Textron (TXT) 19 Oct 172017 Q3 Earnings call transcript

Company Profile

Participants

Eric Salander	Vice President, Investor Relations
Scott Donnelly	Chairman, President and Chief Executive Officer
Frank Connor	Executive Vice President and Chief Financial Officer
Sheila Kahyaoglu	Jefferies
Carter Copeland	Melius Research LLC
George Shapiro	Shapiro Research
Seth Seifman	JPMorgan
Jon Raviv	Citigroup
Julian Mitchell	Credit Suisse
Bill Ledley	Cowen & Company
Rajeev Lalwani	Morgan Stanley
Peter Skibitski	Drexel Hamilton
Sam Pearlstein	Wells Fargo Securities
Noah Poponak	Goldman Sachs
Robert Stallard	Vertical Research
Peter Arment	Robert W. Baird & Co.
Myles Walton	Deutsche Bank
Kristine Tan Liwag	Bank of America Merrill Lynch
Drew Lipke	Stephens

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Textron Third Quarter 2017 Earnings Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Also as a reminder, today’s teleconference is being recorded. will Investor conference Relations, I host, to time, President, Vice Mr. this turn over the your At Eric Salander. Please go ahead, sir.

Eric Salander

Thanks, Tony, everyone. and good morning,

begin, are today’s in subject our mention press to various risk estimates release. our I’d filings are be to today. we detailed which call statements future during and and we forward-looking These SEC factors, discussing expectations Before will like also in

and today, we Financial have CEO; Chairman and call Textron’s Chief Frank the On Officer. Donnelly, our Connor, Scott

be found our can year’s the Investor in Our quarter of presentation earnings billion, last in Relations section million website. the call third quarter. from revenues Textron’s up were $X.X $XXX

recorded or this third after-tax. share During of pre-tax $XX $X.XX quarter, per special charges, we year’s million

share, flow from Manufacturing $XX the Excluding quarter. third to that, quarter. pension up before million year’s third With these million, will adjusted $X.XX I $X.XX in from items, last up cash income was continuing contributions Scott. turn $XXX operations year’s from over last per call was

Scott Donnelly

from order year’s year. the five Thanks, down in and to Eric, Systems quarter, the Arctic saw with were Bell, last V-XX’s, related X quarter, third at Textron seen Revenues at last acquisition X% and flow XXXs volumes up we as to Industrial and increased in we’ve over higher XX.X% flat deliveries X from up H-X’s, the year. revenues quarter again commercial quarter on demand XX last strong delivered XX in improved up We past everybody. strong margin, due the year, helicopters, with six We commercial commercial reflecting Bell delivered of good revenues at the in morning, higher third Cat. in the a execution were operating

order of solutions Plan included we Caverton earlier an the Group for deliveries to quarter, began eight that Customer aircraft. year. order the China in Advantage XXXGXPs support of Bell’s also of we Helicopters, this Also received announced which XXX for the from units Energy during on Shaanxi each We XXXGXP

the we FMS our military, in quarter. first for Pakistan to two Moving delivered H-X aircraft

side, our track one the first XXX% ground On Valor on year. flight remains RPM this V-XXX achieved for successfully at development testing and

on of featured along on full-size was achievement at with where video V-XXX program a progress full AUSA last this we mockup. our week, Our this display

Our with objective investment aligns in accelerate program its modernization realize Army’s priorities development well future stated one this and to the key lift. vertical product of

our we revenues to we simulators higher deliveries. flight as Systems, to At we quarter business. in were Moving TRU, grow up continue In on marking of first delivered Mirage an six Airborne system international were Aerosonde FXs business, competitions. the contract Bulgaria, awarded in Unmanned support Systems, this TAPV In full acquired our air contract future platform. fleet Solutions sale of FMS we in adversary our a Textron

Arctic be volume the we’re plan earnings remain accretive and integration business. the our for to in in were XX% industrial, to execute in track on other Cat and mix we Arctic margins impact Overall largely reflecting revenues, we impact Cat. unfavorable to reflecting saw primarily down, in Moving the the business Arctic acquisition diluted continuing At and XXXX. increase an to of Cat, of

aircraft Citation midsize Scandinavian Latitude the beginning as received from the stronger and X compared and medevac-configured first down from down to XX this the saw Also and displayed an year. eight at fitted Beechcraft first-half first aircraft service. best-selling Babcock the show, additional Latitude, to production achieving of in in delivery milestone Longitude interior. T-X in past XX market in of celebrated our We order Aviation, following King compared we XXXX. a XX Citation into the we $XX Air as King today, XXXs recently last were deliveries for to revenues for NBAA, year, months jets year. just Airs, Ambulance at million, Moving last the entry with This international XXX quarter, fully King with week the XX Air Air Caravan XX deliveries We Textron trainers we the flat the delivered

Following XXC we as a demonstration this tour in XXXX. begin to deliveries aircraft embarked show, the on look

Offense, on Moving recent extremely across and it to the light line cash I’ll Scorpion sum performance, and up our businesses. Textron Frank. program. development the AT-X both quarter, achieved demonstration furthering we attack growth Aviation our turn U.S. the while strong our over Aircraft, With continued new Air during products Wolverine to business well efforts Force’s that, top performed OA-X And to

Frank Connor

was million, everyone. profit $XXX the revenue. the from Segment increase third million $XX million XXXX Thank in quarter of a in $XXX morning, you, down Scott. quarter Good and

At of Let’s ago, review $XX in the Aviation. Textron result how unfavorable down a year. impact Aviation, billion, this Segment by at $X.X period the was the down million Textron a and $XX mix, million with contributed revenues pricing. million the from million, performance year were from Backlog segments from from as up profit ended segment starting second primarily and a favorable $XXX each last $XXX of partially lower quarter. quarter volume offset

down acquisition. to to $X Segment profit million At end in second quarter. Bell, from million other. million, $XX $X unfavorable second by lower down was commercial million, reflecting segment pricing primarily end $XX quarter. segment profit and up of volume and revenues to Arctic to at profit from billion, segment Textron $X.X the due and the favorable of was performance from Sensors to XXXX, decreased increased of revenues the Cat were and the was million Finance volumes down in partially the the million Systems, increased were in higher the Backlog the from the quarter, impact third revenues end Land $XXX in $XX Industrial Segment Moving Marine at Weapons $XXX due Backlog offset inflation. and impact million revenues down a profit of Systems, $X increased largely due the million. mix, and Segment the primarily due $X volume product line. up $X billion deliveries. quarter million. $XX million was the higher

year, down transfer to ago. $XX of from million, Aviation. $XX profit, $XX largely up year million, segment $XX Textron program last the was million below corporate from a million Interest Scorpion the expense to were expenses related Moving

the of tax rate to related XX.X%, million, XXXX a in of largely effective third included income was tax quarter taxes. Our discrete net $XX benefit state

the we pre-tax announced that recorded the recognized charges Year-to-date quarter, last plans million million. we year. restructuring XXXX, have During pre-tax of of $XX special charges under $XX we

million we X.X During the shares, to quarter, shareholders. returning million repurchased cash approximately in $XXX

to XXX a range our voluntary notes proceeds updating to and continuing adjusted To our pension used wrap for contribution took XX-year and a up, issue the full-year also the per of plans. $X.XX at X $X.XX to operations to opportunity million of We from of share. a X%ish we’re EPS guidance rate

