David James Anderson - Chief Financial Officer and Senior Vice President Elena Doom - David M. Cote - Chairman and Chief Executive Officer

Howard A. Rubel - Jefferies & Company, Inc., Research Division Nigel Coe - Morgan Stanley, Research Division Scott R. Davis - Barclays Capital, Research Division C. Stephen Tusa - JP Morgan Chase & Co, Research Division John G. Inch - BofA Merrill Lynch, Research Division Jeffrey T. Sprague - Vertical Research Partners Inc. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division Deane M. Dray - Citigroup Inc, Research Division

Good day, ladies and gentlemen, and welcome to the Honeywell Fourth Quarter 2011 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host, Elena Doom, Vice President of Investor Relations. Please go ahead.

Thank you, Stephanie. Good morning, and welcome to Honeywell's Fourth Quarter 2011 Earnings Conference Call. Here with me today are Chairman and CEO, Dave Cote; and Senior Vice President and CFO, Dave Anderson. This call and webcast, including any non-GAAP reconciliations, are available on our website at www.honeywell.com/investor. We ask that you note that elements of this presentation do 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, and we would ask that you interpret them in that light. We also identified the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission. This morning, we'll review our financial results for the fourth quarter and for the full year 2011, as well as share with you our updated guidance for the first quarter and full year 2012 and, of course, allow time for your questions. With that, I'll turn the call over to Dave Cote. David M. Cote: Thanks, Elena, and good morning, everyone. As you saw from our press release, we had another great quarter marked by terrific execution with continued growth in most of our end markets. And then yielded earnings per share above the high end of the previous range. Our reported sales were $9.5 billion, up 8% reported or 7% organic, reflecting continued advancement in our new products and the focus on high-growth regions. We ended the year with segment margins of 15.1%, expanding 90 basis points over the fourth quarter of last year. Then pro forma earnings per share were $1.05, up 21% over last year. Free cash flow was an impressive $1.4 billion in the quarter, reflecting 169% net income conversion prior to a $250 million cash pension contribution. Our 2011 performance underscored our balanced portfolio mix and strength of execution. New products, geographic expansion and traction on key process initiatives, all translated to record organic growth, margin expansion, high-quality earnings performance and strong free cash flow generation. And we did all this while continuing to maintain our seed-planting for the future. In the fourth quarter, we had another quarter of robust new product launches and big wins starting with Process Solutions, who was awarded a highly competitive 15-year $90 million contract to completely overhaul the technology controlling the massive Los Angeles wastewater treatment system, ousting the incumbent in the process. Building Solutions & Distribution expanded their Smart Grid wins internationally with a project that will help connect up the 30 commercial and industrial buildings in the Thames Valley area, west of London. This will help alleviate the potential for future bottlenecks as the peak demand for energy grows. Honeywell is helping to create a more agile grid, without the public disruption or expense of major infrastructure upgrades. UOP, as you might expect, also did well within the quarter. National Refinery Limited awarded UOP a major Uniflex project in Pakistan. As a reminder, Uniflex is the process technology that maximizes the conversion of crude residues. Think of it is as the bottom of the barrel to high-quality transportation fuel. Uniflex technology can significantly increase refinery margins $2 to $4 a barrel over other conventional technologies, and that's a big competitive advantage for our customers. The emerging regions are continuing strong and now comprise approximately 20% of our total sales. We're seeing the biggest increases in Turbo, Commercial Aerospace, UOP and Process and Building Solutions, with sales up approximately 20% again in the fourth quarter for China, India and the Middle East combined. Turning to 2012. We still think the high probability outcome is for slow growth economic environment. That said, our developed market order rates are mixed with continued growth in the U.S., partially offset by weakness in Europe short-cycle businesses. We still expect these businesses to grow but at a more moderate rate in the first quarter. Meanwhile, the commercial Aero aftermarket remains robust with spares and R&O continuing to outpace flight hours. And our longer-cycle businesses like commercial Aero OE, Process Solutions and UOP are increasing backlog with our total book-to-bill rate above 1.2. Dave will walk you through an updated view by business when he discusses the outlook for the first quarter of 2012. But from an overall Honeywell perspective, we remain confident in our ability to sustain good growth, while continuing to expand margins over the course of 2012. So once again, 2011 is further proof that our strategies are working, and we think we've got a balanced plan for 2012 that incorporates the current economic realities, as well as the benefits derived from our continued seed-planting initiatives. And finally, we think that puts us in excellent position to achieve our 2014 sales and margin commitments. Having great positions in good industries, the power of One Honeywell, our consistent focus on improving every year in each of our 5 initiatives, it really makes a difference. So with that, let me turn it over to Dave.

