Good morning. My name is Brika. I will be your conference operator for today. At this time, I would like to welcome everyone to Timken's Second Quarter Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star and one on your telephone keypad. If you would like to withdraw your question, please press star, then two. Thank you. Mr. Frohnapple, you may begin your conference. Thanks, Brika. Welcome everyone to our second quarter 2023 earnings conference call. This is Neil Frohnapple, Director of Investor Relations for The Timken Company. We appreciate you joining us today. Before we begin our remarks this morning, I want to point out that we have posted presentation materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access this material through the Download feature on the earnings call webcast link. With me today are The Timken Company's President and CEO, Rich Kyle, and Phil Fracassa, our Chief Financial Officer. We will have opening comments this morning from both Rich and Phil before we open up the call for your questions. During the Q&A, I would ask that you please limit your questions to one question and one follow-up at a time to allow everyone a chance to participate. During today's call, you may hear forward-looking statements related to our future financial results, plans, and business operations. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in today's press release and in our reports filed with the SEC, which are available on the timken.com website. We have included reconciliations between non-GAAP financial information and its GAAP equivalent in the press release and presentation materials. Today's call is copyrighted by The Timken Company, and without express written consent, we prohibit any use, recording, or transmission of any portion of the call. With that, I would like to thank you for your interest in The Timken Company, and I will now turn the call over to Rich. Thanks, Neil. Good morning, and thank you for joining our call. Timken delivered an excellent second quarter, and we remain on track to deliver another record year of performance. We achieved record revenue and record second-quarter earnings per share. We expanded operating margins over last year, and we delivered significantly higher free cash flow. Organic revenue was up nearly 5% in the quarter. Acquisitions contributed close to 7% on the top line, and in total, revenue was up more than 10% over prior year, despite continued currency headwinds. EBITDA margins of 20.7% were up 70 basis points from last year. While inflation has moderated, costs were up over prior year, and inflation remains persistent. Productivity continued to improve, and supply chain performance has essentially returned to normal. Despite the persistence of inflation, price costs remain positive and will for the remainder of the year. Earnings of $2.01 were up 13% from prior year and were a record for the second quarter. In addition to the organic growth, acquisitions and share buyback contributed to the growth in earnings. Cash flow stepped up significantly, both sequentially and year-over-year. During the quarter, we completed the acquisition of Nadella, expanding our linear motion portfolio. We purchased just under 2% of the outstanding shares of the company. The Nadella acquisition is off to a good start. We've already integrated several areas of the management team and organization within our Rollon group. Linear motion has been a key contributor to our market diversification initiatives and continues to improve our, our organic growth profile. We also reduced our ownership position in our listed entity, entity in India, which Phil will expand on in a moment, and we continue to invest CapEx into the business as we advance our footprint in manufacturing technologies. We are now two quarters into operating under our new segmentation of Engineered Bearings and Industrial Motion, and the reorganization is already yielding results. We have two market-leading segments with ample headroom to continue to expand, both organically and inorganically. Before I turn to the outlook, I want to reference slide 10 in the investor deck, which highlights our five-year performance for revenue, earnings, and margins. Timken continues to perform at a high level through a wide variety of macroeconomic conditions. We have strong market positions in both Industrial Motion and Engineered Bearings. Both businesses are strong generators of cash. We have proven over time the ability to create value through a balanced and disciplined approach to capital allocation. That includes our steadily growing dividend, CapEx back into the business, share buyback, and M&A that has created both strategic and financial value. The result has been record revenue and earnings per share performance each year, except for the COVID year of 2020. Our margins have varied only a couple hundred basis points during what has been a particularly volatile economic cycle. We are confident in our ability to continue to perform at a high level moving forward and to continue to grow the revenue and earnings of the company. Turning to the outlook, we are now forecasting full-year revenue growth of 8% at the midpoint. As a reminder, our normal seasonality is to decline from first half to