All right, so we're going to get started in a second. Waiting for the okay on the webcast. Do we have a live webcast? We do. Okay, good. For those on the webcast, thanks for joining. We're going to restart the Wolf Industrials and Transports Conference with Trane Technologies. Very pleased to have the President of the Americas, Donny Simmons, and CFO Chris Kuehn with us on stage. Chris, let me hand over to you for some remarks, then we'll get to Q&A. Great. Thanks, Nigel. Glad to be here. Already a strong conference, so thanks for having us and good to be back in New York. I'm here with Donny Simmons, as Nigel described. Donny leads our Americas business for Trane Technologies. You want to spend a moment, Donny, just on your background? Sure. I've been with Trane for 24 years, worked in multiple businesses. I'm responsible for all the businesses in the Americas. The majority of my background is in the commercial HVAC space, but I also worked in Thermo King as well. Happy to be here and looking forward to answering some questions. I'm just the CFO, so, you know, I'll sort of answer those questions. Look, we're celebrating our fifth year as Trane Technologies. Very excited for what the future holds. Let me just set you up for what we've done the last four years. We've reported revenue growth of 12% CAGR over the last four years. We've had EPS growth in each of those years over 20%. What I like to describe as high-quality earnings, we've delivered free cash flow as a percentage of income of an average of 108% over those four years. Very excited about what we've delivered, but even more excited about what we're going to have happening in the future and our growth prospects for the future. We've guided 2025 to 7%-8% revenue growth and $12.70-$12.90 EPS. We said on our call a few weeks ago that we expect to be at the high end of that range and will deliver strong free cash flow and also strong investments. Happy to talk about how we started out the year at a very strong first quarter. With that, Nigel, I'll turn it over to you. Yeah, thanks, Chris. That's fantastic. Look, Trane, the company's been with us five years. We measure quality on the basis of organic growth, EPS growth, but more importantly, the consistency of that growth, both organic growth and EPS. On those dimensions, Trane is top of the pack of our coverage. Very high-quality company, great performance. Congratulations. I hope I haven't cursed you, by the way. That's not the performance cycle. Donny, I'm really pleased to kind of double-click on the Americas because it is the most, you know, the largest and arguably the most important region for Trane. Maybe just kick off with, in terms of, you know, what would you say right now are your top two or three priorities, top of your minds? Serving our customers, number one, always. And, look, we've had a really dynamic first quarter. We've had a great last four years, five years plus. Our commercial HVAC business continues to be strong. We're seeing broad-based growth. You know, we can't really think about that in terms of one particular vertical market. We cover all, you know, we look at 14 vertical markets and we're seeing growth in the majority of those. We really have to stay honed in on. One One big priority for us is innovation. We just had innovation reviews yesterday. We're going to do more tomorrow with all of our businesses. That flywheel is extremely important for our success. It's part of the reason that we've seen significant growth. I just pick commercial HVAC and think about the applied business growth that we've seen over the last four years at 200% growth. I mean, that's significant. That's because of the innovation pipeline that we've got in place. Last year, we launched across the portfolio of the company 190 new products. That takes a significant amount of effort. So that's a number one priority for us. Ultimately, we have to serve our customers. We have to make sure they're taken care of. Certainly, we're thinking about, supply chain always. You know, we did a lot of work with supply chain resiliency, and we're always making sure that we keep that in the front of us in terms of making sure that we're ahead of any challenges that we have. We've got a great business operating system that helps us work through those issues now. We've had, we always have issues that come up, and we now have a really robust business operating system that helps us work through those issues on an ongoing basis. I thought it was actually interesting you start off with customer. That's, that's the key, right? It's the customer. Maybe just talking about, you know, more, more recent trends and what you're seeing out there in the markets. I mean, I don't think I've ever seen such divergence in the market right now. There's a lot of different cross currents going on in your various markets, be it residential, commercial, transport. If you think about residential, you saw high teens growth in the first quarter. Some of your competitors saw flattish growth. The market certainly wasn't growing in high teens. Your guidance embeds a real slowdown in the second quarter and the back half of the year. Maybe