Ladies and gentlemen, thank you for standing by, and welcome to the Eaton Fourth Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. Should you require assistance during the call, please press star then zero, and an operator will assist you offline. As a reminder, your conference is being recorded. I would now like to turn the conference over to your host, Yan Jin. Please go ahead. Hey, good morning. Thank you all for joining us for Eaton's fourth quarter 2023 earnings call. With me today are Craig Arnold, our Chairman and CEO, and Tom Okray, Executive Vice President and Chief Financial Officer. Our agenda today includes opening remarks by Craig. Then he will turn it over to Tom, who will highlight the company's performance in the fourth quarter. As we have done in our past calls, we'll be taking questions at the end of Craig's closing commentary. The press release and the presentation we'll go through today have been posted on our website. The presentation includes adjusted earnings per share, adjusted free cash flow, and other non-GAAP measures. They're reconciled in the appendix. A webcast of this call is accessible on our website, and it will be available for replay. I would like to remind you that our comments today will include statements related to the expected future results of the company and are therefore forward-looking statements. Our actual results may differ materially from our forecasted projection due to a wide range of risks and uncertainties that are described in our earnings release and the presentation. With that, I will turn it over to Craig. Okay, thanks, Yan. Hey, we're pleased to report our Q4 results and record performance for the year. Our team continued to deliver our commitments, supported by strong markets and good execution. So let me begin with some highlights of the quarter on page 3. We generated Adjusted EPS of $2.55 for the quarter, and $9.12 for the year. Both all-time records. Adjusted EPS was up 24%, and full year was up 20%, and we continued to post strong margins. Q4 was 22.8%, up 200 basis points, and above the high end of our guidance. We also delivered strong incremental margins, 42% in the quarter, and we continued to see strong market activity. On a rolling twelve-month basis, book-to-bill for eElectrical and Aerospace was 1.1, and our backlog increased by 15% for Electrical and 13% for Aerospace. And as you've read, we're initiating guidance for 2024 and expect another year of strong organic growth, double-digit increases in adjusted EPS, and continued strength in cash flow. And I'll go through the full guidance, details shortly. Lastly, we're announcing a multiyear restructuring program that will eliminate fixed costs and improve our overall efficiency. The program will cost $375 million and deliver $325 million of mature year benefits. So the combination of market tailwinds, our internal growth initiatives, and our continued focus on operating efficiency will allow us to deliver outstanding results for years to come. And speaking of market tailwinds, let's turn to slide four. In the last couple of quarters, we shared our framework for how we think about key growth drivers for the company. The chart reflects the six secular growth trends that will positively impact our business today and for years to come. We're stepping up our investment in R&D and capital to ensure that we're well-positioned to capture this growth. We think Eaton is uniquely positioned in that most of our businesses are expected to see an acceleration in market-driven growth opportunities. In our prior two earnings calls, we provided a summary of progress on infrastructure spending, reindustrialization, utility and data center markets in Electrical, and our Aerospace business. Today, we'll provide an update on the impact from reindustrialization and how it continues to drive a record number of mega projects in North America. We'll also provide you with a framework for how to think about the timing impact on mega projects, from when a project is announced, to a negotiation, to an order, and eventually to a sale. So let's take a look at slide five in the presentation. We've shared this data previously, and it's a good proxy for reindustrialization trend we're seeing. You'll recall, this summarizes the number of mega projects that have been announced since January of 2021. And a mega project, once again, is a project with an announced value of $1 billion or more, and there have been 333 of those through the end of last year, beginning in January 2021. Note that this is North America data, but we're seeing a similar trend in Europe, although the dollars are not as large. A few points to note. First, at $933 billion, this number is 3x the normal rate, and the increase translates directly into Electrical markets. As a reminder, the Electrical content on these projects is typically anywhere from 3%-5%. Second, the number continues to grow and is up 9% from Q3. This will not go on forever, we're sure, but there continues to be strong momentum for U.S. industrial projects, and we're building a multiyear backlog. And third, about 72% of these projects are still in the planning phases, and only 18% have actually started. Some 10% have been canceled or significantly delayed, but this number is actually lower than historical rates. For those that have started, we've won over $1 billion in orders, with a win rate of approximately 40%, and we're in active negotiations on another $1 billion of Electrical content on a small subset of these total projects. So as you can see, megaprojects are a compelling reason to be optimistic about the future. Turning to slide 6, we want to highlight the timing and the duration of these megaprojects as they become opportunities for our Electrical business. The primary conclusion is, we've not seen a significant impact from the large step up in the number or size of megaprojects yet, but it's coming. While each project is different, we put together our view of 3 representative examples of reindustrialization projects, including a semiconductor, an EV battery, and a healthcare example. The slide indicates the number of months between an announcement of a mega project and the time we begin to negotiate it, the time from an announcement to an order, and from an announcement to a shipment. As you can see, it takes, on average, three to five years from when a project is announced to when it shows up in our revenue. So while the gratification is certainly delayed, this is what's showing up in our backlog and providing outstanding visibility to future growth. With over $1 billion of orders that we've already won, we expect revenues to be recognized over the next several years in line with each of these products' individual timelines. Just as a point of reference, our revenues in Electrical Americas for megaprojects in 2023 was only about 3% of our total revenues. By contrast, they represent 16% of our negotiations and 6% of our orders. Hence, the conclusion that most of the impact from this significant step up in megaprojects is still ahead of us. Now, let me just turn it over to Tom, but before I do, I do want to take this opportunity to thank Tom. I mean, Tom has just been an outstanding leader for Eaton in his tenure with