second half, both for revenue and earnings. We are continuing to forecast a greater than normal decline this year on very strong 2022 comps. During the second quarter, we continued to see customers reducing inventory levels and orders to adjust to supply chains that are now operating at normal lead times and reliability levels. We expect that to continue through the end of the year. While we are forecasting sequential softening for the rest of the year, the macro drivers remain constructive and customers across most sectors and geographies remain bullish on their demand into 2024. You can see on slide six in the IR deck that there have been some movements in our full year outlook for markets, some up, some down, with our updated guide reflecting recent order activity and backlog. As has been well publicized, China's rebound coming out of COVID this year has been less than expected. Our Asia results are up double digits year to date, but we have factored in a less bullish outlook for Asia and specifically China, in the second half. This would include renewable energy. From a bottom-line perspective, we are forecasting earnings per share in the range of $6.90-$7.30, which would be up 10% at the midpoint. That guidance includes the impact of all capital allocation actions taken through the second quarter of 2023. The midpoint of the revenue and earnings guide would imply margins to be up slightly from last year. While we expect better manufacturing performance from improved supply chain dynamics, we are factoring in volume headwinds as we continue to get our own inventory levels in line with improved lead times and on-time deliveries. We expect costs to remain elevated, although for the pace of further increases to continue to moderate. Similarly, we expect price realization to remain positive versus the prior year, but to continue to moderate partially due to tougher comps. We also plan for price cost to remain positive through the year. We assume cash flow to be strong in the second half of the year, and with net debt at 1.9x EBITDA at the end of June and strong second half cash flow, we expect to continue to be active from a capital allocation standpoint in the second half of the year, with a continued bias to M&A. We are operating more efficiently today, and we are very focused on driving our operational excellence initiatives across the portfolio, from inventory management and productivity initiatives to our CapEx investments in automation, capacity, and plant consolidation. We would expect these actions, along with capital allocation and our outgrowth initiatives, to provide significant self-help heading into 2024. We will also be publishing our annual corporate social responsibility report in the upcoming quarter. Our Timken team is committed to advancing our corporate social responsibility programming as we give back to our communities and drive sustainability in our products and global operations, and across the industries we serve. Examples of our progress will be evident in the report. It was an excellent first half of 2023. We remain on track for another year of record revenue and earnings, and we are well positioned to continue to drive value for all of our stakeholders in 2024 and beyond, as we continue to advance Timken as a global, diversified industrial leader. With that, I will turn it over to Phil to go into more detail on the results and outlook. Okay, thanks, Rich. Good morning, everyone. For the financial review, I'm gonna start on slide 12 of the presentation materials with a summary of our strong second quarter results. Timken posted revenue of almost $1.3 billion in the quarter, up just over 10% from last year, a new all-time record for the company. Adjusted EBITDA margins came in at 20.7%, up 70 basis points from last year. We achieved adjusted earnings per share of $2.01, a record for the second quarter, along with an attractive return on invested capital. Turning to slide 13, let's take a closer look at our second quarter sales performance. Organically, sales were up 4.6% from last year, driven by continued growth in both segments, led by Industrial Motion. Organic growth benefited from higher pricing across both segments, with unit volumes up modestly from the strong levels we saw last year. Looking at the rest of the revenue walk, recent acquisitions, including GGB, Nadella, and ARB, net of divestitures, contributed nearly seven percentage points of growth to the top line, while foreign currency translation was a 1-point headwind in the quarter. On the right-hand side of the slide, you can see organic growth by region, which excludes both currency and acquisitions. We saw mixed performance across our regions in the quarter. Notably, Asia Pacific was up double digits, driven by strong growth in both China and India. We were also up in North America, our largest region, against last year's strong second quarter. EMEA was roughly flat, while Latin America, our smallest region, was lower versus last year. Turning to slide 14. Adjusted EBITDA in the second quarter was $263 million, or 20.7% of sales, compared to $231 million, or 20% of sales last year. Looking at the change in adjusted EBITDA dollars, we benefited from favorable price/mix, lower material and logistics costs, and