CNH Industrial

Good morning and welcome to the CNH 2026 Second Quarter Results Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now turn the call over to Jason Omerza, Vice President of Investor Relations.

Thank you, Paige, and good morning, everyone. We would like to welcome you to CNH's second quarter earnings call for the period ending June 30th, 2026. 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. Second quarter results were generally in line with our expectations as we continued managing through a difficult point in the agricultural equipment cycle. Operationally, We are making good use of this period to drive improvements in quality, sourcing, and manufacturing efficiency. These actions are supporting performance today while strengthening our foundation for the future. We also continue advancing our precision technology capabilities with increasing adoption of connected and AI-enabled solutions across our installed base and dealer network. While overall market conditions remain challenging, particularly given pressured farmer profitability, we are seeing encouraging developments in several but not yet all equipment cycle indicators. As we think about the eventual recovery in our end markets, we find it helpful to focus on a handful of indicators that have historically provided a good signal for both the timing and strength of the next up cycle. First, channel inventories of new machines need to normalize in line with near-term three to five forward months of sales demand, depending on the machine type, and support a steady production environment. Second, used equipment inventories need to return to healthy levels, creating the financial and physical capacity for dealers to manage new equipment flow-through. Third, the spread between new and used equipment values needs to normalize, allowing farmers to trade equipment economically, supporting replacement demand. Fourth, commodity prices need to move sustainably above production costs and provide farmers with confidence that current profitability levels are durable enough to carry new equipment investments. And fifth, farmers generally need a profitable season behind them and confidence in another profitable season ahead before replacement demand broadens. In addition, something that helps but is not necessarily a demand driver is government assistance programs and interest rates. Farm bills that subsidize crop insurance or borrowing rates, for example. This is all helpful, but it does not set the market recovery in motion. The industry is making good progress on the first three indicators across our major regions, although there is still work to do through year-end. Dealer new and used inventories continue to normalize, equipment fleets continue to age, and the price gap between new and used equipment has begun to converge following several years of divergence. What remains largely absent are the fourth and fifth indicators. Commodity prices remain at or below break-even levels for many growers, while fuel, fertilizer and transportation costs remain elevated. As a result, overall farm profitability remains under pressure and farmers remain cautious with larger capital investment decisions beyond immediate replacement demands. When we put all these factors together, our baseline expectation is for an L-shaped recovery with 2027 retail demand remaining broadly flat, with replacement demand continuing to carry much of the market. As inventories normalize, we expect to increase production to better align with retail demand. Beyond replacement demand, however, it will take stronger farm profitability and greater farmer confidence to support a more pronounced industry recovery. While we don't yet see evidence of a sustained recovery, conditions are becoming more constructive and several of the foundational elements required for the next phase of the cycle are falling into place. Turning to the results, our second quarter performance reflects seasonal sequential volume improvements after a low Q1 and continued discipline execution across the business. Consolidated revenues were $4.8 billion, up 2% year over year, including about 2% positive currency impacts. Our ag segment sales were up 1%, with North America up 10%, EMEA up 1%, but South America down 27%. With farm incomes depressed and macroeconomic uncertainty, we saw continued softness in equipment demand. Industrial adjusted EBIT was $167 million, reflecting lower industry demand as well as the continued impact of tariffs. These factors were only partially offset by positive pricing and cost-saving actions. For the quarter, adjusted net income was $161 million, with adjusted EPS at 13 cents. Free cash flow from industrial activities was $150 million a year over year decline due to lower EBIT and higher working capital investments. We remain fully committed to our long-term strategy and delivering sustainable value through the cycle. 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. Even in a challenging market environment, we continue investing in the capabilities that will differentiate CNH over the long term and position us strongly for the next cycle. Today, I would like to focus on the progress we are making in our dealer consolidation efforts and our strategic sourcing program. In February, we told you about some flagship transactions around the world where we are expanding and consolidating our dealer network. Today, I'm going to review a few more success stories with you. Splintered Oak in East Texas is an example of a dealer expanding its territory. We also have dealer owners expanding to both brands, such as Gritz in Wisconsin, ATV Sachsen in Germany, and Kokri in Brazil, all expanding into dual brands through acquisitions of Case IH locations. Expanding our dealers reach not only helps their ability to service farmers in the markets, it also helps focus our strong and iconic brands more individually and in their collective lineup to compete more effectively in the marketplace. We're getting ready to officially launch the next wave of our strategic sourcing program next month with our supplier convention in Amsterdam. So I thought I would take the opportunity to remind you what this program is and what it is delivering. The program is a disciplined process where we identify potential suppliers alongside our existing vendors and conduct rigorous evaluations to achieve the best supply chain for CNH. The goal is not just material cost reductions, although that is certainly one of the outcomes. We are also looking for a supply base that can grow with us, deliver outstanding quality service production and aftermarket demands and work with us on finding the best total value for our farmers and builders. The program has been a great success so far and we are well on our way to meeting our target of adding 100 to 150 basis point margin improvement from this sourcing effect alone by 2030. I look forward to meeting with our next wave of prospective suppliers in September and continue this important transformation. With that, I will now turn the call over to Jim to take us through the details of our financial guidance.