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Textron Inc  (NYSE:TXT)
Q1 2019 Earnings Call
April 17, 2019, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Textron First Quarter Earnings Conference Call. At this time, all participants are in listen only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, today's conference is being recorded.

Eric Salander -- Vice President of Investor Relations.

Thanks, Brad, and good morning, everyone.

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

On the call today, we have Scott C. Donnelly, Textron's Chairman and CEO, and Frank Connor, our Chief Financial Officer. Our earnings call presentation can be found in the Investor Relations section of our website.

Textron's revenues in the quarter were $3.1 billion, down $187 million from last year's first quarter, largely driven by the impact of the Tools and Test disposition in the prior year. Net income was $0.76 per share, up from $0.72 per share in last year's first quarter. Manufacturing cash flow before pension contributions reflected a use of cash of $291 million compared to a use of cash of about $158 million in last year's first quarter.

With that, I will turn the call over to Scott.

Scott C. Donnelly -- Chairman and CEO

Thanks, Eric and good morning, everybody. Q1 was a strong quarter for Textron. Margins were up 100 basis points in the quarter, driven by strong execution in Aviation and Bell, as well as improved performance in Specialized Vehicles. At Bell, revenues were slightly lower due to commercial volume in the quarter, where we delivered 30 helicopters, down from 46 last year.

We saw solid order activity in the quarter, with multi-aircraft orders across all our commercial models and we expect to ramp commercial deliveries throughout the balance of the year. In the quarter, we achieved certification of the 407GXi from the Civil Aviation Administration of China, which allowed us to deliver the first unit to Shaanxi as part of their effort to establish a medical services and public safety network in China.

On the military side, the Bell Boeing Program Office was awarded a $143 million contract for additional performance-based logistics and engineering support on the V-22, with options for four additional years. With more than 375 V-22 aircraft accumulating in excess of 450,000 flight hours to-date, we expect to see continued opportunities to strengthen our military aftermarket business from the V-22 fleet. The V-22 recently celebrated the 30th anniversary of its first flight demonstrating the reliability of tiltrotor technology and the variety of missions capabilities for the most in-demand aircraft in the US military.

And we're continuing our tiltrotor innovation with the V-280, which recently achieved a cruising speed of 300 knots, as part of its continued successful flight test program. We believe that the success of the V-280 to-date has helped accelerate interest in the future long range assault aircraft program due to the Army's request for information which will initiate a competitive acquisition phase.

Also within FVL, Bell responded to the Future Attack Reconnaissance Aircraft request for proposal and is awaiting the customer's initial down-select announcement. We were pleased to see the Army's continued strong commitment to Future Vertical Lift in the FY '20 budget, with funding for both the Long Range Assault Aircraft and the Attack Reconnaissance Aircraft programs.

At Systems, revenues were down on lower TAPV deliveries at Textron Marine & Land Systems and lower volume marine at Unmanned Systems. In the quarter, Textron Systems was one of the two companies selected to receive an award to provide unmanned systems as part of the US Army's Future Tactical UAS program. Under this award, the US Army will purchase our Aerosonde HQ systems, allowing Army users to evaluate the system, as well as envision and to find the capabilities and operational requirements for future combat missions.

Textron Systems also continues to qualify Block III enhancements to the Shadow Tactical UAS, which will enable to support the US Army for years to come. Also in the quarter Textron Systems delivered the initial next-generation Squad Weapon-Technology prototype demonstrator to the US Army. The automatic rifle prototype based on the Company's proven Cases-Telescoped Weapons and Ammunition Technology is the first of five weapon demonstrators that Textron Systems plan to deliver for the program.

Moving to Industrial, revenues were lower for the quarter, primarily reflecting the impact of the disposition of the Tools and Test product line. At Specialized Vehicles, we saw a favorable performance resulting from our cost reduction and manufacturing realignment actions that we initiated in the fourth quarter of last year.

Also, in the quarter, we started on-boarding Bass Pro and Cabela stores, as well independent Tracker Marine dealers with product information and training events and we began loading vehicles into these retail outlets. And Textron GSE, our ground support business received an order for six Safeaero 220 deicers from Belgium's Brussels Airport, further expanding our international customer base.

Moving to Textron Aviation, revenues were $1.1 billion, up 12%. In the quarter, we delivered 44 jets, up from 36 last year and 44 commercial turboprops, up from 29 in last year's first quarter. The overall market remains positive, with new aircraft order levels 12% higher than a year ago. In the quarter, figures released by GAMA showed that the Citation aircraft were the most delivered business jets in 2018, headlined by the Latitude which earned the title of the most delivered business jet in the midsize category for the third consecutive year.

Success of Latitude over the past three years demonstrates the importance of introducing new products to the market, particularly in the competitive midsize segment, and we're looking forward to the success of Citation Longitude as we work toward final certification, which is certainly taking longer than we expected. We continue to coordinate closely with the FAA as our engineering group works to complete the underlying documentation that's required under the FAA's Design Assurance Process and we expect to complete this work in the second quarter. Given the effort involved in the review and approval process that supports final type certification of the aircraft, we expect Longitude deliveries to begin in Q3 of this year.

With that, I'll turn the call over to Frank.

Frank Connor -- Chief Financial Officer

Thank you, Scott, and good morning, everyone. Segment profit in the quarter was $294 million, up $15 million from the first quarter of 2018, with segment profit margin of 9.5%, up 100 basis points from a year ago. Let's review how each of the segments contributed, starting with Textron Aviation.

At Textron Aviation, revenues of $1.1 billion were up 12% from this period last year due to higher volume and mix across the jet and commercial turboprop product lines. Segment profit was $106 million, up from $72 million a year ago due to the higher volume and favorable performance. Operating margin at the segment was 9.3%, up 220 basis points from last year. Backlog in this segment ended the quarter at $2 billion, up $204 million from the end of the fourth quarter.

Moving to Bell, revenues were $739 million, down from $752 million last year, primarily on lower commercial volume. Segment profit of $104 million was up $17 million, primarily due to favorable performance. Operating margin at the segment was 14.1%, up 250 basis points from last year. Backlog in this segment was $6.3 billion at the end of the quarter, up $459 million from the end of the fourth quarter.

At Textron Systems, revenues were $307 million, down from $387 million a year ago, reflecting lower TAPV deliveries at Textron Marine & Land Systems and lower unmanned systems volume. Segment profit of $28 million was down $22 million from last year's first quarter, primarily reflecting lower volume and lower net favorable program adjustments. Operating margin at the segment was 9.1% in the quarter. Backlog in this segment was $1.4 billion, down $62 million from the end of the fourth quarter.

