Good morning, and welcome to the CNH second quarter results conference call. At this time, all participants are 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, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the call over to Jason Omerza, Vice President of Investor Relations. Thank you, Brianna, and good morning, everyone. We'd like to welcome you to the webcast and conference call for CNH Industrial's second quarter results for the period ending June 30, 2024. This call is being broadcast live on our website and is copyrighted by CNH. Any other use, recording, or transmission of any portion of this broadcast without the express written consent of CNH is strictly prohibited. Hosting today's call are our new CEO, Gerrit Marx, and our 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 included 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 financial measures, is included in the presentation material. I will now turn the call over to Gerrit. Thank you, Jason, and thanks to everyone for joining our call today. Before I begin with the earnings results, I want to say that I'm excited and energized to be back at CNH after 2.5 years at the helm of CNH's spun-off on-highway business. I want to thank everyone for joining this call and look forward to working with this great team around the world. My first 30 days have been spent getting myself reacquainted with CNH. While I was CEO at Iveco Group, CNH was my single largest customer of engines, and we enjoyed a global partnership with financial services in Europe and Latin America. As such, I always remained up to speed on what was happening in the agriculture and construction industries. So in a way, I don't feel like I ever really left CNH, and the welcome I have received has been truly moving. But as I have gone, I've been going around the world, touring our manufacturing plants and R&D centers, meeting with our employees and visiting dealers and farmers, I've been really impressed and recharged with the spirit and dedication of this collective team of practitioners to advance the noble work of farmers and builders. I'm humbled and privileged to have this opportunity to lead this great company and to pick up and further refine the delivery of an ambitious plan from Scott Wine, for whom I wish all the best in his future endeavors. I'll come back to some of my near-term priorities at the end. But first, let's look at the second quarter results. The agriculture industry is going through a down cycle, and Scott and the leadership team had addressed this well in advance with decisive actions on structural costs, production cadence, and dedicated efforts such as our strategic sourcing program. All of this will be obviously continued as we add additional elements to these improvements. I'm also very pleased with the innovative products and technology that our team continues to unveil. These innovations showcase the world-class R&D and technology capabilities that are only found at CNH, and I'm committed to ensuring our business continues to embrace these creative and ingenious spirit. Companies are made of people, and how we play as a team will determine how well we compete and gain in the end markets. Team play is driven by shared values and behaviors, all based on a profound sense of trust and sense of belonging and performance. This will be a primary focus of mine while delivering financial results quarter by quarter. In order to create an even greater business focus and effective execution on key priorities, the board and I agreed to further streamline our governance by designating agriculture as CNH's core business and my primary focus. Our reinvigorated construction business will be managed as a distinct and fairly independent operation for its own agility and optionality to seek opportunities in its industry. We will obviously keep nurturing the synergies with construction, both downstream and upstream, but we need to recognize that agriculture is and will remain our home turf. The second quarter was very challenging, and that is reflected in the financial results. Low industry retail demand, coupled with the need for dealer restocking, resulted in lower production and shipment volumes. Consolidated revenues were down 16%, and industrial net sales were down 19%, while maintaining our pricing discipline. Sales were down in all regions in both agriculture and construction. To counter this on our bottom line, we will remain focused on cost optimization on all levels and retail efficacy throughout the second half of this year. Industrial adjusted EBIT margin was 11.2%, down 206 basis points compared to last year. While the lower sales and production affected revenues and fixed cost absorption, CNH was able to contain the impact on bottom line compared to previous downturns with our production cost and SG&A restructuring actions. Adjusted EPS was $0.38 compared to $0.52 last year. Now, going into a bit more qualitative detail of the quarter. Both the agriculture and construction industries deteriorated during the quarter, with ag retail demand further weakening amid depressed soft commodity prices. We continued our lower production output in an effort to support our dealers as they work through their inventory. Ag production hours were 30% lower than in the second quarter of 2023, with construction also down 20%, and we will continue adjusting our manufacturing output as needed to further reduce our dealer and company inventory levels. We also continue to assist dealers with marketing their used inventory through pool fund access, financing incentives, and technology retrofits. We cannot control the broader market, but we can control how we react and respond to it. The team has worked tirelessly to protect margins, and even in this period of diminishing volumes, we were disciplined on pricing. As a personal champion of continuous improvement and operational excellence, I'm committed to ensuring that we operate with an eye forward, towards efficiency across the company through our structural cost reduction programs. Oddone will give you a more detailed update on these programs a little later. Another one of my big focal points is product and service quality, adding the role of quality and customer advocacy to my top team. And while product quality has always been a priority at CNH, our Q2 results were negatively impacted by higher warranty costs as we expedited repairs in the field for products manufactured