Good day, and welcome to the Aptiv Third Quarter 2021 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Vicky Apostolakos, Director of Investor Relations. Please go ahead. Thank you, Sasha. Good morning, and thank you for joining Aptiv's third quarter 2021 earnings conference call. The press release and related tables, along with the slide presentation, can be found on our investor relations portion of our website at aptiv.com. Today's review of our financials exclude restructuring and other special items and will address the continuing operations of Aptiv. The reconciliations between GAAP and non-GAAP measures for both our Q3 financials as well as our full year 2021 outlook are included in the back of the presentation and on the earnings press release. During today's call, we'll be providing certain forward-looking information which reflects Aptiv's current view of future financial performance and may be materially different from our actual performance for reasons that we cite in our Form 10-K and other SEC filings, including uncertainties posed by the COVID-19 pandemic and the difficulty in predicting its future course and impact on the supply chain and global economy. Joining us today are Kevin Clark, Aptiv's President and CEO, and Joe Massaro, CFO and Senior Vice President of Business Operations. Kevin will provide a strategic update on the business, and Joe will cover the financial results and full year outlook in more detail before opening the call to Q&A. With that, I would now like to turn the call over to Kevin Clark. Sure. Thank you, Vicky. Thanks everyone for joining us this morning. Beginning on slide three, we experienced continued strong demand across the portfolio in the third quarter, despite continued supply chain constraints negatively impacting vehicle production. Revenues of $3.7 billion declined 5% versus the prior year, with a record 18 points of growth over market. New business awards of $5.8 billion, bringing the year-to-date total to a record $17 billion, reflecting the relevance of our product portfolio as well as the trust our customers have in Aptiv, given our success executing for them in this challenging environment. Operating income and earnings per share totaled $219 million and $0.38 respectively, negatively impacted by the significant headwinds from the ongoing supply chain tightness and the downstream impacts that Joe will cover in greater detail shortly. While we expect vehicle production to improve on a sequential basis in the fourth quarter, we anticipate the headwinds related to supply chain constraints to persist well into 2022. Setting the near-term challenges aside, the team is executing well and continues to proactively position Aptiv for the future, optimizing our cost structure while investing in high-growth, high-margin technologies that further enhance the resiliency of our business model, translating into greater value for both our customers and our shareholders. Moving to slide four. The relentless execution of our strategy over the past decade has positioned Aptiv as a more sustainable business, creating over $40 billion of value since our IPO in 2011. This represents an average annual return to shareholders of over 25% and a total return of more than 950% today. As we transformed Aptiv, we built an industry-leading portfolio of advanced solutions that make vehicles safe, green, and more connected. To drive this transformation, we took several actions, including making smart portfolio moves to put further operating leverage in our business model. We exited low-growth, low-margin product lines and spun off our powertrain segment, positioning Aptiv to focus on our unique capabilities around the brain and nervous system of the vehicle. At the same time, we completed a number of acquisitions which enabled our software and data management capabilities, increased our scale and leverage in engineered components, and expanded our presence in adjacent markets. Last year, we established Motional, our autonomous driving joint venture with Hyundai, which will be operating fully driverless vehicles on the Lyft ridesharing network in 2023. These proactive actions perfectly position Aptiv to benefit from the transition to the software-defined vehicle while further increasing the robustness of our business model, all which translates into continued outperformance and long-term value creation. Turning to slide five. We continue to successfully navigate the current challenging environment while proactively enhancing the strength of our competitive position. Our supply chain resiliency team is leveraging technology, data, and analytics to stress test our integrated supply chain network under multiple scenarios, helping us to proactively identify and address potential bottlenecks. At the same time, we're working through daily constraints by leveraging our proven cross-functional crisis management process. Our planning process and manufacturing have enabled us to support a record number of customer program launches, and we continue the intelligent automation of our manufacturing facilities to lower operating costs and increase product quality, all of which improves customer service levels. Our engineering teams are proactively redesigning products to mitigate semiconductor supply risks, reduce material costs, and increase functionality for our customers. Lastly, our culture of continuous improvement translates into the constant pursuit of opportunities to reduce costs and improve quality, enabling us to continue to strengthen our operating foundation and transform our business model despite the dynamic environment. As shown on slide six, third quarter new business bookings reached $5.8 billion, bringing the year-to-date total to $17 billion. As I already mentioned, it was a record. Our unique portfolio of safe, green and connected technologies, combined with our flawless operating execution, continues to position Aptiv as a partner of choice for our customers. Our capabilities around the vehicle brain and nervous system and collaborative approach to platform solutions sets us apart in the industry, enabling us to conceive, specify and deliver advanced architecture and software solutions that enhance systems performance