Welcome to Xylem's fourth quarter and full year 2024 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Keith Buettner, Vice President of Investor Relations and FP&A. Please go ahead. Thank you, Operator. Good morning, everyone, and welcome to Xylem's fourth quarter 2024 earnings call. With me today are Chief Executive Officer Matthew Pine and Chief Financial Officer Bill Grogan. They will provide their perspective on Xylem's fourth quarter and full year 2024 results and discuss the first quarter and full year 2025 outlook. Following our prepared remarks, we will address questions related to the information covered on the call. I'll ask that you please keep to one question and a follow-up, and then return to the queue. As a reminder, this call and our webcast are accompanied by a slide presentation available in the Investor section of our website. A replay of today's call will be available until midnight, February 18th, and will be available for playback via the Investor section of our website under the heading Investor Events. Please turn to slide two. We will make some forward-looking statements on today's call, including references to future events or developments that we anticipate will or may occur in the future. These statements are subject to future risks and uncertainties, such as those factors described in Xylem's most recent annual report on Form 10-K and in subsequent reports filed with the SEC. Please note the company undertakes no obligation to update any forward-looking statements publicly to reflect subsequent events or circumstances, and actual events or results could differ materially from those anticipated. Please turn to slide three. We have provided you with a summary of key performance metrics, including both GAAP and non-GAAP metrics, with references to the prior year segment metrics being made on a comparative basis, reflecting the change in segments as of the beginning of the year. For the purposes of today's call, all references will be on an organic and/or adjusted basis unless otherwise indicated, and non-GAAP financials have been reconciled for you and are included in the appendix section of the presentation. Now, please turn to slide four, and I'll turn the call over to our CEO, Matthew Pine. Thank you, Keith. Good morning, everyone, and thank you for joining us today. The results we released earlier today reflect a strong fourth quarter finish to a record-breaking 2024. In a year of transition and significant transformation for Xylem, the team served our customers and communities with discipline and delivered on our commitments, and the results show their impact. Full year revenue, EBITDA margins, and EPS all set new benchmarks for us. Revenue grew 6%. We expanded EBITDA margins 170 basis points, and EPS was up double digits for the year. The team's operating discipline was apparent across all segments, and the integration of Evoqua is delivering cost synergies significantly faster than expected. In a moment, I'll ask Bill to drill down on the fourth quarter, but the headline numbers reflect a big finish to a big year. The team executed well on resilient underlying demand, with all segments delivering Q4 orders growth of mid-single digits or better. That has given us great pace coming into the new year. We anticipate demand will continue to be healthy overall through 2025, despite uncertain dynamics in a few end markets and regions. The team is doing a great job managing what we can control and is committed to the transformation of Xylem we began in 2024, enabling us to improve focus, increase our speed, and drive accountable execution. The transformation is behind our 8-K filing last week, which follows through on our discussion at Investor Day, when we indicated our intent to simplify Xylem's operating model. We're moving from a matrix to a structure with a single axis, our segments. The plan streamlines our organization, which will strengthen our competitive positioning and enable us to better serve our customers. We've also taken several targeted capital deployment actions since our last earnings call, all aimed at optimizing our portfolio for growth and profitability. In December, we increased our stake in Idrica to a majority ownership and management control of the technology platform at the heart of Xylem Vue, which is a strategic growth priority for us as utilities continue to digitize. We also acquired a few tuck-ins to enhance our offerings in Water Solutions and Services and Water Infrastructure. Finally, just last month, we signed a definitive agreement to divest a non-core business that came with the acquisition of Evoqua and represents about 1% of revenue. As our 2024 performance indicates, transforming our operating model has energized the enterprise, and that's reflected in the 2025 guidance we issued earlier today, which is in line with delivering the long-term framework we committed to last May. Before we go into more detail on that full year outlook, I'm going to ask Bill to unpack the team's fourth quarter performance, which provides the foundation for our momentum into 2025. Bill? Thanks, Matthew. Please turn to