Good morning, everyone. This is Nicole DeBlase, Deutsche Bank’s multi-industry and electrical equipment analyst. We’re back with Honeywell. Pleased to introduce Mike Stepniak, CFO, and we also have Mark Macaluso in the room, SVP of Investor Relations. Please keep this interactive. If anyone has questions, please feel free to jump in. I’ll stop my questioning a few times throughout to just make sure everyone’s getting their questions in. Mike, I thought I’d start with some high-level stuff for you. Now that the three-year portfolio is complete, how does management define success for Honeywell Technologies as a pure-play automation company? What metrics will you hold yourselves accountable to the next 12-24 months? Sure. First, thank you for having us here today. I’m super excited to be here. The year’s progressing extremely well. Strong factors about orders in July are looking good. That’s why we raised the guidance and feel good about the second half. As far as your question, we just laid out, obviously, this is our first month out as a new company. We laid out our three-year growth targets, so 4%-6% top-line growth, doubled EPS growth, trying to get to the $12 in 2029, and strong margin expansion as well as 90% + free capital conversion. We’re off to a good start, feel really good about the second half, and based on how the orders are coming in, next year looks very quite strong as well. That’s great to hear. I guess just maybe just double-clicking a bit on what you guys are seeing from an orders perspective. Can you talk a little bit about short cycle versus long cycle trends, maybe things that are standing out in different parts of the portfolio as particularly strong? As you know, we put a lot more emphasis on higher growth verticals within our portfolio as far as FTI, commercial, how we focus commercially. We reorganized a lot of our teams within Industrial Automation, Process Automation, and Building Automation as far as being closer to the customers, the agents. We see broad-based growth across all of our regions. Historically, the last few years, Europe was a headwind for us. That's no longer the case. China’s doing okay. It’s obviously pressure, but doing okay. Middle East is surprisingly, for me, strong for us. Other parts of Asia. North America is real strong. That’s progressing well, and that’s where really the short cycle and strong growth. We’re seeing growth in our traditional verticals, but also obviously outsized growth in the high-growth verticals. That’s progressing well, and on top of that, we have a long cycle demand. We talked a lot about our process business getting a lot of orders, building backlog. That backlog is starting to convert. On top of that, we have incremental demand coming. The conflict in Iran stimulated demand in Middle East as far as rebuilds, but also in Middle East as far as just security. A lot what is in the input as well as people are reassessing the new world order, if you will, and how they’re going to manage their supply chain. Those are things. I would say generally very good backdrop for us going into the second half of this year. Okay. We’ll definitely get into each of those areas as we talk through the segments, but maybe sticking with some more of the high-level questions. As you become a more nimble, pure-play company, what should investors expect to remain the same versus the Honeywell we’ve known for many, many years, and what might be different? I think what you’re noticing is that we are much more focused. Much more focused at our core, very methodical in terms of how we execute. What’s maybe where we are pivoting and where you see different is much more commercial focus. Co-innovation with our customers, a lot more focus on innovation. We’ve been doing some M&A. We’ll continue to do M&A, and our team is committed to continue to do thoughtful M&A to supplement our portfolio. At the core, it’s really, I would say for us, it’s Accelerator. Accelerator has been our backbone as far as how we run operations, how we leverage Accelerator to expand margins, and we’ll continue to do that. Last few years, Accelerator program focused on us in terms of our revenue models and driving persistently across the company as far as how we deploy our revenue models. Last few years now, we were shifting towards Six Sigma supply chain excellence. Now we’re pivoting again into artificial intelligence and how we leverage Accelerator there. So it’s ever evolving, but the management operating systems that we had are at the core of everything we’re doing. Okay. Understood. Software and services, I think at your Investor Day, you targeted 45% of revenue to be generated from software and services over time. Where does that stand today, and what’s the big pieces of the roadmap to get you to the 45%? It’s really Forge- Okay. -and Forge offering. Last year we connected more assets last year than the five years prior. If you think about the investment we’ve done in Forge over the last five years, it’s starting to pay back in a very meaningful way. Over the next 2.5 years, we’ll connect. Today, we have about, I think, 5 million assets that are connected. We'll probably connect about in total 9 million assets. Why is it important? The connection really gives you a gateway then to try to innovate with customers and provide solutions, et cetera, and build the data that we need. They've got a lot of plans from those