Good morning. My name is Savannah, and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2023 Fourth Quarter and Full Year Financial Results Call. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you are using a speakerphone, please pick up the handset before asking your question. I would now like to turn the conference over to Patrick Nolan, Vice President of Investor Relations. Mr. Nolan, you may begin your conference. Thank you, Savannah. Good morning, everyone, and thank you for joining us today. We issued our earnings release earlier this morning. It's posted on our website, borgwarner.com, both on our homepage and our investor relations homepage. With regard to our investor relations calendar, we will be attending multiple conferences between now and our next earnings release. Please see the events section of our IR page for a full list. Before we begin, I need to inform you that during this call, we may make forward-looking statements which involve risks and uncertainties as detailed in our 10-K. Our actual results may differ significantly from the matters discussed today. During today's presentation, we'll highlight certain non-GAAP measures in order to provide a clear, a clearer picture of how the core business performs and for comparison purposes with prior periods. When you hear us say on a comparable basis, that means excluding the impact of FX, net M&A, and other non-comparable items. When you hear us say adjusted, that means excluding non-comparable items. Finally, when you hear us say organic, that means excluding the impact of FX and net M&A. We will also refer to our growth compared to our market. When you hear us say market, that means the change in light vehicle, light and commercial vehicle production weighted for our geographic exposure. Please note that we've posted today's earnings call presentation to the IR page of our website. We encourage you to follow along with these slides during our discussion. With that, I'm happy to turn the call over to Fred. Thank you, Pat, and good day, everyone. We're pleased to share our results for 2023 and provide an overall company update starting on slide 5. With approximately $14 billion in sales, we delivered more than 12% organic growth in 2023. Our margin performance was strong, coming at the high end of our guide. During the course of 2023, we adjusted our eProducts top-line guide to reflect what we saw in the marketplace. It resulted in a slightly lower top line for the company, but higher margins. This is a good example of the product portfolio resilience that exists at BorgWarner. We delivered $565 million of free cash flow in 2023. This free cash flow supported the $177 million of share repurchases that we executed during the 4th quarter, as well as the closing of the Eldor acquisition. Our Charging Forward progress continued on multiple fronts. We secured multiple new eProduct awards during the 4th quarter, adding to those already announced over the course of the year. These awards were across our portfolio for both BEV and hybrid architectures. We continue to see a strong sourcing pool for our products based on the strength of our portfolio globally. Lastly, we took steps to enable new business awards by executing several strategic actions to further strengthen our eProduct portfolio, like the acquisition of Eldor electronics business, as well as the strategic agreement with BYD, FinDreams Battery for LFP packs outside of China. Now, let's look at some new eProduct awards on slide 6. First, BorgWarner has been selected by XPeng to supply its e-motor, rotor, and stator for the X9 MPV, as well as for their next electric B-class sedan. Production began in January 2024 for the X9, and we're planning to start producing for the B-class sedan in Q3 2024. Our high-voltage Hairpin 220E motor offers high power and torque density and higher efficiency at a competitive cost. We're excited to supply XPeng with our proven stator and rotor, as we believe it continues to position us for long-term success in China, where NEV penetration is already more than 35% of the market. Second, BorgWarner secured an award with a major global OEM to extend its existing business, supplying 400-volt high-voltage cooler heaters for some of the automaker's light vehicle BEV platforms, specifically for its passenger truck and SUV programs. This business win is one of the three awards with North American OEMs incorporating BorgWarner's high-voltage cooler heaters into their vehicles. Third, BorgWarner has secured an award with a major Chinese OEM to supply its 90 kW dual inverter on a series of the automaker's plug-in hybrids and range extender electric vehicles. Production is expected to begin in September this year. The dual inverter is developed for hybrid vehicles as an integrated solution. The product utilizes BorgWarner's Viper Power Module platform and leverages our inverter product leadership and scale. Next, on slide 7. In addition to securing new business, we took multiple steps to build additional capabilities within our eProduct portfolio, driving product leadership and differentiations. I would like to highlight three of them today. First, BorgWarner completed its acquisition of the electric hybrid system segment of Eldor. This provides us with additional capabilities in onboard chargers, DC-DC converters, and integrated high-voltage boxes, all of which are expected to complement BorgWarner's existing product portfolio in hybrids and BEVs. Next, BorgWarner is continuing to expand its product portfolio for battery electric and hybrid commercial vehicles through our agreement to form a joint venture with Shaanxi Fast Auto Drive Group, a Weichai subsidiary. We're working together to accelerate the product efficiency and growth in the Chinese CV market with the largest CV powertrain supplier in China. BorgWarner will then be able to use these products and technologies for the rest of the world. Finally, BorgWarner signed an international strategic relationship agreement with BYD subsidiary, FinDreams Battery, for LFP cells and packs. Under this agreement, BorgWarner will be the only non-OEM localized manufacturer unaffiliated with FinDreams Battery, with rights to localize LFP battery packs for commercial vehicles utilizing FinDreams Battery blade cells. These packs are expected to be sold in the CV markets in Europe, the