Industrial revenues were $912 million, down 19%, largely related to the impact from the disposition of our Tools and Test product line and lower volumes. Segment profit was $50 million, down $14 million from the first quarter last year, largely due to the impact from the product line disposition and lower volume, partially offset by favorable performance related to the Specialized Vehicles product line. Operating margin at the segment was 5.5%. Finance segment revenues were up $1 million and profit was flat with last year's first quarter.

Moving below segment profit, corporate expenses were $47 million and interest expense was $35 million. We also repurchased approximately 4 million shares at an overall cost of about $202 million. To wrap up with guidance, we are reiterating our expected full year EPS from continuing operations of $3.55 to $3.75 per share. We also continue to expect cash flow from continuing operations of the manufacturing group before pension contributions of $700 million to $800 million.

That concludes our prepared remarks. So Brad, we can open the line for questions.

Questions and Answers:

Operator

Of course. And we have a question from the line of Seth Seifman with JPMorgan. Please go ahead.

Seth Seifman -- JPMorgan -- Analyst

Thanks very much and good morning.

Scott C. Donnelly -- Chairman and CEO

Good morning.

Seth Seifman -- JPMorgan -- Analyst

Scott, so you mentioned what was in the FIDP (ph) and then in the budget for future vertical lift, I wonder if you could talk a little bit more about what you saw in there for FLRAA and how that met your expectations with regard to continuing to test and to do work on the V-280 given some of the past comments that you made, was there enough there in terms of funding?

Scott C. Donnelly -- Chairman and CEO

So, I would say (Technical Difficulty) that there's -- we're pleased with what's in there. Obviously, the bulk of the money that's laid out for FY '20 was on FARA. The monies FLRAA was really to initiate and get the program going. You have to remember though that when they put all those budgets together that was really before the V-280 was very far into its flight test program, so I'd say that that has influenced things pretty significantly. They would like to add additional funding and they have asked for more funding to keep that program moving, both in terms of flight test activity, as well as to initiate the former procurement. And the Army has talked about this, that's why we've seen the RFI come out. Those responses actually were due and went in last Friday. They'll use that to inform their next step, which is to put an RFP out to begin the competitive phase of the program. So I think we'll see a fair bit of money through the five-year plan, and we expect that based again on the fact that JMR has been as successful it has been, has really demonstrated that this program is ready to move on and the Army has talked about that and is working on both the funding that they did get in there as well as additional request for funding to help accelerate this going forward. So I think in that respect, it's all positive.

Seth Seifman -- JPMorgan -- Analyst

Great. And then, just one follow up, maybe if you could talk a little bit about the level of profitability at Bell. 14% margin obviously very strong and strong relative to what you guys had guided to the year and maybe a little more color on what drove that? And also, we've seen consistently high margins at Bell for a while now. And how you think about that 10% to 12% range you've talked about over time and if there is room to be over time toward the higher end of that range?

Scott C. Donnelly -- Chairman and CEO

Well, look Seth, I mean we have been performing really well. I think the team down there is doing great job driving productivity. Obviously, we were in the quarter wrapping up a lot of sort of the end of the multiyear two program on V-22 and we've seen great productivity and that's driving part of it. We had a good mix on the commercial side. So in terms of the overall deliveries in the commercial side, we saw better margins there as well, so that contributed to a very strong Q1. I think the business will perform very well throughout the year, but remember, as we go further into the year, we'll see this transition to multiyear three revenue on the V-22 front. And as we've always seen, there's a new -- negotiate new pricing on one of those contracts, it's at a lower level and then we've got to work hard to drive productivity over a period of time to get those margins back up.

So I think that our guide is still accurate on Bell. We're going to just see a stronger start here, again, given mostly the ramp up of multiyear three versus kind of close out on all of the multiyear two activities. But the business does a great job, they are delivering strong productivity on both the military and the commercial front.

Seth Seifman -- JPMorgan -- Analyst

Great. Thanks very much.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we have a question from the line of Sheila Kahyaoglu with Jefferies. Please go ahead.

Sheila Kahyaoglu -- Jefferies -- Analyst

Good morning, guys, and thank you for the time. On the Longitude, everybody likes the fashionably late entrance, but I guess what are lessons learned here on how to improve the process if any? And then if you could just update us on the Denali and SkyCourier and EIS there?

Scott C. Donnelly -- Chairman and CEO

Sure. So I think Sheila there's a lot to learn on how to go through this new process. I think if we were able to start over and do it again, there's a lot of streamlining in terms of how you would create all these documents and how you would put all the tools in place, particularly one of the things that we never imagined the challenges of how interconnected all these different documents are. So not only is it staggering in terms of the sheer volume and quantity per document, but the linkages. So with -- if a commentary is made and if small change is made somewhere, how that connects to all the other documents. Whereas these things used to live sort of independently as you looked system to system. So we have been trying to put together tools and ways to make that an easier process.

I think frankly the FAA reviewers as they look through this have recognized that there's a lot that's being done here that's valuable, but there's a lot of things that could be optimized to make it more productive. I think we feel good about the fact that we've had some FAA folks in and now using some of these tools we've developed to help do the reviews and look at the documents. So, for sure, there are are lessons to be learned here on future certifications. And frankly, when you start this process, there's ways that you can create these documents and trees much much earlier that we just weren't familiar with at the time we started this program. So we injected this process halfway through. So at any rate, it's -- it has proven to be a massive challenge. Again, this is -- for us, this is a timing issue and I don't think this will affect our performance in the year. The production line is humming along, it's a great product that continues to fly really, really well, and we'll get there. The only disappointment frankly for us is we have customers who want the aircraft and we've been trying to do everything we can to support training and readiness for deliveries and all those kinds of things, but it's -- people would like to get their hands on the aircraft. It's a great plane. So anyway we have -- well, there's a lot to learn here and I think it'll will help us on future certifications.

With respect to Denali and SkyCourier, we're still planning on first flights of each of those aircraft this year. I think they're coming along well from a performance, cost, they're tracking and we obviously are a little bit behind on a couple where we'd like to be based on a lot of the resource still being tied up on Longitude certification, but the critical things that need to happen on that program continue to happen and I think both programs are on track to be great aircraft.

