Good morning. Good morning. Welcome to Woodward's 2022 Investor Day. Thank you for attending. It's great to see a lot of you in person. My name is Dan Provaznik, and I'm Woodward's Director of Investor Relations. First, we'll start off with a few housekeeping items. Can you go to the next slide? Safety first. Should we need to evacuate, there is an emergency exit at the front of the stage to my right, and then the doors that you all came in through, please exit, go down the stairs, and then exit the building through the courtyard. Restrooms. Restrooms are, again, out the doors that you came in to the right just beyond the registration desk. Last, lunch will be served following the presentation. Boxed lunches will be available for those of you who are unable to stay. Out of respect for others, please silence your cell phone during the session. Woodward has a culture of continuous improvement, and please use the comment cards that are at each one of the tables to give us feedback on how we can improve this event in the future. Please leave your comment cards at the registration desks when you exit. Could you advance the slide, please? I'd like to introduce the Woodward team. Today, you will hear from Tom Gendron, our Chairman and CEO, Tom Cromwell, our Vice Chairman and Chief Operating Officer, Mark Hartman, our Chief Financial Officer, and then also from the Woodward team, A. Christopher Fawzy, our Corporate Vice President, General Counsel, Corporate Secretary, Chief Compliance Officer, and the person with the longest title at Woodward, apparently. We also have Rajeev Bhalla, a board member present as well today. Turning to the cautionary statement. I'd like you to refer to and highlight our cautionary statement as shown on slide 4 of the presentation. As always, elements of this presentation are forward-looking or based on our current outlook and assumptions for the global economy and our businesses more specifically, including the expected and potential effects of the ongoing COVID-19 pandemic. These elements can and do frequently change. Please consider our comments in light of the risks and uncertainties surrounding these elements, including the risks we identify in our filings. In addition, Woodward is providing certain non-GAAP financial measures. We direct your attention to the reconciliations of the non-GAAP financial measures, which are included in today's presentation and the related schedules. We believe this additional financial information will help in understanding our results. Turning to today's agenda. Tom will start with the Woodward overview. Mark will present and review our financials. Tom will review and provide insight into our aerospace business. After the aerospace review, we will take a short break of approximately 10 or 15 minutes. After the break, Tom will discuss our industrial business, and then Tom Cromwell will provide an operational review. Tom Gendron will then do a wrap-up, and we'll close out the presentation. We will take questions immediately after the financial, aerospace, industrial, and operations sections of the presentation. For those in the room asking questions, please raise your hand, and we will come to you with a mic so that not only everybody in the room can hear the question, but also the people that are online can hear your question as well. For those of you online, there is an option for you to enter a question as well, and I'll be monitoring that list and asking those questions to the presenters. After the wrap-up section, Mark will join Tom on stage for a question-and-answer period to close out today's session. Now I'd like to introduce Tom Gendron, Woodward's Chief Executive Officer and Chairman of the Board, to kick off the day with a Woodward overview. Well, it's great to be here and see everybody in person. I was talking to a few of you during the break, this goes back to December of 2019 since the last time I was in New York City, so it's good to see people, no face masks, getting back at it. I got a high-level overview to start us off, and as Dan said, we're gonna dive into more details on our outlook and each of the business segments as we go through the day. First, what I'd highlight is, you know, we feel we really performed pretty well during the pandemic. As everybody said, it was kind of unprecedented event. We had a nearly complete shutdown of the commercial aircraft market. Through that, though, we were able to still generate a lot of cash, which is a hallmark of the company. We maintained, you know, solid liquidity. It was one of our concerns going into the pandemic to ensure, you know, we had the strength to navigate the pandemic and ensure that Woodward came out strong. We held up our margins, what I think quite well, given the drop in volume and the like. As we move forward, you know, we look to build on that, and we're gonna talk about how we're gonna build on that today. Just kinda going back, I wanted to let everybody know, you know, what our vision and focus is as a company. Many of you know us, but if you're new to Woodward or the Woodward story, this is kind of our guiding principles. You know, on our vision, we wanna be the global leader in energy conversion and control solutions, targeting the aerospace controls market, industrial equipment controls market. One of the things we've always been focused on is improving efficiency, reducing emissions, but we kind of highlighted, as we updated this, that working with our customers, you know, we are helping enable the path to a cleaner, decarbonized world. We'll talk a little about that today as well. For those that aren't familiar with the term energy conversion and control solutions, really what we highlight there is that we, through our applications, convert all forms of energy into electric power, into motion, so it's like motion control, fluid power, as well as propulsion. That's the idea. It doesn't matter if it's a fossil fuel-based, renewable, or new decarbonized type fuels. That's the prime focus of the company. You know, what we look at is like the value proposition. This is how we would phrase, you know, for our shareholders. When you look, we've got tremendous opportunity in aerospace. This really comes from years of market share gains and being on some of the best platforms in the industry. Lot of content that's leading to a substantial aftermarket over the next 5, 10 years. Our industrial markets are also attractive, and they are really driven by efficiency, emissions reduction, and again, being on the right platforms on a global basis. We've got a great track record of organic growth, which has been really facilitated by a strong R&D investment. We really believe in organic growth and then supplementing that with M&A and other activities. That organic growth is something that we leverage in the R&D investments between both segments, industrial and aero. Later in the presentation, I'll talk a little more about that. Part of that value proposition, too, is our True North operational excellence journey. There, one it's to have the best operations to go with the world's leading control systems, but it's also to drive margin improvement. You know, that's a big part of where we're going with that. As I said earlier, we are able to drive a lot of free cash flow. Mark will talk a little bit about that. We've got a... The business can generate, you know, excellent cash. As we go forward, we had made a lot of the investments that were necessary. Pre-pandemic, a lot of you that know us know that we had very large capital expenditures to support the growth that was coming. Pandemic hit, that capital is all in place. We'll talk about how we're gonna leverage that going forward to also help drive cash. We think, and for all of you that, you know, we're very disciplined with capital allocation, whether it's in terms of capital expenditures or M&A, to ensure that we keep, you know, solid shareholder returns. We think we've got a compelling strategy. The first is we really target, you know, niche markets. You know, I would say aerospace is a niche market, but when you dive in there, the areas we concentrate on are large but specialized. The same thing goes for our industrial controls. Heavy emphasis on industrial equipment, primarily engines and turbines, specialized equipment, attractive opportunity 'cause they got long lives, good aftermarket. We do play in with, you know, with that R&D investment. We have proprietary solutions, and then one of the aspects that's also key value is basically everything we do, we're sole sourced. They're long life assets that we're on, and so that drives further aftermarket. We've kinda coined part of our strategy is to be indispensable to our customers. The way I look at that is, our customers wouldn't think of building a plane, an engine, or turbine without Woodward, because we bring the best solutions and help them bring the best product to market. We've got a really large installed base, both on aero and industrial, and we're leveraging that into significant aftermarket growth. With that brings very positive margins. A new thing that's really going across all our markets is really the look to decarbonize. We're really with our customers, and I'll talk a little bit about that as we get into the business segments. We're really enabling them to transition to lower decarbonized solutions. Finally, a big part of our strategy is always to be disciplined with capital deployment. To kind of hit just real high on the markets, most of you are probably pretty familiar with the story on aerospace. Today it's probably changing. You're going to hear us talk about a stable defense market, but really when you look at the commercial market, the projections and the outlook are for substantial growth. In particular, substantial growth in narrow bodies where we have very high content. On the industrial, if you look at the right side of the page, what you see and I think this is a reality out there. All forms of energy, the demand is going up. If you look out over approximately the next 30 years, all forms are going up, including renewables and new alternative fuels. That plays well for our industrial business in that we're hitting on that, we're providing solutions that help reduce emissions, help make equipment more efficient, with that as well, helping enable the energy transition to new fuels, decarbonized fuels. The outlook for this is long-term growth in both of our market segments. We've got good share, and we're gonna, you know, continue to capture and turn that into revenue and enhanced earnings. Some of the key growth drivers across is infrastructure, global infrastructure development, and we really look at this as the movement of people and goods is increasing substantially. That translates into, you know, aircraft, ships, rail, and other logistics applications. Power gen demand is going up, and then we're seeing more and more from, as I said in the previous chart, more demand for energy worldwide. Emissions reductions, we've talked about that, has always been a driver of growth for Woodward. Over the years, the demand for cleaner products, cleaner environment has been in place for decades. Every time there's new emission regulations or drive for cleaner applications, that means more business for Woodward. It's always translated into more applications for us. The energy transition globally, there's a shift. People are looking for cleaner fuels. You know, that's also gonna require a big infrastructure expansion to support those fuels. Interesting part is, as you do in that transition, many of our applications will have multi-fuel, which drives increased content for us, and there's ongoing technology and new applications coming that provide some growth opportunities going forward. Woodward's always been committed to sustainability, good governance, and corporate responsibility. I'll hit a little bit on this for everybody, but it's been in the fabric of the company for well over a hundred years. If you look at there's sustainability, we didn't want to walk everybody through it, but I'd ask, you know, go out and look at our sustainability report. You can download it off of the page here, or you can get on our website. It really documents all the things we're doing around sustainability. If you look at corporate responsibility, this is an interesting one. Really back in the 1940s, the Woodward family and our previous CEOs back in the day really had a philosophy, and this is documented. We really call it stakeholder philosophy. It was documented in the Woodward Constitution that was truly documented and incorporated in the company 50 years ago. It really predates that. It really goes back to the 1940s. It was really the philosophy of balancing between all your stakeholders, and this has been something we've strived for. Really, you know, we always start with shareholders, you know, that we look to drive a long-term return to shareholders that represents a superior investment. It's also about supporting customers as a trusted partner. Our members, you know, that term was brought up, is that you're part of the organization, that we treat them very well. They're essential to our success. We really look to provide meaningful work, good career opportunity, and a good living. Suppliers, you know, are critical to Woodward, and I'm sure we're gonna get some supplier questions today. You know, working with them and ensuring that they also have a good business and we're a good partner for them. Finally, in the communities, hallmark of Woodward as well is always to make our communities a better place to live and work. This has been a philosophy of the company for a long time. As we look over to ESG, and we'll talk a little bit about this as we go into segments. We've always been, like I said, driving to clean up, you know, the equipment we provide controls to, reduce emissions, improve efficiency, and over the years, we've helped substantially reduce the emissions from the equipment we are a part of. That, that's the first, but then internally, we're committed to reducing the emissions out of our operations. You know, on the social side, we've got a diverse workforce that we're looking to really continue to grow and develop and train as the world and operations and things are changing. You know, we're looking to develop our own people and bring them along. As I highlighted as well, we're really embedded in the communities we operate in. In many of the communities, we're one of the largest employers, and so we feel a responsibility to help improve those communities. On the governance side, I'm really proud to be part of the organization that has really solid governance. Yeah, as we highlight here, I'm the only non-independent director, so all our directors are independent. Each one was hired for a purpose to bring skills to the company, different experiences and, you know, to help guide and direct the company. As I said, the Woodward Constitution is overriding umbrella of how we operate the company. It flows into all of our policies and procedures, and I think it sets a very good overall governance and compliance mentality within the company. Kind of with that, flowing out of there, all that comes together and we're helping. You know, we always use our tag, always engineering for a better future, but we're really trying to enable a path to cleaner world. With that, I'm gonna turn it over to Mark, who's gonna go through our financial outlook. Here you go. Great. Thanks, Tom. I echo Tom's comment on, it's nice to be back in person in front of everybody and, versus, you know, me staring in my office, staring at a lot of you on the computer screen. It's nice to see a live face, so I'll look forward to catching up with a lot of you later on break and lunch also. I'm gonna go through the financial highlights. First, I wanted to really just kind of do a reflection. The first few slides here is gonna be really a reflection of the last couple years and specifically 2021, also, and then taking a look at 2022, and then we'll talk about our long-term financial targets and outlook. You know, as Tom mentioned, we consider that we've navigated the pandemic pretty well. You know, we did generate a significant amount of cash flow. It was the number one focus for us really, you know, two years ago today, when the pandemic hit us, that was something that we focused on very quickly, liquidity and cash generation. And we did generate, you know, over the two years, a significant amount of cash and, you know, really that helped us strengthen our balance sheet, improved our liquidity, and really gave us a lot of opportunities to accelerate ourselves out of the pandemic. We also, you know, I've talked to a lot of you about the investments that we made during the pandemic. You know, one of the hallmarks of Woodward is we invest in downturns and through downturns, so that we come out of them even stronger. Whether that be in you know, our strong R&D investment, you