Good morning, and welcome to Otis' fourth quarter 2020 earnings conference call. This call is being carried live on the internet and recorded for replay. Presentation materials are available for download from Otis' website at www.otis.com. I'll now turn it over to Stacy Laszewski, Vice President of FP&A and Investor Relations. Thank you, Justin, and good morning, everyone. Welcome to Otis' fourth quarter 2020 earnings conference call. On the call with me today are Judy Marks, President and Chief Executive Officer, and Rahul Ghai, Executive Vice President and Chief Financial Officer. Please note, except where otherwise noted, the company will speak to results from continuing operations, excluding restructuring and significant one-time non-recurring items. The company will also refer to adjusted results where adjustments were made as though Otis was a standalone company in the current period and prior year. A reconciliation of these measures can be found in the appendix of the webcast. We also remind listeners that the presentation contains forward-looking statements which are subject to risks and uncertainties. Otis' SEC filings, including our Form 10-K, upcoming annual report on Form 10-K, and quarterly reports on the Form 10-Q provide details on important factors that could cause actual results to differ materially. With that, I'd like to turn the call over to Judy. Thank you, Stacy, and good morning, everyone. Thank you for joining us, and we hope that everyone listening is safe and well. I'm pleased we've delivered a strong quarter and a solid year. Despite the challenging environment, our 2020 results demonstrate the resiliency of our business and the benefits of becoming an independent Otis. We grew adjusted earnings for the second year in a row, generated $1.3 billion of free cash flow, expanded our product and service offerings, and remained agile to support our customers as the pandemic evolved. We expanded adjusted margins by 70 basis points in 2020, following eight years without margin expansion as a segment of UTC, demonstrating the benefits of our independence. I could not be prouder of our 69,000 Otis colleagues who rose to the unique challenges presented throughout the year and never wavered in their commitment to provide essential services to our customers. We did this while staying true to who we are, recognizing the challenges within our communities, and allowing our Otis Absolutes to keep each other safe and guide our actions and behaviors toward a more equitable future. For the full year, organic sales were down 2.1%. At constant currency, adjusted operating profit was up $52 million, a $17 million improvement from the midpoint of our prior outlook. Margin expanded 70 basis points, reflecting the strong performance in the service segment throughout the year. Adjusted EPS was $2.52, up $0.28 or 12.5% versus the prior year, and a $0.10 improvement from our prior outlook. Turning to page four. In our new equipment segment, we grew share by 60 basis points, with growth in all major regions. We proudly marked the 20th anniversary of our Gen2 platform and hit a major milestone, surpassing more than 1 million Gen2 units delivered to date. We continue to innovate, introducing new solutions for customers. For example, in India and other developing markets, we introduced the Gen2 Prime, a low-cost entry-level elevator. In China, we began shipping new equipment units enabled with our IoT platform, Otis ONE. This year, we'll expand this offering to include shipping IoT-enabled units in the U.S., Asia Pacific, and EMEA. We continue to pilot Gen360, our next-generation digitally native elevator that brings the advantages of connectivity into a new, more compact platform. We anticipate formally launching this transformational solution in the EMEA region later this year. We enhanced our sales force's ability to adjust the market by increasing sales coverage mid-single digits, including adding more than 850 agents and distributors in China, and implemented tools to improve efficiency on the back end. Today, more than 85% of our business is on a common CRM system, and we continue to find new ways to reach customers in this dynamic and more digitally enabled environment. Service is the core of our business. In 2020, we added to our industry-leading maintenance portfolio by approximately 2%, with growth in all major regions, including high single-digit growth in China. This growing portfolio, which accelerates our recurring revenue business model, along with cost containment actions and productivity initiatives, allowed us to grow earnings. This resulted in adjusted margin expansion in all four quarters and 110 basis points of expansion for the year. I'm pleased with our progress made on the IoT deployment. We added approximately 100,000 Otis ONE units as planned, bringing us to approximately 540,000 connected units. Over the medium term, we plan to accelerate portfolio connectivity to approximately 60% of units, up from the roughly 25% currently connected, creating value for our customers and productivity benefits for Otis. This year, organic modernization sales were flat globally as we faced project delays in some regions due to COVID-19. Modernization demand in Asia Pacific was particularly strong, with orders up approximately 30% and sales up double digits, driven largely by regulatory demand. Our operational initiatives generated favorable outcomes. We're very focused on material and service productivity to offset headwinds from labor inflation and commodities. Approximately 70% of our service cost base is labor, and approximately 70% of our new equipment cost base is material. We have material productivity initiatives to more than offset any potential