Good morning, my name is Kim and I will be your conference operator today. At this time I'd like to welcome everyone to the Terex Corp first quarter 2016 financial results conference call. [Operator Instructions]. Tom Gelston, you may begin your conference, sir.

Thank you, Kim and good morning, everyone and you for joining us today's first quarter 2016 financial results conference call. Participating on today's call are John Garrison, President and Chief Executive Officer and Kevin Bradley, Senior Vice President and Chief Financial Officer. Following the prepared remarks we will conduct a question and answer session. Last evening we released our first quarter 2016 results, a copy of which is available on our website at terex.com. Today's call is being webcast and is accompanied by a slide presentation which includes a reconciliation of non-GAAP to GAAP financial measures that we will use during this call and is also available on our website. All per-share amounts in the presentation are on a fully diluted basis. We will post a replay of this call on the Terex website under audio archives in the investor relations section. Now let me direct your attention to slide 2 which is our forward-looking statement and explanation of non-GAAP financial measures. We encourage you to read this as well as other items in our disclosures because the information we will be discussing today does include forward-looking material. And with that please turn to slide 3 and I'll turn it over to you, John.

Thanks, Tom and good morning, everyone. We appreciate your interest in Terex. I will begin by providing an update on our M&A activities and a brief commentary on our markets. Kevin will review our financial results for the first quarter and I will follow with an operating summary and segment updates before we open up the line to your questions. So let's get started. Concerning the M&A activities I hope you respect I will be limiting my discussion on this topic to these prepared remarks. As we disclosed a few weeks ago, Terex received a revised nonbinding proposal from Zoomlion Heavy Industry to acquire all of the outstanding shares of Terex for $31 per share in cash. We're holding discussions with Zoomlion to determine whether we can obtain a binding and fully financed proposal which provides for a high degree of closing certainty. Working with our financial and legal advisors we're focusing on critical issues such as the certainty of Zoomlion's financing, Zoomlion's shareholder approval, government approvals and the security and amount of a reverse breakup fee. At the same time Zoomlion has continued to undertake its due diligence of Terex. Both sides are working diligently. However, I cannot commit to when this work will be completed or whether an agreement can be reached. On the Konecranes merger, we're moving forward with all necessary filings to achieve antitrust, regulatory and shareholder approvals that are required to complete the merger transaction. At this time the Terex Board of Directors has not changed its recommendation in support of the proposed combination with Konecranes. These are exciting, dynamic and challenging times at Terex. We have multiple M&A transactions in process. The global marketplace is very competitive. Each sale is hard fought. Industrial production in many regions is flat to down and low commodity…

Thanks, John. Good morning, everyone. Please turn to slide 5 and I'll review our financial performance. The Q1 loss per share of $0.05 as adjusted was in line with our expectations. We had adjustments of $0.63 per share in the quarter and a reported loss per share of $0.68. Sales for the quarter decreased 4.6% as compared to the prior year, with 3.1% driven by currency movements, primarily the euro. Free cash flow was a negative $146 million in the quarter which is consistent with the seasonality of our business. We have traditionally consumed cash in the first quarter as we build for seasonal peak. We still expect to generate free cash flow for the full-year of between $200 million and $250 million. Let's turn to page 6 which shows the comparative quarterly income statement on an as adjusted and as reported basis. Please note the current and prior-year period results included in the earnings release and presentation reflect the resegmentation of our scrap handling business from construction into MP and part of our North American services business from cranes into MHPS and AWP. Adjustments for the quarter of $74.6 million fall into two main categories. The first being transaction related costs associated with the announced M&A activity which totaled $10.5 million. The second category is restructuring and related activities which totaled $64.1 million. Of the total charges $67.1 million was reported in operating income, while $7.5 million was reported in interest and other. The restructuring actions were broad-based with an emphasis on reducing our SG&A cost structure. Total reductions will be approximately 670 team members across all segments as well as Corporate. The annualized savings from these actions is approximately $60 million and we expect to realize approximately 40% in 2016. From an operating perspective sales were mixed during…