know, Tom Cromwell will talk about our operational improvements that we've made that is allowing us to to leverage and come out of the downturn very strong and then, you know, the improvement in the capital expenditures. I know I've talked a lot of you about you know, our facilities and some of you have made it to our facilities, and you see the automation that we've put in place and continuing to be able to leverage that was something we definitely focused on over the last two years. As we look ahead, you know, as Tom just highlighted briefly and we'll talk more about in the Aerospace and Industrial section, you know, our markets are recovering, and we do have strong growth. You know, we are projecting to be, you know, at, returning to 2019 sales levels, in 2023. As we exit 2023, we are anticipating that we'll be at our segment target levels, which I'll talk more about. If you look at kind of the last few years, you know, and see what happened with sales, you know, obviously 2019 pre-pandemic, you know, half of our fiscal 2020 was impacted by the pandemic, and then, you know, 2021, taking a step down, and now markets recovering. You know, we're starting to grow and see a strong step up in 2022. When you look at earnings, all right, we're looking to leverage that sales volume. You know, we have the capacity in place, and really that opportunity then is in front of us to leverage that through strong incremental operating margin. The one as we talked about in the November timeframe and highlighted again in the January timeframe for our guidance, you know, one of the headwinds that we do have is the return of the variable compensation structure. Just to remind everybody, you know, our variable compensation goes across all of our members, so across every single employee. The principle of the plan is we have to have earnings per share higher than the prior year. In essence, we didn't have any variable compensation impact in 2020 or 2021, and returning that back into the cost structure. Finally, in 2022, we've talked about the inflationary pressure. You know, we typically talk about inflationary pressure and offset by productivity. Obviously, in the environment that we're in today, we weren't able to offset all of that with productivity, and so that was a headwind to us for 2022. Still anticipating a solid free cash flow, though. Another year, you know, as you see on the slide, approximately $315 million. We will have an investment in accounts receivable as sales return. That will definitely be a working capital matter that will hit us, you know, we look at that as, you know, obviously solid because the sales are returning and that we're able to collect that cash. It'll just be a timing matter during the year. When you look at our business, you know, if you start at the segment level, Aerospace about 63% of the company, Industrial about 37. You can then see the breakdown underneath those. Tom will talk a little bit more about, you know, each one of those sub-markets that we have there. Then you look at who we're partnering with. I mean, we partner with the industry leaders. You know, we are with the big boys, you know, with the who's who in our industry, and we partner and collaborate closely with them. As Tom mentioned, you know, one of our key strategies is how do we become indispensable to our customers and, you know, this strong partner list that we work with. Looking kind of over the last few years, you know, first starting on sales, you can see the growth pre-pandemic up to 2019. As I mentioned, 2020 and 2021, the pandemic effect kind of put in a two-year pause. This is how we talk about it. Now we're accelerating out of that into 2022. What's really driving that is across, you know, almost all areas of our business. You know, our commercial aero on the OEM side with build rates increasing is a significant opportunity for us. The aftermarket with both legacy and the dynamics of the fleet is really a higher Woodward content, which will be a big opportunity for us, you know, in the short term, and we'll talk more about in the longer term is quite a story for us. When we were looking at the defense markets, we were considering them stable. You know, we'll see. Obviously, with the current situation that's going on, there might be some positive upside there with some opportunities with some of our foreign military partners, and we can talk more about that. Power generation demands are growing. Developing world is really what's driving that. Tom will talk more about what's really driving a lot of that need. As you saw in the one chart he already showed, you know, the increased demand of energy and then the mix of that energy is gonna be a positive for us. On the marine side, really the utilization and new ship orders are really driving that side of our business. When you look at kind of the impact on our adjusted earnings per share, you know, obviously, we had the pandemic-related decline, which was really the sales decline is what impacted our earnings. We were aggressive very early on in the pandemic of, you know, we took out, you know, over $100 million of costs in FY 2020. That's how we were able to manage so well through the pandemic. You know, more recently, we've called this out, you know, we have the COVID disruptions with supply chain and labor disruption, you know, that has impacted us and Tom Cromwell will talk a little bit more about that later today. On the aerospace side, you know, you can see kind of the same story here as you know, the Woodward story. You know, significant impact starting in really second half of 2020. You know, still with us through 2021, and now we're at an inflection point and going up for 2022. You know, the higher content on the MAX and the neo is what's really driving the future growth on the aerospace side. We are anticipating then to be able to leverage that sales volume increase to be able to increase our segment earnings by significantly, you know, up 200-300 basis points, you know, is really gonna help us drive that earnings flow from the sales volume increase. On the industrial side, again, the impact in 2020 and 2021 related to the pandemic. We are anticipating, you know, up low double-digit to mid-teen% sales growth in 2022. Then, you know, flat to up 150 basis points on the industrial margin. You can see here, you know, 12.9% in 2021 and, you know, being up or flat to up 150 basis points in 2022. I'll talk more about what we're anticipating for the future on both segments here in a few slides. We've talked about this, you know, really the strong free cash flow generation. That is a big part of the Woodward story. You know, really, as we go forward and, you know, the earnings improve, we'll be able to leverage those earnings down through our cash flow. The one thing we talk a lot about and we've mentioned and we'll talk more about is really we're at the maintenance level of CapEx spending. We did the large investments previously, and now going forward, we just really need to be able to maintain our CapEx. That will also help us generate cash flow. We did have significant improvement in working capital during the pandemic. You know, as you see here with, you know, $315 million in 2020 and $427 million in 2021 for cash flow. The significant driver of cash flow was our improvement in working capital. For example, inventory. I think we declined over $100 million during the pandemic. You know, a big focus for us there. You know, as I mentioned, we are anticipating with receivables increasing that we will have some headwind on the working capital side as we move forward. You know, we do target conversion you know, greater than 100% of net income to free cash flow. You know, we've continued to prove that we can do that. Moving into CapEx. You know, we identified this as kind of three cycles we had here. Tom mentioned earlier, in the middle part of the last decade, you know, we had a very large capacity, you know, investment that we really put in place, you know, for those that have seen our facilities, whether it's in Niles, Illinois, Rockford, Illinois, or Fort Collins, Colorado, that was half a billion dollars that we spent to recapitalize the company and make that large investment. You know, during 2017, 2018, and 2019, as our markets were growing and our content share grew, we were still adding capacity in that period. COVID hit in 2020, and you can see there we had a decline in CapEx down more to that maintenance level, which is kind of where we're anticipating we'll be at, you know, in this $50 million-$80 million area going forward over the next few years of really just again, maintaining our capital, maintaining our equipment so that, you know, needs replacements. For any of you that have been to a Woodward facility, you see some of the equipment, you know, is well used, and we like that, but we've also made investments in state-of-the-art facilities and equipment to really improve our productivity. What has that led to on the balance sheet? We have a strong balance sheet overall. You can see from the leverage level here, the yellow line, 2018, we had the L'Orange acquisition. We took our leverage up, and again, a hallmark of Woodward is this is what we do. We do disciplined M&A, and we can take our leverage up, and then we're able to take that cash flow and very quickly pay off the debt and bring our leverage back down. You can even see that we're able to do that during the pandemic, even with the impact. The cash flow has allowed us to pay off all of our pre-payable debt and you know that's where we're at now with that $750 million of debt on our books. A lot of capacity to increase that as needed. Even as you know our markets recover, our earnings improve, you know that will improve our balance sheet even more. Now moving a little bit, looking ahead. Financial targets. We are anticipating high single-digit sales growth, and I'll talk more about that related to Aerospace and Industrial coming up. We still have the objective overall of we want to take that sales growth and double it at the earnings line. That's something that we very much focus on leveraging that sales volume and being able to leverage that through earnings, which then allows us to leverage the conversion of greater than 100% of net income for free cash flow. And really, with the sales growth and where we're at, we are anticipating that both Aerospace will be, you know, 20% plus, Industrial will be 16% plus margins. And you know, that will be our recovery and I'll talk more about that here going forward. Our five-year outlook. Through 2026, on the Aerospace side of the business, we are anticipating a sales CAGR of between 8%-10%. And what will really drive that is the strong commercial growth that we have. As I mentioned, and as Tom mentioned, really the content wins on the, you know, current generation, the Max and the Neo and on the wide bodies. You know, as international demand improves, you know, the wide body content gains that we have is also significant. As the build rates ramp across that commercial business, it will really drive our sales, and will drive our earnings overall. Also to remember is really the aftermarket opportunity. The aftermarket opportunity is both on the legacy, you know, the CFM56, for example, and in this period, we're starting to see the new generation aircraft, the Max and the Neo, really driving a lot of that aftermarket growth as they start seeing their first shop visits. Tom will talk more about that in the aerospace section. On the defense side, we anticipated in our outlook that defense would be relatively stable. Again, we'll see where that goes with the current situation and what some of our foreign military partners do and what the U.S. decides to do. You know, we'll be prepared for that. That would be, you know, an upside opportunity for us if it was something other than, you know, what we anticipated in this outlook of being stable. One of the new opportunities, new strategic arena that we're looking at going and actually have been successful in penetrating some is on the growing space side of the business. Tom will talk more about that as to what we see our opportunities there. It's a good fit for our technology, and working with and being indispensable with the space customers is definitely a strategy that we have. Industrial side also significant sales growth, 8%-9% sales CAGR is what we're anticipating in our outlook. Really, you know, as we've talked, you know, we've been bouncing along the bottom in the trough for, you know, a 5-year period. We're starting to see all of the markets improving. As we highlight here, you know, the marine utilization and new ship builds, new ship orders has definitely improved. We're seeing, you know, with that utilization the aftermarket opportunities are very strong in front of us. We've talked about really the energy and the power demand across really a lot of our markets, power gen and oil and gas and alternative fuels. Tom mentioned that, and we'll talk more about that. You know, regardless of fuel source, we have the technology, the capability, to handle that and help our customers through that. With all the content that we have out in the field across all of our industrial business, you know, it does drive a strong aftermarket opportunity for us, which is great. You know, as that equipment is used, especially, you know, in today's times with, you know, oil as an example, where it's at, you know, we would anticipate that the aftermarket opportunity would be significant there. Really the decarbonization efforts and really the rise in energy demand definitely gives an opportunity with all the capital expenditure that we anticipate, you know, that the end users will be performing over the period. What does that lead to on free cash flow? You know, again, a big part of the Woodward story is our strong free cash flow generation. You know, we did generate $1.4 billion from 2017 through 2021. We are anticipating that from 2022 to 2026, we will generate approximately $2 billion. You know, we will maintain greater than 100% free cash flow conversion. Really that maintenance level of CapEx, as we've talked about, you know, $50 million-$80 million a year is all we really need as we go through this whole period, because of the big investment that we made in the middle part of the last decade. What does that allow us to do? You know, cash obviously gives you a tremendous amount of opportunities to invest in organic growth, inorganic growth on M&A fronts, you know, being disciplined there and returning it to shareholders, which really is what, you know, a big part of our story is our disciplined capital deployment process. If you think about, you know, a lot of our organic growth and what drove that was our investment in R&D. Tom mentioned it, you know, we've invested historically, you know, 5%-7% of sales in R&D. You know, I would say more than most of our peers and competitors. You know, my opinion on that is I think our shareholders have seen a tremendous return on that R&D investment. The other is the capital expenditure investment that we've had, you know, really is allowing us to drive productivity, drive efficiency on the factory floor, and Tom Cromwell will talk more about that. Disciplined inorganic growth opportunities. You know, we do have an active funnel. You know, as you probably all know, you know, we do acquisitions, but we do them in a disciplined focus. We really focus on the markets that we serve, you know, the strategic arenas that we're in. We look for technology that's a good fit for ours. We look for customer opportunities. Innovation is really the inorganic growth opportunity that we have. As you think about returning capital to shareholders, you know, we have had the long-term commitment to returning at least 50% of net earnings to shareholders via dividends and share repurchases. We have had a you know, just recently we announced a significant dividend increase. Over this period, you know, from 2017 to 2021, you can see that we have paid out about $177 million in dividends. Just recently in January, the board approved a share repurchase program over the next two years, so in 2022 through... 