“Our global annual effective tax rate is anticipated to be 23% excluding discrete items, MP and E free cash flow should be slightly lower than 2025 reflecting the high CapEx of around $3.5 billion in 2026.”

In context

“$2.6 billion, which is $800 million higher than incurred in 2025. If we did not take the actions we plan to take in 2026, this bill would be around 20% higher. We expect incremental tariff costs of around $800 million in the first quarter, a level similar to 2025. The run rate should improve towards the second half of the year as we take actions to reduce our tariff exposure. Finally, please remember that tariffs are volume sensitive. We will continue to take actions to manage our costs in the normal course of business and remain committed to operating within our adjusted operating profit margin target range with the goal of being around the midpoint of the range over time. Now concluding our expectations for the year, we expect restructuring costs of roughly $300 million to $350 million. Our global annual effective tax rate is anticipated to be 23% excluding discrete items, MP and E free cash flow should be slightly lower than 2025 reflecting the high CapEx of around $3.5 billion in 2026. Now turning to slide 18. To assist you with your modeling, I'll provide color on the first quarter. Starting with the top line, we would expect stronger sales and revenues versus the prior year. We anticipate stronger volume in K, including sales to users growth, and a tailwind from machine dealer inventories. We expect a more typical machine dealer inventory build this quarter aligning with a seasonal pattern to the first quarter build in excess of $1 billion. This compares to flash levels in 2025. We also anticipate a favorable impact from price realization. In Construction Industries in the first quarter, we anticipate strong sales growth with the increase versus the prior year, driven by volume and favorable price realization. We expect continued sales to users growth with our confide”