Ladies and gentlemen, thank you for standing by. Welcome to the Lennox International fourth quarter earnings conference call. I would now like to turn the conference over to Mr. Steve Harrison, Vice President of Investor Relations. Please go ahead. Good morning. Thank you for joining us for this review of Lennox International's financial performance for the fourth quarter and full year of 2020. I'm here today with Chairman and CEO, Todd Bluedorn, and CFO, Joe Reitmeier. Todd will review key points for the quarter, and Joe will take you through the company's financial performance for the quarter and year, as well as the outlook for 2021. To give everyone time to ask questions during the Q&A, please limit yourself to a couple of questions or follow-ups and re-queue for any additional questions. In the earnings release we issued this morning, we have included the necessary reconciliation of the non-GAAP financial measures that will be discussed to GAAP measures. All comparisons mentioned today are against the prior year period. You can find a direct link to the webcast of today's conference call on our website at www.lennoxinternational.com. The webcast will be archived on the site for replay. We'd like to remind everyone that in the course of this call, to give you a better understanding of our operations, we will be making certain forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Lennox International's publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Let me turn the call over to Chairman and CEO, Todd Bluedorn. Thanks, Steve. Good morning, everyone, and thank you for joining us. In the fourth quarter, we continued to see strong momentum in our residential business and year-over-year improvement in commercial and refrigeration. Overall for the company, revenue was up 3% and hit a new fourth-quarter high of $914 million. GAAP operating income was $139 million compared to $192 million in the prior year quarter that included $93 million net gain from insurance recoveries. GAAP EPS from continuing operations was $2.91 compared to $2.92 in the prior year quarter that included $93 million in insurance benefit I mentioned in a $39 million pre-tax pension settlement. In addition to record fourth quarter revenue, the company set new fourth quarter highs for total segment profit and margin and adjusted EPS from continuing operations. As reported, total segment profit was a fourth quarter record, $139 million, up 5% from the prior year quarter that included $25 million of insurance recovery. Total segment margin was a fourth quarter record 15.2% up 10 basis points. Adjusted EPS from continuing operations rose 18% to a fourth quarter record of $2.89. From an operating perspective, excluding the $25 million of insurance benefit in the prior year quarter, total segment profit was up 29% and segment margin expanded 300 basis points. Looking at our business segments for the fourth quarter, Residential set new fourth quarter records for revenue, profit, and margin. Residential revenue was up 11% on double-digit growth in both replacement and new construction business. Residential indoor air quality revenue was up more than 30% in the quarter. Segment profit rose 18% and segment margin expanded 130 basis points to 20.9%. From an operational perspective, adjusting for the $25 million of insurance benefit in the prior year quarter, residential profit rose 58% and margin expanded 630 basis points. In commercial, fourth quarter revenue was down 13% and profit was down 11%. Segment margin expanded 40 basis points to a fourth quarter record 19.4%. We continue to see year-over-year improvement in the business in both replacement and new construction, as well as in national accounts and regional and local business. Commercial equipment revenue overall was down mid-teens in the quarter. Within this, replacement revenue was down low single digits at constant currency, with planned replacement down high single digits and emergency replacement up low double digits. New construction revenue was down at mid-20s percentage. Breaking out revenue another way, regional and local business revenue was down low double digits. National accounts equipment revenue was down mid-teens. On the service side, Lennox National Account Service revenue was down high single digits. Some highlights to mention for commercial. Our team added six new national account equipment customers in the quarter to bring the total to 32 for the year. While small today, we are seeing fast indoor air quality revenue growth led by our new Building Better Air initiative. In the first quarter, we are on track with the launch of our new Model L rooftop unit as we continue to lead the field in energy efficiency. The Model L features variable speed technology and an all-new advanced control system. We are seeing high customer interest in this industry-leading product for 2021. Overall, commercial