Good day, ladies and gentlemen, welcome to Honeywell's Fourth Quarter Earnings Release and 2021 Outlook. At this time, all participants are in a listen-only mode. The floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your touch-tone phone. If at any point you find your question has been answered, you may remove yourself from the queue by pressing star two. Lastly, if you should require operator assistance, please press star zero. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mark Bendza, Vice President of Investor Relations. Please go ahead, sir. Thank you, Steven. Good morning. Welcome to Honeywell's fourth quarter 2020 earnings and 2021 outlook conference call. On the call with me today are Chairman and CEO, Darius Adamczyk, and Senior Vice President and Chief Financial Officer, Greg Lewis. This call and webcast, including any non-GAAP reconciliations, are available on our website at www.honeywell.com/investor. Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our businesses as we see them today. Those elements can change based on many factors, including changing economic and business conditions. We ask that you interpret them in that light. We identify the principal risks and uncertainties that may affect our performance in our annual report on Form 10-K and other SEC filings. This morning, we will review our financial results for the fourth quarter and full year 2020, discuss our 2021 outlook, and share our guidance for the first quarter of 2021 and full year 2021. As always, we'll leave time for your questions at the end. With that, I'll turn the call over to Chairman and CEO, Darius Adamczyk. Thank you, Mark, and good morning, everyone. Let's begin on slide two. We finished a challenging year with a very strong quarter, driving sequential improvements from the third quarter in sales, segment margin, adjusted earnings per share, and robust free cash flow. In the fourth quarter, we delivered adjusted earnings per share of $2.07, flat year-over-year, and $0.05 above the high end of our guidance range. This result was up 33% sequentially from adjusted EPS of $1.56 in the third quarter. Organic sales were down 7% year-over-year, four percentage points better than the high end of our guidance range, and 7 percentage points sequential improvement in the 14% organic sales decline in the third quarter. We drove double-digit year-over-year organic sales growth in Defense and Space, Worn Products, and recurring Connected Software Sales, as well as 27% organic growth in Safety and Productivity Solutions, an outstanding result. Our cost plans delivered our full-year commitment of $1.5 billion in savings and helped us protect margins, limiting our decremental margin in the quarter to only 26%, an improvement from Q3 29% decremental margin. Segment margin contracted 30 basis points year-over-year, which is a significant improvement from the 130 basis point contraction in the third quarter, driven by margin expansion in Aerospace, Honeywell Building Technologies, and Safety and Productivity Solutions. We generated $2.5 billion of free cash flow in the quarter, up from $758 million in the third quarter and 9% above Q4 2019, achieving 170% adjusted conversion. In terms of capital, we deployed approximately $2.8 billion of cash to dividends, growth CapEx investments, share repurchases, and M&A. We talk more about our recent M&A activity on the next page. For the full year, we deployed $3.7 billion to reduce shares outstanding by approximately 3%. With these strong fourth quarter results, we finished 2020 with $7.10 of adjusted earnings per share and an 11% organic sales decline, both above the high end of our expectations from October. For the full year, we generated $5.3 billion of free cash flow, resulting in adjusted conversion of 105% or 16% of revenue, a very strong result. There's no doubt that the COVID-19 crisis created significant challenges for the business and economies around the world. I'm very proud of Honeywell's ability to rise to the challenge to deliver strong execution and sequentially improving results throughout the year. Next, let's turn to slide three to discuss our recent M&A activity. I'm pleased with the progress we made in actively shaping our portfolio, and our recent M&A announcements directly align with our ongoing transformation into a premier software industrial company. In the fourth quarter, we completed three acquisitions and announced a fourth, all of which meet the rigorous criteria in our M&A framework, which ensures the transactions are aligned with our portfolio strategy and meet our return expectations. We have previously discussed the acquisitions of Rocky Research and Ballard Unmanned Systems, which provide emerging technologies aligned to strategic initiatives in our Aerospace business, as well as our strategic investment from path to full ownership in Trinity Mobility, which supports our smart cities breakthrough initiative in Honeywell Building Technologies. In mid-December, we acquired Sine Group, a technology and software as a service, or SaaS company, that provides visitor management solutions that are readily accessible from mobile devices. Sine technology will enhance our connected building offerings and will also support a mobile platform for a broader portfolio of Honeywell Forge offerings. We will expand on Sine features and solutions and make Sine products available to customers globally. Most recently, we announced an agreement to acquire Sparta Systems, a leading provider of enterprise quality management software, or QMS, to the life sciences industry for $1.3 billion. We previously highlighted the importance of the life sciences market as a breakthrough growth initiative. The acquisition of Sparta further bolsters our software controls and analytics capabilities in this space. Sparta's AI-enabled SaaS offering will combine with Honeywell Forge to provide greater value to our life sciences and pharma customers. Additionally, Sparta complements our growth strategies for the automation and digitization business within Honeywell Process Solutions, enabling greater penetration in life sciences and the pharma market segments. Sparta will further bolster Honeywell's portfolio of accretive, non-cyclical, recurring connected software sales. I'm excited about the new technologies and adjacencies we have unlocked through our recent acquisitions and investments. We've said before that we have an active M&A pipeline. This series of acquisitions is further evidence that we are continuously evaluating our portfolio and investing in new opportunities. We also evaluate our portfolio for areas that are no longer core to our long-term objectives. Earlier this week, we signed an agreement to sell our performance and the lifestyle footwear business to a leading manufacturer of premium footwear and apparel, Rocky Brands. The transaction value is approximately $230 million and is scheduled to close by the end of the first quarter. Our SPS business will continue to provide industrial safety footwear for workers. M&A is just one important part of our broader capital deployment strategy, which also includes share repurchases, dividends, and capital expenditures. Let's turn to the next slide to view our total capital deployment. In 2020, we continued to demonstrate our commitment to identifying and investing in high return opportunities that help reshape the business for a software-oriented future. Over the past three years, we have consistently deployed more than 100% of operating cash flow to fund share repurchases, dividends, M&A, and capital expenditure. 