while lowering the vehicle's total cost, positioning us to increase our share of wallet with both traditional and emerging OEM customers and at the same time, strengthen our overall competitive position. Turning to highlights from our Advanced Safety and User Experience segment on slide seven. Third quarter revenues declined 7%, which was 16 points better than the reduction in global vehicle production. New program launches, content increases and market share gains translated into continued market outgrowth despite the significant supply chain disruptions impacting the segment. Consumers continue to demand more active safety and connectivity features in their vehicles, which are delivered through more advanced software features leveraging the latest sensing and compute solutions. This trend in strong consumer demand and our industry-leading capabilities presents us with additional market share opportunities and the ability to increase our customer share of wallet. As evidenced by our third quarter conquest business award with Mercedes-Benz to provide our multipurpose interior sensing solutions on their next gen electric vehicle platform. This business award builds on our recent in-cabin monitoring successes and advances our customers roadmap of interior sensing features by further enhancing driver safety and improving the in-cabin user experience. The evolution of in-cabin sensing is playing out as expected, and our leadership position makes Aptiv a strong collaboration partner for our customers. Turning to slide eight. Revenues in our Signal and Power Solutions segment declined 4% during the quarter, 19 points better than the reduction in global vehicle production, reflecting the continued benefit from the acceleration in the production of electrified vehicles, resulting in greater demand for our high voltage solutions and the continued strong demand for connector and cable management products for both automotive and non-automotive market applications. We are the industry leader in Electrical Distribution Systems, with the engineering capabilities and global manufacturing scale necessary to rapidly bring customers to market as they quickly adapt to the accelerating macro trends. A great example is our recent business award for Stellantis, an extension to our existing business to support design changes and content increases on the Ram truck. It was another strong quarter for our Signal and Power Solutions segments in a very challenging environment. Slide nine provides an overview of some of the specific areas where we're focusing our software development capabilities. As we've mentioned previously, our OEM customers are beginning to decouple software from the underlying hardware, both technically as they implement Smart Vehicle Architecture and in how they source new programs. Our leading position in the design and development of high-performance, cost-optimized automotive-grade hardware as well as deep software development capabilities, allows us to provide industry-leading interior and exterior perception solutions, modular software and features that lower system costs and accelerate speed to market through higher reuse. Middleware solutions which support up integration and the serverization of compute, vehicle lifecycle management through data collection and data analytics, and full vehicle-level integration, testing and validation services. These capabilities, along with extensive collaboration with our customers and our supplier partners, allows us to continue to be a partner of choice for our customers across literally all vehicle domains, enable our customers to offer greater flexibility for end user differentiation and personalization, and further strengthen our competitive position as a leading provider of Smart Vehicle Architecture that accelerates the transition to the fully electrified software-defined vehicle. With that, I'll hand the call over to Joe to take us through the financials in more detail. Great. Thanks, Kevin, and good morning, everyone. Starting with slide 10, the business continued to outperform the market despite the challenging environment Kevin referenced. Revenues of $3.7 billion were down 5%, with record 18% growth over market and market outgrowth in every region. Adjusted EBITDA and operating income were $412 million and $219 million, respectively, reflecting year-over-year headwinds, primarily COVID and supply chain disruption costs of $55 million and $40 million from FX commodities and input costs. Earnings per share in the quarter were $0.38 and operating cash flow was $4 million, reflecting higher inventory levels resulting from customer schedule reductions and longer lead time requirements from certain suppliers, as well as the lower earnings level. Looking at the third quarter revenues in more detail on slide 11, we continue to experience demand for higher content vehicles, driving strong growth over market across all regions. Despite lower vehicle production levels. Favorable FX and commodity movements were offset by lower production volumes in the quarter. From a regional perspective, North America revenues were down 7%, representing 16 points of growth over market, driven by the ramp in Active Safety launch volumes and a favorable truck and SUV platform mix. In Europe, strong double-digit outgrowth of 19% due to robust customer launch activity and higher volumes in our high voltage electrification product line. Lastly, in China, revenues reflecting 17 points of growth over market, resulting from growth with leading local OEMs and strong high voltage growth. Moving to the segments on the next slide. Advanced Safety and User Experience revenues fell 7% in the quarter, translating to 16 points of growth over underlying vehicle production, including strong growth in Active Safety and somewhat lower market outgrowth in User Experience, driven by the timing of new program launches. Segment EBITDA was down $46 million, driven by supply chain disruption and higher input costs, primarily related to semiconductors. Signal and Power Solutions revenues were down 4%, representing 19% growth over market. The market outperformance was driven by continued strength in our high voltage product portfolio, as well as