Good morning and welcome to the CNH First Quarter 2024 Results Conference Call. Please note that today's call is being recorded. At this time, all participants are now in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, please press star one on your telephone keypad. To withdraw your question, press star one a second time. Thank you. I will now turn the call over to Jason Omerza, Vice President of Investor Relations. Please go ahead. Thank you, Brianna. Good morning, everyone, and we apologize for the delay. We'd like to welcome you to the webcast and conference call for CNH Industrial's First Quarter Results for the period ending March 31st, 2024. This call is being broadcast live on our website and is copyrighted by CNH. Any other use for recording or transmission of any portion of this broadcast without the express written consent of CNH is strictly prohibited. Hosting today's call are CNH CEO Scott Wine and CFO Oddone Incisa. They will use the material available for download from the CNH website. Please note that any forward-looking statements that we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor Statement, including in the presentation material. Additional information pertaining to factors that could cause actual results to differ materially is contained in the company's most recent annual report on Form 10-K, as well as other periodic reports and filings with the U.S. Securities and Exchange Commission. The company presentation includes certain non-GAAP financial measures. Additional information, including reconciliations to the most directly comparable U.S. GAAP measures, is included in the presentation material. I will now turn the call over to Scott. Thank you, Jason, and thanks everyone for joining our call. Before we review the quarter, I would like to address my upcoming departure from CNH. First, I want to sincerely thank the team here for delivering three straight years of record sales and profitability, and our notable transformation into a customer-focused, technology-forward culture. I'm proud of the team's accomplishments, especially the acceleration of our tech development, the successful deployment of CBS and strategic sourcing to drive operational efficiencies, and improving our through-cycle margins, which we will surely be a key topic of our discussions today. I have full confidence in our strategy and our ability to achieve it, even with slowing market demand. We were early to get after productivity, our cost reduction targets are achievable, and we are on track to deliver them. Our tech insourcing work is progressing, and we have a line of sight to execute everything we set out to do. I believe in the team's ability to continue to deliver margin expansion while outselling our peers. Simply put, the business is solid. My reasons for leaving are personal and have nothing to do with the ag cycle, our strategy, or CNH's bright future. As of July 1st, Gerrit Marx will rejoin CNH as the new CEO. Gerrit and I have worked closely together when he ran commercial vehicles for CNH, and he has been CEO of Iveco since its spin-off in early 2022. He's a proven leader, he has my full support, and I am confident he will do well here. Now, onto our quarterly results. We said the first quarter would be challenging from a demand perspective, and that is how it played out, especially in South America and Europe. We also noted competitive pricing pressure where dealers are working hard to reduce their inventories. Nonetheless, we maintained much of our pricing and profitability gains, with construction even increasing both their absolute profit level and their margin percentage year-over-year. Cost efficiency remains a priority for us in this environment. We were ahead of the curve on instituting hard but necessary programs, such as our SG&A restructuring, to respond to the realities of operating in a cyclical downturn. We will build on the cost reductions already implemented, and those savings will compound throughout the remainder of the year. We continue to advance our tech stack, expanding our team and integrating solutions from our acquisitions effectively into our business. We announced exciting developments in satellite connectivity and off-board management earlier this week, and we will continue to leverage innovation as a competitive advantage. In line with our expectations, first quarter consolidated revenues were down 10%, and industrial net sales were down 14% as the industry adjusted to even lower demand and to dealer inventory levels. We proactively addressed South America dealer inventory last year and furthered those efforts in the quarter. Industrial EBIT margin was just under 10%, down 180 basis points compared to last year. Despite the lower shipments, decremental margins were in the mid-20s, reflecting the positive price realization and cost reductions. Competitive pricing pressure was the most acute in South America, but the team there is doing a great job managing the situation and keeping our operations profitable. Adjusted EPS was $0.33, down just $0.02 from a year ago. Throughout the quarter and across all regions, we saw