Thank you for standing by, and welcome to the Honeywell Fourth Quarter 2023 Leadership Webcast. At this time, all participants are in a listen-only mode. Please be advised that today's call is being recorded. I'd now like to hand the call over to Sean Meakim, Vice President of Investor Relations. Please go ahead. Thanks, Kevin. Good morning, everyone, and welcome to the fourth quarter 2023 installment of the Honeywell Leadership Webcast Series. The purpose of these webcasts is to provide our investors with the opportunity to hear from a wide range of Honeywell leaders on topics of special interest. For example, in March, we hosted a discussion on the many ways that Honeywell is driving decarbonization for ourselves and our customers. These webcasts are available on our investor relations website. Today, we'll host a discussion on Honeywell's upcoming realignment and other key topics with our senior leadership team. Joining me today from Honeywell, our Chief Executive Officer, Vimal Kapur, and Senior Vice President and Chief Financial Officer, Greg Lewis. In addition, we have Nigel Coe, Managing Director and Senior Analyst for the electrical equipment and multi-industry sectors at Wolfe Research. This webcast is available on our website at www.honeywell.com/investor. Honeywell also uses our website as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our investor relations website in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media. Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and our business as we see it today. Those elements can change based on many factors, including changing economic and business conditions, and 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. All right, with all that out of the way, good morning, everyone. Vimal, Greg, thank you for being here today. Let me first start by turning the call over to Vimal for some opening remarks. Yeah. Thanks, Sean, and first of all, welcome, Nigel. Thank you. Thanks for hosting this webcast today, and welcome, everybody, on the call. Six months into the role, coincidentally, today, I started my job on June 1, and today is December 1, so 180 days. Nice coincidence. I talked about my four priorities during our main Investor Day. I'll just start with a quick update, and we'll open up for Q&A to Nigel. So four priorities I talked about was, first, simplification of Honeywell. Second, how we make higher growth orientation in Honeywell, make it more growth-oriented portfolio and business. Third, portfolio optimization work, rejuvenation of M&A process, and finally, continue to work on Honeywell Operating System. So those are the four priorities, I identified when I kicked off the role. I'm making good progress in each one of them. On simplification of the portfolio, we announced a realignment of the Honeywell portfolio into three mega trends: energy transition, automation, and future of aviation. We'll talk more about what it means and where we are headed with that, but I feel pretty excited with that move on simplification. On growth orientation, I have specifically put in place three actions which are going to enable Honeywell growth. How we accelerate our new product introduction. Number two, how we continue to drive our growth in high growth regions. And number three, how we monetize our install base with services and software more actively. So that's... Those actions are already in place, and I feel pretty good about it. Number three, the portfolio rejuvenation work is important. I'm very sensitive that we have to build a higher quality portfolio. That will happen with the additions and subtractions, and I look forward to the discussion on that, actions we are putting in place on this. And finally, Honeywell Operating System. Honeywell Operating System has done a great outcome for Honeywell over the last several years, but we are not yet done. There's more opportunity to keep enhancing our capabilities as a company with operating system, and we are in version 3.0 of Honeywell Operating System, which we now call it as Honeywell Accelerator. So when I put these all four priorities into execution mode today, my confidence factor on taking Honeywell to the next level is very high. I feel we are heading in the right direction. Not only we're gonna have good 2023, good 2024, but many years ahead, we are programmed for a pretty good runway ahead for us. With that, I'm gonna pause here, Nigel, and I'll open up for you for Q&A. Thank you very much, Vimal, and it's great to be here. Thanks, Greg. Thanks, Sean. Thanks, Rina. So I'm glad that you set the table that way because a lot of the questions I've got are addressing these topics, so we're gonna double-click into some of that. So I thought we'd keep it a little bit high level to begin with, and then perhaps get into the businesses and then maybe wrap up on 2024 and how you're seeing 2024 right now. You know, you mentioned some of the changes that are happening. And you know, we see the segment realignments, we see the new leadership, et cetera. But you know, what's actually changing day-to-day to accelerate growth, to improve efficiency, you know actually at the business level? Yeah. So to drive a different growth orientation, the simplification of Honeywell is a very important step because it provides us strategic clarity on what we are and what we are not. So by defining the three megatrends on which we want to align, gives us a clear