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Additional information concerning these measures, including reconciliations to comparable GAAP measures, is included in the release and posted on our website at johndeere.com/earnings under Quarterly Earnings and Events. I'll now turn the call over to Brent Norwood. John Deere finished the year with solid execution in the fourth quarter, resulting in a 13.6% margin for the equipment operations. Ag fundamentals remained strong through the course of the year, and our order books indicate another year of robust demand in 2022. Meanwhile, the construction and forestry markets also continue to benefit from strong demand and lean inventories, leading to the division's strongest financial results in over 15 years. Now, let's take a closer look at our year-end results for 2021 beginning on slide three. For the full year, net sales and revenues were up 24% to $44 billion, while net sales for equipment operations increased 27% to $39.7 billion. Net income attributable to Deere & Company was $5.96 billion or $18.99 per diluted share. Slide four shows the results for the fourth quarter. Net sales and revenue were up 16% to $11.3 billion, while net sales for the equipment operations were up 19% to nearly $10.3 billion. Net income attributable to Deere & Company was $1.283 billion or $4.12 per diluted share. At this time, I'd like to welcome Cory Reed, President, Production and Precision Ag, to the call to discuss the segment's results and provide an update on the global ag environment. Cory? Thanks, Brent. Before I cover our fourth quarter results, I'd like to recognize all of John Deere's 77,000 employees for their tremendous hard work and dedication throughout a year filled with unpredictability. I'd also like to recognize the ongoing efforts and unparalleled capabilities of the John Deere dealer network. That's not only an integral part of our value proposition in the market, but also often called upon in the toughest of times to keep our customers up and running. Let's start with fourth quarter results for Production and Precision Ag on slide five. Net sales of $4.66 billion were up 23% compared to the fourth quarter last year, primarily due to higher shipment volumes and price realization. Price realization in the quarter was positive by about seven points, and currency translation was also positive by roughly one point. Operating profit was $777 million, resulting in a 16.7% operating margin for the segment, compared to 15.2% margin for the same period last year. The year-over-year increase was driven by positive price realization, higher shipment volumes and mix, partially offset by higher production costs. It's worth noting that last year's results were negatively impacted by employee separation expenses resulting from restructuring activities. Shifting focus to Small Ag and Turf on slide six. Net sales were up 17%, totaling $2.8 billion in the fourth quarter. The increase was primarily driven by higher shipment volumes and price realization. Price realization in the quarter was positive by just over four points while currency translation was minimal. For the quarter, operating profit was $346 million, resulting in a 12.3% operating margin. The higher shipment volumes, sales mix, and price realization were partially offset by higher production costs, R&D, and S&G. When comparing to the fourth quarter of 2020, keep in mind the prior period included $77 million in separation costs and impairments. Slide seven shows our industry outlook for ag and turf markets globally. In the U.S. and Canada, we expect industry sales of large ag equipment to be up approximately 15%, reflecting another year of strong demand. In fiscal year 2021, customer demand, driven by the combination of strong fundamentals and advanced fleet age and low inventory, outpaced the industry's ability to supply. With all of these dynamics still present in 2022, we expect demand to exceed the industry's ability to produce for a second consecutive year as supply-based delays continue to constrain shipments. Order books for the upcoming year are mostly full, except for a few cases where we've paused orders to manage supply challenges and allow us to reevaluate inflationary pressure later in the year. Currently, orders are complete for the year's production of crop care products, while our combine production slots are over 90% full with the early order program still ongoing. Meanwhile, large tractor orders are sourced well into the third quarter, and we expect the remainder of the book to fill out shortly. We're encouraged that take rates for our mainstay precision technologies like Combine Advisor, ExactApply, and ExactEmerge continue to track higher year-over-year. More recent new product introductions such as ExactRate Planters and the X9 Combine saw significant increases when compared to last year. Our premium and automation software activation take rates are over 85% for our 8 Series and 9R Series tractors. Additionally, we saw significant increases in customer engagement with our digital tools in 2021. Engaged acres now stand at over 315 million acres, due in part to a sharp increase in Europe, where the number of engaged acres has doubled over the past year. Likewise, use of our digital features such as Expert Alerts and Service ADVISOR Remote has increased by about 30% compared to last year. In the Small Ag and Turf segment, we expect industry sales in the U.S. and Canada to remain flat for the year as supply challenges continue to limit industry production. Following two years of very robust demand, field inventory levels are at multi-year lows and are unlikely to begin recovering until sometime in 2023. Moving on to Europe, the industry is forecast to be up roughly 5% as higher commodity prices strengthen business conditions in the arable segment and dairy prices remain resilient even as margins show some pressure from rising input costs. We expect the industry will continue to face supply-based constraints, resulting in demand outstripping production for the year. At this time, our order book extends into the third quarter for Mannheim tractors. In South America, we expect industry sales of tractors and combines to increase about 5%. Farmer sentiment and profitability remain steady at all-time highs as our customers benefit from robust commodity prices, record production and a favorable currency environment. Our order books reflect this strong sentiment and currently extends into the second quarter, which is as far as we've allowed it to grow. Despite limited government-sponsored