$XXX contributions are before to of also our full-year million. cash million, $XXX pension a concludes remarks. to We our increasing $XXX with expected range prepared pension That by continuing about contributions expected from million $XXX manufacturing operations million flow of

Tony, open questions. the for line can we So,

Operator

you Instructions] very come [Operator our Jefferies. from go much. with Thank And Sheila Please first will Kahyaoglu ahead. question

Sheila Kahyaoglu

morning. good Hi,

Scott Donnelly

morning. Good

Sheila Kahyaoglu

just And talk $X.XX, EPS guidance is cash, about industrial what’s within Just business, it going it’s there? can maybe you of profitability if the on the sorry, on where the coming? tightening the

Scott Donnelly

sure. Yes,

the the associated going are did contributing you the of charge things first know, I obviously, in quarter, lower-half TAPV think take the first as of to guidance. two is, our a program. sort there’s we that And with towards original

the our the of year. for performed balance overall has So, business to the plan

little segment. basically through well, we it resources, I The have particularly sure first production expect the thrown the of we particularly is then rest industrial And of balance work well. behind on flowing quarter of the at year. in some some original is We And that that going frankly, the think, look, charge in line integration our the industrial, in fairly people rates to that’s a tough of compared in but Cat got business to our vehicle overall the we had perform goes and output. of a to terms making the But quarter business. Arctic lot a side, in on that guidance full-year

most quarter through to the we of able be of not on to we’re to back and up up go catch our and way like them are to worked here fourth be, we the rates some we the As looks likely QX. of where as beginning quarter, need it the the from in line miss

look some things of sort we volume charge But two the obviously, those think point think bit at the lighter offsets really stronger little those this than a dynamics, that and so took originally primarily at two in little And two in if and vehicle that are QX on just are or conversion TAPV the those business. driven we Aviation guide bit driving lighter, you a expected. lower volume coming I I the again, by

Sheila Kahyaoglu

Thank it one I And Could backlog. program, and on we on aviation, up think was then right. how Longitude? into up may, that if the entry the then ramp And All be service? do just that you. slightly. the just Within about attributed to more,

Scott Donnelly

So it’s by Sheila. not driven really Longitude,

will backlog version, NBAA, now do I a are flights mean, a customers. there we across where the I aircraft the by model. we But of of don’t in to backlog hopefully, of that as yet. it’s Longitude, customer see for to out production into perspective the and So build of result that, And in as really lot expect know, start wouldn’t going but out noted it the of rest good. going think of other have kind we hasn’t around getting I doing people it until happened the model I some be lot aircraft. which have coming see aircraft a year that and remarks, is fitted the seen out you But as platforms, to is for that here flying demonstration start we The aircraft interested first

Sheila Kahyaoglu

the And into entry just on service?

Scott Donnelly

program. to new probably than impact. of push to, no the performing year. suppliers We into think, The to months was well. going a that before and program service, test The we’ll And it longer until entry the it latest probably material decided extraordinarily going probably one incorporate couple early greatest of taken liked made aircraft year, us were that but went key it issues. flight has product we originally through – our sense we we is certification next early next Oh, I have had beautifully. be That’s obsolescence is off some it’s

we deliveries XXXX. to certainly in expect see So solid

Sheila Kahyaoglu

you. Thank

Operator

you. Thank

question next from ahead. Melius will Our go Research. Copeland Carter Please come with

Carter Copeland

good guys. Hey, morning,

Scott Donnelly

morning. Good

Carter Copeland

like to wondered on you resources plan. was unfavorable watch could a How on you out sort the industrial is Scott, the of of quick couple One, then the out got of million Just looks if think mix integration. of to you know, the commentary. And versus ones. $XX that – each I of I It those volume in there called we and relative maybe additional shortfall and the expand is should for and things and how future? people much temporary we sort much

Scott Donnelly

around Well, it, I of the is resources plan. think, the to specifically on frankly going Arctic Cat, piece piece

very on full happy getting the how lines up range are and We’re inventory Cat, what the what proceedings, of of with both happening considerably. or going that development needed to obviously as under lot we knew the product and on to sales speed that’s we the dealer up business. was Arctic drive aligning Textron There’s a dealers base down work retail vehicle in well levels in in as the was

engine all up into our moving manufacturing parts Cloud running. Germany to facility. progressing, There think, that’s Carter. St. We decided I lot are of the factories from facility are here, a move and So the

up kind which closer We manufacturing we’re of dividends. assembling centralizing to our River, manufacturing, plant dirt also starting out the Thief in all of to much move I is obviously to So River. final our did think already Augusta is all which Thief of engine of pay

and I future lot well the that the they these a people were for But all off. stuff So, the to work things, costs think, distraction of are business. some, for go pull bode of

business, rates the said, running. getting In of and the nothing terms a line got just I particularly and production terms magical, in programs control we of of core as logistics our behind little

Augusta, the in Jacobsen down have consolidating things. we’re new a We now all where facility

parts So lot that just had really impacts of rest there’s moving the core the of a business. across

the accretive into on, said, but it’s hit is think have need into clearly, still quarter expect back some go us I going where to to line things into something they to as rate Arctic And So, those be. watch XXXX. be I Cat work are we There’s as I to getting this the we we them think we’ll deal, as we behind up as XXXX. here

moves, in forward, business So answers certainly, A and of of the integration, here better but certainly on a which impact the a the as right in bringing margins internal better productivity Jacobsen lot going driving we in go again, in terms we misstep. Arctic are lot that quarter. Cat, between think

Carter Copeland

And or Okay. Thanks a tax should that color. prefunding Frank. that so think of there we for the for from Frank, about? benefit was one pension $XXX million

Frank Connor

deduction Yes, next that cash so cash into year. on a tax We’ll contribution. this will fall that of for basis, into of get some that a we The will bulk benefit year. basis, get

So it’s spread two the years. between

Carter Copeland

gentlemen. Thanks, great. Okay,

Operator

Thank you.

comes George next with ahead. Research. from Shapiro Our Shapiro go Please question

George Shapiro

Yes, good morning.

