Good day, and welcome to the Aptiv conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jane Wu, Vice President of Investor Relations and Corporate Development. Please go ahead. Good morning, and thank you for joining us to discuss the planned separation of the EDS business that we announced earlier today. The associated press release and slide presentation can be found on the Investor Relations portion of our website at aptiv.com. During this call, we will be providing certain forward-looking information that reflects Aptiv's current view of future financial performance and may be materially different for reasons that we cite in our Form 10-K and other SEC filings. Joining us will be Kevin Clark, Aptiv's Chairman and CEO, and Varun Laroyia, Executive Vice President and Chief Financial Officer. Following the prepared remarks, we will open the call to Q&A. With that, I would like to turn the call over to Kevin Clark. Thank you, Jane, and good morning, everyone. Let's start on slide three. We're excited to share our plan to separate the Electrical Distribution Systems business, or EDS, from Aptiv, creating two optimally positioned independent companies, each with its own unique product portfolio and financial profile, and with greater flexibility to pursue their own individual market opportunities and capital allocation strategies. The separation is expected to be effective through a tax-free spinoff of EDS that is targeted to be completed by March 31, 2026. Our decision is the result of a comprehensive evaluation conducted by our Board of Directors and management team, considering recent industry trends, the evolving needs of our customers, and how best to deliver value for our shareholders. We'll spend our time this morning diving deeper into the benefits of this transaction and providing an overview of the two strong and well-positioned companies that will result before opening the call up for questions. Turning to slide four, we have a long track record of transforming our portfolio through both operating initiatives and organic and inorganic portfolio shifts to best position our business to compete in a changing environment and deliver increased shareholder value. These past strategic actions positioned our business to benefit from accelerating penetration of increasingly electrified vehicles, the enablement of the software-defined vehicle through optimized solutions such as SVA, the need for reliable high-speed signal power and data distribution to optimize ADAS and user experience solutions, and the increasing number of adjacent market opportunities in industries such as aerospace and defense, telecommunications, medical, and industrial. We regularly assess our portfolio of advanced technologies against the backdrop of the megatrends impacting our industry, including electrification, automation, digitalization, artificial intelligence, and connectivity, and the evolving needs of our customers, especially as it relates to the pace of ADAS, EV, and Smart Vehicle Architecture adoption, to identify opportunities to better position the business to deliver more value to our customers and create greater value for our shareholders. This has led to 21 acquisitions, six divestitures, and one spinoff since our initial public offering, establishing Aptiv as a leader across the full edge-to-cloud tech stack, including a portfolio of low and high-voltage vehicle architecture, a modularized software stack and advanced hardware for ADAS and in-cabin user experience applications, and highly engineered interconnects and components for mission-critical applications. Turning to slide five, the same process has led us to conclude that the right next step in our evolution is the spin-off of EDS into an independent standalone company. As separate companies, Aptiv and EDS will be better positioned to benefit from strategies and operating plans focused on each company's unique product portfolio, customer needs, and related market opportunities. Aptiv has been a leader in supporting the industry's transition to software-defined vehicles, and as we increasingly deliver these solutions in a product-centric way, we see further opportunities to expand their application to other industries. To address this opportunity, Aptiv will invest in our highly engineered, mission-critical interconnect and component products, as well as our industry-leading software tech stack and portfolio of advanced hardware technologies. These investments will enable intelligent edge devices across multiple end markets to better connect with the world around them and evolve and improve over their full lifecycle. Conversely, EDS will build on its 100-year legacy as a leader in designing and delivering fully optimized next-generation vehicle architecture for automotive and commercial vehicle OEMs. By leveraging its global scale, unique localized regional capabilities, and portfolio of power, signal, and data solutions, EDS will be well-positioned to increase operating efficiencies, drive revenue, earnings, and cash flow growth, execute inorganic growth opportunities, and consistently return cash to shareholders. EDS commercial organization will continue with their current go-to-market