Good morning. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to the conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. For those participating in the Q&A, you will have the opportunity to ask one question and, if needed, one follow-up question. Thank you. Karen Fletcher, Vice President of Investor Relations, you may begin your conference. Okay. Thank you, Julian. Good morning and welcome to ITW's fourth quarter 2020 conference call. I'm joined by our Chairman and CEO, Scott Santi, and Senior Vice President and CFO, Michael Larsen. During today's call, we'll discuss ITW's fourth quarter and full year 2020 financial results and provide guidance for full year 2021. Slide two is a reminder that this presentation contains forward-looking statements. We refer you to the company's 2019 Form 10-K and subsequent reports filed with the SEC for more detail about important risks that could cause actual results to differ materially from our expectations, including the ongoing effects of the COVID-19 pandemic on our businesses. This presentation uses certain non-GAAP measures, and a reconciliation of those measures to the most directly comparable GAAP measures is contained in the press release. Please turn to slide three, and it's now my pleasure to turn the call over to our Chairman and CEO, Scott Santi. Thank you, Karen. Good morning, everyone. The ITW team closed out 2020 with another quarter of strong operational execution and financial performance. From my perspective, the highlights are that Q4 revenues got back to year-ago levels despite food equipment being down 17%, and that operating income, operating margin, and after-tax ROIC were all Q4 records for the company. It was a pretty solid finish to a year that, needless to say, provided some unique and unprecedented circumstances and challenges and indicates good momentum as we head into 2021. While it was the challenges brought about by the pandemic that dominated our attention in 2020, it was the collection of capabilities and competitive advantages that we have built and honed over the past eight years through the execution of our enterprise strategy that provided us with the options to respond to them as we did. Early on as the pandemic unfolded, we were focused the entire company on only two core imperatives: A, to protect the health, safety, and well-being of our people; and B, to continue to serve our customers with excellence. In my view, we executed extremely well on both. Our manufacturing, operations, and customer service teams around the world deserve special recognition for their extraordinary efforts and leadership in support of these two key pandemic priorities. Their dedication and commitment to keeping themselves and their colleagues safe while continuing to deliver excellent service to our customers was truly inspiring. There is no question that we differentiated ourselves with many of our key customers as a result of our ability to sustain our normal rock-solid quality and delivery performance throughout 2020 as a result of their efforts. We also did our best to take full advantage of ITW's position of strength as we thought through how we should manage the company through the pandemic. Back in the spring, as we analyzed and stress-tested the company's performance across a wide range of scenarios, it became clear that the financial and competitive strengths that we had built up over the past eight years had resulted in a very strong and very resilient company. That as a result, we did not have to just pull out our old recession playbook and hunker down. For ITW, this was a unique opportunity to react smartly and to stay focused on the long term. This conclusion led to two key decisions that we made regarding how we were going to manage ITW through the pandemic crisis. First, we chose to leverage the strong financial foundation that we've built over the last eight years to reinforce our commitment to our people. First, by providing full compensation and benefit support to all ITW colleagues through the entirety of Q2 when the economic effects of the pandemic were at their most widespread and severe, and by deciding that we would not initiate any enterprise-wide employment reduction mandates or programs at any point in 2020. These were not obvious or easy decisions given the unprecedented and uncertain circumstances, but we believe that they were the right decisions for our company. I know that our people will remember them. These decisions also turned out to be the right ones for us operationally given the pace of demand recovery that we saw beginning in Q3. Second, we chose to leverage our position of strength by implementing our win-and-recovery agenda and mindset across the company. Win-and-recovery was not an opportunistic new strategy. What it was and is, is a commitment to staying the course and continuing to prioritize the execution of our long-term enterprise strategy despite the unique and unprecedented challenges brought about by the global pandemic. Win-and-recovery for us did not mean ignore the pandemic, as across the company we had to read and react to the realities of the near-term situation as we always do. It does mean that we are committed to protecting key investments supporting the execution of our long-term strategy and that we have, from very early on, given our divisional leadership teams the mandate to continue to think long-term and to remain aggressive through the pandemic. For 2021, our win-and-recovery posture and mindset continues on and serves as the central theme driving the 2021 operating plans for every one of our 83 divisions. Before I turn the call over to Michael for more detail on our Q4 performance and our 2021 guidance, let me close by thanking all of our ITW colleagues around the world for their exceptional performance and dedication in the face of the most challenging and unprecedented circumstances of the past year. The performance that they delivered in 2020 provides another proof point that ITW is a company that has the enduring competitive advantages, resilience, and agility necessary to deliver consistent top-tier performance in any environment. Like many of you, I'm sure we are hopeful for a return to somewhere in the vicinity of normal at some point in 2021, and with that, getting back to giving our full attention to taking ITW all the way to the company's full potential. Between now and whenever that is, we will continue to leverage the full breadth of ITW's capabilities and competitive advantages to keep our people safe, continue to serve our customers with excellence, and execute our long-term enterprise strategy. Michael, over to you. Thank you, Scott, and good morning, everyone. Please turn to slide four. In the fourth quarter, we continue to see solid recovery progress in many of the end markets that we serve, as evidenced by our revenue being up sequentially 5% versus the third quarter. The increase is 8% when you adjust for equal number of days, when