2023 of $800 million to be able to return that capital and that cash that we have been generating back to the shareholders. You can see kind of the number here over the 2017 to 2021 timeframe. We did return $243 million. We're obviously looking to increase that with the $800 million share repurchase authorization that the board gave us over the two years. With that, I will pause for questions, and if you have a question in the room, I'll remind you, please raise your hand so we can get a mic to you. Yeah. Thanks for all that detail. Mark, just on the return to peak revenues, I guess, or return to 2019, you called out that CAGR, but it seems like on aerospace, you know, I guess maybe you exit this year $1.6 billion in the aero segment. If you get to that mid-teens, it seems like you need a pretty steep ramp in 2024 as well. Is that doable given the current wide-body market? Do you need the wide-body to come back? I know you know, forecasted this year for sort of the precision weapons to be down. You said defense stable. What needs to happen? Is 737 MAX at 47 a month alone good enough to get there? Maybe just, you know, some color on getting back to peak. What needs to happen? Yeah. No, and that's a good question, Michael. Thank you for that. So as we really look at the opportunities in front of us, it is around, you know, the commercial aerospace side is really, you know, OEM build rates as you'd expect. You know, and I mean, wide body returning, yes, but it's not a significant. You know, really what drives our business is the narrow body. You know, so the build rates, you know, Boeing ramping their build rates, you know, we're anticipating 31-ish by the, you know, kind of the end of this year. You know, you all have heard kind of some of the same posturing that we've heard from Boeing, and we'll be able to meet that. You know, we have the capacity to be able to get to those build rates that they have. The other is really the opportunities on the aftermarket side. You know, with the strong utilization during the pandemic, you know, I have always said that the airlines did a very nice job during the pandemic to defer maintenance on, you know, the aircraft that they were using, and whether it's, you know, next generation or, you know, prior generation aircraft, using a lot of green time and, you know, that will have to come through. Will have to come back for the aftermarket growth and, you know, you know, I say that, we're starting to see that, right? We saw it really in our first Q1 with, you know, the significant aftermarket growth that we had year-over-year, starting to see, you know, that opportunity present itself. Really that's what we're anticipating is gonna really help us drive there. You know, again, on the defense side, you mentioned the guided weapons. Yes. You know, we've talked about really the JDAM decline and the softness there. You know, the rest of the defense business we're anticipating will be stable, and that will sort itself out over, you know, the future years. You know, with that and what's happening really on the commercial aerospace side, that's how we get back to those 2019 levels. Mark, I've got an online question from Christopher Glynn of Oppenheimer. In terms of inorganic growth, how much time is spent or pipeline activity in adjacencies versus reinforcing core technologies? Yeah, I mean, it's actually interesting when you think about, you know, our content gains, for example, on the Max and the Neo. You know, we do have a lot of technologies that we do use. If you think about the technology that we have and some of the adjacency opportunities, if you call space, missiles kind of an adjacency with our technology, that's a big focus for us currently. That is an opportunity that we're looking at that we're starting to win in, and we do see, you know, that adjacent opportunity. You know, the other is, you know, as I mentioned, you know, we continue investing during the downturn to be able to come out of the pandemic even stronger. Well, how do you do that? Well, you continue to invest. You help your customers out through problems they face, and those problems may either be technical problems that we're helping them with or maybe their own supply chain problems that we can help them with. We continue to invest there to capture, you know, adjacencies to capture additional content as we move forward. That's a big focus for us, and we are seeing a lot of opportunities there. David? Hey, Mark. David Strauss, Barclays. I think you mentioned you're gonna touch on this maybe a little bit later on today, but can you talk about the progress in terms of that, you know, the pandemic impact, supply chain, labor availability, how you're progressing on that? That's the first question. The second question on the $2 billion target, so you gave us the exact same target for 2019-2023. Can you just talk about puts and takes between what you were looking at then versus now? Yeah. I'll take your second one first, and then I'll go back to your first one. Really the way that we look at it is the pandemic really was a two-year pandemic pause. You look at the puts and takes and the growth that's in front of us now is very similar to where we were in the 2019 timeframe. We'd already recapitalized the company. You know, we would be at a maintenance level of CapEx with the market growth, the build rates, you know, the power generation demands, the marine market opportunities, you know, that's really what we're seeing kinda coming out of this after this two-year pandemic pause. It's a very similar story and concept to the 2019 guidance, you know, outlook that we gave at the $2 billion. Related to the supply chain COVID disruption that we've called out, Tom Cromwell is actually gonna cover that. You know, we've talked about, you know, it's really the supply chain and whether it be the impact of them trying to come out of the pandemic, labor disruption for them was similar to what it is for us. You know, we've talked about the variant. I call it the holiday time variant that kinda hit our business from November through January timeframe. You know, absenteeism was high. Tom will talk more about kinda how we're seeing all of those recover and, you know, what the rest of this year kinda looks like as what we're anticipating with the disruption impact. I think he'll be able to hit on a lot more of the details when he covers that. Another online question from Robert Spingarn at Melius. Why the shift to higher repurchases versus M&A? Is M&A more difficult post-pandemic? I understand why you pulled back on Hexcel at the beginning of the pandemic, but could that deal resurface? The first thing to note on the M&A front, with the higher $800 million share repurchase authorization, we still have capacity to do M&A. This isn't an either/or. With our balance sheet and with the cash flow that we have, we still have capacity. We've always talked about we're a disciplined acquirer. You know, Tom, it seems like daily notes to me that, you know, he's never paid a double-digit EBITDA multiple. We've always been disciplined on that. Obviously, with where the markets are today, where EBITDA is for a lot of companies and, you know, with the liquidity that's available out there, you know, getting a deal done at those levels would be difficult. When we're looking at the opportunities in front of us, the strength of our balance sheet and still leaving ourselves dry powder for M&A, that was how we got to the. You know, we could still do the $800 million over the two years and allow us ample opportunity to do M&A. We have a robust funnel. We continue to develop that funnel during the pandemic, and, you know, we look forward to growth opportunities, you know, on the inorganic front in a disciplined matter also. Related to the Hexcel deal, you know, the industry was at a different point, a different time pre-pandemic. You know, we're not looking for a transformational acquisition, you know, of the Hexcel nature and, you know, just things were different then than they are today. Thank you. If I could just pick up Mike's question a different way. Pre-pandemic, I think you're at 110 narrow-body deliveries per month. Are you assuming you get back there in 2023 on a combined basis? Beyond 2023, it looks like given the fact that you said defense is stable, you're gonna continue at that roughly at that growth rate on the OE side. What are your rate assumptions beyond 2023? A second one on aftermarket, can you just give us some color on what your, I think you said recovery in 2023 there as well. What's your capacity assumptions, market assumptions beyond 2023? Thanks. You know, we are anticipating, you know, as we're exiting 2023 that we'll be, you know, at, you know, approximately those build rates. You know, really it's matching up with what Boeing and Airbus are talking about. Again, we have the capacity to do that, you know, that's not an issue for us. You know, we'll have to bring labor in and, you know, as Tom mentioned on our January earnings call, you know, we are talking about having a need for, you know, hiring 100 direct labor members a month for the rest of the year, you know, to be able to help us meet the ramp, you know, not just on the aerospace side of the business, but really across all sides of the business. On the aftermarket side, you know, we've talked about this deferred maintenance that has been out there and, maybe some of you heard me talk about the bullwhip effect of the opportunity that's in front of us, you know, not only from current utilization, but from all the deferred maintenance. You know, what we see there, you know, the continuing recovery of, you know, if I think of it as, you know, within country, domestic type travel, right? We're approaching 2019 levels. The laggard at this point is international travel, really the wide-body market. You know, we are anticipating that will start to improve. You know, we'll have to see where the variants that come through, you know, the impacts, but it feels like things are starting to open up. You know, the concept of traveling to Europe again, you know, I think it is out there for a lot of people, and so we'll start seeing opportunities and are anticipating some growth there, you know, as we move forward. You know, the aftermarket opportunity with the fleet dynamics that are out there is very good for us because and Tom will cover this a little bit later, when you actually look at the flying fleet and what we anticipate going forward, you know, our content is a lot stronger than pre-pandemic. Another question from Gautam Khanna of Cowen. In what year do you expect to achieve the 20% and 16% aero and industrial margin goals? Is it in 2023 for aero and later for industrial? Our anticipation is as we are exiting fiscal 2023, that's when we would anticipate to be at the 20%+ and 16%+ for Aerospace and Industrial respectively. Really, as we're exiting 2023. Hi, Matt Akers from Wells Fargo. Could you talk about inflation? I think you commented you won't be able to pass 100% of what you're seeing through this year. Can you comment on how big that is? Some of the big, you know, sort of commodity price swings we've seen lately, you know, to what extent can you pass those through, and how does that split out across the two businesses? Yeah. The inflation impact as we even called out in the November earnings and kind of slide deck, inflation impact net of productivity with productivity is both labor and productivity and price productivity. It is a headwind for us for FY 2022, you know, obviously the cycle where we're at, inflationary pressures both on the labor side and the material side are higher than they've been historically. Our ability to pass it through is really two kind of avenues. One is through our aftermarket capability, and we have, you know, we control the catalog pricing for that and are able to increase that, you know, appropriately for the price opportunities that we have and the cost, you know, that's out there. On the OEM side of the equation, you know, it depends, but generally, we have across most of our OEM customers the ability to do industry based increases, typically on an annual basis. You know, most some of them are, you know, January timeframe that we're able to increase based on the indices. Now, some of them have what we call banding that are right the first X% we have to absorb through productivity, and then after that, we get it. Others are, you know, shared across that, and others are just an increase overall. There is some offset that we have on the OEM side, but really the opportunity that we really have is on the aftermarket side to be able to offset a lot of that cost. Hey, Mark. You talked about the increase in accounts receivable this year, but can you talk broader, bigger picture working capital, where you kind of benchmark yourselves, I guess, on net working capital basis and what's implied in, you know, any improvement in net working capital as a% of sales or whatever that's implied in that $2 billion forecast for free cash flow? Yeah. Thanks. The way we benchmark ourselves, generally, we would say, you know, AR, we're in good shape there. We don't have collection issues. We're able to collect timely from our customers. Really AR is just the timing of shipments and then, you know, being able to collect that, you know, after those shipments. The inventory side, you know, I mentioned earlier, we were able to take inventory down significantly during the pandemic. I would say when we look at our inventory as a% of sales, as for example, we still see opportunity there, and what will really then drive us forward is as sales grow and as we're able to hold inventory, and I'll throw payables in there also, you know, kind of the inventory payables offset each other. You know, if you think about the three big pieces of working capital, receivables, inventory, payables. Inventory payables, if I net them together, you know, we're anticipating we'd be able to hold that at about the, you know, the same amount, today. Therefore, as a percent of sales, as our sales grow, it would decrease as a percent, and that's, you know, some of the opportunity that we're looking for. You know, Tom Cromwell will talk about some of the investments and how we're doing that through Kaizen activities and really operational focus that Tom and his team have brought to the organization, and really being able to leverage that as we move forward. Okay, I have one final question from online, from Robert Spingarn. Any evidence of higher defense demand yet? Your concentration in smart munitions would suggest the current environment could yield demand for Woodward, as you mentioned earlier. Any ideas how inventories look? Yeah. We haven't seen a specific you know orders today. However, I think as you all would anticipate, you know, it is a potential that is out there. The great news for us internally is we have the capacity to produce more, and we've done that previously. You know, obviously, the supply chain would have to also get ramped up to help support that. You know, I'll say there can be short cycle businesses in there and long cycle businesses, you know, whether it be a country wanting to order F-35. Okay, well, that's a little bit longer out. There's short term, you know, hey, and if they want new aircraft, all right, well, what are you gonna arm that aircraft with? What are you gonna arm your current aircraft with? You know, the opportunity around the smart weapons side is potentially more short term if those orders started coming in. You know, we've talked, I've talked with some of you about, you know, the foreign military sales opportunity can come quick, and we don't have a lot of visibility to that. That's, you know, it's something we're watching. You know, obviously, the last, what, two weeks has been pretty crazy. We do see that as an opportunity that will potentially show up that's really not baked into our outlook at this point. Okay. Thank you. I'll turn it back over to Tom. Thanks. There we go. Okay, I'm gonna hit and kind of discuss our Aerospace segment. Let's see if I can get this to forward. There we go. Today, or if you looked at fiscal year 2021, we were about 50/50 commercial and defense. That ratio was really driven by the trough that we had in 2021 on the commercial side. I'll talk next slide a little bit going forward. What we do have between, you know, the commercial and defense is we're on the best platforms in the industry as you go through. If you really look and go to the appendix in your books, you'll see some of the key programs we have and the content on them. I'm not gonna walk through that, but it's there for your reference. You'll see that it's truly the best programs in the industry. As we look forward, though, and again, I'll put this as Mark said, in our five-year projection, we didn't anticipate defense growing in real dollars. But what you see here is that we go from 50/50 to two-thirds, one-third commercial. That change is really driven by production rates ramping back up on the narrow bodies. You're seeing biz jets go up. We're seeing wide bodies towards the end of this period starting to recover. We do see with the high content we have on the in-service fleet that the aftermarket's gonna grow. One of the things that, you know, Mark was highlighting some of the drivers in aftermarket, the one that wasn't touched on is, as we start seeing the ramp in the narrow bodies, we will also see increase in initial provisioning sales, and that's starting to happen. That went basically dormant during the 2-year pandemic pause. We're seeing that grow. That yields more of what we would be expecting, two-thirds, one-third as we go forward. It's also a positive as the aftermarket grows. That's also