Stanley Elliott: Great.
Operator: Thank you. The next question is from Seth Weber with Wells Fargo. You may go ahead.
Seth Weber: Hi guys, good morning and Happy Thanksgiving. I wanted to see if you could just give a little bit of context around your guidance for P and PA and the other segments where your growth is expected to be. Your decline is expected to be bigger than the industry declines. If you could just maybe contextualize that for us like why you would be underperforming?. What you’re calling for the industry end-markets? Thanks.
Brent Norwood: Yes, Happy Thanksgiving to you to Seth. Regarding our guide – to our financial guide, relative to our industry forecast you’ll noticed slight differences, some slight differences between the segments, maybe starting with production and precision ag. In North America, we have positioned our self really well and we will be able to produce in-line with retail demand for 2024 where you’re seeing our financial guide a little bit lower than our broader industry guide is really due to Brazil, where we will be under producing retail demand in 2024 as we work to bring inventory levels back to our targeted levels for that particular market. So that’s really what’s affecting our financial guide, relative to the industry guide for production and precision ag.
For small ag and turf, the story there continues to be around small tractors or compact utility tractors where we’ll see another year of under production to bring inventory levels back-down a little bit, that market continues to be affected by the slowdown in single-family housing starts and can also be relatively sensitive to interest-rate increases. And so as that end-market continues to be slow, we’ll under produce yet another year in 2024, I would say for the rest of Small Ag and Turf we’ll have the ability to produce largely in-line with the industry. As it relates to construction and forestry, the story there is a little bit different. You saw the industry at large build inventory in 2023. We did build some inventory, but certainly not at the pace that the broader industry did.
And so that we actually may have a little further inventory build yet to come in 2024, but it will be an inventory build at a – to a lesser extent than what happened in 2023, so that will drive lower shipment volumes year-over-year relative to the industry there. So it’s a little bit different story depending on what segment we’re talking about, but that’s the reconciliation, the broad reconciliation of our financial guide to the industry.
Josh Jepsen: Yes, Seth, maybe, this is Josh, maybe one thing to add is just to reiterate the position in North America on the large ag side. We’ve managed that very well and very different than the prior cycle. I think both new and used were really well-positioned, as Brent mentioned book to build-in line with retail as we go-forward. But the work that’s been done on the new side, we highlighted earlier, but for example, new inventory on combines inventory sales 4% at the end-of-the year, four wheel drive tractors 9% or something like 15% on row crop. So both the new side and then what the dealers have done working through use proactively and we’ve supported that activity has been really positive and positioned us well when you think about our biggest market. Thanks, Seth. We can go to our next question.
Operator: Thank you. The next question is from Tim Thein with Citigroup. You may go ahead.
Tim Thein: Thank you, good morning. Maybe just coming back to the comment on production costs and I guess it’s a bit more of a clarification. But the – I thought I heard you say earlier that you expect the production costs to be favorable overall for the company in 2024, but then later it sounded like maybe there were pieces of it that you expect it to be favorable. So just around the same page in terms of the EBIT bridge you provided by segment that production costs for the company as a whole you expect that to be on the plus side, it’s throughout 2024, is that correct or is that not did I miss hear that context?
Brent Norwood: Regarding production cost for 2024, our guide would contemplate production costs to be flat to a tailwind next year a slight tailwind, I should say. There are some subcomponents within production costs that will still be inflationary, but net-net, we should be moderately positive in the year 2024. Specifically, we would expect tailwinds to come from further material and freight reductions in 2024 when compared to 2023. Labor would be the largest inflationary item within the production cost bucket for us and what we’re seeing is, many of the labor contracts that we have within our factories do have scheduled step-ups in the year. So we’ll have to offset those to bring total production cost to a deflationary state in 2024, which again our guide does not play.
Josh Jepsen: Yes, I mean, in short, Tim, you add-up those bars for production costs, this should be green is our current expectation for production cost in 2024. Thanks, Tim.