strong outgrowth in commercial, vehicle, and industrial end markets. EBITDA in the segment was down $123 million in the quarter on lower sales volumes and additional costs from supply chain disruptions and higher FX commodities and input costs. Turning to our outlook for the remainder of the year on the next slide. Our revenues and operating margin remain unchanged from the outlook we provided in mid-October. We continue to expect revenue in the range of $15.1 billion-$15.5 billion, up over 10% compared to the prior year. We expect global vehicle production to be roughly flat for the full year, translating into over 10 points of growth above market, demonstrating the relevance and diversity of our portfolio and product lines. EBITDA and operating income are expected to be approximately $2 billion and $1.2 billion at the midpoint, with strong year-over-year sales volume conversion. Despite further COVID and supply chain disruption costs, which are now estimated to be $310 million for the year, up $170 million over the prior year, and FX commodity and other rising input costs of $195 million, mainly driven by semiconductor and resin pricing. Product line level margins continue to be in line with our expectations, validating the strength of our market, of our portfolio of market-relevant technologies. Lastly, we expect earnings per share of $2.55 at the midpoint and operating cash flow of $1.2 billion. Turning to slide 14. As we have discussed, the combined benefits of our strong product portfolio and robust business model enable us to convert more income to cash, generating higher operating cash flow. We now expect operating cash flow of $1.2 billion in 2021, driven by increased earnings, offset by higher inventory investment and continued investments in growth. As you can see in the middle of the slide, we ended the third quarter with $2.7 billion in total cash, enabling us to manage through the current environment while supporting record year-to-date new business awards and launch activity. Lastly, our investment in working capital helps ensure we are ready to keep our customers running in this challenging environment, making Aptiv a key partner of choice. Turning to slide 15. Despite the variability and lack of forward visibility in customer production schedules, we wanted to provide some initial thoughts on the outlook for 2022. We continue to believe that the supply chain disruptions will impact overall vehicle production levels in the coming year, particularly in the first half of 2022. Despite these challenges, our strategy remains unchanged, and we believe we are very well positioned to lead the continued transition to higher-content software-enabled vehicles with increasing levels of active safety and powertrain electrification. Although it is still early in the planning process for 2022, we are confident in our ability to outgrow the market, driven by continued acceleration of the safe, green, and connected megatrends. With that said, we do believe 2022 vehicle production will be impacted by supply chain constraints and that the industry will not return to pre-pandemic production levels until post-2022. As it relates to material input costs, we continue to make traction on our mitigation initiatives, including supplier recovery strategies, engineering redesign, and alternative source evaluations, as well as engaging in commercial discussions with our customers. Although we will see some benefit from these initiatives, it is unlikely that the full impact of the elevated input costs are offset in the coming year. Additional costs related to supply chain disruptions, including elevated transportation and freight costs, as well as the costs associated with the intermittent production disruptions will continue into next year. As we have discussed, these costs are not structural in nature and will ease as supply chains and material availability improve over the course of 2022. Finally, the actions we have taken over the prior years to drive underlying product line profitability and establish the company's strong financial position will allow us to continue to invest in new technologies. Both organically and inorganically while supporting our new business pursuit activities. As we've consistently demonstrated, these investments will ensure that we continue to deliver disciplined revenue growth well beyond 2022 and the current industry operating challenges. With that, I'll turn the call back to Kevin for his closing remarks. Thanks, Joe. I'll wrap up on slide 16 before we open it up for questions. While near-term headwinds are expected to persist into 2022, as Joe's mentioned, we remain confident in our product portfolio aligned to the safe, green, and connected megatrends. As we reflect on our recent operating performance, it's clear to us that our relentless focus on innovation and flawless execution is allowing us to better support our customers and is resulting in increased momentum related to new business bookings and strong market outgrowth, a further widening of our competitive moat and a continued strong track record of delivering sustainable value creation. As I mentioned at the start of our presentation, Aptiv's been on an exciting journey these last 10 years, but the team is even more excited about what we'll deliver over the next decade. Beginning with providing our customers with new, cost-effective, innovative solutions that enable the future of mobility, that serve to accelerate the trend to a more safe, green, and connected world, and translate into continued outsized returns for our shareholders. In summary, we remain laser-focused on continuing to build a more resilient business that consistently delivers for our customers and our shareholders over the next 10 years, effectively advancing our vision of the company in 2025 and beyond. With that, let's open up the line for Q&A. Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. In the interest of time, please limit yourself to one question and one follow-up. Once again, that is star one for your questions today. Our first question today comes from Rod Lache from Wolfe Research. Please go ahead. Good morning, everybody. Hey, Rod. Was hoping maybe you could first of all clarify a little bit more what drove the 61% decremental on the volume in SPS. More importantly, if we take a step back and we think about for the overall company for the year, the $310 million of supply chain and COVID costs and the commodity costs of $195 million, can you talk about what the prospects are for recovering that if they did remain elevated? Any thoughts on how to kinda frame that? Sure. Why don't I start with the decremental, Rod? It's Joe. I think as it applies to SPS, it applies overall to Aptiv, right? Q3, I think obviously a very challenging quarter from a decremental perspective. Really there's a couple of things driving that, and I'll start by you know obviously this is very lumpy when you just look at a one-off quarter. I'd say there's two real drivers, right? We saw volume fall off significantly in the back half of Q3. You know, year-over-year, our view of vehicle production will be flat to 2020, but the back half's gonna be down by a little over 20%. There's a lot of volume coming out quickly. Obviously, there's only so much you can do with the cost structure, given, you know, given the short period of time that it's come down. We have continued to incur the supply chain disruption costs. You've got not only revenue coming down quickly, but you've got a fair amount of supply chain disruption costs that are hitting in the quarter and will hit in the back half of the year. The quarter had a sharp decremental. I think if you took a step back and looked at the full year, you know, I think we're much more in line with, you know, our typical ranges of where we think incrementals and decrementals are and what we've historically talked about, sort of that incremental of 18%-22%, and decrementals of sort of 25%-30%, again, depending on how quickly volume comes down. For the full year, I think the incrementals are generally in line with that. We're obviously picking up an impact from the overall supply chain related disruptions. But much more in line with where we'd historically expect the business. It's, you know, I think in a given quarter, particularly when you see the sharp moves in volume, and this isn't, you know, different from what we saw actually during COVID last year. We are gonna run heavier on those decrementals. Again, it really applies to both segments. Rod, it's Kevin. I'll take the second part of your question. I would break our activities to offset into four or five buckets. As we always do, we're constantly reassessing, reevaluating our cost structure and looking for opportunities both within supply chain, outside of supply chain, to further reduce costs. We're in active negotiations with the supply base. Situations like this, I guess one of the side benefits is becoming much more strategic with your customers as it relates to supply chain, as well as more strategic with your supply base, which translates into, you know, quite frankly, fewer supplier relationships, deeper supplier relationships, more strategic supplier relationships, which provide you with the opportunity to further optimize the supply chain and reduce costs. Like in the past, we've talked about over 100 program or product redesign activities that we have underway, where we're substituting alternative, you know, inputs to platform solutions that will further lower those costs. Lastly, but equally important, we're having active discussions with all of our customers with respect to the cost of doing business in today's environment and the support we've provided to ensure that they remain connected from a supply standpoint. Those would be the four major buckets I would categorize things in. I would say as it relates to cost and cost structure, and it's important consistent with past, we continue to invest in growth opportunities, you know, technologies that support growth opportunities in areas like software, in areas like Active Safety, in areas like high voltage electrification, and think it's important to continue to do so, you know, even in light of the decremental margins that you talk about due to, you know, due to production interruptions. Maybe just to put a finer point on that, do you have a view on the extent to which this could be mitigated through those four actions? It's a pretty big number in aggregate, obviously. Yeah, it is. You know, we're working through that. As a part of our guidance for 2022, we'll talk about it. I think it's safe to say that you don't mitigate all of it in a 12-month timeframe, so there'd be some amount of working through it. As focused as we are on, you know, on developing innovative solutions, you know, we have teams as focused on lowering overall cost. Okay. Just second, the growth over market all year has been much stronger than you expected. I think it was 16% in the first half, now 18% this quarter. Have you been able to sort of assess the extent to which this is obviously a lot of it's secular with high voltage and Active Safety, but there's some component of that which is just driven by production mix and what OEMs have done to prioritize certain vehicles. Have you been able to parse that out just to get a sense of what the trajectory really underlying this has been? Yeah, I think it's tough. Well, I think that's a great question. It's a fair question. I think it's tough to do, right? In reality, we've, you know, over the last few years, we've seen accelerated demand for AS solutions, for high voltage electrification and other items. I think it's difficult to be precise or to precisely answer that question. I think Joe in the past has spoken to the fact that, you know, OEM customers, it appears as though, are producing an overall richer product mix. But to the extent that's driven from the current supply chain crisis versus some of it's the overall trend in adoption of active safety or high voltage electrification, it's less than precise calculus. Okay. All right. Thank you. Thank you. Our next question comes from Joseph Spak from RBC Capital Markets. Please go ahead. Morning, Joe. Thank you. Good morning. Joe, just, you know, thanks for all the updated color again on all the costs. You know, if I sort of track this, and I know you sort of give it all on a year-over-year basis and sometimes a little bit sequentially, but