connections. Really excited about that, and that's where that 15% annual revenue growth comes in on software spend. How does AI fit into Forge? Are you enabling, are you using AI, are you applying AI tools to Forge? Is that something that becomes available for customers? That's correct. We're building, leveraging automation of the assets as far as learning and building these AI models. How has the customer response to that been so far? Very good. Okay. I think generally, if you think about where we were five years ago, there was a lot of hesitation as far as getting access to data, sharing data, et cetera. Now people realize it is really necessary. Okay. I think the cybersecurity got much better, too, over the last five years as far as being able to contain things and protect your data and your domain knowledge. That is why it is going out very well. Okay. Understood. We've got two specific AI factors here. You've got the tools that you can use for Forge to drive adoption. Then I would assume that you're doing a lot with AI internally as well. Can you talk a little bit about that? Yes. It's actually quite a steep topic for us as a company. We just made a big investment into AI as far as equipping all of our associates with AI tools and Copilots, et cetera. Now we're building all that up. Look, common knowledge, I think, will tell you that a person that's proficient in AI Copilot probably saves two, three hours a week in their productivity. That's great, but for us, it's much bigger than that. We're really focusing on being able to deploy AI at scale. I can give you a couple of examples. Within our engineering organization, we're using AI for drafting, drawing, retrievals, putting proposals, et cetera. That's tens of thousands of hours of productivity that our engineering team can do and can get to the market faster with proposals. In finance functionally, a couple of quick points. We do now balance sheet analysis using AI. We gather our balance sheets across our 300+ entities, and AI tools analyze them for essentially variances, for comments that analysts put into it, help you look at things, help you analyze things in a much more dynamic way. Same with audit. We leverage a lot of AI doing our internal audit as far as how we review accounts, how we think about various audit cycles. There is a ton of productivity out there. You just have to be very purposeful, and I would say you need to make sure you deploy it in the right areas. Okay. Understood. After the Investor Day, I would say there is still kind of a good base of investors that are skeptical that the 4%-6% long-term organic growth target can be met. What would you say to those skeptics? Well, I guess I would say we are going to prove it. I am a big data person, and if you step back and if I look at the business and why I feel so confident we will achieve those targets, it is looking at leading indicators. Our orders pipeline is extremely strong. We are being successful as far as focusing on our verticals. We have done a very good job integrating our acquisitions, which is driving growth. We have been very diligent and purposeful in terms of how we deploy companies. We have been spending a lot of time on driving our NPI machine, which we talk about it, and it is hard to really show you the data kind of day to day. But we see it in the pipeline, we see it in the orders, we see it in customer sentiment scores. Finally, we have done a lot of work in terms of self-help in our Industrial Automation business as far as customer delivery, being better on time to deliver as far as first promise and Customer One Date, and that is helping. So we have now three businesses, all of which are gaining momentum and growing, both on the short cycle and on their long cycle. So I feel really good about the progress the team has made and where we are going for this. I guess it also helps that you did put a few points of contingency into that outlook, too, right? We put points of contingency to account- Yeah. -for things, demand disruption, inflation or pricing maybe not being at 4%, et cetera. So it is there. So I feel the 4%-6% frame is a good frame for us, and obviously everybody is incentivized to beat that. Got it. You talked about NPI, and I thought this came up a lot at our dinner last night. Right. I thought it was interesting. It seems like that's an area where, at least from an outsider, it feels like you guys are kind of doubling down on NPI after the spin, and that's been something that feels like it's changed a little bit. Is NPI something you're excited about across all of your businesses? I am. Obviously, each of our businesses are at a little bit different stage of the journey. I would say the Building Automation business is the most mature because they've been working on the NPI machine now for the longest. What I mean by it is of making sure that they are diligent on how much money to spend on NPI, their provision. They're very thoughtful in terms of launching NPI timely, making sure the supply chain is ready to fulfill NPI, working closely with customers and collaborating both with channel partners and direct customers as far as what to launch, when to launch, the product features, et cetera. So that's working extremely well. Industrial Automation's been on it now for about 18 months, and we start seeing successes, and they have a lot of exciting launches coming up. Process