the net impact of acquisitions. These positives more than offset the impact of unfavorable manufacturing and higher SG&A other costs in the quarter. Overall, we delivered a year-over-year incremental margin of around 27%, driven by positive price/cost and solid operational execution. Excluding currency and acquisitions, our organic incremental, if you will, was just under 50%. Let me comment a little further on a few of the key profitability drivers in the quarter. Looking at price/mix, pricing was meaningfully higher in both segments compared to last year, while mix was relatively neutral in the quarter. Moving to material and logistics, both were lower year-over-year, with logistics the bigger contributor, as freight rates have more or less returned to pre-COVID levels. On the manufacturing line, we were negatively impacted by lower production volumes as we built a sizable amount of inventory in the second quarter of last year. We also saw continued inflation across our input costs, including labor. On the positive side, we delivered solid operational execution as we benefited from higher productivity and improved supply chain dynamics. Finally, on the SG&A other line, costs were up from last year, as we expected, driven by the impact of inflation and higher spending to support our increased sales and business activity levels. On Slide 15, you can see that we posted net income of $125 million, or $1.73 per diluted share for the quarter on a GAAP basis. This includes $0.28 of net expense from special items and deal amortization. On an adjusted basis, we earned $2.01 per share, up 13% from last year. Note that we benefited from a lower share count in the quarter, reflecting the share buybacks we've completed in the past 12 months. Our adjusted tax rate was up slightly, driven by our geographic mix of earnings. Interest expense was higher versus last year, as we anticipated. Now let's move to our business segment results, starting with Engineered Bearings on Slide 16. For the second quarter, Engineered Bearing segment sales were $857 million, up 7.4% from last year. Organically, sales were up 1.6%, as higher pricing across all sectors more than offset lower volumes on a net basis. Renewable energy and rail posted the strongest sector gains in the quarter, while distribution declined against a difficult comp last year. The net effect of acquisitions and divestitures added seven percentage points of growth to the top line, while foreign currency translation reduced growth by 1.2 percentage points in the quarter. Engineered Bearings adjusted EBITDA in the second quarter was $190 million, or 22.1% of sales, compared to $177 million last year. Segment margins were flat year-over-year, as favorable price mix and lower material and logistics costs were offset by higher manufacturing costs, the impact of lower volume and unfavorable currency. If you exclude the impact of currency and acquisitions, on an organic basis, our year-over-year incremental margin in Engineered Bearings was over 50%. Let's turn to Industrial Motion on Slide 17. In the second quarter, Industrial Motion segment sales were $415 million, up 16.8% from last year. Organically, sales increased 11.2%, led by strong growth in drive systems and services and growth in automatic lubrication systems, partially offset by lower shipments in belts and chain. We also realized positive pricing across all platforms in the quarter. The impact of acquisitions, net of the ADS divestiture, contributed around six percentage points to the top line. Industrial Motion adjusted EBITDA for the second quarter was $86 million, or 20.7% of sales, compared to $67 million, or 19% of sales last year. The sizable increase in segment margins was driven by the benefit of positive price/cost and improved operational execution on the higher volumes, which more than offset the impact of higher operating costs. Turning to Slide 18, you can see that we generated operating cash flow of $144 million in the quarter. Free cash flow was $94 million, up significantly versus last year, as earnings growth and improved working capital performance more than offset higher cash taxes and CapEx spending. From a capital allocation standpoint, it was a big quarter, as we returned $124 million of cash to shareholders through dividends and share repurchases. We raised our quarterly dividend by 6% and repurchased around 1.3 million shares, or about 2% of shares outstanding. This brings our year-to-date buybacks to over 1.9 million shares. We continue to be active thus far in the third quarter. We completed the Nadella acquisition at the beginning of April, which Rich has already covered. At the end of June, we reduced our ownership stake in Timken India Limited at an attractive value, generating pre-tax proceeds of around $285 million and reducing our controlling stake to just under 60%. We expect to use the proceeds to support our capital allocation initiatives during 2023, which is expected to be accretive to earnings per share on a net basis. We remain bullish on the India market and intend to maintain a controlling stake in Timken India going forward. Looking at the balance sheet, we ended the quarter with net debt to adjusted EBITDA at 1.9 times, which includes the net impact