Scott Donnelly

Good morning.

George Shapiro

I wanted provide on to a were had Scott, if performance you some you you that? in aviation, saying could color little pursue, more unfavorable

Scott Donnelly

Well, in if Scorpion there. we do numbers you have clearly, the the spend I George, year-over-year, – look all

actually had I when think did or from look that you quarter – consider third team at well pretty quarter, to were when Scorpion So the went relative performance the with as delivered program. quarter third this of that a you XX, to last quarter, even experimentation still lot on frankly, rates margin through and we increased activity We going spending. the this with

to spend as finalize very a the continue to We we’re have in certification. high continuing Longitude trying

cost nothing beyond what on expect. base So we really would a

think that. on job I a pretty good did guys the

little would a couple they to are considerably were quarter. around the although turboprops bit it have particularly volume, liked first they where than the We of light, stronger we in were probably

part in on that, international that that to we encouraged and but to the I the so demand million around seeing you on out, the some of tough falling the and the both both platforms, on that’s obviously line George line the work So to of market priced and still we think the the a but we see like by to and those hold were to business, stronger making important King continue market continue and trade it’s all-in-all will we versus part on saw that’s market, saw what when we’re Airs Q $XX we which guys Caravans we doing getting little bit is what sure it’s – are the side, volume. comes think line that we’ll continuing are that going pricing a in lighter I hold that’s are to year-over-year, now

George Shapiro

explain down said you much a this that around as R&D, did might bit, Scorpion and quarter look on but had the could year? And second little Scott you quarter the how expect like we doesn’t it come it maybe, would if for

Scott Donnelly

fourth will Well, done. it did the come here significantly now fermentation come program down somewhat, George, quarter, down I think pretty and the in it is

George Shapiro

I I for you your Okay, you if and you if me? take Scott, but about a that said in XXX, year, delivered the up all the is difference quarter, I mean can already deliveries the seven look at get fourth if XX, add latitude through a I reconcile

Scott Donnelly

and was end reconcile number third the have was George, be then, you I through XXX but database and probably the referencing, a the than I call have to number of probably your that you offline QX. do better database should it our through on thought of maybe we’ll I to an with a end try the data have was XXX but the first, quarter

George Shapiro

to one guided the you then came and of mean to dilution like does and look industrial, down margin one Okay, had a last X%, with for on now I I it the what mean year? X% it earlier

Scott Donnelly

give to it’s I probably be to so Well, that than it’s be… prepared a think we’re don’t to going but number, obviously, going lower specific

Frank Connor

than lower that. A bit

Scott Donnelly

lower than bit …a that.

George Shapiro

Okay, thanks very much.

Operator

you. Thank

queue Next with Seifman Please from question go is in JPMorgan. Seth ahead.

Seth Seifman

about good all delay we and announcement engine options hemisphere the are table I of how if could of the the from program, next the program on as source future far how do Scott, says about had the you and and approaching much on view that about goes, we point that of you this very thinking Thanks your wonder the around talk think as morning. the the Silvercrest year? development

Scott Donnelly

at Well, good compressor, learned that’s NBAA. everybody the We of about on Silvercrest question. else a issue just with the kind

and are their they the what with and of I relatively is range on think this We’re what fact solve in might team of doing obviously in options problem. problem be terms to still of in early their is of the a exploring to they work discussions the still understand understanding determine, the as

which of it know probably that a figure don’t we impact, it know out could need high that describing itself, they time minor premature with – are of what is is. could manifests could just exactly think we’re again options sort a here is I pressure more range sounds a certainly really compressor be, be little it’s to impact we issue, team So give significant All to their what it we enough to it that yet. be familiar really impact, like a engineering of what how

to things hemisphere continue with in our supplier to doing kind modeling to We on of selections and happen. which and our have work customers all obviously work lot continued those ergonomic a and key need of

at rate Silvercrest on and that we know are we we’ll you a a based then that in we program that. obviously So appropriate and span I of do the think doing is, keep running where upon based terms what can regulate to that

Seth Seifman

pension Great, thanks. million If for like think just the one of you we took that you And the debt Frank, contribution the think additional next the year by pension about looks then the this offset do on maybe the probably made, offset contribution on? year expense are by about year’s ended – $XX it impact track how expense. we possibly on or about and today you of for more

Frank Connor

return with think think should other – I rates a contribution. of look of with X.XXX% of learned overall before, mean get debt, rate a but cost are X.X% as this standpoint, lot there impact kind the spread be been year return we differential and with move ballpark on from having if things of little are the of assumption to again, about into at simplistically At our we will you for other on where kind a the the well, Yes, I’d the there’s of to we some some still at so and that of type a generally talked and year. pension. kind set, but associated bit just pension we of about returns end do has that XXXX, depend obviously tailwind say, about a impacts, is the as interest level lot a

Seth Seifman

great. Okay, Thanks much. very

Operator

Thank you.

Next Raviv Please Citi. question in with comes go queue ahead. Jon from

Jon Raviv

morning. good Hey,

Scott Donnelly

Hi.

Jon Raviv

a bit commercial signed on sort of more those over On What nature just is Bell, into markets larger year? you’ve past the of go deals end little you from, that lot the of or related can a to it is the positivity. coming is

Scott Donnelly

it’s, think, broad-based. we’re I seeing the I mean, pretty activity is

that pretty do but So transport are on. there’s military foreign of gas fleet be any some deals petrol, out police. it like not we bit particular across areas, There’s good mean some oil activity. There’s of of border a kind it’s whether frankly, broad well. smaller don’t fair as and yet you area, one It’s most have I a in EMS life see right. guys, of and which range there some it’s executive deals sector, one customs, is the just broad-based in geographically going concentrated pretty

South in activity seeing So it Africa, in seeing we’re we’re we’re America. seeing Southeast Asia, in

