CNH Industrial

Good morning and welcome to the CNH 2025 Third Quarter Results Conference Call. All participants are in a listen-only mode. After the speaker's remarks, we will have a question and answer session. To ask a question at this time, you will need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I will now turn the call over to Jason Omerza, Vice President of Investor Relations.

Thank you, Julianne, and hello, everyone. We would like to welcome you to CNH's third quarter earnings presentation for the period ending September 30th, 2025. This live webcast is copyrighted by CNH, and any recording, transmission, or other use of any portion of it without the written consent of CNH is strictly prohibited. Hosting today's call are CNH CEO, Garrett Marks, and CFO, Jim Nicholas. They will reference the material available for download from our website. Please note that any forward-looking statements that we 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. Our 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 welcome to everyone joining the call.

Our third quarter ended in an evolving world of global trade, but with progress along our articulated priorities to lighten channel inventory, reduce our quality and product costs, break new ground to cross our lineup of iron and technology, and build a solid foundation for our recently announced 2030 mid-cycle margin commitment. Since the very early days of our industry, farmers have seen many cycles and shifts in global trade, some even larger and more disruptive than this one. As we look forward beyond the current cycle, it is certain that most arable lands around the world will be used for technology-led crop production and livestock farming. It is certain that most arable lands around the world will be used for technology-led crop production and livestock farming to feed the growing population even if it requires growing different crops. As the only other truly global full-line agriculture machinery provider, CNH is going to play an even larger role in helping feed the world, as we will showcase next week during our Tech Day at the Agritechnica Fair in Hannover, Germany. We are thoughtfully transforming our global supply chain footprint and dealer network to mitigate the risks of further volatility that may emerge in our industry. With this clear direction in mind, we have maintained the overall low levels of production that we initiated in the third quarter of 2024 to help reduce C&H dealer inventories and clear aged products while still defending and in some cases growing market shares. Both ag and construction production was flattish year over year, but large ag production was down 10%, while small ag was mostly up. Our ag dealers' new inventory levels saw another sequential decline of over $200 million, putting them on track to achieve our targeted levels over the next three to four months. Our North American dealers used inventory also saw another sequential decline in the quarter. While that's all good news for CNH, market fundamentals remain uncertain and challenging for our farmers, and it is difficult to say if we will enter 2026 with more visibility or even more momentum. Conditions in South America, and Brazil in particular, continue to be a headwind for our farmers. While we had expected to see this region as the first to emerge from the downturn, difficult geopolitical and market circumstances have persisted. Similarly, conditions in North America have been difficult for farmers, as they see the global trade shifts impact their very own operating bottom line. Even with the recent announcements around the trade deal with China, material subsidies for farmers in their different forms are needed while the leveling of the global trade playing field is progressing. So in the meantime, we use all these shifts, changes, and drags on global framework condition as an opportunity to invest our resources in building a better and higher performing CNH during these slow quarters. We can prepare for upcoming product launches and define new ways of working more efficiently. This business has always been very cyclical, and maintaining a through-cycle perspective on what matters accompanied with consistently delivering profits and cash flows make all the difference. We're advancing our investments in iron and technology all the way to agentic AI applications for our digital farm management system, FieldOps. We continue to take obsolete costs out of the operations to improve our underlying margin profile, outside of the near-term tariff impacts. And we continue to make progress on our new go-to-market network development strategy with regionally important steps to emerge over the next year. So while we thoughtfully navigate near-term challenges, our focus remains on investing in the business to secure leading positions across all our major markets. In full alignment with our board of directors, we are pursuing the path we laid out on May 8th with determination and a healthy dose of flexibility as we navigate near-term challenges. We are C&H and we will deliver. With that, let's turn to the results. As expected and projected, our Q3 results now reflect the delayed impact of tariffs on our costs, which did not yet have a material impact in Q2. As a reminder, we introduced additional pricing adjustments effective with new orders received after May 1st, and we also started to see some of that benefit in Q3. It is our intention that we will eventually offset all the tariff cost impacts through cost mitigation, structure realignment, and pricing actions. In 2025, however, we are absorbing some of the impact alongside our suppliers, network partners, farmers, and builders as we navigate these new trade realities. The changed conditions for purchase components and ship machines impact the entire industry, and relative differences in exposure and footprint will impact near-term results differently. 