Good morning and welcome to the Trane Technologies Fourth Quarter 2024 earnings conference call. My name is Regina, and I will be your operator for the call. The call will begin in a few moments with the speaker remarks and the Q&A session. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. We ask that you please limit your questions to one and one follow-up. I will now turn the call over to Zac Nagle, Vice President of Investor Relations. Please go ahead. Thanks, operator. Good morning, and thank you for joining us for Trane Technologies Fourth Quarter 2024 earnings conference call. This call is being webcast on our website at tranetechnologies.com, where you'll find the accompanying presentation. We're also recording and archiving this call on our website. Please go to slide two. Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Please see our SEC filings for a description of some of the factors that may cause actual results to differ materially from anticipated results. This presentation also includes non-GAAP measures, which are explained in the financial tables attached to our news release. Joining me on today's call are Dave Regnery, Chair and CEO, and Chris Kuehn, Executive Vice President and CFO. With that, I'll turn the call over to Dave. Dave? Thanks, Zac, and everyone for joining today's call. Please turn to slide number three. I'd like to begin with a few minutes on our purpose-driven strategy, which enables our differentiated financial results over time. At Trane Technologies, we continuously innovate for a sustainable world, and our innovation is driving significant customer demand. We are the partner of choice to ensure optimal performance while reducing energy use and emissions. Our customers know that our solutions are green for green, good for the planet, and good for the bottom line. Our relentless investment in innovation powers our flywheel of market outperformance and strong free cash flow. With this momentum, our proven business operating system, and our uplifting culture, we are well positioned to deliver a leading growth profile and differentiated shareholder value into the future. Please turn to slide number four. We expect to deliver top quartile financial performance over the long term, consistently and reliably for our shareholders. This is core to our culture and central to how we set our targets and execute our strategy across our global portfolio. 2024 was a standout year for the company. I'm proud of how our global teams exceeded our targets top to bottom. We closely track top quartile performance against our core peer group and believe our performance will rank in the top quartile on organic revenue growth up 12%, as well as adjusted EPS growth up 24%. We also delivered free cash flow of $2.8 billion, or 109% free cash flow conversion, enabling us to make key strategic M&A investments while raising our dividend and returning significant cash to shareholders through share repurchases. Please turn to slide number five. Relentless investment in innovation, growth, people, culture, and our business operating system have yielded clear benefits over time, demonstrated by our strong track record. Since 2020, we've delivered a revenue compound annual growth rate of 12%, expanded our adjusted EBITDA margins by 400 basis points, and delivered free cash flow conversion of 108% while deploying approximately $12 billion of capital. We believe that consistent business reinvestment is key to our long-term success. For over a decade, we've added a high level of incremental investments each year in high ROI projects. This has resulted in a world-class direct sales force, channel, and service organization. It has also enabled us to develop cutting-edge solutions for the most pressing customer challenges, driving strong demand. We have all the essential ingredients to execute our strategy and continue driving differentiated returns for our shareholders over the long term. Please turn to slide number six. We delivered robust financial results in the fourth quarter, extending our strong track record of execution and industry-leading revenue and EPS growth. Our global team achieved 10% organic revenue growth, 110 basis points of adjusted EBITDA margin expansion, and 20% adjusted EPS growth. Organic bookings for full year 2024 were strong, up 11%, with a book-to-bill ratio of 102% on top of 12% organic revenue growth. This contributed to a highly elevated backlog of $6.75 billion entering 2025. We saw strong performance across our segments, led by our commercial HVAC businesses. Fourth quarter Americas and EMEA organic commercial HVAC bookings were both strong, each up more than 30% on a three-year stack. Fourth quarter organic revenues were exceptional, with Americas commercial HVAC up mid-50% on a three-year stack and EMEA commercial HVAC up more than 60% over the same period. Our teams are excelling in complex bespoke Applied projects, which are key to the multi-year CapEx cycle, especially in high-growth verticals. For instance, three-year stack organic revenue growth in Applied Systems for our Americas and EMEA commercial HVAC businesses is up over 120% and 90%, respectively. Applied Systems offer a durable service tail of 8 to 10 times the initial equipment cost over their lifespan, meaning our strong growth in Applied solutions presents tremendous service opportunities with higher margins that are largely still ahead of us. Looking beyond the continued strength in commercial HVAC, we see several tailwinds in 2025. We believe residential markets have largely normalized and are returning to our long-term framework of GDP plus growth. The Americas transport refrigeration markets are expected to bottom in the first half of 2025, paving the way for a second-half recovery and strong growth in 2026 and 2027. In addition, the challenges associated with our actions in the second half of 2024 to tighten credit policies in China are improving ahead of our initial expectations. Given our consistent performance over time, we are confident in our ability to deliver strong results in 2025. We are initiating a strong guide for the year, which Chris will cover in more detail in a few minutes. Please turn to slide number seven. Demand for our innovative solutions was broad-based across our segments in the fourth quarter. In our Americas segment, Commercial HVAC bookings were up high single digits. Revenues were up mid-teens in both equipment and services. Residential revenues were up low teens, consistent with the second and third quarters. Transport refrigeration bookings were down high twenties after being up high twenties in the third quarter, reflecting the inherent lumpiness associated with the timing of large customer orders in this business. Revenues were down low teens, outperforming end markets, which were down more than 20% in the quarter. In EMEA, commercial HVAC bookings were up mid-single digits in the quarter versus a tough prior year comp. Two-year stack bookings were up 20%. Revenue was also strong, up low teens. Our transport business performed in line