Automation technology, that business was just in the lower. It wasn't in the cycle with this one. Yeah. The NPI is a little bit slower there. But nonetheless, you have some really cool things coming out as far as process technologies. Yes. I would say generally, the NPI machine is firing on all cylinders. I would assume that with NPI, you probably have the opportunity to get some of that price that people perceive as aggressive in the guidance, and so maybe that kind of contributes. NPI, it tends to come with better price or better mix- Right. -however you think about it. Generally, within the first two years, it is accretive to your business, which is great. We are obviously managing the overall demand and then balancing things. We ultimately want to grow EPS, while being thoughtful as far as how much price we drive and not destroying demand. Yeah. NPI has been coming with good pricing as well. Okay, great. Then maybe just shortening the lens a little bit to 2027. We are starting to get investors focused on 2027. It is a big part of the conversation now. It strikes me that Honeywell could have really nice above average, maybe even top-tier earnings growth in 2027. You have stranded costs coming down. You have interest expense coming down. On top of that, we have clear acceleration and order trends. Do you agree? I do agree. In the second half, we'll grow 4%-6%. Yeah. Hopefully, more closer to 6%. It's a slow quarter. Things are personally looking good. That gives you a really good, I would say, setup into 2027. Especially the first half. Feel good about that as well, that the macros are in our favor, businesses are performing. As far as margin expansion, we talked about it at the Investor Day. We'll get much more margin expansion in the near term versus later term. Right. Right. So 2028, 2029, we should get to the more normal 60 basis points margin expansion. The near term, this year, next year, the margin expansion is going to be much more pronounced because we're still working through talent from the portfolio transformations, trending costs taking off, et cetera. As far as the EPS growth next year, I'm looking at like a 15% as well. I think that gets us to that $12 in 2029. But that's something that we're instrumenting the teams. Okay. Okay, perfect. I wanted to start drilling down into the segments. Starting with Building Automation, I think the biggest question I get from investors is, how is it growing in single digits? Can you give us a window into what's going on in that business to drive such strong growth and maybe the sustainability of that? Sure. It's not a one thing. That's the great thing about Building Automation. Building Automation is a business that's the most diversified as far as the end markets, as far as it being diversified regionally, and how the revenue comes together. So it's a multitude of things, not one thing. If you just look at data centers. Data centers are about 5% of Building Automation. Yes, it's growing tremendously, but it's only 5% of the whole business. But your question is, how sustainable is it? I think it's fair to say that this business has a good runway to be able to grow at mid-single digits plus for foreseeing the future. We're not guiding in high single digits just to give the team a little bit of room, if you will, to experiment, to do things that they need to do to grow and to really manage for the longer term versus just the short term and the 90 day. From a margin expansion standpoint, that's really what I'm excited about. The business will finish this year about north of 27%, but we have a really good line of sight for the business to be 29% margin in 2029. I don't think that system. It's really just going to depend on, once again, on the innovation, customer propositions, software at Forge, et cetera, all that it's playing. The business is getting really good leverage right now. They're investing in R&D. There are just a lot of good things going for it. Okay. Understood. But I guess just to be clear, is there anything happening now within that high single-digit growth rate that shouldn't be viewed as sustainable? Certain end markets that you think won't grow as fast in the future, or maybe a surge in NPI that could slow down? No. Okay. I would say there's no red flags right now, but as you know, like I said, the business is well diversified. If something happens in Europe, for example, and all of a sudden there is a demand shock, it's going to affect the business. Sure. That might have a change and an impact on the business around 7%-8%, or 6%. That is why we are guiding the business that we are guiding. Okay, fair. Data centers, you mentioned about 5% of sales today. That was zero not that long ago, right? Yeah. About three, four years ago, it was close to zero. We would like our data center business to double over the next few years. So we would like to be over $1 billion. And it should be 10% of the Building Automation business. We would like the Building Automation business to be a $10 billion business eventually. Remind us what the key products are that you are selling into data centers today. I get that question a lot. Look, it is really a lot around fire sensing. Security, physical security, and monitoring, building management systems, those types of things. Okay. Then as the data centers become more sophisticated, there is a lot of growth opportunity for us from other parts