Honeywell International Inc. (HON) Q1 2013 Earnings Report, Transcript and Summary

Ladies and gentlemen, please welcome, Honeywell's Vice President of Investor Relations, Elena Doom.

Good morning. Thank you for that round of applause. Welcome to Honeywell's 2013 investor conference. While you guys are still getting settled in, just so you know, for the folks in the back, there are some -- a few open seats here in the front. You can find an usher to escort you and start filling in the gaps. But as you can tell, standing room only again. But thank you for joining us. For those of you who aren't able to join us in person, today we are webcasting, and you can find the presentations, including a non-GAAP reconciliation, on our website at honeywell.com/investor. So quickly, just some housekeeping items. You'll note today's agenda with Q&A scheduled after each of our business presidents. So lots of time for your questions. And of course, I need to remind you that today's presentations do contain forward-looking statements that are based on our best view of the world and of our businesses as we see them today. Note that these elements can change the reasons that we cite in our 10-K and other SEC filings. All right, on to the fun stuff. The theme for today, Innovation and Execution, Delivering 2014 and Beyond. You're going to hear us talk a lot about the Honeywell performance track record. And while that's important, what's more important is we're going to talk a lot about the opportunity that still lies ahead. Dave Cote will kick us of with an overview of Honeywell's evolution into a company that can outperform in any market environment. He'll take us through the Honeywell business model, applied with the One Honeywell performance culture across the entire company with a relentless focus on improving our internal processes and driving sustainable and profitable growth. Dave Anderson will bookend our day, adding a…

Well, that's pretty much our story. So any questions? I actually think Elena summarized it pretty well, so the rest of this is just going to be color commentary for the day. We've tried to keep this really simple, so it's really just 2 simple messages. The first is that we have outperformed. And I know most of you know that, but we can't wait to show you again. And then 80% -- in fact more than that. I'd say 90% of that pitch is devoted to why that's going to continue. This is not kind of a onetime phenomenon or "Boy, it was great to own it at this time and see what happens." But rather, what we've done is set up something up that I think you'll end up agreeing creates a sustainable path for sales, earnings and cash growth that I think you'll like. So this is what you're going to hear today, that first we have a great growth trajectory as a company and that seed planting that Elena talked about, we do get everywhere. Some of it pays off the next year, some of it 3 years from now, some 10 years from now. But we're constantly thinking about the future. And for both process and product, how do we make sure we do that right seed planting? We'll spend a lot of time on robust capital allocation. It's not something we ever get a question about, but I thought you might want to know something about it. I know, very bad joke. You all want to know what's going to happen with the cash. Here is the way to think about it. First thing is-high-ROI-growth investment. And you'll see that with the CapEx spend, a Big part of it driven by PMT and I…

As always, it's great to be with you. Pleased to share with you the ACS story. We have consistently outgrown global GDP for the past 10 years. So roughly 1.5x GDP growth every single year. So we've demonstrated an ability to outgrow the economy. You've seen our margin rate has accelerated smartly in the past 4 years, and I hope I will convince you in the next 30 minutes or so that we're going to continue to grow income faster than sales, growing sales faster than global economy and continue to smartly expand our margin rates. As Dave said, we're -- part of my role here today is to demystify some of ACS for those who might still remain mystified. We really are 3 core business models. One is a short-cycle-product business, about half of our sales, 2/3 of our income. So if you want to really pay attention to that part of ACS, that is a big part to focus on. The second, I think, is a model that you all understand well, is the life cycle, long-cycle industrial automation business we have with Honeywell Process Solutions. The third business, as Dave mentioned, is really a channel business. So it makes solutions and distribution a channel or market for our Security & Fire business in the case of ADI, which is 1 of the 2 businesses in BSD. The other is, I think, a model you understand well, which is our building automation life cycle business that also serves a big channel to market for our highly profitable product businesses. What ties together ACS is that all the tools Dave talked about, the Honeywell Operating System, functional transformation, OEF, Velocity Product Development, apply -- those tools apply equally as improvement vehicles for all of our businesses that we own…

So I'm really excited about the potential of the products, and maybe just a couple of comments on the video in terms of things to pay attention to. By the way, all of the products and services are available for you to see during the break. I'm going to talk later about why believe our margin story. Lots of examples embedded in that video of what is popularly known as Software as a Service, ability to monetize data. In the case of our 2 servers, monetize the data our sensors already collect in a building. In the case of our connected home, it's not only monetizing data we get from the thermostat system and security system that's providing connectivity, you make a lot of money on software. High-margin business and to the extent -- and we have about 100 Software as a Service offerings, getting ready to launch over the next 3 years. So although we're a products business, we're going to have a big software play at higher margins. So as we continue to -- all the other good reasons on marginal expand, you have a software. Another point. You saw our collaboration wall there, it is really cool technology. And in addition to just doing our great job in terms of industrial automation, we have closed big sales for industrial automation systems, because CEOs of a big energy company are human beings, too, and they want cool technology and that collaboration -- well, for those who saw Tom Cruise in Minority Report, it's that kind of technology that even big company CEOs susceptible to owning things that are cool. So a lot -- also, that's a lot of opportunity across the portfolio. We have many, many examples where we planted seeds and they've grown into oak trees. In…

It's really great having HPS in the portfolio. Just one quick example, in our personal protective equipment business, the largest single end market for personal protective equipment happens to be the industrial market. So having 1,000 HPS salespeople directly calling on Saudi Aramco's Sinopec, Shell, Georgia-Pacific, et cetera, is just a great door opener for our safety equipment. Our third business model, Building Solutions & Distribution. Our ADI distribution business, great channel to market for us, fire and security businesses, $800 million, $900 million worth of sales, all go through that channel. Our Building Solutions business, it's just a great business. You may say, "Hey the margin rate is a challenge. The turn on investment is over 50%. So we have very little investment in the business. We generally use customer advances so we get paid before we do the work, for example, on our energy performance contracting business, so a great ROI cash business model. Great position in terms of delivering energy efficiency, security, over the life cycle of a building. You'll see the Attune software in the next room. A lot of new products and services out of HBS, continue to rock along with great wins and energy performance contract and security. From a security perspective, we were not in the critical infrastructure protection just a few short years ago. Today, we're one of the leaders generating a business that's going to deliver between $250 million and $300 million in sales this year, delivering high margin, mission-critical, integrated security solution to demanding customers like the London Olympics, by the way $130 million electronic security customer for us. So high profile, the Honeywell brand name means a lot. They really value our service and our technology. Our core strategy, and I've been showing this slide for years. It may…

Thanks, Roger.

