Great. I think we are live. Thank you very much. For the benefit of those who are on the webcast, welcome to the Wolfe Transport and Industrial Conference. My name is Nigel Coe, and I cover the multi-industry companies here at Wolfe Research. It is my great pleasure to be joined on the stage by Carrier Corporation, David Gitlin, Chairman and CEO, and Patrick Goris, CFO. Gentlemen, thank you for being here with us. David, if you want to make open remarks, we will get into Q&A. Thanks, Nigel. Thanks to you and Wolfe Research for having us. Yesterday was a big day for us. We had our first Investor Day since 2022. The bottom line is that we look back at what we said we were going to do in 2022, and we did what we said we were going to do. We said we were going to grow 50 basis points of margin a year. We grew 100. We said we would grow our EPS 10% a year. We did 15%. We said we would have cash flow equal to net income. We did that. We did exactly what we said on our ETR and so on. The key focus we had yesterday was accelerating growth. We said that we would grow 6-8% a year. We grew 4%. What has changed? That was the entire focus of four hours of yesterday's investor day. We said that the market, we were very, I think, conservative. We said market globally around LSD, which is low single digits, where we like our exposure to the right verticals, the right geographies, and the right secular trends. We went through a three-pronged growth strategy. We can get into the follow-up questions on that, Nigel. One was products, where we said we would gain share through differentiated products, channels, and brands. One was aftermarket, 25% of our business growing double digits. That gives you 2.5%. The new frontier is systems, where we're doing HEMS, complete home energy management solutions in Europe and the United States, Quantum Leap for data centers, integrated solutions for things like hospitals. You put that all together, it's about a third, a third, a third, a third from the market, a third from aftermarket, and a third from the combination of products and systems. We've done so much over these last five years to get the portfolio just right. We've done so much with our foundation, with the Carrier way and the team that we have in place. You got to hear from many of these great leaders yesterday. Now it's just heads down, be there for our customers, innovate, grow, execute. We're excited about this next phase ahead of us, growing 6-8% a year. Thanks, Dave. We prepared these questions in the course yesterday. With the Investor Day, a lot of these questions are now redundant or have been answered already. Yesterday was all about growth. The 6-8% organic growth is not the most conservative target you'll see out there. What gives you confidence that Carrier can be that sort of consistent level of growth? We get into the three-pronged strategy. I think that if you look at these last few years, we were very much anchored by two very discrete acute areas of weakness, which I think are ephemeral in nature, that you cannot have Europe residential and China residential down 20% forever. If you see those markets just come back to flattish, we do not need them. We do not need those markets to be up 20%. As you see, especially Europe residential, come back, the market itself come back to kind of flat to low single digits, we should very much be able to have the entire portfolio grow in that 6-8%. Were they flattish, we would have been growing kind of in those numbers. Americas has been strong, continue to stay strong. You look at European and Asian commercial, those have been strong. Those will stay strong. I think you look at Germany, total residential units this year will be at historic lows over the last 30 years. Just coming off a low base. Everything else was that three-pronged strategy, products, aftermarket, systems, each with very detailed roadmaps that we not only shared with you, our investors, yesterday, but this is how we run the business. The stuff we reviewed, how are you gaining share in resi in the United States? That is what we share with our board. That is what we do in our business review. There is a lot of detailed plans behind us that we have confidence in. OK. Market share was part of the outgrowth. And your number one, clear number one in residential light commercial in the U.S., your number one in Germany residential light commercial. I think your number one European and APAC commercial. The list goes on. There are pockets where you're not. So the market share gain, being large and dominant, does that help you gain share or does it just put a target in your back? And what gives you confidence you can actually gain that share? You know, I think it's going to vary by vertical, by business, by region. I don't think we'll gain huge share in resi in North America. That's not part of our growth algorithm, where we have very good share in resi light commercial North America, very good margins. Our goal is just keep winning and make sure that we retain the share that we've gained. We're probably up 300 basis points in resi over the last three to five years. We're up 100 basis points over the last year. We get the question every time, are some of the competitors going to come back at you to try to take that share? We've converted dealers. We're retaining those dealers. We just keep growing those businesses, and we'll be just fine. Commercial HVAC in the Americas is all upside. We know we're number three. We do not like that we are number three, but we like that we are number three because there is so much room, because we now have the capacity. We have the product portfolio. We have added spec engineers. We have added technicians. We have added salespeople. We have put the foundation in place to grow commercial HVAC. Shame on us if we do not