beginning about quality is up the game, skin quality especially. The team's looking at the application of this technology when you think about dents and scratches. While you think those are the kind of minor issues, and generally within engineering, they are issues for our customers, and this is a technology that we can use to look at that. That make-buy advantage. When you've got that supply chain, you've got strong, robust supply chain, and you've got this Waves process, so they know how it works now. You might say, "Well, don't you think they might sit down on you if they lose the work in the wave?" They know another wave's coming. Actually, through every wave, the work improves, the drawings improve. They get into the flow, and they get used to the Waves process. They also know there's the threat of the large fabrication business, where we can pull the work in or we can take parts of the process and make it more cost-effective. Okay, to kind of finish with the third area that we need to focus on is growing for the future. That's about next-gen aircraft and where's Spirit gonna play and how's Spirit gonna play in that. What's our answer gonna be to sustainability? A big deal with our OEM customers. This emerging business jet growth market, as well as adjacent opportunities. I'll leave this for Kevin to talk about, but we focus on seven distinctive capabilities all across the range there you can see. It's not just about metal and composite structures. It's also about accelerating learning curves. It's a big piece of the work that our R&D team help us with. We've made some significant investments in our research centers, and in fact, in Scotland, we opened last year a part funded with Scottish Enterprise, a collaboration center that works on robotics, automation, 4.0 there in Prestwick. Our business jet business. We've some yet to be announced programs in the business jet arena. It's growing nicely. There's a lot of opportunities that are coming down the pipeline there. We're optimistic that we can get to $500 million in revenue on the business jets by 2023, so it starts to become a significant business in and of itself. Then there's the new markets. Again, we've got some yet to be announced programs on vertical takeoff and landing and EVTOL. What does Spirit bring to that? We've got a lot of know-how, as you guys know, both from a metallic and a composite, all the work that we're doing in thermoplastics, but also technology consulting services around industrialization, those types of things, and access to our supply chain. The vertical takeoff and landing is definitely an opportunity area, as well as the sustainable aircraft. To summarize then, we're working on three things. Above all, it's execution and getting back to rate, safety, with safety and quality first in mind, and that's internal and external. That's about our supply chain as well as our internal work. At the same time, we've got to reap the benefit of all of these great changes that we've made and look at continuing to implement more to continually improve and to use our assets in the best way possible. Then in terms of growing for the future, it's really these four areas. It's about what role is Spirit gonna play in the future on the next-gen aircraft. It's about sustainability solutions. We're working on those from R&T. Business jet growth and capitalizing on that, and then looking at these adjacent opportunities. There's lots of pieces of work that fit Spirit profile. Doesn't mean to say we do them all. It has to be accretive from to the position that we're in, but we're looking at those as well. Okay. Thank you. With that, I'm going to pass over to my colleague, Duane Hawkins. Touchdown confirmed. Touchdown confirmed. Okay. Thank you very much, Sam. I get to talk to you about defense. That's and space. Those are my two favorite topics in the world. Really talk to you a little bit about some of the exciting things that we're doing. Even though we can't talk to you about everything that we're doing, at least we can give you a flavor for the progress we've made and we anticipate making going forward. This is where we fit on the chart. We're right above SAM. Eventually we'll be the same size as SAM, right? But not quite yet. That's a big challenge for us 'cause SAM's gonna continue to grow, and of course, we have to continue to grow. We've got five major segments here that I'm gonna talk to you about. This is our revenue for the last few years. You can see we've got a pretty solid segment here with some very good margins. Then what we decided to do a little while ago is say, "Hey, let's get a little bit more strategic about how we're winning things. Obviously, we've been very opportunistic, and we'll continue to be opportunistic. How do we really focus our energies in those areas where we think we can provide the best value to our customers and have the most leverage and move that more quickly? We went into these five areas, and I'll go ahead and explain each one of them just a little bit more, in case you might have some questions as to what we're talking about. We really felt like these areas are the areas that really match our capabilities up with what our customers, defense customers need. I think that's playing out very nicely. I think we picked the right ones. We reserve the right to modify them a little bit, as conditions change in the world. I think overall, these are the areas where we can provide the most value. Let me go talk about the first one here. Next-generation aircraft. Obviously, aircraft makes the most sense. That's what we do. That's what we've done on the commercial side. You know, if you just the P-8, the KC-46 work that we do, obviously that makes sense, but if you really look at all the other types of things that fly for the Air Force and the Navy and the Army and the Marines, you know, that makes total sense for us to stay in that business. What we've done is we've actually grown this business, and this is where we're probably the best penetrated of all those five areas, to the point where we feel like we're pretty fully penetrated in this area in the sense that all these programs that we've added over the last two years in particular are mostly in this area. We're very excited about it because we're at the very beginning. I can't mention the programs, but if you think of a new program out there in this space, we are on it. We're not just building structures. Obviously, that was an entry point for us, but we're actually designing them from the beginning. We're designing the structures, and we're also designing all the components that go inside and doing the subassembly, very similar to what we're doing on 787 Section 41. This just isn't structures. This is full up, very complex, integrated subassemblies that go into next-generation aircraft. We're very excited about that, and I think our customer sees the value proposition there. Part of that is that we design using digital tools and digital thread. Because we actually build a lot of things, we can take that digital thread from design all the way through the end of the product cycle, and which advances our strategy when you think about it nicely. This is something that has really gained a lot of traction with some of the major primes here because a lot of them have over the years gotten out of the manufacturing business, have gotten out of the fabrication business. They need someone to come in and help make the case that they can design for production, they can design for automation, they can design for scalability. That's exactly how we operate here at Spirit. These programs here, you can see they're very exciting programs. We're obviously on the B-21, the V-280. We're very excited to be on that team. The other thing we're able to offer our customers, as Tom mentioned, is that we're able to take some of the Twin Aisle capacity, both facility and machine-wise, and offer that to our defense customers, to manufacture their products, even in the design phase. That's been very attractive to them because obviously we cut a huge amount of time out in the cycle because we already have the facility, we already have the capital. We don't have to go build it and go buy it and install it. It's already there. That's been a huge attraction to our customers. They like that. There's nobody else that can offer that kind of capability in the industry right now. We've been leveraging that a lot. You can see how much. You look at the green, one of our buildings there, the CFF building. The green is where we're at. You can see where we're going, with the blue in the future. We're utilizing this. One important thing is we're utilizing these assets now, for really important work and allowing us to leverage and get ahead, of our competitors in these spaces. Next-generation aircraft, that's the first one. Next-generation effects. You know, if you know my background, you know I'm a missile guy, for most of my career. I like these things. When we bought FMI, we were able to say, "Hey, we're now in this business," because all the high-temperature applications where it's the very tip of a missile or where the exhaust comes out of the rocket motors, which are very, very hot applications, high-temperature applications, FMI builds these products for virtually all missiles, both cruise type missiles and tactical missiles. You can see down there, we're in on almost all of the important programs there. A lot of this has to do with our FMI acquisition. We see a lot of opportunity there in that space, and I think our customers are starting to see that too. Hypersonic. You know, again, FMI has put us on the map in hypersonics. It was somewhat aspirational before that. We got a lot of interest because of our scalability, our ability to get to production fast. As most of you know, that's a real issue right now, is how do we build these things fast. Once they get designed and proven, we need to get a lot of them out there. Of course, I think we're being seen as that solution because of our commercial capability and our ability to ramp up in production quickly. This is just an example here. We have a contract to do the thermal protection system. If you look at that product on the right, this is an example of us proving a larger scalability for 3D woven carbon-carbon product. Most of the stuff that FMI builds now is a little bit smaller. This would actually allow you to build larger acreage product. They, our Wichita guys, who obviously know automation really well, worked with our folks up in Maine and designed this fully automated system that builds larger 3D woven carbon-carbon product much quicker, much faster, and much more efficiently. This has gained a lot of attention here. Obviously, if we wanted to scale up and build at much higher rates than what this would allow us to do, it's relatively easy to go do that, and we know how to do all that. We feel like we have a solution for the hypersonic issue coming up, and I think most of our customers feel the same way about that. Okay, unmanned aircraft system. Again, this wasn't something that we were really it was a little bit aspirational for us. We felt like it's a good space for us. Until Bombardier acquisition happened, it was still a little bit aspirational. Well, it's not aspirational anymore. We're actually building this thing, the whole thing, the entire thing. This thing will fly away from our facility over in the U.K. The work that they're doing is very impressive. Some of us on the ELT are actually cleared on the program, and it's very exciting to see what we're doing here. We also feel like this is a great opportunity for us here in the United States. Even if it's not selling the Mosquito, that's a possibility over here, but clearly, our design capability and our ability to manufacture is now out there, and we think this puts us in a pretty competitive spot. That's another one of our areas there we're very excited about. Then space. Again, space wasn't even on our radar screen. I think it was a few months ago, Tom and I decided to change the name to defense and space. It's all because, primarily because of FMI, because FMI does some really exciting things in in space, in the space space. We've met with NASA quite a few times. That's their biggest customer. But not only NASA, but other folks that are in the space business, private companies that are in the space business. We're gaining a lot of traction in that area, and we're hoping to have some pretty exciting things to announce here shortly about what we're doing in space. You can see they did the heat shield on the Perseverance program, going through the atmosphere on Mars. We were all just kinda waiting there in my office watching it, hoping everything would go well, and it did, thankfully. You know, then we're also in a few years, we're gonna bring all those samples back that we got from