Americas, and select Asia-Pacific regions. The LFP battery chemistry is an exciting technology that is cost-competitive in comparison with some other cell chemistries. We're seeing increased demand from our customers for packs with LFP cells. FinDreams Battery is right for BorgWarner in this area, with over 20 years of experience in batteries, with numerous successful product launches. Next, on slide 8, I would like to summarize the growth we expect in our eProduct sales in 2024. We expect 2024 eProduct sales of $2.5 billion-$2.8 billion, representing a year-over-year growth of 25%-40%. One important driver of our 2024 growth is expected to be our battery system product line. Battery systems demand from our commercial vehicle customers, trucks and buses, continues to outpace our ability to produce. However, we're continuing to increase our capacity to meet the strong customer demand, both in Seneca, South Carolina, and in Europe. We expect this capacity expansion to help drive a $250 million-$350 million increase in battery system sales in 2024, which equates to 55%-75% year-over-year growth, with more to come. Then looking at the other parts of our eProduct portfolio, our guidance is to 14%-27% year-over-year growth, with the midpoint roughly in line with our expected BEV and hybrid market growth. Overall, we expect 2024 to be a heavy year related to the number of launches across our light vehicle portfolio, from IDM to motors, from power electronics to thermal management globally for both BEVs and hybrids. While we expect another year of volatility in BEVs and hybrids volume for the industry, we believe our capacity expansions and intense launch activities will support our outlook. Finally, on slide 10, I want to take the opportunity to remind you of the intent of Charging Forward 2027. Charging Forward 2027 has three pillars. One, eProducts growth. Two, eProduct profitability, and three, maximize the foundational value. The first two pillars center around supporting BorgWarner's long-term profitable growth. We continue to believe that despite near-term volatility, the mid to long-term trends towards electrification, BEV and hybrids remain strong. We believe that BorgWarner is clearly positioning itself to be among the leaders in terms of eProduct business awards and to do so profitably. The third pillar of Charging Forward is an enabler of this long-term growth. Our foundational business brings customer relationship, technological capabilities, and the ability to internally fund our investments. As importantly, with its leading market positions and strong margin profile, we believe our foundational business provides near-term earnings resiliency during times of BEV and hybrid market volatility, just as we highlighted at our Investor Day back in June. As Kevin will review, that is evident both in our 2023 results and our 2024 outlook. The key takeaway is that both our eProduct and our foundational business lines play important role in Charging Forward 2027. This was true when we unveiled our plan in June, and it remains true today. As I look back on 2023, my take is this: BorgWarner successfully managed another challenging environment during 2023. We delivered solid margins and strong free cash flow, which is a sign of the product resiliency that we built. We successfully completed the spin-off of PHINIA. We secured new business awards that are supportive of our long-term revenue objectives in all types of electrification powertrain architectures. We also secured some critical alliances, especially on the CV side, with subsidiaries of Weichai for inverters and BYD for battery packs. We also continued to return capital to shareholders. BorgWarner has repurchased about $600 million of stock since completing the Delphi acquisition in 2020. Over the last four years, we have also returned about $600 million to shareholders in dividends. BorgWarner has returned about $1.2 billion to shareholders since 2020, and that's before considering the tax-free spin-off of PHINIA. Moving into 2024 and beyond, we are balancing nearer-term margins relative to our long-term objectives. We expect to manage our incremental margin holistically while continuing to invest in our future growth. As we've always said, the industry growth in BEVs and hybrids will not be a straight line. The near-term volatility is a long-term opportunity for the companies with the financial strength, earnings resiliency, and a great product leadership focus that BorgWarner possesses. Our product portfolio is built for resiliency, such that a longer combustion tail will help margin and cash generation. As a company, we are executing our Charging Forward 2027, which we expect will deliver value to our shareholders here and now, and long into the future. This is Kevin's last earnings call with the company, and I wanted to take a moment to personally thank him for his tremendous contribution to our company over the past years. Kevin has played an instrumental role in all of BorgWarner's recent major strategic initiatives, ranging from the acquisition of Delphi to the creation and execution of Charging Forward, as well as the spin-off of PHINIA. On behalf of the entire board of directors and the management team, I thank him for his contribution to our company, for his friendship, and wish him a fantastic retirement. I look forward to Craig Aaron stepping into the CFO role next month. I am confident Craig has the right skills, the deep knowledge of BorgWarner and our industry, to execute our next chapter of profitable growth. With that, let me turn the call over to Kevin. Thank you, Fred, and good morning, everyone. Before I dive into the financials, I'd like to provide a quick overview of our 4th quarter results. First, revenue was at the midpoint of our guidance, supported by stronger than expected industry production in the quarter. Second, our margin performance was at the high end of our guidance, driven by strong conversion on higher revenue. And finally, we delivered strong free cash flow performance to finish out the year. Let's turn to slide 10 for a look at our year-over-year revenue walk for Q4. Last year's Q4 revenue from continuing operations was just over $3.3 billion. You can see that the weakening U.S. dollar to over year-over-year increase in revenue of almost 2% or $55 million. Then you can see the increase