Thanks.

We're going to do it just a short round of the Q&A after each business president. So roughly 5, 7 minutes of Q&A. We have our first question from Deane Dray.

Roger, a lot of new data points on profitability of the subsegment, that's really helpful this year. Haven't heard you talk much about Software as a Service. This is -- it sounds like it's a big theme here. As well as the energy performance contracts, which my guess is there's some Software-as-a-Service embedded in those as well. So how big does SaaS get? What are the milestones and maybe a bit about -- you can brag if you want to, about what the economics are behind those. And on the performance contracts, how have those worked out? Do you share any of the gains and are you talk about the cash flow on those businesses as well?

So, well, performance contracting is -- it's actually a business Honeywell invented before I got there. So we're one of the pioneers, it's a great business model, heavily driven by the Federal, State, Department of Defense. So it's fundamentally government, they tend to be longer payback projects. So to answer your question, we don't share any game, we guarantee the savings, and have a terrific track record of not paying out on the guarantees because the stuff that -- we actually know what they're doing and we're able to control the systems. Cash flow, we get paid before we start the work. So that's when I talk about the ROI of the business, it's why it's so strong. Software as a Service theme, I'm not avoiding the question but I don't have the answer when in terms of how big can it be. I just -- maybe some data points. We weren't in the Software as a Service security business in our Security business. Today, we have over 1 million connections. Think of that as $30 million or $40 million worth of income we didn't have until we have a Software as a Service. You're going to see us doing something similar in home comfort. You see us doing it in building automation. It's what Advanced Solutions is all about. If I were to just take an educated guess as how big Software as a Service would be in the next few years, think about a range of $250 million to $500 million, not only in the services, but in the new product sales that it's going to enable.

Okay, great. Steve? Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Roger, you've been a big proponent of, I'll call it, smart margin expansion over the years as -- and you've done this, as you pointed out here, without volume leverage recently. Organic growth, right? Even though maybe faster than the market, has certainly not been where maybe you were expecting at one point. How do we think about it, especially as you give us the subsegment profitability now, we'll look at ESS and 19.5%, et cetera. How do you sort of think about that trade-off and balancing organic volume growth in the investment to make that with what you're talking about in terms of continued and continued margin expansion here above until very much new territory?

It's a great question, Steve, appreciate it. So, if you looked at our DPD chart, for example, even -- and it shows the number of engineers we hired over the last several years. Even in the Great Recession when our sales declined, we actually made more R&D headcount. Did I hire as many engineers as I would have liked to? No. But we hired more, still developed a lot of new products and when our competition was cutting back, we powered out of the recession with a boatload of great new products because we kept doing smart investments. So if you ask where we want to invest, high-growth regions, sales headcount is unconstrained, would be too a generous word, but we are investing in sales, tactical marketing in all the high-growth markets. Trying to manage our investments where we're not getting the growth to pay for that, driving the heck out of the backroom efficiencies on in the manufacturing side, the materials side, or maybe the all the sausage making stuff in terms of cost control that we don’t fully expose and talk about but really try to drive the heck out of because fundamentally, we want to be a growth business and to fund the growth, we've got to be smart on cost and then smart on pricing. So I'm maybe talked around it a little bit. But where does is it all go? We don't start getting some sales growth, that model becomes harder and harder to maintain. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: [indiscernible] pricing.

Yes, pricing, you guys like numbers. When I joined ACS -- it was actually started ACS, right, in '02, started with ACS, we gave up about 1.5 year on price. Today, we get a 1.5 a year. So you think about a 3-point shift as you get to be a $16 billion business. That's a huge deal. So pricing is enormously important and having products that customers value and are wanting to pay for and services that customers value and willing to pay for enables you to get that kind of price. So it's intimately connected with your new product and your new service development machine.

Okay. Scott?

Roger, you're talking about going from 29 silver sites, kind of 2012 up to, call it, 75 or so by 2016. Does it get easier or harder to drive that change when -- I guess what I'm saying is that, for the first 29 sites, like the low-hanging fruit, the early adopters and the next 30 or so are going to be more difficult? Or because of the momentum that you have, is the next 30 easier?

No. It's a great question. As you might imagine, the sites that got to silver quicker tended to be our better forward thinking sites with probably more capable and better management at the site. And also within -- embedded with this, we've done a lot of management changes to get a culture that really buys into HOS. So, I think you a little bit answered the question, the better sites got the silver faster. But still so an enormous improvement. The bang for the buck is going to come when we drag the next 1/3 in the next 1/3, as those sites continue to progress. Our time to Silver is actually shortening, the kind of the pioneers paved the way. But there is more juice in the productivity lemon, if you will, from the second and third tier sites.

We have time for one more question, John?

Roger, if you were to sort of look around the world regionally, is there a way to contrast your operations from a productivity standpoint? Obviously, you've been putting a lot of resources into Asia. What's the run rate there? I mean, how productive could they be? And kind of the segue is, if you were in the future to operate optimally, so maybe you could define that as everything is HOS-compliant or whenever, I realize you're pushing for growth but assuming your portfolio is static, what does that mean in terms of profit margin run rate? I mean, how much uplift can you get as you continue to do what you're doing and sort of where the pockets of productivity that's going to be the easiest or have the greatest opportunity to capture?

Okay. Since I already hinted that out, I'll help you out with some of the math here. Figure our products business today, 19%, 20% margins, those are manufacturing businesses and pretty much all the manufacturing sites are in ESS. I shared with you that our silver sites are in the 25% to 30% range. You've got the percentages there. You guys are probably better than me in modeling out what the maturity is going to drive in terms of organic margin expansion capability in that business. There's a lot there. I'm not sure I answered your question, John. But -- yes? Okay? Okay.

Thanks a lot. Thank, Roger.

Thank you.