approach, working with OEMs as well as Tier 2s, including Aptiv, to design and develop optimized low-voltage and high-voltage vehicle architecture across regions. As separate companies, Aptiv and EDS will be better positioned to leverage resources, including talent and capital, to address the evolving needs of their customers and to capitalize on the distinct market opportunities and growth drivers of their respective businesses. Let's turn to slide six for more detail on the financial profiles of Aptiv and EDS, which underscores the differences between the two businesses. We expect Aptiv to be a high-growth, high-margin company with strong cash flows to support organic and inorganic investments across our portfolio of advanced products, technologies, and solutions, increasing our exposure to diverse end markets and returning excess cash to shareholders. EDS is an industry leader with mid-single-digit revenue growth and solid margins and cash flow, well-positioned to invest in footprint rotation, manufacturing process automation, and bolt-on acquisitions, as well as consistently return cash to shareholders. We expect each company's credit rating to be commensurate with their unique business profile and capital needs, with Aptiv remaining investment grade and EDS rated strong sub-investment grade, resulting in capital structures and capital allocation strategies tailored to each company's most value-creating opportunities and investor bases best suited for their unique value propositions, operating model, and financial profile. Details on the pro forma capital structures for both Aptiv and EDS will be provided as we progress with separation planning and are closer towards completion of the transaction early next year. I'd now like to turn to slide seven to discuss each of the businesses in more detail. Aptiv will comprise the Advanced Safety and User Experience segment, which offers a range of open and scalable platforms and modular solutions for next-gen ADAS and in-cabin user experience applications, such as hands-free driving and personalized connected user experience, and the Engineered Components Group, which includes our Connection Systems business, Intercable Automotive Solutions, HellermannTyton, and Winchester, representing a comprehensive portfolio of harsh environment interconnects and protection solutions that address some of the most demanding signal, power, and data applications across multiple end markets. Aptiv's portfolio of advanced software, hardware, compute, and interconnect solutions represent a full sensor-to-cloud technology stack and is well-positioned to serve a diverse group of end markets, including automotive and commercial vehicles, aerospace and defense, telecommunications, medical, and industrial. Turning to slide eight to review Aptiv's financial profile, Aptiv's total addressable market will remain substantial and is expected to reach over $200 billion in the next few years, particularly when you take into account the full range of strategic end market opportunities beyond automotive. We expect this will translate into mid- to high single-digit revenue growth and low- to mid-double-digit adjusted EBITDA growth on a compound annual basis over the next three years, and we're confident that this growth rate is sustainable well beyond 2028, given the fact that its portfolio sits in the sweet spot of long-term secular trends, including electrification, digitalization, artificial intelligence, and automation, driving growth in hybrid and electric vehicles, further penetration of advanced safety solutions, and increased adoption of fully connected in-cabin user experience in the automotive sector. At the same time, our portfolio addresses the needs of a number of other attractive end markets being shaped by the same technology trends and customer needs, often for ruggedized, mission-critical, and software-defined applications where Aptiv will be better positioned to drive growth. Turning to the EDS business on slide nine, EDS's full range of vehicle architecture solutions uniquely positions it to address the growing demand for feature-rich, increasingly electrified automotive and commercial vehicles. Upon completion of the spin, EDS will comprise three distinct product lines: low-voltage harness systems and cables, including signal, power, and data distribution, delivered in a cost-optimized way with the required quality, reliability, and performance that increasingly feature-rich vehicles rely on, high-voltage harness systems and cables, supporting the full range of propulsion alternatives from mild hybrids to plug-in and full hybrids, all the way to battery electric vehicles, and high-voltage charging cord sets for efficient and reliable vehicle charging. By leveraging its global scale, localized regional capabilities, highly competitive cost structure, and disciplined approach to capital allocation, the standalone EDS business will continue to optimize its engineering and manufacturing footprint, support increased automation of manufacturing processes to over 50% of direct labor hours by 2030, leading to improved product quality and lower costs, and enhance its portfolio of solutions in areas such as flat cables, high-speed