decreased demand in the end markets. However, our retail deliveries in the quarter outperformed the overall market. Despite production cuts in the quarter, we did not make our desired reductions in dealer inventories, so we still have work to do. We continue to lean out and simplify our organization. We completed the first phase of our restructuring program in Q1, and further actions, such as combining and rationalizing our commercial back office operations, are on track. We plan to conclude the restructuring program in Q2, but not our focus on cost. Derek Neilson and his agriculture team continue to execute in the quarter, achieving favorable price realization despite lower demand by working with our dealer partners on effective sales programs. Construction gross margins and EBIT margins were both up 150 basis points in the quarter. Although volume and mix were a challenge, particularly in Europe, Stefano Pampalone and his team's focus on quality and cost efficiency continues to support improving profitability. Our financial services business delivered strong results. Their net income grew on larger receivable balances, and despite some increases in delinquencies, we have a very strong credit portfolio. As we look at our strategic priorities, I want to start with some recent developments on the tech side. Our obsessive focus on customer-centric development has shown us the importance of being the easiest-to-use OEM. This week, we introduced FieldOps, our brand-new web and mobile digital app. FieldOps will lead the industry in usability and intuitive design. Everything farmers need to run their operations will be at their fingertips with a dramatically improved look and feel. The FieldOps interface simplifies farm management and makes data accessible from anywhere, all with fewer clicks to accomplish every task. It also streamlines our internal workflows, as our universal approach to tech development means there is one single app for all customers. The FieldOps web and mobile apps launch in June, and the overall customer experience is already garnering rave reviews from our beta testers. This week, we also announced our collaboration with Intelsat, which brings multi-orbit satellite connectivity to more of our customers' machines so they can access our full suite of precision offerings from remote locations. We have been judicious in our approach to connecting soil to space. We needed a partner with technology that would work in farms' severe operating environments. Intelsat's antennas have been proven in critical applications and inhospitable conditions, so we can bring them to market quickly with confidence they will perform. We also serve customers in areas where low-orbit satellites do not consistently reach. Intelsat's multi-orbit constellation of satellites provides greater coverage with a stronger connection. Becoming a more productive company is a key part of our strategy, and successfully executing our cost reduction program plays an important role. We continue to drive production cost savings through procurement, logistics, and manufacturing efficiencies. Some of those savings are held on the balance sheet at the quarter end as we build inventory for the coming season, but we are confident in our full-year targets. The absolute dollar impact of these savings is somewhat contingent upon production levels, which we will adjust as industry demand necessitates. As mentioned earlier, the first phase of our restructuring program has been implemented, and we have imposed strict discipline on our discretionary spending. We are already working on additional projects, such as expanding support operations in low-cost countries. I will now turn the call over to Oddone to take us through the financial results. Thank you, Scott, and good morning and good afternoon to everyone on the call. First quarter, industrial net sales were down 14% year-over-year to $4.1 billion. This decline was mainly due to lower ag volumes in all regions, partially offset by net price realization. Adjusted net income decreased by 11%, with adjusted EPS down $0.02 to $0.33. Higher net income from financial services, lower tax rate, some discrete tax adjustments, and lower share count all contributed to the relative strength of the earnings per share. Industrial free cash flow was an outflow of $1.2 billion. An outflow is normal in Q1 as we build finished good inventory in support of the Q2 selling season. This year, we have additional working capital impacts from lower production levels. In agriculture, the net sales decrease of 14% in the quarter was driven by lower volumes and the year-over-year impact of dealer stocking. Dealer inventories grew significantly in the first quarter of 2023 as our supply chain was dramatically improving. While in 2024, dealer inventories slightly decreased at a global level. Lower sales volumes were partially offset by favorable price realization despite some fierce competitive pricing pressure, especially in South America. Gross margin for ag was 23.8%, down from 26.2% in Q1 2023, but up sequentially from Q4. The main driver for the margin compression is the