of the business. Think about a lot of new data centers will require their own power source. We have a lot of great technologies of managing the load, sensing the load, the stability, liquid cooling with the data centers, with these higher compute power computers, they require different cooling. We have a lot of great technology that we are launching on sensing, liquid cooling, measuring heat, et cetera. So, there is just a big opportunity for us here. Okay. Okay, perfect. If you were to look at the order and the revenue growth recently within BA, which regions stand out, or has the strength truly been global? The strength is global. China, obviously, is a little bit- Construction's terrible there, yeah. It's just slower growth right now. We're still doing okay. Europe is doing extremely well. North America is doing extremely well. Middle East, other parts of Asia, outside of China as well, you obviously see. So yeah, it's broad-based. Outside of China, everywhere else is doing pretty well. Pretty good stuff. Okay, that is great. You mentioned your excitement about margins improving, which surprises me because the margins have been expanding so much for so long. What do you view as the key levers to unlock getting to 29% and then going further than that at some point? It is really NPI, Forge, and employee leverage. Those are the big things. We talked about it a bit there just a minute ago. NPI has to be creative. When you have good NPI, good delivery, you can demand better pricing. As long as your NPI demonstrates savings for your customers, they will obviously participate in the bigger savings. We feel really good about it. Forge, it is really, I would say, something very unique and powerful for us. As we commercialize it, we see a lot of premium source margins, as you know. Is BA where Forge is maybe the most evolved, or is that the wrong assessment from an external perspective? It is more advanced, I would say. Okay. We have the most penetration. After that, it is really in Process Automation. Okay. Okay, makes sense. I think that is pretty much everything I had on Building Automation, unless anyone else wanted to. Okay, perfect. I am going to move on to Process Automation and technology then. I guess, maybe if you could talk, Mike, about the impacts of what is happening in the Middle East to Process Automation, and it seems like you are already starting to see some of the positive effects of that conflict with respect to the oil price on orders. Can you talk a little bit about what you are seeing in real time? Sure. We just have a ton of demand across the board. What the conflict, I would say, generated is, obviously it generated higher prices within the oil and gas industries. With that, there is, if you look at the first quarter, there was maybe just a pause on catalyst as people were trying to run their facilities harder to get the benefit of the oil price being higher. As people realize that oil prices are going to stay higher for longer, people are taking down their facilities and reloading, if you will, to run them efficiently for longer. We are seeing an inflection in the catalyst demand. Our catalyst demand, if you look at the second half versus first half, it is going to be up double digits. It is still about flat for the year. The second half year-over-year will be up high single digits. We feel good from a short cycle demand. From a long cycle demand standpoint, what we are seeing is a much more pronounced build-out outside of Middle East of new facilities. You think about Africa, and you think about Asia. We see activity also in Latin America. It is broad based. And obviously LNG is performing extremely well right now. For our LNG business, we are taking orders now for slots in the end of 2028. We are building out capacity in our LNG business to continue to support the demand. And then there is some rebuild happening in the Middle East as well, which is, I would say, it is outsized growth. It is obviously just one point in time bubble that we have to accommodate with our customers. The bigger, I would say, theme in Middle East is people are focusing on resiliency. We see much more demand from our Process Automation business, especially around cyber, Building Automation security, et cetera. That is also helping. Business is growing. Okay. And I guess if you were to kind of bifurcate what you are seeing in orders for process technologies versus Process Automation, are you seeing a pickup kind of across the board? We see a much more pronounced pickup in process technologies. Okay. Process Automation, at least our experience has been that Process Automation is about 18 - 24 months behind process technologies. When process technologies was going down two years ago, 18 months ago, Process Automation was still growing for us. Now, Process Technology is starting to grow. Process Automation is kind of flattish. Yeah. It is going to grow faster next year. Okay. In Process Automation, too, there is an interesting dynamic that our Process Automation business is moving to new verticals as well. If you think about life sciences, if you think about a little bit of the screen from pharma medical devices build out. If you think about cyber, if you think about U.S. onshoring and semiconductors business, all that is helping the business grow as well. I see. It's actually diversifying quite nicely. The only thing I'd add to what Mike said