Good morning, everyone. I'm Sam Pearlstein, Vice President of Investor Relations, and I'd like to welcome you all to our headquarters and to our second Investor Day. Before we get started, I do have to remind all of you that we're gonna be making statements regarding earnings, cash flow expectations, and other forward-looking statements that are subject to risks and uncertainties. Carrier's SEC filings, Forms 10-K, 10-Q, and 8-K provide details on important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. Also, any financial projections that you see today exclude any impact from the recently announced Toshiba Carrier Corporation acquisition. With that out of the way, I wanna give you a sense of the agenda for today. We're gonna start with Dave Gitlin to talk about the strategic overview and growth outlook before we turn it over to Bobby, Jen, and Ajay to lay out the opportunity in digital, sustainability, and the aftermarket. The three segment leaders, Chris, Juergen, and Tim, will then discuss their businesses, followed by Patrick to review our financials. The bios of all the speakers are in the presentation materials which you can access on our website. We're gonna hold all questions until the end, and we'll bring back everyone up onto the stage, and we'll take as many questions as we can, but we're gonna end at noon. With that, I'd like to turn it over to Dave Gitlin, our Chairman and CEO. Okay, thank you, Sam, and good morning, everyone. Welcome to all of you here in person and those of you that are joining us remotely. These are exciting times at Carrier. I feel so fortunate to work with this management team, and I am so glad that you get to hear from them this morning. We started on a journey a couple years ago to transform Carrier, and this team has been performing while transforming. We've managed the spin, we've addressed COVID and supply chain and inflationary challenges head-on, but we've also seized the opportunity to create a new Carrier. This team has great confidence in our future, and you'll see the themes on our first slide interwoven through all the presentations today, and we start with why Carrier. First, given the key secular trends that we'll discuss, we see our total addressable market increasing significantly, about $250 billion of additional opportunity through 2030. Then it comes to winning and getting more than our fair share of that increased TAM. We have the strategic focus, the team, the culture, the playbook to increase aftermarket and recurring revenues and leverage our differentiated portfolio to outgrow a growing market. You're gonna hear a lot from us today on ESG, which is not a side activity, but it's a true part of our DNA. You're gonna hear from us how we use sustainability to play offense and drive customer value and stickiness. We will always continue to drive relentless and tenacious cost reduction to not only fund our investments in growth, but also improve our margins. You'll see our updated financial algorithm of compelling top and bottom line growth, margin expansion, and strong cash flow conversion. We will continue to make improvements to our portfolio and use our strong balance sheet to create long-term shareholder value. The good news is plenty of opportunity ahead, but we start from a position of strength. We're about $20 billion in sales. We have solid margins with plenty of runway for expansion. We're recognized ESG leaders. You know, you may have seen about a week and a half ago, Barron's named us. As a relatively new public company, they named us to the top 10 most sustainable companies in the United States. We're market leaders in nearly all of our businesses. We have great brands, channel partners, an extensive install base. Today is really all about looking forward, but I have just one slide to take stock on where we've been. Two years ago, a couple of months before we spun, our leadership team took to the stage of the New York Stock Exchange. We said that we would create a new Carrier, and we discussed The Carrier Way, and I can assure you that the new Carrier is embedded in who we are, and this is a complete new team, new energy, and a new Carrier. We said that we'd establish ourselves as ESG leaders. We are well on our way to carbon neutrality in our operations, and we're tracking to our commitment of reducing our customers' carbon emissions by more than one gigaton by 2030. As Jen will discuss, we're being recognized for our progress by the rating agencies. We said we'd build a new team, a diverse team, and we have. 50% of our 200 executives are new since we spun less than two years ago, and that's been a very purposeful change. By the way, we retained tremendous great talent that had been here, and we've shaken it up with some additional new talent as well, complementing each other. 1/3 of our executives are female, on our way to 50%, as we've committed, and 50% of our leadership team is diverse. We said that we would be a growth company, and we clearly outgrew the market last year with 15% organic growth, really playing into our three pillars of growth. We said, and many of you will recall, we said that we were gonna grow VRF sales. After we close on the Toshiba acquisition, our VRF sales will be up 4x since the time we spun. We said we'd introduce a new playbook around aftermarket. Since we launched BluEdge, we've signed 30,000 BluEdge agreements in the last 18 months, and our aftermarket CAGR prior to spinning was about 3%. It'll be 3x that going forward. Really, really leaned into recurring revenues and our aftermarket playbook. We introduced Carrier 600, which became Carrier 700, and it was of course impacted by the recent high inflation, but our gross productivity will exceed $700 million over three years. We said that we would improve our balance sheet and our portfolio. We sold Beijer and Chubb. We've eliminated nine minority JVs. We've added at least four great acquisitions, and we'll soon close on Toshiba. We launched Carrier Ventures, and we've already made our first two investments. We increased our dividend and our share buyback program, and we have decreased our net debt from the time we spun less than two years ago from about $10 billion to less than $4 billion today. We have plenty of horsepower and firepower to keep playing offense, especially with M&A, and of course, we'll continue to look at further share buyback. You can have confidence that this is a team that does what it says it's gonna do. I can tell you, though we're proud of the progress that we've made, there are two words that we use all the time within Carrier, humble and hungry. Humble and hungry. This team is excited about what we've accomplished, but even more excited by what lies ahead. We still feel like we're in the first inning, and that's where we are today. We're poised to meet this moment. Our industry is at the epicenter of some of the world's most critical secular trends, topics like climate change and healthy indoor environments and the safe distribution of vaccines and foods. We are tremendously energized to meet this moment as these key secular trends drive demand for our product offerings. We know that people globally are spending more on health and wellness. People in the United States spend $36 billion on bottled water, even though it's free, and we expect the same trends around air. People willing to spend more on safe and healthy indoor air environments, even though it's free, because they know it is so critical to their health. Clearly, spend on sustainability will only increase. It's fair to assume that we'll see more regulations, environmental regulations globally, and companies continue to spend on their own carbon reduction commitments. More than 1,000 companies have committed to a net zero emissions target, and you're better off, and you get a better playbook investing in energy-efficient chillers and electric heat pumps than just buying carbon offsets to meet your commitments. Of course, we know that spend on digitalization will continue to multiply and a growing middle class. There are 3 billion people in the world that live in areas without access to air conditioning today, and the same number of people that live in areas that don't have effective cold chain infrastructures. By the way, they're typically in the hottest parts of the world. As 1.3 billion people enter the middle class over the next decade, think about what they'll be spending on that many of us in this room take for granted. They'll be spending on air conditioning and smoke detectors and security systems and access to vaccines and safe food distribution. In the end, the secular trends that you see here will fundamentally change our two ecosystems of focus, buildings and cold chain. Let's start with buildings. Buildings have traditionally been functional. You came to work, you went to the office, and you really didn't take notice of the building. You came in, you expect the lighting and the elevators and the air conditioning to work, and then you went home. Our expectations around buildings are changing. How many of you request outdoor seating when you make a restaurant reservation? It's because there's still some level of anxiety about getting into crowded indoor environments. We now expect building owners to make air visible. You can't see air, so you don't know whether or not it's safe. We expect building owners to equip their buildings with sensors, use those sensors to make air visible, so you know whether or not the indoor air quality is safe. If it's not, we expect building owners, whether it's a school or a building like this, to take action to keep the air safe. Sustainability. Buildings are a huge emitter of greenhouse gases. 40% of carbon emissions come from buildings, and 40% of that from the HVAC systems. Many of you are from New York City, and you may not even know this, but New York City is now requiring a 40% reduction in greenhouse gas emissions in the large buildings by 2030 and an 80% reduction by 2050. That's going to increase spend for our products. We expect more intelligent solutions in our buildings. People wanna control their air conditioning remotely. They don't tolerate it when their air conditioning fails in the summer, and they expect building owners to take preventative actions using prognostics to anticipate a failure and prevent it before it occurs. They're looking for smart systems that adjust to their personal preferences. These trends are a key reason why Carrier has made a very purposeful shift from being an equipment provider to a solutions provider. Of course, we will always sell equipment, but we are perfectly aligned at the intersection of being a leading industrial company with also providing digitally enabled lifecycle solutions. That's what you're gonna be hearing from the BU presidents and the functional leaders today. New digital platforms, Abound and Lynx, transformative, early stages, but they did not exist two years ago. More subscription and aftermarket sales up significantly, driving outcomes for our customers like sustainability and healthy environments. It's a big, big part of the new Carrier, a solutions company, driving more recurring revenues to smoother cycles and more long-term profitable growth. Let me give you an example of how our systems could come together to improve the building experience. As your day begins in the comfort of your own home, our Kidde smoke and carbon monoxide alarms, our Infinity HVAC system, and our air purifiers are keeping your family safe and healthy and comfortable. As you now prepare to head into the office, you'll be able to adjust the AC in your office remotely and then check your Carrier Abound app to see whether or not the building has safe indoor air quality, so now you have confidence to go into the office. As you drive close to your building, your Carrier BlueDiamond app, which we're going to incorporate into our Abound ecosystem, it recognizes you. You now have a touchless personal experience with the building. The garage gate opens automatically upon your arrival. The security turnstile then opens automatically, and then you pass your Abound dashboard with real-time IAQ data. Our Abound app then calls the elevator and automatically takes you to your floor. Your Kidde smoke and carbon monoxide detectors will now have an integrated IAQ, indoor air quality sensor in it that feeds data to the central brains and control system. Ours is right outside this room, the control center of the building. That Abound dashboard then can give you visibility to all of your IAQ parameters, whether it's temperature or humidity or CO₂ excuse me, TVOC or radon levels. By the way, the Abound dashboard also enables you to monitor your energy consumption to see if you're meeting your greenhouse gas emissions. Here in this example, you can see that all of the IAQ parameters stack up well, except there's elevated CO₂ levels on the fifth floor. Our ALC controls then auto mitigate those CO₂ issues by increasing fresh air to that area. By the way, there are systems that you don't even see that are keeping you safe, whether it's our LenelS2 security system or our Edwards fire detection system. One other important point is how these systems come together to create value and solutions. Let me just give you an example. The security system in the building, that tells you where everyone is in the building. That data is very important for your other systems. Take the fire system. If in the event of a fire, knowing where people are, of course, helps you with the evacuation. Knowing where people are directly ties into your HVAC system. If we're all co-located for this event, you can then increase ventilation to prevent the buildup of CO₂. It's part of the interaction of these systems that also create value. This illustrates the power of the integrated Carrier portfolio. It's not just homes and office buildings, it applies to everything from schools to restaurants to hospitals to airports. Don't take just my word for it. You'll get to hear a brief video with Dr. Boden from Emory Healthcare and Mike Plant, who's the President and CEO of the Atlanta Braves Development Company. Both of these customers have a broad suite of our offerings. They have Abound, HVAC, ALC controls, fire and security systems. I've been very fortunate and honored to visit with both of them and then see how these systems come together to create the solutions that they desired. Let's run the video. Carrier has been an important partner when it comes to technology and sustainability and efficiency of designing a building. Because of the multiple systems that Carrier is able to integrate, whether it's fire protection, security, air temperature and quality control, and then just building access, having all that tied together and seamlessly integrated is a big advantage. From the very beginning, our partnership with Carrier was one that flourished in a whole bunch of different areas because as we're designing and building, and this evolved very quickly. Carrier has helped us advance our sustainability efforts in the way they helped us design the efficiency of the heating and cooling system in the building. We believe that we're going to even be able to achieve net zero, and a big part of that has been some of the Carrier systems in creating the efficiency of heating and cooling the building. You rely on experts. Carrier was one of those experts that came to us with solutions and gave us the confidence that they were up for the task of all of the massive amount of air handling we needed and the HVAC systems that we needed to provide to all of these various buildings and do it on time, on schedule, on budget. They delivered. I think the experience and the innovative partnership with Carrier has been an essential part of us creating the Emory Musculoskeletal Institute with the technology and the sustainability and the efficiency of an intelligent, smart building. I hope and expect that partnership to continue well into the future as we make future advances and help showcase Carrier's innovations and developments and be a place where we can collaborate and test even further innovations on the technology as we see it today. We love our customers, and we thank Dr. Boden and Mike for the confidence that you both have shown in us. Mike, congrats to you on the World Series. What we do is we work with our customers and work it back into our designs and our solutions. We do that for buildings, meet with our customers, and then design the solutions and the outcomes they're looking for into our product and our offerings. We do the same with our cold chain customers. Ineffective cold chains are a serious problem. Up to 50% of vaccines never get administered. 1/3 of all of the world's food produced never gets consumed. Imagine the impact that we can have on lives if we could have better cold chain solutions. We could also have an enormous impact on the planet. Food waste resulting from insufficient cold chain solutions generate approximately 1 Gt of carbon emissions. That's equivalent to the annual emissions of Japan, so we're excited to be part of this solution. Here's the upshot. We took you through buildings, we took you through cold chain, we took you through the fact that there's gonna be more spend addressing problems that exist for both and opportunities to create more value. What that means is an increased total addressable market for both. We'd expect the base market for buildings and cold chains to grow at about 3%-4% over the next 10 years, and that includes spend on safety. The trends around sustainability and intelligence and healthy solutions should add another 1%-2% of growth to the base, adding a cumulative incremental TAM of about $250 billion by 2030. Given the market opportunity is increasing and that we expect to outgrow a growing market, you see that we have increased our projected growth algorithm. When we stood in front of you at the New York Stock Exchange a couple of years ago, we discussed mid-single digit growth rates over the medium term. Those are the numbers that you see on the left. GDP and base growing at that 3%-4% level, and given our focus on our three pillars of growth, we'd expect that playbook to get us consistently in the mid-single digit range. What we're now saying is 6%-8% growth, which is driven by the trends that we're seeing around healthy and sustainable and intelligent solution. It's the combination of the secular trends that we talked about and our differentiation that gives us confidence in that growth profile. The BU presidents will discuss this more in detail, but you'll see the same framework throughout the material. On the left, how do we win in the current market? On the right, how we win with healthy, sustainable, and intelligent solutions. On the left, we have an unmatched install base that we plan to connect. Globally respected, recognized brands. We have channels that go back multiple generations, are deeply ingrained in their community, and we have differentiated technologies. What you'll hear from us this morning is how we plan to get more than our fair share of this incremental TAM that's driven by these secular trends. Leveraging our portfolio and offering unique value propositions to our customers, playing offense on sustainability, doubling down on Abound and Lynx. Early versions, we've just launched these platforms. What you're gonna see from us this year and all years going forward, new apps, new capabilities around Abound and Lynx that are really differentiating for the business and also play into our focus on new offerings like X as a Service, and again, more recurring revenues. We feel good about growth, but we also recognize that we have to grow profitably. We're very confident in our cost reduction playbook to make sure that we do grow profitably. You know, Patrick discussed this in our last earnings call, but we are pivoting from a three-year absolute number to an annual expectation. Our portfolio and our addressable cost base will just naturally change over time. The key is that we have year-over-year tenacious cost reduction in our DNA, and that we drive 2%-3% of gross productivity per year. You can think of Carrier 700 as now 2%-3% forever, driven by Carrier Excellence. We committed to $300 million of gross cost reduction this year, and we see so much opportunity ahead. With respect to commodity inflation, we will drive price to ensure that we are at least price-cost neutral with respect to the commodity inflation, while gross productivity will be about controlling the controllables and driving cost out of our operations, cost out of our G&A. I can assure you that we know the playbook to take out costs. We launched this cost reduction playbook a couple of years ago. It is deeply ingrained in how we run the business. We have a virtual cost reduction war room. We have cost summits where we review the specific cost initiatives. Couple years ago, we launched Carrier Alliance and dual sourcing to drive down