Terex Corp (TEX) 2011 Q4 法說會逐字稿

Good morning. My name is Brandy and I will be your conference operator today. At this time, I would like to welcome everyone to the Terex Corporation fourth quarter and year-end 2011 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the call over to Ronald DeFeo, Chairman and CEO. Please go ahead, sir.

Thank you, Brandy, and good morning, ladies and gentlemen. Thank you for your interest in Terex today. On the call with me this morning is Phil Widman, our Senior Vice President and Chief Financial Officer; Kevin O'Reilly, Vice President of Operational Finance; and Tom Gelston, Vice President of Investor Relations. And rather than mention each one of our presidents of our operating units, most of them are participating on the call and will be available for your questions following our remarks. As usual, a replay of this call will be archived on the Terex website, www.Terex.com under Audio Archives in the Investor Relations section.

As usual, I'll also begin with some overall commentary and highlights. Phil will follow with a more detailed financial report, including some analysis of the improved performance achieved during the quarter as well as a few schedules that will help explained certain expenses in the period. Lastly, I'll review our outlook for 2012 including details on individual segment performance expectations as well as some insight into our overall thinking and our focus in strategy for the year. Following that, as usual, we will open it up to your questions. We expect to enforce the one question and follow-up rule. For this call, we prepared a presentation to guide you through our commentary that is available to download from our website. Let me begin by referring to the forward-looking statement commentary on page 2. I encourage you to read and review this as well as all of our other disclosures available in our public documents.

Let me begin by turning to page 3. An overview perspective, we just completed a rather significant year in Terex's development, a year of both investment and improvement. Investment in the high-quality business of Demag cranes, now are Material Handling & Port Solutions segment. This adds a first-class business to our portfolio, improvements and that real progress was made as we streamlined operations, reduced the manufacturing footprint and started generating meaningful cash from earnings and working capital. The cost structure realignment is expected to improve profitability going forward, most notably within the Cranes and Construction segments. We have taken pricing actions to recapture margin lost in 2011 due to material cost pressures and to offset anticipated cost actions in 2012, most notably in Aerial Work Platforms and Construction.

The economic recovery is taking hold in many of our major markets with most markets healthier than a year ago. We do have some reservations about Europe but the recovery in North America seems solid. In 2011, we recaptured growth in our core businesses with organic growth of 27% for the full year and overall net sales growth of 48% inclusive of acquisitions. However, for Terex in 2012, emphasis is clearly on margin improvement, cash generation and the integration of Demag Cranes AG. It is much less about growth.

Now I would like to discuss the market environment by segment on page 4. The Area Work Platform business continues to recover with North America leading the way. Business with the largest rental companies is strong and we are now seeing independent and smaller regional players buying again. Our European AWP business has been a little bit better than we expected. In general, we have been successful implementing a 4.5% price increase effective with shipments in January. The overall backlog remains strong, double last year's level.

The Construction products' market outlook is generally positive. But North American housing and road building markets will remain weak in 2012. We expect continued solid demand for our material handlers, mainly for the scrap steel market. The demand outlook for our arctic/rigid truck business is expected to improve and the compact business is slowly getting better. In general, a solid market where we can concentrate on margin and cash generation.

The global crane market will be stable to positive. China is hard to predict right now; North America will be up strongly and Europe is a mixed picture by country; Australia remains very positive and is a specialty market. Latin America will continue to be strong in 2012. The Port Equipment business that is captured underneath our Crane category, these products are strengthening although, as you know, the sales gestation period for these products is quite long. We are happy to highlight that after starting 2011 off quite poorly in Terex Port Equipment, we did exit the year with a profitable quarter as we had promised.

For our new business, the Material Handling and Port Solutions segment, the market environment is generally improving but perhaps a bit softer than was previously thought, particularly because of Europe. We do see improving trends in North America, India and the Middle East, for Port Equipment and Services. The Domination, Profit And Loss Transfer Agreement, that process continues in Germany. The vote at the Annual Shareholders Meeting on this will be in March.

Lastly, our Material Processing business continues to supply large capacity machines worldwide, most notably to Australia and South Africa as small mining customers continue to look to our largest mobile equipment as a solutions provider for some of their needs. Our dealers are a bit more optimistic in general than a few months ago. Finally, we're excited about the many new products that this business will be introducing in 2012. Now, I would like to turn it over to Phil to cover specific financial results and then I will provide a more detailed review of our expectations for 2012 before taking your questions. Phil?

Thank you, Ron and good morning. Over the next several slides, I will cover the fourth quarter and full-year performance for the continuing operations of the Company. Please turn to page 5 to discuss the fourth quarter. Our business continued to improve during the quarter, reflecting the impact of restructuring and generally improving market conditions. Our adjusted earnings per share were $0.26, slightly better than our guidance for the period and as compared to an adjusted earnings per share loss of $0.20 in the fourth quarter of 2010. Reported US GAAP EPS was a loss of $0.03 compared to a loss of $0.30 in the prior-year quarter. All segments reported net sales growth for the quarter compared to the fourth quarter of 2010 while our order backlog, although stable sequentially, is accelerating in our AWP business and pricing actions are sticking. We generated $168 million in free cash flow during the quarter.

Let's turn to page 6, where I will walk you through the fourth quarter of 2011 as adjusted and the full year of 2011 as adjusted in a little more detail, showing the quarter over quarter and year over year movement. We chose to show the numbers as adjusted to better explain the underlying operational issues and opportunities in the business. We have a reconciliations to US GAAP later in the presentation. Net sales increased 47% for the quarter and 48% for the full year when compared to the comparable period in the prior year. Excluding the impact of our acquisition of Demag Cranes AG on August 16 of '11, the translation effect and the translation effect of foreign currency exchange rate changes, net sales increased 20% and 29% for the quarter and full-year, respectively. The increase has included all segments when compared to prior-year period with our AWP business posting the strongest growth for the full year on both a percentage and dollar basis, as rental companies continue to expand their fleet replacement purchases.

Our cost structure improved during the year as we continued to take the necessary actions to align our business for the environment in which we operate, while not losing sight of our strategic vision. Our gross margin improved 340 basis points and 220 basis points for the quarter and full-year, respectively. Increased volume, pricing actions and improved production absorption levels more than offset cost pressures from the supplier base. Facility closures announced during the second half of 2011 are on schedule and we will see the full benefit of these actions as we head into 2012.