All right. Now we're moving to Andreas. I'd like to welcome to the stage. [Presentation]

Good morning. I hope this little video changed your headset to PMT. As you know, over the last few years, we have produced strong results and an industry-leading performance. What you're going to find out from this presentation today is that our prospects continue to be extremely bright, the party continues and the growth will go on. So after a very strong 2012, let me concentrate on 2013. We're looking at around $7 billion in sales, just under 19 points of margin, and our business, if I can describe it, to set the stage, UOP is about 43%. The rest is advanced materials. Geographic split outside the United States, 56%. Now, many people can say that. However, out of those 56 points, 41 points are in high-growth regions. That says we are positioned. And if you look at that EMEA kind of slice, it's a small e with a 7% in the euro, and a big MEA. So let's look at what happened to this business over the years. I know that Dave often tells me that at the beginning of this period, he was advised many times to throw it in the garbage can. And well, some changes were made to the portfolio. A lot of hard work. UOP was consolidated artfully. The other 50% we did not own in 2006. I guess, I can talk with more authority for the last 5 years, that I've been running this business where we've seen very strong growth and a world-class performance. Now one question that we get about the business is, "Isn't this a chemical business and aren't chemical businesses generally cyclical?" I like the word, generally. Because as you can see here, in the recession of all recessions, the chemical index we have here, and there's about 40 companies,…

So you want to monetize your wells quickly, what are your options? You can get a guy to construct it, bring this deal on site, find the designs, find the drawings or you can call us. We deliver it on skids, about 50 skids, put it up in 17 days, it works. You know it's worked before. You're going to make money straightaway. That's the proposition, very simple. Okay, let me just change type here because we've got some very exciting items in Advanced Materials. In fact, after many years of work, this January, we have Cadillac XTS, the Chevy Malibu, now the BMW M3 and a number of other new cars that have our new -- our new low-global warming refrigerant. What does that mean? The refrigerant you use in your cars, 0.5 billion cars on the road around the globe, was introduced in the early 1990s, does not deplete the ozone but has a global warming factor of 1,430, very high. What we've come out with is totally compatible, global warming factor of 4. Now that is a technology that makes a lot of sense. So you can expect, we use the Solstice brand-name that more and more cars over the next few years, as they get introduced, will be switching to this new refrigerant. It is a major change. At the same time, our Solstice line consists of another 2 unique molecules and this is all Honeywell IP that changed the landscape in aerosols. They change the landscape in insulation. And just to make the point, I want to show a tape, if you run the video, please, on this installation point. [Presentation]

Whirlpool has signed on. Most of the other appliance manufacturers are about to sign on. We believe our first plant, major plant's coming online in third quarter 2014 but will be sold out so we're working on the next one. So we have a product that does a lot more for this kind of environmental performance. You don't have to be genius to go out and sell it. Let me just go now to a part of our business that I don't think is totally understood very well and that's caprolactam nylon, okay? It's a commodity, well, with a difference. We actually operate the lowest-cost caprolactam plant in the world because of its level of integration and that source of raw materials and some other unique process areas that we have. So how much lower is it? The next lowest cost plants are just coming on stream in China, the new plants. We can land in China and we do because that's our biggest market. From Virginia, we land in China and we can have it 20% a cheaper product. So that is our cost advantage. This is why we're in this business. There's another reason why we're in this business. It's a bit more sophisticated but I'll try and explain it. When you make caprolactam, you have a byproduct, which is a very rare fertilizer called ammonium sulfate. Now our process produces 4 pounds of byproduct, valuable, everybody else's produces 1.2. So we get more byproduct. So when times are bad, what happens? Low-cost producers like us, we just keep pumping it out. Those high-cost producers, shut down. There's less ammonium sulfate. Who has the ammonium sulfate? We do. What happens with the price? Goes up. So you got the hedging. With that thing in mind, a more complex…

Just move on very quickly. Obviously, we're on a diverse business. You cannot do that without very strong processes. And what Honeywell provides in its umbrella: HOS, VPD, sales & marketing excellence are very key. It's enabled us to do what we're doing here. And we're absolutely executing in these areas and they're part of what we do. I talked about creating markets. Just don't want to bore you too much but these things are really changing the world. First plant is coming in China, being able to take coal and they have a lot of coal to produce both propylene and ethylene. I mean this is fundamental work here. Valero started in January. Real bio feedstock in their refinery in Louisiana, totally compatible with the fossil fuel. It's come onstream. It's working. It's our technology. I've talked about taking gas and making plastics. This is big items [ph]. New low-global warming. You saw how it changes the world. These are really big items and we talked about these other products that I think are somewhat narrower in niche but they're very, very relevant. So with that, I'd like to thank you and hope you got the main message is that the growth will continue. Thank you.

All right. I know you guys are excited to ask Andreas a few questions. Let's start with Jeff Sprague.

Andreas, it does seem like most of the growth is organic growth driven by your internal science and that is interesting and exciting. Thomas Russell kind of redefines a little bit kind of your sandbox, if you will, more of a product-oriented business, even has a little E&C flare to it, it feels like. I'm just wondering if you could elaborate a little bit on your appetite, continue down that path or what you see is kind of the natural adjacencies for that business?

I think that it was captured by Dave earlier on is how far do you venture or thinking you are in an adjacency. There are some very strong, there's some very strong know-how in Thomas Russell. So the possibility of that process of being able to, if someone called you up, if Chesapeake calls you up and says, I don't quite know the composition of this gas but I want something to separate it, and you have designed something on 50 skids that has the tolerance to handle it, I don't think it's going to be replicated. So I think to the extent why identify situations like that, and that's, obviously vast markets in oil & gas. You can name a number of them. We think we'll go for it. But they are rare situations and I'm not too anxious to get into something for the sake of it, but if we see something good, we certainly, as we've shown in the case of Thomas Russell, we can move very effectively and make a very good acquisition. But you can go from there. I mean, there's LNG. There's the way you work in oil fields. I mean, there's a lot of areas. But it has to be areas that we have very strong defensible know-how.

Steve Tusa? Charles Stephen Tusa - JP Morgan Chase & Co, Research Division: A quick follow-up to Jeff's question is offshore, either FPSO related business or subsea processing, anything that you guys would be interested in looking into? And then the second question, more on your kind of shorter cycle, Advanced materials businesses, how are trends tracking so far? You mentioned the backlog, how are trends tracking so far, order trends through February?

Well, I'm pleased you mentioned FPSO, because last week I was in Brazil and -- Argentina and Brazil but Brazil is very relevant. Petrobras is trying to extract vast amounts of oil just off the bed of São Paulo 300 kilometers out. They have commissioned to date about 17 FPSOs. We are on 14 of them. And what do we do? Basically we are able to take this gas that is just not great gas to be honest. It needs a lot of cleaning. It has water and CO2 [indiscernible]. And in a very compact way, clean it and put it in a way they can pump it ashore. So FPSOs is a great area. We're looking for areas of expansion, whether it's a floating platform or a ship. It's piece of equipment of a couple of billion dollars. So we're trying to get a good piece of that. That's a good one. In terms of orders, we see the U.S. continuing strong. The chemical business in China is a bit of a paradox. We're not the only ones saying that. We see that it has slowed down. Not just now. It's been for a while. And we're not seeing it come back. The Rest of the World looks in good shape. But in the balance of our business, we feel good.