direction on organic and inorganic growth actions. The future of aviation, automation, and energy transition defines Honeywell. So that makes everybody a North Star, that there's this is how we really want to grow. Each of these segments are sufficiently large. Collectively, we estimate Honeywell SAM to be $650 billion between all these three segments, and they grow at around 5% on an average. So the baseline is good. Now, specific actions we are putting in place are three actions, which I want to spend a couple of minutes. The first is innovation playbook. How we invest our R&D dollars to make sure that we are growing our portfolio in the right direction, and our product vitality allows us to keep or grow our share in the markets. So spending that R&D dollars in a much more smarter manner, and we spend $1.5 billion of Honeywell money alone, plus there's a customer money, we customer-funded R&D we do. So making that process more robust is my first action to drive growth. The second action is on high growth regions. Honeywell has 25% of its revenue from high growth regions. We have grown typically 10% in high growth regions. I believe that we still have momentum to grow at that rate in the years ahead to come, so we are going to continue on our execution in High Growth Regions. I want to clarify that High Growth Regions for us doesn't equal to China. China is important country for us. That's, you know, out of $9 billion, little over $2 billion. So we have very good presence in Middle East, in India, in Eastern Europe, et cetera. So it's a combination of countries which present that opportunity. Number three is the third action we are taking is how we monetize our installed base. We create large amount of installed base by shipping our products and also delivering projects. Now, monetizing the installed base, both through services and software, is integral part of our strategy. On the software side, Honeywell Connected Enterprises actions have been in place for a while. It's doing extremely well. 15% growth in our software portfolio year-on-year is very impressive, but equal amount of focus I'm driving an organization on services, at how we drive service contract renewal. We invest more R&D dollars to make sure that we are able to drive modernization of our install base, new product, share of wallet strategy there. So all those three coming together, three actions, is more of a self-help for us in addition to the end markets, which I believe are very, very strong. Now, what are we doing differently on a day-to-day basis is, both myself and Greg, we have changed operating system on how we spend our time. We have made more space for our available to put more attention on growth-oriented action. Not to state that operation will not be our focus. I'm not gonna leave that message here. It's an adjustment to be made that we put equal focus on operational execution and growth orientation, and that's what we have changed. And finally, we are also changing, effective January 1, incentives for our general managers and other roles to make growth as a higher priority. We believe we need to measure people to what we are saying, and that will be another important factor into our playbook. So compounding it all together, we're hearing an awful lot more about AI right now, and I think there's this maybe this notion as a bit of a bubble, perhaps a lot of hype. But just... I'm just curious, you know, from a Honeywell perspective, you know, to what extent are you using AI tools day-to-day? And then Quantinuum, how does Quantinuum sort of play into this kind of world? Yeah. So AI has a natural fit for Honeywell. We are a controls and automation company and naturally have access to the customer's data, and our investments in Forge platform through HCE has built a pretty strong base on how we will evolve to use data in the future. So today, our applications are solving several customers' problem, but AI is going to accelerate using the data we have through our install base. One thing I strongly believe in, that Honeywell is going to lead the industrial world in a concept of autonomy, because the biggest challenge our industrial customers have in Aerospace, in process industry, in buildings and warehouse, is lack of skilled labor. The skilled labor shortage is a real problem, and autonomy is a combination of AI and the data we have, to give them the tools so they can really make that problem less intense. There's no scenario I imagine that a process plant is running without people or a plane is running without people, but it can reduce the tasks with autonomy architecture we have built in. And I clearly see, you know, in my growth actions I talked about, the whole monetizing install-based story, this really fits in really well. So we are actively looking at new products, leveraging AI. We actually, just yesterday, made an announcement in our Aerospace business, working specifically in Europe on autonomous, you know, operation in the, in the cockpit. So that's a great example. At the same time, we are equally excited about use of AI internally. We are one of the early movers on how to use AI in product testing, product coding, customer experience, technical support, the range of actions. And what I can share with you, Nigel, is that we're gonna see pretty substantial productivity benefits in 2024, because we are—I believe we are ahead compared to many, you know, larger markets because