Sheila Kahyaoglu -- Jefferies -- Analyst

Thank you for that color. And then just on Systems, how do we think about the business returning to growth and stabilizing here? You mentioned a couple of new programs --

Scott C. Donnelly -- Chairman and CEO

So, I think if you look at the performance in the quarter, I am kind of very happy with how these guys are doing. Most of the businesses are performing really, really well. That win on the next-generation of UAS, where we've invested in that hybrid quadcopter version of Aerosonde, obviously, to be selected as one of the two guys to go demonstrate that capability and get it fielded with the Army is a big deal for us. The rest of the UAS business fee-for-services is continuing to do very well. I'd say, most -- all of those businesses are performing really well. Obviously, the reason we guided -- the margin rate that we guided is, we still have a very large piece of the business on ship-to-shore in particular that has a fixed price development that we're booking at zero and now we are starting to see revenue. We'll see that continue to grow over the course of the year on the production program.

Again, revenue that we're going to book at zero, clearly, we don't expect that to be at zero margin. We expect that to be a normal healthy margin business, but here in the initial phases, we're booking it at zero. The first three crafts are in the production phase. There is a lot of long lead material that's out there and so we are starting the negotiation with the government to tried to finitize that contract for fiscal year '17, '18, '19. So I think clearly that's a program that's going to drive a significant amount of growth going forward. As I said, we already have the long-lead out there. We're already initiating the production of the craft. So that'll have, I think, a really positive impact for us in 2020. But it's all business that's been booked at zero margin and that weighs down the whole segment, obviously, when you've got a big piece of business at zero. But clearly that will swing to a very positive program for us going forward.

Sheila Kahyaoglu -- Jefferies -- Analyst

Thank you very much.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we do have a question from the line of David Strauss with Barclays. Please go ahead.

David Strauss -- Barclays -- Analyst

Thanks. Good morning. Following up on that, Scott, the changes that we saw in the budget in and around ship-to-shore looked like some volumes were taken out. Can you just comment on that and how that potentially could affect the cadence of the program?

Scott C. Donnelly -- Chairman and CEO

Well, the FY '20 zero was I think from the Navy's perspective a logical thing to do because the monies that had been appropriated in '17, '18, '19, aren't under contract yet. So I think that was the rationale for doing this. Clearly, we have a pretty significant volume of craft that are in the backlog if you will. We would certainly like to see them put something back for '20 just so that we don't have a break in terms of how we negotiate work with our suppliers on anticipated volume. So that's certainly something that we see as an opportunity to step that up as we go finalize the FY '20 budget and also for the fit up as we look out. But I don't think there's nothing sinister here, just the Navy's perspective was, you guys have a whole bunch of craft that are already appropriated in '17, '18, '19, we got to get those on the contract and get going here before we add on additional appropriated volumes.

David Strauss -- Barclays -- Analyst

Okay. Within Industrial, the down some percent, can you help us a little bit in terms of how Kautex and vehicles did within that down 7%? And then, how do you feel you're set up for the dirt season, because I think that's where we've seen problems in the past? Thanks.

Scott C. Donnelly -- Chairman and CEO

Sure. Look, the majority of the volume down here is associated with the fact that we had the Tools and Test business a year ago. So, we will see that headwind here in the first two quarters.

And then, we should get to a more normalized comparative on a year-over-year basis. I think the Kautex business, as you would expect, we are down on the revenue based upon the OEM volume where we've been down. I think from everything we're hearing from our customers when we look at deliveries for the balance of the year, this is probably the lowest quarter for that. Just on a year-over-year comparative basis, we expect it to be somewhat better in the second quarter. And again, improve because you get the -- again more normal comps in the third and fourth quarter in terms of where the OEM volume is around the world but the business is executing fine. Obviously, there's some challenges there on FX as well, which is almost half the decline that we saw in the automotive side of things. But it's performing and sort of to our expectations based on what people were thinking the global auto volumes would be. So, I don't think there's any issue there that we're particularly concerned about.

On the vehicles side, we saw a pretty significant improvement on a year-over-year basis in terms of the performance of the business. The actions that we said that we would take around cost and realigning production and then some of mid-changes that we've made in product portfolio have gone very well. I think that team is executing extremely well and we clearly expect to see the benefits of that continue to accrete over the balance of the year. And then of course the unknown, which would drive any potential upside to this is, how successful we are on the partnership with Tracker. We feel great about it right now, but again, we're early here. We're doing a lot of work together on training and getting everybody ready to receive and retail this new product line in both the stores and the independent dealers.

I'd say that process -- it's a huge undertaking, it's just -- it's a lot of stores, it's a lot of retailer, so it's a lot of training and I think that's going very well so far. We're obviously building out vehicles and have started to stock a lot of the initial stores and dealers and that program continues on track, but we need to give it a couple quarters here to see what the retail sell-through looks like to know what that's going to do to the business. But all that aside, I think, we are absolutely on track with the execution that we expected and forecast for the year, so we're in a pretty good position.

David Strauss -- Barclays -- Analyst

All right. Great. Thanks very much.

Operator

And we do have a question from the line of Carter Copeland with Melius. Please go ahead.

Carter Copeland -- Melius -- Analyst

Hi. Good morning, gentlemen.

Scott C. Donnelly -- Chairman and CEO

Good morning.

Carter Copeland -- Melius -- Analyst

Scott, just a question on certification and I appreciate the Longitude comments earlier, but just a bit more broadly, I mean there's clearly right now a bit more public debate around the suitability of ODA and the cert process. And I just wondered, as you look forward, and you think about the remaining certifications that you have and ones in the future, do you think there's a risk that this becomes more elongated and this is a process -- it's a plan for longer-lead times or just any color you can give us on how you're thinking about that given what's been going on lately?

Scott C. Donnelly -- Chairman and CEO

Well, Carter, that's all very hard to predict. Look, I think that the FAA recognizes the value and the importance of ODA in the certification process. This is a process which has worked extraordinarily well. I mean our industry, whether it's civil aircraft or business jets or GA aircraft, has an unbelievable safety record. And I think the FAA knows that. The process which we can all read about (ph) here and there, the bottom line is, it works. It has delivered incredible safety records. So I hope that no one has a knee-jerk reaction to some of the issues or the only issue frankly that's going on right now in the industry and doesn't go back and say what are the things that should be done differently, although I think we're always open and should always be open to that, if it's something that will improve safety of the delivered product.

I think the FAA will be balanced and these guys are very close to this. They understand the technical details and how the process really works with respect to the overall certification process as well as ODA. I just hope we don't get something that is jam from a legislative standpoint that mandates something that would be, as I said, a knee-jerk reaction. We have a process that does work. And it has again an unbelievably terrific track record in terms of safety of aircraft. So one isolated incident shouldn't cause people to change a very complicated and very effective process that's worked for a very long time.