impacts from raw materials. In 2020, we achieved our goal of 3% material cost savings, helping to offset some of the volume headwinds in new equipment. The early actions taken by our supply chain team, leveraging our scale, rationalizing spend, and taking cost out of products, provided the protection and assurance, even during COVID, that we would deliver on commitments made to customers. Our focus on cost containment extended to adjusted SG&A, where we reduced expenses by $38 million versus the prior year while expanding our sales coverage. As noted, we generated $1.3 billion in free cash flow with conversion of 143%, exceeding our prior outlook by $150 million. We channeled our strong cash generation into our capital allocation strategy, including bolt-on acquisitions to increase our scale and density, $350 million to repay debt ahead of our original schedule, and returned approximately $260 million to shareholders through dividends in the last three quarters of the year. We made significant progress on our tax structure throughout the year, reducing our adjusted tax rate by 370 basis points versus the prior year and 260 basis points better than investor day expectations. We expect over the medium term to bring our adjusted tax rate to a range of 25%-28%. As a final comment to 2020, and amid promising news of vaccine approvals and distribution plans, the three-month study using scientific data and analysis on elevator airflow, sponsored by Otis and led by a Purdue University professor and indoor air quality expert, concluded that elevators have significant air exchange by design and required by code, and a short elevator ride has a risk of exposure level less than that of outdoor dining. Turning to slide 5 and starting with the industry's outlook. While market dynamics remain fluid, the industry's long-term fundamentals remain solid. We are encouraged by the pace of recovery and signs of wider availability of COVID-19 vaccines. The industry's new equipment segment is expected to return to growth in all regions, with mid-single-digit growth in Asia, low single-digit growth in EMEA, and slight growth in the Americas. The recovery in new equipment will continue to feed the global install base and present future service opportunities. The core of our business is based on our service model, and the service market itself is expected to grow about 1 million units per year globally industry-wide. Industry install base in the Americas is expected to grow low single digits. EMEA, where roughly 50% of the Otis maintenance portfolio sits, is expected to grow low single digits. In Asia, we're expecting mid-single-digit growth driven by China. At Otis, we are confident in the momentum we built in 2020 and our ability to execute on our long-term strategy. Looking specifically at our 2021 Otis outlook. For the year, we expect sales growth of 4.5%-6.5%, with organic sales growth of 2%-4%. Adjusted operating profit is expected to be up $125 million-$175 million and adjusted EPS is expected in a range of $2.67-$2.77, up 6%-10% versus prior year and $0.20 at the midpoint. Lastly, we expect free cash flow to be robust in a range of $1.3 billion-$1.4 billion with conversion of approximately 120% of GAAP net income. We will remain disciplined in our capital deployment and are well-positioned to start share repurchases following $150 million of debt repayment that was already completed in January. The foundation we built this year as an independent company, along with the expected recovery in our end markets, gives us confidence that our strategy is working for our customers and shareholders. Our operating leverage, our global footprint, our successful innovation program, our capital management and strong balance sheet, and our industry-leading colleagues give me full confidence we can deliver on our outlook this year and many years beyond. With that, I'll turn it over to Rahul to walk through our results and 2021 outlook in more detail. Thank you, Judy, and good morning, everyone. Starting with fourth quarter results on slide 6. Net sales returned to growth in the quarter and were up 4.2% to $3.5 billion. Organic sales were up 1.3%, driven by a strong recovery in the new equipment business, partially offset by the expected decline in the service segment. Adjusted operating profit was up approximately 8% or $36 million and up $19 million at constant currency as higher new equipment volume and strong material and service productivity was partially offset by the impact of lower service volume, unfavorable price mix, and field inefficiencies in the new equipment business. Our focus on execution drove 50 basis points of margin expansion in the quarter. Fourth quarter adjusted EPS was up 40% or $0.19, driven by $0.05 of operating profit growth and $0.11 from a lower adjusted tax rate. As Judy mentioned earlier, these results were $0.10 ahead of prior outlook, driven by better than expected growth in the new equipment business. Increased benefit from material productivity and a slightly better service pricing environment. Moving to slide 7. New equipment orders were down 3.5% at constant currency, as strong order intake in EMEA and Asia, driven by China, that was up double digits, was more than offset by a 21% decline in the Americas due to a tough compare and weakness in the Northeast and larger metropolitan areas in the western region of the U.S. Awards, which typically precede order booking by a couple of months, were stable in the quarter in North America. Net booked margin, adjusted for mix, was down 50 basis points in the quarter. Backlog was up 2% at constant currency, driven by growth in the Americas, Europe, and China, with overall backlog margin down slightly versus the prior