at our Racine plant during the recent strike. In total, these warranties weighed on our reported financials by over $40 million in incremental cost in the quarter, and about $70 million for the first half of 2024. Racine today is back to top quality output levels, and we are well-prepared to work diligently through the pipeline of challenges jointly with our network partners. We will heighten our efforts in this area, making quality a mindset throughout the company. During the quarter, our restructuring program proceeded according to plan, and substantially all the remaining actions needed to be taken have been identified. Now, this does not mean that we are concluding our focus on cost and efficiency, but we are starting to see the impact of the changes that were made over the last six months, and this helped to reduce our SG&A costs by over $100 million compared to the first half of 2023. The streamlined leadership structure will help maintain spending discipline and deliver synergies from a simplified and more direct governance. I will now turn the call over to Oddone to take us through the financial results. Thank you, and welcome, Gerrit. Good morning, good afternoon to everyone on the call. Second quarter industrial net sales were down 19% year-over-year to $4.8 billion. This decline was mainly due to lower shipment volumes on lower industry demand, compounded by reduced dealer inventory requirements year-over-year. Adjusted net income was $485 million for the quarter, with an adjusted diluted earnings per share of $0.38, down $0.14 from Q2 2023. Second quarter industrial free cash flow was $140 million, down to $246 million compared to Q2 of last year, as a consequence of the lower sales and lower production levels. Turning to agriculture, net sales decreased 20% in the quarter, with lower volumes in all regions. Although the team continued realizing price, mainly in North America, the lower volumes and lower production levels were the main drivers for the contraction in gross margin, which was down 260 basis points at 24.4%. The continuing improvements from purchasing and from our cost optimization program are shown in the chart in the product cost category, which is $20 million positive, net of the $44 million increase in warranty expenses that Gerrit mentioned before. I'd like to remark here that at a 24.4%, the gross margin we're presenting today is the second highest for Q2 after the record we set last year in a completely different market conditions. SG&A expenses were $35 million lower year-over-year from the execution of our restructuring program, reduces non-labor costs and lower variable compensation. R&D expense was $28 million less than last year, mainly coming from engineering efficiencies as we did not cut any development program. Agriculture-adjusted EBIT margin ended at 13.7, down 310 basis points compared to Q2 of last year. Moving on to construction. Net sales for the second quarter were $890 million, down about 60%, driven by lower volumes in all regions. This decrease was larger than anticipated and lowers our expectation for the second half. Net pricing was essentially flat, with positive pricing in aftermarket parts, offsetting higher incentives to our dealers in support of retail equipment sales. Despite the lower sales volume, our cost reduction program made it possible to improve the gross margin by 50 basis points to 16.5%. SG&A expenses were down $8 million compared to last year, and R&D expense was down $3 million. With $60 million of adjusted EBIT in Q2, adjusted EBIT margin was nearly flat year-over-year at 6.7%. In our financial service business, net income in the second quarter was $91 million, a $3 million decrease compared to 2023. Higher revenues and yields were offset by higher risk costs, driven by increased delinquencies. Most of the growth in the past due payments was in South America from the seasonal concentration of yearly installments due from agriculture customers, compounded by some of the economic and environmental factors out there. We continue to feel confident in the quality of our credit portfolio globally, and delinquency rates are better than in previous industry downturns. We get originations in the quarter were $2.9 billion, up slightly compared to the same period of 2023, and the managed portfolio at the end of the quarter was $28.5 billion. Back to the industrial activities. Our cost reduction programs are continuing to yield results, and we reaffirm our commitment to driving structural cost improvements throughout the company. On the cost of goods sold side, we have saved $128 million year-to-year, year-to-date, to focus efforts on reducing logistics, manufacturing, and material costs. These savings show up in the agriculture and construction EBIT walks in the product cost categories, but they are partially offset by labor cost increases and higher warranty costs we discussed earlier. We are progressing in our strategic sourcing program, and as we implement the wave one, we look forward to meeting many of our current and prospective suppliers as we kick off phase two in September. Year to date, we have saved $105 million of SG&A versus 2023, and we will continue to realize savings in the second half as we implement the final steps of our restructuring program. And we will maintain our spending discipline going forward. Moving to our capital allocation priorities. In June, we issued EUR 750 million under our updated medium-term notes program, and we renewed our core long-term revolving credit facility. This demonstrates CNH's strong credit position, and we want to thank the banks who assisted with these transactions. During the quarter, we repurchased $60 million worth of shares and paid $593 million for our annual dividend. Through the first half of 2024, we have returned a total of $1.2 billion to shareholders in dividends and share buybacks. Despite the lower sales, CNH remains a cash-generating business, and our commitment to return free cash flow to shareholders remains unchanged. Lastly, a point related to our recent transition to single listing to the New York Stock Exchange. Based on the most recent market data, CNH will be a U.S. domestic filer for the purposes of U.S. federal securities laws and exchange requirements as of January 1, 2025. As you know, starting from the third quarter of 2022, we began voluntarily filing for our financial results under the periodic 10-Q and 10-K