backlog is up several digits. In refrigeration for the fourth quarter, revenue was up 7% as reported, and up 3% at constant currency. North America revenue was up low single digits. Europe refrigeration revenue was up mid-single digits as reported, and low single digits at constant currency. In Europe, HVAC revenue was up mid-teens as reported, and up high single digits at constant currency. Refrigeration segment profit declined 28%, and margin contracted 360 basis points to 7.5% on the timing of expenses in the quarter and unfavorable mix with the strong growth in Europe HVAC. Currently, refrigeration backlog is up double digits led by North America, and we are seeing strong order flow. We expect segment margin to be up year-over-year starting in the first quarter and be up for the full year in 2021. For the company overall in 2021, we are reiterating guidance. We expect revenue growth of 48% this year in GAAP and adjusted EPS from continuing operations up $10.55 to $11.15 for the full year. While there's an economic and market uncertainty, momentum continues for the company, and we're well positioned for a year of strong growth and profitability. Given the outlook and the company's strong balance sheet and cash generation, we are restarting our stock purchase program in 2021 and plan to buy back $400 million this year. I'll now turn it over to Joe. Thank you, Todd, and good morning, everyone. Let me start with a quick summary of our full year 2020 for the company, and then the financial details on the business segments for the quarter and full year. Overall for the company, revenue for 2020 was $3.63 billion, down 5% on a GAAP basis and down 4% on an adjusted basis, excluding the impact from the divestitures in the prior year. Foreign exchange was neutral to revenue. GAAP operating income was $479 million, compared to $657 million in the prior year. That included a $179 million net gain from insurance recoveries. GAAP EPS from continuing operations was $9.26, compared to $10.38 in the prior year. That included the $179 million insurance benefit and $99 million in pre-tax pension settlements. Total adjusted segment profit for the full year was $507 million, compared to $610 million in the prior year. That included a $99 million of insurance recovery. Total adjusted segment margin was 13.9% for the year, compared to 16.2% in the prior year with the insurance benefit. Adjusted EPS from continuing operations was $9.94, compared to $11.19 in the prior year with the insurance benefit and pension settlements. From an operational perspective, excluding the $99 million of insurance benefit in the prior year, total segment profit was down 1%, and total segment margin was up 40 basis points. Turning to the business segments for the quarter and the year. Excuse me. In the fourth quarter, revenue from residential heating and cooling was a fourth-quarter record, $553 million, up 11%. Volume was up 10%, price was up 1%, and mix was flat, with foreign exchange neutral to revenue. Residential profit was a fourth quarter record, $116 million, up 18%. Segment margin was a fourth-quarter record, 20.9%, up 130 basis points. As Todd mentioned, operationally, profit was up 58% and margin expanded 630 basis points. Segment profit was primarily impacted by higher volume, favorable price, lower material and other product costs, higher factory productivity, and lower SG&A. Partial offsets include $25 million of non-recurring insurance proceeds in the prior year quarter, the COVID-19 pandemic, and higher tariffs, freight, distribution, and warranty. For the full year, residential segment revenue was a record $2.36 billion, up 3%. Volume was up 2%. Combined price and mix was up 1%, with both up. Foreign exchange was neutral to revenue. Residential profit was $429 million, down 8% from the prior year that had the $99 million of insurance recovery. Segment margin was 18.1%, down 220 basis points as reported. Operationally, excluding the insurance recovery in the prior year, segment profit was up 17%, and margin expanded 210 basis points. Now turning to our commercial heating and cooling business. In the fourth quarter, commercial revenue was $226 million, down 13%. Volume was down 8%, price was flat, and mix was down 5%. Foreign exchange was neutral to revenue. Commercial segment profit was $44 million, down 11%. Segment margin was a fourth-quarter record, 19.4%, up 40 basis points. Segment profit was primarily impacted by the COVID-19 pandemic, lower volume, unfavorable mix, and higher freight distribution and SG&A. Partial offsets included lower material and other product costs, higher factory productivity, lower warranty and tariff exclusions and refunds due to exclusions. For the full year, commercial revenue was $801 million, down 15%. Volume was down 14%, price was flat, and mix was down 1%. Foreign exchange was neutral to revenue. Segment