year. New equipment organic sales were up 4.8%, with Americas and EMEA up about 18 and 5% respectively, driven by strong backlog conversion. This growth was partially offset by a decline in Asia. At constant currency, adjusted operating profit was up $7 million in the segment. Margin expanded 20 basis points as higher volume and strong material productivity more than offset incremental investments in China to develop agent and distributor channel, unfavorable price mix, and field inefficiencies. Service segment results on slide 8. The number of units under maintenance contracts increased by 2%, and modernization orders were up 4.9% at constant currency, as double-digit growth in Asia, driven by the mandated regulatory upgrades in certain markets, was partially offset by lower order intake in the Americas and EMEA. Service organic sales were down 1.4% in the fourth quarter, with contractual maintenance demand up slightly, while discretionary repair and modernization projects were pushed out. However, we were encouraged by the repair business improving sequentially over the prior periods with a lower year-over-year rate of decline compared to the second and the third quarter. Adjusted operating profit margin expanded 70 basis points, and profit grew $8 million at constant currency. A strong contribution from productivity was partially offset by the impact from lower volume. The service pricing environment, excluding the impact of price concessions, was modestly favorable. Overall, full-year results on slide 9 reflect solid performance, with $52 million of adjusted operating profit growth at constant currency and 70 basis points of margin expansion despite organic sales being down 2.1%. The service business was particularly resilient, growing adjusted operating profit at constant currency by $55 million and margin by 100 basis points, notwithstanding a slight decline in organic sales as our focus on productivity initiatives continued to yield results with maintenance hours per unit down close to 6% versus 2019. Despite the environment, we are pleased with the operational progress we made in new equipment business. Operating profit was down $45 million at constant currency on 4% organic sales decline, with decremental margins more or less in line with our contribution margins. We achieved the goal of 3% material cost savings in 2020, partially offsetting the headwinds from COVID-19 pandemic that resulted in lower volume, the associated under-absorption of costs, field inefficiencies, and higher bad debt expense. Cost containment efforts were also a large contributor to profit growth, and full-year adjusted SG&A expense was down close to $40 million versus prior year. At the same time, we maintained the investments in R&D and other strategic projects at 1.6% of sales, which was about flat versus the prior year. Full-year adjusted EPS was up 12.5%, or $0.28 versus the prior year, driven by $0.07 from strong operating performance and $0.15 from the progress we are making on reducing our adjusted tax rate, down 370 basis points to 30.4%. Net interest was also favorable by $0.06, reflecting the benefit of $350 million of debt repayment and $500 million of refinancing during the year. This EPS performance is not only better than the outlook provided in October, but also better than the pre-COVID outlook provided in February on our Investor Day and caps a successful first year as a public company. As we look forward to 2021 on slide 10, we feel confident of growth across all key metrics given the higher starting new equipment backlog, resiliency of the maintenance business in 2020, normalizing job site and building access levels, and our focus on operational excellence. Service callbacks, our proxy for repair volume, is also showing continued sequential improvement. Even though the rate of improvement slowed in Q4 due to the resurgence of COVID-19 pandemic, we do expect year-over-year compares to turn favorable in the second quarter of 2021. These encouraging trends, combined with the strong foundation we built in 2020, gives us confidence to grow overall organic sales by 2%-4%, with adjusted operating profit by $125 million to $175 million, with 30-40 basis points of margin expansion. We expect sales, operating profit, and margins to improve in both segments. Adjusted EPS is expected to be in a range of $2.67 to $2.77, up 8% or $0.20 at the midpoint. This year-over-year increase is driven by strong operating profit outlook and a 90 basis point reduction in the adjusted tax rate to 29.5%, partially offset by a $12 million increase in interest costs from the full year impact of debt placed at spin. We expect free cash flow in a range of $1.3 billion-$1.4 billion, with conversion at approximately 120% of GAAP net income. This reflects the strong earnings growth outlook, partially offset by incremental interest and non-recurring tax-related payments in 2021. Given our strong working capital performance in 2020, a reduction of more than $90 million or close to 25% from 2019 year-end balances, we are holding working capital flat in 2021 at the midpoint of our outlook. Our capital deployment plans remain on track, and we have completed the previously disclosed $500 million of debt repayment, with $150 million payment in January, and expect share repurchases of $300 million in 2021, a year ahead of the original schedule at spin. Taking a further look at the organic sales outlook on slide 11. The new equipment business is projected to be up between 2%-5%, driven by accelerated conversion of the backlog that was up 2% in 2020, and the expected return to growth in the market. We expect broad-based recovery, with all three regions returning to growth in 2021. Americas up low