Our SG&A, as a percentage of sales as adjusted, increased slightly over the prior year quarter mainly due to the inclusion of MHPS segment in the 2011 results. Excluding the MHPS as a percent of SG&A to sales, improved by 200 basis points to 11.7%. For the full year, the high level of cost reduction activity resulted in an improvement of 190 basis points including MHPS and an improvement of 270 basis points excluding them. As a result of the above, adjusted EPS for the quarter was $0.26 and $0.46 for the full year, representing a $0.46 and $1.75 increase, respectively, over the comparable 2010 periods.

From a balance sheet perspective, net debt increased $734 million, which primarily represents the impact of our acquisition of Demag Cranes AG, partially offset by the sale of our shares in Bucyrus International during the year. Net working capital, although falling short of our expectations on a dollar basis, we continue to see positive results in the execution of our production [funding] activities, improving the movement of inventory through the plants. At the end of December, net working capital, as a percentage of sales, was 27.8% down from 31.3% in 2010, very close to our expectations for the fourth quarter. Backlog ended the year at $2.1 billion, an increase of 65% over December 2010 levels. Excluding the impact of the Demag Cranes AG, backlog was up 29%, driven by AWP, up 107%; construction, up 75%; cranes, down 7% with softer growth in crawler and all-terrain cranes; material processing, up 3%; and MHPS, although not year over year comparisons reported, a very strong order book at the end of year.

Turning to page 7, where we have displayed a reconciliation of the as reported US GAAP figures for Q4 2011, to the as adjusted results. As we had previously indicated, the step-up of inventory related to the MHPS acquisition would be excluded from our guidance. We also continue to downsize and incur cost reduction of personnel, mainly in our European cranes operations and construction and a partial impairment of a cranes facility we had recently shut down. The supplier quality campaigns refer to two instances related to certain of our install base of scissor lifts and tower cranes where we have initiated field programs related to supplier issues affecting 2010 shipments.

Page 8 is the 2011 full-year bridge of the as reported to as adjusted. The main highlights here include the impact of the sale of the Bucyrus International shares, contributing $0.97 per share which we backed out, of restructuring and related charges of $0.49 per share, or mainly the result of significant activity in the Crane segment to reduce costs in several operations. Acquisition-related items of $0.50 per share include the purchase accounting inventory valuation and other specific costs related to the acquisition of Demag Cranes AG, and other items amounted to $0.05 per share. For a complete breakdown of the adjusted items by segment and period, refer to pages 15 and 16 later in the presentation. With that, I will turn it back to Ron for a review of our outlook.

Thank you, Phil and let me continue by asking you to turn to page 9, so I can review our outlook for 2012. We expect this year to be a positive year for Terex. Overall, net sales are expected to increase of 15% to 23%, or be $7.5 billion to $8 billion, including the impact of the full-year ownership of MH&PS. As we will explain in a minute, a substantial amount of this growth is coming from this new segment. The balance of the increased sales reflects the planned emphasis on margin expansion, as well as currency translation pressure, driven mostly by the Euro-Dollar relationship. If after we secure improved margins, the markets become more positive, we will have better incrementals. So our first objective is margin improvement and cash generation, and then if the markets are better, we will participate in that growth.

Gross margin expansion is expected to improve to roughly 20% from some benefits of the 2011 realignment activities, pricing actions and the inclusion of the MH&PS segment. This is a substantial improvement from the adjusted 16% we achieved in 2011. SG&A is essentially flat with a slight increase being due to higher spending levels of the MH&PS segment, offset by greater efficiencies in the Terex-[based] businesses as Phil indicated earlier. Operating profit is expected to be in the range of $475 million to $525 million or roughly 6.5% at the midpoint of this guidance range. This is about a $300 million improvement versus the 2011 adjusted performance.

Longer term, we continue to drive Terex toward a 10% operating margin target in two years to three years, depending upon the speed of the integration of the MH and PS segment. Interest expense is expected to be slightly higher than 2011, at $145 million as financing that was put in place to complete the Demag Cranes acquisition will be outstanding for the full year. The net result is a range for EPS in 2012 will be between $1.65 and $1.85 per share, a substantial improvement from the adjusted EPS in 2011. In other words, a good step forward.

Turning to page 10, here I will present net sales on a segment basis. Our expectations for AWP is for increased sales of approximately 10%, fueled by continued replacement demand in North America. The Construction business is anticipating stable performance in terms of units and market presence; however, pricing is a substantial driver in our expectations. Cranes is expected to be stable at roughly $2 billion in net sales, although there are different market expectations depending upon geography. North America and the developing markets will remain good growth markets while we expect Europe to be somewhat negative. I should also note that our European business is likely to see negative translation impacts from a weakening Euro.

MH&PS is target to achieve roughly $1.5 billion in net sales, as overall trends remain positive and drive the overall business to about 10% growth year over year. Lastly, the Materials Processing business expects continued strong performance in the mining markets of Australia, Southeast Asia and South Africa as well as improved pricing. So in total, this is how the $7.5 billion to $8 billion in net sales outlook is expected to develop by segment.

Page 11 is a simple waterfall chart that bridges 2011 net sales of $6.5 billion to the midpoint of our guidance for 2012. The percentages that are shown our net of the change in net sales year over year. Driving the year over year change, most notably, is the full-year ownership of the MH&PS segment. Price is expected to contribute about 13% of the increased sales amount with volume contributing about 25%. However, offsetting these is the impact of foreign exchange, as mentioned before, of roughly negative 18% or $225 million in negative sales pressure.

On page 12, we're providing segment specific outlook from an operating profit point of view. For Aerial Work Platforms, increased price realization and cost controls will allow us to return to 10% plus operating margins and $200 million plus in operating profit. I should point out that all of our segments include full corporate allocations of about 2% of sales and the depreciation and amortization for the segments' assets. We may be different from some of our competitors in this respect. Our focus on profitable products, combined with a leaner organization, is expected to lead construction to operating profits of $40 million to $50 million, or roughly 3% operating margin. For Cranes, full-year benefits from cost reductions taken throughout 2011 as well as pricing actions implemented, are expected to improve profitability roughly $65 million to a range of $100 million to $110 million or just over a 5% operating margin.

