Gavin Parsons

CFO quantified it as roughly a 50-50 split between internal producibility work and external supplier resolution.

Atherton said too early to comment on dilution specifics. New Textron's higher growth and stronger margins should support stronger valuation over time. Past attempts were deferred because industrial end markets were not in a strong enough position.

Rosenberg said Kautex profitability improving despite end market challenges. TSV has tariff absorption headwinds. Golf remains steady. Cost reduction activities at TSV combined with stable golf are driving 2026 improvement.

Atherton said three blockpoint upgrades jammed into year-end created bumpiness. Prefers one blockpoint and one clean sheet at a time. Current focus is Denali certification and entry into service, not a new large cabin platform.

Donnelly declined to comment on future aircraft programs beyond those already announced.

Donnelly confirmed strike disruptions behind them. Expects margin rates within guided range and expansion going into 2026.

Donnelly said pricing positive but offset by inflation with minimal net spread. Margin recovery driven by factory performance improvement.

Donnelly said the period expense was a Q4 issue only; FY2025 guide is built on normal volumes with no carryover from 2024 strike costs.

Kathy said the Air Force agreement allows acceleration into a larger program of record and expects a conclusion by year end.

Warden clarified $2-3B is specifically for the acceleration scenario, over a multi-year period to reach accelerated production rates.

Warden deferred 2028 FCF target, saying B-21 acceleration and other pending awards will set CapEx profile. Capital deployment discipline unchanged; will update 2027-2028 as opportunities firm up.

Warden said investment can enable above mid-single-digit growth, citing DS as case study where capacity investment translated to highest segment growth rates.

Warden confirmed opportunity to earn improved returns on both remaining LRIP lots AND NTE units, with clarity expected in coming months.

Crews confirmed core aeronautics drove double-digit returns in first three quarters, offsetting B-21 LRIP dilution to maintain mid-to-high 9% margins.

Warden declined to size it specifically, explaining most revenue shows up embedded in space and mission systems segments.

Patrick acknowledged limited forward visibility, noting aftermarket books and ships about 50% in the same quarter and that predicting three to four quarters out is hard.

Mike said destocking was fairly uniformly distributed throughout FY2025, bouncing around a bit quarter to quarter but generally consistent.

Mike acknowledged about half the 5-6pp peer growth gap comes from distributor and airline inventory lumpiness. Difficult to quantify precisely since airline inventory data is limited. Distributor data is tracked but airline data is less detailed.

Mike confirmed Simmonds and Servotronics are coming in at lower margins than the typical TransDigm acquisition. But in the fullness of time, both businesses have great potential for significant margin improvement.

Mike said destocking was a temporary phenomenon that lasted a quarter or two. Does not expect further headwind. FY2026 OEM guidance has a wider bracket than typical due to ramp-up challenges and unforeseen events in past two years.

Mike expected freight to transition to positive growth in FY2025 as it laps easier comps, estimating a couple of quarters for the transition.

Mike indicated TDG generally avoids over-stressing small suppliers and expects operating units to have inventory ready to step up when rates recover.

Bell expects the draft RFP any day, a formal RFP 30-45-60 days later, and bids near year-end with decisions early next year; the current regions contract is likely extended up to 6 months.

Cage pointed to Homeland and Defense as longer-term margin expansion opportunities. Bell added the Enterprise Transformation office led by Will Johnson will drive overhead reductions, and Entrust is expected to be margin accretive. Both confirmed margin expansion journey is not complete.

Cage explained wider ranges accommodate shutdown extension risk; quick resolution points to high end of guidance. Cash collections could leak into 2026. Investment focused on prototypes, AI, Huntsville capacity.

Cage attributed lighter funded backlog to procurement slowdowns and incremental funding shifts, calling it a symptom of the environment. Bell emphasized line of sight to funding sources and confidence in cash flowing to contracts.

Cage confirmed contracts not removed from backlog; some de-scopes occurred. Bell emphasized guidance reiteration already incorporates possible revenue degradation from administration actions.

Cage directly confirmed EBITDA growth expectation through the VBA transition horizon, citing growth pillars and other health/civil momentum areas. Will provide through-2028 view at Investor Day.

Management said the UCAs already enable full-speed ramp and supplier alignment; converting to multiyear procurements will finalize delivery schedules and profit mechanisms.

Evan confirmed customer partnership on cash flow terms with elevated working capital benefits to offset CapEx. Jim described profit-sharing incentive structure where above-target performance triggers reinvestment back into spare parts, tooling, and factory equipment rather than pure profit extraction.

Evan noted historical 2.5% of revenue CapEx ratio likely holds for prior trending, but potential munitions scale-up could require more capital investment. More clarity in January.

Jay bridged from $6.1B adjusted to $6.7B midpoint via ~$1B F-35 delivery benefit net of $600M lower international advances ($400M net), plus tax benefits and cash-based net income improvement.

Larry said 2025 retirements ended at about 1.6%, now expecting 2% in 2026, better than prior 2-3% range. CFM56 shop visits in 2,300-2,400 range through 2028 with no big decline expected even into 2030. Driven by demand keeping fleets in service.

Larry said departures were up 4% in Q2 in line with Q1, full-year low single digits. No change in customer behavior on fleet plans or skylines. Called the 2H view 'a touch conservative' but comfortable with it.

Larry said no step function improvement expected; progress will come in fits and starts with 500+ GE resources embedded in the supply base.