Thank you. Good morning, everyone. So let's start off on Slide #4, and I'll take you through the fourth quarter highlights, just adding to Dave's comments. As you can see, reported sales of $9.5 billion, up 8%, 7% underlying organic growth in the quarter, so continued strong organic growth and a finish for 2011. Acquisitions contributed about 2% of growth, and we had about a currency of 1% headwind in the quarter. On a regional basis, as expected, Europe was lower in growth. However, we saw strong organic continued growth from the Americas, up about 7%. The Middle East, China and India combined were up almost 20%. Segment profit growth was 15% in the fourth quarter. Margins increased by 90 basis points to 15.1%. We had margin expansion in all 4 business segments. Price, productivity, net of inflation continue obviously to be the key drivers of profitable growth for us. Moving below the line, all items were in the range of their quarterly run rates. Tax, we had a 27.5% effective tax rate on pro forma earnings. That's as expected and as we guided, but of course, ahead of our usual 26.5%, and that's the ETR, where we finished the year, again, consistent with the guidance that we gave you in July. Pro forma earnings per share, that is excluding the impact of the fourth quarter pension mark-to-market adjustment, $1.05, 21% increase over the fourth quarter of 2010. And by the way, that 2010 fourth quarter included $0.03 for discontinued operations from CPG. So, if we really adjust it on a continuing operations basis, we're up 25% EPS fourth quarter. Now the reported EPS included $1.8 billion of pension mark-to-market adjustment, taking reported earnings actually to a loss of $0.40 per share in the quarter. Free cash flow prior to pension contributions, finished strong, $1.4 billion. Working capital was a strong source of cash in the quarter, driven by operational improvements across the board. So let's now go to the next slide and go through the full year numbers. Slide #5. Sales for the year up 13% to $36.5 billion. That includes, by the way, and reflects record 8% organic growth for Honeywell. Acquisitions contributed 3%. Foreign exchange was a tailwind of approximately 2% for the full year. Segment profit increased 19%. Margins expanded 80 basis points to 14.7%. And, Dave, I think that's a record for us as well. This was another strong year for profit growth and margin expansion, which clearly demonstrates our ability to deliver productivity from operations while also providing value from a sales and marketing excellence. Pro forma earnings, $4.05, a remarkable 35%, or $1.05, increase versus 2010. And again, below-the-line expenses, excluding the ongoing pension expense, were relatively flat year-over-year, when you consider that onetime gains were deployed. That's pretty impressive when you consider the number onetime gains that we successfully deployed that will fund repositioning and other items over the course of the year. And then, of course, also reflects the loss of CPG earnings in the second half of the year. Now, as a reminder, we funded approximately $350 million of repositioning in 2011. All of it offset by gains. In addition to funding a number of other projects and considerable investment in R&D, new product introductions, which, of course, sets us up nicely for 2012, 2013 and beyond. Reported EPS was $2.61, up slightly over 2010. That, of course, includes the MTM adjustment I mentioned earlier. Free cash flow was $3.7 billion and that's prior to pension contributions, 115% net income conversion. So now let's go through the highlights of each of the segments, and I'll reference fourth quarter as well as full year numbers, starting with Aero on Slide 6. As you can see, Aerospace sales up 8% in the quarter, 6% organic. Commercial sales were up 20%, driven by continued momentum in the commercial aftermarket as well as strong shipments to OEs. And of course, that was partially offset in the quarter by lower Defense sales. Commercial OE sales grew by 18%, 12% organic, excluding the EMS acquisition. We saw growth in Boeing and Airbus deliveries driven by the ramp-up in production rates, partially offset by lower regional jet deliveries. Business Aviation OE is continuing to benefit from shipments of high-value Honeywell content on new production aircraft, 16% organic growth, taking into account lower launch contributions versus 2010, as well as the EMS acquisitions. Commercial aftermarket sales were up 21% in the quarter. We saw growth of spares and R&O. Those trended differently, as you know, over this recovery cycle. We had strong growth in both in the quarter, and the aftermarket levels are now above prior peak levels, and that's measured in absolute terms. Spares were up 28%, and, by the way, up 28% also for the full year, reflecting continued strong demand globally. The commercial R&O was up 18% over last year, although roughly flat over the third quarter level. So based on the high utilization of existing fleets, we expect continued growth in 2012, although at a slower pace as the quarter-over-quarter comps get tougher. Just a quick minute to go through a couple of the details here. In air transport and regional flight hours, those were up approximately 3.4% in the quarter, and we expect that kind of moderated pace to continue through 2012. Layering on top of the flight hour growth, we've seen older aircraft, which need, obviously, more spare parts and repair and overhaul, return to service and we're benefiting from that. We're also seeing increased sales of newly launched, enhanced safety and navigation software upgrades. Just to give you a couple of examples, a couple specifics of that. Primus Epic and synthetic vision cockpit upgrades, SmartRunway and SmartLanding for airport and runway awareness and Flight Management System upgrades for next-generation Air Traffic Management. Additionally, our high-speed satellite communications packages are doing well, as customers desire more global connectivity solutions. And as you all know, these are high margin contributors that continue to expand our product portfolio, and all of this bodes well for the aftermarket segment of Aerospace in 2012. Now as expected, Defense and Space sales were down 4% in the quarter, driven primarily by program completions and also program ramp-downs. Our service contract completions, ramp-down of funding for the T-Hawk micro air vehicle, partially offset by growth in our short-cycle aftermarket sales in Defense. Now as a reminder, international aftermarket sales were particularly strong in the fourth quarter of 2010. They contributed to a very difficult comp in the quarter, and as we've discussed with you in numerous occasions, we continue to plan for further U.S. Defense budgetary pressures and reprogramming, and we're planning for modest declines in Defense and Space overall in 2012. Now Aero's segment profit was up 40 basis points in the quarter to 18.8%, due to strong commercial aftermarket volume that I referenced, as well as productivity benefits, net of inflation. These were partially offset by higher R&D investments, net of launch payment favorability and the dilution associated with the EMS acquisition. So on an apples-to-apples basis, sales conversion for Aerospace was up just over 30% in the quarter. Now as 2012 unfolds, we'll continue to monitor the macro indicators, obviously, in Aerospace, as well as -- and by segment, as well as by region. But as we sit here today, we expect aftermarket growth to outpace flight hours, and we expect good sales conversion and margin expansion within the Aerospace segment throughout the year. Let's go now to Slide 7, ACS. Sales for ACS were up 4% in the quarter. We had favorable impact of acquisitions, offsetting negative foreign currency translation. ACS continued to see good growth globally, with pockets of anticipated softness in Europe, where sales were down mid-single digits. The emerging markets remained strong for ACS, with double-digit sales growth in India and the Middle East. Growth in China for the quarter was a little bit muted, but continued softness in the residential and industrial sectors for EPC, as well as for Life Safety. Now for ESS, the Energy Safety and Security business. Sales were up 3% organic, driven primarily by strength in scanning mobility but also in security and sense of control. HPS sales in the quarter were up 2% organic, as they lapped a very strong fourth quarter of 2010. And you'll recall last year is a very robust recovery in Field Devices. We actually had 30% growth in that business segment of HPS in the fourth quarter of 2010. Now orders for HPS were strong in the quarter, up 11%, adding over $900 million of new wins. Dave mentioned earlier, HPS has been awarded fairly highly competitive projects in 2011, and we're planning for accelerated revenue growth in HPS in 2012. BSD, or the Building Solutions & Distribution business of ACS. 6% organic sales growth. We had strong security distribution sales in the Americas. We also had improving backlog conversion on several large public-private partnerships, as well as energy efficient -- efficiency projects in the Solutions side. The commercial retrofit activity in these markets continues to show modest signs of life. ACS did softer order books in October and November in their trade and distribution channels, as well as the slowing in China, namely on the HVAC side and ECP but also in the fire products and Life Safety side. However, December exit rates showed improvement, so it's something, obviously, we'll continue to watch closely over the coming months. Now as expected, segment margins for ACS expanded very nicely in the quarter, up 130 basis points to 14.4%. It reflects primarily, obviously, higher organic growth and volume leverage but also very good execution on acquisition integration and good cost controls. ACS also benefited by lapping the headwinds associated with last year's M&A accounting for the Sperian acquisition. So for the full year, ACS sales were up 13%. Segment margin expanded 50 basis points, to 13.4%. And we expect ACS margins to continue this expansion for us in 2012, and feel confident in their ability to reach that 15% to 16% target that we've set for them by 2014. Let's go now to Slide #8, look at Performance Materials & Technologies, PMT. So PMT had double-digit growth at both UOP and Advanced Materials in the fourth quarter. Sales were up 24% and, by the way, we guided it to 21% to 26% for PMT in the quarter, so it's sort of at the -- little towards the high end of that guidance. 