And times, has standpoint. it’s broad-based. Again, basically, of from is market fairly than better been years a doing team the it pretty weaker it’s want think, much I our is was than I competitive it don’t but previous still think, we So in a ago. well to overall couple

brand on they XXXs, We’re the are XXX being models, seeing much in sales good obviously, as come strength But all out. is pretty XXs, XXX. new a again,

applications. a geographies across pretty the pretty and end much range breadth our it’s of do and platform broad-based of So then

Jon Raviv

how this color. that of XXX Can you as spending you spending about level speaking strength back going going of the again. laid picks and up ramps Thanks What’s And trend those the year, for opportunity the on Bell, at up as the as that forward? thinking to out good what’s kind of performance? some of XXX hold there to perhaps profitability give sense things on then us margin the some

Scott Donnelly

about talked that of usually we’ve able to perform in a XX% that range. being XX% – kind usually business like Well, to

productivity okay? deliveries over good guys as Although there I is mean, had some a think a obviously, strong well. to have this XX with sustainable pretty tough is XXX period long of quarter drive year yet done and efficiency. well the mix really I obviously, this a And part, time we

too So I’d business. XX remain going healthy good a but is strong, say, it’s margin to

Jon Raviv

Thanks, Scott.

Operator

Thank you.

with Our ahead. Credit next question go Suisse. will come from Mitchell Please Julian

Julian Mitchell

my profile Air tough Maybe QX. for you. your delivery first about Thank the on think, I in a now, King Good volume Aviation, still XX time, months question has on had morning. just light

levels be outlook you that’s optimism Just think of wondered how flattish how if deliveries for second-half you’re still year? order aggregate seeing giving for those, overall in the and next the can and thinking about, for if you’re you kind any inquiry

Scott Donnelly

King are I Julian, speaking generally which strong Well, all, right, Airs, you’re of international first the that, think both marketplace. a pretty have

what I is have quarter, for of the it’s that’s we’ve lot Again, what we’ve more inquiries delivered was that a year economies and third the a in felt pain while. I and a months lot experiencing. ago a not than very sales order the a seen certainly activity good last and strong we here the and dollar think been of more while lot news think, over a weaker XX

going the and be I So think, year. of been the stronger the I of Do think. to the the given year? has not. that bodes for than do activity we think flat balance that I No, probably first-half it’s of it But well, get inquiry in level the

and of stage definitely right the what let’s finish in pretty now certainly game, marketplace performance of King here year with a again, year saw orders And in But we this first-half. for level the convert. it’s given saw happier the year, we the look we’re with past premature activity how say. than to we’ll is the into stronger of at things the next sales So nature the Air

Julian Mitchell

on due just color or on the the performance cash working next or to period particularly from XXXX. here the year-to-date clarify the I cash And increase in should then capital, some of your as same six months And could you flow Longitude then well? to that capital wanted all the working working my impact around how of over give of second was versus the you. tax-related maybe very introduction any so? flow guidance capital was good if Thank question

Scott Donnelly

Sure, Julian. get just the look, we here in of Well, is by flow in manufacturing and in as this said, better But big cash Frank some do tax cash a most of year. benefit is fact performance terms working driven chunk of that capital.

As of year. at that – a the off businesses cyclicality point we number, the you where the just where we’re know, look quarter, the the this fourth started you you generally of and we’re kind burn basically is see we’re we our working year, at natural through usually capital

on had some So better have like done ramping by a way the Longitude. And a working capital up the – job pressure we’ve teams management. much that includes points

sell year. which already aircraft, in next until we won’t obviously are producing So

back further. sort you look in as capital come that, but when fourth have our quarter. capital expect And to through here we the So, down neutral obviously, we across go in businesses, Obviously, considerable net working the burn down a we’ll year. of despite already working normal cycle the

working and of is it team is majority of manufacturing a big flow delivering that the obviously So capital. chunk cash better that the

Julian Mitchell

you. All right. Thank

Operator

you. Thank

Cai from Company. Rumohr comes question next Our ahead. Please with go Cowen & von

Bill Ledley

a aviation Hi, was favorable on pricing. you some back Wanted Ledley X.X. Bill go little is and this book-to-bill for bit this mentioned Cai And to morning. to

that from jets perhaps a volume King it Airs? what’s and pricing or both you there, give could stronger out, standpoint? you’d would color biz be If some more call great? So Is

Scott Donnelly

kind we’re don’t we’re on we model flattish, general the been the side in jet things. I expected is of go think has by of But going what model. market of sort to which –

that view, We earlier increases the to price. are it’s the at producing my think, that. we I with look the pricing just of – of on some obviously continue line trade investment into designing pleased that aircraft. levels activities to we these the still, on are goes we in And have, amount the – these will we’re low I that and and aircraft price the volume call, too said as helping hold to but

continue some going on price to then obviously we the And volume. push volume take more so lower we’re means and some that forward as go to if we’ll well, as

Bill Ledley

All right. Thank you.

Operator

you. Thank

Our Lalwani with Morgan Please go next question ahead. comes Stanley. from Rajeev

Rajeev Lalwani

Good morning, time. gentlemen. Thanks for the

Scott Donnelly

morning. Good

Rajeev Lalwani

of back about to the over you in? the business. going before XX XX get And coming big products Bell, to government the Scott, next, submitting can be drivers what rolled side are talk new the there say to months

Scott Donnelly

is over general. look, Well, the relatively number flat or in year so, next V-XX a

We as here on seen up some that’s in Rajeev, be continue years. as we expect next H-X will program to stable of up a be be on part this think Again, the and a little huge going on bit. Pakistan H-X to to don’t it’s activity relatively good. of we’ve there I couple FMS going with quarter probably Bell be – there, shifts flat mostly that V-XX, performance is I fairly expect would

Rajeev Lalwani

driver similar of going look aside, moving there kind And Arctic forward push what’s over industrial Thanks. to Once to question? to Cat the then side. the a as be we

Scott Donnelly

Cat, beyond Arctic the core look that’s that Well, used we business you to have. of if the

doing we’re in of think, most well segment. I that

Gulf these are it’s new launch, if place, Frankly, gone think, with are extremely in doing a look batteries you new I very products the well. product into the lithium-ion it’s well marketplace.

the us think, terms our to deliveries good getting order terms was the rates got output shape. Most sure continue running what can a lines and that for up line our getting of market, of We see and activity is very We to there. was continue make had, are whatnot get out, rates. is and order higher – I strong. the strong again, in getting rest and of the of the of quarter the in And We’ve strength we deliveries the production matter market and market during have in but in target actually GSE. to

Rajeev Lalwani

Excellent. question for earnings? A housekeeping year what’s the quick Frank. for benefit – on Frank, in the tax the rate

Frank Connor

a headwind rate looking standpoint rate. we’re a tax – little part Tax of contribution, the guess, or if a of benefit – with deductions from I so impacts well, taxes. tax this the year-to-date, things. only full-year pension I associated of benefit, cash a tax and at book other given bit It’s that’s rate kind just is actually It no we rate and some from given standpoint a There of XX.X% question. the tax mean, quarter

Rajeev Lalwani

you. helpful. Very Thank

Operator

you. Thank

Drexel Our will next come from with Skibitski question go ahead. Please Peter Hamilton.

