Hi. Good morning. Thank you all for joining us for Eaton's fourth quarter 2024 earnings call. With me today are Craig Arnold, our Chairman and CEO; Paulo Ruiz, President and Chief Operating Officer; and Olivier Leonetti, Executive Vice President and Chief Financial Officer. Our agenda today includes the opening remarks by Craig, then he will turn it over to Olivier, who will highlight the company's performance in the fourth quarter. We will then turn it over to Paulo, who will provide the guidance for Q1 and the full year 2025. As we have done on our past calls, we will take questions at the end of our closed commentary. The press release and the presentation we'll go through today have been posted on our website. This presentation, including the adjusted earnings per share, adjusted free cash flow, and other non-GAAP measures. They are reconciled in the appendix. A webcast of this call is accessible on our website and will be available for replay. I would like to remind you that our commentary today will include statements related to the expected future results of the company and are therefore forward-looking statements. Our actual results may differ materially from our forecasted projection due to a wide range of risks and uncertainties that are described in our earnings release and the presentation. With that, I'll turn it over to Craig.

Okay. Thanks, Yan. And we're pleased to close out the year with another strong quarterly result. I'm especially proud of how our team executed in the quarter. As you know, we had to overcome the impact of the strikes in the Aerospace industry and the lingering impact of the hurricane, which impacted our Electrical Americas business. For the quarter, we generated a Q4 record for adjusted EPS of $2.83, up 11% from the prior year. We also delivered record segment margins of 24.7%, up 190 basis points compared to last year and above the high end of our guidance. And we continue to see strong market activity. On a rolling 12-month basis, Electrical orders were up 12%, led by Electrical Americas with orders up 16%, and orders were up 10% in Aerospace. This led to another quarter of growing and record backlogs with once again outstanding results in Electrical Americas, up 29% and in Aerospace, up 16%, with book-to-bill ratios above one in both businesses. As you can see from the chart, we're set for another strong year in 2025. Paulo will walk you through our guidance, but we do expect another year of healthy end markets, strong organic growth, margin expansion, improving free cash flow, and double-digit increases in adjusted EPS. Turning to Page 4, we're once again providing an overview of megatrends and how they're driving growth in our end markets. You're very familiar with this chart by now, but we did want to provide an overview of how these markets performed in 2024 versus our expectations. This is especially relevant in the context of our outlook for 2025, which Paulo will provide later today and at our investor meeting in March. In Electrical, our end markets performed better than expectations due to strength in data centers and the Americas market. Strong growth in these two areas more than offset some unplanned weakness in residential and OEM markets. In Aerospace, markets grew nicely and in line with plan, and this was despite the Boeing strike. Our vehicle market was a bit of a mixed bag with better-than-planned performance in commercial vehicles, offsetting weakness in the light vehicle market, which includes eMobility. Overall, we continue to see megatrends as important drivers of secular growth in our markets and why you should expect Eaton to post attractive growth for years to come. This secular growth is perhaps most evidenced by the megatrend chart that you see on Slide 5 in the presentation. As a reminder, a mega project is a project with an announced value of $1 billion or more, and our reference point begins in January of 2021. We've reported this data for a few quarters now, and our conclusion hasn't changed. Each quarter, we're seeing an increasing number of projects, higher dollar values, and a growing backlog. Q4 was another record with 65 projects announced at a value of more than $150 billion. Through Q4, we're now at 569 projects with a cumulative value of $1.7 trillion, and the backlog now stands at $1.9 trillion, up 33% from last year. To date, cancellations have actually been modest, around 11% and well below historical levels. Given the heightened discussions on data centers this week, I wanted to take a moment to highlight our data center business and why we have so much confidence in our outlook for continued growth. The information on Slide 6 summarizes our sales, negotiations, orders, and backlog for our data center business. It includes hyperscale, colos, on-prem data centers, and the major categories of cloud, training, and inference. Cloud remains the largest category. The rate of growth continues to accelerate with negotiations and orders well ahead of sales. Our backlog is rapidly increasing, up 50% over the prior year, which was up 70% over 2022. Hyperscale customers alone expect to spend almost $300 billion in CapEx in 2025, up 30% from 2024. And the notable figure is that at 2024 build rates, it would take seven years to consume the current backlog. Data center construction doubled between 2023 and 2024. So any notion that this market will slow down is simply inconsistent with any of the data that we're seeing. The industry will continue to see innovation and technology developments that reduce costs. If judged by history, this will be good for the industry and an accelerator of growth. For 2025 and for years to come, we expect data centers to be our strongest market and stand by our previous forecast, which assumed strong double-digit growth. Now, I'll turn it over to Olivier to take us through the financial results for the quarter.