supply chain costs. We're deploying Carrier Excellence in our factories to drive productivity. We've increased spend on automation. We're going from 10% of our manufacturing hours to 20% over the next five years. We will continue to optimize our global footprint in low-cost centers of excellence. We will decrease G&A as a% of our sales by 200 basis points over the next five years through a rigorous application of our Carrier Business Services, which we just launched. All of this cost reduction, again, helping fund investments in growth and driving more than 50 basis points of margin expansion per year. In addition to organic growth and margin expansion, we will remain disciplined with respect to capital allocation. Patrick will discuss this in more detail, but you see our priorities here in order. Investing in growth and returning capital to our investors through increased dividends and share buyback. We remain in a great position from a self-help perspective. We will continue to play offense on M&A, and as we consider those opportunities, you see our priorities. Very, very focused on sustainability leadership, investments that enhance electrification and energy efficiency. We wanna be a one-stop shop for customers looking for integrated building and cold chain solutions. We are very focused on increasing digitally enabled aftermarket sales as we continue to push on recurring revenues. We will, of course, invest organically in technology and technology differentiation and disruption, but we will also look to buy those capabilities as well, and we will be consistent in looking at product adjacencies and geographic coverage. You see some proof points along the right. We're thrilled with the acquisitions that we've completed so far. We just launched Carrier Ventures with focused investments on sustainability and digital differentiation. I can tell you, we cannot wait to close on the Toshiba HVAC acquisition. Chris will discuss it in more detail, but this is something that we have wanted to do for years, and we could not be more excited to close on the deal and get on with it. We will be patient but very focused on M&A 'cause we know that the right deals at the right time, at the right terms, can create tremendous long-term shareholder value. I will tell you that we will always continue to look at our current portfolio. We'll remain dispassionate and clinical in our assessment as we realize excuse me, that we have set plenty of self-help around always optimizing our portfolio consistent with our strategic priorities. Based on all this, we are now updating our medium-term financial algorithm. We feel solid about top line growth in that 6%-8% range. Given our confidence in our cost transformation program, we see more than 50 basis points of margin expansion per year, double-digit EPS growth. Importantly, we expect ourselves to produce free cash flow that is at least equal to net income. Clearly improvements from what we had discussed with you prior to the spin, and we have great confidence in this team to drive the results that you see here. We've come a long way in a short period of time, but there is tremendous opportunity ahead, and we will always remain humble and hungry. With that, I will turn it over to Jen, our Chief Sustainability Officer, where she's been doing a superb job, and then I'll see you back here with the rest of the team for Q&A in a bit. Jen. Thank you, Dave. My name is Jennifer Anderson, and I am Carrier's Chief Sustainability Officer, and I lead our strategy, M&A, and our corporate ventures. Thank you for taking the time today to learn a little bit more about our ESG journey. Why Carrier ESG? As Dave mentioned, ESG is part of our DNA, and we have a three-pronged strategy to achieve our ESG objectives. First, we start with customers. Our legacy has always been in creating the world's most energy-efficient products, and now we are leading the way on decarbonization for our customers with sustainability as a service. Second, we're focused on investments. We continue to invest in the future of sustainable products and solutions, not only through our R&D, of which we have committed $2 billion to spend on sustainable product development by 2030, but also through our M&A strategy and with the recently announced Carrier Ventures, which is our opportunity to disrupt ourselves and the industry. Third, with our operations. As you know, we have established bold 2030 ESG goals, where we are focused on our people, our planet, and our communities. Carrier sits at the intersection of key secular trends, from an increased middle class to growing urbanization to climate change. These secular trends are closely aligned with our core strategy of healthy, safe, sustainable, and intelligent buildings and cold-chain solutions. As you know, today, buildings account for approximately 40% of greenhouse gas emissions, and the HVAC system within those buildings accounts for approximately 40% of the energy usage. Similarly, food waste is a primary driver of greenhouse gas emissions. If food waste were a country, it would be the third largest emitting country in the world. Thankfully, Carrier has the products and solutions that help our customers address these secular trends. How are we doing this? We are meeting our customers where they are and helping them realize both their operational and their environmental objectives. Our vision is to provide comprehensive, sustainable solutions throughout the building, the home, and the cold chain, because sustainability is not a moment in time, but rather a continuous improvement process. We start with design. We have designing and consulting expertise for the building or portfolio assessment expertise for the cold chain to identify where opportunities lie depending on a customer's requirements. Then we enable by providing Carrier highly efficient and low GWP products to meet customers' objectives. Then we overlay our digital platforms, Abound or Lynx, in order to manage and monitor our products. Then we deliver continuous savings through connected equipment, maintenance, and service arrangements. This allows us to monetize on opportunities throughout the life cycle of our products. There is a large and growing market for sustainable, healthy, and intelligent buildings. We believe the incremental market opportunity is approximately $225 billion, growing at a CAGR of 5.5%-6%. The opportunity for Carrier is to help our customers find sustainable solutions throughout the building, whether that be in helping our customers achieve LEED certifications or by providing the market with highly efficient VRF and heat pump products. Carrier has the products and the digital solutions our customers are looking for. Carrier was a founding member of both the U.S. Green Building Council and the International WELL Building Institute. We were also the first to announce the lowest GWP replacement refrigerant for R410A in residential products. We have the world's most efficient screw chiller, which is 42% more efficient than the standard. Through actions like these, and through our digital solutions, we were able to save 500 million kWh of energy in 2021 alone. The sustainable cold chain opportunity is much like the sustainable building opportunity. It is a large and growing market, and Carrier is well-positioned to capture share. We believe the incremental market is approximately $25 billion, growing at a CAGR of 5%-5.5%. We have the solutions that provide end-to-end supply chain visibility for our customers, ensuring that they know where their product is and that the temperature is maintained throughout its journey. We also have leading-edge electrified products, and we leverage natural refrigerants to both reduce greenhouse gas emissions. Some of our recent innovations include the world's first autonomous electric refrigeration system, the world's first hydrogen fuel cell-powered refrigeration unit, and the world's first zero-emissions electric truck refrigeration system. Carrier has the innovative products our customers are looking for to help them deliver on the sustainability objectives for the cold chain. Our products are good for the planet and good for our customers. What do we mean by that? Well, we have recently launched a number of new products that are in support of our Gigaton Goal. Across each of our business units, we have a deep pipeline of innovative products that will deliver not only greenhouse gas savings, but also, very importantly, operational savings. That means that our customers are not only helping save the planet, but they're achieving their own sustainability goals while leveraging our products, and they're reducing their own annual operating expenses. That's a win-win for our customers. Let's talk about a few examples of how we've brought this all together for our customers. Today, we partner with The Home Depot in over 2,000 stores in the U.S. and Canada. Leveraging our design, enable, and deliver framework, we partnered together to identify opportunities to reduce energy usage, improve occupant comfort, and optimize system maintenance. We helped them identify equipment upgrade opportunities, which they implemented, and then they installed Abound to manage and monitor their retail locations. As a result of this, we estimate that they had mid-double-digit energy savings annually from the HVAC system, as well as avoiding 2 million metric tons of greenhouse gases. We're also partnering with E.ON and the City of London. We are providing the Carrier AquaForce geothermal heat pump, which leverages ultra-low GWP refrigerants in their groundbreaking district heating and cooling scheme. The project is anticipated to cut E.ON's connected customers' carbon emissions by up to 50%. Beyond helping our customers with their sustainability objectives, through these types of digitally enabled systems, we are also able to help Carrier's recurring revenues. If we turn our attention to our investments for a sustainable future, we are progressing our customers' decarbonization goals through both M&A and Carrier Ventures. As Dave mentioned, we recently announced the Toshiba Carrier transaction, which we're extremely excited about. When you combine Toshiba Carrier with last year's acquisition of Giwee and our legacy VRF business, our consolidated VRF sales will have increased fourfold on an annualized basis since the spin less than two years ago. Chris is gonna dig deeper into the Carrier-Toshiba transaction, but needless to say, we view this as a highly strategic transaction. We're also very excited to announce Carrier Ventures. Carrier Ventures is our platform to make strategic investments in and partner with high-growth companies that are disrupting our industries. Our focus areas are on sustainable innovation as well as disruptive technology for the building and cold chain management systems. OhmConnect and Addvolt, our initial portfolio companies, are perfect examples of this. OhmConnect is a service that rewards users for saving energy when demand on the electric grid is high. Addvolt was the developer of the world's first plug-in electric system for refrigerated transport. Through each of these companies' technologies, their customers are able to reduce greenhouse gas emissions, and that's perfectly aligned with Carrier Ventures' sustainable innovation focus. As we previously announced, we have established a broad range of 2030 ESG goals across our planet, our people, and our communities. Highlights of this include our carbon neutrality goal, our gigaton goal, and our diversity and inclusion objectives. As we look at our progress to date, we are on track with our gigaton goal. We have launched highly efficient new products across each of our business units. As a result of this, since 2020, we have avoided 137 million metric tons of greenhouse gases. We also certified our first zero-waste-to-landfill site in Indiana this year. We offset 100% of our fuel usage in 2021 with N₂O abatements. From a diversity standpoint, approximately 50% of our executives are diverse today, and we tied our executive compensation to our ESG goals in 2021. Importantly, we also committed to science-based targets. Turning to carbon neutrality, we have established a three-pronged strategy for our carbon neutrality objective by 2030. First, we start with reducing absolute emissions. Second, we are greening our grid and electrifying our operations. Third, we will leverage carbon sequestration when required. We have a defined roadmap on a plant-by-plant basis with both annual goals as well as 2025 goals that gives us confidence in our ability to deliver on our 2030 carbon neutrality commitment. Taking all this together, we are incredibly proud of the recognition we have received to date for both our sustainability and our diversity and inclusion actions. While we are a new public company, we have already achieved top quartile rankings with Sustainalytics and ISS, and we are a leader with MSCI, of which we're incredibly proud. We were named to Fortune's Change the World list, and just last week, we were announced as part of the 2022 Clean200 from As You Sow and Corporate Knights, recognizing the top 200 publicly traded companies globally who are leading the way for clean economy solutions. In summary, we have made great progress to date. We are working with our customers to provide solutions to help them solve for their own sustainability objectives, leveraging our Design, Enable, and Deliver framework. We are investing in innovation for the future of our industry, and we are driving our own 2030 goals, leveraging the same framework we use with our customers. Over to Bobby George. Thank you, Jen. Good morning and hello to everybody online. My name is Bobby George, and I lead digital for Carrier. Digital is embedded in everything we do today in Carrier, starting with how we drive operating efficiencies in our business processes to how we engage differently with our customers in creating frictionless e-commerce transactions through the launch of platforms like Breeze. We're embedding more and more intelligence in our products to drive connected IoT and advanced analytics capabilities into them to make our products smarter every day. These help us drive the sustainability outcomes that Jen just talked about. It gives us access to new markets through the launch of these new digital platforms like Abound and Lynx. We are starting from a position of strength today in Carrier. We have significant domain expertise in markets and in products that we've participated in for decades. To couple that, we've got an enormous install base that is global. It's not just about the install base, it's also about what we have in terms of a dealer network and a service network that associates with this install base that can be activated at a moment's notice that allows us access to these markets and enable us to drive new solutions in these markets very, very quickly. On top of that, we've added investments in our people. For example, 50% of our people inside the digital organization is new to Carrier in the last 24 months. We've added people who've had contemporary skills in launching commercial software products and contemporary digital capabilities like cloud, like analytics, like AI and native architectures and software building that allows us to build upon the strength that we have as an engineering organization to create these new digital capabilities. We've also focused on building innovation platforms inside the organizations called Carrier IO, and we built this in partnership with our technology partners and through some of the startups that we've made investments in through Carrier Ventures. This creates a rich ecosystem that allows us to go to market faster and innovate faster in the products and markets we play in. Finally, we believe in a technology approach that is open and interoperable. This gives us an opportunity to work well with other systems to create outsized outcomes in each one of our markets. Combining our hardware innovation with our digital and open platforms approach, we think can create truly differentiated value for Carrier. Yesterday, we were focused on products that added new capabilities that were faster, cheaper, more efficient. We are all aware of the technology disruptions that is all around us. We've seen sensors becoming smaller and cheaper. We've seen AI and ML becoming more and more accessible. Data is the new fuel. Cloud and connectivity has become ubiquitous. We imagine a future where all of our products are going to be software-defined and upgradable at any point in time. We believe that there is gonna be an API attached to every product, making them accessible and interoperable. We believe our customers are gonna want more pay-as-you-go models, like Dave mentioned earlier, X-as-a-service models that we can offer. We believe that there is going to be an ecosystem that is going to enable the solutions and capabilities that our customers need to drive outsized outcomes around sustainability and building health. Combining the capabilities of our hardware solutions with software, data, and AI, we are able to drive new outcomes. Which brings us to the core of our digital strategy. Our digital strategy is organized around three broad pillars. First, it's about connecting our products to drive services and aftermarket capabilities. The second is about leveraging contemporary technologies and cloud enabling some of our legacy software platforms, like I mentioned. We have more than 40 software solutions in play today, and we have an opportunity to modernize this to drive new outcomes for our customers. Let me give you an example to make it real. OnGuard as a service is a capability within our access control business. We have a platform which is called OnGuard. More than 50% of the Fortune 100 use OnGuard as their access control platform for ensuring physical access and security to each one of our businesses. Now, by taking OnGuard to the cloud and enabling new capabilities, it gives our customers the ability to take OnGuard and deploy it and remove all the undifferentiated heavy lifting that they have to do around maintaining the software and hosting the software, can be current with what is new and latest, can use the APIs and the API gateways to connect with other solutions to deploy new capabilities and leverage their investments more. From a Carrier perspective, we are changing these into recurring revenue streams and synergizing on the cost of having to maintain multiple versions of the software. Finally, Dave mentioned the launch of two new platforms which we're continuing to invest in. These platforms like Lynx and Abound give us access into ecosystems and solutions that enable us an art of the possible of driving new solutions and capabilities to continue to iterate on our offerings in these marketplaces. Let's take a deeper look at some of these concepts. The first one is about connecting our installed base. Now, connecting our installed base unlocks tremendous value for our customers. Let me talk a little bit about the unlock there. First is about continuing to improve the performance of our assets. This is about driving more efficiency and understanding the performance characteristics of our equipment to continue to iterate on the improvements of the equipment, so making them more reliable overall. Second, it's about driving uptime and availability for our customers by ensuring condition-based maintenance activities and prognostics and diagnostics, embedding intelligence into our products. Third is to continue to optimize on the performance of our products through introduction of new software capabilities like over-the-air updates that continuously maintains and upgrades our solutions. Now, this connectivity solution is enabled through our edge and the edge intelligence strategy. It's a telematics edge in our refrigeration and moving parts of our business. It is the edge gateway for the more stationary parts of our equipment, and the embedded edge, which is about all the new equipment that we ship. 100% of the new products in the commercial space that we ship today are shipping connect-ready. However, the true opportunity is in our install base. Less than 5% of our install base today is connected. When we see these products connected, where we've run experiments and pilots, we've seen outsized outcomes. A few examples, right? Number one is around the chiller markets. We see a 20%+ improved attach rates for chillers that are connected versus chillers that are not connected. In our commercial refrigeration business, we see 20% reduction in downtime for our equipment. We increase the dealer productivity and our technician productivity by 20%. In our residential HVAC business, we improve our availability of first time fix rates by about 50%, which means for our dealers and contractors, this is 50% fewer truck rolls to get the products fixed. We believe that all of these factors when multiplied 10x, which is our