Nigel?

Andreas, you mentioned the payback on Sunoco 6 months.

Yes.

Pretty good.

I'd say so.

Right. You're picking up organic CapEx pretty aggressively in the next couple of years. I'm just wondering what kind of payback you've seen on that step-up?

Well, let me tell you. So, even on these big projects, if I don't see 3 years, I'm not going to do it. And there's 2 issues to that. We've got so much opportunity. And you just can't go and put a $200 million plant down without having worked 4 years in advance to plan it, because a lot of these processes are new. So higher capacity to execute, do with rigor and deliver the money and deliver the timing, deliver the product, I think is the limit to what we can do. So we're cutting off very profitable projects but you got to do what you got to do.

Okay. We've time for one more question. Shannon?

Andreas, so Roger had to give his 2016-plus margin goal, I guess I'll call it, since it was a little soft to look but the numbers are sort of implied in there. I guess you got off on that one. Can you give us a sense of where you think all these great growth opportunities put you in terms of margins?

Well, I think in terms of thinking at that business, we are at, obviously, at a record for us in the industry. And I'd like to see some of these new plants come online because they're very high return plants and they are our new products. And on those new products, you get better pricing. So just look at us as kind of increasing a little bit and then going up, I guess. As this thing, investments come up. I need a couple of years. I need a couple of years to reload. We're in a reload mode.

So next year is a catalyst giveaway?

No giveaway. We just got to reload and that's the point we're in, but there's a lot of ammo here to get there.

Great. Well, thanks, Andreas, and thanks for hanging in there with us through probably the longest portion of our program today. We're now going to take a 30-minute break for lunch in the South ballroom and we'll see you back here soon. Thanks. [Break]

Ladies and gentlemen, please welcome President and CEO, Transportation Systems, Alex Ismail.

Happy to be back and give you an update on the progress we are making at Transportation Systems, strengthening our market and technology leadership. We have a pretty compelling story to tell you about our market position and our prospects for growth. So let's get going. I wanted to leave you today with 3 messages: one, we perform very well despite the EU macros; two, we are a Honeywell technology business, a knowledge-based business with high ROI. We see explosive growth from global turbo penetration and our aerospace technology gives us a differentiated advantage for the long term; three, we are very well positioned for 2014 growth and beyond. Our business win is fueling revenue growth for the future and we're growing in emerging region in all fuels, in all segments. And finally, we're fixing our Friction Materials business. We expect Friction in 2013 to be driving the margin leap of year between 40 and 60 basis points. I'm going to come back on this. Overall, a Honeywell technology business, driving performance above peers. What I'd like to do is start by giving you an overview of Transportation Systems that sets the stage of our 2013 guidance. We expect revenue to range between $3.6 billion and $3.7 billion and segment margin to range between 12.4% and 12.7%. This assumes FX at 1.25 and Western EU light vehicle sales down 4% in line with production. As you can see, TS has been outpacing industry macros. Since 2010, sales are up 12% while EU sales are down 10%. Our global turbo launches around the world are really helping us to offset industry macros. We drive significant productivity from our factories, our supply base, while maintaining a very strong cost discipline. We're growing faster than industry and driving performance above our peers. Take…

All right. First question, we'll go with Scott here, front row, benefits, next here.

Alex, there's a couple of things I wanted to dig into a little bit on the margin side. When you think about the new product launches that you have, is there a timing issue where you have the cost up front and then big pay back, kind of year 2, year 3, year 4, if that product stays or is the cost in revenues more essential [ph] from that?

We don't really because we do a lot of products we use and we scale up and down our technology. So you're going to see our R&D and investment being pretty much what it is today going forward. So no pick-up and no big issue in that area.

Okay, good. And then as a follow-up, if you think about taking the leadership on the HOS 67% silver 2013, it's hard to tell where margins have gone -- or where margins would be if you're in a normal demand environment. Does this indicate that when demand does come back, you're going to have outsized incrementals, but you cost basis is so much better than what it was before?

Clearly, volume is a key lever of margin improvement for us, as you know. And HOS has helped us, I would say, leveraging our existing footprint and be able to process more volume through the existing footprints that have been pretty efficient. So as volume come back, you're going to see upsides on the margin side, no question.

Next question, Peter Arment. Peter J. Arment - Sterne Agee & Leach Inc., Research Division: Alex, if you could give us a little more color on the North American market. It seems like there's a big statement from EPA, but it seems like there's also been some resistance from General Motors on the adoption of the turbochargers or at least that's -- whether that's just the competitive nature with them and Ford.

Well, Peter, I'd say we don't see any resistance in the U.S. for many of the big players, including GM. GM has a lot of applications to date that are turbocharged gas, and we're on the Chevy Cruze and they have the diesel applications coming up as well and they do have some significant turbocharge development going forward. And Ford has made this big statement that 90% of their gas offering will be eco-boost, and behind eco-boost, you need to win turbocharged gas engines. The Japanese are bringing as well turbocharged engines. The Europeans are bringing turbo gas and turbo diesel, so frankly, we feel pretty bullish about those numbers and you're going to see in the U.S. a turbocharger revolution. And I would even say, it's already available at your own dealership.

Steve Winoker? Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Alex, when it comes to Friction Materials, clearly you've got a cost plan roadmap laid out and you're executing against it. What gives you the confidence that you're going to be able to hold pricing and not pass that through the customers in that industry as you look forward at least over the next several years?

Right. The improvement is going to come from a better cost position clearly. And we have invested, over the past 3 years, in state of the art manufacturing technology, that's going to give us not only a good process technology advantage, with a good cost position, so I feel pretty good about our ability with technology to differentiate and that's what we plan to do in the next few years.

Our last question, John Inch.

Alex, can you expand on China? It's the largest car market in the world, it has a massive pollution problem, is there any way to frame the opportunity? And the context is also the China government appreciates that perhaps turbos are part of the solution or is that theoretical or are you working with them? And maybe just a little more color around what could be the opportunity to drive penetration because the car market looks like it may slow there in the future, so how -- what's the trade off?

