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CEO Cary Smith clarified the unbooked backlog is now over $11 billion, with the decrease resulting from the removal of the confidential contract's ceiling and successful task order awards on other vehicles. She noted a $55 billion pipeline and $6 billion in bids awaiting award. Both Ms. Smith and CFO Matt Ophelis stated there are no funding risks, highlighting that funded backlog is at a record 70% and collections are strong.

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CEO Carey Smith and CFO Matt Ofilos reiterated that DOGE discussions have been positive and focused on accelerating programs like FAA modernization. Smith also stated they do not expect offensive cyber work to be stopped. They confirmed the guidance midpoint assumes the negotiated value for the confidential contract's option year and that they believe a surge in activity after May would allow them to meet mission requirements and catch up from the Q1 run rate.

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Co-COO Mike Lisman explained that the OE destocking was broad-based across the product portfolio rather than concentrated in one area. For the aftermarket, he identified the non-engine passenger segment as the primary area of relative weakness. He did not note any specific shifts in customer buying behavior beyond a general pullback outside of the engine and interiors segments.

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Co-COO Mike Lisman stated they have seen no behavioral difference in discretionary versus non-discretionary aftermarket spending, with the interiors business continuing to perform well. He reiterated that the tariff impact is not expected to be material. President and CEO Kevin Stein declined to comment on specific M&A deals in process, emphasizing that only closed deals matter.

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Co-COO Joel Reiss stated that distributor POS sales are running in the double-digits, ahead of their direct sales, which they view as a positive leading indicator. CEO Kevin Stein framed engagement with the DoD as a constructive opportunity to improve procurement, emphasizing that TransDigm is a very small supplier in this context and that most of its business is already cost-disclosed or competitive.

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Co-COO Mike Lisman confirmed that negotiations are actively ongoing but declined to comment on specifics. He assured that the potential impact of the new contract terms has been factored into the fiscal 2025 guidance provided.

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CEO Thomas Bell responded that the rate of new contract disruptions has flattened over the last three months, with the administration's focus shifting from cuts to constructive conversations about efficiency, which benefits Leidos. Regarding the VA exams, he stated that the estimated market share loss to the fourth vendor has been minimal, at less than 1% of Leidos's volume, and has not impacted their business.

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CFO Chris Cage attributed the strong results to broad-based performance across the segment and favorable company-wide EAC adjustments. He noted that the customer wants to sustain or increase exam volumes and that no bottlenecks from VA staffing changes have been observed, expressing confidence in sustaining the performance level.

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CEO Thomas Bell pointed to the strong Q4 book-to-bill of 1.7x as providing significant momentum and highlighted a "fundamentally retooled" business development team. CFO Chris Cage added that the upcoming Investor Day will detail a compelling story of accelerating growth, supported by strong cash generation and balance sheet capacity.

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Executive Chairman and CEO John Plant stated that the company's disciplined pricing process, which has been in place for six years, remains unchanged. He reiterated his commentary from February 2024, where he said 2025 pricing would be similar to or greater than 2024. He now expects a similar picture of consistent price movement to continue into 2026 and 2027, with no change in process or annual expectation.

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Executive Chairman and CEO John Plant clarified the new blade will be used in all new OE production, not just aftermarket. While implying performance enhancements relate to value, he expressed only 'some optimism' on improved producibility. He confirmed several hundred engine sets have been produced but stated it is 'early days' to be certain about long-term manufacturing yields.

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President and CEO Tony Thene responded that pricing actions will remain a tailwind due to a significant and persistent supply-demand gap that minor capacity additions won't disrupt. He confirmed that lead times remain extended and he anticipates the market will get even tighter as aerospace build rates, particularly at Boeing, continue to ramp up, which will quickly absorb any excess inventory in the supply chain.