take share every year in commercial HVAC in the Americas. There is so much upside. We will continue to gain share in resi light commercial in Europe because of what we put together with Viessmann. We will gain share in commercial HVAC in both Asia and Europe. It is hard to say with resi in China. I think we just need some stability of that market there. It is only $700 million or $800 million. We will have to just see how that piece of the business plays out. OK. Aftermarket was an area where you said double-digit growth forever, which is pretty good. It's a long time. It scales into pretty big numbers. Now, when you think about the install base of chillers and other devices, your service penetration, I think, is roughly across the board, I think about 45%, 40% or so, 3% in the Americas. Your parts penetration is very low, at 25% on average, I think. Yet, when you take a step back, you think, would not this just be the most obvious thing in the world to milk that install base? Just maybe just take us back 5 years, 10 years, 15 years, why this was not a priority, and then how you are scaling that up to where it should be. I'll take this. And then no matter what you ask next, I'll take it to Patrick. So you could ask about my family history. It's going to. OK. Yeah. I will tell you that I cannot answer why it was not more of a focus for us five or six years ago, because it should have been. It is clear that you look at the opportunity around the aftermarket, and there is just so much low-hanging fruit for us as a company. You mentioned our parts capture rate was 20% five years ago when we spun. All that is, is what percentage of the parts are going that we sell Carrier parts, part of our systems go to us, as opposed to go directly to one of our suppliers and bypasses us. It has gone from 20%. We said we are on our way to 65%. We have come a long way. It should be 100%. Getting to 65%, we are proud that we are no longer at 20%. We are proud that we have come a long way since then. You have to actually have the right contractual relationships with your suppliers, with your distribution partners. You have to actually have the parts in situ. The customer has, when a part fails, they need it. They need it within hours. We have to look at our logistics to give the customers the parts they need when they need them. We have to work pricing. We have to work a whole bunch of approaches on how we make sure that we capture our parts. That is just a way of doing business. Now, when we go to a factory, we open it up and say, do we have our own nameplates on all the parts, whether it is a compressor, a motor, a fan, a control? We want to see a Carrier label on there, as opposed to one of our suppliers. There is a whole formula to it. We know the formula. We have come a long way with huge runway. That is the same with attachment rates, total coverage. We said we have gone from 2,000 connected chillers to 50,000. We have gone from a million connected devices to 3.5 million. We know the formula. We know exactly how to do it, mods and upgrades. We should know where every single chiller is, 400,000 chillers around the world. Where are they? We know when they are coming towards the end of their life, so we can actually go to the customer proactively, have them replace it because of energy efficiency savings or other benefits to the customer. We know the formula. We say double-digit forever for a couple of reasons. Number one is because we only capture 25% of our own aftermarket today. Two is we know the playbook. We have the team to execute it. We're still in the early innings because there's so much low-hanging fruit there. This is the follow-on question. The next question, we'll go to Patrick. This is the follow-on question. Sure. How is the, as you connect more devices, how is the nature of the service model changing? Instead of break fix, to what extent are we starting to get recurring revenues and getting that RMR? Oh, it's much higher. I mean, this is kind of the new frontier for the aftermarket. It's not new to either our industry or the world, but it's new-ish to Carrier. I mean, we know that connectivity, it drives higher margin, higher, more revenue, and more recurring revenue. If you take, I'll take Europe for an example for the Viessmann business. We have V-Guide with our installer partners. We have V-Care with our homeowners. What we can do is it used to be that because we have everything connected, a typical installer would make two truck rolls a year. Now they can get it down to one. Now there's money savings in the system somewhere. How do you monetize that? How does Carrier Viessmann monetize that? You do it through more recurring revenue type agreements. If we do more subscription-based agreements, then the avoidance of cost benefits all of us. Less cost to the installer because they're not sending trucks out to a home just unnecessarily as a preventative prophylactic measure. It is also a benefit to us because we get to monetize it. OK. Thanks, David. Patrick, so you're committing to 50 basis points or more of margin expansion. Obviously, that came up in the Q&A yesterday. It sounds like that's a level you feel very, very comfortable with, that 50 basis points plus. Maybe just recap us on some of the productivity initiatives in place. You talked about material productivity. You talked about platforming technology, platforming reduction, and then investment levels. I just wondered if you maybe just talk about some of the push and pull on margins going forward. The reason we dug a little bit deeper yesterday in our productivity opportunities is, frankly, because we wanted to send the message that while we've driven a lot of productivity since the spin, there is a lot more to be had. Yesterday we talked, we shared a little bit more detail about