Okay, good morning, everyone. Thank you for joining us. My name is Peter Arment. I'm Senior Aerospace and Defense Analyst here at Baird. We're delighted to have Honeywell International with us. And with us from Honeywell, we have Ken West, who's the President and CEO of Energy and Sustainability Solutions. Ken is going to give us a couple-minute overview, say if he's going to make a brief opening statement at all, and then otherwise we'll jump into some Q&A. So really appreciate your time, Ken. I know you're super busy, but thanks for being here. Well, thank you, Peter. It's a real pleasure to be able to be here and actually to provide a little bit of background on Honeywell Energy and Sustainability Solutions, one of the business groups within Honeywell aligned around the three mega trends of the future of aviation, automation, and energy transition. As we take a look at Energy and Sustainability Solutions, or Honeywell ESS, it consists of two main businesses: Honeywell UOP, a leading provider of process engineering and technology solutions enabling our customers with more than 100 years of innovation to meet the latest needs that they have across the refining, petrochemical, and industrial landscape. This business is uniquely positioned and present in more than 90 countries around the world with more than 2,500 engineers, scientists, and technologists, and more than 10,000 patents and applications. This business is able to provide our customers with the solutions that they need from an end-to-end perspective to meet the needs of energy transition, and in this case, when I talk about energy transition, this really is meeting the needs of energy today along with the needs of the energy in the future. One thing we can all agree on is the world is going to require more energy in the future than it requires today, and many of the solutions we provide not only make current operations more efficient and effective with connections to our Forge I oT platform, but also allow our customers to stand up new incremental energy sources, many of which are renewable. In addition to UOP, it contains the Advanced Materials business, which I'll speak a little bit more to in the next slide. Advanced Materials is a leader in a number of products that help enable our customers to meet their needs, including refrigeration, advanced semiconductor manufacturing, bullet-resistant defense applications, and leading chemical applications. This business has benefited with over a decade of innovation, and during that decade of innovation has redefined many of their products to meet the sustainability goals of the customer base. Some of these sustainability goals include the Solstice brand of products, which is able to provide refrigeration and industrial applications in a climate-friendly way, meaning that it is a low global warming refrigerant. It also meets the needs of advanced node semiconductor manufacturing. This business today is very successful and is well positioned, and I'm very proud to say that as a standalone business, I believe it's going to compete very well for growth capital in the future. However, as I opened the comments with, Honeywell has continued to go down a path of simplification to be laser-focused on three mega trends. Advanced Materials sets a little bit outside of those mega trends, thus the decision by the company to move forward in our portfolio realignment and to announce the spin of that business. Now, as we look at what Honeywell ESS will be in the future, this business now, again, and I've said it a couple of times, but is very well positioned with much more than half of the business aligned around aftermarket services, products, and solutions. We're enabling end-to-end technologies. We've added on new capabilities, including closing on the acquisition of liquefied natural gas from Air Products, which now provides a capability to provide end-to-end solutions in the LNG space, an area that we continue to see fast growing over the decade as it is a bridge fuel to allow for those incremental energy needs. As you look at the portfolio in the future, this portfolio is going to be well positioned to provide an increased consistent revenue and earnings growth across that overall platform and across our technologies. I'm very proud to be here with you today and to be able to answer a few questions about the ESS business. Awesome. Thank you for that, Ken. It's a great overview and really helpful. Maybe if we actually want to keep one of those slides up just so everyone has a reference point, that's great. Thank you for that. So ESS has really been trying to solve some of the world's most challenging problems. I mean, when you think about it, just energy transition and sustainability. Maybe if you could just talk to, I know Advanced Materials is eventually leaving the portfolio, but they're involved. Can you talk a little bit how you think about Advanced Materials and UOP on that kind of trying to solve some of those problems? And how do you think about it from over the medium term and maybe over the long term? Yeah, so when you look at the two businesses, one of the synergies that we gain across that entire business portfolio is really our innovation pipeline and our ability to continue to develop and innovate new solutions. Now, many of these solutions that we're putting together today that meet sustainability needs, like the Solstice low global warming molecule, or if you take a look in our UOP portfolio, like some of our sustainable aviation fuel capabilities or SAF plants in Ecofining, have been developed over the last decade. And as we brought those businesses together, you bring together a great hub of R&D knowledge and technology, and those capabilities are able to extend and accelerate that speed of innovation going forward. Yeah. How