of our data work we have done over the years. So we are more ready compared to the wider market to, to take benefit of that. Great. Yeah, and on the engineering side, as you mentioned, it's almost similar to the way we spoke about when we established our Honeywell Technology Solutions arms, you know, in low-cost countries to create more capacity. Same thing here. I mean, what Vimal's talking about is going to expand on the capacity of our 15,000 engineers, and give us even more ability to go pursue- Yeah. you know, some of our NPI. On your question of Quantinuum, we have stated publicly that we would have a plan to monetize our investment in Quantinuum in next 12-18 months time. So those plans continue to get under execution. Our first important step was this year that we are hitting the technical milestone, because unless I don't hit it, I think everything else is hypothetical, 'cause this platform has to work to its intended purpose, and we have made progress what we committed, and that's validated by the right people, that Quantinuum is delivering the capability we committed. We hired a new CEO about 6 months back, roughly, and his remit is really to execute this transition plan on the new state of Quantinuum, what's the right ownership to it. As we speak, we are putting those actions in place to test the enterprise value, and then take the subsequent steps in 2024. I think all things in, I would give ourselves 12-18 months time window for, transitioning Quantinuum to its future state. The reason we believe that is, it's a great example of seed planting by Honeywell. We did that to create a new set of technology, but this, we believe that we have added value to the extent we have at this step, and now the rightful owner should own it to continue to progress this technology. And by the way, if you think about, you started the conversation on AI, if ever there's a place where AI is going to be- Absolutely. Relevant, it's going to be with quantum computing and Quantinuum. Great correlation between AI and quantum, and that's what we are hearing from different customers. Okay. That's great. Greg, do you want to quantify the benefits, the productivity benefits from AI in 2024? Yeah, I mean, we're expecting tens of millions of dollars of opportunity of either, you know, savings directly or additional capacity by being able to do more requests. And as Vimal mentioned, think about engineering, customer service, a number of other, you know, places where that foundation that we have laid with our data platform is gonna allow us to go do that. Okay, great. Thank you. So let's get into the portfolio and the businesses. You know, obviously, you announced the realignments in October. Mm-hmm. You know, a skeptic would say, "All right, you've moved one business, into SPS, you've changed some names. What actually changes?" So maybe just talk about that. You know, what, what do you think this does for Honeywell? Yeah. So, I think it's important to say where this decision came from. You know, I had an opportunity to run HBT from 2018 to 2021, and what I felt really good was that it's a business in one segment. It's much easier to define the strategy and execute the strategy because of the clarity of the purpose, not for me, but for the wider, you know, 20,000 people. When I went to PMT, I realized that PMT has a combination of energy assets and automation assets. So clearly, it was tough for me to balance my time and develop the strategy, which was coherent, which made me think about what's the easier way to drive execution in Honeywell, and that drove this decision. So first, it's based upon real experience and real success, not because I thought it's a fun idea to do it that way. Now, the three megatrends are macros we strongly believe in them is how we are aligning in this portfolio now. Automation is gonna be nearly $17 billion of Honeywell into the two segments of industrial and buildings. Energy transition is gonna be $6.5 billion segment, and then Aerospace is about $13 billion segment. Each of them grow at about 5% CAGR, and the market sizes are pretty attractive. So it lays the platform of what Honeywell future would be. The organic growth strategies are far more clearer because we want to be these three things. The inorganic strategies are far more clearer because now we are pivoting our M&A strategy to further strengthen this team. So if anything else, we will do both addition and subtraction, which take us to this direction. So my conviction that this change is gonna enable Honeywell growth is extremely high, because I've seen success in buildings, I've seen success in Aerospace. Aerospace business is true in its model of having a singular segment, clear strategy high growth, you know, margin expansion you have demonstrated. So those examples gives me a confidence that we are going to do that in industrial, and we are going to do that in Energy and Sustainability Solutions. So much clearer alignment with strategic priorities. And I think it's fair to say that one of your goals and strategies is to accelerate the M&A pipeline- Yeah. and deploy more capital. Mm-hmm. And I'm sure this is part of that strategy. So maybe just talk about that, Vimal, in terms of, you know, kind of the process of getting more deals through the pipeline- Mm-hmm. you know, with these three, obviously, priorities. Yeah. So, you know, these three priorities gives us a north star on how to