Mars, bring them back here to the United States, but you have to actually bring them back and get through the atmosphere and travel the long journey. We're designing the thermal protection system for the vehicle, the return vehicle, that will show up in a few years and bring those things safely back to Earth, so we can do more further analysis on it and learn more about Mars. We're also part of Asteroid Bennu, where we landed on the asteroid for a few seconds and got some samples out of that. From what I understand, they got some pretty exciting things on that. Future missions like Saturn moon, Titan, and then Venus and other programs like that. We're involved with all of those programs with thermal protection systems because our material is the best solution for that. Those are the five areas. You can see, if you look at, you know, what are we working on, what are we shaping, what are we pursuing, and what are we awaiting awards on, you can see next generation aircraft, like I said, is our biggest area there. We've made probably the biggest improvement there. But we have $6 billion of programs of record right now with the pipeline that we have right now. We're very excited about that. We obviously want that to grow and continue to be a larger, and we have more capability and capacity to do that. We're focusing on these areas to grow that pipeline. We feel very confident about achieving $1 billion in 2025. I'm not too worried about that. I think, like Sam said in her chart, it's really about execution. We just need to go execute what we have, and we'll be fine. Obviously, we're focused on the 40%, right? Which for us is obviously more growth and doing more with the defense industry. We have a lot of great programs that we're on, but we've got a few more that we wanna get on, and we're working on those right now. Anyway, the 2025 one, we're not worried about. The other thing is, in the last two years, we were actually doing nothing with Lockheed Martin's Skunk Works. Before we had this event, we couldn't even really talk about it. Lockheed wouldn't even let us talk about it. Then they decided to do an open house. This was back last summer to just show what they're doing in digital engineering and determinate assembly and designing for automation and all of that to just show the world that, you know, they get it and they know they gotta improve in that area. They opened it up primarily to the press, to the media, for the first time in 20 years. They only invited one partner out there, and that was us. Spirit was the only one they invited out. I went out there and was busy talking to the press all day for 5 hours straight. It was a great experience of primarily me and Jeff Babione, who runs the Skunk Works for Lockheed. This is a great example, I think, of us gaining traction on what our strengths really are and showing the largest defense contractor in the world that we can really contribute and help shore up those areas where maybe they need some help. This gained a huge amount of traction. The products that we were making were all on display there. I think we see this as kind of a monumental event here for us to be able to participate. I'm really glad they opened that up, and you know, let the rest of the community see what we're doing. Okay. We're still doing some other stuff. We've converted an older building. It doesn't look old now because we've completely redone it and worked with NIAR, which is part of Wichita State, and they helped fund a lot of this too. We now have a National Defense Prototype Center that can do all things from design, manufacturing, assembly, whatever, on classified products, because all the new products are practically all classified, and it'll probably be that way for a long time. We can do those here in this facility. This is the first of this type of thing that clearly any tier one company has ever done. Nobody has this that's in our space. None of our competitors have anything like this. Particularly with the NIAR part that we're sharing, where they do a lot of the testing for us, all the material evaluation for us. It's a joint effort here. Our customers have really appreciated this, and we're just starting to gain traction. One of our big development programs that we're working on is being run out of here all the way from design all the way into our initial production in this classified space. Then when that gets done, we'll move that to another part of our facilities, and we'll have another one. We can do more than one in this facility. We can do two or three in this facility. We're very excited about this. We think this enables future workforce also. Okay, the other thing we're doing is we're taking some existing facilities. Again, part of the strategy is to fill up, you know, some available capacity in our factory. We've converted this to a classified fabrication center. We've taken and put in their existing equipment. We didn't have to go out and buy new equipment. This is existing equipment and put it in an existing facility. This will be, as far as we know, no one's been able to challenge us on this yet. This will be the largest classified fabrication center in the country. This will be able to do classified fabrication, machining in particular, of some exotic materials anywhere in the U.S. You can see these are actually real-time pictures. You can see we're moving along in there. In a little while, that facility will be open, and we'll be able to, we've already got lots of things lined up to go in there from our prime customers. That's just one more way of us adding value to our customers and getting involved right up front at the beginning of some of these really exciting programs that are coming out in the future. I think to summarize, you know, we're a $585 million business right now. We are targeting $1 billion. We're committed to $1 billion. We'll be at $1 billion in 2025. I think the most significant thing is that, you know, we at one time, not too long ago, we only had 4 programs over $1 million. Now we have over 24, and that's growing. That's important because a lot of that means that there's a lot of design work and also future fabrication work that we're in process. There's a lot of programs we are involved with. Obviously, there's not just 24. You know, there's a bunch of other ones too that we're working on. We're getting involved in everything we possibly think we can have value, and our customers feel like we can add value too. We're really excited about the things we're working on. You know, we've got our strategies in place. We're gonna focus on these five areas. You know, we think in the future after that, we'll be on our path to get to 40%. That's our objective. That's what I have. I think I'm gonna introduce a video. For aftermarket, Kailash Krishnaswamy, I practiced that, is gonna follow up and talk to you about aftermarket. Thank you, Duane. I usually say that my last name is too long, so thank you for trying. It's Kailash Krishnaswamy. I'm happy to talk to you about Spirit Aftermarket today. Aftermarket means different businesses to different companies, and so hopefully today, you'll get a sense for what exactly Spirit Aftermarket means, 'cause we've not really talked about it publicly in a long time. With regards to the strategy pyramid, that's where we fit. You know, I'm gonna talk to you about repairs, customers, geographies, some of the key elements, and I'll also tell you a little bit about how we differentiate ourselves versus our peers and, you know, that'll help with giving you a flavor of how we're different. Notionally, the commercial aerospace business is, let's say, about $200 billion. Now these days it depends on the year that you look at it, but, you know, OEM is about, you know, 60% and aftermarket's about 40%. There are certain fundamental attractive elements of aftermarket. Usually it's a lot longer, it's a long tail past the OEM and, there's a lot more customers, and usually there are better margins. It is a space that most aerospace and defense companies, at least on the commercial side, do have a role in. So it was time for us to tell you what we do in aftermarket. The performance in the last 3 years, we've grown steadily about 15% CAGR I would say. It's been on the back of a few acquisitions. Tom already talked to you about these. You know, in 2019 it was primarily Wichita. We have a repair center here in Wichita that did a lot of 737 and 777 nacelles and flight control surfaces. In 2020 we acquired the Belfast business of Bombardier. Along with that came a Dallas operations, and we added capability on A330, 757, A320. You know, there was a bit of an organic and inorganic growth in 2020. However, that was also the year where we saw the massive impact of COVID on all of aerospace and defense. In 2021 we added Applied Aerodynamics. We added, you know, the JV with EGAT, and we added some more capability. On the back of all of that, you know, we've grown about 15% cumulative. The other part of this chart that I'd like to draw your attention to is the difference between spares and repairs. A lot of what I'm going to tell you today is about our repairs business, because that's really where we have a lot more ability to be agile and respond to the market. Our spares business is typically to the OEMs, so Boeing, Airbus, Rolls-Royce and so on. The spares business is primarily based on orders from the OEMs and of course we fulfill. There are a couple platforms where we can go directly to the market, but today's focus is gonna be on repairs. What exactly are repairs? Couple pictures here. This is a narrow-body nacelle sleeve. On the top left is a unit that shows up in a shop, typically. In this case it's a damaged sleeve that happened because a slat got extended at a time when the thrust reverser was still open. Sometimes you could have ground handling equipment just run into the nacelle. Yes, we build product that is, you know, the right quality the first time that don't break, however, others break it, and we really do have to fix it, which we are thankful for. Now, the bottom picture is again something similar. The bottom one is ground handling equipment. You know, they're just trucks that run into the nacelles. They're thankfully so low to the ground and, you know, we fix those. These are the kinds of complex repairs that we do. There's enormous value that we would deliver to our customers, 'cause the alternative would be to replace the entire unit. On wide bodies, for example, this is a fixed structure. This is a situation where a borescope that was inserted into the nacelle to do an inspection of the engine was left unplugged. You know, you had heat escapes and essentially that blew a hole through the fixed structure. In situations like this, you can see from the bottom left image, it's fairly damaged and it's, you know, about a foot and a half big in size. You know, in situations like this, you know, it's hard to repair, but what we can do is replace just a part of the fixed structure. Again, that's not something that can be easily done. You need specific tooling, you need access to parts, and so you need, you know, engineering repair approvals. I'll tell you a little bit about the fabric that goes behind us doing these kinds of repairs. More pictures. You can see on the bottom left, for example, is an inlet. You see the size of the inlet and the damage in the lip skin typically happens when you have a large bird that flies into, you know, the engine or the plane flies into a bird. You could also get this from, you know, debris on the runway if you're landing in airports that don't necessarily have the right kind of cleaning, for example. On the bottom right, you also see radomes. We do a lot of radome repairs. These typically again are birds, lightning strike, bird strike related repairs. These are all the kinds of products that come into our shop. The more damaged these are, the more economics we generate and we also deliver to our customer. In terms of expansion, you've seen this chart before, but we started with Wichita. We added the Belfast business, which, you know, brought us the Dallas operations in aftermarket as well as Morocco. We cross-pollinated our capabilities from Wichita to Belfast, from Belfast to Taiwan. Taiwan, which is, you know, the EGAT facility, they had an extensive repair library. They're very agile with delivering value to the customer. You know, they're of course captive with EVA Air, so they're all part of the Evergreen family. They have a diverse fleet, and they need to deliver repairs to their own fleet, and they've been very entrepreneurial in developing repairs for their fleet. We're transferring that knowledge down to Dallas. And then of course, you know, we continue this cross-pollination across many regions. Now, one of the key things that I will say in aftermarket in order to be able to