us, and I couldn't have asked for a better partner or a more effective CFO. Tom, we're absolutely disappointed to see you go. We fully understand the reason you made this decision. We wish you all the best of luck, and thanks once again for just outstanding leadership over the last three years. Thanks, Craig. I'll start by reviewing our, how our fiscal year 2023 results compare to our original guidance. Throughout the year, we demonstrated the ability to execute on our commitments and raise guidance for all key metrics. We've delivered our third consecutive year of double-digit organic growth, with a 20% increase in adjusted EPS, all-time record margins, and a 48% increase in free cash flow. Of particular note, organic growth and segment margins were up versus the original guidance, 400 and 110 basis points, respectively. Further, adjusted EPS and free cash flow grew 11% and 4%, respectively, versus the original guide. On the next chart, we have a summary of our quarterly results, which includes several records. With respect to the top line, we posted an all-time sales record of $6 billion, up 11%. Organic growth continues to be strong, up 10% for the quarter. We have generated double-digit organic growth in 7 of the last 8 quarters, with the last 7 quarters growing over 20% on a two-year stack. We posted operating profit Q4 records on both a margin and absolute basis. Operating profit grew 22%, and segment margin expanded 200 basis points to 22.8%. Incremental margin was very strong at 42%. Adjusted EPS of $2.55 increased by 24% over the prior year. This is an all-time record and above the high end of our guidance range. This performance resulted in all-time quarterly operating and free cash flow records. Our $1.3 billion of operating cash flow was 9% higher than the prior year, generating 18% free cash flow margin and 103% free cash flow conversion. For the full year, we also set numerous records, including record sales, segment margins, adjusted EPS and earnings, and operating and free cash flow. On slide 9, we detail our Electrical Americas results. The Electrical Americas business continues to execute very well and delivered another very strong quarter. We set an all-time record for sales, operating profit, and margins. Organic sales growth remains strong at 16%, with broad-based growth in nearly all end markets. On a two-year stack, organic growth is up 36%. Electrical Americas has generated double-digit organic growth for 8 consecutive quarters. All-time record operating margin of 28.5% was up versus prior year, 480 basis points, benefiting primarily from higher volumes, effective management of price cost, and improved manufacturing efficiency. Incremental margin was 58% for the segment. On a rolling twelve-month basis, orders were down 4%. However, it's important to note that the dollar value of the orders remains high, and the decline needs to be viewed in the context of the 34% order growth in Q4 of last year. As discussed in prior earnings calls, order intake is an important metric, but needs to be analyzed together with record backlog. Currently, in our Electrical sector, we have backlog coverage of almost three times our historical average. We've looked at multiple scenarios with meaningful order intake decline and are confident in those scenarios, given our backlog coverage, that we can generate robust organic growth for several quarters well into 2025. More specifically, Electrical Americas backlog increased 18% year-over-year and was also up sequentially, resulting in a book-to-bill ratio of 1.2 on a rolling twelve-month basis. For orders, we had particular strength in data center, MOEM, and institutional markets. Also, our major project negotiations pipeline in Q4 was up 55% versus prior year and up 189% since Q4 2021. On a full-year basis, Electrical Americas posted 19% organic growth, with 26.5% margins, up 400 basis points over prior year. Electrical Americas posted records for full-year sales, along with profit on both a margin and absolute basis. With the tailwinds from secular trends, strong execution, and robust backlog, Electrical Americas is well positioned as we enter 2024. The next chart summarizes our results for the Electrical Global segment. Leveraging Q4 record revenue, organic growth increased to 4% from flat in Q3. We had strength in data center, industrial, and commercial, and institutional markets. Operating margin of 18.8% was up 10% versus the prior year. Orders were up 1% on a rolling 12-month basis, with strength in data center and IT, utility, MOEM, and industrial markets. Importantly, book-to-bill continues to remain greater than one. On a full year basis, Electrical Global posted 5% organic growth and 19.3% margins. The business posted records for both full year sales and operating profit. Before moving to our industrial businesses, I'd like to briefly recap the combined Electrical segment. For Q4, we posted organic growth of 11%, incremental margin of 51%, and segment margin of 25%, which was up 320 basis points over prior year. On a rolling 12-month basis, our book-to-bill ratio for our Electrical sector remains very strong, above 1.1. We remain quite confident in our positioning for continued growth with strong margins in our overall Electrical business. Chart 11 highlights our Aerospace segment. We posted an all-time quarterly sales and Q4 operating profit record. Organic growth was 8% for the quarter, with a 2% contribution from foreign exchange. Growth was driven by broad strength across all markets, with particular strength in defense aftermarket, in both commercial OEM and commercial aftermarket, which were up 26%, 25%, and 18% respectively. Operating margin of 22.4% was down 210 basis points on a year-over-year basis, benefiting from higher volumes and effective management of price cost, offset by unfavorable mix and favorable defense programs in the prior year. On a rolling 12-month basis, orders increased 7%, with especially strong growth in commercial and defense aftermarket and commercial OEM. Year-over-year backlog increased 13% and was up 3% sequentially. On a rolling 12-month basis, our book-to-bill for our Aerospace segment remains strong at 1.1. Moving on to our Vehicle segment on page 12. In the quarter, total revenue was up 2%, all from favorable foreign exchange. Vehicle end markets were down 500 basis points year-over-year, but the business was able to deliver outgrowth, primarily driven by higher aftermarket sales, stronger share in heavy-duty transmissions, and a new product launch of electric Vehicle gearing in China. Operating margin came in at 17.9%, 270 basis points above prior year, driven by effective management of price costs and improvement in manufacturing efficiency. Throughout 2023, we've demonstrated the ability to execute on operational improvements, as shown by our 270 basis point improvement in segment margins from the first half to the second half of the year. On page 13, we show results for our eMobility business. We generated another quarter of strong growth, including an all-time sales record. Revenue was up 19%, 18% organically, and 1% from favorable foreign exchange. Driven by the ramp-up of new product launches, we outpaced the market, which grew 7%. However, due