financing programs, private financing is supporting continued strength in equipment demand, while strong farmer balance sheets enable many customers to purchase using cash. Industry sales in Asia are forecast to be flat as India, the world's largest tractor market by units, holds steady in 2022. Moving on to our segment forecast beginning on slide eight. For Production and Precision Ag, net sales are forecast to be up between 20% and 25% in fiscal year 2022. Forecast includes expectations of about nine points of positive price realization for the full year. For the segment's operating margin, our full year forecast is between 20% and 21%, reflecting consistently solid financial performance across the various geographical regions. Slide nine shows our forecast for the Small Ag and Turf segment. We expect net sales in fiscal year 2022 to be up 15%-20%. This guidance includes nearly seven points of positive price realization and roughly one point of currency headwind. The segment's operating margin is forecasted to range between 16% and 17%. With that, I'll turn it back over to Brent Norwood. Thanks, Cory. Now let's focus on Construction and Forestry on slide ten. For the quarter, net sales of $2.8 billion were up 14% primarily due to higher shipment volumes and six points of positive price realization. Operating profit moved higher year-over-year to $270 million, resulting in a 9.6% operating margin due to positive price realization and higher shipment volumes, partially offset by higher production costs, SA&G, and R&D. The quarter also benefited from the lack of one-time expenses included in the prior period. Let's turn to our 2022 Construction and Forestry industry outlook on slide eleven. Both earthmoving and compact construction equipment industry sales in North America are expected to be up between 5% and 10%. End markets for earthmoving and compact equipment are expected to remain strong in our fiscal year 2022 forecast, benefiting from continued strength in the housing market, increased activity in the oil and gas sector, as well as strong CapEx programs from the independent rental companies. Demand for earthmoving and compact construction equipment is expected to exceed our production for the year, resulting in continued low inventory levels, especially for compact construction equipment. In forestry, we now expect the industry to be up about 10%-15% as lumber production looks to remain at elevated levels throughout the year, even though lumber prices have come down from peaks in mid-summer. Moving to the C&F segment outlook on slide 12. Deere's Construction and Forestry 2022 net sales are forecasted to be up between 10%-15%. Our net sales guidance for the year includes about eight points of positive price realization. We expect the segment's operating margin to be between 13.5% and 14.5% for the year, benefiting from price, volume, and lack of one-time items from the prior year. Now, let's move now to our financial services operation on slide 13. Worldwide financial services net income attributable to Deere & Company in the fourth quarter was $227 million, benefiting from income earned on higher average portfolio and favorable financing spreads, as well as improvements on the operating lease portfolio, partially offset by a higher provision for credit losses. Results for the prior period were also affected by employee separation costs. For fiscal year 2022, the net income forecast is $870 million, as the segment is expected to continue to benefit from a higher average portfolio. Slide 14 outlines our guidance for net income, our effective tax rate, and operating cash flow. For fiscal year 2022, our full year outlook for net income is forecasted to be between $6.5 billion and $7 billion. The full year forecast is inclusive of the impact from higher raw material prices and logistics costs, which we estimate will add an additional $2 billion in expenses relative to 2021. At this time, we expect two-thirds of that increase to manifest itself in the first half of the year as the comparisons get easier in the back half of fiscal year 2022. At this time, our forecasted price realization is expected to outpace both material cost and freight for the entire year, though we will likely be price cost negative in the first quarter. Moving on to tax. Our guidance incorporates an effective tax rate projected to be between 25% and 27%. Lastly, cash flow from the equipment operations is expected to be in the range of $6 billion-$6.5 billion and includes a $1 billion voluntary contribution to our pension and OPEB plans. Before we open up the line for Q&A, we'd like to first address a few of the likely questions around the current market dynamics, our financial results, and the details around our new labor agreement, as well as provide some thoughts on capital allocation for the next year. To cover the range of topics, I'll engage today's call participants to provide some additional color, and then we'll open up the line for additional questions. First, I'd like to start with the current demand environment for large ag equipment. Cory, can you provide some additional color on demand for large ag products and which new technologies are resonating with customers? Yeah. Thanks, Brent. We're really encouraged by both the velocity of our order books and the take rates for some of our latest technology. Demand has been strong since the beginning of 2021, and overall, that doesn't look like it's gonna let up in 2022. I touched on this earlier. Our order books are either full or near full for most of our North American large ag product lines. Starting with our combine EOP. Our EOP for 2022 production will finish in January, where we'll grow the levels of S Series production, and we've already sold out of our planned production for X9 combines. This is the first year in a multiyear ramp-up of production for X9, and we'll ship 1,000+ units of X9 into North America alone. We'll further solidify our market leadership in the power class 9-plus combine categories while also establishing a clear new global benchmark in both productivity and efficiency. We're also seeing strong demand for some of our newer products like ExactRate Planter-Applied Fertilizer Systems and AutoPath. ExactRate represents an important first step in the precision application of fertilizer. Future iterations of this product will be critical in helping us improve nitrogen use efficiency for our customers. In just its second year, we're seeing take rates of that product close to 20%, which is really encouraging. Similarly, in the first full season, we've