succeed is we kind of need to work with the customers. The customers are really focused on turnaround times. They're really focused on delivering quality and value at those, you know, at the turnaround times. Wichita and Belfast were primarily production houses and, you know, they had an aftermarket business. However, Taiwan and Dallas are more aftermarket businesses, and they're, you know, solely aftermarket businesses. As we expand, when we look at Middle East or when we look at China or Central America, our focus is to be work with partners that are more aftermarket-focused as opposed to being, you know, production-focused. Getting that culture into the larger Spirit aftermarket business where, you know, you have a diverse group of people, diverse regions, all thinking entrepreneurially about delivering value to the customer quickly and with the right quality, is very critical for us to gain share in this market. That's what we are focused on, and that's how we intend to grow over the next 3-5 years. This growth in the last 3 years essentially brought us a lot of capability. In 2019, on this chart, what I'm showing you are the various platforms on the vertical axis and then the various components that we could either repair or replace in the horizontal axis. In 2019, it was pretty much focused on the Boeing platforms and primarily, you know, inlet fan cowl and TRs. In 2021, you see that our capabilities have grown across and down. We can address a lot more platforms, we can address a lot more components. Going forward, you know, one can expect this chart to get more populated. For example, actuation systems, exhaust nozzles, we do that on very specific platforms. Landing gear, we do that on very specific platforms. You know, one could ask, you know, "What do you do? Are you thinking about APUs? Are you thinking about hydraulics?" You know. Those are all opportunities that exist out there that, you know, we can go pursue, either organically or inorganically and essentially populate this chart. That's kind of the. That's the way we're thinking about growth, for, in aftermarket. In terms of competitive advantage, you know, when you think about a repair, you really need, engineering and you need parts. Then you need the mechanics that will make the magic work, and then you deliver it to your customer. When you think about parts, and, Sam touched on this, we globally source about 80,000-plus parts. You know, this is a view that gives you geographical spread. This is important, especially when you have global customers. You want to serve them locally. No customer wants their systems shipped all the way from Middle East to Wichita, except, you know, if it's an exceptional situation. Or you don't want customers from the south of South America getting units shipped over to Belfast. I mean, that's just not the way customers would like to work. So we need to be able to serve them in their own regions, which means we need access to parts and repairs in their own regions. Our ability to work with 900+ suppliers, you know, and all these parts across all the platforms that we are on, gives us a competitive leg up. This is not something that we have actively looked at, but it's just waiting for us to unlock and deliver value to our customers. Same thing with engineering. The top half of the page here shows you all the platforms. The dark gray shows you all the platforms that we build, we produce. Many cases, we engineer. That means we have about 1,000 engineers between Belfast and Wichita and, you know, Morocco and Subang in Malaysia. These engineers have all the knowledge necessary for us to deliver design and deliver repairs to our customers. That's again another element that we need to unlock. On the bottom table, I show you all the repairs that our people have designed in the last, you know, 10 years. This is about 2,400 repairs, and there's a lot more that we actively need to develop. It's a portfolio that we manage. Between parts that we have global access to and repairs that we can develop, there is a lot of value that we can deliver to our customers. Using all of that, the DNA that I just talked to you about, we are looking at some very specific strategic initiatives. Now, you know, we always reserve the right to get smarter and always reserve the right to evolve these strategic initiatives as markets evolve. But for now, you know, one of the key ideas is what is about the Spirit Inside concept. The reason why EGAT has turned out to be successful for us and the JV with EGAT is going to be successful for us is because they are right at the heavy maintenance facility of Evergreen of EVA Air. That would be a recipe that you can repeat over and over again with low capital intensity and with several other strategic partners. That's one area that we are actively looking into and actively deploying resources to make announcements and to start getting our capabilities into various other regions. We will of course continue to develop repair solutions. If you look, you know, hard at the capabilities page that I showed you, yes, there are gaps on platforms. You know, we need to start getting aggressive about developing repairs for some of those platforms. That's something that we actively do by, like I told you, managing a portfolio for developing repairs. New markets. Most of our revenue, 95%+ of our revenue comes from commercial customers. We are only minimally touching the sustainment business, which is just about as large as the commercial aftermarket. That's something that we will actively start looking into, and we'll figure out the appropriate entry point to get into the military aftermarket business. Passenger freighter conversions. It started to become very hot and contested, and an interesting area just in the last 2 years. Most of you know NIAR works across from our production facility in Wichita. We have partnered with the Kansas Smart Center, and they, you know, have, they're working on an STC on the 777. There are a couple other players that are also working on the STCs for 777s. You know, this is starting to get a lot of attention both from the commercial world as well as from the production world. It's something that we will look into, and, you know, and assess as the market evolves. We need to position to win on the next-gen platforms. The growth platforms are all the MAX, the Neo, the 787, the A350, the 777X. We will be actively looking to see how we can play in some of those platforms where we don't have, you know, a production position. Of course, M&A. You know, we have a strategy, we have a growth plan. Once assets come to the market that will fit or are aligned with our growth plans, we will be taking a look at them. With that, we feel pretty confident that we can get to, you know, a half a billion in the next three years. That's gonna be about a 20% CAGR from now. It's gonna be a mix of spares and repairs, but we are making the right kind of investments in the right resources to be able to achieve our target. With that, I will like to invite Kevin, our Chief Technology Officer, to come and talk about some of the cool technologies that our team works on. I'm really excited to be here today to talk to you about all the great things we're doing from a research and technology perspective, and also discuss the cultural journey we've been on for quality. First of all, I wanted to thank Tom and my peers for really doing a fantastic job of showing off the strategies and where we're going with the business. As I was sitting in the audience thinking about their presentations, you know, you saw a lot of technology being deployed in the strategies. I see my job, and my team is inspired to actually be the engineering, research, technology, and the manufacturing know-how to fuel all of those strategies. My customers vary. They, they're internal, they're external, and they're also our external customers as well have customers. We're feeding all of that through this group, and I'm really inspired today to talk a little bit more about what we're doing there. We'll start off with a little discussion about research and technology. Again, you're probably gonna see a little bit of duplicative slides in the sense of the pictures, but there's a reason for that. It's very important that what we're doing from a research and technology perspective feed the specific strategies. We'll talk about that. We'll talk about what we're investing from a people and knowledge perspective, and then I'll get into the seven distinctive capabilities. Sam showed you a chart, and I'll get into the very specific details of those and go through that in some specificity. We're gonna talk about quality. We're gonna talk about the journey that we've been on and how important that is to the business. Safety and quality are the two enabling elements that we focus on first and foremost, and I'll talk to you a little bit about what we put into action and some technology advancements. I wanted to start with what I think is very, very important to where we are across an aviation, defense, and space industry. We're seeing massive trends that we've never seen before in terms of enabling different types of flight, different types of capabilities. This is just an eclectic collection of different types of vehicles that are coming into play, and we're seeing this business move at paces that we've never seen it before. Some of it's driven by the sustainability requirements, and we're gonna see a lot more of that happen. Frankly, I can assure you in the last couple years, the sustainability piece has really moved a lot of people forward on technologies that they think they need or are enabling to be there in the future. Duane talked to you about hypersonics. I'll talk to you a little bit about the specifics, but we are the company that's enabling high-temperature flight, and I'll show you some of those details. We're very focused on efficient aircraft, and I refer to that as topology optimization. How can we actually make the aircraft more efficient? It's important to have zero carbon capability coming out the tailpipe, but also in order to enable something like hydrogen flight in the future, we have to have airframes that are super efficient from a fuel consumption point of view. Spirit's very well positioned to be able to do that. We'll talk a little bit about some of the emerging technologies. They're not so emerging anymore, but eVTOL, how we play in that market space, as we go forward. We've been investing in our future. That starts with really our people. By the end of this year, we'll have an increase of about 7% in engineering capacity. During the pandemic, we really didn't go down in engineering size much at all. We had plenty of projects to work on. The defense side was actually increasing and growing, so we moved a lot of our engineers over there. This isn't really a recovery in my eyes. This is an expansion from where we've always historically been. We've seen and we've grown our research and technology spending pretty significantly, and we will continue to do that both from an internal perspective and using external funds to help augment where we go there. Our technical fellows, these are the folks in our business that really drive the significant amount of innovation. They lead our business and ideas. They're out, talking at various industry, forums, you know, kind of putting all that technology, together and giving us the path forward, and we've seen an increase in the number of technical fellows we have on staff. Both Duane and Sam talked about these research facilities. These are the incubators. These are the areas that my team can go into and have space to actually maturate a technology to the point where we can use it internally, and more importantly, that our customers see value in. The Aerospace Innovation Center is about 100,000 sq ft facility, and Duane talked about the National Defense Prototype Center, about 106,000 sq ft. Within this past year, we've added 200,000 sq ft of area where the team can go in and actually work on large-scale projects and take those technologies and prepare them for sale. From an intellectual property perspective, we've been very busy. Actually, this chart is from when Spirit was conceived in 2005. If you do the math, we're basically putting forth an invention one per week. That's pretty amazing for a business of our size. That's what that equates to. That's 874 inventions. Our team is inventing significantly, and every day they're doing that. We're being granted patent rights to that, and we've got future ones pending. This is that fundamental fuel that we use to actually position ourselves and be ready for the upcoming markets. I'm just gonna tee up the seven distinctive capabilities, and then we're gonna dive a little bit deeper into each of these. I won't be able to do it justice in the amount of time I have