Gautam Khanna

Sarah did not commit to a special dividend, saying the company continues to weigh buybacks (subject to IRR criteria) against dividends while sitting mid-range on leverage.

Mike said the pipeline is a good mix of both with a bias toward commercial, mostly small to mid-size targets.

Joel said no material shift in either discretionary or non-discretionary work, with Q2 CAM bookings at an all-time high and solid growth across the board.

Mike said M&A pipeline is active in the small to midsize range. Working hard but M&A is impossible to predict.

Mike said PMA acquisitions were not modeled to reach TransDigm-level margins. Good volume growth drives the 20% IRR instead. Both businesses have internal engines for developing new PMA parts with sizable annual introductions.

Joel said distributor POS outpaced aftermarket partly due to engine overweight in distribution. Channel inventory ended fiscal year with about half a month less than prior year, creating a 1-2 point impact to commercial aftermarket. On defense reform, TransDigm optimistic as a commercial manufacturer bidding firm fixed price contracts.

Mike said destocking was generally consistent across the group, not disproportionately weighted to any product area. On aftermarket, non-engine passenger segment saw more muted growth but engine outpaced. Nothing expected to persist.

Mike reiterated domestic manufacturer status and said internal cost savings and actions aim to ensure no net EBITDA impact from tariffs.

Mike said no behavioral difference between discretionary and non-discretionary aftermarket. Interiors (biggest discretionary bucket) continues performing well with no signs of slowing.

Joel confirmed distribution POS running ahead into double digits vs 9% total aftermarket. Kevin said several quarters of leading indicators point to continued strength.

Kevin said TDG is 0.3% of DLA budget, less than 1% of revenue at risk. Has met with DOGE folks in D.C. Views it as opportunity to improve procurement processes.

Mike deflected specifics on the Boeing contract renegotiation but confirmed it is actively being worked. Declined to discuss what happens if December 31 deadline passes.

Kastner said nothing about the terms was different or special and they are very consistent with the long-term margin profile the company expects.

Ingalls wage increase implemented through positive labor agreement. Seeing increased applications but meaningful improvement will take a couple of quarters to work through, similar to the Newport News experience.

Kastner said LPD-30 delivery is tracking better than Navy J-book dates suggest. High confidence in 2026 delivery. Beyond LPD-30, all other milestones consistent with expectations.

Kastner expects Ingalls union wage negotiation to complete in Q1 2026. Engaged heavily with the union on an almost daily basis.

Kastner said contracts need to be done by end of H1 2026 to maintain production schedules. Engaged heavily with Electric Boat and Navy. FY26 budget completion and FY27 budget clarity will help finalize. Described it as a big, complicated three-party contract.

CVN-80 delayed modules were received and will be installed in Q4 to resume the erection schedule.

Stiehle said extremes of margin range would require many things breaking one way. Performance has been very steady quarter-to-quarter and not expected to inflect significantly. Expects incremental year-over-year improvement.

Stiehle declined to give specific percentages but confirmed over 50% post-COVID by 2027. Currently ramping down from the 70-80% pre-COVID range. Every ship delivery retires pre-COVID work.

Kastner confirmed no material financial impact from CVN 79 schedule change, which was already factored into guidance. Ship at 95% compartment turnover with only 90 compartments remaining.

Kastner confirmed cash upside from executing contracts but refused to quantify. Stiehle noted the contracting approach shifted from omnibus 17 boats to incremental FY24 two-boat approach under the CR.

Kastner said no conversations yet with new administration on fleet composition changes as leadership was still being confirmed.

Phebe cited industrial base stabilization and long-lead material as the drivers but again said only that awards are coming soon.

Phebe interrupted to rule out out-year margin guidance, consistent with the leadership team's stated practice.

Phebe rejected the prior-peak comparison as structurally invalid but declined to offer a substitute ceiling.