Ethernet cables, and high-voltage cables, further strengthening its competitive position while also continuing to deliver strong earnings and cash flow growth that enable the consistent return of capital to shareholders. Turning to slide 10 to review EDS's financial profile, the total addressable market for automotive, commercial vehicle, and industrial low-voltage and high-voltage systems and cables, and high-voltage vehicle charging cord sets is growing at a compound annual rate of low single digits and is expected to reach almost $90 billion over the next few years. Given the trend in feature adoption, the pace of electric vehicle penetration, and EDS's current outlook for customer mix, we expect revenue to increase at a compound annual growth rate of mid-single digits through 2028. And as a result of the earnings flow-through on increasing volumes, as well as the benefits from footprint rotation and manufacturing automation that I mentioned on the prior slide, we believe EBITDA will increase at a low double-digit compound growth rate through 2028, resulting in over 10% margins. Turning to slide 11 to review the key takeaways and next steps, separation of EDS is the next logical step in Aptiv's adapting to an evolving landscape and changing customer needs. The benefits of the separation into two independent standalone companies are substantial. Both Aptiv and EDS are each expected to benefit from strategies and operating plans that are more focused on their unique product portfolio, customer needs, resulting market opportunities, and financial objectives. Each business will have more focused capital allocation plans with investments concentrated on the unique opportunities and growth drivers of each business and directed towards each company's highest value-creating opportunities. We're excited about the separation transaction for Aptiv and EDS and believe it will deliver significant benefit for our customers, create significant value for our shareholders, and position both companies for even greater success. We realize that today's announcement is just the first step. We're targeting completion of the separation by March 31, 2026, subject to final approval by Aptiv's Board of Directors and customary conditions, and we don't expect the funding of the separation activities or the related ongoing expenses to be material to the overall value upside enabled by this transaction. Lastly, before moving to Q&A, I'd like to take this opportunity to provide additional color on our outlook for 2024 ahead of our earnings call scheduled for February 6th. As cited in our press release, we're affirming the full year 2024 outlook that we provided on our third-quarter earnings call on October 31st. We expect revenue to be slightly below the midpoint of our guidance, but well within the range, and operating income, EBITDA, earnings per share, and cash flow to be above the midpoint of our guidance as we continue to see the benefits of our ongoing cost structure initiatives. We'll share further details on the fourth quarter of 2024 and our outlook for the first quarter and calendar year 2025 in approximately two weeks, including certain historical information reflecting three new segments: Electrical Distribution Systems, Advanced Safety and User Experience, and Engineered Components Group, on which we will report beginning in 2025. In addition, we'll continue to keep investors updated on the progress of the separation and intend to hold investor days for both Aptiv and EDS in the fall of this year. With that, operator, let's open the line for questions. Hello? If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're used to speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We ask that you please limit yourself to one initial question and one follow-up to allow everyone the opportunity to signal. Again, that is star one to ask a question. We will now take our first question from Joe Spak with UBS. Thanks. Good morning, everyone. I guess, Kevin, to start, can you just remind us how in the past EDS has sort of gone to market with your customer in conjunction with the other portions of the business, whether that's ECG or ASUX? And was that sort of completely independent? And do you expect each of those businesses to approach their customers going forward? Yeah. Great question. Thanks, Joe. So the way we operate our business, when you think about, let's say, EDS, ASUX, and the Engineered Components Group, all of them are global P&Ls with presidents of each business who are responsible for everything from engineering to development to manufacturing to supply chain to commercial delivery. So we have separate commercial organizations in each one of those companies that call on our OEM customers, if you're EDS and ASUX. And if you sit in the Engineered Components business, you would call on both the OEM customers as well as Aptiv as a Tier 1 and other Tier 1s, so other competitors of EDS, as an example. So we've always had separate commercial organizations. There are points in time where those organizations would go together to a particular customer. But that's also true as it relates to, in some circumstances, other suppliers working through EDS and