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CEO Tony Thene explained that lead times for aerospace materials have slightly improved by a couple of weeks due to productivity gains. He acknowledged a pause in orders from customers heavily tied to Boeing, which was anticipated, but noted that aero engine orders were slightly up sequentially. Thene stated that while there might be spot market discounts from others with capacity, Carpenter's long-term customer discussions remain focused on surety of supply, and he expects demand to rebound quickly.

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Tony Thene, President and CEO, acknowledged that while some aerospace customers heavily exposed to Boeing are taking a 'wait-and-see' approach, this is being offset by strengthening orders in other markets like power generation. He confirmed the order backlog remains over $2 billion with extended lead times and that MRO demand is very strong, with customers still making emergency requests. Thene emphasized that Carpenter's broad market exposure allows it to navigate near-term uncertainty by shifting production to meet urgent needs.

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President and CEO Christopher Kastner clarified that the schedule change was already factored into the company's financial guidance and resulted in no material financial impact. He emphasized that the CVN 79 program is progressing well, with sea trials scheduled for later in the year, and the slip is related to specific systems and added capabilities.

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President and CEO Christopher Kastner confirmed that a cash upside from the submarine contracts is included in the guidance but declined to quantify it during active negotiations. CFO Thomas Stiehle added that the cash outlook has become less certain as the contracting approach shifted from a single omnibus deal to an incremental one, starting with two boats. On naval strategy, Kastner said it was too early to know the new administration's direction but affirmed HII's support for a high-low fleet mix and its capabilities in the unmanned sector.

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CEO Christopher Kastner explained that recent performance issues on pre-COVID ships and uncertainty around the timing and structure of a major 17-ship submarine contract both impacted results. He stated it was not appropriate to separate the financial impacts. Regarding the weld issue, he described it as a minor process problem affecting a small number of welders, which CFO Thomas Stiehle confirmed was not financially material.

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President & CEO Kimberly Fields clarified the nickel investment involves new melting equipment in an existing facility, adding 8-10% capacity next year. EVP & CFO Don Newman reiterated that the full 80% titanium melt capacity expansion consists of two parts: a restart generating $150-170 million in revenue at run-rate, and a new brownfield facility, now running, expected to add another $125-135 million, with a target 35% margin drop-through for modeling purposes.

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Kim Fields, President and CEO, explained that the new Airbus contract will effectively double ATI's participation with the airframer next year, up from zero share in 2020. Regarding the nickel alloys, she stated the sole-source contracts are for critical, non-substitutable materials, extend into the 2030s and 2040s, and have extremely high barriers to entry, minimizing the risk of a second source.

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Executive Vice President and CFO Don Newman clarified the charge was not a 'concession' but a non-recurring item from routine LTA discussions intended to improve ATI's long-term position, not a sign of pricing pressure. President and CEO Kimberly Fields described the ongoing union negotiations as 'constructive and positive,' stating the company is confident in reaching a fair agreement without work stoppages.

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CFO Bill Lacey noted that the China natural gas business remains dampened by the local economy. CEO Chip Blankenship addressed trade policy, stating they have not seen demand erosion but rather 'unnatural volatility,' such as delayed orders followed by unusually large ones, particularly in China services.

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CFO William Lacey confirmed that the commercial OE business is profitable but declined to provide a specific margin profile. CEO Charles Blankenship stated that the company does not view potential demand destruction from tariffs as a significant risk for its Industrial business.

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CEO Charles Blankenship ranked expected FY25 growth as strongest in Military OE, followed by Commercial OE, then Commercial Aftermarket. He noted customers are still building inventory to support rate ramps. CFO William Lacey projected overall price realization of around 5% for FY25, with Aerospace slightly stronger than Industrial.

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CEO Tom Gentile explained that Hexcel expects to be more closely coupled with Airbus's A350 rates during 2026 and anticipates a stronger second half for the 787 program. Regarding pricing, he described it as a gradual, ongoing process, with about 15-20% of contracts renewing annually, noting the main Airbus A350 contract is an exception that extends to 2030.

