“We expect about 25% of the third quarter tariff impact will be incurred in Energy & Transportation.”

In context

“pect about 55% of the third quarter tariff impact will be incurred in Construction Industries. In Resource Industries, excluding the impact from incremental tariffs, we anticipate a lower margin versus the prior year, mainly due to lower price realization and higher SG&A and R&D costs. The net impact from incremental tariffs will reduce it further. We expect about 20% of the third quarter tariff impact will be incurred in Resource Industries. In Energy & Transportation, excluding the impact from incremental tariffs, we anticipate slightly higher margin versus the prior year, mainly due to higher volume and favorable price realization, partially offset by higher manufacturing costs. Including the net impact from incremental tariffs, we anticipate similar margins compared to the prior year. We expect about 25% of the third quarter tariff impact will be incurred in Energy & Transportation. So turning to Slide 16, let me summarize. We are increasingly optimistic about our underlying business and now anticipate slightly higher sales for the full year, including a stronger second half. Business activity and customer financial health remains strong, as do our balance sheet and liquidity positions. With the net impact from incremental tariffs, we expect to be within the bottom half of our target range for adjusted operating profit margins, and around the middle of the target range for ME&T free cash flow. We continue to execute our strategy for long-term profitable growth. And with that, we'll take your questions. Operator: [Operator Instructions] Your first question comes from Tami Zakaria with JPMorgan. Tami Zakaria: I appreciate the quantification of the tariff headwinds. My”