Ladies and gentlemen, thank you for standing by and welcome to the Terex Corporation Third Quarter 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. Thank you. I will now turn the call over to Brian Henry, Senior Vice President, Business Development, Investor Relations. Please go ahead, sir.

Good morning, everyone, and thank you for joining us for today's third 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 third 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 GAAP to non-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. Let me direct your attention to slide 2, which is our forward-looking statement and description 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. With that, please turn to slide 3 and I'll turn it over to John.

Thanks, Brian, and good morning, everyone. Thank you for joining us today. I will begin by providing an update to our strategy and our recent divestiture activities. Kevin will cover our financial results, and I will follow with our segment updates before we open the line to your questions. Focus, Simplify and Execute to Win; these are the key elements of our strategy. While we continue to operate in challenging markets, it's important that we aggressively address our current reality while taking the steps to position the business for the longer term. We are transitioning to a focused portfolio of businesses that compete in the aerial work platforms, mobile lifting, and mobile materials processing and handling industries. Each of these businesses is at a different point in their respective market cycles and each faces different near-term challenges and opportunities. We are addressing complexity across the company. We are simplifying our organizational structure and reducing our functional costs with the sale of the MHPS. We're also reducing our footprint across the company. Central to Execute to Win is commercial and operational excellence, which extends from the factory floor to all aspects of our business, including sales execution, pricing as well as product and service innovation. We are taking action to ensure we consistently meet our commitments to our customers, shareholders and team members. We are developing a winning culture centered on execution excellence. Turning to slide 4, we continue to make progress on refocusing our portfolio. We completed the sale of our German Compact Construction business to Yanmar for $60 million in cash. Included in the sale was the manufacturing facility located in Crailsheim, Germany, and the parts distribution center located in Rothenburg, Germany. The team executed well and closed the transaction on time in accordance with our plan. We're also…

Thanks, John. Good morning, everyone. Please turn to slide 8, and I'll review our financial performance. We reported earnings per share in the third quarter of $0.31 and earnings per share as adjusted of $0.19. We achieved a net benefit from nonrecurring items in the quarter driven by favorable tax treatment associated with the recognition of tax benefits for certain net operating losses. We generated net cash from operating activities in the quarter of $106 million and free cash flow of $47 million. We repurchased $80 million worth of Terex shares in the quarter, consistent with our capital allocation strategy. Backlog at the end of September was down 9% on a year-over-year basis. Declines in Cranes and AWP were partially offset by growth in backlog in our MP segment. Slide 9 summarizes the comparative quarterly income statement on an as reported and as adjusted basis. Net sales for the quarter decreased 16% compared to the prior year, down approximately 14% on a currency neutral basis. Cranes sales declined by approximately 25%, which was more than we had anticipated. AWP sales were down 17%, and MP was down 4%, or about flat on a current FX basis. Our operating margin was 3.7% compared to 7.3% last year. Excluding nonrecurring charges, our operating margin was 4.6%, down from 8.5% last year. Lower volume on favorable mix, pricing pressure and operational factors, partially offset by cost reduction activities, were the primary drivers of margin compression. Return on invested capital was 25.6% compared to 9.7% in 2015, driven by tax benefits. Let's turn to slide 10, and I'll review our guidance. We were disappointed with the overall performance in the quarter and the impact it is having on full year expectations. We executed well in certain areas, but that was more than offset by…

Thanks, Kevin. Starting with AWP, I'll provide an overview of our segment performance. Fifty years ago, an innovator named Bud Bushnell saw a need in the marketplace and developed an innovative solution in his garage in Seattle. That simple pneumatic lift was the seed that grew into the global leader that Genie is today. That same innovation was on display at the Genie 50th anniversary celebration in Seattle in September, where we launched the innovative Genie Xtra Capacity, or XC, product line. This family of boom lifts responds to a widespread need to enable people to work at height safely with heavier loads using a single machine. These products demonstrate our commitment to invest in new products throughout the cycle. Over 200 customers from 47 countries joined us at the 50th anniversary to celebrate and focus on building a future together. Looking at the third quarter, sales were in line with our expectations, down about 17% from last year, driven by the replacement cycle decline in the North American rental market. Our European volume is up year-to-date, but sales slowed in the quarter as the market began to level off. Latin America remains very weak. Asia, on the other hand, was up sharply in the quarter, driven by growth in China and South Korea. Lower volume, foreign exchange and pricing pressure were the primary drivers of the margin compression, offset in part by the ongoing SG&A reduction actions. The AWP team is taking action. It lowered its SG&A by over $4 million in the quarter compared to last year, and continues to rationalize its manufacturing footprint. We also reduced inventory by about $75 million year-over-year. Pricing discipline starts with aligning supply with demand, and we intend to manage our inventory appropriately. We expect to close out 2016 with full-year sales…