of the Nadella acquisition and Timken India transaction I just mentioned. Note that our leverage ratio was unchanged from the end of last year and remains well within our targeted investment grade range. With our strong balance sheet and the significant free cash flow we expect to generate in the second half, we remain in a great position to continue advancing our capital allocation priorities. Now let's turn to the outlook with a summary on Slide 19. As Rich indicated, we've updated our outlook for both sales and earnings to reflect current order trends and continued near-term economic uncertainty. Starting on the sales outlook, we're now planning for sales to be up 7%-9% in total, or 8% at the midpoint versus 2022, which is down slightly from our prior guide, reflecting more modest expectations for organic growth. We now expect organic revenue to be up 2.5% at the midpoint, which includes positive price realization and slightly lower volumes for the year off our strong performance last year. Our guidance assumes customers in certain sectors, including distribution and off-highway, will be reducing inventory in the second half. We're also planning for slower growth in China, which would include renewable energy. Acquisitions net of divestitures should contribute around 5.5% to our growth, and we're planning for currency to be relatively neutral to the top line for the full year. Both assumptions essentially unchanged from our prior guide. On the bottom line, we now expect adjusted earnings per share in the range of $6.90-$7.30. This represents about 10% growth versus last year at the midpoint and would mark a new all-time record for the company. Note that this includes a modest net accretion from the Timken India transaction. The midpoint of our earnings outlook implies that our 2023 consolidated adjusted EBITDA margins will be in the range of 19.3%-19.4% at the midpoint, which reflects our updated organic revenue assumption. This margin level would mark a new high for the company. Our margin expansion reflects our expectation for favorable price costs and improved operational execution, which should more than offset the impact of lower production volume and higher operating costs. Our margin assumption continues to reflect a sizable headwind from currency off the favorable impact we saw last year. Moving to free cash flow, we now expect to generate over $400 million for the full year, which is up over $100 million from last year and reflects the impact of higher earnings and improved working capital performance. Note that our structural free cash flow outlook is essentially unchanged from our prior guide, as our updated guide includes around $55 million of taxes to be paid in the second half related to the Timken India transaction. Note that the gross proceeds we received in June were reflected in net cash from financing activities, in other words, outside of free cash flow. Excluding the India taxes, our free cash flow outlook for 2023 would represent over 100% conversion on GAAP net income at the midpoint. We continue to anticipate net interest expense of around $95 million for the year, plus or minus, and CapEx of around 4% of sales. We now expect our adjusted tax rate to be in the range of 25.5%-26%, up slightly from our prior guide. To summarize, Timken delivered strong results in the second quarter, and we continue to advance our strategic and capital allocation priorities. We're on track for another record year, and we're confident in our ability to drive our strategy and grow the earnings power of the company over time. This concludes our formal remarks, and we'll now open the line for questions. Operator? Thank you. If you'd like to ask a question, please press star, then one on your telephone keypad. If you would like to withdraw your question, please press star, then two. We have first question from Stephen Volkmann of Jefferies. Please go ahead. Great. Thank you. Good morning, guys. Morning, Steve. Lot of good stuff going on here. Rich, I'm sure it's frustrating to see the stock reaction, but since that is what it is, I have to poke at trying to get to sort of what you're seeing in terms of sort of slower end market activity. Maybe the way to do that is kind of relative to slide six. I know you downgraded several of the end markets. I know you upgraded a couple others, but maybe you could just talk about what you're seeing, 'cause the end markets that you downgraded appear to be pretty strong, I think, to those of us on the outside, when we look at your customers' production and forecasts and so forth. Is this all just inventory re-reduction? If, if it is, how long does it last, or do you think there's actually some demand destruction here? I don't think there's any demand destruction, to answer that part first. I think also on, on inventory, it is very normal for us, as you know, Steve, to be overselling, into our customers, what they're selling and, and underselling. That's normal, and the key really is the underlying demand. What we are hearing and seeing from customers and industry data is that the underlying demand is good. With that backdrop, it's on slide six, we moved three markets to the right. We moved automation and industrial services and marine from mid-single digits