historically our revenue per day has increased by 1% from Q3 to Q4. Overall, we delivered revenue of $3.5 billion, operating income of $883 million, an increase of 7% year-over-year, operating margin of 24.4%, free cash flow of $705 million, and GAAP EPS of $2.02. After-tax return on invested capital improved to 32%. As Scott mentioned, operating income, operating margin, and after-tax ROIC were fourth quarter records for the company. Revenue in all major geographies improved sequentially. On a year-over-year basis, North America organic revenue declined 3%, international revenue grew 1%, and Europe was down 2%. Similar to Q3, China was the bright spot with 11% growth. As we've talked about before, the operating flexibility that is core to our 80/20 front-to-back operating system also applies to our cost structure, which was on full display through our operating margin performance in Q4. We improved operating margin by 170 basis points to 25.4%, the second highest margin rate in a quarter in the history of the company, and like I said, grew operating income 7% to $883 million, the highest fourth quarter ever. The biggest driver of our margin improvement remains our enterprise initiatives, as the ITW team executed on projects and activities that contributed 130 basis points in Q4. The impact was broad-based, with all segments delivering enterprise initiative benefits in the range of 80 basis points- 170 basis points. GAAP EPS was $2.02, up 2%, but keep in mind that Q4 last year had $0.11 of one-time gains from divestitures. To exclude those gains, EPS was up 7%, the same as operating income. Working capital performance was excellent, and free cash flow of $705 million was solid with a conversion rate of 110% of net income. Finally, the effective tax rate was 22.1%, down slightly from last year. In summary, a strong finish to a challenging year and very good momentum as we head into 2021. Let's move to slide five to review fourth quarter's recovery and response by segment. We updated this slide from our last earnings call with Q4 information, and you can see that our segments continue to respond effectively to the increase in demand recovery and improved sequentially on both revenue and operating margin. I would just highlight a few things to illustrate the resilience and adaptability of our businesses. You can see the rapid recovery in our end markets relative to the Q2 bottom of down 27%. In Q4, three of our segments experienced demand levels that were higher than a year ago. The most pronounced recovery has been in automotive OEM, which has more than doubled since Q2 and grew 8% year-over-year in Q4, as did construction products. Polymers and fluids grew 7%, while demand in three segments, test and measurement and electronics, welding, and specialty products, was only slightly lower year-over-year. As you would expect, food equipment continues to be impacted by the effects of the pandemic, although we are seeing some sequential improvement. Overall, you can see the benefit of having a high-quality, diversified portfolio and the fact that we're back to demand levels of a year ago, with total revenue essentially flat year-over-year, despite one of our core segments being down organically by 19%. On the right side of the page, you can see the operating flexibility that I just talked about and how that also applies to our cost structure and ultimately shows up in our operating margin performance. At the bottom, in Q2, we still delivered solid operating margins of 17.5%, and only two segments were below 20%. In Q4, we're almost 800 basis points higher at 25.4% despite no volume growth year-over-year, and every segment is back above 22%, including food equipment, as six out of seven segments achieved record fourth quarter operating margins. Let's move on to slide six for a closer look at individual segment performance, starting with automotive OEM. The team has continued to execute exceptionally well from a quality and delivery standpoint in responding to customer demand levels that have more than doubled since Q2. In Q4, organic growth of 8% year-over-year was the highest growth rate since the first quarter of 2017. While North America was flat in Q2, it was more than offset by strong demand in Europe, which grew 10%, and China, which grew 20%. As expected, food equipment end markets remained challenged in Q4. Organic revenue was down 19%, a little better than the third quarter, and demand in Q4 was similar to Q3 when you look at it by geography and end markets. North America was down 20%, international down 18%, equipment sales were down 20%, and service was down 18%. Institutional demand was down about 30%, with restaurants down a little bit more than that. Not surprisingly, the bright spot throughout the year continued to be retail with organic growth of 8%. Moving to slide seven for test and measurement and electronics. Q4, organic revenue declined 3%, with test and measurement down 8% against a tough comparison of plus 6% in Q4 2019. Electronics was up 3%. While demand for capital equipment remained sluggish, the segment benefited from considerable strength in several end markets, including semiconductor, healthcare, and cleanroom. As you may have seen, on January 19th, we announced that we had entered into an agreement with Amphenol to acquire MTS's test and simulation business. The test and simulation business is very complementary to our Instron business, which we highlighted during our 2018 investor day. Some of you may have visited our facility outside of Boston. MTS's test and simulation business has similar organic growth potential, and there is substantial opportunity for margin improvement through the application of the ITW business model. Pre-COVID revenues in fiscal year 2019 were $559 million, with operating margin of 6%. We expect to get the business to generate ITW-caliber operating margins by the end of year five and generate after-tax ROIC in the high teens by the end of year 10. As you saw in the announcement, we expect the acquisition to close in the middle of 2021, and we're very much looking forward to welcoming the MTS test and simulation team to the ITW family. Moving on, please turn to slide eight and welding, where we saw a meaningful pickup in demand as organic revenue improved from being down 10% year-over-year in Q3 to only being down 2% in Q4. Our commercial business, which primarily serves smaller businesses and individual users and accounts for 35% of the revenue in this segment, remained strong and grew 12% year-over-year. Our industrial business showed signs of strong recovery from being down 23% in Q3 to down only 5% in Q4 as customer activity and equipment orders gained strength. Overall, organic revenue for equipment was flat versus prior year and much improved versus the 10% decline in the third quarter. Polymers and fluids delivered strong organic growth of 7%, with fluids up 16%, with continued strong demand in end markets related