in our organic revenue, which was roughly 4.5% year-over-year. The reason why our growth wasn't stronger is that we were negatively impacted in the quarter by customer launch and ramp-up delays of key eProduct programs in China. Lower customer volumes on a North American EV program and lost sales due to the UAW strike in North America. Finally, the acquisitions of Eldor and SSE added $5 million to revenue year-over-year. The sum of all this was just over $3.5 billion of revenue in Q4. Turning to slide 11, you can see our earnings and cash flow performance for the quarter. Our 4th quarter adjusted operating income was $332 million, equating to a 9.4% margin. That compares to adjusted operating income from continuing operations of $321 million, or 9.7% from a year ago. On a comparable basis, excluding the impact of foreign exchange and the impact of M&A, adjusted operating income increased $16 million on $145 million of higher sales. This performance includes a planned eProduct related R&D increase of $15 million. Excluding this higher ER&D investment, we converted at approximately 21% on the organic sales increase. Our adjusted EPS from continuing operations was down $0.04 compared to a year ago, as higher adjusted operating income was offset by a higher effective tax rate. Recall that our adjusted effective tax rate in Q4 of 2022 was only 18%, lower than our typical tax rate. And finally, free cash flow from continuing operations was $679 million during the 4th quarter, which allowed us to deliver full-year free cash flow of $565 million. On slide 12, I'd like to take a moment to look at our 2023 results compared to the post PHINIA spin-off guidance that we provided in June, because I think it provides a helpful look at the resilience we believe underlies our current product portfolio. You'll see that overall sales came in modestly below the midpoint of that guidance. While eProduct sales fell short by about $400 million relative to the midpoint of our $2.3 billion-$2.6 billion guide, foundational sales largely offset this, coming in about $300 million higher than the June guidance. However, the real evidence of our earnings resilience is in our adjusted operating margin performance. Despite the shortfall in sales relative to the midpoint of our June guidance, adjusted operating margin and adjusted operating income dollars came in above the midpoint of that June guidance. This demonstrates precisely the resiliency we've been speaking about since our Investor Day. If eProducts are weaker, then our revenue isn't going to grow as quickly, but our margin is likely going to be stronger, and that's what happened in the second half of 2023. Let's now turn to slide 13, where you can see our perspective on global industry production for 2024. We expect our global weighted light and commercial vehicle markets to be flat to down 2.5% this year. Looking at this by region, we're planning for our weighted North American markets to be down 1% to up 1%. In Europe, we expect our blended market to be down 2%-4% year-over-year. In China, we expect the overall market to be down 1% to up 1%. Now let's take a look at our full year outlook on slide 14. First, it's important to note that our guidance assumes minimal impact from foreign currencies on full year sales. Second, as I previously mentioned, we expect our markets to be flat to down 2.5% for the year. Despite that, we expect to continue to deliver year-over-year organic sales growth, driven by growth in our eProduct sales. Specifically, in 2024, we're expecting to deliver between $2.5 billion and $2.8 billion in eProduct sales, which is up significantly from the approximately $2 billion we generated in 2023. Finally, the Eldor acquisition is expected to add approximately $40 million to 2024 revenue. Based on these expectations, we're projecting total 2024 revenue in the range of $14.4 billion-$14.9 billion, which equates to organic growth of approximately 1%-5%. Let's switch to margin. We expect our full year adjusted operating margin to be in the range of 9.2%-9.6%. It's important to note that this guidance includes a negative operating income impact due to the Eldor acquisition. With Eldor, we purchased strong engineering capabilities that we believe more clearly puts us on the path to achieving product leadership in an addressable market that we expect will approach $30 billion by 2030. However, that business has very little revenue today, which means we'll be generating operating losses for the next few years. Excluding the impact of those Eldor-related losses in 2024, we expect adjusted operating margin to be in the range of 9.6%-9.9%, which compares to our 2023 margin of 9.6%. That implies the rest of the business delivering full year incrementals in the mid to high teens, including our planned growth in ER&D. We believe this margin performance is a reflection of the underlying earnings power of the company, with the ability to manage costs and drive conversion even in the face of volatile BEV and hybrid markets. Based on this revenue and margin outlook, we're expecting full year adjusted EPS from continuing operations in the range of $3.65-$4 per diluted share. Turning to free cash flow, we expect we'll deliver free cash flow of $475 million-$575 million for the full year. The midpoint of this outlook is slightly lower than the $565 million we generated in 2023, due to a modest build in working capital that supports our revenue growth. That's our 2024 outlook. So let me summarize my financial remarks. Overall, we delivered a solid 2023 result despite volatility in EV markets and our associated eProduct revenue. Our adjusted operating income and free cash flow performance showed the resilience of our portfolio. Specifically, when eProduct growth is under pressure, it's likely to be offset by stronger performance in the rest of the portfolio. Now, as we look ahead to 2024, the company will be keenly focused on delivering organic growth despite near-term volatility in the global BEV and hybrid markets and the expected softening of industry production, delivering strong incremental margin performance on an all-in basis, including our spending to support growth, and continuing to make the prudent investments, both organic and inorganic, that we believe will help secure our growth and financial strength long into the future. This will be