Thanks, John. As a reminder, during the question-and-answer session, we ask that you limit your questions to one and a follow-up to ensure we have time to get to everyone. With that, I'd like to open it up for questions. Lorie? QUESTION-AND-ANSWER SECTION

Your first question comes from the line of Ross Gilardi of Bank of America Merrill Lynch.

Yeah. Good morning, gentlemen.

Good morning, Ross.

I mean, my first question is just on Cranes. I mean, how comfortable are you that you can get back to Cranes breakeven in 2017 if end market conditions don't improve?

Thanks, Ross. Can I – I'm going to answer that in a broader context around restructuring and restructuring activities, and Kevin will take us through the timing and impact. But as we focus the company and we simplify the company, on the simplified side, we're really focused on two aspects: our G&A reduction, and then our footprint rationalization. As you look at our performance in return on invested capital through the cycle, one of the challenges is – and especially in our Cranes segment, is that we have too much fixed cost for the market. And so, we have been addressing that with the things that we have announced this year in terms of reducing our overall fixed cost in our Cranes segment, specifically the Waverly plant reduction. So, we're going to continue to look at our fixed cost across the company, obviously in Cranes, as we move forward. There will be more to come as we begin to further implement and execute the plans. And there's two others things that I'll talk about here. As we talk about restructuring as a broader organization, there is a bit of a limiting factor on how fast we can move and the pace that we can implement complex movements. Waverly to Oklahoma City, I'm sorry, was a difficult and challenging move. The team did a good job. You need the talent to execute that complex move. We also, as we go around the globe, have regulatory challenges that we need to deal with as we implement our restructuring activities. So those two aspects will pace. We need to move quickly. We need to move aggressively. As it pertains to Cranes, and Kevin will walk through the details of restructuring, the actions that will be implemented will get us a long way towards. Clearly, our focus for 2017 is to drive a plan that gets us to breakeven on crane margins with similar type of revenue volume. We're not going to assume the market is going to rebound and recover. We're going to attack this issue through our product offering. We'll continue to invest in engineering, but we've got to get after our underlying cost structure. So that will be the focus of Steve and the team is to get – to put in place a plan that we can get to breakeven – no worse than breakeven on similar volumes in our Cranes segment in 2017. Kevin, do you want to take it through a little bit of the detail?

Sure, John. So, there's been a lot of restructuring. We've got another $5.8 million in Q3. Aggregate restructuring that we've called out from a cost perspective in the three quarter cumulative is about $45 million. That's got an annualized benefit of about $49 million. We've said from the first quarter restructuring charges, we get about 75% of that in 2016, and we're still holding to that. That's about $22 million of benefit that's in our guide for 2016. In addition to that, the three quarters worth of named restructuring would generate an incremental $26 million in 2017. That does not include what we talked about from an MHPS. You remember we've got about $34 million full-year expense in Corporate and Other from the unallocated overhang from MHPS going into DiscOps. We're now saying we can get about $10 million of that, at least, in year in 2017 of that $34 million reduced, which would be an aggregate full-year reduction year-over-year in cost of about $36 million. To your question, Ross, we think there's about $15 million in the already named restructuring dollars that impact Cranes directly in a positive way for 2017.

Okay. Thanks, guys. And then, can you talk about the 25% stake in Konecranes that you'll take on in early 2017? How are you thinking about holding that versus monetizing it? I mean, does a 25% non-controlling stake in a Finnish company really fit with your goals of simplifying Terex?

