All right. Good morning, everybody, and welcome to Day 2 of the Industrials and Materials Conference. My name is Joe Ritchie. I co-run our U.S. Industrials and Materials Business Unit. Really excited to kick off Day 2 with Vimal Kapur, the Chairman and CEO at Honeywell. Vimal, I know you wanted to open it up with some introductory comments, and then we'll kick into the Q&A. Sure, Joe. First of all, thanks for having me here. I enjoyed just recalling this is my second time. My first time came six years back, so it's always good to be back here. I would say I've been in my role as CEO for 17 months and Chair and CEO for five months, and executing on my strategy to transform Honeywell into a growth-oriented company. And there are three pillars of that. We started with simplification as a foundation, and last year, October, we announced that we're going to run Honeywell into three megatrends: aviation, automation, and energy transition. And that got a very positive reception from customers, employees, and shareholders because we started on the journey of something which we can explain and what we want to execute on. And then the three pillars of the strategy are the portfolio transformation, in which we made meaningful progress: four acquisitions, nearly $10 billion of investment, one spin, one divestiture. And I believe when they get completed, the compounding effect of that will help us to shape the organic growth. The second priority has been driving organic growth across portfolio, and we're making meaningful progress to understand our new product spend, our capability on offering management. And one can argue that results are not yet to be seen because of the cycle to drive improvement, but I do believe we are making rightful progress there. And finally, we are pivoting our operating system to drive only operational excellence, which has been our historic strength, while we keep that strength, but also pivoting to drive organic growth. So how do we have an operating system which also pivots towards growth apart from driving the operational excellence? So combination of the three, making the right progress, and I do feel confident we are headed in the right direction. That's great to hear, Vimal. And then so why don't we kick it off and just address the elephant in the room? So Elliott took its largest ever stake in Honeywell, calling for the company to break up. Just why don't we start off with what your thoughts are on the letter they sent you and how much have you engaged with them at this point? So I would say, first and foremost, the shareholder value creation is my job. That's why I exist. And I constantly look at actively different ways how we're going to drive that. So the actions which I talked about, we have been working on portfolio transformation, organic growth acceleration, is with the effort to drive that outcome. We actively discuss that with the board all the time, different ways and means to do it. Now, to Elliott's letter, we are engaged with them. We actively engage with all shareholders, as I will do it today. And given our goals are aligned, we both want the same outcome, shareholder value creation. So we'll constructively work with them and find the right outcome, which is good for our shareholders and good for our company. I'm just curious, I mean, clearly you've had conversations with the board about this as well. How's their reception been? I mean, I have, since in my role as CEO, actively discussed with the board different options to create shareholder value. So just for the benefit of doubt here, the subject that split could be one way to create shareholder value has absolutely been debated. And there are different pathways always to create value. We are on a certain pathway today. It doesn't mean other pathways are less feasible or more feasible. And that's my job, to find the most valuable way to drive the shareholder value. I know, look, I know it's still really early on. The last time there was a public activist interest in Honeywell was a few years ago, seven years ago, and Third Point took their interest. At the time, clearly, different CEO, but at the time, Honeywell responded publicly fairly quickly to the letter. Any thoughts around any type of public response at this point? Look, it's early days right now, so I think we'll take the right steps. It's a few days, actually, since this event occurred, and we'll do what will be the right steps in this journey. So I would just say stay tuned. Okay. Yeah, makes sense. Yeah. Shifting to the news from this week on the Bombardier partnership, just maybe talk about the agreement to some degree, the launch contributions. I think the accounting for those contributions, I think, was a lot of people didn't fully understand it, but also in the context of the resolution of the litigation that was pending between the two companies. Yeah. So I think the headline there is our agreement with Bombardier for large programs for which we are going to have our engines and our avionics and our satellite communication part of those programs. The estimated value of those programs is $17 billion in the lifecycle. A typical lifecycle in Aerospace is somewhere 25-30 years, just as a rough order of magnitude. This is probably, I would say, one of the largest deals in our Aerospace business history, just to put everybody in context. So it's