Peter Skibitski

the guys. that, I quarter. But Scott, think touched good on Yes, you ramp lot last again, why this you of slowly? had LOIs a on us, morning, checked. Is XXX the Hey, you can I last so is remind going

So or Bell? is it LOIs, at it converting to execution is

Scott Donnelly

just outside It’s it’s certifications U.S. the production. Well, and other certification. getting the getting the the ramping

nothing I going or are conversion different on very high. there, LOI the would rates there’s really mean, we So expect significant than

So that. there we’re along. the book is is and certainly not The coming ramp order concerned about

Peter Skibitski

just go we And you give an on Scorpion? on us from Okay. where then can of here update kind

Scott Donnelly

Well, experimentation activities in saw frankly here, whole advertised. and about very Dates its program I as not and this has they playing very Force how what think, out. of Air in open thing were terms general the been transparent, exactly

the once flew very obviously good to phase they’re the their think, both that’s steps think is did. very that, going thrilled process how had information be. all the And then and Force whole might program of aircraft were And the program, the Force with through that next and feedback in. finish determine the experimentation very AT-X. what clear well. We they I take they the sort from Air went Scorpion Air pilots also the that I We were

decide how they move So the of we’re forward. to either next sort by, they aircraft on it or and standing all steps – want what while or

see So by and plays we’re just doing I – it standing of how out. and they’re kind think, we’re that

Peter Skibitski

Do surge them sale? some for you get from to to international need an sort wait still of

Scott Donnelly

our mean, an a I don’t. thing aircraft, we some No, I this standpoint, worthiness certification that with as to customers a have to as Peter, kind of from that’s have we U.S. to think, want there necessary. are don’t, some military a international declaration talk customers or certainly continue in other not would see that interaction customers, and

we’re that required. to are is differences whom Air So, definitely there in and not countries this. But a engaged for you approach U.S. see certification airworthiness different some Force in certainly their

Peter Skibitski

got Thank you. it. Okay,

Scott Donnelly

Sure.

Operator

Thank you.

Fargo. come will Our Pearlstein with ahead. go Sam that next question Wells from Please

Sam Pearlstein

morning. Good

Scott Donnelly

Good morning.

Sam Pearlstein

of, Just it’s nine months plan X%. thinking the before, margin, given of year? terms I through seem Can kind challenge year? is the falling, remainder original know we how get to of your Bell should you which be Scorpion how the your going X% on supposed to just the about should follow-up in to a talk the to would wanted be of R&D to about talked be margin about to like just aviation we we think the but is X.X% the about

Scott Donnelly

the So, going R&D, obviously it’s down in of terms to ramp here.

some the a demonstration going wrapped course and flights customer the have internal number. nature, bit Over activity international well little activities with of up. a it We’ll of things be that Scorpion, are of year will pretty on relatively some but small

revenue the overall of originally but guide were to we course lighter to number, earlier seeing the but dollars going terms I push think, that the guiding. year, will we’re probably a of I across we’re through and the on the Aviation platforms. included from the and these hundred be King Obviously, under on, we around particularly million spend, as Caravans, – standpoint, the again, them continue pricing front of all right, the what a with Airs said be couple think In segment Scorpion I it

bit So lighter a revenue than we’ll probably in we were be anticipating little our original on guide.

Sam Pearlstein

obviously, the marketplace? of in to you still the overall just just others, what it Okay. seen line, now, terms you of like pricing, seeing you’re plenty any sounds the trend Have marketplace hold within in change price I there’s And are discounting. mean, of the trying in lots

Scott Donnelly

to can’t, that. there. on don’t feel how still than other I know we don’t are way to say, like I – of comment right. our that Any the I deals out winning All we’re share

I nothing pricing that to problem, I appreciate. think has holding really mean, to of it’s and is strong the way think forefront. just terms But and the people can’t are a was think there’s I still difference it on still that historically. in And We’re a any what I line do customers doing? the speak be understand that our as to to what aircraft business. below jump change there I share where in other need responsible is trying guy we or

a good is rates better a investment good in money to in they customers. rates, have these of and doing things ton Denalis our need are so business are margin Latitudes at level think that a – job. be guys investing margin – the like able We’re for And to and you on this to business like and the sustain of I Longitudes the team

hold to continue to on it. going line the we’re So,

Sam Pearlstein

if Arctic then one of integration. up terms I on just can last follow and the Cat And the question Okay.

impacting going product some the their You you any talked production. your that and the channel moving the of improvement? that’s side But forward in seen distraction have success about showing from distribution anything maybe into

Scott Donnelly

In the on sales Yes, have strong retail, I been have. a basis. we year-over-year think

but Some go inventory. now and a historically name seen into not from dealers have some of bring Off able Stampede, Road EV. you lot only dealers out may and the Prowler clearing we is adding But just Textron getting what Arctic had the those of they older Cat, we’ve may been have product, that of being to announced the the as together the

retail So, They’re seeing level up EV marketplace, integrating we of into the we’re that at bring rolling well the those products – these pick as branding the the product we’re these we’re obviously in and are technology some doing the and in out. sell-through. the side, so and – seeing dealers

I lot heading. and and a them. is, a better the stronger to product line. think news for early, line. a received of now about where it’s good there It’s well it’s being through work So, But obviously. It’s it’s a it’s change change we good It’s – still feel good go much product

Sam Pearlstein

you. Thank Okay.

Operator

you. Thank

in Noah question will ahead. next Sachs. with go Goldman queue come from Please Poponak Our

Noah Poponak

Hey, good morning, everyone.

Scott Donnelly

morning. Good

Frank Connor

Hey, Scott.