Thanks, Ross. The proceeds of sale from MHPS – the first is the cash component, approximately $770 million on an after-tax basis. As we look at that, that clearly will grow towards reducing our debt as we look at an optimal debt structure – capital structure of about 2.5 times net debt to EBITDA through the cycle. So, the first element of the cash proceeds will definitely go towards repayment of debt. As you say, we have a 25% ownership interest, and that is a liquid stock; so, it does provide us tremendous flexibility and liquidity in terms of what we can do with the asset. We do firmly believe in the fundamental business logic of the combination, and I think you see the markets responded to that that resulted – of the Konecranes share appreciation. It does create a lift – a global leader in the Lifting and Port Solutions business. But to your point, we also understand that we're not portfolio managers. And so, as we look at that asset over time, we will determine what's in the best interest of our shareholders to maximize the return for our shareholders, realizing that our shareholders are not paying us to be portfolio managers. So that's how we'd look at that asset over time, realizing again, we're not portfolio managers. We get paid to operate companies and that's what we'll do. But we do have this flexible liquid asset called the Konecranes shares and, over time, we'll look to see what's the best use for that asset going forward.

Thanks very much.

Your next question comes from the line of Nicole DeBlase of Deutsche Bank.

Yeah. Good morning, guys.

Good morning, Nicole.

So, I also have a question on Cranes. I guess, what does current capacity utilization look like? And given that we're theoretically getting pretty close to trough levels of volumes, or at least let's hope so, what's the ideal level of capacity utilization that you would want to operate at at this point in the cycle?

So in terms of – we're doing an in-depth review and analysis of our capacity and capacity utilization, and basically in no area around the world are we operating on multi-shift environments. So, all of our plants are at single shift environments. The floor place – excuse me, the footprint capacity utilization is low. It's especially low in our overall Cranes segment. So, one of the things that we're looking at, Nicole, is – now and then going forward is what's our revenue per square foot of manufacturing space? And then, what do we need to drive that revenue per square foot going forward? And so, as we develop those plans, that's a metric that we're going to be looking at. Right now, it's in the low 400s. It needs to be considerably higher than that going forward. So, that's how we're looking at manufacturing capacity utilization.

Okay. Got it. That's helpful. And then, just with respect to the color that Kevin provided around the restructuring payback, is that – the payback that you highlighted, the incremental payback for 2017, is that predominantly back-end loaded or will you start to see the benefits in the first half of 2017?

So, Nicole, we would – that's an in-year impact, right, so that's during the full year. Obviously, it gets greater towards the end of the year, but – for example, a chunk of that would be the Waverly move to OKC. So, we think that's a benefit that we're going to be seeing in Q1. But some of the footprint-related impacts in Europe would be more towards the back half.

Okay. Got it. Thanks. I'll pass it on.

Your next question comes from the line of Ann Duignan of JPMorgan.

Hi. Good morning.

Good morning, Ann.

Good morning. I think in your opening remarks, you noted that each of your businesses are in different points of their cycle. Could you just walk us through where you think each of the businesses are relative to the cycle?

Yes. Thank you, Ann. As we look at AWP, in terms of the replacement demand, especially the North American rental replacement demand cycle from the 2008 to 2010 timeframe, that is clearly driving our AWP in where we are in the cycle, because North America is still the lion's share of our revenue. Europe, as we said, we saw a strong first half on the AWP side. We're seeing some moderation of the growth, but Europe remains solid. Continued to see growth in the Asia Pacific region with our AWP segment. And then, in Latin America, South America, and this is for all three segments, that part of the world is virtually getting close to zero in terms of sales. So, Latin America across all three segments, it is – it's getting close to zero. We're not seeing a lot of activity there. So that's how I'd describe where we think we are on the AWP side. On the Cranes side, we're clearly seeing continued disruption in the North American market associated with the oil and gas boom-bust, as I talked about. I recently had a business meeting with one of our larger customers, and he was talking about how he had moved here recently 100 cranes that were basically sitting idle in the Tar Sands area of Canada and moving those to other applications in the U.S. So in the cycle for Cranes in North America, we are at or below trough levels for rough terrain cranes, our boom trucks and the products basically that we're making now in our OKC facility. All terrain cranes and crawler cranes are okay, when you talk to customers in terms of the utilization. So, their utilization is better on those products. So in North America we're at – we'd like to believe…

Yes. It sure does. Thank you. And just a point of clarification, and I know we'll probably get more of a long-term view in December, but given the eight-year replacement cycle in North America AWPs, I mean, should we expect 2018 to be weak also? And then, I'd ask the same question on oil and gas. I mean, we really have to soak up all this excess equipment in 2017 and probably into 2018. So, is it possible that we bump along the bottom in those two segments beyond 2017, do you think?