great news for our shareholders because these things, as an example, some of our largest revenue stream in 2024 and 2025 is from the similar agreement we had in 2007. So these things really compound over a period of time. We believe this is not only a belief, it's a fact that it's an outstanding outcome for Honeywell and also Bombardier to have this agreement. Now, the launch contribution is a normal way in this industry. This is not the Honeywell specialty that we have offered something unique here. If you see our peers, they historically have done similar moves. How this is done is a matter of commercial agreement, and we have taken an approach of the early payout of the launch contribution. So our Q4 guidance hasn't changed. We are on a glide path to deliver what we stated. This is an accounting treatment of contra revenue which is required to fulfill the obligations we have towards this. This will also have, as we have stated before, no impact on 2025 in any which manner. It's very positive news. The fact is that it has to be treated this way is a reality we have to treat it and get on with our execution there. Roughly $400 million number seems higher than some of the launch contributions historically. Maybe just discuss. I know at a high level, you can't fully get into the details, why the number is higher than typical contributions. I think the launch contribution depends upon the size of the deal and the tenure of the deal. I think, as I said before, it's purely a matter of negotiation between the two parties. I won't be able to establish that there is a similar reference here. It's X% of the deal. There is no such. It depends on the program and what both parties agree. And the construct of these programs tends to be confidential, so we enter confidentiality with Bombardier, not to reveal more than what we have said that in our press release. Okay. Fair enough. Let's shift gears. So you talked about active portfolio management. You've got to give you a lot of credit. There has been a bunch of deals that you've executed in your time as CEO. Talk about maybe some of those acquisitions, how the integration is going, what you've learned so far about the businesses that you've acquired. So all the acquisitions we have made, they are, first of all, aligned with our megatrends so that we stay consistent with what we said: two in future of aviation, one in automation, and one in energy transition. And the first comment I want to make is that we will stay consistent with that playbook. We are not going to wander around and find something in a different manner. Also, all the acquisitions follow the Honeywell business model, which is create install base, monetize install base. And we want to build Honeywell. I want to build Honeywell around that business model. The spins we did of chemicals business and divestiture we did of personal protective equipment business because they don't naturally follow this business model of create install base and monetize install base. They are good businesses, but like anything else, we are not the rightful holder of that, and we should let the other, in case of chemicals business, the spin handle it, and in case of divestiture, the new owner handle it. To your point, each one of them is under integration process, varying degrees. Access Solutions is probably six months into it. A few are like just a couple of months into it, but my initial read is that each acquisition has been spot on to our strategy. We have a strong conviction on meeting our EVA. Of course, our internal goal is going to beat the EVA and bring some upside for our shareholders, but the defense mega trend in case of Aerospace, I don't have to debate that, so CAES acquisition, right place in the heart of it. LNG, we have a strong conviction. It's a transition fuel. There is an investment cycle of that for the next several years, so it's going to do well. That's our assessment, and Access Solutions business is really built upon the thesis combination of nearshoring. We all talk about nearshoring, and a lot of companies are going to benefit. All nearshoring is an asset. There is a building. You first need to make something on which you make manufacturing. You by default require access control if you have a sophisticated manufacturing of semiconductors, EV cars, data centers. That's where Access Solutions is required, and the business is very U.S.-centric as we acquired it, so we do believe that 80% of the revenue today is U.S. Honeywell Building Automation business is 40% U.S., so we can scale it globally because this demand is across the world. All acquisitions, I do believe, are going to help us to drive, propel our organic growth. That's a comment I made earlier. We are doing it thoughtfully so that we indeed make this as a pathway to drive our organic growth. $2 billion, I can argue is not big enough, but then compounding effect comes. I'm going to continue to do similar momentum in 2025 and 2026 and the years to come and make portfolio management as an active part of Honeywell execution. Great. That's good to hear, Vimal. I guess on the flip side of things, you also have announced some divestitures. Yes. PPE and the Advanced Materials business. If I take a step back, your predecessor did a lot to connect the enterprise, right? And we already had the discussion around Elliott calling for a split. As you