“Excluding this tariff impact, our second half margins are expected to be stronger than the prior year.”

In context

“will be about flat for the full year, which implies some net build in the second half, versus a decrease in the corresponding time period in 2024. Energy & Transportation sales should grow in the second half as well, driven by the strength of our backlog and robust order activity. We expect some adverse price realization in the second half versus the prior year, although this will be at a lower level than in the first half. Now moving on to margins. Excluding the impact of incremental tariffs, the full year adjusted operating profit margin is expected to be in the top half of our margin target range. However, including the net impact from incremental tariffs, we now expect full year margins will be in the bottom half of the target range, on slightly higher sales and revenues versus 2024. Excluding this tariff impact, our second half margins are expected to be stronger than the prior year. However, we anticipate they will be lower when incorporating the net impact of incremental tariffs. Based on the incremental tariffs announced in 2025 and expected to be placed on August 7, we expect the net impact from incremental tariffs for 2025 will be around $1.3 billion to $1.5 billion, net of some mitigating actions and cost controls. This assumes higher net incremental tariff impacts in both the third and fourth quarters compared to the second quarter level. Due to the timing of recent rate changes, the headwind is likely to be larger in the fourth quarter when compared to the third quarter. As Joe mentioned, we expect ME&T free cash flow will be around the middle of the $5 billion to $10 billion target range, or around $7.5 billion. We now expect restructuring costs of approximat”