slide five. As Matthew mentioned, we are very pleased with the strong finish to 2024. The team stayed focused and consistently delivered throughout the year, exceeding our expectations, delivering record revenue, EBITDA, and earnings per share for the fourth quarter and the full year. Demand remains positive, with our ending backlog of $5.1 billion, essentially flat from the prior year, driven by progress executing at MCS on their past due backlog, but offset in part by growth across the other three segments. Our book-to-bill ratio was near one in the quarter and exceeded one in the year. Orders were healthy, up 7% in the quarter, driven by strong performance across all segments, with Water Infrastructure leading the way with 10% orders growth. Revenue growth was robust, up 7% in the quarter, despite a challenging comp of 9% growth in the same period last year. The team's operational discipline delivered quarterly EBITDA margin of 21%, up 140 basis points from the prior year. This improvement was driven by productivity, price, and volume, more than offsetting inflation and investments. We also achieved a record EPS of $1.18, surpassing the midpoint of our guidance by $0.05 and marking a 19% increase over the prior year. Our balance sheet remains in great shape, with net debt to adjusted EBITDA at 0.5 times. Year-to-date free cash flow increased by 29% from the prior year. The conversion rate of 116% was driven by higher net income, offset by higher net working capital and increased CapEx. Working capital efficiency in the quarter was negatively impacted by timing of sales, but our overall performance for the year was strong. Let's turn to slide six. In Measurement & Control Solutions, we continued to convert the backlog, though total MCS backlog remained at roughly $1.9 billion, in line with the prior quarter. This is a 13% organic decrease from the prior year, driven by smart metering conversion. Orders were up 6%, driven by smart metering and analytics demand. Revenue was up 6%, again driven by smart metering demand and backlog execution. EBITDA margin of 17.1% was 120 basis points lower than prior year, driven by mix inflation and investments, more than offsetting productivity, price, and volume. As expected, there was a sequential margin headwind for mix in the quarter, as energy meters accounted for a larger portion of sales. In Water Infrastructure, orders were up 10% in the quarter, with strong demand in transport. Revenue increased 8%, driven by treatment and transport demand across most regions. EBITDA margin for Water Infrastructure was up an outstanding 360 basis points. Productivity, price, mix, and volume more than offset inflation and investments. In Applied Water, orders were up 5%, and book-to-bill was roughly one, lifted by large project wins in the U.S. and strength in Europe. As expected, revenues were essentially flat to prior year, primarily driven by softness in emerging markets. Segment EBITDA margin increased 60 basis points year over year. Productivity, mix, and price more than offset higher inflation, lower volumes, and other costs. Finally, Water Solutions and Services saw robust demand, with orders increasing 8%, driven by strength in capital projects and dewatering. Revenue growth was up strong at 11%, with strength in capital projects, dewatering, and services. Growth was also fueled by projects coming online faster than anticipated as we entered the quarter. Segment EBITDA margins was 22.8%, up 10 basis points versus prior year, driven by productivity, price, and volume, more than offsetting inflation, investments, and mix. Now let's turn to slide seven for our 2025 segment outlook. Before I go through our overall guidance, I want to highlight that we have not factored in any impact for the recently enacted tariffs by the U.S. administration. At this time, we do not believe that there will have a material impact on our full year 2025 results, but it is obviously a fluid situation, and we will update our guidance accordingly as we learn more. Heading into 2025, our markets remain positive, and our teams are delivering on our commitment to simplify Xylem, focus on our customers, and expand margins. We are providing full year organic revenue guidance for the segments that is largely in line with our long-term framework. In MCS, we expect growth of high single digits. We are seeing some pockets of softness in Europe, but overall demand is still healthy, and our pipeline is strong. Our expectation is energy meters will drive a majority of the growth in 2025, and water meters will grow low single digits. We expect to see sequential revenue improvements throughout the year, supported by a backlog and easier comps. In Water Infrastructure, we expect growth of mid-single digits. We anticipate resilient Opex demand due to the mission-critical nature of our applications and solid Capex demand. Healthy utility end markets across most regions, Evoqua synergies, and price capture will drive strong growth in the year. However, as expected, we will see headwinds from 80/20 actions as we simplify Water Infrastructure's offerings, and we do expect weakness