Honeywell International Inc.

Good day, ladies and gentlemen, and welcome to Honeywell's third quarter earnings release. At this time, all participants are in a listening-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please click on the raise hand icon at the bottom of your Zoom screen. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Reena Vaidya, Director of Investor Relations. Reena, please go ahead.

Thank you, Ari. Good morning and welcome to Honeywell's third quarter 2021 earnings conference call. On the call with me today are Chairman and CEO Dariusz Adamczyk and Senior Vice President and Chief Financial Officer Fred Lewis. Also joining us are Senior Vice President and General Counsel Anne Madden and Senior Vice President and Chief Supply Chain Officer Torsten Pils. This call and webcast, including any non-GAAP reconciliations, are available on our website at www.honeywell.com forward slash investor. Honeywell also uses our website as a means of disclosing information which may be of interest or material to our investors for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website in addition to following our press releases SEC filings, public conference calls, webcasts, and social media. Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our businesses as we see them today. Those elements can change based on many factors, including changing economic and business conditions. And we ask that you interpret them in that light. We identify the principal risks and uncertainties that may affect our performance in our annual report on Form 10Q and other SEC filings. This morning, we will review our financial results for the third quarter of 2021, share our guidance for the fourth quarter and full year 2021, and share some preliminary thoughts on 2022 planning. As always, we'll leave time for your questions at the end. With that, I'll turn the call over to Chairman and CEO, Dari Sadamsha.

Thank you, Rina, and good morning, everyone. Let's begin on slide two. Our outstanding discipline and execution enable us to deliver third quarter results that met or exceeded our financial guidance in an increasingly challenging environment. We achieved a high end of our third quarter adjusted earnings per share guidance range and exceeded the high end of our segment margin guidance by 60 basis points. despite significant headwinds from inflation and supply chain constraints, which tampered down our top-line growth potential. Despite that, organic sales were up 8% year-over-year, driven by double-digit organic growth in safety and productivity solutions, the commercial aerospace aftermarket from advanced materials, and UOP. Segment margin expanded 130 basis points to 21.2%. driven by strong actions that we took across the portfolio to address the headwinds we faced from inflationary pressures and supply chain disruptions. Specifically, we've continued to operate our strong productivity playbook. We took swift pricing action that allowed us to stay ahead of the inflation curve. We drove a 4% increase year over year on the top line and yielded approximately 40 basis points of margin expansion net of inflation. Adjusted earnings per share was $2.02, up 29% year-over-year, achieving the high end of our guidance range. We delivered a strong third quarter despite a volatile backdrop that included a hurricane, our PMT factory corridor, power blackouts in China, and the persistent and ongoing impacts on the supply chain more broadly. I am pleased for our disciplined execution, which enable us to navigate the challenges in the macroeconomic environment and capitalize on the ongoing recovery in our end markets. I continue to be encouraged by the strength we are seeing in many areas of our portfolio. Orders across Honeywell are up high single digits, year over year organic, excluding the impact of COVID-related mask business which has seen significant demand decline since the pandemic has been subsiding. Orders across Hanua were up double digits year over year. Backlog was up 7% to $27.5 billion and up 9% excluding the impact of COVID mask orders, driven by strength in many of our segments and positioning us to deliver next phase of the recovery as we head into 2022. As always, We continue to execute on our rigorous and proven value creation framework that drives outstanding shareholder value. Now, let's turn to slide three to discuss some of our exciting recent announcements. Last month, United Airlines and Honeywell announced a joint multimillion-dollar investment in Alder Fuels, powering the biggest sustainable fuel agreement in aviation history. Alder Fuel is a cleantech company that is pioneering first-of-its-kind technologies for producing sustainable aviation fuel, or SAF, at scale. When used together across the fuel lifecycle, the Alder technologies, coupled with Honeywell's eco-finding process, have the ability to produce a carbon-negative alternative to today's jet fuels. As part of the agreement, United is committing to purchase 1.5 billion gallons of SAF when produced to United's requirements, which is one and a half times the size of the known purchase commitments of all global airlines combined. Making this easily the largest publicly announced SAF agreement in aviation history and demonstrating the power of Honeywell Technologies continue to bring to the oncoming global energy transition. We also recently announced the acquisition of Performix, a provider of manufacturing execution system, or MES, software for the pharmaceutical manufacturing and biotech industries. This acquisition builds on our strategy to create the world's leading integrated software platform for customers within the life sciences industry who are striving to achieve faster compliance improved reliability, and better production throughput at the highest levels of quality. The Performex MEX software joins Honeywell's large and growing portfolio of automation solutions for the life sciences industry, including Sparta Systems quality management software and Honeywell's Experian process knowledge system. The combined offerings will address life sciences customer needs across the product lifecycle. from automation project execution to optimal production to sustainable quality. Lastly, we unveiled an all-new aircraft cockpit system earlier this month called Honeywell Anthem, the first in the industry built with an always-on cloud-connected experience that improves flight efficiency, operations, safety, and comfort. Honeywell Anthem offers unprecedented levels of connectivity, an exciting and intuitive interface model after everyday smart devices, and a highly scalable and customizable design. This next generation flight deck is powered by a flexible software platform that can be customized for virtually every type of aircraft and flying vehicle, including large passenger and cargo planes, business jets, helicopters, general aviation aircraft, and the rapidly emerging class of advanced air mobility vehicles. In fact, Honeywell Anthem has already been selected by Vertical Aerospace and Lilium for their vertical takeoff and landing all-electric aircraft. As these announcements highlight, we're continuously innovating and enhancing our portfolio, exciting new technologies aligned to our long-term strategic objectives. Now, let me turn it over to Greg on slide four to discuss our third quarter results in more detail.