Our MH&PS business is expected to contribute $70 million to $80 million in operating profit, but this, too, is appropriately burdened with corporate expense and purchase accounting adjustments, the total of which is roughly $60 million in 2012. I should also note that any business combination synergies expected in the future are not in the outlook for MH&PS as we await the resolution of the Domination Agreement in process before we have the ability to implement changes, if any. Lastly, our Materials Processing business. This segment is looking for a better 2012 with targeted margins in the 10% plus range, delivering $70 million to $75 million in operating profit.

So in summary, on page 13, I think you'll see that our plan for 2012 is to improve margins. We will pursue margin and increased cash flow performance over sales growth. If profitable growth is (inaudible) we had, we will position ourselves to take advantage of those opportunities; however, it will be premature to target to have lofty sales targets without first improving and pushing to achieve approximately $500 million in free cash flow. We will, of course, continue to work toward domination and integration of the Demag Cranes AG business as we gain greater operating control of this business as a result of the domination process. In summary, I think we're in a very good place looking forward. With that, I will turn it over to the operator, who will open it up for your questions.

(Operator Instructions) We'll pause for just a moment to compile the Q&A roster. Ted Grace, Susquehanna.

So the two questions I was hoping to run through with you would be on margins and it's a good segue because that's where Ron ended. Specifically on Aerials and Cranes, and so in the case of aerials, maybe as a starting point, the slide, you walked us through some high-level details, but could we just get into a little more detail about how you get from, call it, 5.2% operating margins to 10% to 11%? I know that there is some low-margin stuff that will [lap in] Latin America that will be beneficial to get off the books but -- and you're putting through the 4.5% book price increase but I was just wondering if we could walk through a little more detail, how you're thinking about price cost, what the net pricing realizations built into those numbers are and just so we can get a little more color on them?

Sure. I will turn it over to Tim to comment in a second but, for perspective, Ted, we ended, on page 15 of the material that we didn't go through, the adjusted quarterly operating profit was $29.2 million, [where] we ended the fourth quarter, which is not typically our strongest quarter in AWP, at a 6.7% operating margin. I think we have, as I previously mentioned, the 4.5% price increase that we took. I think that will be a primary trigger to achieving the levels of margins that we anticipate as well as a little bit of a mix of the business but, Tim, you know the business in more depth than I do. Anything additional to add on that?

Well, I guess the only thing I would say, Ron, is that a substantial portion of our margin improvement is going to come from price. The volume and mix are basically are going to go sideways, if you will, in terms of plus or minus and we do expect to get some improvement from cost, particularly as we hold costs flat and get leverage off the base that we have. That's really the -- I think those are the points to make in terms of the margin increase.

Tim, is there any chance you could just talk to how the price increase seems to be going in Aerials so far and then also what your thoughts are on steel prices for 2012?

I would say, Ted, that we've been pretty successful getting the price increase implemented in virtually all markets around the world. We've had obviously some customers push back but with very few, in very few instances have we lost business because of the price increase. There have been cases where we have played [poker] with our customers and ultimately we've come to resolution but I'm very, very confident in the 4.5% number that Ron and Phil talked about earlier. [I'm] very confident.

And then on the steel cost side?

With respect to steel cost, they started to flatten in about November and we actually think their -- I think what we have in our plans for 2012 is a pretty good look at where we are. I don't think we expect to see any cost increases this year. We really saw them start to go flatten in the fourth quarter and they're holding about where we were.

Okay, and then Ron or Kevin, if we could just go through the same items for Cranes, that would be terrific.

Okay. I think what I will do is I will pass it off to Kevin Bradley on the Crane topic.

Yes. So for us a little bit different, Ted. We're much more on the cost side. So, as you know, we've taken fairly aggressive cost take-out actions throughout 2011 and so the biggest contributor to our increase in margin is the cost and maintaining our discipline around leaning out our cost structure. At the same time I would say, we are taking pricing action. We would not expect to see across-the-board pricing action; it varies by product and by region. I would say our focus is more on attacking the variation in price, especially at the low end. So it's not doing transactions with unacceptable price.

For perspective, Ted, if you -- on page 15 again, the fourth-quarter Cranes margin as adjusted is $27 million or -- I'm sorry, operating margin is 4.6%. A good amount of restructuring activity took place in the fourth quarter. We were successful working with the Works Council at our German factory and reducing headcount for a workforce on a performance basis. It was more expensive. It cost us somewhere in the range of $6 million but we really did get a cooperative effort from the Works Council and got at our -- a lot of productivity issues at that factory. And for reference, if you remember this is the segment that we closed [Mont Vulcunay], we closed the Wilmington Factory, we changed dramatically the SG&A in our German operations. So we've done a lot of good cost work in 2011 to position us here. We've got a little bit more to do. We've got a China operations, that is a little bit of an anchor for us but we don't have that completely solved. But we're hopeful that sometime this year we'll get that resolved and that will be a further uplift to our margins.

So if we just think about the incremental benefit of the cost savings, the carryover in 2012, can you just maybe give us order of magnitude of what that might look like?

I think what we said in a conference call or two ago was that we will have reached -- achieved about half of the cost savings in 2011 and about half in 2012 and order of magnitude, that's in the $30 million to $35 million effect in 2012. So a total of about $70 million to $75 million, splitting that in half. That's about where I think we are.

Terrific. That's really helpful, guys. Best of luck this year, congratulations.

Jerry Revich, Goldman Sachs.

Ron, can you rank order for us which businesses you expect to deliver the highest price increases this year relative to the total Company guidance? Sounds like Aerials is up at top but I'm wondering if you could give us more context? And same question on the material side, what's the range of inflation you are expecting and how does that vary by business?

Okay. I'll do my best, Jerry. It's a good question. It's one that there's a lot of puts and takes as you look at all the businesses but you're correct in saying I think the number one business from a price improvement point of view is our Aerials business. But I think it's important to emphasize this was also one of our number one businesses from a price deterioration point of view at the downturn. This is a business that went from the penthouse to the outhouse in an industry. I think now that we're getting back to the normal living room, I think this is a business that's getting its pricing back and getting its mojo back a little bit and I think it's got a good balance with the customer base. So, number one, it's probably the AWP piece.

A second one is our Construction business and while construction seems hard to understand for many, we made a couple of tough choices in 2011. We actually withdrew from a few markets and that will have a net positive pricing effect or cost effect actually both ways because in some markets, we just weren't going to be positioned to be successful. And we went to the markets now where we think we've got a chance to make money. Our Roadbuilding business in particular, we took a pretty significant cost reduction on that will reduce the amount of losses that we had from that area. So that one has got a pretty good upside in terms of change. I think we cover our material cost increases in all the other businesses. Okay. I'm sorry, Phil --?

