With that, I'll now turn the call over to Clay.Clayton Jones Thanks, Steve, and good morning, everybody. Well we think our fiscal year 2011 is off to a great start. We posted EPS growth of 26% for the quarter and saw a revenue increase by 8%. These results were better than we expected and particularly strong in light of the negative news flow that seemed to present obstacles throughout the quarter. It started with an in-flight incident on a 787 test aircraft that resulted in a further delay of entry into service. This was followed by a deficit commission report which highlighted a few of our key defense programs as potential targets for reduction. Then we had to absorb a delay in the KC-X award time. And having missed the benefit of the R&D tax credit in our fiscal year 2010, we watched as post-election rhetoric lacked clarity regarding any tax policy compromise. However, as often happens, things began to balance out. At the 11th hour, Congress extended Bush arrow tax cuts including the R&D tax credit. Then the Pentagon’s spending priorities were made clearer a few weeks ago by Defense Secretary Gates. And despite another $78 billion in long-term cuts, his announced plan included increased spending on F-18s, F-35 simulators and accelerated funding for the Army's new tactical communications network. All good news for us. Earlier this week, Boeing announced the revised 787 schedule that was in line with our previous estimates of risk. However, we have seen enough opportunity across the balance of our commercial businesses to believe the expected 787 risk will be offset for the full year. Finally, this strength across our commercial market provides more confidence in our projections of the timing and amplitude of the recovery. Considering all these dynamics, I'm very pleased with our performance to date.
Now I'd like to summarize what we're seeing in each of our markets and provide some perspective on some recent developments. First in the commercial markets. We're continuing to see robust OEM growth early in this recovery, and now equivalent growth in the aftermarket with business jets leading the way. The business jet market recovery remains aftermarket lead as improvements in corporate profitability are driving aircraft utilization up 5% for our fiscal year-to-date, which has stimulated demand for our services and support as well as increased hardware spares and upgrades. We anticipate utilization rates will continue to improve and are seeing a noticeable increase in aftermarket quote activity.An unexpected development this quarter is that we're now beginning to see some very encouraging leading indicators in the business jet OEM market as well. First, the extension of bonus depreciation is making new aircraft more attractive for corporate customers, even with the large inventory of used aircraft still available. Second, we've seen a substantial reduction of white tails from about 65 aircraft at the beginning of the quarter, now down to about 10. Finally, for the first time in two years, we're starting to get phone calls from some OEM customers positioning us for build rate increases in the future. These indicators give us much higher confidence that we're on track to see new aircraft order activity pickup during 2011, supporting OEM rate increases as we move into 2012. Now unlike past cycles in the air transport market, OEM growth is leading the recovery. OEM backlog expanded again this quarter as 2010 orders for Boeing and Airbus outpaced deliveries. And both OEMs announced additional rate increases, Boeing on the 777 and Airbus on their 330. In the air transport aftermarket, airlines continue to manage their fleet much more effectively with load factors at approximately 80% still. This focus on higher load factors appears to be here to stay, and is somewhat subduing the aftermarket recovery. Now while we still expect traffic demand will drive aftermarket growth into double digits throughout the remainder of the year, the timing and rate of the ramp-up is something that we'll watch closely. Read the rest of this transcript for free on seekingalpha.com