Noah Poponak

kind guess, the business picture down of I on Scott, market. big top just jet at

that Some of flat hear used youngest it come recently, little market has at – at the used down you inventories the inventory. flight hour leading has how call of a still NBAA. calling a batch indicator I bucket But improved, accelerated, bit in felt especially data growth of that’s kind

like growth movement So a happening fractional leading sure little You never the quite in of had turboprop – your that with sequential and that it of and bit into that, but got a better backlog, maybe market? disconnect what’s remaining know, don’t I – guess, more I business indicator definitively data it what’s a this having little too? sort the jet bit of out of between and robust helped some sounds

Scott Donnelly

question, that’s Well, dollar the million so…

Noah Poponak

it. asked I

Scott Donnelly

me, you on of look, Look, things. couple I a let give can color

first customer all But impact here. model by obviously in with we’ve our the which really material tend the space. by that So customer backlog, big to don’t in no the into on is the as way talked thing, go there’s fractional past, model or towards we again, work of jets, customer and about we net

basically with We’re at more adding of in a of of deliveries we’re deliveries the we or back sort the sort quarter because it’s aircraft backlog, look jets, of of flow less net steady because of pretty how amount into timeline it’s aircraft. the equals

Noah Poponak

Okay.

Scott Donnelly

backlog So from change. standpoint, that’s a material a not

in of some in translates side are that in – good. that in In in a our good quarter there. we I terms of pent-up saw of usually the the business, up? increased of, activity rates certainly quarter, mean, we Absolutely, and the being utilization flying demand had maybe terms activity the we there’s our seeing bit But as you see service think, in that business, terms market which little a is of to of in I increased that, and aftermarket

are used end correct, continue come look, to market, all I statistics think the does I in down. mean your right,

availability used struggle I that the up, still that to new aircraft seem the not is despite pricing in used right we number with doesn’t years, aircraft of so are ex challenging think the low guys they aircraft customers used to to are step-up seeing we this because have does pricing. when fact over reflect want residual notion and has and last these move more that pressure and that aircraft values the dropped values trading significantly –

dynamic weighs still impact it’s on people economic think that is and So, a I to one them. that nontrivial

lower up of okay aircraft can’t any by a of think lowering new do kind up that for the residual are return of so – us higher and just People low for the residual flying that margin the I So, older guys a they and on to value and point the right. us that’s can’t try aircraft, that make and and do used still up want they value reasonable to aircraft, can’t I we is we are pressure in look, our business. as maintenance of maintain costs value look, seeing challenge step want lot for I move make to there the out

and to haven’t love tightening customers, see some you when – pricing, to to we something that’s in as up are control perplexing of tightens not to I would pressure and values we don’t again there used the So demand think – would obviously off we not is we that see I these be going we but lift it’s out haven’t you yet. why aircraft for aircraft, look those and a take would seen coming the love but used little seeing that us the see, those, seen, but market up some control residual

Noah Poponak

too on at I ago it’s or point was over on have a any it was higher much down – cycle to if, that basis, a that come ago last chart a XX too just in hasn’t an a when reasonable last where basis it basis absolute mean still before there? been but years the than but market you in and firmed to there and up yes, burn an XX still on all recently me, and the just better me on look that and it long-run it assumption you years just that’s tightening, get leaves back still it’s why many are used is options and high several it I years, pricing? pricing there’s it’s absolute decline been of so To wondering has steady it

Scott Donnelly

dynamic. and think that’s there so right, out – dynamic in is aircraft bigger therefore the part for much have it’s that that are percents going sure with similar of sure I’m there is the are I and Well, we market, a much more to aircraft a so the all, number fleet first higher are of

But is think get was that a look it because used in I period worth used a to a way, that is more I that, you new their was XXXX anyway, that’s think is I mean now say, at probably that have XXXX-XXXX time, XXXX, to of to so direction, be – aircraft a it’s timeframe, – distortion people I kind the XXXX, distortion is reality a depreciate, is, where an that’s not – asset are mean over was one, be we for not of is there is – saw realistic, not think don’t was were as other look, appreciates, that aircraft like that, were of think big world will people as that you that’s head the I get what them. market going a an is a days little aircraft, we aircraft to said going than illiquid I when aircraft. dynamic those, through we is that turning to was used people in when nobody market the aircraft, aircraft so. other right. right, the what could going. know a the out of which in do But news is There high, aircraft dark that an in what where depreciation I You liquidity market think and get and have right. there of it was selling the what don’t good it’s these where in buying is timeframe, kind XXXX quite available People it I are people buying the this a the

what into a back was and of people over just reality comfortable early have XXXXs. lot not time depreciate is that is that how it with things the So aircraft, the that’s to residual get value used hard there’s than transactions you to move went if different of these

Noah Poponak

sounds it seven the fairly On helpful. basically less really would the that that stepping of the handle interpretation? so is it had seven imply industrial that forecasting margin, up right so into than the that’s sort vicinity be kind in was fourth of anomalous, Okay, been quarter, like for for year the you slightly back number to previously XQ

Scott Donnelly

Yes.

Noah Poponak

Okay.

Scott Donnelly

four think we in up were and quarter, things make to to we was three we’ll all NOP QX so saying kind earlier like, and our a the but Yes, don’t that I back why that’s loss I see that the plan year we’re here for guidance. track had I on of in way I get from think rolling

Noah Poponak

Yes, differential to kind the of rate understand run just trying and had given you the where quarter been? the between

Scott Donnelly

say to Yes and a to it’s that fair QX. in our I think rate rate run get up should normalized back

Noah Poponak

that with asked in when into the rate, the tax lower is much the lastly, did P&L. about XX.X% had then tax were it and Okay It XX.X% quarter a it, benefit sounds a coming understanding pension, from you what a in is accurate? there Frank like earnings you’re you range tax but saying there the rate no in rate guidance prior tax on P&L guidance, has and rate new earnings was P&L today

Frank Connor

quarter through just roll fourth that where rate XX%, quarters to year right this of basically of Yes, type XX%-ish impact, of the kind we so lower sit now. is full kind

Noah Poponak

Got you. Thank it.

Operator

Thank you.