think about acquisitions. But fundamentally, I look at M&A strategy to improve the portfolio quality of Honeywell. That's how I, that's how I think about it. We are looking for acquisitions which are bolt-on because they complement the business. So I have a business X, they have an organic growth strategy, and there's a strong belief that when we add this extra asset to this, not only that asset brings revenue, but it compounds the growth of the base business. That's the fundamental principle. That's why we emphasize bolt-on acquisition. The bolt-on acquisition, enterprise range, value range is $1 billion-$7 billion. So it means that revenue we bring in is anywhere from $150 million- $1 billion and a change. So that's the principle on which we drive, you know, execution. The types of M&A you can think about is gonna be more, of course, it'll vary by segment, but in Aerospace, think about bringing new technology. Because we have a good position in each of the segment we address, but we're looking for more technology vectors where the world is going in future of aviation. Electrification is a big deal in Aerospace, so do we have all the portfolio or do we need to do anything? Same is true in our Energy and Sustainability Solutions business. We have pretty strong portfolio, but we don't have everything required for energy transition, so can there be some attractive opportunities there? And in Automation, we feel the sensing is very attractive. We have a very good position in sensing. We'd certainly like to increase our position in that. We also have a good position in software, in automation, so we have done a great job of, organic growth. We did make acquisitions like Sparta, so we keep looking at software additions into our portfolio. So I think that's basically, the blueprint. Our pipeline is, way better today what it was one year back. The activity level is high. We are working very hard to increase the level of activity because it's the best way for us to give more outcome on M&A. I can't make a commitment on number of deals unless I don't have 10, 15 things to really play on. Final comment I'll make is that the M&A strategy is highly focused on bolt-on. We are not looking for any transformational M&A. We have a pretty strong conviction on three megatrends on which anyone wants to stay aligned. Within that, we will flex ourselves, and I don't see any necessity for us to go around and chase some different directions. Yeah, and Anne laid out, and Matt laid out in the Investor Day, that whole pipeline process, you kind of saw the way we've worked the funnel. To Vimal's point, we are expending a lot of energy around that today, so there's a lot of activity in that funnel. You know, we've done a few deals this year. You know, we've spent close to $700 million on a few things. Not super sizable, but, you know, they're more tuck-in like, and give you a little bit of a sense of the kinds of things, you know, Vimal was describing with, you know, Compressor Controls. Again, very much a business that looks like what we do, but opens up a little bit of an adjacency. You know, we made the acquisition on the heads-up display technology in Aerospace that's gonna go along with some of the cockpit, you know, technologies and offerings that we have. And then, of course, we did the SCADAf ence deal in HCE. So, you know, it's... These themes are real, and I think you're getting to see a little bit of a- I think SCADA fence deal is a great example of the compounding effect. I mean, in the end, it is a small asset we acquired earlier this year. Our cyber business is already in $hundreds of millions. We believe this is gonna keep compounding our cyber business in a 15%-20% range every year. So that's my whole point. It's not that deal value is small. The base business, which is hundreds of-- if they keep compounding with this acquisition higher, that's why we acquired it. So sometimes, you know, the bigger picture can get lost to say, "Oh, this is only a small deal," but the compounding it creates on the base business is pretty impressive. And we're already seeing some impressive results with the SCADAf ence acquisition. We always had a strong position in OT Cybersecurity, and this is gonna make us even stronger player on widening our execution in OT Cybersecurity space. That's great. Maybe talk about subtractions now. Mm-hmm. So, you laid out, I think it's at the I Day back in May. I think relatively surgical, you know, maybe work on the portfolio going forward. Mm-hmm. Maybe just bring us up to speed in terms of where you are in that review process. So, the first step is when we define our alignment to megatrends, it clearly tells us what doesn't fit into it, and that's roughly is about 10%. There is no one big, big thing which makes that 10%, so, I'd like to clarify, there's not gonna be any spins like Garrett or Resideo. There is, but there are smaller businesses or meaningful product lines, and where we are executing is prioritizing what makes more sense from our shareholder returns perspective. And when a business is ready on a certain metric, we like to execute the process of its, you know, divestiture from Honeywell. A good case in point is, as I shared with you, like Quantinuum unless it did not hit its technical goals, there was no point for us to start the process. It's going to be, you know, not meaningful for our shareholders. So that's a great, good example how