Thanks, Kevin. Before reviewing our operating performance, let me talk about Bauma. I really enjoyed spending time with many customers from around the world. Our customers highlighted opportunities and challenges. They vary by region and market segment. The prevailing tone was one of caution. Our customers are competing in markets that are changing driven by low commodity prices, low to no growth environments, volatile exchange rates and other dynamics. They have to compete aggressively to win business and the visibility to the next job or product is not as clear as it has been in the past. The result is a more cautious approach to investing in new equipment. However, I would add I was encouraged by the attention that our new products received. I was very proud of the presence we had at Bauma. Terex stood out as a truly global Company with the breadth of products and services needed to support our customers in these challenging times. Turning to slide 8. For Terex this segment played out in the first quarter. Our largest market remains North America which declined 7% for the quarter on a year-over-year basis. Europe, at 34% of sales, was our most consistent market. Adjusted for currency, sales are up in Europe for all units except port solutions. Growth in Asia Pacific region is primarily due to a large port deal in India. Now let's look at each segment. Aero-work platforms had a good start to the year. From a market perspective the demand environment remains challenging. The reduction in backlog is a result of our customers taking a wait-and-see approach. Sales in North America are down year-over-year as our rental customers remain cautious about their CapEx requirements. Although construction activity is strong, purchase decisions will be delayed until rental companies see utilization and rental…

Thanks, John. As this call is scheduled for just one hour, we ask that you please limit your questions to one and a follow-up so we have time for everyone's question. With that let's open it up for questions. Kim?

[Operator Instructions]. And your first question comes from the line of Seth Weber with RBC Capital Markets. Your line is open.

I just wanted to go back to your comment about the restructuring and the footprint rationalization. Are you precluded from doing anything from a footprint perspective as long as these potential transactions are hanging in balance? Or can you start moving forward with some footprint decisions here before anything is decided?

As we look to the decisions we need to make as I’ve said in my comments, we consider the two different outcomes and the decision makes sense in those two different scenarios. If it does we go ahead and implement and execute that and if not we may delay the implementation of that until either one of these scenarios plays itself out.

Okay. So the $60 million of savings that you referenced does not include any kind of foot print change savings?

That’s correct Seth, it does not include manufacturing foot print rationalization.

Okay. And then I just had a question on your prepared remarks, you touched on the pricing challenges and AWP and cranes. In your opinion is that an inventory issue? Is it competitors competing with currency ? Can you give us any color on the categories as it relates to pricing the pricing environment. Thank you.

In terms of the pricing environment the overall environment in AWP, I think Q1 was consistent with our expectations and the pricing environment the biggest impact that we did see was currency headwinds that we've faced in Europe. We're producing in North America and still shipping to Europe. Matt and the team are shipping to Europe and over time that will improve. So that was a currency headwind and then the other part of pricing is the net pricing on used equipment and use trade-in and we did see some valuation overall ounces if you will on used equipment that impacted pricing. So I think those are the factors that are principally driving the pricing environment but again I think it has been consistent with our expectations and consistent with the overall level of demand in the marketplace.

Okay. So in your view inventories are pretty good across both AWP and cranes then?

Yes. In terms of AWP and inventories, Matt and the team made a strategic decision to have some inventory forward placed in Europe and I think that decision has proven out to be an accurate one and will unfold as the second quarter evolves. We also has some inventory set aside for the North American market and he feels that inventory will be consumed in the second and third quarter. So he made some strategic decisions on inventory placement and we think they are the right ones.

And your next question comes from the line of Jerry Revich with Goldman Sachs. Your line is open.

I'm wondering if you could talk about the order environment in April presumably you first quarter orders were impacted by some folks waiting to place bigger orders at Bauma. Was that the case? Can you characterize the inquiry environment over the past month for us to just put the quarter in perspective ?

Yes in terms of Bauma it's always a challenge. First of all at that we had a great show at Bauma. And again the environment was positive and the team worked hard where there's some orders delayed until the show or until after the show, we have been doing this for 25 years. It's always hard to tell in terms of the order environment. There is no doubt however that the new products that we showed at the show generated some orders and generated excitement across the product segment. With the Demag line, rebranding of Demag and [indiscernible] cranes that stimulated some demand AWP with the Z60 products stimulated some demand. So overall I think Bauma was a positive experience in a challenging market but the takeaway was new products help customers to make decisions and we saw that. From an order standpoint going forward in the quarter it's still early. We're in April and the team is working hard across all the segments to achieve our sales forecast.