2020 was no exception. Even during a global pandemic, we deployed $7.5 billion of capital, essentially equal to the prior two years, demonstrating our commitment to investing in high return opportunities in any environment. Let's turn to slide five, where Greg will discuss our execution record in a downturn. Thank you, Darius, and good morning, everyone. We showed a slide similar to this one during our December investor webcast, and I want to highlight it again here today because I think it nicely summarizes our ability to manage through tough times. Our execution through this year's downturn clearly demonstrates our ability to move quickly and decisively to reduce fixed costs, to protect margins, to ensure liquidity, invest in growth, and position ourselves for recovery, while at the same time we maintain focus on our pre-transformation initiatives, Honeywell Connected Enterprise, Honeywell Digital, and the integrated supply chain. At the beginning of the pandemic, we first acted quickly to address our liquidity and cost structure. Our strong balance sheet provides us with stability as well as the opportunity for investment during challenging times. As you saw from Darius, we took advantage of that. Through a series of actions to further bolster our financial flexibility, we increased our cash and short-term investments from approximately $10 billion at the end of 2019 to over $15 billion by the end of the second quarter, which we maintained through the end of the year, demonstrating our ability to generate strong cash flow and efficiently access the capital markets during even the most disruptive times, all while protecting our debt rating. On the cost side, we responded fast and early to the crisis by identifying and delivering on a two-phase cost program, which achieved $1.5 billion in year-over-year fixed cost savings as we had committed. Approximately 70% of these savings, or about $1 billion, represent a permanent reduction to our fixed cost base. To achieve this, we curtailed discretionary expenses, took temporary actions to reduce costs, including reducing executive and board pay, and removed significant structural costs through our repositioning programs. Our streamlined cost base positions us well for 2021 recovery and will drive margin expansion across all four of our segments, as well as capacity for investment as sales recover in 2021 and beyond. As Darius described on the previous page, we strategically deployed capital to drive returns and to position our business for future growth. Importantly, we also directed resources to address our customers' COVID-19 challenges around the world. We deployed additional capital into high return growth investments to address urgent customer needs, particularly in personal protective equipment and warehouse automation. We are also helping the world cope and recover from the effects of COVID-19 through our new portfolio of healthy solutions. We generated approximately $655 million in sales for our healthy solutions in 2020. We have a pipeline of approximately $2.1 billion, which will drive growth again in 2021. As a result of our swift actions during the downturn, core suite decremental margins were limited to 26%. Improving from 33% in Q2 and 29% in Q3, and demonstrating our ability to protect our margins in a very difficult environment. We are clearly well-positioned for a variety of outcomes as the recovery progresses into 2021 and beyond, and our shareholders are benefiting from that, with a total shareholder return of 23% in 2020, which was over 2x greater than the XLI. Let's turn to slide six to discuss our fourth quarter results in a bit more detail and our 2021 outlook. As Darius highlighted, we delivered a strong fourth quarter to end 2020, with sequential improvement from third quarter on all our key financial metrics. Sales declined by 7% organically due to the effects of the COVID-19 pandemic, which was four percentage points better than the high end of our guidance and represents a 7 percentage point sequential improvement from the 14% organic sales decline in the third quarter, driven by sequential sales growth from the third quarter in all four segments. Starting with Aerospace, fourth quarter sales were down 19% organically, a 6 percentage point sequential improvement from the down 25% we had in the third quarter. Lower commercial aftermarket demand due to the ongoing impact of reduced flight hours and lower volumes in commercial OE equipment was partially offset by double-digit growth in defense and space. Though still down significantly year-over-year, our commercial aftermarket business did improve sequentially from the third quarter. Our air transport aftermarket business was down 48% organically in the quarter compared to 55% in Q3, and our business aviation aftermarket was down 6% organically compared to 28% in the third quarter. Moving on to Building Technologies, sales declined 4% organically, a 4 percentage point sequential improvement from the 8% down in Q3. Building Solutions projects were impacted by timing due to customer order pushouts we saw earlier in the year, which was partially offset by growth in services. Customers are now placing orders for projects that they had previously delayed. As a result, orders in Building Solutions grew 32% year-over-year, and the services backlog was up double digits year-over-year to finish the fourth quarter, positioning the business well for 2021. On the building product side of the portfolio, sales and orders improved sequentially from the third quarter. The commercial fire business returned to year-over-year growth. In PMT, sales were down 12% organically, a 4 percentage point sequential improvement from the 16% organic decline in Q3. Process Solutions was impacted by continued delays in projects and services, as well as volume declines in thermal solutions and smart energy due to end markets softness. However, Process Solutions orders were up 30% sequentially from Q3. UOP continued to be impacted by weakness in the energy end markets, though sales improved sequentially from the third quarter across the UOP portfolio. Orders were up 21% versus the third quarter as well. Finally, Advanced Materials sales increased 8% year-over-year organically, driven by growth across the Fluorine Products portfolio, including strong auto and phone demand. In SPS, organic sales were up 27% year-over-year, a very strong result to end the year in which the SPS team stepped up to meet unprecedented demand for critical safety products. Intelligrated and personal protective equipment led the way with another quarter of double-digit organic growth, followed by high single-digit growth in productivity solutions and services. We are encouraged by the turnaround that team has orchestrated in 2020. SPS exited 2020 with a backlog of approximately $4 billion, which was nearly double our backlog at the end of 2019, placing the business in a very strong position to start 2021, where we expect to see a robust first half in particular. Overall, we expanded margins year-over-year in three of the four segments, Aerospace, HBT, and SPS, limiting Honeywell's overall segment margin contraction to 30 basis points and ending the quarter with a segment margin of 21.1%. This was a sequential improvement of 120 basis points from Q3 segment margins of 19.9, an improvement of 260 basis points from the Q2 trough, demonstrating the effectiveness of our response to the pandemic, in particular our cost actions and operational rigor. We delivered cost actions in the fourth quarter that brought us to $1.5 billion of savings for the year, right at the stated range that we had highlighted earlier, limiting our full-year margin contraction to 70 basis points despite the challenging operating environment. We delivered adjusted EPS of $2.07, flat year-over-year and up 33% sequentially from adjusted EPS of $1.56 in the third quarter. This result was $0.05 above the high end of our guidance, driven by higher segment profit due to better than expected sales volumes in Aerospace, HBT, and SPS. Given the strength we saw in the fourth quarter, we were able to make discrete investments in the business and our employees, including in IT, marketing spend for Forge and brand expansion in the Middle East and China, as well as a special $500 recognition award for our ISC frontline