Good morning, everyone. My name is Sheila Kayalu with the Jefferies Aerospace Defense and Airlines Equity Research team. Thank you so much for joining us for our Third Annual eVTOL AAM Summit. Today, we're lucky to have Sean Meakim here, who's VP of Investor Relations, as well as David Shilliday, who's VP and General Manager of Honeywell's Aerospace Advanced Air Mobility business, who will be discussing how Honeywell is enabling the eVTOL market. In case you haven't heard from David at an event recently, he's VP and General Manager, as I mentioned, of the UAM organization. He's been with Honeywell for over 19 years, and most recently, prior to his current role, was in the power systems business with engines and power systems. He's based out of Phoenix, I believe, right, David? Although you're currently not there, and you're at a rather neat facility of sorts. With that intro, David, thank you so much for joining us. Maybe you could talk to us about how Honeywell plays into the advanced air mobility market. Yeah, and thank you for the opportunity to speak with you, Sheila. I always look forward to these discussions. About five years ago, Honeywell created a dedicated business unit for advanced air mobility, and that was based on the belief that this nascent market was going to need a different set of solutions and a different model for support of these early-stage customers. We needed a group that could move at the pace of the Archers and the Verticals and the Electras that had a startup mentality and a very disruptive MOS. We needed to be adaptable enough to work with legacy players and entrants from the automotive space at the same time. We led the charge. We won some early programs with these early players, knowing not all of them would ultimately see high-volume production, but it would improve our core technology through collaboration with them. Now, five years of that collaboration later, our technology stack has matured. It's allowed us to create some new offerings, things like Inceptors, which we've announced recently, while at the same time supporting flight testing on that first wave of customers. Some of those first customers are moving closer to certification and production, and we're right there alongside of them. The other cool thing that's been great to witness over this five years is some of these solutions that we developed in that sandbox with our AAM customers have now found homes in more traditional end markets. You've seen Anthem, which was developed in cooperation with a lot of early AAM players. Now, announcements with folks like Bombardier and Boom, things like our tuned cooling systems. We've now seen those announced on programs like the Bell Valor, as well as flight controls in areas like Hilo and Defense. Those are other big end markets for us. It is a great signal of how we are able to innovate here in this space and ultimately how it fits with our broader roadmap and helps us achieve scale when these AAM customers go into production. Maybe Honeywell is great at giving forecasts, and so Sean's on the phone to keep us in check. I think you've previously talked about a $31 billion addressable market for Honeywell for AAM, including air taxi at $20 billion, middle-mile cargo of $10 billion, and local light parcel of $1 billion by 2030. Can you maybe walk us through some of these? Should we be updating them? How do you think about the mix of opportunities? Yeah, I guess the biggest shift has been in what those early missions are going to be. We continue to believe in this end market. Some of the early forecasts were probably a bit optimistic for some of the commercial applications, but as we've seen the shift towards things like emergency services or things like DOD special missions, we've seen the vehicles pivot towards those special missions. Just starting with that as sort of the top-level analysis, the other thing that we've seen is that geographically it's going to be an uneven road, right? Today, we're seeing a lot of players in the East lead the way relative to rulemaking and early activities. I think we're going to start to see some special missions in the rest of the world really start to pick up. If the question is, when do we think this is material to Honeywell Aerospace, we still feel confident that the AAM end market is material to Honeywell Aerospace in the 2030s. While we continue to expect that there's going to be a shift in mission and there's going to be a shift in who's at the front of the race, we continue to believe in the end market as well as what we're learning along the way. Maybe if we could talk about your products you'll supply to the AAM market, how do we think about that? I think starting first with Anthem, that opportunity, of course, it'll be eVTOLs, but you'll supply that into commercial transport and business aviation, whether it's new build or retrofits. You could talk to us about Anthem for a minute. Yeah, a lot going on in the world of Anthem. A lot of the feedback we got from those early players like Vertical and Supernal helped improve the architecture and the pilot experience for Anthem. Now you've seen announcements for things like a multi-platform partnership with Bombardier. We've got another announced BizAv win, as well as a retrofit campaign that we'll be announcing soon. You have things like Boom, which is a pretty disruptive aircraft where they've announced they're using the Anthem cockpit as well. That's exactly what we want to see is our co-innovation with these customers, making it a better solution for the next customer and the next customer, including the next AAM customer, right, who's going to get the benefits of all of the development that we've done along the way. Maybe