Carter Copeland -- Melius -- Analyst

Great. Thanks for that. And just as a follow up, I wondered if you might just give us some very general color? I know you don't go by model, but just characterize the Aviation book-to-bill Longitude versus everything else, did you see -- what did you see across the product line and whether do you see any particular strength in Longitude worth noting?

Scott C. Donnelly -- Chairman and CEO

I think it's been strong across virtually every model. I mean certainly there were some Longitudes in there on both retail as well as ongoing -- the process we go through sort of year out on NetJets, on the fractional side. But we saw good retail activity and that's true both at Longitude and really across the rest of the product line.

Carter Copeland -- Melius -- Analyst

Great. Thank you very much.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we do have a question for the line of Ronald Epstein with Bank of America Merrill Lynch. Please go ahead.

Katelyn DeLante -- Bank of America Merrill Lynch -- Analyst

Good morning, guys. This is Katelyn DeLante (ph) on for Ron Epstein. When we think about the Future Vertical Lift programs with FARA and FLRAA, the initial operating capability is still ways away with 2028 for FARA and 2034 for FLRAA. Until these programs gain traction, how do you think about bridging your programs at Bell as the V-22 comes down?

Scott C. Donnelly -- Chairman and CEO

Well, there's a couple things going on there. So, one is, first of all, the Army has been pretty open about trying to, as their baseline, bringing the future long range assault back from that 34, 35, to 30. As part of the RFI process, they asked for ways that it could be further accelerated. As you can imagine, we submitted our input to that. So I mean clearly there are ways for this to go faster. And I think the Army -- well, the Army has been very open about the fact that they would like to see this go even faster. So I think these discussions out into the 2030s are really no longer relevant. The Army is absolutely intent on bringing that back and getting aircraft onto the ramp much sooner than that. And clearly we can support doing that. So they are not as far out as you would think, but they're still pretty far out.

So you'll see a lot more engineering development and initial activity between here, and say, the early to mid-2020s. One of the things that will help to bridge us on our current programs at both V-22 and H1 is, these installed bases are growing obviously very rapidly. There's a lot more aftermarket work that's coming in. The government is working very hard around readiness and sustainability. So you see more PVL and more work that we're performing to help make sure that these aircraft are supported. And again, the installed base is much larger and they're flying these things a lot of hours. So aftermarket will certainly step in and fill the part of that void.

And the other is FMS. So -- as you know, H1 is a bit behind, there's a number of other opportunities out there. There's interest and activity which again is public around -- that's really, let's say, on V-22. So I think -- the real answer here is, there'll be a lot more aftermarket activity to help fill that gap, there will be some upgrades and refurbishments like CC-RAM for instance on the V-22 program, and there will be some FMS opportunities to help also to fill that gap. And I think you'll see more, as I said at the beginning, sort of a pull to the left here to try to accelerate things like long range assault.

Katelyn DeLante -- Bank of America Merrill Lynch -- Analyst

Okay. That's very helpful. And the another question on the V-280, right now, the Army does not currently operate any tiltrotors. What hurdles do the Army need to overcome to commit to a tiltrotor like the V-280?

Scott C. Donnelly -- Chairman and CEO

Well, I think that the Army is, as they have seeing the JMR program play out and they've seen the V-280 performance in terms of not just the things which sort of everybody knew about tiltrotor in terms of their benefits in speed and range, which is inherent in having a, in effect, what's a high performance turboprop when you're enroute, but there was always a question around the low level agility, and the need to be able to be very agile down in landing zone. Again, this was a big change from where we were even a year-ago. With the 280 flying, the Army has been able to observe and frankly fly this aircraft in those modes, and it's superior to the helicopters that are out there today in terms of its low level agility. So, I'd say, if there was a concern around tiltrotor with the Army, it was how do you do with this low level agility, and the V-280 has been able to demonstrate that this is actually a superior technology for that application. So I think that's having seen that, is what is giving them the confidence to try to move out on this program.

Katelyn DeLante -- Bank of America Merrill Lynch -- Analyst

Okay. Thank you. And lastly, can you walk us through what drove the working capital headwind in the quarter?

Scott C. Donnelly -- Chairman and CEO

Well, inventories, obviously we didn't sell Longitudes. So those guys are there and we always have a cyclicality anyway. I mean, if you looked at the Longitudes, it is obviously a significant chunk of that. In general, we tend to have more build on both the commercial aviation side, as well as in Bell, on their commercial side. Again, even though deliveries were not the same as they were a year-ago, we still feel very good about the overall commercial volumes for the year, and those aircraft are in production and are in finishing and that's what drives the bulk of it, and we have a little bit of additional inventory. Again, we're doing all the build for the stocking on the vehicle side. So it's mostly driven by some of those sort of normal annual inventory builds.

Katelyn DeLante -- Bank of America Merrill Lynch -- Analyst

Great. Thank you very much. That's it for me.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we do have a question for the line of George Shapiro with Shapiro Research. Please go ahead.

George Shapiro -- Shapiro Research LLC -- Analyst

Yes. Good morning.

Scott C. Donnelly -- Chairman and CEO

Good morning, George.

George Shapiro -- Shapiro Research LLC -- Analyst

In the Aviation, what was R&D year-over-year? Because my recollection was, you had like $15 million of Scorpion expense in the quarter last year. So I was just wondering how much it might have been down year-over-year?

Scott C. Donnelly -- Chairman and CEO

The numbers, George, is -- on an overall, the R&D number is about on track to where we guide for the year. It's not a major impact one way or the other. Obviously, we spent a little on Longitude than we would like around cert, but net, it's pretty flat.

George Shapiro -- Shapiro Research LLC -- Analyst

Okay. And then what was the aftermarket increase in the quarter, since this year, it was more apples-to-apples, you didn't have 606 messing it up?

Scott C. Donnelly -- Chairman and CEO

In the aftermarket, it was was actually down slightly, George. January, February, and again, whether it's weather or what, we don't really know. But the shop visits were below what we usually see. The good news is, we saw most of that come back in March and our position for bookings in April here, as we go into the quarter, are back to more normal level. But it was a little lighter than we usually see in January, February, but again that activity has picked back up. So I think for the year, we would be fine.

George Shapiro -- Shapiro Research -- Analyst

Okay. And then, if I switch to Industrial, was the Special Vehicles business sequentially better profitability than the fourth quarter?

Scott C. Donnelly -- Chairman and CEO

Yeah.

