“Including the net impact from incremental tariffs we expect full year adjusted operating profit margin to be in the bottom half of the target margin range.”

In context

“t margin is expected to be similar to the prior year. Including the net impact from incremental tariffs, we expect third quarter enterprise adjusted operating profit margin to be lower versus the prior year. Given the strength of our record backlog, we expect full year 2025 sales and revenues to increase slightly versus 2024. This represents an improvement since our outlook last quarter, and our full year outlook from the beginning of the year. Full year services revenues are expected to be about flat versus 2024. This is slightly lower than our previous expectations due to lower-than-anticipated machine rebuild activity throughout the year. Excluding the impact of incremental tariffs, full year adjusted operating profit margin is expected to be in the top half of our target margin range. Including the net impact from incremental tariffs we expect full year adjusted operating profit margin to be in the bottom half of the target margin range. This estimate includes the initial mitigating actions already implemented and currently planned throughout the rest of the year. We also expect ME&T free cash flow to be around the middle of the $5 billion to $10 billion target range. Andrew will provide more details on key assumptions for the third quarter and full year in a moment. To further support our sales outlook, I'll now share the latest view of our end markets. Starting with Construction Industries. As I mentioned earlier, we're encouraged by another quarter of sales to users growth, strong order rates across many of our regions and backlog growth. Customers continue to be responsive to the attractive rates we're offering through Cat Financial. And as a result, we anticipate full year growth in Construction Industries sales to u”