Good morning. My name is Dan Provaznik. I'm the Director of Investor Relations at Woodward, and welcome to our 2023 Investor Day. First, a few administrative items. At Woodward, we have a culture that's very focused on safety, and so should there be a reason that we need to evacuate this room, there's two emergency exits or two exits to this room, the main one that you came through, and another one, which I can't see the sign, I think it's back here, marked Exit. Please take the stairs as you exit and leave the building, should that be necessary. Second most important thing, restrooms. Restrooms are out in the hallway to the right of the registration desk where you all checked in. At the end of the day, this will go to about 1:00 P.M., boxed lunches will be provided for you to grab and go, so that you have something to take with you. Woodward, also, one of our key principles and values is respect for others, and so I would ask that if you have a cell phone, that you silence it during the presentation. And finally, Woodward also has a culture of continuous improvement, and so we will be sending out a survey next week, a brief survey. We would ask that you take a few moments to complete that survey, to give us feedback on this event, and to help us improve future events. We have a very comprehensive presentation for all of you today, and we have quite a few Woodward leaders here to speak to you. Speaking to you today will be Chip Blankenship, our Chief Executive Officer, Bill Lacey, our Chief Financial Officer, Tom Cromwell, our Chief Operations Officer, Terry Voskuil, who's the President of our Aerospace segment, and Randy Hobbs, who's the President of our Industrial segment. In addition, we have some other leaders at Woodward who are gonna tell you about some of our products. So, after each of the sessions, you'll see in the agenda, we'll have some product reviews, where they will come up on stage and discuss some of the key products for Woodward today and for tomorrow. My favorite slide in the whole thing is the cautionary statement. My colleagues in legal said I didn't have to read the entire statement, but there are some key points that I do need to cover. First, elements of this presentation are forward-looking, based on our current outlook and assumptions for the global economy and our businesses, more specifically. These can and do frequently change. Forward-looking statements are subject to a number of risks and uncertainties, including the risks that we identify in our filing, our 10-K, for example. These statements are made as of today, and we do not intend to update them except as required by law. In addition, we'll provide certain non-GAAP financial measures. Please refer to the reconciliation tables at the end of the presentation for additional information. We believe the non-GAAP measures will help in understanding our financial results. Our agenda for today is shown on this slide. In addition, we're gonna have three 20-minute breaks. Those breaks are extended breaks, and it's to allow you to do three things: use the restroom, get a cup of coffee, but most importantly, view and ask some questions about the products that we brought into the room today. The first break will be after Tom, Tom Cromwell's operations update. The second break will be after the industrial presentation and following the product demos, and the third and final break will be after the industrial, presentation and those demos. Now, I would like to introduce our Chief Executive Officer, Chip Blankenship. Thank you, Dan. Good morning, everyone. Welcome to Woodward's 2023 Investor Day. Thank you for being here with us. We're glad you're here. You know, I think some of the people in this room have been thinking that this day is a long time coming. I say that because every time we've met for the past 18 months, you've asked me what my view was for the multi-year outlook of Woodward. Well, we're gonna answer that question today, if nothing else. Some of you, I can see, have already looked forward into the back of the book for the answers page. That's fine. But please, I encourage you to be with us for the entire presentation. I believe we have a compelling value proposition to share with you, and just as important, you're gonna see an exceptional leadership team in action as they describe how they're gonna make all this happen. Also, they will tell you why you can count on it happening. I want to begin by sharing our refreshed purpose and values. These have always been important at Woodward. What you're about to see is the culmination of work by more than 500 Woodward members, our board of directors, our customers, and our suppliers, and my entire senior team, so please take a look. We control energy. Think about that. It almost sounds like a superpower. We're innovators, every one of us, across the whole company. It takes thousands of moving parts to do what we do. We're makers. We design and we build. But most important, we're partners, and we deliver for our partners. We deliver real-world solutions to harness energy more efficiently and sustainably because our partners count on us to help them move the world forward, to invent the future today. And the world we invent today will be a cleaner world tomorrow. We began as a team of inventors over a century ago, making governors for waterwheels. Our goal was never to be big. Our goal was to do big, to help move the pistons that drove the country into a new age, to help fuel the engines of change, defending freedoms, lighting the cities, powering the ships, taking to the sky and beyond, and quite literally changing the world with almost every project we work on. 150 years later, our partners in the aerospace, the military, and industrial sectors around the world accomplish things on a planetary scale that affect generations, finding ways to make bigger and better impacts on our world while making smaller impacts on our planet's ecosystem. We solve some of the most complex problems with solutions never before imagined. We do it with a passion for precision and a pursuit of perfection. These are enormous challenges and responsibilities, and it's on us to deliver. Our promise to the visionaries we're honored to collaborate with can be found in our core values. Integrity: We do the right thing, always. Respectful and accountable: We hold each other in high esteem and hold each other to high standards. Humble and driven: We're confident, but not arrogant. We're always striving for better. Every day we ask ourselves, "What does the world need next? What will the world need 10 years from now, 30 years from now?" We're privileged to be the stewards of a historical transition to radically cleaner and more sustainable ways of moving through the world, for that is our purpose, to design and deliver energy control solutions our partners count on to power a clean future. We're called on to design and deliver alternative energy control solutions. The future is where we'll continue to make history. We are Woodward. I really hope you find this message as inspiring as I do. I especially like the nod to our past, coupled with the promise of a bright future. I was a Woodward customer, as many of you know, from 1997 through 2012. Based on this experience, this message and this expression of our purpose and values really resonates with me. I've been the CEO for 18 months, and I can tell you that I believe our future is bright, even brighter than I imagined when I joined the company. We play a foundational role in the industries, markets, and trends that you saw in that video. I believe we are well-positioned to deliver energy control solutions our partners are counting on, regardless of the speed or the flavor of the energy transition. It's truly an exciting time to be at Woodward. Speaking of exciting, we delivered improved results in 2023, as we shared with you at our earnings call, yet we are capable of so much more. In the first half, we experienced big challenges with supply chain in crisis, lots of new members, and pressures from inflation. We took actions. We streamlined the organization, taking 4 business groups into 2 segments: Aerospace and Industrial. We right sized the Industrial business. We leveraged significant synergies by creating one Aerospace segment. In the second half, we capitalized on continued strong demand with higher output, driven partly by our members coming up to speed. We enjoyed improved pricing and better supply chain performance. What you see up on the screen is a scorecard that represents healthy growth, margin expansion, and improved Free Cash Flow generation. These are the essential building blocks of a strong Woodward value proposition, and also a firm foundation on which we build our 2026 outlook. At the heart of our value proposition are three interconnected value drivers: profitable growth, operational excellence, and innovation. We are in the markets of choice. We serve great customers, and we're on their best products. That means we can use operational excellence as a growth engine and as a margin expansion engine for Woodward into the future years. Innovation is required for breakthroughs in operational excellence, as well as getting us ready for our customers' next generation of products. Our capital allocation for highest return underpins this framework. Bill will talk more about that in his section, and I'll cover each of these three value drivers. Woodward's growth is propelled by a robust demand in both the aerospace and the industrial end markets. I am dropping hints about our outlook on the next two charts, just so you're paying attention. In aerospace, the growth is fueled by growing the industrial base, as well as we have the opportunity to enjoy an extended run of the legacy aftermarket products. We are ready for the OEM ramp, and we're ready for the first shop visits of the fast-growing LEAP and Geared Turbofan fleets. In industrial, the shipyards are booked, there's continued demand for power, and high utilizations keep our aftermarket healthy. Thus, we see high single-digit growth for the company through 2026. Operationally, we started with the basics in the midst of a delivery crisis. How basic? Very basic. We realized we had to train new members on concepts like safety, quality, delivery, and cost. This is the order of battle on the manufacturing floor, and it's the priority for problem-solving. In the second half, we were able to shift from recovery mode to double down on our lean journey, both continuous improvement and breakthrough transformation. Sure, we hired some experienced resources to help accelerate our lean journey. But in our first value stream analysis, in our first value stream under transformation, we uncovered significant talent capability inside our company. Bill, Randy, Tom, Terry, the whole gang, are gonna talk more about this. But I can't help myself, so I'm gonna keep going for a minute. The power of this transformation, when you get 30-40 people from all walks of the business in a room, and you challenge them to analyze all the steps in the value stream, from customer order entry, all the way to shipping the product and collecting cash. Sure, we learn a lot about the, the aspects of the process, but teamwork is enhanced. Waste is identified. Plans are created to reduce or eliminate it. Empathy is created for the work of others, and I think people look at each other and their roles differently at the end of this one-week session. I've been through this a number of times in my career, and I've always seen significant benefits in people, operations, and financial metrics from these kinds of activities. If you look on the screen here, we're claiming that we can derive better than 3 points of margin expansion over our planning horizon, as well as generate elite cash flow levels greater than 100% of net income with this activity. Furthermore, lean is leader-led. I've been blessed in my career with a number of very talented and skillful lean coaches, also known as senseis, some famous for a good reason. The first question each one of them asked me at the start of an engagement was: "Who's the lean leader in this outfit?" If the answer wasn't me, I'd gotten off on the wrong foot with my new coach, and I would have failed the first test. So just so you know, I expect each of my leaders to participate in one, maybe two, still under negotiation, value stream analysis or Kaizen events per year. So, the people you see here on the stage today and their colleagues are all at it on the front lines. So, I participated in the SOGAV value stream analysis on our Lincoln campus one month ago, locked in a room with 30 of my new best friends. And sure, I learned a lot about every step in the process, where there's waste, where there's rework. I learned about some countermeasures masquerading as standard work, but more importantly, I saw the spark of full engagement ignite in the people in that room. Just a fun fact. For the value streams under transformation and the Kaizen events scheduled associated with them for the rest of this year, 30% of these will be led by hourly members. That is powerful and lasting talent development. Since I've worked with and for Woodward for over 17 years as a customer and as a member, I can safely say that innovation and partnering with our customers on their next-generation products is a natural act. Actually, it's deeply embedded in our company's DNA. Our philosophy is to design components, subsystems, and systems, depending on what the customer wants. Some customers want us to design and provide an entire system architecture, and they invite us into their trade study activities to decide what the best way to configure and integrate this is with their system. Other customers just want us to provide that very valuable component that fits perfectly into their system. Regardless of which of these activities the customer wants, we strive to understand and model the system behavior two levels above our scope of supply. That way, we can be the most competitive supplier and the most valuable supplier to our customers. Our obligation doesn't end with designing and manufacturing the hardware and the software. We have a significant test capability in the company at all of our sites, and we challenge our designs in the harshest environments to ensure product reliability our partners are counting on. We serve two markets. In fact, we've organized our two segments around these end markets. They're both attractive markets, aerospace and industrial. At Woodward, though, they're not just attractive markets. We have significant overlap in technology, methods of manufacturing, and test that serve both of these markets. We have 10 active Woodward Innovation Networks, also known as WINs, inside our company, because everything has a three-letter acronym. They're focused on things that help us develop the best way to design and manufacture and test control systems and solutions. Just three examples, additive manufacturing, sensors, and product cybersecurity. These teams are made up of members from aerospace and industrial segments, as well as corporate, sometimes, depending on the topic. These teams deliver value to the entire company. We also have a track record of transferring product technology and manufacturing pedigree from one part of the company to another. The latest example of this is the balance of plant scope of supply that we won at Airbus for their ZEROe demonstrator that's powered by fuel cells for electric propulsion. We won this work based on our experience with hydrogen-capable valves in our industrial gas turbine business. Engineers from both aerospace and industrial segments are participating in this project. Most of the work is being done in Europe, and we're building the test facility at our Stuttgart Engineering Center, which is part of the industrial segment. This is the biggest cross-company collaboration effort we've ever embarked upon, and I believe there's more opportunity with the energy transition for these types of synergies. Okay, so I'm gonna give you a read ahead for the day in terms of what's gonna be covered, but also who's gonna be covering it. Bill Lacey, our CFO, will go over the financial performance and capital allocation. Bill has 30 years of financial and business leadership that he brings to the team, which I greatly value. Tom is gonna cover our progress on operational excellence and our trajectory. Tom is the last man standing from our previous Investor Day, so I ask you to be nice to him. Thank you. Yep, you're welcome. He has over 30 years of operations and business experience, and he is instrumental in all thing's operations in the company. Randy's gonna cover the industrial transformation. Randy brings 30 years of aerospace experience to this role, mostly operations. Randy has, in addition to helping us get industrial on the right track, he has catalyzed the acceleration of our lean journey with partnering with Tom and Terry. His entry into the scene has really created this critical mass of leaders with operational zeal to improve the company. Terry is here to assure you that all our investment in the aftermarket thesis, this entire investment thesis in aerospace, is intact, and in fact, he'll show you that it's probably more attractive than ever. Terry's 34 years at Woodward help him serve as our anchor to the culture of the company. Might surprise you a little bit, though, that Terry's often the instigator, or at least a fast follower of change when change is required. Mike, Rick, Sean, and