And it's encouraging to see sales growth for you folks in Latin America, I think not a lot of machinery product lines are seeing that. Can you flesh out for us what you are seeing in the market what drove the 15% organic growth in the quarter and how much visibility do you have on that continuing -- which businesses are driving that?

Yes, we're a little bit less positive on that. The percentage growth is really off a low base. The Latin American market with the exception of Mexico, Mexico especially in AWP has been a good market for us. But Latin America in general and Brazil specifically has been a very difficult market across all the business segments. I think that was a relatively low number in a high percentage off of a low number.

And are those comparisons just as easy in the coming quarters, John?

Yes they will be. But again our expectations are not high for Latin America. It is a difficult market right now in Latin America.

And your next question comes from the line of Ann Duignan with JPMorgan. Your line is open.

We're restricted on Terex right now, so I'm very limited in terms of what kinds of questions I can. So I will just focus on your regional outlook and your regional actuals. Can you just talk about the Middle East and what you're seeing there? We have heard some comments from other competitors activity is drying up, that a lot of money is being diverted out of construction activity and it depends --- what are you seeing in the Middle East specifically?

Ann, I think our comments would be similar to that on the cranes side or altering cranes. We did see a couple of orders in that area but the rough terrain crane market really does serve that oil and gas industry was down significantly. So I think in terms of -- the Middle East is a difficult market.

And maybe second question for Asia and you did comment on port order for India I think. So maybe just some color on that region.

Right in terms of the Asia Pacific region it really varies by country. Off to a bit of a slow start in China but the team thinks we will catch back up on that. India has had some positive activity of the customer segments of Bauma, the India customers were perhaps the most buoyant. They believe that there's going to be some funds released for major infrastructure projects. So we will be looking forward to seeing that turn into orders as we go forward. So I think it varies by region and again Ann, what's impacting a lot of the countries in that market is the commodity cycle work and so the countries that are tied to commodities are relatively slow. Australia being one, Australian market is also another challenging market as a result of the commodity buzz. It really does very by specific country and segment in terms of what we're seeing in the Asia-Pacific region.

And your next question comes from the line of David Raso with Evercore. Your line is open.

Question on the aerial platform business. The quarter had better revenue I think most of us would expect. Can you help us understand was there any pull forward business and how do we think about the rest of the year because I'm just trying to think about the full-year segment guidance that we received 3 months ago. If you hold that it's implying after a flattish first quarter the rest of the year is down call it 19%, 20%. So just trying to make sure I understand exactly what played out in the first quarter and have to think about the rest of the year.

In terms of AWP first of all Q1 was consistent with our expectations and I think if you look at the backlog and the order rates that's really indicative of that cautious rental channel with the rental companies are looking to drive improvement and utilization and improvement in rates. So we did see a little bit of timing early second quarter versus late first quarter shipments and so there was a little bit of that at the end of Q1, but not a significant amount. And as the year plays out, Matt and the team we continue to see strength and he positioned some inventory in Europe to take advantage of that so we see strength in Europe. North America obviously is going to play out really over the next 60 to 90 days as we see what the major rental houses and independence do in terms of their orders. The overall market in North America around construction segments is really pretty strong and that's what they are looking to see. So we think based on where we're in the year that our expectations haven't changed in terms of AWP and the guidance that we provided earlier in the year we think still holds based on where we’re.

Given the timing the rental houses typically like to take their machines, how far away if they have shared this with you maybe, how far away are they from hitting certain metrics that could improve the rest of the year versus are cautious view right now, because obviously they must only have another say 3 to 4 months to really make a hard decision that would really impact your 2016.

I think to be honest in that conversation is basically almost a daily conversation with our sales team and the major rental houses. So it really is Q2 and what we see here in the next as you said the next 60 to 90 days will provide the clarity that we need to see how the full-year will turn out because obviously Q2 is the big quarter for us in AWP volumes.