goal for connectivity over the next five years, is going to drive outsized outcomes and services in aftermarket space. Let's take a deeper look at Abound. You saw earlier some of the demos what Dave showed about the Abound platform itself and how the Abound applications are affecting how we drive safe, sustainable, outcomes within the building space. Today, a fraction of the equipment, of the buildings today have dynamic scheduling capabilities. What I mean by dynamic scheduling is load-based, grid load-based heating and cooling, occupant-based ventilation systems, et cetera. You take a step back and wonder why, right? It is because most of these building systems operate in silos. It's very difficult to interoperate across these systems. It is very difficult for us to have a standard around commissioning. Each building has a bespoke commissioning process. It's very difficult to get all the information together and drive common outcomes to it, which is essentially the problem we set out to solve with Abound. The Abound platform itself has some core components. The first one is the Abound platform itself. This allows you to connect to all the equipment inside a building, easily access whether it's Carrier or non-Carrier products, easily access data, infuse context into the data, and create a consumption layer for this data that can be easily consumed and monetized in various different ways. For example, when we connect people, spaces, and the equipment information together and make it easily consumable, outcomes of various different outcomes are possible that are not possible today. That's the focus of the platform. You saw a glimpse of the applications that are being built on Abound, the occupant app that gives the occupant in the building an access to the information that is surrounding the building health and the clean air associated with that. The facilities manager app that allows them to mitigate the issues that surrounds either health or energy efficiency and consumption-related details, etc. Additional paths to market and monetization for the Abound platform is through the Abound marketplace and for our customers to continue to drive value through their investments through the Abound API framework. Moving on to Lynx, which is our actionable intelligence platform across the connected cold chain. From source to destination for cold chain, there are various nodes in the cold chain in which we participate as Carrier. We have the opportunity today to light up these nodes of the cold chain. What's unique to Carrier is our cargo temperature monitoring business that is called Sensitech, which is part of our refrigeration business. When we combine the ability of cargo temperature monitoring with our equipment business, we are able to connect the nodes across the end-to-end of the cold chain to be able to drive completely new outcomes like supply chain disruption risk, temperature guarantees, predictability around expected time of arrival, etc. What you notice across the two platforms, if you saw my two pages, it is repeating patterns. You have equipment, you're accessing data, you're creating context around this data, and you are monetizing it in the form of applications, marketplaces, and APIs. We have synergized these efforts in the form of building out these capabilities in a common platform called Carrier IO that powers both Abound and Lynx, able to leverage our investments and accelerate our time to market these solutions. Finally, what I'd like to say is, hopefully, you've had an opportunity to take a glimpse into some of the digital innovation we are driving for Carrier. We are investing in our platform, in our talent, and in our people to drive technology capabilities, digital products, digital services, and aftermarket solutions that is accelerating the pace of innovation for Carrier. It's also driving increased customer intimacy and giving us access to these new markets and also driving recurring revenue and which is margin accretive. We believe that these digital platforms are absolutely critical to accelerate the transition to smart buildings and connected cold chains. With that, I'll wrap with digital driving outsized opportunities in our current markets for Carrier and positioning us to compete effectively in these new markets. Thank you. Now I'll hand it over to my colleague, Ajay Agrawal. Thanks, Bobby. Good morning. My name is Ajay Agrawal, and I am responsible for aftermarket, healthy buildings, and corporate strategy. I am super excited to talk about aftermarket this morning. Before we jump into the details, let me give you the punchline. We have a significant opportunity to grow this high margin, high recurring revenue business stream for many, many years to come in a very significant way. We have implemented a proven playbook with a demonstrated record. We are seeing concrete results today, and we have great confidence in accelerated growth well into the future. Today, Carrier has a comprehensive aftermarket portfolio of $4.5 billion, about a quarter of Carrier revenues. Now, the total addressable market here is large, and it's accelerating on the back of healthy buildings and sustainability trends that Dave talked about. The margins are very attractive. Gross margins are at least 10 points higher than Carrier average with a strong recurring revenue mix. Finally, we see real opportunities for OEM differentiation here through comprehensive solutions across the life cycle, digital tools, and new revenue models like sub-subscriptions. A fundamental building block here is Carrier's massive install base. You heard this before, 330,000 chillers, 2 million rooftop units, 1.8 million reefers, and a massive install base of residential HVAC units and fire and security equipment. Now, this equipment is out there 15-30+ years, during which it needs parts, it needs service, it needs repairs, it needs upgrades, and now we can bring digital value propositions that Bobby just talked about. There's a significant life cycle value multiplier attached to this equipment. If I sold you a $50,000 chiller today, it's gonna produce $250,000-$500,000 in life cycle revenues in parts, service, repairs, and upgrades. That is where the opportunity is. It's a large opportunity when you put together the massive install base with this life cycle revenue multiplier. If we just look at our Carrier install base, by the way, opportunity for us is much, much bigger. From our install base, we capture about 25% of that aftermarket being generated. What I'm gonna walk you through is we have a clear strategy and a playbook and actions to grow this business by $2.5 billion in the coming years. It's gonna translate to high single- to low double-digit growth rate, outpacing the market and accelerating Carrier's overall growth. The drivers for this growth are very clear. Service coverage, digital offerings where we are differentiated, and tailwind from healthy buildings and sustainability. To achieve this growth, we have a proven playbook, which really brings customer solutions across the life cycle. Our vision is very, very clear, to be the first choice for the customers and one-stop shop across the life cycle. For that, we are focused on five things. First, we're designing products to create differentiation, resulting in better parts capture. We are expanding our parts catalog. We're adjusting the pricing. Second, we have dramatically increased our focus on service coverage. As I mentioned earlier, it drives repair pull-through, it drives upgrade and digital services behind it. Third, we are unlocking that digital value for our customers. You heard from Bobby, 100% of our non-resi product we are shipping today is connected ready, and we are retrofitting selectively the install base. Fourth, we are upgrading field-led equipment, healthy buildings, sustainability, performance upgrades. We are bringing that to the vast install base in a systematic and programmatic way. Finally, we want to be the customer's first choice at the end of product life when the customer is making a replacement decision. For that, we have to drive customer delight throughout every single step of the way. What I can tell you is this: this is a powerful and proven playbook. It brings value to the customers throughout the life cycle while accelerating Carrier's growth. We have rolled out this playbook across the company. Today, it influences almost all major decisions we make as a company. We have added significant number of sales personnel. We have launched almost 100 new aftermarket offerings. You heard from Dave about BluEdge, our global service platform with tiered service offerings. Since the launch 18 months back, we have sold 30,000 BluEdge agreements. Abound and Lynx are up and running. We are driving subscription revenue, creating long-term customer loyalty. We have rolled out the Net Promoter Score tool. It gives us real-time customer feedback. We are very pleased with concrete actions and the results we are already seeing. Let me touch on a couple of things to give you a sense at the next level. Now, service coverage is a major focus area across all of our businesses. Chillers, we started with 45,000 chillers under contract couple of years back. We added 5,000 in 2020. We ended 2021 with 60,000 chillers under contract. We doubled our new equipment attach rate to 38%. As we look ahead, we are gonna continue to ramp this to 10,000-15,000 chillers every year, and we are gonna drive to 60% attach rate. By the way, this is not just about commercial HVAC. Refrigeration, Fire and Security, they have similar trajectories with significant upside. Second, on the highly successful Healthy Building program that we launched in the fall of 2020, customers want to safely reopen. We all know that. Whether it's an office, K-12, hospital, restaurant, all are focused on reopening. At the same time, though, customers are increasingly aware of the strong cognitive impact of healthy spaces. People just work better in healthier spaces. We have a dedicated team working it. We generated half a billion dollars in orders last year in equipment upgrades, services, with a rapidly expanding pipeline. Concrete actions, concrete results, all a part of the playbook. All of this comes together in an aftermarket roadmap, which takes an underlying GDP plus end market to high single-digit to low double-digit growth rate for Carrier aftermarket. As you look across here, parts, service coverage, digital offerings, and the macro tailwinds from healthy and sustainable, each will add meaningfully to the expected growth in aftermarket. There are specific actions to every word on this page owned by the GMs. You will hear from the business unit leaders here when they come here. We grew double digits in 2021 on the back of this formula, and the team is really excited as we look ahead. Let's look at a couple of examples. Abound's connected offerings. We have leveraged our award-winning CORTIX AI platform across 750 million sq ft of space, across 4,000 customer sites, and we are monitoring them and acting on them from three global command centers. Not only are we adjusting equipment operation remotely to save energy, but we are also performing remote fixes and dispatching service technicians exactly at the right time. All of this is translating into significant energy savings, remote resolution, and failure avoidance, as you see to the bottom right of this page. On energy savings alone, we saved 500 million kWh for our customers last year. Our BluEdge services stand behind some of world's most iconic structures and brands. At Long Island City's One Court Square, 53-story building, 1.5 million sq ft, we upgraded them to state-of-the-art high-efficiency chillers. We implemented VFD, variable frequency drive, and controls. Significant 50% energy reduction. At KLLM, a leading owner operator of a large trucking fleet, they are using our telematics to help them reduce total cost of operation while ensuring the safety of valuable refrigerated cargo, including food and pharmaceuticals. Carnival Cruise Line, they just signed a comprehensive multiyear BluEdge elite agreement to maintain their onboard fire safety systems across the fleet of 75 ships. These are just a few examples of the 30,000+ BluEdge agreements we have signed in the last 18 months. Let me leave you with this. As we look ahead, we are extremely excited. We have a very attractive business. We have large growth potential, secular tailwinds, and a proven playbook. All of that comes together as a powerful recipe for sustained, accelerated growth well into the future, faster than market and helping accelerate Carrier's overall growth. With that, let me introduce Chris Nelson. Thanks, Ajay. My name is Chris Nelson, and I have responsibility for leading our global HVAC segment. It's great to see everybody today. I'm very excited to take the opportunity to talk to you a little bit about the HVAC segment and what we see as tremendous future growth opportunities. Before I start the details, I wanna be able to take a step back and take a look at the big picture and answer the question that Dave posed earlier, why Carrier, and specifically why Carrier HVAC? First, Carrier is a global leader in the HVAC market with a brand, channel, and footprint that gives us access to every major global market. We invented this industry and remain an innovative leader more than 100 years later. Second, our segment is positioned for mid- to high single-digit growth for the next several years. You will see that we have made the investments in our product, our channel, and our service capabilities that will serve as a foundation for continued share gain. In addition, as Dave pointed out earlier, we are exceptionally well positioned to capitalize on the secular tailwinds that will continue to drive outsized growth in our markets. Third, we have an opportunity for margin expansion as we grow our top line. This margin expansion exists not only from cost reduction opportunities that we have in the way that we design, make, manufacture, and sell our products and services, but also, as you heard from Ajay, by shifting our mix of business to more service-based business at a higher margin rate. As we shift that service to equipment ratio, we know that we will have accretive and better margins going forward. It's a great business with a very exciting future. Let's start with a short overview of who we are and what we do. In 2021, Carrier HVAC generated approximately $11 billion of revenue with 15.6% adjusted operating margins. The segment itself is focused in three key areas. First is the North America residential and light commercial business, which accounts for just over 50% of our revenue. Next is the commercial business, which accounts for roughly 35% of our revenue. This business includes not only the applied equipment in the segment, but also the service and controls that are required to support this business and its end customers. The balance of the business is our global VRF and international light commercial business. This includes our core Carrier VRF and international light commercial assets, as well as the recently acquired Giwee property. It's important to note, and Sam pointed out earlier, that these numbers do not reflect the pending transaction with Toshiba to acquire substantially all of their ownership in the Toshiba Carrier Corporation, our joint venture. I'll get more detail about this later, but suffice to say, there's an exceptionally exciting opportunity that we know will be transformative for the future growth of the HVAC segment. Geographically, Carrier is approximately 70% North America, and the balance or 30% is split roughly evenly between Europe and Asia. I'd like to take the opportunity to expand a little bit more on this geography on this page. When I started the presentation with the why Carrier, one of the things I highlighted was our global leadership and scale. I wanna use this opportunity to give you a real sense of what that is, because it's a very easy thing to say, but a very difficult thing to build and deliver. Carrier HVAC has more than 11,000 manufacturing and engineering employees worldwide, 50% of whom are in low-cost locations. They are responsible for designing and delivering our innovative solutions tailored to each local market. We also have an extensive service network with locations in more than 40 countries. As Dave and both Ajay noted earlier, we are very, very focused on driving growth and improving our service mix. One precondition that is required for delivering this growth is to have a global network. With more than 700 locations worldwide, Carrier has that foundation, and we are comfortable and confident we'll be able to deliver those results. In addition, we work with more than 10,000 channel partners around the world. These partners, as Dave said, they go back in many cases generations, and all of them have a choice for who they want to partner with. Not only is this network a strength of our company, but it is also a testament to the strength and power of our brand and our solutions that we can attract these outstanding partners to take our solutions to the local market. Carrier is truly a global brand with global reach. It is a position that cannot be easily replicated and one that has been earned and built for more than 100 years. It was about two years ago, almost exactly, that I had the opportunity to address a similar forum just prior to our spin from United Technologies. I was very excited at that point to share our strategy to grow this business. I was excited because I knew the power of the company and the network I just discussed. I was excited because I knew what we would be able to accomplish as a hungry, standalone company focused on growth. We laid out a simple formula. We are gonna invest in the right products and the salespeople required to take these products to market. We are gonna look to expand in Asia and to develop a foothold in the rapidly growing VRF segment. We will work to improve our service mix and build out the digital solutions that we know will be vital to our future growth. Well, we certainly didn't anticipate a global pandemic during that presentation, but I'm happy and proud to say that we've stuck to our initial plan and our formula, and it has delivered great results thus far. Last year alone, Carrier HVAC grew revenues 20%, adjusted operating profit 24%, and expanded our operating margins by 50 basis points. In addition to these financial results, we have grown share across our key product categories. We've capitalized on our new growth areas in China and gained that foothold in the rapidly growing VRF market. We have moved the needle in our service and controls businesses. While the execution of the strategy has driven nice results since spin, more importantly and more excitedly, it has, we know that the continued execution of this strategy will set the table for future growth. One of those opportunities for future growth that I'd now like to turn to and talk in more detail about is the recently announced agreement with Toshiba to acquire their portion of our joint venture. As Dave announced on the earnings call, we have just signed an exciting deal with Toshiba to acquire substantially all of their ownership in our joint venture, TCC, or the Toshiba Carrier Corporation. As a key part of the strategy that we laid out two years ago, we said that we were going to grow our presence in the rapidly growing VRF segment. This deal with Toshiba, combined with our previous acquisition of Giwee, gives Carrier a scalable presence in a fast-growing market, differentiated technology that is in the sweet spot of the electrification movement, and another iconic brand with global relevance and a complementary cost-efficient footprint. It's a great acquisition. The global VRF and international light commercial business will serve as a new growth platform for the Carrier HVAC segment. We are putting in place seasoned HVAC residential leadership that will have the responsibility for all key. This foundation will lead and drive mid-single-digit growth in the mid-term. When you couple this foundation with the growth that we are seeing in healthy and sustainable solutions such as accelerated retrofit and upgrade activity, increased demand for higher value, higher efficiency solutions, and a pull for digital solutions that enable real-time performance monitoring, we are confident in the Carrier HVAC segment that we can deliver one to two points of incremental growth over this foundational mid-single-digits outlook. Let's take a look a little deeper and see what this means across the various parts of the HVAC business. In the commercial buildings market, we have made investments in our core offerings to drive share growth. From a product perspective, we have recently launched a new high efficiency back-to-back mag-bearing centrifugal chiller, as well as a high efficiency, sustainable low GWP air-cooled chiller platform. These