seen tremendous feedback from the launch of John Deere AutoPath. AutoPath leverages John Deere's onboard technology, like our Gen4 displays, StarFire 6000 receivers, including the SF3 correction signal, and embedded software linked to the John Deere Operations Center throughout a customer's entire production cycle. That technology leverages data from planting to know exactly where the row unit traveled to plant seeds and then creates a guidance line for each subsequent path, making in-season fertilizer applications, manual cultivation for weeding, or crop protection passes easier and more accurate. At harvest, it makes it easier to find your guess rows and makes harvest even more efficient. In 2021, we saw take rates of the automation package activation or subscription, which includes AutoPath, double, leading to more customers enabled with John Deere's highest value precision ag software. In 2022 and beyond, we'll continue to add value to AutoPath through new features and new technologies as a part of our precision ag software package strategies. AutoPath will be foundational for even more automated farming in the future, making every step of our customers' production system even better. Lastly, See & Spray. See & Spray Ultimate is gonna hit the market this year on a limited basis, and we're excited to get it into more customers' hands. We view See & Spray as just the first step in a long series of sense and act, and that journey we're encouraged by to see early demand for See & Spray itself and multiple products related to plant-level management in the future. Let's dive a little bit deeper on the fluctuations in North American large ag market share for fiscal year 2021, and then let's provide some expectations for this next year in fiscal year 2022. Can you first walk us through the progression of market share that we saw in 2021, Cory? Sure. Yeah. 2021 was a unique year. Demand inflected sharply from October of 2020 to the January 2021 timeframe. As a result, we experienced pressure on market share early in the year due to our asset-light model. If you recall, we talked about this dynamic in our fourth quarter earnings call last year and noted that we expected to recover that share quickly. That's exactly what happened. In fact, we gained two points of market share in North America for our large ag products by year-end. You can see an example of that in the last three quarters of retail sales data for the 100+ horsepower tractor categories. How might market share play out this next year, given that our most recent labor agreement didn't ratify until November seventeenth? Yeah, that's a great question. While it's too early to forecast with a lot of precision, we see the potential for 2022 to play out very similarly. We're very likely to see similar pressure in the first quarter as we recover from record low inventories, but also expect a production ramp that helps us maintain and even grow our position as we execute throughout the year. Let's pivot to some of the details on our latest labor agreement. One of the most frequent questions out there is on the incremental cost of the new contract relative to the previous one. How should investors think about the impact to our cost structure? Yeah. First, it's important to note we're really glad to have our UAW employees back in our factories and proud of the groundbreaking contract that we put in place. With respect to its impact on our cost structure, there are a few moving parts to the agreement. Some components directly impact wages and benefits immediately, while many others, like the retirement benefits, will have a longer tail that largely accrue outside of the contract period. Over the 6-year contract, the incremental cost will be between $250 million and $300 million pre-tax per year, with 80% of that impacting operating margins. We experienced a gap between the last contract and the current one, resulting in a few weeks of lost production. How does that impact the quarterly cadence of our financial results? Yeah, there are a number of unique items impacting the first quarter. If you think about first quarter 2022, we expect the top line for the equip ops to be pretty similar to the first quarter of 2021. You know, missing a few weeks plus of production will neutralize some of the benefits that Cory mentioned in terms of ramping up to higher line rates in December and January. With respect to margins, there are a few things to consider. You know, first quarter, we'll have our toughest price/cost comp for the year. We expect that to be negative in the first quarter, but positive for the full year. We also expect to experience poor overhead absorption due to the lower volumes, as mentioned. There are a few other one-time items that will provide some additional drag, including ratification bonus and some favorable tax credits that we saw in the first quarter of 2021 that don't repeat in 2022. All in, we expect first quarter margins to be mid- to high-single digits for the equipment operations with those businesses that have been most affected by the delayed ratification to be below that average. Looking beyond the first quarter, though, we do expect margins for the rest of the year to be more favorable and incrementals, you know, more in line with historical averages. Maybe stepping back and just thinking about the full year impact on margins, you know, we'd say it'll be about 1% lower as a result of, you know, a combination of work stoppage and some of the supply disruption. Switching topics, let's conclude with some discussion around capital allocation. Ryan, how would you characterize our capital allocation strategy in fiscal year 2021, and what might we expect this upcoming year? Yeah, thanks, Brent. With respect to 2021, you know, our strong liquidity position and our cash flow generation really allowed us to execute against all of our cash priorities. You know, we continued to focus on maintaining our solid A credit rating. Beyond that, we invested in our strategic growth priorities, both organically and inorganically. In addition, you know, we returned over $3.5 billion in capital to shareholders through dividends and share repurchases. Our two dividend increases are evidence of the confidence we have in the structural improvements we've made in the earnings power of our business. Overall, our actions in 2021 serve as a good blueprint for how to think about 2022 as we expect to again execute against all of our priorities. Sounds like we'll continue to see discipline with respect to returning capital, but can you elaborate any further