All right. I think we're gonna get started here. Next up on the agenda, we have Aptiv, very pleased to have with us Chairman and CEO Kevin Clark and Varun Laroyia, CFO. Gentlemen, thanks for joining us today. Always a pleasure to have you. I guess, you know, Kevin, I just wanna start, you know, big picture. Obviously, there's been a lot going on in the industry over the past year, maybe more than even normal in an industry where there always seems to be something going on. Like, even sort of stepping away from some of the tariffs and trade policies and, you know, if I look at Aptiv, you've really tried to position the company to capitalize on the mega trends you identified of electrification, software-defined vehicles, active safety. The progression, I think, of those trends among your customers has, I would say, candidly, been varied. And, you know, I think maybe downstream that sort of impacted some of the nearer-term impacts for you. I'm curious, as you sort of assess the industry and Aptiv's positioning, whether you've seen any more structural changes there. Is this just a delayed progression of some of these trends? You know, how do you, I guess, reevaluate how you're positioning the industry? No, it's a great question. Joe, thanks for having us here. Seriously, it's always great to be with investors and be with you. Taking a step back, listen, we're still big believers in the trends towards, you know, increased safety, increased, you know, or reduced CO2 emissions, increased fuel economy, and increased connectivity. In reality, our view is that goes across multiple markets, and that will continue. To your point, it'll continue at different paces in different regions for a couple reasons. I think one, relative to where we were maybe 10 years ago, the world has become more regionalized, and, you know, there are geopolitics that are impacting certain things. Pace of adoption in certain regions will be faster. China, certainly as it relates to electrification, slower. Places, at least, in the near future here in North America. The general underlying trends continue, right? The world's becoming more software-defined. Digitalization's happening at a much, much more rapid rate. Energy transitioning is happening. It's going on as we sit here, and things are becoming much more connected. I think there's an element of near-term. There's a little bit of different paces in different regions, different execution with different customers, right? That impacts industry and maybe gives investors a sense of, is this going to happen or is it not? Again, we're firm believers it will, but at different paces. Just making sure that we have the right technology that's cost-effective, that will work the right OEMs. Listen, that sometimes changes based on their competitive position or the market that they're operating in. An increased focus from us, you know, we've talked about it. How do we take our technologies into other markets? How do we take those low-cost technologies and how do we participate in other markets that are somewhat adjacent, that are looking for similar sort of product applications, different go-to-market models? How do we adapt to them? Does the, as you sort of describe it, maybe delayed timeline or adoption for some of these trends that you're still sort of firm believers on give you an opportunity to either double down or make a larger bet or maybe a different bet on that? Like, does it give you sort of more time to execute on the opportunity? Yeah. I don't think, given those trends that I talked about, it's really a bigger bet, right? On the electrification side, we've built out a very robust portfolio where we participate, quite frankly, in the automotive space on vehicles that have internal combustion engines, on vehicles that are mild hybrid, hybrid, plug-in hybrid, electrification. We're able to participate there, right? I think it's important that you're in regions on platforms with OEMs that are going to be successful and gonna be successful over the long term. I think those capabilities we've leveraged into areas like space, like aerospace and defense, like industrial as well, when you think about power signal data distribution. We'll talk about, on a go-forward basis, more progress that we've made there. I would say that's less product portfolio today. I think it's more go-to-market kinda cadence and approach. I did wanna actually go down that path and since you sort of brought it there, I loved it. I mean, like you said, I think a lot of the product, I do not wanna say it is sort of fungible, but it does seem to have additional application in some of these other industries. What is sort of the bottleneck or the roadblock for you to sort of get larger? Is it salesforce? Is it knowing the customers? Or is it some tweaking of the product? Where do you see the bigger challenges? Yeah. Just to put it in perspective, when you look at our business today, 80% of our revenue sit, a little under 80% sit in the automotive space, broadly speaking. 