Thanks, Ann. And, again, we'll provide more color at the Analyst Day. So, right now, I'd focus on 2017, and our crystal ball gets a little bit fuzzier as we go further out. But clearly, the North American replacement cycle, we're projecting and we'll determine how much down it is in 2017. But then, probably starting – we believe, based on our models, on the AWP side, seeing in recovery in that 2018 time period, and 2017 most likely being the bottom. I mean, again, that's 18 months out, but right now that's how we're modeling it and that's what our information indicates. On the Cranes side, Ann, I think we've all been wrong there, so I'm not willing to hazard a guess right yet in terms of – as we look at it. We're continuing to work with our customers and model that and see. Again, the thing that is helping, and we don't talk about it a lot because there was so much capacity associated with the oil and gas, is the underlying construction market in North America. Both non-res and residential construction is not bad. That will help to absorb some of the products that were in the oil and gas segment. When does it recover? We don't have clear guidance on that yet, Ann.

Okay, I appreciate it, and I look forward to the December 13 event. So, I'll get back in queue. Thanks.

Your next question comes from the line of Mig Dobre of Baird. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Yes. Good morning. Thank you for taking my question. Going back to Cranes, I'm trying to understand how you're thinking about the fourth quarter guide here, really, in terms of the book-to-bill and the way you're thinking backlog is going to be positioned coming out of this year.

Yeah. In terms of the backlog that we have, what we have in backlog is all out for delivery, obviously, in 2016, and some of it will go into 2017 going forward. The overall backlog being down 21% is consistent with our sales view and our sales outlook. And as we look at the business across the three segments, we see the most pressure on our mobile products. Towers are holding in there and, as I said, utilities, we expect to see, based on our backlog, a modest recovery. Kevin?

I just would add to that, Nick (sic) [Mig] (35:05), in Q3 we did have a few cancellations and pushbacks. So, we're assuming, as I said in my comments, that some of those trends continue into the fourth quarter. So, some of the backlog that might be deliverable from a scheduling perspective in Q4, we're assuming, like in Q3, that some of that slips into next year, and that's reflected in the guide. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Okay. Well, so here's what I'm really trying to get at here. When I'm looking at your backlog, you were down – let's say you're going to have backlog down something like 30% year-over-year coming out of the fourth quarter. Orders are also down double digits. I mean, mathematically, in my mind, there is really no way we're not going to have a, call it, double-digit decline on a top line in Cranes for next year. You're talking about having a goal internally to be able to get the business to breakeven if volumes are flat, but volumes are clearly not going to be flat next year. My question is, are you doing enough in this segment? Are we going to hear about more restructuring at the Analyst Day? How should we think about this?

Thanks, Mig. Clearly, you're going to hear more about the restructuring activities in the Cranes side as we attack the underlying footprint. So, yes, more work to come there. And in terms of – again, we'll be providing more guidance as we get into 2017, but as we look at the markets, in some cases the markets are at trough or near low levels that we haven't seen before. And so, we anticipate the teams' and our focus will be to try to drive to a consistent level of revenue on a year-over-year basis. There is more downward pressure, unequivocally, than there is upward pressure and that, as we factor into our plans and what we're doing going forward, we're going to have to consider that in our restructuring activities. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Okay. Thanks.

Your next question comes from the line of Steven Fisher of UBS.

Thanks. Good morning. You talked about the $10 million of expected MHPS overhead cost savings in 2017. Should we then assume that the remaining $24 million would all be realized in 2018 or might that have a longer tail?

Right now, we're looking at about an additional $15 million, so cumulative of $25 million between the two years. Obviously, we'd like to do better than that, but right now that's what we've got line of sight to. So, we wouldn't get the full $34 million out until 2019. Obviously, we're working aggressively at that. We're hoping there's upside in the $10 million for 2017, but that's our math as we stand today, Steven.

Okay.

A lot of that's coming from functional costs: finance, IT, HR, legal. We're sized, as you know, as a company for a much bigger level of activity. Now that we're going from five to three segments, it's time for us to do some repair work on the corporate functional structure. And that's where we're – we do need to wait a little bit until after we close the deal, obviously, but we've got good plans in place. So, we're thinking about $15 million incremental in 2018.

Okay. And can you talk a little bit about the competitive dynamics? I mean, are you seeing signs of stabilization in pricing anywhere in your business or are you anticipating that the year-over-year pricing headwind will extend for much of 2017?

