CNH Industrial

I would now like to turn the call over to Jason Omerza, Vice President of Investor Relations.

Thank you, Brianna, and good morning, everyone. We'd like to welcome you to the webcast conference call for CNH Industrial's second quarter results for the period ending June 30th, 2024. This call is being broadcast live on our website and is copyrighted by CNH. Any other use, recording, or transmission of any portion of this broadcast is without the express written consent of CNH is strictly prohibited. Hosting today's call are our new CEO, Garrett Marks, and our CFO, Adone Anchiza. 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 Garrett.

Thank you, Jason, and thanks to everyone for joining our call today. Before I begin with the earnings results, I want to say that I'm excited and energized to be back at CNH after two and a half years at the helm of CNH's spinoff on-highway business. I want to thank everyone for joining this call and look forward to working with this great team around the world. My first 30 days have been spent getting myself reacquainted with CNH. While I was CEO at Iveco Group, CNH was my single largest customer of engines and we enjoyed a global partnership with financial services in Europe and Latin America. As such, I always remained up to speed on what was happening in the agriculture and construction industries. So in a way, I don't feel like I ever really left CNH, and the welcome I have received has been truly moving. But as I have gone, I've been going around the world, touring our manufacturing plants and R&D centers, meeting with our employees and visiting dealers and farmers, I've been really impressed and recharged with the spirit and dedication of this collective team of practitioners to advance the noble work of farmers and builders. I'm humbled and privileged to have this opportunity to lead this great company and to pick up and further refine the delivery of an ambitious plan from Scott Wine, for whom I wish all the best in his future endeavors. I'll come back to some of my near-term priorities at the end. But first, let's look at the second quarter results. The agriculture industry is going through a down cycle, and Scott and the leadership team had addressed this well in advance with decisive actions on structural costs, production cadence, and dedicated efforts such as our strategic sourcing program. All of this will be obviously continued as we add additional elements to these improvements. I'm also very pleased with the innovative products and technology that our team continues to unveil. These innovations showcase the world-class R&D and technology capabilities that are only found at CNH, and I'm committed to ensuring our business continues to embrace this creative and ingenious spirit. Companies are made of people, and how we play as a team will determine how well we compete and gain in the end markets. Team play is driven by shared values and behaviors, all based on a profound sense of trust and sense of belonging and performance. This will be a primary focus of mine while delivering financial results quarter by quarter. In order to create an even greater business focus and effective execution on key priorities, the Board and I agreed to further streamline our governance by designating agriculture as CNH's core business and my primary focus. Our reinvigorated construction business will be managed as a distinct and fairly independent operation for its own agility and optionality to seek opportunities in its industry. We will obviously keep nurturing the synergies with construction, both downstream and upstream, but we need to recognize that agriculture is and will remain our home turf. The second quarter was very challenging, and that is reflected in the financial results. Low industry retail demand coupled with the need for D-Levy stocking resulted in lower production and shipment volumes. Consolidated revenues were down 16% and industrial net sales were down 19% while maintaining our pricing discipline. Sales were down in all regions in both agriculture and construction. To counter this on our bottom line, we will remain focused on cost optimization on all levels and retail efficacy throughout the second half of this year. Industrial adjusted EBIT margin was 11.2% down 206 basis points compared to last year. While the lower sales and production affected revenues and fixed cost absorption, CNH was able to contain the impact on bottom line compared to previous downturns with our production cost and SG&A restructuring actions. Adjusted EPS was 38 cents compared to 52 cents last year. Now, going into a bit more qualitative detail of the quarter. Both the agriculture and construction industries deteriorated during the quarter, with ag retail demand further weakening amid depressed soft commodity prices. We continued our lower production output in an effort to support our dealers as they work through their inventory. Ag production hours were 30% lower than in the second quarter of 2023, with construction also down 20%, And we will continue adjusting our manufacturing output as needed to further reduce our dealer and company inventory levels. We also continue to assist dealers with marketing their used inventory through pool fund access, financing incentives, and technology retrofits. We cannot control the broader market, but we can control how we react and respond to it. The team has worked tirelessly to protect margins, and even in this period of diminishing volumes, we were disciplined on pricing. As the personal champion of continuous improvement and operational excellence, I'm committed to ensuring that we operate with an eye forward towards efficiency across the company through our structural cost reduction programs. Odona will give you a more detailed update on these programs a little later. Another one of my big focal points is product and service quality, adding the role of quality and customer advocacy to my top team. And while product quality has always been a priority at CNH, our Q2 results were negatively impacted by higher warranty costs as we expedited repairs in the field for products manufactured at our Racine plant during the recent strike. In total, these warranties weighed on our reported financials by over 40 million US dollars in incremental cost in the quarter and about 70 million US dollars for the first half of 2024. Racine today is back to top quality output levels and we are well prepared to work diligently through the pipeline of challenges jointly with our network partners. We will heighten our efforts in this area, making quality a mindset throughout the company. During the quarter, our restructuring program proceeded according to plan, and substantially all the remaining actions needed to be taken have been identified. Now, this does not mean that we are concluding our focus on cost and efficiency, but we are starting to see the impact of the changes that were made over the last six months, and this helped to reduce our SG&A costs by over 100 million US dollars compared to the first half of 2023. The streamlined leadership structure will help maintain spending discipline and deliver synergies from a simplified and more direct governance. I will now turn the call over to a donor to take us through the financial results.