selling solutions to OEM customers. So the model remains consistent, Joe. The model remains consistent. Just as we mentioned in my prepared statement, it provides each of our three reporting segments, the two businesses, just more flexibility, more focus from a strategy standpoint, business operations standpoint, and a capital deployment standpoint. Okay. Thanks for that, Kevin. And then just a second quick follow-up. This has sort of been on my end, but for EDS, I mean, I know you said you're going to talk about capital structure in the future, but did you mention high non-investment grade? Was that the commentary that you're expecting for? Yeah. High sub-investment grade. It's a great business with solid cash flows and margin profile. Obviously, it's a lower margin profile than the two businesses that sit within Aptiv that are higher margin, and one of them much higher growth. So the cash flow profiles are different. Therefore, the capital structures will be a bit different. Therefore, the ratings are likely in the range that I mentioned in my prepared comments. Okay. Thanks. I'll get back in here. Thanks. Thank you, Joe. We'll go next to Mark Delaney with Goldman Sachs. Hi, yes. Good morning. Thanks for taking the question. You spoke to the non-auto part of Aptiv being over 20% of revenue and how that could help to mitigate some of the auto and market volatility and potentially allow for faster growth. Could you provide any more color on that? Maybe some examples around how well Aptiv may have held up perhaps over the last year given some of the market volatility and has that thesis worn out?, and maybe just elaborate a bit more too around how much of a focus non-auto may be for Aptiv. Yeah. So in the 2024 calendar year, non-automotive revenue growth was greater than what we saw in automotive in total. Now, there's a broad mix of those markets that we sell into, from commercial vehicle to aerospace, defense to semiconductor to medical to industrial. So as you know, there were different dynamics in each one of those markets. But in the aggregate, it was faster growth. When you look at the ECG business and the ASUX business, both have north of 20% non-automotive revenues. So strong non-automotive revenues. The margin profile and cash flow nature of the Aptiv business with those two businesses within it obviously provides us with a great opportunity to continue to grow both organically and inorganically outside of automotive. That is going to be one of the key focus areas from a strategy standpoint, both within the ASUX as well as within the ECG business, to continue to diversify our revenue base across multiple end markets. Thanks for that, Kevin. One other follow-up for me was just around any potential dis-synergies you may need to work through, and as you think about manufacturing and corporate overhead, any way you can help us to quantify how much stranded cost there may be? Thank you. Yeah. We'll share more of that as we move along, as we move further into the separation. I would characterize both as manageable in terms of stand-up cost, relatively manageable. There's certain corporate activities where we're going to need to make some investments, but we don't view them as significant. And from a stranded cost standpoint, listen, as we've talked about, we've been maniacal about reducing our overall cost structure. That's something that we'll continue to do. That's something that we execute very well on. And that's something that we're comfortable managing through. Thank you. We'll go to our next call. Dan Levy with Barclays. Hi. Good morning. Thanks for taking the questions. I wanted to follow up on Joe's question earlier. And specifically, I was under the impression in the past that the high-voltage product set was more of a bundled process. So maybe you could give us a sense of, within high voltage, to what extent those could operate as a separate product. What does that leave at least the connectors business to as far as high voltage without the EDS side? Yeah. So Dan, it's a great question. So again, in the past, and we'll continue post-separation, we worked very hard to provide solutions to our customers that generate more revenues for Aptiv. And in this particular case, it would be Aptiv in the EDS business. So to the extent we can drive revenues given our close alignment from a relationship standpoint, from a strategy standpoint, that's something we'll do. The reality is when you look at our high-voltage revenues and you look at that portfolio, we have more revenues in the interconnect portfolio, quite frankly, than we do in the wire harness portfolio. So a greater mix of those revenues are high-voltage connectors, charging solutions, things like that. So it's an opportunity to still leverage whether we're under one umbrella or not. And it's something that, quite frankly, we'll be able to, I'm confident, easily manage. Okay. Great. Thank you. Second question is on footprint. Maybe you could just remind us how much of the footprint is shared versus separate. And then how much of this was really a play to maybe take on more of a labor-light approach with the remaining Aptiv businesses? I believe that EDS is much more labor-intensive. So