with our expectations, with revenues down low single digits. In Asia-Pacific, our team demonstrated resilience, achieving strong sequential improvement. Bookings in the region were up 8%, and revenues were up 1%. Strength in the rest of Asia more than compensated for the softness in China, where bookings were down low single digits and revenues declined by low teens. Now, I'd like to turn the call over to Chris. Chris? Thanks, Dave. Please turn to slide number eight. This slide provides a snapshot of our fourth quarter performance, showcasing strong execution across the board. Organic revenues were up 10%. Adjusted EBITDA margin increased by 110 basis points, and adjusted EPS rose by 20%. At the enterprise level, we achieved robust organic revenue growth in both equipment and services, up high single digits and low teens, respectively. Our high-performance flywheel continues to yield results, with relentless investments in innovation driving top-line growth, margin expansion, and EPS growth. Please turn to slide number nine. At the enterprise level, we achieved robust volume growth, positive price realization, and productivity gains that offset inflation and high levels of business reinvestment. In the Americas, we delivered nine points of volume growth and two points of price. Strong performance in commercial HVAC and residential was partially offset by softer transport results. Adjusted EBITDA margin expanded by 140 basis points, driven by volume growth, productivity, and price realization. In EMEA, we delivered six points of volume growth and one point of price, with strong commercial HVAC performance. Adjusted EBITDA margin expanded by 20 basis points, driven by volume growth, productivity, and price realization. In Asia-Pacific, we delivered one point of price, and volume was flat. EBITDA margin expansion was driven by price realization and strong productivity, more than offsetting inflation and business reinvestment. Now, I'd like to turn the call back over to Dave. Dave? Thanks, Chris. Please turn to slide number 10. This slide outlines the key dynamics shaping our market outlook and guidance for 2025. In the Americas, we anticipate continued strong execution and broad-based strength in core markets, with particular momentum in high-growth verticals. Our world-class direct sales force and leading innovation are powerful competitive advantages that enable us to optimize opportunities and drive market outperformance. We expect residential markets to return to a GDP plus framework in 2025, following a modest pre-buy of around $75-$100 million in Q3 and Q4 of 2024. Most of this pre-buy is expected to impact the first quarter of 2025. For the full year, we see mid-single digit growth in the residential business, with a tailwind from the low GWP mix. Turning to transport, we expect relative flat markets in 2025, plus or minus low single digits. The market should bottom in Q1, down about 25% year over year, then rebound in the second half, aligning with freight market recovery forecasts. While the exact timing and speed are uncertain, ACT predicts a sharp recovery in both 2026 and 2027, up mid-teens each year. We've continued to invest heavily during the market downturn, and we are well positioned to outperform as the market comes back. In EMEA, we expect continued strength in commercial HVAC in 2025, driven by strong execution in core markets and tailwinds from thermal management systems, services, and key growth verticals. EMEA transport markets are expected to be flat to up low single digits in 2025, and we expect to outperform. In Asia, we anticipate a flattish market for the year due to a soft macro backdrop and our tightened credit policies impacting the first half of 2025. We expect muted performance in China to be offset by growth in the rest of Asia. Now, I'd like to turn the call back over to Chris. Chris? Thanks, Dave. Please turn to slide number 11. Our 2025 guidance reflects the market dynamics outlined on the prior slide and our optimism about our ability to outperform. It also incorporates our value creation flywheel, emphasizing continued investment in innovation, market outgrowth, healthy leverage, and strong free cash flow. We are initiating 2025 guidance with 7%-8% organic revenue growth and adjusted earnings per share of $12.70-$12.90, representing approximately 13%-15% EPS growth. This includes about 100 basis points of negative FX and roughly 50 basis points of growth from M&A impacting revenue, which together are expected to negatively impact earnings by about $0.20 for the year. We are targeting organic leverage of 25% or higher, consistent with our long-term goals. We anticipate another year of 100% or greater free cash flow conversion in 2025. Looking at the first quarter of 2025, we expect approximately 6%-7% organic revenue growth, driven by continued strength in commercial HVAC. We expect adjusted EPS in the first quarter to be between $2.15 and $2.20, with a midpoint of $2.17. This midpoint represents about 17% of our full year guidance, ahead of our three-year and five-year historical averages of approximately 15%-16%. Overall, we believe our Q1 guidance is strong and an achievable start to the year. For additional details related to our guidance, please refer to slide number 18. Please go to slide number 12. We remain committed to our balanced capital allocation strategy, focused on deploying excess cash to maximize shareholder returns. First, we strengthen our core business through relentless reinvestment. Second, we maintain a strong balance sheet to ensure flexibility as markets evolve. Third, we expect to deploy 100% of excess cash over time. Our approach includes strategic M&A to enhance long-term returns and share repurchases when the stock trades below intrinsic value. Please turn to slide number 13. In 2024, we deployed or committed approximately $2.5 billion through our balanced capital allocation strategy, with approximately $800 million to dividends, $470 million to M&A, and $1.3 billion to share repurchases. We made several strategic bolt-on acquisitions, enhancing our AI and digital building management capabilities, expanding specialized refrigerated transport, and making multiple channel investments. Our M&A pipeline remains active, and we will continue to be disciplined in our approach. In addition, with $6.2 billion remaining under repurchase authorizations, we have strong flexibility as our shares trade below our calculated intrinsic value. For 2025, we expect to deploy between $2.5 billion and $3 billion in capital. Our strong free cash flow, liquidity, balance sheet, and significant share repurchase authorization provide excellent capital allocation optionality moving forward. Now, I'd like to turn the call back over to Dave. Dave? Thanks, Chris. Please turn to slide number 15. We've already covered our transport market expectations in the Americas and EMEA on slide 10, so I'll keep my comments brief. While the Americas transport refrigeration markets have been more volatile in recent years compared to the five years preceding