we think of other assets. It has to have a certain milestone. When the milestone is hit, we are ready for the process. Yeah. Businesses have to earn their place in the portfolio. To Vimal's point, that's something we look at each and every year. Yeah. We know what that waterfall looks like. We've got metrics around the health of those businesses, and again, to ensure that we get the value for any of the things that we'll exit, we want to make sure the business is, you know, in a healthy place and the markets are receptive to deals at that time. Okay, that's great. Maybe just to touch on some of the business trends now. Mm-hmm. So let's start off with Industrial Automation. Mm-hmm. A new name for. Yeah, the new name for SPS and process. Yes. Obviously, the legacy SPS segment has gotten a lot of attention. Big decline this year, 15% or so. Mm-hmm. The outlook for warehouse starts next year still looks pretty dismal. Mm-hmm. I would say. But then we've got some channel headwinds that we're hopefully not gonna have next year. So how should we think about how this business develops, the SPS business, in the next 12 months? So, let's kind of first look at what the new IA segment is all about. To me, there are five distinct subsegments within IA. We have our process automation business, we have our sensing business, our scanning business, our safety business, and then Intelligrated business. So there are five components of it. The first and important step for me is to look outward to say what we really want to build, taking these very critical assets, what we already have. So expect from us a reveal sometime in 2024, what's the new strategy for IA? I, our baseline is pretty strong because of the capabilities we have, but it's a great opportunity for me to think about what do we do next, as a next step. Part of it will be thinking about synergies, which it brings in. There are clearly synergies in technology, 'cause SPS businesses had a lot of products which are software-oriented, hardware-oriented, same as HPS, so there are clearly technology synergies, and there are synergies in supply chain. So all that reveal will happen in next few months when we are able to build a strategy. To your specific question on 2024, I would say that the short cycle recovery is an important element of SPS performance and future IA performance. HPS has carried forward pretty good backlog, so they are certainly going to help the new segment, and I do expect that IA segment on totality will grow. Intelligrated, in particular, it's gonna be less than 15% of the new IA segment so... But I do expect that to have more of a flattish year. Your point is valid. The market is still not spending a lot of money, but we see a lot of momentum in aftermarket in Intelligrated. Where it is helping us is, as I look about 2024, I look at Intelligrated as a margin expansion story for IA and for Honeywell, because we have better quality backlog. It's more diversified customer base now. Historically, we were, you know, dependent on one or two big customers. That's not the case anymore. Our aftermarket services business is more than $500 million now. It continues to grow 15%, so that's an important element of the margin expansion there. And finally, we have taken some very major supply chain actions to drive productivity, which flow in on a full year basis. So even in a flattish year scenario, the margin expansion story in Intelligrated is gonna be good. All that put together, you know, we should have a good year for IA in 2024. Yeah, and the warehouse space, particularly like you said, the market outlook's not great. We're not we don't have a different call on that. Yeah. But given the concentration that we did have in terms of the customer base we were serving before, to Vimal's point, you know, we are going into different end markets and a different customer set. So there's a little bit of a benefit we're getting just because we're trying to diversify that a bit. But if you think about it, this business has grown on a CAGR basis, 10% since we bought it. I think the long-term outlook for this space, you know, 8%-10%. Yeah, absolutely. Is not unreasonable to believe. Yeah. Okay, that's, you know, with the pandemic, you know, which, you know, whipsaw that's happened, that's not gonna happen in 2024, but certainly when you zoom out, longer term, we still think it's an attractive end market. But longer term, I look at IGS business, Intelligrated business, as more of continue to expand margin story. Because the baseline is low, we are, that's the reason we bought it, monetize install base more, we've taken other actions. So really, that's how I think about this being a part of our margin expansion story. Great. Moving on to ESS, Energy and Sustainability Solutions, slimmed down PMT, if you will. Obviously, UOP becomes much more central to this business. And I think most investors would lately say, you know, UOP is an all-in gas play. But, it feels to me like there's a pretty significant, you know, new energy story there—Yeah—be it LNG or hydrogen. So maybe just talk about how you see the sort of the yin and yang of, old energy, new energy playing out. So, so to me, the energy transition is always an and question, not a new quest, not an or question. The old energy will be sustained for a while till the new energy molecules start penetrating, in our daily lives, and that's the strategy we have been executing for