is it. It seems like, if I sort of back into just for the fourth quarter, that COVID and sort of supply chain costs you talked earlier, that's relatively flattish year-over-year. Is that fair, and is that what's sort of causing maybe a little bit of the better, you know, margin sequentially third quarter to fourth quarter? We do start the lap at Joe. We had $40 million of supply chain disruption costs in Q4 of last year. You are right. We are picking up a lap where for the first three quarters of this year it was, you know, specific to supply chain disruption costs were the first time we were really incurring anything at that level. Okay. Just, you know, thinking out a little bit here with everything going on and lessons learned, and as we sort of turn to the cash, like you mentioned, you know, the higher inventory, is that something that is going to be a little bit more structural for you that, you know, everyone sort of in the value chain will sort of carry a little bit more inventory, provide a little bit more buffer, and, you know, weighing on working capital a little bit. On CapEx, you know, I know that that sort of came down, or flex down, I guess, here. I think you normally sort of talk about 5% of sales. Should we expect like a catch up next year for some of that that might have been deferred or delayed, or does it just return more towards that 5% mark? Joe, I'll let Joe give a more precise answer. Listen, I think as you look at lessons learned, I'm not sure I'd characterize it as lessons learned as well as folks getting smarter overall about supply chain and you know, a bigger push for greater visibility from customer to supplier, a better understanding or visibility to sub-suppliers and capacity, more committed volumes from the OEM down through the supply base. That capital is more effectively deployed. Then, you know, with that increased visibility, the reality is there will be areas where there'll be more investment in inventory, but there'll be other areas where there'll be less. How that offsets is probably a little difficult to estimate at this point in time. Near term, it likely translates into more inventory. I think the question is just how much. In conclusion, on certain parts or certain products without committed volumes, JIT inventory management doesn't work for certain parts. Joe? Joe, I mean, on CapEx, there was a small push into next year. Listen, I think we're, you know, I think that 5% as an overall range is still good. You know, there's been years where we've been a little under. There'll be years where, you know, we're a little over by, you know, not more than half a basis, you know, a. 05% point. I still think five is a good proxy. There has been a little movement around just as we work through some of the disruptions in the volume comeback, but I wouldn't say that's a material change. On inventory, to Kevin's point, I think we're learning a lot. You know, there is a fair amount if you just looked at sort of normalized our inventory. About half of the increased balance is, I would sort of describe as really transactional. Production came down really fast in the back half of Q3. We were obviously given lead times. We were, you know, we had inventory on hand to produce to the original schedules. That half I would describe as more transactional, right? Volume came down. We have higher inventory levels. You know, we tend to use the same inventory if you think about what we make, resins for connectors, you know, the electric distribution business, the chips we'll use to the extent we have them. It's more of a timing related to the production slowdowns for about half that balance. To Kevin's point on the remaining balance, there is inventory on hand because lead times have extended. We're focused on making sure we have stock. In some cases, you know, if you've got a product that has 350 parts and you're waiting for one chip, you tend to have the other 349 in stock, so you're ready to go once you get that chip. There's that type. Certainly the full investment that you see on the balance sheet now, I would not think is representative of the investment that needs to be made going forward. To Kevin's point, there probably will be some, but it's not gonna be at that level. That was half of that was really the production disruptions. Thanks for the call. Thank you. We're now moving on to David Kelley from Jefferies. Please go ahead. Hey, good morning, team. Thanks for taking my questions. Good morning. Yeah, just 3Q outgrowth, another robust quarter here, and realizing we aren't guiding to 2022, but you did reference in the slide deck some sustained growth over market opportunity. Can you talk about some of the drivers into next year, you know, the content, mix electrification, and how you're thinking about those relative to the steeper hurdle we're gonna see into 2022? Listen, I think as we've talked about, I think as Joe mentioned, we're not giving 2022 guidance, obviously at this point in time. The nature of our product portfolio, you know, in and around safe, green, and connected, obviously there are macro trends that are driving significant demand for products in those three areas. You know, clearly this year we've had a number of program launches that you should see the benefit of as we roll into 2022. You know, continue to be optimistic as it relates to outgrowth, you know, in the out years, in line with what we've seen, you know, over our past. Joe. No, I think, yeah, the drivers, you know, they're very consistent with what we've been seeing, right? It's high voltage and Active Safety are clearly leaders. SPS continues to benefit more broadly from the content adds into vehicles. Even if it's not our Active Safety system or other technology, you know, that business has content on one out of every 3.5 vehicles manufactured globally. So there's a really positive content tailwind there. The commercial vehicle and industrial businesses continue to be accretive to growth. We're having a really good year from a commercial vehicle perspective and would expect, you know, the product lines in that space to continue to grow and be accretive to growth over markets. Okay. Got it. Thank you. Then maybe a question on the semi