production and production support employees who performed so bravely and well through this crisis. Repositioning was lower than in Q4 a year ago, as expected, driving a $0.15 year-over-year tailwind below the line. Interest income and foreign currency were lower than Q4 2019, driving a $0.07 headwind below the line, which was offset by higher pension income. Our effective tax rate and share count were also lower than in the fourth quarter of 2019, driving $0.20 and $0.40 of EPS benefit, respectively. A bridge from Q4 2019 adjusted earnings per share to Q4 2020 can be found in the appendix of this presentation. I am also proud to report that our fourth quarter cash flow generation was very strong. We generated $2.5 billion of free cash flow, up 9% year-over-year, resulting in adjusted free cash flow conversion of 170%. Free cash flow and conversion both improved year-over-year due to working capital improvements, including inventory reduction and strong collections. Our teams put an extra focus on cash in the fourth quarter and really delivered, and we expect to continue this progress in 2021, particularly on inventory. In terms of capital deployment, we paid approximately $670 million in dividends, repurchased $1.6 billion in Honeywell shares, over-delivering on our commitment of 1% share count reduction in 2020. We invested approximately $300 million in CapEx and deployed over $250 million to complete three acquisitions. All in all, a very strong fourth quarter to close out 2020. Now let's turn to slide seven to talk about our 2021 planning assumptions. We hope and expect that the worst is behind us as we move on from 2020. We're seeing promising signs of the recovery unfolding, but there continue to be a few key uncertainties to be mindful of. Over the past couple of months, we've seen governments around the world approve multiple effective COVID-19 vaccines and begin rolling them out. Our current view of 2021 assumes the vaccines are widely distributed, leading to lower manageable infection rates over time and allowing the global economy to largely reopen and stabilize. However, many regions have recently been coping with a new wave of infections and lockdowns, new COVID-19 strains, and vaccine distribution challenges, so it remains unclear when exactly infection rates will slow down materially and the economic recovery will really accelerate. As a macro planning assumption, we're expecting the recovery to be weighted to the second half of the year and are expecting to experience a little bit of a slower start in 1Q. We're assuming fiscal stimulus remains supportive of the economy in 2021. We do expect passengers will begin flying more freely again as the vaccine rollout begins, leading to a modest improvement in global flight hours in the first half and acceleration in the second half. This is one area where we are seeing some renewed softness, particularly in China and APAC as the year begins. We also expect stability in defense budget spending. Finally, we assume improved macro conditions broadly will drive moderate increase in oil consumption in the second half of the year. Given that, let's turn to slide eight and discuss our markets and segment outlook. Starting in Aerospace, the previously mentioned increase in flight hours as the pandemic subsides will gradually lead to improvements in our commercial Aerospace business as aftermarket demand accelerates, particularly in the second half. However, we expect recovery in the commercial OE business to lag the commercial aftermarket recovery due to a gradual ramp in commercial OEM build rates. Stable defense spending should support continued growth in our defense and space business, though at a reduced pace versus the double-digit growth we experienced in 2020. In total, we expect the Aerospace business to be flat to up low single digits in 2021. In HBT, we expect the non-residential market to remain relatively stable in 2021. We anticipate solid demand for building products and management systems in key verticals, including data centers, warehousing, and healthcare. In other verticals, including hospitality and commercial offices, we expect them to remain challenged as the world recovers from the effects of the pandemic. These challenges will be partially offset by the traction we have been gaining over the past couple of quarters with our Healthy Building Solutions, with key wins in education, commercial offices, healthcare, and some government verticals. Our solutions address key customer concerns, including air quality, social distancing, and controlled and touchless access, and we expect continued demand through the year. Building Solutions ended 2020 with a quarter of strong year-over-year orders growth, which positions the business well for 2021. We expect customers to continue placing orders that they deferred in 2020 as the macro economy recovers. We also have a robust services backlog that is up strong double digits year-over-year and will support 2021 growth. We don't expect building access to be a significant issue in 2021. We don't anticipate any material challenges getting on sites to complete projects. In total, we expect HBT to grow low single digits for the year. In PMT, we expect the oil and gas and petrochemical markets to remain relatively flat, with oil consumption picking up slightly in the second half. We expect the HPS recovery to be led by our large backlog of global mega projects and the products businesses. In UOP, we expect the energy markets to remain challenged through the year, particularly in the first half. However, we expect business conditions will recover sooner for petrochemicals than for oil and gas. We anticipate increasing investments in renewable fuels, which will drive demand for our new Sustainability Technology Solutions and partially offset challenges in the oil and gas market. In addition, the specialty chemicals market is expected to grow modestly in 2021, with strength in global healthcare, automotive, and residential construction end markets driving demand for advanced materials. Overall, we expect PMT to be down slightly to up low single digits for the year. Lastly, in SPS, we expect continued strength in warehouse automation and personal protective equipment as we execute the delivery of our robust backlog. We also expect productivity solutions and services to grow as the strategic turnaround of the business drives market share gains. We expect gas sensing to recover in line with the market. In total, we expect SPS to grow double digits in 2021, with comps getting tougher in the back half as we lap strong growth in the back half of 2020. Overall, we see improvement across most of our key end markets in 2021, and we have confidence in our continued operational execution. The pace of the recovery may vary due to the items we discussed on the prior slide. We are taking a cautious approach as we begin the year. Let's move to slide nine to discuss how these dynamics come together for our 2021 financial guidance. For 2021, we expect sales of $33.4 billion- $34.4 billion, which represents overall organic sales growth in the range of 1% to 4%, reflecting double-digit recurring connected software growth and the impacts of our announced M&A and divestitures. Segment margins are expected to expand 30- 70 basis points, supported by higher sales volume and our streamlined fixed cost base following 2020 cost actions with investments for growth. While we expect margin expansion across all the businesses, SPS will lead the pack as we scale up capacity and become more efficient, followed by Aero, driven by high-margin aftermarket recovery. These organic growth and segment margin expectations are consistent with our long-term commitments for low- to mid-single-digit organic growth and 30 - 50 basis points of margin expansion and give us flexibility to deliver earnings growth and invest for the future. 