Divya will highlight their favorite products, also known as some of Woodward's most valuable growth products for the future. By the way, the experience that'll be on the stage here today is off the charts. You'll hear from over 250 years of aerospace and industrial experience today. With that, I'll turn it over to our CFO, Bill Lacey. Thanks, Chip. And good morning. Thank you for joining us today. It's good to see so many familiar faces, but also, I see there's some folks that I haven't had a chance to meet, and hopefully we'll get that taken care of today. You know, it's been a tremendous six months. I have had the opportunity to learn and become more intimate with Woodward, with our industry, and with our key stakeholders. It's also I came in at a really great time because I got a chance to collaborate and work with this leadership team to develop our purpose, strategy, and goals and objectives for 2024 and beyond. I am excited to be here today to share some of that discussion that we've had with you and show you where Woodward is going. Let me pick up where Chip left off. You know, our value proposition, in addition to providing clarity to our leaders and members about where to focus, it also informs us of what's gonna be driving our financials for the next three years and beyond. Now, Chip mentioned I'll hit on capital allocation in a few pages, but given the importance of operational excellence, I just wanna spend a little more time in this space. We view operational excellence as an enterprise-wide imperative that will enable us to drive world-class execution. Now, this goes beyond supply chain in manufacturing. It really goes into every corner of our business, including transactional processes. Now, the good news is this: the same lean principles that we're using to transform our manufacturing value streams are the same tools and methodologies that we can use in these transactional areas. As we got into some of these transactional areas, we realized that we needed some work on some of the basics to shore up the fundamentals. These transactional areas are key to us meeting our business objectives, areas like pricing, product lifecycle management, accounts receivable, accounts payable, to name a few. Now, we're in the early stages and early phases of this, but the results that we've seen from our initial efforts have been very encouraging. And where we saw some of that encouragement is in our 2023 financials, and we saw the powerful impact that operational excellence had in a couple of areas. As Chip mentioned, increasing our output and allowing us to realize price to offset inflation. In 2023, we delivered $2.9 billion of sales, which was up 22% and took us to a high point that we saw and experienced back in 2019. Aero represented 61% of that, $2.9 billion, and industrial's $1.1 billion represented 39%. Randy, I'm gonna steal a little bit of your thunder, but that $1.1 billion represents record levels of sales for industrial. You know, in my opening, I mentioned that I've, I've had time to get more familiar with Woodward, and we have things to work on, but I am so impressed with so many things. And one of the things I'm most impressed about is the quality of our customer base. We walk with giants. Our customers and partners are major players in the aerospace and industrial sectors. This gives me a ton of confidence in our ability to continue to deliver year-over-year organic growth. Now let's switch over to our full year financials. I just hit on sales, so we'll jump right to EPS, where we delivered $4.21, which was up 53%. And what drove that? Again, our ability to drive price that more than offset our inflation. Through that increased output, we had higher sales that we were able to leverage to the bottom line that expanded our margins and also enabled us to deliver $238 million of free cash flow, which was up 94% from the previous year, as we were investing in working capital to fund the recovery we're experiencing right now. Now, that $238 million is 92% free cash flow, cash conversion. As Chip mentioned, we wanna be greater than 100%. We feel that we're headed in the right direction with this 238, and we'll be able to hit that target going forward. One thing you'll learn about this leadership team, we believe in measuring our progress in order for us to hit our objectives and be accountable when we don't. As we look at our full year 2023 financial scorecard, aerospace margins was short by 30 basis points. We know the issues. We have put corrective actions in place, and Terry and team, and I expect that to come through in the first quarter.... Seven of the eight commitments that we made financially, we met or exceeded. Now, you will have walked away from this discussion today, having heard about the importance of operational excellence has on our business and will continue to have on our business. So, I thought to give a little perspective about, and quantify what it meant to us in 2023, I wanted to spend a little time here. Again, we have not had issues with demand over the last couple of years. That has not been the issue, but our execution has been hindered by all the things that we've been talking about over the past year. And this operational excellence enabled us to settle down and stabilize that supply chain. We were also found ways to improve the way we onboarded our members, and we realized, we were able to realize efficiencies. This allowed us to drive $350 million of volume, which enabled the 22% sales growth, and then additionally allowed us to get that price of 7.6% price realization or more than $180 million, which allowed us to expand our margins by 230 basis points. So, we know and feel really good that we're on the right, right points here, and that, our ongoing focus on organic... I'm sorry, on operating excellence, will allow us to drive our organic top-line growth, continue to allow us to expand our margins, and allow us to generate free cash flow. We finished fiscal year 2022, 2023 with a strong balance sheet and access to greater than $1 billion of liquidity, which gives us flexibility and optionality in, in the future. We came in at 1.5 times leverage, which is right between our sweet spot of being 1-2 times of EBITDA. Now, we have the ability to go above the 2 times leverage if we wanna go out and we see some M&A activity we want to support. We've also have a demonstrated record of being able to generate cash flow from operating activities to bring that leverage back down into our preferred range of 1-2 times. In summary, we are in a financially strong position, and we have the means to address any strategic opportunity that comes before us. We will continue our from a capital deployment standpoint, to be balanced and disciplined in our approach. We will be focused on deploying our capital where we have alignment and a strong fit with our strategy, and also where we can generate the greatest returns. Over the last five years, we have returned nearly $1 billion to shareholders via share repurchases and dividends, showing our commitment to investors. We have a number of great opportunities to consider going forward of where we will deploy, deploy our capital. We see, we see areas like R&D, where we can continue to grow our future. We also see areas like operational excellence in automation, which Tom is gonna talk about, that will enable us to increase our capacity, drive productivity, and improve our turns. And because we see such a great opportunity here, we are gonna be increasing our CapEx trend from $80 million to $100 million in order to support our organic strategy. Now, our organic strategy informs our inorganic activity. We have a very active funnel of opportunities that we look at, but we are disciplined acquirers, and we have a very stringent evaluation process that only lets a very few opportunities that we even make it to that next phase. And then it goes back to this very central point of: does it fit our organic strategy? One point I just wanna be clear on is that as you look at our outlook, it is built upon 100% organic growth. We are always considering everything that we do and trying to understand how does that contribute to improving long-term shareholder value. As I mentioned, we believe in measuring our progress and holding ourselves accountable, so we are constantly measuring ourselves against our peers because we know that you have options, and in order for us to garner your trust and your investment, that we have to outcompete our peers. So, in order to measure that, we look at total shareholder return, and as you can see on the screen, we looked at three indices over a horizon of three years, and Woodward beat each one of them. We believe that our value drivers that are off to the right are intact and will be so for the long term, allowing us the ability to continue to grow and outperform our peers, providing you with a great place to invest.... Fiscal year 2024 guidance, now this is the same that we provided in our press release. I won't spend a ton of time here. Want to hit on a couple of things, though. On our top-line sales guidance of $3.1 billion-$3.25 billion, what underpins that is strong double-digit growth in both segments. Now, in our industrial segment, that is partially offset by our planning assumption for China on-highway coming down in fiscal year 2024 from a high point in fiscal year 2023. Additionally, I want to hit on aerospace margins, which we're guiding to grow 160-260 basis points. We will see a headwind from mix as our commercial OEM business growth rate outpaces our growth rate in our commercial aftermarket business. Despite that mix headwind, because of the leverage that will flow through, that will be the engine that drives that margin expansion. Fiscal year 2023, in summary, was all about getting back to the basics and shoring up our fundamentals. As a result of that, two things: greater output and ability to deliver price to offset inflation. We will continue this lean journey that was discussed, and that will enable us to transform our manufacturing value streams. It will allow us to simplify the supply chain and strengthen it, and it will allow us to have world-class transactional processes, which will be a driver of our productivity, along with enabling us to build on the ground that we have already captured and allow us to continue to deliver organic top-line growth, expand our margins, and generate free cash flow. Thank you for listening to me. Now I'd like to turn it over to Tom Cromwell. Good morning, everybody. Great to see so many familiar faces, also some new faces in here. As Chip said, I had the pleasure of speaking with all of you during the last Investor Day, but I do have to admit, my hair was a little darker then. My face was definitely less weathered, and in fact, I actually had to update my picture so you all could recognize me. It for sure has been a challenging 20 months since that last Investor Day. The supply-based challenges that we thought we were going to face were worse, they were deeper, they lasted longer. Electronic component shortages were a big part of that. We also continued to see higher turnover than we expected, so that caused us to have to hire a lot of new members in. So, it was a challenging time. But I would say we stabilized the business, we've made dramatic improvements, and the last 10 months have actually been a lot of fun again. The other comment I would make, you know, just to open everything: this is my 33rd year in this industry. I've worked with a lot of good teams. You've heard from Chip already, you've heard from Bill. We've got some newer faces into Woodward. You're certainly going to hear from some very seasoned members, long tenured with Woodward. I can say this is the strongest team I've ever worked with in my career. We are very well aligned as a leadership team, and where Woodward is positioned and where we're headed, I am super excited about it. So, it's a fun time to be at Woodward, and really proud of where we're at. So, with that, I'm going to jump in here and talk about our operations overview. So, over the last 10 years, we've spent $500 million in capital. That was to get ourselves ready for the narrow- body ramp, get ourselves ready for the industrial business that we saw coming. We are very well positioned. 16 significant plants spread across 3 continents. We have 4,500 members working in our plants today, and so we are extremely well positioned for the business we have over the next 4-year horizon. We spent 18 months, the past 18 months, stabilizing the business. So, what did that mean? We have onboarded over 1,000 new members. I'm going to talk about how we did that, how we brought them in efficiently, how we found the right members, brought them in, got them trained, got them up to speed. That was a huge part of, you know, the performance you're starting to see now through the second half of fiscal 2023. We also built a very strong supplier escalation process. We, I'm going to talk about it, but as we went into fiscal 2022, we had 1,800 suppliers, and you can imagine with that many suppliers, there were issues that came as a surprise that we didn't anticipate. We needed a way to escalate those issues very quickly and develop alternatives, either internal manufacturing or sourcing those parts to another supplier, so we could maintain good continuity of supply. So that was a process we built rapidly. We put key team members in there, and it really helped us go in and help suppliers with specific issues they had. As part of that, we also built rapid response centers, so I'm going to talk more about that, but that's what gave us internal manufacturing capability, rapid-type machining centers where we could address specific issues. All of that led to really increased productivity and output, which you started to see through the second half of fiscal 2023. So rapid response centers. Chip talked about this in a couple of the calls. We've invested $10 million in highly flexible machining center-type capital. What that's allowed us to do is, if a supplier had an issue, we recognized it, we would, in many cases, make the determination to pull those parts in-house and produce them ourselves. Our objective was to do that in 10 days. From the time we saw an issue till we had the parts produced and shipped to our production lines, our target was 10 days. In some cases, it took us longer than that, depending on the complexity of the parts. But then we've had certain parts where we've had repeat orders for them. We generally now can produce them and get them to our production lines in less than 5 days. That capability, that flexibility, has changed our ability to deliver to customers. As that model has matured more and more, we're starting to load these machines up with about 50% base load. So, we want good utilization off of those machines, but that also keeps them staffed all the time. It keeps members in there that are running those machines all the time. So, 50% runs base load, repeat-type parts. The other 50% is reserved for that flex capacity, for any issue that might come up. Could be from our own internal machining centers, or certainly could be from a supplier, but that's how we're using these today. I would also add, we intend to continue to use this model and grow it. If we see issues with grinding capacity or other things, we would add additional capability in and continue to use these rapid response centers. They've been very effective for us. You know, when we think about people, again, we brought in 1,000 members. Attrition has stabilized for us for sure, but when we started our Rock Cut facility back in 2015, we built dedicated training cells in that plant, and we hired a dedicated training team. That's all they did, is train new members. If you think about starting a new plant, we hired over 800 new members into that plant. We had to be able to bring them in efficiently, get them trained, and get them productive. They had to understand our quality systems, how to measure parts, how to work within our, you know, SAP-type system or WISE system that we use, you know, as our main production system. They had to understand all those basics, and then they had to learn assembly and test and all those basic skills. Over the last five years, we expanded that model to all of our other plants. We found it to be very effective to shorten the learning curve for new members. So now that we have those systems in place, we've gotten through the onboarding of 1,000 new members last year, we're actually using these centers to go ahead and cross-train members. So, if you think about that many new members in, you train them on those first initial jobs. Now, as you go into fiscal 2024 and fiscal 2025, you need to be training them on other jobs, giving them an expanded skill set. So that's how we're using them today, and I think you're gonna see that productivity in 2024 just continue to improve as we add that flexibility cross our people. We also really looked and said, "Okay, we have challenges." Precision machining is at the core of who we are as a company. And when you think about today's environment, there are less people coming through technical colleges, and there's less just machinists out there in the industry. So, we had to change our model. We had to help create additional machinists that we could bring in, get up to speed quickly. So, we worked with local technical colleges in our key areas, Illinois and Colorado being the primary two, to build out Woodward-specific