today. We could probably spend an entire day talking about these seven different areas. There's so much going on here, but I will do the best I can today. It really starts with performance architectures. We are heavily focused on what we need to do to actually be on the next generation aircraft. We're enabling those capabilities today with the foresight knowing where that market space is going. This notion of topology optimization, what that really is a fancy word for we are the folks in the industry that are most capable of optimizing performance architectures for weight, for cost, and industrialization. You heard my peers talk a lot about that today. I don't think there's anybody better that does all of that harmoniously together and can provide value to our customers in unique ways. We're very skilled at it. It has served us very well, and I'll talk a little bit how that dovetails in from the EVTOL market because it's actually a little bit evident when we get there. Material optimizations. No business in the aviation space would be complete without having detailed knowledge of how to transform advanced materials into engineering design solutions and actually have the allowables and all of the techniques that we need to actually certify that aircraft. We're very good at that. We also have been spending a lot of time on ceramic matrix composites, and again, all these will be fleshed out a little bit more in the upcoming slides. Then advancing the areas of thermoplastics and pi-joints and how we actually bring different materials together. Product development tools. It's one thing to say that you have a digital design tool like CATIA or NX. It's another to actually have the capability to develop and actually implement rapid tools that take knowledge from our engineers and put that into an actual computer-wise version and use that to our advantage so that we can scale quickly, and we can develop solutions much faster. We have these knowledge applications that sit on top of the standard tools, and we've been developing those for many, many years, and we're really good at that as well, and we actually can deploy that to upcoming programs to go fast. Lean metallic structures. We don't wanna lose sight of what our heritage is. Our heritage is in a traditional metallic fuselage and wing business, and I'm gonna talk a second about where we sit in the composite space. We've been very focused on growing and advancing our lean metallic structures. We've always been good in high-temperature materials like titanium. We are accelerating and have been working on, for the past three years, we've staked out a position in nickel-based alloy fabrication techniques that nobody else has as well. I already mentioned about composites. If you don't know this, we are the world's largest consumer and producer of carbon fiber materials anywhere on the face of the earth. Spirit does more than anybody else, and we've used that position to actually continue to evolve and grow. We haven't rested on the fact that we are the best. We are actually inspired to make sure that we bring the next generation of capabilities to our customers and stay ahead of our competitors. Competitive tooling. It goes without saying, for those of you that are familiar with the composite business, it can be very prohibitive cost-wise from a tooling perspective. We've been spending a significant amount of time over the many years as well, optimizing and producing tooling solutions that are affordable and mechanized for high volume. Finally, again, you heard this a little bit today, but accelerating our learning curves, the digital thread. You're gonna see a term that, I'm actually been using a lot lately. I call it the digital trinity. It's really digital design, digital thread, and digital twin. You have to be doing all three. It isn't good enough to say, "I have a digital thread capability." This trinity notion, or Boeing uses the word, metaverse, but we have really pioneered, and I would say by far, we are leading the way when it comes to actually digitizing the manufacturing processes, and people are actually coming to us to look to see what we're doing. Let me start off, each of these, we're gonna dive in a little bit. Let me start off with really these performance architectures. Again, from a military architecture perspective, we see these very unique capabilities and these needs. Duane talked about our procurement, our purchase of the FMI business. Frankly, FMI is by far the number one provider and most capable business of providing high-temperature materials. Now, by definition, Spirit, and when we went into the deal, we knew that there would be a synergy here. We actually have this position in the market space for future flight. Everything that we, you know, in the future that we see, will be going faster and further. To enable that, you have to have these unique type of material positions. Next-generation commercial aircraft. We're very focused on, you know, where does this go? Obviously, we have a very strong position in the structure business today, but we wanna make sure that we're ready for tomorrow. On the top there, you see the Wing of Tomorrow. That is an out-of-autoclave cured composite structure. It's a green process compared to a traditional autoclave approach. We're actually laying up composite material on the tool, we're heating that tool, and we're curing that product, again, in an out-of-autoclave capability. These zero carbon or efficient airframes, we're positioned on doing some work in these areas. We have the technologies to actually enable this. Building a spherical or a round fuselage and pressurizing that is something that people have been doing for a long time. Building these big, large, flat structures that you wanna pressurize turn out to be a little bit trickier. We again have a position, and we have the enabling technologies to make that happen. eVTOL. The thing about eVTOL is it's all about weight. The battery technologies haven't progressed very far yet. Frankly, every pound that goes on these eVTOL vehicles is critical. Again, Spirit is very well known for having these topology-optimized vehicles, very efficient from a weight perspective, structurally sufficient. We can certify those vehicles, and we have the capability to provide to these companies that need this capability today. Then finally, just a quick discussion about propulsion. I didn't put a lot of material in here about SAF and hydrogen. Trust me, you know, we're involved in that. We have the enabling technologies to do that. But a couple of things here is we're looking at actually how to come up with new thrust reverser designs that's out of our Belfast area. This is a product that's very far along. Then laminar flow lip skins. We have both a metallic version and a composite version that we've been working on. And this, again, enables efficiency in future flight. From a material optimization perspective, the second leg of the distinctive capabilities, we are very focused on ceramic matrix composites. These are the technologies that we all will fly on in the next, say, 5-40 years. These are the things that will enable these ever faster, further flights. Carbon-carbon, carbon, silicon-carbon, Ox-Ox, and these ultra-high temperature coatings. These are the items that are providing that. We're looking at it through multiple veins. Duane talked about rocket motor bodies and throats. Of course, thermal protection systems for hypersonic systems. Also looking at apertures or radomes, if you think of them that way, for hypersonic flight that enable radars and thermal sensors to look through. We're really very broadly focused in this area, and we have all of that capability. Thermoplastics. Again, another form of a greener type of carbon fiber solution here. Thermosets, once you cure them, they're set forever, and they don't recycle well. Thermoplastics provide a completely different paradigm when it comes to recyclability. We can actually ultrasonically weld thermoplastics together, so we can build bigger and bigger structure by combining them. None of this would happen without specific capability to be able to take all of the things that we are developing and turn them into something that the engineers can actually certify. We're very good at these computational materials engineering, doing the lab work to actually gather all the analytics that we need about the product and making it ready for final use. I talked about digital trinity. Again, this is a slide that we could spend hours on. You have heard about, I'm sure, digital twins, digital threads. The thing that we've done here is we've actually executed projects. Duane showed you one with Skunk Works. We've been executing a lot of projects using these different various 3D technologies. The thing about Spirit is we sit in this market space that's rather unique. We're not an OEM, so we don't get to dictate the solution that we get to use, but we sit in a market space where we service multiple customers. Our solution has to be agnostic to a different type of CAD package and how our customers work. We've spent time and energy on this, and we're actively deploying what we refer to as Spirit One, which is transforming our business systems to enable us to do everything in a digital fashion. You saw a lot of that today. A lot of the things on the factory floor have already been digitized. Again, I think that's where we are clearly ahead of a lot of our competitors. We have been working on lean metallic structures for quite some time, and we actually have parts flying on 787, a Rapid Plasma Deposition, 3D printed titanium part. This is unique characteristic. This is the only part that I know of that is actually flying today, other than some of the engine parts that are printed, which is a different type of printing process. We've been working on this. This will give us a tremendous advantage to go faster in the marketplace when we are prototyping. Something that we've been spending a lot of time on. I'm gonna give you a couple of smatterings. There's a lot of different modalities when it comes to combining of materials. Linear friction welding or friction stir welding, this enables us to create new designs, taking relatively small structure and continuously combining it into the structure that we ultimately want or need. We have gotten very good at extreme high temperature materials, nickel-based alloy materials, sometimes referred to as Inconel. Frankly, again, to enable these high temperature flights, you have to have these type of materials. Over the last three years, we've spent a lot of time focused on how to actually fabricate these parts. We stand in a very unique position. There are very few people that can do this, and we do it very well. We've pioneered, frankly, some new techniques that others don't know about, and our customers have stood up and understood that. Most of the air-breathing hypersonic weapons or hypersonic flight-enabled vehicles will use an Inconel-based type material, and those that are higher than Mach Five will use this carbon-carbon approach that we talked about. We're positioned both on the high-end extreme of hypersonic flight and the mainstream of hypersonic flight. Finally, we continue to explore more exotic methods of lean metallic structure construction. This idea of kinetic fusion allows us to take powdered metal and combine them in unique ways. In the past, you always had one type of metal. We can actually lay down different types of metal in the substrate and build up a structure that's completely unique that no one has ever seen before. Our ultra-competitive composite business. Again, if you had the opportunity to go to the Tech Expo, Sean was showing this off, our resin transfer molded spoiler. We've been doing resin transfer molding on 787 since the dawn of that program, and recently this resin transfer molded product and spoiler line in Prestwick was put in place. Highly automated, great capability. I'm gonna talk a little bit about dry fiber because I think it's important to where we're going. Today, we do a resin infused dry fiber wing in our Belfast facility. That's the A220 wing. There's a new type of dry fiber product coming into fruition, which is called fault tolerant. We actually stitch the dry fiber together like, basically almost like a sewing machine. What that provides is we don't actually have to put fasteners into the structure in those areas to prevent damage in case. It's a more fault tolerant capability. It's a lighter structure. A different manufacturing process, but that is one of the enabling technologies that will get us into these, massive carbon fiber structures that aren't cylindrical. No discussion from Spirit would be remiss without talking about how we are the world's automator of composite structures. Duane showed you that photo on the lower left. You