lower volumes, with production hours 22% lower compared to the first quarter of 2023, which impacted fixed cost absorption. We were able to reduce product costs from lean manufacturing efforts despite continued labor inflation. As Scott mentioned, not all of the product cost actions implemented in Q1 were realized in the quarter's P&L. Units held in company inventory keep those savings on the balance sheet until they are sold to dealers. The SG&A savings of $33 million reflect our restructuring program and help mitigate the decremental margins. Adjusted EBIT margin was 12.5%, 200 basis points lower than last year. In construction, net sales for the first quarter were down about 11%, mostly due to lower volumes with net pricing about flat. Gross margin increased by 150 basis points to 17.4% as improved product costs more than offset the volume impact. Adjusted EBIT also benefits from the lower SG&A expenses ending the quarter at a 6.7% EBIT margin, well above last year's levels. Net income of financial services was $118 million, a $40 million increase compared to Q1 2023. The notable improvement was mostly driven by solid margin gains, as the adjustment to higher interest rates is now largely completed on the receivable portfolio. We also had improved volumes across regions and a favorable effective tax rate. Retail originations in the quarter were $2.5 billion, up $300 million compared to the same period of 2023 as we continue capturing a higher percentage of our end customers' equipment financing needs. The managed portfolio at the end of the quarter was nearly $29 billion, up over $4 billion compared to the prior year. You would note that delinquencies ticked up in the quarter, which is normal when markets contract. Higher delinquencies are in pockets of our portfolio and mainly in South America, where we are seeing more frequent late payments but no increase in credit losses so far. The delinquency rates we are seeing now are at the same or lower level than in previous downturns. Our credit reserves are appropriately set to protect our future profitability. Finally, just a quick note on our capital allocation priorities and specifically on shareholder returns. We repurchased over $580 million worth of stock in the first quarter as we completed our $1 billion extraordinary buyback program and move on to the new $500 million program in March. We continue to buy shares now, and we pay our annual dividend of about $600 million in the coming weeks. CNH is a cash-generating business. And of any M&A needs, it is our goal to return back to our shareholders nearly 100% of industrial free cash flow through dividends and share buybacks. And with that, I will now turn it back to Scott and come back for a Q&A. All right. Thank you, Oddone. Reviewing the full-year outlook for agriculture, our forecast for tractors is largely in line with previous projections, albeit moving more toward the lower ends of our range. We have reduced our expectations for combine industry volumes in both EMEA and South America. In aggregate for our key markets, we now estimate that agriculture industry retail sales will be down about 15%, putting us at the low end of our previous guidance. Consequently, we are lowering our 2024 agriculture net sales forecast to decrease by 11%-15% from 2023 versus our previous projection of down 8%-12%. This reduction is related only to lower industry demand and our intention to keep channel inventory in check. With this lower volume, we will decrease our EBIT margin forecast by 50 basis points to between 13.5%-14.5%. In construction, we have slightly improved our industry forecast for heavy products in North America but marginally lowered the projection for light equipment in APAC. In the aggregate, we still expect industry volumes to be down about 10%. We are reaffirming our net sales and EBIT margin forecast, with sales down 7%-11% and EBIT margins flat year-over-year at 5%-6%. Combining the agriculture and construction net sales forecast, industrial net sales are expected to be down 10%-14% versus last year, with industrial free cash flow now estimated at $1.1 billion-$1.3 billion. We've also trimmed the EPS projection by $0.05 to $1.45-$1.55. What I would like you to take away from our call today is that we are on track in executing our strategy, which will see us through the downturn while strengthening our position for the inevitable upswing. We have built a leaner and more resilient company that puts our customers at the center of everything we do. We have a deeply ingrained focus on margin and market share improvement as we continue on the path of marrying great iron with great tech. We've simplified our capital market profile with a single listing in New York, and we have an experienced team who, under Gerrit's leadership, will take CNH to even greater heights. Gerrit and I have worked together since I joined CNH, and he is not only a strong operator and a highly respected colleague, he's a good friend whom I have tremendous confidence in. I am grateful for my time at CNH and would like to sincerely thank our hardworking team. I will remain a significant