on investing back into our businesses? Yeah, sure, Brent. You know, the Smart Industrial strategy that we put in place during 2020 is the foundation for us to focus our resources on the areas that are most differentiated from a customer value perspective. It's through that lens that we are positioned to increase the level of investment back into our business, both organically and inorganically through M&A. As you can see in our guidance, the R&D investment is up 17% in 2022. The focus of the increase is on further developing our tech stack, which accelerates our capabilities related to sense and act, autonomy, digital solutions, connectivity, and electrification. We're planning to demonstrate many of our new technologies at our Investor Day in mid-2022, so stay tuned for that exciting event. Finally, as it relates to M&A, expect us to continue to be active, aligned with the themes that we've discussed over the last year. Lastly, is there anything else that you'd like to highlight for investors to expect in 2022? Yeah. 2022 is shaping up to be a very important year for us. We've put in place the new strategy and are well-positioned to accomplish our goals. On that note, we do have a set of goals both related to business and sustainability that will sunset this year. Accordingly, we'll be rolling out our next suite of goals that will highlight the opportunity we have and what we think we can accomplish over the rest of the decade. Importantly, we are uniquely positioned in that there is direct alignment between our co-creation of customer value, improving our own earnings, and delivering more sustainable outcomes for the environment. Brent, expect to see a comprehensive suite of goals that really brings all of those elements together. Now we're ready to begin the Q&A portion of the call. The operator will instruct you on the polling procedure. In consideration of others and our hope to allow more of you to participate in the call, please limit yourself to one question. If you have additional questions, we ask that you rejoin the queue. Tasha? Our first question comes from Rob Wertheimer with Melius Research. Your line is open. Hi, good morning, everybody, and thanks for all the color. My question is on See & Spray Ultimate. I wonder, in whatever way you could, if you could expand on, you know, what limited launch means, how the technology is progressing. I don't know if you can talk about the pipeline for fertilizer versus herbicide, and/or the geographic scope of the launch. Thank you. Yeah, I'll start there. Cory, please add in. You know, we haven't put out exact numbers, but we'll have that, you know, out in, again, in customers' hands with, you know, production units. And again, you know, through multiple products, you know, soybeans, cotton, corn. Continuing to evolve there, and I think we feel really good about both how we're performing and the customer response as we get it into their hands. Yeah. I would say, you know, our See & Spray journey started with ExactApply and the ability to use individual nozzle control. We've gone through and put the Select product into the market this year in full supply, so that's the green-on-brown solution. We're now taking many units into a commercial application with Select customers in 2023 or in 2022 of See & Spray Ultimate. That's to both, you know, prove out our business model and show the value, and then we'll ramp from there, so it's a really exciting journey. We're seeing a lot of demand for it and we're excited about it going forward. Yeah. Thanks, Rob. We'll go ahead and go to our next question. Thank you. Jerry Revich with Goldman Sachs. Your line is open. Yes. Hi, good morning and happy Thanksgiving, everyone. I'm wondering if you folks can talk about what you're seeing in the installed base of equipment. I know you track used equipment inventories closely based on industry data that we see. It looks like that's cut in half from 2015 levels, but maybe you can comment on where it stands for your equipment specifically. What does that tell you about what the potential for new equipment demand to offset supply, you know, beyond 2022? I think when we look at used, I mean, we're at tremendously low levels of used inventory, you know, particularly in large ag. You know, levels we haven't been at for well over a decade. You know, we've seen that pull down. What that's driving is, you know, increasing used prices, which has been really positive for our farmers that are trading in product. You know, impacting their trade differentials, making those differentials as they trade up more, you know, or make that differential less, excuse me. I think that's a big piece. I think it's also important as we think about just overall, you know, the replacement cycle and recovery that we're seeing there. The lower those inventory levels are, you know, I think that, you know, that extends some of that cycle. Cory, anything you'd add? No, you know, Josh said it. We're well below the bands that we would normally see and the lowest we've been in 10 years. You know, you have a combination of factors going on. Obviously, you have solid farm income on the part of farmers, albeit with some headwinds and inputs. We have an aging fleet. You have new technologies. You have the opportunity to trade their equipment at the highest values they've ever traded, and it's driving tremendous demand. You know, right now the limitation is used, creating significant demand going forward. It's really figuring out the supply side and making sure that we can deliver every product into the market, but used right now is at all-time low. Yeah. Thanks, Jerry. We'll go ahead and go to our next question. Jamie Cook with Credit Suisse. Your line is open. Hi. Good morning. I guess question, the R&D up 17%, that's a big jump. I'm just wondering if, you know, given where we're going with technologies, should R&D structurally be up in sort of the high teens range going forward? Then just sort of, you know, on the M&A front, can you just talk about the pipeline there and what that implies, you know, for... Is it just focused, you know, on technology, precision ag tech solutions? Thanks. The R&D, maybe it's looking at the increase in 2022. Some of that is compared to 2021, where we were down a bit, and some of that was really the effects of pulling together the organization, you know, creating the chief technology officer org, which did allow us to pull and centralize components of the tech stack. We saw some elimination of redundancies. That's really the jumping off point then for this increase in 