a big part of how we get to the 20%+ segment margins. I'm gonna go through the next few slides, kind of what we do in aerospace. This goes back to where I said we got very attractive niche markets. You could really bucket it in three key areas that we focus on. Integrated propulsion systems, flight deck controls, and then aircraft actuation. Those are the prime focus for the company. If you look at flight deck, really what you have here is anything the pilot needs to touch to operate the aircraft. We talk about the side sticks, throttles, the rudder brake pedals, flap levers, and then other devices that are in the cockpit. Very sophisticated. This is also tied to fly-by-wire aircraft. You may be surprised to know, but there's still aircraft out there that fly with cables. We don't participate in that. It's all fly-by-wire, very sophisticated equipment, and flight critical. The integrated propulsion system, what this is actually the controls on the turbine, but also on the nacelle. We do the complete fuel system, combustion control, which is really, you know, fuel injection, ignition, sensing. We do electronics as well on smaller engines. Then thermal management, which consists of oil and air control. Then on the nacelle, we do the TRAS system, thrust reverse actuation system. In terms of actuation, it's a broad area, so we go all forms of actuation. Really what you're looking at here is hydraulic, electromechanical, applied from flight controls to auxiliary actuation around the aircraft. That's our focus in aircraft. The outlook, and we kind of already hit on this, you know, we're getting through the pause of the pandemic. We're seeing recovery in traffic. We are seeing a demand on the MRO side, and that is picking up. As we said, Mark highlighted, the airlines did a, I think, a brilliant job of managing the green hours on their aircraft. That's coming due, and we're starting to see that. They did a great job, but now the aftermarket activity is picking up in particular on the engine side. We start to see you know that hit in the build rates as we get through 2023 and then into 2024 with wide bodies and full aftermarket recovery. On the defense side, really, when you look at this, it's growing, but in real dollars, it's fairly flat at the moment, that this is what we built into our forecast. Obviously, with the Russia-Ukrainian situation, some of this is... I think it's gonna change, but we have not seen anything to date, but we do anticipate that we'll probably see a little higher budgets coming, domestically, but also internationally. You know, we've had great success over the last decade, winning on platforms. This, you know, the model in particular in our world where, you know, we create the OEM control systems, the reason you go for that is to get the aftermarket. These applications are highly utilized and, you know, they do drive a lot of aftermarket. Again, I refer you to the appendix so you can get more detail on the OE side. But as you look at the growth drivers, I'm gonna walk through some of these with you. You see the OEM market share gains that we've had, that story, as the questions were asked during plans. Those programs we won earlier went on pause. The ramp and the forecast outlook for those are continuing. We think they're back on the trajectory they were. The aftermarket, we got a huge installed base. It's growing. I have a few slides to show you what that looks like. Really one of the surprises, I have to tell you, I was personally surprised, you know, when the pandemic hit, I thought biz aviation was gonna collapse, and it did the exact opposite. People wanted to get around in a safe manner, and so that kind of really exploded. We see that growing for, you know, the period here of the LRP. We had a lot of defense platform wins. I'm gonna talk a little bit about some of our new initiatives around space and missiles. Then decarbonization in the aircraft world is happening, and I'll talk a little bit about what we're working on with our customers there. All of these, we think, are gonna support the growth over the five-year period. We got to understand, and this is, we talked about organic growth and being disciplined. Five years is really short in aircraft. We really are looking out 20 years and planning for the next 20 years. You see some of that. Some of that revenue is happening now, but a lot of it we anticipate in a decade or more. We constantly invest across that type of spectrum, and you'll realize that as we go through some. I think we've hit the slide, you know, the commercial order book. This is the graph is deliveries, but the order book's strong. Deliveries are picking up. You know, we've got a number of rate increases that are being proposed by Airbus and Boeing. Exactly when they hit those rates and has some uncertainty to it, but they're definitely gonna ramp up. There's a high demand for, in particular, narrow bodies. We expect the wide bodies to come back. On the wide bodies, we've got great position on wide bodies. 777X is a very big program for us, been delayed for a long time. That's gonna come back online. 787 will come back. You see like A330 and A350. I do anticipate as we move through the five-year period, you're gonna see wide bodies come back, and it's good content for Woodward, and those drive a lot of aftermarket as well. This is really the big part of the story for Woodward Aerospace. With all these wins we've had, if you go back, first what we talk about is the content wins, and this is, you know, the various components we have on an aircraft. So if you look at the growth in those from 2016 to 2026, it's a very large increase, you know, basically three times what we had going forward. Those components, as they're being operated, generate aftermarket revenue. First, we had to get those OE. That was a lot of work, a lot of investment. We have it. We've got the capacity to deliver it. They start utilizing it, then it's gonna drive aftermarket, and the aftermarket looks like this. I think some of you are asking, where's it coming from and the like. It's that installed base, legacy and future, and we think we're gonna grow well above the market, you know, 10 points higher than the market in the aftermarket. We've got, you know, we're showing you really a 10-year look, but it grows substantially in the 5-year period, accelerates in the second half. You just gotta think about that. That's all these new aircraft going into service with the high Woodward content, getting utilized, and then the aftermarket flows. This is gonna drive growth for Woodward for really decades to come. It's something that we really focus on and ensure that we get what I call our entitlement level of that activity coming back to Woodward. This includes both MRO as well as initial provisioning. A little bit on biz aviation. Again, if you reference the appendix, you'll see, you know, good content on almost all the new biz jets, and the larger ones are the ones that generate the best revenue. We see growing at about 7% versus 4% for the market. We think this is gonna stay strong for a while. If you track what drives it's generally corporate profits and inventory, and the used inventory is very low. We see that this is, over the five-year period, it'll be a continued good growth. On the defense side, similar, we've got a great portfolio across all types of aircraft, fixed-wing, rotorcraft, weapons. We're on the growth platforms of the future. I'll talk a little bit about where I can. In the weapon side, we're advancing new missiles, and we're working on a number of hypersonic applications with our customers. We think we'll be growing faster than the market here. In particular, the market may grow quicker, as we've all highlighted here. Some of the key programs that are driving growth, they're on left side here. Ones that we've won that are moving and still going into production. As you look at the new opportunities, the new rotorcraft, as that competition goes through, we're participating in that. It'll depend on who wins and which aircraft for the amount of content we have. We're working on the Next Generation Air Dominance aircraft. We're working on hypersonics. We got a lot of UAV activity going, and we do have actuation on some land vehicles, particularly M1A1 tanks and some other ones that are coming along. Those are the new defense opportunities being worked. A lot of those will take time. Those will probably start to appear towards the end of our 5-year outlook, but definitely during the decade. What I wanna talk about is a couple of the key growth areas in addition to our core. As I said, we're looking at missiles and hypersonic opportunities. We're looking at space, and a big one really is around the energy transition in aerospace as well. Go through those. As we're looking at, like, missiles and hypersonics, if you just take a step back to what we do, two of the key areas for us is propulsion control and motion control, and so on these vehicles, it's exactly the same thing. They're different, but our propulsion control, meaning fuel systems, combustion systems, air management, thermal management, are all applicable, and then they all have actuation. As you go through that, you know, you see an example of what we call a CAS system, so the actuation really to help fly a missile into its target. This is really the key. It's leveraging current Woodward technology into new defense applications. The space market is interesting, and I kinda highlight too. For years at Woodward, I've said we're gonna stay out of space, and the reason for that is that it was a lot of one-offs and it's more like engineering services than it was production. Our focus is being commercial, having great technology, apply that to products, and produce products in volume. What we're seeing is that this market is changing, and you're getting volume now, and we like it, and there's a commercial mindset happening. We said one of the mega trends that we were focusing on was the commercialization of space. Whether it's launch vehicles or satellites, you're seeing a commercial mentality from what was a cost plus mentality, low volume mentality. We're in here. We're getting a great response from customers. We're winning a lot of programs, both on launch as well as on satellites. It plays again to our core strengths. It's really in this, again, it's around propulsion control and motion control applications. We see this as a growth opportunity. Starting now, we're winning, and we're getting some programs moving. It'll be in that 5-year period, accelerating in the 10-year period. In terms of decarbonization, I'm sure all of you have been seeing, you know, there's a lot of pressure on the aerospace industry, particularly commercial aerospace, to reduce you know, the carbon footprint of the aircraft. Really, as you look at it, key areas that are being considered is really around, first, efficiency. It's really around the propulsion efficiency, but also aerodynamic efficiency. It's around new fuels, and it's around more electric. Okay, those are where you see the key drivers. There's other things that aren't applicable to us. It'd be like controlling operations, flight patterns and things. That's not where we play. These are some of the key drivers that everybody's trying to do to help reduce the carbon footprint of aircraft. You know, we're in here, and I have a few things on each of these. If you look, first is aerodynamic efficiency. If you follow this at all, one of the key ways of doing that is what they call thin wing technology. So a very thin, long wing is more efficient. It creates problems for fitting the actuation into the wing. We've created a new flight control technology, we're working with our customers, that helps solve that issue. As new programs come, we see that could be a growth opportunity, also helping enable, you know, the thin wing technology to take place. That technology requires a new wing, which means you need a new aircraft. It'll come with time, but that's one of the key drivers. The other is, you know, SAF, sustainable aviation fuel. We've been working on this a long time. All the programs that you see where they've been testing it, Woodward controls have been involved. It's primarily a materials and sealing issue, but we're there helping our customers make sure that they can use any variety of SAFs. A big one that's getting a lot of attention, especially in Europe, is hydrogen. There's really two looks at hydrogen. You'll see fuel cells discussed. You know, you can use hydrogen in a fuel cell, generate electric power, drive a prop or something to get propulsion. The other is you just burn it in a turbine. If you burn hydrogen, it's emission-free. We're also working on that. What's interesting here is, and I'll get to it later in the industrial segment, we've been working on hydrogen in our industrial business for a long time. On our industrial gas turbines, we have that. When we've been with customers, they're very pleased to see that we already know what needs to be done. We're working with them on the hydrogen on the propulsion side. Also in our industrial business, we've done fuel cell controls. We're bringing that to a number of these demos that are taking place. Basically, the way I look at it is any fuel that's gonna get used in an aircraft, we're already working it, we're already enabling our customers, and we're partnering with them to bring these to light. The other one, of course, you've heard a lot in the industry about advanced engine concepts. These concepts are being developed. We're working with our customers on those too. This is where that R&D investment continues to go. It'll generate future organic growth. A lot of these are targeted for the 2030s timeframe. Back to, you know, to stay relevant and to be there, you gotta invest today for the long term. Most everything I'm highlighting here is 2030 or beyond. More electric, all electric. First you gotta generate the power, so we're working, as I already highlighted, on that. We've got a great portfolio of electric actuation, sensing, and things that will help facilitate the more electric aircraft. Again, we're working with our customers on that. All this is helping for the next gen programs when they come out to be lower carbon footprint, be ready, and we're proving all that technology out today and over the next, you know, 5 years so that aircraft entering service in the 2030s will have some of this, and it'll be Woodward. Kind of a summary on our aircraft segment. Production's ramping, the aftermarket's growing. We're gonna capture more revenue from that. We see some really nice opportunities for the longer term in both space and defense. We're enabling, you know, sustainable aviation. We will be there. you know, we see a good growth rate over the next five years, you know, in the 8%-10% range. With that, I'll take questions if anybody has them. Hey, Tom. Michael Ciarmoli, Truist. I know, you know, this environment's highly fluid, but oil prices where they are now and maybe even thinking back to what we saw in 2008, 2009. Yeah. You know, you put out a very compelling, you know, ten-year aftermarket growth forecast. How are you thinking about even in real time now, you know, any behavioral changes from the carriers? You had that legacy base, you know, that showed modest growth. Are there a lot of planes left that could be retired? You know, just how are you guys thinking about that? Or what's kind of built into the forecast? I know this is evolving pretty quickly. Yeah. Well, first thing, it's a great question. I mean, as we look back, and if you really go back, you know, I've been in the industry 40 years, so if you went way back in time, high oil prices really killed the airline industry. You know, it was really difficult on them. The airlines have learned to handle the higher energy costs. What it did drive in the 2008 and through today is fleet renewals to the newer, more efficient aircraft. I see if prices stay high, that you will see a shift occurring to the more efficient aircraft. A lot of that's already occurred, but there's still more that can transition. The positive side of that is we are, even on the legacy, on the more efficient aircraft that we see staying in the service. We were looking at retirements, and as of now, we're not seeing a huge impact from near-term retirements. We think the new aircraft will come in as you see the second half of that ramp, second five years. Right now I don't see it as detrimental. It could affect, you know, the flying public if you get too expensive of tickets. You know, that could. What I anticipate, though, is today, you know, a lot of it is leisure travel occurring. I do believe business travel's gonna come back. I think a lot of you guys flew here, right, and came in. I think business travel is gonna start picking back up, and it can offset some of that. I think it's primarily, it may sound funny, but primarily a positive because it'll shift