costs. You noted specifically driver of the higher AS and UX input cost. Could you give a bit more color on the semi impact in the quarter? I guess going into next year, do you see further semi-price increases on the horizons? Just curious how you're thinking about the potential price increases versus some of the offsets that you referenced. Yeah, obviously still a lot of work in process, as it relates to semiconductor pricing. It tends to be the price increases we're seeing now are really twofold. We have seen some price increases on what I'll call the constrained chips, that I think will continue into next year. You know, the other thing we're seeing at the moment, and I'd describe it as a bit of a sort of spot buy market. So even if they haven't sort of institutionalized the price increases, just given the constraints You are paying up for semiconductors. Again, that total number is about $195. It's a mix, primarily semiconductor and resin. You know, as I made in my comments, we're obviously, you know, making progress on some of the offset initiatives that Kevin just talked about. But at this point, we're not but also not ready to talk about how much of that we see rolling into 2022. Some of it will, and when the offset actions start to take effect. Got it. Thank you. Thank you. We're now moving on to a question from Mark Delaney from Goldman Sachs. Please go ahead. Yes, good morning, and thanks very much for taking the question. Bookings have been running very nicely year-to-date. The last couple of years, the fourth quarter in particular has been quite strong. Maybe you can talk about how you see bookings tracking in the fourth quarter of this year. Yeah, you know, bookings have been strong year-to-date. We're running at record levels. Having said that, the timing of customer awards can be very lumpy. It's sometimes a bit difficult to predict, and it's incrementally difficult to predict in situations like we're in now, where you're seeing supply chain disruption. Several of the individuals from an OEM standpoint that are responsible for that activity are engaged to some extent in managing overall supply chain disruption. I think with a fairly high level of confidence, you know, we see bookings for the calendar year north of $21 billion-$22 billion, given what we see on the table today. That's helpful. Thank you. For my follow question was related to the supply chain disruptions, but more around how the industry may try to better deal with these longer term, and a number of the OEMs are talking about procuring semiconductors and other key components more directly and not just working with tier ones like Aptiv. You know, I know those discussions are ongoing, you know, we've been at this for a while now, and I'm curious if you have an update you can share around how you think Aptiv's role in supply chain and working with your OEM partners may evolve. Thank you. Yeah, that's a great question. I think by and large, you know, every participant in the supply chain is reevaluating their role and potentially what they can do differently. Having spoken now several times to, you know, the leaders of all the semiconductor companies, one of the critical items that needs to be addressed is committed volumes, right? When you look at an industry that is highly capital intensive, predictability of production is extremely important, and it gets compounded in an industry with long lead times that's currently constrained. However we transition to more of a committed volume model, at least for the medium term, whether that's you know, operating the way we historically operated with tiers being the primary face to the semiconductor players, or it's OEMs working with the semiconductor players as well as the tiers, you know, either can solve that problem. I think for us, for Aptiv, we'll be flexible to operate in either scenario. I would say the one thing that'll be different as we move forward is certainly more strategic relationships on the semiconductor side, which likely translates into deeper relationships, fewer semiconductor relationships that drive, you know, more volume and a more strategic relationship, both from a technology and a supply chain standpoint. Thank you. We're now moving on to Dan Levy from Credit Suisse with our next question. Please go ahead. Okay. Hey, good morning, everyone. Good day. Thank you. Wanted to just see if I recognize, you know, you've given us some directional comments on 2022. That's appreciated. Wanted to see if maybe we could put a slightly finer point on the directional comments. One, you know, if you could just remind us on just pure volume growth alone, you know, stripping out the performance or other efficiencies or inefficiencies, what type of incremental margins, you know, you generally get, what you might expect, you know, in a year where there could be, you know, double-digit industry recovery. If commodity prices just stay flat versus where they are today, is there an early sense on what the net commodity impact is into 2022? Again, it's Joe. Let me start. I think the best way obviously I'm not gonna give any more information on 2022, where, as I said in my comments, it's very early days to be doing that. You know, from our perspective, and we've talked about this, you know, certainly the COVID and the supply chain related disruption costs we do not view as structural. We think those are very much driven by the events of the day. As I said in my prepared comments, as supply chain and material flow returns to normal, would expect those costs to start to go away as well. If you look at 2021, I think it's a good proxy. You know, we've historically talked about incremental margins on the OI line between 18% and 22%. This year we'll be at 16%, you know, carrying $300+ million of supply chain and COVID-related costs. So if you backed out that $300 million, we'd be closer to 24%. So, you know, very much within a historical range and the expected range when you adjust for the COVID and the supply-chain-related disruption costs. Now, you know, as we said, even last quarter, we're not treating the inflation as transitory, the 195. I'm not gonna add that back, but I'd really focus on we get back into that 18%-22% range with