And your next question comes from the line of Steven Fisher with UBS. Your line is open.

Just to broaden up David's question on the guidance. Just try to reconcile the down 10% on revenues with the 20% decline in backlog in the quarter. Are you expecting year-over-year growth in backlog at any point during the year and what are the most important things broadly for all segments that you are counting on to happen to hit the guidance?

So in terms of the full-year guidance as you said we did reconfirm that down 10% in terms of what the full-year will look at. Looking at the AWP as we just spoke it started off as expected perhaps slightly better than we expected it. The second quarter is key for us, our seasonality is heavily weighted to the second quarter. Cranes is off to -- whereas AWP was off to a bit of a better start, cranes was off to a slower start and so cranes is an area of focus for us as we look forward in terms of the topline on cranes and so again based on where we're in the year and what we have seen we call maintaining our guidance and the other thing I would add is that we really are focused on controlling the cost elements as well. We had some good execution and we had some other areas in the quarter where we didn't execute as well as we need . So as we go forward in the remaining three quarters of the year again to pick up some of the places where we had some execution shortfalls so that we can achieve our EPS guidance on the lower revenue. So that's where we're in the quarter and how we're seeing going forward.

And then you previously said that within 90 days you would have some portfolio related decisions. Can you just give us any date on where you stand on that or is that now all on hold given that transaction thoughts that are in process?

The portfolio decision really fall under the criteria. There are two different scenarios that we’re operating under right now. So we will delay major portfolio decisions until we have greater clarity on what scenario plays out.

And your next question comes from the line of Jamie Cook with Credit Suisse. Your line is open.

I guess a couple of questions. One you noted the pricing deterioration in the quarter although in line with expectations. But how big of a risk do you see price material cost in 2016 given it looks like material cost could potentially be a headwind not a tailwind relative to maybe three to six months ago and then I guess my other question on the used pricing comment that you made with regards to aerial work platform. Can you give a little more color how broad-based was that across product line or by geography? Thank you.

Let me start I think with the first part on the material side. We did have some good material price variance of productivity in the quarter. Some of that is still benefiting from the drop in steel prices that we had last year particularly in the fourth quarter. So that was used and did help to offset some of the pricing headwinds that we had. We're working very hard with our procurement teams across the organization and managing it very aggressively to see positive pricing variances if you will. Negative material variances across and leveraging our spend a little bit better and again using that to offset some of the pricing headwinds that we have had. The other elements of pricing is used equipment in North America and again there is some good news there. There was some stabilization on [indiscernible] rates on an used equipment sales and so that is a good sign. Our realization was close to that and so on used equipment side if we continue to see some stabilizing of used equipment values that will help as well in the overall pricing dynamics.

And your next question comes from the line of Mig Dobre with Baird. Your line is open.

John, maybe you can help us a little bit with the way you're thinking about the earnings cadence through the year just given your announced costs savings and all the moving pieces. And I'm also wondering if your expectations at segment level have changed at all versus prior guidance

So to take the first question of the cadence of the earnings through the year. I think we're looking at it as our historical norm. We don't see any significant shifts in terms of the earnings across quarters. So I would say historical norms for that. And the second question, I'm sorry?

If you're expectations of segment level have changed at all from the prior guidance?

No in terms of our overall guidance I think we're consistent. As I said AWP got off to a little bit faster start, cranes off to a little bit slower start on our MH and PS business on a material handling side kind of in-line for clearly with the slowing of the container traffic we saw a slower port side of the business. And MP was pretty much in-line on material process business and construction it was good to see a positive move on the construction. Our North American concrete business executed well in the quarter and had a good quarter and it looks like that can be sustained going forward to help offset the challenges we've had in our compact business. So that's how I would kind of look at the full-year guidance by segment.