to program startup costs, the operating loss increased by $14 million when compared to the prior year. On a full year basis, eMobility posted 18% organic growth on slightly lower margins as we continue to invest in the business. We remain very encouraged by the profitable growth prospects of the eMobility segment. In 2023, we won new programs with more than $1 billion of mature year revenues. Through these wins, we continue to find opportunities to leverage expertise and differentiated technologies across segments. Moving to page 14, we show our Electrical and Aerospace backlog updated through Q4. As you can see, we continue to build backlog, with Electrical stepping up to $9.5 billion and Aerospace reaching $3.2 billion, for a total backlog of $12.7 billion. Both businesses have increased their backlogs by significantly more than 100% since Q4 2020, with Electrical growing almost 200%. Versus prior year, our backlogs have grown by 15% in Electrical and 13% in Aerospace, which exceeded our expectations as we began the year. As noted earlier, both Electrical and Aerospace have book-to-bill ratios above 1.1. Our strong backlog to close the year gives us continued confidence in our growth outlook for 2024 and beyond. In addition to our strong backlog growth in 2023, the next page shows the acceleration in growth of our negotiations pipeline, which supports our expectation for stronger markets and structurally higher organic growth rates. In Electrical Americas, the pipeline doubled over the past three years and increased a further 29% in 2023. This is even stronger than the 19% organic growth in our Electrical Americas business, which suggests continued strength going forward. For 2023, we saw $6.2 billion of projects in our negotiations pipeline in Electrical Americas alone. Now I'll pass it back to Craig to walk through the guidance and wrap up the presentation. Thanks, Tom. Turning to page 16, we lay out our end-market assumptions for 2024. You'll recall that we provided an early look at our 2024 assumptions during our Q3 earnings call at the end of October. So today, we're updating those assumptions. And with the exception of residential markets, where we have increased our outlook from down slightly to flat, in commercial Vehicles, where we have decreased our outlook from slightly declining to declining, all of our assumptions have remained the same. In contrast to what we're seeing in the macroeconomy, we continue to expect growth in about 80% of our end markets, and much of this growth is supported by large backlogs. Turning to page 17, as you've read, we're announcing a new multi-year restructuring program to reduce fixed costs and enhance our efficiency. While we're structurally positioned to deliver higher levels of organic growth, we also have a vast number of opportunities to improve the way we run the company. We're at a point in time where we have the organizational capacity to take on a number of these efficiency projects that have been in our pipeline for some time. The program will focus on reducing structural costs through the consolidation of rooftops, increasing shared services, and deploying digital technologies. These actions will also free up time and resources in our businesses, allowing them to focus on growth and driving operational improvements. Overall, we expect $375 million of restructuring costs over the next three years, with $325 million of mature year savings in 2027. This includes approximately $175 million charges in 2024 and $50 million of savings, both of which are included in our 2024 guide, and I'll cover those in the next several slides. While the company is performing well, we see these actions as an important part of how we'll continue to do so for years to come. Moving to page 18, we summarize our 2024 revenue and margin guidance. Our organic growth for 2024 is expected to be between 6.5%-8.5%, with particular strength in Electrical Americas and Aerospace, both expected to be up between 9%-11%. While eMobility is expected to grow some 30% as new programs are launched and the electric Vehicle market continues to see solid growth. I'd also add that the healthy end markets, combined with our large backlog, provides actually better than normal visibility for our 2024 outlook. For segment margins, our guidance range of 22.4%-22.8% is an improvement of 60 basis points at the midpoint from our 2023 all-time record of 22%. As we've communicated earlier, incremental margins of about 30% are what you should assume, and that's what's reflected in our guidance. These incrementals are consistent with our plan to step up investments in R&D and with the investments we're making to expand our manufacturing capacity, all done to ensure future growth. On the next page, we have the balance of our guidance for 2024 and Q1. For 2024, our adjusted EPS is expected to be between $9.95 and $10.35 a share, $10.15 at the midpoint, and up some 11% from 2023. For operating cash flow, our guidance is between $4 billion and $4.4 billion, up 17% at the midpoint. The key drivers here are really a combination of higher earnings and improved working capital. We also expect to repurchase between $1.5 billion and $2.5 billion of our shares outstanding. Given our cash position at the end of the year, at the end of 2023, and our strong cash generation this year, we'll still have plenty of room for strategic M&A. For Q1, we expect organic growth to be between 6% and 8%, segment margins between 21.3% and 21.7%, and adjusted EPS in a range of $2.21 and $2.31 per share. So let me just close here on page 20. You know, as we transition into 2024, I think we can all conclude that Eaton has proven that we're a changed company, a company that delivers higher growth, higher earnings, and does so consistently. And we're proud of our team's record performance in 2023. But once again, we see opportunities to be better everywhere. As we look forward, we continue to experience powerful mega trends that are driving higher growth in our end markets, and we're investing to ensure that we're capturing these opportunities while gaining market share. We're also continuing to optimize the way we run the company, improving our operational execution, leveraging our scale, and reducing our fixed costs. This is allowing us to invest like never before in R&D, in capacity expansion, and in our people. So our expectations are high, and our teams are looking forward to delivering another exceptional year. So with that, I'll open things up for any questions that you may have. Thanks, Craig. For the Q&A today, please limit your opportunity to one question and a follow-up. Thanks in advance for your cooperation. With that, I will turn it over to the operator. Give you guys the operat. I give you- Thank you. Ladies and gentlemen, if you wish to ask a question, please press one, then zero on your touch tone phone. You will hear a tone indicating that you've been placed in the queue, and you may remove yourself from queue at any time by repeating the one-zero command. If you're on a speakerphone, please pick up your handset before pressing the number. Once again, if you have a question, please press one, then zero at this time. Our first question will come from the line of Jeff