Greetings, and welcome to the Honeywell Portfolio Update call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now turn the conference over to your host, Mr. Sean Meakim, Vice President of Investor Relations. Thank you. You may begin. Thank you. Good morning, and welcome to Honeywell's Strategy and Portfolio Update conference call. On the call with me today are Chairman and Chief Executive Officer, Vimal Kapur, and Senior Vice President and Chief Financial Officer, Greg Lewis. The presentation materials, which include definitions of certain non-GAAP measures and this webcast, are available on our investor relations website. Our discussion today includes forward-looking statements that are based on our best view of the world and of our business as we see it today, and are subject to risks and uncertainties, including the ones described in our SEC filings. For details, please see the information at the beginning of this presentation material. From time to time, we post new information that may be of interest or material to our investors on our website. This morning, we will walk through our latest portfolio update that we announced this morning and outline how this fits within our long-term strategy and will unlock shareholder value. As always, we will leave time for your questions at the end. With that, I'll turn the call over to Chairman and CEO, Vimal Kapur. Thank you, Sean, and good morning, everyone. I appreciate you joining us today, and let's begin on slide two. Last time we provided a strategic update like this to our investors was almost exactly a year ago, to the day, when we announced the reorganization of our business around the three megatrends of Automation, Future of Aviation, and Energy Transition. As we continue to simplify our portfolio and shape it around these compelling megatrends, we have made several significant additions in the last year, committing about $9 billion towards high growth acquisitions. Today, we have announced another significant step in that process with our plan to spin off our Advanced Materials business into a standalone, industry-leading specialty chemicals company with nearly $4 billion in annual revenue. Advanced Materials have been long recognized as an industry leader, and we believe the business is best served going forward as a standalone business, in which it can set its own strategic focus and capital allocation priorities. As Honeywell focuses our effort towards helping our customer navigate the Energy Transition, we believe the non-AM portion of our Energy and Sustainability Solutions segment offer more tangible synergies with the rest of the Honeywell portfolio, and we're able to benefit more meaningfully from our value of our Honeywell Accelerator operating system. We expect to spin off the business in a tax-free manner to our shareholders towards the end of 2025 or early 2026. As we work towards the separation, we'll continue our integration work with our four recent acquisition, as well as pursue additional accretive bolt-on aligned to our strategy. Today's announcement does not have any impact on our capital deployment commitment, of which we remain well ahead of schedule. Our deep deal pipeline remains strong, and we continue to plan operationalizing this aspect of our work to continuously improve our portfolio and enhance our financial performance through consistent deployment of capital. Now, let's turn to slide three to go a little deeper into the rationale of this transaction. We believe this transaction provides substantial benefit to Honeywell, the Advanced Materials business and our shareowners, and this is the right time. The spin is another building block towards creating a Honeywell capable of generating stronger organic growth with less cyclicality, requiring less capital to fund that growth, and generating best-in-class free cash flow margins. For Honeywell, spinning Advanced Materials is another important step in simplification of our portfolio, the number of end markets we serve, and the supply chain required to meet our customers' needs. As you may recall, between 2016 and 2018, we spun off roughly 20% of our revenue through three transactions, creating standalone AdvanSix, Garrett, and Resideo. Advanced Materials will continue to build on its impressive legacy of innovation and sustainable solution as a standalone company, but we believe Honeywell is no longer the natural owner going forward. AM's mission is not as connected to the Energy Transition as rest of the Energy and Sustainability Solutions portfolio. This transaction, when combined with our strong strategic roadmap in UOP, our sustainable tech, technology solutions, our STS business, and our recently acquired LNG business, creates stronger focus towards our commitment to helping solve the world's most daunting Energy Transition challenges. For Advanced Materials, we are excited by the opportunity to create a leading specialty chemical and materials pure play. We believe that a standalone, well-capitalized AM will benefit from greater financial flexibility to pursue its own agenda and associated investment choices, including distinct growth opportunities, next-gen sustainable refrigerants, specialty electronic materials, and highly engineered solutions for healthcare applications. Now, let's turn to slide four and unpack the financial profile and competitive advantage of Advanced Materials that will make it a leading specialty chemicals company. Advanced Materials will clearly be a standout amongst publicly traded specialty chemical companies. The business is expected to generate revenue of roughly $3.8 billion in 2024, with a global scale and sector-leading EBITDA margins above 25% on an estimated standalone cost basis, supported by intellectual property protected portfolio and regulatory driven demand. The business has deep relationship with leading customers, enabling differentiated solutions to some of the best, most challenging problems in their respective verticals, not least the transition to low emission solution as customers pursue their sustainability goals. With over $1 billion invested over the past 8 years, AM has built a robust economic moat with an efficient supply chain and a global customer base in highly regulated