my last earnings call after five years working with Fred and the team to drive the transformation of BorgWarner. I'm proud that I can leave the company at a moment where I truly believe it's positioned to be a winner in the world of electrification across a variety of eProducts, which is probably not the case when I joined in 2019. With a resilient portfolio, I believe the company is poised for long-term success, no matter how the progression toward electrification plays out in the coming years. As a result, I expect that will translate into value creation for our shareholders. I'd like to thank Fred and the team for the opportunity to be part of this journey, and I know I'm leaving the finance function in good hands with Craig. Finally, thanks to all of you in the investment community for our engagement over my last 11 years as a public company CFO. It's been a fun ride, and I've enjoyed the relationships I've had the chance to build with many of you over the years. With that, I'd like to turn the call back over to Pat. Thank you, Kevin. Savannah, we're ready to open up for questions. Thank you. At this time, I would like to remind everyone, if you would like to ask a question, press star one on your telephone keypad. If you are using a speakerphone, please pick up the handset before asking your question. In the interest of time, please limit yourself to one question and one follow-up question. We will pause for a moment to compile the Q&A roster. Our first question will come from John Murphy with Bank of America. Please go ahead. Good morning, everybody, and congrats, Kevin. Look forward to crossing paths sometime in the near future. Thanks, John. Just a first question here. You know, I understand you have to run a business and sometimes it makes sense in the volatile world that we live in to take a slightly conservative tack. But if I were to tell you, you know, instead of your volumes being flat to down 2.5%, you know, they might be flat to up 2.5%, at the midpoint of the range, that would add about $355 million in revenue to your outlook. Would it be, you know, reasonable to you know, sort of assume that those could convert sort of a 15%-20% incremental margin, and that would kind of really translate into about 5% upside to, you know, earnings, and potentially cash flow? Is that a reasonable way to think about it if that were to happen? It's a reasonable way to think about it. Yeah, I mean, we—our guide is premised on our expectation that our markets are flat to down 2.5%, but if markets come in stronger, we fully expect that we would execute on that, deliver the revenue, and convert on it. And you can see the conversion on an all-in basis implied in our guide is a mid-teens conversion. And so if we see upside in revenue, you should expect to see us converting on that incremental revenue. Okay, and then just a quick follow-up. I mean, the market is shifting all over the place, although it's not moving as quickly as kind of some of the commentary would lead you to believe. If we saw a greater hybrid penetration, not just in 2024, but maybe in 2025 and beyond, Fred, is there potentially a shift in cap allocation and slightly in strategy that you could execute, and not leave capital stranded? I mean, you know, how sensitive are you to shifts between EVs and hybrids, and how much would you have to shift the strategy and cap allocation? The products for the E side of the hybrids are similar than the products on BEV. They are the same motors, they are the same power electronics. They are the same transmission cases. They are the same high-voltage cooler heaters. So it's from an R&D perspective, it's extremely fungible. They're the same engineers, and from a capital standpoint, it's pretty fungible too. So we've developed an eProduct portfolio that is, I would say, very fungible across hybrids and BEVs. Very much so. That's helpful. Thank you, guys. Thank you, John. Savannah, we're ready for the next question. Savannah, are you there? Yes, I am here. Are we ready? Yeah, please, the next question, please. Question will come from Colin Langan of Wells Fargo. Oh, great. Thanks for taking my question, and, and congrats to Kevin as well. Thanks, Colin. Just talking on contribution margins, you know, it does come out to something like a 16 if you exclude Eldor. Any other puts and takes? You mentioned ER&D. How much of a headwind is there? Any commodity or labor issues that we should be thinking about? And then when we think about Eldor, when does this drag start to go away, or is that sort of gonna be here for several years? Yeah, with respect to the year-over-year conversion in 2024, there's nothing unusual to really think about. I mean, right, we're looking at the mid-teens, and that is on an all-in basis. If you look at - we are investing a little bit more in eProduct R&D again in 2024. It'll be up organically about $40 million-$50 million, but that's embedded within that conversion. So we're looking at our conversion now, given the scale of the business from an eProduct perspective on an all-in basis, and we expect to contribute in the mid-teens with that in mind. Eldor, any thoughts on that, moderate? So let me take a step back here. I think Borg is very good at taking great technologies and commercializing them and globalizing them. Look at what we've done with Delphi. Look at what we've done with Akasol, which literally had no revenue. This year, we had about around $50 million at the midpoint. The plan with Eldor on DC-DC converters and on board chargers is exactly that. And so I am very optimistic about the drive that we can generate and profitable growth that we can generate from the engineering base that we acquired with Eldor. Maybe I just add to that, Colin, you know, this is something we anticipated when we gave guidance back at our Investor Day as well, you know, because Eldor was well in flight, and we knew that would have an impact on our margin in the short term, but position us for long-term success in a $30 billion addressable market in 2030. So it is impacting the near term, but over time, as we start to have some success in that business, look into the next few years out, it'll start to be a positive for us, but that's still several years away. We expect to have operating losses in that business for the next couple of years as we support the R&D necessary to