shareholder and a cheerleader. Thank you all. Brianna, that concludes our prepared remarks. If you could open the line for questions. Thank you. We will now begin the question and answer session of the call. If you would like to ask a question, please press star one on your telephone keypad to join the queue. To withdraw your question, press star one a second time. We kindly ask that you please limit yourself to one question and one follow-up to allow time for as many participants as possible. Thank you. Your first question comes from Mig Dobre with Baird. Please go ahead. Thank you. Good morning, everyone. Well, Scott, it's a shame to see you go, and I understand your comments about the circumstances around your departure, but I do want to ask, timing-wise, you were stepping down here before we're really kind of seeing the fruits of your labor. You and the team over the past couple of years have done a lot to transform the business. So I guess two questions around that. As you're sort of looking at the execution or operating momentum, how do you sort of frame that relative to your expectations when you first sort of designed the strategy and the plan? And the second thing is, how is Gerrit coming into all of this, right? I mean, how familiar is he with the strategy that you put in place? Is it fair for shareholders to expect Gerrit to maybe take the company in a different direction than the course that it's in? What has your communication with him been so far? Yeah. Well, I mean, first of all, as I said in the prepared remarks, I'm just really thankful for the impressive work the team did delivering margin expansion, changing into a customer, all of the stuff that we've accomplished. Part of the reason that I'm comfortable leaving is that the team has really, and I said it, I mean, it's an ingrained culture of focusing on customers and delivering margins, and that doesn't change. Part of, I mean, again, I have a tremendous vested interest in the ongoing success of this company. And Gerrit and I have had ongoing dialogue since this was announced. He didn't run the ag businesses, but he watched in all of the operating reviews. He's intimately familiar with how we do this. Obviously, he's going to put his spin on things, but you can't ultimately, if you think about you step way back, what our strategy is, it's about market share gains and margin expansion. And I don't care who's running the company. Those are the two value creation levers that we're going to have. Now, how we get to those things could change. But if you look at the construction results that Stefano's team delivered, you look at what Derek's done over the last three years, there is a lot of momentum that's going to carry forward whether I'm here or not. Understood. Then my follow-up, maybe a question on dealer inventories. I'd love to get your perspective as to what you're seeing in a channel. And I'd appreciate it if you can comment by geography and also by segment. I'm curious what you're seeing in construction as well as ag. Thank you. All right. Well, I'll start with construction. Stefano and his team continue to do well. That was a different scenario because we had throughout last year, we got ahead of ourselves a little bit on agriculture shipments, but construction really never had that. And especially the strong retail performance they had in the fourth quarter allowed us to be in a much better position overall on construction. So we'll essentially shift to demand there throughout the year. On the ag side, again, we had a good market share performance in the first quarter. But despite somewhat significant production cuts, we still did not decrease dealer inventory at the levels we wanted to. So we've got work to do. We'll get most of that done in the second quarter. Combines, or we talked about that in the prepared remarks. Combines are where we're seeing the most pressure. There's used inventory building up. Demand is down quite considerably, so we'll adjust that as we go forward. But interestingly, the North American tractor market's still pretty strong, but we're overall committed to getting the biggest chunk of dealer inventory done in Q2. Still probably some will carry into Q3, but I think we're in pretty good shape there. All right. Good luck, Scott. Thank you. Your next question comes from Jamie Cook with Truist. Please go ahead. Hi. Good morning as well, Scott. Sorry to see you going because you've done a great job with the company. So I guess my first question just on production cuts. Scott, I know you said you have more to do in the second quarter. Can you talk to how much you think you're going to underproduce retail demand, and do you still think that you will be in a position where, as we exit 2024, that we should be able to produce in line with retail demand given just your view of the market today? And then my second question, given the stock underperformance based on concerns about the magnitude of the downturn, management changes that sort of weren't expected, I'm sort of wondering how you guys are thinking about utilizing your balance sheet? I know you've done a lot in