As far as what we're seeing this year, it's clearly across the segments, especially in AWP and our Cranes segment; we are seeing competitive pricing headwinds. As we think about pricing, in my opening comments, I think one of the most important things that we can do as a manufacturer is to balance supply and demand so we don't exasperate competitive pricing dynamic. So, we'll be focusing on ensuring that our production schedules meet the market demand so that we can help to influence competitive pricing dynamics. So, right now, pricing headwinds are a headwind, and we would anticipate them remaining a headwind as we look forward into 2017.

Okay. Thank you.

Your next question comes from the line of Andy Casey of Wells Fargo.

Thank you very much. Good morning.

Good morning, Andy.

I mean, we've touched on volumes and competitive pricing as a headwind. You've addressed a lot of the bad. Are you facing any additional incremental cost headwinds that might become bigger in Q4, then persist into next year?

In terms of Q4, no. As we look at our material spend, we have seen a modest blip, a little bit on steel and steel pricing in the quarters; but, again, that pricing reversed out. We've got about a 90-day lag. We are going to be pushing our strategic sourcing teams to help offset some of this competitive pricing dynamics and volume impact. And then – but those are the two things as we look going forward. So, we don't anticipate anything further beyond that. Kevin, you want to comment?

No. Not really in a close (40:22) category, but obviously keeping a close eye on the impacts of Brexit on a translational impact. We should have kind of continued $2 million to $3 million drag on the translational impact from the currency drop, but other than that, John, I think it's really the steel side that we're looking at.

Okay.

Okay. Great. And then, one follow-up on the Corporate and Other, you have some small group of assets in there. Are you looking at any additional dispositions?

We did move some of the smaller companies into Corporate and Other. The reason, as we look – again, the screen that we look at: does the business have scale and the opportunity to out-earn its cost of capital through the cycle in a relative competitive marketing position? And so, the businesses that we'll put into Corporate and Other are smaller businesses. They don't necessarily meet that characterization. So, over time, we'd be looking to potentially dispose of those companies assuming that we can get a reasonable value for the companies. But strategically, they don't meet – match our screening, and so we would be looking for potential sales of those companies going forward, again, assuming we can get reasonable value for our shareholders.

Let me just give a little bit more color on Corporate and Other, because I know we've been moving things in there. Our latest guidance for a full year loss is about $40 million. Now, that includes the $34 million of drag from the MHPS on allocated costs, leaving you with about $6 million negative impact. That includes about $11 million of loss for the construction-related businesses that are in there for the full year. And then, the rest, which would be things like Terex Financial Services, government programs, a little bit of the unallocated administrative costs from corporate, would be a kind of a positive – net positive in Corporate and Other, just to give you a little bit of the anatomy.

Okay. Thank you very much.

Your next question comes from the line of Jerry Revich of Goldman Sachs. Jerry Revich - Goldman Sachs & Co.: Hi. Good morning.

Good morning. Jerry Revich - Goldman Sachs & Co.: John, in the past you've spoken about return hurdles across the portfolio of at least beating cost of capital through the cycle. And obviously, that's a challenge in Cranes. You've done some restructuring, but I'm wondering, are you looking at more drastic action beyond just the incremental facility restructuring that we've spoken about to get at the margin performance you would need to hit that hurdle rate, or does that goal still apply?

Thanks, Jerry. No, the goal still applies, and we do believe that we can get the Cranes business – historically, it has been a performer where it has earned significantly greater than its cost of capital. So, we believe that the goal is achievable. Clearly, we have to get after the underlying cost structure and that's what the restructuring activities are about, both, I might add, in terms of physical assets, property, plant and equipment, but also we've got to get after our underlying cost structure within the organization. I will say that as we do this across all the segments, we're going to aggressively attack our G&A cost, but we're going to protect the engineering and product development. And that's especially important in Cranes, because if we have updated products, we've seen that our customers will buy that and we can expand our scope and bring new customers in. And so, we will continue despite the downturn to invest in our products and services going forward. And then, we just have to look at our global footprint and reduce the fixed cost and associated cost within the business to get us to a reasonable medium-term EBIT margin – operating margin that yields our 10% cost of capital hurdle. So, that's what Steve and the team is going to be focused on and, obviously, I'll be focused on this significantly as well going forward. Jerry Revich - Goldman Sachs & Co.: Okay. And then, this year you mentioned that the market performance has disappointed you in Cranes and, obviously, you've got the management transition. Can you just talk about what part of the turnaround didn't get as much traction as you had hoped for this year and how we should be thinking about these action plans over the next, call it, 6 months to 12 months?