17% organic, and segment margin was up 80 basis points to 15.6%, which included the dilutive impact of the phenol plant acquisition that closed in late July. Now sales at UOP were up an impressive 36% in the quarter, delivering upside with refining and specialty catalysts sales of almost 40%, as well as growth in projects and services. Demand fundamentals for UOP remained robust. UOP exited the year with record backlog, a book-to-bill ratio above 1.3. And in the quarter, UOP signed significant contracts for new technologies. They also benefited from the feed portion of their large Petrobras project, and they were selected by Petrobras in the quarter to provide gas separation technology for other offshore processing units. So that just continues to be a good news story. UOP is also well positioned for another strong growth year in 2002 (sic) [ 2012 ] with higher sales conversion driven by favorable project and the catalyst mix, which will offset most of the pricing headwinds that we expect and we've guided you to in Advanced Materials in the first half of 2012. Turning to Advanced Materials. Sales were up 18% in the quarter, 7% organic, with continued favorability in terms of pricing in RNC [ph], offsetting slower demand in Fluorine. And as a reminder, and really it's very notable with that 18% reported, 7% organic, the phenol acquisition obviously contributed importantly in the quarter, but was $80 million in revenues compared to about $120 million that we'd included in our original guidance. And that's just the function of the flow-through of a reduction in commodity costs, no real change in volume there, just a reduction in both phenol and acetone pricing in the quarter. Now Fluorines in the quarter continued to see price declines due to increased availability of supply of refrigerants globally. We've seen signs of global demand slowing for resins and specialty products, with some inventory destocking as a result, partially offset by continued uptake from new product applications. So overall, obviously, a great year for PMT, record margins of 18.4%. Clearly, a credit to the work that Andreas and the team have done capitalizing on the strengths of their businesses, with a lot of emphasis on new technologies, products, as well as new applications. Let's turn now to Slide 9, Transportation Systems. In the quarter, TS sales were up almost 10%, driven by volume increases primarily in Turbo, partially offset by the unfavorable impact of a weaker euro. Now turbocharger sales continued to outperform the industry macros. European light vehicle production was roughly flat in the quarter year-over-year, and European diesel penetration expanded 3 points to a record 62%. Sales for TS for the full year were up 21%. Turbo unit shipments exceeded prior peak levels that we had recorded in 2011. And that reflects our high win rate on both gas and diesel platforms, as well as obviously increased Turbo penetration globally. Sales in Europe for TS have moderated, consistent with slowing vehicle production rates. Sales in the emerging regions, however, improved with sequential improvement in China, despite commercial vehicle sales for the year being down due to reduced government incentives. India continued strong in the quarter, with increased demand from local OEs. Now segment profit was up 14% in the quarter for TS. Expanding margins 40 basis points, they had strong productivity gains, partially offset by inflation and negative mix from some softer aftermarket sales. So for the year, segment profit for TS was solid, expanding 150 basis points to 12.6%. So with that review of the 4 business segments, let's go to Slide 10 and transition to 2012 and talk about our preview for the first quarter. Turning to Slide 10. In total, we're planning for first quarter total company sales in the range of $9 billion to $9.2 billion, up 4% to 6% from last year, assuming a euro rate of 1.30. And I think last year, first quarter, Elena, we had a euro rate average of about 1.40. So at EPS, we're looking at $0.93 to $0.98, up 6% to 11% on a reported basis, 8% to 14% on a continuing operations basis, which excludes the earnings, the $0.02 from discontinued operations, which is, of course, the CPG. And of course, and just as a reminder, that not only that $0.02 impact of not having CPG in the first quarter, we'll have that also for the second quarter, given the timing, as you recall, of July 2011 sale of CPG. So let's just take a minute and walk through the rest of the first quarter and talk about those business segments. So in Aerospace, for the first quarter, we expect a continuation of more than -- more of the same, commercial OEM aftermarket momentum lifting the segment higher, partially offset by a relatively flattish outlook in Defense. So as a result, we expect sales to be up for Aero, 7% to 9%, with margins expanding nicely despite the bigger role that an unfavorable mix will play in 2012. And as a reminder, specifically, what I mean by that is, we're expecting commercial OE sales to grow at approximately double the rate of aftermarket growth for Aerospace in 2012. For ACS, for the first quarter, we expect revenue growth in the 2% to 4% range. Now that includes the impact of slower growth due to weak European and residential markets affecting our short cycle ESS businesses. In addition, we expect foreign exchange headwinds to more than offset the net benefit from acquisitions, so about 2%. However, on the other side, we anticipate acceleration in Process and Building Solutions growth given the expected strong backlog conversion. So as a result, we expect ACS margins to be up approximately 30 basis points in the first quarter over 2011 and on track to their outlook for the full year. At Performance Materials, we anticipate sales up a strong 12% to 15%, growth driven by robust sales at UOP and favorable impact of the phenol acquisition, which would add about 8% to 9% and moderate growth, organic growth in Advanced Materials. From a margin standpoint, we would expect PMT to be down of their record 21% margin that they had in the first quarter of 2011, but still in the range of the first quarter of 2012, in the range of their full year 2011 segment margin rates. So still very attractive, very impressive. Transportation System sales are expected to be relatively flat in the first quarter. It reflects an 8% decline in the Western European light vehicle production, coupled with foreign currency headwind of approximately 3 points, offset by robust new launches and an expected increase in European diesel penetration year-over-year. And I referenced that 62% diesel penetration in Western Europe where we ended the year. And in light of the current demand expectations, we expect the first quarter 2012 margins for TS to be in line with how they exited 2011. So in summary, we're looking for another good growth quarter in the first quarter of '12 despite a more challenging economic backdrop, and we're obviously anticipating nice income conversion. So let's now go to Slide 11, the full year 2012 financial guidance summary. And as you can see, nothing really new to report here. We reaffirmed our financial outlook for 2012 that we gave you mid-December of 2011. We anticipate sales for Honeywell in total to be in the range of 4% to 7%, up this year $37.8 billion to $38.9 billion on a reported basis, up 4% to 6% on an organic constant currency basis. Segment margins to grow 15% to 15.3% for the year, up from 2011's 14.7%. And of course, EPS, $4.25 to $4.50. It reflects 5% to 11% increase over the $4.05 base just completed for 2011. Now again, the guidance assumes a flat effective tax rate year-over-year of 26.5%. Share count roughly equivalent to our fourth quarter exit rate. We're also assuming a de minimis amount of repositioning charges consistent with our approach to fund repositioning with onetime nonoperating gains. On cash, we're planning for around 100% cash flow conversion. So translating to free cash flow of approximately $3.5 billion. Importantly, before any potential NARCO trust funding or further voluntary pension funding. And on pension, our guidance assumes level contributions over the course of 2012 of $200 million to $250 million per quarter, but we'll actually do that as the year unfolds and we'll manage that, measure it as the year unfolds. Now we finished the year approximately 83% funded globally, with the U.S. portion slightly better on a year-over-year basis. The 2012 ongoing pension expense will be favorable by about $50 million versus 2011, which for now will appear to offset the potential for further foreign currency downside. So think of that, if you will, as added contingency, some of which is reflected in that first quarter guidance that we gave you. And again, on the bottom of the page, you could see some of the variables that may influence our performance in the year and form the basis for our guidance range. So the 5 outcomes as we talked about mid-December on the left, would cause the earnings to be closer to the low end of the range and, obviously, those on the right would cause earnings to be at the higher end of the range. And we feel, again, the range is broad enough to incorporate these varying outcomes, as well as just the overall macro uncertainty that exists in today's environment. So Slide 12, a terrific year for Honeywell. Just to recap before turning it over to Elena for your Q&A. Capping off an impressive 10-year transformation at Honeywell. Our performance track record over that time, underpins the operational and financial disciplines that you've come to expect from us. And while we've come a long way, we obviously feel even better about our future. That said, based on all we're seeing and hearing, 2012 will be a more challenging overall environment. While order rates remain positive overall, we've seen some weaknesses, as I've cited, in Europe and China, in energy, safety and security, as well as in our Advanced Materials. On balance, our long-cycle businesses, those orders continue to show a healthy pace and they'll contribute to very good growth for Honeywell in 2012. We're expecting sales in the developed regions, primarily the U.S. and Europe to moderate but still outpace GDP over the course of 2012 through increase penetration, new product introductions, as well as market share gain. Everything we're seeing says, we're going to be living through an economic downturn in Europe through the first half of 2012, which is reflected in our orders and our sales outlook. The good news here is that with approximately 40% of our European sales not affected by the near-term macro uncertainty, as we continue to convert the long cycle backlog of Commercial Aerospace, Process Solutions at UOP, and continue to enjoy the robustness of the commercial aftermarket -- commercial Aerospace aftermarket. Now we're expecting strong operating performance again in '12, increasing our sales conversion, whether it's our relentless focus on cycle time both commercial and R&D effectiveness, controlling our fixed costs through OES, layering in the benefits from ongoing repositioning actions. And we'll continue to deliver another year of continued margin expansion and 100% free cash flow conversion. And, of course, we plan to update you on our long-term outlook at our upcoming Annual Investor Conference in New York City, Wednesday, March 7. You'll hear more from Dave about how the diligent deployment of our key process initiatives over the last decade has set us up for an even better future. And we'll showcase the evolution of those initiatives that underscore the organization's ability to be a top-tier performer with a balanced portfolio, short- and long-cycle businesses and a disciplined playbook focused on smart cost management. Again, positioning Honeywell for top-tier performance again in 2012, as well as beyond. So with that, Elena, let's go to -- turn it over to you for Q&A with our audience.