how does the footprint play into this? Yeah. So as I mentioned or the initial comment, so again, we run global businesses with stand-alone operations for each of those businesses. So there's very little mixing of certainly manufacturing locations. I'd say there's virtually none on the manufacturing side. There's some on the engineering tech side, but it's manageable. And then from an SG&A standpoint, there may be a little bit more. As it relates to doing this to drive more of an asset-light approach to the ASUX business and the Engineered Components business, listen, we're always trying to drive down our manufacturing costs and become more efficient. The ECG business has more of a mix of manufacturing activity and footprint, as you can imagine, relative to the ASUX business. That's something that we'll continue to focus on in terms of optimization. But it wasn't a key driver for this decision. Understood. Thank you. And our next question comes from Chris McNally with Evercore. Thanks so much, team. Kevin, just wanted to follow on some of your prepared comments and just to get some clarification. So was this thing specifically for EDS taken as part of a full portfolio asset review? And if so, just any insight into why EDS as opposed to other large divisions like ASUX or ECG when you consider sort of spinoff? Yeah. Listen, we're always looking at the broad portfolio, Chris. So I would say that's a normal cadence that we go through as a management team and with our Board. When you look at the businesses, the EDS business, more of a program sort of business when you think about the delivery of the solution to the customer, a business with very strong competitive position, large global scale, a real focus from a customer standpoint on weight, mass reduction, cost optimization. So a significant focus on that in terms of delivery of solutions. When you look at the ECG business and the ASUX business, they're highly engineered product businesses, so a different approach, higher margin profiles, higher cash flow generation, providing more flexibility, quite frankly, to continue to pursue growth opportunities organically and inorganically, both in automotive, but importantly, outside of automotive as we bring our technology into other markets. And then from a product standpoint, quite frankly, that ECG business, when you think about connectors or interconnects, there's a big content aspect as it relates to supporting the ASUX business as it's selling Smart Vehicle Architecture solutions. So that is a portion of the overall product that gets sold into zonal controllers or central vehicle controllers and open server platforms. So there's some product synergy there. Having said this, listen, I'd be consistent with our track record. We'll continue to regularly evaluate ways to optimize Aptiv's business mix and maximize value for investors. Super helpful, Kevin, on the growth aspect for the rationale. Maybe just the follow-up. With respect to this decision, is it fair to say that you explored also the potential sale? Investors will obviously be curious that theoretically, strategic values for a lot of your assets higher than sort of current suppressed public multiples for suppliers. So any comments that you can add? Yeah. Listen, we looked at everything, Chris. I think we arrived at this is the best path forward for the business. To the extent there's an alternative that presents itself that delivers a more attractive return to shareholders, that's something that we obviously would have to take a look at. Excellent. Thank you. And our next question comes from Colin Langan with Wells Fargo. Oh, great. Thanks for taking my questions. Can you talk a little bit about the potential maybe dis-synergies? Because I think in the past, sometimes you could get connectors when you sell the wire harness. Is that a material part, or how should we think about framing that potential risk as you split connectors and wiring? Yeah, Colin, it's a good question. So our EDS business goes direct to OEMs selling vehicle architecture solutions. And our Connection Systems business, our ECG business, sells both to Tier 1s like our EDS business as well as directly to the OEM, as does its competitors. So when you think about EDS, the reality is they sell solutions that include competitors of CS. They work with competitors of CS. Similarly, with our connector or our Engineered Components business, they're working with competitors to the EDS business to try to gain share. So that dynamic really doesn't change. We'll be under separate umbrellas when it occurs, but that dynamic of having to sell both to the Tier 1 as well as to the OEM will continue. We think the synergies are minimal, and it's something that we'll be able to manage. Clearly, the teams, having come from Aptiv, have solid relationships across the organization, but the reality is the EDS business does do business with competitors, and that's something that the organization needs to manage through on a regular basis, and quite frankly, that's something we encourage, so each business needs to stand on its own with its own P&L and its own soup to nuts from product development all the way through manufacturing commercial