support our capitalizing on that business. Got it. That makes sense. And, you know, just you touched today on the this year's guidance being sort of flexible between EV and ICE profitability. And at your Investor Day, you talked about 2027, same dynamics of if EV mix is higher, the, to sort of offset higher or lower, you'd, at a dollar basis, be similar in 2027. But, you know, you're still forecasting, like, a fivefold increase in your e-powertrain sales, through 2027. I mean, and that would imply probably a lot of ER&D as you try to prepare for those launches. So is that flexibility gonna be consistent over the, the midterm, or is there gonna be some puts and takes because you have some pretty chunky R&D needs to get ready for that $10 billion that you talked about in 2027? Yeah, when you look at the eProduct related R&D, as we mentioned in the past, we thought the real peak in that was going to be in 2022 in terms of the growth in the eProduct R&D. You might remember it stepped up $150 million that year. But then we said we expect the pace of the growth in the ER&D to step down year-over-year. And you can see that happening. You know, last year, it stepped up about $60 million, so not as big an increase as what we saw in 2022. And as we look ahead to 2024, it's going to step up about $40 million-$50 million organically. So the pace of the growth in that ER&D is definitely slowing, but still growing because it's supporting our ability to successfully launch and ramp up programs, as well as to capitalize on continued profitable opportunities out into the future. So we think the pace of what we're seeing right now is supportive of our long-term outlook for electrification. Okay, sounds great. Thanks for taking my questions. Our next question will come from Joe Spak with UBS. Thanks. Good morning, and congrats to both Kevin and Craig. I guess I just wanted to sort of touch on a couple of the midterm factors here in light of what's going on and your strategy. So first, if I look at slide 13, and I look at, you know, combustion plus hybrid of the industry, you're showing about a 4% decline, roughly, at the industry level. Your implied foundational revenue growth is, like, - 1.5. So that, like, 2%-3% outgrowth, is that, like, a reasonable level of outperformance on the foundational stuff as ICE continues to decline over the coming years? And can you still hit that 13% foundational margin target that you laid out if ICE continues to decline? So, I would say, Joe, that, you know, we're outgrowing the foundational side by about 300 basis points. I would tell you that on the X- side, I see more upside than downside at this point in time. And we are constantly, as we presented a few months ago, and as we review the team regularly, we're constantly restructuring in a position of strength. And that, I believe, will allow us to maintain the foundational margins as it is called by our third pillar of Charging Forward. Okay. Thank you for that. Then I guess the second question, maybe to build off of, Colin's question a little bit. Like, you know, let's call it $2.5 billion eProducts, guidance for this year. You know, your prior 2025 was $4.5 billion-$5 billion, so that looks like a big jump. So maybe, maybe a couple of things there. Like, it seems like maybe some of that product launches through the year, so maybe the 2024 exit rate is, is a better sense, and I don't know if, if, if you would agree with that. And, and I guess just, you know, secondly, you know, is that sort of 2025 level for eProducts still, attainable? I mean, it doesn't seem like the market really believes it is, but I'd be curious to understand your view. So if you take the CV packs, we're growing 65% CAGR year-over-year, and we are ramping up in U.S. significantly in Q2 and in Europe at the end of the year, and more to come. So I would say that the end of 2024 jump-off point on CV is much higher than the current year. On light vehicle, roughly 60% of the programs that we've disclosed so far, we're launching this year or we've launched at the tail end of last year. So even if there is some variability possible, I think you're right. The jump-off point at the end of this year is gonna be from a much bigger base on the light vehicle standpoint, as it is, I just alluded to on the CV side. So, I would say that if the customer volumes are holding as they are currently forecasting, we would expect to be within that range in 2025. Okay, so obviously, a volatile market we need to monitor, but based on what you see now and sort of the growth through the year on what you just sort of talked about, it still seems achievable. For now, we're focusing on 24. We're launching so many products, we're focusing on 24, and we'll let you know what we think finally on 25 in due course. 24 is our focus, but I just wanted to give you the color of the different building blocks between CV and light vehicles. Okay, I appreciate that. Thank you. Thank you. Our next question will come from Rod Lache with Wolfe Research. Please go ahead. Good morning, everybody. Hey, Fred. Congrats, Kevin. I want to first of all confirm on the question that Joe just asked, is based on the growth in eProducts and in a flat market, it would appear that there's some moderation in the foundational business, but you are maintaining that 13% margin, so you're not delevering. And secondly, can you remind us what's embedded for M&A within the eProducts revenue target for 2025? I'm referring to the $4.5 billion-$5 billion. So I take the second part of the question. There is no M&A in the $4.5 billion-$5 billion. It is booked business. There is a significant portion, about $2 billion, of M&A in 2027. Okay. And then on the foundational margin, one of our key strategies is that we know over time, as electrification continues to grow at the expense of underlying combustion-based technology, that it'll put pressure over time on our revenue outlook. And our challenge is to make sure we're managing the cost structure of that business, I should even say, the overall P&L of that business, whether that's on the price side or the cost side, to make sure we're delivering and sustaining our margin profile. We fully expect that to be the case as we go through 2024 and well beyond that. Thanks, thanks for that. Maybe just bigger picture, when we take a step back and you kinda analyze the