to mid-single digits, EMEA up low single digits, and Asia up mid-single digits, driven by growth in China. In the service segment, we expect maintenance and repair sales to be up 2%-4%, with maintenance sales growing from a stable base and recovery in discretionary repairs that will accelerate post Q1. Modernization sales should be up low to mid-single digits, with Asia Pacific maintaining the growth momentum from an effective go-to-market strategy to tap into the demand created by the regulatory requirements and other regions returning to growth as they convert the higher year-end backlog. Overall, the sales growth of 2%-4% represents a solid turnaround after a difficult 2020, with growth across all regions and all lines of business. Switching to operating profit on slide 12. We expect operating profit to be up $125 million-$175 million and up $75 million-$125 million at constant currency, reflecting the benefit of volumes returning to pre-COVID levels and continued strong contribution from material and service productivity to offset the headwinds from pricing in the new equipment market, increases in commodity prices, step-up in maintenance expenses, and incremental standalone costs in the first half of the year. This outlook represents the third consecutive year of strong earnings growth as we continue to execute the basics, deal with the challenges, leverage the investments we have made in the business, and benefit from a market recovery. With that, I'll request Justin to please open the line for questions. Thank you. As a reminder, we ask that you please limit yourself to one question. To ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Once again, that is star one if you'd like to ask a question. Our first question comes from Jeff Sprague from Vertical Research. Your line is now open. Thank you. Good morning, everybody. Good morning, Jeff. Good morning. Hey, I'm wondering if you could just elaborate a little bit more on, I guess it's kind of a multifaceted question, but all this is somewhat interrelated. The topics of unfavorable price mix and some of the pressure you might be seeing on the OE equipment side, and how that dovetails with your productivity efforts to offset that. morning, Jeff. You know, we've seen earnings momentum going into 2021 with earnings up close to $50 million in the second half of 2020. We are projecting to continue this momentum into 2021. If you look at the new equipment segment, there's a couple of drivers that are driving the growth in 2021 on the earnings side. The biggest piece of that is the segment returns to growth in 2021 after a challenging 2020, with 3.5% organic sales growth at the midpoint. The drop-through we'll get from that is a strong contributor to earnings growth. Along with strong material productivity, we still think we can deliver the 3% material cost productivity after absorbing the impact from commodity headwinds. This, along with the restructuring actions that we took last year, will help us offset the incremental standalone costs, headwind from some of the actions that we took, you know, some of the short-term actions that we took last year to protect the earnings, and any adverse pricing that may materialize. I mean, the pricing was more or less stable. I mean, we were down slightly on the backlog. We expect some headwinds for pricing, but we're obviously building that into our guidance. You know, the key here is that we are able to grow margins of the new equipment side despite the commodity headwinds, increase in standalone cost, temporary costs coming back, and the pricing pressures. This has been the key part of our strategy. We've been talking about it since our first earnings call back in April last year, that we understand the challenges we are facing, and we have these operational excellence programs that we're working on, whether it's backlog acceleration or material productivity to deal with anything that may arise. We feel good about where we sit today right now, Jeff. And- Yeah, let me just add one thing, Jeff. When we stood up at Investor Day, I think you heard Rahul and I both set a target to end 2020 at a higher backlog and to go into 2021 with a higher backlog than we entered 2020. That was something we've reiterated at every earnings call. With this 2% and improved backlog conversion, we really think that's going to make a difference in new equipment in terms of driving the revenue, and then we'll get the follow-through. maybe just one kind of related follow on it. Have you found that your actual realized margin is consistently coming in above kind of the booked margin at the time of order? How did that play actually through the year and in the quarter? Yeah, no. Our operational excellence not only is based on what we do in the factory, but also it's equally important what we do in the field. We track that thing very closely, Jeff. Every month, every quarter, we get reports from every country around the world. Our delivered margin consistently is above our booked margin. We'll continue to push that, along with pushing material productivity in the field as well. The delivered margin is higher than a booked margin. Great. Thanks a lot, guys. Appreciate it. Thank you. Our next question comes from Nigel Coe from Wolfe Research. Your line is now open. Oh, thanks. Good morning, everyone. I think there's a few questions about the orders, down 4%, backlog up 2% versus the sales outlook. There's a 2%-5% for equipment. You've clearly got some very easy comps in 2021. Would you expect to be good in backlog, as you ship from that backlog to achieve maybe the high end of that range? Are you expecting orders to accelerate through the year? Just any color in terms of the forward look would be