two launches not only boast outstanding efficiencies, great part load performance, but their compact design is ideal for the large and growing replacement market. We have coupled this product investment with the sales force pro-focus to bring all of Carrier's power of their equipment, controls, and service solutions together into one bundled opportunity and solution outcome-based to our customers. As noted, we just added to our electrification capabilities in VRF. We know that with the continued execution of the strategy, we will continue to drive share growth in these commercial markets over the medium term. In addition, there are real and tangible accelerators in this market due to the pull for healthy and sustainable solutions. We are seeing significant demand for healthy building upgrades and we currently have a pipeline of over $500 million of these types of opportunities. In addition, the desire for increased rates of ventilation and filtration is driving higher capacity requirements for cooling equipment. These higher capacity machines come at higher price points and thus provide incremental revenue tailwind to the business. From a sustainability perspective, we are seeing a significant increase in demand for variable speed products and heat pumps. Both of these types of products come, once again, at higher price points than standard cooling-only equipment. These are real dynamics that exist today and will continue to exist into the future that will help deliver that incremental one to two points of growth over the mid-single-digit outlook. Next, I'll transition over to the North America residential and light commercial business, which I mentioned earlier is the largest business within the portfolio. We have continued over the past couple of years to invest in our unparalleled product line. More importantly, we have continued to invest in the underlying differentiated technology in core air management and heat exchange that will allow us to continue to differentiate our offer. Carrier is the leader in this business, full stop. We will extend that leadership position as we launch an entire new product line in advance of the 2023 regulatory increase of minimum efficiencies. Along those lines, as we think about sustainability and regulatory will be a large driver in this business over the next 5+ years. As we transition to higher minimum efficiencies and higher efficiencies overall, as we go into new lower global warming potential refrigerants, and as we see code changes that drive incremental changes into the business, such as the need for increased outdoor air and a more rapid adoption of heat pumps due to incentives for electrification. Each of these regulatory changes will increase the average value per transaction and provide overall revenue tailwind to this business. This dynamic is going to be especially pronounced in the North America residential market. We love the North America residential market. We're a leader in it. Over time, as you know, you take a look back, it's a great market with mid-single-digit growth traditionally. As you look at recent growth, we've seen actually higher than that, and we've seen some very impressive results out of that industry. While we may not see that type of high level growth in the next couple of years, there's nothing I see as I sit here today that says we should not continue to grow, especially when considering all the new products, the new technology, and the regulatory tailwinds that we just talked about. Now aftermarket, it's thematic, as you may have picked up by now, and you heard it from Dave, you heard it from Ajay, you heard it from Bobby, how digital is a part of what we're doing to make sure that we can drive the outsized growth in the aftermarket business. It's no different at Carrier HVAC. It has been and will continue to be a large theme for our HVAC segment. That is because increasing our mix of service and aftermarket represents not only an opportunity for continued growth, but also an opportunity for margin expansion. Over the past couple of years, we have invested significant resources in upgrading our service systems and infrastructure to enable this growth. These investments have set the foundation for a more digital connected service offer moving forward, and this is how we will differentiate ourselves against our local competition moving forward. As we look forward, our branch network that we discussed earlier will drive increased attachment rates, more digital connectivity with customers, and improved remote service capabilities. Given the size of this market and where we are on this journey, significant opportunity exists for us to increase our service revenue from our extensive installed base. Once again, you couple this with the demand that we're seeing for healthy and sustainable solutions in the aftermarket segment and how we'll continue to drive higher market activity in the foreseeable future. An example of this is we perform healthy assessments and energy audits for our customers using the branch network that I referenced earlier. These engagements highlight opportunities for us to work with our customers to improve both the health and efficiencies of their building, and in turn, provide opportunities for us to propose on different jobs or accelerated retrofits for energy efficiency and healthy building upgrades. Our goal very clearly is to grow this service and aftermarket business in excess of our equipment business over the medium term to allow us to continue to improve the margin profile of the HVAC segment. Now digital. I think Bobby said it very well. We don't think about digital as its own thing. We think about digital as being embedded in everything we do in Carrier HVAC. We see it as a key enabler to be able to drive not only the service growth, but the customer intimacy and connectivity that will allow us to continue our life cycle relationship with our customers. Since the spin, we have invested significant resources in key technology, like our Abound platform and like our digitally enabled controllers. We have made several strategic acquisitions to improve our offerings and our footprint to be able to offer these digital solutions. A good example of this is our success with our Automated Logic controls business. Since then, we have grown this business nicely. We have invested in it and the footprint, and last year, we grew that in the mid-teens%. That's a trend that we expect to continue to see in the medium term, and not only the way that we are able to grow that business, but to continue to share in the building automation space. We will continue to pursue inorganic opportunities in this space to increase Carrier's reach and product portfolio. Going forward and thinking about how this digital really plays into the secular tailwinds, we know that with our Abound platform, we're gonna be able to provide best-in-class, healthy, and sustainable SaaS-based solutions to our customers. From energy reports to ensure they are meeting their sustainability targets to continuous air monitoring so that they feel confident that they are offering a safe indoor space to their occupants, we know the Abound platform is the right offering at the right time with the trends that we're seeing in order to really drive more recurring revenue opportunities and a closer connection with our customer base. Now I've spent a lot of time talking about the crucial investments that we've made, the momentum that we've built, and that we'll have continued investment to keep this momentum going and drive that incremental one to two points of growth over mid-single digits. Now let's talk about how we fuel those investments, how we make sure that while we invest, we continue to expand margins. That is by our relentless focus not only on cost reduction, but on sustained margin expansion. In HVAC segment, we look at this in three buckets. First being price cost. We've done a good job over the past year plus in staying, price cost neutral and keeping up with the hyperinflation environment that we've seen. We expect to continue that and be at least cost price neutral in 2022. We're just not pushing it through in price. We're taking opportunities and driving projects that will enable us to reduce our reliance on some of the more volatile commodities that are driving inflation. Good example of this is copper. We're transitioning as part of the new 2023 product line in our residential business from an outdoor unit that had a copper aluminum coil to an all-aluminum coil that we'll be launching as a part of that new platform. That's a great opportunity not only in avoiding the inflation that we see coming in copper, but also in higher reliability of the product line itself. The second one, and we're really driving this theme home, is aftermarket. We know that by increasing our aftermarket mix, we are going to not only provide growth in recurring revenue streams, but as Ajay mentioned, that comes at roughly 10 points higher margin. It's accretive to the overall Carrier HVAC portfolio. Last, but certainly not least, is operational excellence. We are always working in Carrier, in Carrier HVAC to optimize our footprint. We have a roadmap that we know we can increase our percentage of manufacturing hours to low cost locations to over 70% in the medium term, really providing a nice margin expansion lever. In summary, I just say that while I am incredibly proud of what we at Carrier and within Carrier HVAC have been able to accomplish since our spin, I'm even more excited about what the future holds. I am confident in our ability to deliver and execute on the strategies laid out here. With that, I think we're gonna take a short break, and after we come back, I think we're gonna transition to Jurgen to talk about the Fire and Security segment. Thank you very much. Ladies and gentlemen, our program will resume in one minute. Please take your seats and silence your devices. Thank you. Carrier Healthy Buildings and Healthy Homes creates confidence with solutions that are setting the standard in indoor health, safety, and security. In homes, our current portfolio makes us today's trusted leader in home safety and positions us for natural expansion into integrated detection of other home hazards, like water leaks and indoor air quality, equipped with the credibility of unmatched quality standards, a culture of continuous innovation, and the most advanced detection technology. Open protocols enable collaboration, not just with other parts of our portfolio, but also with the most popular consumer choices for smart home integration. Expanding our global portfolio with highly designed interconnected home safety devices will further delight customers, as well as provide unique opportunities to expand into new territories around the world. Additionally, by enhancing our real estate key mobile credentialing technology with state-of-the-art digital services, we are optimizing scheduling for sellers, buyers, and agents, delivering actionable insights and improving agent productivity. In buildings, our best-in-class fire and life safety solutions will monitor indoor air quality to further enhance healthy environments, leveraging technologies that enable safe return to work spaces. With proactive protection, reduced touch points, and occupancy management technologies for heightened access control. Our advanced intrusion detection systems provide an added layer of security from the outside. Our future is built on integrating technologies, maximizing cloud capabilities, empowering innovation, and enabling strategic partnerships. In doing so, we create experiences where occupants control health and safety at their fingertips. As spaces do more than just alert, they adjust, anticipate, and assist. Carrier, inspiring confidence. Good morning. Welcome back from the break. My name's Jurgen Timmermann, and I'm the president of Carrier's Fire and Security segment. First of all, I hope you enjoyed our video. It's really a glimpse into a number of the exciting programs we've got going on in Fire and Security, programs that either have already been launched, are in the process of launching, or will be coming soon. Now today, I'll talk to you about our Fire and Security growth story and walk you through how we are a critical part of Carrier's overall strategy. First, let me take you through a few of the key changes that define the new and improved Fire and Security segment. As you know, we completed recently, earlier in the year, the divestiture of our Chubb business. Now, as a result, we became a highly focused, highly differentiated, more profitable core of leading brands in market positions. Now, as you can see, we're about a $3.4 billion business overall in top line, with almost 16% of adjusted operating profit. In post divestiture of Chubb, our core real expertise really lies in providing high technology products and digitally enabled recurring services. This last area really led by the security part of our business, but expanding rapidly throughout all of our portfolio. Finally, as we focus and continue to drive differentiation through targeted investment in innovation and digital, returns are often faster in this segment than in some of our other segments. This is really driven by the digital nature and the predominantly shorter innovation cycles of a lot of our businesses. First, let's start with why Carrier Fire and Security. Now we'll start the same way as I will end today, with a number of key messages to set the stage and which I hope you will walk away with here today for our segment. First, within Fire and Security, we are a leader in every segment we play in. With well-recognized brands like Kidde, Edwards, GST, or LenelS2. We're a highly profitable segment that has grown above market over the past few years through focused investments in innovation in digital and sales and marketing. We see significant opportunity for both top-line growth and bottom-line growth, you know, throughout our segment, you know, going forward, driven by some of the mega trends and some of the initiatives I'll talk to you about. Now, as part of capturing this growth, we plan to rapidly digitize our large install base across all of our business units to drive digitally enabled recurring services. Now, we are safe in Carrier's healthy building strategy, but we're also expanding into healthy and intelligent to our best-in-class detection capabilities and the digital aspects of our security business. We talked before Spin about mid-single digits organic growth. We see healthy, safe, and intelligent really adding one to two percentage points to that, putting us in that mid- to high-single-digits organic growth outlook for the future. Finally, we're not just about driving top-line growth, we're also about driving bottom-line growth. We'll talk about how we're doing that through digital innovation and continued operational excellence. As I go through the presentation, I'll be touching on all of these points today. Let's start with a quick overview of the new Fire and Security segment as a refresher. I talked about $3.4 billion overall in sales with a respectable profitability. Our main offerings are twofold. First, fire and life safety, which includes residential, commercial, and industrial, both detection and suppression. Second, electronic security, which includes both commercial access solutions as well as commercial intrusion detection. We lead with iconic brands, as you can see on the bottom left here, like Kidde in residential fire, like Edwards and GST in commercial fire, or like LenelS2 in access solutions. In terms of the dynamics, we are mainly a products business now after the divestiture of Chubb. That being said, we see great opportunity for growth in services and aftermarket, especially by digitally enabling our vast install base and growing our portfolio of connected services. Where you see we have a lot of our revenues in the Americas, but we have great and growing presence in Europe as well as in Asia. In the middle, you can see a few of the key statistics there that really talk to both our scale and our competitive differentiation, which all results in what you see on the bottom right, with the punch line being that we are the number one across almost everything we do in this segment. Now, our end markets are driven by strong mega trends, some of which you see on this slide. Codes and standards are particularly important for our fire businesses. In our global residential fire business in the U.S. alone, less than 30% of the homes are protected to NFPA minimum fire safety standards. This is in one of the most mature fire markets in the world. Now, with more synthetic and flammable materials being used in homes today, the average time families have to get out of the home in case of a fire went from 17 minutes some 30 years ago to less than two minutes today. Still today, unfortunately, three out of five home fire deaths are still in homes with either no or nonworking smoke alarms, which is tragic. Now, we see this gap and others around the world amount to more than $6 billion of untapped, underprotected potential that can be fulfilled by our products. Now, similarly, in our commercial fire business, we see legislation again and standards as being important growth drivers for growth. Over the past two years, we have COVID that has really added to the importance of healthy buildings. Now, our global economy, as you can see, bears high expense from fire and other building related health hazards. COVID has increased occupant expectation and demand for more touchless access and more services for them to feel safe and healthy enough to go back to the workspace. Lastly, security continues to be a main concern in today's world, with the Internet of Things providing both opportunities and threats. We see the Internet of Things in buildings grow to be a more than $80 billion segment. We also are seeing the cost of cybercrimes and business breaches grow to more than $10 trillion a year. Now, in this context, again, our security offerings are extremely relevant. With these trends driving our markets, we see significant growth potential across all parts of our business. Now, our current addressable market in fire and security is about $19 billion. Now, when you add in the underprotected residential fire opportunity I mentioned, the opportunity from healthy and safe buildings and homes, and the opportunity from digital services related to those, in line with the trends on the prior slide, we see another $12 billion plus of market potential. We've got a great portfolio to win with, as you can see on the right. In residential fire, we are the global market leader with Kidde, with an unparalleled installed base in the U.S. alone of more than 90 million homes and more than 400 million devices, with market-leading detection technology and the lowest cost manufacturing footprint. In commercial fire, our Edwards brand is known for having the best channel loyalty. Our latest EST4 innovations are designed for ease of installation and servicing with a scalable platform architecture that's unmatched in the market today. In access solutions, our LenelS2 business is recognized for its open software platform, its vast suite of building integrations that enable us to provide unified security solutions, driving customer stickiness that enables us to be the global access control and access control software provider in the world. In summary, I would paraphrase by saying that we are very well positioned in an industry with lots of headroom to grow. Now, with the market opportunities and our strengths in mind, let's talk a little bit about our strategy. We are executing on a strategy to maintain and increase our position as the number one fire and security products company in the world. We're doing that by winning customers with leading health and safety sensing technology and integrated digital solutions. Now you can see that in line with Carrier's strategy, we're focused on three pillars as well. First, we're growing our core through market-leading innovation. Second, we're growing in adjacencies like healthy buildings and healthy homes. Third, we're growing our portfolio of digital and recurring services. Now, you can see that we're well on our way with the progress made in the last two years, as you see on the page here. First, with the accelerated innovation in investment in R&D, we expect our new product vitality to continue to expand with more than 60 launches of new products every single year. In healthy buildings, healthy homes, we built on the strength in our sensing technology to expand into other aspects of healthy and safe, like indoor air quality, water leak, or gas detection, among others. Now we're closing the loop with linkages with HVAC through Carrier Cloud and Abound that you heard earlier as well today. Now in digital and services, we're targeting significant install-based digitization over the midterm and are accelerating