Financial Data and Key Metrics Changes - Adjusted sales for Q3 were $22.5 billion, up 12% on an adjusted basis and 13% organically year over year [14] - Adjusted segment operating profit increased to $2.8 billion, up 19% year over year, with a consolidated segment margin expansion of 70 basis points [14] - Free cash flow was robust at $4 billion for the quarter, contributing to a full-year outlook of $7 billion to $7.5 billion [15][18] Business Line Data and Key Metrics Changes - Collins sales were $7.6 billion, up 8% adjusted and 11% organically, driven by commercial OE sales up 16% and aftermarket sales up 13% [20] - Pratt's sales reached $8.4 billion, up 16% on both an adjusted and organic basis, with commercial OE sales up 5% and military engine sales up 15% [22][24] - Raytheon reported sales of $7 billion, up 10% on both an adjusted and organic basis, with adjusted operating profit of $859 million, up $198 million year over year [24][25] Market Data and Key Metrics Changes - The book-to-bill ratio for the quarter was 1.63, resulting in a backlog of $251 billion, up 13% year over year [7][28] - New awards in the quarter totaled $37 billion, with $23 billion in defense and $14 billion in commercial orders [7] Company Strategy and Development Direction - The company is focused on executing commitments and driving performance improvements through its core operating system, achieving 10% organic sales growth while keeping headcount flat [8] - Strategic investments include over $600 million in capacity expansion projects, with Raytheon investing $300 million to support growing demand [10] - The company is innovating for future growth, including a hybrid-electric propulsion demonstrator for regional aircraft and next-generation braking systems for the A321XLR [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of global demand for products and services, particularly in commercial aerospace, with passenger air travel expected to grow approximately 5% this year [4] - The full-year adjusted sales outlook has been raised to a range of $86.5 billion to $87 billion, reflecting strong operational performance and market demand [16] - Management anticipates continued top-line growth, margin expansion, and solid free cash flow conversion beyond this year [19] Other Important Information - The company completed the sale of its actuation business and the Collins Simmons Precision Products business for $765 million [15] - The company is strategically using data analytics and AI tools to improve productivity and decision-making across its operations [12] Q&A Session Summary Question: Confidence in delivering LEAP engines to Airbus - Management expressed strong confidence in meeting delivery targets for LEAP engines, citing robust production ramp-up and collaboration with Airbus [32][38] Question: Limitations to growth in Raytheon segment - Management highlighted strong demand and a book-to-bill ratio of 2.27, but emphasized the need for a healthy supply chain to meet production increases [44][45] Question: Margins in Collins - Management noted that tariffs were a significant headwind affecting margins, with efforts underway to mitigate these impacts [85] Question: Top line and bottom line dynamics in Pratt - Management clarified that the uptick in revenue outlook for Pratt was driven by a mix of spare engines and increased defense contracts, with expectations for continued MRO output growth [90] Question: GTF compensation payments and AOG levels - Management confirmed that the financial outlook for GTF compensation payments remains consistent, with no changes to the expected timing for reduced AOG levels [80] Question: Future margin expectations for Raytheon - Management indicated that while current margins are strong, further upside is contingent on supply chain health and production ramp-up capabilities [114]