know, we have uniquely positioned ourselves to provide, you know, high temperature materials to the U.S. government, frankly, for this evolving hypersonic area. It was a desperate need. We knew that when we bought FMI, one of the synergies would be to actually do specifically this, and we've brought that capability. We also have a position with Albany. They provide 3-D woven fabric. What that does is allows us to lay down or essentially build the material up quicker and then densify that material into a final product. Again, we are the folks that fundamentally invented automated fiber placement, which revolutionized everything in the aviation business as it relates to composites, and we continue to do that. That is one of the things that makes us who we are. Competitive towing solutions. You can see here that this is a small sampling of the thousands of different things that we do every day on printing and making sure that our factories are as efficient as they can be. Kristen was showing you the specific example of what we refer to MGun. I don't know the words that she was using in there because I was talking with Jim about another product, but this is essentially putting the power of auto fastening in the hands of a mechanic. It's a very efficient means of actually drilling a hole and filling that hole. It also provides carbon fiber drill templates, which one mechanic can manipulate. We're very focused on the safety of those mechanics and empowering them for success. Reconfigurable tools. We've had the capability for some time now, and we're starting to implement a lot more 3D printed large-scale tools to our factory to make it more efficient for our mechanics. Finally, on this slide, we have an advanced manufacturing strategy team that focuses a lot on the capabilities about advancing our factories. You heard about Charhill. That was an AMS project. This is an example of what we expect to do in our center of excellence for Section 41's coming up. We're, you know, spending a lot of energy and time making sure that those technologies come to bear. Finally, from a distinctive capabilities, accelerated learning curves. Duane showed you this same photo, but what's unique about this is, we were able to do full size determinate assembly on this product with carbon fiber and metallic structure. It may not be obvious. It's a rather tricky proposition because they grow and shrink at different rates, due to the thermal expansion, and we've been able to prove that we can do that. You saw how we're using augmented reality. We use that extensively. One of the things that has been a big enabler on our 737 line, all of our work instructions now are digital. Sam talked about how the next generation wants to have kind of these YouTube-like videos, show me how to do it, and we did that. It was a big undertaking, a lot of leadership buy-in here to make this happen, but our mechanics can now sit down and see how the product is built, and we tell them everything about what they need to do to build it, including exactly what type of fastener, the torque values. None of that was really available before. In the interest of time, we talked about Opticrew, Floorsight. These are the tools that enable our factory floor, and we've digitized the entire factory floor so that they can be productive and know exactly where their work is at any given time, and be alerted in real time when something isn't going right or when they need to redeploy crews because they're done early. We have a lot of digital knowledge now about how that happens. We talked a little bit about SPIFFI, but the thing I wanted to say about SPIFFI here, what's unique about it is we've taken stop-motion cameras, just like Hollywood has done when you see avatars or things like that, and people have balls on them. We have the exact same technology. What we've done is we can take this apparatus or other apparatuses, and we can go anywhere on the fuselage, and we know where it is in aircraft coordinate space. That is a huge advantage that others can't do. It's like a large CMM if you think of it that way. Okay, so that kind of wraps up the technology piece. I really wanted to spend a few minutes on this chart. I think this is probably the most important chart from a quality perspective. We understood that to enable our future, we needed to really focus on the culture of quality in our business, you know. I give a lot of credit to Tom for standing up and leading us from a safety perspective and quality. They are the fundamental building blocks of everything we do in our business. By getting our entire team focused on making sure that everything we do is first centered on safety and second on quality, our team has benefited tremendously. We've seen the amount of things that maybe we have to necessarily rework come down significantly. We're seeing our customer satisfaction go up higher. Our customers recognize that the value that we bring to them is higher. Frankly, we understand that our customer, customers are becoming a lot more demanding of our big OEMs as it relates to quality. There was a discussion about skin quality a little bit. We are going above and beyond what the requirements ask of us to make sure that our customers are successful when it comes to quality so that they can enable the sale of that product to their customers efficiently and effectively. We really have become customer-focused. We listen to our customer more today than I think we ever have. We are working with them hand-in-hand, making sure that we have quality on our mindset first, because we know it enables our manufacturing system. When I talk with our board about quality, I mean, that is my primary job. I talked to them about the fact that I'm focused on building a production system, and quality is a key component of that. Our team has done a great job of embracing that throughout the last few years as we've taken that opportunity to transform during the pandemic. We're building better teams. We're building them integrated. I'm honored to be the senior executive that's responsible and chairs what we refer to as our various excellence councils. We have an operations council. I have somebody that orchestrates this for me, but we meet as an operations team globally, twice a month, and we share our experiences. We share the good things, we share the bad things, and we make sure that we're learning from one another, and we're optimizing that. Along with that, we have a quality excellence council, and we have a safety council. Tom personally spends his time in the safety council with us every other week. That's the priority level that Tom puts on safety and quality. He is demonstrating and leading the company in all aspects of this. Symbiotically, we're able to interweave all of these things together and making sure that our teams understand the importance of how these three things interplay and the value that we get from it in our related businesses. We've yielded a lot of capability from that. Just a real quick high-level discussion about the things that we've done, or I guess the results of improving our quality. You know, we've really spent more time teaming with our manufacturing processes and making sure that they're optimized. When we have a quality failure, we typically don't see that as a mechanic made that failure. We typically see it as the fact that the production system let him or her down. We focus it from that perspective, trying to help them be productive and making sure that they get it done right the first time. That's a very important aspect as we go up in rate, and also, frankly, as the logistics get a little bit more challenging from a supply chain perspective, we wanna make sure that we don't actually make a mistake and have to go get another part. It's been very important. We've leveraged these distinctive capabilities in our factories. Everything that you saw today came from Spirit. It came out of a research and technology project somehow, some way, and it made itself to the floor, really just innovating how we inspect products, and we talked a little bit about SPIFFI and some of the other digital technologies. We've really listened to the voice of the customer. We've reduced the cycle time it takes to actually deal with if we do have a defect, how long does that take? Improving the closure rates of that, and then making sure that our customers aren't waiting on us for anything. This idea of zero delinquent items, and I'm really proud to tell you that last year we had no delinquent items with our customers. We've made a lot of progress. We hear what's important to our customers. You probably read the press, you know, about FOD. We have ensured that our customer gets a FOD-free product, and we've made really good improvement, and we were recognized by one of our customers for making that happen. The other thing we realized is that we need to perpetually ensure that when we're building the product, we're building it per specification, per engineering, per the planning. We've deployed a technique that we refer to as three lines of defense. You may have heard that in a couple different areas. We've leveraged this a lot, not just from a quality perspective, but wherever we think we want to make sure that we have a surety in what we're doing, we're leveraging this type of technology. We actually spent time over the last year, and we have about one more year to go, ensuring that our processes and our products are actually in conformance with the engineering requirements. We've deployed teams to go verify all of that, which is mitigating any potential for future escapes. Then we deploy these three lines of defense perpetually, so when the mechanics and the inspectors are responsible for making sure that the product is done every day, but we also have our engineering team out auditing that process and product to make sure that indeed it is actually being built per specification. Where it's not, we can actually make adjustments or update the planning. We've seen a lot of value by doing this. We can actually update the planning to make it a little bit more clear for the mechanics and inspectors so that they get it right. Finally, we have an, what I would call that audit function, making sure that all of this works and is behaving. We're randomly selecting areas to dig in deeper. Some of the technologies that we're actually deploying, you saw very briefly what we refer to as Lynx. It's a digital system that can actually, it uses pixel differentiation, and we can see, if you look carefully in that, you can see that the bracket is flipped around. Those are the kinds of things that can happen from time to time. With this digital capability, we can, and that gives power to the mechanic, they can run the scanner, and they can say, "Hey, something's not right here. Go look at this." You know, new scanning capability we brought to bear. We talked a little bit about SPIFFI. It's really a device called Atri. We're now using it on the exterior of the aircraft to look for dents and skin scratches, which used to be very subjective. Now we get a real-time, instant feedback topology map of if there is an area of concern, we can actually measure it and provide data on what it looks like. We talked about work instructions. You saw an example of where we were using digital inspection tools. Again, this puts the power right in the hands of the mechanic to make sure things are right and in SPIFFI. In summary, you know, again, I use that word feel. We see ourselves as the enabling function for the strategies that we're out executing. We really have been recognized, and we will continue to lead the way on digital transformation and adoption. Our factories are more digital than anybody else in this industry, I can assure you. I've seen it. I've been out to look at others. We are on the cutting edge of that, and it's providing a lot of value to us. Then finally, just this relentless pursuit of quality excellence is paramount. It is critical to our customers and again, to their customers as well. We've spent a lot of time getting our team focused on that, and it'll serve us well as we continue to escalate and rate. Thank you. At this point, we're gonna go back over for a break in the technology area. I would love if you get an opportunity to go over and see all three areas today. My team's really proud of what they do, and I thank you for coming, and we'll see you back here in about probably 10 minutes or so. 11:15. 