just adjusting for those COVID costs. The other thing I'd mention, we've got about $600 million. Again, we backed this out of the adjusted growth rate, but there's about $600 million of incremental volume from commodity and FX that has a negative flow on it, right? We've often talked about copper impacting margin rate, but it also obviously impacts the incremental rate. Just something to think about as you're working through the math. Right now we see full-year material inflation of about $195 million. A lot of that is, you know, come in the back half of the year. I think the back half run rate is probably at least indicative of what we're managing for 2022. Again, not gonna speak to how much we're able to offset, but certainly start with, you know, that $195 we're talking about, that full year number is certainly what we're working on at the moment. Dan, if I can just chime in just to underscore, you know, the points Joe makes, but maybe at a higher level. You take a step back and in 2018, global vehicle production was close to 100 million units, and this year global vehicle production will be under 80 million. In 2018 revenues were $14.4 billion. This year we'll do $15.3 billion. You know, when you look at our guidance as it relates to, you know, full year EBITDA dollars and EBITDA margins, and you factor in the cost headwinds that Joe's walked through for 2021, be it supply chain or COVID, and you look at the transition from where we were in 2018 and where we are today in light of all these, you know, effectively macro challenges with incremental investment in advanced technologies. You know, it just underscores the strength of the business model we've built and the fact that, hey, there may be quarters or short periods of time we go through macro disruption, but the underlying robustness of the business model, you know, the cash conversion is extremely strong, if not better than what it was historically. Thank you. No, that's that historical perspective certainly is helpful. Thank you. A second question, and I think it's a little more related, but it's specific to ASUX margin. I know there's a number of things that are moving that. It's been low. Obviously, the volumes are quite weak and you have, you know, your semi cost inflation. I guess I'm wondering though, just broadly on the going forward, this is a segment where you have your software exposure. You know, theoretically this is a segment where margins should, you know, sharply benefit as, you know, that software type revenue starts to come in, you know, on ADAS. You've obviously gotten that, but you'll get more. You know, you're talking about continued investment. It just feels like, you know, there could be more of a period of, you know, mid-single digit or high single digit type ASUX margins. I guess I'm wondering what are the things that need to happen for the margins to really break out in this segment? I know volume is a big one, but, you know, what else needs to happen? Yeah, listen, I think, you know, predictability of schedules is one. Two, the execution of the launch of the existing programs that we have that we're launching today is two. The continued separation of software and hardware is three. I guess the ongoing demand for the, you know, for the Active Safety, for the User Experience, for the data and connectivity solutions that the segment provides. So, you know, there's all sorts of tailwind there. Now, having said that, Dan, we've talked about some of the areas of opportunity in the future, like SVA, like high performance compute areas, like software areas where, you know, we feel like there's tremendous opportunity and if it makes sense, there are areas that we'll continue to invest in and some areas potentially increase investment in. Got it. Thank you. Appreciate it. Very helpful. Thanks, Dan. Thank you. From Bank of America, we have John Murphy with our next question. Please go ahead. Hi. Good morning, guys. Hey, John. Thanks for all the info and the shot at 20, you know, or what you're giving us on 22. I know it's hard. You know, Kevin, you kind of mentioned one of the solutions to the issues that are going on right now is that automakers sort of give more committed volumes and there's greater visibility through the supply chain. You know, I'm just curious, you know, how you think that mechanically could work in an industry that is a slave to some degree to macroeconomic cycles and you have normal 20, I think the trough. volumes. It just, it's just hard to understand how an automaker could sit there, you know, and give, you know, a committed volume number because they are, you know, at the whim of what's happening in the macro. Then also now finding out that they're sort of at the whim of what could happen, you know, deep in the supply chain. I mean, how would you envision that committed volume from an automaker working? Yeah. Listen, John, it's a great question, and it's not easy. The point you make is a legitimate point, but it's an issue everyone across the supply chain, right, has to deal with from the, you know, OEM all the way through to the wafer manufacturer. It affects every aspect of the supply chain. If there isn't some level of baseline commitment on some level of products for some period of time, there's an amount of estimating that everybody in the supply chain is doing, and ultimately you end up in a situation like we find ourselves in today. I think on... I think we're from a supply chain standpoint, we'll be more strategic with customers and then through to tier two, tier three, tier four suppliers. The supply chain will be more integrated with more visibility. In exchange for that, there'll be more commitments, at least on certain products for some agreed period of time. That's the way we'll start to dig ourselves out of this or more permanently address some of the structural issues. Okay. Sure hope we get there. I mean, it seems like you guys- Yes are in a good spot to actually help, you know, manage up and manage down in some way. Yeah. I mean, we're working at it. I mean, you know, under Joe's leadership, from a supply chain standpoint, you know, I'd say we're working more closely. We've always worked closely with our customers and our suppliers. I