George Shapiro -- Shapiro Research -- Analyst

Okay. So, that would imply that the bulk of the organic revenue decline was Kautex, and also maybe the margin was a little bit weaker at Kautex, is that a correct statement?

Scott C. Donnelly -- Chairman and CEO

Well, we're not going to go through the -- exactly segment by segment, but Kautex was fine, the Vehicle business was up and obviously, the Tools and Test stuff wasn't in their.

George Shapiro -- Shapiro Research -- Analyst

Okay. And then, one for Frank. Corporate expense was $47 million in the quarter. That's somewhat higher than implied -- the run rate of $140 million that you kind of gave as guidance on January. Is there any change to that or what caused it?

Frank Connor -- Chief Financial Officer

No. We're on track for that $140 million. George, it's just the timing issue related to the recognition of certain expenses, particularly how compensation vests and things like that. So, we are on track for the $140 million.

George Shapiro -- Shapiro Research -- Analyst

Okay. And one last quick one. Tax rate was low in the quarter. Is this a new tax rate or are you still sticking with the 20% for the year?

Frank Connor -- Chief Financial Officer

No. 20% is still good. We had a discrete item in the quarter that helped that, but 20% is still good for the year.

George Shapiro -- Shapiro Research -- Analyst

Okay. Thanks very much.

Frank Connor -- Chief Financial Officer

Sure.

Operator

And we do have a question from the line of Robert Stallard with Vertical Research. Please go ahead.

Robert Stallard -- Vertical Research -- Analyst

Thanks very much. Good morning.

Scott C. Donnelly -- Chairman and CEO

Good morning.

Robert Stallard -- Vertical Research -- Analyst

First question in terms of capital deployment, are you still sticking to your guns in terms of prioritizing a share buyback going forward versus M&A?

Scott C. Donnelly -- Chairman and CEO

Yeah. We did that in the quarter, Robert. So, I think that the buyback activity has been strong and we would expect to see it stay there.

Robert Stallard -- Vertical Research -- Analyst

Okay. That's great. And then, secondly, on commercial helicopter, you mentioned it was a bit soft in the quarter. And I know three months is a short period of time, but have you seen anything change there in the end market?

Scott C. Donnelly -- Chairman and CEO

I'm sorry Robert. I don't want to interpret it to be soft I mean it's just the normal -- I mean our sold position is quite strong, order activity is very strong, so there's no change to our outlook on the commercial side. It just happens to be -- I mean we always have some lumpiness here in delivery of certain customers and certain model types. So, the commercial side is continuing to be strong, order activity is very good, sold position is very good, mix is actually positive from a standpoint of a few more (inaudible) here in the quarter. But there no change to our outlook of end market or the forecast for the year.

Robert Stallard -- Vertical Research -- Analyst

Right. And then just finally from me. I was wondering if you can comment on business jet pricing. Obviously, you saw some strength through last year, and I was wondering if that had continued?

Scott C. Donnelly -- Chairman and CEO

It did, I mean, at a lower level. I think, we've made a lot of moves in the last year plus in terms of trying to get price back to a more normalized place and I think we've done that. We will continue to keep pushing -- to keep up with just -- I mean markets and inflation is what it is. So I think we did see some price in the quarter, but I wouldn't expect it to be at the same level of increase that we've seen over the last year or so.

Robert Stallard -- Vertical Research -- Analyst

Okay. Sounds great. Thank you very much.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we have a question for the line of Rajeev Lalwani with Morgan Stanley. Please go ahead.

Jonathan Morales -- Morgan Stanley -- Analyst

Hi. Good morning, gentlemen. This is Jonathan on for Rajeev. So moving back to Industrial, you mentioned the Bass Pro Shop relationship is progressing and you're loading vehicles in stores. Have you completed a footprint rationalization and what's left to do here and what's the expected timeline?

Scott C. Donnelly -- Chairman and CEO

So, the footprint rationalization and the product lines, that work has been done. So that's I would say pretty well completed at this point in time, so our focus right now is, obviously, around the core of our business in golf and GSE, which are doing well and continuing on the turf product, particularly aimed at golf. I feel -- I think, we feel we're in a very good place there. The rationalization of product line and addressing a lot of the issues around inventory and whatnot on the dirt/snow side is in a good position. We had a fabulous year in terms of snow and getting that to a position that we're happy with in terms of the inventory levels. And so most of our work now on that is really around the Tracker partnership and driving that to be a successful program.

Jonathan Morales -- Morgan Stanley -- Analyst

Got it. And then just another follow up on share repurchase. Are you still comfortable with the original guide and any excess going -- any excess free cash flow into share repo?

Frank Connor -- Chief Financial Officer

Yes. As we said, when we guided, we expect that the bulk of our free cash flow will go to share repurchase this year and that continues to be the intent. And the first quarter rate was reflective of that.

Scott C. Donnelly -- Chairman and CEO

$200 million in the first quarter is consistent with the guide that we gave you.

Jonathan Morales -- Morgan Stanley -- Analyst

Yes. Very solid. Okay. Thank you guys.

Operator

And we do have a question for the line of Noah Poponak with Goldman Sachs. Please go ahead.

Noah Poponak -- Goldman Sachs -- Analyst

Hi. Good morning, everyone.

Scott C. Donnelly -- Chairman and CEO

Good morning.

Noah Poponak -- Goldman Sachs -- Analyst

Scott, the Cessna Jet units up 22% year-over-year in the quarter without Longitude, and with a normal Latitude compared at this point. How should we expect the remainder of the year's growth rate in the ex-Longitude, the legacy -- now legacy business, how should we expect that growth rate rest of the year to compare to the 22 in the first quarter?

Scott C. Donnelly -- Chairman and CEO

Well, look, I think if you look at the total year, it's going to be consistent with the guide, and also, certainly, we would have expected a few Longitudes here in the first quarter. So you'll see certainly a shifting here, particularly as we go into Q3 and Q4, where more growth will be driven by the Longitude program. So I don't think --

Noah Poponak -- Goldman Sachs -- Analyst

I guess my question is more, the guide is for volume up ex-Longitude, and we've sort of -- in the past, you've talked about ability to tweak the number of units on some of the legacy programs versus the I guess a different process of a full-on production increase. And so, with that up 22, which I think is a surprising number to most folks, trying to figure out, are you tweaking units in the legacy business ex-Longitude or have you actually raised the production system 20%, such that you would have 20% growth the rest of the year in the legacy business ex-Longitude?