to healthcare and hygiene. The automotive aftermarket business benefited from strong retail sales with organic growth of 5%, and polymers grew 4% with solid demand for MRO and automotive applications. Moving to slide nine, construction continued to benefit from strong demand in the home center channel and delivered organic growth of 8% in Q4. Growth was strong across all geographies, with North America up 10%, double-digit growth in the residential renovation market, offset by commercial construction, which represents only about 15% of North America revenue, down 11%. Europe grew 9%, and Australia and New Zealand grew 5% due to strong retail sales. Specialty organic revenue was down 3% this quarter, with North America down 2% and international revenue down 4%. Demand for consumer packaging remained solid, but was offset by lower demand in the capital equipment businesses. That concludes the segment commentary, and let's move on to the full year 2020 summary results from slide 10. In the face of unprecedented challenges that included temporary customer shutdowns across wide swaths of our end markets during the year, organic revenue was down 10%. Still, we delivered operating income of $2.9 billion and highly resilient operating margin of 22.9%, only down 120 basis points year-over-year, despite no major cost takeout initiatives or mandates, and with a strong contribution of 120 basis points from our enterprise initiatives. After-tax ROIC was 26.2%, and free cash flow was $2.6 billion. Throughout the pandemic, one of our priorities was to maintain our financial strength, liquidity, and strategic optionality, and as you can see, we did just that in 2020. ITW's balance sheet is strong, and we have ample liquidity. We did not have a need to issue any debt or commercial paper in 2020, and we ended the year with total debt-to-EBITDA leverage of two and a half times, which was only slightly above our two and a quarter times target. At year end, we had approximately $2.6 billion of cash and cash equivalents on hand. With 2020 behind us, let's move to slide 11 for discussion of our guidance for 2021. Starting with the caveat that we continue to operate in a fairly uncertain economic environment, we have based our guidance, as we always do, on the current levels of demand in our businesses. Per our usual process, we're projecting current levels of demand into the future and adjusting them for typical seasonality. The outcome of that exercise is a forecast of solid, broad-based organic growth of 7-10% at the enterprise level. Foreign currency at today's exchange rates is favorable and adds two percentage points to revenue for a total revenue growth forecast of 9% -12%. At our typical incremental margins of 35%-40%, we expect GAAP EPS in the range of $7.60-$8 a share, up 18% at the midpoint. We're forecasting operating margin in the range of 24% -25%, which is an improvement of more than 150 basis points year-over-year at the midpoint. Enterprise initiatives are a key driver of operating margin expansion in 2021, as they're expected to contribute approximately 100 basis points. Restructuring and price costs are expected to be approximately margin neutral year-over-year. We're closely monitoring the raw material cost environment, and embedded in our 2021 guidance are the known raw material cost increases in commodities such as steel, resins, and chemicals. Given the differentiated nature of our product offerings across the company, we expect to be able to offset the impact of any incremental raw material cost increases that might arise in 2021 with pricing actions on a dollar-for-dollar basis. We expect strong free cash flow in 2021 with a conversion rate greater than 100% of net income. I wanted to provide a brief update on our capital allocation plans for 2021. Top priority remains internal investments to support our organic growth efforts and sustain our core businesses. Second, we recognize the importance of an attractive dividend to our long-term shareholders and review the dividend as a critical component of ITW's total shareholder return model. Third priority are selective, high-quality acquisitions that supplement our portfolio and reinforce or further enhance ITW's long-term organic growth potential. I should point out that the guidance we're providing today is for the core business only. After the MTS test and simulation acquisition closes, we'll provide you with an update, but we do not expect a material impact in 2021. In line with our capital allocation, we return surplus capital to shareholders, and we are reinstating share repurchases with a plan to invest approximately $1 billion in 2021. We expect our tax rate for the year to be in the range of 23% -24%. Finally, when it comes to portfolio management, we have decided to defer any divestiture activity until next year and instead focus our time and efforts on the recovery in 2021. While our view regarding the long-term strategic fit of the remaining divestitures has not changed, we also believe that given their expected performance this year, they will be more valuable in 2022. Let's turn to slide 12 on the forecast for organic growth by segment. With the caveat again that the environment remains fairly uncertain, we are providing an organic growth outlook for each segment, and based on current levels of demand, we are forecasting solid, broad-based growth as every segment is expected to improve their organic growth rate in 2021. At the enterprise level, it all adds up to solid organic growth of 7% -10%. To wrap it all up, ITW finished a challenging year strong as we continue to fully leverage the capabilities and competitive advantages that we have built over the past eight years through the execution of our enterprise strategy. Our strong operational and financial performance in 2020 provided further evidence that ITW is a company that has both the enduring competitive advantages and resilience necessary to deliver consistent upper-tier performance in any environment. Looking ahead to 2021, we have good momentum from Q4 heading into the year, and our solid guidance reflects the fact that we remain focused on delivering strong results while continuing to execute on our long-term strategy to achieve and sustain ITW's full potential performance. With that, Karen, I'll turn it back to you. Okay. Thank you, Michael. And Julian, let's open up the lines for questions, please. Certainly. At this time, I would like to remind everyone in order to ask a question, please press star followed by the number one on your cell phone keypad. As a reminder, we ask that you please limit yourself to one question and one follow-up question. Thank you. