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Chairman and CEO Larry Culp reported positive performance for the LEAP 1A durability kit, including the new blade, expecting a 2X improvement in cycles. He noted that LEAP 1B equivalent certification is anticipated in the first half of next year and that upgrading the entire installed base will be a multi-year effort, with current focus on the aftermarket and future plans for Boeing post-certification.

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Larry Culp, Chairman and CEO, reported positive initial performance for the LEAP-1A durability kit, with the new blade at its core, expecting a 2x improvement in time on wing. He mentioned the LEAP-1B equivalent is undergoing certification for a first-half next year release, and the full upgrade of the installed base is anticipated to be a multi-year effort, starting with the aftermarket and then Boeing post-certification.

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CEO H. Culp declined to provide a specific breakdown of LEAP engine deliveries between airframers. He stated that GE Aerospace is in frequent communication with both Airbus and Boeing and is well-aligned to support their respective production ramps in 2025.

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Executive H. Culp stated there is no operational change, as GE continues to test the GE9X engine and prepare for its production ramp. Executive Rahul Ghai added that a few revenue recognition units are included in the Q4 forecast and that GE is working with Boeing on 2025 engine requirements. He reiterated the long-term cost-out plan for the engine and the expectation for the program to achieve profitability by 2030.

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Executive Chairman and CEO John Plant responded that he has fewer worries but pointed to uncertainty in the commercial truck market, specifically whether pre-buy activity related to 2027 emissions regulations will materialize. He noted the company has taken a cautious stance in its assumptions. Otherwise, he sees solid fundamentals in defense aero, F-35, and IGT for data centers, concluding, "I'm paid to worry about things. And, providing I do it, then you don't have to."

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Executive Chairman and CEO John Plant stated that Howmet has raised its full-year 737 build rate assumption to an average of 28 per month, up from 25. On wide-bodies, he noted the 787 ramp was delayed and the A350 rate is slightly lower than expected, but he remains confident in the strong underlying demand for both platforms.

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Executive Chairman and CEO John Plant acknowledged that Q4 requirements from Boeing were not strong and that inventory-related cutbacks have been factored into the Q1 guide. He expressed concern about potential demand instability later in the year. Plant also mentioned that the changeover for the LEAP-1B engine's turbine airfoils is not expected until later, which is a key dynamic for the year's forecast.

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Executive Chairman and CEO John Plant highlighted a significant strategic shift, noting that aftermarket revenue is expected to grow from 11% of total revenue in 2019 to over 20% in the coming years, reducing earnings volatility. He dismissed destocking concerns by pointing to strong demand and increased production, with output of key turbine blades up 40-50% year-over-year, positioning Howmet to meet robust demand for both OE and spares.

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Chairman & CEO William Lynn explained that China's export restrictions on germanium have impacted supply and increased prices, affecting the infrared product line. EVP & CFO Michael Dippold added that this has caused some absorption issues and overhead impacts. On M&A, Lynn clarified that flexibility would be on the ROIC timeline, extending beyond the typical three-year window, but the company would not compromise its EPS accretion or overall margin and growth story.

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CEO William Lynn stated that the administration's efforts have not yet impacted the Department of Defense and that DRS is focused on the upcoming '26 budget build. CFO Michael Dippold clarified that the primary one-off adjustment in the adjusted EBITDA reconciliation was related to the foreign exchange impact on certain balance sheet items.

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CEO Bill Lynn stated there is no significant indirect risk to their portion of the Columbia program, as their contract is segregated and ahead of schedule. CFO Mike Dippold identified supply chain and material availability as the primary variables for the 2025 revenue range. Lynn confirmed that M&A remains a priority, with an uptick in actionable opportunities in their core markets.

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Chairman and CEO Christopher Kubasik firmly stated they are not signing riskier deals, noting a reasonable contracting environment with cost-plus for development and fixed-price for production. He also credited better bidding to improved data analytics. SVP and CFO Kenneth Bedingfield added that the company's agility allows it to move fast without taking on undue risk.

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Chairman & CEO Christopher Kubasik firmly stated they are not taking on riskier contracts, noting the administration seems to understand business well, resulting in reasonable contract types. He emphasized that improved data analytics and basis of estimate processes allow them to bid accurately. SVP & CFO Kenneth Bedingfield added that moving faster doesn't mean more risk and that the company's agility is a strength.

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CEO Christopher Kubasik affirmed that L3Harris is well-positioned for such opportunities. He noted that the company leads the hardware for the TR3 upgrade, which is central to enhancing the jet's capabilities. He also highlighted the potential for a significant retrofit market for its core processors, digital cockpits, and memory systems, beyond just new deliveries, and stated L3Harris will work closely with Lockheed to support these efforts.