just talk about what you're seeing in residential. There's been a big sort of concern, if you will, or debate about pre-buy of 410A systems. Maybe just talk about some of the context of that. Sure. I mean, we thought there was a bit of a pre-buy in the end of last year, but what we learned in the first quarter is there really was not. As product became available, we saw our channel really stock up on product. We feel like there is maybe a little bit, maybe $75 million-$100 million in our independent wholesale distributor channel that is a little bit too much. We think that will maybe create a little bit of a pocket there in the year. It is hard to look at one quarter. It is hard to compare anybody on one quarter in that business because of the way that we go to market and how product is available and when it is not. We're pretty confident in what we've, you know, announced here for the remainder of the year and expecting mid-single digits for the total year for residential. It's early. You know, the season hasn't hit. We will learn a lot as the second quarter continues, as we get into the third quarter. If you're getting 10 points of mix, which I think that's the number you talked about on the new A12 systems, you know, the mid-single digits embeds down mid-single digit volumes. Again, I don't want to get too much in the weeds here, but it does seem like a very conservative view of the world just based on, you know, what you just reported. Think about, the transition to the new refrigerant would be more high single-digit price increase just given the sensors and the higher cost. That is only on, say, 75% of the year on 60-70% of the portfolio. Not everything changed with, the upgrade to 454B. That componentry probably gets you to 3-4% growth in residential, then layer on a normal GDP-type growth environment, which adds about another 3 or 4 points. Then back off the pre-buy, which as we started the year with it being from Q3 and Q4 of last year, now it maybe kind of got refreshed, let's say in the first quarter, you pull probably 3 or 4 points of growth off of that, gets you right around the mid-single digits, Nigel. Let's see, to Donny's point, the first quarter is an important quarter, but not the most important quarter for residential. We'll give you an update when we get to the end of July. Your math is a lot better than mine, that's for sure. It's more like three to four points of net realized price mix as opposed to the 10. I think on the refrigerant transition, yes, think about it as the year is probably 75%-ish 454B, and then you've got a componentry of the products. It's not the full product set. Yeah. That's right. Okay. I do not want to kind of spend too much time on tariffs, but it is a top of mind for us, everyone here, you guys as well, I assume. How does the, the pullback in the China tariffs, or the pause, I should say, in the China tariffs, how does that change any additional actions, be they pricing, be they supply chain kind of measures? How does that change the way you are thinking about the world? Yeah, I'll start on the tactical side, and I'd love Donny to jump in on, you know, kind of the more broader things we've been doing with our supply chain and region for region. We guided a $250 million-$275 million impact, unmitigated impact from tariffs based on what we knew as of April 30th. And to your point, Nigel, a lot's changed since that period of time. That number, think of that number, it's more tier two and tier three for us. Okay? It's more around our suppliers' suppliers, and where they're buying, with the largest impact of that tariff cost would be from China. With the latest news of tariffs being, you know, paused down to 30%, it would certainly mean that that dollar amount will be less. We have not quantified it publicly what the number would be, but it would be less. It does not change our approach, though. Number one, let us mitigate the cost of the tariffs. Let us work with our supply chain. When we think about the growth that we have had and the growth we are anticipating, it gives us a lot of flexibility with our supply chain to let us migrate more to markets to be more in region, for region. We are continuing to work that each and every day with our operations teams. Let us get the cost down first to mitigate, and then after that, if there are pricing requirements, we will do that with, you know, up to pricing kind of environments. We can be very surgical, very nimble, but, you know, the fact is we have been in region, for region for quite some time. Yeah, I mean, I think that's a really important point. We have stressed that. Just in North America, we've got 25 factories. Only one of those factories is in Mexico. We produce in region, for region. We don't import any product from Asia or Europe into the U.S. as finished goods. We manufacture everything ourselves in region, for region. We're really set up here. We have 900 suppliers that exist in North America. The majority of those produce in the U.S. Certainly, they bring tier two, tier three components from elsewhere. We've got a bit of a cushion there relative to the impact that the tariff has on us. It gives