CNH Industrial

and welcome to CNH fourth quarter conference call. Please note this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. I will now hand you over to your host, Mr. Jason Omerza, Vice President of Vestor Relations, to begin today's conference. Thank you.

Thank you, Ben, and good morning, everyone. We would like to welcome you to the webcast and conference call for C&H Industrial's fourth quarter and full year results for the period ending December 31st, 2023. This call is being broadcast live on our website and is copyrighted by C&H. Any other use, recording, or transmission of any portion of this broadcast without the express written consent of C&H is strictly prohibited. Hosting today's call are C&H CEO Scott Wine and CFO Adone Anchisa. They will use the material available for download from the CNH website. Please note that any forward-looking statements that we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor Statement included in the presentation material. Additional information pertaining to factors that could cause actual results to differ materially is contained in the company's most recent annual report on Form 10-K, as well as other periodic reports and filings with the U.S. Securities and Exchange Commission. The company presentation includes certain non-GAAP financial measures. Additional information, including reconciliations to the most directly comparable U.S. GAAP financial measures, is included in the presentation material. I will now turn the call over to Scott.

Thank you, Jason, and thanks, everyone, for joining our call. Our 2023 fourth quarter and full-year results reflect this C&H team's resilience and dedication to driving customer-inspired innovation, lean operations, and sharp commercial execution. With purpose, pace, and positive changes progressing throughout the organization, the results are evident in our margin progression. Our agriculture and construction segments both achieved record EBIT margins for the year as they balanced continued price discipline with aggressive cost management. We are improving through cycle margins to be more profitable regardless of industry strength, and our ag business demonstrated that in the fourth quarter. 2023 was our second full year as a pure play agriculture and construction company, and we again achieved record revenue and net income. I'm quite proud of the way the team addressed a challenging demand environment, notably in South America, where we are benefiting from our long-term focus on customer and dealer satisfaction. Our Brazilian dealers gave us early warnings about farmers postponing purchases, allowing tighter management of dealer inventories and demonstrating our commitment to their success, not just ours. Since the demerger, we have been fully able to fund our core businesses and allocate capital more efficiently, evidenced by our increased R&D and CapEx investments. The benefits from our intensified focus on product development are already visible as we launch 72 new products in 2023. many of these fully integrated with in-house tech solutions, garnering positive feedback from dealers and customers. This helped push our sales contribution from precision tech components over $1 billion in 2023 as planned, and that is just the beginning. We have considerably more tech-enabled products coming in the quarters and years ahead. Fourth quarter, consolidated revenues were down 2%, and industrial net sales declined 5%. as South American markets remain soft and we underproduce low horsepower tractors in North America. Despite the drop in sales, we expanded industrial even margin by almost a full percentage point with adjusted net income growing 15%. Adjusted EPS for the quarter was 42 cents, up six cents from last year. As Adoni will highlight, we are beginning to see the benefits of our enhanced focus on cost. Our full year earnings results were equally impressive. Industrial net sales were only up 3% over the prior year, but EBIT rose 12%. As price realization in the first half was supplemented by the accelerating impact of our cost actions, EBIT margin grew 110 basis points to 12.4%. Our CNH business system, or CBS, is leveraging our deep and talented global team to streamline our operations and businesses. Adjusted EPS was $1.70, an increase of over $0.24 since 2022. Recall that $1.70 was our original 2024 target, so we hit that a year early. Derek Nielsen and his agriculture team continued to execute extremely well last quarter, skillfully managing costs while confronting declining demand and elevated dealer inventories. Margin expansion in such an environment is tough, and I am proud of what this team has accomplished. Stefano Pavloni and his construction team also did an excellent job. Construction margins were up 230 basis points in the quarter and 260 for the full year as they improved dealer performance, product innovation, and cost efficiency. We decreased ag dealer inventory sequentially, but remained up more than 5% year over year. Our needed increase in North American inventories of combines and high-horsepower tractors outpaced proactive reductions in South America and in low-horsepower tractor inventories in North America. We have some work to do in product-specific dealer inventory levels, particularly in Europe, so we will maintain our retail execution focus and appropriately manage shipments. I want to clearly state that retail sales for both segments were ahead of the industry in the quarter and the full year. Our dealers' 2023 retail performance was impressive, and we appreciate their efforts. SG&A expenses declined year over year in the fourth quarter. We expect this trend to continue for every quarter in 2024, driven by our restructuring program, which is well underway. We reached an important and exciting milestone in our strategic sourcing program as we began supplier selection for the first wave of components. As we look at our strategic priorities, I would like to start with customer-inspired innovation. We mentioned last quarter that CNH won the only gold medal at Agritechnic for the New Holland CR11, our next generation flagship combine. I want to quickly highlight how it exemplifies the integration of world-class technology with our great iron. This machine offers a full suite of benefits requested by our customers, providing much greater productivity and yield for the farmer. Real-time machine learning, automated predictive adjustments, intelligent fuel management, and unique sensors to understand a crop's nutrient composition are just a few of the combine's extraordinary features. The CR-11, with its counterpart, the new Case IHAF-11, will cement our standing as the world's foremost large combine manufacturer and will especially help us improve our position in North America. These beasts will be in the field around the world this year for intensive testing and demonstrations with order books opening later this year for 2025 deliveries. T&H remains committed to adding value and creating profitable growth for its customers and shareholders through sustainability. We continue to build on our legacy of sustainability performance as evidenced by the recognitions we receive. For example, we placed in the top 5% of over 9,000 companies rated in S&P's Global Corporate Sustainability Assessment and took second place overall in the Dow Jones World Index in the machinery and electrical component category. Like our farmers around the world, C&H maintained its longstanding commitment to protecting the environment And we are excited about our customer adoption of our first-to-market innovations that enhance customer productivity while improving fuel and emission savings. Due to the continued supply disruptions in 2022, we purposefully delayed much of our $550 million cost reduction program. But with solid improvements in 2023, we remain confident of reaching that cumulative savings target this year. As a reminder, we are targeting three main drivers, reducing logistics costs, lean manufacturing operations through CBS, and supply chain savings, including our strategic sourcing program. With a solid foundation to build upon, CBS has been enthusiastically embraced around the company as we engage our employees to create more efficient processes using lean principles and Kaizen events. Strategic sourcing is ramping up and we will begin to contribute in 2024 with accelerating savings for many quarters to come. For our SD&A restructuring, a 10% to 15% reduction translates to about $160 million to $240 million of savings. We are well underway with this difficult work and expect to complete this effort in the first half of 2024. We are also zero-based budgeting our non-labor SG&A with an eye toward right-sizing some of our service agreements and expanding support operations in low-cost countries. Together, we expect these SG&A initiatives to save about $140 to $180 million in 2024, with the remainder carrying over into 2025. I will now turn the call over to Adonay to take us through the financial results.