reporting forms. So this change will not alter the structure of our financial filings. With that, I turn it back to Gerrit. Thank you, Oddone, for running us through the financials. Moving to the agriculture outlook. Given the further weakening of farmer demand, we project full year industry retail levels to be lower than previously forecasted. We have further lowered our projections for end market demand in North America, EMEA, and South America. As a result, we are lowering our 2024 agriculture net sales forecast to a decrease between 15% and 20% versus 2023. This is in response solely to industry demand. Based on our expectations for for lower volume with modestly positive pricing, partially offset by continued cost reductions, we are lowering our EBIT margin guidance by 50 basis points to be between 13% and 14%. Production hours in the second half of 2024 will be down around 25% when compared to the second half of 2023, and that reflects our plans to underproduce retail demand for the remainder of the year. Q3 production slots are almost fully covered by orders in all regions. We are already taking orders for model year 2025 row crop products in North America, but it is still too early to draw any conclusion about 2025 demand. Turning to construction. Sentiment and leading indicators have trended negative during the quarter, and we have seen industry channel inventories start to tick up. This trend, along with expected lower demand through the re-rental channel, has brought us to reevaluate our sales outlook. Therefore, we are lowering our 2024 construction net sales forecast to be down 15%-20% versus 2023. Despite this, we are reaffirming our previous EBIT margin guidance of 5%-6% for the year on the strength of our cost reduction programs, compensating pricing pressures and lower production levels. Production hours in the second half of 2024 are being rebalanced, with significant reductions in North America and Europe. Worldwide production will be down around 20% compared to the second half of 2023, assuming underproduction compared to retail demand for the remainder of the year. Q3 production slots are mostly covered by orders, and order collection is in progress for Q4. Turning to Slide 15. Combining these updates segment forecasts, we now anticipate industrial net sales to be down between 15%-20% compared to last year. Industrial free cash flow is now estimated to be between $700 million and $900 million, reflecting the lower sales and the impact on net working capital of the lower production levels. We now forecast adjusted EPS to be between $1.30 and $1.40.... I will conclude with a few words on my priorities for the next 90 days. While there's a lot going on at CNH right now, we will not take our focus off delivering results in this challenging market environment. Our global leadership team was announced on Monday this week, built on way more than 100 years of combined experience in our industry, and is empowered to carry out faster and more effective delivery of the strategic priorities for profitable long-term growth with a simplified matrix structure and clearer accountabilities. As we focus on agriculture as our core business, our brands, Case IH, New Holland, Raven, and STEYR, to name only the largest, will claim their rightful turf and leave an enduring mark in their respective fields. We do not aim to follow anyone, but we will break our new ground every day with every step we take. We will work jointly with our network partners to improve our commercial and brand effectiveness. By allowing our construction business to run more autonomously and to explore optional paths on their strategic map, we empower them to unlock even more value while retaining their synergistic benefits with Ag. In 2021, CNH began its journey to bring its tech stack in-house with the acquisition of Raven. A tremendous amount of work has been done to marry our world-class iron with our enhanced suite of precision tech. An integrated approach to having technology embedded into our equipment from each new product inception will see our now combined engineering teams deliver more consistent results. We will accelerate our innovation, innovation engine and the convergence of iron and precision into a seamless user experience. Finally, I'm looking forward to meeting with many of our shareholders. Over the second half of the year, I hope to be able to engage with most of you in person or virtually. I want you to feel as confident as I do that CNH is a great company and team with tremendous potential for value creation. We are planning our investor day for early 2025, and we'll let you know as soon as we have set a date and location. I look forward to going into much greater detail around my vision for strengthening the company's value proposition and demonstrating how we win in a competitive marketplace. As I've traveled to our offices, plants, dealer facilities, and our customer farms to meet with the many people who make up the CNH ecosystem, I've gotten up to speed on where most of our priorities sit. Our people are among the most knowledgeable, capable, and hardworking individuals I've encountered during my professional career. My goal over the coming months and years is to weave together our competitive advantages and overcome hurdles to unlock growth, value, and industry leadership. I want to express my deep appreciation and gratitude towards everyone who is a part of the CNH family for welcoming me with open arms. I very much look forward to the journey ahead. That includes our prepared remarks, and we will now 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, then the number one on your telephone keypad. To withdraw your question, press star one again. Please limit yourself to one question and one follow-up to allow time for as many participants as possible. Again, that's star one to ask a question. We will take our first question from Jamie Cook with Truist Securities. Please go ahead. Good morning, and congrats on a nice quarter, given the environment that's out there. I guess just two questions. Can you talk to what's implied in your guidance in terms of pricing for the full year? One of your competitors yesterday lowered their pricing assumptions for—and this is specific to farm equipment, from you know 1% to now flat. So I'm just trying to understand how you're balancing you know price versus market share you know going forward. And then I guess my second