Financial Data and Key Metrics Changes - The fourth quarter results showed organic growth of 5%, the highest level of the year, with revenue performance driven by strong trends in secular growth markets and improving retail conditions [3] - Adjusted EPS for the quarter was $9.61, up 14%, and 16% for the full year, indicating solid operational results [4] - Free cash flow in the fourth quarter was $487 million, or 23% of revenue, with full-year free cash flow at 14% of revenue, an increase of nearly $200 million over the prior year [10] Business Line Data and Key Metrics Changes - Engineered Products revenue declined due to lower volumes in vehicle services, but margins improved over 200 basis points due to cost management and product mix [5] - Clean Energy & Fueling saw a 4% organic growth driven by strong shipments and new orders, although margins were slightly down due to lower vehicle wash solutions [6] - Climate and Sustainability Technologies posted a 9% organic growth, with margins up 250 basis points, indicating strong demand for CO2 refrigeration systems [8] Market Data and Key Metrics Changes - Bookings were up 10% in the fourth quarter, with all five segments showing growth, indicating broad-based demand strength for 2026 [11] - The North American retail fueling market is expected to enter a new CapEx cycle, with strong demand for clean energy components [14] - Demand for brazed plate heat exchangers in North America is robust, particularly for liquid cooling applications in data centers [16] Company Strategy and Development Direction - The company is focused on organic investment as the highest priority for capital spending, with a significant increase in capital spending in 2025 [12] - The acquisition strategy remains strong, with $700 million deployed across four strategic acquisitions in high-growth markets [12] - The company aims for double-digit EPS growth in 2026, supported by solid demand trends and a strong order book [5][18] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook for 2026, with no individual end market presenting a material headwind based on current visibility [4] - The company anticipates solid volume leverage on incremental revenue and carryover benefits from prior restructuring efforts [18] - Management remains optimistic about the overall economic environment, with strong bookings momentum and good production performance expected [25] Other Important Information - The company initiated a $500 million accelerated share repurchase program, highlighting its disciplined approach to capital deployment [4] - The balance sheet remains flexible, allowing the company to respond dynamically to market conditions [5] Q&A Session Summary Question: What are the expectations for price cost management this year? - Management expects to manage raw material costs with a price increase embedded in the guidance of 1.5-2% [22][24] Question: Has anything changed in the economic outlook recently? - Management has not seen any changes that would alter their positive view on the economy and business [25] Question: What is the expected operating leverage for DCEF and DCST segments? - Management indicated that DCEF will benefit from prior restructuring, while DCST saw a margin jump in Q4 and expects further improvements [30] Question: What is the growth outlook for 2026? - Management is guiding for 4% growth, which is considered conservative based on current visibility and backlog [36] Question: How is the retail fueling CapEx cycle developing? - The retail fueling market is experiencing a resurgence in North America, with expectations for accelerating demand [54] Question: What is the outlook for the natural gas power generation side? - The company supplies components for both large and small turbines, with significant follow-on CapEx expected in the back half of 2026 [87] Question: Are there any plans for divestitures? - Currently, the company is comfortable with its portfolio but remains open to considering divestitures if they align with shareholder interests [113]