Okay. Then my follow up on MHPS if I look back there's been a lot of restructuring in this segment. I think it's something north of $100 million over the last four years. And I'm just wondering from your perspective at this point what needs to be done in terms of maybe potentially the footprint longer term or some of the fixed costs base in order to get this segment in the black

Steve and the team have been working hard for several years to position the business from a cost structure standpoint to be successful. The actions that Steve took in the quarter were necessary . The SG&A side of that business if you look as a percent of sales is quite high and so attacking that from an SG&A standpoint was important. They have been taking cost out unfortunately the volumes have been coming down about the same level or actually a little more than the cost side, so that is impacted the business. I might add as part of our execute to win business strategy one of the elements we talk about is strategy and obviously we continue to look at strategy. We will be spending several days on the ground with Steve and his management team going through in depth their strategy to see how we can break out of the recurrent restructuring going forward. But they are doing the things they need to do to face the environment that we're facing into and I suspect we're going to need to continue to take action until till we get this to a profitable level at the current volumes.

And your next question comes from the line of Robert Wertheimer with Barclays. Your line is open.

The question is on cranes and as you sort of take a look at the cranes business, do you think that it's just suffering from a lack of volume right now or do you find that there have been bigger structural changes with a competitive balance whether it be the euro at the end and how do you -- do you think the structure of the business has changed and do you’ve to respond more radically or it's just a low point that you hope you will come back in a year or two?

Clearly the cranes business is in a difficult trough especially in the United States we're at 2009/2010 levels in rough terrain and boom truck cranes. We're seeing some growth in Europe with the launch of our new Demag brand. I think the dual branding strategy is going to help with Demag for all terrain cranes and our crawler cranes and the Terex for the rough terrain cranes and our boom truck, so Ken and the team have worked there on the up frontside. And then we have to evaluate the overall cost structure of the business. And one of the things that we're stressing is we have to earn our cost of capital through the cycle which means we've got to be profitable at these levels of volumes so what are the actions and steps that we need to take to have a return that covers our capital just not at the peak but in the troughs. So that's what they are focused on. Ken and the team also had some execution challenges in the quarter that impacted us. Some product warranty and some product recall type things that we need to do a better job of executing. At lower volumes everything is magnified and we saw that in the quarter with a couple of warranty related activities that really hurt us on the lower volumes. So Ken and the team is working hard, as I said, to execute to win strategy. The month of May is going to be spent visiting in-depth reviews with the teams and one of the things we will look hard at is the cost structure as well as new product and new product development. And I think the encouraging thing for the crane side is we've made some modifications, we've made some upgrades to our cranes and those that we did, we're seeing a response in terms of order inquiry on the equipment. So Ken and the team have a lot of work to do and the competitive environment, it is a competitive marketplace. But as I said in my comments, we're one of the few companies in the world that has the product breadth to compete across the product line and to compete globally and I think there's a solid foundation for us to build on going forward.

Just a follow-up on the question earlier on raw materials -- are you seeing increases in steel, in the high-strength steel that is more often used in cranes or is it not seeing that kind of pressure? It feels like it could be a difficult six months from now.

I would say on the steel side we're not yet saying some of these pricing increases. Where we do it unequivocally is in the high tensile strength steel, that's the first place it shows up. But we're going to be working hard to make sure that we can push back on some of these increases. There's still an oversupply of steel in the global market place.

And your next question comes from the line of Joe O'Dea with Vertical Research. Your line is open.

Also on cranes and related to margin and progress through the course of the year, there's sort of the balance between what you can control and what you can't and so obviously the volume and the mix challenges are there. But you also noted some warranty and execution issues in the quarter. So just to think about what the trajectory looks like for that margin over the course of the year and whether you think the corrective action is in place, such that we see a nice step up in Q2 or how that trends based on what you're planning.

In terms of the trends, we do believe we'll see -- we had a tough first quarter in our utility segment that's reported under our cranes segment. We expect that that will come back more as the year progresses. Some of the action that Ken is taking, near term actions, I think are going to help later in the year on the margin side. And then they also, some of the new products that we're introducing, have some better gross margin opportunity as we bring those into the marketplace. So without question cranes' operating margin in progression is one of the challenges that we have, given our guidance. But for now we're going to stick to that until we see how the year unfolds a little bit more.

Okay. And then going back to the Konecranes merger and some of the contemplated synergy benefits there and then the press release this morning from them. Just in terms of how, if you have revisited that, how that affects the year one savings that you had put out versus the three years savings? If there's any just updated framework on that?