helpful as well. Nigel, good morning. It's Judy. There's a few questions in there. We do expect orders to accelerate. I think we've shared that two-thirds of our book that we will execute on in 2021 is in backlog. The rest is kind of book and bill type business for us across the board, both new equipment and service. We do expect it to accelerate, and we will be using 2021 to fill the 2022 backlog so that we go in strong and keep this momentum going. Orders on any quarter basis aren't really the best determinant. They do go up and down. There's different levels in different regions. We were down 3.5% at constant on the new equipment side. I would point out our modernization orders were up almost 5%. That business, which we see as a growing opportunity for us as well, even with all the discretion that's been happening in modernization, our modernization orders are up. The other way, Nigel, just to add to that, is that you can almost look at the guide of 2%-5% with our backlog up on the new equipment revenue. With our backlog up 2%, you can almost look at that as a floor, right? That's what we're starting with. Judy mentioned about the acceleration of backlog. We demonstrated that in the fourth quarter of 2020, driving substantially higher organic revenue than where our starting backlog was at the beginning of the quarter. That just shows the steps that we are taking to accelerate our backlog conversion is happening, and we'll continue that into 2021. Obviously, the markets are coming back, and that is what Judy was talking about, and Judy shared the data, that we're expecting growth across the world with Asia up mid-single digits. That helps the growth as well. You start with 2%, add on the backlog conversion, and then add on the market recovery, that gets us to the 2%-5% range. Thanks for the detail. Thanks for that. Thank you. Our next question comes from Steve Tusa from JP Morgan. Hi, good morning. Hi, Steve. Hey, just to be clear, I think the backlog was influenced a bit by Forex too, right? The organic backlog is actually up a little more than that? Yes, absolutely, Steve. At constant currency, the backlog is up 2%, which is what we're talking to. At actual FX, we benefited from backlog conversion. That's ending up about 6%. Got it. at reported numbers. Yeah, reported numbers. Right. Okay. Got it. I must have missed that and got that wrong. Just on the services growth, is there anything in there that's reading through from what you're doing specifically around the technology? Is it kind of too early for that to show up in the services growth rate for 2021? Steve, I think we're starting to see the benefits of the IoT Otis One investment. We're clearly seeing the productivity benefits of all the apps that our field professionals have and are being able to put in play. Otis One, we're starting to see that. We deployed just about 100,000 new units in Otis One, primarily in China, EMEA, and in North America. There's real demand pull for that from our field professionals. It's really giving them that advanced look, that ability to be able to fix things remote and to really bring down our callbacks. Our retention rate, we think that's really where you're going to see this in the retention rate. Our retention rate, we ended the year at 94%, which is industry-leading and is up from earlier in the year when we were closer to 93%. We're seeing it there. The reason we believe in it, we're going to be deploying at least that same number this year, and we're also now pre-positioning our Otis ONE on our units that we're shipping from the factory. It's already started in China. We're adding the U.S., EMEA, and Asia-Pacific. That'll take some time to work its way through, obviously the warranty period, a year or so in most places. We believe in it, and we're seeing the early returns, and we're seeing the productivity gains. Our customers are able to really have that access for really operational knowledge, whether they're on site or not. Is my elevator working? Am I getting more uptime? We think that's just going to buy more stickiness, and that's the whole thesis of our connected strategy. Just one last one just on China. Pretty decent orders number. Can you maybe just clarify what types of differences you guys may have in exposure versus your kind of more visible, publicly traded peers within China? They make comments all the time, but sometimes it's tough to read directly through from what they're saying. What's your outlook on China and maybe how may you be different than those guys? I'll leave it at that. Thanks. Sure. Let me just kind of look back at China for 2020. As we started at Investor Day, we thought it was going to be a flat segment. The new equipment segment really had mid-single-digit growth, and we held our own to slightly up. We also had high double-digit growth in our portfolio in China, which is key as that becomes a large market for us for the install base. Where we gained share on the order side, Steve, was really in the office, commercial, and infrastructure markets in China as we really look at the back half of the year, and we're seeing that kind of roll through in January as well. Our high-rise business continues to perform well. We made a lot of investments in China since we became independent, this whole expansion, significant expansion, 850 agents and distributors that are helping us garner more key accounts, which then have a higher conversion rate. Last year was a great investment year for us in China to build the foundation. We had strong results as the market came back, we expect strong results as that market grows, we expect to outgrow the market this year in 2021. Steve, just to add to that we continue to do really, really well in the