profit was $137 million, down 17%. Segment margin was 17.1%, down 40 basis points. In refrigeration, revenue was $135 million, up 7%. Volume was up 3%, price was up 1%, and mix was down 1%, and foreign exchange had a favorable 4% impact on revenue. Refrigeration segment profit was $10 million in the fourth quarter, down 28%. Segment margin was 7.5%, down 360 basis points. Segment profit was primarily impacted by the COVID-19 pandemic, unfavorable mix, higher distribution, warranty, and other product costs, and the timing of SG&A expenses. Partial offsets included higher volume, favorable price, and lower material costs. For the full year, refrigeration revenue was $472 million, down 12%. Volume was down 14%, price was up 1%, and mix was flat. Foreign exchange had a favorable 1% impact. Segment profit was $33 million, down 47%, and segment profit margin was 7%, down 470 basis points. Regarding special items in the fourth quarter, the company had net after-tax gain of $800,000 that included a net gain of $3.4 million for insurance recoveries related to damage at the company's manufacturing facility in Iowa, a benefit of $2.3 million related to environmental liabilities, a benefit of $1.5 million for excess tax benefits from share-based compensation. For charges, we had $2.7 million for asbestos-related litigation, $1.5 million for special product quality adjustments, $1.4 million for personal protective equipment and facility deep cleaning expenses incurred due to the COVID-19 pandemic, and a net change charge of $800,000 in total for various other items. Now looking at special items for the full year, the company had net after-tax charges of $26 million, and they included a charge of $8.5 million for other tax items, $8.4 million for restructuring activities, $6.2 million for personal protective equipment and facility deep cleaning expenses incurred due to the COVID-19 pandemic, $4.2 million for asbestos-related litigation, a net loss of $2.3 million related to damage to the company's manufacturing facility in Iowa, a net charge of $600,000 in total for various other items, and a benefit of $4.2 million for excess tax benefits from share-based compensation. Corporate expenses were $30 million in the fourth quarter and $92 million for the full year. Overall, SG&A was $143 million for the fourth quarter or 15.7% of revenue, down from 16.3% in the prior quarter. For 2020, overall SG&A was $556 million or 15.3% of revenue, down from 15.4% on an adjusted basis in the prior year. For 2020, the company had cash from operations of $612 million compared to $396 million in the prior year. Capital expenditures were approximately $78 million for the full year compared to $106 million in the prior year, and proceeds for damage to property and disposal of property were $1 million compared to $81 million in the prior year. Free cash flow was $535 million for the year compared to $371 million in the prior year. In 2020, the company paid $118 million in dividends and repurchased $100 million of company stock. Total debt was $981 million at the end of the fourth quarter, and we ended the year with a debt-EBITDA ratio of 1.7, and cash and cash equivalents were $124 million at the end of the year. Now, before I turn it over to Q&A, I'll review our outlook for 2021. Our underlying market assumptions for the year remain the same. We expect industry to see mid-single-digit shipments growth in residential, commercial unitary, and refrigeration markets in North America. The company's guidance for 2021 remains the same as we presented at the December investment community meeting. Our guidance for 2021 revenue growth is 4%-8% with neutral foreign exchange impact. We still expect GAAP and adjusted EPS from continuing operations in a range of $10.55-$11.15, with about half of the earnings in the first half of the year and half in the second half of the year. Let me now run through other key points on our guidance assumptions and the puts and takes for 2021, all of which are unchanged. We expect a benefit of $50 million in price for the year. We expect a benefit of $25 million from sourcing and engineering-led cost reductions and a $20 million benefit from factory productivity. We are guiding for residential mix to be neutral, and we anticipate that foreign exchange will be neutral as well. For the headwinds in 2021, we expect a $30 million headwind from commodities. Freight is expected to be a $5 million headwind. We will be at a more normal run rate with distribution investments this year with 30 new Lennox stores planned. Tariffs are expected to be a $5 million headwind. We are planning for SG&A to be up approximately 7% for the year or a headwind of about $45 million. Within SG&A, we will be making investments in R&D and IT for continued innovation and leadership in products, controls, e-commerce, factory automation, and productivity. A few other