us a little bit more capability to be a little bit more surgical and a little bit more nimble. We can make sure that, as an example, in the transportation industry, surcharges are very normal. We can put a surcharge in place to make sure that we're covering anything that's very specific, and then we can easily pull that back, which is, you know, how we're reacting to the changes that took place. Yeah. It seems to me like given your largely in-country, four-country manufacturing sourcing for the Americas, for, sorry, North America, U.S., I should say, it seems like it's a durable competitive advantage given that a lot of your competitors, your key competitors are actually very heavy Mexico and in some cases are sourcing from China, et cetera. Do you agree with that? Do you think it gives you a customer-facing durable competitive advantage? I believe it gives us a competitive advantage, but don't forget that even manufacturing in Mexico, manufacturing in Canada, if you qualify through the USMCA, you're not, you know, there's no real advantage there from that standpoint. Yeah, yeah, for now. That changes, that could change, right? For now. For sure. Yeah. To Donnie's point, 95% of our products sold in the U.S. are manufactured in the U.S. Over the last four years, we've put, I think, $1.2 billion of capital into the U.S. for capacity expansion and added close to 4,000 employees in the U.S. The fact is we keep driving in terms of the growth and making sure we've got the infrastructure to support the growth in the Americas. Let's keep working on the supply chain resiliency as well as the optionality to really drive it closer and closer to in region, for region. When you benchmark the fact that you're, you know, in theory, you've got a higher cost base, you know, in the U.S. versus Mexico for some of your competitors, when you benchmark your product costs versus your competitors, are you offsetting that, you know, labor arbitrage with productivity? When you compare your unit costs, are they at a disadvantage, advantage? I mean, where does that stand today? I mean, you mean as opposed to competition? As opposed to your competitors? Look, we do, we'll do tear downs of products and we'll look at the, you know, the makeup of the products and how that would compare. We're always looking for opportunities to improve costs. I don't think that labor is a significant portion of our product costs to begin with. It's not something that drives us to make a decision in terms of where we manufacture. What really is important is making sure that we have a productive and lean environment and we've got a business operating system to support that. We add capacity. We don't just stand up four walls of new factories. You know, we, Chris mentioned that we have invested significantly in our infrastructure. We added significant capacity in La Crosse, Wisconsin. We added significant capacity in Grand Rapids. These were existing facilities that we already had. Much less expensive to do that than go, say, stand up a new factory in Mexico. Yep. Yeah, that's fair. The most surprising part of your one-key results for me, at least, was the growth you saw in TK Americas. You know, the markets for truck and trailer down 20% plus this year, I think down low 20s is what you're planning for. Maybe just talk about how you managed to grow in the first quarter and how that might change over the balance of the year?. Sure. Look, I think for one, we had some big customers that had their planned purchasing cycles and they placed the orders and we were able to deliver those on plan. It does not really change our outlook for the year. We absolutely feel that the industry is going to be down 20%. That is off of a 14%-15% down last year. ACT, which I know you have them coming in, just called it down closer to what our guide was, which we had called in our guide around, called it the 28,000. They are now down to 28,900. We are absolutely confident that is kind of where things are headed. We do not see that changing. There is a lot of dynamics there, but at the same time, we feel like we are going to outperform what that market should look like, just as we did in the first quarter. Yeah, if the market lands where we expect it to land this year, it's going to be a 15-year low in the transport markets. We're back to 2010 levels. It just shows the age of the fleets are just getting older and older. At some point, right about now, the cost to maintain those older fleets starts getting pretty punitive. We do think that there's going to be an inflection point. ACT is really talking about very strong growth in 2026 and 2027, 20%+ growth in those. They're up towards those. up towards those. Yeah, they're calling 30% growth there. We're, we'll get through 2025 and keep innovating in the product sets. Donny mentioned the innovation reviews we're doing. Yesterday was a bit of a focus on the transport portfolios. Keep investing in the business. We'll be ready when it comes back and we're getting excited about what 2026 and 2027 can bring. What goes down comes up eventually. What about applied? I mean, applied seems to go up and up and up and never seems