tier 3 to tier 6 cities, and that has been our bread and butter. We've done well over the last five, six years there. We've continued to gain share in those markets. Those markets were slightly slower to recover than the tier 1 markets, and that's where we need to do the work, as we've previously discussed. That's the part where some of our publicly traded peers have a slightly stronger share. I think the agents and distributors that we've added this year, with that, we're confident we'll do better next year or in 2021 in those tier 1 markets as well. Our success in 2020 was in the tier 3 to tier 6 cities. Thank you. Our next question comes from Cai von Rumohr from Cowen. Yes, thank you very much. Nice results. Your maintenance units were up 2% in the fourth quarter. My recollection is they were up 1% in the third. Can you comment how much of that is organic versus acquisition and maybe trends outside of China? The 2% was a full year number, Cai, so that's a full year number. I think that's where we ended the year. The growth that we saw in the quarter was all organic. I don't think there's any acquisition worth speaking about, so it was all organic. Am I correct? I think you published that the third quarter, the units were up 1%. If 2% is for the full year, what was the fourth quarter? It just depends on the way you should look at it is where we ended Q3 last year versus Q3 of 2019. It's a year-over-year growth. This is a Q4, it's a balance sheet number, right? That's the way to think about it. It's in Q4 of 2020. At the end of 2020, we ended up at 2% higher units versus where we ended in 2019. Terrific. Then on the raw material front, refresh my memory, is it the% of raw materials, the absolute number of raw material purchases, what% is stainless steel? Because stainless basically what it topped something like close to 20% since the middle of the quarter. Yeah. Our commodity spend, Cai, total commodity spend is about $300 million, out of which about 80% is steel. You're right. If you look at kind of what we are seeing right now for 2021, steel is about 7%-8%, maybe a little higher in Q1 right now, and the fall was a little bit lower. It averages out about 7%-8%. The way we're thinking about the commodity issue for next year is, it was a tailwind in 2020. It's for 2021, it is a headwind given where the steel prices sit today. The spreadsheet math would suggest, hey, that could be like a $20 million-plus headwind for us. The other part that has simultaneously happened is that both euro and the renminbi have appreciated against the dollar, and we buy in local currency in both Europe and China. We should be able to offset part of this commodity increase by just appreciation of the local currency. That's one piece of it. The second piece is that we are working really hard on material productivity to offset the commodity headwinds. I think that's what Judy said earlier. We're starting 2021 in a much better position than we did in 2020, given the cadence that we gained last year. A carryover benefit from the projects that we started mid-year in 2020 is higher than where we were at this point last year. We still think we can deliver 3% material productivity after absorbing the commodity headwinds and grow our new equipment margins, which is what I said earlier in response to Jeff's question. The other piece, to the extent that dollar weakness is causing the commodity headwinds, we're also seeing the $50 million FX gain on our earnings overall. It's in a different line of the P&L, some of the commodity weakness is because of the depreciation of the dollar, we gain that on the overall earnings side. A little bit of a trade-off, overall, it is an issue, it's built into our guidance, and we feel we can get to 3% material productivity and grow our new equipment margins in 2021. Thank you very much. Thank you. Our next question comes from Julian Mitchell from Barclays. Your line is now open. Hi, good morning. Good morning. Good morning. Just a couple of clarifications, really. One was around the free cash flow outlook. There isn't a lot of growth dialed into that guide, despite a reasonable adjusted earnings increase. Just wondered any sort of split there around working capital versus CapEx and if you've seen any change in working capital terms, perhaps as some of your customers are fairly squeezed. A very quick clarification, just non-controlling interest, I think was lower year-on-year. Just trying to understand that. Yeah. Let me start with cash and then we can talk about the minority JV payments. If you look at our cash, really strong year last year. We ended $150 million better than what we had guided, and net income came in better. Working capital was really good. As I said in my prepared remarks, we reduced working capital by $90 million, which is a quarter of our working capital, which was a fantastic performance given what you hear overall. As we look at 2021, the biggest driver is improvement in earnings, Julian, as you referenced. There are two issues that we are trying to deal with next year. One is just the timing of the interest payments. Just the way where the interest payments landed, we do have an extra interest payment in 2021, which we did not have in 2020 given the timing of when we raised debt. The other issue is that we do need to make a tax-related payment for an old tax matter that we've inherited from UTC. We built that into our guidance as well. That matter is still ongoing, but we built that into our guidance. As I said in my prepared remarks, we have not built any working capital improvement into our guidance at this point. We'll obviously keep working at the midpoint of our guidance because when we'll keep working there hard, but our plan, at