2020 was a challenging year. We'll be back on track to deliver our standard commitment to shareholders in 2021 and beyond. The net below-the-line impact, which is the difference between segment profit and income before tax, is expected to be in the range of $-130 million - $+20 million, which includes capacity for $400 million-$525 million of repositioning. We expect an effective tax rate of approximately 21%-22% and a weighted average share count of approximately 705 million for the year, representing our minimum 1% reduction in shares. As a result, we are guiding earnings per share of $7.60-$8, up 7%-13% adjusted. We see free cash flow in the range of $5.1 billion-$5.5 billion in 2021. That represents cash margins of 15%-16% of sales commensurate with the 2019 and 2020 rates that we have demonstrated, and a cash conversion in the 95% range. Keeping in mind that our conversion excluding non-cash pension income would actually be approaching 115%. Very healthy numbers overall. This range does include $375 million that we expect to receive in an upfront payment from Garrett, resulting from their proposed plan of reorganization. We'll continue to include cash receipts from Garrett going forward within free cash flow in order to be comparable to prior periods, where the cash proceeds from the indemnification and reimbursement agreement were recognized. Just to spend a minute on that topic, we are pleased that Garrett has agreed to the plan of reorganization under which they will be recapitalized and well-positioned to meet their obligations, including those to Honeywell, and will avoid costly litigation. We believe this is the right path forward that maximizes value for all stakeholders. Let's turn to slide 10 and walk through our 2021 EPS bridge. Segment profit is expected to be the key driver of our earnings growth. Higher sales volumes, commercial excellence, continued productivity improvements, and ongoing benefits from previously funded repositioning will contribute $0.54 per share at the midpoint of our guidance. The impact of our acquisitions of Sparta, Sine, and Rocky Research and the divestiture of the retail footwear business will drive a $0.07 headwind at the midpoint. Below the line and other items are expected to be a $0.22 benefit per share at the midpoint of our guidance, primarily driven by higher pension income in 2021 compared to 2020. I'd like to take a moment to discuss those pension dynamics in a little bit more detail. We expect approximately $1.1 billion of pension and OPEB income in 2021, up approximately $260 million from 2020, with the majority of this increase related to our U.S. pension plan. We have de-risked our U.S. pension plan to approximately 60% of plan assets being in more conservative, fixed income-like assets and the remainder in return-seeking assets. As a result of another strong portfolio performance in 2020, our funds returned approximately 14%, increasing our pension asset base compared to the prior year. This higher asset base, combined with lower discount rate, is driving higher income in 2021. Our diligent management and strong returns have been an important value driver for the company, putting us in a position where our pension-funded status continues to be robust, ending the year at 113%. For taxes, we expect an effective tax rate of 21%-22%, which would result in a $0.06 headwind per share at the midpoint. Finally, our base case is that our share repurchase program will result in a benefit of $0.07 per share as we reduce our weighted average share count from 711 million to at least 705 million shares. In total, we expect 2021 earnings per share to be in the range of $7.60-$8, up 7%-13% year-over-year adjusted, nearly back to 2019 levels. Let's turn to slide 11 for a preview of the first quarter. As I noted earlier, we're entering 1Q with a cautious stance as the environment continues to evolve real time, which is driving a wider than usual range for our quarter. We expect organic growth in the first quarter in the range of down 10% - 5% organically, which brackets our fourth quarter sales growth performance, recognizing market conditions could vary. The year-over-year sales decline will be driven by continued headwinds in commercial aerospace and UOP, partially offset by ongoing strength in warehouse automation, PPE, and advanced materials, as well as gradual recovery in other areas of the portfolio. Keep in mind, 1Q will be our toughest comp for the year across all four segments, since the first quarter of last year was only partially disrupted by the COVID pandemic. We expect segment margins in the range of 20.4%-20.9% in the first quarter, slightly below the fourth quarter, based on lower sales leverage, given our usual sequential step down in sales from 4Q, partially offset by ongoing productivity. That represents year-over-year segment margin contraction of 140 - 90 basis points. We have positioned ourselves with a streamlined fixed cost base for 2021 and expect sequential segment margin improvement from the second quarter on. The net below-the-line impact is expected to be between a $40 million expense and a $5 million benefit, with a range of repositioning between $100 million and $140 million as we continue to fund ongoing restructuring programs. We expect the effective tax rate to be in the range of 23%-24%, and the average share count to be approximately 705 million shares. As a result, we expect first quarter earnings per share between $1.68 and $1.83, down 24%-17% year-on-year. Let's take a moment to walk through our expectations by segment. In Aerospace, we expect first quarter global flight hours to remain relatively flat in the fourth quarter. We could see a step back in 1Q in certain regions given the flare up in infection rates over the holidays. As a result, we expect current softness in flight hours to continue impacting our air transport and defense aviation market sales in the first quarter. In addition, lower air transport OEM build rates and lower business jet demand will continue to impact our commercial original equipment business. We expect Defensive and Space to partially offset the challenges in commercial aerospace, supported by stable U.S. defense spending. In Building Technologies, we expect business conditions to remain similar to conditions in the fourth quarter. We don't expect significant issues accessing our customer sites, as I mentioned earlier, which will enable us to deliver projects as normal. Our strong building solution services backlog should drive growth in the quarter, and we expect demand for building products to continue improving. In addition, we expect continued customer momentum with our portfolio of healthy building solutions. In PMT, we expect continued customer CapEx and OpEx budget reductions and project delays to impact the engineering and licensing business in UOP and products and services in SPS. In UOP, we expect continued weakness in gas processing and lower catalyst shipments due to the lower production and refining volumes. However, we do expect to see some demand return in process solutions product services, and we expect another strong quarter from advanced materials driven by continued demand in Fluorine Products. Finally, we expect continued strength in SPS with another quarter of double-digit growth in Intelligrated and personal protective equipment. Our personal protective equipment backlog remains up triple digits year-over-year, and our Intelligrated backlog is over $2.5 billion, giving us confidence for the first quarter and the full year. For productivity solutions and services, we expect continued growth driven by market share gains and low inventory levels in the channel due to favorable sales out of distributors. While macro conditions continue to put pressure on the sensing and IoT and gas sensing businesses, we expect strong overall SPS sales growth for the first quarter. Now, before I turn it back to Darius, let's look at slide 12 and talk through the ultimate measure of our performance through this crisis, total shareholder