in China's utility market. In Applied Water, we expect modest growth of low single digits. We see growth across developed markets, particularly in the U.S., with large projects coming online and a general recovery in their end markets. Growth will be offset in Applied Water as well by 80/20 actions as we exit unprofitable businesses. WSS growth is expected to be mid-single digits, driven by strength in outsourced water projects and solid demand in dewatering. This segment is supported by a $1 billion backlog and strong funnel activity across all of their businesses. Now let's turn to slide eight for our full year 2025 and Q1 guidance. The growth outlook by segment translates to full year revenue of $8.6-$8.7 billion, resulting in revenue growth of 0-2% and organic revenue growth of 3-4%. This is on the low end of our long-term framework due to the 80/20 actions we're taking across our segments that will be a larger impact in early phases of implementation. EBITDA margin is expected to be 21.3%-21.8%. This represents 70-120 basis points of expansion versus the prior year, driven by productivity and price more than offsetting inflation and our investments in the business. We will also benefit from our simplification efforts, which help to mitigate mix pressure from MCS. This yields an EPS range of $4.50-$4.70, up 8% at the midpoint over the prior year. FX will be a meaningful headwind in the year, and excluding those impacts, EPS growth would be double digits at the midpoint. As a reminder, we are committed to low double-digit free cash flow margin in our long-term financial framework. However, cash flow will be impacted in 2025 by our recently announced restructuring actions that may drop us slightly below our long-term goals. Drilling down on the first quarter, we anticipate revenue growth will be in the 0%-2% range on a reported basis and 1%-2% organically. We expect first quarter EBITDA margin to be approximately 19.5%-20%, up 30 to 80 basis points, driven by higher volumes, price realization, and productivity gains, as well as impacts from our simplification efforts. We do want to note that MCS EBITDA margin will be down year over year, driven by the energy and water mix we highlighted earlier, but will be up sequentially from Q4. This yields first quarter EPS of $0.93-$0.98. We are entering the year with momentum and in a position of strength. Our balanced outlook reflects our strong commercial position, the durability of our portfolio, and benefits for our simplification efforts. While we also continue to monitor broader market conditions and volatility, including potential new or additional tariffs and fluctuations in FX. Regarding tariffs, we are ready to take additional price actions as needed to offset any increases and take cost actions to mitigate the impact on our margins. Overall, our expectations for the year remain positive as we build on our strong momentum. With that, please turn to slide nine, and I'll turn the call back over to Matthew for closing comments. Thanks, Bill. We spend a lot more time looking forward than back, but the full year results do offer a moment for reflection and appreciation. We had a smooth leadership transition coming into 2024, and then we spent the year digging in and, frankly, getting a lot more done. The results tell a great story, but not the whole story. What we've accomplished in just one year is a huge credit to our colleagues around the world. They've delivered for our customers at the same time as doing the difficult work of deep change. I really appreciate how the team has leaned in and embraced our transformation as an energizing challenge. Earlier, I spoke about simplification and taking complexity out of our structure. That work on structure goes hand in hand with refining our operating model more broadly, sharpening our high-impact culture, streamlining our processes and systems, and optimizing our portfolio with targeted capital deployment. At the same time, we've amplified our commitments on sustainability, raising the bar again with our 2030 sustainability targets. And in 2024 alone, the team responded to more than 40 water-related disasters, serving communities in times of crisis, from India to Spain to the Carolinas to Brazil. Together, the team is transforming Xylem to be better positioned to fulfill on our purpose, to empower our customers and communities to build a more water-secure world. In 2025, our transformation initiatives will improve our profitability, further optimize our portfolio, and make it easier for customers to do business with Xylem. We know this kind of transformation takes time and may not happen in a straight line, but we've made a great start. We have an outstanding team, the right strategy, and privileged positions in attractive markets. Building on the progress we made in 2024, we're looking ahead to a strong 2025 and delivering on our long-term commitment to profitable growth and sustainable value creation. With that, Operator, I'll turn the call back over to you for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. We ask that you limit yourself to one question and the