regulatory requirements for your light vehicle customers, I'm curious if you have any thoughts on how much flexibility the OEMs really have to defer electric vehicles. Do you think that they would be able to shift to plug-ins or hybrids to a much greater extent? And are you seeing any benefit from the fact that you have a lot of kind of off-the-shelf hybrid technology, which if these are sort of late decisions, I would imagine they might accelerate. Yeah. So for, for customers, I think most probably you need to ask them. I think there is some flexibility. We are hearing commentaries, as you do, that in the U.S., there is some intention to ramp up hybrids. Outside of the U.S., hybrid is a big portion of the new energy vehicles. In China, it's 30%-40%. In Europe, it's a big percentage, too. What's important to me is that we've built a product portfolio that is totally fungible across hybrid and BEV. R&D, it's the same engineers, power, electronics, motors, transmission, thermal management, it's the same thing. For us, it does not matter. We can support our customer to wherever they want to go. Fred, just to clarify, are you actually seeing that? We're reading about it, we're hearing about this increased interest in the U.S. Are your customers now sort of accelerating activity with you in that area? I think it's a little too early to see the communication and the RFQ materializing on the hybrid side. But I would say that with the scale that we have in our eP roducts, that cuts across hybrids, different types of hybrids and BEVs, we can be one of the enablers of a rapid launch of hybrid powertrain for those customers. That makes sense. Thank you. Thank you, Rob. Your next question will come from Dan Levy with Barclays. Hi. Good morning. Thanks for taking the questions, and congratulations to Kevin and Craig on the new roles. Maybe we could just start with Eldor and the broader M&A strategy specifically. So, how are you managing, I guess we could say, the integration deals? Because you have done a lot in the way of M&A. What is the process for integration? You know, how do you manage any integration risks? And then maybe you could just remind us on Eldor, you know, are these losses in line with what you originally anticipated, or is this a function of maybe a weaker EV environment than when you originally did the deal? So first of all, the financial profile of Eldor was fully comprehended when we did the due diligence, and it was fully comprehended into the views of our financials. Integrating companies is becoming, I think, a real strength of BorgWarner. We do that in a very disciplined way, and we're doing it with a very disciplined way with Eldor, too. We are locating BorgWarner people on location, and we are managing the business starting day one. We've owned Eldor for a couple of months now, but we are going to just, you know, manage the Eldor business as we manage the BorgWarner business with financial discipline. There are attractive businesses in on-board charger, DC-DC converter, and one-box, which again are totally the same products, either it's a hybrid or a BEV. And we see a lot of pulls and a lot of demand from our customers in those power electronics technologies, too. Maybe I'll just piggyback on that, Dan, back to the losses being in line. You know, keep in mind, if you look at what's implied in our guidance this year, we're at 9.6%-9.9% without Eldor. And you know, as we looked out to 2027, we thought we were on track to be a 10% margin business. So we'd already be on the cusp of that, you know, without doing Eldor. But Eldor was contemplated as impacting us to the tune of 30-40 basis points in the short term, because we knew we were investing in a strong engineering shop that doesn't have a lot of revenue today, and so that was contemplated in our original guide. Okay. And then maybe just as a follow-up on that, given, you know, we've seen some shifts in product plans, maybe you could just give us a sense of what the go-forward capital allocations. I mean, Fred, you mentioned a moment ago that there's $2 billion of M&A assumed in the 2027 targets. I know we're not, you know, gonna get an update on that today, but maybe you can give us a sense of how this environment shifts what your appetite is for assets. How does the capital allocation change? And what else is remaining that still isn't in your portfolio from a capability or product or a customer exposure standpoint that still, you know, would require some M&A? I would say that the capital allocation strategy is pretty much unchanged. We are looking at M&A as an important part of strengthening electrification capabilities. We are very disciplined in the way we look at M&A. We are looking at way more companies than we actually pull the trigger on. And we think that the current environment could provide some attractive buying opportunities, and rest assured that we will include and consider the near-term impact in the valuation assessments. We are looking at M&As with discounted cash flows, and we're taking those near-term impacts really importantly. Let's say, the policy on capital allocation also includes the dividends that we've left unchanged even during COVID. We've repurchased stocks, and buyback is part of the strategy. I alluded to in my prepared remark on how much we've given back to our shareholders and the spin-off of PHINIA, which I think was a great success. It's also part of the capital allocation strategy. Kevin, do you want to add anything? No, I think that's it. You're good? Our next question will come from Adam Jonas with Morgan Stanley. Hey, everybody, and congrats, Kevin. Just two simple questions. First one, what portion of your 2024 budget of CapEx and R&D is allocated to E-Systems? Yeah, we don't, we don't really break that out, but it, it publicly, in terms of what we've been disclosing in terms of, of an overall R&D or CapEx allocated that way. But what I would tell you is, you know, if you look at R&D first and foremost, we invested about $475 million in eProduct related R&D in 2023, versus the $700 million or so, $715 million or so of R&D in total. As we look ahead to 2024, organically, we'll add another $40 million-$50 million there from eProduct R&D perspective. And you can expect that the foundational-based R&D will probably come down a little bit on a year-over-year basis, as it's