Thanks, Craig. I will start by providing a summary of our Q4 results, which again includes many new records. We posted fourth quarter record sales of $6.2 billion, up 6% organically or 5%, including 1 point of FX headwind. Hurricane Helene and labor strikes in the Aerospace industry negatively impacted Q4 sales by approximately $80 million or 130 basis points. Operating profit grew 13%, and segment margin expanded 190 basis points to an all-time record 24.7%. Adjusted EPS of $2.83 increased by 11% over the prior year. This is a Q4 quarterly record and near the high end of our guidance range. This performance resulted in an all-time record cash flow performance, including operating cash flow of $1.6 billion, up 23% on a year-over-year basis and free cash flow of $1.3 billion, up 27% versus the prior year. I will now review the segment's quarterly results followed by a recap of the year. On Slide 8, we detail our Americas results. The business continues to execute very well and delivered another record quarter. We set new records for operating profit and margins and posted a Q4 quarterly record sales. Organic sales growth of 9% was driven primarily by strength in data center, along with solid growth in commercial and institutional markets. Without the impacts of the hurricane disruptions to the business, organic growth would have been in the double digits. Operating margin of 31.6% was up 310 basis points versus the prior year, benefiting from higher sales. On a rolling 12-month basis, orders remain at a high level of 16%. We had particular strength in the data center market, where activity remains very robust. U.S. announced data center project starts are up 99% in 2024 and 173% year-over-year in Q4. U.S. data center construction backlog is now estimated to extend out about seven years based on 2024 build rates. Electrical Americas backlog increased 29% year-over-year with a book-to-bill ratio of 1.2 on a rolling 12-month basis. These results closed out a record year for the business, which posted full-year revenue of $11.4 billion, organic growth of 13% and margin of 30.2%, up 370 basis points over the prior year. On Page 10, we highlight our Aerospace segment. We posted all-time record sales and Q4 record operating profit. Organic and total growth was 9% for the quarter driven by growth in all end markets, except for the commercial aftermarket. Without the impacts of the Aerospace industry strikes, organic growth would have been in the double digits. Operating margin was strong at 22.9%, up 50 basis points year-over-year, mostly from higher sales. Our book-to-bill for Aerospace segment remains strong at 1.1. Moving on to our Vehicle segment on Page 11, in the quarter, total revenue was down 10%, including a 7% organic decline primarily driven by weaknesses in the North America, EMEA, and APAC light vehicle markets and three points of unfavorable effects. Despite the top line weaknesses, the team executed well from a margin perspective. Operating margin came in at 18.8%, 90 basis points over prior year from improved operating efficiencies. On the full-year basis, Vehicle recorded organic revenue down 5% with 18% margins. On Page 12, we show results of our eMobility business. Total revenue was down 11%, including a 10% organic decline primarily driven by our customers' program launch and production ramp-up delays and 1% unfavorable FX. Operating profit was $3 million, resulting in operating margin of 1.8% for the quarter. On a full-year basis, eMobility posted 4% organic growth with negative 1% margin. On Page 13, we show our Electrical and Aerospace backlog updated through Q4. Backlog continues to be very strong with Electrical at $11.8 billion and Aerospace at $3.7 billion for a total backlog of $15.5 billion. Versus the prior year, our backlogs have grown by 27% in Electrical and 16% in Aerospace. They are also increasing sequentially. As noted earlier, book-to-bill ratios for Electrical and Aerospace are both 1.1. The continued growth in our backlog underscores our high level of confidence in future demand.

Thanks, Olivier. On Page 15, we summarize our 2024 financial results compared to our original guidance. This occurred again in 2024. Throughout the year, we demonstrated the ability to exceed our commitments and raise guidance on all key metrics. We delivered 8% organic growth, an 18% increase in adjusted EPS, all-time record margins of 24% and a 23% free cash flow, all above our initial guidance. Of particular note, segment margins were up 140 basis points versus the original guidance midpoint and 200 basis points from the prior year. And adjusted EPS of $10.80 was 6% above the $10.15 midpoint of our original guide. We're in the right markets, and the identified megatrends are creating some of the biggest opportunities that we'll see in our lifetime. The growth opportunities are everywhere. Our negotiations pipeline, record orders, and strong backlogs are evidence of our ability to convert on the opportunities. We now have the capacity in place or coming soon to support even faster growth. We have the Eaton Business System, or EBS, that keeps everyone focused on getting better, running better functions, better factories, and better businesses. So now is our time, and I couldn't be more pleased with the team leading the next stage of Eaton's transformation. Paulo will walk us through our key assumptions and financial guidance for the year.