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Chairman, CEO and President Tom Gentile declined to provide 2026 guidance but confirmed that rates would be higher. He explained that the impact is highly variable across the approximately 35 different delivery locations, with some suppliers running behind and others ahead. The revised plan is based on the average demand across all of them, which equates to 68 shipsets for the year.

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CEO Tom Gentile confirmed the 787 pull rate was steady at about 7 per month in Q2 and Q3, unaffected by the Boeing strike. He explained the sequential slowdown in A320 and A350 pull rates in Q3 was expected due to normal seasonality from European summer holidays, with the A320 impact being more pronounced.

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CFO Matt Calderone attributed the lower funded backlog to the slow pace of funding, calling it a timing issue and not a cause for concern. COO Kristine Anderson stated they still plan for a Q4 acceleration due to mission needs and a funding backlog. On headcount, Anderson and Calderone expressed confidence in their ability to hire as needed, noting they are pacing hiring to demand. CEO Horacio Rozanski commented on the Advanta contract, expressing pride in the work and highlighting its broad applicability and role in driving the company's AI business.

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CFO Matt Calderone confirmed the plan is to ramp up hiring, noting that billability was at a record high in December, and they are now activating the hiring engine for recent large wins. CEO Horacio Rozanski added that they are seeing a clear slowdown in some agencies, though Booz Allen has minimal exposure there. He noted that award timelines had already lengthened in some civil agencies prior to the transition.

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Chairman and CEO Christopher Kubasik explained that for radios, a new budget line item likely contains modernization funding, and strong international demand provides an offset, giving him confidence in continued growth. SVP and CFO Kenneth Bedingfield noted the dip in Armed Overwatch funding is not a concern due to the program's long-term nature and significant international opportunities.

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Chairman & CEO Christopher Kubasik addressed the radio budget by noting a new, larger line item (NextGen Command and Control) was added, which he believes will fund modernization. SVP & CFO Kenneth Bedingfield stated there were no concerns about Armed Overwatch, as the production flow is stable and they see significant international opportunities to offset any domestic dips.

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CFO and President of Aerojet Rocketdyne, Kenneth Bedingfield, outlined his priorities as increasing production capacity for solid rocket motors to meet high demand, driving efficiency in the space propulsion business, and ensuring delivery on critical programs like Artemis. He expressed confidence in the strong teams at both AJRD and in finance to execute on these goals.

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CEO Christopher Kubasik clarified that L3Harris is under contract through Lot 19 for the F-35 and is not experiencing financial headwinds from prime contractor negotiations. He stated the company is meeting its TR-3 commitments and the customer is happy with their performance. Regarding IMS, he confirmed the segment is performing well and margins are recovering to previous levels, attributing the success to new leadership, systems investments, and improved program execution, including better management of change orders.

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Scott C. Donnelly, Chairman, CEO & President, described commercial helicopter demand as strong across all models, with good order activity. He stated definitively that Textron has not seen evidence of demand erosion due to tariffs at this point, noting that many customers are taking a 'wait and see' approach and that much of Textron's business is North American-based.

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Chairman and CEO Phebe Novakovic stated that the first G800 delivery is imminent. She explained that the G800's initial production lots will have higher margins than the G700's did, as the G800 did not carry as much developmental cost. Ms. Novakovic anticipates the G800 will see similar margin expansion over time as it progresses down its learning curve.

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Jason Aiken, EVP of Technologies, confirmed GD has been part of government actions like stop-work orders but did not quantify the impact, stating the full-year outlook remains the same and noting GD's conservative backlog accounting. Phebe Novakovic, Chairman and CEO, estimated the international portion of the Gulfstream pipeline typically runs around 40%, with the U.S. at 60%.

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Phebe Novakovic, Chairman and CEO, distinguished between different funding types, explaining that the industrial base funding is directed to the supply chain partners themselves, not to General Dynamics directly, although GD may execute contracts for the Navy related to that funding.