to come down. A beautiful thing. A beautiful thing. I think that the data point was in Q1, your Americas applied equipment was up 40% year- over- year. The rooftop was down within that. I would love some perspectives on the durability. I am not saying you are going to grow 40% forever, but the durability of double-digit growth in applied systems. Look, we have a very healthy pipeline. We talk a lot about our sales force and the direct sales force that we have. I mean, you just have to think about it in terms of having a highly educated technical sales force that call on consulting engineers, call on mechanical contractors, call on owners across 14 different verticals, and they can pivot to where the opportunities are. That is very different in the marketplace in terms of how we go to market. A lot of that is what is driving that applied business. It is not all one vertical that is helping drive that applied business. We have a flywheel of innovation as well. We talk about our innovation reviews, and I mentioned that we launched 190 products. We have got a tremendous amount of great new products coming out. have got our digital capability that we have that is absolutely connected to that applied business and helps create that tether and helps create additional opportunities as well. Look, the future is bright relative to the applied business overall and really confident with that. We will see how that plays out for the remainder of the year, but it is. Any pockets of weakness though within that, you know, within the verticals? I think you talk about 14 verticals. You've called out, I think lodging is maybe a little bit tougher, commercial office maybe. There are parts of commercial office that are soft and there are parts that are really strong, like Class A buildings in New York City is actually pretty strong right now. You think about, you want to have the most attractive space to get clients to come into the space. I mean, we're seeing a lot of retrofits in those type areas. We see pockets there. Retail is a bit soft right now. You can see that really in the unitary. I mean, that would certainly be an indicator in terms of what's going on in the unitary portfolio. Life sciences is a bit slow, but look at where the strengths are. We have strength in healthcare. We have strength in education. Even though we do not have significant strength in K- 12 education, it's not, I mean, it's still growing. It's actually still a very nice market. There was a lot of concern that ESSER funding, when it went away, that we're going to see this big drop off. Infrastructure is still there. It still needs to be upgraded in the K- 12. We're still seeing growth in that segment as well. There are pockets, but again, we use our sales force to make sure that we find where the opportunities are. They direct themselves. We do not direct them. They direct themselves to where the opportunities are and make sure that we're able to take care of the customer. Donny, just to double click into K- 12, because when you have big competitors, they call out that as a watch item. Are you still seeing order growth and backlog expansion within K- 12? Yeah, we're seeing a stable environment in K-1 2 is the way I would talk about it. I mean, it's certainly not the growth that we were seeing during the prime of ESSER and in the last couple of years, really, you know, really in 2023 and halfway through 2024. It's a very stable market and we're seeing, like, don't just keep in mind that K- 12 doesn't only get funded through elements like ESSER. You have municipal bonds that get approved and we have an energy services business that takes advantage of those municipal bonds and offerings to our customers to make sure that we're able to retrofit their entire school system. That's a big, you know, it's not reliant on ESSER funding to make that happen. I think it allowed those school districts to really just do a further inventory of where their assets are at and what can you get upgraded through ESSER, but the others still remain. Let's leverage back the historical levels of, or ways in which you would fund those projects through municipal bonds, as Donny shared. We would call out higher ed as a strong vertical for us as well. I mean, there's strict competition around students going to colleges. I know Dave's kind of used this analogy and I had to go through it with my oldest about a year ago. Schools are differentiating themselves. One way they do that is let's talk about the campus environment, the learning environment, the dormitories and the investments that they made there. As parents are thinking about, okay, where do those dollars wind up going? You want to make sure you're in a safe space. And that's a way that they're differentiating. We still see a lot of growth within higher ed. Okay. That's great. I'll take one more question and then, we'll throw it open to the, I know, I know there's one or two, but just one more for me. Please be patient. Data centers. I know Dave gets a little bit, I wouldn't say annoyed, but you know the assumption that it's all data center driven, the growth, but maybe just talk about data centers in terms of