Well, the average turbo penetration in China is around about, all in, around 15%. 15%, 1-5 right? I could tell you that this is going to easily double in the next 5 years, right? And until recently, we always felt very confident that China would deliver these numbers. And with what we've heard in February and what I described as recent policy win changes, we even know that the Chinese government is now looking at turbocharged internal combustion engine as the way to solve some of the emission challenges that they are seeing and they are dealing with today. So going forward, I would expect these numbers to be even bigger than what I'm describing right now.

Okay, great. I'd now like to welcome Tim Mahoney, President and CEO of Aerospace; and Carl Esposito, Vice President of Marketing and Product Management to the stage.

Good afternoon. I've asked Carl to join me today to talk about some -- a part of this agenda relative to some very exciting technologies, industries that we're serving and new products. So let's -- the kind of the headlines here and that I'm going to review today with you is that we've certainly had a very big year in 2012 in winning in the marketplace and focused on those platforms that are going to be very big impact for the next couple of decades. But in this space, I would say, the thing I'm the most proud of about 2012 and beyond is the fact that there's a dexterity that the organization demonstrated of not getting fixated just on the winning on the big business, but cultivating and developing the short cycle business. And this has been a big fuel for our growth engine, relative to that significant installed base, and I'll touch on that. But last year was a very big year for us across all 3 segments in that area. From an organizational perspective, we're feeling very, very good about the organizational structure that we have in place, like I put in place in 2005, so we haven't made any changes. But I think the maturity did. So feeling good about the structure, the people, the processes and the programs that we're on relative to enabling our growth and our operating performance going forward. And the third as I touched on, Carl has got some very exciting areas that we're going to touch on, specifically about what's happened in the areas relative to connectivity of the aircraft, both from a machine-to-person in the cabin and machine-to-machine that's on the aircraft, which was not in our vision statement when the acquisition took place and the integration [Audio Gap]…

Okay. Thank you, Tim. As Tim mentioned, those commercial OE wins are really important, right? And those are some big wins for us, we're very happy that we're winning across the portfolio, many different technologies, many different products. But we don't want to lose sight of other growth opportunity that we have. Components, mechanical components, we have a number of them next door. Differentiated technologies, differentiated products that are undergoing a technology transition, from hydraulic, pneumatic to electromechanical, and capturing that technology transition. Aircraft connectivity, with our acquisition of EMS Technologies now fully integrated, we're really capitalizing on the desire for not only passengers, but the desire for the aircraft itself to communicate globally. And International defense. Doing the right marketing research, putting the right people on the ground, understanding where we can grow with those upgrades to help those customers across -- effectively upgrade their capabilities. Let me get -- talk a little bit more detail about the mechanical components. These are things like pumps, valves, actuators. They get wrapped around the engine. And we have that indigenous capability within our own design house, to design -- have for our own engines. We've really spent the last 3 years or so looking at how we can take that technology and push it out more to external customers, and sell outside of Honeywell as well. And we've had very nice wins in the past couple of years because that differentiated technology, and we've helped other companies become more efficient and make their aircraft engines more efficient. As engines get more complicated, they actually use more components. Which is a good thing for us. We like that. Makes the aircraft much -- the aircraft and the engine much more efficient. But we play in a relatively small space right now, and…

Thanks, Carl. So, in summary, 2012 was a good year not only from a performance standpoint, growth and operating income expansion, But I think more about the foundation -- some additional foundation work that we did in order to build on those successes going forward. We feel really good about the organizational structure, our people, processes, programs that we're on, and clearly, the growth projection that we've got here. I think that we are be a more thoughtful organization around -- if we think about productivity, efficiency, so on, a lot of that has been enabled by HOS and the transparency as we've got on to one ERP system. So about 90 -- slightly in excess of 90% of our business is there now, and certainly there has been a lot of learnings at being able to capitalize on the information and transparency as we've migrated from actually thousands of systems to less than 1,000 at this point, or in the States, about 300. So, we plan on continuing to stick with the playbook that we have. And we're feeling very, very good about the alignment that we have, relative to delivering more value than our competitors are, to our customers, so we expect to continue to outperform. With that, Elaine, I'll turn it over to you for Q&A?

All right. We'll take about 7 minutes of questions. First question here, Nigel.

Can you talk about -- as you move from the 320 to the NEO, 737 for the MAX, 330 from 350? How does your content per ship set change?

So, on the 320, it's probably going -- on the 320 NEO, it's probably actually going to grow a bit. There is a keen interest that's predicated on the fact that we win the electric taxi. So that is something that has a lot of pull from the airlines relative to that area. From a 737 MAX, where all of the subsystems, with the exception of some small ones, have been selected, our ship set content has actually grown relative to the 737 NG. There's also a very important dimension to that and that the business that we won in the 737 MAX has a much longer aftermarket stream and fuller aftermarket stream than the content that we have on the 737 NG.

[indiscernible]

Well, the 350, of course, all of the selections have been determined. As you know, we have significant content on the mechanical side, so it was identified as the extended mechanical perimeter. So that's the auxiliary power unit, the environmental control systems, air management system, gallery cooling, et cetera. That is a very, very big package. I think it was $16 billion or so when it was originally awarded. We also have the Flight Management System and the ADSs or surveillance system that's on there. So we're very, very pleased with the content on all 3 of those aircraft.

Next question please, Lisa [ph]?

Can you just maybe talk about the aftermarket trends so far through first part of the quarter? Through February. If there's anything unusual, any kind of volatility you've seen, any de-stocking or anything out of the ordinary where you've guided to this year. And also your ATR OE revenues for '13 look like they're flat in this bar chart. Are there dynamics around mix of deliveries and then do you have kind of a pickup in the back part of the -- should be a delivery schedule, I'm just wondering why it's flat this year.

So, on the ATR aftermarket, we're seeing normal type of recoupling, I would say. So we're seeing a coupling with flight hours. So we're growing faster than flight hours, but we're seeing less spares activity than we did last year, which is indicative of the fact that, last year, there was some restocking. So we do not see any de-stocking relative to the ATR, and we are continuing to grow faster than the flight hours. I think flight hours in January was about 3.4% growth year-over-year. So we're aligned with that and that's what we had in our plan. Relative to the OE ship rates for this year, of course, last year there was a significant increase relative to the rate increases, right? Particularly the narrow bodies of the 737 and the A320, and so we're lapping those comps from a year-over-year perspective. There is one area, but it's not in Q1, but it would be for 2014, that we're watching very closely relative to rate changes, but that's not for this year.