Scott C. Donnelly -- Chairman and CEO

No. We've got to be consistent with where we guided and also the production planning process, which again, we -- it's a real-time process, right. And looking at (inaudible) and demand in the marketplace, would not cause us to think that it's up 20%.

Noah Poponak -- Goldman Sachs -- Analyst

Okay.

Frank Connor -- Chief Financial Officer

Our revenue guide was up 11% for the year, we were up 12% in the first quarter without Longitude. So you can kind of do the math around that. Consistent with what Scott said, we had planned legacy up somewhat and we're maintaining that perspective.

Scott C. Donnelly -- Chairman and CEO

Yeah. But the good news is, the demand is there, right, and it's consistent with what we guided and we're seeing demand that supports our guide. So I think it's -- we continue to feel great about the end market, but we are clearly going to need to see the deliveries, the launch to kick-in to drive the overall guidance number, and we feel good about that.

Noah Poponak -- Goldman Sachs -- Analyst

Got it. So for several years in a row, prior to this one, you had the first quarter unit number right around 35 and then a pretty steep ramp through the year. So is this year just more level loaded ex-Longitude?

Scott C. Donnelly -- Chairman and CEO

Look, I think it is more level loaded. If you go back in and look at last year, we've had more normal demand in the marketplace, and we have the ability to move aircraft, not just for instance in selling in Q3 and Q4 in particular, which is always very high demand, but enough demand in the marketplace, that we need people to move into the next year, which is a good thing, right. So you saw a little more level loading because you had customers that are taking Q1 deliveries. And the good news is our level of order activity is also up around that same 12% kind of range of just order activity in Q1 versus Q1 a year-ago, which again I think supports our perspective that that's about the right increase in revenue that we will see for the year.

Noah Poponak -- Goldman Sachs -- Analyst

Got it. Any quantification you could provide on how much your average lead time in the legacy jets has extended versus six to nine months ago?

Scott C. Donnelly -- Chairman and CEO

No, I don't think there's been any change.

Noah Poponak -- Goldman Sachs -- Analyst

No major change on that? Okay. And then, similarly, on the margins in the segment, if you maybe could just dig into those a little more. I mean, especially without the longitude, It's a pretty strong margin at the 9.3%, and you've got the guide for 10% for the year and similarly, it usually ramps through the year. Should -- will that just also be more level loaded, or perhaps you could just peel back the onion a little bit on the margin strength in the quarter?

Scott C. Donnelly -- Chairman and CEO

Well, I don't think we're going to get into Aviation margins on a quarter by quarter basis. You're certainly right, Noah, that generally, the Aviation business, again, in large part driven by volumes, which kind of change. As you go through the year, it typically sees stronger margins. I think we will see more level loaded -- again, the volumes are a little more consistent, the revenue is a little more consistent, so I expect the margins to be a little more consistent, and look, Q4 will still be a a bigger quarter than most quarters as it always is. And therefore, I would expect to see a little bit better margins in Q4.

But I think we'll see strong margins through the course of the year and again, it should all be consistent with our guide. The first Longitude as we'll make those deliveries, will have some dilutive effect. But as you play through that volume, our cost and pricing is in line with where expecting it to be and it will be a great part of the portfolio from a profitability perspective, once you get through those first units. So we will have to bear the burden of some dilution of that in four or five aircraft.

Noah Poponak -- Goldman Sachs -- Analyst

Got it. Thanks so much.

Operator

And we do have a question for the line of Jon Raviv with Citi. Please go ahead.

Jon Raviv -- Citi Investment Research -- Analyst

Hey. Good morning everyone. Scott, you went through a couple of the -- we went through all the segments, but just any tweaks versus the guidance you offered three months ago? It seems like Aviation and Bell margins are tracking ahead, whereas maybe there's some moving pieces elsewhere. So any kind of tweaks you want to offer in terms of who's running ahead, who is running behind thus far?

Scott C. Donnelly -- Chairman and CEO

No. I think it's still early in the game here. We feel like we delivered a great quarter. The businesses are positioned where we expected them to be. And at this point nothing that would cause us to change anything in the guide.

Jon Raviv -- Citi Investment Research -- Analyst

All right. Thanks. And then in auto, in the outlook that you've given for the Industrial segment, the sales outlook and the margin outlook, what is the auto assumption built in there and to what extent if it derisks just because it seems like as you mentioned, your customers have their plans, but maybe those plans can change some times?

Scott C. Donnelly -- Chairman and CEO

I think, so far it's tracking as we would expect, and the outlook that we're getting both at the industry roll-up, IHS kind of data, as well as what we're hearing from the individual customers in terms of their model mix and expected quantities that it's consistent with our plan. So I think we're in fine shape in terms of how that business is positioned with respect to our guide.

Jon Raviv -- Citi Investment Research -- Analyst

Great. Thanks.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we do have a question from the line of Cai von Rumohr with Cowen and Company. Please go ahead.

Cai von Rumohr -- Cowen & Co., LLC -- Analyst

Yes. Thanks so much. So not to beat dead horse, but could you give us what the net price impact was at Aviation? It was $14 million in the last two quarters. And secondly, the impact of pre-owned transactions in the quarter?

Frank Connor -- Chief Financial Officer

The impact at pre-owned was trivial, Cai, so not a big mover one one way or the other, where you're going to see pricing impact of around $6 million. And that's price, and then inflation is going to be a little more than that. So, one of the things that -- look, the business has delivered terrific performance, but, we're little behind the curve on price inflation. So you'll see that as a slight drag and obviously something we'll working on. But the overall performance of the business in terms of driving productivity in total is what drove strong margins. And I would expect that to continue through the year.

Cai von Rumohr -- Cowen & Co., LLC -- Analyst

Got it. As we look out to next year, what are your thoughts in terms of when you hope to certify the Denali and the SkyCourier, and start to deliver them?

Scott C. Donnelly -- Chairman and CEO

No. Cai. I'm pretty focused on Longitude right now. So we have said that we want to get both aircraft into the flight test program, with first flights here by the end of the year. We're just -- we don't want to go out there yet with expected certification dates. Obviously, that process has been a lot more painful than we expected. So we'll probably take a little time to make sure we understand how that process is going to play out on those aircraft before we commit dates out there.

Cai von Rumohr -- Cowen & Co., LLC -- Analyst

Okay. Got it. That's it for me. Thank you.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we do have a question from the line of Pete Skibitski with Alembic Global. Please go ahead.

Pete Skibitski -- Alembic Global -- Analyst

Good morning guys. Couple of Bell questions. Scott, I don't know if you mentioned the 525, is that -- I guess another certification question, is that still on track for late this year, sir?