2026. will be a year of alignment and adjustment for our industry, and we expect those to play out fully for the 2027 season. Consolidated revenues for the quarter were down 5% at $4.4 billion. Our global X segment sales were down 11%, with North America down 29%, but in the up, 16%. While the geographic mix shift has a negative effect on our margins, It is encouraging to see some bright spots in EMEA sales, particularly tractors, especially in Eastern Europe and in the Middle East, and to some extent also in Germany. Some of our product launches to be revealed next week in Hanover are precisely targeted to fill gaps and gain more ground in those markets for CNH. We will explain these step changes in greater detail next week. Industrial adjusted EBIT was $104 million, down 69% compared to last year, mainly reflecting the impacts of lower industry demands, tariffs, and geographic mix. Adjusted net income was $109 million with adjusted EPS for the quarter at $0.08. While the markets are not helpful to our farmers, growers, and builders these days, We remain more committed than ever to strengthening the company and prioritizing long-term value creation. Our company strategy is centered around five key strategic pillars. Expanding product leadership, advancing our iron and tech integration, driving commercial excellence, operational excellence, and quality as a mindset. These pillars remain front and center to ensure we stay aligned with our long-term strategic objectives. and our team remains focused and united in our shared purpose to feed and build the world we all live in. Today I would like to focus on a few of these items that demonstrate our commitment to the future while we turn the challenges of the present into opportunities for the future. First, in the era of expanding product leadership, I'm revisiting a chart that we showed at our Investor Day in May. It shows a sample of our extensive product offering across many different farming applications. At the 2025 AgriTechnica show next week, we will be unveiling several new products, highlighted here, with key launches across our tractor and hay and forage lineup. Furthermore, we will be launching significant upgrades across our full product portfolio in terms of both iron and technology. Stay tuned as more news will be revealed about these products next week, but we are very excited about the advancements that we are making here. Speaking of Ivory Technica, in advance of the show, we received two Innovation Award silver medals for our corn header automation and forage cam. The corn header automation system uses advanced AI and automation to enhance corn harvesting, which ultimately results in more high-quality grain in the tank. ForageCam uses a camera to instantly analyze crop flow and kernel fragments, delivering real-time kernel processing scores and helping to boost livestock nutrition. These technologies, which deliver significant agronomic advantages, demonstrate how CNH continues to deliver the tools and innovations that create the most value and the greatest impact for farmers. We have transformed how we think about quality within CNH. We are taking a 360-degree view of quality, spanning product development, supply chain, manufacturing, and our dealer network. Let me give you a few examples. We have embedded quality into everything we do, and our suppliers are a big part of that. Through our strategic sourcing program, we are selecting suppliers who meet our stringent quality standards. These collaborative partnerships yield more reliable, durable parts that directly enhance our machine's performance. In an industry downturn, it's tempting to focus only on the purchase price of our components, but we are maintaining a holistic view of quality throughout the sourcing process while we still take costs out from our purchased goods. Programs that we piloted at our Racine plant, such as no-fall forward and dynamic vehicle validation testing, are now being deployed at other facilities. I'm happy to report that, as measured by our dealers, we are now achieving the highest delivered quality scores for our large tractors that we have seen in over a decade. Our dealers recognize the difference, and our customers are seeing it, too. We never want to have machine downtime. But when problems do occur, our motto is fix right first time. Our diagnostic AI tech assistant tool is providing dealer technicians with real-time insights at their fingertips. It has significantly reduced the time it takes to identify solutions, and we see that in our dealer help desk efficiencies. We already see the benefits in our bottom line. Year-to-date, we have reduced our quality costs by over $60 million, and there's a lot more to go, as we discussed during the investor day. But perhaps more importantly, this commitment to a quality mindset reinforces the trust our customers have in our brand and lays the foundation for achieving a higher net price realization for new and used machines over time. With that, I will now turn the call over to Jim to take us through the details of our financial results.