our Carrier Alliance program with our biggest suppliers, still opportunity to consolidate suppliers. We talked about factory productivity, reducing the time it takes to produce a unit. Again, there we see significant opportunity there. We talked about warehousing and logistics. I do not think we ever spoke, frankly, publicly about warehousing and logistics. It is about $2 billion in spend. It is an opportunity for us to basically optimize from a company perspective, whereas in the past it was optimized by site. Optimized company lanes, optimized modes of transportation from a company point of view, and a much more robust SIOP process. You mentioned platforming. It is just one additional example of where there is plenty of opportunity. Carrier was run in a very decentralized way. Even within a business or within a segment, you could have duplicative investments in R&D. Now what we are doing is we are platforming, for example, on controls across the company, including transportation, not just HVAC. We are significantly reducing the number of SKUs, reducing complexity, improving time to market. It only has benefits. An enormous opportunity for us. The message we also wanted to send is some of these benefits are not going to happen tomorrow. We will see some benefit tomorrow. They are going to build up over time. That is why we're comfortable saying that we'll see continued strong productivity for many years to come. In terms of investments, since the spin, you can think of us making incremental investments each year of about $100 million to $150 million. While we've done that, we've generated strong margin expansion, strong core earnings conversion. Going forward, we can easily continue to make those incremental investments at that rate. If we have room, actually, frankly, if we grow 6%-8% at 50 basis points or more margin expansion, we could actually reinvest more. It would all depend on do we get the return on these investments. That is key. Maybe a couple more questions just emanating from the investor day before we move on to more sort of current affairs. There might be a tariff question. I do warn you on that. Thinking about sort of the median multi-industry company right now is EBITDA margin about 22%, roughly. That has increased from high teens several years ago. Best in class HVAC would be high teens to 20%. Do you think there is any reason why, over time, the HVAC sector, yourself included, cannot be above 20% EBITDA margins? I don't, because today our outlook is for operating margin to be at about between 16.5% and 17%, add a few points of that of DNA, continued opportunity for margin expansion. I don't see any reason at all where, over the medium term, we cannot get to 20% or more EBITDA margins. Right. Right. Yeah. Great. Then on the surplus capital, you talked about $10 billion over and above dividends over the medium term. It seems like that is a five-year view. It is. That's a five-year view. It is. Then you mentioned $14 billion keeping leverage constant. That obviously pricked my ears as well. Is the protocol here that you basically will use free cash flow, surplus free cash flow for buybacks and then use leverage for M&A? I mean, how do you think about that? The way we really think about the $10 billion of excess capital is we follow our priorities for capital deployment, organic growth, inorganic, growing sustainable dividend, and then share repurchase. That is a lot of capital just for acquisitions. You heard Dave and I say yesterday that the acquisitions we intend to make are more in the bolt-on size. I think it will be a combination of acquisitions and repurchases. Frankly, we'll toggle between the two depending on what the number and size of acquisitions is. I would not want you to think that the extra $4 billion, if we keep leverage the same, that that would just go towards acquisitions. That is the flexibility we have. We're very comfortable keeping on that leverage at about 2x. Great. OK. When you think about the bolt-ons, Dave, I think this is for you. Where do you see the white spaces in the portfolio? Because just from the outside in, it does not seem like there is a whole lot you are lacking right now. There's really not. I mean, if you look at our pipeline, it's in the three categories that we focus on strategically. In the product space, there could be some technologies that, instead of just organically developing ourselves, we would just go buy. For example, Ed Ryan yesterday mentioned Eaton, which gives us a lot of power control electronics, which is not only very important for our reefer business and the electrification that's happening there, the same technology is going to be used on the HEMS side as well. We could have developed it, but they had phenomenal technology with a great team, a great group of engineers, so we bought that. The same could have been true for liquid cooling for our system solution. We did look at buying some of the smaller liquid cooling companies, but we decided the key thing that we needed to develop was the CDU, the coolant distribution unit, which is effectively a mini chiller. We said, we know exactly how to do that. We can either. The multiples people were looking for were a bit higher than we wanted to pay. We just organically developed it. We have it. We are now in the marketplace with it. It can be technology. It can be channel. We bought some of our branches for the ALC business, some of the distribution channel. Those have done very, very well. We will continue to do those. Same on the commercial HVAC side where that makes sense. Things that we kind of need to round out our systems portfolio or even aftermarket, like a services company. OK. Great. I'll take one or two more, and then I'll open up the Q&A to the room. Maybe keeping it a bit more current, we're sort of halfway