step back, because folks might not know what Anthem is. Can you talk about Anthem Avionics, how it's different than the prior system, Epic? What should we expect the first application to be? Is Is it eVTOL and when would it enter service? That's a great question. In terms of what Anthem is, Anthem is our integrated cockpit. The big places it's differentiated from systems like Epic are, one, it's highly scalable to larger air transport aircraft all the way down to GA aircraft. It allows you to host other applications on the Anthem cockpit, which gives you unique capabilities and unique co-innovation opportunities with other software systems you might want to integrate there. The other thing is these systems, it is designed to be connected all the time, which is really what the future is going to look like, as well as it's designed for a future where reduced crew operations up to zero crew operations are going to be evolving. Anthem is future-proofed for all of those developments along the way. Modular open system allows us to integrate with other systems or host other systems. When would the first application come into place? Would it be new build on eVTOL, and when would you expect that to enter service? We've publicly announced that it's the cockpit, it's the integrated cockpit on the Vertical aircraft, which is targeting EIS in 2030. I think that'll be a bit of a foot race between it and some of the other unannounced applications for Anthem. I would say it's 50/50 that it's either an AAM application or a more traditional end market where you'll see Anthem first. You mentioned Bombardier and new products, and thank goodness Sean is on so I don't get in trouble again. How do we think about other applications in addition to potentially eVTOL? Could it be retrofitted onto existing platforms? What sort of FAA certification would it involve? Keeping myself out of trouble with both Sean and my boss, I'm going to keep my powder dry on that one, except to say we have a big retrofit campaign for what we would consider to be a more traditional end market with Anthem that we'll be announcing soon. Could you retrofit it? [Yes.] Does the aircraft have to get recertified? Okay. I think you talked about the pipeline of UAM being about $10 billion. What are you seeing in winning the largest opportunities across the portfolio? Yeah, there's been a bit of a shift. Early on, our pipeline was really about Anthem, the integrated cockpit, as well as our flight controls, our compact fly-by-wire were really the big drivers for that pipeline. While we continue to have demand for those, we've seen increased interest and wins for our tunes, our Micro Vapor Cycle System. Folks like Archer and Bell Valor have taken on that system. The ASUR electromechanical actuation, a number of wins there, including Archer and Electra, who are using that electromechanical actuation system. We see demand across all vehicle types and missions for our navigation systems, right, where we have a long legacy. Probably the things we have not been talking about since the last time we were here with you is new technologies like our Inceptor, our side stick, which we originally developed for the Orion spacecraft, but we have found that it is a unique benefit to AAM customers. Vertical has recently announced that they will be using our side stick on their VX4 vehicle. This is exactly what we want to be doing, either developing new technologies that fit an unmet need with our customers or adapting existing technology to meet that unmet need. It is a bit like puzzle pieces, right? The more we can understand these customer needs as they go through their development and certification process, we add more pieces into the mix to help them solve that. We think a year from now when we're talking to you, there'll be even more of that. When we think about the AAM portfolio, where should we think about the biggest value add? Is it avionics, fly-by-wire? Is it propulsion? They have different business models. I guess if you think about our avionics systems or fly-by-wires, there's constantly going to be updates and improvements to the control laws for updates and improvements to the software that goes into that integrated cockpit. By contrast, you can imagine things like electromechanical actuation or things like cooling systems where those controls are learning over time how to operate more efficiently, how to predict wear-out modes. The business models are very different, right? Whether you're talking software upgrade or whether you're talking replacement and repair. The biggest value add when we sell to the OEM may be something like the cockpit or like the flight controls over the life of the vehicle. It could end up being something more mechanical, right, that's going to need repair and replace something like the electromechanical actuation or a big cooling system. How do you think about the investment involved in UAM? How much of it is products you've developed for your existing portfolio that you could transfer into UAM? How does Honeywell think about that in developing new technologies with industry partners? Yeah, so the vast majority of technologies we're offering in this space were invested as part of an aerospace roadmap. They are not bespoke in any way for AAM. If you think of the development of a cockpit of the future in Anthem, that was a long-term strategy for BizAv, for Defense, for air transport. The early adopters of that and some of the early iterations went through AAM, but that was always a core investment for us. Similarly, electromechanical actuation, flight controls, cooling systems, again, core roadmaps where we were able to evolve and improve those products with our AAM customers. The