2022, which is, you know, focused on, you know, the areas that Ryan mentioned in terms of, you know, where we really feel like we can, you know, accelerate and differentiate sense and act, autonomy, electrification, connectivity. Those are the areas where we see, you know, the biggest opportunities to deliver value for customers, and are spending there accordingly. Relative to M&A? Yeah. This is Ryan. As it relates to M&A, you know, as we've talked over the last year, you know, we've got these thematic trends with respect to the sense and act platform that we're building, autonomy, digital solutions, connectivity, and also electrification. You know, an example of digital solutions, we acquired Harvest Profit, and that's right along with our expectations of delivering value and overall management of a customer's P&L and making it super seamless and easy for them to use. You know, with respect to autonomy, which we see accelerating, Bear Flag is an example of a transaction like that. You know, we've got a relatively full pipeline over the next several months. You know, you'll see us continue to be active and source deals and close deals that allow us to accelerate our journey along those thematic trends. So stay tuned. More to come. You'll see us be active in this area over the next several years. Maybe the one thing, Jamie, I'm sorry, I missed part of your question, was just the level. You know, this does represent a bit of a step up compared to where we were. You know, we think broadly this level is reasonable for where we operate. Okay. Again, always reserve the right in the future as we see new technologies or new opportunities to invest to create value. You know, I think that's a fair view of where we are today. Okay. Thank you. Thanks. Stephen Volkmann with Jefferies. Your line is open. Hi. Good morning, everybody. I'm wondering if we could go back to inventory, but touch on the new side. Does your plan for 2022 anticipate rebuilding any new inventories, or does that sort of get pushed out into 2023? Good morning, Steve. It really does imply very little to no inventory build. You know, given what we're seeing, you know, broadly a demand above the industry's ability to produce, you know, we would expect most everything we ship gets retailed, but no replenishment of those inventories. You know, as a result of that, whether it's you know, large ag equipment, you know, small ag in the construction, we think it probably takes multiple years to rebuild some of the field inventory levels coming off of historic lows. You know, for example, if we look at you know, small tractors or compact construction equipment, they're in the teens inventory to sales as we ended the year. The targets there are probably closer to you know, 40+% inventory to sales. There's a lot of room to go there. Even large ag, which traditionally comes down, we're at, you know, levels we've really not seen before. You know, row crop tractors, 10% inventory to sales. Combines, low single digits%. You know, very low and, you know, I think as we consider how this continued replacement drives forward, you know, we do see that as positive in that we see the need to recover inventory over a few years, not just one. Thanks, Steve. Thank you. Chad Dillard with Bernstein. Your line is open. Hi. Good morning, guys. My question is, how much room is there to impose higher equipment prices on farmers? Just trying to get a sense of, you know, whether there's any fatigue in the near term, given what we're seeing on the fertilizer price side. You know, could you actually pass some of the costs on from the labor cost increases? Yeah, thanks for the question. I, you know, I think certainly farmers have seen some headwinds relative to their overall input costs. I think the first part is for us to focus on being able to deliver technologies that help them improve their profitability. A lot of our pricing comes from our ability to deliver technologies in the machines that make them or give them the ability to create more yield or manage their costs differently. That's a big part of it. Now, obviously, in the last 18 months, with a lot of the commodity increases, there's also been the opportunity to recover for some of those commodities, and that's allowed us to do that. By and large, I would tell you that our pricing model is based upon delivering value for them and being able to make sure that each time they can go to the field, we can make them more profitable by using the equipment that we put out there. Each of the examples like the See & Spray or X9 or AutoPath, that's what they do, is allow them to either create more yield or manage their cost and be more efficient in the field. That's the focus. The other thing we've seen too that's impacted price has been very strong overseas pricing. As we've reacted to both, you know, FX movements as well as inflationary environments, you know, we've taken more price. Really throughout 2021, you know, and into 2022, you know, we're seeing if we look at Production and Precision Ag, low double-digit pricing in the overseas market that has driven that. You know, as we think, you know, looking forward, we continue to see that occurring. You know, the one piece that we don't see as much repeating or tailwind is on lower discounts. You know, as we pulled down discounts throughout the back half of 2020 and through 2021, there's not much left there. That is another thing to consider when we think about price. Thanks, Chad. Appreciate the question. We'll go ahead and go to our next caller. Tim Thein with Citi. Your line is open. Thanks. Good morning. Yeah, Josh, maybe dig into the Production and Precision Ag margin guidance of, you know, call it, you know, under 100 basis points of improvement on 20%+ sales growth. You know, with $1.5 billion or so of positive price. If you just maybe walk us through obviously that, I would assume as you talked about for the full for the total company, call it 100 basis points from the work stoppages. I assume that a disproportionate amount of that is impacting that segment. Maybe you can correct me on that. But maybe just walk us through how you get to, you know, maybe sort of, you know, headwinds and tailwinds as we think about margin for that segment. Thank you. Sure. You're right. You know, there's an outsized proportion of that impact is in Production Precision Ag, most largely affected. You know, if we think about the puts and takes, particularly in the first quarter, as you mentioned, you've got some amount of lower production impacting that which drives lower overhead absorption. Material