Sprague from Vertical Research. Please go ahead. Thank you. Good morning, everyone. Good luck, Tom. Hey, Craig, first question for me is just on the restructuring itself. We tend to think of these things being kind of countercyclical, right? Demand is weak, we're in a recession, we do a heavy restructuring. Seems, you know, I don't know, odd or a little risky maybe to undertake a big, you know, big move like this with such a strong demand pulse through both the Electrical and aero businesses. So can you maybe just, you know, address the risk mitigation and, you know, how you manage kind of maybe the capacity through this? I assume you're also trying to increase capacity while you restructure, but love to love some additional thoughts on that. Hey, Jeff, appreciate the question. You know, I'm not sure if everybody else, but getting a little background noise on the call. I'm not sure. Okay, that's better. Hey, you know, Jeff, you know, we spent a lot of time as a company, you know, sorting this one out, in terms of whether or not it made sense to take on these restructuring projects at this time, because to your point, things are going very well, and we have perhaps more growth opportunities than we've ever had in the history of the company. But at the same time, we actually have more capacity today than we've had in a long time. You know, as you'll certainly be aware, we haven't done many acquisitions over the last couple of years. In fact, we really haven't done any. And so we actually have more bandwidth as an organization today to take on these projects. And one of the things that we do as a company is that we always have a forward view of our opportunities to be better, to improve efficiencies, to eliminate redundancies, to build scale, to essentially leverage some of these new technologies that are coming forth. And so we, today, as an organization, as a leadership team, all agree that there, there's probably, you know, no better time than right now to take on these projects, to improve our cost position, and really set the company up for margin expansion for the next three years on top of the growth that we're going to see as a business. Yeah. Lots of confidence today in our ability to take it on, and we have plenty of capacity as an organization to do so. And what I would just add, Jeff, to that is, I think it would actually be riskier if we didn't do it, because the foundation of the restructuring program is simplification as well, and elimination of waste, which frees up human resource time to focus on the shift that we've been making into growth. So it actually would be riskier if we didn't do it, and it's great to lean forward and execute it at a time of strength. It's a great point, Tom. Great. I said that in my opening commentary, this notion that essentially, we're freeing up time in our operations so that they can focus on growth and improving our operational execution, while some of our corporate teams take on a number of these support services. So you're absolutely right, Tom. Thanks for that amplification. Yeah, thanks. Just to follow. The background noise might be me. I'm dialing through my computer here, juggling multiple phone calls and different cell phones going on a crazy day here. Unrelated question, just on, on backlog. Obviously, it does provide a lot of visibility and, and comfort, but, you know, we've seen a couple companies with big backlogs also have sales disappointments because, you know, the backlog's big, but it's not fungible, right? You know, air pockets develop here and there. You know, maybe just kind of address, you know, that risk. Do you kind of see anything that you need to kind of navigate through from a timing standpoint, particularly given the way you illustrated the long, you know, kind of, you know, order conversion cycle on some of this project stuff that's in the backlog? Thank you. Yeah, no, appreciate that question, Jeff, and understand the nature of it. But I can just tell you, based upon at least what we're seeing and the nature of our backlog today, and as I'm sure you're well aware that, you know, we, as Eaton, and really, quite frankly, as an industry, we've had more demand than we've had capacity, you know, largely over the last couple of years. And so we think we have plenty of ability to accelerate, deaccelerate, if necessary, you know, backlog conversion to essentially keep the top line growing at an attractive rate in the event that you have some sort of, you know, order that would be moving in or out, or there's some sort of, you know, lack of linear, linearity in the order book itself. Not a concern. We've not seen it to date. As we look at kind of the stratification of the backlog and when orders are due, we don't have that concern. Thank you very much. Thank you. Thank you. And the next question is from Andrew Obin from Bank of America. Please go ahead. Hi, guys. Good morning. How are you? Good, Andrew. We're doing great. How about you? Morning, Andrew. Yeah, it seems like you guys are doing great, yes. Just a different way of asking, I guess, Jeff's question. Can you just talk, you mentioned capacity additions. Can you just, you know, and I appreciate that some of this is competitive, but what areas are you adding capacity? When will this capacity be available to really move the needle? And yeah, and anything you're doing differently on geographies, you know, post the whole COVID experience? Thank you. Yeah, no, appreciate the question, Andrew. You know, one of the things we tried to do in the last earnings call is provide a little bit of color around, you know, this $1 billion of investment- Right that we're putting in as a company to support growth. And I would tell you, it's really pretty broad-based. We talked about investments that we're making to support growth in utilities, in transformers, in voltage regulators, in our line installation and protection equipment. We talked about, obviously, this huge growth that we're seeing in data centers and commercial and institutional markets, and the investments that we're making there in low and medium voltage assemblies and switchboards and panel boards. We've had to make investments in our core component, circuit breaker capacity, and obviously, we're making big investments in eMobility as well. So I'd say it's actually fairly broad-based with respect to the product lines. As it relates to the geography, we're clearly seeing a much bigger investment, much faster growth in the Americas, and that's really where the principally a lot of these big investments have gone. But we, you know, and to your question about timing, you know, what we're assuming in terms of our own capacity, industry capacity is another issue as we work through suppliers and some of the others in the value chain. But we think a lot of this capacity for us begins to phase in this year, and so sometime between, let's say, you know, the second quarter and the end of the year, when we'll have most of our investments done, and certainly gives us the capacity to do more, assuming there aren't other bottlenecks and restrictions, whether it be labor or others in the value chain. Gotcha. And, just a follow-up, I guess, naturally builds on the first answer. In terms of your supply