to up high single digits. No major moves there, but, just a, you know, slight-slightly better than what we anticipated a few months ago. We moved two to the left, and that was industrial distribution and off-highway. I would say broader across the space, as we mentioned, China, which we've gotten off to a very good start to the year in China, but we did see orders softening in China. In total, we would, we would be a little less optimistic on China for the second half of the year. I, I think in particular to your comments of, of where we are hearing and seeing customers report much stronger results than what we are experiencing would be off-highway. A couple large OEMs have recently reported and, you know, organics up mid-teens to over 20% with, with some of that price, but double-digit unit volume. They also all talked about reducing their inventory in the second half, so we are experiencing that. They, while not guiding to 2024, I think, still remain bullish on the underlying demand. That would be the one, I think, where we've seen the largest separation in our outlook versus what's happening across the space. There's no material share changes there. Industrial distribution, same story, although a little less pronounced. You know, our large distributors that would be publicly reported in the U.S. and Europe are not reporting 15% and 20% growth, but they are reporting stronger numbers than down mid-single digits. A similar situation where we're getting input that, you know, our orders are probably going to, in the second half of the year, be below their sell-through rates. Got it. Okay, that's helpful. Then maybe just briefly on renewable energy and, and maybe wind specifically. I'm not an expert on wind. My head spins, no pun intended, when I try to look at that sector. It looks like at least one of the major global suppliers has kind of run into a big issue with some quality control, and they're maybe not producing anything for a little while. I'm, again, I'm not in the weeds on this, but does that impact you? How should we think about sort of wind specifically? You know, I don't wanna comment on customers, but the answer to your question there would be no, we don't, we're not having any specific issue, like that from a demand standpoint or revenue standpoint, with the exception of it, it would be more, I believe, for us, a China story. Again, a very strong start to the year, full year looking to be up, but we are expecting. There's a normal seasonal slowdown in the wind market for us in the fourth quarter, usually fairly pronounced. We're just expecting a greater one this year from a combination of the same things we talked about, a little bit of overbuilding, as well as a cooling of the China growth rate. Not necessarily a contraction in China, but a cooling of the growth rate. The other thing I'd say about wind, nothing has changed about our long-term optimism on the market. The world is gonna need a lot more renewable energy, and, the, the market has, in the little more than a decade we've been in it, it, it, it pauses, contracts a little bit from time to time. The growth path is certainly not linear, but we believe, there's still a lot of headroom for growth in that market, and, we feel good about it longer term. Great. Thank you. I'll pass it on. Thanks. Thanks, Steve. Thank you. We now have Bryan Blair with Oppenheimer. Thank you. Good morning, guys. Good morning. If you could offer a little more detail on off-highway and industrial distribution order trends, the cadence through Q2, exactly what you're seeing in Q3, and perhaps quantify how much channel dynamics in those markets influenced the reset to the full-year guide. I assume that it's both volume and mix impact for the second half. Yeah, you know, on the industrial distribution side, there is, there is an element of that that's backlog, that's make-to-order, but the vast majority of that is orders in and out within days. What you really have to look at much more there is the trend line that you're on and, and the, the sales rate of your customers, where we have that information, of what they're selling into their channels, the inventory levels, et cetera. You know, I'd say we just saw some sequential softening through the quarter, and, and we're getting direct input from the customers that they're looking to, to reduce some inventory in, in the second half. Off-highway is one more where we would have pretty good visibility to three, four months of, of demand generally. The second quarter didn't come in dramatically differently than what we expected from a revenue standpoint, but orders were softer, setting up for a softer second half. Again, generally, customers telling us, you know, be ready for a good 2024, but they're looking to adjust. Most of this is a reflection of the improved supply chains. When lead times go from eight weeks to four weeks, you need less orders, you need less inventory, and we're seeing that in a lot of places, and we're doing that ourselves. We're working to get our own inventories in line with better supply chain execution. I understood. That recalibration makes sense. A high level one, any, any color you can offer on the deal environment? You know, your balance sheet's obviously in, in solid