our software-as-a-service conversion. We're exploring new business models to drive recurring revenues, and for our longer cycle businesses, primarily in our industrial fire businesses, are providing full life cycle management for our customers, as you heard, from Ajay. Now in the next few slides, I'm going to double-click on the last two columns here on this page to give you really a better sense of some of the more recent opportunities. Let's start with the first of our key initiatives I wanna talk about, and that's our smart, healthy, and safe homes initiative as part of Carrier's Healthy Building Program. Now we are the global leader in residential fire safety today, targeting significant share expansion over the next five years by really tapping into that underprotected 6 billion-plus global market opportunity I talked about earlier. Of the growth in this segment, we see about 60% coming from healthy and smart homes, the initiative on the page. We are transforming, first of all, from a standalone carbon monoxide and smoke sensor portfolio to a digitized, expanded sensing and services portfolio. We are leveraging our detection expertise to expand into other areas like indoor air quality, like gas and water leak detection, among others. We're driving ecosystem stickiness through open smart home integration and partnerships with best-of-breed smart home providers like Google, Amazon, Alibaba or Tuya in China, to name a few. We're in the process of creating new digitally enabled recurring services, like charging a monthly fee to know your home is safe and healthy, and obtain the services to keep it that way. The data from our connected devices can be used and will be used to enable micro-marketing and cross-selling within our own segment and with the HVAC segment, as we target consumers based on their habits and usage and make them more educated and more aware about health and safety, whether in the home or in the building. Now the result of all this will be higher total portfolio sales, higher share, market expansion, and higher return on sales through the introduction of higher margin, new products and recurring services. Now we've already made great progress against this ambitious initiative with some of our most recent launches. We launched our Kidde MOON series detector and smart home offering in Q3 last year in China, and most recently launched our Wi-Fi smart smoke alarm with Kidde in Q4 in the US. Very exciting space. We got a very busy agenda for the year. More to come here in the first half, but definitely stay tuned on this. Now the second of our key initiatives as part of our strategy is in our commercial fire businesses, where we are tackling very similar innovations like I just shared for the home, but in this case, for the commercial building, buildings like this. We're globally number two in this space and have a very attractive installed base of more than 700,000 buildings. Now we're a technology leader in this space as well with the launch of our Edwards smoke detection platform, which was most recently first to market meeting the new WELL standards. We're leveraging technology as well to drive global expansion into EMEA and Asia. Now here as well, we have expanded our world-class detection capabilities to include indoor air quality through partnerships. We've expanded into other adjacencies like intelligent evacuation and emergency responder communication to provide buildings with a total health and safety solution as opposed to a fire solution only. Lastly, we're offering a number of new life cycle services like remote monitoring and remote diagnostics and others. Anything in the service context done remotely in a building contributes to the health and safety of that building with fewer visitors and fewer touchpoints. It also helps us to reduce total cost of ownership for everybody. Now over the next five years, similar to what you heard on the resi side, we're looking to digitize really our commercial fire installed base to drive growth through more insight-driven and new recurring services and revenue streams. Now the third and last of our key strategies really pertains to our access solutions business, helping to address both the secure and intelligent building needs as part of Carrier's Healthy Building Program. Now out of all of our fire and security portfolio, this is the business that already has the highest percent of recurring and digital revenue. Now in this segment, we are the leader in global access control and access control software for commercial buildings and critical infrastructure with more than 70,000 large installations and penetration with more than 50% of the Fortune 100 companies. We have one of the broadest software feature sets in the industry and one of the most extensive open building integration platforms in the world, with today more than 150 registered partners. Now we monetize partner integrations in our platform by either reselling hardware, selling software integration licenses, or through recurring revenue fees. Now with our unified security platform, we offer critical intelligence, control, and services to a variety of users, whether the building owner, the facility manager, or building occupants, and most importantly, provide corporate leaders with peace of mind knowing that their employees in their buildings are safe. Now in terms of growth, we're accelerating software-as-a-service, moving from on-prem solutions to cloud-based software solutions. We continue to lead with mobile credentialing or the use of smartphones to make a building more touchless and also increase our services content. We'll leverage partnerships like the one we have announced in Q4 with Apple to drive further adoption with building occupants and with buildings overall. Now lastly, we aim to expand here as well our portfolio of value-added services in the commercial building linked with Abound services like way finding, density management or indoor air quality monitoring among others to really further enhance the building experience. Now all of these services are digitally enabled, extremely cyber secure, high margin and recurring in nature and provide an excellent growth engine for our business for the future. Now I wanna bring the opportunity in this segment in particular alive with a double click on mobile credentialing. Which is the common denominator that along with software has been a key enabler for profitable growth in this segment. First let's start with what is a mobile credential? Simply put, it's a secure, unique and personalized digital key like our own digital identity stored on a mobile device, could be your phone. With this unique digital identity in our technology, we can grant you access anywhere, anytime and personalize the experience based on your and your business' needs. This tech underpins everything we do in access solutions. You can see that in the middle column here that in the past two years we've really grown our penetration and services substantially on the back of this. I just wanna highlight a few examples. First in real estate, in our Supra real estate business we have grown our portfolio to more than 1 million realtors today using digital keys to access their properties and enable more than 40 million showings every year. Now this is where we made one of our most recent acquisitions with BrokerBay. Since the BrokerBay acquisition we have doubled the number of agents on the BrokerBay services platform in just a few months. Now in Onity, in hospitality we were the inventors of how to bypass the front desk. Overall and in working with the largest hotel providers our solutions have enabled the opening of more than 150 million hotel room doors to date and this through the cloud. You can see in commercial building and access control with LenelS2 similar expansions in connected devices. Going forward the punchline here is that the potential for growth is immense in this segment and we're really focused on three areas to capitalize on that as you can see on the right. First we're working on further penetrating our existing attractive install base with partnerships like the one I mentioned with Apple launched in Q4 last year or announced in Q4 last year. Second, we're expanding into new verticals like storage facilities and new geographies in and outside the U.S. Third, we're adding new services like the ones listed here, way finding, contact notification, elevator calling. But also others, density management, indoor air quality and facial recognition are on the list to really upsell what we offer. Now we've seen great growth in this segment and we see this accelerate even further on the back of some of these trends in our actions and this at very accretive margins. Now bringing all this together, right? If you take a total Carrier view how does fire and security fit in? Well the answer is very simple. Along with HVAC we provide indispensable services to make sure that a building is healthy, safe, sustainable and intelligent. We are the safety in Carrier's healthy building strategy. On the fire side our specialty is in detection and suppression augmented by notification and evacuation. On the security side our specialty is in access control and unified security with value-added services for the building that enhance the building experience for everybody. With HVAC our offerings will be integrated with Abound as a platform and Carrier Cloud as the digital platform so that for customers we can truly provide a one-stop shop holistic building solution. We believe that this is a significant differentiator not only for our segment but also for Carrier. Now I mentioned we're not just about growing top line, we're also about growing bottom line. Now in order to fund the investments for growth as well as contribute to the bottom line we have specific programs in place to drive continuous margin expansion. First we're pricing to offset input cost inflation and target to be at least price cost neutral in 2022. Now we're also driving higher margins on the back of the innovation I mentioned by doing two things, value-based pricing combined with bringing differentiated technology. Now second, operational excellence is in our DNA. In this segment we already have more than 90% of our cost standard hours in low cost countries and have achieved that by reducing our manufacturing footprint by more than 60% in the last 10 years. We're gonna continue to drive that 2%-3% productivity every single year by focusing on labor, material and logistics and we see labor productivity particularly in this segment enabled by factory automation. Third, as services and digital margins grow so do digital revenues grow so do our margins. Service and digital margins are highly accretive to our product margins and they're 2x the growth of our core products. E-commerce not only makes us easier to do business with it also helps us to lower our cost to serve. Through all of these and other initiatives we really expect to drive increasingly profitable growth for Carrier contributing to that 50 basis points of operating margin expansion per year for the midterm. In closing I wanna end where I started. This is an awesome business. We're a leader in every segment we play in. We're highly profitable. We've grown above market through some of the focused investments in the last two years. We see significant opportunities for both top line growth and bottom line growth. We're on a path to rapidly connect our vast install base bringing high margin recurring services and revenues and we see a healthy, safe and sustainable and intelligent really add to positioning us to that mid- to high-single-digit organic growth for the future. Finally, we're not just about top line, we're also about bottom line by focusing on digital innovation and operational excellence. I hereby want to thank you for your interest. With that, I will hand it over to Tim for refrigeration. Thank you. Thank you, Jurgen. Good morning, everyone. My name is Tim White, and I'm pleased to lead Carrier's Refrigeration segment. Today I'll be talking to you about why we're so excited about this business. I'd like to leave you with just a few key takeaways. First, we're the global leader in cold chain solutions. We operate in a $35 billion addressable market that's growing mid-single digits%. We have the largest installed base and service network, and we provide end-to-end cold chain solutions. Second, we're forecasting growth in mid- to high-single digits%. It's driven by differentiated technology, growth in emerging cold chain markets, and growth in cold chain digital services. Third, we see annual margin expansion that's driven by growth in our aftermarket business, transforming our commercial refrigeration business, and a continued and relentless focus on productivity through Carrier Excellence. At our core, we're a cold chain solutions provider. We offer products that help our customers with the transportation and storage of temperature-sensitive and high-value cargo. We participate across the end-to-end cold chain. About two-thirds of our revenue comes from our transport businesses and one-third from our commercial refrigeration business. We have strong leadership positions across the board at number one or number two in the segments that we compete. We have about 25% of our revenues are aftermarket, and we operate and sell in more than 130 countries. Altogether, more than $4 billion of revenue operating at a 12% adjusted operating margin. We talked about it a little bit, but the cold chain market in which we compete is roughly $35 billion. There's really three trends that are driving that growth. I'll start with sustainability. An inadequate cold chain results in more than $235 billion of annual food and pharma losses. As both Dave and Jen alluded to, that results in more than 1 billion metric tons of carbon emissions. There's a significant opportunity for cold chain solutions providers such as Carrier to mitigate these economic losses and help address the associated emissions. If you look at emerging cold chain markets, China and India spend only a fraction of what the U.S. spends on transport refrigeration. We foresee years of strong growth rates in international markets as the priority is placed on the safe and efficient distribution of both foods and medicines. Lastly, Bobby and Ajay spent time talking about the opportunity in digital. In the cold chain that opportunity is significant, and it starts with the connectivity of our equipment and our cargo. Essentially, we have the opportunity to deliver data and analytics in real time to help our customers with operational benefits and operating across the cold chain. This is a very exciting trend for us, and it's opening the market to new software solutions and new service models. You might think about how does Carrier differentiate itself in this market. The first is really the scope of our business. We have the broadest end-to-end cold chain portfolio. We actively serve the cold chain from the point of harvest and production to the point of consumption. We're uniquely positioned to fuse data that's being collected by our cargo monitoring equipment and our transport refrigeration equipment and utilize the Lynx platform to consolidate that data across nodes and offer our customers real insights to improve their overall efficiency. The next is technology leadership in this space. We're investing heavily in product innovation to deliver sustainable solutions to our customers. We're the first to market with our electric trailer platforms. We have the largest installed base, and this is more than just putting a battery together with a transport refrigeration unit. These are highly engineered systems. They include power regeneration technology and proprietary control systems. We're the natural refrigerant leader and the largest installed base of CO2-based systems in Europe. We're excited about our active controlled atmosphere technology and our container business. This technology precisely controls the oxygen and CO₂ levels in containers and slows the spoilage of both fresh fruits and vegetables. Third, we've talked about the scale of our business. We have more than 1.8 million transport refrigeration units in operation. We're located in more than 50,000 cold storage and retail locations, and we have the broadest network of dealers, service centers, and distributors that provides an excellent foundation for our projected aftermarket growth. Now I'll take you through our individual business segments and some of their overall business dynamics. I'll lead off with transport. The core of this segment is our trailer and our container equipment businesses. You can see that they're progressively growing businesses despite some cyclicality. Now, the listed accelerators that you see on the right, they enable us to smooth the cyclicality over time. First, we forecast high single-digit to low double-digit growth in aftermarket and digital software. This is associated with new subscription service models, delivering customer lifecycle value and more recurring revenues for Carrier. It's driving the mix shift that you see on the lower left of the page. Second, we're accelerating the adoption of our transport refrigeration equipment in emerging cold chain markets, and we're expecting low double-digit growth for the factors that I talked about on the previous slide. Third, we see growth in our sustainable transport solutions. Think about electric TRUs that I talked about, transport refrigeration units, electric APUs, the application of natural refrigerants. This is all driven by both regulations and our customers' own individual sustainability goals. In this space, we're anticipating double-digit growth on a midterm basis. If you take a look at the core of our business on equipment basis and the accelerators, we're forecasting a mid-single-digit or to high single-digit growth over the medium term with reduced cyclicality. I wanna spend a little bit of time talking a little bit about our electric transportation refrigeration offerings, because we truly believe to be a leader in transport refrigeration and sustainability, you have to lead in the evolution that's taking place between the market and diesel to electric. We're very pleased with our position. We're pleased with the investments that we've made and our strategic partnerships. In the highly important trailer space, we're the first to market in Europe. We've been the first to market in APAC, and we just launched in the Americas in 2022. We have the largest installed base of electric trailers, and we're rapidly industrializing the solution. Across our other platforms, we have initial offerings in the market. We're launching new products throughout this year, and we're enhancing our capacity and our efficiency of those product lines. By the year-end, we will expect 100% electric offerings in all of our core segments globally. What this will do, this will allow us to serve our customers that are seeking not only regulatory compliance, but to meet their own sustainability, carbon emission footprint reduction goals, as well as realize energy cost savings. While we're early in this shift in the market, by 2030, we anticipate more than 50% of the units that we sell will be electric. Before moving off of transport, I wanted to briefly highlight the successes that we've had with customers so far in electrification. We have units that are operating in more than 10 countries today. We're delivering positive sustainability outcomes for more than 25 customers. We have a strong backlog with sales opportunities across three continents. An electric trailer is really a win-win for both Carrier and our customer base. From a Carrier perspective, there's larger system content, there's higher rates of service and digital subscription attachment, and this presents 1.5-2 x the lifecycle revenue opportunity over the current diesel technology. From a customer's perspective, this offers lifecycle cost savings through eliminating fuel costs. It eliminates direct CO₂ emissions and ensures regulatory compliance. We're very excited about this technology, the customer interest that we're seeing, as well as its impact to the environment. Now I'll move on to the commercial space. We're a leader in the food retail refrigeration and natural refrigerant technology in both Europe and Asia. We provide complete lifecycle solutions, including design, manufacturing, installation, and aftermarket. Our equipment business is really based on cold storage, warehouse refrigeration, and high-efficiency cabinets for the retail market. Accelerating our growth is the adoption of sustainable natural refrigerant systems like CO₂-based systems and our CO₂ racks, deployment at greater scale in warehouses and cold storage facilities, and the modernization of fresh food retailing in countries like China. Now, although we see growth in our commercial refrigeration business, our priority is to improve the bottom line through