General cost inflation, where we talked about is a couple of points on material but it does vary by segment, percentage points.

Sorry, Phil, can you explain a little bit on that last point? Which ones are going to be at the high end?

There's a -- it really doesn't go any much higher than 2%, but there are some that have less, closer to zero, in terms of their cost reduction programs as we go through but it's not really like there is a 5% out there. It's about 2% overall and it doesn't vary much from that, except something went down.

If I add a little color to that, I would say in 2011, Aerial Work Platforms had some of the highest increases in material costs in part because of steel, okay? So now that steel has flattened out a little bit and we don't expect it to spike, that's all baked into our base cost structure. So what we're getting in pricing from here should be additive.

Ron, can you say more about the point you're making, Construction, perhaps bridge for us the $60 million improvement that you're expecting from 2011 in EBIT, and just tell us how much of that is exiting [tough] product lines or markets, and other factors?

Yes, I'm going to let the guy doing all the hard work answer the question, George Ellis, because I think this is an opportunity for the Company. It's not a slam dunk, but I think a lot of hard work has been done. George, why don't you just comment on that?

Thanks, Jerry, for the question. We had to just look at the markets around the world within the construction businesses and make decisions. We chose to pull out of certain markets, as Ron mentioned, that were struggling from a penetration and also from a leverage on price. But at the same time we also looked at the operational side of the business to really get after where the markets are down. We took the cost out of the business while the markets are down, and the term we used, mothball, some of the lines or activities. At the same time, we're working on redesigning and developing the product so when the markets do come back, particularly North America, specifically, on the roadbuilding side, we've really tried to focus on getting ourselves positioned when the market does come back.

Also, we've had a really tough year last year, specifically in road building in Brazil where there were a lot of governmental issues and financing issues and spent the week there last week and actually saw significant improvement there. There's a pent-up demand. We have a very good position with only a few competitors, with strong pricing. I see that turning around in 2012, which will be a positive instead of a negative drag on this. So, it's a very mixed bag, but we've made some tough decisions, candidly. We're not going to chase all the deals. We're not going to go toe to toe in marketplaces, or where everybody is on it and everybody is cutting price just to get the volume. That's not our focus. It's more strategic, more of a niche products, where we can make money and we don't care if we're big. We just want to make money and generate cash.

Yes, so let me give you a number. SG&A year-over-year in the Construction business is going to be reduced somewhere in the $25 million to $30 million range so about half of the differential is cost that's already been taken out. Okay? And the other portion will come from pricing. So that's the focus. We took the cost out already, took levels out, there's two or three levels in the organization that are gone and then we took markets out and the pricing will come.

Perfect, thank you.

Ann Duignan, JPMorgan.

Hi, good morning; I'm not sure I have any questions left after all of that.

(Laughter) We thought that was a popular one.

Maybe Ron or any of the business managers, maybe you could talk about -- we're sitting here in the middle of February, what does the environment look like out there today versus maybe you're going -- in particular, I would like to get some insights to what you're seeing from the fundamentals in China versus your JV which you're struggling to deal with?

Okay. Well, the two questions there, Ann, that I will try to bifurcate and then address both of them. First, the early part of the year in our business is always some of the slowest period. So the start, the first quarter for us will probably be one of our -- the weakest quarter of the year for sure, but clearly, much better this year than last year. The tone among our customers is more positive, and broadly speaking, I think the economic environment is one of -- we have been down a long time, we are recovering, it's not rapid growth, it's planned, solid growth, that's a North America attitude but it also is the same in Latin America, the same in the Middle East, the same in Russia. So there is, generally speaking, an overall positive attitude. I think it strengthens through the year but generally speaking, it feels much better today than 12 months ago.

China is an interesting market to try and handicap. Clearly, there's a lot of cross-currents taking place. There's no doubt in my mind that the Chinese economy is a long-term growth economy in infrastructure-related projects for the next 20 years. However, the competitive environment in China is pretty brutal. So you have to pick your spots, if you are a Company like Terex, and you have to figure out where your value-adds are and concentrate on them. For us, we've got some particular advantages and some particular disadvantages. A particular advantage for us is our 20-plus year old joint venture in dump trucks. A third of our European production goes to China right now in our dump truck business. We are a major supplier and the number one dump truck manufacturer, even though we're only a 25% equity holder of the North Hauler Joint Venture. So that's a pretty important and long-standing JV, and a JV we continue to invest in and reinforce.

On the flip side of that, we have a 5-year old JV in the truck cranes, probably the most competitive market in China. We have had a joint venture partner that has not had the same mutuality of interest as we had. It is our view that we are close to changing that joint venture partner and should be in a position to reduce our position from 50% owner to something less than that. But that's not a completed transaction at this stage. So, in doing that, we'll probably get a JV partner that's much more collaborative, with a much greater forward view and committed to grow the business. So that's the bookends and we've got a bunch of stuff in between with a new joint venture in our Materials Processing business and a new factory making crawler cranes that's just beginning, where we're 65% ownership of that business. So I think you've got to pick your spots if you are a manufacturer of our size in China. The bigger manufacturers, it's game on, it's local versus global, and from my point of view, stay the [expletive] out of the way and pick your spots and see if you can pick up profitable business.

Okay. In the interest of time, and interest of everybody else, I will leave it at that, and take my other questions offline. Thanks. Appreciate the insight.

David Raso, ISI Group.

Hi, good morning. My question is on something, Ron, we probably haven't talked about in, really, eight years, nine years but it'd really do a lot for the stock in that '02, '03, '04 period. Terex is a bit of a deleveraging story. So trying to get my arms around his cash flow number you put out there, the $500 million. If you look at the way you calculate the cash flow, we have an EBITDA of $500 million, G&A is about $150 million, what are you assuming for working capital year-over-year change for 2012?

David, it's Phil. In the outlook, we indicated 25% of working capital for sales ending the year, which would give you a couple of hundred million potential improvement from a cash standpoint. The way we categorize that free cash flow calculation, again, it doesn't include changes outside of working capital so when we talk about the tax payment that we have in the first quarter, for example, of $160 million to $180 million, that wouldn't be in that number. So you have to take that out, plus the cash taxes which would approximate the tax expense this year, would also not be in there. But what is in there, you've got $140 million of CapEx and if you add up that [math], there's probably some additional opportunity beyond the $500 million, but in terms of the target at this date we just said greater than $500 million.