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Andrew Kaplowitz from Citi. Please go ahead. Your line is open. Good morning, guys. Good execution as usual. Morning. You hear me okay? Yeah, we got you, Andy. Thank you. It has been a couple of years now since your last analyst day. Maybe you could update us on where you are in terms of the goal of finishing the job related to enterprise strategy. It seems like your performance in the second half of 2020, the 7%-10% growth guidance you have for 2021, is reflecting full organic growth potential versus your end markets. Maybe you give us some color around that and how you're thinking about enterprise strategy coming out of the pandemic. Do you still see 100 basis points of margin improvement per year through at least 2023? I'd say a couple of things, Andy. First of all, this has been a process throughout the entire journey where the sort of further we go with it, the more opportunity we find to continue to improve. I think one of the remarkable things from my perspective is eight years into this, I don't see that slowing up any. We are focused on continuing to move forward to get better every year, get a little bit better this year than we were last year within the framework of the strategy that we've laid out. I think there remains ample room to continue on that path for a number of years. We also have some performance goals out there. You're right, it's been a couple of years, but I think two years ago was when we updated those goals, and we remain absolutely on track and committed to delivering on those goals. As we get closer to that, we'll figure out what the next steps are. Thanks for that, Scott. Is it right to think that generally you should see more margin improvement from your segments with the largest growth projections for 2021? Could you give us—I know you talked, Michael, I know you talked about price versus cost. You sometimes have sort of these lags in some of the segments like auto, OEM. Do we get concerned about that at all? Any other color on price versus cost you can give us? I’d say, Andy, based on our bottoms-up planning process, we expect every segment to improve on their margin performance in 2021. As Scott said, a little bit better every year as we march towards our full potential. I think one of the remarkable things when you look at the margin performance by segment is how the range has narrowed. As we sit here today, the low end is food equipment at 22, and the high end is welding at 29. Very different range from when we started this strategy eight years ago. I think the fact that we have businesses delivering margins in the high 20s just gives us further confidence in the long-term goals that we’ve laid out for the company. The big driver in 2021 remains enterprise initiatives. Those are broad-based. In every segment, we’ll make progress on 80/20 and strategic sourcing. Certainly, we expect also a meaningful contribution from volume leverage as we go through the year here. I would not single any segment out as having more margin improvement potential than others. I think we expect all of our segments to continue to make progress towards their full potential. Appreciate it, guys. Yeah, Andy, I can give you a little bit on price cost. Certainly, like I said, we are closely monitoring the raw material cost environment. We are seeing inflationary pressures in commodities such as steel, resins, certain chemicals. By segment, automotive, construction, polymers and fluids is probably where we are seeing the more significant increases. In all of our segments, the plan is to offset those cost increases, the ones that we know about and the ones that may arise this year with price on a dollar-for-dollar basis. As you know, in automotive, just given the nature of the industry, that is a process that takes a little bit longer. We are confident that over time, we are going to be able to offset any raw material cost increases with price, just given the differentiated nature of our product offerings in each one of these segments. Appreciate it, guys. Your next question comes from Nicole DeBlase from Deutsche Bank. Please go ahead. Your line is open. Yeah, thanks. Good morning, guys. Good morning. Could we just start with the outlook for auto OEM? When you think about the 14%-18% that you forecasted for 2021, how does that look in the context of some of these semiconductor supply chain issues that we are seeing? I guess, are some of those hiccups embedded in your outlook? With that said, if you could talk maybe a little bit about the potential quarterly cadence for the auto business. I know you guys don't give quarterly guidance, but in this case, it could be kind of a weird year. Yeah, thank you, Nicole. I can tell you one thing on the quarterly cadence: Q2 is going to be a lot better this year than it was last year. That's one thing I know for sure, really, thanks. I agree with that. Just on the—there's a lot of talk about the shortage of semiconductor in the automotive OEM space. What I can tell you is, and this is true across all of our businesses, we've not seen a slowdown in demand, and strong momentum going into the year certainly carried through January. It is possible, though, that we may see some production slowdown here in Q1 at some of our customers. Whether that will impact their demand for our products, I think, remains to be seen. We view this right now as more of a timing issue. This could put a little bit of pressure on the auto business here in the first quarter. As we sit here today, we would assume that we're going to catch that up in Q2 or the second half of the year. In terms of the quarterly cadence for the auto business, I think you saw the strong performance here in the fourth quarter, up 8%. Like I said, we've not seen anything to suggest that demand is slowing down when we're looking at the January results. We expect, given how we've planned the business, to be off to a pretty good start with positive organic growth and margin improvement in the first quarter. That typically, sequentially, builds as we go through the year. Q2 will be, as Scott said, the biggest quarter, and the second half, the comps start to get a little bit more challenging. The build numbers are a little bit different. That is probably as much as I can give you on the automotive business and kind of how this might play out by quarter. No, thanks. That was actually super helpful. Maybe just as a quick follow-up, when you think about the guidance that you put together for just the full company organic growth in 2021, thinking back to last year when you guys were really talking about opportunities to outgrow as we move into recovery mode, how do you factor in some of that margin improvement into—or sorry, market share improvement over peers into the 2021 guidance? The only way that it's factored in at this point is it's embedded in the impact that those efforts have already made in our current run rates. We are not baking in any further acceleration. That does not mean that we do not have a lot of intention around continuing to, as we talked about before, be aggressive as the recovery continues to accelerate. From the standpoint of our normal planning practice, what's embedded in our organic growth forecast is