question, you know on the production cuts, I think you said down 20%, it would be more concentrated in North America and Europe. Does that imply South America, Brazil, is where you wanna be now? We've we've right-sized that. And then sort of how are you thinking about, you know, if the markets get worse, to what degree is the strategy to, you know, continue to cut production in 2024 to set you up for a better 2025? Thank you. So let me take the pricing, Jamie. We confirm very low single digit price potential price increase in agriculture, whereas we confirm that we are less confident on pricing on construction. So we are prepared to accept it to be negative in construction for the balance of the year because of the competitive position. Yeah, and on the production cuts, as we said, we have 25% in agriculture production cut in the second half of the year, and 20% in construction for the second half of the year and a year-over-year view. On the construction side, I mean, most notably, that is because of the weakness in the U.S. residential sector, while the base infrastructure construction is obviously continuing to go reasonably well. Production cuts in LatAm are around those numbers as well. We've taken them down slightly earlier than the others, and we keep traveling on a very careful level of production there to continue lowering our, you know, dealer inventory globally, where we see still, for the agriculture segment, about $1 billion-plus... Dealer inventory to be reduced by year-end to reach where we want to be entering into a certainly flattish, you know, 2025 to be seen, yeah, but we need to have the dealer inventories significantly lower than today by about $1 billion plus globally. But is the strategy to make sure, like, will we take the team in 2024 to set you up for a better 2025? So if the market- [crosstalk]I think yes. gets weaker, would you cut production further? Is it, like... That's the question. We get ready for a good start into 2025, expecting similar levels of muted, you know, customer demand. And I mean, obviously, we can react quite swiftly if that is to change either way. But we get ready for 2025. Okay. Thank you. Our next question comes from Daniela Costa with Goldman Sachs. Please go ahead. Hi, good morning. Thanks for taking my question. I have two questions, more regarding the announcement two days ago. One, on the you created this new role of chief of quality. And I guess, sort of what prompted you to create that? Was there something that you've seen that was missing? Why do we need that now? Or, maybe that's the first question, and then I'll ask the second one. Hi, Daniela. Well, I mean, head of quality was certainly there before, in the segment, and now that I put myself on top of the ag segment, that position moves to a direct report, and we further strengthen this position across the globe, because we believe that there is more work to be done in creating custom products that delight our customers. And as I said, we, in my prepared remarks, we have gone through a quality challenge with the production from the Racine plant following the strikes, and hence now we are clearing this and cleaning this. We have successfully returned the Racine plant to very good quality output levels, but you know, maintaining that and also bringing everyone else around the, you know, CNH world to levels of world-class is a constant ambition that we need to live up to. Hence, having quality in a direct line is something I'm very much used to, and quality is the voice of the customer, and that person shall always be in every discussion that we have. Therefore, we call it quality and customer advocacy, and that is a very needed position, I think, in any manufacturing company. Understood. And then I guess sort of regarding construction equipment and the relation with the group, I guess you were back there on, in 2021 when the decision to separate Iveco was there and Construction Equipment was considered a core part. It had some synergies with the rest. The language now seems to slightly shift. Can you talk about, like, what has changed, and how sizable are these synergies with the group? And could something change to make those synergies less relevant? How should we think about the roadmap for Construction Equipment? Yeah, Daniela, I think when we spun off the on-highway business or the trucks and engine business back in the days, that was truly, you know, different in most of its aspects from CNH Ag and CE. And while here with construction, I think it is to give this business that has led a tremendous turnaround and a very good success story, the freedom to explore all the options around its in its ecosystem to develop its full potential. The two businesses, Ag and Construction today, have today already separate manufacturing footprints. They have dedicated R&D resources. We have separate dealer networks and even separate sales organizations. We have the backend synergies are predominantly, and they are sizable, they are predominantly around procurement, joint procurement, and back office functions like finance, IT, and the likes. But the industrial businesses are already separated today, and giving this team the agility it takes to capture the opportunities in their playground is requiring them to be at arm's length, and I will focus my time on Ag while having regular business reviews with CE, obviously, yeah. Mm-hmm. Okay. Thank you very much. Our next question comes from Mig Dobre with Baird. Please go ahead. Good morning. Thank you for taking the question. I want to follow up on Jamie's question on inventories and a production cut. If I look at your slide 18, where you're discussing dealer inventories, looking at those charts, I struggle to see much evidence of dealer destocking thus far. You have a goal to take out $1 billion worth of inventory over the next couple of quarters, and I'm sort of curious if the 25% production cut will be enough to deliver on that goal, considering the fact that production hours were down 30% in Q2. So, are we doing enough here? How can we get the comfort that this cut is gonna achieve that? Yeah. I think there is a certain time delay between production cost cuts and until that leads to actual retail inventory or dealer inventories to drop. So we have taken 30% production cut in Ag in Q2 versus prior year, and this is going to shine in already, and it shows already impacts in the early innings of a Q3. So there is a