Thank you. Stephanie, if you can now open the line, we'll take our first question.

[Operator Instructions] Our first question comes from Steven Winoker from Sanford Bernstein. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: I just want to ask about -- first, let me just start with the first quarter versus the rest of the year. What risk do you see or how much are you relying on that sort of second half pickup macro in Europe? And how much is in your control, do you think, to -- versus not -- I mean, in terms of the degree to which you're covered at the low end of that range? David M. Cote: Well, it's always tougher, of course, because you have to make some kind of forecast about the economy. So we're not assuming global recession, for example. And then all bets would be off if that were true. So it's a little tougher to answer that way. I would just say, I feel pretty confident that our ability to deliver at this point, with most of it being within our control. And we're not counting on that much for the second half in Europe improving that much there, because who knows. It's kind of tough to say, it's going to go dip but only for 6 months. We hope that's the case. But we're not counting on that. We're kind of just assuming that it's a slow growth, global economy, the whole year. Dave, anything you want to add?

I would just say that the -- one little added color, Dave, I would give to that is, at ACS, we're going to see a stronger Process and Building Solutions first half based on the backlog that we have. We'll see a little stronger on a relative basis, we're going to see a stronger second half ESS and, if you will, Products for ACS. We'll actually see some of that benefit over the course of the year just in terms of margin rates and margin rate build for ACS.

In addition to the... David M. Cote: So it's not driven by macro...

No. David M. Cote: So much as it is we had about heating season, for example, and we don't expect a bad cooling -- we're not assuming a bad cooling season on top of a bad heating season.

Exactly. David M. Cote: Does that make sense, Steve? Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: It does. And then just digging into the ACS points that you raised. We know -- there's obviously always the mix impact between the product and the -- or the new product definition and the solutions definition. But as I recall, you'd been making very strong headway within HBS and within HPS on margins, dramatically, over the last decade. I mean, so how much lift is that giving you continued or has that sort of -- are you at the point of diminishing returns on the margin front within each of those businesses? David M. Cote: I'm not a believer that margins have ever peaked in the Honeywell portfolio. I'd say, in every business, we still have pretty good runway, that's not just limited to Process or Building Solutions. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: But specifically, within those, because those were the ones that were obviously lower by nature. How are those progressing? David M. Cote: They're progressing fine. I would say, if you said, in Building Solutions, will we evolved to a 20% margin at some point? The answer would be no. That's not going to happen. But we could still grow from where we are. There's still runway there. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: All right. And that, as I recall, was just low double digits, in that range? David M. Cote: It is on the low side, yes.