through the quarter, Dave, Patrick. What are we seeing? Any big changes in demand across the geographies or anything you'd call out within the businesses? No, not really, Nigel. I think what Patrick said yesterday is no new news. That is true. We're fundamentally tracking to where we said. What we will look at every single month in a short cycle business, there are some parts of the portfolio that might be a little bit better, a little bit worse than we thought. Frankly, everything is right where we thought it was going to be just a few weeks ago. OK. You've called out pockets of inventory builds, I think, in residential. Is this something to be worried about? Or is this more a function of the transition from 410A to 454B? I think it is more of the latter. I think the industry's just, I think, playing out how this transition happened. If you look at us, for example, we had a very strong first quarter. We were up 20%. As we got towards the end of the first quarter, we had effectively transitioned out of 410A quicker than our peers because they, obviously, a couple of our peers in particular, ship more direct from their dealers. We ship through distribution. Pretty much everything that was 410A was out of our, is effectively out of our four walls. They were still shipping. What was happening in the channel was there was some switchover that was happening from the 410A to the 454B, which I think did create a little bit of elevated inventory. We said on our last earnings call, inventory was higher than we would like it to be. We're very purposeful at working with our distributors to get their inventory back to where we think it should be in balance. We are working our way through that. We said that 2Q for resi would be up 15%-20%. We still feel like that's the right number. What we are trying to do is bring inventory down. If you look at our full year guide for resi, we've said high single digits to low double digits. Call that 10%. First quarter was up 20%. Second quarter up 15%-20%. To get to 10% for the full year, you need the second half to be flat-ish. We get probably 10% by showing up because we know that we've been getting 454B pricing in that 10%, maybe even a little bit higher than that. That means volume in the second half has to be down. That factors in all the inventory that we're keeping an eye on. OK. And that 15%-20%, so if we think about the movements at your channel partners, the sell-through, that would be flat-ish, I guess. Flat to maybe low single digits when we back up price mix and inventory. Yeah. That is the balancing act we are looking at right now, Nigel, as we are looking at inventory. We are looking at those movement levels. We are looking a little bit at ordering rates. That is not something that we are going to, if it is super positive or negative, is going to keep us up at night. The key for us right now is really watching those movement numbers. We saw what they were in April, watching them here in May, and making sure that movement stays strong. Then the inventory gets out of our dealers to the homeowners to see that pick back up. Great. Thanks, Dave. Any questions from the room? There is one here. Do we have a mic? Oh, I have a mic right here. I'm sorry. Hear me? Yes. I was just curious if you could comment on your end markets for commercial HVAC in terms of, are any of them currently at a cyclical peak, such as data centers, education, or any other end markets? Thank you. I would not call a peak for any of them right now. I think when we look at our verticals, we see some that are stronger and some that are weaker. We do not see a peak. Data centers, we did $500 million of sales last year. We will do $1 billion this year. We are trying to fill the pipeline of orders for the coming years. Different hyperscalers are buying at different rates, same with the colos. We certainly do not see a peak there. The areas of strength are things like semiconductor fab, not only in the United States, but globally. We have had some great wins in China, for example. We see health care globally, typically an aging population, so hospitals. We see pharma has been quite strong for us. That has been good. Some of the higher ed has been good. K-12 was a little bit weaker in the first quarter than we thought. We think that's sort of short term. We don't see that as a concern because there's $76 billion of bond funding out there for K-12. We just see that as a timing issue. Some of the things that were weaker, commercial real estate has been soft, and it continues to be soft. I think that's generally it. Great. Thanks for the question. Anyone else? Great. Maybe Patrick, tariffs. Obviously, since you reported the quarter and you sort of updated, you've refreshed your guidance, we've had China tariffs roll back. I think you said yesterday nothing's changed with the $300 million of net offset to the tariffs. So just maybe just talk about why that's the case, because it does feel like you've got a bit of a cushion here. Yes. First of all, in terms of context, we mentioned that with the tariffs, there was a gross impact offset by some supply chain actions. There was a net impact of about $300 million, which was offset through incremental prices that we have put through. One, the reason why we said nothing has changed for the moment is, one, it is still really early. Who knows what will happen? Two, it is not like we have not seen other pockets of price increases in the system. That is really the reason why I made the comment. It is still an environment where a lot of things move really fast. We are seeing some pockets of other price increases, and we may need the $300 million anyway to cover that. OK. The price increases you put through the channel, how would you describe those in terms of acceptance by the customers and the channel? For