terms of share repurchase. A lot of that was associated with the delisting. But just to give the market confidence, I guess, that there still is a cost and market share story there. So I'll wrap up with those two. Thank you. Thanks, Jamie. No, we feel really good about—I mean, the production adjustments. Derek and his team, because it's mostly an ag phenomenon, but have really looked at the ongoing production for the next three quarters. And I mean, unless there is—I mean, obviously, we can't predict exactly what the market's going to do. But given the ranges that we are expecting, we will be shipping to demand not only in 2025 but later in 2024. So that I'm pretty confident in. Oddone, you want to talk about the share buybacks and where we stand? Yeah. So I had in my prepared remarks that we completed the $1 billion program. We started a new $500 million program in March, and we are buying on that program. We're going to pay $600 million in dividends this year. So if you add up, it's a considerable amount of money that is going out to shareholders this year. And if we consider the behavior we're having now on share buyback and our dividends, and we don't expect to change our dividend policies, basically, almost 100% of our industrial free cash flow will be devolved back to shareholders if we exclude any M&A that we may have, consider that we don't have any large M&A inside right now. Okay. Thank you very much. Thanks, Jamie. Your next question comes from Nicole DeBlase with Deutsche Bank. Please go ahead. Yeah. Thanks. Good morning, guys. And Scott, thanks for all the help, and good luck in the future. I guess maybe starting with picking up where Jamie just left off on production and ag, is the expectation that the worst year-on-year production decline occurs in the second quarter, and then you guys kind of get back to more modest declines in 3Q, just maybe putting a finer point on the quarterly cadence in the ag segment? Yeah. That's true. And it's also true because of the comps year-over-year. The comps get a lot easier for us in the second half, but also, we're pretty confident. And I mean, the production cuts are one half of it. The other part is what we do driving retail. And I'm really confident in how the team is working closely with our dealer partners to make sure that we accelerate and capture every one of those where we can. Since I mentioned it, I'll talk about the fact that we're not going to chase. And we're going to be disciplined. And when some of our competitors will really discount things to get sales, and we're not going to do that. And I think you see the price realization that we're talking to. We're going to drive for market share gains. We're going to drive for retail efficacy, but we are going to be very disciplined on managing price through that. Got it. Thanks, Scott. That's helpful. Then just maybe one on construction. The margin performance was really impressive there this quarter, but you guys have still maintained the guidance for 5%-6% for the full year. Implies a step down from first quarter results. I guess what's driving that? Well, first of all, you can't not recognize the significant improvement in margins that Stefano and his team have drawn. But the reason we didn't raise it most or a good bit of the beat in the first quarter was related to ongoing strike impact that we had in the first quarter of last year that doesn't repeat throughout the year. Got it. Thanks, Scott. I'll pass it on. Your next question comes from David Raso with Evercore. Please go ahead. Hi. Thank you. I'm just trying to square up in ag. The sales guide is down 13%, but your end market outlook is down 15%. Obviously, the parts business itself doesn't move around as much as unit forecasts for the industry, the complete goods. And the fourth quarter of last year, you did underproduce retail. So I appreciate those two offsetting factors. But when you were thinking about the rest of the year, I don't think pricing is that high. I'm just trying to square up. How much are we really underproducing if the sales guide isn't down as much as your industry guide is my first question? Just trying to make sure that we're level setting. Where you expect inventory to end the year? The math isn't working for me as easily as I would have liked. Well, definitely, there's some mix in there. There's some market share consideration, and we expect to outperform the market this year. If you look at how we behave compared to the market last year in some parts of the world, and I will look at South America first, there we have space to recover into the production or sales-to-market view. I mean, it's a question of stocking and destocking the dealers. We had stocked our dealers in the first quarter of last year. Our dealers have kept their stocks basically flat this year or slightly down this quarter, sorry. And we expect to have dealer inventories at the end of the year lower from where they were at the end of last year. But most of the legwork has been done there. Don't forget o ur penetration of technology sales. Yeah. Our penetration of technology sales is improving as well