people to the aircraft that we have more content on, which then, you know, if you take a little bit of a longer term view, which is what we do as a company, that's gonna be a good thing because it'll drive a lot of aftermarket. Another question from Noah, Goldman Sachs. Is the stable defense revenue forecast including JDAM or excluding JDAM? No, it includes JDAM at the rates that we see. You know, they buy those in what they refer to as lots. We have a projection for the next few years of lot size, and that's what's in our outlook. If you know, the disruption you know in Europe drives more, that's not in our plan. I think that question was asked to Mark a little bit, too. We could see an upside. We don't have any indication of that at this point. You know, as you look at the guided weapons, smart weapons, it seems logical that it would increase, but that's not in the outlook. Louis Raffetto from UBS. I guess, as I think about that last thing you just said, are there some offsets within aerospace, you know, that could offset any benefit you get in defense with, you know, Russian aircraft or just flights in that area altogether? There's that opportunity or option. If I got it right, is it negative? Are you saying that? I guess there's this possible positive in defense. It seems like there could be almost an offsetting negative within a small area of aerospace. Oh, in commercial. Yeah. Yeah. That's the case. You know, so right now what you would be seeing is, you know, new aircraft going to Russia are on hold. You know, the near term, I think that demand will be taken by other airlines around the world. It could long term be a little bit of an offset. They're not a huge market either. From that standpoint, I don't see it that way. Hopefully, Ukraine holds, you know, and protects their country, and they're gonna need a lot of development. I think, you know, that'll drive some, hopefully some new aircraft as well. as I think of your aftermarket, not much of that's really discretionary. I would think most of that's sort of required unlike some other people. Yeah. That's the beauty of, you know, I'll highlight in our aftermarket. The largest part of it comes from engines. If you look at aerospace aftermarket, engines is the largest part of the MRO market. The beauty of that is, you know, the engines run no matter if there's 1 passenger or, you know, 200 passengers on a plane. As you go forward, you do have to maintain them, and that maintenance is there. We track it, and we have pretty good analytical tools to look. We track, you know, from engine hours, shop visits, utilization rates, so we can forecast that pretty well. It is. That's why I use the term entitlement. It, you know, an entitlement just means we know there'd be this much service activity in terms of parts and labor and initial provisioning. The key is that we capture that back to Woodward. We could forecast pretty well what that looks like, so we got good confidence in that outlook, and it's not real discretionary. You, if you're gonna fly the planes, you're gonna have to do the maintenance. Just last one on the 10-year outlook. I assume provisioning tails off at the, you know, sort of later in the decade, maybe get a little benefit of the 777X, but I can't imagine there's much Mid-decade to some extent. That is correct, but you also have to think there's a two-year pause, and then there was the MAX pause that's beyond that. There's a pent-up demand that I think will carry out, you know, beyond five years of provisioning. As you pointed out, the 777X, as that comes in, will drive some additional provisioning. Over time, it's a correct statement. As the fleet gets established, the provisioning's in place, it starts to drop off. That would happen. I think it's gonna be strong, you know, for, you know, five to 10 years still, really. I've got a question from Gil at Stoneridge Capital. How will the C919 from China affect your business long term, and how much content do you have in that plane anyway, if any? Yeah. First on the content. The primary content that we have on the plane is on the LEAP engine. Okay. We have some minor components that go through some of the tier ones on there, but the main one is the engine. We have it in the forecast. It's very small dollars in the forecast for C919. There's a big question in my mind when it will be certified and, you know, who's gonna actually operate it. I think it's gonna be small revenue. From that standpoint, it's pretty immaterial to our outlook. Question from Rob Spingarn. Tom, on hydrogen, do you agree with the Airbus view that it could be in service by 2035 or with Boeing that a true use of hydrogen and aircraft propulsion is in the 2050 timeframe? Yeah. I think the difficulty with hydrogen is the hydrogen infrastructure and that it's available where you're gonna fly the aircraft. I always say, like, okay, if you're gonna fly from New York to Des Moines, is there gonna be hydrogen in Des Moines, you know? I think that's a huge challenge. I think it's gonna take a long time. There may be some applications, you know, like Airbus is looking at that will be, I'm gonna say more niche in a smaller geographical area where you might be able to do that. Other than that, I'm a little more leaning that it's out a ways as Boeing predicts. Oh, I've got one from Christopher Glynn at Oppenheimer. With the expectation for Aero margin at 20%+ exit rate exiting 2023, should we expect nice leverage and mixed benefits past that as Aero aftermarket increasingly leads growth or expect funding future growth investments? You know, we're anticipating that question. We put a plus on it that we do expect as we move forward through our 5-year that we'll be on the plus side of 20%. What we really wanna do first is deliver the 20% and show that it's sustainable, and then, you know, we'll update outlooks after that. You know, you definitely could look at that as that aftermarket kicks in. In particular, in the 5- to 10-year period, that'll accelerate margins. Hey, Tom. David Strauss from Barclays. Yeah. Your aftermarket sales, are they all time and material, or do you sell power by the hour as well? What's the mix there? Yeah. We do have some, you know, power-by-the-hour agreements, but it's through the OEMs, but it's that aftermarket pricing. As we have some of our long-term agreements with customers, if they're selling that, we're participating on some of the newer applications. What I would tell you is that's a smaller portion of the aftermarket. Most of it's still time and material. What's the rough breakout aftermarket direct to your airline customers versus through the OEM? It's gonna be more like 90+% to airlines. You know, it all depends if the engine OEM has the maintenance contract, you know, then we're going through them. But you might be surprised that that's not the largest for the full maintenance, which includes our hardware. Mm-hmm. Sometimes there's maintenance that's just on the turbomachinery. It doesn't include all the components, all the accessories. We end up still direct. It's smaller when they include all the accessories into those contracts. When they do, we work through the OEMs. Bulk of it's direct to airlines. The last one I had, you mentioned, Future Vertical Lift. Yeah. Who's, you know, Textron versus Lockheed? What's better for you in terms of the outcome there? Yeah. It would be Lockheed, the higher. We're working with both, but we'd have better content. The other one too is, you know, just as a reference, the T901 engine, which is being used on the FARA application, is a very good application for Woodward. We have actuation, sensing, pilot controls all going onto those helos. First question from Noah Poponak at Goldman. Tom Gendron, 16% aero aftermarket over the next 10 years, do you see it well above the first half of that period than below it in the second half, just given compares, and how much of that outperformance versus the end market is provisioning, and how much is next-gen aircraft positioning? Yeah. If you look at the growth rate, it's strong in the first five years, as you see, and it accelerates a little beyond that. In the first five years, you have more initial provisioning, and then that MRO starts to kick in. Then in the second five and beyond, the MRO really accelerates. We gotta look at is, you know, as aircraft goes into service, we expect to see first initial provisioning, and then we see shop visits, you know, approximately in a 7-year timeframe. You could just start stacking deliveries, 7-year time frames, and then, you know, multiple shop visits over their life, and that's how you get to those out years growing, you know, CAGR better than 16% as you go. That, that's out, you know, at the end of the decade. Yeah. Hey, Tom. Yeah. Michael Ciarmoli again, Truist. Just on the decarbonization and maybe a little bit longer term, but are you positioned well, or do you have content already with some of the EVTOL providers? I mean, could that be a market opportunity when we think about those, whether it's Yeah. Joby, Archer, Lilium, any of those players could drive content growth for you or share gain? It could. You know, we're looking at some of those with actuation. I'm a bigger believer that some of that electric will be more used not for passengers, but for logistics. You know, as such, we're looking at some of those. We're partnering with some customers. Frankly, in the next decade, I don't see it as a real large. I don't see large revenue coming from that. We are active, but it's not gonna drive a lot of revenue near term. A question from Pete Skibitski at Alembic. Tom, you mentioned strong content on the 777X. Will that revenue flow through Woodward or first flow through the JV like your current wide body content? Yeah, no, great question. It's gonna flow through the JV. The earnings will show up on our JV line. Let me also make a point on that. We produce those products in Woodward factories, and we sell some of that into the JV, and then earnings and aftermarket revenue flow through the JV back to Woodward. There is top line, and there is JV earnings line. It's a little more complex, but it does drive top line growth. Yeah, I wanna make that clear. Yeah. Hi. I just wanna make sure, I guess I'm thinking about the OE versus aftermarket correctly, kind of over the 10-year horizon. It looks like aftermarket will be up like 4x based on the compounded growth. I'm guessing OE maybe doubles. Right. Just the mix within the segment is gonna skew, as you know, significantly towards aftermarket versus OE. Is there anything, you know, that would, in your mind, disrupt that pattern from happening? Is there any reason why I know you said that 20%+ on the margin, but if you really think out in that 26-31 type of timeframe, you know, it could be plus plus. Yes, that. I wanna say anything disrupts it, but what you could see is a launch of a new aircraft. Now you gotta think the timing here. Then new OE sales can come in here. But you know, we are going to move to more aftermarket heavy for a while, and then you see, you know, there will be some new program launches, and then that brings it back. But that's what'll change that. But yeah, for the 10-year period, we're gonna start being more weighted to aftermarket than OE. I think that's all the questions in the room. Okay. There are some questions coming in online that are related to some of the other areas, so I'm just holding those till the appropriate areas. Okay. Just so the people online know that I'm not ignoring their questions. I think we're ready for a break. Yeah, we're gonna take a break. What, 10 minutes? Is that? Yep. Why don't we do 10 minutes? Yeah. All right. 10 till. How does that sound for everybody? I think that makes it 12 minutes. With love delicious. Though it's all fictitious. Mm-hmm. Handle me with skills. Bend me to your will. Break my- Make the stars swing low. And the world roll over, baby. Thrill me. Do it now or never. Nothing lasts forever. That includes the thrill of love. Handle me with skill. Bend me to your will. Break my heart but thrill me. Oh, set the sky on fire. Make the stars swing low. And the world roll over, ooh, baby. Thrill me. Do it now or never. Nothing lasts forever. That includes the thrill of love. Ooh, I want you to thrill me, baby. Yeah, thrill me. Take me in your arms and thrill me. Oh, just you and me. Yeah, in the dark. Nothing lasts forever. That includes the thrill of love. I'm not the girl who cared about love. I'm not the girl who cared about fortunes and such. Never cared much. Look at me now. I never knew the technique of kissing. I never knew the thrill I could get from your touch. Okay, I'll give everybody a minute. Let's get back started up. Okay. We're gonna rotate over to our Industrial segment, kind of give you an overview and then take questions on this as well. First, if you look at our Industrial, and I know that from time to time we get questions that's harder to understand our Industrial, and I get that. And I'll explain on the Chart 2 why. But when you get back to it, think about it, what we really are about, again, are engine turbine and power management controls for reciprocating engines and industrial turbo machinery that are used in the industrial equipment market. I highlight that in that it's not automotive. You know, when you think engines, a lot of people think automotive or on-highway trucks. We're industrial equipment, okay? That's what this chart's kinda showing you. Today, you know, three-quarters of it is engines going into applications in power generation, oil, gas, and alternative fuels, and transportation, and a quarter of it's turbo machinery and going into the same markets. Turbo machinery, a lot less in transportation, but if I put military marine as transportation, there's turbines on that. That's the focus, and then when you then say these applications between the engine and turbines being applied in there for power gen, it could be for large base load, it could be for distributive power, it could be in data centers, backup power. The oil and gas obviously hits all parts of oil and gas. Right now we're putting alternative fuels in there because there's gonna need to be an infrastructure for alternative fuels, which is gonna be the processing and distribution of them, and that's gonna drive demand for some of our equipment. Then transportation, the main ones what we put in here are marine. That's the largest part of transportation. We highlighted other off-highway equipment, so that could be like mining trucks and rail and some other things that aren't as large. Then we do have this niche business in China, which is around natural gas trucks. Okay? That's how we look at it. Next couple charts hopefully explain a little more. You know, in the center here, if we look at on the reciprocating engine side. This could be from small industrial engines that you could see in construction equipment, up to massive engines for ships or mining trucks, okay? What you have here, and this is why it's a little challenging to always say, "Okay, how do I model this?" or "How does it flow?" is we're showing an engine here, an engine generator. If you just think of the engine, we make and I'll go on the next slide, what we make for it. You know, just think of it as the whole control system for the engine. That same engine, one model engine, can go into a data center, it can go into a mining truck, it can go on a ship. That's where tracking it gets a little difficult, I think, for everybody. That's how this market flows. It's not a one-to-one, one engine to one application. Hopefully that's a little helpful, but you know, this is the prime, and then as you saw on the other, you know, it breaks down the two largest parts of this are really power and transportation. Oil and gas will be growing, I believe, as we move forward here. That's where the applications go. What we do, and this is really you see is the same things we do in aircraft and the same things we do on industrial turbomachinery. We provide a system solution. We control fuel, air, and exhaust. We provide electronic controls, software, and algorithms to control the engine, and we also provide what we call combustion control. Combustion control just means you inject fuel, you light it, you sense it, and then you control it. We do that for all these engines. As we look at some of the applications, some of them we provide all of this. Sometimes working with OEM, we provide part of it. It varies from engine to engine, customer to customer. We have the capability to do everything to control the engine as well as the generators that go with them. If we look at turbomachinery, what I mean by turbomachinery is industrial gas turbines, steam turbines, and compressors. Okay. They're all rotating turbomachinery. Those really end up in, you know, three areas. We're actually one of the largest providers of controls for military marine applications. A lot of the modern vessels use turbines in