verticals. We expect a well-capitalized advanced material business to pursue growth as well as return of capital over time, though most of these details will be formed as we get closer to finalizing the transaction. A standalone AM will be able to continue to its focus on developing new, more sustainable solutions through next-generation chemistry. Its portfolio is uniquely positioned to benefit from strong macro trends, such as increasing demand for refrigerants, driven by regulatory requirement for more sustainable solutions, growing demand for electronic materials, driven by high-end computing, AI, and 5G, and growing need for highly engineered solutions for healthcare application, to name a few examples. Advanced Materials has leading position in low global warming potential refrigerants, specialty electronic materials, high-end armor technology, and variety of other industrial-grade fibers. AM is also only U.S. manufacturer of uranium hexafluoride, making it a primary beneficiary of the resurgence in domestic clean energy demand in the years ahead. Now, let's turn to Slide five for a little deeper look into AM portfolio and its favorable macro trends. Advanced Materials is a global leader in materials science with a portfolio of IP uniquely positioned to benefit from strong macro trends. The long-term demand trend for refrigerant is positive as more of the world's population migrates to middle class, while regulatory requirements for sustainable products with lower global warming potential are taking a larger share of growing pie. AM's Solstice molecule is one of Honeywell's most commercially breakthrough innovations to date, and more than $1 billion revenue of its own. AM will be able to continue to invest in next-gen molecules to further grow that business. Advanced Materials will also benefit from growing demand in electronic materials, driven by growth in high-end computing and investments in AI. AM has unique manufacturing capability in Continental U.S. that creates a significant opportunity as more of these activities are brought online domestically. Advanced Materials has a global leadership position in industrial-strength fiber, with an increasing number of high-impact applications and impressive performance, with some products fifteen times stronger than steel by weight. The best-known brand in the portfolio is Spectra, which offers fiber and ballistic materials that have been protecting military and law enforcement personnel for more than thirty years. AM engineering is behind some of the most advanced personal protection system in the world, keeping both soldiers and police officers safe. And last, Advanced Materials also poised to benefit from increasing need for highly engineered solutions for healthcare applications. Led by Aclar brand, AM offers a lineup of leading global packaging materials that protects drug stability by providing the highest moisture barrier among all polymer materials. We see significant potential for new application for this technology and therefore growing demand. Turning to Slide six, I'd like to put today's news in the context of priorities I laid out when I became CEO of Honeywell and progress we have made over the past year or so. First, our top priority continues to be accelerating our organic sales growth to deliver the upper end of our long-term target range of 4%-7%. Internally, we are focused on what we can control, such as enhancing how we think about new product innovation, monetizing our vast install base, accelerating our software offerings, and improving our leadership position in high-growth regions. I am confident these self-help actions will help us to achieve this critical goal, but they will work in concert with my other priorities as well. Second, we are transforming how we run Honeywell through the latest version of Honeywell Accelerator operating system. We are scaling our capabilities by business model to drive incremental value, enhancing our growth profile by leveraging the digital backbone we have created over the past eight years, enabling multiple growth drivers that benefit the entire enterprise. We're also leveraging multiple forms of AI to maximize the potential benefit of our operating system, both for our customers and ourselves. As anticipated, Accelerator is proving to be a powerful driver of profitable growth across all our businesses, as well as an important tool to successfully integrate the recent addition to our portfolio. Third, as is probably evident from our comments this morning, we are excited about our progress in our portfolio optimization goals. We are delivering on our commitment to accelerate capital deployment through multiple strategic bolt-on acquisitions in the $1 billion-$7 billion range, high-grading the quality of our business and financial profile. When the impact of these acquisitions is combined with the selective subtraction we are actioning, the result will be enhanced financial performance that will reward our shareholders. Lastly, we aim for the ways to accelerate growth at Honeywell. Simplification in all forms will be another enabler for that outcome. As we described today, spinning Advanced Materials dramatically simplifies our supply chain and number of end markets we serve. While our work is far from done, I'm pleased with the early results in executing this strategy. Turning to Slide seven. We offer a nice visualization on the progress we have made on our portfolio over the past year and a half. During this time, we have reorganized our business around the three megatrends, announced a total of four bolt-on acquisitions, plus a handful of smaller but strategically important technology tuck-ins, committing close to $10 billion of capital and adding about $2 billion of run rate revenue, growing at accretive rates. Of course, today we also revealed our plan to spin off close to $4 billion specialty chemicals business. While this is a record year for Honeywell in terms of capital deployment towards M&A, it's important to reiterate that this is only the first installment of our commitment to make M&A a consistent part of our operation rhythm, acquiring accretive bolt-on each year that further enhances our portfolio's positioning and our financial