business simplification, overhead cost reduction, improved price realization, and transformation of our service businesses. Bobby spent some time talking about digital. A key enabler of growth on our business is digital, and you've heard us talk about the Lynx platform. What Lynx does, it takes data from our refrigeration units and our cargo monitors and delivers insights to a wide range of stakeholders across the entire cold chain ecosystem. We've developed Lynx with four main product subproduct groups, and each are serving distinct customer segments and delivering specific customer outcomes. We've received great feedback from customers, allowing us to continue to improve our solutions. In 2021, we more than doubled our subscription rate, which gives us great confidence in our ability to forecast, and our ability to deliver the high single-digit% to low double-digit% growth in our aftermarket service businesses. As we think about Lynx and its ability to drive our aftermarket, we see it as a great enabler for BluEdge and lifecycle value for our equipment owners. Earlier I talked about our leading installed base in the refrigeration equipment segment. As we connect to this installed base, there's a wealth of new data that's being unlocked. This is requiring advanced analytics, digital tools, and customer interfacing applications. This is where Lynx comes in. Lynx is the center of intelligence for our service and aftermarket software solutions. As we build out our BluEdge contract offerings, we're utilizing data from Lynx to optimize the way service is priced, the way it's managed, and the way it's delivered. Our BluEdge contract offerings are more value-added and differentiated because of Lynx. With this, we expect our aftermarket to grow at high single digits to low double digits. Now I wanna share with you how Lynx is driving customer value with a few customer-specific examples. First, I'll take Lynx Cargo. In this case study, utilizing real-time data, we helped an international fast food chain improve operations and significantly reduce operating loss. With Lynx Fleet, we identified opportunities for an international container shipping company to automate operations to unlock labor savings. We engaged in a pilot to employ proactive condition-based maintenance, which resulted in a significant reduction in the amount of equipment downtime that we see in our retail environment. These are just a few examples of how Lynx is delivering cold chain solutions to drive growth for our business. We have a solid plan for growth. We also have developed a strong game plan on margins, and we're confident in our margin growth path moving forward. Our margin growth path is focused on three main elements. First is the growth in our digital and aftermarket offerings at accretive margins. As I highlighted earlier, we expect to see a material portfolio mix shift over time. Second is transformation of our commercial refrigeration organization. We're reducing the complexity of our structure and our associated overhead costs, and we're improving the price realization and implementing process improvements in our turnkey installation and aftermarket services. Third, we will relentlessly pursue Carrier Excellence, and this is through investments in automation, in lean, and supply chain efficiencies. We'll consistently deliver 2%-3% operational productivity. With this plan, we are forecasting more than 50 basis points of margin expansions annually. In summary, we're incredibly excited about the opportunities we see for this business. As a global cold-chain solutions leader, we see a strong path to continued growth and multiyear margin expansion. We will continue to innovate and delight our customers. Now before I turn things over to Patrick, I'd like to share a brief video from Bob Sappio, who's our largest container customer. Carrier's been a great partner. I met with Carrier in 2016 in Singapore, and I told them we were gonna be their number one customer. We like working with Carrier, and we like being partnered with Carrier. For us, deciding to throw ourselves in and be primarily a Carrier shop was not a hard decision. Carrier has the best parts and service and maintenance network globally. If a compressor breaks in Santos, Brazil, Carrier has the capability of serving that issue and correcting and providing a remedy for our customers in Santos, Brazil. Lynx Technology is a big step in that direction in not only providing visibility, but providing equipment owners like myself with useful information about how that equipment is being maintained and how it's being run. Carrier is the number one refrigerated unit that's asked for by our customers. When a customer is looking and calling us up for depot units, that they need additional units, new or used, Carrier is the first one out the gate. All of us have a responsibility to the communities we serve, and frankly, to our children, to make sure that as we run our business, we're being thoughtful and right about how that business impacts the environment. Carrier, I think, continues to highlight that the energy efficiency of this unit in the industry is second to none, and we hope we can continue to grow on that with our customers. Well, I'd really like to thank Bob for that testimonial. Great customer, great business. With that, I'd like to introduce Patrick Goris. Thank you, Tim, and good morning, everyone. Well, I hope you can tell that these have been some exciting times at Carrier since the spin. If I look back at last year, which was our first year as an independent public company, we did pretty well. We gained some share, we expanded margins, we grew EPS by over 30%, and we converted net income into free cash flow at well over 100%. Now, maybe more importantly, since the spin is what we did is to set ourselves for continued success going forward. We significantly strengthened our balance sheet, and we initiated shareholder-friendly returns. While we delivered superior financial returns, this is just the beginning. Or as Dave said, we remain humble and hungry. This is our value creation framework for continued strong financial performance going forward. It all starts with above-market 6%-8% organic growth, 50 basis points of margin expansion per year, a lower ongoing effective tax rate of 22%, 100% of net income in terms of free cash flow, and additional capital deployment, including acquisitions and share repurchases. All that leading to double-digit adjusted EPS growth through the cycle. In the next few slides, I will dig deeper into each element of this framework. I'll start with above-market organic growth. You've heard all of the prior speakers this morning either talk about our attractive market supported by secular tailwinds. You've also heard our speakers this morning talk about what we are doing and what levers we have to outgrow this attractive market. You also heard each of my colleagues this morning talk about what we're driving to differentiate ourselves and the additional digital capabilities we're developing to set ourselves apart. I hope that one priority is clear for us this morning, which is we want to drive above-market organic growth going forward. As you can see on this slide, we're making the investments in R&D and in sales resources to support that. Let me move on to the second element of our framework, which is margin expansion. You've heard each one of our segment leaders this morning talk about everyone's objective of expanding our operating margin by over 50 basis points per year. How do we get there? Clearly, volume is a tailwind. Given our gross margins of a little less than 30%, growing 6%-8% will automatically provide an uplift to our operating margin. In addition to that, there are some tailwinds and there are some headwinds. I'm not gonna go into each and each individual one of these tailwinds and headwinds, but this is the takeaway I'd like you to have. One, we expect price realization to offset inflation costs. Two, we expect the benefit of productivity and the aftermarket initiative to offset, to more than offset, to exceed investments and the annual merit increases. The net outcome of the tailwinds and headwinds is a target for us to deliver $100 million of extra operating profit every year, which will in turn, of course, help with margin expansion. In other words, we're targeting 30%-35% core earnings conversion going forward. That excludes the impact of acquisitions and currency. Now, to put that a little bit into context using 2022. This year, we expect to deliver higher operating profit on lower reported sales. If I adjust for the Chubb transaction, our core earnings conversion is about 20%, but that includes $1 billion of price and $1 billion of material inflation, much higher than we would typically expect. Excluding price cost, our core earnings conversion this year is well over 50%. It just tells you how much productivity we've built into our guidance for 2022. Let me now dig a little bit deeper into the different elements within margin expansion. We start with productivity. Everyone in the company, overall company, we're targeting 2%-3% cost productivity every year. Every element of the company is expected to contribute towards this productivity. Now, selling resources in R&D are the prime recipients of our investment dollars. It's less about compressing selling expense in R&D than optimizing it. Every other function will be contributing to productivity every year. Some will be asked to contribute over 5%. Others will be asked to contribute a little bit less. As you can tell from the pie chart, clearly, supply chain will be the largest contributor of productivity going forward. As we mentioned on the earnings call just a few weeks ago, G&A is becoming a stronger contributor of productivity with $100 million targeted of productivity for 2022. Let me now provide some examples of productivity that we are driving. Actually, I'm going to recite some examples mentioned by some of my colleagues. Chris Nelson talked to you about material substitution and how we intend to replace copper with aluminum to drive down costs going forward. Another one of my colleagues, Jurgen, he shared about his plans within the fire and security segment to increase the use of automation, reducing cost, increasing reliability, and improving quality. Finally, on the G&A side, shared services. Most of the companies our size and most of the companies you cover started implementing some form of shared services 10, 15 years ago. We started implementing shared services and set up our shared service organization in the fall of 2020. We have a tremendous amount of opportunity ahead of us implementing shared services and getting the return associated with the investment in shared services. Aftermarket is an additional opportunity for margin expansion. Ajay shared with you the opportunities we see, our playbook, and progress we're already making on aftermarket. We don't only expect to see additional value provided for customers, additional revenue streams, including recurring revenue streams, but we also see this as margin accretive, as on average, aftermarket gross margins are 10 points above the company average in terms of margin. Ajay was also kind enough to put a dollar figure on the slide. $2.5 billion incremental revenue expected 5 years from now. If I just take that $2.5 billion at 10 points of additional margin, that is $250 million of additional opportunity for margin expansion associated with this initiative. No pressure, Ajay. What are we going to do with the benefit from productivity and the aftermarket? Part of those, the productivity we generate will be used to fund investments. The priority for investments are pretty clear. A, we want to fund organic growth. B, we want to fund additional productivity. You see on this slide the priorities in more detail and how we're going to measure success. Again, I will be providing a couple of examples. With respect to investments in digital, both Bobby and Tim discussed about how our new platforms, Abound and Lynx, will deliver additional value to customers, will enable additional revenue streams, ensuring recurring revenue streams, and clearly a key element for us to differentiate ourselves, and a key recipient of the investments we're making. Another example is enabling technologies. Throughout the company, we're investing in enabling technologies that will help our business and drive productivity. One example is an enabling technology to increase the efficiency of our field technicians. Another example of an investment we're making is a tool that increases sales force effectiveness. Finally, I talked to you earlier about shared services. We are investing in technology that enable and support the implementation of shared services throughout our company. Now, it is maybe somewhat strange to talk about taxes as part of a value creation framework, but there is some newness here. At the time of the spin, we had an adjusted effective tax rate of 25%. We now have a path, starting with 2022, for an ongoing lower effective tax rate of 22% under current tax law. Clearly, a value driver compared to where we were a couple of years ago. That takes me to free cash flow, which is obviously probably the most important value driver in our framework. The short message is this. We expect to convert 100% of net income into free cash flow going forward. We've taken some proactive actions that make us, that improve our financial profile or improve our free cash flow profile. The divestiture of Chubb helps. The simplification of our JV structure. Also, the acquisition of TCC will improve our free cash flow profile. Actually, as I mentioned on the first slide, we actually delivered well over 100% of net income into free cash flow in 2021. On the right side of the slide, you see that there are some headwinds for us in terms of free cash flow, particularly in 2024 and 2026 related to the TCJA. There won't be perfect timing, but we do see opportunity for reduced working capital to help mitigate some of that impact. That gets us to working capital. I think it's fair to say that we have an increased focus on working capital improvement within the company. Historically, we've been a very decentralized organization, and what that has meant, for example, for working capital improvement is we have limited subject matter expertise. We did not have scale tools or processes or organizations to drive working capital improvements for our company. We've made some progress, as you can see on the slide. There's a tremendous amount of additional opportunity ahead of us, and we expect to monetize another $250 million of working capital in the next several years. Let's move to the balance sheet. I mentioned earlier on that we've made a significant improvement with respect to the financial position of the company. We remain committed to paying down $750 million of debt this year, as we shared with you earlier. We target an ongoing Baa2 / BBB credit rating, and we intend to get there by growing the EBITDA. Combining a very strong free cash flow profile and currently no priority of paying down additional debt beyond the $750 million, that gets us to capital deployment. What are we going to do with all the capital and the cash we generate? Our priorities are unchanged, funding organic growth, inorganic growth, i.e. acquisitions, a growing and sustainable dividend, and share repurchases. For organic growth, expect capital expenditures about 1.75% of sales. Our primary metric for acquisitions remains free cash flow yield. With respect to a dividend payout, that dividend payout has been increasing since we became public, and we're targeting to get to a 30% payout starting in 2023. With respect to share repurchases, we expect a reduction each year in the number of shares outstanding, and we will have the flexibility to toggle between share repurchases and acquisitions. Now, to quantify a little bit the free cash flow we generate and what we can put to work in terms of capital deployment. If I take 2022 as a base, roughly as a base, for free cash flow, after payment, there is about $1.5 billion left either to make acquisitions or to repurchase shares. We only intend to grow that free cash flow number. In short, we have tremendous capacity for capital deployment, for value-add capital deployment going forward. Let me talk a little bit about the acquisitions. We covered a little bit of this before, but I hope the priorities are clear. Sustainability leadership, expanding the addressable market, including into higher growth areas, accelerating organic growth, and incurring, and increasing recurring revenue streams and cash flow streams. In terms of size of acquisitions, think of focus on bolt-on acquisitions, $1 billion-$1.5 billion. Clearly, we have the capacity to do more. I think you'll agree with me that if you look at this slide, you will recognize that the TCC acquisition fits in really well with all the priorities we've laid out on this slide. Take another look at our value creation framework. 6%-8% organic growth, 50 basis points of margin expansion each year, a lower ongoing effective tax rate, 100% free cash flow conversion, and value-add capital deployment. Double-digit adjusted EPS growth through the cycle. Before I turn it over to Dave, we have strong performance since the spin. We have a clear value creation framework to use for continued strong financial performance going forward. We have significant self-help levers available to us and plenty of capital to deploy towards value-add opportunities. With that, Dave. Okay. Well, thank you, Patrick. My thanks to all the presenters. I mentioned that we've shaken up the team a bit, but we've also doubled down on the team that we've had. We have 50,000 people working around the world really believing and putting their heads down every day, committed to our mission. I hope that you have a clear takeaway that we have a management team, but also a greater Carrier team that is focused, that is aligned, and has tremendous energy to continue to drive best-in-class results. With that, let me ask the folks to bring up some of the stools on the stage, invite my colleagues up to the stage, and we will open it up for questions. Thank you, guys. Thanks, gentlemen. Am I in the right spot? Yeah. Sorry. Oh, he sits here. Over here. Okay. Sit anywhere. Sam, are you still handling? You ready to go? Yeah, let's do it. Okay. And also just anyone online, just so you know, you can, you can't call in with a question, but you certainly can enter in and we'll try to do a little bit of that. Julian, why don't you start right here? Please wait for the mic so that we can have it webcast as well. Thanks very much for all that information. Maybe firstly for Dave and Patrick on the portfolio side of things, you know, how satisfied are you with the state of the existing portfolio in terms of most of the non-core stuff having come out by now? Or do you think there's still a lot of room to prune things? Then on the acquisitions front, how aggressive should we think about Carrier as being in terms of M&A and kind of how far from your existing core would you look to expand with deals? Let me start, Julian, and Patrick can add. I will tell you that we will always be looking at our existing portfolio. You know, we said we'd be clinical and dispassionate, and there is no part of our portfolio that is beyond review. We're very pleased with our portfolio, but there's underperforming parts of our portfolio that need to perform better, and they know who they are, and they're stepping up. There's other parts that we will always continue to look at. I don't think we'll ever stop looking at our existing portfolio. I will tell you, we've really built out our pipeline in terms of M&A. We're thrilled with the Toshiba acquisition. We can't wait to close on that. You know, we wanna keep it in the fairway that we talked about our priorities. I put them up there. Patrick then reiterated them as well. We will stay focused on our strategic priorities, but we are opening the aperture as well, you know, things like product adjacencies, geographic expansion, some of those. Recurring revenue, sustainability, we have certain themes, and there's a lot that fits under the umbrella of those themes. Patrick, you wanna add to that? No. Jeff, go ahead, right behind you. Thanks. Good morning. Jeff Sprague from Vertical Research Partners. Just on the margin expansion, Patrick, you're calling it 25-30 or 30-35% core, but yet your revenue level and margin level, 7% at 50 basis points is an observed incremental of low 20s. So maybe you could kinda bridge that, 'cause it looks like on your slide 100, the investments and the productivity offset, so just not quite piecing that together. Yeah. The margin expansion we target is over 50 basis points each year. We get a benefit from volume leverage given our gross margin is close to 30%. I think that gets you close to, call it, 25%+ earnings conversion. Add