And you have — you could have the owner in Korea, you could have the engineer in Seattle, Washington and the project is in Texas. And we’re able to triage that and work with the customer and show the value that we can provide. So we’re super excited about a lot of the mega projects that are still in the pipeline.
Andrew Kaplowitz: And then Chris, could you give more color into the organic leverage you’ve been delivering. Organic leverage in the mid-30% range is obviously a good result for Trane. We know you’re guiding to 30% for Q4 and 25%-plus long term. But maybe you could talk about whether you have an extended period of productivity projects along with good price versus costs that could help your margin performance well into ’24, given I think it was more difficult to engage these projects during the pandemic?
Christopher Kuehn: Yes, Andy, it’s a great question. And I would say we go into every year looking at incrementals in the 25% or better category, right? And we’ll dial that in as we get a little closer to 2024. But we continue to see this dovetail of the contributions from growth price normalizing, with the gross productivity getting better as we work through the quarter this year — the quarters this year. The supply chain has continued to improve. With that, the volume growth has continued to grow each and every quarter. We delivered around 5 points of volume growth here in the third quarter. And with that, the inefficiencies, as you said, it was hard to get that productivity the last couple of years. The inefficiencies have gotten less.
So there’s a lot of room to go here. We’re starting to see some of the benefits of that in 2023, but this will be a continued opportunity for us as we go into 2024 really and beyond. We’re really getting back to the DNA of the company, right? The ability for us to drive the lean culture and look at cost takeout and ultimately lean through with automation in our factories, these are all investments we’re making this year. And we’re able to pivot the workforce to focus on that versus the supply chain challenges over the last few years.
David Regnery: Yes, Andy, I had the opportunity to visit several of our locations during the quarter. It was just such a great feeling to feel the flow that’s happening in the operations today versus where we were a year ago, where we were looking at the yard full of product that had to go back on the line to be reworked. So that’s all helping with the productivity. So we’re really starting to hit our stride here in our operations, which is a great job by the team because they’ve had some tough times they’re working through the supply chain. But I’m glad to say that they’re operating extremely well right now.
Operator: Your next question is from Gautam Khanna of TD Cowen.
Gautam Khanna: Great quarter. Just wanted to get your sense on, you mentioned the transport refrigeration, you opened the order books in October. Any early read on how demand looks and how far out you’re booking into 2024 right now?
David Regnery: Yes. I mean, like I said, we did open the order book in October. As expected, Gautam, I mean, the Thermo King business has performed very well for us over a number of years. And with our current guide, we’re forecasting that we’re going to outperform the markets again in 2023. So it’s a great business. We have a lot of innovation that we’re pumping through that business right now as we electrify our portfolio of products. Great team, and it’s — I’m pretty excited about where we are with Thermo King. I know that ACT is forecasting a bit of a dip in 2024. We’re validating that. There’s some things that don’t align up with our internal forecast, but we’ll validate that in the short term and update everyone as we report out our fourth quarter earnings.
Gautam Khanna: Okay. Can you comment on how far out you guys are actually booking into ’24 at this point or…
David Regnery: It’s always within a 12-month period. So these orders don’t get booked way out. But in fact, in the prior years, we would only open up the book for 6-month increments. So just because we wanted to make sure we are pricing right when we were in a higher inflation market.
Christopher Kuehn: Yes. I think for Americas, it [indiscernible] through middle of ’24, Gautam. And I think for Europe, it may be open for a bit longer than that. But to Dave’s point, the order book would really only be for 2024 at this point.
Gautam Khanna: And just 1 quick follow-up on resi. Any evidence of people deferring replacement and instead repairing units? Are you seeing any uptick in those products?
David Regnery: Yes. I was with the resi team recently. We’re not seeing that, no. So I think the short answer is no, we haven’t seen that yet.
Operator: Your next question is from Chris Snyder of UBS.
Christopher Snyder: I wanted to ask on commercial HVAC. Orders this quarter clearly bifurcated from the broader industry. And the company has always prided itself on driving innovation. So I guess my question is the world moving to emissions targets and just higher electricity prices globally, are you seeing customers more so appreciate the innovation and efficiency that you are providing to them? And do you think that could result in a higher rate of share gains moving forward?
David Regnery: Chris, hope all is well with you. Great question. Look, we always lead with innovation. I think our customers always appreciate higher efficient products, greener products using low-GWP refrigerants, so we pride ourselves on that. Look, we do a lot of innovation around verticals, and I don’t talk a lot about that for obvious reasons. But if you think of data centers, we had a very strong quarter in data centers. A lot of that has to do with the innovation that we’re providing working with the customer. So these are unique solutions for them and then they scale it through all the data centers that they’re building. So we’ll continue to do that in the future. We’ll continue to sell our energy efficiency to our customers. And we’ll continue to make sure that we have a connected solutions so that our service business can continue to expand in the future.