the 2020 pandemic, the long-term outlook remains strong. ACT forecasts show an average of 44,000 trailer units per year over a 15-year period. For 2026 and 2027, ACT projects mid-teens growth. The future looks bright, and we're excited about the opportunities ahead. Please turn to slide number 16. In summary, we are well positioned to deliver leading performance and differentiated shareholder returns in 2025 and beyond. Our uplifting and engaging culture, combined with our leading innovation and proven business operating system, continue to set us apart. I'm proud of our team's consistent track record of growth, including our standout performance in 2024. I truly believe our brightest days are still ahead. Now, we'd be happy to take your questions. Operator? At this time, if you'd like to ask a question, press star followed by the number one on your telephone keypad. We ask that you please limit your questions to one and one follow-up. Our first question comes from the line of Chris Snyder with Morgan Stanley. Please go ahead. Thank you for the question. I wanted to ask on service with Q4 up low teens again. I think Americas was in the mid-teens in Q4. Service has now grown at a double-digit rate for the last three to four years. Dave, I know you typically talk about high single-digit service growth. So I just wanted to get a sense for the outlook here and what's baked into this 2025 guide on service, which I know in the past you've said has usually lagged equipment by a couple of years. Thank you. Hey, Chris, how are you doing? Thanks for the question. Yeah, I'm so proud of our service business, just the growth rates that we've seen there. Chris makes me use a seven-year CAGR on that, so that's where the high single digits come from. And it's very high, high single digits. But look, we were up mid-teens or low teens, I'm sorry, in the fourth quarter, low teens for the full year. Our service business now, from a dollar basis, is $6.5 billion. And just tremendous growth that we're seeing there. And if you think about our backlog, right, which is predominantly on commercial HVAC, predominantly applied, that's really where our service business was designed around our applied solutions. And the more complex those solutions become, the more propensity for the OEM to do the service work. So look, we'll keep our guide at the high, high single digits, but think about $6.5 billion that's growing at a close to 10% rate per year. And the last couple of years have been in that double-digit range. As you said, it's a very resilient business, and I could tell you that we're operating very well there. It's part of our operating system, the cadence that we have there, and we're really hitting on all cylinders right now. No, really, really appreciate that. And then maybe turning over to the commercial HVAC equipment, orders this quarter, high singles a bit better than last quarter, low singles. Comp seems to be the same. And I know there's always a lot of focus on data center, but you guys do, obviously, I think you talked to 13 or 14 commercial verticals. So was that improvement, is that just project lumpiness, or when you look across those verticals, do you see a positive rate of change across some of them? Thank you. That's a great question. Look, our order growth for Commercial HVAC in the Americas was up high single digits. On a two-year stack, it's over 20%. On a three-year stack, it's over 30%. So we continue to see tremendous growth in our Commercial HVAC business. As far as the verticals, yeah, we track 14 different verticals, and we're seeing growth. Yes, we're seeing growth in data centers. It's been a strong vertical for us in the past. It's going to be a strong vertical for us in the future. But we're seeing broad-based growth. And if you think about it, I mean, the revenue for the Americas for the year was up over 20%, and we had growth in 13 of the 14 verticals. The only vertical that did not show growth was life science, and it's been challenged all year, but we're very optimistic about the future there. So think about that. We're showing broad-based growth, and you would expect that from Trane Technologies with the broad-based portfolio of products and services that we have. We didn't design our portfolio of products to serve a particular vertical. We designed it to serve the market, and that's exactly what we're doing. And if you take that with our direct sales force with deep domain expertise, knowledge at both a technical level and then within a vertical level, you could understand why we're being able to have this broad-based growth. So we're very excited about what we're seeing in commercial HVAC. The teams perform very well, and the pipeline too is very, very strong. So obviously, we report orders, but the pipeline is what the team's working on, and that remains very, very robust. Chris, I would add, thinking about our Applied solutions, which impact many of those 14 verticals, revenues in Applied are up over 120% in the Americas commercial HVAC business over the last three years, and the EMEA business is up more than 90%. And that is building an installed base that then drives services that think of that as a few years after the installed base, the service revenues start to apply post-warranty period. That's largely in front of us. So it's a very durable tail, as Dave described, and really excited that, again, Applied serves multiple verticals. Thank you, guys. Really, really appreciate that. Thanks, Chris. Thank you. Our next question comes from the line of Julian Mitchell with Barclays. Please go ahead. Hi, good morning. Maybe just a first question around the sort of organic sales guide through the year. So I think a lot of investors would have expected maybe a slow start to the year and then an acceleration because of Resi HVAC recovering from the pre-buy headwind and TK picking up a bit. But your organic growth guide looks very steady through the year, just a point less in Q1. So trying to understand, does that reflect not a big headwind from Resi HVAC and TK in Q1, or does it just reflect some conservatism when we're thinking about the second half and the commercial HVAC sales growth? Yeah. Hi, Julian. It's Chris. I'll start. Yeah, think about the first quarter, and I'll start with residential, right? Dave called out the pre-buy estimate that we had around $75 million-$100 million. We expect that should largely impact the first quarter. It may extend beyond that, but right now, we're thinking that should largely impact the first quarter. What it means residential is flat to slightly down in the first quarter. Transport markets, as you described, I mean, we're seeing them bottom out in the first half of the year, probably a bit under challenge here in the first quarter. But we're seeing continued strength in the commercial HVAC businesses. So think of them as up high single digit, could be 10% growth here even in the start of the first quarter. But it's really why we have a range of 6%-7% organic revenue growth for the first quarter. We think the guide's in