think about the portfolio today, what can you do easily on the margin versus maybe might be a little bit more difficult because of what's really happened over the last seven years in connecting the enterprise? Look, the margin expansion is definitely a strength of Honeywell, and I would say that given that we have delivered elevated margins over many years, some years we have delivered margin expansion of 90, 100 basis points. Our commitment is 40- 60, so if you take a CAGR of that, we are on a glide path of that. I don't expect that to change. The reason is that the levers by which you can drive margin expansion can change, but not the fundamentals, so the levers I see look ahead, for example, is definitely direct material savings, which was not a lever for the last two years, but clearly has played out in 2024, what has changed there is it's not the normal way negotiation, and you can buy more things from more attractive cost locations, but also how we are doing value engineering work. That's become our strength. That's a big portion of our direct material savings. We continue to get better with pricing. I think one thing we learned from pricing during COVID is a much deeper understanding of pricing execution at the product line level, at the country level, so that agility is giving us more ability to help us expand our margins, so it's a different thing and a flat use of AI, I would say, in our operations. We have been given all the work the areas did. Honeywell is heavily digitized. Any use of AI, use data first, and you need to be fundamentally digitized as a company, so we took advantage of our capability, and we applied AI in software development, software testing, customer experience, sales function, quite extensively, so there's certainly a productivity benefit of that, so when you start adding it all up, it's a meaningful number. I don't have any concern at all with our ability to expand margins. One last data point I'll share with you is this year. I know our revenue will grow, give or take somewhere around, say, close to 4% based on our guide. Our headcount is flat year- on- year for the same revenue number. I don't have to give any more evidence, so we generated this much more revenue without adding any people. Of course, people moved within the businesses. That's evidence of our constant productivity journey as a company, and we expect that trend to continue. This is not going to stop. That's great to hear all the details on margins. Just maybe going back to the divestitures and how you're thinking about trimming the portfolio from here. I know you've talked about a 10%+ target. So maybe just, are there things that you can continue to do without disrupting the company? Look, yeah, there's a lot on the plate right now in terms of making four integrations work. It's never easy because we also do deep work on IT integration in year one as a company policy. We learned Honeywell has been not a newbie to acquisitions, so we learned the hard way that the earlier you do this work, the better off you are. So to your point, from a capacity perspective, yeah, we are at the peak, but then some of these are going to wind down and will create new capacity. And I expect a normal year, 2-3 inbound, and anything which doesn't fit into a portfolio moving forward will be more driven by my business model question. If the business constantly doesn't deliver aftermarket, either through services or software, it may be an automation business, it may be an Aerospace business, it may be an energy transition business, is it a fit in Honeywell? Because that's what is Honeywell. We need to live it to our principles. So that will be the, I would say, next round of constantly looking at optionality, and based upon opportunities, we'll take some more actions. Just to be clear, the 2-3 inbounds is typically folks interested in parts of your portfolio? No, I would think 2-3 inbounds for us to make acquisitions into Honeywell. I mean, yeah, there will be we make inbounds to others. Others make to us. That's the normal way. I would say there's nothing extraordinary about it. But I was more mentioning that do expect two to three M&A acquisitions inbound into Honeywell in a normal year. That's how we want to transform our portfolio. That's why I mentioned earlier, $2 billion in 2024 is a good start. But if we keep this momentum, not that I can do $2 billion every year, but even if we did a billion for a point of discussion, then it starts compounding. Yeah. And And that's my commitment that active portfolio management will be part of my act as a Honeywell leader. Great. Let's shift the gears to organic growth. Clearly, on the eve of 2025, this year, you're going to post about 3%-4% organic across the portfolio. At the same time, you've had very significant headwinds in the Industrial Automation business this year. So maybe just as you think about next year, is the long-term target of 4%-7% achievable? And as you see things today, is there an opportunity or a good chance you can do the high end of the range? I would say we'll provide the guidance normal way late January, early February. With one thing which I've learned being CEO is that for businesses which we have exposure to three broad end markets and multiple countries, the things are so dynamic. Just as an example, stuff happens in Korea, stuff happens in France. This 