11:15. We'll get Mark come on up, and Kevin and Kailash. We'll get them in. You need to as well. I've got my lavalier, yeah. Kevin, come on up. We got Kailash. Right. We went through all the presentations throughout the morning, and didn't take time after each to do questions. We thought we'd have one opportunity to get all of us up here to answer any questions that the group has. The thought was we'd spend about 30 minutes or so just to answer questions. No particular order to that. It's just as you have a question, please raise your hand. We'll get you a mic, and then we will answer the question. The mic is important so that we can get. Jessica, Ken's got a question over here. Yeah. First. Ken's got a question right over there, Jessica. We'll get you a mic, and then just please say your name and your firm, and then go ahead with your question. Thanks for everything. Ken Herbert with RBC. Maybe for Tom or Mark, if you could just start the discussion. It seems like the margin assumptions are based upon continued cost savings from the supply chain, from your supply base. As you look at, you know, that 60%, as contracts roll over in that, what's a realistic assumption of as the contracts roll, or how long is the typical contracts? I tend to think sort of 5-10 years. What's been historically the savings you've gotten as these contracts roll over from suppliers, and as we sort of think about what that contributes to, you know, the path to 16.5% over the next few years? Well, supply base is important because as a manufacturer, about 65% of our cost is in the supply base. Materials, raw material plus the materials that we buy. That's important. Our contracts typically are 5 years, so about 20% are rolling over each year. One of the things that we showed was during the pandemic, we actually extended several of the contracts. Our contract with Boeing on most products goes out past 2030. On the 737 MAX, specifically, it goes out to 2033. When the pandemic hit, one of the things we offered a lot of our suppliers was the opportunity to go all the way out to 2030 or 2033 for a couple reasons. One, to provide them with some stability so that they could use that to go to their banks and get funding. Also to provide them with long-term continuity so they could continue to invest in their own automation and technology. Also as a hedge against inflation for us, because we then would have a back-to-back contract with the suppliers and with our customer. Those were some of the things that we did with the customers to extend the contracts. Typically, about 20% of them otherwise are rolling over each year. The Waves that I described are something that we've done multiple. We're on Wave 10 now. Every year we'll do 1 or 2, depending on the number of expiries that are coming up. We're always at least two years out, so that we have plenty of time if there is gonna be a transfer of work to manage that. But very often, there isn't. We negotiate with the incumbents, and we either avoid the Waves altogether or they keep the work. That's also a very good outcome. In terms of the savings, the savings vary significantly from package to package, supplier to supplier. Depends on a lot of different dynamics. What's really important is to manage any transfer of work. As I said, in the last five years, we've transferred 26,000 parts. We'll probably do that number again in the next five years. It's extremely important that we do that well and that we don't have any disruptions. It's a gated process. There are deliverables, very specific, very detailed deliverables. There's an operating mechanisms. There are dashboards to that transfer board process. We call it a plan for every part, and it's at a very, very detailed level, and we have a very large team that drives execution of that, which makes all of the initiatives in the supply chain that we describe possible. You know, Christine. Just remind everyone if you could state your name and then the company you represent too, that'll help us with the Q&A. Kristine Liwag. Oh, here. Kristine Liwag, Morgan Stanley. From the plant tours yesterday and the presentations you had today, it's clear you've made significant investments for efficiency, digitalization, automation. I guess there's only so much you could do, you know, with a 50-year-old platform. If you were to apply all the learnings that you've gleaned from all the initiatives you've done since COVID, how much cost savings could you have if you were to have a new aircraft program, a clean sheet program? Is this something like 15%, 20% in savings for manufacturability and lower engineering costs? Can you give us an idea of how much that would be? Also because right, Boeing had said that if they were to look at a new aircraft program, they're leaning less on propulsion and more on other things like manufacturability. Right. Well, what I would say is all of the changes that we've made in our current factories are very much applicable to next generation. In fact, we developed and designed and implemented them with next generation aircraft in mind. It starts with the digital engineering that Kevin described, the Spirit One, where we can use 3D tools, very advanced 3D tools to design products that can then go into production very quickly. We talked about it, this Determinate Assembly. It's very important because the 3D designs allow us to put in holes in advance so that you don't need large tooling jigs to hold structures in place so that you can connect them. You can put the holes in advance. It's not just pilot holes that have to be drilled like in the past. These are full-size holes. When the products come together, we just set them next to each other, and we can start fastening them, and that is a huge difference. You combine that with the things that we've done on digitization, automation, robotics, all those things are very much designed to enable next generation products. What type of savings could result? Don't know specifically because we don't necessarily have the designs right in front of us, but it's significant. You know, we're seeing some significant cost reductions on current programs. Even brownfield programs that are 50 years old, we're seeing significant cost savings, and that can all be applied to future generations. Kevin, maybe you could comment further. Yeah. I was gonna give you a couple of numbers maybe. I happen to sit on the digital transformation board for AIA, so I think two things that come to mind immediately. What we see across the industry with the new 3D-type tools, 3DEXPERIENCE Teamcenter, those types of tools, is we're seeing about a 30% improvement in engineering costs. Probably the most profound thing, though, is that, you know, we'll be synthetically building an aircraft inside of the digital space, and we'll do that, and we'll fundamentally be building it up to what we call, like, T 100. We'll build 100 different aircraft digitally and prove all that out before it actually hits the floor. Historically, the very first aircraft, T one, is exponentially more expensive than the next second one, third one, fourth one, fifth one. That's where these digital tools really come to play, is we'll be able to do all of that synthetically, prove out that we have a good production system, us and our partners, and take advantage of that differential in cost between the first unit that we would have historically built and the first unit that we build using these digital tools. It's pretty profound. That's one thing I will highlight is you saw in the videos and in some of the presentations these virtual reality simulations that we did of the advanced tools before we deployed them. That enables us to work out some of the bugs before you ever start cutting metal and putting these things in the plant. For example, Tar Heel. We had these virtual reality simulations, very detailed ones with significant animation in advance so that we could design and modify and refine it before we actually put it on the floor. Interestingly, when we go to like NIAR at WSU, the people that we engage with are people who do a lot of gaming and programming for gaming. It's a unique skill set, but it's very applicable to this virtual reality, and they've proven to be quite good at it. Seth, I think Jessica. Thank you. Seth Seifman from JP Morgan. I guess if I could ask, when we look at those 2025 projections you have, kind of what you're thinking about capital spending, and some of that is a modeling question, but maybe more importantly, you know, what it's for in terms of how much more investment would you do proactively in some of this digital toward digital engineering and digital production, how much investment might be required or would you be doing to ramp up on some of the, you know, new defense programs that we should look at and see. If I could sneak another one on the end, maybe if you could talk about the production rates that underlie the commercial segment revenue target for 2025. Right. Mark, why don't you talk about capital expenditure? Yeah. Seth, so if you look at it, you know, we invested heavily from a capital standpoint in the 2017, 2018, 2019 timeframe. We're capitalized and tooled up on 737 to 57 a month. We're tooled and capitalized on A320 in excess of 65. 14 on 787, 13 on A350. That heavy capital investment period that you guys saw back in that timeframe where we were in the ballpark of $250-$300 million of CapEx- To invest in that growth in those higher production rates, that's behind us. You know, we obviously, throughout the pandemic, we've had to really be very cognizant of what we spend from a CapEx standpoint. As we move forward here, you know, 2025, where we're going from a compounding annual growth rate on the commercial side, that capital and tooling is in place. We're ready to support that. You know, there's gonna be investment on the defense side that Duane has, but we're repurposing some of the twin aisle's space and equipment, broaches, autoclaves, trim and drills, EI machines. We're taking advantage of that. I think we're gonna, from a capital application standpoint, it's gonna be very efficient usage over the next several years. That will allow us to make investments on the technology side, some of the really cool things that Kevin showed, digital twins, digital trinity, Spirit One. We'll be able to, you know, over the next couple years, we spent $150 million last year. You know, this year it's gonna be a bit north of that. You know, the next couple of years when we hit, we get to those 20% growth rates, you know, you'll see us CapEx be over $200 million. You won't see us spending the type of capital that we needed to put that infrastructure in place. We'll spend more than we're spending now. It will be to focus on helping Duane and Kailash grow. A lot of the capital is in place for Sam's growth, and then it's the new technologies, right? We're gonna invest correctly. We won't overspend on that. We'll start to spend more from a CapEx standpoint as we move into 2023 and 2024 to make those investments so that we can grow our business, diversify, and you know, help support our customers with a lot of these new technologies that we think will help contribute to them winning new work as well. All right. On the commercial rates, Sam, why don't you talk about that for the next few years? Sure. We've already talked about 31 airplanes a month, and we've talked about on the 16.5% margin, we're assuming we get to 42 airplanes a month, and we're holding that at a steady state. That forms much of the foundation for as you're looking at the financials that we're projecting on the commercial segment. I think a couple of other points to make on that, the question on supply chain, that's a big piece in that. As Tom talked about, there's a number of Waves that occur and continue to occur because as contract blocks come up every couple of years, there's another stream of supply chain opportunity. There's also a second piece of opportunity in terms of the make buy that I talked about, whether we do it inside, we push it outside, or we change the nature of the value chain on the make buy as well. There's a number of those things that we're thinking about that all contribute up towards what we're looking at on that financial horizon. Great. Let me try to address this because somebody else asked me the same question. When we look long term to 2025, these are kind of estimates, right? They're not guidance or targets. Those assumptions are based on a commercial aerospace recovery from a single aisle and from a twin aisle standpoint. The question somebody asked me at break was, well, does 2025 assume 42 a month on 737? It assumes higher than that, okay? We're assuming single aisle recovers by 2025, whether Boeing's at 47 or 52. The assumption is Airbus is at 65 plus on A320, that we're back at more normalized production rates on the twin aisles, not back to 14, not back to 10. The A350 and 787 are gonna be the workhorses that you know, the wide bodies are... That wide body customers are gonna go to. We're expecting those to be in the 6-8 range when we get out to that time frame. For modeling purposes, we're expecting some recovery. We don't expect anything well beyond what we saw in 2018 and 2019, but those foundationally are based on assumptions that 737 continues to recover, A320 stays strong, and the twin aisles start to get back to some level of normalcy in 2025. Okay, Ryan, I think it's. Go ahead. Hi, everyone, Myles Walton, Wolfe Research. Question for Kailash. On aftermarket growth, how are you thinking about the share gain that you're gonna need to reach the 2025 goal, growth you expect for new customers and repairs that you're already working on versus sort of the consideration for adding new capabilities and new capacity? Yeah. Thank you. It depends on the platform. 