the right range. We've got opportunities in multiple ways to get there. But you're right. I mean, transport, residential, it may have a start that could be a little bit down at the beginning of the year, but a lot of strength coming through commercial HVAC. And then we have multiple opportunities as we execute to the guide on the full year, which we said was 7%-8% organic revenue growth. A lot of confidence in our guide for the first quarter and for the full year. Thanks very much. And then just my follow-up would be around the price sort of volume outlook within the organic sales guide. So I think fourth quarter price was sort of one-to-two points across the company, higher than that in the Americas. When we're thinking about the year ahead, is it sort of a similar one-to-two-point price tailwind in the sales mix? And any sort of concerns about customers, for example, in the Resi channels pushing back on price increases? Yeah. For the fourth quarter, price was a little bit above two points. It really has been coming down over the last couple of years. And now, for the full year in 2024, it was a little bit above two points as well. And the Americas would be really the driver there, a little bit above two points in the Americas. And Julian, for 2025, we'd expect pricing to contribute about a point to maybe a point and a half on the full-year revenue growth outlook. So on 7%-8%, we'd get 5.5%-6.5% around volume, and then 1%-1.5% points coming from price. It's less of the carryover from 2024 pricing that would impact 2025, just given the low nature of the contribution in 2024. It's really around the new price increases that we put in place for 2025. On residential, you mentioned that. Just to be clear on the transition to the lower refrigerant, the 454B refrigerant for us, we're going to report that price increase, which is high single digits for that portfolio. We're going to report that in volume, so that would not be part of price. But think of that as on 65% of the portfolio and then about 75% of the year, three quarters of the year really being impacted by that transition for the A2L refrigerant. So hopefully, it gives you a sense. We're probably in that 1% to 1.5% point price range for the year. That's great. Thank you. Thanks, Julian. Thank you. Our next question comes from the line of Andy Kaplowitz with Citi. Please go ahead. Hey, good morning, everyone. Hey, Andy. How are you doing? Good. How are you? David, Chris, I wanted to ask Chris's question in a slightly different way. I know you have the 14 verticals, but are data center project bookings set to lead growth, for instance, in 2025 versus 2024? And it seems like education-related bookings are holding up well. There's been some consternation about that. And just on the comps issue, comps in North America seem like they continue to get a little more difficult. Can you still grow commercial HVAC bookings in North America even against difficult comps? Yeah. I'm not there, Andy. But look, we saw growth in, like I said, almost all verticals. So yeah, data centers were strong, but we had a lot of other verticals that were very, very strong. And you've hit on one, education. Education has been strong. Certainly, ESSER funding was a tailwind there. But even in the fourth quarter, where ESSER funding is now, at least from an order standpoint, behind us, we still saw growth in fourth quarter bookings. And I would tell you the pipeline there in education is very, very robust. So look, as far as the do we think there's opportunities that comps get hard? Look, we still believe there's tremendous opportunities here for growth in all verticals, right? If you think about the megatrends around decarbonization and energy efficiency, they continue to intensify. If you think about reshoring activity in the United States, that continues to intensify. If you think about the multi-year CapEx cycle with mega projects, that continues to have momentum. So we're very bullish on our commercial HVAC business. I would tell you that the portfolio of products and the innovation that we have there, I know I said in my prepared remarks, we are green for green. When you have a solution that's very sustainable for the planet and has a great payback for the customer, it's a great place to be. And that's what we have at Trane Technologies. So I'm very bullish about the future. Very helpful, Dave. And then just focusing on margin, APAC margin was obviously surprisingly strong in Q4. Maybe just comment on the durability of those margins in 2025. And then I think your incremental margin dropped a little in Americas and EMEA in Q4. You mentioned transport mix. Is that really what it is? But you also talked about investments quite a bit. Could you quantify how much they were and what you're thinking for 2025? Yeah, Andy, I'll start. I'll start with Asia. Yeah, we expected sequential improvements in Asia in the fourth quarter versus the third quarter, and our team in Asia just has even outperformed those expectations. It's still going to take some time to continue to normalize in China the tightened credit policy. So that'll probably extend into the first half of 2025. But their decisions were the right decisions, and you're seeing that come through on sequential improvement versus what we saw in the third quarter. Margins, look, that team has just been outstanding in terms of managing their productivity, their investments, and ultimately still investing in the business. So let's see where margins go for going forward. They're certainly leading margins across the regions, and it gives us a lot of confidence that EMEA and Americas can continue to grow their margins into the future as well, given just to recall our Asia business, it's largely commercial HVAC that they're selling into the region. For the other markets, very strong results in terms of margin expansion. We're driving all of those businesses for 25% or better leverage into 2025. We like that framework. The last couple of years, actually, we've taken the lid off of investments. We're making sure that we can drive strong leverage and also accelerating as many investments as we can. And that's really across all three of our regions. Otherwise, I think that hopefully answers the question. We have a lot of confidence that we're going to be able to grow the margins and really the leverage with the investments we're making. Yeah. I'll just add that, look, I'm super proud of the team in Asia. I know Asia, it's only 8% of our revenue. 