In terms of the treasury or IRS notices that came out, they did have and will have an impact on our announced synergies. At the time of the merger we had announced $119 million of pretax operational synergies, but including in that was $35 million of post-tax benefits and tax in restructuring. As a result of the treasury notices most if not all of that $35 million of tax synergies will be eliminated. Obviously we're learning. It's a very dense document, but our initial analysis is that there will be at least a $35 million reduction in the announced synergies at the time of the merger.

Okay. And one last one, probably can't say anything but just timing it's been a month since we got a press release from you on Zoomlion. I know there, you know, a couple things that you're pursuing to try to get more confirmation and confidence in the closing there. Is there anything that you can point out for us in terms of what to expect on the calendar and what comes next or wait and see?

You know the Board and Management, we understand the, you know, we want to resolve the uncertainty as quickly as possible and as I indicated in my prepared remarks, both sides are working diligently to do that. And again we're focused on the financing. Their shareholder approvals, the governmental approvals and security and amounts of a reverse breakup fee. So those discussions are ongoing and we will announce as soon as we can which direction this will go.

And your next question comes from the line of Ross Gilardi with Bank of America. Your line is open.

John, I just wanted to follow-up on MHPS. Obviously results are very weak and I'm just curious, how are you managing the competitive environment and particularly given that your biggest competitor is also a company that you might be merging with. Are you seeing customers delaying purchasing decisions, be it in MHPS, cranes, AWP's, anywhere, while they wait to see whether there's a change in ownership or whether your transaction with Konecranes even happens?

At this point in time we're intense competitors in the marketplace and we also have a merger agreement. So there's very strict firewalls that we established as part of the merger planning integration activities. So there are very strict firewalls in place. In terms of the market development, I do not believe that customers are delaying their purchase decisions based on the potential outcome of the merger transactions at this time. I really do think that if you look at the underlying fundamentals in the business, on the material handling side I think it's tracking pretty closely to factory utilization. It's in the low 80s in Europe and we're seeing some growth there. In the United States, factory utilization on that 75% range, so that's not great, it's not bad, but it's not great. So I think that's driving the purchase decisions on the material handling side. And on the port solutions side the slowdown in growth rate in container traffic is really causing ports around the globe to delay some of their purchase decisions and saying we can get by with existing equipment that we have, that we don't need new equipment. And a so across the product line on the port side we're seeing customers delay their purchase acquisitions. I'm not aware of any situation where a customer has said, I'm delaying this decision because I'm uncertain about the acquisition and the merger.

Got it. Thank you. I mean are you getting any feedback from your key customers on the potential change in structure or ownership of Terex in any of your business and what that might mean for future relationships?

In terms of conversations, most of the conversations that I had at were around Bauma and they inquire just because obviously it's a major issue. Not an issue, it's a major uncertainty right now in terms of the ownership structure. The message that we've conveyed to the customers and frankly to the employees is that in either scenario they are going to be dealing with the same great people they deal with every day. The same products and service organizations that been dealing with. And so the impact of who owns the equity of the Company is frankly not that significant on the customer's transaction. And most customers when you talk to them about that, they get that and then they move on to the business.

And then just lastly, quick housekeeping one, on the interest expense can we use the Q1 number as a run rate for the full year?

Yes.

And your next question comes from the line of Andy Casey with Wells Fargo Securities. Your line is open.

Just a question on the $60 million benefit. Do you expect the benefits to really start in Q3 and do you anticipate exiting 2016 at the roughly implied quarterly rate of about $15 million?

In terms of the $60 million in restructuring, as Kevin indicated in his remarks, we're anticipating about 40% of that in the year with most of it coming later in the third and fourth quarter. So think that's, from a flow standpoint, how we're looking at the benefits from the restructuring.

And then on the cranes price pressure comment, did you see any of that in the larger crane categories or was it primarily related to rough and all-terrain and boom trucks?