certain time delay between those effects, and as we continue with the 25 production cut in Ag in Q3, carefully watching what we might need to do as well in Q4. Maybe we don't need to add further cuts, maybe we need to. We can take that decision in a few weeks from now. We are pretty confident that we're gonna reach those inventory levels on retail level. The impact of Q2 starts to shine already. Mick, don't forget that last year, the second half of the year, we had already taken down production, particularly in the low-horsepower tractors globally, on a quite significant way. I appreciate that, Oddone, but given the fact that- So the reduction that we're showing is not sequentially year-over-year, right? No, I get that. I'm just a little bit confused at why we really haven't seen more of an impact already from your prior production cuts on dealer inventories. But I guess my follow-up here, just to kind of move on, is on construction and again, your language around this segment is very different. And I'm wondering if at the analyst day that's gonna be upcoming in 2025, we're gonna be hearing something more concrete around strategic alternatives developing for this segment. Thank you. Yes. I think we are working diligently on the full potential of both of our businesses, and I think on construction side, the optionality and the trajectory the team has created will set the stage for an interesting capital markets day next year. But it's our investor day next year. Thank you. Our next question comes from Kristin Owen with Oppenheimer. Please go ahead. Good morning. Thank you for taking the question. Also looking to maybe double-click on the production and inventory levels, and more specifically, on the ag inventory levels, maybe a bit by region. You know, given the outlook for underproduction relative to demand, if you can maybe help us break down where the inventory levels are, where you might be oversupplied versus regions or types of equipment, where you feel like you're more comfortably in the right range? Yeah. So I think, look, in Europe, we just destocked in Q2 mostly combines, and we intend to reduce it this even more in the second half. And let's see how the year-over-year change whether it will happen then, and while we actually have reduced dealer inventories in APAC already versus beginning of the year. So I think here we are well set up. And in North America tractors, we are planning to destock in Q3 and Q4, significantly under producing retail that is planned for the second half. While, for combines, we are lower than Q4 and overall. And in summary, we are pretty much aligned with our expectations as we have summarized on global level here. That's very helpful. Then, my follow-up, I think you mentioned in the prepared remarks, you know, that you've opened up the early order program for row crop in North America. Just any early indication, understanding it's not necessarily representative for 2025, but what the book pricing is assumed for that 2025 early order program? Thank you. Well, we've put in some pricing, modest pricing in the price list that we put out for our row crop in North America. It's really early to say to give any expectation for 2025 based on where we are right now. Our next question comes from Andrea Balloni with Mediobanca. Please go ahead. Yes, good afternoon, everybody, and thanks for taking my question, and welcome back, Gerrit. My, my first question is on free cash flow. If I look at the midpoint of your guidance range, you basically reduce the target by circa $400 million. What does explain this reduction, if we consider that the cut in the net industrial EBITDA is only $200 million? And, again, on free cash flow, if you can give us an idea about the CapEx target we should expect for this year. My second question is on restructuring cost. If you can give us an update on the total pre-tax amount we should expect. And my very last question is on the warranty cost you have experienced in Q2, totaling $14 million. I'm really sorry, I didn't get what these costs are, if you can explain it again. Thank you. Andrea, Andrea, let me take the last question first. The warranty costs that are inside our reported adjusted financial results for the second quarter are related predominantly to quality campaigns, fixing campaigns that we have already launched, and they are well underway, correcting quality issues that came out of the Racine plant as a result of the strikes that we had endured last year. Those are topics we know and we are on top of, and in the interest of the customers, we very proactively are out there and fixing those issues as we speak, and that number is around $70 million for the first half of this year already. This is the reason. And on free cash flow? On free cash flow, I would say the reduction is part of it through the EBITDA, as you mentioned, and the other part is in working capital dynamics when we reduce production and we reduce sales. ... And on CapEx, we are confirming the guidance that we gave at the beginning of the year. So we don't have big changes there. Yeah. Okay. Thank you. Our next question comes from David Raso with Evercore ISI. Please go ahead. Hi, thank you. On slide 11, I just wanna make sure I'm reading it correctly on the savings. So the—for example, on the COGS, the $120 million listed in 2Q, that's an aggregate year to date, right? So the idea- That's correct. -the whole year. Okay, so, so basically, if you do both those for SG&A and COGS, the second half of the year has an incremental $255 million of savings, right? That's what the back half provides. Yeah. The spirit of the question is, is looking at your margins. So for example, the second half of the year, your Ag margins are implied at 13.8%. Before last year, the company had never done 13.8%, right? I mean, the- Yeah. Basically, the margins were close in 2022. So I think we're all just sort of trying to figure out, is 2025 another leg down, or can these margins be viewed as, you know, at least close to a bottom? But obviously, it makes you nervous. You look back and go, "This company's never done 13.8 before, except for one year," and now people are trying to figure out it's a bottom. So the savings in the back half of the year, I can run the math and I get it. The back half of the year, the decrementals for the whole company are only 16, right? It's impressive, the comp is easier. But even if you pull out the EUR 255, it's still less