50% of that's China, 50% 's outside, the rest of Asia. But I mean, just great performance. I mean, the rest of Asia had 10% growth, and it had order growth in the high teens. So very strong performance there. And as Chris commented, the team in China just executed very well implementing our new credit policy, and the credit tightening is the right reason. And that was the right prudent thing to do. And I was very clear on the third quarter, if we don't have a down payment, we're not going to take the order. In the fourth quarter, we made some adjustments to our backlog to make sure that everything in the backlog had down payments in it. That team is just executing at a very high level. Appreciate the color, guys. Sure. You're welcome. Our next question comes from the line of Amit Mehrotra with UBS. Please go ahead. Thanks. Morning, guys. Dave, can you talk about the margin? Just coming back to the service conversation at the front of the call, just to understand the margin opportunity in the service business over time. I know there's a lot of investments in technology to make technicians more efficient, maybe predictive maintenance. But hoping you could just speak to the runway there, just given, obviously, the third of the business and the installed base is growing quite rapidly. And a few years from now, it could be quite larger. So if you can talk about that. Yeah. But it's Chris. I'll start. Yeah. Look, we like the margins in the service business. It's higher margins when you think about what we're delivering to customers and making sure that their products are running efficiently. As Dave's described in the past, the service business is rapidly evolving from running to go fix something that's not working effectively to now making sure that the equipment's always optimized, right? It may be running. You may think it's operating well, but the fact is it may be operating inefficiently. And therefore, that's a really nice opportunity for us. So it gives us a lot of confidence that we should be driving organic leverage 25% or better. And a reminder, services is a third of the enterprise revenues. It remains a third of the enterprise revenues. And you're right, the investments that we've been making across our portfolio also include investments on our service portfolio. So think about service technicians, think about front-end tools, digital in terms of diagnostics. It's an area that, again, that's a great area to take the lid off and keep investing in that part of our portfolio. Yeah. I mean, one of the things that we announced in the quarter two was the closure of an acquisition, BrainBox AI. And that's really going to help our service business as well in the future. So if you think about today, we have 42,000 roughly connected buildings. We have well over 2 million connected assets. And we're getting a lot of data at the building level and at the asset level. And we'll call that structured data. What AI does is it augments that with unstructured data. And when you combine that, that's really where you're able to make buildings operate more efficiently. So our service teams will be a big part of that in the future. And I know you've probably heard me speak in the past about demand-side management. Look, we've done hundreds of thousands of energy audits, and we know that about 30% of the energy consumed after the meter is being wasted, and our goal is to help decarbonize that built environment and to get everything back to where it was designed to operate, and if we could save that 30%, there's so much opportunity there well into the future. And then just related to that, because obviously, paybacks are so compelling today, which is what's driving a lot of the growth. But there is this expectation that power prices will continue to go up over the next several years. I guess the BrainBox acquisition probably allows the equipment to run even more efficiently. Can you just talk about how you think the payback map evolves over the next few years? Because the question you routinely get is, how long is it sustainable? But if paybacks can actually improve, I wonder if just growth can actually re-accelerate. I think you're spot on. I don't think anyone's projecting that the cost of energy or at least electricity is going to go down in the future, right? So you think of the paybacks, it's actually going to become more punitive if you're not running the system the way it was designed. So the paybacks will actually increase. So we think there's a tremendous opportunity in demand-side management, and we're executing to that strategy. BrainBox can be a big part of us. It's a small business today, but we've been really good at taking these technologies, in this case, the technologies on the software side, and scaling it within our channels. So we're really excited about the growth that we're going to see in the future from it. Thanks a lot. Appreciate it. Sure. Thanks, Amit. Our next question comes from the line of Scott Davis with Melius Research. Please go ahead. Hey, good morning, guys. Hey, Scott. How are you doing? Good morning. Good. Good. Congrats on a very strong year. Guys, I wanted to go back. I mean, you talked a lot about energy audits, and it just makes a ton of sense. It seems like that's kind of what drives the sales cycle. Do you measure internally the number of energy audits that you do kind of each quarter? And is there such a thing as kind of thinking about that as I'll just call it like front log, that energy audits are up X% this quarter, and that gives you some additional confidence on the backlog or on the front log? Yeah. No, it's a great question, Scott. But obviously, we have a lot built into our operating system around our energy management audits that we do. So I won't disclose too much there, but absolutely, we track a lot of different metrics, okay? And a lot of them are leading metrics, and that would be one of them. But we track a lot of others as well. At the end of the day, when you're connected to an asset, you're going to make sure the asset is performing the way it was designed and it's not wasting precious energy. And when you show that to customers and they start to understand it, it becomes very compelling. And now, with the addition of not only the structured or machine learning data that we've been able to derive in the past, this unstructured data that we bring into the equation with BrainBox, it really, we're able to drive results that we didn't think were possible three or four years ago. Dave, can you use AI now to do a digital twin meaningfully faster than you could in the past? Are we there? Are we at that point yet? Yeah. We do a lot of work with digital twins. I'm not sure if you saw it when you went to 55 Water Street because I think we demonstrated one there. The speed is always getting better in the tools that we're using. Obviously, we're using all the tools that we have available to us, and AI is one of those tools. So there's other tools as well that have really sped up that process. But when you can see it visually and you see the digital twin and then you see the before and after, it's very, very compelling for the customer to understand the impact that we're able to have by constantly monitoring the equipment and constantly making sure it's at the peak performance levels. Okay. Best of luck this year, guys. Appreciate it. Thanks, Scott. Appreciate it. Our next question comes from the line of Joe Ritchie with Goldman Sachs. Please go ahead. Hey, guys. Good morning. Hey, Joe. How are you? Oh, doing great. Thanks, Dave. So look, for better or for worse, your stock at times tends to trade with the sentiments