the moment, they're all holding. The last one went into effect May 1st. That's good news. As a customer of Carrier, that's not good news. I do feel that. There's somebody doing replacements right now of Carrier systems. It is a lot. Your home is really comfortable, though. It feels good. I've got to say that. Europe is the business. Europe, I think your guiding for, obviously, it was down low doubles in the first quarter, guiding for flat in the second quarter, and then a return to growth in the second half of the year. Maybe just bring us up to speed in terms of what you're seeing right now in Europe and confidence levels in that inflection. The reason why we expected and we saw a weak first quarter was, frankly, because last year we benefited from a significant backlog reduction. We fully expected Q1 to be down about 10%, which it was. We expect flat to modest growth starting in Q2 for a couple of reasons. One, the comps get a whole lot easier. Two, we're seeing some early but positive signs of a market that is stabilizing and an increase in the number of applications for heat pumps. We've seen, actually, the order intake for heat pumps pick up quite substantially. In addition to that, I think it's fair to say within our biggest market there, which is Germany, with the new government, I think there is more stability now than we've seen over the last six or nine months. New government is formed. new government has kept the incentives, has committed to lowering the cost of electricity, which is good, has also committed to more infrastructure spend. As importantly, the new government has also committed to the decarbonization goals for 2030 and beyond. Overall, we think the market is, we're cautiously optimistic. We certainly don't think the market will get worse. Actually, we see signs that it may improve. OK. Maybe just talk about why we are seeing the strong recovery right now in heat pump orders in Europe, not just Germany, but in Europe. Is it because we are at a hard floor here and then we are just bouncing off a very low level? Or is there anything else we should bear in mind? I think what's happening in Europe is you will see an accelerated shift to heat pumps because I think there's a reluctance to buy fossil fuel right now. You think about Europe, only 10% or so of the gas that's consumed in Europe is produced in Europe. I don't think a lot of Europeans want to be overly reliant on importing gas from Russia, the United States, the Middle East. I think you're going to continue to see an accelerated shift to electrification. I think the government in Germany, the shift to reducing electricity prices, that will bring that ratio of gas to electricity, electricity to gas significantly lower, which is very helpful. You have this combination of electricity pricing coming down, especially in places like Germany and France, which is nuclear and so on. You have the increased taxes that we are going to see on gas. Gas going up, electricity coming down, that ratio mix is very helpful. When we said that we would get 3-4 points of growth in our RLC business, that is from mix, that assumed heat pumps up 15%, boilers down 5%. I think what we are going to see this year and then probably for the coming years, heat pumps will probably be higher than 15%, and boilers will probably be down more than 5% because any new, like your new homeowners, are really, they were trying to figure out what is happening with subsidies, what is happening with regulation. They are really, I think you are going to see an accelerated shift to electric heat pumps. Thanks, Dave. Back to margins, Patrick. You've got a target of 15% on the medium term. You said two to three years to get to 15% margins in Europe versus 9.4% last year. It seemed to me that you were indicating that, look, we think we can do better, but let's get there first before we move on. Is there any structural reason why we should have a big gap between the Americas at 22% and Europe at 15%? I think we'll see the margins convert over time. I think, and of course, the objective is to get as close to and exceed the U.S. margins. In the United States, we really benefit from a really large country, homogeneous, where we have tremendous scale. We believe we have the market, the leading market share. We will see them converge. We have, of course, asked the team in Europe to get as close to or exceed, like a horse race, to get close to the margins in the United States. What we wanted to share yesterday is that our step one is to get to mid-teens, given that we're at 9% today. That alone is a big objective. OK. We have one more minute, actually 40 seconds. In the last minute or so, maybe just, Dave, just recap what is Carrier's strategy in the data center because it does seem like you are trying to knit together something quite special here. I think it started with win in the trenches, which was add capacity, make sure we have the product portfolio that we needed to build, make sure that we have the right customer relationships with the hyperscalers and the colos, the right sales force, the right dedicated integrated product management team. We have done all that. Because of that, we have gained a lot of wins and gained great positions with both colos and hyperscalers. The next phase is differentiation. That is going to come, I believe, through our Quantum Leap offering, which is a one-stop shop with this integrated offering. Right. OK, Dave. Thanks for the time, Patrick. Thanks for the time. This is a great discussion. We look forward to catching up with you soon. Thank you, Nigel. Thanks for having us. This presentation has now finished. Please check back shortly for the archive. Great. I think we're live. Thank you very much. For the benefit of those who are on the webcast, welcome to the Wolfe Transport and