training curriculum. Now what we are able to do is, we hire people that have maybe limited machining experience, but not fully trained, or in some cases, we'll take people out of assembly and test who have good mechanical aptitude, and we'll send them into this training course. So, they'll spend that 8-10 weeks. They'll start working in machining at the same time. We'll build out their skill set, and it gives us the ability, without hiring people that have extensive machining experience, gives us that ability to pull them through and have very good machinists in our plants. The other thing we've changed and recognized: we are an operations and engineering-focused company, and those pipelines for young engineers coming out of college, you know, up through our systems, we needed a stronger pipeline there. We've had, you know, strong internship programs in the past. We've had good training programs, some rotational programs, but we haven't been consistent in our demand signal to universities. So, our big change here, our big pivot, is to create a very stable relationship with universities, have a consistent demand and pull, so we're constantly pulling students in, which allows universities to count on us, makes us a very strong partner for them, and allows us to pull in some of their very best and brightest talent. So, this is a key focus, and we want to create that stability and consistent relationship. The OEM ramps and business ramps that we've seen over the last 2 years, you know, Chip talked about it. We've had great demand in every market. It's been industrial, it's been aerospace, but that put a lot of pressure on our supply base. It forces us to step back and say, you know, going into fiscal 2022, we had 1,800 suppliers across our company. On-time delivery performance was poor, 75%. So, there were some fundamental challenges that we had with that supply base, and we said, "We have to simplify this supply base. We have to get to more strategic suppliers. We have to get suppliers that are committed to Woodward." So, you can see in fiscal 2023, we've made some progress. We've pulled some parts in-house, started to produce them ourselves, but we've also taken parts from smaller suppliers and moved them into bigger, more strategic suppliers. Inside of that 1,800 suppliers we had in fiscal 2022, 80% of our spend was with 300 suppliers. So, if you think about that, that means the other 20% of our spend was spread across 1,500 suppliers. So, we had a very long tail to our supply base. So that's what we're working hard on. You can see by fiscal 2023, we were down to 1,500 suppliers. On-time delivery performance had continued to improve. This is a multi-year journey. We're out there identifying that supply base we need in the future. In many cases, we have great suppliers that we'll move more business into, so some of our suppliers are gonna definitely see more business. But you can see our targets. It's to get that supply base down under 900 and have really good 95%+ on-time delivery performance from those suppliers. We're also focused on automation. I think, you know, if, if I look at Woodward, our automation levels from plant to plant vary greatly. Rock Cut, built in 2015, high level of automation. We will have, in some cases, 8-10 machining centers all tied together with a single robot. So, you'd have an operator at the front of that line, they'd load a part onto a pallet. The robot would come in, grab that part, feed it into a machining center. That machining center would do a certain number of operations. The robot would come and grab that part out of that machining center, move it to the next machining center. That machining center would do some additional operations. It would continue through that process till it eventually came back to the operator as a part that was done with those sets of machining and really ready to go on to the next operation, which could be something like heat treat. So, that plant is well automated. We have a servo line that is virtually fully operated, runs with very few operators in it. But then just down the road from that, we have our Loves Park plant, built in 1940. Not the same level of automation in that plant. So, this effort is to level up all of our plants to a higher degree of automation. But more than ever, if you think about the difficulty in workforce and recruiting, this is a way as we continue to grow. You know, Bill talked about strong growth rates. Chip talked about high, you know, single-digit growth rates for us. This will reduce our demand to hire new members. It also improves production quality and stability and consistency, so that's an important part of it. The other key thing we see here, though, we have certain more redundant jobs that tend to see higher turnover. This is a, you know, really ripe area for automation. As you automate those jobs, we reduce that hiring demand a lot because we don't have that turnover in some of those jobs. So, Bill talked about it. $100 million in capital spend going forward, there's a significant chunk of that that we can peel off and dedicate it to automation. So that's giving our teams the ability to plan this out. The other thing Chip's gonna talk about in the end is we've changed our planning process. We've gone to a very disciplined four-year planning process. Through that, we're planning out demand in much more detail, but operational capacity and needs, hiring needs, all of those types of things. It's also given our teams a chance to think about capital and automation and say, "Okay, I have a longer horizon here to think about. I can plan for it and build in more automation projects." So, we're seeing that change from our teams in how they plan for automation, how they build it into their capital plans. Chip talked a lot about this. He's clearly passionate about it. This is at the core of what I've done across my career, what I 100% believe in. We started down a lean journey within Woodward. We had some good success, but there were also some challenges in how we were approaching it. When we move forward, and the pivot for us here has been to double down on this, get more aggressive with it, we will continue to do daily and weekly CI activities in every plant, which are... Think about, you know, if you've got a bottleneck where parts are kind of stacking up and not flowing as well as you could. We will continue to focus on that in every plant. We'll do Kaizen work; we'll do continuous improvement work. We'll break some of those things loose. We'll constantly be looking at flow and layout and improving all of those things. But at the end of the day, the big pivot here is we need to do a better job of developing lean leaders. It's about that experience of running through cycles and cycles of lean. And Chip talked about it. We are focused on very specific, high-impact value streams to the company. So, think about a value stream that would have 100 members working in it, maybe 150 members working in it. It's high sales revenue. It's an area that's ripe. If we can make dramatic improvements in there, it's meaningful to the overall company. It will have an impact on how efficient, how productive we are. So, what we're doing there is we're mapping, as Chip said, everything from the time an order comes in from a customer to how we get it shipped out the door and how we collect cash. So, think about all the steps. Typically, we would have, you know, a bunch of order entry steps. We'd have a bunch of material planning steps. We then would start to machine parts. We'd eventually get it to assembly. We'd get it to test, then we'd get it out to our shipping dock. We'd ship it to a customer. There is waste and inefficiency throughout that process. There are always things that you can improve. So, what we do, we spend a week with a very collaborative team, typically 30-50 members that know every part of that process. They map every bit of the operation. They map how many parts are trapped in the different operations, so where parts are stacking up. What that leads to is a 12-month plan to say: How do I improve that value stream? If it takes us 50 days today from the time, we get an order till we get that shipped, and we collect cash, our objective in a 12-month time is to cut that in half, get it down to 25 days. As we get late in that cycle, we've gone through 12 months, we will get to that 25 days. We will map that process again, and we will do the target then of cutting that in half again, so from 25 days down to 12 days. Then you'll do it again when you get to that end of that 12-month cycle, and it'll cut it in half again. So, this is a multi-year process, and what happens is, as you've mapped out that opportunity for 12 months, you build a Kaizen rhythm, essentially one Kaizen per month, where you're focused on a specific area that has waste. You're taking that waste out, improving that area. The next month, you might be in a totally different area within that process, improving it. And so, what happens is you're building a lot of leadership muscle. This becomes not a part of the work they do; it becomes the work that leadership team does. So, the other big benefit to this is it creates a bunch of lean leaders that really understand this discipline, they understand this process, and it becomes the way they think and how they do the work. The other comment I would make, every value stream we've done... We've done 4 value streams at this point that are under full transformation. We'll have 2 more by the end of the fiscal year, at least.... What we're seeing, about 50% of our opportunity is in our office processes, and 50% of our opportunity is in the manufacturing floor. Historically, those two would have felt somewhat disconnected. Our office teams would have been working on office process; our operations team would have been focused on the plant floor. As Chip said, this really brings that workforce together. It's a common problem. We need to get that lead time reduced. We need to drive efficiency, and so it causes our teams in the offices to be stronger supporters of the plant floor. The plant floor also to be helping to improve our office processes. It brings that team together, puts them in the same boat, and has them working collectively together. So huge step forward for us. We're making very good progress with the value streams we have under transformation. The last thing I'm really going to talk about is ESG and our focus on ESG. Chip talked about it. At the core of our company, we have always been extremely innovative. Our products tend to be very fuel efficient. Virtually everything we do is aimed at reducing fuel usage for our customers. You know, less emissions coming out from our customers, giving them dual-fuel capabilities, so they can use sustainable fuels, environmentally more friendly fuels. 80% of the reduction we're going to have in the world, the impact we're going to have in the world, is going to be through our products. That's what it's been historically. That's what it's going to continue to be in the future. But at the same time, we're very focused on our own global operations. We can do a lot to reduce the amount of wastewater, water we use and consume in our plants, with the amount of waste we produce in our plants. We're also focused on changing our diverse, diversity and inclusion, improving. We put some very strong processes and teams in place to continue to improve there, and we've added additional ESG oversight into our board and governance there. So, we're making good progress in all areas of ESG, and it will continue to be a key focus for the company. So, with that, I am extremely pleased about where we are today. Great leadership team. Woodward is well positioned for all the growth we have coming in aftermarket, in all the key areas from OEM customers as well. So, we are ready for our break. It looks like we're going to have about 30 minutes for the break. Need to be back in here at 10:30. Okay? Thank you. Okay, we're gonna get started again in about a minute and a half. All right, we're about ready to get started with our next speakers from Woodward. Thank you. Good morning. Good morning. So, I'm Randy Hobbs. I am very proud to be able to share with you the Industrial Woodward story. Today actually marks my one-year anniversary at Woodward. Thank you, Chip. He's all that counts. That's after 33 years of being at GE Aerospace. I've had the great fortune and privilege to, in my opinion, work with, work alongside of, be mentored by some of the greatest operational leaders in industry. At the same time, I've been a 30-year student of Lean and have had the luxury of having a lot of external senseis built into me. And so over time, I've really honed this management philosophy. It's a system that I am extremely passionate about and have enjoyed the fruits of through activating teams. So just over a year ago, I'm sitting in a pretty sweet spot. You know, I'm running, probably... Well, I'm running the largest part of the GE Aerospace operation. We're leading from the front through this transformation and management system, and we're doing great. I'm actually training the top 1,000 executives in leadership and Lean, and then Woodward called, and it was a chance for me, to take this system and, and that I'm so passionate about, and I believe in so much, and put it in a position as a president. In a company that was big enough to be substantial, but small enough to-- that I knew that in pretty quick order, we could make some big wins for deserving members. You see, the talent at Woodward has always been there. It's not about me at all. It's about activating this system and activating these employees through focus and empowerment. Our team, two of them are here, Mike Moore and Jeff. We talk about frequently, yes, we run the, the, Woodward industrial business, but actually, we run a leadership factory. So, let's start with the markets. As you can see, our, our demand, our, our increase for demand here is gonna be greater than 50% over 30 years. We're in the business of energy conversion and control, and there's been no greater time for that than right now. It's a great space to be in. We do big things for big industries. Our products serve the engine and turbomachinery OEMs and end user customers for transportation, power generation, and oil and gas. And our customers, as Bill said, is like the who's who. So, we have General Electric, we have Cummins, we have Wärtsilä, MTU, Caterpillar, many of whom we've had partnerships with for decades. We're not a commodity player. We're not a... We just don't make parts. We bring system-level solutions to our customers. Our customers value high reliability, high accuracy, high speed technology, delivered consistently in extremely demanding environments. So, let's talk about 2023. So 2023, just so proud of our team. I don't know that there's been any time I've thrown as much change on a team in my career, and a lot of tension in the system, and it's not--they didn't, and it wasn't just enduring it, they responded in it. They flourished in it. That change started the first week when I got there. We had two industrial businesses. We put a core team together to start problem-solving; how do you bring this together as one industrial business? In two months, we had right sized our cost structure to that. We put a management system in place, a rigorous, robust management system that ruthlessly prioritizes and empowers people, especially those people, the most important people, where the work is performed. Our management system is built and delivers work at the Gemba, where work is, not in conference rooms. We learn with our hands, we see with our feet. The other thing that we did in January is we shut down all new demand for 3 months. When I got in, we had an unconstrained demand forecast flowing unimpeded through our planning system and locked into dates when our customer needed it. Well, that doesn't work for operations. That drives extreme chaos and havoc in the operations. Not only that, it sets really poor expectations with our customers, and financially, there's no way we have any understanding of what we can or cannot do. So, in those three months, we created what I think is the most important business process, that's SIOP. Stands for sales, inventory, operations, planning. Here's what this process is: You bring cross-functionally together the sales team and what the customer's demand is, how much and when. You put that together with the operations team. What is our capacity? Where are our current constraints? Then you throw the finance in there. What is our commitments to ourselves, to these people in this room? And you put it in a three-way, equally tensioned scrum, and what comes out is a optimized plan. An optimized plan to deliver the customer the best that we can with the resources that we have and an impeccable say, do around our finance team. It's the most important process I believe there is. So, we built that from scratch and incorporated it, started in March. The other thing that we did is we developed a pricing process. So, the pricing process we did and accelerated such that mid-year, we were able to incorporate it into our catalogs, and we incorporated into three long-term agreements, substantial agreements with customers. So, this chart here is actually hanging on my refrigerator. Luckily, all my kids are out of the house, so I didn't have to remove their stick figure pictures of me with a big old head. The first thing I want you to look at is all three, not just transportation, all three of our industries are growing substantially. But that's not why it made my refrigerator, and Bill clearly just stole my thunder, but $1.1 billion of sales is an all-time historic high in the midst of the change that we were throwing down on our teams. It's just phenomenal performance. Oh, and also a record around earnings. So, let's look at from 2022 to 2023. I just talked about 33% earnings growth, but let's look at the margin expansion, 450 basis points of margin. Yeah, we, we got lift from China, but what I want you to focus on is 200 basis points of this margin is because of the operational improvements we've put in place; the operational business processes that we shored up, pricing that we realized really drove that, those fundamentals. You'll note, 2024, listen, we're looking, we're looking flat. And as you've heard from Bill, Chip, in the earnings call earlier, we're counting on a, on a strong first quarter with China, but after that, with a little bit of, with less line of sight, we have de-risked from quarters 2 through 4. So, let's, I'm gonna talk to you about China. Maybe you might be interested. So, 2023 tsunami of demand, unforecasted, short cycled. Like, probably as much demand as I'd seen, that was unforecasted within a single year. You guys have read about or written about the why. The why is we had a favorable spread between natural gas and diesel. The why is China started really promoting their environmental policy, and there was a good supply of natural gas in that China market. So, but I don't want it to be left how. It is one thing to have the demand; it is another thing to deliver that demand. And so, what I really want to give credit to is our China teams, whether it is our two plants in China or our supply chain, they were able to respond to this. Now, we had excess inventory from 2022. 