what you're seeing. I don't know if you can quantify the size of the data center business for Trane, but that'd be helpful as well. I'll jump in on that one. We have not quantified it, externally, but we do talk about the broad-based growth. We have been talking about broad-based growth for well over a year, not, not more recently. The intention is our sales force is encouraged and incented to go out and try to find opportunities in any vertical and working across, you know, the 150+ sales offices we have in the Americas, making sure that they are finding opportunities. There is a lot of laws and regulations that are happening at a state and a city level. When you have got a sales office in a city that they understand the local laws, and New York would be a perfect example with Local Law 97 and more punitive measures that happen in 2030 and 2035, if you do not decarbonize, it is the power of that sales force knowing what those rules are. Let us avoid those taxes. Let us avoid those penalties really to move through that. Data center has been a strong vertical and Donny, I know you've been investing in that for many years. It continues to be a strong vertical. I'll tell you what has changed a little bit. First off, the activity is as strong as it's ever been. Right? There's more activity. It's just growing and growing. The pipeline is very healthy. The customer behavior has changed a little bit in that, you know, during the supply chain constraints of 2022, 2023, you were more apt to get orders well in advance, like far in advance of lead times. That's normalized now, which I think is a good thing. We're not going to see the lumpiness that we once saw in order rates coming from data centers. It's a little bit more consistent. You have good visibility two, three years out in terms of what the customers are going to do, but the actual purchase order doesn't come in. They'll make commitments to us in terms of what they're going to give us, but the purchase orders will come in within lead time. It's a very normal, I like that. It makes it much easier to answer questions. Thank you. you. Thank you. Yeah, just very three quick questions, if I may. One is that one of your competitors mentioned that they want to concentrate only in verticals that just make sense, like in terms of growth and margins. They do not want to spread themselves thin. Like for your strategy, I mean, obviously you have been always successful, like in 14 verticals, as we mentioned, but do you see that going forward? Maybe you have to cut something just to make sense out of it or just, you know, just a question. Then second, in terms of that estimate of the tariff effect, is it already official numbers that you get from your suppliers, or is it just your estimates on that so far? Third question is, in terms of bonus depreciation, do you have any upside there at all or it's kind of like not really, it's very minimal? Why don't we start with direct sales force on the first one and just our ability to serve all verticals? I think a part of the secret sauce of Trane Technologies is the direct sales force we have in commercial HVAC. I would add there, I was, as you were asking that question, I was trying to think, are there any verticals that I don't see as attractive for some regional reason, structural margin within the vertical? There is nothing that sticks out to me. There might be aspects of a vertical, you know, you might want in the services business. As As an example, facilities management is not real attractive to us, so that is not an area that we would focus on, but it is not a vertical market, right? I mean, the actual vertical markets are attractive equally in the commercial space. On tariffs, it was an estimate, but also working with our suppliers on estimating where their source of supply is. Maybe that is different for Trane Technologies. Our number at $250 million-$275 million estimate we gave on April 30th was really more around tier two and tier three exposure. Others have talked about tier one with copper, aluminum, steel. That is not really a big exposure for us. In the U.S., we buy 100% of our copper and 100% of our steel from within the U.S. Over 90% of our aluminum is purchased from within the U.S. For us, it is really getting into a deeper level and that is just our business operating system is to get into that. Your last question was depreciation. Maybe just repeat that if you could. I mean, there might be some tailwinds from that, but I think we just have to see how that plays out. Certainly, if that comes to fruition, we'll have conversations with customers. We do a great job sitting with our customers, making sure that they understand what the benefits that they would have from any type of incentive that's out there. We would, you know, we would use that in those discussions. Yeah. We think you have strong paybacks already in the three- to five-year range on average. If there's a faster cashflow payback for the customer, right, that's a great conversation to have. Thank you. I was just curious, do you believe you're at peak in any of your 14 commercial and market verticals at the peak of the cycle? I don't know