return. We're creating shareholder value and outperforming the industry in the broader market in all environments. If you look at this chart, you'll see that Honeywell has shown remarkable consistency, outperforming both versus the XLI and the Dow Jones Industrial Average, indicative of the outstanding resiliency of the company. Investors can depend on Honeywell to generate superior return compared to the benchmarks, regardless of market timing, due to our rigorous and proven value creation framework as well as the Honeywell Operating System. This crisis reinforced the fact that our value creation framework, which we discussed at length in our December Investor Webcast, is highly effective in delivering consistent outperformance in all market conditions. In fact, this framework drove Honeywell shareholder returns above both the XLI and Dow Jones Industrial Average again in 2020. With that, I'd like to turn the call back over to Darius. Thank you, Greg. Before we wrap up, I'd like to take a minute on slide 13 to discuss one of the key elements of our overall ESG story. Last quarter, we discussed Honeywell's commitment to shape a safer and more sustainable future. This time, I'd like to focus on another important topic, corporate social responsibility. Honeywell is committed to corporate social responsibility and community involvement, which we demonstrate through unique global programs to work to improve lives and inspire change in the communities around the world. Beyond these programs, we acted quickly throughout the course of the pandemic to address the needs of our employees, communities, and customers. A few of our more recent actions are shown on the slide. Most recently, we announced our participation in a unique public-private partnership backed by North Carolina Governor Roy Cooper to help support the goal of 1 million COVID-19 vaccinations by July 4, 2021. We are partnered with Atrium Health, Tepper Sports & Entertainment, the Charlotte Motor Speedway, and the state of North Carolina to administer the vaccine, manage complex logistics, and to provide operational support for mass vaccination events. We're very proud to be part of this effort to prevent further spread of the virus by helping frontline workers and other members of our communities get vaccinated. Another recent example of Honeywell's contribution to our communities is the important mask delivery milestone we achieved in December. We delivered more than 225 million face masks that will protect workers in their response to COVID-19. We delivered N95 respirators and surgical face masks to multiple locations in the U.S. for healthcare systems, the Federal Emergency Management Agency, and the U.S. Department of Health and Human Services. We shipped millions of masks to both state and local governments. We're proud of these contributions and our role in providing much-needed PPE to workers around the country responding to the pandemic. We're also committed to recognizing and responding to the needs of our employees. We recently recognized the dedication and strength of our own frontline integrated supply chain production teams, who have been instrumental in keeping our manufacturing sites running safely, enabling us to meet critical customer needs during these unprecedented times. To show our appreciation, we announced a special $500 recognition award for each of our frontline production and production support employees. We continue to be inspired by the members of our integrated supply chain team, who have truly gone above and beyond to support our customers throughout this pandemic. Let's wrap on slide 14. There's no doubt that 2020 was a challenging year. We effectively managed through the downturn, the repercussions of the global pandemic by focusing on liquidity, cost management, strong operational execution, and investment for the future. We drove sequential improvement from the third quarter in sales, segment margin, adjusted earnings per share, and free cash flow, creating good momentum into 2021. The past year was another proof point that the Honeywell value creation framework delivers outperformance even in the most challenging economic and market conditions. We continue to invest in organic and inorganic growth opportunities in the downturn through high return CapEx and M&A, positioning ourselves for the future and the recovery to come. These growth investments will help us solve challenging problems for our customers, address critical global sustainability issues, and drive superior shareholder returns. I am proud of Honeywell's rapid and effective response to the challenges of 2020. Our employees around the world worked hard to quickly adapt and deliver through the crisis, including ramping up production of critical PPE, developing a portfolio of healthy solutions, and delivering growth in multiple areas of the portfolio. We are well positioned for a recovery in the second half of 2021 and beyond, as demonstrated by our expectation to return to our key long-term growth commitments in 2021. With that, Mark, let's move to Q&A. Thank you, Darius. Steven, give us a moment while we gather here for Q&A. Absolutely, sir. Okay. Darius and Greg are now available to answer your questions. We ask that you please be mindful of others in the queue by asking only one question. Steven, please open the line for Q&A. Thank you. The floor is now open for questions. At this time, if you have a question or comment, please press star one on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We ask that when you pose your question, you please pick up your handset. We will now take our first question from Nigel Coe with Wolfe Research. Please go ahead. Thanks. Good morning, everyone. Thanks for all the details on the guidance. Your 1Q sales guide, so I just wanted to dig into that. You provided some good general detail on what you're expecting, the midpoint 7% up, 7% down, very similar to what we saw in 4Q despite much easier comps. I'm just wondering, was there anything unusual in 4Q, any budget flushes? There's some speculation that there's some pre-order activity from other companies, et cetera. I'm just wondering if you're seeing tight supply chain causing some bring forward of demand that maybe causes the sales guide to be sort of essentially flat Q-over-Q with what you saw in 4Q. Yeah. I don't know that there was anything unusual in Q4. I think, obviously, we kind of see a continued ramp-up of our SPS business. That will continue, but it does start flattening at some point. PMT basically came out about as we expected. As we know, the UOP business particularly is lumpy, and the mix of the catalyst ship can vary dramatically. I think if you look at overall, COVID-19 is a big play in this. I would say, especially as you compare the COVID-19 situation early in Q4 versus where we are now, we're in a much worse place. Obviously that has some weight on that. Frankly, we really thought about whether or not we should guide Q1 at all. I think that we're in a place that the level of infection throughout the world is the highest it's ever been right now, and there's a lot of uncertainty. We thought we'd give sort of our best effort and provide a little wider range than normal to give our investors some of our best, really educated view of where we think we're going to end up. There's more uncertainty this quarter. Greg, I don't know if you want to add to that. Yeah. Even for all of us, traveling is a question mark. If you read The Journal this morning, they talked about the airlines, and concerns even in the U.S., about whether there's going to be testing requirements put in place for domestic travel. We know that that's been put in place already on international travel. Yeah, to Darius' point, I just think there are some things out there that are really kind of hard to predict. As I said in my remarks, the down 10 -5 kind of brackets, the down seven we had in the fourth quarter. The down 10 is in case