2022, when the demand left us, as surprisingly as it came back here. So, we were able to. We were afforded that luxury to help us. But then our China team, operations, supply chain, were able to greatly shorten lead times, create pretty incredible surge capacity, working extremely long hours, and use of the spot buy market, we were able to deliver what will go down as one of the most impressive things I've seen, to be honest. Now, Chip and I have both been out to China independently in the last three months to visit our biggest customer. And we went out there because we're trying to figure out, how do you dampen this volatility on the market? How, how, how can we become more predictable for ourselves, for you? And what we came back with was, we now have a commitment for three months of firm demand. Would love that to be a lot longer, but that's three months more than we had. That three month is why it's correlated to we're, we're showing you our planning, which says we're gonna have a strong quarter. And then with limited line of sight, we're de-risking the rest of the year associated. What's important is, to us, is how do we become resilient in this space? So, our team, I just talked about SIOP. We have a separate SIOP just for this material and these customers in this space, and we meet nearly weekly, and we take this customer information that's coming in daily. We're canvassing the industry and the news out there. We're understanding the leading indicators, fuel spreads, et cetera. But we're also visiting dealers, and we're saying: "What's going on with this product? Is it moving? What's the customer saying?" So, we can get as much insight as we can so that we build a plan that, to the best of our abilities, can deliver to important customers, but also de-risk our cost and cash, and we will continue to build that resilient plan. So that's a lot to be happy about, but that's not what I'm passionate about. I'm passionate about business transformation. So, the next two charts, I'm gonna talk to you about business transformation. And so, both Chip and Tom talked about lean, and man, you guys must see so much PowerPoint about lean. However, here's the facts: of all those pitches you hear about lean, five out of six companies will fail at lean. It's a fact. Fail at lean. Now, I've had unbelievable access to companies and senseis from the companies who didn't fail at lean: Toyota, Herman Miller, Watlow, Ingersoll Rand. And Chip hit on some of the factors of why the companies are successful or not. It's 'cause it's leader led. It's gotta be, it's gotta be a passion from the, from the top down. But let's talk about top down. Lean is cultural. What tends to happen is, you have a traditional organization structure of a tops-down command and control, and they'll say: "Hey, this lean seems like a good thing. Let's sprinkle some of that in." And they'll drive some lean tools in there. Guess what? The lean tools work, but the... And then they'll be like, "Hey, they worked. Let's spread that like peanut butter as fast as we can." But you don't have the culture built out. The culture is you take that org chart, and you flip it upside down. You see, the org charts serve up. So you put the most important people at the top. The people doing the work are at the top of the org chart, and then you build an ecosystem of support throughout the rest of the organization, such that those people can do their standard work at the pace or takt time required, and they're empowered and expected to come with a better way every day. And you activate, like, I nearly have 4,000 employees. Imagine 4,000 employees activated versus 30 people in conference rooms trying to make decisions. That's when lean works. And so, we started in Lincoln, where, which is the site that we need to do the transformation is faster than the others. We have nearly 40% of our lines on, in an active transformation, and as they, these guys talked about, we have material and information flow analysis, value stream analysis, that informs where our Kaizens go. But the Kaizens are outcome-based to a True North metric. Our True North metric is lead time. Why is it lead time? 'Cause customers feel lead time. I reduce that lead time in half, customers feel that. What also happens? Cash flow. That starts driving your inventory turns like a machine, and so cash starts generating. Why else lead time? 'Cause that's a growth engine. So that hits everything. So, we are aligned everything, all activities, to reducing lead time. We will start seeing some benefits of this in mid 2024, and by early 2026, we will have step function change in this business based on these transformations. The next thing that's gonna drive transformation. The other thing, when I came into the business, we were aligned organizationally by function, engineering, operations, sales, quality, et cetera. Each of them had their own budget, their own KPIs, never aggregated up to a product line, to a P&L. So, you can imagine there's well-intended pet projects in every one of them little functions, correct? So, we started almost immediately, Mike Moore, who you're gonna hear from, we set a organization position, a VP, that he is doing awesome at manning as VP of Product Management, and we started reorienting how we were structured. We are now structured under five distinct profit loss product lines. We've stitched finances together to see those individual P&Ls. We have roles and responsibilities through the business aligned to the health and wealth of those product lines. We have KPIs. More importantly, all our business decisions are made throughout, up through those P&Ls. So, listen, it's not rocket science here, but as you can imagine, all of a sudden, we have transparency that we never had before about how healthy our business is by product. And there's been some significant call to action and some significant imperatives strategically that we've got to go sort out. Let's talk about the call to action. Chip's been talking about it. You seem to be interested. Product rationalization. I classify products in 4 categories. You got runners, they're always happening. You got repeaters, like every week. You got strangers. They may visit you every 5-8 months, knock on your door, you're like, "Whoa! Did not expect to see you. Come on in." You got aliens. You might get an abduction every 5-10 years. 25,000 products we've rationalized. A lens. That should give you a sense of, wow, the opportunity to be amazing stewards for our product lines, right? So, in this year, 2024, we're gonna continue to rationalize our non-core products, start to embark on standardization. But we've mapped every one of these products, and for those high value, high growth, high technology products, we're gonna position them commercially. So, just really good opportunity that's gonna be transformative, that I'm very excited about within this space. All right, last slide is the energy transition. So, the energy transition is accelerating. Policy is requiring it. Technology is enabling it. Economics are starting to favor it. We have many customers who've made very strong commitments to get to net zero in the near future. Here's why that's important for you. Well, more important for us, but you'll come along. So, here's why that's important. Our product portfolio already spans the spectrum of fuel, diesel, methanol, hydrogen. You know what's even more important? Our systems are delivered a lot, you're gonna see some of the products associated with that, in dual fuel capabilities. So, put yourself in a customer's shoes. You're a customer. You got to make a decision on your next fleet. That's a pretty expensive decision, and this is a long cycle business, so you're gonna make a decision, and that decision is gonna have your imprint on it for 40 years more. And so, you don't know when the energy transition is gonna happen. Hopefully, it happens on your terms. Maybe it happens outside of your terms... Why you choose Woodward? Because we're differentiated. We give you dual fuel capabilities that you have optionality now. It has future-proofed your fleet. That's why it's important. So, I keep hitting the point there. I'm hitting the wrong button, that's why. So, I'm gonna introduce Mike Moore. I already kind of introduced him, but he's gonna talk to you, along with Rick Boom, about our fuel control systems, which enable the energy transition. They're just a small sampling of our portfolio. There's much more to it, but it'll give you a sense. And this portfolio contains or is planned for product that spans 4-megawatt recip engines all the way up to 700-megawatt gas turbines. So, Mike, I'm gonna turn it over to you. Hit the green button. Don't hit that button. It does nothing. All right. Thanks, Randy, and thanks, everyone, for attending today. As Randy mentioned, we're gonna talk a little about some of our portfolio that's supporting the energy transition. First, a little overview of me. I've worked in the power and industry for 30+ years. I started my career at Woodward, and over a 14-year span, I had roles in engineering, sales, program management, and then I took a brief 18-year detour and worked outside of the Woodward family. I had the great opportunity to come back in February of 2022. A good friend and mentor, I thought he maybe butt-dialed me, but it was actually he meant to call me and just couldn't pass up the opportunity to come back. I can't say I... The choice I made was one of the best professional choices. I'm so happy to work with the team that we have at Woodward and the exciting future in front of us. So, as Randy mentioned, we're gonna talk about a couple of our products in the industrial portfolio that are currently serving the current energy landscape and the fuels of today but are also positioning us for fuels of the future. Those are the SOGAV and the P2X diesel fuel injection. So, we've thrown around some acronyms today. You're gonna hear me say low carbon, P2X, net zero. Those are all really talking about these fuels of the future. So P2X, what is that? Power to the X. So, the basic concept of that is that it allows you to take a renewable or surplus energy source and use that to generate green or low carbon fuels. Net zero, again, is this concept that we're bringing fuels of the future to the market that significantly reduce the carbon footprint. So, the product I'm gonna talk about today is SOGAV, and as Chip said, we're gonna talk about some of our favorite products. Full disclosure, I love all of our products. But really, Rick Boom should be talking about SOGAV because he's a bit of the godfather of SOGAV, but he gave me the opportunity to talk about that exciting product line. So, what is a SOGAV? It must be a really special product because it got a five-letter acronym instead of three. No, really what it is, it's a solenoid operated gas admission valve. So, if you think about any of you who still have a standard internal combustion engine in your vehicle, it's very much like the electronic fuel injection system that you would have in your car versus an old carbureted system. At its core, much like many of our products in our portfolio, what it delivers to our customers is improved engine performance and optimization, lower emissions, and improved fuel efficiency. All of our products do that in a different way, but that's one of the key attributes of SOGAV, what it brought to our customers. How it operates is it provides very precise and tightly controlled fuel injection, which equates to injecting a certain amount of gas fuel into each cylinder as it operates through the operating cycle. So, that in and of itself doesn't seem that impressive, but it has to do it, an open and close sequence, very rapidly. Timing is very critical, so you're talking in the milliseconds. To complicate it even more, every engine has multiple cylinders, anywhere from four to 20. So, you're not only managing the injection into an individual cylinder, you're getting that sequence flowing through the whole engine and all of the cylinders. So, it's a very tightly coordinated product with, the supervisory control system, how it operates the engine, and critical to delivering engine performance, on that product line. So SOGAV's been around for, a number of years. It was first introduced by Woodward back in the 1990s. So, one might say, "Well, geez, you're talking about a pretty old product." The concept was introduced in the 1990s. We got early adoption kind of through the 2000s, but it's really a product that's been innovated and expanded throughout its life. You know whether it's for new engine programs with our key OEMs, meeting new market needs, different energy sources. You know, it started out as a pure pipeline gas application, transitioned to use with natural gas, LNG, now being used for ammonia, hydrogen. And then as you go forward, with SOGAV, we still have many product derivatives that are on our strategic roadmap. So, it's a product that will continue to evolve. You know, our customers develop new engine programs, larger size, smaller scale, you know, adaptation of different fuels, whether it's a single fuel source or a dual fuel source. So, while that product's been in our portfolio for some time, it's going to be a relevant part of our portfolio for a number of years to come. There's some unique attributes with the SOGAV, the above, beyond just its performance and how it operates the engine. I'll cover a couple of those. With any gaseous fuel, it's obviously a combustible fuel source. So, there's a lot of emerging requirements around safety, around fugitive gas emissions. In other words, no leaks within the engine compartment or around the engine. So that's very important. In the marine industry, that's really leading that charge in terms of requiring that requirement for, you know, zero fugitive gas emissions. But we're starting to see that drill into other industries as well. As we move into these other fields, it will become equally as important as hydrogen, being one in particular, that has a little more combustibility issue than natural gas. Another key attribute that's differentiated is really some of the internal coating technologies Woodward's developed to help this product with component wear and extending service life. So, as you can imagine, I mentioned that this is an on/off cycle product, and it does it thousands and thousands of times. That generally leads to component wear. So, this, the things we've done to adapt the product and the coating technologies really lead us to provide a, a product that not only can meet, you know, demanding operating conditions, but have a long service life. The other thing that's unique in a lot of the gaseous fuels that all of our products operate in is some of the metallurgical challenges. So, as you go from natural gas to hydrogen or ammonia, while they're both gaseous fuels, they have different constituents that may be harsher on some of the metals and seals and others. And so that's one of Woodward's specialties, is really driving that technology into our products. So, with a single platform design, you have the fuel optionality to use that same product across different fuel sources. Okay? So, where is SOGAV used? Randy talked about some of our core market segments, so power generation, transportation, oil and gas. SOGAV is applied in all of those. So, if you look in the transportation sector, in particular the marine markets, you have LNG fuel transports, container bulk carriers, ferries, cruise ships, coastal vessels, and then for land-based application and transportation, dual-fuel locomotive engines. In power generation, you can see