The Building Solutions and Distribution is a mid-single digit margin business, Steve. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: The Process, I meant.

The Process is double digit. It's actually low teens. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Yes, okay. All right.

But there is a point though that we will see that favorability in terms of margin rate as we see that shift in terms of stronger products. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And then just lastly, on pricing versus inflation, because I've been looking at that. It looks to me like the trends are starting to reverse -- to become more positive on that front. Are you guys -- how are you anticipating that developing over the year? David M. Cote: Well, we've actually always done pretty well there, because as you know where we drive most a pricing improvement is from new products that add a lot more value to the customer. I know that's an overused word out there, but it can be true, and we've been doing that. So we don't expect that to change all that much.

Our next question comes from John Inch from Bank of America. John G. Inch - BofA Merrill Lynch, Research Division: I want to ask about your guide for the year. I mean, I realize your history, Dave, is pretty conservative. But it just seems a little, almost too conservative. Like a lot of companies are sort of calling out this week first quarter, given the European issues, given the compares. The midpoint of your first quarter guide of up 11% is the high end of your annual guide of up 11%, and your 4% to 6% revenue midpoint, right? The midpoint is the low end of your -- I guess, I'm just trying to understand. I heard a little bit of some of this color, but is there a way to just sort of think about first half, second half and why up 5% EPS this year is even on the table?

Well, I think, Steve -- or John rather, I'm sorry. There's a couple of things, I think, in that first quarter. Number 1, I think, we've referenced that we've got foreign currency headwind of a couple of points. We've got also the CPG continuing operations comparison, which is about $0.02. And as you said, if you look at the midpoint of our guide for the first quarter, that translates into a very nice full year, when you look at it in terms of our historic linearity. And frankly, when we look at the numbers on a full year basis, both the implied organic growth in our guidance, as well as the EPS growth in our guidance, those trends tend to be very much in line -- in the ballpark. David M. Cote: We feel we're at the high end of the ballpark, actually. John G. Inch - BofA Merrill Lynch, Research Division: What -- I'm sorry, what's the high end of the ballpark? David M. Cote: The guidance that we've provided. John G. Inch - BofA Merrill Lynch, Research Division: Meaning you -- you're meaning, you're suggesting that the midpoint is the high end of what you think is reasonable? I'm sorry, I don't mean to... David M. Cote: When we look at the range that we think we've provided for guidance in what's an uncertain economic environment, we think, compared to everybody else out there, we tend to be more towards the high side. And we don't like being too bullish on what we think the economy or currency is going to do or count on anything like that, because we just don't think those things can turn against you too easily. John G. Inch - BofA Merrill Lynch, Research Division: That's fair. Dave Cote, do you have contingency plans if things do turn down and the 5% which, again, doesn't seem realistic. But if it comes more into the realm of possibility, do you have contingency plans from what you would do vis-a-vis restructuring may not -- you obviously did a lot last year, I'm just -- how do you think about this year in that basis? David M. Cote: Well, given what's going on over the last 4 years, we always think in terms of having flexibility in both directions. Because You just don't know. And things could be better than what we think they're going to be, and you need to be able to respond to upside also. But conversely, things could be worse. And we need to be able to be prepared to respond that way. So the big message at our Leadership Conference this year, for example, was the same as it has been for the last couple of years, and that's flexibility. You've got to be able to have flexibility in both directions. Be very careful about how you hire, but also be very careful about never going too far, because you just don't know which way things are going to go. And you have to be prepared. You got to be on your toes. You just don't know. John G. Inch - BofA Merrill Lynch, Research Division: Just lastly, what do you think normalized organic growth is at ACS? I mean, I realized you see -- did 4% this quarter, you got difficult resi and you've got the European issues. But then you've got booming energy markets and you guys have done a great job with the new product introductions. I mean, if you were to kind of normalize a lot of factors, how do you think about growth over the trend line in that business, in that segment, sorry? David M. Cote: It's another one where it depends on what's the economy that's the backdrop to that. So it's a tough one to answer. And that's why the way we tend to always talk about it, John, is that we feel that given the end markets that we are in, we can outperform our peers in any economic conditions. Because we think we've done all the work that we need to, to have great positions in good industries, the One Honeywell, 5 initiatives, we keep working that. That's put us in a better position to outperform. But it is tough to say, so what's the natural growth dynamic of the business, because it depends on what global GDP is going to be.

I think one of the things, Dave, just to add to what you said is, Roger has always said, and I think we've seen numbers that bear this out, at around 2x GDP, in terms of the underlying growth rate of the business. So that translates into pretty... David M. Cote: So we'll work to make that 2.5x GDP, 3x GDP.

Our next question comes from Scott Davis from Barclays Capital. Scott R. Davis - Barclays Capital, Research Division: Guys, can we get an update on cost cuts and where we have headwinds and tailwinds, things like ERP and other kind of discretionary or project-related costs. Just to get a sense of where the tailwinds and headwinds are. David M. Cote: Boy, I have a tough time thinking beyond what we already listed on -- We don't expect material inflation to be particularly onerous. We don't expect labor inflation to be particularly onerous. When it comes to any kind of major projects that we have, there's no one that's so big that it drives the thinking of the company. So I'm hard-pressed to think of anything that I find troublesome right now. Scott R. Davis - Barclays Capital, Research Division: Even ERP?