guidance points. Corporate expenses are targeted at $90 million. Net interest and pension expense is expected to be approximately $35 million. We expect an effective tax rate of approximately 21% on an adjusted basis for the full year. We are planning capital expenditures to be approximately $135 million this year, about $30 million of which are for the third plant at our campus in Mexico. We expect construction to be completed by the end of 2021, and have the plant fully operational by mid-2022. We expect nearly $10 million in annual savings from the third plant. Free cash flow is targeted at $325 million as we reinflate working capital to support strong growth. Over the long term, we expect free cash flow to approximate net income on average. Finally, we expect the weighted average diluted share count for the full year to be between 37 million to 38 million shares, which incorporates our plans to repurchase $400 million of stock this year. With that, John, let's now go to Q&A. Certainly. Just as a reminder, ladies and gentlemen, you may enter the queue to ask a question by pressing one and zero on your phone, and pressing one and zero again will have you exit the queue. First we'll go on to Jeff Hammond with KeyBanc. Please go ahead. Hey, good morning, guys. Morning, Jeff. Hey, Todd, good to see the execution was much better than your football team. Hey, I think we're both watching other people's teams this weekend. Yes. I want to understand on resi margins, just the strength there. It was considerably higher. What were the big drivers and if there was any real impact as you produced more to restock and if that continues into 1Q? I read your pre-note. Yes, the short answer is there was some benefit from absorption as we continued producing fourth quarter for the demand rolling into 2021. Even more important than that, as the drivers of the margin were the aggressive SG&A costs that the team took out early in the year. We haven't added back a lot of them, we had great SG&A leverage. Also, we had very strong quarter material costs. Just in the factories themselves, even above absorption, some of the productivity initiatives really kicked in second half of the year, and we saw the benefits. Absorption helped, and it will help, as you suggest, as we roll into next year. There was strong performance across the board in resi. Okay. Maybe switching over to commercial, was book-to-bill positive in 4Q? Did you see order acceleration? When do you think that backlog starts to flow out in sales growth? Thanks. We're seeing sales growth in first quarter so far. It's starting to accelerate in first quarter. Orders have taken a bit of a pause during the first three weeks in January, which I think is normal as you go into a new year. That's not unusual for us. I think there's a little bit of uncertainty out there in the commercial marketplace. We're set up for a nice quarter in Q1, and the backlog's starting to build for second quarter and balance of the year. Okay, thanks a lot. Thanks. Next, we'll go to Julian Mitchell with Barclays. Please go ahead. Hi, good morning. Hey, Julian. Hey. Just a first question on the incremental margins. Just wanted to sort of check on your conviction in being able to get that 30% incremental for the year across the company. Any segment color you'd provide, I suppose particularly in refrigeration, how should we think about operating leverage there this year? The good news for anyone who's ever worked in a large corporation, the good news after having a tough year is the next year you have great comps, and I think that's true on the refrigeration business. I think we'll have positive news in refrigeration. Overall for the corporation, we guided 30% incrementals. We're still feeling pretty good about that. We're going to have price of $50 million that'll offset the commodity headwind of $30 million, freight and tariff headwind each of $5 million, so $40 million of costs in those three buckets offset with price, and the MCR and additional volume. As we talked about in December, we feel pretty good about the 30% incrementals. Thank you. Maybe just following up on the commercial side, if you could just give any color around sort of different verticals that you're seeing, any update as well on the sort of competitive landscape in commercial, and how quickly we can expect revenue to turn positive. Is it Q2 or perhaps earlier in terms of year-on-year? Yeah, understand. I'm not going to answer that last part. We said we have double-digit backlog going into the year. Where we saw the pickup in order rates in fourth quarter were in planned replacement as large national account customers got more comfortable on placing orders. I also think some of them had capital at the end of the year that they didn't spend because of uncertainty earlier in the year. We didn't deliver those units, but we booked those business and that