So, Phil answered the question from a tactical point of view and a detailed point of view. I'll answer the question from a more strategic point of view. To me, one of the real untapped opportunities for us is to delever our balance sheet by successfully integrating Material Handling and Port Solutions or Demag Cranes and by capturing a substantial amount of cash on the upside of a recovering end market. If I look forward for two year to three years, I think this is a huge opportunity because I believe we are valued more on an enterprise value to EBITDA basis then we are on a PE basis. To the extent that we can reduce the gross debt of $2.3 billion dramatically, I think that moves directly to the equity column and frankly, I've got a lot of reasons to want that equity price to go up.

So that said, in summary again, we're back in '02, '04, that was a big deal to the [stock] besides the cyclical recovery. We're looking at EBITDA, $500 million; [G&A], about $150 million, so you're at $650 million, but then I have about a $115 million of cash taxes, $160 million on the [Bucy] payment and $140 million CapEx. So trying to -- and a cleaner number, it's $235 million which would still be over 100% conversion on the implied net income of around $200 million.

With the (inaudible), I think was cash taxes on the base.

I did, yes. I got that. About $115 million, right? Or something like that. So again, you're still looking for over 100% cash conversion in '12, that's how we should be thinking about it?

That's right. The other comment I mentioned, David, on the debt side, we do have our 8% notes that are callable in November of this year and our 10-7/8% are callable in the second quarter of 2013. So we are going to be looking at the debt movement and we do have [to fund] the acquisition of the remainder of Demag Cranes, which depending on how the Domination Agreement works out, that could be in the couple hundred million dollar range as well.

That's helpful. I appreciate it. Thank you.

Sean Williams, BB&T Capital Markets.

Just wanted to maybe look a little bit further out and maybe this is an unusual question given that you're just digesting Demag at this point but as you look further out down the road, maybe in 2013 and 2014, where do we see the product portfolio of Terex heading? Are there additional acquisitions you would like to do within that Material Handling unit? Is there further restructuring to be had within construction? I wondered if we can just take a long-term perspective and maybe talk about where we would like to do more acquisitions down the road?

Okay. I think the best way I can answer that question is we're going to keep our heads down in 2012, focus on operational and margin improvement and maybe towards the end of the year, look back up and see if and when there are any opportunities out there for the future. Because our ability to actually do acquisitions and additional growth is very much dependent upon our ability to do what we have in front of us right now. So, that's a table setting comment, I realize, and it may be hard for people to believe from a guy that's done over 50 acquisitions in his career. But frankly, that's -- we wanted a fairly large transaction to replace our Mining business. We were able to secure that. It's a good diversification for us; it's a good business with a great services profile and we're going to work on that. I think that will drive a lot of common improvements within Terex, the Services business, but Portside Integrations, and working on the Industrial Crane business. There may be acquisitions to add on to the Demag Cranes business down the road, okay? But I don't think there's anything that has to be done, Certainly not -- nothing that has to be done of size, okay? With regard to Construction, I think our Construction business is at a place where, again, similar to the overall Company, [prove] it out, achieve a 3% operating margin. Frankly, it's a business that will improve when housing improves and the US starts to spend some money on road building. I think it would be foolish for us to try and do anything prematurely as long as those businesses we've gotten into place that aren't really draining much capital or cash from us. So I think our history has been to try and make a substantial acquisition, harvest the value that's in that acquisition and then look back around and see what else is out there in the years forward. I -- it certainly is my expectation in 2013, 2014 with a strong balance sheet and a Company that's driven to have improved its equity performance that we will look and see what opportunities are there, that will be accretive. Okay? But first things first here. So I hope, Sean, that helps.

Yes, no, I appreciate the color. Then maybe just a segue way, looking at the opportunity that you have at Demag, you've had maybe a little bit more time since the closure to get in there and look through the books a little bit, work with management over there. Can you talk about, I know you're not going to put a number to it, but can you talk about some of the opportunities that you've recognized in terms of what may eventually evolve in terms of synergies? or additional profitability enhancement there

Well, everything that we do relative to Demag Cranes AG will add value to Demag Cranes AG and not take value away from it. But, really it's hard to say concretely at this stage. I think the one thing that has changed is the overall end market view looking out several years is probably less positive today because of the European economic concerns then it might have been a few months back. But barring that overhang which we think is a pretty substantial overhang, we think there's combination value in the services business and material purchasing and in manufacturing processes and manufacturing locations. So those are the things that [were] going to work that are pretty much similar while they're [identical], to the reasons why we bought the business along with the diversification of the industrial Crane business. So I think we suffered at the end of 2011 from a big market concern that we bought a European business at the wrong time. I don't really agree with that. I think we bought it at the right time because I think there is much more upside in the business, in particular, when owned by Terex than there might have been if there hadn't been.

Okay. Thanks. Appreciate the update, guys.

Seth Weber, RBC Capital Markets.

I guess, first, just a clarification. I was under the impression that you pushed through a 4.5% price increase in Aerials, mid-year 2011. It seems like that's not really showing up in the 2012 number. Did that just not get accepted or can you talk about that?

No, I think we pushed it through. I think you've got to understand from where we started, okay? And the amount of raw material and material cost increases that we had. I'm happy with the 6.7% adjusted fourth-quarter margin but I wasn't very happy with the margins that we were delivering in the third quarter or even the second quarter. So I think that was a function of really where the market is. Now having said that, you can only [take] your prices so much relative to your competition. I think our competition reported a margin that was dramatically below where our fourth-quarter margin is. I think we're on the right path there and I think we are showing pricing leadership. Now, Tim, you may want to add to that but I feel very strongly that his team, Tim's team has gotten two price increases.

To be clear, Seth, we did in fact put a price increase in place that was implemented mid-year around the same margin level or at the same rate, 4.5%. If you look at our fourth-quarter results, I'm not going to give you a number, but we had a substantial impact from the price increase in our fourth-quarter results, and that's carrying through. The 4.5% that we're talking about here is, in fact, the second price increase that went into place in January and as Ron said, we're really trying to recover the material cost increases so some of the impact of those two increases have been absorbed by or eaten up by the material cost increases we faced in the 2011 time period.

Sure. So for the first half of 2012 then could show price increases of somewhere between 4.5% and 9% then?