chain, what are the biggest challenges? Are you still experiencing, and what has gotten better over the past three, six months, and what's still a problem? Thank you. Yeah, what I would tell you is, in many ways, you know, Andrew, we're really back to where we've been historically, and we've never lived in a world where we didn't have, you know, the intermittent supply chain issues. So I would say, by and large, we've seen fairly significant progress every place. It used to be that electronics were a major bottleneck and issue. Most of those issues are now behind us. We still have pockets of individual challenges in various suppliers with various components, but I would say today, it is really more episodic and unique than it is, I'd say, a pattern or a broader, let's say, capacity constraint in a particular commodity. And so we, like in our own investments, we've been working hard to build capacity internally. We've also been working with our suppliers, giving them lead time and visibility into our growth over the next multiple years to ensure that they, too, are making investments in capacity to keep up with our demand. And so I would say today, it's largely, you know, the, the episodic issue as opposed to a systemic issue. Well, thanks so much, Craig. Yeah, just to jump in, Andrew, on that last point. I think that's really been key of partnering with the suppliers so we can grow together with them. And we've gotten much more efficient, probably as a result of the pandemic, understanding what we need on a go-forward demand basis. Got you. Well, Tom, thanks so much for all your help. You'll be missed, and Craig, congratulations. Thank you, Andrew. Thank you. Thank you. Our next question is from Chris Snyder from UBS. Please go ahead. Thank you. So obviously, mega projects have become a big driver of the Eaton story and an important driver of the outlook. So appreciate all the information you guys provided there. But if we step back and look, and even look through the low single-digit mega project tailwind in 2023, I think you said it was 3% of total Americas revenue. Organic growth has still grown at a double-digit rate for the last 8 quarters. Can you just talk about why underlying demand has been so strong? Because I think when most investors see the huge growth numbers, everyone just assumes it's the mega project opportunity already playing out. Thank you. No, appreciate the question, and I think, you know, I'd say long before we were talking about mega projects, we were talking about secular growth drivers. We were talking about energy transition. We were talking about the electrification of the economy. You know, we were talking about digitalization. You think about, you know, today, mega projects deal with these big projects above $1 billion announcements, but we've seen very similar growth in projects that are well below the $1 billion threshold. And so, you know, reindustrialization of the U.S. and other markets, where today you have production moving back in, and big investments taking place. And so the trends are much broader than mega projects. The reason we've put this emphasis on mega projects is because it's a great indicator of the multiyear runway that we have and the chance to give, you know, the investment community visibility into the outlook over multiple years. But you're absolutely right. We're seeing broad-based growth in our business, you know, much beyond, you know, this mega project emphasis, but the mega projects will become a bigger piece of our future. That's why we talked about 3% of sales, 6% of orders, 16% of negotiations. That continues to be a tailwind, a real impetus for future growth. Yeah, and Chris, if I could just throw in on that, you know, we talked about in the prepared remarks at a high level, our major projects, our large project negotiations, and that's much less than these mega projects. And just some of the numbers, if you look at year-over-year for data centers, growing over 160% in terms of negotiation volume, institutions, over 40%, governments, and healthcare over 30%. So it's really broad-based, as Craig says. You know, the mega projects, if you like, just really put the cherry on top and give us just a long runway going forward. Yeah, no, absolutely, appreciate the durability and sustainability that it brings. And then just kind of on that same topic, you know, my back-of-the-envelope math suggests that this ramp in mega projects drives about a $25 billion incremental market opportunity over the next few years. So a pretty massive ramp for an industry that is already having trouble keeping up with demand. So I guess the question is, do you see a pathway forward for the industry to meet this demand? And how does that impact your multiyear expectations for ability to push price and drive margins higher? Thank you. Yeah, I think your back-of-the-envelope math is pretty good, actually. It does create a very large, you know, growth opportunity for the Electrical industry. And I would say to the question around, you know, whether or not the industry is gonna have enough capacity and bandwidth to capture all these opportunities. I think, you know, one of the restrictions today on growth in general is the fact that there is not enough capacity in the industry, which is why we're making fairly sizable investments in our own manufacturing facilities and working with our suppliers to do the same, so that we can try to get out in front of some of this demand and continue to grow the company. And then on top of that, you know, perhaps the greatest, you know, limiter on growth may be the labor constraint, in terms of finding enough skilled tradespeople to deal with, you know, the significant, you know, backlog of demand. And so what we think fundamentally is gonna happen is that the growth will be there, but the cycle will be extended because, you know, we simply will not have enough capacity and labor to deal with all the demand in the timeframe in which it's requested, and so the cycle will simply be expanded, you know, out multiple years beyond where it normally would reside. Thank you. Appreciate that. Thank you. The next question is from the line of Steve Tusa from JP Morgan. Please go ahead. Hey, good morning. Hey, Steve. Hey, Steve. Tom, congrats on going out with a bang here. Great, great results. Thanks, man. Appreciate it. Just the, the pricing dynamics, what, what are you guys assuming for in your Electrical businesses for, price roughly in 2024 embedded in your guidance? Yeah, Steve, as you, as you probably are aware, you know, we don't provide specific price guidance. We don't separate price and volume. And I will tell you that on a relative basis, when you compare, let's say, 2024 with 2023, 2022, the price will contribute a much smaller piece of our growth than volume will. And that's - so we're gonna be probably back to a more of an historical level of price realization in terms of 2024. And that's really a function of the fact that, you know, we're not seeing inflation. You know, we had to essentially work the price lever fairly significantly over the last couple of years as we dealt with this inflation that was in the system. Now, we still have some inflation, principally on the labor side, so