“Capital expenditures are anticipated to increase by roughly $250 million to support growth investment attached to orders we already have in build backlog.”

In context

“Aerospace margin should expand modestly as volume leverage is partially dampened by mix pressures. Finally, we expect P&T segment margins to be roughly flat year over year, with pricing and productivity offsetting material cost inflation. Expect a combination of strong top-line growth coupled with fixed cost reduction will drive adjusted earnings per share of $10.35 to $10.65, up 6% to 9%. Our guidance assumes a 1% reduction in share count stemming from share repurchases. As we have signaled, we intend to focus our cash deployment in 2026 on reducing debt ahead of the separation. Moving to cash, we expect free cash flow of $5.3 to $5.6 billion, up 4% to 10%, which represents an approximately 14% cash flow margin and 83% conversion at the high end, or 90% excluding noncash pension income. Capital expenditures are anticipated to increase by roughly $250 million to support growth investment attached to orders we already have in build backlog. This increase in spending will be funded by improvements in working capital efficiency, with a continued focus on aerospace inventory. Let's move to slide 12 to briefly review our full-year 2026 EPS bridge. The main takeaway on this slide is that the overwhelming majority of our earnings growth in 2026 is expected to come from segment profit growth, adding approximately 64¢ at the midpoint. We expect to benefit from higher volumes, enhanced productivity, and favorable price cost offset by higher investment in Quantinuum, as I noted. As you can hopefully see, we have a fairly clean, high-quality, and straightforward path to our 2026 outlook. A few other points to note. Below the line, expenses should be roughly flat year over year as higher pension income of approximately $660 million is o”