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CEO Phebe Novakovic stated she expects the FY24 ships to be contracted in the next few months but has no firm timing for the larger Block 6 Virginia or Columbia boat 2 contracts, citing the need to work through significant input cost increases with the customer. She confirmed the company is in constant negotiation on various contracting actions and will seek remedy for cost increases through entitlements in existing contracts.

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CEO Christopher Calio reported that GTF Advantage production has started, with first deliveries planned for late 2025 and a multi-year transition. A 'Hot Section Plus' package, incorporating nearly 90% of the Advantage's durability improvements, will enter the MRO network next year. He also noted broad supply chain improvements, including over 20% growth in structural castings and nine straight quarters of material growth at Raytheon.

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Executive Chairman and CEO Christopher Calio stated that airframer backlogs remain strong and they are focused on ramping production, with no material changes to expectations. He reiterated progress in key supply chain areas like rocket motors and structural castings and specifically noted that the 787 heat exchanger supply is now meeting demand.

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Executive Christopher Calio identified ongoing challenges with structural castings and forgings at Pratt, and rocket motors at Raytheon. He noted improvement in microelectronics at Collins, where lead times have come down. He also mentioned that heat exchanger production doubled last year and is on track for recovery in 2025.

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Executive Neil Mitchill indicated that Raytheon has "turned the corner" on productivity, citing a $110 million year-over-year improvement and an expectation of nearly $200 million for the full year. He explained that new backlog is being priced more favorably and that factory productivity will increase as the supply chain, particularly for rocket motors, improves. While not committing to pre-pandemic levels, he expects continued margin improvement.

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Chairman & CEO Lawrence Culp reported significant progress, with a 10% sequential rise in material input and 95% delivery-to-commitment rates from key suppliers. SVP & CFO Rahul Ghai added that they expect the supply chain to remain tight and inflation elevated, but pricing actions are anticipated to fully offset this impact through 2028.

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CFO Rahul Ghai outlined a two-part approach. The standard mid-to-high single-digit catalog price increase is still planned for late summer. Separately, to address tariffs, the company may implement a temporary surcharge to recover costs that are not offset by mitigation efforts and SG&A controls. Ghai emphasized this surcharge would be temporary and removed if the tariffs are rescinded.

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Executive Rahul Ghai explained that the peak for CFM56 shop visits is still expected in 2025 but is now projected to remain at that elevated level through 2027. For widebodies, the GE90 is entering its second, more intensive shop visit cycle. Conversely, GEnx shop visit volume is expected to be flat for the next 3-4 years as strong time-on-wing performance pushes inductions later into the decade, which is a positive for program profitability.

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CEO Toni Townes-Whitley identified the NASA program loss (lapping in Q3) and the no-bid on the Cloud One program as the main headwinds, stating there are no other significant known recompete risks. Regarding the cost overrun, she explained it was on a complex, fixed-price space development program. CFO Prabu Natarajan added that the program is unique, the EAC captures remaining risk, and it is expected to move into a healthier sustainment phase soon.

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CEO Toni Townes-Whitley described the impact as delays in contract actions and the need to reset relationships with new government personnel. CFO Prabu Natarajan added that work perceived as simple consulting or reselling is getting more scrutiny, which is not SAIC's core business. Toni noted they are tracking SBA policies but pivoted to opportunities for SAIC in the current environment, including contract conversions and integrating new commercial technologies for the government.

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Co-CEO Eric Mendelson said that while progress with WENCORE is good, there is 'a lot more to come.' He noted no change in the excellent relationship with the FAA and its approval pace. He confirmed engine components have been very strong but sees strength across the entire market, both engine and non-engine.