freight cost higher, and we would expect to be price-cost negative in 1Q in Production Precision Ag. Then, again, you have the larger portion of some one-time items like ratification bonus. You may recall, last year in the fourth quarter, or excuse me, last year in the first quarter, we had about a $50 million benefit from taxes overseas related. That goes against us in the first quarter. That pulls down the absolute margin pretty significantly. Stepping forward from that and then thinking about the full year, which you mentioned, you know, about 100 bps higher, from an absolute margin point of view, yeah, we return to the incrementals, you know, that would run historically where we expect to see them. You know, around 35% incremental rest of year, Q2 through Q4, for PPA. Thank you. Thanks, Tim. We'll go ahead and jump to our next question. Kristen Owen with Oppenheimer. Your line is open. Great. Thank you. Cory, you talked about the incremental functionality that you're looking at rolling out for AutoPath over the coming years. Can you just speak to how you're thinking about sort of current customers' ability to participate in that incremental functionality? The question is really one about business model and what types of model, be it subscription service, et cetera, that you're exploring for that solution. Thank you. Sure. You'll see more on this from us in the coming quarters as we roll out some objectives for how we're thinking about this. One of the things we're talking about and making sure is that just like we did with guidance solutions in the past, where we started years ahead putting base functionality into machines that would allow us to both put the functionality for, in this case, AutoPath or further automation features into every machine. We'll start working through a series of making sure that the base functionality of the vehicle will allow us to either ship the vehicle with the functionality or upgrade it in the future. We're looking at new ways and new business models to make that easier for customers to adopt. That journey, you know, we're on that path right now. We're rolling out ways that we're doing that with our Precision Ag hardware. You'll see us do it more with our subscriptions and software going forward. We're out cooperating and working with customers and how we can make that work on their operations today and how they'd like to consume it. You'll see that revenue stream continue to grow from us in the future. Yeah, Kristen, it's Ryan. As we talk about and roll out our next generation of goals, you'll see us think through an evolution of our business model over the next decade with respect to what, you know, what Cory talked about and the value we're delivering every time our customers go across the field, and how can we think through a business model that's more of an ongoing basis. More to come on that, and you'll see us have some relatively specific targets and goals on what we think we can deliver from that evolution. Thank you. Adam Uhlman with Cleveland Research. Your line is open. Hey, everybody. Happy Thanksgiving, I guess. I wanted to turn back to the supply chain issues that you had mentioned. Could you share some more insights on what exactly you're seeing and more so maybe, you know, what you've included in the forecast? I'm curious how much visibility you have into, you know, supply chain getting better. You know, what could be tough still with chips that maybe should start to improve and maybe what could be held back by capacity limitations at your suppliers that maybe won't free up for another year or so. Morning, Adam. If you go back a quarter ago in the third quarter, we expected the supply challenges to be more, you know, more impactful in Q4, and that's what we saw. We did see it deteriorate. It was a more challenging environment in the fourth quarter. You know, between the supply challenges and some of the work stoppage, you know, that probably impacted the fourth quarter by, you can call it a half point of margin or so, for the equipment operation. It was more challenging. You know, as we think about the 2022 plan, you know, we went in assuming that similar level of disruption in activity and supply chain. We haven't embedded a significant amount of improvement there. We expect to continue to be challenged and choppy. You know, one of the things we did do, you know, during the last couple months is we continued to bring parts in, parts and components into our facilities. We were able to continue that. We didn't slow that down. That's positive as we ramp up, as Cory mentioned, start to ramp up production coming back. That's important. We think that continues to be a challenge. It's broad-based. Chips you mentioned, very tight. You know, we expect that continues through 2022. You know, other things, you know, there's material challenges. There's labor availability in the supply base. This extends across many geographies. Logistics become a challenge as well. We're continuing to work through those. Supply management team is working really closely with our suppliers. We've given them more visibility than we ever had before, to try to work through this, and we've tried to plan accordingly. Yeah. I would echo that. This is Cory. You know, if you look at 2021, we knew we were gonna have some challenges coming forward. What we said was, we have to execute and make sure that we can manage that better than anyone in the industry. I think what you saw us do through the back half of the year was manage it well. We're positioned well as we kick off and have the workforce back. There are gonna be a whole lot of pop-ups that come, electronic components, labor, logistics. But we have to manage through them. That's where our folks have been up to the task up to this point, and we're confident they can be up to that task going forward. Yeah, we have seen some regional, you know, disparities. I think, you know, Europe for us has probably operated a little more smoothly than say the Americas and Asia. You know, there are some deltas and differences there that have impacted our businesses differently. Continue executing, and we'll update as we go through the year. Thanks, Adam. Ross Gilardi with Bank of America. Your line is open. Yeah. Good morning, guys. Can you just address your ability to deliver in time for planting season, which isn't that far away, you know, in the aftermath of the strike and given all the supply chain constraints. Then just also the. You know, there seems to be a lot of investor chatter that soaring input costs for the farmer are