throughout the year. Yeah. I mean, it feels like there's at least enough market share there to at least have to put that into the equation. Because when you look at the mix, it's actually high-ticket items that are down more than the low-ticket items, right? Brazil, really, combines around the world as well as even within North America. It's the larger tractors that are down. That's why. But obviously, there's a market share component there. Lastly, on the margins for the rest of the year in ag, and if you square that up with what you're trying to insinuate on Slide 9 of how much savings are left for the year and I know that covers both segments. But the framework still seems you seem still pretty comfortable with rough numbers, decrementals of 40%, but then you add the cost savings, and we kind of get back to around that 20%. That doesn't seem to have changed. So I guess the question is on price-cost, did anything change in your thoughts in the guide on pricing versus before and price-cost in general? The math suggests not. I'm just trying to square up the market share, but are we not changing the price look? So I'm just trying to square all this up. Thank you. Yeah. No, it hasn't. It hasn't. I mean, we still have the same consideration in pricing that we had before. So talking agriculture, right? Very modest price increase, but some price increase and continue reduction in our cost of production and then positive impact of our SG&A actions. All right. That's helpful. Thank you so much. Your next question comes from Mike Shlisky with D.A. Davidson. Please go ahead. Yes. Hi. Good morning. And Scott, I'll add my best wishes to you as well. Wanted to talk quickly on pricing in ag. You mentioned positive pricing in the quarter. And I know that's wholesale, not necessarily retail, where there was some discounting happening around the world from your competitors. But would you say that you're just kind of broadly speaking, when you price to farmers, you're not looking to kind of play that game right now? And is that implying that maybe you're trying to keep things open for some growth in 2025? I mean, obviously, we're going to do everything we can to position ourselves for growth in the years ahead. But right now, it's just being disciplined on price realization. And like I've said before, this is a we were mostly covering cost before. But Derek and his team have really done a nice job, and it's a region-by-region execution. We don't have a universal policy. And I think what we're striving to do is get price where we can, get price where it makes sense, but get market share and retail acceleration to the extent we can. And I think the team's done a really good job region by region executing that strategy. And we're comfortable that as we exit the year and again, most proud of what Rafa and the team have done down in South America, just really having us in very, very good dealer inventory positions. So as soon as that market turns, we'll be able to take full advantage of what happens. So I think it's reasonable to assume that what we did in the first quarter with pricing will maintain throughout the year. Okay. Great. And then to follow up on how you grow your tech stack, I guess I'm curious, with the Intelsat agreement, are there any one-time costs that will take place this year or next to get either the software or the hardware upgraded on current systems and any future systems that get sold to the farmers here? Or is it kind of baked into each individual sale or some other way to account for kind of layering in Intelsat capabilities here? No. I mean, part of the reason that we went with Intelsat is because of the proven ruggedness of what they do, which lowers the amount of validation work. I mean, I'm reluctant to ever call anything plug-and-play anymore, but it's about as close as we can get. And Marc Kermisch and his team have really done a good job evaluating the opportunities and ensuring that this is something that we can read. And the first market to benefit from this will be Brazil, and that'll happen later in the year. Okay. Super. Thank you so much. Your next question comes from Kristen Owen with Oppenheimer. Please go ahead. Great. Thank you so much for taking the question. And Scott, also, best wishes to you. I wanted to ask about the market share comments, this being obviously one of the two biggest drivers that you have going forward. You highlighted the outperformance relative to industry in the first quarter. Just wondering, how much of the market share gains that you're seeing are sort of this recovery given last year, you mentioned you're still comping some of the strike implications. What you're regaining there and how well-positioned you are from a market share perspective. Do you anticipate that that will be incremental market share versus just making up what you lost? And then I'll have a follow-up question on the tech stack. Well, we made up throughout the year last year. I was really proud of the work the team in Racine did to just accelerate our production throughout the year. And I think we're there, again, about matching demand. It's a street