than 30% decrementals, which is still pretty impressive. That's a long-winded way of asking, going into 2025, what is left on the savings programs from actions already taken? Just in case we- Mm ... wanna model, you know, 200 basis points pressure on pricing or another leg down, what are some of the savings that are already baked into 2025 from actions taken? There are a couple of opportunities for 2025, and let me name three for two opportunities. Yeah. I mean, we have this strategic sourcing program. We have structured it in four waves. We've just done wave one, which is under implementation as we speak, and we have kicked off and will accelerate on wave two in September, later this year, when we have all our strategic suppliers together at our annual supplier conference. And that will continue with wave three and four throughout 2025. So there's a continuous cost reduction coming year-over-year from these procurement programs. So the procurement itself has obviously already contributed in 2024, but it only really starts to show in the years 2025 and after. So this is reason 1, or let's say, confidence level number 1, on additional cost reductions. Then the second point was related to the quality side of things. As we said, we have in the first half of this year, in the reported adjusted financial, $70 million drag in the numbers from quality issues that we have in the current production of Racine fixed, okay? So we are living through this, and it is going to come to a closure at some point next year when we have basically those products hitting the market, at larger scale, at quality levels that we want. So in today's numbers, there is, I don't wanna call it a one-off, but there is a quality fix in... And that is, obviously now a target not to repeat again, okay? This is something that will certainly help 2025. And on a third element, that is not to be underestimated, we are going to have a full-year impact of the SG&A restructuring that Oddone also commented on, which was the program launched by Scott and the team here, that is under implementation in its last innings. And with that, we get the full-year impact next year. There is quite some cost reduction ongoing and in the pipeline to help 2025. I guess I'll just ask the obvious question: Would you like to try to quantify a little bit when you think of the potential cost savings? Like this year is, you know, $488 million, very significant number. Is it ha-ha-- I mean, roughly half that? So I'm just curious how you're thinking about the magnitude of potential savings from those three items. Well, we'll not quantify it yet because, with the on the supplier side, we will have quite some work to do, and I'm pushing for the upside, as you can imagine. And on the quality side, I need to see the timing on when we are through this. And while on the SG&A, we obviously have a number, but if at all, I would like to give you all three together, and we have sufficient time at our investor day next year to go deeper into those numbers and reduction opportunities supporting 25 and the years to come. I can appreciate that. Thank you so much. Our next question comes from Nicole DeBlase with Deutsche Bank. Please go ahead. Yeah, thanks. Good morning, everyone. Welcome, Gerrit. I guess maybe just starting with the cadence of earnings, how to think about the third quarter versus the fourth quarter. Any help that you can give us on the expectation for production cuts in ag versus construction, and any delta in the expected decremental margins between three Q and four Q? Thank you. ... Yeah, so I think in the prepared remarks, we had the size of the production cuts in agriculture and construction is around 25% in agriculture and around 20% in construction year-over-year. We had a difficult Q4 last year. We expect all things considered, from a profitability standpoint, to be more balanced in the Q4 of this year. In Q3 is where we have most of the production cuts, and Q3 is typically a quarter where we have our plants basically down in the month of August. So it's a more difficult quarter to, yeah, from a profitability standpoint. But I would say if we compare to last year, we expect to be more balanced on the fourth quarter, where last year we started to take the big adjustments in our production and our sales- Got it. Okay. -particular results. That makes sense. And then, Gerrit, I know you probably have a lot more to share at the Investor Day next year, but any early thoughts on capital deployment priorities? The balance sheet is, you know, in a pretty strong position and, you know, thoughts around share buyback, et cetera. Thank you. Look, Nicole, we're certainly gonna return cash to and value to shareholders through share buybacks and dividends as per policies you know in place and you know prior distributions, as you can imagine. You know, it's pretty consistent how this group has performed, and I think we have no reason to change that as we move forward. So the- Our next- I mean... Okay. Yep, go ahead. Our next question comes from Angel Castillo with Morgan Stanley. Please go ahead. Hi, this is Grace, for Angel. Thank you for the question. Can you talk a bit more about the competitive environment you're seeing in large ag and small ag, and where are you seeing competitors be more aggressive? Thank you. So the competitive situation right now, I mean, we have seen a pretty steep decline this market, now, not competition, but market in combines, stronger than globally, actually, in combines more than in high horsepower or large tractors, where, you know, we are leaders in, on the combine side, and we haven't really seen competitive intensity to go up. And, you know, we have just recently launched our CR11, our new flagship combine, or we call it the next generation. And that will next year also translate into CR10 and the CR9. And with that, we are super well positioned in the combine segment, where, again, we are leaders with these new products to keep and further grow our market share. So that is, but that's not that much. I mean, on the high horsepower tractors, competitive intensity is always quite strong, as you can imagine. This is a very focused product and segment for all of us, but I haven't seen that really changing much on a global scale. I mean, after now that we have seen in our cash crop high or heavy horsepower tractors back in the market with really good quality, I think we'll gain back market share there, which