surrounding AI, CapEx, and data centers. I guess just maybe as you kind of think through the trajectory of your data center business from here, maybe just give us some color on how you think that you expect that to progress. And then also just on your commercial HVAC backlog, are you still well above normal on that backlog in terms of how long cycle it is, or is it starting to normalize? Yeah. Why don't I start with the backlog, then I'll get to the data center question. Look, our book to bill in 2024 was over one. It was 102%. And our backlog year over year is relatively flat. It's down a little bit. What everyone needs to understand is we had a couple of adjustments that occurred within the backlog, right? There's really three. One is currency worked against us all year. Two is I've been very clear in Asia, specifically in China, that if we don't have a down payment, we're not including something in our backlog. So we adjusted that out of our backlog. And then the third is the normalization of our transport businesses, which have been under pressure all year. That accounts for about $500 million of backlog adjustments that we took in the year. So if you think about it, our backlog would actually be up year over year versus what we're reporting right now. That said, our backlog is very, very elevated, which gives us a lot of visibility into 2025. And that's why Chris and I could speak with so much confidence about the guide that we're putting forward. It gives us great visibility. And the other thing that we track a lot of is the pipelines. And these are orders before they become orders. That activity remains very, very robust. As far as data centers go, look, data centers have been a strong vertical for us for decades, and they'll be a strong vertical for us well into the future. As far as the news about a new competitor coming out of China and the impact that will have, we'll see. I can't comment on that. I could just comment on what we're seeing right now, and we're seeing a lot of growth in data centers, and we're seeing a lot of pipeline activity in data centers. I had the opportunity to listen to the earnings call from Meta last night, and if you listen to them, they would say that they're building out their infrastructure, and that's part of a competitive advantage that they have, so it doesn't appear as though they're going to be slowing anything down. But we'll wait and see, but everyone needs to understand that we're much more than just data centers. Data centers are strong. They've been strong in the past. We're really good in that vertical, but we're really good in 13 other verticals that we track very, very closely. That's super helpful. And bless you to whoever needs the background. The quick question follow-up there is just maybe just a tariff question. Any comments on how you see this playing out and any thoughts and your potential exposure there? Yeah. I mean, good question, Joe. Look, for decades now, we've had a manufacturing strategy of in region for region. So you think about in the Americas, we have a plant in Mexico. We have over 20 plants in the United States. We have plants throughout Europe. We have plants throughout Asia, some in China, some outside of China. So look, in the past, we've dealt with tariffs. Should they happen, we'll react. Do I think they could impact our supply chain? For sure. There's a little bit of flexibility there, but they will have an impact. But I think we've been able to part of our operating system is we understand our cost inputs. And if we see something change, we're going to react, and we're going to act very quickly to make sure that we stay margin neutral over time. Thanks, guys. Thanks, Joe. Our next question comes from the line of Steve Tuso with JPMorgan. Please go ahead. Hey, good morning. Hey, Steve. How are you? Good. Always interesting times. So I guess just on this Resi guide, roughly, I don't know, 4%-ish on the mixed benefit, which you'll call volume, a one and a half, maybe 2% headwind from pre-buy. This is all annual. So what are you thinking about the market on a volume basis this year, just from an underlying demand and replacement events perspective, if you will? Yeah, Steve, it's Chris. Yeah, you're right. There's three elements that really come into the guide of around mid-single-digit revenue growth for residential. The first one would be that mix tailwind from the A2L refrigerant change, right? You can think of that as maybe around four points. High single-digit price on 65% of the portfolio multiplied by, say, three-quarters of the year impact gets you to around four points. The view around a GDP-plus framework would be the second element. Think of that as maybe three-four points of growth from returning to GDP. IRA tailwinds, right? That money is at the state level, and it's really starting to be deployed. That could be a tailwind for 2025. And then items around consumer confidence, tax cuts, those are all things that could be beneficial to a GDP-plus framework for the year. And then the third element would be that pre-buy dynamic, which is probably around three percentage points of a headwind. So altogether, you get into that four to five-ish range on growth, which is our guide for the year around residential. But to be fair, if it turned out that things were softer in the markets and it wasn't necessarily growth, but it was flattish, really the impact to our enterprise revenues would be less than a point. It would be 70 or 80 basis points. And we really feel comfortable. We've got that, and it's manageable within our guidance for the year. Yeah. That makes sense. What are you guys seeing light commercial? What's your expectation for the year on light commercial? Yeah. We certainly think applied markets are going to grow faster than the unitary markets will for 2025. We'll see where it plays out. The best thing about Trane Technologies is we've got the broadest portfolio of products. And unitary versus applied, it's harder and harder to kind of figure out what the need for the customer is. We're looking at a solution. And many of those solutions will involve multiple products to ultimately deliver the energy savings that they need. So let's see. But probably more growth in applied for 2025 than unitary. Okay. And sorry, one last thing. Given services is such a topic. Dave, you said like eight to 10 times, I think, the multiplier on services. That just seems like a big number for an asset that has, I don't know, a 30-year useful life that basically people are spending that much money every three years to service. Is that really considered an annuity, or is that more like every five years they do a major refurb or something like that? How visible is that revenue? Because it just seems like a really big number for a building guy or an equipment owner to spend relative to his initial buy. Yeah. Just understand 8 to 10 over the life of the asset, right? So the asset's going to add 30 years, and the asset costs $1 million. Think of it at $8 million in service over that time period. But yeah, I