exactly what Michael said earlier, that current run rates, daily run rates projected through full year 2021, with whatever the normal sort of seasonal impacts are quarter by quarter. Got it. Thanks, Scott. I'll pause it. Yeah. Okay. Thanks, Nicole. Your next question comes from Jeff Sprague from Vertical Research. Please go ahead. Your line is open. Thank you. Good day, everyone. Two questions. One kind of following up on that last thread. Fully understand your methodology here, kind of just rolling forward current trajectory. When you look at the segments, are there one or two kind of either way, positive or negative, that your astute business sense and long history with these businesses would suggest are likely to be potentially better or worse than kind of the exit rate here as we exit 2020? I'm trying to think about that question. The obvious one to point to is food equipment, depending on sort of the pace of vaccine penetration and recovery. Obviously, even at that 8%-12% growth rate for the year, we're well below 2019 levels of demand, let alone the incremental growth opportunities we have. From the standpoint of the one with the most upside leverage, that's clearly the case. I don't know that there's anything else that I would say would really stand out. I think the capital equipment businesses you would expect, so welding and test and measurement, that as businesses get more comfortable with both the pace and trajectory and sustainability of the recovery, that their comfort level with investment and their confidence in the future would certainly stimulate perhaps more demand in those sectors, maybe, as I think about your question. I think that would be the two areas that should things continue on in the positive direction they are, that certainly could benefit from continued broad-based momentum that we're seeing. Also thinking about kind of cyclical versus structural growth, Scott, right? The effort to kind of pivot the businesses, the whole ready to grow but not growing, and the ones that were outgrowing, do you think there will be measurable outgrowth across most of the portfolio? Like you said, we don't know quite what the world's going to hand us in 2021. I just wonder your confidence and visibility on outgrowth. You mentioned new products and food equipment, for example. I'm sure there's things in other segments. Maybe you could just provide a little additional color there. Yeah. I think that's where the proof's got to be in the pudding. I mean, that's what we've been working on. Certainly in 2020 and 2021, I think to try to get any sense of sort of what the market baselines are, given just the overall volatility and all the, let's say, the corresponding supply chain impacts on demand and inventory levels and all that stuff, it's really, it's almost impossible to tell, but I would absolutely expect that our ability to stay focused and aggressive on the growth agenda through all of this, I won't say it better payoff, but it's what we're all about. It's what we've been doing all this stuff for. I won't tell you that every one of our 83 divisions are all the way there, but I guarantee you that I can say that 90% of them are in great position, are doing all the right things, have stayed focused and stayed aggressive through this. We're not in the—we're not using the ready to grow and not growing categories anymore, I'll put it that way. I think we're well past that point. Great. Thanks for the color. Good luck this year. Thank you. Your next question comes from Ann Duignan from JPMorgan. Please go ahead. Your line is open. Hi. Good morning, everybody. Maybe you could give us— Morning. Morning. Maybe you could talk a little bit about your outlook for construction products. I might have expected organic growth to have been up a little bit more in 2021, but perhaps it's just on the back of strong renovation in 2020. Just some color there in terms of regional and subsectors, that would be helpful. That's exactly what I told our EVP, just so you know. What I'll tell you, Ann, is that obviously a strong year for the construction business and finishing Q4 up 8% on a year-over-year basis. A lot of strength in the home centers that we've talked about really since the beginning of the pandemic. We expect that to be, just given the comps, that the growth in the home centers will be in the low single digits. There are some encouraging signs around housing starts. We have a great portfolio of highly differentiated products. You put all of that together, I think our view is we should be able to grow in the mid to high single digits here in 2021. As I said, we're off to a good start here in January. Any differentiation regionally that you'd like to comment on? No, I think it's pretty—I think the comps are a little bit easier in Europe maybe than in North America. Really, on a global basis, we had a good year. That's really all that I would point to. Okay. As my follow-up, perhaps similar question on welding, just different customer bases and maybe different regions what you're seeing. I'll hand it over. Yeah. I think welding, strong finish to the year, good momentum going into 2021. I'd say a pretty solid outlook for all end markets, maybe with the exception of the oil and gas piece, which is somewhere in the 15%-20%, probably closer to 15% of total revenues. That is expected to remain soft as we go through the year. The commercial business has been strong all year and no signs of that slowing down. The industrial side, so this is what Scott talked about with CapEx maybe picking up as this recovery path is a little clearer. We're expecting a solid year in the welding business with, again, continued progress on the margin side, despite the fact that they put up almost 29% here in the fourth quarter. Yeah, it certainly was impressive. Okay. Thank you very much. I'll get back in line. Thank you. Your next question comes from John Inch from Gordon Haskett. Please go ahead. Your line is open. Thank you. Good morning, everybody. Hey. Picking up—morning, guys. Hi Karen. Picking up on a couple of the themes of the past few questions. Do any of the businesses, Scott and Michael, stand out based on, call it, internal changes they may have pursued in 2020 that position them in your minds really favorably for 2021? These could be everything from, I don't know, acceleration of enterprise initiatives, new products lineup that they've got ready to kind of tee up here, maybe new customer sort of supply line or, excuse me, new customer channel initiatives or anything like that that you might call out? Yeah. I can't really think of anything, particularly given the environment we're in, other than points of what we've been talking about throughout, which is we stayed focused on implementing the relevant changes, strategic changes, business by business, along the lines of what you're talking about throughout the entirety of 2020. I think, if anything, the most significant part of what we comps in 