Danny quantified 2025 tariff impact at $41 million, explained timing mismatch between cash outlay at import and earnings impact at aircraft delivery, noted 2026 will be higher than $41M but is contemplated in margins

Danny declined to split productivity vs supply chain contributions to margin improvement, but confirmed both are material drivers and expects durable, steady improvements continuing the 2024-to-2025 trajectory

Confirmed operating assumption of contract execution this year for next Columbia and Virginia blocks, declined specifics but noted closer government partnership

Confirmed G800 lot 1 starts at higher margin than G700 lot 1 due to lower developmental cost burden, expects similar lot-over-lot margin expansion trajectory

Confirmed large-cabin pipeline is approximately 60% U.S. and 40% international

Confirmed GDIT received stop-work orders from DOGE but declined to quantify, noted conservative backlog methodology provides buffer, outlook unchanged

Distinguished between CR program funding (for specific boats) and industrial base funding (goes to suppliers), clarified GD role as potential contract executor

Ghai attributed the gap to normalization from unsustainable early-quarter order levels, with H1 orders up 34%.

Culp highlighted double-digit sequential and YoY supply chain improvement, engine output up 43% and commercial services up 39% as proof of supplier progress. Credited Flight Deck collaboration approach.

Ghai said no disruptive customer behavior observed; Q1 was $300M above expectations. Momentum carrying into Q2 with high-teens services growth expected. H2 caution is precautionary, not reaction to observed risks.

Larry said no notable changes in customer behavior, demand environment remains robust post-pandemic with airlines wanting maximum fleet support. CFM56 stability continues with expanded workscopes.

Larry said no single breakthrough, improvement is cumulative across wide-body, narrow-body, legacy, and new platforms. Key is deep collaborative problem solving with priority suppliers on factory floors. Looking ahead to readiness for Airbus rate 75 and Boeing rate increases.

Larry cited 10% sequential volume improvement from critical suppliers (12 companies, 18 sites) with 95% commitment delivery. Rahul said supply chain remains tight with no inflation letoff expected; pricing expected to cover inflation through 2028.

Rahul confirmed standard mid-to-high single-digit catalog increases in summer plus a temporary tariff surcharge to cover remaining cost after operational mitigations.

Calio credited Raytheon's margin trajectory to mature-program mix, strong supply-chain material receipts and a 48% international backlog.

Calio confirmed AOGs down 15% with 23% MRO output growth and 20% turnaround time improvement on heavy visits. Declined to give point estimate but cited improving indicators: inductions up 7% sequentially, castings up 10%, forgings up 18%.

Mitchill confirmed $700M powder metal in 2026 guide, cumulative $2.8B through 2026 vs ~$3B total. Raytheon margins approaching 12% with international backlog at 47%. No reason margins can't exceed 12% given mix and productivity trends.

Mitchill confirmed no change to powder metal outlook. On track for $1.1-$1.3B in 2025 with residual in 2026. Provision remains adequate.

Calio said GTFA production underway with deliveries end of year. Hot section plus kit (90% of durability improvements) entering MRO next year. Supply chain steadily improving.

Calio confirmed no material production rate changes, airframers focused on ramping. Heat exchanger production for 787 now at needed levels.

Calio detailed progress: Pratt castings +12%, Collins microelectronics lead times normalized. Still constrained on rocket motors and isothermal forgings.

Bell cited DHMSM extension expected through near-term continuity mechanism and Antarctic program continuity while customer decides future approach. Cage emphasized nothing at major program level beyond what was discussed, with almost 70% of next-12-month pipeline focused on new business and takeaway. Above 90% recompete win rates.

Bell confirmed recompete bid expected in summer, with focus on technology investment to deliver exams better, faster, and cheaper. Cage pointed to Health long-term margin guidance of above 20% as already contemplating the recompete outcome, citing proven ability to sharpen the pencil and still deliver for shareholders.

Cage highlighted reserve health readiness program and Australian airborne ISR as larger recompetes. Overall 2026 more weighted toward new business and takeaways. VBA recompete at end of 2026 already being shaped.

Bell confirmed DOGE disruptions flattened over last 3 months. Fourth VBA vendor share loss estimated at less than 1% of volume so far. Tone shifting from slash and burn to constructive efficiency conversations.

Cage attributed strong margins to broad portfolio strength plus favorable EAC adjustments company-wide. Noted VA volumes sustaining or increasing with no bottlenecks from VA staffing reductions.

Bell highlighted strong Q4 bookings and retooled BD team but deferred specific growth targets to Investor Day. Cage hinted financial expectations through 2028 will show compelling momentum.