No, no. I think it would be a little bit optimistic to think we're going to get a 9%. Keep in mind, when we talk about price increase, we're talking about a number of components of price so they could be in the way we value a trade. It could be in how much we're willing to give somebody on a trade. It could be in the marketing allowances that they get or the terms that they receive so we're looking at this on a complete pricing model, not necessarily on the absolute dollars on the unit.

Okay, that's helpful. Thanks. I guess just a follow-up question on the Arial revenue target for the year, the $2 billion, can you just talk about your confidence getting to that number? Your backlog today is it $635 million? Your bookings number seemed like it ticked down a little bit sequentially, 3Q to 4Q and I would've thought, given the price increase in January, you might have gotten some year-end bookings. Maybe Tim, can you give us some color if the bookings accelerated in January? First quarter is usually a strong bookings quarter. Is that the trend that you're expecting or do you have purchase orders in hand for later this year? Just how we're getting comfortable with the $2 billion number?

Yes. First of all, I'm pretty comfortable with the $2 billion number. If you look around the world, we have two very good markets today -- the US is strong and Australia is strong. We have two markets that are, I would characterize as uncertain -- Europe and Latin America. Then the rest of Asia, China, (inaudible), are doing okay but not materially going to change or move the needle. The other thing I would say that's out there, it's a little bit of a question, is what is the effect of the URI and RSC combination going to have on the purchases of those two companies? So I think there's a little bit of reluctance to put a big revenue number out there but we feel pretty confident that we're going to get to the $2 billion number. Now again, this is a range that we've got here so it could be a little higher, a little lower but I think that number is a pretty -- I feel pretty good about that.

So do you think that first quarter bookings will be above fourth quarter then?

I would expect that we will have a good first half and we'll see how the year plays out.

Okay. Thanks very much, guys.

Robert McCarthy, Robert W. Baird.

Hi, good morning, everybody. Actually, I wanted to follow-up on something, as long as we're talking about AWP, that Tim mentioned earlier, when you were talking about margin outlook for the business, you said something that was very interesting, that there wouldn't basically be any volume leverage. I wondered what is changing within the business that would eliminate the positive impact of 10% to 15% growth?

I don't think he said there wouldn't be any volume leverage. There's not a lot of increased volume to leverage.

The word was sideways was the word Tim used.

Let me clarify. When -- The question I was asked was the impact of margins, how do we get it from where we were to where we're projecting. What I was inferring was the impact -- excuse me, the impact of the volume on the margin increase is relatively modest plus or minus, more plus than minus but relatively modest, relative to the impact of other things. I did say that we will get leverage off the cost base both from a SG&A and from a manufacturing standpoint. So when I look at volume, I'm already thinking, are we getting a better mix, better geographic spread, that thing and how is that affecting us? I might have misled you a little bit there but we will get some benefits from the factory leverage.

Okay, I appreciate the clarification. The question I really wanted to ask you, Ron, is it surrounds Demag. I think there was at least some surprise that when they reported their results last week, that their guidance didn't -- they maintained guidance unchanged for the year. It just naturally in my mind raised the question of what role do you play, how much consultation is there with you as regards what they've been saying publicly or are you still in a position where you're not supposed to be coordinating? It's just not clear to me whether what they did had your involvement?

Well, I saw the press release after the market saw the press release. Okay? So I had no involvement in that. They're a publicly traded company and the management made its those decisions and right now, I am an 82% shareholder that needs to consolidate so I have access to their information and participation but I'm not directing traffic. And their announcement was driven by themselves independently.

But incorporated by you into your guidance?

It's incorporated, yes. Their business plan is incorporated into us, adjusted to US GAAP.

Okay and so can we get some vote of confidence from you about that unchanged outlook or do you prefer to defer given that you still have an arm's length relationship?

Well, there's a little bit complexity here. That complexity is involved to make sure that we protect the rights of the minority shareholders, okay? Having said that, I believe the management team's honest gain, working hard, got the right views and participates with us. Okay? Aloysius Rauen, who is the CEO of the business, is a member of the Terex management team, okay? So while the financial results are reviewed and produced independently, he is participating with us. I have a lot of confidence in him and the team. But I'm not telling him what the numbers are; he is managing that aspect of the business until we complete the Domination Agreement. I think, as I stated in my remarks, that there may be additional opportunities following the Domination Agreement to seek a Business Combination plan. We do have a Business Combination Agreement that was negotiated as part of the acquisition so that's what we will focus on.

Okay, thank you, Ron.

Charlie Brady, BMO Capital Markets.

I just want to come at the AWP price increase from a different angle just to make sure I'm clear on it. So when would you expect to realize the second price increase of 4.5%, sometime second quarter, third quarter?

45 days ago.

Yes. Charlie, the way I would say it is let's look from where we started, okay? 18 months ago we were producing, I don't remember the number exactly, but not much margin. Okay? Not much margin, and we had a business that was fairly flatlined and we had material cost increases that were going up pretty rapidly, particularly steel. So in taking two price increases progressively, we've -- this is important because this is why I said that the margins went down on the last downturn and pricing went down on the last downturn. So we took two price increases and I think the first one was to help us offset the material cost increases that we had and the second one is to begin to recapture the level of margin we think is appropriate for the business plus, please remember we increased the business by nearly 70% in 2011. So there clearly was some volume leverage in 2011. So those things contribute to getting our margin where it is and helping us get our margin to where it's going to be.

Right, right. I guess the point I was just trying to clarify was if something was ordered, say in December of 2011, that obviously did not reflect the January 1 price increase, correct? Or is it the fact that it's based on when the product was shipped, not when it was ordered before January 1?

When it ships.

Okay.

The other thing I would point out, Charlie, is that the mix of the customer base does impact the margins in the period. So if we did a greater mix of one customer type than another or one product type than another in a particular quarter or in a particular product, it impacts our margin because not all of our products have the same margin as others and not all of our customers have the same margins as others.

Right, right. My second question is on the Crane business, and your sales guidance into '12. I guess I'm a little curious. North America is strong, Australia is strong, Latin America is strong, Europe is soft, I'm surprised that maybe given those commentary, why the outlook for revenues in Cranes isn't a bit better? Is it a function of Europe is such a larger percentage of the business? You have the port business tied into that, that's offsetting all the strength in some of those larger markets?

I think we're just trying to build a better business here. I think our view is that in 2012, it's less about growth and more about driving margins and returns on capital. Kevin you have anything you want to add?