been doing the last few years. So the R&D will continue to be increasingly weighted towards eProduct, and it is the majority of the investment. From a capital perspective, you can see we stepped up our capital investment last year pretty meaningfully, $200 million relative to 2022, and that was really focused on investing in some of the eProduct portfolio ramp-ups that we needed, particularly within our ePropulsion segment, as well as our battery pack business. You'll see a comparable level of investment in capital in 2024 going toward that. I think these will be a couple of the peak years of investment from a CapEx perspective, particularly on that battery pack business, and then you'll probably see it come back down a little bit to more normalized levels as we hit 25 and beyond. And then what's really important is to understand that the R&D and CapEx are for EV and hybrids. And again, I'd say multiple times, the products are the same for us in light vehicle, whether it goes in a hybrid or a BEV. It's the same people, it's the same R&D, it's the same CapEx. Thank you. And I'm just going to attempt on that point, Fred, that there are many aspects of E-Systems that are agnostic of—let's say, agnostic between BEV and hybrid. I'll ask you, I won't hold you to specifics, but what would be your best guess or range of how much of your 2024 E-Systems and foundational business are going into hybrids to include plug-in hybrids? If you were to isolate just hybrids specifically, because, of course, some of your foundational stuff increasingly is going into hybrids as well, as we all know. So I didn't know if you could isolate a guess of how much hybrid would account for the revenue in 2024. Uhmm. A range would be great. Yeah, I guess maybe just a couple of these. I think Pat can come back to you on the details, but what I would say is, when you look at the $2.5 billion-$2.8 billion guide, the first thing I'd say is off the top, the $700 million-$800 million associated with battery packs is all EV. It, it's, it's EV in the commercial space, in the CV space. So then what you're really looking at is the other $1.8 billion-$2 billion of eProduct revenue, and we'll, we'll have Pat come back to you with a specific breakdown. I don't want to quote a number and have it a little bit off. Appreciate it. Thanks. Our next question will come from James Picariello with BNP Paribas. Hi, everyone, and congrats. Congrats, Kevin. Just a clarification question first. So based on the margin guidance, excluding Eldor, you know, the implied loss rate for Eldor this year is roughly $50 million. Is that right? And then in addition to that impact, you're stepping up organic eProducts R&D by $40 million-$50 million. So all in, you know, an additional $90 million-$100 million in spend. Do I have that right? Roughly, yeah. The Eldor—the portion of the Eldor loss that's engineering related is somewhere around $40 million. So you're right, it's $40 million-$50 million of organic step up of the R&D, and then Eldor adds about another $40 million. The overall loss in Eldor is around—the midpoint is around what you said. Yeah. Okay. And then can you confirm what the... Appreciate that, that color. And then can you just confirm what the eProduct margin was in, in 2023? And then based on what we just covered, is it possible eProduct losses are, are close to flat year-over-year? Just how should we be thinking about that? Or, or asked another way, you know, part of the impetus behind separating out ePropulsion was to, you know, provide that clarity and transparency on, on the eProduct progression. Is there a, a segment-specific guidance that to share maybe on, on ePropulsion? Thanks. You know, we're not going to give any segment-specific guidance this year, but what I would say, when you look at the ePropulsion segment, obviously, we were focused on driving toward breakeven in the 4th quarter of last year. That was the guidance as we started out the year last year, and that was purely premised on our ability to successfully convert on the incremental revenue. And we were disappointed that we had to pull back on that when we saw some of the volatility in the e-markets and how that was impacting our revenue. So as we ended the year, you can see when you look at the ePropulsion segment, we ended up coming in at about $540 million of revenue in the 4th quarter, which is about $200 million-$300 million short of our original guidance when we were expecting to get to breakeven. So that business ended up losing about, I think, $16 million or so in the 4th quarter. I think what gives us some comfort in the way we're managing the profitability of that business is the fact that we were down $200 million-$300 million in revenue versus our original guidance. You know, if we had simply let contribution margin flow through on those lower, that lower revenue, we probably would have had a bigger loss than $16 million in the quarter. So I think we feel good about the fact that we're managing the profitability of that business in light of some of the near-term volatility. But ultimately, the path to break even into long term profitability in that business comes from successfully converting on the incremental revenue. And what we take a lot of comfort in is that we see the contribution margin really flowing through the business. I mean, you can see it in the 2024 guide, right? We're converting on an all-in basis at mid-teens, and all of the growth in 2024 is coming from the e-businesses. So we see the underlying fundamentals of the profitability coming through, and so as we scale that business, we see the path towards the profitability objectives of the company intact for that portfolio. Thanks. Our next question will come from Emmanuel Rosner with Deutsche Bank. Thank you so much. I was hoping to follow up on the, on the incremental margins and just try to understand a little bit, how the math would work for the foundational side, of your business. So we've basically reached a point now where within your 2024 guidance, foundational revenue is already, you know, down, I guess, even with the growth of the market. And so I guess, how, how should we think about contribution margin within, you know, within foundational? Like, is it-- does it become sort of like the decremental margin? Do you need sort of like restructuring to sort of, like, offset