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Scott C. Donnelly, Chairman, CEO & President, confirmed that accelerating the MV75 program would pull forward planned capital expenditures by about 18 months, a manageable change factored into long-range plans. On fleet deals, he stated that Textron is only interested if the business is good, emphasizing the current strength of retail demand and backlog.

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Chairman and CEO Scott Donnelly stated that the impact has been 'pretty de minimis' so far. He explained that the largest businesses, Aviation and Bell, are principally North American manufacturers compliant with USMCA, avoiding significant tariffs. For the Kautex business, products are manufactured and consumed within the same global regions, preventing tariff exposure. While some parts are sourced from Europe and Asia, the impact is not material, and the company will continue to monitor the situation.

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Scott Donnelly, Chairman and CEO, responded that he sees low risk in the Bell guidance as it is supported by existing backlog, with the FLRAA ramp aligned with pending appropriations and commercial business well-booked. On the election's impact, Donnelly noted that Textron did not experience the typical pre-election slowdown, likely due to long backlogs, and has not observed any subsequent changes in demand for its industrial products.

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CEO Scott Donnelly confirmed that Textron used the strike period to work with suppliers and improve parts availability, accepting a temporary inventory build to enhance future factory efficiency. He also acknowledged that the European auto market is challenged, but the Kautex team is managing effectively through productivity and pricing actions.

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Chairman and CEO Phebe Novakovic explained that the reorganization, particularly the new role for EVP of Global Operations Danny Deep, is designed to increase operating leverage across the portfolio. She assured that the fundamental management approach remains the same and stated definitively that the Combat and Mission Systems segments will not be combined.

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Phebe Novakovic, Chairman and CEO, clarified that while the supply chain has made very good progress, problems are not entirely resolved. She stated it is too soon to determine the full impact of tariffs but noted that a significant amount of material consumed by Gulfstream has high U.S. content, which may mitigate some effects.

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Phebe Novakovic, Chairman and CEO, responded that since GD's European business is domiciled there, they have not seen changes in buying habits amid increased spending. Regarding exports, she noted that the current administration has been clear about its intent to export, and General Dynamics is prepared to support that policy.

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CEO Phebe Novakovic explained that the supply chain is not improving at the anticipated rate due to factors like manufacturing cost inflation, demographic challenges, and the sheer demand increase on submarine suppliers. She confirmed this has already impacted schedules and will put 'considerable pressure' on the short-term goal of producing two Virginia-class boats annually. The company will adjust its pace to align with the supply chain and focus on internal productivity.

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CEO James Taiclet explained that the President's budget is an initial step and that congressional committees have already marked up the F-35 procurement numbers significantly higher. CFO Evan Scott noted that with a backlog of 311 aircraft and another 150 expected from Lot 19, the company has substantial flexibility. Taiclet confirmed they can adjust schedules to accommodate strong international demand.

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Chairman, President & CEO James Taiclet explained that the President's budget is an initial step and that both the House and Senate armed services committees have already marked up higher quantities for the F-35. CFO Evan Scott added that with 311 aircraft in backlog and another 150 expected from Lot 19, the company has significant flexibility to manage production and accommodate international demand.

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Chairman, President and CEO James Taiclet responded that he is 'not necessarily' concerned, as Lockheed Martin applies a stringent, risk-adjusted ROI bid process to all contracts and will walk away from unfavorable terms. CFO Jesus Malave added that over the past 12-18 months, the DoD has shown greater recognition that matching contract type to technical risk is crucial, especially for immature technologies.

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CFO Jesus Malave explained that roughly four days of cumulative working capital improvement would be needed through 2026, which he described as 'possible, but a stretch.' He stated that due to this challenge, a higher-confidence plan involves combining organic working capital initiatives with inorganic options, such as debt financing, to act as a 'gap filler' and ensure the pension headwind is managed.

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Chair, CEO & President Kathy Warden clarified that all three segments of the Sentinel program need to move forward together and that work on the launch facilities (silos) has resumed, with a focus on finalizing requirements to potentially reduce costs and accelerate the schedule. CFO Kenneth Crews stated that the R&D tax change provides approximately $200 million in cash tax benefits over the next few years and had a roughly $50 million impact on the P&L.

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CEO Kathy Warden expressed confidence based on seeing delayed award decisions begin to move forward. CFO Ken Crews clarified the cash impact from the B-21 charge would not be material in 2025 but spread primarily across 2026, 2027, and 2028.

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CEO Kathy Warden stated it's too early to predict the regulatory environment for national security M&A but affirmed the company will remain active in portfolio management to create shareholder value. CFO Ken Crews confirmed the B-21 Lot 2 award in Q4 did not trigger any new accounting changes or immediate cash flow impacts beyond what was already accounted for in the company's guidance, noting the cash impacts from the 2023 charge occur over a long duration.