mean, there's the maintenance that happens. And then obviously, at some point in the useful life, you tend to do our renewals for it where you'll change out controls or make it run more efficiently just because technology continues to advance. So we're very comfortable with that number. We've done a lot of analysis on that with installed base. So I'm very comfortable with the 8 to 10 times over the life of the asset. Okay. Great. Thanks a lot. Our next question comes from the line of Jeffrey Sprague with Vertical Research. Please go ahead. Hey, thanks. Good morning, everyone. Hey, Jeff. How's Connecticut, Jeff? It's a little chilly. It's warmed up recently. But yeah, we're not needing any HVAC in the well, we don't need any AC. We need some H. That's what we need. You need a heat pump, Jeff, but go ahead. Yeah. Yeah. So hey, a lot of ground covered. A little, maybe a couple of nits from me. Just first on backlog, I think you include everything in backlog regardless of how far out it reaches. Maybe you could just give a little color on kind of the backlog staging, what's deliverable in 2025, and how far out it does reach. Yeah. Jeff, it's Chris. I'll start. So $6.75 billion of backlog at the end of 2024. Again, the majority of that, call it 90%, is going to be driven by commercial HVAC globally. And then of that, it's going to be majority Applied Systems. That backlog, the majority of it will revenue in 2025. So that's actually fairly consistent with how we've seen the backlog in terms of the growth over the last few years that the majority will turn in 2025. There'll be a small amount that'll push out into 2026, and that's really at the customer demand. But the majority of that backlog will turn within 12 months. Yeah, and understand, Jeff, remember, we don't have services in the backlog. Right. Yeah. Majority doesn't mean 55%. It means 80 or 90 or something like that, it sounds like. Yeah. It would be. Yeah. It's not a tick above 51 or 50, but no. Yeah. Absolutely right. Yeah, and could you just also really in the weeds on Resi, how do the two-step channel perform in the quarter versus your internal channels as we kind of think about all the pre-buy gyrations we went through here? The pre-buy obviously happened in the two-step with our IWTs, independent wholesale distributors. Think of that pre-buy, that $75-$100 million, Jeff, as between Q3 and Q4, all right? We don't think it was all in Q4. It's hard to tell because we're estimating, but we think probably about 50% was in Q3, 50% of it was in Q4. But we also think, as Chris said earlier, that the majority of that will be impacted in the first quarter. Some of it will probably go into the second quarter, but we can give you guys an update on that when we get to that point. Great. I'll leave it there. Good luck this year. Thanks. Thanks. Our next question comes from the line of Nigel Coe with Wolfe Research. Please go ahead. Thanks. Good morning. Lots of questions on services. So here's another one. So I probably should know this, but what is the mix between predictive connected type services versus, I guess, transactional services where there's a phone call from a customer, where there's parts involved, etc.? So just wondering what that mix is, and does it matter? I mean, is there a growth differential? Is there a margin differential between connected versus transactional? Yeah. It really doesn't matter, but we haven't disclosed that, Nigel, for a lot of different reasons. But we're strong in both. I mean, obviously, we want to encourage our customers to have agreements because we make sure that the assets we do more maintenance than to make sure that the assets are performing. But obviously, we're going to respond if we get just a cold call saying, "Hey, my system is down. Can you help me?" And then what we'll do is if that happens, the goal is to make sure that we try to sign that customer up for a more comprehensive service agreement over time. Okay. And is there a margin differential between whether the contract versus more transactional? Yeah. I'll say no, but there might be one if it's a cold call, okay, depending on what's going on. We try not to charge them more because someone's in a dire need. That's usually not a long-term way to grow a business, so we try to be competitive in both just because we want the customer for life. Okay. And then a question on BrainBox AI, a company that I said, but BrainBox AI. It seems like it's quite a chunky deal. It looks like $3 million or so EV. So just wondering if you'd just give any details on the size, growth profile, how you can really kind of really expand this business. And then a nerdy accounting question for Chris, I think. This sounds like a very sort of intangible heavy business. So just curious if the intangible amortization is coming down when we think about that step down in the Trane amortization from 15 years ago. Yeah. Nigel, I'll start with BrainBox AI. So less than $300 million from a purchase price. We had another meaningful acquisition that we closed on in the first week of January, like we did with BrainBox, actually over in Europe, acquiring one of our independent channels there, very similar to a strategy that we have in the US. But yeah, less than that from an EV perspective. And not dissimilar to Nuvolo in 2024 with early-stage technology company. Has a lot of amortization expense. We're expecting that to happen in 2025 for BrainBox. It's part of the guide in terms of the FX headwind and the amortization from the newly acquired business. We'll have about a $0.20 negative impact on earnings. And we've got that incorporated in our guide. But you're right. That's kind of the accounting rules around the acquisition. On the accounting rules, going back to Trane, you're right. We start stepping down on the Trane amortization in 2025. It's around $25 million or $30 million of lower amortization expense. That's really being offset fully with the investments we made over the last few years in CapEx and the rising depreciation that comes from that. We've also had a few acquisitions that have some higher amortization as well. So in 2025, the net impact of that benefit from the Trane amortization is really offset and nil. Let's see this in 2026. It's a bigger step down in 2026 on Trane amortization. We'll update you then for next year. But for 2025, it's really a neutral impact. Yeah, and as far as the growth rates go, Nigel, look, we're pretty excited about it. It's small today, but we like these technology companies that we could scale. We have 42,000 buildings, right, so there's 42,000 potential customers that we already have the data on that we're going to start running algorithms against it to understand what the impact could be with structured and unstructured data together. So this is going to be exciting, and like I said, it's going to be a nice tailwind for our service business earlier. Great. Thanks, guys. Thank you. Our next question comes from the line of Deane Dray with RBC Capital Markets. Please go ahead. Thank you. Good morning, everyone. Hey, Dean. How