will flow into the first half of this year. Emergency replacement was up in fourth quarter, that continues to flow. I think the area that's weakest right now, quite frankly, continues weak is commercial new construction, given the uncertainty that still exists around the recovery from COVID. Great. Thank you. Thanks. Next, we'll go to John Walsh with Credit Suisse. Please go ahead. Hi. Good morning. Hey, John. Question around your opportunity as you see it in the K-12 vertical. We're starting to hear people talk about some of these executive actions that President Biden took, trying to get students and teachers back into schools healthily and quickly in his first 100 days. Are you seeing any of that in your commercial business? Schools tend to move relatively slow. From the time there's sort of a mandate on top until the time that you see the revenue flow through the business takes time. We have a very strong K-12 program, if you will. We have dedicated salespeople just for that vertical. Our indoor air quality product serves that market. Our high-efficiency product serves that market. We're in lots of dialogues with people, but I don't think there's been a light switch turned on on that market. Got you. I guess, maybe not necessarily surprising, a bunch of the detailed items in the guidance walk didn't change, but I guess I'm a little bit surprised on the commodity costs still in line with the December outlook, given the move in steel. Maybe you could just remind us, I know you have a hedging program on copper. I thought you bought a little bit more spot steel, but maybe can you just help us understand that a little bit better? Well, I'll give you the specific answer, and then I'll directly answer the broader question of why it didn't change. Narrowly, we buy steel a couple different ways. We have some fixed contracts, we have some contracts that are tied to scrap, and then majority of it is we buy from the mills based on CRU pricing the prior quarter. When we're, quote-unquote, predicting copper and aluminum, we have a large hedge already in our books, and so we have a pretty good view of what we're going to have. For steel, we have to sort of predict what's going to happen. The honest answer is, in December, we were, depending, I guess, what side of the trade you were on, we were either bearish or bullish, but we assumed steel was going to go up, and we rolled that into our guide. It's plus or minus commodities is still a $30 million headwind. Great. Thank you. Appreciate it. Thanks. Our next question's from Gautam Khanna with Cowen. Please go ahead. Good morning. Thanks, guys. Hey, Gautam. How are you? Doing well, thank you. I was curious, just can you speak to any changes in the competitive dynamics? We'd heard that Daikin's Goodman facility, it was some COVID outbreaks, and then you saw kind of the big channel refill in resi in Q4. I'm just curious, any sort of things to think about year-over-year as we kind of comp the weirdness of 2020 in resi competitively? I think the most important thing is what I spent a ton of time talking about in December, which is the larger your independent distribution network is, the more our belief is that you pulled volume from 2021 into 2020. That distributors not only were reloading for inventory that was down, but sort of the scarcity mindset was taking over, and they were trying to make sure they had lots of inventory in case OEMs ran into production issues. Our sense is people with independent distribution have inflated sales numbers in fourth quarter, and that will bleed off as you go through the year. Compared to us, which is we delivered in resi up 11% overall. That we think, in fact we know in our Lennox business, which is 80% of our residential, we see demand when the customer's buying the unit to a vast large degree. I think that's the one thing to model for. As we talked about with us narrowly, that sort of the timing of EPS or earnings is a little bit different to normal, that we expect about half of our EPS to come in first half and about half of the EPS in second half, which is a little different weighting than what we've had in the past. That's helpful. Todd, I know you used to work at Carrier. I'm just curious, have you seen any change in their behavior competitively now that it's an independent company, anything you can speak to, just based on your? No, I think short answer's no. Carrier's always been a very good competitor. Publicly, different things happen, they say different things on the earnings call, but on the ground it's the same tried and true sales force and strong dealer network, they've always had good product. They haven't changed their pricing strategy. They haven't changed, I don't think, how they buy components and commodities, their sourcing strategies. They haven't changed their distribution strategy. From where we sit, it's very similar to what we've