I would say it was clearly impacted on the rough terrain boom truck market segment. The large crawler crane market, it's competitive but we've got a very strong position especially with our 3800 in that market space. So we can demand a good price because we provide a significant value to the customers. Also one other thing on pricing that I think is important is, we've said we're going to compete aggressively but we're going to compete intelligently. Price can't always stimulate incremental demand and we understand that we're in a capital goods business, so it's the upfront initial price plus the operating cost of the life cycle plus the residual value and resale value. So as we look at a transaction, we're having our sales team really focus on the value add and being overly aggressive to try to stimulate a market that's not there with an upfront price doesn't help anybody in the value chain. And so we're going to compete aggressively but we will compete intelligently on the pricing side.

And then last question going back to an answer you gave previously on the MHPS. Within material handling you've commented on seeing some growth in I believe Europe. Did that get progressively bigger during the quarter or was it just pretty consistent all the way through?

I would say pretty consistent all the way through. That's relative to our these businesses, that's a relatively rapid velocity business in terms of order and ship rates and so I would say it was pretty consistent through the quarter.

And your next question comes from the line of Stanley Elliott with Stifel. Your line is open.

One of the first times we met, you'd spent a lot of time talking about working capital and improvements that you thought you could find within the business and you kind of talked about the free cash flow for the year. Could you update us on some of these progress that you've seen so far and maybe where we could think of ending the year, working capital, it's a percent of sales or however you want to frame that first to think about? Thanks.

Networking capital is a focus, such a focus that we redesigned our management compensation scheme to put a big part at risk with our networking capital improvements. We're being rigorous, we have our biweekly cash calls/networking capital calls with all the segments where we focus on all elements of networking capital. Where we're starting to see some progress and again I will caution it does take time to implement these changes throughout the organization, but we're seeing improvements in things like APs. Where we look at AP terms and making sure we've got contracts that are in the bucket of what we believe are acceptable and the teams are making progress there. AR on the receivable side, looking at receivables, receivable collections, reducing the days late across the business segments. We're continuing to make progress there. On the raw, whip and finished goods, that is about improving our S&OP process and the team's working hard around that on their sales and sales forecasting and then driving down through the operations with changes in the EROP system so they actually see a reduction in raw, whip and finished goods. And it's going to take some time. But we're focused on it. In terms of the percent of sales and absolute dollars we're basically flat on networking capital. Slightly higher in Q1 to prior year, but again I think that was due to some strategic decisions specifically in AWP that Matt made about positioning some inventory. I think as we look AWP, I'm sorry, as we look at network and capital to sales on a full year basis, probably in that 24% to 25% of sales range is what we're looking for to drive to by the end of the year.

And your final question comes from the line of David Raso with Evercore. Your line is open.

Help me with that comment and Kone made the same comment this morning about the tax benefits potentially lost eliminated with some of the tax rate proposals. That is almost 30% of the total combined synergies of the two companies, so I was just curious has this been fleshed out or has it reopened the negotiated terms on the Kone deal? It's obviously not an immaterial percentage of total savings and it depends on what kind of share repo the combined Company would do. But even if you just do the $500 million repo overnight, as you suggested at the beginning, it's almost $0.30 of a rough dollar of synergies of the combined Company, so it's not immaterial. So I was just curious has this started a new negotiation around the terms and any implications of how Zoomlion thinks about Terex deal and the price paid?

David, in terms of the, as I indicated, the treasury notice did have a significant impact on the savings. We're going through what the implications of that are to the overall transaction. At that this time I don't want to comment about negotiations or renegotiations with Konecranes, but we're collectively, Konecranes and Terex, working through the implications of the treasury and tax notices to understand what it means to this transaction.

And at this stage the Board even with the reduced synergies at Kone as of now hasn't changed their recommendation? We're still looking for that more of a binding definitive proposal from Zoom, right? That's kind of where we stand right now?

Correct. As I said in my prepared remarks, the Board has not changed its recommendation for the Konecranes merger. We continue with our discussions with Zoomlion across the elements that I've discussed to ensure that we can have a firm and binding commitment proposal going forward. And so that's what we're working on.

I would now like to turn the call back over to Mr. John Garrison.

Again, I want to thank you all for your interest in Terex. If you have any additional questions, please follow-up with Tom. He would be more than happy to address your questions. And again, thank you and have a good morning.

Ladies and gentlemen, this concludes today's conference call and you may now disconnect.