the product used in stationary power, backup power, data center applications, and a growing demand as a backup power source for renewable energies when that variable generation source isn't available. Last, the oil and gas. A lot of applications in midstream, whether that's in compression or pumping applications or fracking. So, it's used in all of our core industries. We've seen, as Randy noted, really solid growth across all of our industries. In particular, we're seeing really strong growth in the marine dual fuel market, and when Rick covers our dual fuel injector, he'll touch a little bit about how SOGAV's tightly interacted with the marine market requirements. The last thing I want to cover then is our service strategy for the SOGAV portfolio. You know, it's-- Woodward's done a great job historically in developing great products. We bring those products to market, and they last for a long time. What we haven't done as good of a job in the industrial sector is really building a service strategy that follows our products throughout their life cycle. SOGAV, like many of our newer products, we're intentionally designing service strategies that go with the product after the initial sale of the product. So, SOGAV is a product now that we can do what's called a reman, where it comes back into one of our factories and goes through an extensive, you know, remanufacturing, goes through the entire end-of-line test and calibration, or an overhaul opportunity, where we take that product, don't bring the product to us. We take an overhaul kit to the customer. So that's deployed into the field. Customers then have the option to do that overhaul kind of on their terms, on their timing. No end-of-line test required, no special calibration. So, it's kind of the equation of you know, you doing an oil filter change on your car versus having to take it back to the dealer every time you need maintenance done. So, we've built that in into the product, and our service strategy follows it. Has a long service life, though, so it's not like this is a product that's going to be require an overhaul or service repair on a frequent basis. It has a 12,000- to 14,000-hour service life. Goes on engines that have a 30-year life cycle, so you guys are probably better at math than some of us. You can kind of equate how many overhaul cycles that could turn into for Woodward as a service opportunity over the life cycle of that asset. So, with that, I'm gonna turn it over to Rick Boom. Rick is the director of our large engine systems portfolio. He's gonna talk about the dual fuel, fuel injector but also cover how the SOGAV and that dual fuel injector kind of come together in dual fuel applications and the energy transition. Thank you very much. Good morning. My name is Rick. Thanks, Mike, for the introduction here on myself. I will talk about the dual needle or the injector technology. Mike gave a nice transition from SOGAV, from gaseous to liquid fuels. But before I go into the injector, I do want to give a little bit of an additional comment on how Woodward is positioned or relates to the large engine industry as such. We, as Woodward, we are member of a true international organization. It's called CIMAC. It's a society around internal combustion engines that is truly global, where suppliers, manufacturers, customers, end users are working together in a pre-competitive phase, dealing with topics, discussing topics about fuels, lubricants, emissions, regulatory affairs, et cetera. That organization is basically fundamental to shaping the future of large industrial combustion engines. Myself, I'm very, I would say, extremely proud to serve that organization as their president. Yeah, that makes me really proud, not only from a Woodward perspective, but put it into perspective of the total industry. So as Mike said, transitioning from gas to liquid, sometimes they are basically both used on the same engine, the SO-GAV and the injector. The injector, typically, if you have an engine, you always need an ignition source. You know, probably your spark plug or your lawnmower mower or your, your car, whatever. But an engine with a big bore engine, the ignition source is basically the diesel injection pilot, which is giving a little bit of diesel, which ignites automatically on the diesel cycle, and that ignites and burns the other fuel, like the gaseous ammonia or other fuels like methanol or ammonia. So, what does it do, a high-pressure injector? It basically takes the... You compress the liquid fuel, the diesel, and you press it through small holes while it then atomizes, it sprays into the combustion chamber, and the diesel cycle will ignite it automatically. So, that's important. But before I go through some of the details here, I mean, making such an injector, making fuel injection technology, dealing with these high pressures, 2,200 bar or something like 35,000 PSI, is extremely challenging. Because you imagine steel, you cannot... It's very hard, it's heavy, but at these pressures, it becomes, it deforms, it becomes a little bit flexible, so to say. So, knowing exactly how to do that, how to bring a needle, to move it up and down with the same tolerances, et cetera, that the system functions, is a real differentiating technology that we own as Woodward. So why do we do these dual needle type of injectors? Because there are many injectors in the field that were all single needle injectors. They can inject the diesel. What we can do, we can inject the diesel and the other fuel in one cylinder body or in one body that goes into the engine. The advantage of that is that first of all, the cylinder head of an engine is a complex piece of equipment. It has inlet and exhaust valves, it has cooling channels going through these, through the engine block, making connections, and there is in the center, this injector. If you want to add another fuel to the same combustion chamber injector, you will have to find another location, basically find another hole, position, physical envelope to put the injector. So, the value proposition of a dual needle injector is that it's all in one body, so you can strip it or put it into the same position. The other big advantage is that when you inject the diesel and your other alternative fuel, methanol or liquid ammonia, you inject it from the same center. So, the spray patterns mix perfectly, and you have a perfect combustion or an optimized combustion and emission. Imagine if you would have opposite injectors, one side the diesel and the other fuel. It takes time to meet each other into the combustion chamber, so it has a combustion effect. So, we are therefore providing that as a significant advantage. Both needles, both fuels are electronically controlled, so it gives all the freedom to the combustion engineer to develop his combustion regime, to do a little pre-injection here, have a main injection there, all electronically controlled. So, this needle or this technology is really a differentiator, as I already said. As Woodward, we started as part of our acquisition in Stuttgart from the company, L'Orange. In 1997, we had the first common rail diesel injection system for large industrial engines. And based on that technology, as I explained about the tolerances, dealing with the pressures, the leak rates, et cetera, we have been able to develop injectors where two of those needles are really embedded in the same body. You also have to imagine that the cylinder, the injector, is at the flame deck, as they call it, at the top of the cylinder. It's hot, high pressures. It's an extremely challenging environment to make something work and live for many, many cycles. So, that's a differentiator. The other differentiator in our technology is that what you see here on the screen, we have many different looks on the injectors. What we can do with our dual, dual needle injector is that we take the diesel side, which can be a common rail, so pressurized, but we also can take it from a conventional fuel system, a pump line nozzle system, as it's called. And the big advantage of that is that the diesel part does not have to change on the engine when an engine maker wants to introduce a second fuel as an alternative. 'Cause if you would only have the common rail diesel side, it would mean that many of the engines that are now out in the field have to be upgraded to a common rail fuel system, and that's a big investment. It's a big effort. So, what we offer as really, as a differentiator is either depending on what the customer wants, we can do it with, together with the pump line nozzle system, which is conventional, or with a common rail system. So, what is our market position with this dual needle injectors? As Mike already said, this is typically a marine application, where it links together with SOGAV, where we have the gaseous admission of liquefied natural gas, which is evaporated before it's injected. That is our market. We have one, and that is public knowledge at Wärtsilä and Hyundai Heavy Industries, two major engine platforms that are being used on container vessels, offshore wind service supply vessels, ferries, et cetera. So, there's a big market growing there because all the announcements that are done in the market around methanol-fueled vessels will have the main engine methanol fueled, but they also need the auxiliary engine to generate the power on the ship as well. And there we are well, very well positioned. As Randy actually already stole a little bit of my thunder here, is that if you invest in a vessel and you want to have it dual fueled, methanol fueled, ammonia fueled, you are investing in a long time, 20, 30, 40 years sometimes. There's a big discussion always in the market, is there enough of this alternative green fuel available? Now, I don't know. The point is, our system does have 100% diesel backup capability. I mean, we are not depending, or our customer end user is not depending on the availability of the alternative fuel. So, we are basically enabling, allowing them to run on alternative fuels, but in case that is not available, it won't stop them to do their business. They can continue to run on the alternative or on the main diesel as a backup. So, with that, we really, the injectors, together with the SOGAV, we provide a unique set of components to equip and to support dual fuel engines in the market, for today, but also moving to the future. Ammonia is being discussed. It's not really that active, but we are prepared to take gaseous ammonia, but also the liquid ammonia in these technologies. So, we have these unique components, and for today and for the future. But that's not all. We also can, we don't have it at display, we're not presenting here. We can take it one level deeper with controlling this, because those all injectors, SOGAV, are electronically controlled to optimize the combustion process, to manage the balance between the methanol or the alternative fuel and the diesel, to optimize all these things. So, we have also the ECU platform offering to support and to control these engines and to optimize the performance of that. So, it's the product, but we have the system solutions as well. And in that sense, Woodward is really relevant for this piece of industry. Besides that, we are really relevant. We also understand our business, we understand engines. With that, I want to come to the end of my presentation. I want to thank you for your attention, and I think it's also now time for the break. We will be back then. Please help me- 20 minutes. 20 minutes. So thank you. All right, we're gonna get started in about two minutes. All right, less than a minute, and we're gonna get going. All right, we're gonna get started with our next speakers for Woodward. First, I'd like to thank each of you for being here. I was hesitant at first when Chip talked about doing this Investor Day, which I've never done before. And then he said he wants to include business leaders. I was definitely hesitant. And he said, him and Dan were like, "They wanna hear, they like to hear from business leaders." I said, "Okay." And so, this is my first one, and of course, I'm almost last, and I'm realizing with all the questions on breaks that, I'm like: I could have changed the presentation to add that. I could have... And I've answered already, answered some of the questions, and I had to refer people. I'll be talking about that in the presentation. So, I've been at... I'm a passionate person, and I'm very passionate about aero, and so I definitely enjoyed the opportunity and to tell you about the aero story. I have been in at Woodward 34 years. I've seen—I've lived through four downturns and three growth periods. And I had a couple of people already ask me, "Over that time period, how does this compare?" And I can honestly say I've been dealing with the front end of the business almost my whole career, with technology, new business, working with customers, and so I've been living a lot of this over the entire career.... There is no time in aerospace like there is today. I can honestly say that. With the growth that's ahead of us on the commercial side, with the military, you know, with the geopolitical aspects and them growing their fleets on, in almost all their platforms, given the different aspects of what's happening, and on top of it, you have airframers and engine makers are already hot and heavy on the next generation and looking for that technology breakthroughs for the next generation. It is, I've never seen a time like this where it's all going on all cylinders all at once. So, I can honestly say then, as a result, there's not a better time to be leading Aero. So, Woodward has been producing products for energy conversion and controls for a better and cleaner world for decades. Long since before I was a young engineer at Woodward, they were making advancements in engine and aircraft controls that met this purpose. At this, I can honestly say, having during my 34 years, we are as committed to that purpose, which Chip talked about earlier today, as we ever have been. It's exciting. So, I'm gonna go through, in my presentation, the aerospace strategy and how it fits in, to the purpose and core value proposition that Chip laid out this morning: growth, operational excellence, and innovation. Market. The IATA data says that passenger numbers are gonna double between 2020 and 2050. Engine OEMs, not engines, just OEMs, in general, are ramping up both production rates and their fleets in preparation for this. If you look at some of the numbers, Boeing and Airbus are saying that, between the two of them, they're gonna produce over 40,000 new planes in the next 20 years. That's a lot of planes. And so, what you're gonna see as I go through this presentation, that we have had a strategy, and we've been investing, in the right areas to be prepared for this growth. One of the key things that has made us successful is we've remained very focused on our strengths. It's, innovative products, precision machining, and rigorous testing of controls for engines and aircraft, and you will hear that repeatedly. This leads us by staying very focused to our strengths, it'll... Enables us to meet our customers' ever-increasing performance requirements and the high requirements for safety, reliability, and fuel efficiency in very harsh environments. The aerospace business, as a whole, can be broken down into these three core areas: integrated fuel and control, flight deck controls, and aircraft actuation, aircraft actuation controls. The end use, and this is an important part of what I'm gonna walk through, the end items of these can be in completely different applications and environments. But when you break it down below that, there's a ton of commonality below that at the manufacturing process level, at the design practice level, and it there's just so many areas that we that there's commonality here. When you look at it, it's amazing. You step back and you look, we have six main plants in aerospace, six key plants. We make stainless steel pistons for actuators in all six plants, but they go into these different core areas. So, additionally, some of the products that go into this, each of these areas uses sensors. Each area uses electronic controls. Each area uses valves and actuators, so a lot of synergy across these groups. That is the reason this past year, and you've heard about it, we brought the aerospace businesses together under one team. If I elaborate on that, we had the Aircraft Turbine Systems group, and we had the Airframe Systems group. The Aircraft Turbine Systems group was primarily an organically grown business. The Airframe Systems group was really developed out of three acquisitions in 2008 to 2012. When you step back and look at it, each of the plants, when you do the assessment, you look at it, they were running fairly independently and with a wide range of standard practice, best practices and processes. So, we brought One Aero together in October 2022, at the start of our fiscal year. The first goal for the Aero team was to take the best practices and the standard practices and drive those, take the best practices and processes and drive that across the Aero group. So, we spent the first half of the year really focused on driving that. An example that, a simple example, is Andon process. What's an Andon? You have an operator at a machine or on an assembly line, and when that person runs into a problem, an Andon allows... Andon process allows them to push a button, turn on a light, whatever it is, to flag