the last couple of years. UOP will grow nearly 10% in 2023, as we have seen the performance in the first six quarters on a runway to do that, and it's gonna carry forward pretty impressive backlog for 2024. What it is driving is, the reason of the good performance is the base business continues to perform well, specifically on aftermarket, on catalyst. The demand remains high because people are running their plants harder, and the demand for catalysts remains strong. The new energy vectors are slowly scaling. We have seen scaling of biofuels/sustainable aviation fuel since 2022. We have now licensed about 45 projects. Think about that as the billions of dollars of life cycle value of these projects from license fee, engineering fee, equipment, catalyst, which will flow over the last 15, 20 years. I see the inflection coming in future years on hydrogen and carbon capture. IRA is certainly helping for customers to think about returns because it certainly enables a return, but it's in a stage where biofuels were three or four years back, where there was activity was strong, but decisions were less. So all in all, I believe the Energy and Sustainability business is in a right position of energy transition, so the current energy position stays while the new energy position grow. And one of the commitment we had made is Sustainable Technology Solutions business within UOP will be $1 billion by 2026. We are directly in that path. Our bookings remain very strong to support that projection, which means that, which makes me confident about the overall UOP growth. So I would like to absolutely clarify that, you know, UOP is not an oil and gas business, it's an energy transition business. You know, Honeywell has a great set of portfolio, but this will be one of my top, you know, priority in terms of where I believe there's a lot of momentum in growth in the years to come ahead. Yeah, and again, the UOP technology is, I think you know, separation technology, catalysis and that licensing model, that's gonna play through- Yeah in the new energy sector, you know, just as well, and there really aren't other competitors who can deliver the technology. That's the important point here, Greg made. We are not changing UOP business model. UOP licenses technology and then monetizes its install base through catalyst. Just because we are moving from traditional energy to new energy, our business model hasn't changed. The same thing, the margin rates haven't changed, cycle hasn't changed, but we are selling different offerings now. Fundamentally, that's a shift, and the business margin rate and growth projections remain pretty attractive. And then on the, you know, not to take away from advanced materials, but the Fluorine business also continues to be extremely strong, and, you know, I think that's another one we're pretty excited about in the future. And, you know, Ken having now run both of those businesses- Yeah ... you know, his strategic clarity on what he wants to do here, you know, I think is quite good. So we're looking forward to- Yep the impact that he's gonna have as he takes control of Great You know, the entire portfolio. Time is running by here, so, I do wanna touch on 2024. Mm-hmm. Before we do that, maybe some perspectives on the Aerospace cycle. Mm-hmm. I mean, I think investors feel very comfortable with the OE side of the commercial market. Mm. Aftermarket- Mm-hmm Maybe some concerns on 2024, perhaps. Mm-hmm. Defense, supply chain, et cetera. So So maybe just fill us in on how you see the moving pieces, progressing here. I know, as I said, OE demand remains pretty strong. 2023, as you've seen our results, we are growing double digits in aero. We expect strong Q4 also from Aerospace, 'cause OE demands remain high. Aftermarket, we still not pre-COVID levels of 2019, so there's still some runway left on aftermarket, on commercial aero side in particular. Defense and Space growth is pretty impressive. Our orders rate growth is 30% in Q2 and Q3, and quote rates are pretty high, so which means this momentum is continuing. There are two underlying reasons. One is unfortunate war in two places, and second is many countries have committed GDP growth of defense budget to their GDP, so they are really driving our Defense and Space business. Finally, I would say the Urban Air Mobility is a future growth vector. I don't want to undermine that. We have, you know, $10 billion of wins in that business, at the right time, when the approvals will come through, that it'll become 2026-2027 timeframe, the fourth revenue stream: commercial, business jet, Defense and Space, and Urban Air Mobility. So I can't feel more bullish about Aerospace. The outlook looks very promising for the years ahead. Yeah, and the supply chain, you know, while it's not gonna heal as fast as people would like, you know, keeps making sequential progress quarter over quarter, year over year. That's what's helping us deliver, you know, 20% output growth, and Vimal's point, mid-teens, you know, revenue growth. That, that labor shortage is gonna be... It's, it's industry-wide, and it's gonna be with us for a few years. So as we go into next year, we're probably gonna continue to grow past due backlog. We're, we're having more output, but the, the order strength Vimal is describing is probably gonna have our past due backlog continue to grow. Bad news is, you know, we're not gonna have the, the straight up vector. The