20% non-automotive, and those are everything from commercial vehicle to aerospace and defense would be the biggest kind of non-transportation, telecommunications, and broadly industrial. Those products tend to be very similar. They may be in certain applications, larger or smaller. It tends to be, quite frankly, again, that go-to-market, who are you calling on? What's the value proposition that you need to present? How do you contract? I mean, it's actually fairly tactical from an execution standpoint. Not that, to your point, the product automatically can come off of, you know, out of one of our connector plants in Mexico and have applications, simple applications in A& D, as an example, but with small modifications, there's big opportunity across those various markets. On the software side, it's one of the benefits with the Wind River transaction, quite frankly, and the fact that they play across multiple markets. The bulk of their revenue is non-automotive and the ability to bring in their RTOS, their Linux solution, their Wind River Studio into customers who actually do utilize perception systems, who actually do sensor fusion, who are actually focused on increased usage of AI at the edge, which is an overall global trend. It positions us well to exploit it. Is there any, you know, chicken or the egg type problem in that, like, let's say you're hypothetically, again, sort of trying to win A& D business and you can do the product but you don't actually do it, that they wanna actually see the product before they're willing to sort of commit the PO? Yeah. I think given the fact that everything we do in our traditional automotive industry is mission-critical, right? Whether it's power or data distribution or it's a perception system and an ADAS solution, it has to work. It has to work 100% of the time. That's the same requirement in telecommunications. You can't have a telecommunications system go down. It's the same application in A& D. That tends to validate it. I think more often than not, when you look at the product, there's a certain element of the robustness of the automotive solution. Maybe it's more robust than what it even needs to be for some of those applications, right? For us, it's slight design changes in those particular examples. In others, Joe, it's opportunities like, you know, one of the items that Joe Massaro running ECG is really working on. We've had great opportunities. How do we bundle our existing, traditional automotive connector portfolio with what we saw at Winchester that goes across multiple markets? Because there is a tremendous amount of overlap opportunity, and it's an incremental sale. It's incremental revenue. How do we bundle that and bring that to customers? That's what I say. Our biggest change, transparently, it's not the product. It's the go-to-market approach. Okay. Definitely an area to sort of stay tuned and follow and learn more. I just, I do wanna move on and maybe sort of bring it a little bit more near-term. If we go back in April when you reported, you mentioned that, you know, you weren't really seeing any underlying changes to demand. You issued the second quarter guidance. You said things were sort of tracking well there, limited changes to production schedule. Now that, you know, we're another month plus through and you will most likely have the schedules at least out through the end of the quarter, what's sort of the update there in terms of what you're seeing? High-level confidence in the second quarter. I would say we've seen minimal broad strain changes there, maybe some shifting between OEMs and platforms. Mm-hmm. Over the back half of the year, I would say, slightly weaker schedules in North America, slightly stronger schedules in China. Than what you maybe anticipated prior? Yeah, that we anticipated in our initial sort of guidance, back in February. Some weakening in EV schedules, principally North America. Mm-hmm. overlaid on top of that. I would say some puts and takes in general, slight softening, but nothing that we would sit and look at and say is a significant change. Very interesting. I think, yeah, I think that's been pretty comprehensive. You know, pretty good about the second quarter in terms of what we had guided. And just to kinda reiterate one point that Kevin mentioned, you know, way back when we gave guidance in February, you know, we talked about some inherent conservatism within our guide. And when we double-clicked into it, you know, we talked about EV platforms, for example. We talked about, you know, North America production, for example. And if you were to triangulate with an external market, so S&P IHS's latest numbers, that market has largely kinda played out as we had kinda planned, right? I'd say North America is a little bit weaker. You know, China is better. Mm-hmm. Than what we had planned. Europe is relatively flat. That is just to kinda give the latest color. It'll be kinda interesting to see as to, from the way we had kinda thought about it, the market is pretty much playing out. With regards to the second quarter specifically, Joe, as your question was, you know, we had visibility. We have visibility. We feel comfortable with the guide that we gave. When you talk about the back half, are you, I'm assuming that's based on sort of what you're seeing in terms of schedules mainly for the third quarter at this point, or is there already some indication that's going a little bit further out? Yeah, I'd say third and fourth. There would be schedules, lowercase s, right? So we get some, for most of our customers, some element of visibility. If we think back, Varun, and I know you definitely sort of gave some of those guardrails, and I think you were even trying to express, even though the guidance was withdrawn, that there was some good initial or there was a good amount of conservatism built into that initial guidance. You gave the example of how much production would have to be down even to hit sort of the low end of the guidance. Are you seeing enough firming of or narrowing of bands of uncertainty to sort of, you know, reissue guidance when you report second quarter, or how do you think about that? If not, what do you need to see to sort of get guidance back? Yeah. Listen, great