follow-up. At this time, we will pause momentarily to assemble our roster. The first question today comes from Deane Dray with RBC Capital Markets. Please go ahead. Thank you. Good morning, everyone. Hey, good morning, Deane. Maybe we can start with the restructuring announcement. And just based upon your analysts' day last year, you knew that this was a next step coming. And maybe it'd be helpful if you kind of gave more color on the plan. Is it all SG&A? It seems like it's headcount. What's the mix between North America, outside of North America, and maybe some payback expectations? Yeah, I'll start us off, and I'll let Bill get into some of those details in terms of the timing and geography and things of that nature. But I just want to say these actions, however necessary, mean that valued colleagues are leaving Xylem, and we don't take that lightly. We're going to make sure we have ensure a smooth transition and that colleagues are treated respectfully and fairly. So I want to start there. To your point, Deane, the plan is consistent with our 2024 investor day in May, really about taking complexity out of our business, which includes not only simplifying our structure, but really the implementation of 80/20. It's a little bit of both in terms of the 8-K filing, the structure, and the bottoms-up we've done from the initial 80/20 work. We are focused on reducing that complexity, making it easier for our colleagues to do their job, but also making it easier for our customers to do business with us. We've already seen here in the back half of 2024 and as we enter 2025, the organization is moving much faster. They're definitely more focused, and we have much more end-to-end accountability. Maybe one other point I would call out is this is in service of growth. At the same time we're doing this work, it does allow us to redeploy our resources and our effort across the business to focus on A customers. In many cases, through 80/20, we have been moving some of our B customers to channel partners that can better serve them and be more efficient. So the majority of the workforce reductions are expected to be complete in 2025, with some of them moving into 2026, subject to local laws. But maybe I'll pause there and let Bill give you a little bit more color on some of the numbers. Yeah, and just to level set everyone, for those who didn't see it, as we highlighted in our 8-K last week, we expect to incur total pre-tax charges of approximately $95-$115 million. We incurred some initial costs in Q4, but the bulk of the remaining expense will be realized in 2025 and early 2026. We expect to realize about $130 million of net benefits for the program over the next two years, with about $75 million of the benefit coming in 2025. Timing of the benefits will be more back half-weighted as we work through the labor negotiations and different processes around the globe, as Matthew mentioned, so I think of it as kind of 30% first half, 70% second half. Again, these actions are going to impact all of our segments and corporate functions, with Water Infrastructure and Applied Water having the two largest impacts in Europe, probably the most impacted region. The plan impacts a little bit less than 10% of our workforce and is mostly concentrated in SG&A. Great. I appreciate all those details. That's a big help. And then the second question unrelated, just given the administration change, there's some anxiety about potential rollbacks of PFAS. We saw a halt of an industrial PFAS test. Just what's your expectation here? I realize PFAS is not in your framework. That was made very clear at your analyst day, but just the understanding on what might be done differently from the industrial side versus drinking water side. But I'd love to hear your thoughts. Thanks. Thanks. Yeah. I mean, to your point, I'll just echo. We didn't have any PFAS regulatory impact in our guide or in the LRP for municipal or industrial. Industrial is the one that was still kind of a draft rule. And that specific draft rule, and I think you mentioned this recently in a note, Deane, was dropped with the Trump executive order to pause all regulations. And I think it was aimed largely at the chemical industry and really designed to set an effluent limitation or guideline for PFAS chemical manufacturers. So I would say that this has no impact on the drinking water regulation when that rule went final last year. And maybe a comment I would make, I'd say Lee Zeldin recently stated in his confirmation testimony for EPA Head of the EPA that he would be an advocate for PFAS cleanup. So it'll be kind of a wait and see when it comes to the industrial side. But we don't see any rollback of the municipal side. And I think the Trump administration, as a lot of people know, were the ones that initially started the PFAS regulation for municipal drinking water in the first term. So in general, we're still bullish on PFAS. We know that the timing is going to push out, but states, as we've talked about in the past, have taken action of their own. And specifically on the industrial side, Deane, we've seen a few states, specifically