good news is, we've got a multiyear growth path, that we feel very confident in. Okay. So it sounds like the revenue outlook for 2024 looks pretty good overall. Urban Air Mobility, when do we start to see some commercialization in that business? I would say more like 2026-2027 timeframe. Okay. That's where the testing of the different platforms is happening. I believe that the need is compelling. Every time I go to New York, I think we need Urban Air Mobility. So we were walking on the streets two days back. As we were jumping out of the car. Right. Yeah. Jumping out of the car. I think we need it, but hopefully, FAA hears us out and approves it. This mobility would help. Yes. So 2024, let's just talk about the framework. But before we get onto that, Greg, you know, I think you reaffirmed guidance in- Yep the slides on the Yeah any, any kind of color. So yeah, just to clear the decks there, I mean, we're, you know, we're, we're just entering December. You know, half our quarter happens in the third month, so we still have 50% of the way to go. But yes, as you mentioned, we've reaffirmed guidance for the quarter and for the year. We feel good about, you know, how the, how the finish is, is gonna go here, and it'll set us up well as we enter into 2024. Great. That's, that's fantastic color. So, you know, back in October at the 3Q earnings, you kind of gave us a broad framework for 2024. Any sort of evolution in the way you think about the macro or the business trends, Vimal? As we said during our 3Q earnings call, long cycle backlog remains strong. Our long cycle backlog up 8% end of Q3. The orders rate for long cycle continues to look good, and I do expect that 8% number, if anything, will only get slightly better, which will position us well for 2024, carrying that backlog. The short cycle remains, you know, to be seen, to be determined, and where the short cycle will pivot in 2024 will really determine, you know, we are at upper end of our long-range guidance of 4%-7% or lower end. You know, that's kind of the variable factor. The self-help we are driving to improve our performance, in spite of these conditions, is three things I mentioned above: executing on new products, how we monetize our install base better, how we do grow in high-growth regions. It's in our control, so we are going to drive those actions to deliver better results in spite of whatever is there in the end markets. And, that's how we are thinking about for 2024 ahead. Okay. So it sounds like the 4%-7% still feels like the, like the right range, depends on where you're going to be- Again, just to be clear, we're, you know, that's not formal guidance. We'll do that in about 60 days. 60 days, yeah. You know, the framework there is just meant to be kind of directional in nature, and we'll be a bit more specific as we, you know, get into the end of January, early February time frame. But it's, I think it's illustrative of what you'll see from us. Okay, great. And again, just thinking about the sort of the broad sort of moving pieces, we still have PMT and Aerospace- Mm-hmm. at that, at sort of the upper- Right. -side of the curve, and then, and then, And then the products businesses will probably progressively get better as the year goes on. Right. Mm-hmm. So, you know, whether the, you know, whether they're growing in the first half or not, you know, that, that will remain to be seen. But I think what you're... You know, we've talked about stability in our short cycle in the back half of this year, and so, you know, the, the length at which that is stable before it starts vectoring up, and it's not going to be all in one go. Yeah. There'll be different parts of the short cycle businesses that'll inflect up, you know, before others. I think as you see, the progression of the year will just get better, as we go. Vimal, can I just clarify one thing? Did you say you expect maybe some acceleration in the long cycle orders? I do see, I mean, the Q4 tends to be a big quarter, even for orders, apart from revenue, and we do expect to finish strong. And depending on where we will finish, will determine our backlog, and we'll report to you during our February earnings call. I remain optimistic that we should have a good finish, so we should maintain this 8% or make it slightly better. Great. Thank you. That's fantastic. Maybe touch on margins. You know, the, I think you said, Greg, you know, the 40-60 basis points still looks like the right range going forward. It's gonna be in the neighborhood of that. We do have some headwinds, though. Sure. Just wanted to just touch on that. So we've got the Zebra royalty income falling off in 2024. Feels like Aerospace margins might still be flattish in 2024. Maybe you tell me if that's wrong, but maybe just talk about some of the offsets to those. Yeah. -to those headwinds. Yeah, I mean, just to maybe start with Aerospace, you know, the margins have have gone up pretty dramatically in the last few years. You know, we've gotten to 27 faster than we had expected, given some of the dynamics between the OE and the aftermarket. And as we've talked about at length, that OE mix headwind is probably gonna be with us again into 2024. So we don't see Aerospace margins as being a big mover in and of themselves, but they are going to continue to be the highest growing part of the portfolio. So growing 27 points, you know, at a high rate, is gonna be accretive to Honeywell