question. First of all, we would like to give guidance. You know, we would like to give outlook to, you know, in terms of what we're seeing, you know, for the broader investment community. That's just kinda table stakes, and that's something I just wanna make sure that we reiterate. Given where the situation was a few weeks ago, we certainly did not withdraw guidance. Essentially, we gave guidance for the second quarter, and we said we would get back given the levels of uncertainty, you know, for the second half of the year, given the latest on tariffs that were happening, and just kinda waiting for our larger customers as to how they thought about production strategies, dealer inventories, how they were thinking about, you know, tariffs in general. Again, if you think about tariffs per se, hard costs associated with tariffs, we are comfortable with them. We find them very manageable, and whatever we believe, the small amount that, you know, needs to be passed through, we are passing through. Mm-hmm. Okay? It was the softer costs associated with what happens to global vehicle production, what happens to North America production, how are the OEMs thinking about, you know, strategies associated with the higher input costs that they'll be facing with. What does that do? What does it do to consumer sentiment? That was the uncertainty. And as we kinda fast forward the tape, call it five-plus weeks since the time we announced our first quarter earnings, I think it's fair to say that uncertainty hasn't diminished, right? I mean, we still have the 90-day pause, you know, on the retaliatory tariffs. We still have the China tariffs now, you know, through the initial part of August, for example. So that that has not been clarified as of now. Mm-hmm. With regards to, you know, the second half of the year, we are committed to, you know, providing clarity as soon as we have further information. I just wanted to kinda share some of the moving pieces, those that we believe we have direct line of sight and we believe we have a good handle on. The broader element is the question mark. I think if I can just add to that, I think we have the benefit of two more months behind us, right? That is helpful. I think we have more clarity on strategy as it relates to USMCA. I think we have a stronger view on what the objective is there based on discussions in the U.S. and outside of the U.S. I think we have clarity on that. I think there's an element of we have more history of how this tends to play out with a Friday afternoon announcement and that, so we have more experience. Maybe that's a better way to describe it. To Varun's point, in times like these for investors, the reality is you need more communication versus less. We firmly believe that. We need to make sure, though, that we're giving you information that's useful, that's very useful, right? That's what we'll continue to do through the balance of this quarter and, you know, when we announce earnings as it relates to our Q2 results in late July or early August. I'd say at that point in time, I'd say we'll be in a better position to at least provide further clarity in terms of our view on the back half. Mm-hmm. You know what I mean? Maybe it's a little different than historical periods of full year, but more clarity to investors. We feel really good about where we are from a product portfolio standpoint. We're making progress as it relates to customer mix. The direct impact from tariffs for us is de minimis, and there are certain areas where we're passing that on to our OEM customers so we can manage through that. We're continuing to rotate our supply chain to make it even less, and we can do that and do it pretty painlessly. In light of everything going on, we feel really good about where the business is. I would say maybe just a little bit different from the way Varun articulated it, and we're in complete aligned on this. Hey, come Q2 earnings call, you'll get more visibility to our outlook for the year. I guess, you know, to that point, and I know you mentioned the direct tariff is pretty de minimis, but we have seen some, like, I don't think that 90-day pause on China or the China relaxation was when you initially. Mm-hmm. Guided, right? Is there any meaningful impact from that or not? Trans-ship, very little back from China too. What about, you know, from this past weekend, some, you know, additional tariff on some metals, steel, and aluminum? You definitely use some of that. I do not think there would be maybe a direct impact, but the cost of the metals could be an impact. Are there contracts in place? It's very, it is steel. Aluminum for us is very, very small from a purchase standpoint. The bigger issue, Varun touched on this for us, is how do costs like that impact OEM pricing strategies within customers, and then what does it mean for vehicle production? We are in contact with our customers. We are watching what they are doing, but we do not have perfect line of sight. It is transparent with everyone here. We do not. I guess one of the other things that has sort of come up a little bit more recently is rare earth metals and whether that could cause any sort of disruption in supply chains. Again, I do not think any direct impact to you, but please let me know if you are doing any of that sourcing. But, you know, we have heard a little bit of noise out of Germany, maybe a little bit of noise from another company that was just on stage about some potential challenges in getting rare earths out of China given the export controls. Have you seen anything sort of show up in the schedules yet that is overly