Georgia, recently set standards for industrial effluent. So it'll be a little bit of a tailwind from a state-by-state basis. But from a federal perspective, the industrial side will probably push out, but the muni side is still tracking. The next question comes from Mike Halloran with Baird. Please go ahead. Hey, good morning, everyone. Good morning, Mike. So first, on the MCS side, maybe just talk through how you think about the margin progression through the year. I know you said sequentially improves through the year. What are we thinking for an exit rate or an approximate exit rate, all else equal, once NICS normalizes and given all the restructuring things you're doing? And then on a related basis, maybe just talk through what you expect to see in the end markets through the year that give you confidence in that high single-digit margin. Because I know some of it's backlog, but I have to imagine some of it's what your customers are saying, front log, stuff like that too. Yeah. Maybe I'll take the first shot. So if we start just with the Q4 margin performance and first just highlight, again, that's really related to the mix just between water and energy. There's a few small one-timers, but fundamentally, MCS is the biggest driver of the year-over-year decline. We talked about that last quarter and highlighted that. Then I think we need to just talk about the adjustment period over the next couple of quarters as we do go from less water meter customer volume as they rephase their deployment schedules, continue to work with our partners and customers to get home access and labor scheduling nailed down. We'd said that was one to two quarters. It's probably closer to three quarters inclusive of Q4. And this is going to shift that balance of sale towards the energy meters that we saw in Q4 and expect that through the first half of the year. And then I just want to make sure, again, from the full year perspective, MCS margins were phenomenal. They were up 370 basis points last year. And some of those core elements we will see next year as they continue to capture a strong price. The teams continue to drive solid productivity. Obviously, with this restructuring action, they're going to get some benefit. NICS is probably the only thing that's an outlier relative to our short-term margin expansion journey for them. We said, I think Q4 is probably the bottom. They'll sequentially improve through the year as NICS normalizes, some of the impact from the restructuring starts to take hold. And for the full year, we will see expanded margins. First half, there's a little bit of contraction, but then we'll see significant expansion in the back half with net-net 2025 will exit at a higher rate than 2024. And then the second part of the question was just help me get to the high single-digit organic guide and what that means from a customer perspective. Yeah. So overall demand is still healthy. The team has a very strong pipeline. We've won a couple of verbal awards that we haven't just received in the backlog yet. Really, Europe's the only place we've seen some softness, but the fundamentals across the majority of the business are still solid. We're kind of a long way to go on the AMI adoption curve. Really, the short-term noise is just along this project rephasing. Just to remind everyone, the North American water business over the last two years has grown 30% per year, which is absolutely phenomenal relative to our peer set in that market. So as we look to next year, again, the energy meters relative to the refresh that they're going through will grow at a significant rate, close to 40%. It's the refresh cycle. And they've had a couple of projects in backlog that we have full visibility to with defined ship dates. And then on the water side, relative to the backlog phasing that we have in line of sight, customer projects that we've won that have yet to just get into our backlog, we're pretty confident in the ramp that we'll see there in the back half. But again, on the water meter side, kind of low single digits and energy being the significant driver of growth. The next question comes from Nathan Jones with Stifel. Please go ahead. Good morning, everyone. Hey, good morning, Nathan. I wanted to go back and follow up on some of Deane's questions on the restructuring. I think you said $75 million that you'll realize in benefits in 2025, which is about 90 basis points of margin expansion and kind of accounts for all of the margin expansion you're expecting at the midpoint of the guidance for 2025. You do get some organic growth. There should be some simplification benefits. There should be some pricing and other productivity benefits. Maybe you can just help fill in the gaps there on what the headwinds are that doesn't actually have margins up a little bit more with the benefit of this restructuring? Yeah. Yeah. No, the simple, Nate, here is if we look at roughly the midpoint of 100 basis points, our productivity and price are more than offsetting all of our material and labor inflation, as well as our continued investment in the business, giving us about 50 basis points of expansion with