Vertical Stallard Robert question next from come with go Please in Our Research. ahead. that queue will

Robert Stallard

and volume. we price? you since sacrificing incremental higher, to When you given you Thanks this going aviation what much, margins you expecting were stance morning. about of are one and get to be want of good take prepared sort comments making more and get both think better how Scott to or so pricing you to you whichever in pricing, robust Frank should want trying be margin this, stabilize forward, volumes better on

Scott Donnelly

Rob… Well,

Eric Salander

the things our is similar which of lot around Salander in including really turboprop was we’ve business the business obviously Eric obviously so Obviously similar as the a one seen things, higher in get again not, been we of we challenging we’ve issue the military turboprop, what the kind number always talked margin side, a a there, year going a usual the in about of margin you mix, than year of expect just our and beginning business R&D that on we business it good last has investment being increase couple is of we’ve higher as latitude. and can’t in was our a conversion, we’ve here and and we when obviously achieving of reductions Scorpion by terms on the quarter-over-quarter which as number. we thing based that into pretty put so is this here, been are here, about a talked the on Hi, do mix – significant year, had volume expect lot year which this XX% sort had quite the R&D kind and seen pressured of we’ve do what –

on we’ve is in and numbers. XX% we number, normal that we Now kind those getting as but the here actions so see on we in a the margins, dilutive to of and and but been taking year-over-year pricing similar news that latitude mix overall a a based better actions whatnot, has the challenge, – of been would expect good to XX% cost they look normal are the mix world, terms are

Robert Stallard

coming And for into a on being case with like presumably, the latitude comp that? thinking like should in, XXXX heading longitude be

Eric Salander

year initial yes, small are production stable yes, would as the hopefully of you Well, get to first we number are relatively going that rates longitudes towards we units, more and challenging, kind that – of production have more always probably run the get real a back and they true. get be will going, but the of the because

Robert Stallard

Okay, that’s if additional and to remove any going of front, into contributions future flow you does potential the use are the that and then terms pension case, secondly for this the in returns? on cash contribution what cash

Frank Connor

we’ll as expect cash of about, to for of to been yes of of it pushes shareholder just market than obviously return required cash, through continuing our is out as organically Obviously negate we in contributions plans. continued additional prioritize look doing. in contributions, proceed forward. capital invest that capital we’ve buy past things to talked the at to events, of we way you that business things and have share we’ve we’ll so barring obviously excess that’s wouldn’t continue kind use return we So like this other it so helps as And some R&D significant it we certainly we’ll and any repurchase which which that. terms what that non-funded quarter today is kind same the Obviously continue and stock

Robert Stallard

That’s great, much. you thank very

Operator

you. Thank

question go next Peter Baird. Our ahead. from Arment queue come with will Please in that

Peter Arment

Scott Thanks, Frank. Good morning and

a all Just one, as quick questions my asked.

about program it something do the On throughout we ramps or how test materially XXXX? the there, think it up is the impact we and year? kind flight gets linear of the that absorb something get XXX, fairly on as margins that into Is

Scott Donnelly

R&D we’re mean obviously consumption and of through things going next given more well, our ramp of for specifically, has a air in think here flight obviously XXX of it I into program I year Peter. think I the that’s back balance we’re factored up get the peaked, back that overall the its the as sort through here R&D program are I think or next are year that’s numbers, aircraft – will again, the And test, in is, going so. flight in terms where test we

other. a into baked it I our will one that plans material guidance, or see So don’t into be having our impact the way

You won’t start to that XXXX. see deliveries until of really aircraft

terms in I of expect mix to not XXXX. any issue that So in would see

Peter Arment

a you that just mentioned long pursue follow-up, Scorpion international. not do you certification if might a that, And timeline you have But take? how that’s Okay, roughly on if to have some a that does do on you then helpful.

Scott Donnelly

U.S. a terms to stuff the other as already It’s this Force in of on going on. we’re entitled you Air Force working XX probably with something all process, here months that’s kind U.S. line been of know Air

don’t them with they other that we something that how timeline. I talking their So talk I about on countries it, to obviously need already work that. mean that’s and When do do about probably certification work own us

as are an those quicker a internal but part would that all processes order foreign hold with of sales little activity, probably and up would customer. just So or be program it’s incorporated because that not the largely a something

Peter Arment

helpful. that’s you. Thank Yes,

Operator

you. Thank

Our ahead. next Please Myles with from that come Walton Deutsche will go question Bank.

Myles Walton

the Thanks good morning, thanks taking question. for

maybe to in the excuse that one you bit and on is subtracting longitude net the little of general is – add, coming are a is aviation are excluding up latitudes First expecting into you be expectation overall or the Cessna jet XXXX, deliveries XXXX longitudes me, legacy? the or

Scott Donnelly

about answer that Myles, three in I can for months. question probably you

Myles Walton

Okay. your the or imagined management that’s it cash any Well, based? year as the working more just just to this I’ve there’s if flow working wondering you’re broad production relates aviation capital system, helping side

Scott Donnelly

absorb next right. the year it’s already our of obviously longitude, ramp broad to to Like various now quarter and really way we’re based. No, I probably the at third some on the into goods, aircraft to first-half are stages are the I in mean aircrafts cases more least finished the say, actually deliver year that the next actually we of having weapon. expect certainly In that all in

is unit. a flying that So we’re that around production aircraft

there’s that of offset some any a normal else just longitude, the new products So to ramp with pressure the we’re our support and of capital working definitely from to working in everywhere business. capital that’s working but our

Myles Walton

But to XX just over electrification higher from position to systems do for piece be long-term XX what now? you maybe how trend the long, that is thinking may half obviously level other look fuel XX, start it industrial in different question. for a it’s industrial change and the as you to next and years of business at years one, bit industrial of the world Okay position it the Scott, a but a business is have and this

Scott Donnelly

there’s a a the industry to terms significant is think that program. hybrids, to shift working frankly I seven the structural right there’s that is different going they’re – work industry. now with going longer actually don’t are where lot you a the think is on technology technology of around into of to that no issues much to question much, going that our frankly can over in I long question timeframe over we’re any going in for of hybrid is new normal that of tell but on world, require and and horizons full of tank with the of lot electrification already the fuel are Kautex automotive think periods higher not a customers in that’s the XX the in of next build of drive Well, But right products on fuel a that But and how of technicalities change that already just of we’re portion that’s get that something to no a doing we’re of a And there OEMs we’re sort material the much time already of here, out tank constant the some does around winning have like technology Myles, now proportion hybrid notion of you the be years. support does a people system, some and number these won difference too of combustion the to systems much in XX there’s for of fuel the working run and have about the here side going those vapors lot electric that on And working that the time. plant of a can become that programs it’s power a already terms sort a how fluids have and terms a draw something you I of engine. hybrid, market year the

but on changes are customers but So that, we you at I to least there working going we’re technology. going a of see proliferation issue, decade, other guys, when hybrid think do do over a to small a going that certainly hybrid piece at next the think the a to here significant the look are be I fairly electrification is that’s full whole sensitive to another with

Myles Walton

you And where is of is organic unknown you’re capital acquisitions, willing or hybrid put the despite where that next incremental terms the about an this a in to years, goes to market can XX in move? the adapt place the

Scott Donnelly

organic. purely is This

Myles Walton

Okay.