metrics. We recognize a spin-off of this size creates some near-term earnings dilution. But over time, we are confident that the net impact of our capital allocation, including additional acquisition, further share repurchases, and optimizing our operations, will lead to an enhanced financial profile for Honeywell that is more attractive to our investors. Turning to slide eight. Looking at Honeywell in terms of verticals we serve, we believe that the portfolio structure naturally aligns to these three teams: Automation, the Future of Aviation, and Energy Transition. Within each, we have several promising growth vectors. With roughly half of our revenue in various Automation verticals, we have offering in multiple growth categories, including building Automation, process Automation, warehouse and supply chain Automation, and advanced sensing. Our vast install base spans across critical infrastructure, buildings, energy, manufacturing, and warehouse exposure, and we deliver solution to our customers through products, software, projects, and services. Our Aerospace portfolio draws its strength from breadth across both platforms and applications, with roughly 60/40 split between commercial aviation and defense and space. Within each of these categories, we have broad exposure to platforms and content across air transport, business and general aviation, and defense. Our technologies are increasingly empowering the advanced aerial mobility market, and we are building capabilities to enable that. We see the Future of Aviation through powerful vector in which Honeywell is poised to lead: electrification and autonomy. And lastly, when thinking about the greatest opportunity of our age, decarbonization must be at the top of the list. Third-party estimates suggest global energy demand will increase by roughly 50% by 2050, and that can't be met by renewables alone. Honeywell is in a unique position to not only help the world's energy producers meet today's energy needs, but also enable the Energy Transition towards lower carbon sources. Each of these megatrends is underpinned by customer demand for digitalization, where we have a unique leadership position with Honeywell Forge. The Honeywell Forge IoT platform increasingly enables the digital transformation for our customers through enterprise performance management with our cloud-native, SaaS-based solution, providing an OT system of record. And with our substantial focus on decarbonization, let's take a closer look at the strategic roadmap for the Energy and Sustainability Solutions segment, post AM spin, to meet some of these challenges. Let me turn to slide nine. Post-spin, our Energy and Sustainability Solutions segment will be tightly focused on solving the world's most complex Energy Transition challenges, including both sustaining the production of traditional sources over near to mid-term, while enabling the emergence of new energy verticals that not only come with a lower or no carbon footprint, but add to expanding global energy stack. One underappreciated fact is that the world needs more energy, and we need to reduce emissions and increase the share coming from lower carbon energy sources. Honeywell will play a major role in that journey. Honeywell UOP is in a unique position and has a track record dating back to more than a century now of not only experiencing Energy Transition, but leading them through innovation. UOP is best in the world at separating and transforming molecules, and while the type of molecules will change, the need for UOP's expertise will only become more critical in tackling the major technical and commercial hurdles to scaling these emerging energy sources. We expect to more than double the ESS business ex AM from its 2020 levels to north of $5 billion in revenue through a combination of organic and inorganic growth, as the stable core of refining and petrochemical remains fairly steady, while robust growth in natural gas production, plus the key emerging growth verticals of relatively small bases, will blend to an attractive growth rate for overall ESS in line with the rest of Honeywell portfolio. We already have key enabling technologies in the attractive growth verticals like biofuels, carbon capture, hydrogen, chemical plastics recycling, and multiple forms of energy storage, but these are also areas of interest for established bolt-on acquisition, as well as emerging technology tuck-ins to supplement and enhance our value propositions. Meanwhile, we believe that natural gas is the transition fuel to make the biggest impact on global emissions within a reasonable investment time horizon. We expressed the view through two of our acquisitions over the past two years, including CCC, our Compressor Controls, and most recently, an LNG business from Air Products, which we just closed last week. These acquisitions only further enhance our customer intimacy with the most consequential energy producers globally, who share our bullishness on natural gas demand in the decades ahead. And yet, while the revenue mix by end market will shift dramatically in the years ahead as the Energy Transition gains steam, one thing we don't expect to change is the business model that made UOP such an economic success for Honeywell. The business model starts with developing differentiated, innovative technologies that make an energy producer's operations safer, more reliable, and more energy efficient, and then licensing that technology to those customers, building our vast installed base. In some cases, we will strategically deploy some kit or equipment to help our customer get their new asset up and running, but the value delivered in the technology and aftermarket services and software is unmatched. We service our installed base with not just replenishment of catalysts and adsorbents, but also continuously improved products with incrementally higher value to help our customer extract more from their existing asset base. Increasingly, we are leveraging the power of Honeywell Forge IoT platform to connect our customers' assets and directly monitor them to reduce unplanned downtime, increase output, and create more value, recurring revenue for Honeywell. Now I'll turn to Greg to look at financial impact of the