something gets worse that we don't really concede at this moment. It could be better than that if things progress. No, there's nothing strange. We always have a fourth quarter to 1 Q, decremental sequential sales. Fourth Q is always our strongest quarter, so nothing unusual in there. Yeah, just to add to that, I think actually predicting that sort of in line is probably not that unusual. Then Aerospace, which obviously is our biggest business, the thing to consider there is, if you look at infection rates and the fact that at least in the Western world, you had holidays, the air miles flown could be actually down. We see that. Given some of the outbreaks that we saw earlier this quarter in China and Asia-Pac specifically is where we're seeing some pressure. That's sort of the puts and takes of the quarter. Thank you very much. We will take our next question from Steve Tusa with JPMor gan. Please go ahead. Hey, guys. Good morning. Morning, Steve. Morning. I wish I had time to read The Journal this morning. That's impressive you can read The Journal on earnings day. You must have it all wrapped up there. Just on the margin side, pretty decent margin expansion guided for this year. Assuming you guys do better on sales, would there be any reason as to why those margins would be weaker than you're guiding to? Do you think that if you do a little better on sales, you can still kind of convert it at this high level? Yeah. Steve, I think what we tried to do is position ourselves this year for anything. If we guided something we feel like is very much deliverable in that 30-70 range, and if sales actually turn out to be better, I think two things can happen. One, we could convert a bit of a higher rate. Two, we may invest more back in the business. We have some important things to get done in aerospace from an R&D perspective. We are funding some of that already. If things get better than we think, we could let the line out a little bit further. If you look at our conversion in the last three quarters of this guide, it's really converting at, like, 37%. Just the math says a 37% conversion rate in Q2 through four with this guide. We think it's a pretty strong rate of conversion as it stands right now, and we're trying to give ourselves optionality to both deliver earnings as well as make sure we've got some room for investments. Is that high 30s sustainable? Is that high 30s kind of a sustainable rate going forward? I think that remains to be seen. Again, we're very confident that now that this 30-70 this year gets us right back in the 30-50 long-term framework that we've been consistently able to deliver. That's what I guess I would say about that. I think a couple of points. First of all, Steve, if you take a look at our conversion rate for 2021 versus the deconversion rate or de-leverage rate, it's better, right? We project that in Q2 to Q4. The wild card in a lot of this is Aero aftermarket, right? That is probably the single hardest number for us to call because it is directly correlated to vaccinations and the speed of those vaccinations and rollout. If that comes in better than we're projecting, then obviously there's upside to the margin rates. If it doesn't, well, then probably going to be someplace in the mid to lower end. I think it's really important to note something else, Steve, which is, if you look at the upper end of our margin rate for 2021, we get back to 2019 levels. Basically, we're kind of taking a one-year break. Initially there were discussions about whether it would take us three years or two years to get back to that, and we're kind of getting both on the EPS range and so on pretty much to 2019 in a quarter. It's sort of a one-year break. As usual, we're trying to be prudent in our planning this early on in the year with this many unknowns, with the vaccine at levels the world has never seen. We're trying to embed that into our guidance, and obviously we're going to provide you more clarity as the year progresses. One more quick one. Will you guys pretty much track flight hours in commercial aerospace aftermarket, or will there be kind of a lag like some have talked about? There's a little bit of a lag, but there'll be a correlation eventually. As you know, those numbers are kind of correlated. As we track the flight hours traveled, yeah, there might be a bit of a lead lag, but the correlation is there. Thanks. We will take our next question from Scott Davis with Melius Research. Please go ahead. Hey, good morning, guys. Good morning. Good morning, Scott. I'll keep to one question, but hopefully, you guys can answer it a little bit more broadly than perhaps what I'm asking directly. Can we talk about Intelligrated and just the kind of how scalable it is? I mean, are your margins rising as you grow? I know the installer isn't necessarily all that profitable, but are you actually seeing an improvement in margin structure, perhaps because of the supply and demand imbalance, maybe better pricing that's leading to better margins? I'll just leave it at that, and if you can give some color there, that'd be great. Yeah, let me maybe start on very much that. I don't think we're expecting dramatic margin improvement in Intelligrated in 2021, and let me explain why. The reason is that we're just booking an incredible amount of greenfield projects. It was another incredibly robust year in terms of bookings. We expect double-digit growth again. Particularly, what's really important is to look at the ratio of our aftermarket business to our projects business. As you can imagine, that's not changing. If anything, probably the projects are growing that much faster than aftermarket. Obviously, that one's going to keep pressure on the margin. We should view that as a good news thing because as I explained this before, eventually, when the growth slows down, the growth rate will be slower, but the margin rate will be higher. We're still going to be very much in this greenfield expansion mode for the next few years, which means higher growth rates, lower margins, which over time is going to moderate to lower top-line growth rates and higher margins. That's sort of how that business is going to grow. What's really encouraging here is the amount of share that we're gaining in the marketplace. There's unquestionably, this business is winning and winning big in the market. Yeah, I would just add to your question about scale, that we talked about some of our growth investments, and some of them are here to scale this business. We are making investments in capacity and scaling up as we go, both here and in Europe. Again, that was also part of the plan as well, broadening our reach beyond just the U.S. That's a big focus for this team. The scale question is one of the biggest things that they have on their plate, and we're making nice progress. Okay. Good luck, guys. Thank you. Thank you. Thanks. We will take our next question from Andrew Obin with Bank of America. Please go ahead. Hi, guys. Good morning. Sort of continuing with sort of Scott's angle. Another business, you announced the deal with SAP on the building solutions, and you didn't provide a lot of details, but since then, I think Latch has published an extensive deck talking about very aggressive market growth targets. I was just wondering if, given that there is a competitor there with aggressive targets for market growth, if you could just talk about maybe in a little bit more detail about opportunities that you are seeing in sort of software on the building side as this business is evolving. A couple of things. Number one, we're seeing very strong double-digit growth in our Honeywell Connected Buildings offering. The SAP partnership is working. We're actually still innovating together. We're launching even more aggressively into the marketplace this quarter, next quarter, as we complete some of that joint innovation. Just to give you a perspective, across all of our business units, this will give you a hint as to