are you? Doing real well. Thank you. Maybe we just circle back on the pre-buy. It seems like it was relatively uneventful, at least in terms of how you were positioned. But if you just step back, anything that surprised you in terms of the demand, the timing? And there's always this nuance about competitive positioning, who cuts over first. But kind of just the postmortem, was there anything that you'd call out in terms of what you were expecting or what didn't play out? Not really, Dean. I mean, we said for a long time we thought it would be a modest pre-buy. It was. The team did a nice job of executing the changeover to the A2L refrigerant. We're fully operational on 454B product now. We have the capability of running mixed model lines in our factories, so we can support the aftermarket for 410, which will be needed. But not a lot. I mean, it was pretty much as we predicted. The only thing I would say maybe a little bit different is we probably had more of the pre-buy in Q3 than we anticipated. I didn't realize it was kind of a pre-buy until we got into Q4. So that would have been the only maybe oddity. But it makes sense, though, too. Why would you wait to the fourth quarter if you were going to do a pre-buy and you might not have product? So we probably saw more in Q3 than I anticipated. But again, we're talking about relatively small numbers that really don't have a big impact on results. Good to hear. And I also like hearing that you say 410 is going to be around for a while because I will be a user of that, so. We'll help you out. We'll help you out with the Trane product. You probably won't need to have it worked on for a while. But if you ever do. Good. It may happen to be one of your units. So that's good to hear. And then just second question, just circling back on China and that whole tightening the credit, it seems to have played out exactly the way you said you would be getting the down payments and maybe some progress payments. But when I hear about tightening credit, that also makes me think that you actually turned down some customers or maybe shying away from particular verticals. So has there been any selectivity going on maybe related to this credit sensitivity? Yeah. I mean, at the end of the day, we're looking, we call it tightening credit. What we're doing there is we're requiring down payments, right? We're requiring a down payment when the order comes in, and we're requiring an additional down payment before the order will ship. So it's not specific to any one vertical or any one channel. That's just the rules of the game that we're operating with. And the team is doing a nice job of educating our customers as to the why. And we made nice progress in the fourth quarter compared to the third quarter. We have some work in front of us in the first half of 2025, but this is our new way of doing business in China. Great. I appreciate that, color. Thank you. Sure. Our next question comes from the line of Tommy Moll with Stephens. Please go ahead. Good morning, and thank you for taking my questions. Hey, Tommy. How are you? Doing fine. Thank you. Chris, you called out early in the call that if we look at the first quarter earnings contribution as a fraction of the full year outlook you've provided, it's a bit higher than the average. I thought about it differently just given the transport and Resi headwinds in the first quarter. So is there something we're missing that changes as you go into Qs two, three, four, or is it perhaps some conservatism just about what's longer dated here? Just help us triangulate there. Thank you. Yeah. We wanted to call out, Tommy, that EPS, the percent of the full year guide, is around 17%. It's normally 15%-16%. So we are starting the first quarter a little bit ahead of that three-year and five-year average, which we just wanted to make sure everyone understood. It's a strong guide for the first quarter, and we have a lot of confidence in it. As you work throughout the year, though, the transport markets are going to be expected to be down in the first half. There's expected recovery starting in the second half of the year. Roughly flattish, maybe plus or minus low single digits for the full year, but growth in the second half. And really, what's exciting is the growth expectations for 2026 and 2027 in the transport markets in the Americas. So we'll see how the year plays out. But yeah, there's more of a headwind in the first half of the year from transport. Residential, the first quarter, a little bit more of a headwind from that pre-buy, right? We think that'll largely impact the first quarter. It may drip into the second quarter or beyond. We'll update as we go throughout the year. But that'll really normalize, let's say, by the second half of the year. And we'll see where growth is based on market conditions and then the tailwind we're getting from the A2L pricing. So those are the two that would stand out to me. Maybe the third would be Asia. Again, that new business in China and our team, again, executing very well there. That could be a little more headwind in the first half of the year. Much easier comps as you get into the second half of the year in Asia. So I think those three would probably really be the dynamics I'd call out now. Thank you, Chris. And then as a follow-up, I wanted to ask about the comment made on some recent investments in channel. I just want to ask if there's anything more you can share there. Dave, I think you mentioned one investment in Europe. But if there's anything you want to call out in terms of a strategy update there, please do. Or if this is same as before and just some opportunistic transactions, let us know that. Thanks. Yeah. Look, we've been buying up our independents in our commercial HVAC business for a long time. And these are great businesses. They've had great leaders. And just it's opportunistic for us to buy them up. So nothing's changed there with our strategy. There's not a lot of them left, unfortunately, because they're great acquisitions and they've become accretive very, very quickly, almost instantaneously. But that's just more of the same. And we just had one this time. It was actually in Belgium over in Europe. Yeah. For January. So think of it as we've been 95% plus direct, and it's these last few percentage points of those independent channels that when they're ready, we're ready to kind of fully bring them into the Trane business. Thank you both. I'll turn it back. Sure. Thanks, Tommy. That will conclude our question and answer session. I will now turn the conference back over to Zac Nagle for closing remarks. Thanks, operator. I'd like to thank everyone for joining today's call. As usual, we'll be available to answer any questions you may have in the coming days and, frankly, in coming weeks. We'll also be on the road in the next couple of months attending conferences and other things. And so we hope to see you in person very soon. So hope everyone has a great day. Thank you. This will conclude today's call. Thank you all for joining. You may now disconnect.