we will still get price, but its contributions to our growth will be significantly less than it had been in prior years. Right. And I guess just on the cash flow statement, you know, I think like two... Am I-- I'm not sure if I'm seeing this right, but $2 billion of share repo in 2024? I mean I think that's a pretty decent sized number. Anything going on specifically there? Hmm. Yeah, no. No. He's bringing it at the midpoint. Okay, go ahead, Tom. Yeah. No, you know, we finished 2023 with $2.6 billion in cash. And you know, given how we're guiding and given how we are, you know, doing a better job of, you know, managing working capital, given the supply chain constraints are going away, we're gonna have a very good year of generating cash in 2024. So we go to our capital allocation tenets, and we're very clear we're not gonna collect cash on the balance sheet. So at the midpoint, we've got $2 billion. As was said in the prepared remarks, though, this gives us plenty of dry powder to do strategic M&A, so even with that $2 billion. The final thing I would end with is our net leverage on the balance sheet, which you probably know, Steve, is 1.3. So we've got a very strong balance sheet, just a ton of flexibility from a capital allocation perspective. Right. So, so 2% lift from share count, you know, in general, embedded in the guidance for EPS growth-ish? Relatively minor. A couple pennies versus consensus, yeah. Okay, got it. All right. Thanks a lot. Thank you. Thank you. Our next question is from the line of Joe Ritchie from Goldman Sachs. Please go ahead. Thanks. Good morning, everyone. Morning, Joe. Morning, Joe. So I think, you know, Chris kind of touched on this in his question, but maybe to ask it more explicitly: as you think about that first $1 billion-plus in mega projects that you've won, just what's the margin profile of those wins, and how we should be thinking about that, you know, ultimately materializing in the P&L? Yeah, I would say that, you know, the margin profile on these mega projects is not gonna be terribly different than the margin profile on the underlying business. You know, it's these, you know, we are in a position, as you can imagine, when you're capacity constrained, to be selective around where you win. And so we would not expect, even though they're big projects, and oftentimes you find with large projects, your margins, you know, take a bit of a haircut, you should not expect that as these mega projects you know, translate into revenue. Got it. That's great to hear, Craig. And then I guess, look, the funnel keeps on growing now for the last couple of quarters at a pretty material rate. There's a lot of concern with the election coming that, you know, perhaps this first wave of projects that have broken ground continues, but maybe you get a stall on the second in the second wave. Just any thoughts around that? I know you kind of touched on the potential for labor constraints, but I'm really more - any other thoughts that you would have on just C ontinuing to grow the funnel and then making sure that actually we actually see that ultimately in your outlook? Yeah, no, no, I appreciate the question and the concern. I mean, given, you know, the upcoming elections, and in many ways, it's kind of an unknowable in terms of how the election is gonna turn out. And then, quite frankly, even with the change in the administration, difficult to know what position they will take with respect to a lot of the stimulus spending that is essentially, you know, underlying and supporting these mega projects. And I will tell you what gives us, you know, fairly high level of confidence that it's not gonna change materially, is that a lot of these projects are going into red states. And so, you know, despite what may happen kind of on the political front, the benefactor of a lot of these projects are actually, you know, you know, those red states, and so we'll have to wait and see how that plays. We don't think today it's gonna have a material impact. Today, we are looking at more demand, and we have capacity to serve. So even if there was a little bit of give back, the business is still in great shape to support, you know, the long-term growth assumptions for the company. But it's, in many ways, kind of the unknowable. We just don't know how the election is gonna unfold and then what happens afterwards. That's helpful, Craig, and best wishes, Tom. Thank you. Appreciate it. Thank you. Thank you. The next question is from Julian Mitchell from Barclays. Please go ahead. Thanks very much, and thanks a lot, Tom, for all the help. Maybe, Thank you, Julian. Maybe just a first question would be around, you know, when you're thinking about sort of the mega projects and the impact on North America orders, so you had a sort of, you know, book-to-bill well over 1x in 2023, even with those trailing twelve-month orders being down somewhat off the high base. When you look at 2024, is it sort of a similar construct where I suppose you could have orders down, but the book-to-bill still over 1x just because of the capacity constraints? And then more broadly, you know, any concerns that you and your peers collectively are adding maybe too much capacity in Electrical output? You know, I appreciate the question, Julian, and certainly, you know, it's one of the things that we spend a lot of time thinking about as well, in terms of, you know, what will the tenor of 2024 look like? But I think, you know, the short answer to the question is yes. I mean, it's very much possible that you could continue to see a moderation of orders and a book-to-bill on the total backlog, that it doesn't change. In fact, when we came into 2023, we actually expected to be able to eat into the backlog, and the backlog grew by some 15%. And so the industry continues to be constrained. And obviously, you know, but for industry constraints, you know, we would post bigger growth numbers than we provided in the guidance. The demand is there to grow faster than 7.5% that we've talked about as the midpoint of our guidance. So it absolutely is possible that you could, you know, essentially, you know, Eaton's orders could still moderate, and your backlog could continue to be record highs or continue to grow. Yeah, and just to add a little bit more color to that, and Julian, we've talked about this in previous calls and tried to put it in the prepared remarks, but I, but I think it's, I think it's very important for, for everyone on the call. We, we have modeled year-over-year order decline, meaningful order decline, and, and in those scenarios, given our, our backlog coverage, as we said in the prepared remarks, we are able to have robust organic growth well into 2025. So that gives us, that gives us great confidence that even if year-over-year orders continue to decline in meaningful ways, we, we've still got a good runway. That's helpful. Thanks very much. And then just a quick follow-up, maybe switching to eMobility. You know, you'd raised that medium-term revenue guide a few months back. The noise or the news in the EV world is sort of very, very uneven. So maybe just sort of tell us, you know, how you see it for the growth rates of that business. We can see a very high growth rate dialed in for