I think that's right, Ron. Europe, it is probably important to point out that if you go back a ways, Europe was absolutely the most significant portion of our sales. So, being soft in Europe is more meaningful than being strong in Australia. That said, where we've seen some opportunities in Europe, to be honest, the most of them we think are feeding with large players who have a global fleets, feeding developing markets. So we see strength, we also see strength in the Middle East. But China is fairly soft right now and Europe being soft is a fairly material statement for us.

But historically, Kevin, we would also have a little bit more aggressive pricing attitude with some of the bigger European Crane companies. What we're trying to do today is be more disciplined in our price and sales approach. I think that has an impact on our attitude relative to volume. That's right.

Thanks.

Andy Kaplowitz, Barclays Capital.

Ron, could you talk about maybe the change in tone in your Material Processing business? Last quarter, you had mentioned that you're watching mobile crushing and then this quarter, it sounds like your dealers are more optimistic on that business and in Mining in general?

Sure. I think I'll just let Kieran Hegarty comment on that. Kieran?

Yes, I think last quarter, I think the uncertainty around Europe, obviously Western Europe still makes up about 30% of MP revenues so I think the quarter for uncertainty was primarily driven there. The [change] now it would obviously be America like the other Terex overall America's getting very positive. Europe is still touchy but it seems to be a country-to-country story. Some countries relatively positive, some not. Then obviously, continued when Ron talked a bit of mining strength that's in markets. We're seeing some strength where we, over the last number of years, introduced larger products, smaller mines are seeing as more applicable and more use to them. So generally the positive vibes that are coming out of those markets are somewhat product-driven as well in terms of decisions we've made. Again one of the other things that's important. We've obviously go to market by our third-party distributors and we actually look at the inventory that's actually at historically low levels, which we think is a positive thing.

Good. Thank you, Kieran.

Okay, that's helpful. Maybe if I could shift back to AWP for one second and this is for Ron or Tim. I'm going to take a previous question from the opposite point of view. It seems like with backlog doubling again and price increases affecting 2012, that maybe the guidance is a bit conservative. I know, Tim, what you said, not about Europe, and not in Latin America but are you reserving for those end markets to be -- the uncertainty in those end markets when you give us this guidance?

Go ahead, Tim.

As Ron had said, I think our guidance reflects our objective in 2012 is to get to double-digit profitability; it's not revenue growth. We are going to go after the businesses out there that's good, quality revenue and we'll let the competitor have the order where price is unattainable or whether they're willing to take it a lower pricing. I think the markets are healthy but there are some things out there that do need you to want to have a little bit more of a balanced view on what the prospects look like. We want to make sure that we are delivering the return on sales that you would expect from this business so I think is it conservative? One might look at it and say, it might be, but our objective is to get to double-digit profitability and make sure that the business we have is very sound, from which to grow.

Thank you. That's helpful, guys.

Andy Casey, Wells Fargo securities.

Good morning, everybody, thanks for all the details so far.

Sure, Andy.

A summary question, given a lot has been asked and answered. I'm trying to tie the backlog trends to your 2012 emphasis on internal margin improvement or cash flow improvement, and whether we should expect guidance to be more heavily weighted to the second half given the seasonality of Q1?

I think that's a very fair comment. I think, historically, Terex was pretty balanced first half, second half. But with the addition of Material Handling and Port Solutions, by far its strongest quarter is the third quarter. One of the weaker quarters for Terex historically was the third quarter so it does change the way our earnings profile will calenderize. I think it does matter. Our third quarter has been historically the Demag Cranes AG's fourth quarter. Because it's in the industrial crane business, many factories take a summer shutdown and during the summer shutdown, the overhead cranes in those factories get repaired which is why their fourth quarter is their strongest quarter or our third quarter. So that impacts calenderization, Andy.

Okay, thanks, Ron. Just to follow-up on that for Demag specifically and the reports have gone from bullish to still bullish but a little less so. Does your guidance expect the second half of '12 calendar ex the acquisition expense to exceed what they did in '11?

I don't know, Phil, can you answer that question?

From a contribution to EPS?

Yes.

Remember in the third and fourth quarter we had the amortization of the inventory step-up in '11. That's gone now. That alone plus their performance should be a little better year-over-year.

I think their performance year-over-year is trending northward. But we've taken basically their plan and integrated to us in US GAAP. So it's not like we've taken their plan and added anything to it or taking anything away. It's basically an integration of their plan. Of course, we had to add one additional quarter which was the next quarter of their three-year plan.

Okay, thanks. One last one on the European crane commentary about the pricing. Is that at all related to increased price competition from new entrants?

No, no. Not at all. We talked a lot about and get a lot of questions about potential new entrants from Asian-based sources but that's really not included here and nor do we expect much.

Okay, thank you very much.

Alex Blanton, Clear Harbor Asset Management.

I would like to go back once again to the question of the guidance on the AWP segment. There have been a couple of questions on that in both directions. Mine is directed at why you are looking for virtually flat sales year-over-year? Because if you subtract the current price increase plus half of last year's price increase from the volume increase that's guided to the range is at the bottom 2.5%, at the top 10.6%, increase in sales excluding those two price increases. Meanwhile, we have United Rentals, for example, saying that they're going to spend 29% more. Now I realize they haven't broken that down into Aerials and in the [Dirt] equipment but you are getting more sales from the independents and possibly much bigger orders from the bigger rental companies. Is Europe really going to be so weak that it offsets all that? I mean there's a big replacement market out there that these fleets of Aerials are pretty old and it seems to me that the replacement market alone could support some sales that are there in Europe.

Alex, we could whip ourselves up into a theory about how exciting the revenue trends are going to be for Aerial Work Platforms. If you look at the [Ryles] Reports, if you look at all those reports, there's huge quantities of fleets that will need to be replaced.

Right.

We could do that and we've got a strong franchise where, in many of the product lines, we're number one, we're clearly number two in across many others and we've probably got a better margin business than our number one competitor. So we could whip ourselves up into a revenue fury but I remember when a customer once said to me and they said revenue is for vanity, profit is for sanity, and cash flows is reality. (laughter)

Okay, good one.

That's what we're going to run Terex on in 2012 so just to be completely clear. Now if we get at that margin and the revenue is there and our customers want to pay a fair value for the equipment, and this is fair value equipment that they're going to get a good return on, that they got replacement rates, high residual values and high rental rates, I'm more than happy to sell them product at a fair price.