5% of the Honeywell revenue happened in the last two days. So better to do it later than earlier because you jump the gun and then say, "Oh, never mind." But to your point, if I look ahead next year, and so we'll provide the guide normal way in our Q1 earnings call. I do expect at a high level, Aerospace is going to come to more at a normalized level of growth. So think about mid- to high-single-digit. Likely we'll like to maintain high-single-digit there. It will not sustain its double-digit growth, which we have delivered for eight quarters in a row. But at the same time, it's not going to shift to low single digit either. We do expect the Building Automation businesses slowly cycling up. We started the business with a negative growth, then to neutral to some growth, and we are trending in the right direction in Q4. And I think exit rates are good for us to have. I would say, use the word normal year in Building Automation. The solution business in particular is doing well. We are finally getting share in data centers. That was not our strength, but we are slowly paving our way through that. So that's helping. The products in Building Automation are trending up, but more work is required there. We're expecting that trend not to ramp up a lot in 2025 based upon the facts what we know today. In ESS business, if I for a minute not talk about chemicals business, given we are on a path of spin and we'll complete the spin during the course of 2025. The UOP business has strong bookings. We reported Q3 UOP had historically high bookings ever in its history, so we are going to carry a good backlog, and the catalyst demand on aftermarket remains stable. Net-net that business should perform. It should have a good year next year in 2025, and Industrial Automation is our challenge. We had a tough start of the year, negative growth for three quarters in a row. We do expect things to be more settled by Q4. But I'm not expecting that a business which was high single-digit contraction in 2024 is going to magically start growing in 2025. We have to do more work there. Short cycle recovery is required. The core HPS business will follow the trend of the market. So you can think about what our peers are saying. We'll perform the similar way. It shouldn't be much different. But rest of the business, Industrial Automation short cycle, more recovery is required. More work is required by us on organic growth, and also more work is required by us on portfolio on that. So that certainly is going to be the part which we require more work. Super helpful. I'll open up to the audience in a couple of minutes. Just wanted to follow up on a couple of the comments you just made. So on the Aero side, the mid single digit, the high single digit, how much of that is a function of the defense supply chain normalizing this year? And you're seeing very healthy, good growth rates in that business. And then also any comments you want to make on the OE and aftermarket side of the business? So I would say that in Aerospace next year, we expect the aftermarket to more normalize versus elevated rate it had seen over the last few years. The OE rates will remain high. It's both good news, bad news. Good news because we continue to accelerate creation of installed base. Bad news because then it puts margin pressure because OEs lower margins compared to aftermarket. And the defense and space will be performing at a better rate than historical rate. The bookings are strong. The trends are strong globally. Our business is rapidly expanding. And then CAES acquisition is going to be part of that because it brings more defense portfolio. So overall, I think Aero should have a good year in 2025, even in the years ahead. The things we are doing like Bombardier deal, you talked about Aero. It's important for me to mention that urban air mobility is something I'm very passionate about. It's becoming a reality, something everybody should take notice on that FAA has passed the certification process. This is what was the unlock. Not that now the planes can fly. We have to now certify it, but that was the missing element. Now the cycle of certification will start, and UAM can become revenue stream for our OEM customers, 2027, 2028. I mean, this is now imminently happening. That will become our revenue stream. We have $10 billion of wins in our backlog, not purchase orders. That's not in our model. That's not in our forecast because it was more of an ambiguity there. When I pull this all together, I have a strong conviction on Aero continues to be on a right glide path for growth for many years ahead. Helpful. And then in the context of the growth rates that you just mentioned, the margin entitlement might be a little bit different next year. I know the expectation longer term is segment margins above 25%. But as you think about each of those different business segments and where you'd expect margins to grow the fastest, maybe the slowest, any comments around that would be helpful? I mean, I would say we will expect at each business level. I think I'll divide that question into two parts, the segment level margin expansion and the business level margin expansion. Fundamentally, as I mentioned before, we are seeing margin expansion across our businesses. The primary reason if it is not showing up in the reported number is the mixed dynamics across the board