is, last year, remember we had a couple of mega, really big orders starting in the second half of last year. Yes. The book-to-bill will still be strong. We're starting to bump up, especially in PT. That's PT, right? Up against some really big comps. Yeah. A couple of multi-hundred million dollar orders in Q3 and Q4 of last year. Still great demand, but just the variances are going to look a little different as we bump up against those tough comps. Okay. That is exactly right. You will see probably our orders in PT to be potentially down in the fourth quarter. Yeah. Maybe in the third quarter. But book-to-bill is way above one, and the revenue inflection is happening. It is just the nature of the cycle. And obviously, like Mark said, we are lapping some really, really big deals. Okay. Important to point that out. Thank you for that. And then you mentioned that you are booking LNG projects out to 2028. How would you classify the LNG pipeline today? Is the demand still flowing? We are going to be booking into 2029? I think so. There are new customers coming in, essentially almost daily with new asks, new opportunities, et cetera. So, we are seeing a lot of demand and we are obviously working with the customers to satisfy the demand. Okay. Understood. Maybe just to double-click on the comment that you made about second half catalyst. I know you guys are expecting Process Automation technology to return to high single digit total year-on-year growth for the segment in the second half. The biggest driver of that, is it the catalyst business? It's projects. Okay. It's projects. I mean, our total catalyst business, talking about $67 billion segment is $5 billion. It's really the projects that's driving the top-line growth. Okay. I guess that means that from a mix perspective, we need to take that into account when we're thinking about forecasting margins, right? That's right. A couple of dynamics in Process Automation technology, and I think generally folks have our Process Automation and technology business a little bit too high of a margin right now, I would say. Okay. You have to remember, we just acquired Johnson Matthey. It's going to be dilutive to us. This year, Process Automation technologies will finish the year probably. We'll print about 22.5% margin for the year. It's going to be, I think, about 150 basis points erosion year-over-year. But that's driven by mix and Johnson Matthey integration, et cetera. Within that, though, obviously LNG is accretive. I would say catalyst coming back, that's going to help as well. I would expect us to continue to expand margin in the next year, especially going into the second half next year. Okay. That is good. Honeywell will still have a very strong margin expansion progress in the second half of next year. Within Process Automation technology, we are working on the dynamics of JM and just margin mix. Okay. Understood. Maybe we could just spend a little bit of time on JM, and you could talk about what you are most excited about with that transaction. If you see the opportunity for margins to get to the Process Automation technology average over time or better. Yeah. As far as getting the business to Honeywell margins, especially if you think about north of 20%, 24%, 25%. 25% is what we guided for 2029 Process Automation technologies. Yep. That is going to take a while. Okay. That is going to take two, three years. In the short term, there is a big benefit. Just looking at the inflection of our current business, we should see the inflection in demand as well in Johnson Matthey. We will actually spend the next couple of weeks just working our way through that, and we know there are opportunities there. From a cost standpoint, there is just a big cost opportunity for us as far as how efficiently we are running the business. How we manage the cost synergy. I am actually quite excited about the opportunity here as far as improving the business performance. Okay. Understood. I think you guys have targeted for Process Automation and technologies, 25% margins in the three-year plan. That's right. What's the confidence in that, given that this is probably the segment where mix can have the biggest influence on reaching that margin? That's right. I would say the confidence is high. Okay. The business is. That's why we've done some M&A in this business. If you think about LNG, if you think about Sundyne, they're accretive to the overall process technologies business. Process Automation is also accretive to overall process. We're making the business less cyclical. I am quite confident as far as us being able to get to the 25%. It is not going to be linear. We have to get through this build cycle. Right. While we are getting through the build cycle, we are also working on our various offerings as far as software, recurring revenue in that space, et cetera, which is a big deal. Then margin is going to progress quite nicely. Okay. Maybe just one more before we move on to Industrial Automation, just with the orders that you are seeing related to the Middle East conflict, both rebuild and as a result of the Middle East conflict, because of the focus on resiliency, when should we start to see that revenue? Could that be 2027? You will see some of it in 2027. Okay. Because these projects, they are on the rebuild side, at least the drawings are there. The customer wants exactly the same thing built in. From a