do you think about what's more in the near term on some of those applications and then what's going to take longer? Yeah. So the nice part about that portfolio is that we really are well positioned across the entire transition. So in the nearer term, we're continuing to partner with many of our customers that are in traditional energy sources. And one of the benefits that we're providing is connecting to their refineries and petrochemical plants. We have more than 700 connections across our installed base. Those connections allow us to get real-time data of how our customers' operations are going and to be able to provide incremental services and support to those customers to allow those operations to run more efficiently. That's going to help propel additional revenue streams here in the near term. As we look in the long term, we've continued to see a very strong order rate in double digits this year. Part of that order rate is signing new projects that are in sustainable aviation fuel and Ecofining, where we've signed more than 55 licenses to date. Wow. Wow. That's great. Let's talk a little bit about UOP, maybe some of the key factors that you think are the drivers of growth for UOP. I think it's a fantastic business. I visited many years ago and was blown away by all the PhDs that work there and patents. And so I think you just need to kind of peel back the onion a little bit for everyone on UOP because it's a tremendous business and franchise. Yeah, so like I said in the opening comments, UOP has more than a 100-year history of innovation and developing new technologies, but part of what is really unique about UOP is its support structure behind the scenes. This business has more than 100 pilot plants. When you think about a pilot plant, this is like a mini science experiment of what a refinery or a petrochemical plant operates or even a renewable fuels plant. We operate these every day in a control system environment. Our engineers are watching these. Every time one of our customers has an issue, a concern, wants to provide improved yield or improved operating rating capabilities at their plant, we can simulate that right on our pilot plants. We have these around the world. We operate them 24 hours a day, and this is really a unique capability within the UOP business. It helps us extend that aftermarket services portfolio. Got it. Talk a little bit about the acquisition of Air Products with the LNG process technology equipment, how that's going to fit in with UOP. It feels like a very strategic deal and gives more critical mass. It is. And I'd say two things. One, the deal is accretive and very synergistic, but also the timing has worked out very well as we continue to see a proliferation of new LNG deals that are there to meet those incremental energy needs. So when we think about our existing business that was at Honeywell, we already were in a number of pre-treatment, meaning the front end of the process when you make liquefied natural gas. Now we're bringing on the equipment side and the heat exchanger side that is on the back end of that process. So as we bring those two together and then we put over top of that a proprietary control system, now we have an end-to-end solution. So we can go in and help support all of our customers. But even more importantly, this is a business that has been out there for decades providing these very large heat exchangers out into the market. And these heat exchangers are very important to the operation of these liquefied natural gas trains. When one of these goes down, it's very expensive. We now have the capability to add our connected services and solutions, just like we do across our catalyst business and adsorbents business, to this broader installed base and continue to provide more aftermarket services that really was almost an untapped opportunity in the past. How should investors view the cyclicality of UOP, or if there is such a thing, the volatility, maybe the price deck of oil? Just how do you think about it? And does this maybe help dampen some of that cyclicality? Well, it does. So one of the things that is going to help dampen some of that cyclicality as we go into the future is continue to grow that aftermarket services chain. As we get an incremental part of our revenue from services and aftermarket products, reloads of catalyst technology, training, we get paid for all of those items within UOP. As that becomes a larger portion of the portfolio, that takes out some of that volatility and cyclicality from large projects that may come in one year and not be there the next year. Got it. All right. Maybe on just when you think about the LNG market that's, I guess, quadrupled over the last 20 years, and we were talking just before we came up on stage, I think the push of what AI is doing and the requirements, and there's probably going to be a bridge of either with natural gas and some other things before we get into nuclear supporting a lot of that stuff. How are you thinking about the LNG environment? Yeah. Well, we think about all energy sources as and, not or. And when we think about the and, LNG is a big piece of this. It has been seen as an effective bridge fuel as customers are wanting to provide cleaner sources of energy versus prior sources. And so as customers, as countries need additional energy sources to help support new applications, augmented reality, AI, machine learning, optimization, all of these new technologies are going to take more energy than the technologies of the past. And that's going to create an incremental energy demand as we go into the future. And LNG is going to be there to help bridge that gap. Yeah. Honeywell's always had a big emphasis on breakthrough initiatives, and that's a huge focus of kind of creating a lot of upward momentum