fight out there. And I tell you that a lot of what we've done is just a customer-centric, customer-focused. And I think you're seeing that play out with our dealers as we're able to win more of those battles throughout the year. But I mean, don't expect big I mean, it is a battle. And I'm not suggesting it's easy, but I think what you saw in the first quarter is the team's ability to execute that. And what we've guided is the expectation that that will continue. But it really is the product portfolio is quite strong right now. As you've seen with some of the announcements of late, it's just getting better. We feel like technology is getting better, the product portfolio is getting better, the team's execution getting better. As you do all of that, you have to expect the market share gets better. Right. So then follow up on the tech stack. Sort of talked a little bit about the Intelsat being as close to plug-and-play as it can get. I mean, is there an incremental modem? Or maybe help us understand how you actually go about implementing that and how Intelsat fits in with the integration of Raven and Hemisphere GNSS, sort of what that unlocks for you on a go-forward basis. Thank you so much. Yeah. It is an antenna that goes on that we have to do. And that's the ruggedness we talked about. We've done, I mean, for a long time, we've figured out how to integrate different cell phone signals and everything into our operating system. So Marc and his team are really comfortable about their ability to integrate this quite seamlessly into both AFS Connect and PLM Connect going forward. Your next question comes from Tami Zakaria with JP Morgan. Please go ahead. Hi. Good morning. Thank you so much. Scott, congrats on completing a very successful time leading CNH. I'll miss you, but best of luck for the next chapter. Thank you. So my first question is, can you comment by geography what you expect total sales decline in the ag segment to look like for this year? You're guiding to down 11%-15% ag sales. Can you give me some color? How should we think about North America versus South America versus Europe for the year? Well, South America is where we are seeing the highest declines in percentage terms. Europe, as we commented, we also see industry down and declines, in particular in the combine market. North America, in percentage terms, declines are lower. But of course, the market is larger. So I would say the clients are across the board, right? They hurt most, or they are more intense in South America right now. And they may recover at the end of the year, but that's what we have. But I would say in every region, we have declines. Got it. Okay. That's very helpful. And then on the construction business, I think the first-quarter margin was quite impressive. Can you elaborate what really drove that? And also, since we are, I mean, the guide would imply construction segment sales improving sequentially from here on. So I guess, why keep the full-year guide unchanged? Would margins not see improvement as well as total sales move up? Yeah. Well, again, we had some benefit in the first quarter compared to the year before that didn't have the Burlington cost in there. So that's part of the reason we're not guiding it. We do expect that pricing pressure will be greater in construction than it is in ag. So we're going to have to fight that battle to the extent we can. But you cannot talk about construction and not look at the portfolio expansion is helping drive both sales and margin. The relocation of production to low-cost regions is helping drive it. And Stefano and his team have done a really good job of improving quality. And all of those things contribute to margin. But we don't expect everything. And again, as we go throughout the year, the compare gets more difficult. So we feel like it's prudent right now. Again, you see it in our peers in construction. It's been a robust market, but it's not going to get more robust throughout the year. If anything, it's going to get less. And we're just prepared for that. Got it. That's fair. Okay. Thank you. Your next question comes from Angel Castillo with Morgan Stanley. Please go ahead. Hi. Thanks for taking my question. I just wanted to maybe stick to the cost kind of conversation a little bit more. You talked about earlier just kind of remaining cost-focused even beyond the programs that you've kind of laid out. So given you've already done so much to improve operations, you mentioned, again, some of the changes you made in your cost structure. What kind of levers do you foresee are left to continue to pull beyond this to continue to improve that that aren't kind of contemplated already in your cost initiative? Yeah. Well, first of all, we talked about kind of putting a bow on this overall SG&A restructuring. At some point, you got to stop having anxiety amongst the team. And I think we're going to close that out in the second quarter. So the team can move on to different things when I leave that that restructuring will have been effective and will be over with. But what doesn't stop is the work with CBS and our lean initiatives in the