that group. Then, to your point, we're getting the benefit of our restructuring actions and the balance of the Evoqua synergies gives us about another 125 basis points of favorability. So about 175 basis points there. But then the biggest piece in the math is really the negative mix within MCS. That puts about 75 basis points of pressure, again, due to that energy and water mix shift netting out to the 100 basis points. That's helpful, and I guess you're still pretty early in the 80/20 rollout, and I wouldn't imagine that this restructuring program gets you to the end state that you're looking for. Are you able to comment on the potential to see or opportunities to do some more restructuring in 2026 or 2027 or whenever you get through this and start looking at the next round? Yeah. I would say that the announcement in the 8-K does roll into 2026. So some of that's baked into that initial announcement in the 8-K. I would just maybe highlight that part of this 8-K was focused on our operating structure, and part of it was 80/20. And it was really driven by the kind of first wave of 80/20, predominantly focused on our legacy silos business, with a lot more focus on Applied Water and Water Infrastructure and a little bit on MCS. So obviously, we didn't get through the entire segment. I think we talked about having about 40% of the business kind of exiting 2024 fully through the full. And through the first quarter of this year, we'll have about 70% of the business. So absolutely, there's going to be more opportunity as we continue to really optimize the portfolio and the customer line simplification. So this is a journey. We need to move from a we talked about a transformation. It's really developing a transformative mindset in the business. And that means you're kind of never done optimizing. So for sure, there'll be more things that we look at over time. The next question comes from Andy Kaplowitz with Citigroup. Please go ahead. Hey, good morning, everyone. Hey, good morning, Andy. Pine, can you give a little more color into the bookings environment that you're seeing and maybe some of the cyclical headwinds in the emerging markets and/or in applied water that you've seen and when they might turn? Orders up 7% obviously seem solid in Q4. Would you expect that kind of order strength to continue into 2025? And it looks like you're predicting a modest turn in applied water. Can you talk about the visibility into that? Yeah. I think orders in the fourth quarter overall for all of our segments was extremely strong. So we're continuing to be pleased with the commercial momentum we have across all of our businesses. Specific to Applied Water, they'll be back to growth in 2025. We do see momentum across the developed markets, particularly in the U.S. They continue to have some larger project wins that we realized through 2024. A lot of those will be coming online. And then just a general recovery in a lot of their end markets after a fairly challenging year. We did talk about growth will be offset a little bit by some of our 80/20 actions exiting unprofitable businesses as we really look for Applied Water to simplify their product portfolio and geographic presence. To your point, they have seen some challenges in emerging markets. Really, where do we want to leverage our technology and specific applications to win in those markets? And And then double down on our core here in our developed markets with our largest customers through some new technologies and better overall operating performance. So Applied Water is back to growth with a little bit of pressure from some of the 80/20 actions. But even on the 80/20 side, I think the incremental pricing they're getting from that toolset is really positive. So bottom line performance for them in 2025 will be really strong. Very helpful. And then it appears Xylem passed on some large water assets that were available for a while, but you do have a very strong balance sheet. So how are you thinking about M&A right now versus other methods of deployment repurchases? How should we think about ultimately what happens here? And obviously, you talked about the majority ownership in Idrica. What does that mean for you moving forward? Yeah. Thanks, Andy. First, I just want to say how proud I am of the team's execution on the integration of Evoqua. I don't want to skip over that. I mean, that was a big transaction, and we've delivered 18 months early in our cost synergy. So we built a lot of muscle. And actually, that muscle has translated well into our operating model transformation. We formed a transformation management office largely for some of that team that did the Evoqua integration into Xylem. Andy, as we laid out in Investor Day, we want to be more consistent deployers of capital and helping to move us to the mid-teens EPS over the long-range plan. We talked about we'd be optimizing the portfolio, whether that's divestitures or just exits of products or business lines through 80/20 that are underperforming or no longer fit. One thing I'd highlight, and I might have mentioned this on the last call, but we've put in place a very strong