for organic growth. How about within UOP? How do you think about kind of breakthrough initiatives, things of that nature? Well, you know, we think about our sustainable technology services business, which is part of UOP, and that really was a clear breakthrough. This didn't start a year or two ago. This started with over a decade of work to develop new process technologies for products like sustainable aviation fuel, where we're using used cooking oil and biomass to create aviation fuel. As we take a look at the technologies, many of these were started with technologies that were used in traditional refining. We can take those technologies and we can bridge them into expanded markets and new market opportunities. Yeah. Where do we stand on sustainable aviation fuel or SAF as they are? How do you see the kind of the broad adoption for that? Yeah, so we're starting to see an increased amount of regulations around the world that are going to push more demand for sustainable aviation fuel. Today, it's a very small percentage of the overall amount of aviation fuel that's out there. However, when you take a look at the interest, and when I look at the number of customers that are standing up new facilities and that are signing licensing with us, as I said before, it's more than 50 licenses for sustainable aviation fuel today, a number of new startup companies, and this has become a reality. Companies have plants up. They are running, and we are getting sustainable aviation fuel into the system. Can it go through the existing infrastructure that's out there over time, or do you think there's going to have to be a lot of investment on the infrastructure side? There will be investment in the infrastructure side for new facilities. But the beauty of this is you're creating a jet fuel that's going to have much of the same characteristics and same specifications as the jet fuel you have today. So when you think about all the infrastructure needed for transportation and storage and distribution, all of that can be used across the portfolio. That's great. So let's flip over and talk a little bit about Solstice because that's been a big driver of ESS for a long time, lower global warming products. How do we think about what's going on in terms of mandates or adoption for different markets with Solstice? Yeah, so the push for Solstice, which is providing a low global warming potential refrigerant, has started over the last more than a decade, and as we look at this, those regulations are well advanced in the U.S. and Western Europe. In fact, in the U.S., the vast majority of all vehicles have already been converted over to low global warming refrigerants today, along with Western Europe. We're continuing to see that proliferation around the world, and we're seeing new advancements in some of our high-growth regions, whether that be in Asia or in others in Central Europe, so I continue to see this as a growing opportunity. It's one where we've seen that wave kind of start in the U.S. and Western Europe and continue to move around the world. But as countries and our customers are looking to reduce their overall carbon footprint, this is a great way that they can do that. In fact, to give you maybe one statistic, the amount of conversions from prior generation refrigerants to Solstice that have happened has taken out the carbon dioxide equivalent of 83 million cars on the road. Wow. So that's a big step as we look at decarbonization initiatives. How is the adoption factor when you think about those high-growth regions? Is it following the same kind of path, or is it a little slower than what you saw in kind of the Western societies? It's actually faster, and it's faster for one reason, Peter. When we take a look at many of the companies, many of the high-growth regions have auto manufacturers that are also exporting to Europe and the U.S., and many of these companies, they don't want to run two refrigerants in their line. So if they already needed to have a low global warming option to go into Europe or to go into the U.S., it's advantageous to them to go ahead of those regulations and to go ahead and convert. Got it. All right. Let's talk a little bit, maybe a little bit about current trends in terms of what happened most recently and kind of a 3Q talk. So ESS was up 1% organically. Advanced Materials was up 3%. I think UOP was down 2%. But maybe just talk about what you saw in the third quarter kind of for the businesses and then how you're thinking about kind of setting up for next year. Yeah. It's a great lead-in. So as we took a look at the third quarter, it was a great quarter for overall orders and order intake in the UOP business. And as we looked across the overall portfolio, that's been a consistent trend. We've continued to see, while from a quarter-to-quarter perspective, it's always hard to have a consistent linear trend because of the size of some of these large deals, we have continued to see on a year-over-year basis a really nice double-digit increase in that overall order intake. Now, what we have also seen, though, is we've seen some slowing in the move from orders to revenue in some of these projects. And some of that slowing has occurred for a couple of reasons: geopolitical uncertainty, which we're starting to get past here, it's higher interest rate environment. One of the things our team does a great job at is partnering with financing organizations and with our customers to ensure that these projects are bankable and that they can move forward with them. I would say some geopolitical unrest in certain parts of the world, but that actually opens up a new opportunity or a broader opportunity for us as we benefit from larger modular equipment projects. In some of these countries, we can take risk out of the overall construction