it, to say, "I'm stopped, and I need help. I cannot take my part on." And when you step back and looked across, we had areas in Aero that had no Andon process. So, if a operator had a problem, there was no flag that they could raise. We had other parts that had Andon system, but there were no support teams. So, they would raise the flag, but there was no support team to come and address that issue. And so typically, you want Andons to be addressed, typically in a matter of minutes or hours. We had areas and plants that were averaging days and weeks in resolving these Andons. So, made great strides there. A lot more to go. Another area we focused on was daily build rate. You know, Tom talked a lot about operational excellence. It's I call it, Operations 101. Every operator needs to know how many parts they need to produce every hour, every day, at their station. And we had things in place, but the accuracy of that, we had stations without any DBR. The operator just ran the order that was in front of them, and so we really took that and raised the accountability and the process around DBR to another level. We made improvement, still have a long ways to go on that. But what happened as a result of these processes, and the processes, I talked about operational processes, but the same thing was true in our engineering, sales, program management, and other, enterprise, processes. So by implementing this, the team, the One Aero team, did an incredible job just really focusing on implementing these standard processes across Aero. In the second half of the year, as a result of that, we started to see much more consistent results. We started to hit numbers, hit plans, more consistency, and with less variability. And that is, I believe, you, you've seen that in the results of our... particularly in our third quarter and fourth quarter results. So we hit, as Bill talked, we had $1.8 billion in sales. That was with 30% growth in OE in commercial OE, and we had 30% growth in commercial aftermarket. I can honestly tell you that if we had not put the focus on getting these processes in place across the business, across Aero, we would not have been able to deliver these types of results. So looking moving to fiscal year 2024. So fiscal year 2023 was putting a strategy and a plan together and executing on what needed to happen. The improved aero performance, and this year, the focus is on accelerating what we started in 2023. And I believe we have the right team, we got the right strategy to execute on that plan. And so the numbers you see here, which Bill went through earlier for sales and margins, I believe have a very achievable plan that support that. So, we are on, and you've heard this in previous calls, I know, we are on all the major platforms for the narrow-body and wide-body aircraft. There are over 30,000 of these planes in service around the world today. That's a lot of Woodward content and components in service. So there's, there's questions that come up around military. Our military, we utilize the military to develop and mature technology for commercial applications. The military, the requirements for military products, for military applications, and environments that they're in, typically lead commercial applications. So, our strategy for the military is very opportunistic, and we utilize the major military platforms to leverage technology into the future, next-generation commercial applications. So, I'm gonna transition here and talk, go a little deeper into growth. A lot of questions already. I've had a lot of questions already about our aftermarket, and, hopefully, I know I won't answer all the questions, but hopefully, I can take care of a good chunk of them. This is a diagram, and you can see. And I wanna be able to explain, a key part is I wanna be able to explain that Woodward is not just riding on the coattails of the narrow-body growth, but that we have a multiplier effect on top of that. So, on the left, you see the current generation in red with the 737 MAX at the top. Those products are really in the middle of their ramp-up for OEM production. We see production rates for those applications go up another 50% and then continue for, you know, probably another 10 years before they start tapering off. We have increased content. We have on the 737 MAX and A320neo, we have 3 times the content, that we had on the legacy, and on the GEnx-powered 787, we have 7 times the content. So, on the aftermarket, again, the seven, the current generation with the 737 on top in red, that fleet, those fleets are really at the front end of the aftermarket cycle. They are just really starting to enter into that first, first cycle. So, we will see aftermarket, revenue for decades to come from those products. The legacy generation, you can see here, is also in red, just off in the top right with the 737 NG. Our legacy generation products are basically at the peak of their life cycle right now, in service here. So, this slide is probably, to a lot of you, might be the most important slide in my whole deck. This is really intended to show the multiplier effect. On the left, you can see the V2500 and the CFM56-5 engines. Woodward had 2 or 3 components on those engines. On the CFM56-7 engine, actually, Woodward has zero content. A little history, when we did not win any components on the CFM56-7, and I remember the week that we've got the final decision on that, we laid out a strategy and executed on to get us content on LEAP and GTF, and not just get content, but to grow it... That was a 15-year endeavor that was a top priority for the company. So, a lot of focus on it. Well, the results speak for itself on the right side. So, now on the PW-1100 and the LEAP engine, we have 10+ components on those applications. That means we got significantly more content on the 737 MAX and the A320neo. When you try to do evaluation of the aftermarket, it gets a little complex because these components vary in their repair scope at each return and on the repair cycle when they come back. We took all that into account, and by our calculation, we show we have a 5 times service value multiplier over our legacy generation aftermarket. That is an incredible number. I know Randy talked about his refrigerator and putting his plot up there. I actually think this deserves a walk-in refrigerator to put this on. Because of the slides I just went through is why we are saying that the Woodward growth, aftermarket growth on these applications, commercial aftermarket growth, we are going to exceed the market growth. So hopefully, we've tied that together. And another important point on this plot is actually the red bars. As I said earlier, the legacy products on the are at the peak of their aftermarket cycle. We're gonna continue. That's what those red bars are. We're gonna continue to see the aftermarket that we have today for quite a few years on those products as this current generation products enter into the first repair cycle. We see, we don't see the legacy products starting to tail off until the current generation are well into their first repair cycle. So good timing there. Readiness. As I said earlier, we actually have been working a strategy for over 20 years to win this content. And a little, at the beginning of last decade, is when we actually won most of these products. So we've known and have been working to prepare for this for quite a while. It's already been mentioned about Rock Cut. We spent over, well over $200 million on new equipment as part of our Rock Cut facility, which opened in 2015. A lot of effort went into that. We utilized the latest, most, the latest precision machining, and we utilized cutting-edge automation as part of this endeavor. I probably have given some of you a tour of this facility in Rockford. I've done a number of tours of this. The picture that you see, and Tom referred to it, this is actually our servo cell at Rock Cut. That product, the servo product, has typically been manually assembled and tested. Difficult product to assemble and test. We automated it. A lot of work went in between manufacturing, engineering to automate it, and now we can do in this cell with six people on a shift that previously we actually would have required nearly 150 people to do the same amount of work. So, one of the most exciting things is with the lean transformation emphasis that both Chip and Tom talked about, we really are gonna have a, I've already started some additional lean transformation on here to really drive-up velocities, get out waste, you know, improve yield and ultimately margin. So just as we've been preparing for the OE, we have been preparing now for the aftermarket. We have operational transformation going on at our Loves Park facility in Illinois and in our Prestwick, Scotland plants. So, this is a picture of what a year and a half ago was the main machine floor for our Loves Park facility. And it had been a machine floor since 1940 when this building was built. It's being transformed with the latest and greatest technology to be prepared for the MRO work. This is where the LEAP and GTF products are gonna get repaired and overhauled. We have dedicated team to this transformation, and their job is to make sure we take and put in the best world-class lean value stream that we can and utilize, just as we did at Rock Cut, automation, where possible as well. So, this is a picture of the OE fuel metering unit test stands at Rock Cut. So, a lot of work went into these lines to set up the right value stream. The transformation team is taking everything that was learned and done at Rock Cut, that's one of the key foundations they are utilizing to move that into as we build out Loves Park. So, I'm really excited to see how those lines ultimately are gonna end up. We've already seen a significant reduction in LEAP and GTF turn times. So, the future next generation. So, when you look at each a new airframe, a new commercial aircraft does not come out unless you get at least double-digit fuel efficiency improvement. That's just been the standard over the years. That was achieved on the current generation with the geared turbofan, higher temperature materials, composites, and other improvements. When you look at the next generation beyond that, it's gonna require even bigger steps in innovation and improvements to achieve that. Every engine, it gets tougher and tougher to improve that fuel efficiency, and so it takes bigger and more innovative changes to do that. That means this piece is right into Woodward's strength. It means we're gonna have to have tighter packaging. We're gonna have to have fuel systems and actuation controls that have tighter, lighter packaging, that have higher performance, that work in harsher environments. And all this plays into Woodward's strength. This is where our wheelhouse is. So, this, that's good. When you step back then, additionally, there's systems they are gonna have to look at—we have to look at, within systems and do more tech innovation around whether hydraulic versus electric. We're gonna have to do more innovation across systems, more systems integration as a whole, especially when you look at integrated propulsion. This actually, One Aero, is very powerful for this in going forward. Before we had One Aero, we do hydraulic actuation and electric actuation. Customers, though, because of the way we were structured and how they're used to working with us, they would talk to the individual groups. If they wanted to talk about hydraulics, they talked to our hydraulics team. If they wanted to talk about motor-driven electric actuation, they would talk to our electromechanical group. By going to One Aero, this broke down those silos and allowed our teams, and this now allows our team to work more seamlessly across these various technologies and areas to do trades to determine what is best for each application. We also have seen over the past year, we are more closely linked with customers on new technology and development applications. So, our teams are now better equipped to go in and work with our customers as well, being able to take the Aero portfolio and work with them to say, "Look at these technologies, do the trade studies, and determine what is best for their particular challenge." The other aspect, if people will look at and say, one of Woodward's strengths is product innovation, and that is very true. But along with that, we get numerous opportunities to rise up to challenges and solve issues, some that are the most difficult and complex issues in front of our customers. The relationship, the deep relationship that we develop with customers and how we collaborate with them to solve these difficult problems is actually one of what I believe sets us apart. It's that close intimacy and working very closely with customers to solve, help them solve their issues. So, Chip mentioned earlier that we've been chosen to provide the balance of plant on Airbus' ZEROe demonstrator. This has an ambitious goal then of providing the first hydrogen-powered commercial aircraft flying by 2035. An amazing time in the industry right now with everything that's going on, and I'm excited to see where all these technologies are really gonna take the future of flight. When you step back now, the main takeaway, we have the right... We're on the right platforms, we have increased content, which gives us a multiplier effect, and we have been investing and preparing for this growth and are ready to execute. And as I said in the beginning, I don't think there's any better time to be leading Aero. So, with that, I will introduce Shaun McAlavage, he's gonna talk through our fuel system products, and then after that, Divya Bell will come up, and she will actually talk more about our hydraulics, our actuation business, and as a whole across Aero. Thank you, Terry. Oh, somebody can push that backwards? Red one. Got it. Okay. Okay, Shaun McAlavage. I'm the Vice President, General Manager of our Fuel Systems and Controls business. I'm what you'd call a legacy at Woodward, meaning my father worked here for almost 40 years as an engineer, and he actually helped develop some of the predecessor products to what I'm gonna talk to you about today. With my father working at Woodward, my first job anywhere was, of course, with Woodward as a high school student, mowing the lawns in the summer. So I got my start at Woodward. Then I did what any young college graduate would do. I came home, and I told my father, "I'm gonna go work for an aerospace competitor of Woodward's." And that led to some great holiday conversations, as you might imagine. After college... Or I'm sorry, then I eventually made my way back home. I've been in aerospace now for 22 years, the last 15 with Woodward, and I couldn't be any more happy with the way my career has gone there. So, so at Fuel Systems and Controls, we make systems and components for turbine engines. We make fuel systems, hydraulic systems, thermal management systems, and electrical systems, and we even work on the control system for the Airbus ZEROe fuel cell as well. Terry mentioned it's just a fantastic time to be at Woodward. I could not agree with him any more. He walked you through the three times content on OEM, five times content on aftermarket, and that's really just a fantastic opportunity for our leadership team to first deliver those OEM components and systems, literally tens of thousands of deliveries, and then support those products over their lifecycle throughout the field. Today, I'm gonna talk to you just about two of those components. It's the two, if you had a chance to come over to the product tables, they are over on the product tables. The first being the fuel metering unit for the LEAP engine, or FMU, I'll use that interchangeably, and the second being the servo control unit or SCU. So what is an FMU, and what is an SCU? So I'll give a little simple explanation. An FMU is simply takes the electronic signals-... from the engine electronic controller or computer and translates into fuel flow to the combustor. The combination of those two components are important for managing thrust on the engine and also for making sure the engine stays within its performance parameters. The SCU has two key functions. The first function is it actually takes that fuel flow from the FMU, and it splits it into different zones on the combustor, and this allows the combustor to burn that fuel more efficiently, more sustainably. The second key function that it does is it actually manages several different actuation systems on the engine to also improve efficiency. So in combination, these products do a great job of improving engine efficiency, making them more sustainable, reducing greenhouse gas emissions. So why are they so special? The first thing, if you're an engineer, you have to love the fact that they are strapped to a 6,000-pound machine that generates up to 30,000 pounds of thrust and burns fuel at over 3,000 degrees Fahrenheit. The environment is difficult, to say the least. And these products, to deliver on the operations that I talked about, the functions that they provide, live in that environment. They are produced at very rigorous specifications. And Terry talked about how we have invested both in design, proprietary designs as well as proprietary manufacturing processes to deliver that performance. And I'll try to put a little bit into context. Each one of those products has several control valves inside of them, and we have to hold them to very, very tight tolerances to make