meaningful? No. Okay. No. Yeah, I, yeah, I, no. We've not directly attributable to that. We've not. There obviously are products or sub-products, components that use rare earth minerals, most, a lot of which obviously is supplied or sourced out of China that could be impacting either suppliers or OEMs for us. That's a small, small exposure. Okay. One of the things that I think was interesting and probably, you know, candidly went a little bit under the radar given sort of the intense focus on tariffs and policy that you talked about is what seems like, if not improvement, at least sort of rate of change improvement in some of your progress in China with domestic customers. Obviously, the customer mix in China has been a headwind to your business over the past year plus. Can we just dive into that a little bit? Like, what's changing? Is it really some of the customers that have been challenged are already at low levels, so it's less impactful, or are you winning with some of the newer, other, with the other side of the business? Is it a combination of the two? Yeah. No, that's a great question, Joe. For us, background, you've heard of, we've been in China for close to four decades, actually, at this point in time. When you think about our business in China, it's truly a China business with a Chinese leadership team that's been focused over the last, you know, decade, really building out the China ecosystem and the China supply base. In China, we show up as a Chinese supplier to Chinese OEMs, whether they're multinational JVs or they're the locals. I'd say historically, just given where we came from, there tended to be more focus on the multinationals, right? Just big market for German and US OEMs. I think naturally our team fell into the, "Let's focus on those customers." I'd say over the last five years, that's changed. Our focus has changed. Transparently, I don't think it changed fast enough. If I were to be critical of what, you know, I did, we did as an organization, it didn't happen fast enough. Today for us in China, Geely's our largest customer. We do business with BYD. We have opportunities in China and outside of China. We bring a unique capability, and we're having discussions with multiple local Chinese OEMs about supporting them as they move outside of China. We feel like we're very well positioned as it relates to that activity, as well as supporting them on their export programs outside, you know, the vehicles that are headed outside of China, other markets. Given our capabilities and knowledge in China, as well as our experience with local, you know, regional requirements, whether they're regulatory or other, we're really well positioned. In that area, we've been very successful in terms of winning business. That's a place where business comes online. Literally, we have ADAS programs where we're awarded a program, and within 12 months, we're launching an L2 plus program on Chinese vehicles. That will continue. It won't be a perfect line every quarter. There will be, you know, in terms of launch cadence, things like that, but we've made tremendous progress. I think as Varun said on the last earnings call, we'll exit this year at the point where our revenue mix will match the vehicle mix, China local versus multinational in China. Did you, just want to, focus on that for a second. Like, did you actually have to change, or did you change your sort of go-to-market strategy with some of those domestic players, or was it really just sort of like, "Let's refocus the sales force on the. Refocus the sales force. Okay. And then in terms of, you know, you mentioned, growing with them as they sort of localize and expand around the world, is that because of the relationship you've built with them in China, or is it more a function of, like, you have the footprint and the capability in the regions they're expanding to, or is it both? It's quite frankly, it's both. I mean, we have several of those OEMs. We've done, in effect, you know, our version of the Non-Deal Roadshow where, whether it's in Eastern Europe or it's in South America or elsewhere, where we're walking them through kind of what our engineering manufacturing capabilities are, our commercial organizations, making introductions to our ecosystem of suppliers so that to the extent they make that decision, they can have locally based in-market capabilities. Maybe just, you know, you mentioned earlier sort of electrification, and regionally it could play a different, I mean, it seems like in the U.S. here, we're headed towards a direction where not that we don't continue a march along the path towards more electrified vehicles, but the pace is going to be different. And I believe most of your, you know, what you used to sort of reference as sort of like the high-voltage portfolio was more in Europe and in China than maybe the U.S. So maybe not that impactful to you. But I am curious sort of how you think about that could impact the growth profile for the business here. And then somewhat related, I guess, the profitability profile, because, you know, the offset to less EVs is obviously more of everything else, right? And it's not like you do not have content on those vehicles. In some cases, maybe sort of it's extension of existing programs, which could be quite profitable as well. How do you sort of see the interplay of all those factors impacting the business? Yeah. No, Joe, I think that's a great question. And it's one of those items where we can probably do a better job communicating to investors. As we sit here in the United States, it's easy to come to the conclusion that EVs, broadly speaking, are