Scott C. Donnelly -- Chairman and CEO

It's still flying. The program is going really, really well. In terms of flight test, in terms of an exact date, look with the FAA process right now, we're just not going to -- we really can't commit a date. We don't really control that process as much as we'd like to think that we do. So, we are focused on the flight tests, the aircraft is flying spectacularly, so we feel great about where it is, but in terms of getting through this process, we'll have to see.

Pete Skibitski -- Alembic Global -- Analyst

Got it. Okay. And then the -- anything you can share on the air taxi market. Is Bell spending a lot of IR&D on that effort/ Is it such that it may be impacting margins, although the performance has been great? I'm just kind of wondering, are they focused more so on the air taxi type of stuff versus more traditional next generation commercial helicopters?

Scott C. Donnelly -- Chairman and CEO

Well, so I would say that the vast majority of the R&D that we're spending on any new program starts at this point is more oriented around obviously the Future Vertical Lift programs. There is a relatively small amount of R&D that we're spending around some of these new, be they electric or hybrid type technologies, which probably is the future of a lot of commercial helicopter. There's a lot of work that's gone into these things we call EPTs, which are the really more of a light cargo. There's really a lot of interest in the military for that kind of technology, there's already some RFIs, and we expect RFPs that are coming out. So that work will support the early adopters, which frankly, I think we'll be more military than commercial. These are not necessarily inexpensive technologies, but they have a very high value in a combat environment in terms of delivering cargo around the battlefield, and so that technology I think will be adopted there first.

On the air taxi, again, part of this technology investment is along those lines, but it's a relatively small number because we need to see how does that market really play out. I think there's a lot of uncertainty, I think if it's going to happen, clearly, our team at Bell is someone who can design and build aircraft that would fit into that marketplace. But right now, it's something that's a relatively low level of funding compared to where we allocate the things that are more important here in the near-term, which is primarily around FVL.

Pete Skibitski -- Alembic Global -- Analyst

Got it. And I appreciate the color.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we do have a question for the line of Robert Spingarn with Credit Suisse. Please go ahead.

Robert Spingarn -- Credit Suisse -- Analyst

Hi. Good morning. Just a couple of clarifications on some things, Scott. First of all, on the regional, if we look at bizjet demand, regionally, is North America still driving the market? Is that where the strength is coming from?

Scott C. Donnelly -- Chairman and CEO

North America still drives the market, but we saw some pretty good order activity in the international markets in the quarter as well.

Robert Spingarn -- Credit Suisse -- Analyst

Any particular (Technical Difficulty)

Scott C. Donnelly -- Chairman and CEO

Well, we had some pretty good order activity going into the Chinese market, we've seen a little bit better in some of the European market, but it's still more of a North American story than an international story around jets.

Robert Spingarn -- Credit Suisse -- Analyst

(Technical Difficulty) from different manufacturers I don't think everybody else is seeing the strength that you're seeing. So (Technical Difficulty)

Scott C. Donnelly -- Chairman and CEO

I'm sorry, your line is really breaking up. We're not -- we can't really get the question.

Robert Spingarn -- Credit Suisse -- Analyst

I was asking of (Technical Difficulty)

Scott C. Donnelly -- Chairman and CEO

I'm sorry. Your line is not readable.

Robert Spingarn -- Credit Suisse -- Analyst

Okay.

Eric Salander -- Vice President of Investor Relations.

Why don't we go to the next question?

Operator

My apologies. We do have a follow-up question from the line of George Shapiro with Shapiro Research. Please go ahead.

George Shapiro -- Shapiro Research -- Analyst

Yes. Scott, I mean you've seen strong used pricing in your market, availability down, I mean you've had strong orders for quite a while now. What does it take to start to increase the legacy production rates, and could that have a positive impact on your guide for this year?

Scott C. Donnelly -- Chairman and CEO

Well, George, we did plan, as we talked about, having an increase in legacy deliveries in the year, and we saw that here in Q1. So, I think we will continue to see that. The end market is good. Our order activity, again, in the quarter, on a year-over-year basis was was very positive. So, I think we have said our expectations around having an increase across all those product lines. And I think we'll see that for the year for sure.

George Shapiro -- Shapiro Research -- Analyst

Okay. And then, just Scott, in the commercial helicopter business, you said things would be stronger the rest of the year. Can you highlight any of the models that you expect to be stronger?

Scott C. Donnelly -- Chairman and CEO

I think it's going to be, deliveries are going to be up in virtually every model type, George, and again, the deliveries are never linear, right. So I mean this is not something that we weren't expecting. This is a question of when people are taking deliveries of their aircraft and getting through finishings. So the order activity has been there to support what we have guided for 2019. It's just not a linear delivery schedule.

George Shapiro -- Shapiro Research -- Analyst

I actually had switched and maybe to -- in Bell's commercial deliveries as to what would drive it --

Scott C. Donnelly -- Chairman and CEO

So, I'm sorry. That's what I am talking about George. So Bell's -- the order rate through all of last year on the commercial side has been good, it continues to be good. So the orders are there to support our forecast in terms of deliveries in 2019. And it's just a matter of when customer delivery dates are and there's nothing that's an issue, there's no softness, there's no concern. It's just this is what the delivery plan was in terms of customer dates.

George Shapiro -- Shapiro Research -- Analyst

Okay. Very good. Thanks very much.

Operator

And we'll try Robert Spingarn with Credit Suisse again. Here you go.

Robert Spingarn -- Credit Suisse -- Analyst

Hopefully, this is a better connection. Can you hear me?

Scott C. Donnelly -- Chairman and CEO

Yes sir. We can hear you now.

Robert Spingarn -- Credit Suisse -- Analyst

Okay. All right. What I was getting at with the regional strength is, are you perhaps taking share? We've seen some of your competitors have much weaker demand situations, missing deliveries, et cetera. And I wanted to understand if this is somewhat driven by share? And then, secondarily how are the tailwinds that we got in the United States from tax reform et cetera, how are those holding up now?

Scott C. Donnelly -- Chairman and CEO

Well, the GAMA numbers will show whatever the share is. I mean I think that -- again, guys, we've been talking for a long time about the investments we've made in new products and our belief that: A, they partly stimulate the market, and if you've got a better product, it helps in terms of being out there and selling it in the marketplace. So, I like where our product lineup is, I think the guys have done a very nice job on that and I think we're being rewarded for that in the marketplace. But look the GAMA numbers show what what they show.