sure they can deliver on the performance that we ask them to deliver on. So you've heard the saying, we're splitting hairs here. Well, to get to an equivalent dimension that we manufacture these valves to, you'd have to split that hair not once, not twice, not three times. You'd have to split that hair four times to get to an equivalent dimension. So for all the math people in the room, that's exponentially smaller than a human hair. For everyone else, it's really, really, really small. The last thing that I'll talk about is the novel way in which Woodward combines several functions into one. If you had a chance to get over to the table, you'll see there's a lot going on in these units, and they cover a lot of ground in terms of functions. Well, on each engine application, each engine generation, as Terry talked about, they're getting more and more efficient. And as they get more efficient, it actually shrinks the engine, especially the hot section. That's where we find these components. It also increases temperatures and increases pressures. So these components have to be packaged in a much smaller, tighter environment and have much harsher conditions on each one or each generation. And we have developed proprietary designs and proprietary manufacturing to accomplish this. To kind of put that into example, if you look at those housings over there, that all of those valves are mounted in, there are over 4,000 critical features, and Woodward has to be able to manufacture them over and over and over again with quality, with safety, meeting those performance specifications. There's only a handful of companies in the world who can deliver those two products that are sitting over there on the table. Ultimately, these products need to be safe and reliable. Terry talked about the extended life cycle of these products. Our customers - they're not just counting on these products to work flight after flight, getting you to your next destination. They need to operate them year after year, decade after decade, and Woodward has the proprietary designs to do just that. That's my short overview of the fuel metering unit and the SCU. I will be available after break if you wanna talk some more about it. I now would like to introduce my peer, Divya Bell. She's gonna come talk to you about some of our actuation products. Thank you. Let's see if I can move this forward. Hi, good afternoon, everyone. I'm Divya Bell, Vice President and General Manager of our Hydraulics Aerospace business, and I have the honor of walking you through our actuation controls across our entire aerospace business. We'll start with hydraulics. These applications are used extensively through airframe and helicopter applications. This includes engine thrust reverser, fixed wing control surfaces, such as rudders and ailerons. It also includes helicopter main and tail rotor control. It includes ground vehicle turret control, and it also includes space applications, including engine control as well as aerodynamic control. These platforms all utilize servo valves, control valves, and actuators. In addition, they also utilize hydraulic fluid as their medium. The synchronized non-locking actuator on the table over here and at the bottom of the screen behind us is an example of a hydraulics actuator. These high-pressure hydraulic actuators are used extensively throughout aerospace, airframe, and helicopter applications. But hydraulic actuation is actually only one type of actuation that we design and deliver through our aerospace businesses today. Our fuel systems and controls business, led by my teammate and friend, Sean, also delivers these actuators, but for critical engine functions, such as throttle, variable stator vanes and bleed valves. As opposed to hydraulic fluid, these actuators use fuel to power and drive the actuator. The geared turbofan actuator to the top right on the screen behind me is an example of a fuel actuator. Up until this point, all of the applications that I have walked you through use fluid, either fuel or hydraulic, to power the actuator, but actuation and control can also be used using electric power. Our aero electrical, mechanical, and electronics business group designs these actuators using clutches, motors, gears to control and drive movement in these actuators. The rudder trim actuator behind me, to the top right of the screen, is an example of an electronics actuator. Woodward has designed electronic actuation for decades, nearly as long as hydraulic actuation, and will continue to provide that coming up. Each of these components that I've walked you through operate in difficult, complex, flight-critical functions and must achieve the highest form of safety and reliability. Our components have redundant fault logic and complex systems redundancy built into them to achieve this. Woodward has a long history of designing applications in harsh conditions. These harsh conditions include both temperature and vibration extremes, from the high scorching heat of the engine to the freezing arctic of the wing. Under these harsh conditions, our actuators must achieve performance criteria such as high accuracy, slew rates, and varying loads. Achieving this performance criteria under these severe conditions can only be achieved through world-class innovative design and precision machining. Through hundreds of millions of hours of reliable, demonstrated flight time, Woodward has developed the design pedigree needed to develop the products we have today that are reliable and capable. But let's talk about the future. These conditions are only gonna get harsher. This will drive our actuation control systems to be lighter, smaller, and operate in even harsher environments. Woodward has provided both solutions, hydraulic and electronic, for decades, and we are prepared to deliver the systems of the future, depending on the needs of our customers. In fact, we are actively partnered with them today on trade studies that will determine these architectures of the future, and we are confident that there is a Woodward pedigreed option, no matter what that trade determines. Together with our customers, we are creating a better tomorrow. We power the future. Woodward is constantly striving to lower emissions and create a greener and more sustainable future, using our actuation technologies to lead the way. Actuation technologies from Woodward are creating a better tomorrow. Thank you very much for your time today. It was my honor and privilege. With that, we'll take a 10-minute break and continue on with Chip. Thanks! ... He said 10 minutes? No, we just had 10. Okay, we'll get started in about 2 minutes here. Okay, we're going to do a wrap up in about 1 minute here. We need a few more offices. Yeah. Okay, I think, we're going to get started. All right. The team has set the stage, and you've read ahead, so I'm not sure I need to spend a whole lot of time on the concluding charts, but I do want to draw your attention to a couple of things. So, before I deliver the financial outlook for Woodward, I want to share the process we used to generate it. We conducted our usual spring strategic planning exercise, like we always do. And in a long cycle business like ours, you need to look at decades to really make sure you understand the entire forward trajectory of the business and to think about R&D and think about capital expenditures. But we also created a detailed financial plan, customer by customer, program by program, product by product, for the next three years, but including the one we were in. So we call this our 1+3 plan. The current year we were in, which was fiscal 2023, plus the next three: 2024, 2025, and 2026. We synchronized that top-level commitment with the R&D and the CapEx expenditures to make sure that the plan held together and our margin expansion goals are satisfied. So the outlook is based on a firm foundation, as it should be. What we see for the aerospace segment is high single-digit growth on the top line. We have plans to overcome a little bit of OE headwind compared to aftermarket in the early stages of the period, to achieve upwards of 22% margins. The headwinds and tailwinds that you see on this chart are similar to any other company in terms of what they're exposed to in the environment and the challenges that they may face, and the opportunities that may present themselves. The biggest watch item for us in this segment, really, is in the normal course, the speed at which the LEAP and geared turbofan fleets experience full shop visits. That is, when do these engines come in to overhaul shops and have all the LRUs routed for repairs, and we enjoy that uptick in the aftermarket, both from a mix standpoint and from a margin standpoint, all by itself. If you remember Terry's chart, that uptick is just a bit outside of the planning horizon we have for 2026. So, we're saying margin expansion and really good numbers in aerospace in our planning horizon, but it only gets better after that. And we might enjoy some upside if this business shows up a little bit sooner. For industrial, we see mid-single-digit growth rate over the planning horizon. This is from moderate growth in marine, power, and oil and gas. We have margin expansion plans based on our lean journey and the product rationalization that Randy referred to in his presentation. And as he shared earlier, really, these are important for 2025 and 2026. That's where we'll really make hay from this investment in our lean journey and our product portfolio management approach. Headwinds and tailwinds in this segment, also similar to what you would see for any industrial business other than Woodward, save one, which is China on-highway. Randy did a great job, I thought, of explaining to you what that situation looks like and what our strategy is to optimize our results based on what is, what is handed to us there. The way we've planned it, China on-highway is a wild card for upside on both growth and margin expansion for us in this planning horizon. For the company in total, we see high single-digit growth on the top line, and we see earnings per share growing at two times the rate our top line grows. We forecast upwards of cumulative cash flow, neighborhood of $1.2 billion, and those are the, those are the important numbers here. Apart from the numbers, after your exposure today to this leadership team at Woodward, I'd like to connect you with our values. You can count on this team to act with integrity, no matter the circumstances, and we will be respectful and accountable to you as investors. We are humble, yet we are driven to provide outstanding returns for your investment in our company. So thank you for being here today. Now we're gonna assemble on the stage for some Q&A, but I'm kind of thinking you got most of that out of your system during the breaks and in between. But you might surprise us with one or two things that we can, we can answer for you. Thanks for joining me, team. Terry, come on up. Yep. Don't be shy. Gotta go next to aerospace over here. All right, good job. All right, what do we have? Sheila. Thank you, Here's a microphone. Okay, sorry. Maybe, Chip, if you wanna walk us through your, margin targets for both aerospace and industrial, and what your assumptions were, 'cause you did a great job with the top line, and what you're sort of assuming the risks and upside drivers are. So margin bridges, and then if I could ask on the 787, and the content changes. 787 seems lower than the prior presentation, 737 and A320 are higher, so what kind of, drove those changes? Okay. So starting with the margin walk, which I wish I had a whiteboard and a marker, but I'm actually also glad I don't. 'Cause I'd get in trouble. The real focus here is the combination of pricing and managing our cost of goods sold. So the supplier simplification, the insourcing, and the lean focus on applying resources to improve our cost base and getting some productivity. Our new people are still learning to be outstanding machinists. It's not an 8-month journey to learn how to be a machinist. Sure, you can run a part, and you might even get close to the target part production rate, but can you do setups, and can you figure out how to do the next flow through the line? So there's still quite a bit of productivity learning curve available to us as we look at the cost side of the business. And this is the exact same story for Aero as it is for Industrial in terms of cost of goods sold. From the price side of the house, you know, we intend to be very competitive and achieve value in the aftermarket in terms of how we price our catalog and opportunities for collaboration with bigger customers on LTAs when they've become available. You saw how we derived some of that benefit already. Some of that flows through to 2024, just because it's partial year in 2023, and then the rest of it is about continuing in that process with that discipline of pricing for value. Who knows what inflation's gonna do, but we're gonna try to make sure we can offset that with price and have a positive value gap. Let's see, what was the rest of the question? 787. 787? Yeah, and the other- Yeah, I don't know, actually. I don't know, Terry, if you've got any- No ... any clue. But what we did this time was we were just very focused on what was -- what's the data, what do we have on each platform. Could have been a little bit of comparison choices along the way, but I think it's fairly similar, similar. Could be rounding. Sir. Closer to the mic. Hi. Could you touch on, I guess, the step up in CapEx this year? You talked a little bit about the investment in automation. I guess, how much of that is automation? How long does that investment sort of take? I think there was a lower maintenance level. I guess, I talked about does it step back down, and then if there's any way you can quantify the benefits of some of that, that automation? ... Yeah, I'm happy to start, and then Tom, maybe you wanna jump in. But right, we see this as a step up from our sort of $80 million CapEx to a run rate of $100 million over the period. And it is largely based on automation and being able to drive that, the productivity to meet the capacity growth. We are a capital-intensive. We have machines, and we have to provide maintenance. Probably that steps up for a year or so as we catch up. And then, Tom has got a lot of great examples and opportunities in developing his team to really provide the automation that will create another level of productivity. Yeah, I think a good way to think about that is the step from 80 to 100, there'll be a good portion of that that will be around automation. So as Bill talked about, we have some aging equipment in some of our facilities. We'll be replacing some of that. We'd count that as maintenance capital, but at the same time, it's a great time to add automation at the same time. So you, you bring in a better machine, you add automation to it, and you get a lot of productivity and efficiency gain with that. Scott was next here. Thank you. What percentage of industrial sales come from the aftermarket? Yeah, that's typically not something we talk that we provided, but I think it's fair to say that it is substantial part of the industrial revenue. Do you control those aftermarket sales or that aftermarket value chain, such that there's no other competition in that aftermarket? You wanna hit that, Randy, or you want me to hit it? Well, I would say we don't do it as well as we can, and that'll be part of the strategy. As we start looking at these PNLs, that's something that's coming forward that we have a great opportunity to do better. Okay. Yeah. This may be for Randy as well, but, you know, when an industrial company talks about getting better at price and also managing down SKUs, one way they do that is 80/20. Curious if that's been part of your process at all, and if that's something that you may be- I don't look at it- considering in the future. Yeah, sorry. I don't look at it as 80/20. I look at it as really understanding through our business PNLs and mapping our products, and then understanding each one earns its way into the system or earns its way out. So, we're not really looking at an 80/20. We're just doing it part by part. It's funny, that's definitely the way that the team is doing it, but that's one of the reactions that both one of our board members and I had was that kinda they're doing it bottoms up instead of top down. So some of the results and some of the tools for comparisons may be similar, but the way they're going about, the industrial team's going about it is like Randy says. Thanks. Chris Glynn, Oppenheimer. Had a question about the industrial margin. Congrats on the traction last year. I know you regard part of it as ephemeral, but certainly a nice chunk of it, structural as well. I think, if I recall, in the past, when the margin targets were particularly elusive and iteratively so, one of the explanations I heard was that the transition to next gen products by customers, where you have a lot more content, was just kinda at the pace it was at and not really in your control. Are those conversions pretty well on track now, and are you seeing the customers pivot to their next gen products, where your content bumps up nicely as very assertive now? I don't—I would say right now, we got a... The tide is raising our ship, even a leaky ship as ours, that we're putting piecing together as an operationally excellent machine. I would say that we're enjoying the fruits of that, and some of the conversions