this point, doesn't contemplate that. $1.35 billion for 2021 is a solid number. It's 120% of GAAP net income and substantially higher than where we expected 2021 to be on Invest Day. We think it's a solid start to the year. On NCI for 2020, not any one single driver. It was a combination of various things, a couple million here and there, and FX was a little bit of a headwind as well. I wouldn't read too much into where we ended on NCI for 2020. Great. Thank you. Thank you. Our next question comes from John Walsh from Credit Suisse. Your line is now open. Hi. Good morning. Morning, John. It was great to hear and it sounds like there's a lot of excitement around the new products and rolling them out across the different geographies. I guess, one of the questions I had is as you roll these new products across U.S., EMEA, China, APAC, do you believe that these new products are ahead of where your other kind of public competitors are? Are these to get you to be in line because you've talked about making these investments, or do you think that there's still some other folks that might still be leading even with these new products? I'm just trying to understand kind of the competitive dynamics there with a lot of these new launches, if you're kind of leaping ahead or if this is to kind of get back in line with where some of the market already is. Yeah, John, it's a little of both. We've increased our R&D investments 60% since 2015. Actually, we've done really well. Our patents have gone up four times since that same period. Our new product releases since 2018 are up 250%. We've made a conscious effort to really reinvigorate the innovation engine and the DNA in this company. Some of that is a little bit of catch-up, but others, like our Gen360, is going to be an incredibly new digitally native. With an electronic safety, first in the industry, that code authorities have to approve. It's going to revolutionize really how people are gracefully handled when there's an issue in the elevator and the elevator has to actually stop. It's going to gracefully bring them down to an actual landing floor so that customers, and more importantly, passengers, aren't entrapped at any length of time. Our destination dispatch product we believe is industry leading. We've released the Compass 360 product that gives us even more capability, and we found customers are really very interested in that whole destination product because it's touch-free. We've always talked about the safety of our products, now we also talk about the health offerings of our products. Our team moved very rapidly during the COVID era to generate new products, whether it be gesture, whether it be our apps, our eCall app that allows you either via Bluetooth or other connectivity to use your phone. We've tried not just to hit the high end with a Gen360, in terms of complexity and features. We've also tried, as we talked about our Gen2 Prime, to find a nice, stable, affordable entrant that'll be a workhorse for us in India, in the Middle East, in Africa, in other emerging markets. We're trying to hit that whole span. On the service side, when we rolled out Otis ONE, we made a conscious decision to roll it out as a productivity enabler first. We think we're going to drive one point of productivity with Otis ONE, and we're going to keep adding units to do that. The reason we did that and the strategy we did that we took, was a density-based approach. There's not as much value if you just sprinkle sensors or IoT units across the globe. We did a very focused, density-based, route-based attempt and focus to be able to actually yield that productivity. That'll grow in productivity, but it'll also grow in terms of customer value and retention for us. It provides a foundation for us to add services. A little bit of catch-up, no argument, based on some prior years' lack of investments pre-2015. I think we've really accelerated both in the mechanical, the digital, the electronic, and most importantly, the passenger experience. Thank you for that answer. Then just as a follow-up, looking at the Americas orders growth, I know any one quarter isn't maybe necessarily the best data point and they need to be looked at probably over a four-quarter period, but can you remind us what your order to ship is right now in the Americas? Because I'm just trying to figure out, elevators typically lead and how to kind of roll through these negative orders we've seen in the Americas through the model. I think you also talked about awards being kind of stable. I didn't know if that was an Americas comment or a total portfolio comment. Thank you. Yeah. No, John. The typical, I would say, the order to the ship time on elevators is about 12 months in North America. I think that's what we've said before. That's where we are. The comment on awards, which typically precede orders by a couple of months, and they were stable in the quarter, that was a North America comment. If you look at Americas overall, John, I think the markets are kind of uncertain, right? As Judy mentioned in her prepared remarks, we're seeing good growth in Asia. We know kind of feel good about the mid-single digit growth there. If you look at EMEA, we feel good about the low single digit. Americas remains challenging, and the market was down mid-teens last year. Obviously we did better than the market. If you look at the Dodge Momentum Index, that just turned strongly positive in December for the 1st time in several months. That's an initial sign of recovery since COVID. If you look at the Architecture Billings Index, that's still under 50. Now the inquiries have been positive for 4 months straight. Kind of mixed signals. If you look at the range of guidance that we are