spin. Thanks, Vimal. Good morning, everyone. On slide 10, as we demonstrated here this morning, the spin-off of Advanced Materials is another important step in the simplification of Honeywell and creating stronger alignment to our three powerful megatrends. We will also continue to shift the portfolio towards the optimized Honeywell Accelerator business model. We'll share more with you on that and this compounding construct in 2025. As you can see on this slide, post-spin, our business model, revenue mix will be about 60% products and projects, which drive expanded install base, with the balanced 40% comprised of aftermarket services and software, primarily driven by the incremental value we can offer to our customers within our vast install base. Critically, separating Advanced Materials dramatically simplifies our supply chain, leaving Honeywell with a smaller, less complex manufacturing footprint and lower capital intensity. Honeywell's supply chain operations are now focused on discrete and batch manufacturing, providing a clearer focus with the ability to leverage further synergies within our operations. The result of these efforts is to continue to push our organic growth capability higher while reducing cyclicality. In this case, with a relatively neutral margin impact and ultimately with an enhanced free cash flow profile. For more details on the recent slate of transactions, we've included a slide in the appendix of today's presentation. Looking at slide 11, it's important to reiterate our capital deployment plans in light of today's news. While today's announcement is a spin-off of a substantial business within the Honeywell portfolio, we've been bulking up our capabilities to execute on accelerated megatrends without compromising our capital deployment capacity. As many of you may recall, at our March 2022 Investor Day, we highlighted the significant internal transformation work we had done over a six-year period, what we called the Great Integration of Honeywell, and at that time, we said, once we had built this powerful platform, we expected to turn our attention back to a more external lens, including executing more M&A. Coincidentally, the external environment was also becoming more favorable for an A-rated strategic like Honeywell. At our May 2023 Investor Day, we committed to deploy at least $25 billion over the three-year period from 2023 to 2025. This includes all forms of capital deployment, with about $4 billion a year committed to our dividend and capital expenditures, and the balance to be dynamically allocated between acquisitions and repurchasing our own shares. And it's important to emphasize this was a floor, not the ceiling, and our robust balance sheet affords us the opportunity to deploy closer to $40 billion over the same time frame without materially altering our capital structure. While we deployed about $4 billion a year on average to share buybacks between 2021 and 2023, we were also rebuilding our deal pipeline with a desire to shift more of that capital deployment towards value-enhancing, bolt-on acquisitions, and you're seeing those now. So you should view our actions through that lens, a more capable organization with a clear strategic intent, executing on the vision for the company. We're pleased with our recent progress, closing on three substantial bolt-ons and a handful of strategically important technology tuck-ins between 2023 and 2024, representing roughly $10 billion. Coupled with another $1 billion plus on share repurchases in the first half of 2024, we're knocking on the door of our commitment a year early, and we don't plan to slow down our portfolio shaping program with a very fertile deal pipeline that we will continue to prosecute. So with that, let me turn it back to Vimal for a few closing remarks before we open it up to your questions. Thanks, Greg. As CEO, I believe my primary role is dynamically managing our portfolio and balance sheet to position the company to benefit from more favorable growth lanes within the three powerful megatrends in which we have a strong right to compete. These actions are critical to driving the type of enhanced organic growth and overall financial performance I envision for Honeywell. Advanced Materials is a leading specialty chemicals and materials business with global scale and a strong moat, driven by differentiated IP portfolio and attractive and often regulated markets. And it's going to generate strong investor interest as it pursues the next generation of more sustainable molecules and products. Now is the right time to give it the freedom to pursue its own strategy and investment program, while also further simplifying Honeywell, strengthening our focus on three mega trends, including the Energy Transition and ultimately enhancing our financial KPIs and value to our shareholders. While we have made important strides over the past year, plus, we are far from done. We'll continue to keep up the speed of our progress and with our next communication at end of this month when we report our third quarter results. So with that, Sean, let's move to Q&A. Thank you, Vimal. Vimal and Greg are now available to answer your questions. Given we are in quiet period, we don't plan on answering any questions about the third quarter or our full year twenty twenty-four guidance. As we work towards firming the results, our third quarter adjusted earnings per share is trending towards the upper half of our guidance range. ...More detail will be provided during our earnings call on October twenty-fourth. Thank you for your cooperation as we stay focused on today's portfolio update. Melissa, please open the line for Q&A. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In order to get to as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Julian Mitchell with Barclays. Please proceed with your question. Hi, good morning, and congratulations on the news. Maybe just to try and understand first off, so you'd said, Vimal, around 10% of sales might be non-core, and you said that last year, and Advanced Materials comprises, you know, around that share of Honeywell. So as you've looked more at the portfolio, and as you see a sort of richer environment for deal making in general, has that 10% kind of scope of potential divestments expanded a fair amount as you and the board have reviewed the business this year? Should investors expect more divestments of scale to occur in twenty twenty-five alongside acquisitions? So Julian, when I started my job last year and positioned Honeywell on three mega trends, my initial look was approximately 10%, and parts of the AM business was a big part of it. However, when we took a deeper look, we found it more compelling that the broader AM spin makes much more shareholder sense. So the scope of what we initially thought got expanded in best interest of Honeywell and in best interest of our shareholders. Now, are we done from our work on portfolio? Answer is no. There are still more opportunities we continue to work on. And what I can only share with you is that as we make more progress, please stay tuned on, you know, more portfolio actions. The commitment I can make is that portfolio will be a continuous activity. I've stated that repeatedly, that active portfolio management will define my, you know, stay as Honeywell CEO, and this is a step towards that. Thanks very much. And then just a quick follow-up on the SpinCo. So I think, you know, some of the public peers, businesses like Arkema and Chemours, who clearly trade at a, you know, a valuation that's different to where Honeywell total is today, is the argument that Advanced Materials, when it spins out, it deserves a decent premium to some of those peers, largely because of the margin profile. Is that the way to think about it? Yes. The margin profile is, we would argue, is best in class industry and also the growth runway, because this position is well positioned to grow with continuous expansion of sustainability materials, the more and more demand for electronic materials, our position in clean energy. So the vectors which this business have uniquely positioned it towards, growth orientation and also the margin attractiveness. So we do believe that the business should get attractive multiples, compared to its peer in the segment. Great. Thank you. Thank you, Julian. Thank you. Our next question comes from the line of Steve Tusa with J.P. Morgan. Please proceed with your question. Hi, good morning. Congratulations. Morning, Steve. Any commentary on leverage or any liabilities going with the SpinCo? And then on the revenue for the RemainCo AM or ESS, I think it's like $2.8 billion in sales or something like that. You said it's gonna get to $5 billion in the future. Can you just give us a little more color on, like, what the future, what timing the future means? Yeah. So maybe I'll start on the leverage side and then pass it back to Vimal. You know, Steve, we expect this to be a strong non-investment grade ratings profile as we spin this company out. So I think that's what we would like people to be mindful of and certainly what we expect. And you know, it's gonna be. It's dissimilar to the prior two spins, where what's going with it will be the things that are attributable, you know, to this portfolio only. So and then, Vimal, I'll pass it back to you on- Yeah. ESS future. So, I think the ESS future, we do expect. But your question is, how long it will take to get to the pathway of greater than $5 billion? I would say that, I see strong growth in sustainability solutions business, so that certainly is a big enabler for that. We are seeing very robust trends of bookings in 2024, so my belief is supported by that trend. The recent acquisition of LNG business should also support it. So overall, we do expect business to follow on the Honeywell growth rates, likely in the upper end of our 4%-7%. At the same time, we'll remain active on building this portfolio. That's part of, that's part of the work we have to do, which are going to be more bold tasks. So expect more things in the whole space of Energy Transition or core energy, kind of acquisitions we have done in the space, like LNG or CCC. So the timelines I can't commit to you, but it's not 10 years from now. It's imminently next few years, and earlier, quicker, the better for us, and that's what we are striving for. ... sorry, the liabilities and anything there? I didn't quite catch that at the end of your comment on the leverage. Yeah, nothing, nothing specific really to highlight there, Steve. I mean, again, what will go with this company will be what's in its perimeter of its business. There's not gonna be, you know, any special other construction as we have had in a few of our past spins. Okay, great. Thanks a lot. Thank you. Thank you. Our next question comes from the line of Andrew Obin with Bank of America. Please proceed with your question. Yes, hi, how are you? Good morning. Congratulations. Morning, Andrew. Just clarification to Steve's question. I think specifically, we've been getting questions, PFAS liability. So does that mean that it's gonna be a spread between Remainco and Spinco, or like, where does that end up? Sorry, just to understand. Yeah. So Andrew, as, as Greg mentioned, we are gonna spin this business on as it is basis, all the capabilities it has, all the offering it has, and naturally, anything associated with that goes along with it. To your question on PFAS, you know, PFAS has captured thousands of chemicals in its definition, and we have been doing work with the regulatory agencies, both in Europe and U.S., for the last three to four years, to make a case for how our offerings are more energy efficient and more environmentally friendly, and should not come into the mode of the broader definition of, PFAS. So this is, nothing new for us. I would say we have been actively engaged on, on both sides, both in Europe and U.S. At the same time, we have been working to expand the portfolio of the AM business into molecules which do not come under the definition of PFAS. So to me, this is, I can use the word, the natural course of the bigger business progression, something we are well aware of for the past few years, and actively working to both mitigate the risk, but also create newer opportunities for us. I guess I'll follow up offline. And then just a question about sort of UOP future and, you know, you've outlined your ambition for growing the business, but what about just go-to-market? You