Thanks, Craig. Shifting our attention to 2025 on Page 17. We provide our view on end-market growth expectations for the next year. As you can see, we continue to anticipate attractive growth markets in nearly all of our end markets. We're expecting double-digit growth in data center and distributed IT, commercial aerospace, and electrical vehicles. For data centers, we remain constructive in our future outlook due to the strength and breadth of our secular trends. We continue to see strong demand in the data center market with the adoption of cloud computing and acceleration of AI technologies. We also expect solid growth in utility and modest growth across many of our other end markets. We anticipate weaknesses in commercial vehicle and residential markets. But the change in residential outlook from last quarter is offset with strength in other end markets. Overall, 2025 should be another year of significant growth with more than 85% of our end markets seeing growth. Our growth outlook is supported by strong order book, a strong record backlog, and favorable secular trends. Moving to Page 18, we summarize our 2025 revenue and margin guidance. Organic growth for 2025 is expected to be between 7% and 9% with particular strength in Electrical Americas at 11.5% at the midpoint. Healthy end markets, combined with our large backlog, provide premium visibility to support our 2025 outlook. For segment margins, our guidance range is between 24.4% and 24.8%, an improvement of 60 basis points at midpoint from our 2024 all-time record margins of 24%. Our EPS is expected to be between $11.80 and $12.20, $12 at the midpoint and up 11% from 2024. And our free cash flow guidance is between $3.7 billion to $4.1 billion, up 11% at the midpoint. We expect to repurchase between $2 billion and $2.4 billion of our shares outstanding. We also expect to leave plenty of room for strategic M&A. Our guidance also includes Q1 specifics. On Slide 20, we wanted to highlight our upcoming Annual Investor Conference on March 11, 2025. We'll be back in New York City, and we'll stream the presentation live on eaton.com. Along with myself, you will also have presentations from other senior leaders that are shown here on this page. We are really excited to talk about the future of the company, including outlining our 2030 targets. With that, I'll hand it back to Yan and the operator for Q&A.

Thanks, Paulo. For the Q&A today, please limit your opportunity to one question and a follow-up. Thanks in advance for your cooperation. With that, I will turn it over to the operator to give you guys the instruction.

Thank you. Our first question comes from Chris Snyder with Morgan Stanley. You may proceed.

Thank you. Maybe starting off with one for Olivier. So the guide calls for, I guess, at the midpoint, about 6.5% organic in Q1 and then 8.5% the rest of the year. Can you talk about the drivers of that pickup in growth? And then what should we expect for the cadence of adjusted EPS throughout the remainder of 2025? Thank you.

Thank you for your question. Let me cover first the EPS guidance through the year, and Paulo and I will tag team on the revenue section. If you look at the EPS, we are planning today to have the first half represent 48% of the full EPS guide for the year and the second half as a result, 52%. If you look at the recent past, we used to have a mix between first half and second half of 46% and 54%. I also wanted to talk about the Q1 EPS guide. Again, similarly to the first half and second half, the Q1 sequential decline is actually better than what we have experienced in our recent past. This guide implied a decline of 4%. The decline is always expected because of merit increases. We're very bullish about our business, and we invest in demand generation and manufacturing. So that explains the Q1 sequential decline on EPS. And maybe in revenue, Paulo?

Yes, just to add - thanks for the question, Chris. For modeling purposes, I think it's fair to assume the first half being at 7 and the second half at 9. Electrical Americas will pick up a bit in the second half because of the additional capacity we're adding. We track those projects one by one. So far, so good. They're coming as we planned. We also see that in the second half, most probably the Electrical Global business will pick up again with some recovery in the European markets.

Appreciate that. Really, really helpful. And then if I could follow up with one, maybe for Craig. I really appreciate all the updates on demand outlook. It's certainly a lot of good trends out there. But I wanted to ask about the supply side. We've heard a lot about product availability in the industry being incredibly tight. Are these lead times starting to come down? When you look at the industry-wide capacity adds, do you think that's enough to meet demand? Or do you think that this industry could still be short product beyond just the near-term? Thank you.

Yes. Appreciate the question. It's actually one we haven't received recently. Coming out of the COVID period when supply chains got massively disrupted, we were spending weekly calls and daily calls with our suppliers on dealing with supply constraints. I'd say for the most part, we're back to where we were pre-COVID regarding our internal supply chains. A lot of these constraints have been resolved. We have fairly good visibility and transparency regarding the outlook for these markets, and our suppliers have responded. As we think about our longer-term outlook, we're certainly constraining our view of the world largely because we do think labor continues to be somewhat constrained.

Thank you, Craig. I appreciate that.

Thank you. Our next question comes from Andrew Obin with Bank of America. You may proceed.

Hi. Yes. Good morning.

Morning, Andrew.

Hi, good morning.

Yes. Just maybe a question for, Craig, you talked about Electrical Americas and the mega project impact. Can you quantify or can you just talk about how much did mega projects actually have an impact on your business in 2024?