Yeah. I think it really falls into two broad categories. The Cranes industry is a relatively small industry, and so customer intimacy and customer knowledge is incredibly important. And I think as – Steve will help drive and to help mitigate some of the headwind pressures that we have on the top side on the revenue side. So, I think, Steve, he brings a unique capability there. Also, on the restructuring side, we have to move aggressively and as quickly as we can, again, paced by the talent to implement the complex moves and regulatory hurdles. Steve's had to deal with a lot of that in his last assignment. So, I think he's perfectly suited for the knowledge of the customer base plus his past experience of how we have to move aggressively and decisively on restructuring activities to position the business for future success. So, those are just two areas. And again, Ken did a great job. I just think when you – we're shrinking the organizations from five segments to three segments, and you've got to make a choice on who you think the best person is for the job going forward. And I think Steve is that person. Jerry Revich - Goldman Sachs & Co.: Okay. Thank you.

Your next question comes from the line of Seth Weber of RBC Capital Markets.

Hey. Good morning, everybody.

Good morning, Seth.

Just given your comments on the pricing environment, I'm wondering, do you think that you guys can hold a 30% decremental margin in the AWP business next year?

Yeah. No. I think, Seth, the focus Matt and the team have on cost is no different than the other segments. They fully appreciate the realities of the replacement cycle math. They're preparing for it. And we do have a fair amount of flexibility. Being largely North American based, our ability to augment our cost structure is a little bit easier than MP and Cranes. So, I do believe we can maintain reasonable decrementals going into 2017.

Okay. So, 30% is a good number to think about, then?

30% or better.

Or better. Okay. Thanks. And then, I'm wondering, can you give us any color on the warranty expense that you guys called out on the Cranes business? Can you quantify it? And I guess, it sounds like that's going to continue here in the fourth quarter, but have you kind of ring-fenced that and do you not expect that to continue into 2017?

Yeah. We've had a number of items that we've called out over the three-quarter period. Roughly, aggregate drag on year-to-date earnings for Cranes is about $15 million from total quality warranty, product campaigns, et cetera. Certainly, an anomaly for that segment, but it's been a meaningful part of the miss that we're experiencing this year. Not going to get into specifics by product, but it's been fairly broad-based.

Okay. But do you expect that to be done by the end of 2016 or do you think that that will bleed into 2017 as well?

No. We believe it will be complete in this year.

And go to more historical product warranty reserve levels going forward. That's one of the things that we have to drive improvement on. And then also one of the other talent moves we made there is we've got one of our senior executives has been helpful on the construction side and been engaged in a lot of the restructuring activities. We've moved George over to be the Head of Operations on the Cranes side, again to bring the executive horsepower we need to drive improvements in that segment. And I think that will also help on some of the product-related issues we've had as an organization.

Okay; sounds good. Thanks very much, guys.

Your next question comes from the line of Stephen Volkmann of Jefferies.

Hi. Good morning. Just a quick follow-up to that one.

Good morning, Steve.

You had also talked about some operational issues, I think, in Cranes. Did those also go away as we get into 2017?

Yes. I think we had some disruption in our facilities. And, again, the other key challenge here is – we had is sizing the organization for the volume that you're going to have. And so we had some unabsorbed costs that we could have, frankly, handled a little better in the course of the year. So, as we lay out the plans for next year, driving the head count – it's not just physical assets, but it's also people – the head count for the volume, and so that we can absorb that going forward is another aspect. So, that will be something that we work on as well on the restructuring side. It's not just physical assets, but it's also on the people side, unfortunately.

Okay. Got it. And then, you had mentioned also, I think, some inventory destocking. I don't even remember which business that was in. But maybe more broadly, how do you feel about inventory? It's either yours or in the distribution channels for AWP and Cranes, and do we have to continue that process or – where are we in that?

In terms of – we spoke in the opening comments of about a $75 million year-over-year reduction in AWP inventory, so the distribution channel there is really a rental distribution channel. So, we don't – that is the channel. And again there, it's again about matching supply and demand so that we don't oversupply in the marketplace to put further downward pressure on competitive dynamics. On the Cranes side, it's more of a mixed model between direct distribution, direct to customers, and then through the distribution channel. We do not have a significant amount of inventory in the distribution channel. We did produce some carryover industry at Waverly prior to the closing to cover us through the ramp-up period. We think – we believe that level of inventory was appropriate. So we don't, in general, unlike some other industries, have a large distribution channel with significant inventory that we have to move through going forward. On the net working capital side, we're down about $370 million on – as a percentage of sales from about 29.7% to 26.5%, which is decent improvement in a challenging environment, but not near what we were driving for internally as we go forward as our internal plan. But we'll continue to manage the SIOP process aggressively so that our supply and demand is in balance, so that we don't build up excess inventory and, in my view, an inappropriate use of cash.