drawing standpoint, it is not a lot of work, I would say, incremental work. It is just being able to get that product through the manufacturing process, which obviously takes a while. Okay, I see. Does anyone want to ask anything else on- I just have one. Sure. Oh, sorry. [inaudible] here in North America. Based on what we are seeing is refining is coming up. It will probably be high single digit growth for us this year. I think you will see more reloads next year. That is how I would frame it. They are just going to keep running through. Is there a risk of unplanned downtime over the five years? There will be some downtime, but I would expect, based on our demand profile that we are seeing right now, we see more reloads happening next year. Okay, I am going to move on to Industrial Automation. Mike, we still get a lot of questions about the underlying drivers of segment demand. I guess, what would you highlight with respect to key product lines and end market exposures as we are thinking about forecasting this business? Sure. It is a good question, and the business is now pure-play, really sensing and measurement. I think [TOW], obviously, the picture was quite clouded. This business coming out, you have a really nice pure-play sensing and measurement business. It is, I would say, very similar to a Building Automation business as far as it is global. So it is some presence in the U.S., but there are also a lot of presence in Europe, China, Asia. What Pete has been focusing on during his tenure so far is from a commercial deployment standpoint, it is really being able to deliver better for our customers. On time to first promise increase, getting it to 80% on time delivery. That helps him then drive more demand, secure more demand from the customers. It helps him with pricing, better pricing, because we have not been able to price in the business for a very long time due to our poor performance. That is getting better. In the meantime, and actually even before Pete got here, we reinvested into NPI. As you remember, last year we talked about NPI cost, R&D cost being a little bit of a headwind for us, about 50, 60 basis points, I think. We talked about a lot of that NPI reinvestment or R&D investment budget went into Industrial Automation, and these products can start coming into the market. That obviously now works the flywheel, just like in Building Automation. Building Automation probably three years ahead where IA was. So Pete is going to grow those single digits, those single digit plus in the second half. Next year he has a really good, I would say, line of sight to grow double from the single digits. Okay. We'll build from there. It's really based on a lot of self-help as far as execution and commercial intensity as far as NPI and getting products to the market and refreshing the offerings with our customers. That's on the top-line side. On the margin expansion side, the teams just had a lot of opportunity as far as strengthening the source. Cost separation, simplifying the organization. They've done a lot of that, and you'll see a very nice margin expansion progression in the fourth quarter from the team. They will expand margins some in the third quarter, but they still have a little bit of a [TOW] overhang. Right. Based on when that business came out, you should see about a 22% margin rate out of that business in the fourth quarter, which then gives you an idea of where that business can be in 2027. With the improvement in on-time delivery, what are some of the key enablers there? It is really running a better side of the process. Okay. The commercial teams talking with the supply chain teams as far as what is needed, when it is needed, where are we going to manufacture it, running things in our supply chain as far as sending the right signals to our suppliers, our own suppliers, as far as when we need product, holding the commitments, et cetera. Those are kind of the, really just basics over the basics. Yeah. I know you have improved on-time delivery already quite a bit, but it is probably still not up to Honeywell standards as well, right? Yeah. On time to first promise, we are about 80% right now, which we would like to be 85%, north of 85%. Okay. The more important metric is on time to Customer One Date. It's really just, I would say, collapsing just our own production cycle and fulfillment cycle to be more responsive to our customers. Which obviously also will then has implications on how much inventory you carry, what kind of inventory you carry, what kind of SKUs and offering, et cetera. So that's everything we're working on. Okay. With the NPI investment, was this like kind of a one-time, let's fix this issue and actually invest, or now we need to spend more on an ongoing basis on keeping that NPI engine running? NPI is really about the flywheel. Think about it as a bread machine, right? Yeah. Once you start making the bread, you need to continue to feed it, don't stop. Because when you stop, then you have to start from scratch. Right. I think as we're going post 2020, we've had a lot of starts and stops and a lot of team turnover, et cetera, and we weren't consistent. It's really, we find that when we're consistent in allocating 4%-4.5% of our revenue dollars into R&D, we have the best outcomes. Okay. Is Industrial Automation best thought of as the business within Honeywell's portfolio that should benefit the most from just a general short cycle industrial recovery? Well, I would say Building Automation is benefiting as well. Okay. In a big way. I think that in terms of incremental improvement, that is the business that has the most opportunity. Because it is the market, but it is also self-help, and it is coming from, I would say, the lower level. That is, I think, where we are so excited because we can see the opportunity of this business being as good as Building Automation is today. Wow, that's impressive. 