No. I think we're at run rate on ERP. I think, kind of back to an earlier question, Dave, I think pricing will offset inflation. We've got productivity, obviously, is a key driver in terms of our net margin expansions. So we talk about margin expansion range for the company, and we think it's going to be pretty attractive this year. That's really driven by net productivity. And there's no single item, Scott, that stands out. R&D, we've talked about R&D year-over-year 2010 to 2011 for Aerospace. But as we talked about, that really to moderate and if it goes up in absolute dollars, it's steady as a percent of revenues in 2012. So there's no single item I don't think I would point to. David M. Cote: In ERP, we're close to done. Scott R. Davis - Barclays Capital, Research Division: Okay. So that's more of a 2013, that rolls off and it gets easier then, is that what you're saying? David M. Cote: No, you're saying that where there's a big benefit from not having to put -- continuing to invest in ERP? Scott R. Davis - Barclays Capital, Research Division: Yes. And spending on duplicate systems derived. David M. Cote: I think we'll see some of that. Again, I wouldn't point to those something that's going to make our year, for example. Scott R. Davis - Barclays Capital, Research Division: Yes. No, I understand. I'm just trying to get a sense of the puts and takes. But let's move on. Defense and Space, this may be perceived as kind of a strange question. But does Defense and Space going down hurt margins or help margins when you think about the overall segment? I guess, what I'm saying is, you've got the fixed cost coverage issue with some contracts, but you may be rolling off some lower margin contracts. So when you think about Defense and Space down, let's say down 4% or 5% in 2012, does that -- is that a tailwind to overall margins or a headwind? David M. Cote: In my view, it's -- because of the way pricing works there, things tend to stay flat. So good or bad, it kind of stays where it is. It's just part of the pricing model. So I wouldn't expect to see a big boost or a big negative going in either direction.

Dave, I would just say, just in a word that it's summarizing and agreeing with what you said, it's really neutral in terms of Aerospace margins. And as I said earlier, Scott, we're going to see some margin lift, obviously, in Aerospace in the first quarter, as well as for the full year 2012 despite -- we continue to anticipate it. I think, we've got it 4% to 5% down revenues for the year. Scott R. Davis - Barclays Capital, Research Division: Okay. And then finally, just a quick one. I mean, your incremental margins in transportation I think were about 16% or so. When I think about Turbo back in kind of the "glory days," if you will, the last cycle, margins were higher, kind of 17%, I think, it was something that was talked about back -- a ways back and now, a little bit lower. What can get you there? I mean, is it a different price environment, where you just can't print that kind of margin anymore? Or can you get the volume pull-through to get back to those kind of glory day margins at some point in the next few years? David M. Cote: Well, we have -- there's another business in Transportation Systems. Scott R. Davis - Barclays Capital, Research Division: Sure, yes. I understand that. But given how important Turbo is, there's no way the Turbo margins could be -- well, I guess there is a way, but...

We had -- to Dave's point though, we did have headwinds in the quarter from our Friction business, which encountered a pretty significant commodity cost increase. And it's the type of business and the kind of environment where it just -- you just can't pass through or pass through as much clearly as what you are impacted by, so you need to absorb that. So really, most of what we've talked about, Scott, in terms of that phenomena of what you would expected in conversion of the business versus historic is really explained by Friction.

Our next question comes from Steve Tusa from JPMorgan. [Technical Difficulty]

We will move onto our next question. Our next question comes from Deane Dray from Citi. Deane M. Dray - Citigroup Inc, Research Division: I want to get some more color on some of the key geographies, you touched on this in the prepared remarks, both between Europe and China. And for Europe, you first started talking about this in September with some of the softer signs of destocking in the Building Solutions Distribution. How has that played out and beyond just the European Auto, lower production expectations? David M. Cote: So you're just talking about Auto or... Deane M. Dray - Citigroup Inc, Research Division: No. Just broadly the conditions in Europe. Because at first you talked about the softness was in September, where you first started to seeing some of the destocking. It sounds like that's the same conditions that you've been facing in the fourth quarter and just at the margin how has that played out? David M. Cote: Yes. The way I would describe it is if we went back to that August-September time frame, we actually saw Europe orders dip, go negative for about 2 weeks. So we start to get really concerned, and that it bounced right back. At this time, I'd say it's been negative for about 6 to 7 weeks in a row. So if it were me, I'm not an economist, but I would say they're in a recession now. It might not be a big one, like we all hope it won't be. But I would say they're in recession now and that's the way we're thinking about it. We're thinking about the whole year as being a slight recession in Europe.

Deane, if I could add just a little bit to Dave's comments on Europe. As I mentioned earlier, we've got some important differences, obviously, when you look across the portfolio because Aerospace, Dave, as you know, the commercial aftermarket business is... David M. Cote: They're doing fine.

Is doing very well. So that's very important to know. The other thing is in Transportation Systems because of -- in Turbo, because of the strength of our position and our wins and new platforms, we actually continue to see volume, good volume growth there.

Strong double digits.

Strong double digits. So what Dave is really referencing, which is really correct in kind of where you started, Deane, with your question, is really when you look at some of the traditional energy, kind of Life Safety and Security segments of the business, that's where we're seeing it most pronounced. David M. Cote: Well, maybe I misunderstood your question, Deane. I thought what you're trying to get is, a sense for is Europe's economic environment. What are we seeing or what did we think was going on there. Deane M. Dray - Citigroup Inc, Research Division: No, that addressed it. And I just want to see, did it start to -- the destocking and the shorter cycle stuff was expected, and had you seen it begin to worm into some push-outs and any of your longer cycle businesses and it doesn't sound like that's happened.

No, that has not occurred. Deane M. Dray - Citigroup Inc, Research Division: And then, how about over in China. And broadly, you said the emerging markets is up 20% but then you gave some data points on ACS, softer October, November in HVAC. But what -- and you wouldn't be the first company this earnings season to say that it's seeing a slowdown in the fourth quarter but how are you characterizing the business today? David M. Cote: I would say I'm very glad that we've got the kind of presence that we do -- that we have in China and it keeps growing. We were up very strong double digit in China again this quarter, and we expect that to continue this year.

Yes. What we cited, Deane, when we -- when I went through my review of ACS. I cited the fact, again, on the ECC side, we've seen, we've experienced softness. And we've seen basically the softness in the resi side on the Tier 1 and Tier 2 cities. So that is not a surprise at all, given the headlines in terms of commercial real estate, et cetera, what the government's doing in terms of government policy. On the other hand, as I cited, we're also seeing growth and some recovery in the Turbo commercial vehicle business. We've seen some softness on Fluorines, but we've seen continued relative strength on resins and chemicals. So it's, again, you kind of have to get a little bit specific. But the common theme, I think, between Europe and China is the sort of the short cycle energy, the combustion and the residential and the commercial markets and the retrofit markets have been softer. So that's where we've really seen the softness. But as Dave cited, overall, when you look at the overall numbers for Honeywell for China, they look very good. David M. Cote: Very good. Deane M. Dray - Citigroup Inc, Research Division: That's great. And just last, a data point. You provided a backlog number, I think, for the first time in the third quarter on your longer-cycle businesses, it was $16 billion. Did you provide the update for how you ended the year?