overall. You know, you're right about the Zebra license payments. Those will roll off in 2Q. We've talked about that at length. You know, the way I would just think about that, though, is Vimal mentioned the margin expansion opportunity in IGS. Those two things are gonna largely offset one another, not dollar for dollar, but that's the way we're thinking about it. And then, as we see short cycle businesses around the company begin to ramp up, remember, those things carry very high variable contribution rates. And we've done the, you know, the teams have done a good job to make sure that we keep our fixed cost base aligned to the volumes at which we're operating now. So I expect to see some nice volume leverage as we go into next year as well. Yeah. I mean, if also, just to add a margin expansion perspective, next year, if throughout a Honeywell level, I also expect price costs to be a slight tailwind. Not it was in 2022, but it's not gonna be a headwind. The tailwind is gonna be also stronger in direct material productivity because we clearly see those higher productivity benefits coming in, in this year, but next year we'll see that benefit for the entire year, so that certainly is gonna help. And I mentioned to you the benefits of AI in our P&L, which will show up. So when you see combination of things, we feel that our, our general guidance of 40 basis points-60 basis points will hold well for 2024 also. Okay, great. Time is flying by, so I think maybe one more question. What better way to finish off the discussion than cash flow? Absolutely. We've had, you know, a couple of claims on cash this year. Yeah. Greg, I think this is for you. Maybe just give us some perspective on how you think about cash flow into 2024 and then maybe beyond that. Sure, sure. As you mentioned, our free cash flow on a reported basis, we had $1.3 billion in settlement payments, which I think was a good decision for us to take some legacy liabilities long term off the balance sheet. So very happy that we got that done here. And so, so right off the bat, that's, you know, kind of off the decks for next year. And then when we think about the multiyear inventory build that we've all experienced in the industry because of the supply chain constraints, is going to start, you know, cresting and turning over into 2024 and 2025. So that's gonna be the single biggest accelerator of free cash flow is going to be that inventory multi-year decline that's beginning. And again, I feel very strongly that that's gonna be a-- that's gonna be something we'll be very successful at for a few reasons. Number one, obviously, the supply, you know, constraints are easing. But don't forget, too, we've also basically simplified our supply chain network almost by 50%. You know, Torsten Pilz, who runs our supply chain, you know, laid out a path of simplification of 300 sites down to close to 150, and we're gonna be there as we exit this year. And then when you layer on top of that, all the digital capabilities that we've built in the supply chain as well, you know, our, our capabilities just continue to get better from a digital operations standpoint. So in fact, my expectation is as we, you know, get past the, you know, the structural aspects that's happened, we're gonna go beyond our capabilities that we had in 2019 from an inventory perspective. So I think we're gonna, we're gonna start to get on a, a multi-year, cash flow from operations run, and then the, the last part of that will be how much CapEx do we have, to expend it? Do we have some very attractive growth projects coming our way? So we'll talk about those as they, you know, become more real. But if I think about cash flow from operations in particular, you know, that should have a very healthy growth rate attached to it. And then, I think, you know, as you know, our internal growth investments are the highest ROI investments that we have, and so we're not gonna starve the business to growth. So I don't know if there's anything you wanna highlight on the growth side, Vimal. No, I think I'll only add on the capital expansion. On Energy and Sustainability Solutions business, we do see some very attractive growth levers. When we are ready for those capital spend, we'll of course share with everybody, because those are long-cycle investments, but also very long-term revenue-attractive revenue streams. So we're working on a couple of big ideas, which we can reveal in 2024. Thanks, Vimal. We're out of time, so let me hand back to you for closing remarks. Thanks, Nigel. First of all, for, you know, very interesting set of discussion. In closing, I would say that first, we love where Honeywell is going. The setup we have made in terms of, three mega trends, really give us a clear clarity of strategy for organic and inorganic growth. The long-term setup is very favorable, and we are positioning Honeywell for organic growth actions, which we discussed here. And the portfolio optimization, offers an upside. We are gonna work on our portfolio and make it more, contemporary and, more higher quality, and we are absolutely committed to that. So, looking forward to another strong year ahead in 2024 and, a strong hunting for growth for Honeywell in times ahead. So thank you very much. Thanks for everybody being on the call, and happy holidays, and stay safe. Thank you. This concludes today's conference call. We thank you for participating. You may now disconnect.