kind of acquisition committee process, and it's a much more strong bottoms-up process to drive more consistency and help us gain momentum. Obviously, we want to deploy capital, obviously to our core, but second to that, we want to do a creative M&A. And we'll do opportunistic share buybacks if needed, but really, we want to be consistent deployers of capital. And hopefully, you're starting to see this as we exit 2024. And to your earlier point, we're going to remain disciplined, and we're also going to be very aligned to our strategy and the value mapping work that we completed last year. So that's a little bit on capital deployment. In terms of Idrica, we signed and closed that in Q4 and moved our ownership to majority so we could more deeply integrate and rationalize the R&D investments of that joint venture and with the Legacy Xylem business. Quite frankly, leverage the platform across as a standard for Xylem to help us be more efficient. We have a lot of confidence in the platform and its ability to solve a lot of our customers' biggest pain point, which is trying to manage their data in application management. I think that's a really good fit for us and a lot of good momentum in that acquisition. The next question comes from Scott Davis with Melius Research. Please go ahead. Hey, good morning, guys. Hey, good morning, Scott. Guys, I wasn't, maybe I missed it. Is it fair to assume that the 80/20 headwind is about two points? Does that sound kind of ballpark? If you said it, I apologize. I didn't hear it. No, no, we didn't. It's a little less than two points. Okay. And then just to take a step backwards, Matthew, when you joined, on-time deliveries was kind of went through kind of a dark day, had to get to the other side of it. Where do you stand now on on-time deliveries and maybe just some context to where do you stand now, and perhaps where do you think you'll be in a year, assuming you're not where you want to be now? Great question. I just did a tour of North American factories a couple of weeks ago, and the two biggest things I focus on, Scott, is quality and on-time performance. If you do those things right and you have a great product with a fair price, you're going to win. And so we have made improvements in on-time performance. It's only going to get better through 80/20 because 80/20 will help us simplify our factories and have better flow and just better execution. We've already started to see it happen. We don't really get into quoting our on-time delivery, but I would just say that we probably, over the course of 2024, made a 500 basis point improvement, and we have about, I would say, 5 to 700 basis points more to go to hit kind of what I would call our entitlement or where we think best in class is. And if I look at our roadmap and our KPIs, we will come close to that this year. So we're keenly focused on that metric. The next question comes from Brian Lee with Goldman Sachs. Please go ahead. Hey, guys. Good morning. Thanks for taking the questions. Good morning. I guess one on the free cash flow, I know you're talking about this kind of being a little bit of a softer year. If I back into it, I mean, you've given us conversion targets in the past. I think this year you're flying around maybe 70%-80%. So one, is that kind of the fair range to be thinking about? And then two, what are some of the biggest factors here in 2025 that you have visibility or confidence around will revert back in 2026? And is the target for 2026 to be back to that 100% or higher free cash flow conversion? Yeah. I think, again, a little bit in the prepared remarks is really the largest negative factor is the cost of the restructuring program weighing on overall cash flows. We highlighted a little bit too. We've got some larger build-own operates that's going to will aid our top line and bottom line, but some upfront capital associated with them will impact. And then lastly, as we continue to improve our systems across the organization, some incremental investments to support that activity. Those are the three biggest things with the restructuring being the 80/20 out of that. All right. Fair enough. And then I know you mentioned also in the prepared remarks you're not factoring in any tariff impacts. You're not expecting anything at the moment. Just to kind of level set us, none of the dust is settled here, obviously, but just as we think about your potential exposures, can you sort of walk us through some of your key kind of geos where you do have either supply chain or procurement exposure to some of the regions that are being talked about in terms of being potentially impacted by tariffs? Thank you. Yeah. I'll start us off and turn it over to Bill to get into some of the numbers. But we don't believe that tariffs will have a material impact on our full-year results for 2025. Our teams were ready and sprung into action yesterday to help offset the tariff increases. And we were out, obviously, with our China increase. We had to pull back on a couple of others that we thought would be going out yesterday, but we were quick to take action, and we have taken action with