activity. Got it. Any color on how this changes your exposure to EVs and the shifts there? That's obviously been quite volatile. I mean, what EV products actually stay? It's kind of still kind of a little bit unclear. I guess does the ePowertrain stuff stay? I guess you said interconnects stay. And what sort of is it just the wiring and the heavy wiring? Yeah. So interconnect and bus bars are part of the Engineered Components Group. High-voltage cable management sits in the Engineered Components Group, and it's the wire harness that sits within EDS. And the ePowertrain? So exposure. The The two businesses, exposure to high voltage or electrification remains the same. It just sits in two different business units. Okay. Got it. All right. Thanks for taking my questions. And ladies and gentlemen, as a reminder, please press star one to ask a question. And we'll move to our next question from Tom Narayan with RBC. I think speaking of questions, I have a kind of a reverse question to the dis-synergy one, which would be potential integration benefits or synergy benefits of combining ECG with ASUX. I understand how they're all three different global commercial businesses operating separately, but does this now offer an opportunity for any integration, or are these completely separable items? As I mentioned, there's some aspect as it relates to when you look at areas like Smart Vehicle Architecture where the teams work together in terms of pursuit of opportunities, similar with how the ECG organization will work with the EDS business on pursuit of opportunities, similarly to how they work with other wire harness players as examples. So I would say commercially, at times, there will be some synergy opportunities. Back office, supply chain, there'd be some element of synergy opportunities. But from a manufacturing standpoint, from a product design, really, they're two separate stand-alone businesses that operate separately with limited shared sort of resources. Okay. Thanks. And my follow-up, from the OEM exposure between the new Aptiv versus EDS, it looks like geographic exposures aren't significantly different. Obviously, the non-automotive automotive piece changes that. But specifically, as it relates to Chinese domestic auto OEMs, could you talk about maybe the difference there between the RemainCo Aptiv and EDS? Yeah. I don't have the exact percent in front of me, Tom. It's a great question. The new Aptiv would have more exposure to the local Chinese OEMs than the EDS business would at this point in time. I would say over the next two years, they will end up relatively balanced in terms of mix or pretty close. Got it. Thank you. And we'll take our final question from James Picariello with BNP Paribas. Hi, everybody. Hi. How are you thinking about cap allocation on a post-spin basis, and in particular for ECG, which has had a successful bolt-on M&A track record, predominantly focused on non-auto end markets? Just curious on your thoughts there with Joe Massaro now heading up that division. Yeah. Yeah. Listen, we think there's growth opportunities for both businesses. Our intention would be to accelerate the M&A activity during 2025. ECG is a logical place, to your point, just given the market and given the opportunities that are out there in our experience. So the focus will be on both. You're right. We have an absolutely strong track record in ECG, and we'd expect that to accelerate. Great. And then just for EDS on a stand-alone basis, do you foresee the opportunity for future consolidation in the wiring space with this spin-off possibly helping to accelerate that outcome? Yeah. Go ahead. I'm sorry. I was just going to say, as we consider Aptiv's Mexico footprint, does the EDS business have a disproportionate presence there, or is it pretty routable across the segments? Apologies for interrupting you. No. No, no. I'm sorry. No. Given the nature of the product and the manufacturing process, the EDS business has a larger presence there. We have a very strong footprint there. I talked about footprint rotation. That's one of the areas that we're focused on, rotation to Central America for cost reasons, right? So that will obviously continue. When you look at opportunities from a consolidation standpoint, the reality is that industry is perfectly positioned for it. I'm glad you asked. The EDS business is perfectly positioned to execute on that, given its competitive position, given its global scale, given its capabilities. It's a product area that should consolidate given what our OEM customers are looking for, and there should be players out there acting like consolidators. Perfect. Thank you. That will conclude today's Q&A session. I would now like to turn the conference back to Kevin Clark for the additional closing remarks. Great. Thank you, operator. Thank you, everybody, for taking the time today. We really appreciate it. We're really excited about this next chapter with Aptiv, both the opportunity for the electrical distribution systems business as well as Aptiv. We're excited about it, and we'll have more to talk about in two weeks on our Q4 earnings call. Look forward to speaking to you then. Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.