Industrial Conference. My name is Nigel Coe, and I cover the multi-industry companies here at Wolfe Research. It is my great pleasure to be joined on the stage by Carrier Corporation, Dave Gitlin, Chairman and CEO, and Patrick Goris, CFO. Gentlemen, thank you for being here with us. Dave, if you want to make open remarks, we will get into Q&A. Thanks, Nigel. Thanks to you and Wolfe Research for having us. Yesterday was a big day for us. We had our first Investor Day since 2022. The bottom line is that we look back at what we said we were going to do in 2022, and we did what we said we were going to do. We said we were going to grow 50 basis points of margin a year. We grew 100. We said we would grow our EPS 10% a year. We did 15%. We said we would have cash flow equal to net income. We did that. We did exactly what we said on our ETR and so on. The key focus we had yesterday was accelerating growth. We said that we would grow 6%-8% a year. We grew 4%. What has changed? That was the entire focus of four hours of yesterday's investor day. We said that the market, we were very, I think, conservative. We said market globally around LSD, which is low single digits, where we like our exposure to the right verticals, the right geographies, and the right secular trends. We went through a three-pronged growth strategy. We can get into the follow-up questions on that, Nigel. One was products, where we said we would gain share through differentiated products, channels, and brands. One was aftermarket, 25% of our business growing double digits. That gives you 2.5%. The new frontier is systems, where we are doing HEMS, complete home energy management solutions in Europe and the United States, Quantum Leap for data centers, integrated solutions for things like hospitals. You put that all together, it's about a third, a third, a third from the market, a third from aftermarket, and a third from the combination of products and systems. We've done so much over these last five years to get the portfolio just right. We've done so much with our foundation, with the Carrier Way and the team that we have in place. You got to hear from many of these great leaders yesterday. Now it's just heads down, be there for our customers, innovate, grow, execute. We're excited about this next phase ahead of us, growing 6%-8% a year. Thanks, Dave. We prepared these questions in the course yesterday. With the Investor Day, a lot of these questions are now redundant or have been answered already. Yesterday was all about growth. The 6%-8% organic growth is not the most conservative target you'll see out there. What gives you confidence that Carrier can be that sort of consistent level of growth? We get into the three-pronged strategy. I think that if you look at these last few years, we were very much anchored by two very discrete, acute areas of weakness, which I think are ephemeral in nature, that you cannot have Europe residential and China residential down 20% forever. If you see those markets just come back to flattish, we do not need them. We do not need those markets to be up 20%. As you see, especially Europe residential come back, the market itself come back to kind of flat to low single digits, we should very much be able to have the entire portfolio grow in that 6%-8%. Were they flattish, we would have been growing kind of in those numbers. Americas has been strong, continue to stay strong. You look at European and Asian commercial, those have been strong. Those will stay strong. I think you look at Germany, total residential units this year will be at historic lows over the last 30 years. Just coming off a low base. Everything else was that three-pronged strategy, products, aftermarket, systems, each with very detailed roadmaps that we not only shared with you, our investors, yesterday, but this is how we run the business. The stuff we reviewed, how are you gaining share in resi in the United States? That is what we share with our board. That is what we do in our business review. There is a lot of detailed plans behind us that we have confidence in. OK. Market share was part of the outgrowth. And your number one, clear number one in residential light commercial in the U.S., your number one in Germany residential light commercial. I think your number one European and APAC commercial. The list goes on. There are pockets where you're not. So the market share gain, being large and dominant, does that help you gain share? Or Or does it just put a target in your back? And what gives you confidence you can actually gain that share? You know. I think it's going to vary by vertical, by business, by region. I don't think we'll gain huge share in resi in North America. That's not part of our growth algorithm, where we have very good share in resi light commercial North America, very good margins. Our goal is just keep winning and make sure that we retain the share that we've gained. We're probably up 300 basis points in resi over the last three to five years. We're up 100 basis points over the last year. We get the question every time, are some of the competitors going to come back at you to try to take that share? We've converted dealers. We're retaining those dealers. We just keep growing those businesses, and we'll be just fine. Commercial HVAC in the Americas is all upside. We know we're number three. We don't like that we're number three, but we like that we're number three because there's so much room, because we now have the capacity. We have the product portfolio. We've added spec engineers. We've added technicians. We've added salespeople. We've put the foundation in place to grow commercial HVAC. Shame on us if we don't take share every year in commercial HVAC in the Americas. There's so much upside. We'll continue to gain share in resi light commercial in Europe