“We continue to anticipate higher CapEx spend this year, likely to be around $2.5 billion.”

In context

“nce rate was 0.95%, remaining near historic lows. Business activity at Cat Financial remains healthy. Retail credit applications increased by 13% and retail new business volume grew by 8% versus the prior year, with increases in all regions. This reflects the attractiveness of our sales merchandising programs. In addition, used equipment inventory levels remain low and conversion rates remain above historical averages as customers choose to buy their equipment at the end of their lease term. Moving on to Slide 15. ME&T free cash flow was about $200 million in the first quarter. This is about a $1 billion decrease versus the prior year, primarily driven by lower profit. The quarter included our annual payment for 2024 short-term incentive compensation and CapEx spend of about $700 million. We continue to anticipate higher CapEx spend this year, likely to be around $2.5 billion. Moving to capital deployment. We deployed $4.3 billion to shareholders in the first quarter. Nearly $3.7 billion was for share repurchases, which included a $3 billion accelerated share repurchase, or ASR, that may last for up to nine months. The ASR provides us with favorable pricing, which is finally determined at an attractive discount to the volume weighted average price, or VWAP, over the full period of the agreement. Our balance sheet remains strong. We have ample liquidity with an enterprise cash balance of $3.6 billion, in addition to $1.2 billion in slightly longer-dated liquid marketable securities to improve yields on that cash. Now on Slide 16, let me start with a few comments on the full year. We are closely monitoring the evolving economic conditions. Demand signals were str”