in multiple segments, Aero, OE versus aftermarket in case of buildings, projects versus products. So there's a different mix happening compared to our historic levels. To your specific question, I don't have those numbers top of my head to say how much each business will do it. What I can tell you is that Aerospace probably is going to see a similar trend as we have observed, continue to grow, margin expansion, bouncing around the same number given the OE mix. Other businesses, our goal is always to strive to drive margin growth. So we'll come back in Q1 earnings and give you more perspective for 2025. Come back to that in a second. Any questions from the audience? All right. Let's keep going. So in terms of the restructuring and repositioning that you've done across the portfolio, where are you taking out the most cost? Where do you see near to medium-term benefits across the portfolio? Costs, are you asking in terms of the fixed cost or? Yeah, I'm talking about structural costs that you're taking out of the portfolio. I mean, structural cost, the good news is we constantly look at our fixed cost as a percentage of the revenue as a standard work every year, every quarter, and so we never do any big bangs in that sense because it's a discipline to say, what's my entitlement of fixed cost relative to revenue and what's the pathway to do it, so if you typically see in every quarter, we'll announce restructuring. In a typical year, this year, we guided somewhere between $150 million-$200 million restructuring cost, and that means our strength. We continue doing it every quarter to create the pipeline of productivity for future years, and I don't expect that trend to change materially moving forward. It's multiple smaller things you do, which could be footprint rationalization of the factories, for example. We're down to 150 factories now. At one point, it was 300+. So, work on that nature. There are other benefits which will get on productivity using different software tools, like AI in particular. Yeah, so I feel confident. What I feel confident is we would not miss our goals of fixed cost as a percentage of revenue, and as we continue to grow, we only should get leverage, as a point of, specifically the short cycle businesses get high leverage as the volume grows because we are not going to add more factories just because we got 5% more volume. Fair enough. We were lucky enough to spend some time with your D.C. team at the end of September. I'd be remiss not to ask the election implication question given that we're only about a month removed. So just any thoughts on the next four years? Look, I think this is a process which companies like us do every four years, so I think every four years, this question comes in front of us, and we were prepared for either scenario. I would say there are both defensive and offensive opportunities for Honeywell with the new administration. The defensive are common ways: the outcome of tariffs, what will happen, and then Tax and Jobs Act and how the corporate tax will play out. Nothing specific to Honeywell. I would say tariffs in particular. We built a playbook last time when the tariff happened, so we have to repeat the playbook should it occur. At the same time, Honeywell has local for local strategy, so we probably are going to be differentiated compared to others should tariff occur because we do have less things coming in because of the large amount of localization. But still, there are things which we'll have to really worry about. On the opportunity side, I would say certainly see opportunity in LNG, certainly see opportunity in acceleration of defense and urban air mobility working with the administration. So yeah, so there are pockets of opportunities and there are pockets of defensive moves which we'll have to really work on as the new administration comes on board. Helpful. I want to go back to the conversation we had earlier around some of the acquisitions and particularly the Access Solutions deal since it was the largest one announced to date. There's some concern heading into 2025 on not Access Solutions specifically, but the commercial end markets in the U.S. At the same time, to the point you made earlier, there is a significant amount of investment that's occurring from a mega project perspective here in the U.S., and the companies that are selling into these facilities are likely to start benefiting in 2025, so in that context, how do you think about what trends are you seeing in the business today? And then how do you think about the accretion that you could potentially see from the business in the next one to two years? If you see the Access Solutions business, the last 10 years of revenue before Honeywell acquired it was more of a mid single digit. That's a fact which generally is not known because this business was reported by Carrier as an aggregated segment. So the aggregated segment shows a low number, but this business was always mid single digit on a 10-year history, including COVID year. So we have a good base. The two factors of the growth we see in the business natural way is first is continued more investment in high-value assets. So as high-value assets are invested, data centers, pharmaceutical manufacturing, semiconductor manufacturing, the Access Solutions is a big part of that because these are high-value assets. So you need to