because of what we put together with Viessmann. We'll gain share in commercial HVAC in both Asia and Europe. It's hard to say with resi in China. I think we just need some stability of that market there. It's only $700 million or $800 million. We'll have to just see how that piece of the business plays out. OK. Aftermarket was an area where you said double-digit growth forever, which is pretty good. It's a long time. It scales into pretty big numbers. Now, when you think about the install base of chillers and other devices, your service penetration, I think, is roughly across the board, I think, about 45%, 40% or so, 30% in the Americas. Your parts penetration is very low, at 25% on average, I think. Yet, when you take a step back, you think, would not this just be the most obvious thing in the world to milk that install base? Just maybe just take us back 5, 10 years, 15 years, why this was not a priority, and then how you are scaling that up to where it should be. I'll take this. And then no matter what you ask next, I'll take it to Patrick. You could ask about my family history. It's going to. OK. We'll do that. I will tell you that I cannot answer why it was not more of a focus for us five or six years ago, because it should have been. It's clear that you look at the opportunity around the aftermarket, and there is just so much low-hanging fruit for us as a company. You mentioned our parts capture rate was 20% five years ago when we spun. All that is, is what percentage of the parts that we sell, Carrier parts, part of our systems, go to us, as opposed to go directly to one of our suppliers and bypasses us. It's gone from 20%. We said we're on our way to 65%. We have come a long way. It should be 100%. Getting to 65%, we're proud that we're no longer at 20%. We're proud that we have come a long way since then. You have to actually have the right contractual relationships with your suppliers, with your distribution partners. You have to actually have the parts in situ. The customer has, when a part fails, they need it. They need it within hours. We have to look at our logistics to give the customers the parts they need when they need them. We have to work pricing. We have to work a whole bunch of approaches on how we make sure that we capture our parts. That is just a way of doing business. Now, when we go to a factory, we open it up and say, do we have our own nameplates on all the parts, whether it is a compressor, a motor, a fan, a control? We want to see a Carrier label on there, as opposed to one of our suppliers. There is a whole formula to it. We know the formula. We have come a long way with huge runway. That is the same with attachment rates, total coverage. We said we have gone from 2,000 connected chillers to 50,000. We have gone from a million connected devices to 3.5 million. We know the formula. We know exactly how to do it, mods and upgrades. We should know where every single chiller is. 400,000 chillers around the world. Where are they? We know when they are coming towards the end of their life, so we can actually go to the customer proactively, have them replace it because of energy efficiency savings or other benefits to the customer. We know the formula. We say double-digit forever for a couple of reasons. Number one is because we only capture 25% of our own aftermarket today. Two is we know the playbook. We have the team to execute it. We're still in the early innings because there's so much low-hanging fruit there. Yeah. This is the follow-on question. The next question we'll go to Patrick. This is a follow-on question. Sure. How is the, as you connect more devices, how is the nature of the service model changing? Instead of break fix, to what extent are we starting to get recurring revenues and getting that RMR? Oh, it's much higher. I mean, this is kind of the new frontier for the aftermarket. It's not new to either our industry or the world, but it's new-ish to Carrier. But we know that connectivity, it drives higher margin, higher, more revenue, and more recurring revenue. If you take, I'll take Europe for an example for the Viessmann business. We have V-Guide with our installer partners. We have V-Care with our homeowners. What we can do is it used to be that because we have everything connected, a typical installer would make two truck rolls a year. Now they can get it down to one. Now there's money savings in the system somewhere. How do you monetize that? How does Carrier Viessmann monetize that? You do it through more recurring revenue type agreements. If we do more subscription-based agreements, then the avoidance of cost benefits all of us. Less cost to the installer because they're not sending trucks out to a home just unnecessarily as a preventative prophylactic measure. It is also a benefit to us because we get to monetize it. OK. Thanks, David. Patrick, so you're committing to 50 basis points or more of margin expansion. Obviously, that came up in the Q&A yesterday. It sounds like that's a level you feel very, very comfortable with, that 50 basis points plus. Maybe just recap us on some of the productivity initiatives in place. You talked about material productivity. You talked about platforming technology, platforming reduction, and then investment levels. I just wondered if you maybe just talk about some of the push and pull on margins going forward. The reason we dug a little bit deeper yesterday in our productivity opportunities is, frankly, because we wanted to send a message that while we've driven a lot of productivity since the spin, there is a lot more to be had. Yesterday we talked, we shared a little bit more detail about our Carrier Alliance program with our biggest suppliers, still opportunity to consolidate suppliers. We talked about factory productivity, reducing the time it takes to produce