Yes. So backlog is about the same in terms of end of year for the total company, Deane. And U.S. continues to be very strong. Just a side, a couple of the specifics there in terms of the ending backlog, and this is comparing to the fourth quarter of 2010. On the ATR side, it's up 26%; BGA, up 24%; and at UOP, as I mentioned earlier, up 10%. So those are pretty good, I think, demonstrations. And by the way, the other interesting number is Defense and Space backlog, it's actually up 4%. So we've had across the board good positive momentum on the long-cycle business.

Our next question comes from Steve Tusa from JPMorgan. C. Stephen Tusa - JP Morgan Chase & Co, Research Division: Just back to the backlog. Last year, and you gave this number in your 10-Ks, the number kind of to-be-shipped for the coming year. I think, last year you had a backlog of 14,616, and the to-be-shipped number was about 10,600. What's the to-be-shipped number this year, do you guys have that at hand there?

I don't have that one at hand, sorry, Steve. C. Stephen Tusa - JP Morgan Chase & Co, Research Division: Okay. Is it materially different as a percentage of the backlog? Did that stick out at all when you were going through your numbers at the end of the year? David M. Cote: What I would say though, Steve, is when we look at the quarters, the 4, 5 quarters out, and we take a look at percentage of sales already in backlog, and it's better this year than it was last year. C. Stephen Tusa - JP Morgan Chase & Co, Research Division: Right. Because when I kind of do the math on the, I guess, what I would consider to be book and ship, just to come for the next year. And you kind of subtract out that number, the percentage of backlog to be shipped and you just basically get to the book and ship number, it looks to me like kind of the midpoint of your range is up kind of low-single digits and the high end is up 5%. Last year, I think, it grew in the mid-teens. I guess, this is just reflective of what you guys were talking about, kind of some of the uncertainty in Europe and some of the macro concerns that are clearly at play with others in the group as well? David M. Cote: Yes. I think generally, I think, you'd say that, Steve, to your point is you've got long cycle strength and then short cycle moderating. So that -- it's really the blend of those 2 that really represent that full year 4% to 7% up in terms of revenue guidance.

And that number is probably a bigger percentage of our total revenue base in 2012 versus what it was in 2011.

Right. Exactly. C. Stephen Tusa - JP Morgan Chase & Co, Research Division: Yes. Right, right. I mean, I still think if you guys are going 1% in that business, I think, we're -- we would might all be in trouble from an economic perspective. One last question just on the ACS margin. Clearly, a very strong conversion. Anything kind of unusual because now you're stepping down to the 25% in -- maybe I missed it in the comments. But you're stepping down to, I don't know, around the 25% incremental in the first quarter. Can you maybe help us to just break out a couple of the big moving parts there, what kind of impacted you the most?

Well, I think, first of all, we were lapping a relatively not-strong conversion in the fourth quarter of 2010. The other thing we had is and we've referenced is we had positives in terms of M&A, so we didn't -- the Sperian acquisition and some other things, Steve, that benefited us 2011 compared to 2010. So that was a very strong quarter as anticipated for EPS. And when you look at the first quarter, what you've got is you've got some -- now M&A headwinds, because you've got EMS, as well as the King's acquisition, you've gotten a mixed headwind. I know Dave doesn't like me to talk about that. But the reality is, we're going to have a stronger Process versus -- and Solutions business, the BDS business compared to the ESS in the first quarter. That's just the phenomena that's occurring there. So it's really those things that are causing it. The other thing you got is you've got foreign currency now going the other direction, and that's a big item for ACS. When you look across FX impact in the total company, it isn't just the euro. It's also the Australian dollar, it's the Indian rupee, it's the Canadian dollar and they're really being impacted as we've seen a strengthening of all of these currencies relative to the dollars as we progressed through the final month of 2011. C. Stephen Tusa - JP Morgan Chase & Co, Research Division: And sorry, what was your order growth in HPS and then I'll hop off?

Tell me again? C. Stephen Tusa - JP Morgan Chase & Co, Research Division: What was your order growth in HPS, Honeywell Process?

11% organic in the quarter.

Our next question comes from Nigel Coe from Morgan Stanley. Nigel Coe - Morgan Stanley, Research Division: So, Dave, you called out an interesting data point. I think you said 40% long cycle, 60% in short cycle in Europe, is that correct?

I'm sorry? Nigel Coe - Morgan Stanley, Research Division: I think you called out your European sales as 40% long cycle and 60% short cycle.

Yes, I referenced that. That's right. Nigel Coe - Morgan Stanley, Research Division: Yes. That's interesting. So of that long cycle, about how much of that is Aerospace?

It's a very small portion of it. There's a -- well, obviously both BGA and ETR. But the biggest pieces there are really in our Solutions business and also in UOP. Nigel Coe - Morgan Stanley, Research Division: Okay, interesting. And then in your 2012 outlook slides, you had that chart showing the sequential trends in your short-cycle orders. I mean, we're only one month into 2012, but how would you characterize those sequential trends on short cycle? Would you say that's stabilized or are they still moving down a little bit?

I would say that we're seeing in terms, if you're talking specifically in terms of what we're seeing to date, in the short-cycle businesses? Nigel Coe - Morgan Stanley, Research Division: Exactly.

Yes. Well, I think it's sort of -- unfortunately, it sort of an it depends. I mean, when you look at the Aero business, it's very good, Nigel. We talked about that in terms of just the continued strength that we're seeing in the Aerospace aftermarket. We're seeing good numbers in terms of Turbo HTT. Elena has cited that in terms of double digit, continued strong double digit. The softness, again, as I've talked about earlier, is really in the ESS, selectively within the ESS businesses at ACS. That's really where we've seen the most change in terms of moderation of growth or even in some segments, some market segments decline.

And some pricing headwinds in Advanced Material.

Yes, good. You're right. Nigel Coe - Morgan Stanley, Research Division: Okay. But would you say they've found a floor at this point, or are they still moving a little bit softer, sequentially?

I think in terms of our planning, from a planning standpoint, as you can see from all of the numbers, the guidance that we've given you is, we've given you revenue growth across the businesses. So I think the answer really is that what we're seeing is that we're going to continue to see growth in all of our businesses. Nigel Coe - Morgan Stanley, Research Division: Okay. And then I hate to be a nerd, but a question on your effective tax rate on the mark-to-market. It's past 37% on the 2010 mark-to-market, and it's up quite a bit from 2010. Again, bear with me here, but it means, first of all, why would that tax rate move up? And then secondly, is that similar to the tax shield you get on your pension contributions?