the U.S. fleet and other fleets around the world. The biggest markets are really around, you know, the oil and gas processing, petrochemical, and power generation is where these end up. We play across those. Again, an application of, let's take an industrial gas turbine. That turbine can be in use with a generator for power gen, or it could be put on a compressor and could be in an LNG plant. You know, that's where you track and flow. It does make it look challenging for all of you to model it, and we're trying the best we can to help you with understanding it. You know, I just want you to know that's where the applications go. Then the product line again will look familiar. The form factors are different, but you see again, we do the fuel systems. We provide a complete system solution. We provide actuation around it. We provide, again, the combustion part, fuel injection, ignition. We do a lot of electronic controls, and this is one that ties into the electronic controls, but around the machinery is, this is very dangerous equipment. If you lose control of it could be catastrophic for, you know, a plant or for the loss of life. So they have what they call functional safety systems around it, and we're a large provider of those safety systems that go to ensure that there's no runaways on the turbines. So this is the products we bring, whether it's, you know. It depends on, you know, it's a, if it's a gas turbine, steam turbine, compressor, but it's the same mix of products. I wanna go through some of the growth drivers. That's what we do in our industrial business. Go through some of the things that are driving the industrial segment of Woodward. First and foremost, as I think I said in the overview up front, is emission reductions, decarbonization. That's been a driver for a long time and, you'd have to see if you went back, you know, 30, 50 years, some of this equipment was around. Engines and the engine controls were very basic, but you had very high emissions. Today, every time you need to tighten it up or clean up these engines, it means more control technology needs to be put in. That's exactly what we bring to our customers. That's a big driver of growth and will continue to be as we move forward and we go into the energy transition. The other is that energy demand, every outlook from every international agency that looks at energy shows all forms of energy increasing. Renewables is the fastest-growing, gas is right behind it, but all forms are growing between now and 2050. That demand will flow into the type of equipment we provide. We talked previously about infrastructure and transportation continuing to grow and require this type of equipment. Then in our Industrial market, we also have a very large installed base, it's continuing to grow, and it's driving aftermarket, and we're looking for detailed ways, strategies to pull more out of that aftermarket. These are the prime growth drivers on Industrial. Yeah, just starting with aftermarket, excuse me. One of the things that's happening right now, and we're seeing this as we move through fiscal year 2022 and in 2023, is we are seeing a recovery in the marine aftermarket, and we're also seeing oil and gas aftermarket picking up. We think that's gonna accelerate, and I think today, with what we're all seeing with energy prices, I think that's gonna continue to accelerate. We are doing a lot of strategic work with our OEM customers on helping to partner with them to service their equipment. We've added a larger presence in the Middle East, and that's in particular around oil and gas and power generation support. What we're seeing around the world and in the Middle East is increasing demand for upgrades around power and the petrochemical area. The upgrades are around transition to cleaner fuels, so we are seeing demand growing to change some of the applications from burning oil to burning natural gas. You will also see a movement to other types of fuels over time. For a while, there was a lull in upgrades, but people are looking for modern controls to go on it. You know, you do have the same obsolescence issues you have with, like, laptops and other things. That occurs in these plants that use this equipment, and so we're seeing upgrades around that. Then there's a bigger push around safety and, you know, the costs to insure, and safety systems are growing. A big one that we think is gonna make its way across all these markets we're in is cybersecurity. You may be surprised to know a lot of the equipment out there is not up to date for cybersecurity, and so there's a big push to do that. We see this as all growth drivers in the aftermarket and areas where we can play and, help it grow that to a higher percent of industrial revenue. Energy demand, you know, we've been hitting this and, you know, you've seen these type of charts, but what it really is just the point of them is to show all forms of energy are increasing. When you see this, when they say petroleum, it's petroleum and other liquids, so that would be, you know, biofuels. It could be what they call Power-to-X fuels and the like. I'll talk about that in a little bit. That's in that category. We see all that moving forward. We are seeing natural gas continuing to grow, and I think you're seeing that even, I think, in Europe. They're now calling it clean fuel. That was a change. Asia, that's the case. We're gonna see more and more, I think natural gas utilization around the world. We're starting to see what we're calling the energy transition. It'll be slow, but the movement to cleaner or zero carbon fuels. What are we doing, again, to enable, you know, the energy transition? You move across, you know, obviously improving efficiency is at the heart of any of these. Helping adapt the engines and turbines to be able to use low carbon, zero carbon fuels. More integration of renewable power and more electric. To get there, you know, you're seeing a lot of things that drive activity at Woodward as well as our R&D. Temperatures are going up, tighter control and accuracy are happening, more sensing, new advanced algorithms and controls, more advanced combustion logic and recipes. Then you see electric solutions. I'll talk a little more about these, but those are the drivers and issues that we have to help our customers solve. If you look at, we say enabling the energy transition, what's interesting, we were tracking a little bit, what impact have we helped our customers with, okay? We always say we're enabling or supporting them. If you look over the last 60 years, we could see some data that the emissions from industrial turbines has really been reduced 60%, and then we're going for further reductions. It's been a great progress in that time period, but can increase. The same thing on internal combustion engines or recip engines. It's been down 35% over that time period with the look to further reduce. We've been working that from the beginning of the company. It's all been about efficiency improvements. Efficiency improvements drive reduced emissions. As we go forward, we're looking at new solutions really around current energy sources and then helping to be able to use alternative and zero carbon type fuels. The way we're looking at that, and when we talk about it, I'm sure you've heard some of these happening, you know, hydrogen again. Ammonia and methanol are just proxies for hydrogen, okay? They allows you to get it in liquid form with no emissions. Then ethanol, which, you know, is like a kind of equivalent to like sustainable aviation fuel. Today, we haven't highlighted this much during previous investor meetings, but we've been providing gas or hydrogen gas-enabled valving for industrial turbines since 2018. Today, we got over 23 active programs going to ensure these gas turbines are, you know, from various manufacturers, can run on 100% hydrogen. We're collaborating with engine OEMs, the reciprocating side, to either use hydrogen or the proxies for hydrogen. Maybe you might have seen like in the marine market, Maersk, one of the biggest, you know, ship owner logistic companies in the world, is now requiring or saying they're gonna have all their ships methanol-enabled going forward. What's interesting about that. We today are working and demonstrating the ability to use. Some of you that have been to our Fort Collins facility and our test center, today we're working there on hydrogen programs, ammonia and methanol and ethanol to bring all these to market. We got a lot of active programs on the recip engine side for that. The thing that's interesting about this, you know, I think the question came on aircraft. Okay, when is hydrogen gonna be widely available? Or, you know, today there is ammonia, there is methanol, but they're not green, okay? It's really about getting green hydrogen, green or, they're talking about blue, which is really using fossil fuels to develop these, but carbon capture, okay. All that's being worked on and bringing these. The interesting thing, and this is like for the ships or for a lot of power generation for industrial turbines, all the customers wanna ensure their machine is hydrogen or its proxy enables. That means to us we're shipping multi-fuel system applications. Even though some of those fuels aren't readily available in a green form, we're providing what you'll hear be dual fuel or hydrogen-enabled. These, like these ships, these power plants are gonna have multi-fuel Woodward fuel systems. Actually our content is going up even though the transition's gonna occur over a number of decades. This is a big area, you know, it's being spec'd in on these industrial equipment applications to ensure that they're ready, 'cause those applications, think about it, they're in service for 20-40 years, sometimes longer. You know, you put in a new gas turbine power plant, no matter what fuel it's burning, it's gonna be there 30+ years. They wanna make sure they're ready. It's actually a positive to us. A lot of work going on at the company for this and making sure all our customers are ready as that transition occurs. We're also looking at electric. I mentioned earlier on the aircraft side, fuel cells and the control. When I say fuel cells, we're doing some people refer to it called balance of plant. Basically, it's the interesting thing about a fuel cell, this will be interesting for engineers, but if you black box the fuel cell stack, it looks just like an engine control. Everything that wraps around it, you control fuel, you control air, you know, you got the controls, you actually, you know, manage the water that comes out. It's exactly the type of products we make. We're working with a number of our customers that are moving to fuel cells. We started on the industrial, we're bringing that to aero and then back. It's a collaboration and joint R&D across the company. We're also doing some hybrid electric-type applications. We're not doing hybrid drives, we're doing hybrid engine. That can then be put in an application with a traditional transmission. That's another one that, you know, can enhance fuel efficiency. Across any time you go more electric, there's gonna be a lot of electric actuation and, you know, that's something we specialize in. You got the fuel, you know, first is efficiency, then it's the fuels, and then it's electric. Our R&D is covering all of these. This again will materialize over time, really, you know, more like a decade is when you should anticipate seeing this, but all the work is happening today. A little bit on industrial. Just kinda wrap up. Hit it a number of times. The demand for energy is just gonna keep going up. There's gonna be a lot of content growth from multi-fuel applications, you know, to support the long-term requirements of the industry. Efficiency, you know, I keep harping on efficiency, but I forgot to say earlier, take a step back. All, you know, current today efficiency translates to lower emissions, but it's also less fuel burn is how you get the lower emissions. Now, you put in these new fuels, they're all a lot more expensive than oil and gas, a lot more. Efficiency is even more important. You get lower emissions, but they're very expensive, so you need to have efficiency. Efficiency is number one, no matter what you're looking at, and then we're enhancing the ability to adapt and use these alternative fuels. They're also more difficult to control to use, so it's more advanced control systems, so that's good for us, more complex. We always like tough, complex applications, it's good. We do see. You know, again, we're coming out of a multi-year trough on our industrial, so we are seeing about 8%-9% growth over the next five years. We have the capacity in our facilities, so it's about leveraging that capacity into higher earnings. That's, you know, how do we get 16+? A lot of it is we're not optimized on our capacity. The second part of it is the aftermarket's coming back, and we're targeting more aftermarket growth like I highlighted. That, that's how we're gonna get the margins up. Growth we see is there, we just gotta turn that into the right margins and profit. Kinda with that, I'll take questions on our industrial side. When I'm finished here, I think Tom Cromwell is up next. Tom's gonna talk, as we said, about how we're handling supplier disruptions and then also our operational excellence journey. Hi. Sheila Kahyaoglu from Jefferies. Just diving into the margin target a little bit more. You've underperformed your targets for the last decade or so how do we think about how you're gonna get to 16% by 2023? Just a little more detail on the specifics. Yeah. Thanks. Sure. Everybody hear that? I think so. How do we get there? I think there's several elements. First, you know, the aftermarket does carry better margins in the OE side. Industrial aftermarket is not at the same margin as Aero aftermarket, but it has good margins. Capturing more of that and hitting these new areas and these upgrades that I was highlighting, that'll drive some good margin there. The other is that our Turbo Machinery business, really, the market collapsed on that. Some of you may, you know, remember some of the turbine guys flooded the market, then it collapsed, and, you know, there's a lot of things that happened there. That is now turning, and we're seeing some good growth projections coming on Turbo Machinery. Turbo Machinery, industrial Turbo Machinery controls for us is a good margin business. As that comes off a really low point for a number of years, that'll add to it. We're continuing to optimize facilities, for productivity and then the operating leverage on sales where we have the capacity in place. You know, that all combined is how we get there. Yeah. Louis Raffetto from UBS. I guess if we go back to the slide of what we do in these businesses. Yeah. What's the overlap there with the aerospace side? I mean, I know there's a significant amount. You talk about optimizing footprint, but I think a lot of the factories are kinda spitting out things that go to both sides of the business. Is there anything you don't do? Or I guess if we look at those slides, what do you do in industrial that you don't do in aerospace? Yeah. It's a great question. We really do the same thing in all our businesses. I'm glad you picked that off the slides. That's correct. I'd say the one thing that we do in Industrial that we don't do in Aero is the safety systems. It's not huge for us, but that's a growing part. We do more electronics in Industrial than we do in aerospace as well. Those are slight differences. The functions that we provide to the manufacturers are really the same. With respect to our factories, you know, we say, like, okay, we do a fuel system for an industrial turbine, for industrial recip engine, for an aero turbine, truly it's the same, and some of the control, algorithms and things that we do are the same. I can highlight that. You know, we've created what's called FADEC systems, electronic control for small, aircraft engines. We used our industrial turbine guys when they were in the lull to help us create that product. Now we've pushed them back, and they're working on cybersecurity and functional safety and the next-gen control. We can move people back and forth, but the factories are very different. A fuel metering unit, if you wanna say fuel valving for an aircraft engine like, the LEAP engine, I could hold. The fuel valves for an industrial turbine would cover this stage, and they're probably taller than I am and weigh, you know. I don't know, I don't know, Tom, what are they? 600-700 pounds. Okay. They do the same thing, but in different form factor. Actually, the technology and understanding of that is very similar. It's just the form factor is massively different. What that means is the factories specialize, and there are some that we do both aero and industrial, but it's very limited. Most everything's specialized because of the form factors that are so different. If that helps, yeah. Steve. Hey, Tom. Mike