shape, you're throwing off quite a bit of cash. Capacity's there, you've been on your front foot, you know, for a while in terms of M&A. Just curious what you're seeing, confidence you have in the deal pipeline and, perhaps getting another one, you know, across the line by the end of this year. I'd say the, the inbound remains fairly slow. It's not zero, but it's not as robust as, as it was before, before interest rates went up and COVID. It's certainly been slower, and I think that's well-publicized. Our outbound, the, the doors we're knocking on and the contacts we're making hasn't slowed down at all. I would see no reason we would not be able to bring something across the finish line within the next 12 months. I wouldn't wanna say yet this year, but I think our pipeline is active enough, and history would say certainly in the next 12 months, we would be able to do that. As I said, we do have a bias towards M&A with, with the cash we're gonna generate in the second half, along with the cash we generated from the TIO sale down. We're in a, a good position to deploy capital to, to one or the other in the next, 6-12 months, and we would certainly expect it to, be a, a meaningful contributor to 2024 earnings. Understood. Appreciate the time. Thanks again. Thanks. Thanks, Brian. We now have Rob Wertheimer of Melius Research. Howdy. good morning, everybody. I understand the same thing, but I, I, I kind of agree with Steve on the, the, the reaction's a little confusing, just given that I think channel inventory destock or OEM destock is, is not a surprise and it's been anticipated. Just couple questions. One, to clarify a question, your, your, your comments on China, Rich, is that a destock? It seems like renewables are pretty strong, so is that a OEMs loaded up a bit too much, or is there any market share shift or anything else explaining, slowdown in orders in China? Well, it was, it was definitely a couple of years of build, build, build, and we, you know, as capacity's coming online, ramp it up and now it's a, hey, we've, we're at an equilibrium here. We don't, you know, we don't wanna be as far ahead of it. I, I wouldn't call it a destock. I would call it a deceleration. It's still in our far right bucket, so it's looking to be up high single digits or more, just not quite as high as what we had anticipated. You know, too early to call on 2024, but it's still gonna be a growth sector. It's gonna grow this year. It's just not gonna grow quite as much, as in the second half as what we had anticipated. Perfect. Then, I guess you can see sort of elevated raw materials at Cat and, and maybe others, and so not a shock there. Do you have any sense as to whether you get through the destock in one or two quarters, or how big a drag to sales how big a boost to sales it was in the past, and how big a drag it might be, just so we can quantify the, the timing and the, you know, the, the magnitude of it? I'll stop there. Thanks. Yeah. I, I... One, we think it's been a drag for three quarters already. We talked about it in the 1st quarter, that we felt it was a drag in the 4th quarter and, and would continue to be a drag. We just upped it a little bit. You know, typically, particularly with larger OEMs, there's a lot of focus around the year-end cash flow and, and getting things right. We would certainly expect sequential. Then there's also the normal seasonality, right? It's pretty normal for us to have 51% or 52% of our revenue in the, in the 1st half of, of the year and, you know, 48 or 49 in the 2nd half of the year. But then we usually jump right back up in the 1st quarter. We are, we are expecting, you know, it to last a year, so we're not expecting, a surge in, shipments at the end of the year like we've had in some past years. But we certainly expect a step up sequentially to start the year, and I think it's just, a question of how much we jump up from the fourth quarter to the first. One thing I would add, too, in the markets, I know we've hit industrial distribution and off-highway and renewables, but, you know, on the, on the flip side, we did see, we did move some markets to the right, really highlighting the diversity of the portfolio. Got off to a great start in Marine, started some new business during the year, which is moved that over to the right. Industrial Services has got a, a very good backlog at the end of the second quarter and had a really strong second quarter, so we moved that over to the right. Automation had a, had a strong first half. We expect a strong second half. Certainly, industrial distribution, renewable and off-highway are big sectors for the company, but we are seeing robust growth and even strengthening conditions in other, in other verticals or other sectors, which is again, a highlight to the diversity of the company. Got it. Thank you. Thanks, Rob. Your next question comes from Steve Barger of KeyBanc Capital Markets. Please go ahead when you're ready. Hi, good morning. Morning, Steve. How quickly does the view around organic growth... Yeah, thanks. How quickly does the view around organic growth weakness emerge in the quarter? I ask because your inventory went up sequentially. How many quarters of reduced production are we looking at to get your inventory in line to where