25% margins in three years. What's the level of confidence? This is the one that I think investors are the most skeptical about. On Industrial Automation? Yeah. 100% confident. Wow, okay. Look, you will see it. You will see it in the fourth quarter, and you will see it next year. Okay. Once that business gets to close to 25%, then I think people will have less anxiety about getting to 25%. Probably fair, yeah. Anything else on Industrial Automation before I move on to a few other issues, topics? No? Okay. Just wanted to talk a little bit about portfolio and capital allocation before we wrap up. It seems like from the way management communicates that your portfolio and transformation journey is kind of coming to an end. Do you agree with that, Mike, or do you still think there is work to do on the fringes? We are never done with portfolio transformation. But I think where we set out 2.5, three years ago as far as what we wanted to do, we were largely completed. The big things that we wanted to accomplish, we have accomplished. There are some things that we still need to do, but it's nothing really that I would say is disruptive to the overall business, our capital allocation, how we think about our debt structure and so yeah. None of that. Okay. Just few hygiene items that we're working through. But that's kind of normal course of business. The teams always are incentivized to always continue to look at the portfolio as part of our MOS, if you will, and we constantly re-look at the portfolio as far as opportunities. Generally, from a capital allocation standpoint, talk about it, short term, we're focusing on reducing our debt- Right. -and getting our debt ratio to below three. Then we're on a good, I would say, trajectory to be able to accomplish that by year end. Our dividend ratio should be around 35%. Okay. So that should be north of 1% yield on dividend. Then, from a share count reduction right now, given we're focusing on debt repayment, we'll probably keep our share count flat. Okay. Try to also dilution. From a CapEx standpoint, with Solstice coming out and with [TOW] coming out, with Aerospace coming out, we are a little bit of a more CapEx-light business. Our CapEx as a percentage of revenue should be around 3%. We talk about we will spend some money on building out capacity in LNG, but we are being thoughtful about it, and that is kind of contained without our overall CapEx splits. I would say those are kind of the big things around the capital allocation. The only thing you did not hit on is M&A. Yes. Most important thing, I guess. We will continue to do M&A, and we talked about the right ticket size for us is $2 billion-$4 billion type of bolt-on M&A. I think if you look at our portfolio and where we'd like to focus, I think the biggest opportunity we have is in Industrial Automation. Okay. For various reasons. One is the industry is probably the most fragmented. It's probably the easiest to find assets that are accretive to our growth, accretive to our margins. There are a lot of exciting targets out there. That's where we're focusing on. For us, especially, Industrial Automation business is close to a $12 billion business. We'd like it to be a $7 billion business. It's going to be, I would say, much harder to get to $7 billion without doing any M&A. But as we said in our Investor Day, we'll be extremely thoughtful on it. We want these acquisitions to be accretive, grow, have good synergies, be at the core, which is sensing and measurement. We do not want to experiment, and we want to get them at the right multiples. Our average multiples have been 13-ish type multiples. Those are good multiples for us. Then I would tell you is that we want to hit our 10% ROI by year five. Those are the parameters we are looking as far as potential targets. I guess within IA, any aversion to discrete given that you are more of a process-focused business today, or could that be an area of interest? No aversion to discrete, and the discrete markets are quite attractive to us, I would say. The reason we do not have any meaningful discrete portfolio, we have some discrete businesses in Honeywell, but not in a meaningful way. Yeah. The reason for it is just how the business evolved. But if you talk to or you talk to our general managers, there is no aversion to discrete. It is just how the business evolved. What about aversion to a large transformational deal? Is that off the table? You never say never, but I would say probably not a priority for us. Okay. Just given how disruptive it would be, and at least personally, I feel as if we have a really good setup that we need to execute on and stay focused. I'd like us to stay focused. Makes sense. All right, Mike. Well, I think we're almost out of time, so we'll go ahead and wrap it there. I really appreciate your time. This was a great conversation. Thank you very much. Thank you. Thanks for your time.