seen in the past. Thank you. Next, we'll go to Nicole DeBlase with Deutsche Bank. Please go ahead. Yeah, thanks. Good morning, guys. Morning, Nicole. The commentary around the first half versus second half split is definitely helpful. Todd, anything you want to say about calibrating expectations for 1Q based on what you guys have seen into January? I'll answer the question obliquely. In residential, we continue to see strong momentum. In commercial and refrigeration, as I talked about, backlogs are up double digits as we end the year. We're hitting first quarter at a pretty stiff pace, and we'll see how the balance of the quarter goes. We feel pretty good as we start the year. Okay, got it. Thanks. On the seasonality of free cash flow, how do we think about the quarters in 2021 relative to what you normally see? Just thinking about how the cadence of working capital use could look throughout the year. I think it'll be more of a normal year, where we'll sort of peak in working capital early and then burn it off second half of the year, where 2020 was abnormal, that we never sort of reloaded on working capital second half. We outperformed on free cash flow. I think it'll be more of a traditional year. Again, just to connect some of the dots, I'll take your question and expand on areas that I want to talk about maybe, Nicole, that you didn't directly ask. I would just sort of underline the free cash flow of $535 million to 2020, which is a record. We're guiding for $325 million next year. Over the two-year period, it's about 110% of net income. 2020 added to 2021, over the two-year period, 110% of our adjusted net income, which is a pretty strong performance in cash flow over a couple-year period. Got it, and thanks for expanding. I'll pass it on. Thanks. We'll go to Nigel Coe with Wolfe Research. Please go ahead. Thanks. Good morning. We had a pretty thorough event in 2021 back in December, so not so much for me. I'm curious, the 10% volume growth in residential during 4Q, how did that look by brands, Allied versus Lennox brands? Overall, we're up 11%. Our Lennox was up high single digits, and our Allied grew mid-20s. What we saw in our business is what we've been saying others are seeing, which is our independent distribution business, Allied, grew much stronger than our Lennox business, but not because they're winning share. Just we have distributors who are reloading and quite frankly with a scarcity mindset, trying to pull some volume in. Right. Thanks. The HARDI data, I'm not sure how accurate that actually is. The HARDI data showed a big pickup in shipper shipments in December. I'm curious if you saw the same pattern with your Lennox brands in terms of the sell-through to dealers. It makes sense from a weather perspective. I'm just curious what you saw. No, we didn't. Just from a weather perspective, it wasn't so cold in January this year versus December this year versus last year. We saw some pickup in December, but not near the HARDI data. Again, I think you're right that the HARDI data in any given month is suspect. I think directionally over a 12-month rolling data sort of gives you the right area for the number. I think in any given month, it could be a little misleading. Thanks. Yeah. Next we'll go to Steve Tusa with JPMorgan. Please go ahead. Hey, good morning. Morning, Steve. Can you just maybe clarify the margin kind of color on resi? I think to Julian's question. You mentioned refrigeration would be good. I just didn't catch what you said on resi specifically. Reframe the question. I'm not sure he asked me a question on residential margins. Sorry, I thought he asked about residential margins. You had said overall guide 30% incrementals and positive-. Yeah Refrigeration would be pretty positive. What's the resi kind of view? Yeah. I think on the round, they're all ±30. From a resi viewpoint, 30 commercial, 30. Refrigeration could probably be a little bit higher, but that's such a small part of our business. The other two will drive it and then what we do on corporate expenses. Got it. Then just lastly, kind of looking out over the next couple of years, I know there's another efficiency regulation coming in. Is there any kind of change to your approach on product development beyond 2022? Do you see the industry shifting more towards these kind of hybrid ductless products with the inverters in them beyond that with this new step up in cost on this efficiency regulation? What are you doing to kind of address that vertical, that kind of hybrid ductless inverter-based product vertical? Yeah. The hybrid ductless, again, we can develop whatever product we want, 80% of the product's replacement, the ducts are already in the home. The lowest cost solution for the 80% that's out on a replacement are ducted systems. We are coming out with a 28 SEER unit in first quarter that we talked about. We think we have as good or