number of unique AAM offerings, that's a relatively modest investment. Things like our Ground Control Station that allows you to operate uncrewed vehicles in a controlled airspace is something that we invested in specifically for this product in a relatively modest way and in coordination with a number of the regulators and a number of cooperative partners there. Another one that I would say sort of straddles the line between core investment and AAM investment is something like the work we do on autonomy. We have announced some investments with a company called Near Earth Autonomy where we are flying Blackhawks remotely. Part of that is how we advance the Anthem cockpit for more simplified vehicle operations or reduced crew operations. That is something that is on our long-term roadmap, but will likely be adopted first by AAM customers. Maybe the three buckets to put it into, Sheila, where we can take an existing certified product and drop it into an AAM vehicle, we do that. Think our navigation systems, think our sensors, i f we can adapt it, something like Anthem or our flight controls where the core product is developed, but specific software development or control laws need to be adapted for that vehicle, that's sort of the second bucket. The third bucket would be something we developed specifically for the AAM market, and that would be something like our ground control station. Uh-oh. Hopefully I'm still there, Sheila. Sorry, I was muting it as I was writing. How do we think about target markets and revenue generation of Honeywell's AAM business? Yeah, the geography is highly dynamic. Sort of which geography is going to go first for which mission is I spend a lot of my day following that. Maybe the only non-controversial statement would be that the Eastern Hemisphere is going to have the early adoption. The rulemaking landscape there has set the pace. The good news is that has been and will be a catalyst for progress in the West, right? They've published the rules. They've certified a couple of early vehicles for operation. We see folks in between, like the United Arab Emirates, moving really aggressively to find a path to incorporate these vehicles into the airspace. I don't want to downplay. The United States announced AAM as a strategic priority on inauguration day. While Secretary Duffy has a lot on his plate relative to modernizing the airspace, he's really leaned forward in terms of making this a priority. One of your other speakers, I love what Archer has done relative to their commitment to LA 2028 as sort of a forcing function to move regulators and adoption forward. It increases the pressure for folks like us who are supporting Archer with critical systems, but we'll gladly take that to see the market move forward and learn what the next need and what the next challenge is going to be so that we reveal those and get busy solving them. Maybe if we could talk about just the content. Honeywell's, I think given this content, or we might have guessed it, $200,000-$1.5 million on a typical UAM, $2 million-$5 million vehicle price. I think, I don't know if we backed into that. And then $100,000-$1.5 million on an autonomous cargo, and then $5,000-$60,000 of content on a delivery drone. How do you think about, are those figures right? Have they changed at all? What do you think is the first to enter service? How do you think about the allocation of your resources? Yeah, that's a lot. Maybe I'll start with just the first part in terms of the value per vehicle. Our specialty is always going to be the most complex, safety-critical vehicles. Things like Anthem and flight controls and some of the electromechanical systems I described, that puts them probably towards the higher end of that range that you've described per vehicle. Autonomous cargo is going to need fewer of those systems. Certainly, it doesn't need a lot of the pilot interface, right, if they're going to be remotely piloting or autonomously operating those vehicles. That value comes down a little. As you move towards something like delivery drones, that's not going to be our sweet spot. We do things like ground control stations to really figure out how we're going to manage the airspace in the future, but that is not the most safety-critical, big vehicle operation. We are going to tend to focus our precious resources, as you described, on those larger vehicles who really need higher safety requirements and more complex systems. Any thoughts on how you work with the regulators to certify the aircraft or does Honeywell take sort of a direction from the OEM on that? A little bit of both. We're certainly arm in arm with our customers when they're talking with the regulators because certainly we need an Anthem architecture, a flight controls architecture that we're confident will be certified under the most stringent rules. We typically go arm in arm with our OEM partners so that we understand the feedback they're getting from the regulators in a space that has not been solved before, right? These are new questions being asked in a lot of spaces that we're going to have to navigate for the first time. At the vehicle level, they're going to be responsible for that ultimately. For all those pieces along the way that we provide that allow them to meet those criteria, to meet those vehicle-level safety requirements, we try to join with them. We also try to help educate regulators on some of the unique things with these vehicles and some of the design trades to solve it. When we think about Honeywell and UAM and the content there, is it similar to general transportation and commercial transportation when we think about the percentage Honeywell can have on an aircraft, or is it more of an