plant. That just gets better and better every week, every month, every quarter, and every year. And that is building momentum throughout the organization. Our strategic sourcing program, I mean, I'm so impressed with the work the team's done. But it is a slow buildup as we re-source things where we need to. We implement new suppliers, integrate them into the machine. So that is one that builds over time. And then what Oddone has been leading, it's almost a zero-based budgeting exercise. It's just a fundamental focus on cost in everything we do. And I think those three levers will put us in a position that we can continue to drive margin expansion well into the future. That's very helpful. Thank you. And sorry to keep going back to this, but I'm still a little bit confused as to the construction outlook. So you talked about I get kind of the Burlington impact and some of the one-time items on the margin side. But I think you talked about kind of an industry unit performance, at least in North America, for heavy construction equipment that is improved to now kind of -5% to flat. But how do we square that with your comment that pricing in this industry is probably tougher, just given that it seems like the industry demand seems to be improving? So maybe any kind of help you can kind of give to kind of bridge that as well as any incremental color on retail sales and what you're seeing and maybe what's driving some of that heavy improvement for the year. Well, I will say two things. One, the residential outlook in North America is not clear at this point. And with the latest news on the interest rates and all the rest, we're sort of prudent there. Secondly, our ability to maintain pricing, as Scott mentioned before, in construction is very much subject to the fluctuations of the overall market. Construction is a very competitive market. Many players there, many players coming from overseas as well, not that much in North America, but in the other regions. We have competition from the Far East, which is quite intense and on pricing. And so our prudence in construction is on the pricing line, I would say. That's very helpful. Thank you. Scott, wish you all the best. Thank you. Your final question comes from Michael Feniger with Bank of America. Please go ahead. Yep. Hey, everyone. Thanks for adding me. Just, Scott, you were more cautious on the ag cycle. Getting CNH in a better position for the downturn kind of became clear. Just where we stand today, $4.50 corn, rates potentially staying higher for longer. If there's no significant change within some of these variables, is it tough to grow on that in 2025? I'm just curious what you feel like, at least for your key customer, the puts and takes there that we should be kind of keeping our eye on as you're trying to position the company for 2025, leaving it in a good place. Thank you. Well, I've tried obviously coming into this business, there was a lot to learn. But if I learned anything, it's not to comment or opine on the ag cycle. So you're not going to trap me into saying something about 2025 on this call. Fair enough, Scott. And then just one of the we talked a lot about margins, and there's some commentary on market share. I'm just curious, beyond 2024, just what are the regions and product groups where you see the best line of sight to gain that share? Is it new product introductions, what you guys are doing on Raven? Do you feel like that ball's already going? Or is there some more levers that need to be pulled to really drive market share higher than maybe it was when you started and came to the company a few years ago? Thank you. The term we like to use is great iron and great tech. I mean, when I started, we got regularly people commented on, "Man, you guys have great iron. We just wish your tech could get there." And part of what helps our market share in the future, and you saw it, I mean, FieldOps, this offboard management system is really, really good. As we continue to develop NGMA or our system for AFS Connect and PLM Connect to give our customers better solutions, that all plays into it. But ultimately, it comes down to, I think, a couple of levers. It's our close working relationship with our dealers and our focus on delivering for our customers. The CR11, the new Class 10, I mean, it's unbelievable what that does. We're going to have 25-ish, probably a little bit more because there's so much demand for it with those machines operating in the field. And the incremental productivity that that brings, obviously, I think, is going to drive tremendous demand going forward. What we've done with the tractor portfolio, especially the European tractors, and then soon upgrading the North American tractor platforms is all really good. And Derek's been investing a lot of money in some products, what I'll call white space, that we could or should be in. So I think all of those bode well for the ability to gain market share in the future. There are no further questions at this time. This will conclude today's conference call. Thank you all for your participation. 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