you want it to be? Yeah. Hey, Steve, this is Phil. I would tell you on the inventory, it, it looks like it went up sequentially, but don't forget, we had the Nadella acquisition coming in there. We would say- Right organically, we were down slightly if you take out acquisitions and currency. It was more, more flash. It would've been down, you know, maybe, maybe $10 million or so. Then on, on the trends of the order intake, you know, we talked about, we were here a quarter ago. We had had April. We had talked about April running consistent with Q1. It was really as we worked through May and June, where we saw, you know, a, a, a shelter, as Rich said, a deceleration a little bit in the order intake in certain sectors, and then that translated to, you know, slightly lower sales for the quarter. All those sales for the quarter came in very close to our internal expectations, but did see a slight deceleration there as well, which then prompted us to look out the rest of the year and take the full year outlook down on the anticipation of the inventory reductions in off-highway and distribution, as well as the broad, broad slower growth in China, which is rippling into renewable energy as well. ... Just to comment a little more on Phil just said, the second quarter was not off significantly. We would have expected to be, you know, flat to up 1%. We were down 1% organically, sequentially. It was more, and it was more of the orders, in, in May and June and July. The messages from the customers of, what they're looking at for the, for the second half. It was, the, the second quarter, we expected to be flattish and is pretty close to flattish. Yeah. As it relates to the guidance, you know, the $0.10 cut at the low end is pretty small. I'm curious, with two quarters left, why not just qualitatively push people towards the low end? Or do you see enough headlines that there's a real chance that $7 is off the table? No, I would I would say, Steve, it was really just us trying to, trying to call it as well as we, as well as we could see it. Obviously, a, a $0.40 range at this point in the year arguably maybe is a little bit wider, which factors in, you know, really the economic uncertainty, and then, and then it really sort of takes into account, yeah, we're anticipating an inventory reduction over the back half of the year. We don't precisely know what that's gonna be, so the range really enables us to really put a, you know, put a fence around the organic growth over the course of the rest of the year, and then the... On the top line, and then that just sort of translated to what we expected in the bottom line over the second half. You know, I think, you know, $7.10 at the midpoint was sort of our best estimate, and, and felt like we put a $0.20 range on each side of that at this point, given the uncertainty. Another comment I'd like to make on the organic growth. certainly in the short term, we have to take what markets, give us and deal with it. We certainly think the, you know, the high end of the range, we wouldn't put it out there if we didn't think, we had a good shot at achieving it. Plus, wanna hit, you know, I take you back to the slide on the, on the five-year performance, and it looks equally good if you go back seven and eight years. you know, we're not just riding markets here. If we're in an inventory correction for a couple of quarters, I mean, the real, these, these things are normal, and, and, we're really been adding consistent, organic revenue through our organic outgrowth initiatives as well as M&A, and we're gonna continue to do that. I think when you look at the longer term, it's gonna be really, really positive. Appreciate that context. Thanks. Thanks, Steve. Thank you. We have our next question from Michael Feniger of Bank of America. Hey, everyone. Thanks for for taking my questions. I realize price versus cost is, is gonna stay positive. Just help us understand that, that price versus cost spread, does that stay consistent in the second half, or does that, does that begin to narrow? And I realize that Q3 last year was, was a really strong quarter for pricing, so a tough comp. Just help, help us understand, you know, that price growth figure as we exit the year, is that, is that still positive? Thanks. Yeah. We expect it to be positive every quarter, every month of the year. It does moderate on the price over price moderates on harder, more difficult comps. We came into this year saying, you know, we had some carryover, some new pricing, but less than prior year. As the year moves on, that becomes a little bit less. We'll also have some carry forward to start next year as well. On the cost side, we have some improving costs of logistics and raw material, but now we have a volume headwind as well, that's mitigating some of that. We would still expect price cost to be positive and costs not to decline, but to be leveling off. They, and they largely have been leveling off for the last, several months. Yeah, I mean, you know, I think the issue with the price is obviously the comps get tougher, so the year-over-year benefit from pricing kind of moderates as you move through the year. The cost, the cost benefit should be there, Mike, so it'll be a solid contribution in the second half, no