better variable speed technology with our compression partners. We think we're playing right in the sweet spot, which is to have the lowest cost point, to have the highest efficiency in the marketplace. We think with our compression technology, our coil strategy, and our Mexican assembly facility, we're able to do that. Got it. When you look out to the next couple of years, do you expect pre-buy in 2022? What's your latest and greatest on the multi-year view? I don't think there'll be a pre-buy in any meaningful way. Again, it always comes down to the fine-tuning of the actual details, how it's implemented. The last time we did this, which was a more normal way to do it, you had months to prepare and get it correct. You don't have this huge step function change like we did back in, or the industry had back in 2006, 2007. I think there may be a bit of pre-buy, but not like there's been in the past. Got it. There won't be that much of a change in competitive landscape coming away from this in your mind? No. Again, when we went from 10 to 13, or the industry, I wasn't here, but we went from 10 to 13, and it had been the first major jump in a while. That really screwed up the premium competitors in retrospect. The big winner was Goodman, because all of a sudden, differentiation got collapsed. One, I think everybody's understood that. One of the reasons we come out with a 28 SEER in 2021 is to prepare to sort of have the high end stretched out for when we have to make the transition. The other is, it's a much smaller bite when you're going from 14 to 15. That's much difference than going from 10 to 13 as a percentage, obviously. You just don't have this huge cost shock to the system and size shock to the system with the big units back in 2006, 2007. I view it as sort of not quite ho-hum, but pretty close to ho-hum. The other thing that's on the horizon residential regulatory-wise is change in refrigerants to lower greenhouse gas emissions. With the current administration, it looks like it's going to be national rather than just in a few states. We'll be prepared for that, as I think the rest of the industry will be. That California reg was pushed, right? More or less? California reg was pushed, it looks like the Biden administration, our best understanding, is it will drive it as a national implementation, just not CARB. Wow, okay. Got it. Thanks a lot. Appreciate the color. Our next question's from Joe Ritchie with Goldman Sachs. Please go ahead. Thanks. Good morning, everybody. Morning. Good morning. Maybe just starting off on refrigeration margins. I know you mentioned there were some mix issues in the quarter, and some step up in SG&A. Can you guys just maybe parse that out a little further and help quantify some of the impacts this quarter? The two I gave you or the two you rattled off were the two big drivers. It was the fact that we were up in HVAC in Europe and down in our North America refrigeration business had a significant impact on the margins. The other piece was just the timing of costs, and getting to account and sort of accrual adjustments and sort of year-over-year differences, and fourth quarter took a hit compared to fourth quarter last year. As I think I mentioned in the script, we expect to have margins up in Q1 in refrigeration and for them to be up full year. Got it. As you maybe take a look at your backlog in refrigeration, it sounds to me like there's going to be a mixed benefit then in 2021. Are you seeing the North America piece of your business growing a lot because of Europe at this point? Yes. Yep. Okay, cool. My one follow-up question, going back to commercial for a second. On planned replacement, I'm just curious, it seemed like you saw an uptick there in the quarter. I'm just curious, I guess, in terms of getting on-premise access for your services, how do things compare today, with COVID-19 cases surging, versus what we saw maybe earlier in 2020? You broke up a little bit or I didn't hear. Can you ask the question one more time? Oh, sure. No problem. Sorry about that. The question is really just around getting on-premise access to do your planned replacements today. Oh, get it. Yeah. versus what you saw two months ago. We have no issue. We're able to get on the job site and do what we need to do. Our guys are masked up, and commercial customers have no issue letting them in. All right, great. Thank you. Thanks. With no further questions in queue, I'll turn it over to you, Mr. Bluedorn, for any closing comments. Great. Thanks, everyone. To wrap up, as I mentioned in Q&A and during the script, momentum continues in first quarter, and 2021 is off to a nice start. Lennox team is executing well to capitalize on market growth and share gains. We look forward to a year of strong growth and profitability. Thanks again for everyone for joining us today. Ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.