On the product side, we have a continued pipeline of aftermarket upgrades that customers are demanding and wanting, those connectivity solutions for satellite communications, navigation improvements and navigation performance benefits that improve the efficiency of the aircraft, and some safety and situational upgrades as well. They're very popular.

Yes. And so, one of the difficulties this year, at least -- particularly in the first part of the year, is that we're lapping such significant comps from a year-over-year perspective.

Next question, Howard Rubel. Howard A. Rubel - Jefferies & Company, Inc., Research Division: Tim, with all these wins comes, typically, an opportunity to spend more money in R&D. So how are you taking advantage of what you developed so that you minimize some of the bill? And then I think, just Carl's question I just want to -- or Carl's point on comps. What are we going to do in terms of -- I mean you're still not in airborne in anyway and is there any need to be there?

Okay. So I have 3 points relative to our DNA [ph]. One is, that just by -- in my DNA [ph] I'm relatively ruthless on cost, with the exception of research development and engineering. I think that's the lifeblood of growth going forward. So not trying to make bad -- trying to make all good decisions relative to costs, but I think that my comment around transparency is getting -- SAP has made it a lot more transparent on where our costs are. The second point, I kind of lost my -- third point. Sorry, Howard. So the second point though is, actually, if you go back a couple of years ago, we've talked about core development, right? That's almost in our DNA [ph] right now. So we're still grasping a bit, but what they've been doing is and we can show you, actually break it down, on how much we're doing from a core development standpoint. And core development is where we design it and developing, and certify it once, and apply it many times. So let's talk about, one, that's really, I would say, an industry bell-ringer, is next-generation FMS. We've developed a Flight Management System that is flying on the 747-8, which is a big aircraft, and on the G650. And the core functionality was only developed once. It's got 5 more applications that is going on. And the only nonrecurring cost for those applications are the application-specific nonrecurring cost. So that's what we've been doing, trying to make sure that we continue to fuel growth from an innovation standpoint and doing it by core developments.

Howard, to answer your question on the radio side of things. We're using that same core concept, around radios and radio technology. We actually make radios in all of the sort of market segments, everything from our Bendix King, general aviation, all the way up to business aviation and air transport, and even space applications. We made the radar altimeter for the Mars lander program. So we are taking those core concepts around core radio technology, software defined radios and software architectures to reapply technologies as we continue to refresh our radio product line, but we have a very strong and robust radio surveillance and communication product lines.

We have time for one more question, Jeff, Kyle. Jeff Sprague.

Tim, just looking at the components opportunity as you laid it out. If you look at that $40-some-odd-billion that is not in your served market, how much of that would you kind of classify as of legitimate interest? And how do you get there? Is it all kind of bolt-on M&A or is there organic path to some of those served markets?

So I'm not dodging the question, Jeff, Dave asked me the same thing about 2 weeks or so ago. And I did have to tell them I don't know at this point, but we will know that in about another 3 to 4 months. Really, I'm being very honest. It is not -- we're not focused on bolt-ons or M&As at this point. We certainly have a milk run [ph] and we understand to place in the space, and we understand -- I would say, when we look are parametrically at where we differentiate ourselves, in the areas that we've been successful, so $2.7 billion of wins, that market was being served by others. So, in that 3 months, that remaining 3 months, what we're going to really understand is, do we have those core competencies internally? Do we build them or would it be something that we would codevelop with somebody else? So don't have quite the answer yet but it's coming in the next few months on that. Quite excited about this area. And I want to kind of expand this by saying that one of the areas that Carl touched on, around this migration, this technology transition, that's an important component to this. So, moving from pneumatics and hydraulics to electromechanical, that stuff is in our wheelhouse and has been. But in this area of growth, what it took for us is, just to open up our aperture and get our headset around this area. Not developing new technologies that we have in our wheelhouse already.

Thanks, Tim. Thanks, Carl. We're now going to take a short 10 minute break. If you would like to proceed to the South Ballroom, we have one more opportunity to mingle. Check out the cool technologies and talk with the folks that we have here from Honeywell. Thanks. [Break]

Ladies and gentlemen, please welcome President and CEO, High Growth Regions, Shane Tedjarati.

Good afternoon. Thank you. Good afternoon. It's great to be here to share with you an update on the High Growth Regions. As you'll recall, 2 years ago, right here on this stage, we began to refer to emerging markets as high-growth regions. And for very good measure; High Growth Regions have been driving a significant part of Honeywell's growth. In 2012, we drove more 54% of our growth from these regions. And since 2009, we've been growing at a steady 15% CAGR per year, nicely spread throughout all of our businesses and all of our major geographies around the world. And even though China takes the lion's share of it, it's very well balanced between other regions throughout the world. As Dave mentioned, the macro tailwinds that we're experiencing in the High Growth Regions, at least 2 or 3x faster at a higher pace than the developed markets in the world. And the important part of that is that Honeywell has been consistent -- in the lower right-hand side, as you can see, consistently growing at about a couple of -- twice the speed of the -- those macro changes in these High Growth Regions. The story has been one of evolution that we started more than 10 years ago with trying to go slow, to go fast, do it right in the most important market, which was really China at that time, to make sure that we have all the on-the-ground presence and the leadership, the connectivity and the full Honeywell prescription that we needed to become a full local player. And then taking that over to India to make sure that we have the 2, if you like -- if I need to borrow a term from Aerospace, it would be the 2 rocket boosters to be…

Good afternoon. I'm going to just provide a summary, relatively brief financial review, just to tie things together, really 4 key themes. Number one, obviously, in 2012, as you know, we set high expectations and we delivered. In fact, we're one of only a couple of companies in the multi-industry space that actually exceeded the original consensus estimates for 2012. We're proud of that performance. We're confident in our 2013 outlook. You heard today that we're executing on attractive opportunities despite the macro challenges. I'll talk a little bit more about the assumptions, just the update on those in a moment. And we're conservatively planning our costs, no surprise there, staying flexible, and we're benefiting from ongoing repositioning. I'll remind you of some of those numbers a little later. Seed planting continues for future growth. That was clearly a theme for the day. I think many things stands out from this year's Investor Day for Honeywell. It's really the substance of what we have been doing and what we're continuing to do to lay the groundwork for continued attractive profitable growth for the company. And we're setting up then for out-performance, again, in 2014 and beyond. Just a quick summary of 2012, and put it a little bit in context. I've shown '10 and '11 as well just to provide some perspective. 8% compound growth rate in revenues up to the $37.7 billion that we delivered in '12. 170 basis points of margin improvement, and you recall that 80 basis points of lift from '10 to '11 and then another 90 basis points from '11 to '12, a record for us in terms of margin expansion. 22% compound growth rate in EPS: $3 in 2010, over $4 in 2011 and $4.48 in 2012; that's impressive. And on cash flow, an…

All right. So we have time for roughly about 10 minutes of questions. We'll start here. Cliff?