this? And if I think about some of our thoughts here around, you know, basically cashing decisions in the future, like how quickly can you go from, you know, having sort of like incrementals if the volume plays out better versus having to sort of like restructure to offset any potential downside? I mean, you—with respect to the foundational business, implicitly, you're right, the revenue is down a little bit year-over-year, somewhere in our guidance, implicitly around $60 million-$260 million. If you—which means we're down about 0.5-2 points in that portfolio year-over-year. If you look at the underlying markets that those products support, being the combustion and hybrid markets, those are down anywhere from 3%-6% on a year-over-year basis. So we are outperforming those markets as those are coming down a little bit year-over-year, but we are seeing a revenue decline. As you know, at our Investor Day, we talked about our expectation that over time, we were going to see revenue in the foundational portfolios coming under some pressure, and what we needed to do is make sure we're managing that P&L holistically, pricing, cost, restructuring, to make sure that we would sustain that margin profile over time, and we fully expect to do that. We expect to execute that in 2024 as well as all the way through the end of the Charging Forward plan. I would add one thing. And then I would add one thing is that on the combustion side, we don't really see no new, we don't really see new engines or new transmissions being developed. It is more longer life or slightly higher volume on the current product. So it even if combustion, as you mentioned, may go back up or longer tail, that doesn't prevent us to adjust the SG&A and the engineering elements of the foundational P&L. Yeah, that's super helpful. Just to make sure I understand, so because 2024 could help us really understand also the mid or longer-term picture, because you have a guidance, obviously, about it, but so you mentioned this mid-teen incremental margins all in, you know, for this year. Any way to directionally think about it on what does that look like on a foundational versus, you know, eProduct? Because, you know, obviously, as mentioned, foundational is actually down revenues, and then eProduct is up a lot. So what does that look like? And I think it would help us a little bit better understand how you manage this going forward. No, I mean, fundamentally, we're not going to break out the details in terms of our guide, but fundamentally, in order for us to execute on our foundational margin profile over the coming years in line with Charging Forward, it means we need to decrement on an all-in basis in the mid-teens. And for our eProduct portfolio to deliver on its margin expectations, we need to convert in the mid-teens. And I think you see the blend of that actually coming through the financials and the P&L in our 2024 guide. Mm-hmm. Great. Thank you. We have time for one final question, and that question will come from Noah Kaye with Oppenheimer. Please go ahead. Thanks. Hey, Kevin, I wish you well in retirement and appreciate all the done a lot over the years. And with that, I'm going to get to ask you a couple more questions before you go. But first, just a clarification, what was said earlier. You talked about, you know, really this year and perhaps next being kind of the peak for CapEx. Is that meant to be CapEx in absolute dollars? You know, should we think about sort of reversion to more like 5% of sales, on a go-forward basis, with that being the 2026, 2027? I'm just trying to understand the- Yeah. -the intent of your comments. No, fair question. I mean, typically, we've run in the past at 5%. We've had years where we've dipped below, and we've been in the 4.5%-5% range, but then you see the last couple of years, we've been elevated, running closer to 6% than 5%. My expectation over time is that as we get to more of a normalized run rate environment, we're probably coming back down toward that 5% range. Great. And then, you know, Fred, you know, there was a good color earlier on the battery pack expectations for this year, but I'd actually love to delve a little bit more into where you're at in terms of, you know, tooling and automation, you know, staffing up, cell supply. To just help us understand your true visibility into the production ramp as you go throughout the year. Yeah, we are ramping up a second production line in Seneca, South Carolina. We have our first production line in the Michigan area. This is ramping up in Q2, and the same line is being commissioned for Europe, and this will ramp up later in the year. And that is the 65% year-over-year growth at the midpoint for those battery packs. The demand is much higher than what we can produce, and we don't see in the commercial vehicle any noise of any slowdown whatsoever, to the contrary. So that's pretty much what we're doing on the battery pack. We don't see any issues on cell supply, so, a ll that is is reviewed and monitored very, in a very focused way and very precisely. Yeah. Let me ask one more. It's more generally to help our understanding of your insights into customer behavior. You know, given the shifting dynamics around power train of choice, E versus I, increase in labor costs, you know, for some of the OEMs, well-publicized in North America, but more broadly, how has it translated to the customer expectations around pricing versus value proposition? Do you still feel comfortable in being able to hit the ROIC targets that you've always quoted for this program? Is there anything notable you'd call out in terms of kind of customer expectations and behavior right now? No, I think, you know, we're always quoting businesses with 15% return on invested capital. We have volume-based clauses, and everything that I see is trending towards meeting those 15% return on invested capital, and we're very experienced on how to do that. For us, it doesn't change whether it is an roduct or F product. The rules are the same. Appreciate that. Thanks, Fred. Thank you, Bill. Thank you all for your great questions today. If you have any follows, feel free to reach out to me or my team. With that, Savannah, you can go ahead and close today's call. That does conclude the BorgWarner 2023 4th quarter and full year results conference call. You may now disconnect.