think we're working more closely than we ever have. You know, there are going to be areas where we likely carry incremental inventory, but there's likely areas where we'll actually have to carry less. We're just. Yeah We're all getting smarter about it. Unfortunately, we had, you know, the COVID-19-induced perfect storm that we're going through in 2021. I think everyone's focused on how do we learn from it, and how do we, you know, improve how we operate. Okay. Just a follow-up on vertical integration. I mean, you know, we're hearing about this from these new EV manufacturers as well as the incumbents that are building out their own EV, essentially AV platforms. Ironically, you know, there's a lot of stuff that they talk about that's very much sounds like SVA or zonal architecture or other technologies that you bring to the table. You know, when people hear vertical integration, they're like, "Oh, crap, you know, outsourcing is gonna reverse and there's gonna be insourcing." It doesn't. You know, it seems like it's a question of semantics because it really sounds like a lot of your technology is landing in some of these platforms. You know, how should we generally think about it? Because it really seems like there's a semantic issue here about what vertical, quote unquote, "vertical integration" really is. Yeah. No, listen, I think that's a great point. We do business with a number of the players that you'd refer to as new, you know, battery electric vehicle companies. I think in reality, across all of them, there's very little in the areas of what they produce that kind of vertical integration is religion. Vertical integration tends to be an economic trade-off. To your point, we feel like we're well-positioned with both software and hardware capabilities, vehicle architecture capabilities. I think we would tell you based on our discussion with all those players, the reality is there are certain areas that are growing rapidly in the car from a content standpoint, like software. I think both in the software area and the hardware area, OEMs, whether they're new OEMs or legacy OEMs, in reality are gonna be dealing with fewer suppliers. A couple of the newer battery electric vehicle companies that we have a relationship with, what they'll actually say is, you know, more of the activity is actually outsourced from a dollar standpoint today, but they're actually dealing with doing that with fewer suppliers. That's, in our view, likely the trend that takes place, and that's where we're working really hard to make sure that we're in front of that trend, and we're able to benefit from it. Great. Thank you very much. Thank you. Our last question today comes from Itay Michaeli from Citi. Please go ahead. Great. Thanks. Good morning, everybody. Mm-hmm. Just two quick ones. A near-term question and a longer term question. On the near-term question, maybe Joe, can you just give us the puts and takes on the implied Q4 revenue GOM? Maybe a longer term question for Kevin. You know, we heard, you know, I think recently at the GM Investor Day, their plans to launch consumer AV with the help of Cruise in about 5 years. I'm curious kinda what Aptiv's strategy is with respect to consumer AV as well as your relationship with Motional and the potential for you to perhaps leverage that relationship in the next 5 or 10 years for consumer AV. Yeah. Itay, let me go real quickly on the growth of a market. Listen, it's a bit of the same dynamic we've really been wrestling with for the last couple of quarters, right? There's just a lack of visibility of customer schedules. You know, we obviously haven't seen anything that would suggest that it's, you know, that there's gonna be a meaningful change downward. You know, we've introduced sort of the 10+ for the year. You know, to the extent the production holds at these levels, and we continue to see strong mix, you know, we're expecting another good growth over market quarter, so it's hard to call an exact number at this point. Itay Michaeli, with respect to your question about AV and at least the Aptiv strategy, I can't comment on others because AV is used, you know, is used differently by different OEMs or different suppliers. As you know, we have Motional, which is our joint venture with the Hyundai Motor Group, which is doing extremely well, has driverless vehicles being tested on roads today in Las Vegas and elsewhere, and we'll have fully driverless vehicles as a part of the Lyft network in 2023. From a business standpoint, they're doing and technology advancement standpoint, the team there is doing extremely well. A couple comments broadly on AV. As you know, we've always viewed autonomous driving as the furthest spectrum of you know, full ADAS solutions. We use our partnership with Motional as an opportunity to continue to test, to validate, you know, to future-proof, technologies that we can pull into our current ADAS solutions and that's what we continue to do. We feel like at Aptiv, this is Aptiv, there's a lot of opportunity that remains in, you know, the L zero to L three sort of ADAS framework. You know, less than 60% of vehicles today have an ADAS solution on them. If you believe IHS, they forecast that increases to 70% by 2025. We actually believe it'll be more than that, and the fastest growing area will be on L two and L two+. I would tell you that's our biggest focus area. Having said that, over... We're using Motional as a resource to enhance the solutions that we use in the L2+ sort of space. Concurrently, we're working with Motional as well as have internal resources focused on L3 and beyond. You know, our view is that that's you know, from a cost or commercial standpoint, that's likely beyond 2025. It's certainly technology that we're focused on, and it's a capability we wanna make sure that we're positioned to have. That's very helpful. Thank you. Thank you. That concludes today's Q&A session. I'd now like to hand the call back over to you, Mr. Clark, for any additional or closing remarks. Great. Thank you, operator. Thank you everyone for joining us this morning. Take care and have a great rest of the day. Thank you. Thank you. That concludes today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.