In terms of tax, as we've talked about before, this -- I don't think we've been in particularly tax situation that's very different than it's been for quite some time, right. You already had bonus depreciation, now you have 100% versus a 50/50 kind of deductibility in the US. I think this has been much more driven by our customers having more confidence in what's going on in the economy and a willingness to commit, in most cases, to upgrade their aircraft. And certainly with a used market that has had a lot lower levels of inventory, a lot more liquidity, in terms of time to sell aircraft, all those dynamics are what is creating a more robust end market than what we had seen for many years. So -- but I think it's a lot more about confidence in what's going on in their businesses than it is a pure tax play.

Robert Spingarn -- Credit Suisse -- Analyst

Okay. And then, just lastly on the Longitude, is there a point in time that you need to have certification in order to deliver to your internal plan the quantities for this year?

Scott C. Donnelly -- Chairman and CEO

Well, our internal plan would have had deliveries starting frankly here in Q1. We've adjusted those internal plans again just based again on just our expectations for the timeline to get through all the document reviews to plan on Q3.

Robert Spingarn -- Credit Suisse -- Analyst

Yeah, that's what I'm asking to --

Scott C. Donnelly -- Chairman and CEO

From a financial standpoint to us. it will be a little lighter in Q1, and Q2 than we had expected, but we would expect that will be fully made up in Q3, Q4. The aircraft are being produced, they are ready to go. So it's not an inability for us to respond once that certification is issued.

Robert Spingarn -- Credit Suisse -- Analyst

Okay. Thanks very much.

Scott C. Donnelly -- Chairman and CEO

Sure.

Operator

And we do have a follow-up question from the line of Noah Poponak with Goldman Sachs. Please go ahead.

Noah Poponak -- Goldman Sachs -- Analyst

Hi. Just wanted to try to better understand the Bell margin, and specifically, the V-22 transition impact to it. I thought, you had said in the past that the transition to the next multiyear from a volume impact perspective was -- had a larger impact in 2020 than 2019. And so, if that's true, would the positive cumulative catch-ups associated with the late stages of the current multiyear -- should we be expecting that to kind of last through much of the rest of 2019, and then, see the margin drift lower next year, or does that change occur sooner?

Scott C. Donnelly -- Chairman and CEO

Well, it has some impact this year, right. I mean, a lot of cumm catch on multiyear twos are recognized this year. And remember, now under the revenue recognition system here, we are starting to recognize a lot more revenue on multiyear three, as we go through this year. So it's not just -- it doesn't just impact in that actual delivery quarter, but as you start to drive revenue associated with those craft, which we are, those are recognized under the margin rates of multiyear three as opposed to multiyear two.

Frank Connor -- Chief Financial Officer

So we're going from, in the first part of the year more multiyear two revenue at Bell than multiyear three, and that transitions in the second part of the year to more multiyear three, then multiyear two, and then, obviously next year 2020, it's multiyear three. So this is the transition year and as Scott said, you get the program impacts as you -- on multiyear two, as you go through winding up that program.

Noah Poponak -- Goldman Sachs -- Analyst

That's really helpful on that first half versus second half mix, Frank. So thank you. Thanks a lot.

Operator

And we do have a follow-up question from the line of Seth Seifman with JPMorgan. Please go ahead.

Seth Seifman -- JPMorgan -- Analyst

Thanks a lot. One follow-up question on Future Vertical Lift. You mentioned, Scott, that you guys will have an offering for FARA and it's not something you've really talked about a lot, that's obviously the one that Sikorsky has been pushing as what they would like to see happen first, and they've kind of taken a view of the Raider, that's somewhat like you guys have talked about on V-280 and we've got it flying and we're racking up hours and stuff. And so how do you see that competition playing out? What can you tell us about the offering that you guys have and whether you view that as a realistic avenue for Bell to go down?

Scott C. Donnelly -- Chairman and CEO

Of course, I think, we have a very competitive offering for FARA. We haven't talked a lot about it publicly, but I mean look it's not going to be a secret for long where we have basically taken the technology that we've invested in pretty significantly over the past number of years on 525. Remember 525, we've seen this craft flying over 200 knots and that's a function of the technology that we've invested in terms of the rotor technology, the fly by-wire systems, control systems that has enabled us to field a more conventional helicopter that has very high speed, very efficient, very smooth operating capability. And so what we did basically is taking that technology that we've validated in the 525 program and scaling that down to a size and weight that's consistent with the FARA requirement.

So if you look at what's required from a speed and performance standpoint to execute the FARA mission, we think we have some technology that's been validated, that can meet that requirement with a much more cost effective, much more reliable conventional technology. I say conventional, I mean this is obviously a big step in terms of a more conventional rotor craft, but I think we have a proposal on the table that meets the requirements and can do it in a very cost effective, very highly reliable and sustainable way.

Seth Seifman -- JPMorgan -- Analyst

Great. Thank you very much.

Scott C. Donnelly -- Chairman and CEO

Sure.

Eric Salander -- Vice President of Investor Relations.

Okay. Everyone, that completes our call for today. Thank you. And we will talk to you again in second quarter.

Operator

And ladies and gentlemen, today's conference will be available for replay after 10 AM today through July 16th. You may access the AT&T teleconference replay system at any time by dialing, 1-800-475-6701, entering the access code 457170, International participants may dial, 320-365-3844. And those numbers again are 1-800-475-6701 and 320-365-3844, again, entering the access code 457170. That does conclude your conference for today. Thank you for your participation and for using the AT&T Executive Teleconference Service. You may now disconnect.

Duration: 61 minutes

Call participants:

Eric Salander -- Vice President of Investor Relations.

Scott C. Donnelly -- Chairman and CEO

Frank Connor -- Chief Financial Officer

Seth Seifman -- JPMorgan -- Analyst

Sheila Kahyaoglu -- Jefferies -- Analyst

David Strauss -- Barclays -- Analyst

Carter Copeland -- Melius -- Analyst

Katelyn DeLante -- Bank of America Merrill Lynch -- Analyst

George Shapiro -- Shapiro Research LLC -- Analyst

George Shapiro -- Shapiro Research -- Analyst

Robert Stallard -- Vertical Research -- Analyst

Jonathan Morales -- Morgan Stanley -- Analyst

Noah Poponak -- Goldman Sachs -- Analyst

Jon Raviv -- Citi Investment Research -- Analyst

Cai von Rumohr -- Cowen & Co., LLC -- Analyst

Pete Skibitski -- Alembic Global -- Analyst

Robert Spingarn -- Credit Suisse -- Analyst

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