to that $100 million falling through the bottom line per year from the net tailwinds and the headwinds, and that gets you to the 30%+ conversion and increases the margin well over 50 basis points per year. Just secondly, even though the guide excludes Toshiba, other than kind of that one-year pickup when it comes in, do you foresee the projections we saw today on growth margins or anything else changing materially? No, except for the one-year reset, as you say, yes. There will be a one-year reset, including an impact on margins because the absence of equity income, and we'll consolidate the full results. But at this point, we don't see any reason why that would change our model. As we discussed when we announced TCC, we see the opportunity to deliver $100 million of cost synergies associated with this transaction, which will help us with the incrementals as well. I wanna go to Steve over here. Thanks as well for all the info. You guys talked about the margins in aftermarket being relatively high. Can you just help kind of rank order where they would stand relative to like resi and transport business? Are those still kind of like your two highest margin reporting subunits, if you will, and how those compare on an operating margin basis to aftermarket or services in general? Steve, I'll talk about gross margin for the moment, if that's okay. I think it's fair to say that transportation and resi, including also some pieces of fire security now, are among our highest margin businesses. Light commercial. Light commercial, yes. If you then look at aftermarket, some of those margins are north of those as well. Okay, got it. Steve, there's a mix within aftermarket. You know, certain service things may be lower, certain parts may be higher. You know, there's a mix just even within the aftermarket. Right. Then I noticed the resi cycle chart is missing this time around. Last year in early 2020 you said there was an 18-year useful life. Can you maybe just update us, officially, where you guys stand when it comes to kind of the market model there? I think you said you had a guy somewhere working on this model for the last like 40 years. He's in a back room somewhere. Yeah, some somewhere. Go ahead, Chris. Maybe just kind of update us on what you see for the next few years through the forecast period and what kind of assumptions you're using. I have one more question. Yeah. I think just taking a little bit of a wider aperture on it, you know, we look at the history of that industry, and it's a mid-single digit type of industry over a long period of time. We see nothing fundamentally that will change that, you know, in the upcoming years and certainly in the midterm as well. You know, as I stated, there are elements of cyclicality that we've seen in it, If I take a step back right now and take a look at it and say that, you know, right now we see excellent demand, and there's nothing that I sit here and say fundamentally would change my outlook on that, especially when I would consider, you know, the real tailwinds that exist from the regulatory changes. I mean, there are gonna be pretty significant changes in 2023 and 2025 that are gonna add to the average price per transaction, I think will continue that growth trajectory. As far as the useful life question, I think if you just take a step back and do the math on what's been happening, it would indicate that in the replacement market, there has been a faster replacement cycle. I mean, it's just basic math of what we see going on. We do have some early evidence that we are seeing units being changed out quicker. You know, we think that there's a couple phenomena with the investment in the home and the work from home, but then also, you know, there has been a tailwind of increasing cooling degree days over a multi-decade cycle that is gonna increase the wear and tear and cycle. Now, it's early days and, you know, one to three years is kind of what we're seeing right now, but we're gonna need longer to see where that data comes in. But that's certainly a watch in our model right now. Yeah. We talked 17.5, 18 years, it's probably closer to 15. 15. Okay. Then just one last quick one on acquisitions. You know, a lot of the stuff you looked like you were targeting, when you use the term ecosystem, you've been talking a lot about services and connected and digital commercial building services. Resi doesn't really seem to kind of, you know, fit that. I mean, it's not necessarily an adjacency that you need to expand into geographically. Like, is U.S. resi, you know, a big deal there, kind of not a priority for you guys at this stage of the game for U.S. resi? What I would just link it back to the priorities that we set. You know, we look across all of our segments, growing the core in any segment. We looked at sustainability, we looked at recurring revenue. We're not declaring anything off limits, and we're not gonna kinda go segment by segment. We like the portfolio we have, but we're gonna continue to add to it. Let's bring it back on this side. Go with Andy here. Sure. Just a question on digital services and Abound. You know, it seems like the controller technology has evolved and sort of provides opportunities to disrupt the space. You know, where do you see yourself versus sort of more traditional BMS systems? Also, what kind of other emerging competitors are you seeing given the changes in the hardware? Let me maybe split it between Chris on kind of ALC and legacy BMS, and then Bobby on Abound. Why don't we start with Bobby, just to discuss Abound differentiation and how we see that playing out, and then Chris could probably add a comment on ALC. Yeah. Like I mentioned earlier, the ability to dynamically optimize the performance of a building. There were certain limits that existing BMS systems provided. There was not an ability to access what the latest technology has to offer in terms of cloud-based IP technologies and sensors to incorporate all of that information to dynamically manage a building system, which is kind of the genesis of this IoT overlay over the building management system to drive higher level outcomes around sustainability and performance. That's kind of where you see generally how these technologies have evolved. Specifically on why we thought this was important for us is when we set out to build the Abound platform, we essentially said, we looked at the technology landscape and saw that there is a contemporary set of capabilities that are available today with our partners, with hyperscalers, the advances in technology that we could adopt to address some of these challenges. We leaned in. We didn't have a legacy set of capabilities that we had to cobble through. We leaned in and derived these open systems. That's kind of on the one side. The competition essentially that we see is twofold. Our traditional competitors have some sort of offerings in the space, and in addition to that, there are startups in this market. The way we differentiate ourselves there is the domain expertise that we have and the install base that we have, and the service networks and all of the things that go with our global presence as a player in this industry. That's clearly what the ways in which we find ourselves distinguishing from a technology startup that is trying to solve this problem and the approaches that some of our competitors have taken. Do you wanna add anything? Yeah. Think about it as more of a traditional or core building automation perspective. In our Automated Logic business, the answer is very similar, and it actually plays in very well with Abound. The foundation or legacy of that business has been built off of more of an open approach than many of our competitors, and it also has been built on end user ease of use and functional capabilities. When we think about how we see the market moving, whether it be in Abound as an overlay or building automation, we see much more open, we see much less siloed, and that's where Automated Logic really excels. We've been seeing, and will continue to see success in that space going forward. Just a follow-up question. I think Patrick had a slide where he sort of talked about outgrowing the market and I guess increasing the attachment rate as part of the strategy. Yet I think the slide sort of indicates that the sales force is gonna remain flat year out. Can you just talk about it? Because I would have expected, you know, you pushing more aggressively in that direction. Actually, the slide showed from 2019 till 2022, and from 2019, I think, to 2022 showed an almost 1,000 headcount increase in selling resources. Clearly, our selling expense will be higher this year than last year just because of the full year impact of the resources we added. I think it's fair to say that this year we will not be adding as many sales resources as we've had in the last two years. One of the reasons, of course, is also because we still have to get the full return on those resources. It doesn't mean that we will cap the number of sales resources. Clearly, we won't. There will be continued investments, including in sales resources. We've added a tremendous amount of headcount already, and wanna make sure we get the return on it. As we get the return on and identify additional opportunities, we'll continue to add headcount. Josh. Thanks. Just sticking with kind of the aftermarket and service focus here, which you guys touched on in a lot of the business. Maybe to follow up on Andrew's question, how much of this is sort of incumbent upon Carrier versus working with some of your independents? I think, Chris, you had a slide talking about, like, the Carrier service space. Looked like it was a lot smaller in the U.S. maybe versus Asia. You know, is some of that just that there's another channel or another, you know, kinda independent, you know, standing between you and the customer? And how do you partner with or work around them to get that digital attachment or get that service attachment? Yeah. I mean, as it relates to HVAC, you know, we own the right and the capability and the branch network to service our products, our commercial products globally. There is no ambiguity about that opportunity from a channel perspective. I'd say that, you know, there is, you know, it's traditionally not something, and I say traditionally going back several years, it wasn't necessarily a focus, and we were more what I'd say would be a first sale type of business. That's not how the industry works overall. We've been, you know, we just need to be very clear, and we have been in our desire to service our own equipment. That's one thing, the communication. The other issue, you know, is that you've gotta have a value-added offer, right? We have to be able to say, and I know I mentioned in my comments that we're gonna differentiate ourselves from the local competitors with our smarter digital offerings, and that is the competition. It is, mostly speaking, the larger service mechanicals in a geography. I think we're well positioned with the investments we have made and the focus we have to grow using the branch network that we have. Then I guess just related to that on BluEdge, and you mentioned the 30,000 sites. I think within that, there's sort of like a good, better, best offering. Like, how would you sort of, you know, characterize that stratification? And then what would the attachment rate look like for, "Hey, I'm a BluEdge customer, and I also want Abound too." Like, are you able to bring it all together in one package, or is this just getting folks to kinda come in and turn the wrench for the first time? Yeah. Within BluEdge, as you mentioned, there are tiers. The way we designed it is really understanding customer base, what the customer needs are, how we segment them and create offerings that meet where they wanna go. Core, BluEdge Core is the more basic end, and Elite is the most comprehensive offerings. Abound really is tied into, as you progress from Core, Enhance, Elite, Abound becomes a bigger and bigger part of the play, especially all kinds of digital offerings, remote management, the kinds of things we talked about energy services, plus Abound, all of that comes together as you go towards the Elite end of the offerings. Just one quick one. On the six to eight, how much of that is price? Oh, over longer periods of time, we're not gonna call out price. There will be some price element, but it will be nowhere near the 5% it was in 2022. If it is, it's gonna be LSD, low single digit. And that- Yeah. Typical is probably one, right? Yeah. Correct. Thanks. All right. Why don't I go to Deane, and then Nigel right here. Thank you. It's Deane Dray with RBC. A question for Ajay on the aftermarket opportunity. You know, the number of installed chillers, 330,000. How do you attack the unconnected chillers? Just, you know, what's the heavy lifting involved? Do you have to do field retrofits? Do you have to add sensors? What's the payback? Have any of the competition beat you to the punch here? Are there competitors that have connected your chillers, or is there proprietary that, you know, barriers to letting that happen? What I would say is in terms of connecting the existing chillers out there, you know, the whole industry is in a pretty early stage, to Bobby's earlier point. We are all progressing in that direction. You know, on your question of how we attack it, we generally know where those chillers are, and it's really the question of creating that value proposition for the customer. We have unique architectures that we have come up with, including edge devices, to really create that value proposition for the customer. When we have that discussion with the customer, it's actually not a very heavy lift to actually connect the customer and immediately start bringing that value to the customer base. I think it's if you take a look at it and say just really at the brass tacks level, we're doing work on those chillers now. If there's a chiller that breaks down, you know, we're gonna have parts that we provide, and we're gonna work to get that chiller back up and running. It's very, you know, the kind of going to connected and how we get there is very closely tied to overall BluEdge and service agreements. You wanna then go be able to instead of having that be break, fix, time and material type of work, you wanna convert that customer over to the value of why they would want a service agreement. In that service agreement, you would build in the ability to connect that longer term because we know that not only is it better for the customer, but it's ultimately stickier on that service agreement going forward. That's how that actual transaction works at kind of the branch level. Thank you. Just a follow-up, a couple questions on the supply chain. Can you give us an update on the dual sourcing initiative? Where does that stand? What are the goals for 2022? You know, since it is a real-time situation on semiconductors, and you do have a big commitment to digital, what's the latest in terms of supply of semiconductors and alternative sources there, too? Yeah. We, Deane, we went from 25% of our critical components dual source to 35% last year. We're on our way to 75% in the next five years. We'll continue to see material progress. You know, it's a complicated time right now 'cause everyone's sort of dealing with shortages, and a lot of our supply chain organization is balancing between keeping the operations moving and renegotiating. We'll continue to see progress there this year as we work our way to that 75% dual sourcing. I would say chips has been really a significant amount of change for us over the last year. I would say it's the first time ever that we've negotiated directly with chip OEMs. The way we kind of think about chips over the next year or two is that we'll continue to be chasing this year. I mean, we have significant chip shortages, and every day the team is very focused on managing those in any way we can, sometimes even on the brokerage market. We've negotiated direct relationships with some of our key chip OEMs, and we'll see the benefit of that as we get into the second half of this year, and we're seeing some level of prioritization for us as we negotiate those agreements. As we get into next year, in addition to the negotiated agreements, we see more capacity coming online, so that should continue to help us as we get into the second half of this year into next year. Go ahead, Nigel. Yeah. I'm hiding here. So I wanna go back to the service opportunity, the 4.5-7. Is there a need to, you know, invest significantly in field sales? I know you've already added a lot of salespeople, but is there a need to invest? Is the nature of that seven changing versus what we have today? Is there more software, you know, SaaS, software as a service type business models? Any change that we should flag there? Go ahead, Ajay. In general, what I would say is the 4.5-7, in terms of addition of capacity, whether it is sales or technicians, all of that's embedded in the plans that the team has shared today. Yes, as we progress, you know, there will be need for additional investments, but that's part of the overall plan. What I would say is mix, you know, is shifting more and more towards digital, more and more towards recurring revenue models, and that's where the new value propositions, which are part of BluEdge, really come into play. That's where the OEM differentiation becomes really, really important. My follow-on's about shared services. Perhaps not the most exciting topic you'll hear today, but you know, your SG&A doesn't strike me as very low. It's 15%. It's certainly a lot lower than some of your competitors, so I'm a little bit surprised that shared services was flagged as a significant opportunity. Maybe just flesh that out. Yeah. Maybe, you know, what kind of targets do you expect there? Generally within G&A, we see opportunities across the company. After the divestiture of Chubb, our G&A is a little over $1.5 billion, I believe. Mm-hmm. We see opportunity to reduce that. As I mentioned this year, $100 million. That's gross. We see continued opportunity over the next several years to go after that and reduce that number and implement more scalable processes in organizations that will benefit the overall company. If I may add to it, you know, when we grew through acquisition over many years, we ended up with duplicative G&A, as Patrick said, all over the world. What we've done, we have Eva Azoulay and a team that created Carrier Business Services, where we have centers of excellence in Monterrey and in Prague and in Hyderabad, and we'll be adding one in Shanghai. What we do is co-locate into these COEs. You get various benefits through co-location, and then you drive automation. Rather than just reduce G&A through brute force, we're doing it in a much more strategic, sustainable way. We see significant opportunity on the G&A side. John? Hi. Thanks for all the presentation material. I guess the first question's around electrification, and I'm sure there's gonna be a lot of conversations around where natural gas prices might go. When you talk to your customers and they're looking at the return on investment of one of these systems or doing an upgrade, how much of their decisions being driven by kind of the energy efficiency savings versus, you know, the other stuff around, you know, sustainability and some of the other goals that you talked about? Maybe we'll hit it from a reefer perspective. Tim, you wanna talk about the electrification piece there? Yeah. So I'll say from a reefer perspective, the model essentially is the customers are looking at, they may talk to us about kind of the initial contacts associated with their goals associated with sustainability. Then quickly it becomes an opportunity to look at what is the life cycle savings that are associated with transitioning from a diesel-driven reefer to an electric reefer. You know, typically the conversation then moves to, "Hey, this pays back over time. It's a great investment. It allows us to meet our sustainability goals," and essentially is, I'll say a win-win for us and our customers. What I'd add, John, is that if you think about various cities throughout Europe, they will be mandating no diesel engines in the cities in a certain period of time. Some of our customers are faced with the decision, if I buy a new diesel reefer today, I may have to replace it, say, in 2025. Even though we are first to market with our electric trailer units, we're in 11 countries, and it is more expensive than a diesel engine today. What customers are starting to say is, "Maybe I'm better off spending the money on the electric, you know, powered reefer unit today, knowing that if I don't, I might have to replace it in four years anyway." There's a payback piece, but especially in Europe, customers are very, very focused on the sustainability piece, and that's now migrated to the U.S. as well. Maybe just as a follow-up and sticking with transportation, I think, you know, we've seen the cyclicality of the business in the past. You've laid out a couple of different growth initiatives. There's probably some price in there as well. I mean, as you look out three to five years, should we be expecting, you know, some pressures on volumes at all? Yeah. How do you see that cycle playing out? I'll say, if we look out certainly in the next couple of years, the fundamentals of the market are strong. Our customers are doing well. Transportation rates, you know, refrigerated trade rates are up. We see the fundamentals driving growth in the business, over the, I'll say, 12-24 month timeframe. You couple that with the emerging market growth that we're seeing, which has been sustained and, I'll say very encouraging over the last five years, and you forecast that to be strong over the medium term as well. The sustainability regulation Dave mentioned in Europe, there's regulation, there's CARB in the U.S. that's driving a replacement cycle. We see kind of those three trends that are bolstering the overall growth of the business as we go forward. Joe? Hi. First question, if you could just expand a little bit on the market share objectives within the growth algorithm and talk about how much of that is within the strategic component, if there's any of that that's within some of the more secular sides of things. Then if you can expand on it by kind of a regional or segment level in terms of where some of the biggest opportunities are? Well, at a high level, the way we sort of framed it was that we said the base market was gonna go 3%-4% and that we were gonna grow mid-single% because of outgrowing the growing market. That is part of it. If you look at our three pillars of growth, you know, part of it was just outgrowing the core. We've seen share gains. If you look at last year, we saw significant share gains in resi, light commercial, many parts of Jurgen's portfolio, clearly in transport refrigeration. No matter how you do the math, we picked up share. It was fairly broad-based in terms of our share gain, and I would say there's opportunity across the board. The other piece of organic growth and kind of share gain, so to speak, is the aftermarket piece. You know, it's really tremendous white space for us to go after, that if you look what Ajay presented, the amount of installed base we have where we would sell a piece of equipment and then never touch it again and leaving on the table. 