737, 777, you know, it's pretty much mostly historically done out of Wichita. You know, we're starting to do that in Dallas. We feel Americas is pretty well covered for those platforms. We've started taking the capability to Belfast to start supporting those platforms in the EMEA region. You know, historically, Belfast did not do any work on those platforms or did very minimal. There's opportunity there in the EMEA region. We've talked about, you know, looking for a partner in the Middle East. You can think about, you know, the platforms there and in the Middle East, and, that's again, something that we can capture on 737, 777, and then, in the APAC region, right? So on the 737 and 777, we've pretty well covered Americas historically, but then going forward, you know, there is opportunity in EMEA, APAC, Middle East. A330, Boeing 757, we've traditionally done that out of EMEA. We've done that out of Belfast. We've done a little bit out of Dallas because, you know, that was also part of Bombardier. But we have not done a lot of that in China Mainland or in APAC. You can think about those platforms, you know, in those regions. in terms of shared gains, it would be platform specific and, you know, our growth plans of going into China Mainland or Middle East or Central America should give you a sense for the fleet that's there and, what we can potentially do. Sheila's got a question, Jessica. Thank you. Sheila Kahyaoglu from Jefferies. Mark, this one's for you. Thank you all for all the time you spent with us today. Maybe can you talk about as you put together your 16.5 forecast, and I know you said it's not a guidance parameter, but it's still a number we got. As you think across the programs, whether it's defense or commercial, what do you think about where you have the most confidence and where you see the most risk? That's a good question. Tough question, as well. You know, I think there's a couple of different ways that I can go pivot on that. You know, we really feel good about Defense and where they're going from a revenue growth standpoint and the stability as it relates to those margins that they contribute. You know, Kailash and his business is doing a great job, 20%+ margins. It's really great to see a structures company like us be able to have a part of our business that generates those types of margins. I think, you know, really over the next couple of years, the strength of our margin improvement is gonna be as the single aisle rates go up on 737 and A320, the fixed cost absorption, some of the digital automation and cost improvements that we've put on there, the ability to see those rates go higher and hold and recover, I think is going to be highly important to us as we think about the 16.5% margins. It will continue to be Commercial, the largest portion of our overall business over the next couple of years. I think as long as the twin or the single aisle rates hold, right, over the next couple of years and commercial aero recovers, I think 737 and A320 will lead the way to help us really achieve those 16.5% margins. As it relates to risk, you know, we're all up here. Our job is to manage risk, right? Our job is to deal with the perturbations that happen in the marketplace. I do think near term, the things that I really worry about is inflation, right? You're looking at labor inflation, you're looking at freight costs, you're looking at the length of time that product is on the water that's driving additional liquidity or capital requirements. I think near-term inflation is a big pressure for us. I think over the next couple of years as we grow and we add, it's gonna be about resources, labor, right? The Baby Boomers are retiring, and we've got to work really hard to attract people to come to go work in aerospace. I think there's a lot of automation. A lot of our jobs aren't just driving rivets, right? People are operating machines, and it's a good-paying career, and you can really provide for your families. I think over the next couple of years, those are gonna be big watch items for us, inflation and then labor resources. Okay. Ryan? All right. Thanks. David Strauss from Barclays. Hate to go back to this margin question again, but you had been saying 16.5% at 42. I think we all thought or we think that 42 happens before 2025. You're talking about 2025 above 42. I guess, like, if you could just kind of square that out. Are you now assuming that you can't get to 16.5% at 42, or you're implying that you can actually maybe get to 16.5% earlier? You know, higher rates on MAX, is that a good thing or a bad thing from a margin perspective? Yeah. I know it's positive from a unit seller perspective. Yes, Dave. Mark, just, I just want to comment. First of all, what we've said is the 16.5% is something that we aspire to achieve once MAX rates stabilize at 42 aircraft per month. Okay? Because that's a nice clean number. That's where we were back in 2016. If we have two lines, 21 M days a month, each producing one aircraft, that's 42 aircraft. It's a very good number for us from a baseline perspective for productivity. That would, once we stabilize at that level again, that's when we can get back to 16.5%. The reason we don't say that we'll go above 16.5% is I always say you have to run fast to stand still. That's true in this industry. No matter all the productivity things we do, there's always headwinds that we have to offset. Also in particular on the MAX, the way the pricing works with Boeing is it's indexed to rate, and 42% is essentially the threshold. As rates go above 42, they get a discount. While they're below 42, we get a premium. Going forward, as rates go up beyond 42, we're saying we can hold at 16.5% margin, which will be good. The absolute dollars of margin will go up as the rates go up, but we don't expect that the rate of margin will increase from there. David, thanks for the question, because somebody at the break asked me the same question, so it's good that you asked for clarity. The 16.5 and 2025 does not mean that we've backed off on what Tom just said. Okay? We're gonna achieve. We have targets and plans to achieve 16.5% well before 2025. It's a target, it's an estimate. It's just coming back to you to say, "Hey, we told you we can achieve 16.5% margins. As we move forward, you guys should expect us to be able to deliver at least 16.5% margins." That's how it was portrayed on the charts. It was not a backing off of what we've told you before, and I think Tom explained it quite well. Okay, Jessica, I think you've got a question. Gavin Parsons from UBS. Mark, another one for you. You laid out a slide with capital allocation, and I guess one question I had was, do you need to get delevered to 2x before you do M&A, or is it- Does that have to come first? It doesn't, right? Tom could speak a little more. What we've always said is, you know, when we think about growth and diversification, that's really important to us. We know that, we've added some debt, as a result of the challenges over the last couple years. If the right strategic asset became available, right, that meets our strategic diversification needs, and it had the right financial parameters around it, we could pause or delay our debt repayment plans that we have. We wouldn't put ourselves in a position where we would over-lever, but sometimes an asset comes available when it does. You know, we're still working through the recovery. It would be best if we were a little further along the recovery before we went down that path. I think we're providing ourselves some level of flexibility to pivot on that. Tom, you wanna add? Yeah. I mean, acquisitions are opportunistic. They're available when they're available. If the right thing came along that met our strategic criteria and our financial hurdles, then we could pause the delevering in order to execute it. We do think we have capacity to execute deals. I'd also say that we've explored some scenarios where, depending on the company and what their current debt levels are, by combining, we could actually delever, in effect. The answer is, we are not gonna just wait until the delevering is done to consider M&A. We'll consider it opportunistically, and we'll either pause the delevering or we'll achieve it by a combination. Okay, Ryan. Hi, good morning. This is Jack Ayers from Cowen and Company. I guess just kinda switching gears here to cash in 2022 and 2023, if you can kinda maybe just lay the groundwork of some of the puts and takes. I think you guys alluded to working capital being a tailwind here. I think, Tom, you mentioned you know how you guys have kind of helped out suppliers in the supply chain. I think it was a fairly large number. I guess, is there any opportunity there to kind of you know stretch payables and you know from a days payable perspective you know can we you know extend those, if you can just provide some color there, that'd be helpful. Yeah. I mean, we have market terms with our suppliers on payables, and at this point, we don't see that as a source of opportunity, is to extend those any more than they are. There is still a little bit of delivering going on, or destocking, let's call it, as rates go back up. We'll cross over, and we will start then to consume inventory and put more orders in. The working capital headwind starts to go away as rates go up. You know, Mark, why don't you comment in terms of. Sure. I think you have it right. You know, this year is still some level of uncertainty, okay? You know, Boeing's not yet delivering 787s, which puts pressure on our cash because we're not delivering and collecting cash. Boeing hasn't yet made any commitments above 31 a month on the 737, which is our largest program. Some of those things have to be sorted out in order for us to make some final determinations of where we think cash is gonna be this year. Obviously, even at 31 a month, we're gonna see meaningful revenue improvements year-over-year. We'll see meaningful improvements in earnings, and that will help contribute on the cash side of things. I think we have a real opportunity here. We are carrying extra inventory through the pandemic and supplier support. That is a huge lever and opportunity for us, but we have to be balanced. I mean, as we think about going up in rates, we can't put our suppliers under undue pressure as we need them to go up in rate. We're now seeing, with Ukraine and Russia, raw material challenges now potentially on the titanium side. There's a lot of puts and takes here, and I would say, we can probably come back, you know, specifically around 2022, whether it's first quarter or second quarter, some of those things get behind us, we can dial it in and provide some more clarity around this year's cash. But inventory will help. Improvement in earnings will help on the cash flow side of things. We're gonna be very disciplined on the capital side. We'll see meaningful improvement year-over-year as it relates to cash flow. As we move into 2023, and I don't wanna get too ahead of ourselves here, but a lot of assumptions are that the bulk of the pandemic will be behind us. Boeing will have burnt off a significant amount of their stored aircraft and so will we. We'll have a syncing of our production system between us and Boeing. Airbus will continue to be delivering at high rates on the A320 program. When we move into 2023, we'll have, I think, better fine-tuned where our inventory levels are. I think in 2023, you'll start to see the type of cash flow that you saw from Spirit in 2017, 2018, and 2019, and all of that is gonna come to the higher revenues, the more normalized revenues, and you'll start to see the kinda cash generation that we are able to produce pre-pandemic levels. There's still a bit of choppiness that's going on this year. There's still some uncertainty around 787. We get past that, I think we get a much better line of sight. But we're feeling good about the back half of the year. We're seeing some improvements, and I think we're really optimistic as it relates to where we're going in 2023. The other thing about our cash is, obviously, big driver is narrow body production, and a big driver is MAX. We're not certain on MAX production levels yet for this year. Boeing hasn't committed. They'll be doing that as we get a little further into the year. We do have the $123 million cash