know, it used to be integrated with HPS, with PMT, then we separated them. So, you know, given the changes in the portfolio, should we be thinking closer integration with HPS once again? I guess what I'm asking, any changes to a corporate structure between UOP and HPS, given it's sort of the diminished size of the business and, you know, the fact that we are getting rid of the specialty chemicals business? Yeah. Yeah, Andrew, so what I want to stay focused is build the scale of ESS business. So we are constantly looking at ways and means to expand the current base. We have demonstrated that with two actions: creation of organic action of sustainability solution business, which we did about three years back, and that has made very handsome progress, and now addition of LNG business in that space. And we are not done. We're looking at more organic opportunities, and we are looking at more inorganic opportunities. At the same time, the partnership or cooperation between UOP and HPS remains strong. It's a natural process between a large company that we are able to work it successfully on a sales synergies, on new products, and we are doing it quite effectively. So I don't see any upside or downside. I think that was a concern raised when we announced the formation of ESS segment. Our facts and data suggest over one year, we have very successfully managed the transition of cooperation between the two businesses, even though they operate in two separate segments. And Honeywell operating system, that's where it comes in. We have a well-defined operating system for a reason, so it's not a random set of actions. It's a well-defined set of labels. Part of what gave us the confidence we want to do that. Yeah. Terrific. Thanks so much, and congratulations once again. Thank you. Thank you. Our next question comes from the line of Nigel Coe with Wolfe Research. Please proceed with your question. Thanks. Good morning. So Greg, I just wanted to clarify, yeah, your comment. Did you say strong non-investment grade rating? That's exactly right. Okay, so like a double B plus kind of range. Okay, got it. Okay, great. Any kind of estimation or kind of ballpark on public company costs, one-time costs, breakage fees, et cetera? Anything there would be, would be helpful. Yeah, so it's a bit soon for that at the moment, Nigel, so we're not gonna get specific around those things. But what I would tell you is, we don't expect this to be outsized, you know, for a spin of this size. You know, this company has actually, you know, its own ERP and things of those nature, so, you know, so I wouldn't expect this to be outsized in, as it relates to, any spins of its revenue profile. Okay, great. And then Vimal, it seems like the 10% you put out there, yeah, I think you mentioned that the majority of that, or maybe, you know, more than 5% would have been some of these businesses within Advanced Materials. So would it be fair to say that, you know, if we, you know, obviously taking account of this spin, that perhaps the scope of the non-core is now like 15% or so? Would that be fair? I didn't get the second part of the question, Nigel. Can you please repeat that? Has the 10% become more like 15%, including the spin? Yeah, okay. Yeah, I mean, definitely, as I explained to the earlier question, the initial estimate I had of about 10%, that included parts of AM business, and as we did work, we felt the broader business is a more value creation, so there are still parts of the portfolio we are working on. Yeah, so technically speaking, the answer has become slightly bigger than 10%. Okay. Thank you. Thank you. Our next question comes from the line of Sheila Kahyaoglu with Jefferies. Please proceed with your question. Good morning, everyone, Greg, and congratulations. Maybe if I could just ask, what makes something that part of that 10%? What qualifies this as a divestiture candidate? And given the organic growth, especially from Solstice in the past, does it change your 4%-7% organic growth framework? Was this business going to decelerate? Any thoughts on the growth profile? Mm-hmm. Yeah. So maybe the second part of the question I'll answer for Sheila. So I, you know, this spin makes Honeywell organic growth rate likely better than what it is today. Similar margin rate, because what we are exiting is kind of on a very similar rate of what is our overall Honeywell average, and better cash flow quality because this business has a higher capital requirement compared to rest of Honeywell. So the main goal is higher growth rate, similar margin rate and better free cash flow. Now, what is the basis of our determination? I would say the phase one, I call it phase one, is do things which are lesser fit on three mega trends on Honeywell's operating system. Because we strongly believe that we add maximum value when businesses are, you know, create install base and monetize install base, so think about Aerospace, think about our Automation businesses, think about our UOP businesses. They are very coherent, consistent, create install base, monetize install base, so phase one is to get to that state that Honeywell is three mega trends and consistent operating system company, and we are not yet done, so once we are finished on that, hopefully soon, then we look at the obvious question on the remaining core to say, are there any asset within each of these spaces which are less profitable, less growth oriented or whatever the reason may be for us to look at a further look at that. That's the reason I keep repeating that active portfolio management will be the key aspect of my priorities as Honeywell's CEO. Yeah, and I would just say, Sheila, you, you said, does this change our 4%-7%? It doesn't. Yeah. Again, you should think about part of this portfolio shaping is to enable that, you know, to be even more possible. Correct. Thank you. Because we certainly want to own a portfolio which is inherently capable of growing at that rate. So every action, Sheila, we are doing of additions or subtraction, naturally positions us to achieve that, because unless we don't have the right portfolio, we will not be able to deliver our commitment to you. Got it. it. Thank you. Thank you. Our next question comes from the line of Joe