Cliff Ransom. Dave, you inherited a company that has had a couple of real body blows, 2 failed mergers, a culture that had been built and then lost. What were the couple of big lessons, big learnings that you got recreating that cultural format that so drives Honeywell today? And how do those learnings impact what you're going to do over the next 3 to 5 years?

I think, first of all, all those bad experiences that you described upfront, while bad for the company, it was good for me because I wouldn't have got my job. So it's kind of been a plus and minus there. In terms of the big learning, see, there's just -- you have to be relentless about it, just absolutely relentless and on every dimension. It's not just with my staff, not just with a particular country, not just with a particular business, not just with the people working in the factories. It's everybody. And you have to be absolutely relentless about it. I can remember one of the first discussions that we have with my own staff, where they spent time going through how are we going to work together, that's where we derived these 12 behaviors. And I can remember being asked, "Chief, why are we wasting time on this? We have all the strategic issues that we have to address and we're not going -- we're spending our time doing this instead." And my comment was, "Well, I can make all the strategic decisions you want. But if nobody does them, it's not going to matter." So we spent a lot of time saying, "So how are we going to work together?" Now interestingly, it was only like a month or 2 later, we had made a strategic decision. And one of my guys was -- who is not on my staff anymore, was not doing it. And I called and said, "Geez, we have had this discussion about how we're going to work together. Then we had this meeting where we agreed that we were going to do something. Now you're not doing it. How do you see that as consistent?" And so we had a nice…

Shannon O'Callaghan?

Yes. So, Dave, in the release this morning, you say we're not even at the halfway point yet. I don't really know what that means. What's the starting point? What's the ending point? What's the metric?

Actually, thank you, because I can't tell you how many times I've been asked. So you like sports, Dave, if this is a baseball game, what inning are we in? And I keep saying top of the first. I mean, it's there's a long way left to go. So this an attempt to answer that question for you without putting an endpoint. So you can figure out halfway to infinity how close are we. I just see so much opportunity in Honeywell. And when I look at the base that we've been able to build, which we didn't have before, the culture that we were able to apply to it, I'm just really excited about everything that's coming. And we've shown an ability to evolve, which I always think is important. So at some point, yes, we will hit those margin rates that our peers are. And I'll have to explain to you, so how are we going to get beyond that. At some point, we'll get beyond that. Then I will have to explain you, so what are we going to do next. There's always going to be an evolving part of the story, because it's what we're building into the culture. It's just how we think.

Dave, just one more quick one. You've been very successful with OEFs.

Yes.

How much do you still left in that? I mean, how low could that go as a percentage of sales do you think? I mean, you've accomplished a lot already.

Well, I'm always astounded at the progress you can make on something like that, and it's just how people are. There's an infinite capacity to improve just about everything. And when you look at productivity, most productivity is coming from just being able to use less manpower to get something done than you did before. We've had 130,000 people. My guess is that as you look out into the long future, headcount is not going to grow anywhere near as fast as sales for a long time to come. It's -- we're just not going to have to do. There's -- it's the biggest source of productivity. And when you take a look at the things we have going for us, HOS, Velocity Product Development, Functional Transformation, I mean, those are all things that help you keep driving that OEF cost down while improving the effectiveness of your organization. So it's another one I'd say, I don't know, top of the first.

Next question, Steve Winoker.

Exactly, it's a long game. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Two questions, one for Shane and then for Dave. Shane, you've mentioned in your talk that those organizations that have not been investing for the last decade are pretty much in trouble when they look ahead in terms of take and manage the growth dynamics at High Growth Regions. Within the Honeywell portfolio, there's, I think, a very big divergence of those parts of the businesses that have been not only able to make up investments but build very well successfully, and there's a group of folks who haven't quite get the penetration there at all. How do I think about the ability for the guys, who have not yet been up to that minimum average, to get there?

Well, I would say of -- about 8 years ago, when we started looking at where are you in the continuum, from just being on the ground to all the way being a global challenger with your business in China, most of our businesses, if you like, on a scale of 1 to 8, were 1s and 2s. But today, with the relentless focus that Dave is talking about and the fact that, actually, for a good 2 years, every year, twice a year, our businesses do a self-assessment and review them personally with Dave, once in March and one time in September. We've seen significant improvement. In fact, the self-assessment of where you are in terms of being THE Chinese competitor continues to shift. And some businesses even de-grade themselves because dynamics have changed or the market has changed or the competitors have changed. And I would say of all of our, say, 15 or so SBUs, strategic business units, just about majority of them, almost all of them will be in THE Chinese competitor range within the next 2 or 3 years. So we've made significant progress in the past 3 years just because our attention is on it, and the rigor and the daily vigilance is on it. And becoming THE Chinese competitor is going to be a little bit different in some businesses, like Aerospace, which means how do we operate locally but still with global products, as well as some local products. In UOP, it's going to be execution, it's about IP protection, it's about relentless focus on being able to seamlessly bring our technologies to places. But every business is inching forward.

If I could -- even before that, Steve, I'd like to build on Shane's point. Because the way we try to talk about it is in almost any industry or any business that you're in, your next big global competitor is likely to come from China. And if you can't win against them in China, you're going to be fighting them in Europe, in the U.S. And it's an important dynamic to just inculcate in everybody in the company that that's how we need to think about this, because they're the second biggest economy in the world. If we grow at 3% in the U.S., they grow at 7%. In 25, 30 years, they're the biggest economy in the world. And we need to make sure that all our business are thinking that way and winning in China today, which, by and large, they are. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Okay, great. And then, Dave, you -- Dave and Dave, you both made us a case today of how successful the execution has been in capital deployed, certainly CapEx investments, M&A investments, et cetera. At what point do we start seeing you get even more aggressive on capital deployment or looking to provide more financial leverage or looking to push even harder and faster, given how successful, frankly, the track record has been to this point? Why not get more aggressive even sooner? Is it execution risk you guys are thinking about? I mean, you talked about physical capacity to do more.