repayment to Boeing for the advance that we got back in 2019. That's gonna be a headwind. But as Mark said, as the narrow body production rates stabilize, recover, that will ultimately drive our cash flow in the near term. Okay, Jessica, I think you've got one. Hi, Ronald Epstein from Bank of America. I know you guys have touched on it briefly before, and we toured the 787 facility yesterday, I kinda wanted to get a little more clarity on this. When exactly can we expect the excess wide-body capacity to kinda move over to other programs like defense? Any timeline there? Any color? Yeah. It's really ongoing as we speak. We've already allocated a lot of capacity in our 787 area to defense programs, and some more will happen. Same thing in Kinston with the wide body production capacity there. We've insourced some products that were out in the supply chain, so that adds to the hours in Kinston, and we're also putting some business aircraft activity there. The shift, this repurposing of the wide body capacity to defense is ongoing and will continue over the next few years. Duane, anything else to add to that? No. I'd just say that, you know, we already have quite a few programs over there, and they're either gonna be operating very quickly or will be within the next few months. Then we have some other wins that we've gotten that we're planning on moving over to the Twin Aisle. It's all over the plant where we're doing it. Most of it's kinda in the 787 area, 'cause it fits really nicely with the kinda products that we're putting in there. You know, all the new defense things that we're bringing in, we're really not facilitizing any new buildings for any of that right now. That's not the plan. Right. Well, Duane in his presentation had a diagram of one of our facilities, and it showed how much has been already repurposed. Yeah ...to defense and what the next steps are. You can see from the standpoint of square footage, it's quite significant. Yeah. The other point I would make, and I know for you guys it's, you'll probably say, "Mark, well, that's obvious," but there's a double benefit, right? You're talking about composite new production systems on 787, EIs, broachies, autoclaves, trim and drills that Duane needs in his world. By sharing space with 787, not only does it help Duane meet customer commitments sooner, reduces our capital expenditures, being able to take the products to market quicker, but that helps drive down costs that allocates on the 787 program, which over time, as 787 rates come back, we're very, very focused on improving the overall financial performance of that program. It's a double benefit. It's really, really good for us. We've got the space, we've got the equipment, and we're taking advantage of it, and that's leading to a lot of great wins by our defense team. Okay. There's one over here. One here. Hi, it's Cai von Rumohr from TD Cowen. It's a question for Kailash on aftermarket margins. How does the 20% split across repair and spares? And within spares, is there a difference between OEM-controlled spares and spares you sell directly to market? Thank you. Yeah, thank you. We don't publicly disclose the margins between spares and repairs. If you think about spares, there are a couple platforms where our spare sales are to airlines directly, and you can expect that margins in those are a lot higher than spare sales that go to the OEMs directly. Now, the OEM contracts, of course, many of these contracts are part of the production contracts itself. The pricing for those and the margins for those are, you know, just complex and, you know, it's across the 80,000 parts that we build. Overall, you know, I think we'd be looking to manage the combination of repairs and spares to be about, you know, 20%+. Ryan, did you have a question? Thank you. It's Jonathan Raviv from Capital One. Mark, you mentioned earlier some of the rising risks around raw materials. I wonder if you could provide a little more perspective on what raw materials, excuse me, that you rely on. How do you buy them? You know, again, anything beyond titanium as well. Any perspective on how much is already in the system or stockpiled, if you will, and at what point does it become more of a real-life challenge where we just can't build things because there's not the stuff there, if it becomes that at all? Yeah. Let me talk to that. On the raw materials, really we buy most of our raw materials through the buying consortia for Boeing and Airbus, 90%+. When you think about the types of materials we use, aluminum, titanium, those are the really big ones. There are some other, and we use a little bit of stainless steel and some Inconel in different places, but it's mostly aluminum and titanium. TMX on the Boeing side, Constellium on Airbus, that's where we get most of the materials. The good thing about that is the scale is huge on those, and the pricing has always been stable. With Boeing on TMX, the way the contracts work is, if the prices were to go up and we paid more to TMX, then they would pay us more for the product. They just keep the TMX flat, and that's always how it's worked. It works well for them, it works well for the suppliers, and that's always been a good thing. Airbus is a little bit different, but a similar concept. Right now, there hasn't been any sort of challenge on aluminum or titanium. Of course, with titanium, a significant portion of that comes from Russia. For aerospace titanium, you know, it's a fairly large amount, in the 40% range. Of course that's a concern because now there are sanctions in place. The good news is both Airbus and Boeing have been planning on this for years, and they have developed alternative sources in places in other countries, so that's one thing. They also have stockpiles, so that helps and gives a cushion. In addition, if you look at the aircraft, there's more titanium proportionately on wide body aircraft than there is on narrow body. Of course, wide body production is lower right now because international travel hasn't recovered. That helps. It gives us, I'd say, more time as an industry to develop those new sources. That's what's gonna have to happen. I think David Calhoun in the Boeing earnings call said it well, which is, there's no immediate concern and issue. We have plenty of cover, if you will, for current requirements. We do have to monitor it, and we do have to make sure that we continue to develop new sources, particularly of titanium. I think we've answered most of the questions from the online audience. Maybe we've got time for one more question in the audience here. David? Thanks. David Strauss, Barclays. Tom, on 787, the fixes on the stored aircraft that Boeing has produced, can you give us an update on how that's progressing? How long it takes you to do these repairs? Yeah, just an update there. Thanks. Right. The 787 issues were, broadly speaking, fit and finish. Fit and finish being how the structures fit together, the different composite structures, and how much pull-up force was required to fasten them. The issues largely were being able to determine in different areas of the aircraft how much pull-up force was used, and if it was too much, then to put a shim in place to help close the gaps. As we went through all the analysis of our sections of the aircraft, we identified 3 or 4 areas that required rework. We identified how much rework would be required in terms of material and labor, and we built that in. Those were the forward losses, essentially, that we took last year. The forward losses were partly related to the rework and partly related to the schedule compression that happened on 787. We've identified all that rework, and we are prepared to do the rework. We've already started it, and as I mentioned in the earnings call, we're about 40% done. It's different, let's say there's 3 or 4 different things. We've completed a different number of aircraft for each one of the repairs, but collectively, it's about 40% of the work is done. We'll continue to do that as we get access to the aircraft. Our repairs will only be a fraction of the time that Boeing requires to do other repairs for other sections. As they're working on an aircraft and they can give us access, we'll go in and do our repairs and then be done. I don't know what their final schedule will be for those repairs, but again, as we get access to the aircraft, we'll complete our repairs, and we're about 40% done to date. How long does it take you to complete a full repair on your section? Oh, it varies, but ours take much less time than it will take for Boeing. We'll be able to fit nicely within their windows. Okay. I think that concludes the question and answer session for today. Thank you, panel, for participating in our session. I'll turn things back over to Tom for some closing comments. Well, thank you to everybody for, again, coming to Wichita. We know it's not easy to get here, but it's important for us to be able to show you what we do as opposed to just tell you. Of course, you can't do this on Zoom easily. The factory tours yesterday were very important for you to have the opportunity to get out in our factories and see some of the changes we've made to the flow, to the automation, the robotics, the digitization, so you can kind of touch and feel and see those things. We're proud of them, but we also think they contribute significantly to where we wanna go as an organization. You know, as I started off by saying, the last few years have been difficult. For Spirit, we had the Max crisis, and then we had the pandemic, and we've seen historic changes in our industry. Our focus is to emerge from this period of challenges as a stronger, more diversified company. We're on our way. I'd say probably the single biggest thing I'd like you to remember from today is that Spirit is a very good play in terms of market recovery, because you are seeing domestic traffic recover first, and it's 85%-90% back to where it was in pre-pandemic levels. That's gonna favor narrow-body aircraft like the A220, the A320, and the MAX. Spirit's backlog is still $35 billion even after all of these challenges, and 85% of that is narrow bodies. We have obviously the biggest work packages on narrow body aircraft of any supplier in the industry. We're very proud of that, and I think it's gonna serve us well as these markets recover. I think over the next three or four years, we're gonna see the fastest rate of growth that we've ever seen, much faster than we saw from 2016 to 2019. That creates some challenges in terms of rate readiness, but I think we've shown you all the things that we've done to improve our manufacturing process so that we can do it better than we did it last time. Wide bodies are gonna take longer. International travel is not recovering as fast, but it will recover, but not as fast. Wide body production may not go back to the same levels as it was before, certainly on 787 or A350. What we're doing there is repurposing a lot of that capacity, including the capital, things like the automated fiber placement machines, autoclaves, trim and drill, nondestructive inspection, auto fastening. These are big capital investments. We already have those, and we're using those to win new defense work. That will help accelerate our defense growth. That's also a unique advantage for Spirit. As we go forward, we talked about the three Ds, continue to diversify, and our goal ultimately is to get to 40-40-20. We've made some progress, we've got more to go, but that's the direction we're heading. Secondly, to de-lever, to pay down some of the debt that we took on during the pandemic. It was important to stabilize our company and have adequate liquidity. We did that. Now we wanna pay down the debt, get back to investment grade rating, and that will help us lower our interest rates and our interest payments so that we can invest more in innovation and more in growth. The last thing is to continue to drive our performance back to 16.5% margins. That's here we were, roughly in 2016, when things were stable. Once narrow body rates recover back to, say, 42 for MAX and higher for A320, that's where we wanna get to in the future. That will generate not only profitability, but cash flow. Our goal is to get back to the 7%-9% cash flow. We'll continue to invest that cash flow in productivity, organic growth, M&A, and then if we've exhausted those, we also wanna continue our program of returning cash to shareholders as we have in the past. That's the plan that we have. Ultimately, it's about continuing to diversify, de-lever to get back to investment grade, drive margins to 16.5% so that cash flow can be 7%-9% of revenue again. So that's the plan that we have for Spirit, and we really appreciate the opportunity to describe it to you over the last couple of days. Thank you for coming to Wichita, and safe travels back to your homes. Thank you.