Yes. Appreciate the question, Andrew. One of the reasons why we started reporting mega projects is that we saw this fundamental shift in our industry as the world was going through a massive CapEx rebuild cycle, and the size of projects has been much larger than what we've seen historically. In 2024, our business doubled in mega projects to over $600 million. Our negotiation pipeline is up some 60%, and for the overall business, it's up 41%. We continue to see an increasing number of projects, and the good news is that most of the benefit from these mega projects is still in front of us. The number and size of these projects continue to grow, and we are undergoing a significant CapEx expansion cycle globally.

Thank you.

Just to add, Andrew, in a look forward for 2025, we see that in 2024, there were 56 projects that started and around $135 billion in total. Their forecast for 2025 is actually that we're going to reach over $300 billion in 114 projects. So the longevity of the growth cycle ahead of us is significant.

Thanks so much. Just a question on supply chain and the state of supply. How are you incentivizing your supply chain to have capacity, particularly at the components in critical areas?

We work closely with our suppliers to provide visibility and certainty to encourage them to invest in capacity. We're not providing specific financial incentives but working through multiyear agreements backed by multiyear commitments from our customers. This capacity is flowing to where the real demand is, which is good for us.

Thanks so much.

Thank you. Our next question comes from Steve Tusa with JPMorgan. You may proceed.

Hi. Good morning.

Hi, Steve.

Could you give a sense of the mega project pipeline and what it means for orders as you look forward over the course of this year? What is the visibility on these mega projects converting into orders?

It's very difficult to forecast orders for mega projects. However, with the negotiation pipeline growing 60%, we see large projects taking time to convert into revenue, ranging from three to five years. We're seeing the effect of projects we started tracking in 2021. As Craig mentioned, our sales doubled for mega projects in 2024 compared to 2023.

Okay. And on the data center question, your order is up 75%. Are you shipping to the starts, or sending blanket orders from hyperscalers?

We have multi-year visibility on forecasts from our customers, and we ship product as the project requires. So we follow the construction of the data center as it progresses.

Great. Thanks a lot, guys.

When we talk about a start, it's when a shovel goes in the ground. That's when a project becomes real.

Thank you. Our next question comes from Jeffrey Sprague with Vertical Research. You may proceed.

Thanks. Good morning, everyone. Maybe just one more on data centers. How much data center is now in the mega project number you're sharing with us today if you have visibility on that?

Yes. Your thesis is correct; as these data center projects have become bigger, some are now falling into the mega projects category. Approximately 17% of the mega projects are data centers.

Yes. 17%, one-seven.

We also track projects between $25 million to $1 billion and are seeing tremendous growth in that area as well.

Great. And just thinking about Electrical Global specifically, what is your view of improving margins there?

Starting in 2025, we already see improvements based on restructuring impacting the P&L and also volume-driven productivity gains from large orders, particularly in the data center side. We can build strength as we drive operations.

As Paulo said, mix has been a headwind for our business there, but as markets normalize, we should see a natural improvement in profitability.

Thank you. Our next question comes from Deane Dray with RBC. You may proceed.

Can you talk about tariffs, potential impact, vulnerabilities, and preparation you've gone through?

We are prepared. We know precisely what to trigger and have a philosophy of moving our production closer to consumption to decrease the impact of tariffs.

Thank you. Our next question comes from Chad Dillard with Bernstein. You may proceed.

As AI data center shift from training to inferencing, how does the Electrical content and intensity differ between these use cases? How much of your data center sales are cloud versus AI?

Within the data center, we maintain the same portfolio. Higher adoption of inference data centers could accelerate the build-out, which would be great for us. However, we expect our sales to include both training and inference needs.

Got it. That's super helpful.

Thank you. Our next question comes from Andy Kaplowitz with Citi. You may proceed.

Can you talk about machine builders in Europe and residential starting to bottom out?

Most industrial data from Europe continues to be weak. However, we're expecting the European market to be incrementally better in 2025 with some signs of recovery.

That's helpful. And then backlog up 29% Electrical Americas. What else slowed revenue in the quarter?

Q4 saw some weaknesses in residential and lower cycle business, but we're confident in our strong backlog and outlook for the year.

We have anniversaried several price increases, and our volumes are contributing more to our growth going forward.

Thank you. Our next question comes from David Raso with Evercore ISI. You may proceed.

Can you quantify the amount of capacity being added across Electrical?

We've not expressed it in terms of a percentage of capacity increase. We have made investments to cover our growth forecast in our industries over the next several years.

We'll provide a breakdown of segments and our views until 2030 at our Investor Day in March.

Thank you. Our next question comes from Phil Buller with Berenberg. You may proceed.

Have there been any green shoots this quarter or market share gains in Europe?

In terms of recovery in Europe, we remain cautious but expect growth because they're benefiting from data centers and the utility market.

We're going to discuss eMobility and vehicle business at our Investor Day. It remains a focus for us.

Thanks, guys. We appreciate everybody's questions. The IR team will be available for follow-up questions. Have a good day.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.