right. Our customers operate in a long-term environment where they're developing vehicles over literally decades, right? And the concept of switching those strategies and turning them completely off, I'll start with that, that does not happen. Mix may change, so maybe less focus on BEV, more focus on plug-in hybrid or hybrid. Just reminding everybody, from an ICE to a hybrid, it's 1.5x the content. To a plug-in hybrid, it's almost 2x. To a battery electric vehicle, it's over two from a content opportunity. We get a benefit along the way, and there may be some slowdown here. OEMs are still working on EV platforms, less focused today on introducing near-term BEV, more focus on hybrid. That's what you should assume, but still working on electrification solutions. In Europe, OEMs continue to work on electrification platforms, most being focused on platforms today that can be either BEV, hybrid, or internal combustion engine. That's the one piece that has changed from a BEV platform versus an ICE platform. Heading down that path. When you think about China, China's all in. When you think about China and what they're exporting to Europe and focus on manufacturing in Europe, they're EV platforms. So again, that's where we come back with. We're strong believers in the energy transition. We believe it's going to continue. There will be periods of time where it will slow. It'll accelerate. There will be periods of time, given customer mix, that our revenue will be impacted. The general trend will be very positive. You know, maybe you want to sort of move on to the portfolio a little bit. I know you've sort of announced the spin of the EDS or the wire harness business. I think on the last call, you talked about really none of this sort of policy stuff or any of the recent developments to change that process. Maybe you could just sort of, you know, talk, you know, confirm that. But also, you know, and I know we'll hear more about this as we get later in the year. I think you're planning for some analyst days. But how do you think about the positioning of each side of the Aptiv businesses for success to win in the market? Sure. The EDS business has been around for 130 years. That's its legacy. It's number one or number two market position literally across every major automotive market in the world. Very strong competitive position. 70% of the programs that they work on are, we call them, full-service programs. We design and optimize whether it's a part of the harness or the whole full vehicle harness. We're bringing value to our customers. Our margins in that business relative to our peer group, as you probably see, reflect that value we bring, right? It is what we refer to as a program business. Although we're driving towards standardization and automation of the wire harness so that we can automate manufacturing and then working with several OEMs on how do they automate their installation process in the assembly plant, it's still fairly program-specific. We have literally, we produce wire harnesses for certain OEMs on a VIN-specific basis. We ship from Morocco to an assembly plant in Serbia, and it arrives at the assembly line four hours before vehicles produce, and it's installed on a VW or a Range Rover or other vehicle in Europe as an example. They have tremendous capabilities. That business led the whole drive for Aptiv on smart vehicle architecture, just given our historical experience there in terms of how do we drive towards that path. It is well positioned to participate, one, in consolidation in automotive, which needs to happen in that space. It needs to happen. In reality, there were certain opportunities over the last couple of years that we passed on because it did not work well for Aptiv. Higher margin, lower margin. It did not. That was not what was best for that portfolio. It is now positioned to, whether it acquires or is a part of a consolidation, be an even stronger player in that market. We have significant opportunities off vehicle, like I mentioned, whether it is aerospace and defense, robotics, or energy infrastructure. Those are all areas that team is very, very, very focused on. Remain Co. Listen, those are two product orgs. Our AS&UX business, the margin progression you've seen in that business has been the result of two things. One, we've productized solutions so that we have much higher levels of engineering reuse on the software side. We are now, more often than not, quoting software separate from hardware, to drive that behavior in our organization and that mentality with our customers. We are much more focused on how do we make it hardware agnostic, especially from an SoC standpoint. That includes China with China SoCs so that it's well positioned for high margin, higher growth in giving our customers choice because it's open architected. On the ECG business, you are all familiar with players like TE or Amphenol. Those are product businesses, and that is a business that is operated as a product business. It's an area where we'll continue to do M&A, you know, opportunities. It is high margin. It is solid growth. It's a matter of taking our existing product portfolios, near-term bundling them to grow organically and outside of automotive, but also looking at, you know, M&A opportunities. Yeah. You sort of answered my next question a little bit, but I guess on that ECG business, right, there are, and you sort of alluded to this, a big number of conversations just alluded to now. I think there's a lot more end markets, if you will, where the product can serve. How do you balance those, sort of trying to develop those organically