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Eric Mendelson, Co-President, declined to give specifics on DoD PMA strategy for competitive reasons but confirmed HEICO has experience selling proprietary and interchangeable parts to the government. He believes they are in the first half of the Wencor cross-sell journey with significant opportunity remaining. Victor Mendelson, Co-President, described the defense demand uptake as "fairly broadly based," also noting the success of the Exxelia acquisition in capturing European defense growth.

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Co-President Eric Mendelson explained the primary obstacle for DoD adoption of PMA parts is a lack of process, which he called a "relic of the past" that must change. He sees a very large opportunity in both commercial derivatives and other military platforms. CFO Carlos Macau clarified that while recent acquisitions will contribute, growth in fiscal 2025 will be "mostly organic."

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Eric Mendelson, Co-President, stated that aftermarket strength was very broad-based with no major trend differences between product types. On Wencor, he said that while great progress has been made, they are still in the early stages of realizing all potential synergies, calling it "the gift that keeps on giving." CFO Carlos Macau noted that the space business was roughly flattish for the year but up slightly for the quarter.

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CFO Adam Spice explained that launch margins are driven by cadence, which affects fixed cost absorption, and average selling price (ASP), which varies by mission complexity. He expects both to improve in the second half of the year. Spice also noted that negative free cash flow will remain elevated through Q2 due to Neutron investments and long-lead inventory purchases, with moderation expected after the first launch. He stated that tariff exposure is minimal due to the New Zealand-based manufacturing for Electron and high U.S. content in its Space Systems products.

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James Taiclet, Chairman, President and CEO, projected the F-35 Lot 19 contract would be finalized in the second half of the year, which is factored into guidance. He expressed high confidence that very strong international demand would allow the company to offset any potential moderation in U.S. orders and maintain the 150-plus annual production rate.

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CFO Jesus Malave, limited by the program's classified nature, indicated that once past the current fixed-price phase, pricing would be open, and they would 'expect to return to reasonable type margins.' He noted the margin profile would get 'substantially better' but would not immediately reach typical MFC levels due to ramp-up dynamics. CEO James Taiclet added that it is expected to be a long-lived program.

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CFO Ken Crews attributed the Mission Systems margin expansion primarily to performance, efficiency, and learning curve benefits from scaling the business, not a significant mix shift. CEO Kathy Warden stated that revenue from systems directly used in Ukraine is less than 1% of total revenue and that the company anticipates a multi-year cycle of stockpile replenishment, suggesting no immediate negative impact from a cessation of hostilities.

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Chair, CEO and President Kathy Warden stated she does not see a significant difference in defense priorities post-election, as budgets tend to reflect the global threat environment, which has driven consistent strategy. For the Space segment, she reiterated expectations for a return to growth beyond 2025, noting the underlying portfolio is already growing at a mid-single-digit rate, masked by the wind-down of two specific programs.

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CEO John Mengucci and CFO Jeffrey MacLauchlan stated they do not anticipate major delays in contract awards, as the relevant work occurs at levels less affected by senior leadership changes. Mengucci also clarified that while CACI gains insights from global conflicts, its direct revenue exposure to areas like Ukraine is de minimis and does not drive financial outcomes.

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CEO Nicolas Finazzo explained that the AerAware commercialization phase is longer than anticipated due to the complexities large carriers face with implementation, such as pilot training, logistics, and budget cycles, rather than direct pushback on the product. Regarding feedstock, Finazzo described a highly competitive market where airlines are retaining mid-life aircraft and new financial players are bidding aggressively, leading AerSale to maintain bidding discipline despite a low 3.1% win rate on awarded deals in the quarter.

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President and CEO Stuart Bradie stated that LinQuest has no material small business set-aside work. EVP and CFO Mark Sopp added that the work mentioned is under an SBIR Phase III vehicle, which is fully available to large businesses for commercializing technology. Regarding a potential CR, Stuart Bradie expressed confidence that bookings will remain strong due to sizable awards currently in the protest phase and a robust pipeline, and he does not expect a CR to alter the company's guidance for the upcoming year.

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