Well, it sounds to me like there is some price competition going on because you're saying you're not going to take anything but profitable business and that implies that your competitors is trying to grab some market share by reducing price.

Not necessarily. Not necessarily. You have to just let the year play out, Alex.

Okay. Well you really don't know. Okay. Could you, a follow-up is, could you break down the outlook in Aerials a little bit more, for example, by product line like booms, scissors, telehandlers, either in geographic -- well, you've done geographically already but by product line?

Tim, do you want to comment on that?

Yes. I would say I don't expect this year to be materially any different than it has been in the past. If you look only at the Aerial portion, so excluding Utilities, which is a meaningful part of our business, booms have historically been about half the revenue and I think it will probably be consistent with that. Scissors in the 20% of revenue, telehandlers in the 10% to 15%, and part of the rest, you can do the math on the rest of it. So I think that's approximately how it will shake out but you've got to keep the utilities piece out of that.

Okay. One more thing, how much is Utilities of the total of the segment?

We don't break that out separately.

Okay. Well, it is a meaningful part --

20% roughly would be our revenue. Maybe 20% of that, but did you ask the other guys how much (inaudible) down and all those other products are?

(inaudible) is very small. [MHPS] they do break out. They break that out in the footnote. So you can take that out. At least they break out the sales part not the earnings part. They give you an idea of it. So Utilities, if that's flat, that can mean the rest is up a little bit more then, you're saying?

It could.

Okay. Thank you.

Joel Tiss, Buckingham Research.

Almost my whole list of 26 questions have been answered. (laughter)

Joe, you've got to press the button early.

Beats yesterday afternoon. Two things, if you do the free cash flow calculation from your free cash flow statement, you have $19 million of operating cash minus $79 million of CapEx, can you bridge the gap there? What am I missing between that and your $168 million? Did I miss something, Phil?

The glossary in the press release has the table -- let me just flip through it here. Page 16 of the press release, they got income from ops of $32 million, we have G&A of $37 million, we have an asset impairment, which is non-cash.

Okay.

You see it in the press release?

Yes, yes, yes. All right. And then any tier 4 impact in '12?

Yes. We are in the middle of that conversion across the whole range of things. I would say it is definitely an impact but it's embedded in our guidance. I would hope that one of the real opportunities is improvement in working capital. I can tell you that my construction leader over here has -- he's gone long in engines and he expects to be able to reduce them over the course of 2012. I think we'll see some inventory reduction in engines. The other segments maybe aren't quite as significantly impacted as George is in construction. But nothing that I would say is that material.

Okay. All right, thank you very much.

Matt Vittorioso, Barclays.

Good morning, and thanks for sticking with us here. I guess, Phil, if I could just ask you about the Terex Financial Services, how much do you expect to invest in that in 2012? Maybe just from a high level, what are you guys doing to make sure that you don't put too much risk on your balance sheet as you help finance your customers' business?

Yes, it's a good question, Matt. Because we're about mid-year '11, with the acquisition of Demag Cranes, we shifted our approach on financial services because we have multi-opportunities here and we can take some on the balance sheet, we can work with partners to offload that. We looked at balancing the portfolio to keep pretty flat in terms of what we have invested. In the US, it's about $140 million. Since the middle of last year, we pretty much held that flat with selling more of our deals upfront. Also looking to sell some of the existing portfolio that we had. So we used that to balance the cash flow investment in terms of where we are going. So we will continue to do that into 2012. We have established a financial services capability in China to fill some gaps there, but I would not expect that, that would be a huge material change to that.

We will have modest growth, I would say, in the $50 million range overall this year, would be in the planned expectation. On the balance sheet piece. If you look at our delinquencies, originally nonexistent in the Financial Services. We've done very well to manage through the downturn and our delinquencies are very admirable in terms of the space that we're in.

Okay, great. That's helpful. Then just lastly, you talked about generating cash in 2012 and focused on deleveraging the business. Should we look at your outstanding unsecured bonds as essentially just looking to the next call? Those 8% bonds callable later this year, would that be the first thing you look to address as you look to pay down debt?

Not necessarily, Matt, but I'm not going indicate which specific ones but we are going to put a plan together. We have to take into consideration we have to replace the Demag Cranes' existing credit facility when the Domination Agreement becomes effective and also the dollars associated with buying out the minority. So that's going to play into a factor of timing in which debt structure that we have. We are less than 3.75% from a net debt leverage standpoint as of the end of '11 so that gives us a little more flexibility in terms of our debt situation as well. More to come, I guess, is what I would say on that one.

Yes, that's fair. Any appetite to buy back shares in 2012?

We wouldn't comment on that. I don't want to comment or speculate. That's probably the most prudent thing to do.

Okay, thank you.

Brian Rayle, Northcoast Research.

Most of my questions obviously have been answered. Historically, you guys have put out longer-term goals in terms of revenue targets by a certain date. Obviously, there's been a lot of changes at least in the Construction and Material Handling businesses. Would it be possible to go through, I guess slide 10, and not necessarily your 2012 outlook but, say your peak outlook, or a three-year outlook of what you think that revenue could be over a long period of time?

I want to be careful here because we have some information that's in the marketplace already. I just don't have it at my fingertips to be able to be able to pull it up but we don't have is Material Handling and Port Solutions on a two-year to three-year view. But I would say is we probably see the longer-term view fairly unchanged from what we've previously said but maybe not exactly in the same year. Okay? It could be a year later or so. The Material Handling and Port Solutions, until we get a better sense of the integration, the opportunities for shared, for some things that we're working on, I don't want to go too much, too deep on that.

Okay, but for the other segments, your previously stated guidance hasn't changed in any way?

But I wouldn't say it was ever guidance. I would say it was the opportunity that we viewed in this segment. I would say that opportunity remains the same. I wouldn't necessarily say it's in 2013 because we're looking at a market environment where Europe is not what we thought it was going to be so but I still think a potential exists if it's not 2013. It's certainly in the two-year to three-year timeframe. Does that help?

That's great, thank you very much.

At this time, there no further questions. Mr. DeFeo, are there any closing remarks?

I want to thank everybody for bearing with us. It's been a long call and I hope we've answered as many and all of your questions as possible. Please follow-up with us if you have any additional ones. Thank you for your interest.

This concludes today's Terex Corporation fourth quarter and year-end 2011 financial results conference call. You may now disconnect.