Scott Donnelly

really pooling. new new and got from not things model different you’ve and we to purely while but normal downstream to like different is Purely platform, organic. today. It’s different in do tooling Obviously, technology a us, what a organic. or invest than business like where a is it’s a that, this And it’s process business

Myles Walton

Okay. Thank you.

Scott Donnelly

Sure.

Operator

Thank you.

in of Epstein queue Ronald Please question will come with next Bank from Our go America. ahead.

Kristine Tan Liwag

guys. for It’s morning, good in Ron. Hi, Kristine Liwag calling

Scott Donnelly

Hi, Kristine.

Kristine Tan Liwag

Scott, corporates do last month, GE much But announced of another conversations change think how could we’ll jet. how that recovery? in do if it’s corporate grounding wave of at its customers, fleet of strategic of with your And see fleets? so, corporate market this your think headwind their you be the look you

Scott Donnelly

is. it Look, think I that don’t

look this from standpoint. companies when an at think thing I economic

they there I mean, saves. recognize the of huge timing corporate think, using value a I the productivity the it’s productivity boost. and that in

customer to any you if the trade them, for company. I NBAAs, think the and them people groups, it’s a productivity use have of boom the huge talk

many you to by those own As a around whether year use aircraft. your or aircraft is hours charter use fractional driven fleet you economics how or

think economics that’s doesn’t stop our right view hours, fly unless going I the flying sense, customers. many feedback the And on corporate get the own to we is from any thing that your our GE way looking you when aircraft, corporate you’re the go. make aircraft to is So,

Kristine Tan Liwag

the What’s expectations to some That’s you in maybe discussed how you in volume the pricing your to on pricing pricing used been in market and believe the manage up start have comments aviation getting from them then to helpful. down approach do you’re is your on to of that customer And feedback been seeing here? following and that customers using coming how discounts not market.

Scott Donnelly

price like price it’s have that great And market, great a current have lowering So look It’s relative going even easy they it’s you to I what to trying are look work we’ve aircraft the try value. been upon conversations, performance, economics think, they us, look, But doing conversations. a to business are the just customers for at there does. that that mean, we it’s deal I are. we for by and as at when deal, And best to prices. these always levels a our compared these look, to always them. are everybody historically Frankly, we’re been, not impress – run

want customer a customers So because – and just aircrafst. lower the to starting getting had And those the we – on having test lower And not it’s believe are look, to the do customers generations make able say as be We’ll – to and to I I think, we make trade our drop discounts take we’re not aircraft. on to reasonable pricing. we’ve to this It’s the going of I lower sustainable a great move to it’s products the deal and giving today. to we I’m we say, have margins guys, I’m support that. it, sorry, but certainly, volume we’re kind having need of think not next ends and quarters just, or – value products with will business you, of that and to investments on have we’re selling those not

things And, And – done. deals. I to fine, an at are levels. these as won’t But deal just incredible still we price discussion, a still tough think, those there see, close but we that’s going test. some we yes, get to still lot value are of these So, guys you continue are can more

Kristine Tan Liwag

very helpful. That’s you. Thank

Operator

Thank you.

Please from ahead. Our next Drew Stephens. with question Lipke comes go

Drew Lipke

Real mix despite the Good the kind squeezing the sales the drove Weapon TAPV, there Sensor year? thanks for hold the curious sequentially what margins unfavorable of systems, the in to morning on here. flat strength in there for guys, me and I’m managed Fuzed and quick no of outlook rest margin what’s of

Scott Donnelly

mean the and I businesses support of our other parts performance businesses, our that’s business, our Well, what’s system fee-for-service to difference. making the really I flight continue deliver think the business, services and solid unmanned

in the the but in loss us, and systems, that in behind the half. having strong which just As up and of around get to driven SFW stabilize volume, of kind the the higher back unmanned the but systems trying and to I namely the going higher in SFW these back thing had of some of sales that we here the are margin program we’re think areas again our you to performance half TAPV know be support obviously program year, solutions is make of helping parts other here not are to for

Drew Lipke

changes there, can directionally backlog year-over-year directionally? basis, parse the and maybe then and that Bell, seeing just out looking are commercial again at just Great on the you and backlog you sequential a maybe on

Scott Donnelly

we don’t. No,

dynamic know fourth the we component basically until we the the in it’s year this don’t goes because so you is into next by as process all. backlog through add the Bell its normal quarter, know or guys get multi-year of the year the next cycle that’s multi just You – cycle doing

Drew Lipke

steps if to March Okay, think the talk as about then you we maybe and work and about taking you aviation impact? a to can about aftermarket going any just within of capture there, in backlog think how should last theoretical that’s are mandate meaningful more and then you the be that what aftermarket, going ADS-B think one, that demand driver to aftermarket forward spur do we

Scott Donnelly

of we’ll in side Well, things. the see bigger a driver in what think I aftermarket terms the of is AD

look mean guys, doing open we’ve and more terms of know doing aftermarket mean played and and have to I well to third-party has direct, I strategy that in always taking you and in us, to the gone is out locations share and to worked we’re lot well, that it’s as good As we done future because we’ve speak. that’s deal will those out back do those well. general huge of as think the in we that a we really of a that of but continue service not the huge ADS-B in some we lion’s I that that of opportunities is cost, to of as do have been number past, our opportunities for those deal installations, our as of increase a a in customers we we at have centers opportunities some kind but the would more service we look for

labor to So content installed it, of really a lot it the which does as is our those being but is which drive into that. visits equipment do are obviously opposed the doing to of shop service the dollars

us a not significant it’s it’s any a a So, our to means. cost by not to – big upside but customer, is it

Drew Lipke

all guys. Okay, right. Thanks,

Eric Salander

we’ll joining to gentlemen, concludes ladies and Okay, and that you next quarter. for our talk us Thank you call.

Operator

January Thank for you night. through available will running gentlemen Eastern conference Time mid and AM and be XX, replay XXXX ladies after this at XX today

Teleconference. phone Executive dialing the those may any International conclude AT&T’s for Executive your of You XXX-XXX-XXXX numbers may dial the for code today. time XXXXXX. Playback conference are Once does XXXXXX. you at of XXX-XXX-XXXX by AT&T code and That We access entering XXX-XXX-XXXX using call Service access thank and the XXX-XXX-XXXX. and participation do access parties for our again using

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