cycle by moving to a modular form of equipment instead of stick-built, and we can provide a larger amount of that content in those projects. That takes some of the construction risk out. Got it. I think you said the orders were up in UOP over 50%. Was that in the quarter, or were they close to $1 billion? I forget the exact number. Yeah. They were up double-digit, is what I will say. Maybe that was a year-over-year number I was looking at. But when you look at the roadmap for UOP in terms of your customers, I think you work with 99% of the refiners around the world, or it's a big number? It's a large majority. It's a large majority, yeah. Are there differences in terms of volatility in the Middle East? I mean, is that a big factor when you think about UOP, or is it because it's so diversified we don't see as much volatility on that? Diversification is definitely something that helps us. Less than 40% of the sales are in the Americas. We truly are in countries all around the world, participating in over 90 countries. We see the Middle East as a great opportunity. Actually, in some unrest in other areas, have seen more energy projects that have moved to the Middle East and actually have been started up. So while there are geopolitical uncertainties there, and we all wish that some of these would calm down sooner than later, we've continued to see many of these projects move forward. So when we're looking at the pie chart and like services and things, you talk about the 2020, and we look at the future. It doesn't look like a lot of that, they move differently. I mean, it seems like they're all going to be growing at the same pace: catalyst, adsorbents, equipment. Is there anything that would stand out in either one of those, more licensing or just more equipment sales, do you think? Anything about that? Yeah. So a couple of things. One, I think one part of moving forward in the equipment has been adding on acquisitions like what we did with the liquefied natural gas business from Air Products. And we're continuing to look at other potential bolt-on acquisitions. In fact, our pipeline is very strong now, and I continue to meet with prospective opportunities that would have similar characteristics of being synergistic and being accretive to our overall portfolio. As you take a look at the services side, one of the pieces that's going to index at a higher rate is going to be our connected services. I talked a little bit about one of the unique positions that Honeywell UOP is in because we have Honeywell and we have UOP. We bring this unique Forge Internet of Things capability alongside our technology and experience to be able to provide a connected solution there. So that's going to grow at an over-index rate. So I think between kind of the acquisition opportunities and equipment, the over-indexing and the connected services side, that's going to help transpire that growth going forward and make that a larger majority of the overall portfolio. Great. Great. Another opportunity for more margins. That's great. Maybe let's talk a little bit about the spin. You talked a little bit about it in your opening remarks about kind of how it's set up to be a standalone. Maybe some people aren't familiar with Advanced Materials and the ability to be a standalone. Maybe you could talk a little bit about how you think about the business, how it would be repositioned out into the marketplace. Yeah. So one of the unique things about Advanced Materials are those leading capabilities in providing products and solutions that in some cases are unique and have a great value proposition for our customers. So that's enabled this business, which will be around a $3.8 billion business, to maintain mid-20s EBITDA margins and to very attractively compete for growth capital amongst the peers that they're going to have as they stand alone. Again, this is a business that I've been very proud of the success that it's had over the last five or six years. And as I take a look at it, it's continued to grow stronger and strengthen and have better outlooks in the future. But it doesn't align directly with the simplification that we have in the portfolio. So even though it's a good business, sometimes you have to take a look at that, and you have to make some difficult choices when you take a look at the overall portfolio of the company. And I think the advantages that the remaining Honeywell is going to have from the laser focus on these three mega trends and the synergies that we're going to gain across with the Accelerator operating system over top all of those businesses is really going to propel the remaining business to have a great future. And I look forward to seeing a great future in the spinoff business in Advanced Materials as well. Just to calibrate with everyone, timing roughly end of 2025, early 2026, roughly? Yeah. That's what we've announced, so it was just announced within the last month. We've started the work streams and putting everything together to make sure that we're developing a business that can succeed very well day one, and that timing's likely going to be late this year, early next year. Sorry, late 2025, early 2026, to correct that. Just quickly on Advanced Materials, it's not just Solstice, but we were talking about Spectra. And so maybe just highlight that because that's another growth avenue for Advanced Materials. It is. There's a number of innovative products in this portfolio. So we talked about Solstice, which is low global warming refrigerants and industrial products. It also provides a leading provider of healthcare packaging under the Aclar brand name. This is packaging that allows single oral dose medicines to have stable shelf life over a period of time and a unique capability. But Spectra is an exciting part of that portfolio. So