eMobility this year. Maybe just any sort of perspectives on that and maybe how you're outperforming the industry. Yeah, you know, appreciate the question, Julian. As you know, as we talked on our guidance, we're anticipating 30% growth in our e-mobility business. And I can tell you, you know, that 30% number is today dialed back from what our customers are asking us for. We do recognize that, you know, the industry itself has gone through a little bit of a, I'd say, a wake-up call with respect to the underlying demand for EVs. By the way, still great demand, still good growth of 20%, I think, in the fourth quarter for us, but overall, a slower rate of growth than perhaps what people were anticipating maybe 12 months ago. We think the industry will continue to grow and grow nicely. What we try to do as we, you know, build our own plans and our guidance, is to make sure we're appropriately, you know, hedged back to ensure that we're able to deliver, you know, our commitments. But at the same time, we have the flexibility to respond in the event that some of these customer forecasts and their outlooks are actually come to fruition. So yeah, we talked about $1.5 billion, 11% return on sales. We are absolutely still see line of sight and committed to those goals, and our forecasts have not changed. Yeah, and just one other thing I would add, Julian, and taking you back to the prepared remarks. In eMobility, you know, the market grew 7, we grew 18. You know, so we're, you know, we're winning some good business there. Yeah. And yeah, to your point, Tom, it really is, and I think this was maybe your question, Julian, as well. It really is platform specific, and our growth really comes from the launching of new e-mobility platforms that we have content on. And that's why our growth, we think, will clearly be, you know, well above the industry's growth rate. That's great. Thank you. Thank you. Thanks. The next question comes from Steve Volkmann from Jefferies. Please go ahead. Great, thanks for fitting me in. I want to go back to the cost-cutting program, the $325 million of benefits in 2027. Should we think of that as kind of net in, in terms of margin, or will you have some increased investments that offset some of that? No, I mean, the way, I mean, we talked about it, you know, we're gonna spend, you know, $375 million of restructuring to deliver $325 million of mature year benefits. And, and, and that is the way you should think about it. You know, we'll, we'll spend, you know, those restructuring dollars over the next few years. And we had embedded, as we talked about in our 2024 guidance, $175 million of spending and $50 million of benefits, but those benefits will fall through to the bottom line with- Super. Okay. Okay. No offsetting expenses. Yeah, perfect. Thanks for that. Sorry, Tom, go ahead. Yeah, and I was just gonna say, and the cash associated with it is in our cash guidance as well. Understood. So, my guess is it's probably a little more Europe-centric since these things tend to be, but any guidance on sort of where we'll see these results most? Yeah, no, I appreciate the question, and, you know, I think you can just think about it. It's gonna be pretty, you know, widespread, and, and you can think about the total kind of allocation of the, the benefits being pretty much aligned with the company. Two-thirds will be in Electrical, one-third will be in industrial. We'll be focused on, you know, taking out rooftops, you know, in the, in the company, you know, driving some shared services, leveraging digital. But a lot of these benefits will really cut across the company. Yeah. Great. What I would also say is, you know, you've described it as cost cutting, yeah, and there is an element of that, but I really want to come back to, it's a smarter way of doing business as well. I mean, we've got a number of sites. We're a very complex organization with five reportable segments, and we've got opportunities with our central functions to be more efficient and take work off of the business units and allow opportunity cost for, you know, leveraging resources, leveraging talent, leveraging, you know, and capital as well. So there's. It's not just pure cost cutting, it's a smarter, more efficient way of doing business as well. Great. Okay. Appreciate you doing. It's the way we help fund the growth, right? It's the way we're funding, you know, increases in investments in R&D and other things that we need to do to grow the company. Thanks, guys. Appreciate it. Thank you. The next question is from Nigel Coe from Wolfe Research. Please go ahead. Mr. Coe, your line is open. Sorry about that, mute button problems. So good afternoon, everyone. Thanks for the question. So cover a lot of ground, but, you know, coming back to this capacity issue or capacity expansions, I mean, the 9%-11% growth in the Americas, Craig, I mean, it feels like given the backlog build, you know, obviously orders continue to add to that. Feels like that could be, you know, relatively conservative. So just wondering if there's any kind of capacity constraints, you know, that are getting that growth forecast. And are you assuming there's gonna be some backlog burn or conversion as we go through the year? I mean, any sense there? Yeah, no, and I think I mentioned also in my commentary, Nigel, that, you know, there's certainly enough demand in the marketplace to post higher growth than we're reflecting in our guidance. And we're making investments to eliminate capacity bottlenecks, and we think by the time we get to the end of the year, we'll be in great shape. But as you know, we're participating in an industry, you know, where you have a lot of players in the value chain, where you have fairly sizable labor constraints around skilled trades. And so I do think there's gonna be a governor on growth based upon, you know, these factors that prevents us and the industry from growing, you know, much faster than that. You think about this 9%-11%, this is on top of, you know, some 30%+ growth over the last two years. And so I would say that, today, you know, we'll see what happens with, in terms of the backlog growth and how much the backlog we can burn or can't. Once again, difficult to really say. There's a lot of variables in that. Once again, we thought we were gonna burn backlog in 2023, and we actually increased it by some 15%, as the market continues to perform even better than what we imagined. But there are very real capacity constraints in the industry that we think become the governor around this 9%-11% growth in our Electrical business in the Americas. Yeah. Yep, I appreciate that. And then it just feels like data center is the obviously, that's, that's probably gonna be your strongest growth vertical in 2024. And I think you mentioned negotiations up 160% off a pretty high base. So just thinking about capacity in that single end market, I mean, is that a concern? And does the $1 billion deeper in, does that have the kind of growth that we should see coming through in 2040, 2045 then? You know, data centers will certainly be a very strong growth market for us in 2024 as well and into 2025. We talked about, you know, in terms of our own forecast for the industry, we said, you know, the data