Well, what it is -- it's just reflective, if you look at 2011's mark-to-market versus 2010's is the higher distribution in U.S. as opposed to foreign entities. So that's just what drove the rate up. That's why we're working on comprehensive tax reform in the U.S. Nigel Coe - Morgan Stanley, Research Division: And is that the same tax shield you get on your cash contributions?

I'm sorry? Nigel Coe - Morgan Stanley, Research Division: Is that the similar tax shields that you actually get on your pension cash contributions?

Yes, that would be a pretty good proxy.

Our next question comes from Howard Rubel from Jefferies. Howard A. Rubel - Jefferies & Company, Inc., Research Division: Dave, I wanted -- just sort of package these 2 items together. Could you address sort of the progress of the restructuring and then some of the capital spending plans? I know you outlined at the end of the year a step-up in CapEx and, clearly, some of that's going to lead to either more productivity. But if you could sort of tell us where you're targeting it and update us on some of the progress with the restructuring, I'd appreciate that, please.

Well, the restructuring, Howard, is on track. We go through -- just a little bit of background, as you know we go through a very thorough vetting and fuse with our businesses and roll that up in a disciplined process and review individual -- every individual project with Dave. There's a lot of dialogue, a lot of pushback, that ultimately culminates in anything that gets approved. And it means that it's in a business where there's strategic justification, it has operational merit and on the major projects, we go back and we actually review that performance and we report out that performance in terms of how we're doing relative to what we've committed. So we'll be doing in 2012, for example, reviews of major projects. The second thing is in terms of the CapEx, so you should take the first to say, that's all as you would expect, it's all working as you would expect. Relative to the CapEx, what we're looking at is a ramp-up in 2012 in terms of our plan, and that plan, if you looked that in the terms of type of projects, really, think of it as growth. What we're really doing is we're really funding, particularly in global markets, we're funding increased presence, whether it's technical centers or operating facilities or joint ventures, funding in terms of joint ventures. If you look at it by business, it's really kind of across the businesses in terms of the increases, with the greatest percentage increase coming in PMT associated with a scarcity in terms of capacity to meet global demand and the outlook for those -- for a number of the technologies in PMT. Howard A. Rubel - Jefferies & Company, Inc., Research Division: And then, while you talked about growth, might you, Mr. Cote, give us a little bit of sense of where you're targeting or what kind of projects you see for 2012 for both UOP and HPS? I think those continue to be very strong growth vehicles and is the activity as good for '12 as you've seen in '11? David M. Cote: Yes. We won't go into any specific projects that we're addressing. But I would say, yes, the demand is still very much out there. And even though the refining industry in total only grows 2 or 3% a year, the churn is going on within that especially outside developed market is huge. And we don't see that diminishing at all. When you couple that with the new technologies that our guys have come up with like this Uniflex, that we were talking about earlier, to refine the bottom of the barrel. That's going to be even more useful to refineries that already do exist. So I just -- I think this is going to be a market that stays bullish for a while. And then all the natural gas that everybody is finding, which, as you know, we made some early plays there and I think those have been proven to be pretty smart overall. So yes, those feel very good.

Our final question comes from Jeff Sprague from Vertical Research. Jeffrey T. Sprague - Vertical Research Partners Inc.: So last bullet on the last page of the slide, update on progress of long-term targets already ahead of plan. You've already crossed over the top of the range in Performance Materials. Is there -- if you think about the other 3 segments, are there any that stand out as being kind of noticeably above where you expected them to be if you think about kind of the ratable improvement you need over the next 3 years to get there? David M. Cote: We think we're pretty much on track as a company and with those -- the other 3 businesses. So Performance Materials, you're right, it did manage to get there very early. But they also had some pricing uniqueness that they were able to get last year that we're not confident is going to be able to continue on to the future. And the other businesses are going to have the kind of basic volume of the business is going to have to make that happen. So all in all, we feel we're pretty much on track. Jeffrey T. Sprague - Vertical Research Partners Inc.: And then just on the project work, it does look like the Process business is kind of back to some of its old historic strength of long ago. But you also remarked on competitive projects, and I just wonder how you feel actually about the organization's project management and making sure what your booking in the backlog is actually as profitable as you think and what's -- kind of what's going on in the pricing environment on large projects? David M. Cote: Well, I'm pretty confident in our ability to, first of all, forecast what the profitability is going to be on a project and then to actually deliver what that's going to be. And I would say, if you went back 10 years ago, that was not a strength of ours and we did get surprised. That's one of the things that we had to fix. I feel pretty confident now. When you take a look at the big projects that we do, they pretty much come out where we think they're going to. So I'm very much okay with that. And yes, things can get more competitive. But it just means you need to decide to walk away sometimes, which we may do. In other times, you figure out how to be more competitive. So I feel pretty good, Jeff, about our ability to do that now. Jeffrey T. Sprague - Vertical Research Partners Inc.: And then just finally, on capital allocation. Obviously, you got a be mindful of pension and maybe NARCO, but what should we kind of expect for the balance over the course of the year? Is there a bolt-on pipeline or might you be in the market, picking up some stock along the way? David M. Cote: Well, I'd say our answer is going to be boringly consistent with what we've said for the last 10 years, and that's that we'll be opportunistic about it. We want to pay a good dividend. We always have a robust pipeline of opportunities, so that you never know when one is going to come up or not. And we still think our stock is attractively priced. So we'll, as we go through the course of the year, we'll decide what the best way is to deploy that capital. Like I said, it's very boringly consistent, Jeff, which I hope becomes a strength of ours in your eyes.

All right. Thank you for your participation today. I do want to turn the call back over to Dave Cote for any final comments. But as usual, I will be available throughout the day for your questions. Dave? David M. Cote: Thanks. Well, we're pleased with our performance last year and we're encouraged by our ability to outperform again in 2012. Having great positions in good industries, the focus on One Honeywell and the continued evolution in our 5 initiatives makes us a better company every year. That continuity of purpose and strategy allows us to outperform in any economic conditions and puts us in a position where we can say, as good as it's been, the best is yet to come. Thanks.

Ladies and gentlemen, that does conclude today's conference. You may all disconnect, and have a wonderful day.