versus looking for acquisitions? You know, just I guess to sort of put it out there, right, like you mentioned, you know, Amphenol, TE, right, obviously the data center AI has sort of been a huge growth area that seems to be actually fairly consolidated at this point, but the pie keeps getting larger and larger and larger. Is there an opportunity for a player like Aptiv either organically or inorganically to at least evaluate an end market? Absolutely. Yeah. I mean, we do today, just transparently. We do today. Evaluate or participate? We participate in it organically today. We evaluate opportunities today, though, as well. Okay. Anything in the audience? Any questions? Okay. I guess, maybe sticking with the, you know, capital allocation a little bit, right? Like you completed, you know, the ASR. If we go back to your original guidance, I know you said cash flows still seem sort of pretty healthy here. But, you know, one, you have some of the uncertainties still talked about. Two, you do sort of have this spin coming up. Should we think about things being relatively calm from a capital allocation perspective until we get through some more clarity, maybe we get through to the spin? How do you just sort of think about maybe preliminarily some of the thresholds for each of the businesses? Yeah. Yeah, absolutely, Kevin. That's okay. Yes. So with regards to, you know, the balance sheet, we're in a good position. You know, we talked about paying down $1 billion of debt, you know, by the end of 2025. We're running roughly about three quarters ahead. That pre-payable debt has all been paid off as of now, you know, as we talked about a few weeks ago with the first quarter earnings. The ASR, the $3 billion ASR that was done last summer, that is completed. Really at this point of time, Joe, as you rightly pointed out, it's more about we believe it's prudent to maintain liquidity and just kind of let the dust settle, right? It's more of a cash-built position at this point of time. That's really where we are. and then kind of evaluate opportunities, whether it be on the M&A side, whether it be, you know, other avenues. but kind of having that liquidity, we believe, you know, is the right thing to do at this point of time. With regards to your question about, you know, the relative levels of cash needed within the business, you know, from an as-is basis, roughly about $600 million- $800 million is typically what we would require. We haven't kind of broken it out between, you know, the spin versus, you know, new Aptiv post-spin. but, you know, we are we are intensely focused on making sure that we capitalize the EDS business appropriately. as Kevin mentioned, it has a certain set of strategic priorities, you know, to continue to, you know, deliver what it has been for over a century. and then there could be some opportunities for them also. It's just making sure that is appropriately set up from a cap structure perspective. Again, we will share more details in the coming months, on both those pieces. Maybe just a super high level, like, are there any material working capital differences between the businesses, or is that relatively? No, listen, both businesses actually deliver a tremendous amount of free cash flow, right? Number one, you know, the EDS business has been a tremendous generator of free cash. And then with regards to ECG and our AS and UX business, marginally higher, right? If you think of the new Aptiv, that'll be well into the 90s, close to 100% if we're adjusted net income, right? That's how you should think about that. Excellent. Maybe just to close here in the final minutes, Kevin, I know, you know, we've spoken a lot over the years, and especially, you know, I think, over the past year where there's been a number of industry challenges, right? I think there's been some, you know, frustration with the stock price and the valuation. What do you think, you know, from your perspective and meeting with investors all the time is sort of most misunderstood about the Aptiv story and opportunity? Yeah. Listen, I think there's still opportunities that are significant within automotive. I think there's still significant opportunities within the automotive industry overall. Let me start with that. We seem to have gone from electrification hype to no electrification to tariffs to now rare earth minerals. It seems to be one item after another. I understand investors decide where to allocate capital. The more complicated things are, the harder it is to do too. We appreciate that. We understand that. That gets back to my point about making sure that we're communicating information more frequently that's more valuable for you guys. You have our commitment to do that. I think net net, listen, transportation continues. Technology in vehicles continues. That's where we sit. That's where we apply. We have a highly competitive cost structure, a great competitive position. We have a starting position outside of automotive that we're confident we can take existing technologies, and with small tweaks and changes to the go-to-market, we can get incremental revenues. That's where we're focused. At the same time, we're serving our largest customer base, right, which is very important. You know, we feel like there's a tremendous amount of opportunity, but we understand the complexity that investors at this point in time, the lens that they're looking through and what they're hearing. Great. With that, gentlemen, Kevin, Varun, thanks for joining us today at the conference. Really appreciate it. Appreciate it. Great questions, Joe. Take care. It's always great to see you. Thank you.