opportunity for Honeywell? I think it's more of an opportunity. One of the things I haven't really touched on is because of the breadth of our portfolio, think of everything from when the pilot touches the side stick, which then sends a signal to the flight controls, which then translates that into an action for an electromechanical actuator, and then the cockpit provides the feedback on what that has done to the orientation of the vehicle. We can provide all of those systems, and we can also integrate those systems in a way that reduces the size, weight, and power requirements of it. I think there's enormous opportunity for us to sort of redefine what those buckets of product offering are and merge them together in a way that reduces the cost of integration, creates simplicity, allows these vehicles to be certified and operate more efficiently. I think the traditional silos of the products we provide are going to get merged together in new and unique ways, and I think it's going to be to the benefit of our customers as well as to the people who get to fly on these aircraft. With that said, how do we think about the revenue ramp and profit opportunity for Honeywell, if that's possible at all? Sean's wiping down his face, so I'm not sure if I'm allowed to ask that because that wasn't in the original set of questions. I think the one thing we can say for sure is that it's going to be lumpy. It's not going to be a straight line. I expect that we're going to see some missions that we hadn't predicted suddenly ramp up, which will drive production of vehicles that maybe we thought would be second wave entrants. I think we'll see some folks that we thought would be at the front end potentially struggle. We're bullish on the end market, and so we're willing to continue to advance our roadmap, find other homes for it while this market matures. Maybe one more in terms of just the safety, the public acceptance of eVTOL. How do you think about some of the restrictions versus, say, commercial aircraft have? How could we make eVTOL more widely accepted? Two thoughts there. One is the more conspicuous we can make the airspace, everything in the airspace, the more it will drive the opportunity for new vehicles to be part of that airspace. Conspicuity all the way down to small drones, to GA aircraft, to large air transport aircraft, and awareness of the airspace will create an opportunity where we're less concerned about a new and novel entrant coming into that airspace. That sounds like motherhood maple pie, but I do think it's worth saying again and again as we think about modernizing the airspace that that's critical not only for the vehicles that operate today, but for the vehicles that are coming along the way. The second is we keep very close tabs on sort of new and novel applications to see what the challenges with public adoption are. I'll just give two examples from where I live in Arizona. One is Waymo, where early on that felt like a novelty, and now it is absolutely an indelible part of the landscape. People love Waymos. You see them all over our highways and our surface roads in Phoenix. It went from, "I would never do that," to suddenly it's an indelible part of people's lives there. The other one on the west side of Phoenix is where we see drone delivery. Again, fairly small applications, fairly limited range, but we're listening to what the public feedback is on that because we think it's a potential indicator of either the challenges or the positive feedback we might see when UAM, UAS vehicles become more seen and heard in the landscape. Maybe two more and we're done. I think we have 20 companies in total presenting today. Given Honeywell as a supplier, how many of them have you officially partnered with, and is this something that we should sort of look forward to as we think over the next few years, more announcements and more partnerships and more products? The answer is yes. There's plenty more that we're actively developing with that we have not announced. Being completely transparent, we are choosy. We have to be. We want to make sure we're deploying our precious resources, primarily engineering resources, on those programs and those vehicles that we feel have the highest chance of success. There are a lot of programs that have not been made public that I think you'll be pleasantly surprised when you hear our name attached to, but I don't think you'll see a list so long that you would be concerned that Honeywell has spread themselves too thin. Got it. And then one last one for you. What are one or two things you're most excited for the next year looking ahead for Honeywell? First and foremost, in this space, I'd be remiss if I didn't say I want to fly on one of these. Wherever the early opportunities are, whether it's a demo tourism flight or some early opportunities to be with one of our customers as they do demonstration activity, I'm going to get on one of these aircraft sooner rather than later. The other is seeing business applications that were not originally envisioned, right? It's like the early days of the internet where we didn't know what we'd do with high-speed internet until we had it. I can't wait to see when these really start to show up at scale, the great ideas that people have and the economies that get opened up as a result of these new and disruptive vehicles. Awesome. We will look forward to that too. I am yet to try that Waymo car. I have only seen it as I passed by Phoenix, though, and the end ramp, I think. We will look forward to adoption of all things new and innovative. Thank you so much, David, for doing this, and thank you, Sean, as well for involving Honeywell. That concludes our webcast, everyone. Thank you, Sheila.