“If you look at our price cost, expectation for 2026, inclusive of tariffs in that number, we expect to be price cost positive.”

Why this grade

Management revised full-year 2026 price/cost guidance down from positive to neutral before the commitment came due, driven by reduced pricing in C&F.

Deviation basis: qualitative shift from price/cost positive to price/cost neutral, not a percentage move

In context

“Great. Good morning, everybody. Thank you for taking the question. I guess I will focus on tariffs. And you talked about the $1.2 billion I think, headwind I think that was your 2026 number. But how are you thinking about offsetting that and over what period would you think that perhaps you'd be able to kind of recapture that? Trying to think a little bit about the cadence of the year I assume you'll improve as the year progresses, but curious how you're thinking about it. Thanks. Josh Jepsen: Yes. Thanks, Steve, for the question. You got the numbers right. So it's $1.2 billion is the pretax tariff hit in 2026. That's about $600 million incremental, from the $600 million that we saw in 2025. The run rate of the tariffs by quarter is pretty evenly spread, roughly $300 million per quarter. If you look at our price cost, expectation for 2026, inclusive of tariffs in that number, we expect to be price cost positive. So we'll start to capture back we'll capture the incremental exposure this year and some of the exposure that we saw in 2025. Won't get us fully there, but it gives us a good chunk along the way continue to execute activities to mitigate that. I'm going to expect to take some continued price in the future as well to cover that additional piece. Thanks for the question, Steve. Stephen Volkmann: Thank you. Operator: Thank you. Our next question comes from Jamie Cook with Truist Securities. Your line is open. Jamie Cook: Hi, good morning. Just a question on production and precision ag, just on a 7% sales decline, the implied decrementals, I think, are approaching 60%. So just trying to understand that. I mean, I'm assuming a good portion of that is tariffs. So how much is allocated to tariff”