giving, part of that range is driven by the Americas growth outlook. That's a contributor to that. Overall, again, I think we discussed with Nigel earlier, we feel good about all the steps that we've taken in terms of improving our sales coverage, kind of 7 points in China, 10 points overall, new product introductions. Our proposals were up 7% last year. That obviously is another good sign that we can keep building on this momentum that we have and the share gain that we've enjoyed, we can keep building on that. Americas market is uncertain, but that's what we built into our guidance. Great. Thank you. Thank you. Our next question comes from Carter Copeland from Melius Research. Your line is now open. Hey, thanks and good morning, everybody. Morning, Carter. I wondered, could you speak specifically to conversion rates? I think at one point in time you talked about giving those sort of once a year, and even if you can't give us the exact number, just some of the regional trends data, any color on that on just how you finished the year in terms of conversion? Yeah, let me start, and I'll give you more of some regional flavor, and then Rahul can add. We saw strong conversion growth and uptick in China, which is the most encouraging for us because that's obviously the largest, at over 50% of the segment. That's our largest opportunity base to grow our service portfolio. The service portfolio, as I mentioned, we had high single-digit growth in there. We saw nice conversion, and our retention rate went up in China as well, as did our recapture rate on units we wanted to get back. All three metrics that help drive net recovery for us in China were positive. We think that's the strategy playing out. Everything we've told you about enhanced customer stickiness, IoT, more key accounts which have higher conversion rates closer to the 80% range, more infrastructure, which also has higher conversion rates. With that pivot in our strategy in China, that's where we're seeing that accelerate. Rahul, do you want to comment on the- No, and the- At the macro level? Yeah. The overall conversion kind of hung in there at about 60-ish%, Carter. Not a lot of change to the overall conversion. As Judy said, China was up about a point and a half, so that was good momentum. The only other thing is the retention rate for us, which is very critical, was at 94% in 2020 versus 93% in 2019. That ticked up as well. That's good. Good momentum in the service business, obviously. You saw that come through the results as well. The other thing I'll just comment on, Carter, just from a service pricing, what we saw, if you hold the concessions off, and they still exist, and we believe they're still going to happen in 2021, in the early 2021, in the hospitality parts of the business and retail. Our service pricing held well as we finished 2020. Not only were we getting the conversions and keeping the retention, we were holding price, if not just slightly up. Based on those trends, presumably you expect your service portfolio growth to accelerate in 2021 versus 2020, I would assume? Yes. Okay. All right. Thank you very much. Thanks, Adam. Thank you. Again, ladies and gentlemen, if you have a question, that is star one. Again, if you'd like to ask a question, that is star one. We have a follow-up question from Nigel Coe from Wolfe Research. Your line is now open. Thanks for the follow-up. Appreciate it. Rahul, I was just wondering if you could maybe just size that tax number you've got dialed into your forecast. Then maybe just clarify the $20 million of raw material, that's sort of dialed into your budget. Is that the kind of the growth impact, or is that net of productivity or FX movements? Is that just the pure increase in spot prices? No, $20 million is just a commodity piece. We think we will offset that, Nigel, with the 3% material productivity, and we will deliver 3% net productivity after absorbing that $20 million headwind. Okay the commodity piece. On the tax savings, it's kind of in tens of millions, Nigel. It's a big number. It's not a small number. It's a tax matter. We will continue to deal with it. Again, no P&L impact. The P&L is all accrued. It is basically a cash outflow for us in 2021. It's like a separation type number. Does that clear up the separation matters more or less at this point? There will be a few tax matters that will continue. We had this old toll tax, if you guys remember from, you guys who've been following UTC for long, that will continue for a few years, but that's not a year-over-year change, Nigel, that's in the $15 million-$20 million of cash outflow every year. That's not a big number, but this is one of the biggest issues that we have remaining from a separation. Okay. Thanks very much. Thank you. Now I would like to turn the call back over to Judy Marks for closing remarks. Thank you, Justin. To summarize, we delivered a strong close to a solid first year as an independent company. I'm pleased with the performance we delivered against a challenging economic backdrop. Nearly a year ago, we held our investor day at the New York Stock Exchange. We shared with you the strength of our portfolio, our long-term strategy to deliver growth and profitability, our track record of execution, our commitment toward disciplined capital allocation, all to drive shareholder value. We laid a strong foundation, the targets set out for 2021 reflect the resiliency of our business model and the strength of our long-term strategy. Our fundamentals remain strong. We're well-positioned to continue driving value for our customers, for our colleagues, and our shareholders. I hope you all stay safe and well. Thank you for joining us. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.