Ciarmoli, Truist. Just back to the margin question- Yep. Within industrial. Outside of the mix shift skewing radically towards aftermarket, is there a specific product mix that's optimal for you guys to drive margins? You know, for example, if nat gas engine sales take off, is that better than, say, big demand for reciprocating? Or if we see, you know, the E&P markets for oil take off, I mean- Yeah. Ideally, what would be your, you know, preferred sales volume to really drive margin growth there? Yeah. I guess what are the highest margin products? Yeah. The highest margin products are electronic controls. So whether it's, you know, power management, recip engine or turbine. So that's the highest margin. But you might be surprised, and this is back to the volume leverage, we carry good variable margin on basically almost all the industrial products. The issue we have on some of that, though, is if volume's not there, we're not getting that through to the bottom line. You know, that's because of the support and overhead costs that go with it. So there's some variation, but they're not low-margin products. So that's, you know. Where they have been, like when we had our renewable power business, that became a very low-margin business, very commoditized, and, you know, we sold it and got out of it. We're really concentrating on products that have good variable margin. I always manage off variable margin, 'cause if you've got good variable margin, then you gotta control your volume and your overheads, and you get to good profit. It would be misleading to say that we have bad margins. They're not bad. There are some variations. I would say, you know, answer a little more of your question. The highest margin is electronics. The second would be around the turbomachinery control. The third would really be right in there, would be our fuel injection business. L'Orange is a good margin business. Then I would lump the rest after that. A question from Pete Skibitski at Alembic. Tom, with the recent spike in both crude oil as well as natural gas, how does this impact the China CNG demand in the near and midterm? Yeah, good question. Right now the price of natural gas in China is high, and we are seeing some pressure. We called that out earlier in the year. That has not changed. The pressure from the higher price of gas has, you know, limited near-term demand. Hopefully, that was somewhat clear in our earnings release, last one, but we're not seeing any change in that. It is putting pressure on that part of the business. Thank you. I've got a couple of questions on the sales outlook for industrial. Sure. If you think about the guidance for this year of low double digits to mid-teens, and then you think about the cyclical recovery, can you give us some indication of the profile of the growth over the next five years? 'Cause presumably it's gonna be front-end loaded. Could you help us understand the split between what's maybe cyclical recovery versus structural growth? Yeah. In the five-year period, the majority, I'm gonna say the majority of it is going to be cyclical recovery. The reason is, and for those that have followed us for a while, if you remember, why we were winning on the aero side for those narrow bodies, we also captured a lot of applications, particularly around natural gas and then, some new, engine applications. So that all had a downturn and a pause, and so that market share is still there. It, our industrial has some similarities to aero. Almost, I'd say everything we do is sole sourced. The life's on the products, if you exclude the China natural gas trucks, okay? I would say the life of the products are all in the 10-50-year timeframe. You have long lives. During the pandemic downturn, there was not a whole lot of new applications coming out. What was happening was, you know, using, developing alternative fuels and things, but it was the same main platform. I see that. The aftermarket, though, has some growth opportunity that we see accelerating towards the second, I'm gonna say years 3 through 5 and then on beyond that. A lot of it's just the recovery in these markets are coming back. Maybe just to follow up, I think it's been four years since you bought L'Orange, which I think next month is the anniversary. One of the sort of major attractions was that you'd be able to win more business- Yep. With you know, Caterpillar, Cummins, basically the non-Rolls-Royce power systems customers. How's that initiative going, and how much of that is baked into the guidance? We are seeing that one area where we're seeing more growth coming. This is L'Orange with the traditional Woodward is in Asia. What's happening is we're looking at some of these larger engine applications. We're coming in with the whole solution. We've got the industry's best fuel injection systems. And then now to help those customers, we're bringing the electronic controls, some of the actuation and like. With the large Western, it goes back to my comment earlier. They haven't created new engines, but they are, and we are working with almost all the major recent manufacturers that do this industrial type engines on alternative fuels. It's the same if you wanna say it's the same engine, but they now want, you know, so they have to change the fuel system, the fuel injection, and some of the control algorithms, but the engine's not changing. That's coming in, but that is not gonna be in the next 2-3 years a lot of revenue. It will be 5-10 years as those all go to production. That's a little bit. We're real happy. The L'Orange business is picking back up. The marine market, as was highlighted, is picking up. The aftermarket from them is picking up. It's all starting to move, and it's primarily the current product range. Yeah. Tom, David Strauss from Barclays. Have you said how big the aftermarket is within industrial? How does it break out OE versus aftermarket, and where does the aftermarket sit relative to, I guess, peak levels? Yeah. We have given that information or indications of it by markets. In terms of peak, it's. You got it off the top of your head, Mark? I'm just- Yeah. Off my bottom. Uh. Compared to peak, you know, if you think about where we were. No, I meant on percentage first. I might hit on the peak. Yeah. It's probably 40/60 aftermarket. You know, as we look at our industrial business, you know, as Tom was mentioning, you know, it goes into many applications. We always don't know where the units eventually end up. That's why it's a little bit tougher for us to tell aftermarket versus- Yeah. OEM, you know, I would say it's a little heavier OEM than aftermarket. Yeah. Yeah. Just a little further on what Mark highlighted, one of the reasons that there's a difference on some of the industrial applications or a lot of them, the aftermarket goes through the OEMs. It's a different business model, you know, just or structure, and that's what Mark's referring to. Sometimes it's hard to track. We have pretty good indication. Then we do some direct end user as well, so that's clear. We're below peak aftermarket. In the main, I would go back is we really saw one of the. A couple areas that drive very good aftermarket is in the oil and gas value stream and in the marine market, and both those were down. We're seeing signs they're coming back. Equipment was down, utilization for a while was down. We're seeing some of those rig counts, other things are picking up. You know, we're seeing that improve. With that picking up, that's where some of those upgrades I was talking about earlier are gonna come into play as well. I think we're a few years away from peak or anything close to peak in the aftermarket. It's gonna take a little time to get back. As you think about that 8%-9% revenue CAGR, you know, looking by end market between transportation, power gen, oil and gas, are they all in a similar range, or is one leading and one's lagging by a fair amount? They're different. You know, we're expecting better aftermarket growth. Part of that is just strategic initiatives we put in there to, you know, capture more. That's probably a little higher. I would say base load power generation is a slower growth. Probably the others are probably similar. Okay. A question from Rob Spingarn. Tom, actually two questions. First, on cybersecurity upgrades, how specifically does Woodward participate in that? I'm assuming if the controls are vulnerable, they are networked, and therefore, are they primarily software upgrades with high incremental margins? And the second question is, you showed the emissions reductions over the past 60 years. Is there a quantifiable target looking forward over a particular period? Well, I'll first talk about the cybersecurity. The issue with the cybersecurity, there is cybersecurity out there on current applications, but to meet the new cybersecurity requirements, the majority of the installed base of electronic controls cannot meet those new requirements. It kinda comes down to the functionality as well as the computational as well as, you know, the software that's required. I do believe there will be a large upgrade going around, you know, the U.S. for sure, and other parts of the world. What that really means is it's a control system upgrade. You take out the old, and you put in a new. That would be primarily targeted at, you know, power generation, petrochemical plants, process, water, any critical infrastructure, I think is gonna change. Just for clarity for everybody, we are in the process of developing new electronic controls that can meet the cybersecurity requirements that are coming. That's what we're trying, you know, and it's a big investment we're doing, and it'll be targeted for that, and I think there'll be a nice upgrade program coming. That's more, I'm gonna say in the 2024, you know, calendar year 2024 and beyond time period, because we gotta get it out, we gotta get all these things going. It's very necessary, and it's gonna be mandated, you know, down the road it'll be mandated, you know, just for the safety of our infrastructure. The second question. Dan, remind me again, sorry. The second question was, the emissions reductions over the next 60 years. Oh, yeah. Is there a target going forward? Yeah, you know, the target that we hear from a lot of customers or others is zero. You know, as funny as that sounds, but that's the idea. You're gonna use these new fuels. As surprising as that is what people are talking about now, the infrastructure and the availability of having green fuels with zero carbon emissions is gonna be a long time and costly. In the meantime, you know, we're working on efficiency gains, you know, in the 10% kind of range that'll help drop emissions. We're working on blended fuels, you know, so if you use a blend of natural gas and hydrogen, a 30% blend, you can get about an 80% reduction in emissions. When I highlighted on one of the charts that we already have those in service, it does greatly reduce it, but you still have to have hydrogen. And it needs to be green hydrogen, otherwise you're producing emissions somewhere else. That activity is going. First and foremost, we think we get, you know, maybe another 10% or so out of efficiency, and then you gotta bring in these other fuels to really drive them lower. Okay. I'll turn it over to Tom Cromwell, and we figured this was gonna be something on everybody's mind, and so we brought Tom, who's doing a great job driving our operations. Here's the Thank you, Tom. Here's the clicker. Good morning, everybody. Great to see everybody's face. You know, good to be in person again for sure. I'm really gonna cover two topics. I'm gonna start with COVID disruptions, the impact that's had on our company, and then how we see that recovering. Secondarily, I'm gonna transition into our overall Woodward Production System, operational excellence, and how that fits together with, you know, the long-term improvements, long-term margin enhancements. That's the main topics here. If I jump in, just as a reminder at the end of Q1, these are the COVID-related disruptions we talked about, $70 million in total. I would say, you know, that's bigger than you've seen from some companies. You know, if you think back to some of Mark's earlier discussions, we took during the pandemic, we took inventory down by about $100 million. We were aggressive with taking inventory down, reducing total inventory rates. We were changing material practices because Mark also talked about, if you look at working capital, one of our opportunities as a company, we still have the room to take inventories a percentage of sales down from what it is today. We were making some changes in our material planning and ordering practices to bring material in in smaller lot sizes, pull it through the plant, you know, at a faster pace. I would say more like a heavy truck type industry. We weren't at automotive levels where you're bringing product in every day, but we were certainly bringing product in on a more regular basis. The key to that, though, is you have to have consistent flow of materials. I would say as we've come out of this pandemic, as businesses started to ramp up, you know, we've seen the impact of that more significantly than some companies because our supply base struggled to get ramped initially, and because we had some of those smaller lot sizes coming in, they've really needed to catch up. If you look at it, you know, we had one specific aero supplier that was a big disruption for us. We've seen other components here, you know, that were an issue. Then internally, we were facing some labor shortages in our own plants getting ramped back up. I'm gonna talk about each one of these and where we're at in the recovery process. I'll just touch on the labor shortages, though, first. What we really saw was, as we got to, you know, late last summer, we started to see attrition increase. We saw wage rates moving in some of our key markets. We saw people being sucked out of Woodward, you know, members being sucked out of Woodward. And so we adjusted wage rates in the beginning of October. You know, it's in our plan. It's part of what Mark talked about with inflationary pressures. What that's done is it's allowed us to spool up our hiring. We've got much better, you know, incoming new member rates. I'm gonna talk about that. Our path to recovery there is quite good. These are the key areas that, you know, we were impacted by and, in general, how we see them recovering. The aerospace specific supplier issue that we're facing, that has continued to get much better during this quarter. We see ourselves recovered there as we head into next quarter. Overall supply chain disruptions, machine parts, other things, that has gotten better here in the second quarter for sure. We see it continuing to get better in the third quarter. We believe we'll be in good shape overall with our supply base as we finish this fiscal year. The chip challenge, so electronic chips, that has continued to be a real challenge for us. You know, getting good supply, consistent supply of chips, you know, even through this second quarter has been challenging. We're starting to see it get a little better in the later part of this quarter, but that certainly needs to continue, and we really don't see full recovery until we get into next fiscal year. Our internal labor, as I talked about, as we adjusted wage rates, our hiring process has improved dramatically. We really see ourselves in good shape from an internal labor standpoint, you know, with where we need to be as we go into the third quarter here. The right-hand side of the slide, though, just to be clear, you know, these sales haven't been lost. We definitely have the sales going forward. We've just delayed them into the second half of the year. If I talk about, you know, some of the additional actions to manage the supply chain and COVID-19 disruptions, we put an executive management process in place for our critical suppliers. We have 28 suppliers currently in this process. They get executive management reviews. I have a review with our supply chain teams literally every week to go through those 28 suppliers, make sure we have enough support on-site presence with them. You know, we're on-site with our most critical suppliers, so we're in there really managing them. I would say across the company, we've redeployed people out of our engineering organizations, out of other places within the company to specifically manage the supply base and even some of our internal plant disruptions as we're smoothing things out. From a labor standpoint and thinking about headcount again, Tom and Mark have both talked about this. Our hiring rate needs to be about 100 new members, you know, through the balance of this fiscal year to get our internal, you know, labor rates where we need them to be. You can see since the beginning of the calendar year, we've actually hired 279 people. So that was as of late in February. So we're ahead of that 100-member