gonna lead to a big slowdown in equipment demand or premature end of the cycle. I mean, it seems like the opposite might be true if lower fertilizer application rates lead to greater demand for precision ag as well as lower yields. I'm just wondering if you'd address that too. Thanks. Yeah. Thanks, Ross. This is Cory. You're right. I mean, one of the things we're focused on is even as we were in the middle of the interruption, was making sure that we could deliver products on time seasonally for our customers. Planting is the top end of that. We continued and made sure we could surge components into our planting lines as people were coming back. We've got a production plan that's commensurate with what our early order program is. We do have some risks. We've gone out and talked to our customers about where we are and our dealers about where we are with that. But we feel really confident in our ability to deliver even more planters into the market this year. Where we have the opportunity, if customers wanna accept planters later in the season, we'll do that as well. From that standpoint, you know, we operate with transparency, talk to our dealers and customers and then put a good production plan together that allows us to meet market demand. That demand hasn't slowed. In fact, it's continued. Much like all of our other large ag products, planters are one of those things that even post the optimum planting window, people are taking product. Ross, your question related to input costs, you know, and how does that impact the cycle? Maybe stepping back more broadly, and I'll address that in part of this. But when... As where are we at right now and how are we seeing this play out, and we feel like there is a continued runway of replacement recovery out here to continue and to be had. That's for a few reasons. One, you know, underlying farm fundamentals continue to be very strong. Whether you know it's you know cash receipts, income, what we're seeing land values, for example, those are positive. You know, we see demand for replacement. The age of the fleet, you've heard us talk about this a lot. 2021, we got older, and even as we look to 2022, you know, we'd expect the fleet overall in North America to age out. Then you have this dynamic that we've seen in 2021 and repeated in 2022, where demand's above the industry's ability to deliver. You know, further, you know, in our minds, stretches or elongates a little bit of that recovery cycle. You know, as mentioned earlier, you know, inventory levels for both new and used are quite low. So again, when you think about comparing back, we get comparisons back to 2012 and 2013 and some of the dynamics. You know, one of the big differences is we are at significantly lower levels of inventory, which makes, you know, some of the replacement demand push out a bit further. Then lastly, as it relates to input costs, you know, as input costs rise, the impact that our precision tools can have in terms of leveraging technology to drive more accuracy, more precision with inputs, whether that's seed, fertilizer, chemical, can make that value proposition even more attractive. And you know, if you Cory talked a bit about this in his prepared remarks. But the take rates that we're seeing on technology, you know, took a significant step up. You know, we're ExactApply on sprayers, 55%, which is up quite a bit. ExactEmerge on planters, 55%. And then we're seeing that really across these technologies, a pretty significant step function change in terms of the use of the technology that drives, again, back to, you know, better yields and lower cost through increased precision. You know, we'll continue to execute there, but we feel like there are legs to this recovery that we're in, and really began, you know, about one year ago right now. Thanks, Ross. We'll go ahead and jump to our next question. Mircea Dobre with Baird. Your line is open. Yes, thanks for taking the question. Just looking to maybe get a little more color on the commentary of raw material headwinds, the $2 billion that you called out. Kind of two questions to that. First, where are you in terms of the assumptions that you made relative to current spot prices for things like steel? Like, what's kind of baked into this number? And then, you know, given the higher than normal visibility that you have in terms of where, you know, the early order program seems to be shaping up, I'm kinda curious as to what you're doing in terms of either forward buying materials or you know, the various components that you're gonna need. Thanks. The material freight cost, you know, Brent mentioned this. We expect, you know, $2 billion of headwinds compared to 2021, and that's split, you know, roughly 80% material and about 20% freight. You know, the freight is driven by essentially all different modes, whether it's air, ocean, you know, truck, all those things are impactful there. On the material side, it's things like the raw that you mentioned, steel, for example. You know, traditionally we buy, you know, roughly a quarter ahead. You know, we've seen, you know, from a pure spot price, you've seen steel moderate some from where it was peaking probably a bit a quarter or so ago. We haven't adjusted significantly. You know, we do work with supply base to ensure that we've got availability. You know, given the demand we have, and the customer you know, desire to get product, you know, we will try to balance that in terms of having product, and making sure we've got the availability of raws. I mean, from a price perspective. Yeah, we haven't gotten into the detail of where we're at or, you know, where we're locking in. But definitely we do expect to see more of that come through the first half of the year, and our comps get a little bit easier in the back half. You know, of that $2 billion, we expect about two-thirds to come through in the first half of 2022. Maybe lastly, you know, similar splits in terms of the businesses. About half of that is Production Precision Ag, about 30% Small Ag and Turf, and roughly 20% C&F. You know, a lot of that just varies based on the products and the makeup overall of their material. With that, we'll go ahead and jump to our next question. Joel Tiss with BMO, your line is open. Hey, guys. Just switching gears a little bit. Can you talk a little bit about the focus of future restructuring and any guidelines that you can give us about, you know, you think 50 basis points a year of margin improvement or 100 basis points or just sort of some of the targeted areas and what it's gonna mean? Morning, Joel. Morning. Going