5x type multiples on that piece of equipment, it's now gonna just dramatically shift. We've made progress over the last couple years. You saw our double-digit aftermarket growth. We have an enormous opportunity. That is our God-given right to our aftermarket, which I know often offends people, but it's true. It's just that is our aftermarket that we should be getting our fair share. When we connect those devices through edge devices, when we create these elite offerings and value-added services, and we then create customer stickiness, that is an enormous revenue opportunity as we go after that install base, but also the attachment rate for our new equipment sales. That's gonna be a significant recurring growth driver for us for years to come. Did I answer it? Yeah. No, that's great. I wanted to ask on TCC and VRF, and if you could talk about, you know, pro forma, what your position is gonna be in that market, what the kinda light commercial side of it looks like, what the VRF side of it looks like, what you think your market position is kind of competitively in that market post-close? Chris? All right. You know, I think as far as we take a look at the overall market, it'll put us in a position where we are going to be one of the scale players globally. You know, there's probably, call it really 6-8 competitors that have that real global scale presence, and we're gonna be one of them. I think if I look regionally, you know, what's so exciting about the opportunity we have is that it really. We do have a great opportunity from a global perspective. If I look at South Asia and our presence there with our you know with the TCC facility in Thailand and its presence and ability to serve that market and our share of market there. If I look at where we are in China with our owned network there, as well as a brand new low-cost facility in China to produce for the local country, as well as integrating in the multi-brand and multi-channel approach with Giwee Carrier and Toshiba in that market. We've got a great position. We have, you know, we'll have a facility in Poland that is another low-cost facility that's new to be able to serve the European market. Really, we are serving that market as a joint venture remotely, and that just... You know, if you think about the dynamic of having the owner of distribution kind of broken apart from the owner of the design and development, which was kind of our joint venture arrangement, and then you couple on top of that you're serving that European market remotely from Thailand. Now you bring it into Poland, and you say, "Okay, I own it cradle to grave, design, make, market, sell, distribution, and I have the local design team and manufacturing team to serve that market." We're in great shape. We've really grown what we do in that segment in North America, and have a nice foundation to build off of. Then the question becomes how you can look at maybe future opportunities to localize some of that production. If I look around the world, there's opportunity everywhere for us. We'll be present everywhere. We'll have the brands that we need and the technology we need to be able to compete, and we'll be one of the scale players in the marketplace. Jeff, go ahead. Thanks. I was hoping just for a little more granularity on service. In particular, could you give us a sense of how much of the service business is however you wanna define it, but kind of recurring, contractual, perhaps digital, relative to kinda how big the parts and repair bucket of the equation is? Yeah. If we look at the $4.5 billion business, you know, the way to think about it's spread across all the business units. This is a majority service, and, you know, parts are less than 50%, but it's a, you know, parts is a very, very important part of the mix, because they're often unique to us. They tend to be very high margin. That's how I would break it down. Recurring revenue mix in general tends to be much richer in the service business than overall Carrier, and that's just because of the nature of the service contracts, which are multiyear in nature. We have more and more of these Abound and Lynx-driven contracts, which are subscription models. We have X-as-a-Service models. As an example, Supra, that Jurgen talked about, it is basically equipment-as-a-service models. All of those are multiyear kind of relationships which drive a rich mix of recurring revenues. Dave or anything to add? Julian, go ahead. Thanks. Maybe wanted to follow up on the digital point. I guess firstly, you know, what kind of price increases can you get in the service business, you know, as you roll that out? Do you see, you know, higher pricing power in service because of what will come along with digitized offerings? Secondly, you know, a lot of companies in the sector talk about digitization, not so much helping revenues, but more around the internal cost base and getting the cost to serve down. You know, companies like Otis or Honeywell, for example. Didn't hear much of that today, so just wondered if that is a big push within the Carrier organization as well. Well, it is. I mean, a big part of our digital dollars go towards efficiency. You know, as we've consolidated ERP systems, and Bobby's done so much work, you know, since we spun off on consolidating applications and really just making us a leaner and more efficient organization. Maybe if I can ask him to give maybe one or so example on how we're using digital to drive efficiency, and then Chris can comment on or Ajay on how we're upselling with the revenue piece. Yeah. Maybe on the efficiency side. We had a team that you heard consistently across where we had an organization that operated pretty independently with autonomous decision-making capabilities. We had never looked at how we can drive synergies in these markets. The opportunity we saw and have executed to over the last couple of years was around consolidating our data centers and moving the data to the cloud, to moving all these workloads to the cloud. As an example, 70% of our internal workloads have moved to the cloud. We have shut down 14 data centers, which are expensive undertakings, as most of you know, during that course. And that's just one example. Another example would be how we've standardized our entire network globally. We had traditionally high-cost MPLS networks across the 675 facilities we have globally. What we've done is move to more software-defined networks, which gives us accessibility into cloud, leverage more, scalable technologies from a digital perspective and secures our enterprise in a pretty significant way from a cybersecurity standpoint. Adoption of cloud, SaaS-based capabilities, rationalization of applications, modern concepts around networking and technology, that's kind of what we've been executing to over the last couple of years. A tremendous amount of those dollars that we've driven out of efficiency are some of the dollars that we are using to reinvest in some of the capabilities that we need to continue to build on the growth side. I would just add, Julian, that several of the examples I gave about productivity are examples of investments in digital capabilities to drive that productivity. I mentioned field technician productivity. I mentioned sales force effectiveness. Those are all digital investments we're making in better tools, scalable tools to increase the effectiveness of our field and sales resources. I think we're doing a lot of that. Then on Julian's first point, Chris or Ajay. Yeah, I'd say that you know, the digitally enabled service agreements create value from multiple perspectives, one of which would be price. I mean, certainly, as Ajay mentioned, the elite BluEdge are gonna be much more digitally enabled. Those sell at a higher price point or a higher value point than the non. It also, if you think about just what we were talking about, the connected service agreement is gonna be more efficient for us to be able to actually fulfill because we're gonna have a view into what's needed. We're gonna have lower truck rolls, higher technician efficiency in serving those. Thirdly, they're stickier. You're talking about a higher price point that's more efficient and a stickier better retention. That's why we really wanna drive that from a, you know, it's a win-win-win type of scenario for us and our customers. Steve, over here. Yeah, just to follow up on both of those questions, on a little more of like the structure of the connected chiller, if you will, 'cause we think about it, you know, maybe from an elevator perspective, which is a lot more contractual, almost like an insurance contract. If you said 5-10x the revenue coming off these things over the course of their useful lives, $10,000-$15,000 a year for per connected chiller, I mean, that seems high to me. But is that kind of the right math that you think about when you connect these things? And then what is the, you said a couple of years of contract. I mean, is it two years? Is it four years? Like, what's the average, you know, life of the contract right now for you guys? Okay. There's a whole it depends thing in there that I'll tell you, but you know, it's a great question. You say that, as I mentioned, you're gonna be talking, you know, $10,000-$15,000 is gonna be for an individual chiller. That's relatively high in the spectrum of what we'd be expecting. Certainly, the value per asset goes up as you get it connected versus just maybe a basic service agreement. Secondarily, I would say that, you know, we're not only in the process of driving to a higher attachment rate and a higher conversion rate, but looking to extend the duration of the agreements as well. 'Cause you have been talking an average of maybe, I don't know the exact average, but more of a one to two year scenario, versus we believe that with the portfolio that Ajay and his team have rolled out with BluEdge, we can be extending that and then making it stickier with digital as well to be, you know, having the renewal in a 2-3-year timeframe and have it be more automatic and more opt out than us going and opting in. Is there an attrition rate that you guys talk about with all this stuff? Seems like it's growing really fast, so I don't know what kind of I don't know. Across the portfolio. Yeah, across the portfolio, our retention rate runs close to 90% plus, Steve. And that to Chris's earlier point, it's actually improving as we get more and more stickiness from digital value propositions. Once there is a connected chiller or a connected reefer, and the customer experiences that ability to visualize data real time, act on it, there's really this tremendous amount of stickiness that comes out of it. Thanks. Go on, Josh. Just sticking with that same kinda line of thinking, on the 38% new equipment attach rate, I mean, you guys are working pretty hard at this, but I think there's still maybe a bit of a gap to some of your peers. When you don't win, w hat's the reason? Is it a price point? Is it like some geographic capability where like, "Hey, we're really great in Atlanta, but New York, we just can't get like delivery times." Like what is sort of comprising that gap? I think that there is an element of making sure that we're very focused on getting it out of the gate. There has to be an understanding that it's a bundled sale that we're looking for. That is less of a gap than it was before, is one thing. The other thing is that you do have varying levels of product line that you have out there that you're attaching to. I don't know how everybody else measures it, but I know how we measure it. It's every unit out the door, and it's a service agreement as opposed to any type of business with it. We're talking about service agreements on all types of chillers. You know, our service agreement attachment rate on a chiller that's a, let's just say, a centrifugal, is much higher, call it, you know, close to double the rate that we're talking about for the lower end air-cooled. That gap is that we need to continually be able to improve our service offer and our service BluEdge portfolio to hit the right type of equipment that drives that value proposition for attachment. There's a much more well-recognized value proposition for the higher end, more complex equipment, and we have to be able to deliver that at the right price point and cost point in the air-cooled segment as well. Then on the installation side, I mean, I think some of your competitors have different strategies on how much of their product they want to install versus, you know, kind of leave it independent. Where are you guys on that? Is there a deliberate push to go one way or the other as you try to implement some of this other stuff around digital and services? Oh, yeah. As it relates to HVAC. Yeah, commercial HVAC question, sorry. Yeah. We want to be in a position to do the installation and a turnkey for the customers that we work with, in a lifecycle type of relationship where we have that service attachment rate. For something that is more, call it a plan and spec new construction type of building, that's not really, I think, probably across the industry and certainly with us, that's not somewhere where we're looking to, you know, very clearly auto execute and do our own installation there. It's kind of really we want to make sure, like Ajay said in his presentation, we want to be the first choice at the end of life of the equipment. When we say that, we want to not only do the upgrades along the life cycle, but we'd like to be doing the install on the replacement because we kind of have the understanding and the network and the inner workings of that building to make it as efficient as possible. Nigel in the back. Going back to the heady days of February 2020, you know, applied market share gains was one of the more kind of striking targets you put out there to become number one in applied equipment. Where are we on that roadmap? I think you said within three to five years. Do you still think that's gonna be, you know, achievable? Well, he was the one that said it, but I'll answer it. Go ahead. I mean, listen, we're absolutely still committed to market share gain. You know, we are committed to making the number one position. I don't think that it's gonna be in that timeframe, you know. Part of what I'd say, we've, you know, there's been a lot of activity and changes in the environment since that spin date or the spin conference. I'd say what's been the thing that we wanna make sure we're most sensitive to is as we drive that share gain, and we have been in that segment, we wanna be growing share profitably. As we've had hyperinflation, we gotta make sure that we have that balance. You know, there's a way you can go get share that we wanna make sure is the right way, and it's a profitable way, and we'll build the products and the sales force to do that over time. Yeah, we're still gaining share. We still have the goal to become number one, but we're not gonna timestamp it, given that we wanna make sure that we have a lot of self-help and a lot of capital deployment opportunities where we can continue to be margin accretive. We wanna make sure that we balance that correctly and don't kind of launch headlong into a number one goal by a timestamp that forces us to do or, not forces us, but encourages us to do things that undermine our desire to expand our margins. Yeah, we were, I think, looking at about projected 50 basis points a year to get to that one in five years. It's probably been more like 30. That is not something in our internal reviews. We're like, "Chris, you have to get to number one share with..." I mean, we put it out there, we're still targeting to share gains. I will tell you that we there are things we pass on if they don't have the right returns, and our applied margins need to improve. We are increasing aftermarket. You know, Steve asked about margin. We have very high margin. We're very proud of our margins in resi and light commercial. Our applied margins need to improve. With more aftermarket, we'll get that balance up. We'll get the share gains. Whether or not we get to number one in the next few years, we'll see. We're focused on increasing share, but making sure we do it profitably, as Chris said. Thank you. A quick one for Patrick. You mentioned cash taxes as a headwind, 2023 to 2026. That's me. $400 million, I think it was. What is that? Is that R&D? Is that the R&D tax credit changes or something else? No, this is something else. This is part of the Tax Cuts and Jobs Act and part of our cost of freedom from our prior parent. We were stuck with having to pay over the next 8 years. There is $400 million left, and the larger amounts will be 2024 through 2026. You mentioned the R&D. That is actually embedded in our free cash flow projection for this year, and that's about a $75 million headwind cash taxes for us this year. As I said, it's embedded in our guidance for this year. Maybe one last question. Have it Deane. Thank you. A question for Jen and ESG. Carrier in the last 12 months has made one of the fastest moves of any industrial stock up the ranks of holdings by active and passive ESG investors. Your two primary competitors are in the top five. You should be cracking the top ten in a short time. The move from here, how much of it is dependent on the rating agencies just having a time element of how long you have a public company track record? And have you kind of, you know, game theory-ed this on how soon you'll be able to check the box there and then have the ratings that would justify a further move up the holdings ranking? Well, we're not beholden to a time period, I think, with regards to when the agencies will increase our ratings. We're obviously working very actively to increase our disclosure, and some of that is with the time period of us being public. It's just the ability to have greater disclosure. But we're really focused on our strategy, really focused on delivering on our 2030 ESG goals and building out really tangible plans to achieve those. I think with further demonstration of our activities against that will hopefully help us with our ratings with the agencies. Thanks, Deane. Thanks to all of you. We know that many of you traveled in over a holiday weekend, and we really appreciate you taking this time with us this morning. We appreciate all of you that have called in remotely, and we appreciate your support and confidence in Carrier. We share that confidence, and we appreciate the confidence that you have in us. Thank you all very much.