per month pace. We see the pipeline coming in. High degree of confidence we'll stay on pace there. We'll take care of our labor requirements. The point on the top there is from a capacity and utilization standpoint, we've talked about our facilities are well-capitalized, so a big part of this is getting back to second and third shift operations in all of our plants. The other point here is we have a very strong onboarding process. As we get new members in the door, they essentially don't touch any product for the first two weeks. We give them a good company orientation. We give them all of the key safety, health-type things, but then we also spend several, you know, two weeks with them offline in training cells before they actually go to the production line. What we've found is that shortens their learning curve dramatically, makes them much more productive, much more effective, and it also doesn't take away from our teams on our shop floors. Now I'm gonna transition. That's kind of where we're at from a supply-based disruption standpoint. I'm gonna transition into the longer-term operational performance piece. Our True North vision, where do we wanna be? It really is the perfect safety, perfect quality, perfect delivery, and zero waste standpoint. If you look at our business, look at what we do, it is a high-mix operation. We really kind of say low to medium volume with high mix. Our plants are complicated from an operations standpoint. Our Woodward Production System, there's four key areas you can see here. Value stream architecture is the flow of product through our plants, so it's how they're laid out, how our value streams flow. We use a strong leader standard work cadence. That's the guidance to our leadership teams on the, you know, the cadence of meetings they're gonna use, the structure they use to run the plant. We're very aggressive with continuous improvement. I'm gonna talk more about that. At the same time, process adherence is standard work for our members on the plant floor. We want them doing the same thing all the time until we find a better way to do it, and then we want them to use the new standard work with the better process. The other key piece here is sales and inventory and operations planning. That's our long term. We're always looking at an 18- to 24-month rolling sales plan, you know, and then building our supply plan and our supply base plan around that. What do we get from this production system? It's definitely about productivity and efficiency in our plant floors. You know, if I looked at the hiring needs that I talked about, if we weren't making all these improvements, we would need to hire significantly more members than what we have today. We've been able to drive productivity and efficiency in all of our plants, which has reduced the total number of new members we've needed to hire. The other key here, though, is faster flow through our plants. We talk a lot about velocity or lead time reductions. This is very much about serving customers faster and better than we have. What does that mean financially? Obviously, it's better working capital leverage and then certainly stronger cash flow. If you look at, you know, over the last three years, what are some of the bigger transitions we've made? We've certainly hired in a stronger operations team. We've brought in a number of new plant leaders that came out of more like heavy truck, ag and off-highway markets. They may have some automotive experience in their background, but they understand what a lean, good flowing plant looks like. Typically, we also wanted them to have some of that experience in more of that lower volume, high mix type operation. We've been able to find really good talent, you know, and brought them into the company. What we're now doing is using that talent and our processes in this Woodward Production System to develop internal talent as well, so in the future, we can fill more of these roles from within the company. We've also added quite a bit around real-time metrics, so much better data reporting out of our plants. real time, I can look at any plant today and see exactly how they've performed, how much product did they build, what did their scrap rate look like, you know, where are they at from an inventory performance standpoint. It's given us great transparency in and out of each one of our plants and allowed us to run them in a much more disciplined manner. From an improvement process standpoint, you know, we've gotten better at, you know, all the things listed here, resource planning, layout, and flow. I would say our base methodology for improvements is Kaizen activity. You know, we've run over 250 Kaizens in the last year across our plants. What a Kaizen would be is, let's say you have a line that has 8 operators in it, and it produces 20 parts a day. We will do a week-long process where we'll go specifically to that value stream. We'll look at the layout and flow through that value stream, and often we can reduce the number of members needed in that line by 20%-40%. We typically can increase output pretty dramatically. Oftentimes, if you looked at velocity, let's say in the past, it may have taken us 10 days to get a part through that value stream. Often through these Kaizen activities, we can cut that down by more than 50%. Instead of taking 10 days to get a product through, we can cut it down to 5. This has been a great improvement process for us. It's about, you know, continuing to drive efficiency and effectiveness on our plant floors, and it will be core to how we continue to improve margins going forward and also working capital. We're also focused on digital transformation in our plants. You can see it here, it's a lot about how do you take a design from, you know, our drawing boards straight into the operations process with minimal human intervention. How do you get from a modeled part to getting it into your machining centers seamlessly, you know, automatically with minimal human intervention? How do you teach your robots how to move these materials? We've got very good systems for that. We continue to get better though, and stronger there as well. We're also adding a fair amount from an automation. Robots and cobotics, we're adding that to a number of plants, which also reduces that requirement for new members. A lot of work here. Closed loop manufacturing. That is, if you take a machining center, historically, we would have needed a trained machinist to run machining centers. With a closed loop manufacturing, you tie a vision or inspection system right to that machining center. As a part comes off, it goes into a CNC-type inspection machine. You take all the critical dimensions off of that, and then it feeds the data back into the machining center and makes all of your offsets and adjustments automatically. You take that human intervention that we would have had, you know, in the past and that skilled machinist, and you can really replace it with, you know, a lot of this automated processing. Those are the things we're using to, again, drive productivity, drive efficiency in our plants. You know, in summary, where are we at? This Woodward Production System, over the last three years, we've evolved it dramatically. We've learned how to drive continuous improvement in these big Kaizen event process improvements into our plants. It's become very effective, very efficient for us. We know how to keep driving margin and improvement out of our plants. The second piece, and Tom and Mark both touched on it, we've already spent the capital on new buildings. If you walked into our Rock Cut facility, if you walked into our Niles facility, they are fantastic buildings, fantastic locations. We've added the right equipment. You can see it on the picture here. We've got great machining centers, great equipment in our plants. Now it's all about just, you know, volumes coming back and utilizing that equipment better across all three shifts, and obviously, driving the leverage out of that. Really strong performance. We've got a good system, and we're in good shape going forward. With that, Tom, do we wanna take questions at the end for the operations section? Okay, good. I think from a timing standpoint, that'll work better. There you go. I got two slides to wrap up. I know we're getting close to noon, and a lot of you probably have to run. We have lunch, but a lot of you I know have to run. So two more slides, and then we'll take questions on any topic. I hit some of this already, but just, you know, we get the question a lot, why do you have industrial and aero, you know? First time we go back and say, we do the same thing. In each segment, we get a lot of leverage across it. I highlighted some of that. It's not only technical leverage, but our business system is identical. Our core processes are the same. Tom just said, like, our production system is the same, so we're able to leverage that across. We also leverage people back and forth where the demand is. We can leverage the people and the talent. Some examples where we've done it, talked about electronic controls. We created a whole air valve line for aerospace, and it was all developed with our industrial team. We have the ignition systems that came out of industrial to aero. There's a back and forth of technology and product development that we leverage. The whole decarbonization energy transition efforts we're doing as a company, and it's in every one of our markets. Those are leverage points. There's a good reason to have the company as one. A lot of times in industrial, we can move a little bit faster than aero, so it gives us a chance to develop some things a little quicker. Just really the final wrap-up, you know, we have won a lot of business over the last decade. We had a pandemic pause. That business is coming online now and is back to growth. We got a large install base, both on aero and industrial, and we're leveraging that to drive profitability and margins. We're in the thick of the energy transition, helping our customers meet all the requirements they need out there. We are leveraging the Woodward technology into new areas. Examples were like space, you know, missiles and things that we're growing, and they leverage our current technology base. We do have the capacity. We've hit that a few times, but the capacity is in place to handle the five-year forecast. This is where we get the opportunity to leverage those sales. We are forecasting strong continued cash generation, and we're dedicated to disciplined capital deployment. That's kind of the wrap, and we could take questions, Tom and myself or Mark, whatever is on your mind, we can take. Start one off from Gautam Khanna at Cowen. How much of the $70 million of supply chain related sales delays have been made up? Good question. I would say the second quarter's still been challenging. You know, we saw definitely, you know, the Omicron variant here in the U.S. impacted us definitely in the January timeframe. I would say at our European plants, that actually transitioned more into the February timeframe. During the second quarter, it's been both for us internally and our supply base, there's been, you know, some high absenteeism periods. I would use our plants as an example. There were times we would see 25%-30% absenteeism out of a plant in a specific area. The second quarter has still been rocky, but as I've talked, the second half of the second quarter is getting much steadier. It's getting more consistent. I think we'll carry that momentum really into the third and fourth quarter. I'll do another one, from Noah Poponak at Goldman Sachs. Are the revenue CAGR targets entirely organic, or do they assume some eventual acquired revenue contribution? Yeah. They're all organic. Okay. Hi, Matt Akers from Wells Fargo. You guys have sort of hinted that maybe there's room for M&A, despite the big buyback. Are there any areas that you're targeting? I know some of the changes lately have been more on the industrial side. Should we expect that to continue or just any thoughts on that? Yeah. The M&A, you know, we just don't add acquisitions just to grow. You know, the acquisitions are always targeted to further develop our system solutions, build out customer base within the markets that are applicable to what we do. We've got a constant funnel of looking at potential companies. What we're looking at today and some of those take years to develop and look at the multiples are really high, and so to be rational to make sure that we're actually deploying capital in a good return to shareholders, that's where we're saying we'll be disciplined. We're very careful. It's not meaning we're not active, but, you know, we're not gonna go out and acquire something that you can't get a good return on. Today's market's a little challenged that way. Not saying it's impossible, just a little challenged that way. We have the bandwidth, as Mark Hartman highlighted, but we just have to see when the good opportunities arise. The question from Paretosh Misra at Berenberg. Do you consume any of the minerals such as titanium, nickel, neon, that may see supply risk due to the Russia-Ukraine situation? Yeah. Yes, we do use minimal amounts of. You know, titanium is not something we use extensively. You know, nickel, we have a number of nickel-based alloys, but it's a small part of the content of the base materials. You know, I think we're seeing commodity inflation cost pressure, if you will, more than we're seeing any significant supply base issues at this point in time. You know, as we look forward, you know, we've taken some forward positions on some raw materials. You know, we continue to pull in some additional material, you know, but I'd say it's an area we'll continue to monitor closely. Okay. Another question from Robert Spingarn. On the five-year free cash flow outlook versus the 2019, Mark highlighted it's really a shift to the right of the prior assumptions. Does the mix change a bit with somewhat higher energy and slightly lower aero, especially wide-body? Or do you see a full recovery to pre-pandemic aircraft production rate targets? Yeah. You know, as we highlighted with the sales growth that we have, you know, 8%-10% for Aerospace and 8%-9% on the Industrial side, there isn't a significant shift, you know, from where we're at today. You know, obviously, Aerospace being, you know, almost two-thirds or, I'm sorry, you know, the fifty-fifty, you know, but Aerospace growing at about the same as Industrial. I wouldn't say a significant shift, you know, from that perspective, but rather, you know, the opportunities within, you know, as Tom highlighted on the Industrial side, you know, all the markets are recovering there. On the Aerospace side, especially on the commercial Aerospace, that's where the shift and the opportunity will really be. Hi, Brett Rausch with Wells Fargo. Going back to aero earlier, I think you did a nice job laying out the growth that hits over the next 10 years and then the R&D spend 10-year plus. How do you feel about like pipeline programs that, you know, maybe fill in the 5- to 15-year as you look forward? We're looking at, you know, anything near term revenue. One I'll highlight is right now we made the decision to reengage in space, as I talked about earlier. That's moving so quickly that we started that a little over two years ago, and we're now starting to see revenue. We see we can move quickly on some of those applications. We're targeting ones where we can. Those will add some, you know, if you wanna call it near term, mid-term revenue. A lot of it is planning for the big programs, you know. That's that longer term R&D to make sure we're there. Where we can, even some of this, as I talked on the industrial side, some of the energy transition activity actually is gonna generate some revenue because they're gonna be multi-fuel systems. You know, we see some of that happening in the, you know, 2-5-year period as well. There is some good opportunities. You know, where we can, we're always interested in revenue, so we're always looking for those opportunities. Another question from Rob Spingarn, excuse me. How is fiscal Q2 trending relative to the guidance plan that you provided in late January? Yeah. Did you Tom highlighted that a little bit, you know. Just to be clear, we give annual guidance. In that guidance, you know, what we're anticipating is truly a second half recovery, which I think Tom just mentioned, you know, where we were at kinda during the Q2 period. You know, we still again haven't lost the orders. We're working our way through the disruption issues, as Tom has highlighted. We're still anticipating the second half recovery. I think maybe that's all the questions. We're wrapping up. Our team's gonna be here. We do have. I think lunch is back where we had breakfast. If you can stay and join us, we could continue conversation over lunch. I appreciate everybody here and online. Thanks for joining us online as well. Yeah. Thank you.