takes time, but that is something I think we will follow through. We will explain also during the Investor Day how we regain on that end, but I would not say that competitive intensity in the high horsepower or large equipment has significantly changed. On the small turf, on the very small ag, on the compact segment, when you start at that end of the market, we clearly see competitors from Asia in some of the markets coming stronger into our markets. We feel very well positioned with the lineup that we have recently renewed, and we continue to add to with products that will be also engineered and designed in Asia, most notably India. As you might have noticed from the organizational announcement that came out two days ago, I will have India as a market specifically called out from Asia Pacific as a separate market and member of our global leadership team. And that is also a reason related to not only the massive potential that India in terms of volume offers, but it's also home to some players that we already see globally in the small ag segment, small turf. And being there, giving it the right level of priority is, for us, a necessity to counter competitive moves in the future from players that come out of Asia, in this case, most notably, India. For us, and I mean, if you allow me that analogy, I believe that India, for agriculture, is probably comparable to China as it was 15 years ago for the passenger car industry, right? Slightly not in the focus, yeah, but differently treated, and hence we here at CNH take India extremely serious as a place to source, as we already said before, cost opportunities from sourcing components from hiring talent, from engineering products in India, which we do already today, but also as a market to sell. And in the end, it's also the home of some uprising competitors that push onto global markets from the small ag, and being there is key for us to counter that competition once they reach our home markets and also higher horsepower segments. Which is not the case today, just to be clear. So fairly unchanged competitive dynamics on the high horsepower and large equipment. On the smaller ones, we see some moves, and we counter them, also, you know, not only not limited, but also including our structural realignments and priorities, predominantly on India. Got it. That's very helpful. Can you also talk about the level of incentives that you are seeing in the market, and where you see the greatest pressure or potential for higher levels of incentives in 2024? Thank you. So we have seen some increased level of incentives, in particular in South America, where there has been, in the market, an overhang on supply, starting last year. We have reacted to that as we said, by reducing production very early. But definitely that has been a very competitive market in terms of incentives. We're very proud of our team in South America, who's been able to remain profitable across the quarters. And in the rest of the world, what we see is some higher, as we mentioned in the call, some higher financial support in terms of financing incentives. We are giving some incentives for supporting the dealers on working on their used inventory and on trade-ins. But I would say it's pretty normal conditions, nothing excessive. And that's- [Thank you. You see that on our pricing performance, right? Our next question comes from Tami Zakaria with J.P. Morgan. Please go ahead. Hey, good morning. Thank you so much for taking my question. So my first question is, I was hoping you could help me conceptualize this year as it relates to the theoretical mid-cycle level. Where do you expect to end this year's production volume in the Ag and also in the Construction segment, versus your estimate of the mid-cycle number for these two industries? Well, I mean, we expect the industry to be below the mid-cycle, what we can define the mid-cycle, let's say, the average of last 10 years. We expect the industry to be at 90%-95% of that. And we are producing less than the industry because we're adapting, we're adjusting our inventory levels. Is that for ag, or ag and construction both? That would say mainly for ag. Construction is, I mean, given also our market presence, is much more difficult to define this, compared to a global industry, if you compare to some of our peers that have a much more global presence. Got it. Thank you. So I just- So I don't think. I don't know. Sorry. Go ahead. Yeah, no, sorry. Go ahead. I just wouldn't say that I don't know how much it can be helpful in your macro analysis is getting our data on construction from that standpoint. Got it. Okay. Thank you for the color. And then a quick follow-up on what you just said about competition around pricing and incentives. I think you see it as being pretty normal. We've heard about some stepped-up price investments and discounts by OEMs and dealers in both new and used equipment markets. So do you... In the current guide, do you have any sort of buffer to react to increased competitive pricing pressure for the ag segment, for the back half, should it come to that at some point? Yes. That's the way we manage the business, and we feel confident with the assumptions that we have on a market that is down and that is competitive. Got it. Thank you. Our next question comes from Mike Shlisky with D.A. Davidson. Please go ahead. Hi, good morning. Thanks for taking my questions. My first question, Gerrit, I'm – I don't know how far along you've gone in this, but, what is your view on, on the precision ag offerings that, CNH offers at the current time? And more recently, can you just tell us a little bit about, have farmers this year been more cautious on adopting any of your tech stack? Maybe because they're kind of very busy or worried about their current year and not worried about future stuff. Just some thoughts as to whether it's been, ramping up according to our plan here. Thanks, Mike, for the question. Look, I, I've been following also the precision side of, of CNH while not being here necessarily, but because, being on the, on the neighboring company, we've done similar yet very different, tech. And we had obviously, you know, fruitful exchanges on, on, on what was going on. But my, my real foot on the ground, it, let's say, started four weeks ago. Nevertheless, precision is a key priority, and I'm, thanks to John Preheim and the team, in Raven, whom I paid my very first visit, and I spent a few