that I'm just thinking through each one of the verticals that any one stick out as a peak. I mean, there might be some that are more in a trough and at the low end that are going to rebound, like retail as an example, warehouse, you know, warehouse saw a really big boom during the COVID, you know, shortly after COVID, that certainly has come down. You know, we'll start to see those come back. On the flip side of that, you know, I'm not seeing a peak in higher education. There's still a lot of work to take place there. We, we've talked about data centers. There's no peak in sight there. You know, no other vertical sticks out to me as something that I would think was at a peak starting to look at, you know, a retrenchment. Thanks for the question. Maybe just quickly on the rooftops, which has been trending a little bit weaker. I think views here diverge on Wall Street in terms of how that develops. What is your perspective on the rooftop market in the Americas? Yeah. You want to start or you want? We have said, unitary for the year from a guidance perspective would not grow as fast as applied. Unitary, could it be flat to slightly down? Sure, it could be. Maybe to Donny's point, it kind of plays more to certain verticals than other verticals. Yeah, it does. It plays more to certain verticals. It's really well correlated with ABI and ABI has been really kind of low in the last several months. We feel like we're at the low end of that. So we're, you know, we're in that kind of flattish space right now. There's a few factors there that I think you got to remember. One is, you know, we had the Department of Energy regulations, the efficiency changes that took place that created some demand early. We had refrigerant change that created some demand. We had supply chain constraints that extended lead times. All that's normalized now. Now we're in a very much of a normal market. I think we can now look at the market and expect, you know, where it is and anticipate how that recovers on a go-forward basis. As you know, as consumer sentiment increases, we're going to see impact there as well. I think it's, you know, on the unitary side, it's got a really bright future here for us. That's great. And then maybe on capital allocation, you know, I'd say Trane tends to do M& A that you would, I would never forecast, you know, in terms of the companies you're buying. So BrainBox AI, the more I look at BrainBox AI, it looks like an even better deal every time I look at it. I'd love to talk about BrainBox because it's like, it was an awesome answer. I'd love for you to just double click on BrainBox AI, what that brings to the organization. Perfect. What kind of other technologies are you looking to add to the portfolio? BrainBox is an artificial intelligence capability that you think about as being built into our building automation system. It enables customers, using both structured and unstructured data, to save up to 25% of their energy costs. Think about gas and electricity, 25% in savings. We call that Trane Autonomous Controls. It is powered by BrainBox. They have another capability that we are actively selling now. We have a big pipeline of opportunities there that just add value from a services standpoint. In addition to that, we have a portfolio called ARIA, which is A-R-I-A. ARIA gives productivity for technicians. It uses artificial intelligence to diagnose a system before a technician shows on site. It can say, here are the fault codes. Here is the diagnosis of those based on the data that we can pull. Here's what you need to look at. Think about that as really enabling our commercial technicians and also think about that in the future, enabling our residential dealers to be able to diagnose systems and be that much more productive. Super, super exciting. The third element is they have a cloud-based BMS system. You know, think about that in terms of not requiring hardware to connect to all the systems that exist in a building. Now you have a cloud-based BMS system and they've been very successful with that, being able to do all the algorithms and everything in the cloud as opposed to on-prem. There's just, that's a perfect example of buying a technology that complements how we go to market perfectly. Does BrainBox, is that a revenue driver? Does it expand the TAM for Trane or is it more making your field more productive? It's a revenue driver. I think it's both. Expand the TAM. I think it's both. Yeah. I think it's both. Yeah. I'd lead with expand the TAM and it's a perfect example of take a bolt-on acquisition that's got great technology and match it up with, we believe, the unparalleled direct sales force and channel in the Americas. Frankly, there's no reason why it couldn't be brought to Europe or brought to Asia too, as you're thinking about building management systems. Let's start in the Americas, but a great way to go take that business and great partners already, but prior to the acquisition and now you partner up with a channel where we're excited about that. Okay. I think we're out of time. Thank you very much for the conversation, Donny, Chris. That was great. Thank you. Yeah. Thanks, Nigel.