Great. Thank you. See you in December.

Thanks.

Your next question comes from the line of Robert Wertheimer of Barclays.

Hey, good morning. If I could just follow-up on the last one. I mean, the comments on inventory are great and it's doing better, in our view anyway, than some of the other verticals we see. We have, though, seen pricing go outright negative in a few different machinery end markets. Do you guys have any negative pricing or is it just softening?

We have had year-over-year pricing erosion. So – in some models, in some segments, we start with an annual price increase for the year. And so we have seen some pricing erosion by model. One of the other things that we're working on as a team to drive in our commercial excellence is around pricing and the leakages that you get based from your list on down. So we've got a lot of work going on to stem the tide in leakages, because we are, in many of the segments, at or close to being a market leader. So how we set price does impact the overall market. And so – but we have seen, in some products, in some regions, year-over-year price declines.

Okay. Perfect. Let me ask you a different question, if I may. You gave a nice walkthrough where you are in the cycles. I wanted to ask a little bit more detail on Aerials in Europe. I mean, at least to us, it seems as though you never really – the industry, rather, never really fulfilled a replacement cycle there. I mean, we had one in the U.S.; I'm not sure we did in Europe. Is that your view? Is there a chance that there's underlying strength in Europe despite the recent softening? I'm not sure why it's soft, in other words, if replacements should be relatively okay.

We clearly have not seen the same pronounced replacement cycle in Europe that was seen in North America, so the underlying demand has been more stable with less volatility. We are seeing a bit of a pause associated with Brexit in the UK. There has been some pause there, but the underlying market does not appear, based on what we've currently modeled, to have this relatively significant decline associated with the replacement demand cycle.

Great. Thank you.

Your next question comes from the line of Joel Tiss of BMO.

Hey, guys. How's it going?

Going well, Joel.

There's been a lot of questions about the businesses, and I just wondered if we could spend a minute to talk about the internal restructuring. And when do you think we're going to feel kind of the full benefits? When is the new Terex going to come together? It sounds like it's more of a 2018, or is that going to bleed into 2019, you think?

I'll turn it over to Kevin, but I'll just start. As I said, we have more work to do with our restructuring activities. Obviously, we'd like to get it done sooner rather than later. We'll implement more actions here most likely in the fourth quarter and some more actions in 2017. We'll realize the benefits of those in 2018 and beyond, but that's kind of the timeline that I'm looking at. We'll move as aggressively as we can with some of the limitations going forward to get to – to right-size the organization for the markets that we're in. Kevin, do you want to talk about...

Yeah. No, I think, clearly, not a wait-till- 2018 activity. John has mentioned – still not complete in our portfolio evaluation, so that work continues. There are some things we're doing right now on costs. There are also a large chunk of cost-related activities – reduction activities that trigger on the sale of MHPS, so late Q1. And as we said earlier, we see the footprint rationalization beginning in earnest and – but also accelerating through 2017 into 2018. So, there's a lot of activity. It's not a wait-and-see by any stretch, Joel.

And then, just a follow-up. Are these – as you – it's probably too early to tell, but are these the three right segments to be riding for the next 5 years to 10 years, or there's still more work to be done to get to the answer there?

No. I think, Joel, right now the reduction from five down to three segments and competing in the aerial platforms industry through our AWP segment, the mobile crane side through our tower cranes, mobile cranes and our utility products, and then material processing, I think, if you look, that these are businesses where we have a scale on a global basis. We have in many businesses consistently out-earned our cost of capital, in the case of AWP and MP. And then, on the Cranes side, it is fundamentally a good business in terms of the competitive dynamics in the marketplace. It is clearly a cyclical business. And we have to get our cost structure in line with that reality. So, I think as we go forward, these three industry segments are three industry segments that we can compete and win in, and return capital and returns to our shareholders that reward them for being in these three segments. So, that's clearly how we're looking at the business for the next five-year time horizon plus, is that these are the three industries we're in. We're going to compete aggressively and win in these three industries.

That's great. Thank you very much.

Your next question comes from the line of Steve Barger of KeyBanc Capital Markets.