2020 is we stayed ready, we stayed prepared, we stayed in position, and we kept moving the ball. I do not know that there is any big shifts that I can point to as much as the fact that we stayed in there and kept moving forward while dealing with a pretty unusual set of near-term circumstances. I expect that that will pay significant dividends, particularly if the rate of recovery continues on as we are seeing right now. Scott, how significant, as we think of the next couple of years in recovery, are new products or the introduction of new products going to play in terms of the drive to faster growth? Is this an opportunity? I mean, we do not have a view inside the company, right? Is this an opportunity for, yes, to do realignment, cost cutting, and so forth up to a decentralized level, but for the folks to basically say, "You know what? Let's push on this initiative or that initiative or launch that as part of kind of your overall emphasis to take share, which was stated kind of early on? Yeah. New products are core—it's a core element of our business model, customer-backed innovation. We have been—there's been no change in terms of the central nature of that as our strategy. We're banging out a couple of thousand patents a year, year in, year out. That's certainly continued on in 2020 as it always has. I don't know that there's been any inflection or change in terms of our posture there. In my view, it's the only way we outgrow our markets over the long haul. We're going to get some penetration from our service capabilities, from our ability to attract new customers. In the end, innovation, new products, new technologies attached to our existing products is the key and core driver, ultimately, of our ability to outgrow our markets consistently over time. That's not a new concept here. I would just add, financially speaking, our internal investments, new products are top priority from a capital allocation standpoint. If you look at our new product investments in 2020, it was the same number as in 2019 as we stayed invested in these projects and strategies to drive above-market organic growth. Historically, we've achieved about a percentage point of organic growth every year for new products. That's kind of what we're counting on in every segment as we move forward. Makes sense. If I could just sneak in one more. As you return to M&A, the two obvious challenging verticals have been commercial aerospace and oil and gas. Are you guys perhaps thinking you guys are contrarian thinkers? Are these possibly going to present opportunities for M&A? Would you consider an aerospace deal? In terms of oil and gas, would that be off-limits just because of ESG considerations, which you obviously do not have today? Yeah. I just go back to our basically key criteria. One is that it has to—we have to—we are going to make that kind of an investment in terms of not just our capital, but our time, effort, and energy. It has to be in something that we have a lot of conviction about can support or further accelerate the company's long-term growth potential. We have to also have significant potential for margin improvement from 80/20. You can look at MDS, and that absolutely checks both of those boxes. We do not have anything that, in my view, is off-limits if those criteria are met. I'll just leave it at that. Nor would I say that I'm not leaving it at that. I'll also say, nor are we leaning in super hard on one particular sector or another. I think, as we've talked about before, we have demonstrated ability to perform and execute across seven businesses today. Ultimately, it is more a function of the individual characteristics of the asset that we are talking about than it is any sort of outside-in view of a, "We need to get growth here," or a play to a certain theory about long-term end market growth. Makes sense. Thank you both. Appreciate it. You too. Your next question comes from Jamie Cook from Credit Suisse. Please go ahead. Your line is open. Hi. Good morning. I guess just two follow-ups. One, I know you talked about sort of supply chain and as it relates to the automotive sector. I guess, one, do you have anything in your guidance embedded for supply chain, potentially higher freight costs or whatever that you're managing for? I guess my second question, when you first laid out your strategy in 2020 to go after market share during COVID, you talked about potentially your competitors having issues as demand ramps or even managing through the downturn. Can you talk about whether some of the supply chain issues are impacting your competitors and whether it's sort of in line with what you thought, greater than what you would have thought? I'm just trying to size that potential opportunity. Thank you. Yeah. Jamie, on your first question, we are seeing an increase in freight cost. It is not one of the largest categories when we look at where we're seeing cost pressure, but it is. Any known increases in terms of freight and logistics are embedded in our plan, in our guidance here today. I think in terms of market share as a result of being able to maintain delivery and quality, if we were to talk to our segments, they would all be able to come up with lots of examples from their divisions where that is the case. It's not just in one segment. It's really across the board. We've been able to pick up share. I would just say we're not doing this with a short-term focus. These have to be sustainable market share gains, and they have to be at ITW-caliber margins for us to be interested in pursuing them. It's probably the best answer I can give you on that one. Okay. Thank you. Thank you. Your next question comes from Julian Mitchell from Barclays. Please go ahead. Your line is open. Hi. Good morning. Maybe my first question really for Michael around the free cash flow outlook. CapEx was down substantially, I think almost 30% in 2020. What slope of recovery do we see there? And how much of a working capital headwind should we expect as well? I suppose the end point here is to try and understand relative to that $2.6 billion of free cash last year what the delta is this year in the context of the earnings, Scott. Yeah. Julian, you're right. Some of the capacity expansions that were planned for 2020 were obviously pushed out as a result of the global pandemic, not as a result of anybody at corporate saying, "You can't invest in your businesses." This was really our divisions deciding to defer these capacity expansions. As the recovery progresses, that CapEx spend will return to normal levels, which is the assumption that's embedded for 2021. We also have in our free cash flow forecast an assumption that we will build up some degree of inventory receivables, working capital to support almost double-digit growth across the enterprise. We have about $125 million of working capital coming in, and that is included in our numbers here. You put it all together, we expect to deliver another strong year from a