through, you know, the Smart Industrial operating model and the shifts and changes we made, you know, in 2020, and we feel like we're seeing the benefits of that play out in 2021, as we, you know, refocused the organization, and then really started to put the capital allocation model to work in terms of, you know, how do we guide and invest in the parts of the business where we feel like we can differentiate and create the most value. You know, so I think as we've worked through that, I think you see now maybe some of that impact as you see R&D increasing, you know, this next year, and that's in the areas that we focused on. You know, we made adjustments to how we're organized and to how we're allocating resources. You know, we worked through, you know, some things like divestitures in 2020. I think that's the continued model. Yes, Ryan. You know, I think you'll see us pivot, particularly as we announce our next set of goals to focus on the growth opportunities that we have. There'll be financial components of the goals that come out, but there'll also be kind of additional infrastructure related investments that we can make with our technology stack that will really unlock the next generation of customer value. So that's where we're focused. You know, we spent the last couple years doing some restructuring activities, having a more dynamic capital allocation process. Now as we move forward, it's gonna be more about growth and taking advantage of the unique opportunities that we have to create customer value, both profitability and sustainability wise. Great. Thank you. Thanks, Joel. We'll go ahead and go to our next question. Stanley Elliott with Stifel, your line is open. Hey, good morning, everyone. Thank you all for taking the question. Can you talk a little bit about the, you know, with the news on the infrastructure bill the other week, when would you expect to see that through the portfolio? And then also maybe any sort of nuances between the road construction business versus the legacy core. Morning, Stanley. On infrastructure, you know, the interesting thing there is as we start to see that, we think, you know, jobs probably really start to move more towards the end of 2022. Given this dynamic of, you know, demand above the industry's ability to produce due to supply, you know, probably not as much impact as one might expect or hope in 2022. We'll continue to watch that. You know, we think, you know, that type of program is very positive for the industry. Tends to have a long run of impact, but probably start to see more of that in 2023. You know, when we step back and look at that, you know, there's a significant amount of the funding that is roads, bridges, waterways, broadband, all of which, you know, really are very attractive and applicable to our earth moving and road building businesses. I think that's particularly positive. You know, if you look at our industry outlooks, you know, we're up 5%-10%, North America for both construction and compact construction. This is muted somewhat by just the supply constraints, but, you know, up 5%-10%. You know, globally, we'd say road building's probably in that same vein, up 5%-10%. You know, we'll keep our eyes out there. Dealers are obviously working very closely with customers. I think, you know, we'll watch the independent rental companies. You know, we've seen some of their CapEx start to move upward in 2021 and into 2022, and that's probably a good leading indicator of some of the work on infrastructure coming. Thanks, everyone. Happy Thanksgiving. Thanks, Stanley. Take care. Courtney Yakavonis with Morgan Stanley, your line is open. Hi, good morning, guys. Thanks for the question. Can you just compare for us a little bit the gap between your small ag industry guidance and your sales guidance? You know, obviously pricing is a part of it, but I don't think you said that you're really expecting inventory levels to be most of it to the mix or, you know, just to help us understand, the difference between those two. Small Ag and Turf North America, we expect to be flat. You know, our overall sales for that business unit are up 15%-20%. So a big part of it's price, you know, so about 7 points of price embedded in there. You know, that is also a more global operation. So that has some impact when we think about, you know, where and how we operate around the world. So there's a piece there. So there's a little bit of market share. I think it'd be fair to assume some gains there. You know, on the very little margins maybe on some segments of tractors. We expect to build a little bit of inventory, but a relatively muted. I think those are the components that are driving the difference between those outlooks. Maybe just as a follow-up, can you also just comment on, you know, the margins being, you know, down year-over-year in that segment? You know, is that, you know, is anything that's disproportionately weighing on the small end segment? Yeah, good question. It's, you know, price-cost for Small Ag and Turf is positive for 2022, but I'd say it's the most challenged. It's, you know, we're price-cost positive, but that's where we're seeing a bigger impact there as it relates to margin, and particularly incremental margins are more challenged in that regard. I would say that's the part of the business where we are seeing constraints on the supply side that are impacting some parts of that business maybe a little bit more than others. With that, I think we've got time for one more question. Larry De Maria with William Blair. Your line is open. Hi. Thanks. Good morning. Slightly off topic here. I'm curious if there's anything in the contract that talks to that, what Deere's policy is, and, you know, just trying to understand the expectation around further issues in production both here and potentially even in Mannheim. Thank you. Sure. Thanks, Larry. Yeah, I mean, I would say that, you know, the focus here over the last couple months has really been around the negotiations on the contract and getting our employees, you know, back in our facilities and operating. We'll continue to work through all the important guidelines and everything that needs to be put in place. I'd say, you know, if we go back to the early days of the pandemic, you know, we were taking measures ahead of guidelines, ahead of CDC requirements, in as well as in other parts of the world to take care of our workforce, to keep them safe. You know, we shifted to multi shift operation of taking care and keeping our good Thanksgiving, and we'll talk soon. Take care. Thanks. Bye.