Hi, guys. Thanks. I got on the call late.

Hi, Steve.

I'm just trying to think about the consolidated SG&A ex-MHPS for next year. Did you guys give what that run rate could look like?

Yeah. We didn't share 2017 numbers at this point, Steve. We just kind of walked through a lot of the cost restructuring actions and what impact they would have on 2017.

Okay. I'll go back and check the transcript. And then, just to the comment that you just made about Cranes being fundamentally a good business, but at the bottom of the cycle, do you mean that in the context that globally it's not oversupplied or it's rational? Or, I guess, why is it fundamentally a good business on a go-forward basis if we stay at a relatively constrained level of end markets for a while?

Right. I think if you look at the global marketplace and the number of global competitors, there are barriers to entry in terms of these are complex, highly-engineered products. And so, it does create that level of barrier to entry within the industry segment. There has been – us and other competitors in the industry are rationalizing footprint and taking cost out, capacity out of the system. I think that overall will help the industry going forward. And so, when I say fundamentally, those are kind of the underlying fundamentals that you can look at and say the business should, through the cycle, always cover its cost of capital. And that's what we're setting ourselves up to do. So, that's the fundamentals that I look at.

Understood. Thanks.

Your next question comes from the line of Antti Suttelin of Danske Bank. Antti Suttelin - Danske Bank A/S (Finland): Yes. Hi. Could you talk about MHPS business? How much was sales and how much was EBIT in the quarter?

In terms of the MHPS, and I'll comment and then turn it over to Kevin real quickly, sales overall were down in the quarter about 10%. That was really driven by our port business that was down. The material handling business was down low-single digits in terms of revenue, but actually increased – on the material handling side, increased our profitability by about 100 basis points I don't have the specific EBIT in front of me. I'll ask Kevin to get that, and we'll break that out and follow up on your call. But, overall, the business – port is been tough with the container traffic, so we've had a decrease in port business order intake. We've got a fourth quarter that – we've got material harbor cranes that we've got to deliver here in the fourth quarter. On the MH side, greater stability, off a little bit, but good performance on margin expansion on lower volume in our MH side of the business.

Yeah. I'll just add to that, John. The GAAP EBIT for the quarter was $79.5 million. Now, that included a good guy (1:00:08) of about $55 million. You guys will recall that, in Q2, we took an impairment based on the sale proceeds expected of $55.6 million. Given the stock appreciation that we saw during the third quarter, we were able to fully reverse that. So, when you back that out and some other small restructuring adjustments, we've got an EBIT as adjusted from – an EBIT as adjusted of about $26 million for the period. Antti Suttelin - Danske Bank A/S (Finland): All right. And is this before or after corporate allocations, this $26 million?

That does not have any corporate allocation in it. It also reminds you that under DiscOps accounting, we freeze the depreciation and amortization. So that $26 million doesn't have depreciation and amortization or corporate charge. Antti Suttelin - Danske Bank A/S (Finland): Thank you very much.

Your next question comes from the line of Yilma Abebe of JPMorgan.

Thank you. Good morning. My first question is you're – you mentioned that you expect to reduce debt with expected proceeds from the Konecranes transaction. Has your view changed today versus the prior quarter in terms of how much of that proceed you expect to reduce debt by?

No. Again, we're trying to drive towards an optimal capital structure as we'd looked at this somewhere in that – in the range of 2.5 times net debt to EBITDA through the cycle. So, that implies somewhere around in the range of $700 million of debt repayment in the year, next year post-closing.

Okay. So...

One other just piece I would add to that is I think most of you probably saw that we went out and were able to get amendments on our credit facility, which allows us, now, with that debt repayment to go after our higher cost debt, our senior notes at 6.5% and 6%. So, we're looking at 2017, once we accomplish that, of roughly a $40 million reduction in interest expense.

Okay. Okay. So, just to be clear, you expect to reduce debt at closing by about $700 million, and it looks like you're looking at the senior notes for debt reduction here.

That's correct.

Great. Thank you very much.

At this time, there are no further questions. I'll now return the call to management for any additional or closing remarks.

Thank you, again, all, for your interest in Terex. If you have any additional questions, please follow up with Brian. He'll be more than happy to answer those questions. And I really do look forward to seeing you at our Analyst Meeting in New York City on December 13. Again, thank you for your participation.

Thank you. That does conclude the Terex Corporation third quarter financial results conference call. You may now disconnect.