a unit. Again, there we see significant opportunity there. We talked about warehousing and logistics. I do not think we ever spoke, frankly, publicly about warehousing and logistics. It is about $2 billion in spend. It is an opportunity for us to basically optimize from a company perspective, whereas in the past it was optimized by site. Optimized company lanes, optimized modes of transportation from a company point of view, and a much more robust SIOP process. You mentioned platforming. It is just one additional example of where there is plenty of opportunity. Carrier was run in a very decentralized way. Even within a business or within a segment, you could have duplicative investments in R&D. Now what we are doing is we are platforming, for example, on controls across the company, including transportation, not just HVAC. We are significantly reducing the number of SKUs, reducing complexity, improving time to market. It only has benefits. It is an enormous opportunity for us. The message we also wanted to send is some of these benefits are not going to happen tomorrow. We will see some benefit tomorrow. They are going to build up over time. That is why we're comfortable saying that we'll see continued strong productivity for many years to come. In terms of investments, since the spin, you can think of us making incremental investments each year, about $100-$150 million. While we've done that, we've generated strong margin expansion, strong core earnings conversion. Going forward, we can easily continue to make those incremental investments at that rate. If we have room, actually, frankly, if we grow 6%-8% at 50 basis points or more margin expansion, we could actually reinvest more. It would all depend on do we get the return on these investments. That is key. Maybe a couple more questions just emanating from the investor day before we move on to more sort of current affairs. There might be a tariff question. I do warn you on that. Thinking about sort of the median multi-industry company right now, its EBITDA margin is about 22%, roughly. That's increased from high teens several years ago. Best in class HVAC would be high teens to 20%. Do you think there's any reason why, over time, the HVAC sector, yourself included, can't be above 20% EBITDA margins? I don't, because today our outlook is for operating margin to be at about between 16.5% and 17%, add a few points of that of DNA, continued opportunity for margin expansion. I don't see any reason at all where, over the medium term, we cannot get to 20% or more EBITDA margins. Right. Yeah. Yeah. Great. On the surplus capital, you talked about $10 billion over and above dividends over the medium term. It seems like that's a five-year view. It is. That's a five-year view. It is. You mentioned $14 billion keeping leverage constant. That obviously pricked my ears as well. Is the protocol here that you basically will use free cash flow, surplus free cash flow for buybacks, and then use leverage for M&A? I mean, how do you think about that? The way we really think about the $10 billion of excess capital is we follow our priorities for capital deployment, organic growth, inorganic growing sustainable dividend, and then share repurchase. That is a lot of capital just for acquisitions. You heard Dave and I say yesterday that the acquisitions we intend to make are more in the bolt-on size. I think it will be a combination of acquisitions and repurchases. Frankly, we'll toggle between the two depending on what the number and size of acquisitions is. I would not want you to think that the extra $4 billion, if we keep leverage the same, that that would just go towards acquisitions. That is the flexibility we have. We are very comfortable keeping on that leverage at about 2x. Great. OK. When you think about the bolt-ons, Dave, I think this is for you. Where do you see the white spaces in the portfolio? Because just from the outside in, it does not seem like there is a whole lot you are lacking right now. There's really not. I mean, if you look at our pipeline, it's in the three categories that we focus on strategically. In the product space, there could be some technologies that, instead of just organically developing on ourselves, we would just go buy. For example, Ed Ryan yesterday mentioned Eaton, which gives us a lot of power control electronics, which is not only very important for our reefer business and the electrification that's happening there. The same technology is going to be used on the HEMS side as well. We could have developed it, but they had phenomenal technology with a great team, a great group of engineers. We bought that. The same could have been true for liquid cooling for our system solution. We did look at buying some of the smaller liquid cooling companies. We decided the key thing that we needed to develop was the CDU, the coolant distribution unit, which is effectively a mini chiller. We said, we know exactly how to do that. We can either, and the multiples people were looking for were a bit higher than we wanted to pay. We just organically developed it. We have it. We are now in the marketplace with it. It can be technology. It can be channel. We bought some of our branches for the ALC business, some of the distribution channel. Those have done very, very well. We will continue to do those. Same on the commercial HVAC side where that makes sense. Then things that we kind of need to round out our systems portfolio or even aftermarket, like a services company. OK. Great. I'll take one or two more, and then I'll open up the Q&A to the room. Maybe keeping it a bit more current, we're sort of halfway through the quarter, Dave, Patrick. What are we seeing? Any big changes in demand across the geographies or anything you'd call out within the businesses? No, not really, Nigel. I. I.