Ritchie with Goldman Sachs. Please proceed with your question. Hey, guys, good morning and congratulations. My first question, just on the spin rationale. So did you guys try to sell this business? Was there something around, like, the market concentration of the products or the portfolio that maybe prevented you from doing so? Just any color on going down this path. Yeah. So, Joe, obviously, we've looked at all options, because our desire is to make sure that this is the best transaction for shareowners, and we feel like spin does that for us. So, you know, that is still our view. That is our view at this stage. We'll continue, as we always do, as we go down this path, to be open to other options. But it would have to be really compelling for us to change, you know, to change our perspective at this point. Okay, great. Also the certainty part of it, Joe, we looked at the certainty on the different optionality, so the certainty this provides on a timeline perspective and the tax-free nature to our shareowners also makes a compelling case for us to consider this option, but we are open for anything alternative by the time we close the spin process over the next, as we indicated, end of 2025 and maybe early 2026. Got it. Okay, that's, that's helpful, guys. And then, and then just to follow up, so you talked about this improving, basically the capital intensity, lower capital intensity of your, of your, you know, remaining portfolio. Again, less cyclicality. You know, as I think about this business, I remember there's, you know, pretty significant fluctuations from a pricing standpoint. So when, when you think about that equation to overall Honeywell, maybe just help me understand a little bit more, you know, how capital intensive was this business? You know, what's the resulting, you know, free cash flow, potential improvement to pro forma Honeywell? Yeah, we're not going to give specifics around that, Joe, but I mean, again, you can appreciate from the kind of manufacturing footprint that that goes into delivering, you know, this this type of a product that certainly as it relates to our $1 billion, you know, rough CapEx. It's an outsized contribution to that. As we go through the process, we'll become, you know, more specific as we're filing the appropriate financial documents, you know, over the course of next year. Okay. Fair enough. Thank you. Thank you. Our next question comes from the line of Peter Arment with Baird. Please proceed with your question. ... Yeah, thanks. Good morning, Vimal, Greg, congratulations. Hey, Vimal, you've been super active since taking over the role, and I think one of the important slides that you guys are kind of talking to on slide 10 is the kind of sales by business model, where you've got a third aftermarket and some software products in the products portfolio. Can you talk a little bit about, you know, kind of as you think about the megatrends and how those, that kind of mix or the business model is gonna continue to evolve? And it certainly, I think, very helpful to think of it from that context. Yeah. Thanks. Yeah. No, thanks. You know, the way I look at it, I talk about Honeywell Accelerator, and we really think about business model as creating install base by shipping products or selling projects, and then monetizing that install base, either through services or software or a combination of both. And we expect in our business model, software and services to grow at a rate greater than projects and products, because projects and products are more linked to economy, capital spending. We can't control much of that. We have to play with the market. But services and software, we serve the customer, their existing need, new needs, and we do expect that growth rate to be more high single, whereas, you know, growing at GDP rates or slightly above GDP rates in projects and products. Today, one third of Honeywell revenue is services and software. I do expect to increase that constantly every year as we put more focus on services and software. That's the intent of showing the distribution, because we want to bring that transparency to showcase execution of our strategy of our accelerating Accelerator business model, to continuously grow more services and more software. Honeywell Forge's IoT platform is a big part of it. We want to connect our different products to serve our customers better so that we have more entitlement of more services, more software through that, and we are making good progress on that. Overall, that's the very model of Honeywell. We want to be serving three megatrends and live through our accelerating operating system, and combination of that is what defines Honeywell. Appreciate the details. I'll leave it at one. Thanks. Thanks, Vimal. Thank you. Thank you. Our next question comes from the line of Joe O'Dea with Wells Fargo. Please proceed with your question. Hi, good morning. Just any color on how you think about the dilution related to the transaction and the timeline, you know, by when you would like to see offsets? I think you outlined a number of the tools that you'll have to do that with, but just any objectives you have out there in sort of that timeline to offset the earnings dilution from the spin? Sure, Joe. So the earnings dilution is gonna be roughly in line with the revenue dilution. So just, you know, for simplicity, think about it in that regard. And, you know, as you alluded, we have multiple levers to do that, but it's not gonna be overnight. So I'm sure there will be some aspect of share repurchase that will come along with this. You know, we also expect that we will address the stranded costs to the degree, you know, they happen to be, you know, meaningful, you know, probably over a period of one to two years. It's not gonna happen immediately. But also keep in mind that, you know, when we think about the impact on, you know, the value of Honeywell, we don't feel like it's gonna take much in the case of re-rate on RemainCo to really be able to recover some of that. So, you know, I... It's not gonna be immediate. We've got, you know, multiple levers to go drive it, but you also know that that's what we're good at, right? So when it comes to the management of certainly on the cost operations and