question. Then on the price, you know, we came in, just to maybe comment on that a little bit more directly. You know, we came into the year saying we thought we'd land somewhere between, say, 2% and 4%. We're getting pricing, we're holding pricing, and at this point, we, we would expect pricing for the year to come in over 3% at this point. And obviously with customers are still raising prices, input costs remain high, albeit off peak levels. We don't, we don't see material risk of, of any price downs this year. As I said, price is, price is holding well, and we're still getting pricing in the marketplace. Yeah, well, we are getting self-help on the cost side. I would say we are operating the most efficiently today that we have, probably since the pandemic hit and we started initially experiencing shutdowns and then, and then, you know, from there, the supply chain problems. We are operating more effectively, and I think more importantly, we're, we're back to the relentless focus that we have on operational excellence versus chasing supply chain issues. I feel good about where we're at from a, from an operating standpoint, and I haven't been able to say that for, for quite a while. Thank you. Just on renewables, I, I realize China is still positive for the year, up high single digits. You made some comments on orders. Are, are, are orders starting to turn negative in, in, in the back half? Just broadly on renewables. Obviously, you know, as, as Steve referred to earlier, there's this highly publicized issue with wind. I'm just curious if you're seeing or hearing any impact that that could have on future investments as we're, we're going out for the next 12 months? On wind, we, you know, it's an area where we typically have at least three and generally six good months of backlog. You know, again, what we saw really more was the fourth quarter not filling in to the degree that we would have liked in the last quarter. Again, normal seasonal decline, but, you know, we were expecting the strength to continue and we're, we're, we're seeing some softening there. You know, not looking to call positive or negative, but sequential softening from the second quarter to the third and the third to the fourth is what we would expect. I do not expect any long-term changes in the wind outlook or the solar outlook as we sit here today. The industry has had its share of warranty issues. It's relatively new technology. That's one of the reasons why Timken is very valued in there. That's one of the things and that we do very well. You think about the loads and the operating conditions that this technology is exposed to, it's very demanding and requires companies like Timken that can solve highly technical problems. We remain committed to it, believers in it, and it's gonna grow long term. I would just. Appreciate that. Kind of anecdotally, Mike, that, you know, Timken's warranty expense, warranty expense is actually down in the quarter versus last year. The warranty, warranty experience at the company and that kind of wood remains, remains quite good. Great. Thank you for that. If I could just squeeze one more in. I, I know it got asked about the off-highway comm, if you could touch on this. I, I believe off-highway includes, you know, ag, mining, construction. Is there a particular vertical within off-highway that, that, that you would cite here, that, that you noticed any step function change, this quarter? Thank you. Yeah, I would say in the quarter, Mike, you know, among the, call it, the off-highway verticals, we sort of always talk about ag, mining, construction, and there's a variety of others, hydraulic equipment, et cetera. It was mainly, it was mainly in the, in terms of the year-over-year, probably a little bit lower in ag, and then the other, other, elements like hydraulic equipment and whatnot, whereas mining and construction were both, were both up in the quarter. And then as far as the, the look forward, though, when we think about, some of the inventory reductions we expect from our, from our customers, that would be more broad than that. I think as we look over the course of the rest of the year, would expect that to impact us a little bit more broadly, as, as we're not really seeing any, we're not hearing any specific areas of inventory. It's more, "Hey, we generally wanna, wanna take our inventory levels down to reflect the current conditions. I would add, we moved it from up mid-single digits to neutral. Yeah. It was not a, it was not a huge move, and as I said, it's common for us to be selling more or less to our customers, depending on what they're doing with inventory and what they're looking at forward. For us to be neutral and off-highway, it would not be abnormal for the customer base to be up five or 10 if they're looking to take inventory out. Yeah. On a unit basis, up five or 10. Thanks, Mike. Thank you. There are no remaining questions at this time. Sir, do you have any final remarks? Yeah. Thanks, thanks, Brika, thank you everyone for joining us today. If you have any further questions after today's call, please contact me. Thank you. This concludes our call. Thank you for participating in today's Timken's second quarter earnings release conference call. You may now disconnect.