cash flow perspective at 100% plus conversion from that income. Thanks. Maybe my follow-up on the uses of that good cash flow and the big cash balance at the end of December is for Scott. I think, Scott, you sounded somewhat reticent on M&A at the last earnings call. Today we see the buyback placeholder and heard Michael's comments around deferring divestments into 2022. I just wondered what your latest thoughts were on the M&A appetite, if you are more or less optimistic on acquisitions today versus a few months ago. Yeah. What we talked about last call was really around the fact that what we are interested in is quality assets that we can help, good companies that we can help become even better companies. The fact is that during times of major disruption, those good companies typically do not want, it is not a good time for them to sell their businesses. The reticence was not ours from a financial perspective. It was just a statement of reality that the kind of assets that we are interested in acquiring are not available. Our interest in adding quality assets to ITW that fit our strategy and that meet the criteria that I talked about, that was in my response to another question, that does not go up and down. That is always there. We have plenty of capacity, whether we have cash on hand or whether we have—it would even use the balance sheet. That is just a timing issue. We generate so much cash. We have the ability to improve these assets we buy. We generate great returns. It is just a matter of we are also very disciplined. We come across an opportunity that we think fits. It's not a situational, "Is it the right time or not?" It's, "We have ample capacity to do it." We are not going to just lower our standards because we happen to be sitting on some cash right now. I think that's the best way I can characterize it. MTS is a compelling ad. It has characteristics that are very similar to the Instron business that we bought back in 2005. Entry margins are roughly the same. I think Instron's were a couple of points higher. Similar end market characteristics. It's a terrific fit. It would not matter what time, what year, where we were in the cycle, or what time of year it was. If we have another MTS-like opportunity, we will take full advantage and do our best to take full advantage of it. That's the best way I can say it. Yeah. Maybe I'll just clarify something, Julian. I mean, I think given our track record here as we just talked about in terms of consistently generating strong free cash flow, given the strong balance sheet, I don't want you to interpret the fact that the buybacks are coming back as we don't have capacity to do M&A because that is certainly not the case. I mean, we have ample liquidity, as Scott said. If the right opportunity comes along, we're going to be certainly looking closely at things. I wouldn't read anything into the buybacks coming back. We are in the fortunate position where when I talked about the four priorities from a capital allocation standpoint, for us, it's not A, B, C, or D. It's really we can do all of the above. We have the capacity, the financial strength, the balance sheet to do all of the above. Great. Thank you both. Your next question comes from David Raso from Evercore. Please go ahead. Your line is open. Hi. Good morning. You mentioned on the price cost, you'd match the higher cost dollar for dollar. Just obviously, price equaling cost is not helpful to margin. I mean, when I think of the full-year guide, the revenue guide, the organic that's up 8.5%, how much of that is actually coming through with the margin? I mean, what percent of the 8.5% is simply price being negated by cost? We do not really look at it that way, David. Let me try to answer your question maybe a little bit differently. I think what I heard you say is we will offset any material cost increases with price on a dollar-for-dollar basis. Let me just add a clarification. That means on incremental from here. That does not mean necessarily in our plan. Correct. That is what we are saying. Yeah. That is where you are going. Yeah. That is where I was going. Any incremental cost increases that we may see as we go through the year will be offset with price dollar-for-dollar. Obviously. That really reflects the timing problem. Yeah. It is not the problem, but the lag. Long term, we will definitely catch up, and we typically get more than that. I think what you are talking about is that in the—that does mean if you do the math, which I am sure you have done, that can be slightly diluted to operating margins as we go through the year. That is not what is in our planning today. Our plan today is we are positive price ahead of cost, and any cost increases that are coming through will be offset dollar-for-dollar. There can be a slight lag. We talked a little bit about some of the challenges in automotive. That is probably the best I can answer your question. Okay. No, I was just—look, the incrementals are still impressive at 40. I was just—this is in the guide. I was just curious, are they even higher than that in a way or in a core fashion because, say, 2% of the revenue growth was coming in at no incremental rate, coming in at price versus cost? Overall, you are saying add it all up, we are still getting 40% incremental. If costs go up from here, that might be a bit diluted on the margin just given it might be just price equaling cost. That's all I was trying to get at. I mean, the 40 is still very high. Yeah. And that's the underlying. Yes. That's what I think. I mean, when it comes to the M&A pipeline, obviously, all the SPACs that are out there and the money at Wash and private equity, the MTS business that you bought, it seemed like you found something that fits well. Obviously, the margins aren't tremendous, so I think you probably got it at one time or less the sales. Are you finding with all the SPACs out there and so forth that you can still find businesses like this that are maybe a little off the radar, or it's just going to be a little more challenging to put the money to work just given maybe people are bidding up assets otherwise wanted just given? Yeah. No, I think it's not a matter of finding things that are off the radar. The ultimate advantage we have, even in a competitive market, is the margin improvement potential. That our ability to pay whatever the multiple is, there are certainly our financial modeling. I'm not suggesting we can pay any multiple, but certainly our ability to pay market multiple and then triple or quadruple the underlying earnings and knowing that we can do that with a high degree of certainty over some period of time is ultimately what allows us to be competitive. That's what we've said all along is we're not going to pay for a fully buying or acquiring a fully margin business is not interesting for us because it takes that competitive advantage off the table. From a return standpoint, it makes it all about where you're right about the