Spectra is an ultra-high molecular weight polyethylene. Wow, it's a mouthful. But when you say what that is, it is a fiber material that provides bullet-resistant capabilities. And quite frankly, we have some of the largest U.S. military applications and law enforcement customers, and we're able to provide leading low-weight products that help protect our servicemen and law enforcement folks every day. So it's just another leading technology in there that's continued to innovate. I think they're on their 5th or 6th generation of armor materials, and that just shows the capabilities of that portfolio. Do you consider Solstice the lead molecule in the world for refrigerants, or how do you view that? It is. Yeah, so when we look at Solstice, the Solstice brand has a few different molecules underneath it. So when we think about gas and refrigeration, now you start to get a little bit technical here, but these are all individual molecules that create the gas that goes into your car or creates the liquid-blowing agent or gas-blowing agent that's out there. So the brand name of Solstice represents the entire portfolio of low global warming products that are in that portfolio, and then when you take a look at that, not only is it the leading position there, but it has great IP protection as well as we take a look at the overall portfolio, so well-positioned and continuing to be the leader in those conversions. So, given that you have a global business that you run, maybe could you talk about, just take us around the world a little bit, how you see the different high-growth regions in terms of how that's affecting your businesses, what you're seeing from each one of those markets, particularly China, India, some of those markets? Yeah, absolutely. Well, you know the thing about China and India is there is going to be a continued increasing need for energy and products in both of those regions. I mean, both countries have roughly three times the amount of people that are in the population that's here in the United States. As those populations continue to grow and we have a growing middle class, you're going to have a growing consumption for energy and products. And both countries are looking at ways that they can do this in a sustainable way, whether it's more sustainable materials or whether it's lower global warming footprint energy solutions. So as we look at growing those energy needs, we're going to maintain the energy requirements of today, and we're going to help them grow incrementally into climate-friendly options. We had a question that the industrial analysts all batted around about what we should be asking management teams after the election. Has the election, does it have any impact on your business, or how do you think about just kind of now that we at least we're behind the election? Well, you know one of the areas in our business that I would tell you most important is to reduce overall volatility. And I think getting past these election cycles and moving forward, we're going to reduce volatility of what we think oil price is going to be and what we think some of the energy prices are going to be. And that's very important because when you think about our customers, many of our customers are putting up multi-billion-dollar capital units. And to be able to finance and bank those, they need to reduce that overall volatility. So I think one of the advantages we have of being past the election cycle is reduced volatility of what the future looks like. And I would tell you, you know when I look at our business, many pieces of our business are a very long cycle. We didn't start sustainable solutions yesterday. This has gone over decades. It's gone over administrations that are on both sides of the aisle within the United States and administrations on both sides of the viewpoint within Europe. So even as these go through cycles every two, four, six years, we continue to move forward with a long-term focus, and I think that's going to continue. Great. And then lastly, last minute or so here, you know, would you think about just because you do have a lot of growth, I think, in front of you, how are you thinking about from a CapEx and supporting the businesses? How do you, particularly given the acquisition of the LNG business? Yeah. So as we think, as we go forward, there will be some growth capital that's needed to help continue to expand these businesses. We're actually going to put a project in over the next year in that LNG business because we're seeing great organic growth in that business as it's come on. It's going to be a nice accretive part of the portfolio. But also as we think about ESS in the future, you know the remaining portion of the business that's going to be at Honeywell is far less capital intensive. It's much more of a licensing and engineering and process technology business. When you think about the manufacturing of catalyst, it's much more of a discrete and batch manufacturing process. So it's less capital intensive. And when you think about the business that we're going to spin off, that business has a higher capital footprint in it and is going to require growth capital over the coming years. But as you take a look at the growth rates and the margin in that business, I think it's going to compete very well for growth capital out among its peers. So I think it's very well positioned in the future. I'm excited to be here. It's a pleasure for me to be able to be a part of this business and to lead this team. And I'm very excited about the coming years. Terrific. I think we'll end there. We'll have a minute left. Ken, thank you so much for being here. I hope there's a great overview of Advanced Materials and UOP, and thank you everyone for joining us. Thank you, Peter. Really appreciate it. Thanks. Yeah, a pleasure.