days up there. I am pretty clear on the timeline on, and on the benefits that our precision ag offering will bring and brings today. You know, we have today's system, which is NGMA, our current system that we have running. We have a roadmap, thanks to our precision team, where we bring upgrades now to that system, all the way until we are launching live our new CNH operating system in a few years from now. More details, not a few years from now, but in the near future. And that is going to be, and I'm pretty certain, gets pretty close to a software-defined tractor, and with that, offers great functionality for our farmers. So our offering today, again, thanks to the Raven team, thanks to the M&A work that we've done, tucking in other companies like Hemisphere or Augmenta and other things, is really coming together quite nicely, offering a nice suite of precision offering, on board and off board. So that's a good roadmap. You've seen the recent organizational move, putting precision under one single leader, our CTO, Jay Schroeder, who has been with the company for more than 25 years, leading the ag engineering for quite a while, and bringing these two together under one lead offers greater effectiveness on bringing the innovations to life and responding even faster to what our customers and our farmers expect from our digital customer interface in our machines, may it be a tractor or a combine. So the roadmap is clearly laid, laid out. We'll give you more color during the Investor Day. We'll proudly present you these technologies and features on site. And so this makes me pretty confident that we are very well set up on this end as we as we also launch other innovations and and automated you know functionalities around implements and not only tractors, but also combines and more to come. I mean, I can't reveal them them here, but I'm pretty excited about what I've seen. And the pipeline is, the product pipeline is really strong and well invested. Got it. My other question was about your plan to make ag the core business and give construction a bit more autonomous, I suppose. But I've always thought of—I've always thought that farmers were a big customer base for the Case and construction equipment. Can you tell us what% of construction sales are actually really on farms? And will there be any changes to how? I know there are two separate distribution channels, but will there be any changes as to how the segment faces the farm sector going forward? Well, the farmers really like the Case construction equipment, whether branded Case or New Holland, in their farms. And that's a piece of equipment that is a smaller part of what Case Construction does. So yes, there is also that type of synergy, clearly. Yet the larger market for construction, when you look at, you know, crawlers and wheel loaders and also even the backhoes, they sell to a greater quantity in other segments, which is typically construction, residential, and the likes. So there is a need for these types of equipment in farms, but the by far largest amount of those machines go to, let's say, more traditional construction segments. And that has nothing to do with how we operate the businesses inside the group, with construction being an arm's length operation that has gained its independence also through its you know pretty impressive turnaround. So on the customer side, things come together, but on the operations, on the business side, they are clearly two distinct businesses. Okay. Thank you. Our final question comes from Kyle Menges with Citigroup. Please go ahead. Thanks, and welcome back to CNH, Gerrit. Gerrit, I was curious, in your first 30 days as you've met with dealers and customers, so on the ag side specifically, I'd love to hear just from any of the common threads of feedback that you've gotten from dealers and customers, and how that's informing some of your strategic priorities over the next year or so. Well, look, this was a lot, but if I—I mean, as I alluded to, quality has always been in our top priority list. We have recently encountered some challenges there, and I think that echoed here and there, that we need to get that back to the top levels where our customers and farmers are used to, and we're on a good track to get there. And as I said, reception is already at a pretty good level. So I think that was cutting across. I think another element that was more implicitly than explicitly is we are going to further strengthen our dealer network to make it, when it comes to the different brands that we have-... More prepared to take the opportunities in the market and to compete more effectively in the territories where they are. So I think on the dealer side, we want to strengthen them, we want to grow them. And we have also, for that reason, created a Chief Commercial Officer position, which is taken by Stefano Pampalone, the former CE head. And before that, Stefano has been for many, many years, leading very successfully our Asia Pacific region for both Ag and CE. And I think all his knowledge and insights he will bring to bear in, you know, gearing up on creating a really strong brand-aligned dealer network. I think that is clearly something that was not explicitly mentioned, I'd say, but it's more like implicit, a takeaway, that dealers are our partners. They are, in parts, our friends, but they're predominantly our business partners. Our revenues start with their commercial success with customers, and strengthening them means strengthening ourselves. I think that is another pretty key priority and focus that I will bring to bear, apart from obviously, precision, as we talked about, right? Meeting even at a faster pace, having the precision and the iron come together. Also some more minor points that were more local when you talk to customers, for example, in the United States or in Germany, they have different views and different needs, and I think that would, you know... I would overrun in this call to summarize those, but I'm listening quite attentively, and I will continue to do so forever, actually, being in dealerships and listening to customers what they want. I'm pretty present and hands-on, I would say, so very strong momentum with customers and a couple of things to fix, a couple of things to reprioritize, but we're on a pretty good trajectory. That's helpful. Thank you. That's all from me. That does conclude today's conference call. Thank you, and you may now disconnect.