efficiency of the way that the company will run, you know, it's it plays into our strengths. Only thing I'd like to, Greg, is we'll also look at actively any acquisition to continue to add to our earnings. But as you can imagine, that's not time bound, that no commitment can be made. But our deal pipeline is very active, and we'll continue to work on to see if we could make additions before the close of the spin, which we estimate will happen, you know, by end of 2025 or early 2026. I appreciate that. And then, also just in terms of how you think around expectation setting and whether this would mean a move to discontinued ops, or how you think about it within a guidance framework. And then just wanted to confirm, I think Sean made a comment about third quarter EPS trending toward the upper half of guidance, but wanted to make sure I heard that correctly. Yeah, you heard that correctly, and, you know, no further comments on that until we get to earnings in a couple of weeks, but we're gonna report Advanced Materials as part of our regular way portfolio through 2025, and the guidance that we give in the early part of next year should incorporate that, so this is not going to discontinued ops. Great. Thank you. Thank you. Our next question comes from the line of Christopher Glynn with Oppenheimer. Please proceed with your question. Yeah, thanks. Good morning. A lot of details so far. I was curious about the timeline to end 2025, early 2026. What, you know, what are kind of the long poles there? I think you talked about, keeping all options open during that interim, and, so curious if that is a particular factor on the timeline or if it's more around internal system separation. Yeah, Chris, I think it's really more around the fact that we're gonna be onboarding four companies that we've recently acquired while doing this transaction as well. So, you know, on a standalone basis, you've seen us execute spins in 12 months. You know, but this is just a recognition that we're gonna make sure that we do both the incoming and the separation in a high quality manner, and therefore, the timeline is a little bit longer than what you've seen in the past. And, you know, if we can pull it in, we'll certainly, you know, do the best we can to do that. But it's really just recognition of, you know, so many different things happening at the same time. Makes sense. Thank you. Thank you. Our next question comes from the line of Phil Buller with Berenberg. Please proceed with your question. Oh, hi. Thanks for the question. I guess the last two spins had a bit of a bumpy start to life after they were spun out. I was wondering if you've had any learnings from those processes which might feed into this one, i.e., do you envisage owning a larger proportion of the shares for a period of time? Would you expect to receive royalties post the spin, which I think is the case with Resideo? And as a follow-up, how should we think about or how do you envisage the dividend in absolute terms? I get the EPS dilution, but would you envisage the DPS being held steady given the improved cash profile of the remaining co-piece? Thanks. Yeah. So, we're not gonna, again, give specifics around sort of post-spin. All of that will be handled as we work through this. You know, on the learnings perspective, I'll maybe share a few, but again, I don't think you're gonna see some of the... Every spin is a little bit different, and so you know, you mentioned royalties with the Resideo spin. That was because they were continuing to use the Honeywell brand. You know, so I don't expect to see those similar kinds of things in this particular case. And we have a book full of learnings. As you can probably imagine, we're a learning company, and so, you know, we are certainly going to take some learnings from the last time around. You know, again, one of those is, as I mentioned earlier, you're gonna see what's in the perimeter to be just things that are in the perimeter naturally, as opposed to, you know, what we had done previously. You know, Dhiman, I don't know if you have any other comments, but I think certainly we're gonna be improving on, you know, our prior practice with what- I would say the learnings we had from the two spins, the good news is that all the leadership team which did that is still part of Honeywell and their experiences. That's not only Greg and Ahmed, I don't know how many of you are very familiar, but next level of people who actually did work, they are still part of Honeywell. So we have wealth of expertise and lessons learned from those, and we're going to incorporate all that and make a flawless execution here. I'm also very confident on the leadership team of Advanced Materials business. You know, a very strong leadership team, very deep bench, so we do expect to run business flawlessly as we also transition. So overall, the confidence factor on delivering this spin flawlessly is very high. Thank you. And the dividend? Dividend, we won't. You know, there will be dividend, but we are not going to share that specifics at this point of time. As we do more work, we'll share the, you know, the dollar amount, which will be available, you know, as we complete the process. So, we will provide details at appropriate time. Great. Thank you. Thank you. Ladies and gentlemen, this concludes our time allowed for questions. I'll now turn the floor back to Mr. Kapur for any final comments. Thank you very much. So in conclusion, today's announcement is yet another crucial step in Honeywell's transformation. I'm very excited about the progress against our key priorities and the benefit we expect from this transaction for our shareholders, both from future success of Advanced Materials, as well as a simpler, more focused Honeywell. I remain confident that this series of portfolio actions will position Honeywell to create a compelling value for years to come. Thank you all for our shareholders for your continued support to Honeywell's story. I would also like to thank all our Future shapers who continue to drive innovation and differentiated performance for our customers and our shareholders. Thank you for listening. Please stay safe and healthy. Talk soon. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.