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Chair, CEO and President Kathy Warden stated that the outlook for the Sentinel program already incorporates anticipated changes from its restructure, with growth still expected year-over-year, just smoothed over a longer period. Regarding GPI, she explained it is an incrementally funded program starting with risk reduction and design maturation, with the recent down-select signaling the Missile Defense Agency's confidence in Northrop Grumman's approach.

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Christopher Calio, Chairman & CEO, stated that the full-year tariff impact outlook has improved from $850 million to $500 million, driven by both reduced rates and enhanced mitigation efforts. He confirmed no negative impact on demand has been observed, citing strong commercial aftermarket growth. CFO Neil Mitchill added that the $500 million impact is split between Collins ($275M) and Pratt & Whitney ($225M), with about $100 million incurred in Q2.

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Executive Chairman and CEO Christopher Calio clarified that the $850 million figure is net of mitigations, including regulatory, contractual, and operational actions. He stated that while RTX has become proficient at passing on costs through pricing in the recent inflationary environment, the company will remain balanced and monitor the fluid trade situation before taking further action.

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CFO Neil Mitchill confirmed a prudent approach, particularly for Collins, to account for some inventory in the narrow-body channel, while noting the company is positioned to meet a faster ramp. For Pratt & Whitney, he expects large commercial engine unit growth similar to 2024's 14% rate, with some offsetting mix headwinds.

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Executive Christopher Calio explained that RTX has increased aggregate deliveries of both original equipment (OE) and spares, with volumes up 16% year-to-date. He emphasized that a careful balance between spares and MRO support is necessary to manage the powdered metal issue and support the existing fleet. Calio noted that production of key components like isothermal forgings is ramping up significantly, and RTX is aligned with Airbus to meet its Q4 delivery needs.

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President and CEO Kevin Stein confirmed TransDigm's serious interest in Jeppesen, noting it fit their proprietary, high-aftermarket criteria, but emphasized that the company's disciplined valuation process led them to decline the deal. Regarding tariffs, Stein stated the impact is currently "insignificant," and while all value drivers including price are always available, it is not a primary concern.

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Co-COO Joel Reiss stated they expect the freight submarket to improve and the engine business to remain strong, with broad growth driven by passenger traffic and an aging fleet. CEO Kevin Stein addressed tariffs, stating the impact would be "de minimis" as TransDigm is primarily a domestic manufacturer with limited exposure and has already relocated production from China.

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Co-COO Mike Lisman attributed the Q4 booking softness to timing and potential airline inventory adjustments, which will likely make Q1 the lowest growth quarter. However, he expressed confidence in the full-year guidance. He also confirmed that their pricing strategy remains consistent, aiming to be 'slightly ahead of inflation'.

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CEO Guillaume Faury confirmed that Airbus has not been impacted by the SPS fire. Regarding the A350, he acknowledged that issues at Spirit AeroSystems have negatively impacted the program, causing a delay of about a year in the ramp-up. However, he affirmed that Airbus still believes it can reach the production rate of 12 per month by 2028 despite the difficulties with Spirit's Section 15, as the rest of the A350 supply chain is ramping up as planned.

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CEO Guillaume Faury confirmed that changes and uncertainty from their competitor do add stress to the shared supply chain, citing Spirit AeroSystems as an extreme example. Regarding India, he stated that a commercial aircraft final assembly line is not the current plan. Instead, Airbus is pursuing a broad and deep growth strategy there, including final assembly for the C295 and H125 helicopter, significant sourcing, and growing its employee base to 5,000 by 2025.

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EVP and CFO Brian West stated the sale will not disrupt the company's long-term goal of mid-double-digit margins. He confirmed the net proceeds would be approximately $10 billion, close to the full purchase price, as it is an all-cash deal with minimal leakage, which de-risks the transaction between signing and closing.

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CEO Christopher Kastner identified the key sticking points as a mismatch between outdated budgets and the current economic reality, plus the need for an innovative contract structure to fund critical investments. CFO Thomas Stiehle characterized the Mission Technologies Q4 outlook as conservative, noting that while performance can be timing-dependent, the company raised the segment's full-year guidance on both revenue and margin.

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Pat Shanahan said the negotiations are very similar, focused on the A220 and the misalignment between the production system's maturity and performance expectations. Mark Suchinski confirmed the A220 had a good, quiet quarter with no forward loss. Pat Shanahan believes a deal with Airbus can be reached before the February earnings call.

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Jerry DeMuro, President and CEO of BAE Systems, Inc., noted the US budget was encouraging, with key programs like F-35 and combat vehicles well-supported. CEO Ian King revealed the strategic review was prompted by inbound interest and emphasized that a sale would only occur if it created shareholder value, with any proceeds following the established capital allocation policy toward areas like electronics and cyber.

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