how well this business did. Our Honeywell Connected Buildings business won the business unit of the year across all of Honeywell. That will tell you a lot about its financial performance. That business is growing as fast as any business we currently have. We're getting traction in the SAP partnership, we're also getting traction in the marketplace, because frankly, it's a gap that's unfilled. We don't think that there is anything out there that's as comprehensive in terms of our connected building solutions than what we have, which really covers the full scope of energy management, occupant comfort, safety, overall maintenance footprint. It's really comprehensive, just about anything and everything related to a building. That business is, think about high double-digit growth kind of numbers. Well, thank you. We will take our next question from John Inch with Gordon Haskett. Please go ahead. Thank you. Good morning, everybody. Morning, John. Darius and Greg, good morning. Under what scenario would PMT sales be negative in terms of your range, so the low end of your guide? I'm just thinking out loud, you do have auto build exposures in Fluorine Products, which is going to be really good. I would think there's UOP catalysts in reload likely next year based on pent-up demand. We've got commodity prices higher. I'm just wondering how that actually plays into your thinking for the segment. Both in terms of sales and margins. I think PMT detrimentals were about 50% or over that in the fourth quarter. Any color you can provide. I'm cramming a bunch of stuff into my one question, so there you go. Yeah, no. Thank you. That is good adaptation. Here, the answer is defined. This is all about UOP. Let's start with that, right. Advanced Materials, we're pretty comfortable with our growth profile. HPS, we've earned all roughly what we're going to do, which is grow. UOP is a little bit of an unknown, right. Because what we've seen can happen is that a lot of the catalyst loads or reloads get pushed out, or projects get pushed out. To give me some comfort is that our bookings in the backlog are higher entering 2021 versus what they were in 2020. I am cautiously optimistic. We're going to see the growth piece. We've also seen some push outs of particularly catalyst loads and delay in projects. If that happens, obviously we're going to have to see pressure from the UOP side. Frankly, the price of oil is at a reasonable number right now. It's not in the 30s or 40s now, it's in the 50s, which is quite receptive to investment. What worries me is that a lot of the big oil and gas majors who are our customers set their budgets just like we do in Q4 of 2020. They've announced some pretty big cuts. What we don't know fully is, are there going to be adjustments made based on the economic conditions, based on adjustments to those budgets? There is a point, there is definitely a pent-up demand because you can't underfund this marketplace for too long. Whether that happens in the second half of this year or 2022, that story is yet to be told. What we don't know is we still have a lot of sort of bookings that we expect for the second half that we have visibility to, but they need to land. That's why we provided the guide we did, because we don't know whether or not they will land, or they'll get pushed out to 2022. I have zero doubt, and I mean zero doubt, because I was in this business in 2015 and 2016, that there will be a big reinvestment cycle because you can't starve this market for so long. That's why it's sort of we can debate when it will come, but there's no doubt it will happen. Yeah. If I just, because you mentioned margins as well, I think the thing you have to keep in mind there is two. Number one, as Darius described, the catalyst obviously pretty high margin, that impacts our mix. Then the other thing is we are executing on a lot of the gas processing business that we had won back in 2019 and in 2020. A lot of that's in high-growth regions. You can imagine there's a lower margin aspect of some of that business as well that we're actually executing here through 2020. That's been an impact to the PMT margins when you take away the catalyst business and that becomes a bigger share of the overall PMT, or sorry, yeah, PMT mix and UOP in particular. Okay, just to make sure I understand. If a reload does happen, that's possibly very significant upside to the guide, but for now, you're not assuming that. I'm assuming PMT is probably kind of on the UOP side, sort of flat for the year. That's right. Is that a fair statement? Yeah, that's right. Right now those jobs are not booked in the second half. We have visibility. They're in the pipeline, but until they book, it's a little bit of an uncertainty. We expect them to, but could they get pushed out to 2022? Absolutely. Got it. Thanks for the color. Appreciate it. Sure. We will take our next question from Josh Pokrzywinski. Please go ahead. Hi, good morning, guys. Hi, Josh. Good morning. Just looking at the broader Honeywell software offering, connected and otherwise, I understand it probably varies by business, obviously a lot of different end markets there, but can you talk a little bit about how adoption has fared and customer conversations are going? I would imagine with folks starting to pivot back to growth or investment, as they expect COVID-19 to get resolved, that those should be accelerating. As you mentioned a few times, Darius, there's an awful lot of complexity and cases are actually worse. How is that adoption going, and is that trend line moving higher as people are thinking about kind of post-COVID-19 digital transformation? I'll be honest. I think we actually had a very reasonable year in 2020 despite some of the challenged markets we were in. Just to give you a couple of rough numbers, if you think about our overall software growth, it was mid-single digit even in the 2020 environment. For recurring growth, because frankly, we're sacrificing some top-line growth because we're really converting our entire Forge business, Forge software business, is only sold as a SaaS offering. That actually grew in the teens last year. That was a very good year, and we expect an acceleration on both of those figures for 2021. 2020 for me was a really good proof point that this business is a cyclical, and as we continue particularly to build that recurring revenue base, which is growing more than 2x our sort of traditional software base, it's going to be a great tailwind for the future of Honeywell and the future of that software business. With offerings like we just talked about in Connected Buildings and our cyber offerings, I'm quite confident that it's going to continue to grow at that kind of pace. The short story is we're seeing more traction and we're winning more accounts. Great. Thanks. Sure. We will take our next question from Julian Mitchell with Barclays. Please go ahead. Hi, good morning. Maybe my question would be around the free cash flow outlook. The operating cash flow is guided to drop, I think around $400 million at the midpoint, even though net earnings should be up probably high single digits. Just wanted to try and understand what's happening within that around sort of working capital. Is it the fact that you had that exceptional receivables tailwind in 2020 that has to reverse? Just trying to gauge how conservative or what assumptions you've got on that working cap side. I think that the CapEx is up, but only up maybe 10% or so. Sure. As we discussed the 5.1 - 5.5, just to ground out the numbers, that's 15%-16% of sales, pretty similar to what we just did at 16%. It's 95%-98% conversion, approaching 100%, and it's 113%-115% conversion extension. Just keep in mind relative to the basic metrics, they're pretty healthy numbers. As it relates to working cap and what's happening there, obviously sales came down substantially this year, and both with some transformation and effectiveness in our process as well as harvesting