absolutely are coming through. I can't, I'm not smart enough to be able to say this percent or that percent, but, we're enjoying good markets across all three, and we're enjoying growth in our new products. I think the conversion to dual fuel applications, it's definitely gaining traction, and that is beneficial for us. It is higher content, you know, products, and we're seeing that applied on more and more products at a rapid pace. Is that a meaningful proportion as yet, either in, you know, current revenue and backlog or the spec cycle? I would say it's growing. Mm-hmm. Yeah, it's growing. Okay. Thank you. Yep. Yep, go ahead. Thank you. Lou Raffetto, Wolfe Research. Can you just, on the M&A aspect, is there a preference between, like, a fixer-upper or just buying a, a high-quality company, as you, you think about it? Is there a preference on the industrial or aero side? So, you know, the way I've typically looked at that and the way our team is, is thinking about it is a little bit less on the fixer-upper versus some price target multiple, and it's more about what is our strategy to go achieve in the marketplace as Woodward. And can we do it by ourselves, or are we better off acquiring someone or partnering to do it? Like, do they have technology that we don't have, that fits with the strategy where we're trying to go in? Do they have access to a market that we don't have, that fits with the strategy of where we're trying to go? And these kinds of questions at the fundamental of it. Then, when we look at trying to make a risk-adjusted return calculation out of it, the things that you talked about kind of come into that. How do we feel about whether we have the bandwidth and the capability, and will this likely turn out as a value enhancer or value detractor in the process? Thank you. ... Yeah, she's come behind you. Switcheroo. Thanks. Chip, on the best value pricing, how do you implement that across the entire organization, you know, across various tiers of leadership? So value pricing, I think for, from a introduction to that, to the pricing process for a commercial arm of a company, best place to start is new products. And that's where we're thinking through from a new product introduction standpoint. When we're offering something to a customer that improves fuel burn or improves, reduces emissions or improves life cycle costs, how do we make sure that we really put together a analysis about what the benefits are to our customer and their customer to make sure we achieve that value? It's harder to do, like, on a catalog exercise, right? Because you've got all this, all this kit on this list. Now, select pieces of a catalog on the aftermarket, we really can think about from an intellectual property standpoint and so forth. We differentially price on the catalog, but value pricing quite often is focused on new products. Randy, you'd mentioned the three-month agreement with the China truck natural gas truck customer. Is that a one-time, or is that something that's you want to know? Continuous, yeah. In fact, my team is there right now, working with them to bring forward our next quarter. What else? Back to back there. Yeah, I can't see from the lights. Is it possible, maybe putting aside China or even very clear, to give us some flavor of the demand visibility you see in the different industrial end markets? Is it a year out, two years out? Just trying to understand in various macro scenarios. Yeah. Yeah, you know, as we look at our backlog, we have a significant amount of fiscal year 2024 in our backlog, so we get decent visibility for the end markets that we service. Mm-hmm. And also, we have experience with customers in that backlog, and they also provide us 1- to 2-year forecasts that stick pretty close to those numbers. So, it's a question not always of exactly like visibility, like seeing it, versus experience with how volatile is that. One thing that SIOP, development of SIOP afforded us is we really started accurately portraying our lead times, which extended them from where we were in that unconstrained portion of it. So that has afforded us an ability to see a stronger backlog, longer backlog than what we had done in the past. I don't know. Sheila- Sheila, did you want to go again? Yeah. And then Scott. I just wanted to clarify the free cash flow target versus the prior target as well. I think there's about a $400 million delta versus your prior target of $2 billion, given what you generated in fiscal 2023. So, why the lower free cash flow? So I'll answer this one way, and it will be incomplete. But if you just do the math on a 3-year versus 5-year forecast, you can get pretty close to the numbers that we have. And I also will just tell you that we revised our FY 2022 guidance after the last investor day, which changed the free cash flow forecast for that actual year, which changes the jump-off point. So, I mean, I think largely it's fairly similar from an ongoing standpoint, but there was this, like, realization about what FY 2022 was gonna be like. Got it. And then, Scott. Would it be possible to talk a bit about working capital? We've moved a bit away from some of the previous targets, and there hasn't been a huge amount of mention today. Is that an area still where we feel the business could improve? Yeah, you know, we've assumed some turns improvement in our three-year working capital free cash flow. And so that's kind of where the focus is. I say that we've put in improvements in line with what we can see. As I have experienced lean, and it takes a while to see what it really is gonna be, but I think as we continue to pursue our lean activities, that we have greater opportunity. But I think we were responsible in the... We have room with current capabilities to improve our turns. Yeah. We put that in, and that's kind of where the major work is, as we look at our Free Cash Flow growth. So, we improved turns in FY 2023, and we have improvement baked into the planning horizon. That is, Bill said we have line of sight, too. So, we I feel like we're being, may have used different definitions of kind of what the working capital assumption is and the basis, but I feel like with our lean focus and our focus on turns, cash flow is gonna follow in good order. Um- Then, Scott. I know you're waiting. I'm sorry. I've got the mic. I'd just love to ask a question about the SKU rationalization program at Industrials. I think the last number we had was 60,000 from the top of my head. Do we have a target in mind, you know, in line with the reduction in the number of suppliers at the end of the plan? No, I don't have a target. Frankly, it's earned its way in the portfolio. It doesn't earn its way in the portfolio. Like, I just feel like if I just made a target, I'm not being a steward of the product lines, which we have an opportunity to do. So, when we build this bottom up, we look at, is it a high growth? Is it a high margin? Are we commercialized effectively? What kind of disruption does it drive as a co- if it, if we do get abducted? So, we do not have a target on total SKU rationalization. We have a target to have a healthy product line in industrial. Same thing with suppliers. You know, Tom and I- Yeah Have gone back and forth a lot on this. We don't want a number to drive decisions that are less valuable just to hit a target number. We wanna evaluate. We know that 1,800, 1,500, too many suppliers. Less than 900, whether that's 800 or 600, I can't tell you right now. Same thing with the 60,000. We know that's way too much, but somewhere in there is gonna be a lot of value generated by getting to a simpler place. Scott? Bill, does the EPS CAGR include the benefit of buybacks? We've assumed that we will offset dilution, and that is as far as we have sort of baked into the plan. Obviously, that's just our modeling, the way we model. As we go through the period, we will constantly work with this leadership team, with the board, understand where can we get the best place to allocate our capital, and that may be a source of where we deploy. Okay, so if you're generating all this cash, that could all be upside if it's going all to buybacks. Right now, I mean One choice. Right. Right. Right. Okay. and then for Randy, if a marine engine has a dual fuel architecture, can you maybe talk a little bit about how much that changes the shipset content on that engine? Is it twice- Um, I- If the marine engine has a dual fuel architecture, how much does that change the dollar shipset content on that engine? Hmm. I don't know the answer to that off the top of my head. Maybe I... I don't know if I'm allowed to phone a friend or not, but- Yeah, I think the way to think about that is it's not double the shipset content, but it's between 50% and double. It's significant when we're—if, especially if it's liquid and gas, so we're- Yeah ... we're doing both an injector and a SOGAV. If it's, if it's dual fuel inside, just a liquid injector, because it's a liquid alternate fuel, it's less than 50% more, but it's, it's still better than- Okay. The industry is early in the transition to that type of architecture, right? Mm-hmm. That would be a multiyear tailwind to your- Yeah ... ability to grow above the rate of the market. It is that, but the fact of the matter is, it seems early, but the lead time for ordering the engine for the ship that's in the shipyard now, that will then get on the sea and eventually generate aftermarket for us, that time is now, that the companies are making decisions that say, "I'm not gonna order another ship that's not powered with an alternate fuel choice." And so, like, those decisions are happening now, but like you said, when will it hit our top line and bottom line is out to the future a bit. Come back, and then you. Thanks. Yeah, just wanted to go a layer down in the industrial guidance for fiscal 2024. If we do our best efforts to back out the China on-highway after the first quarter, it sort of seems like maybe low double digits for the balance of the portfolio. So wondering if you can comment that, and then a little detail on how we understand that, 'cause it seems like the OEM base is not quite that ambitious. Yeah, Chris, and I'm sorry, your question was the- Industrial ... on industrial, when we back out OH, that the rest seems to be? Low double digits. Low double digits. That is accurate. And again, the team, you know, delivered sort of 9.6% margins. So to get to that is, I think, pretty darn good and demonstrates a level of effort that we drove in, driven in operational excellence, and that is a sustainable number for sure. And then the OH would... if that got bigger, obviously, that would be upside, too. 9.6 in 2022- 2022. when there was really no Right ... OH. That's right. I'm sorry, the question was— Yeah, it's about the volume. Volume. So- Yeah. I think we said earlier what the non-OH business was... I think in your slides, you said it was growing double digits, top line. Right. That's right. Sorry. 2024. Yeah. Sorry, Chris. Yeah. Terry, Randy, and team will be working very hard to drive and offset that China OH, and that would represent double-digit top-line growth, low double-digit top-line growth. Just to be clear, though, I think that demand is already in our backlog, so we still are carrying some past due in that industrial business. We have certain parts of that business that are still growing rapidly, so that's what underpins that. Up here. The end. Thanks. Just on the industrial, looking out through the horizon to 2026, is there any assumption of, you know, macro slowdown? You talked about how everything's kind of supportive right now, and that's generally not likely to stay that way, you know, over time. So, I'm trying to understand what is assumed in kind of the out years for underlying kind of market demand for industrial. So, the assumption of the product rationalization providing some lift there, lean starting to take hold, right? I think we talked before, our three markets used to be in and out of phase with one another, and COVID locked them together, drove them down in COVID, driving them up now. And so, it affords us an amazing opportunity to really start developing these strategies with transparency we haven't had before, to make really good commercial decisions, strategic decisions on harvesting or rationalization. So, these are the things are gonna really come to bear in 2025, 2026. I think some of your question might have been, though, about what do we think about the sustainability of the market growth, right? Well, the sustainability of the market growth, and when I think about the 2026 kind of targets- Yep. Is that a, quote, normal environment for the industrial business? You know, because we've been hearing about, you know, mid-teens for the industrial for a decade. Yeah. It's hard to kind of get overly excited about, you know, today's targets. Yep. And so, you know, the question is, you know, is this target something that, you know, in a normal environment, we should be hitting, and then if things are good, we should be able to go above? Or is this kind of- Yeah, I'm just trying to understand what you mean by environment. So if you're talking about top line- Yeah. We feel pretty good about the top line, but again, three years is three years away. A lot of things can happen. What we're trying to do is create a business operating model here that can be flexible and withstand and perform in upturns and downturns. But what we forecast is what we have—what we think we see, which is continued growth. The only thing that I've seen in all my discussions and research about potential softness in industrial is, you know, the U.S. oil and gas production being lower over time. And so, but marine, the shipyards are full, and these are long lead items, and the ships for 2026 are booked, so the equipment follows that. So, as best as we can tell, we like that top line, moderate growth, mid-single digits. As far as the bottom line goes, like Randy said, we intend to keep expanding the margins and we think mid-teens are achievable without China on-highway, and that's the way we're driving the business. Thank you. Maybe just to follow up on that, to be clear, the 2026 guidance does not have any China natural gas in it? It has a low amount in it. Okay. And then, maybe one for you, Terry. Is there any benefit to the GTF flight management program for the, To the what? I didn't- The Pratt & Whitney's flight management program for the GTF, or fleet management program. Is there any benefit on the aftermarket side to you guys as those, you know, engines are pulled off wing sort of early, you know, in 2024, 2025, on the aftermarket side? The only-- I actually had that question a couple times in the hall, and it really comes down to our nozzle business. So, we do see an increase aftermarket on our nozzles because they're gonna. It's-- but it's really like a test-and-clean type of, you know, cleaning the nozzle and sending them back out in the field. So not a full replacement or- That's right. Exactly. Okay. Yeah. Perfect. Thank you. One more? Yep. On your other side. Here you go. Last question. So, there have been tons of questions about the industrial business, but I'm struck by how, you know, industrial operating earnings are roughly half of aerospace, and the multiple it deserves is roughly half of aerospace. So, we're talking about a minority of the valuation of the entire Woodward enterprise. If, for some reason, we don't hit these renewed targets, and we continue to disappoint on both top line and margin, would you ever consider spinning out or selling industrial? I never say never to any question like that. Our job is to do the best thing for the shareholder and for the members and for the communities, and we're constantly looking at our portfolio. As of right now, we have a plan that organically improves the industrial business, and I, I believe with this team guarantees that we're gonna be hitting those margin targets, hitting those cash flow targets, and people are gonna be asking in 2026: "How'd you get to that level of returns and cash flow in an industrial business?" That's, that's what I believe. That's it for the questions, right? Yeah, maybe one more. 1, 1 more. Just keep going on that. Thanks. Pete Skibitski, Alembic Global. Can you talk about the assumption for defense revenue growth that you have in your aerospace outlook? And then maybe any color on F-35 aftermarket, the targets you think you can hit there, and any emerging platforms that could kind of catalyze growth? Yeah, yeah, Pete, let me hit the first part of that. As you know, our defense revenue has been coming down over the previous few years, driven by JDAM coming down. We feel like we're sort of at the trough on that one, and the other programs that have been growing that you couldn't see will be generating moderate single- to low-digit growth through the period. And so that's sort of what we would expect from our defense business. And I don't know- Any JSF overhaul in this timeframe, really? In, in, in, uh- A lot, a lot of contractors just seem to think that the F-35 aftermarket outlook is really positive. The engines are being used a lot. They run pretty hot, so I'm just wondering if you guys are seeing that. We are not seeing that at this point. Yeah. But we do have that in our forecast. So, but I can't speak that we're seeing an increase at this time. But we'll be ready to catch that business if it comes our way, Pete. All right. Thank you all very much for coming and spending the morning with us. Thank you.