It's -- I guess I would say, Steve, we feel we are being pretty aggressive, smart, but aggressive, in terms of capital deployment, and there's a couple of ways to look at it. One way to look at it is, as you said, you can cite specific categories of spend or redeployment, and we featured prominently today CapEx because we wanted to make sure that there was a good understanding of -- if you will, of the road map that we have to both justify from a marketplace and from a opportunity standpoint that investment, but also the internal processes and disciplines that we have in place to manage that CapEx. And I'd say, the other way to think about it is in terms of capital deployment or any of the traditional metrics that you might want to apply, either traditional, for example, credit metrics that you might want to apply to Honeywell; funds from operations, for example, to use one of the -- one of the terms and one of the metrics supplied by the rating agencies, minus dividends divided by debt. Any of those kinds of metrics you would say that Honeywell has really maintained a very efficient, if you will, overall capital structure. So we think we've done a good job on maintaining that positive access to capital markets while being aggressive in terms of, if you will, the traditional measures that we used to measure credit. And we feel like we've got that right disciplines in place, the right focus and the growth focus that's in place in terms of how we're redeploying capital. So frankly, I think we are pushing to the appropriate level in terms of aggressiveness.

And for what it's worth, Steve, if you need to bookend it, I don't view Apple as a role model here, okay. So you don't have to worry about that we're just going to continue let cash build to extraordinary levels. That's not our intent, not the way we think about it. And to build on Dave's point, we're always going to invest in -- first priority, I guess, is stays [ph], to make sure that we stay really good cash flow generator, which we're going to do. Then we look at deploying it, investing in our businesses, still leaves a lot of money. Next is dividend. And I like making sure that we pay a strong competitive dividend because of what that tells you about the future in addition to the reward it provides. And I think our track record is -- are pretty good and balanced there at the same time, which leaves you -- you think about buybacks, and you think about acquisitions. Our M&A pipeline is very good right now, and I think we have demonstrated a real capability to do that. But by the same token, you just never know exactly when it's going to happen, all right, because we're -- if you stay disciplined about it, like we do, sometimes you go, 1.5 years, 2 years where not much happens, then you hit 9 months where all of a sudden a bunch of things happen. And you need to be prepared for those times, and we want to make sure that we stay smart about that. Then buybacks, I do understand the -- first, I understand the desire, because I assume that there was a buyback question semi-lurking in there, that I do understand the importance of it and the significance of it to a lot of investors. And that's why you start -- I started planning to do more of that last year and are committing to it again this year. So I do understand that. But at same time, to Dave's point, it's not always bad to have some cash on hand. I don't think it's the worst thing to have. Now where's that point that dollar amount where it clicks and I flip the light switch, well, I don't have that in mind. We'll see how things end up evolving. But I can promise you, it top of mind for us.

Okay. Last question, Howard Rubel. Howard A. Rubel - Jefferies & Company, Inc., Research Division: You talked a lot about how you've improved the profitability of the business, and many of the businesses today have enviable returns no matter who owned or operated them. But, Dave, what are you doing in terms of thinking about resetting the restructuring bar so that you can get some of these goals towards the longer term? I mean, what are you thinking about in terms of saying to some of your businesses, "Well, this is nice, but I've got a factory that's never going to be bronze, or I have an operation that, even though it might be silver, is never going to be gold." How do you think about either repositioning plants or some additional opportunities? Because there's clearly some -- to your point, the job's never done.

Yes. Well, first of all, I would say every factory will get the bronze, every factory will get the silver and every factory in business will get the gold. So I don't accept the first part of that. But let's say the question that I think is implied in that is are there factories or businesses that just aren't ever going to make it. They aren't going to be a Honeywell-type operation. I'm assuming that's implicit in the question. And there, we're constantly looking at what makes sense for the company consistent with that great positions in good industries and is it a Honeywell-type of business. We're constantly looking at that. And sometimes, things can happen quickly. Sometimes, it takes time. And if you take a look at -- if you just want some examples, Resins and Chemicals. That one we were able to come up with some solutions pretty quickly. And in this space, you remember how horrid that business was when we started, when we -- what do we call it, the nylon. When it was the nylon business, it was hard. Three years later, it turned into a good business because of the things that we were able to do, and I think you've seen it performed since that time. Something like consumable solutions, an okay business, good industry, we didn't do so well just because it was tough to get Tim and his guys interested in it, because distributed -- distributing nuts and bolts was never going to save lives or get Bob Smith and his guys all cranked up in engineering. It was just never going to do that. We couldn't get their attention. It was better off owned by somebody else who could run it a lot better. Well, it took us a number…

Dave, maybe if I could just add really quickly to what you said, because, Howard, you also used the word, "repositioning", or repo, repositioning in your question. And as you know, repositioning in the sense of just continuing to build a better company by taking costs out, particularly with a focus on fixed cost, people, facilities, but a lot of it as we've done -- as you know, has been very high ROIs, smart transitions in reductions that we've made. That's just going to be part of the story going forward. This is going to be part of what we do going forward. And again, we're going to take opportunities where we have gains to do that to redeploy. But it's a -- the ideation process from the businesses, the generation of possibilities is continuous. It's something that we encourage on an ongoing basis.

Well, I want to thank you all for attending today and close -- have -- turn over to Dave for closing comments.

As I mentioned at the beginning, the 2 messages are that we have outperformed and, more importantly, hopefully, you got a sense from today on why we're going to continue to outperform. We have Honeywell culture that we have built, which really is fundamental. It's very important to try to get something done. Because if you have 130,000 people working together in the same way, giving each other the benefit of the doubt and actually working in concert, it's really surprising how much you can get done if you have a great portfolio and you drive your big, internal processes, in particular, in a way that just says, day-by-day, quarter-by-quarter, follow a consistent strategy, and it's remarkable where you can get to over a period of time. You've seen us do it over the last 10 years. And what I could promise you is over the next 10 years, it's just as good or better, because we have a lot of runway for future growth. And the nice thing about it, especially if you've got this kind of evolution concept in mind, it's just the way you think, the more you do, the more opportunity you uncover. And that's the situation with us right now, and it's just an exciting time to be a part of Honeywell. I appreciate all of your share ownership, and I can't resist but, again, to say, "Buy now while supplies last." Thank you.