receivables, we had a very big cash flow from AR this year. We started to see some of the inventory come down in Q4. For the year, it was still a build. When we think about next year, that's the area that I expect us to make more progress is on inventory and start seeing some inventory reduction, again, even in the face of sales growth. I think you're going to see we're world-class on payables. We'll continue to make some steady progress as we do each year. We'll make some progress on our programs around transforming on our credit to collections aspects. I would expect we'll make some more progress on past dues and DSO, but the big effort is really going to be focused around inventory in 2021. Yeah. I think I would classify our cash conversion in 2020 as exceptional. I mean, 105% conversion and 120% if you would exclude something very positive, which is the fact that we're one of the few companies that had substantial pension income. We might be going from exceptional to very good. Frankly, the receivables performance was outstanding. We're not sure if that can be replicated. We're certainly going to try, but we're going to focus on some other elements. I'd also say we've done a nice job on advances on build, too, in terms of 2020. I thought that this performance on cash was exceptional. If you'd really take a look at, especially if you adjust for pension or take a look at our cash generation as a percent of our revenue, you'll find that we're in the top quartile performance. Yeah, we used to live down in the 11%- 12% of sales, and now we've been posting 17%, 16%, 16%. Yeah feel pretty good about what we've done here. Yeah, hopefully by now it's sort of clear that this is not luck and it's not a one-time phenomenon, that this is actually a repeatable event. Great. Thank you. We will take our next question from Jeff Sprague with Vertical Research. Please go ahead. Thank you. Good morning, everyone. Morning, Jeff. Hey, good morning. Maybe a quick one on pension. Agreed, the conversion numbers look great, especially if you adjust for that. The fact that you're now so overfunded, is there a way through an insurance company or something to actually kind of extract monetary value from the pension? When you speak of it as kind of a value driver, are you really kind of talking about, A, it's great that it's overfunded, and B, you can use pension income to basically offset restructuring or other kind of cost-related actions you might be taking? I guess I would say a few things. We're always looking at options around the future of the pension plan, that's something that we look at constantly. As far as value creation, I view it in two ways. Number one, it's a risk mitigator. Other companies are having to pile cash into their pension plan because they're unfunded. We don't. I can't remember the last time we put anything substantive into our pension fund, which obviously would take away from our ability to deploy capital into things that are going to drive growth. That's when I say it's a value driver, particularly vis-à-vis others. It's a huge value driver in that case in particular. Yes, it's 113% funded. I feel great about where that is. Even if we were to have a bit of a market downdraft, we would still be in a very good position in terms of that funding level. To me, the team has done a terrific job of managing the pension and the returns around it for a very long time, and it has absolutely been very good for us and for our balance sheet and our liquidity. Yeah. Jeff, maybe a couple other things to it. There is really only two ways you can sort of monetize this. The one way is obviously if there is no more people in the pension plan anymore, which frankly, it is a couple of CEOs from now. The other way is you could sell it to potentially an insurance company and so on. There is a big premium on that, so financially that doesn't make a lot of sense to do that right now. I think what our investors should really remember is that when they think about pension, particularly given the de-risking that we have and the amount of fixed instruments that we have now, this should be completely worry-free for them, because even a huge adjustment in the stock market is not going to put us in peril. I just think that this is sort of a safe haven in terms of an area that frankly, is a big question mark for a lot of companies out there. For us, it's a big positive, and it's going to stay that way for the foreseeable future. Great. Thank you. Steven, let's take one last question, please. Yes, sir. We will take our final question from Joe Ritchie with Goldman Sachs. Please go ahead. Thanks. Good morning, everybody. Thanks for fitting me in. I have a little bit of a longer-term question, actually, on the UOP business. How do you think about that business with the backdrop that you've got, EVs are obviously going to become a much bigger portion of the market going forward. There's going to be some biofuel conversions. How are you thinking about that business kind of structurally more longer-term? Yeah. Good question. Good morning. 2x. The first one is the world, obviously, the world of energy and how energy is generated is going to change over time, and the direction of that is clear. It's going to be renewables. Energy is going to become much more prevalent part of this future. It's also not going to be immediate. It's not going to happen in 2022 or 2023. It's going to be slow, gradual progress. A lot of the things that UOP still does will become relevant, particularly with a big part of that business being around gas, natural gas, which we know is the cleanest of the hydrocarbons. That's phase one. I think that we got to continue to serve our customer base. Frankly, many of them will be transforming in terms of how they provide energy to the world. The second part, as you know, we've launched a new business within UOP called the Sustainability Technology Solutions business, which is going to become a bigger and bigger part of the UOP portfolio. It really has three primary growth levers. One is energy storage, which is economically feasible and viable, and we're building and deploying our first prototype of that this year. It's not a dream. Two is 360 degree plastics recyclability, which also we're going to be deploying some technology this year. Last one, where we're really the pioneers, which is Ecofining, which is going to become a bigger part of the refining footprint. We've got three this is under one business umbrella, and that's going to become our growth engine for the future. What I envision happening is potentially longer term, some of the more hydrocarbon-oriented offerings will slowly, and I emphasize the word very slowly, decline, while our Sustainability Technology Solutions business will grow very quickly. That's sort of how I see that business evolving. This is another place we're investing, put our dollars to work, and we're excited about the future and the kinds of solutions that we have. As you know, we don't have better scientists anywhere in our company than in UOP when it comes to material science. I'm quite confident that some of these technology breakthroughs will work and will really enable a path to the future energy footprint of the world. That's helpful. Thanks, Darius. Thank you. This concludes today's question and answer session. At this time, I'd like to turn the conference back to our speakers for any additional closing remarks. Thank you. I want to thank our shareholders for their continued support of Honeywell throughout the macroeconomic challenges of 2020. I am pleased by our execution throughout the year, proving that we can and will outperform in all economic conditions. We are well positioned for the recovery, and I'm excited for the opportunities to come in 2021 and beyond. Thank you all for listening, and please stay safe and healthy. Thank you. This does conclude today's conference. Please disconnect your lines at this time and have a wonderful day.