regards to China. And obviously, we're moving and mobilizing our supply chain where possible to make sure that we're taking advantage of second sources. We've spent a lot of time over the past two to three years on diversifying our supply chain, especially as we look at Asia. And then lastly, just making sure that we're buttoned up on discretionary costs to mitigate any impact. So the teams are ready, and we've taken some action with regard to the China tariff. We'll continue to monitor the situation over the next 30 days and see what comes of Canada and Mexico, and obviously monitor our customers and our channel partners and just try to understand how this may or may not impact their order patterns. So that's something that we'll keep a close watch on. So maybe I'll pause there and turn it over to Bill just to give a little color on the numbers. So if we look at, let's just call it the proposed tariffs for Canada and for Mexico and the enacted for China, they impact about 5% of our material costs as a percentage of sales. The Canadian tariff impact is really negligible. And to Matthew's point, the team's done a phenomenal job post-COVID, lessening our dependency on supply from China. The supply chain there is really just for in-country production. The Mexico tariff is the 80/20 for us and primarily impacts MCS and Applied Water. Again, both segments are taking the appropriate actions to mitigate the impact on our customers and on our bottom line. So I think we're well positioned. It's obviously a very fluid situation, so we're keeping a close eye on it and taking any and every action necessary to mitigate the impact. The next question comes from Andrew Buscaglia with BNP. Please go ahead. Hey. Hey. Good morning, guys. Hey. Good morning, Andy. I just wanted to check on your water solutions had a really good quarter. I'm just curious what the trends are in that segment. I know that can be pretty lumpy, but what do you see going into the first portion of the year? And then you had a couple of months to digest President Trump and his new EPA pick. Obviously, treatment can be influenced by some policy there. Could you just talk a little about specifically what you guys think of this new administration and how it pertains to water solutions? Yeah. Maybe I'll hit WSS first. I mean, Q4 was really the antithesis of Q3. The projects that customers were waffling on timing ended up starting or progressing a lot faster than we had anticipated. We knew there was a chance of this happening, but low enough probability they didn't want to build it into the expectations for the quarter. Again, to your point, I think it's worth mentioning that we are seeing an increased demand for outsourced water solutions, and sometimes that can drive some lumpiness in WSS's performance where there's an upfront revenue stream associated with the build-out of the system before we get the long tail of recurring revenue. So as we build that business, it can be quarter to quarter some variations before things smooth out as that business builds over time. But going into next year, I think we're expecting another strong year from WSS as they continue to leverage synergies with the combined portfolio. The WSS had a very strong year in 2024, and we look for that to continue next year. Again, the outsourced water projects, the funnel is extremely strong, and we have line of sight to some larger wins here later in the year. So I think we're excited about what that segment's only been in effect for one year, and the combination is really delivering some strong, consistent performance. So maybe I'll turn it over to Matthew to talk about the regulatory environment. Yeah. So maybe I'll just start by saying we operate in a sector where there's, from my perspective, strong bipartisan consensus regarding the need for safe, clean, affordable water services. So on a number of issues, we see strong support on both sides of the aisle. We anticipate that water infrastructure funding will likely remain at kind of the historical norms. And we do checks, obviously, with several utilities in the U.S., and we've confirmed continued OpEx and CapEx spending increases into 2025 to improve the significant aging infrastructure in the U.S. We'll stay close to our government affairs team, myself, and some other key leaders. We're going to stay close to the incoming administration as they take their new positions, and we'll just keep a close eye to them. And we've had great relationships. With regard to Lee Zeldin, I mentioned earlier on Deane's question that water remains a key priority for him and the administration. Again, in his nomination hearing, he did talk about PFAS and the need to make that a top priority. I'd say net net, we're pretty positive on the new administration's focus on water, and we'll continue to drive those relationships to make sure we understand it. Yes. All right. Thank you, guys. Thank you. Okay. We'll wrap it up there. Thanks for your questions, and thank you to everyone who joined today. And as always, we appreciate your interest in Xylem. All the best. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.