have a sophisticated security system. The second factor we see which is going to enable growth for us is that in all the Honeywell portfolio of automation between industrial and Building Automation, the offering or product line which will move to cloud will be security. Because security is moved to IT since COVID. Security is not bought by; there's no security buyer. IT has become security because it's become more sophisticated integration of software, moved to cloud. So why it matters? The reason it matters is that the installed base which exists on on-prem security systems that will eventually also get migrated. So that certainly plays out to the growth algorithm for this business. And last but not the least, which I mentioned earlier, the access solution business as we acquired is heavily concentrated in the U.S. And we are very global. So we do expect and we're already seeing robust proof points that we are able to take this business globally because the value proposition is very, very strong. So it's going to be, I would say, a catalyst to Building Automation growth. I would be surprised if this is not true. But the early data I have seen. It should certainly help us to continue to drive growth in Building Automation. You mentioned earlier that paraphrasing that you've historically been under indexed in data centers, but you're starting to see momentum. Just provide some color around what's happening there. So, when we were late entrant to the party and we set up our organization in early 2022 to address data center customers, obviously took a while because why they should switch to us if they already have automation system provider versus a compelling reason. But now three years into the journey, I would say for all the hyperscalers, we have presence across the board. And we are getting meaningful share. And our bookings in 2024 are $ hundreds of millions now. It's a good place to be starting from zero. And we expect that number to grow at a very high rate in the next few years because our strength is, which I never doubted it, the good thing about the data center business is you can count the customers on two hands, the hyperscalers and the big data center builder. And they do this at a global scale. They build data centers in the U.S., in Europe, in Asia. That's what Honeywell. And Honeywell is good in global scale. Honeywell is good in program management. So it's not about the product alone. It's the whole value proposition package. And I think once that story got across, we are getting more traction that it's not about product. It's about the lifecycle value creation we provide. And that's giving us momentum in this space. I always worry when we have high market share in some segment because somebody will take it. I always get excited when we have no share because we have nothing to lose. We can only move up in one direction. And that's the direction we are headed towards. Yeah, that is a good problem to have. Did you have to reorganize either your field organization or Salesforce or how did you tackle it? One change we have made in Building Automation is we are reorienting the business towards verticals. The three verticals of choice we have chosen for high growth are data centers, hospital, healthcare, hospital, whatever word you want to use it, and hospitality, hotels, and entertainment center, casinos. We believe these are all megatrends here to stay forever. And our sales force has been reorganized by verticals. So we have specific business development people who call on the customer to do business development work, specification work, whether we sell a solution or whether we sell a product. This change we made over the last this year. You can see you will expect to have a lot of Honeywell sellers in this kind of segment. And that's a shift we have made to get more demand onto our way. One more question around the comments you made earlier regarding the Bombardier agreement not impacting 2025. And since we think about, we all have our estimates for 2025, but even think about the free cash flow implications. It seems like there shouldn't be any implications from this recent agreement. But how should we think about free cash flow growth from here on out? Look, my goal is 2025, we break our lack of momentum on free cash flow. My goal is that free cash flow grows greater than income growth. So this year, if you take your guide, there should be more than earnings growth, free cash flow growth in 2025. Why will that happen? Inventory unlock has to happen. Aerospace is a $1 billion+ inventory. So our goal is to now start dialing it down to a smaller degree starting 2025. Even a smaller number will help. So then all income flows into cash plus some working capital reduction, and that's a goal we are working towards, and expect to hear more from us in Q1 earnings call. Great. I'll turn it to you in case you have any closing comments. No, again, thanks for having us here. I do feel excited on where Honeywell is headed. Sometimes it can feel a bit of disappointment on lack of progress specifically in Industrial Automation. My commitment to everyone is we are executing to what we said. We are going to demonstrate progress in the time ahead. Thank you very much for having me here. Oh, thanks for coming. Great to see you again. Thank you. I appreciate it. Appreciate it. I really appreciate it, chip.