center market, we think, grows at a compound growth rate of some 16%, you know, over the next five years or so. And that is certainly more than supported by, you know, orders. You know, we grew some 20% in Q4. You know, we, you know, in revenue, orders on a rolling twelve were up 30%. Negotiations were up a lot more than that. So we continue to see just an acceleration in the data center market in terms of the rate of growth. Once again, you know, because this industry, too, is capacity constrained, is labor constrained, we think what you'll ultimately end up happening is a, as a growth cycle that just extends for, could be for a decade, at very attractive growth levels. Yeah, a decade, that's a long time. 2024, do you think 2024 will be in that 20% zone or even better? Yeah. Yeah, I mean- Yeah. We'll see. We're not providing guidance per se for individual end markets today. But you can certainly assume that within that 9%-11%, you know, that our assumption for data centers is gonna be on the higher end of that. Right. Yeah. Okay. That's great, and thanks, Craig. Yeah, just to add, the chart for the end markets, you know, we have data centers and distributed IT growing in a strong, strong double digits. So, and, and everything from an order perspective, as Craig said, points to very robust growth in 2024. Yeah, it's, it's vertical. Thanks, Tom, and congratulations. Thank you. Thank you. The next question is from Tim Thein from Citigroup. Please go ahead. Yeah, great. Thanks. I'll just fire one in here, but, I guess to start, you know, after spending some time with Mike Yelton, I guess it was around this time last year, I guess I can better understand why he was in such a good mood. But, you know, just on the mix in Electrical, it. I would guess, just given the strength in these big, you know, projects, that, you know, there has been a trend, I guess, this is Americas, but you've seen kind of this continued shift from more of the growth coming from systems versus products. How do you, you know, in years past that, there's been times when that's given you challenges in terms of kind of managing the profitability of that. But I guess maybe your outlook in terms of that mix dynamic in 2024, and again, your confidence in terms of managing it to the extent that continues, you know, more of the growth coming from systems relative to products. Thank you. Yeah, and appreciate the question. And I know we kind of created this monster a little bit, but we're trying to get, you know, the investor community to move away from this systems versus products distinction, because, you know, practically speaking, they're all connected. So anytime you sell an Electrical system, it encompasses all of our products and components. And so for us, we really think about the right way to think about the company is to really take a look at the end markets that we laid out. You know, data centers, utilities, industrial facilities, commercial facilities. And that will be perhaps the most informative way to think about the company in the context of where growth is going. And I can just tell you, in general, from a profitability standpoint today, there is not a significant difference today between the profitability of systems and the components that go into the systems. Now, there was a time inside the company, back when, let's say we were in—we started the lighting business, for example, and lighting was considered a products business. It was a relatively large business with relatively, you know, lower margins than the rest of Electrical. And there was a meaningful difference, perhaps, held back by lighting, that drove different profitability between the two. But today, we don't have a significant difference in profitability, and we really think the right way to think about the company is really, you know, the function of these end markets that we've laid out once again on slide 16. So hopefully it's helpful to you. Yeah. Yeah, for sure. Real quick, Craig, on the Aero piece within commercial, is there do you expect much difference in terms of the growth between OEM and aftermarket in 2024, or are those both similar projected growth rates? Yeah, no, and it's an important question because, as you know, there is a very different profit profile on an OE order versus an aftermarket order. Both will grow nicely in 2024. We do expect OE to grow slightly faster than aftermarket, which holds margins back a little bit, which has been reflected in our guidance. But we expect to see very strong growth in both commercial as well as the aftermarket piece of the business, commercial, OE, and aftermarket. Okay, great. Thanks for squeezing me in. Great. Thank you. And our next question is from Dean Dray from RBC Capital Markets. Please go ahead. Yes, good afternoon. Thanks for fitting me in. Hey, Dean. Congrats, Tom. Best of luck. Thank you. I don't know if you can parse this out, but is there any way you can frame your expectations on North America Electrical of what would be going through distribution versus direct ship? I'm not sure how precise you can get there, but any color would be helpful. Yeah, you know, I would say, you know, Dean, that, you know, in North America, specifically, a lot of what we do goes through distribution, and that number, order of magnitude, I think, is about 70% or so. So it's a fairly sizable piece. You know, and as these mega projects continue to grow, as, you know, perhaps, you know, data centers, you know, hyperscalers continue to grow, some of that tends to be perhaps more direct, just by virtue of the nature. But a lot of our business today goes through distribution, and our distributors are just-- You know, I'd say, I've always said, they're perhaps our greatest asset. We, we are committed to distribution. They add tremendous value. We have a very strong distribution network. So yeah, it's one of the real assets of the company. Great. I don't think I heard the word destocking come up at all today. So and it did create a chuckle there, but is there any destocking, any pockets of it? You all seem to have steered clear of any of that over the past four months, four quarters, but just any color there would be helpful. You know, Dean, we did talk about a little bit destocking that we saw in our European business, which, you know, quite frankly, it really began at the beginning of 2023. We started to see destocking in Europe, specifically. You know, you know, fortunately, the good news is that we're beyond that. But in the Americas business, specifically, you know, other than the oddballs and pockets of places, we've not really seen destocking in the Americas, and that's largely because these markets, as we talked about, continue to grow pretty dramatically. But we did have a little bit of it in Europe, but it's, you know, fortunately behind us now. Got it. Thank you. Thank you. At this time, there are no further questions. Thank you, Mr. Jin. Please go ahead with closing remarks. Hey, thanks, guys. I know it's a busy day, and we do appreciate everybody's question. As always, you know, the IR team is available to address your follow-up questions. Have a good day. Thanks for joining us. Bye. Thank you, ladies and gentlemen. That does conclude our conference for today.