growth rate 10 years out, which is a pretty challenging thing to get right. We can compete in the right circumstances. We just proved it. I think. I'm sorry, please. No, you go ahead, please. I was just thinking for MTS, and I know this is you just have a framework for hopefully future deals that you can do. When you think of some amortization of the intangibles that are coming in, that 6% margin of MTS was in 2019. I would think the margin might have been down in 2020. What's the level set for us when we think of modeling that, say, from mid-year on? What's the starting point for all in the margin amortization and the base we're coming off of? Then the ramp to the 20% plus over five years, how much is there a step function in the first full year, and then it's kind of linear from there? David, let's close on the deal first and do all the accounting. Hopefully, that'll be mid-year. When we get on the earnings call, hopefully for Q2, we'll be able to give you a lot more detail in terms of the questions that you're asking. Our current view based on what we have modeled is that there's not going to be a material impact in year one. The implementation of the business model takes some time. We didn't buy the business, obviously, for the potential year one. This is a long-term investment, and one we're very pleased with. We see a clear path to get it to ITW-calibre margins and returns over the timeframe that we discussed. If you could wait until we get the deal closed, we'll provide all the detail here. I'll help you with this part if you want, which is just figure the margin is steady sequential improvement year on year, just like we run the company. There's no big step change. The path from 6% or whatever the starting point is to the ITW average is by five. It's probably a better model than some hockey stick in the early period, if that helps. Your next question comes from Stephen Volkmann from Jefferies. Please go ahead. Your line is open. Great. Thanks for fitting me in. I'll be real quick. Scott, I think you gave us a couple of quarters ago a number that you thought you had won some new contracts because of your win-the-downturn kind of strategy. Any update to that kind of for the full year 2020? Yeah. I'll go back to what Michael said. At that point, we could count them because we just started. We were a couple of weeks into it, and there were some obviously visible specific opportunities that we were aware of. At this point, it's far too broad-based. It's not something that we're sort of tracking across the company necessarily. Okay. All right. Fair enough. Then. Could we, given the volume. Yeah. Understood. Michael, I think you said PLS is 50 basis points of headwinds in 2021. Isn't that kind of what we should consider sort of normal and the run rate for the foreseeable future? Yeah. I think last time we looked at this, at full potential, we had modeled 30 basis points as kind of the ongoing run rate. You are pretty close here. Okay. That is all I had. You are right. We modeled 50 here for 2021. That is correct. Appreciate it. Your next question comes from Ross Gilardi from Bank of America. Please go ahead. Your line is open. Oh, thanks for squeezing me in. Just on the EPS guide, I wanted to clarify. Why would not the low end be $8 plus when you just earned over $2 in the fourth quarter? You have added 9-12% revenue growth. There is not a lot of seasonality in your business in a normal year. Why would not $2 at minimum be an appropriate quarterly run rate for EPS in the first half? If that is the case, are you baking in a meaningful second half slowdown? I mean, any help you can give us on how your guidance looks first half versus second half? Yeah. So, Ross, let me say first, I hope you're right. Second, I'll just go back to what I said in the prepared remarks in response to one of the questions earlier is that how we have modeled the top line is really using current levels of demand in what we're seeing in our businesses. We're projecting that into the year. If you go and look at kind of historically how a typical year unfolds at ITW in terms of the earnings in the first half versus the second half, it is remarkably consistent. I think that's probably a good start to help you maybe understand a little bit better how the things might unfold kind of first half, second half. To be very clear, again, we are not baking into any of our guidance that demand is going to slow in the second half. We are also not baking in that demand is going to accelerate. To the extent you have a more positive view in some of the segments, you can certainly model that and see what answer you get. We are assuming that, like I said, the demand stays, revenue per day stays where it is, adjusted for seasonality, projected into 2021. Just on that, Mike, I mean, if you're saying you're just taking current demand, I mean, you just earned $2 in the fourth quarter. Yeah, but you'd have to look at it. Maybe, Ross, we take this one offline, and I can walk you through the historical trends. I'm not sure how else to answer your question. I'm not giving you quarterly guidance. We're giving you a full year. I think there's enough information to look at the historical trends to figure out how things might play out on a quarterly basis. Great. Thanks, Michael. Your last question will come from Joe Ritchie from Goldman Sachs. Please go ahead. Your line is open. Thanks. Good morning, everybody. Hey, Joe. Two quick things for me. I know we'll get more details on MTS later, but just given that PLS is part of the framework and equation for you guys, how should we think about MTS's revenue trajectory? Will there be some PLS, you think, in the beginning and then growth from there? How should we think about that? Yeah. I mean, like I told David earlier, we'll provide more of a detailed update once the deal has been closed. Thanks. Good morning, everybody. Hey, Joe. Two quick things for me. I know we'll get more details on MTS later, but just given that PLS is part of the framework and equation for you guys, how should we think about MTS's revenue trajectory? Will there be some PLS, you think, in the beginning and then growth from there? How should we think about that? Yeah. I mean, like I told David earlier, we'll provide more of a detailed update once the deal has been closed. I think it is certainly helped that some of the end markets were quite favorable in Q4, and the outlook for 2021 is pretty good in areas such as health and hygiene. We are seeing a recovery in MRO applications. The retail side related to automotive aftermarket has been solid too. I will pass on your comments to the polymers and fluids team. Okay. Great. Thank you. They will be thrilled they got a question. I think we are out of time. I will just say to everybody, thanks for joining us this morning. If you have any follow-up, just give me a call. Thank you. Thank you for participating in today's conference call. All lines may disconnect at this.