The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Stephen Volkmann - Jefferies LLC - Analyst
: I guess I will focus on tariffs. And you talked about the $1.2 billion, I think, headwind, I think that was your '26 number. But how are you
thinking about offsetting that and over what period would you think that that perhaps you'd be able to kind of recapture that. I'm trying to
think a little bit about the cadence of the year. I assume you'll improve as the year progresses. But I'm curious how you're thinking about it.
Question: Stephen Volkmann - Jefferies LLC - Analyst
: Thank you.
Question: Jamie Cook - Suntrust Robinson Humphrey Capital Markets - Analyst
: Just a question on production in Precision Ag, just the -- on a 7% sales decline, the implied decrementals, I think, are approaching 60%. So
just trying to understand that. I mean, I'm assuming a good portion of that is tariffs. So how much is allocated to tariffs. And also just your
comments on mix, understanding North American large ag is going to be down a lot, but you've also spoken to improving profitability in
other regions, in particular, Brazil.
So if you could just unpack the decremental margin on the sales decline.
Question: Kristen Owen - Oppenheimer & Co Inc - Analyst
: I wanted to double click on the large ag price assumption, that 1.5%. I think when we were talking about early order program that number
in North America was closer to 3% to 4%. So could you just help us unpack at 1.5%? How much of that is being driven by maybe some of
the geographic mix? Just a little bit more color on the underlying assumptions for that number.
Question: Timothy Thein - Raymond James - Analyst
: The question is just on production costs in '26. You highlighted tariffs, but just ex that, you saw kind of a build throughout '25 just in terms
of production costs. How are you thinking about that as we look into '26. Obviously, a number of pieces that flow into that. So maybe just
some help in terms of for the overall equipment upside we're thinking about production costs.?
Question: Chad Dillard - Sanford C Bernstein & Co LLC - Analyst
: So a question for you on your guidance. So as we think about 2026, to what extent does it embed any additional farm assistance from the
government. And then also, just like how do you think about the operating leverage of the business coming out of this deeper-than-the-normal
cycle?
Question: Steven Fisher - UBS AG - Analyst
: I wanted to just clarify a couple of assumptions that you mentioned in the dialogue. I think there are some folks that were surprised to see
the expectation of South America flat in light of some of the sort of incremental caution we've seen there, but it sounds like you cited some
potential for lower interest rates. Can you just kind of give us a little more color on your confidence there. And then on the small ag side,
you cited some expected improvement in -- or better results as a result of better housing activity. Can you just clarify if you've seen any
indications of that already.
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