Good morning. My name is Brandy and I will be your conference operator today. At this time, I would like to welcome everyone to Terex Corporation’s Third Quarter 2011 Financial Results Conference Call. (Operator Instructions) After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now turn the call over to Ronald DeFeo, Chairman and CEO. Please go ahead.

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, Tom Gelston, Vice President of Investor Relations. And participating also and available for your questions will be the leadership of our business segments: Kevin Bradley for the Cranes business; Tim Ford for Aerial Work Platforms; George Ellis for Construction; Kieran Hegarty for the Materials Processing business; Steve Filipov for developing markets; and Ken Lousberg for our China operations. As usual, a replay is archived on the Terex web site, www.terex.com, under Audio Archives in the Investor Relations section. Before I begin, however, I’d like to acknowledge the recent passing of John McGinty, a person who long covered Terex mainly as a sell-side coverage analyst and more recently on the investment banking side. He was an influential thought provider for over 30 years to our industry. He was an astute observer of trends, a friend of Terex, one that had a great and fun personality, and a person I respected very much. He will certainly be missed. I will begin with some overall commentary on current performance, as well as commentary on the market environment. Phil will follow me with a more detailed financial report, including an analysis of the Demag Cranes acquisition and the related accounting for this quarter. Following that, as usual, we’ll take your questions. We will enforce the one-question rule with a follow-up. That will allow as many people as possible to ask their most important questions within the timeframe of this call. As we’ve done in recent calls, we’ve prepared a presentation as a guide through our commentary. It was e-mailed last night to those on our investor relations contact distribution…

Thanks, Ron, and good morning. Page 5 displays the quarterly, year-over-year, and sequential results for the continuing operations of the company. I’ll cover some points here and cover more detail in the bridge later. The results of our acquisition of Demag Cranes AG, reported in our Material Handling & Port Solutions segment, are included from August 16 of this year. Net sales increased 68% from the prior-year quarter or 35% excluding the effect of foreign currency translation and the impact of Demag Cranes AG. The increases over the prior year were most significant at AWP, Cranes, and Construction as we continue to experience an industry recovery from the prior year. This recovery is somewhat fragile geographically and by product area. Net sales increased sequentially in Cranes and Construction mainly due to improved production throughput while AWP and Materials Processing showed some seasonal declines. Material Handling & Port Solutions contributed $256 million in net sales for the period. We had income from operations of $53 million in the third quarter, compared to $4 million in the prior-year quarter. Excluding the impact of restructuring, certain acquisition-related and other items in the income from operations, it would have been approximately $78 million in the current period versus approximately $5 million in the prior-year quarter. The favorable effect of increased net sales volume was partially offset by higher input costs, mainly in AWP, of about $11 million; the negative absorption effect of manufacturing cost efficiencies and supplier disruption; as well as fluctuating production schedules. Transactional foreign-currency changes year-over-year also negatively affected the results, most significantly in AWP of about $12 million, mainly the result of a 17% change in the Brazilian real in the month of September relative to the prior year. SG&A expense increased primarily due to the inclusion of Material Handling &…

Thank you, Phil. Just a couple of comments before we open it up to questions. In general, I’d say the Terex leadership team, and particularly our base business leadership, is focused on the items that are going to drive return on invested capital. We continue to put emphasis on lowering our working capital investment through better planning. The sales and operations planning process has been greatly emphasized throughout our organization over the past six months. We see some dividends. We see some benefits. Each and every one of our general managers at all of our factories is pretty focused on this. We also believe that the pricing and supply chain challenges that we face have been both real and have slowed our progress down somewhat. On the pricing side, we are aggressively moving our pricing up to offset some of the both raw material and component cost increases that we face as well as pushing back on our supply base. Every one of our factories has a list of the top ten suppliers. We know where the increases have come. We know our suppliers took their prices up early, and we’re pushing back to try and get as much reduction on that front as we possibly can. Focusing on planning our business better and on getting our costs down, and then lastly on our SG&A, is what’s going to drive our margin improvements, which is really the most critical thing for us in planning for 2012. It’s not how big our business is, it’s how – what kind of positive returns we can capture from the size business that we have. This is how we get healthy and how we plan to drive performance. With that, I’d like to open it up for questions, Brandy.

(Operator Instructions) Your first question comes from the line of Ted Grace with Susquehanna. Ted Grace – Susquehanna: Hey, guys.

Hello, Ted. Ted Grace – Susquehanna: I just was hoping you could first touch on third-quarter margins, and just kind of give us a sense for how they may have compared to your internal plan on the legacy business. And then the second kind of follow-up question was: just in light of all the restructuring that you’ve talked about over the last few quarters, if you could just kind of give us some update on how we might think about 2012 margin prospects with particular focus on AWP and construction equipment.

Okay. I’ll do the first.

Okay.

Let me talk about the margin, Ted. I think relative to our internal expectations, probably the biggest impact we saw that was not there was this currency impact that we had on transactional impacts. That – again, Brazil was a pretty big swing, 17% in the month of September, and that causes a relationship on our outstanding short-term obligations that hit the P&L. Again, I mentioned that was really AWP and a small amount in Construction. Absorption, I think, was the other area that affected both AWP and Construction – some of the disruption in production facilities, and we also took a cost reduction action in the late part of the third quarter in AWP to reduce some of those costs to get that absorption more in line with what we had. We had some unusual things. Not all of them are excluded in that other items that I mentioned earlier, but stuff happens; I guess is what I would say. But overall, I think we’ve made progress in several of our segments in reacting to changes in demand to get our cost structure down as quickly as we can.

Okay. With regard to 2012, I’m not going to give guidance on margins sitting here because we haven’t completed our planning process and, as you know, Ted, like most companies you try to complete your planning process as close to the pending fiscal year as you possibly can and ours really gets done on or about the first week of December. But as we look forward, what I’d say is we’re going to have a fairly positive customer demand in our Aerial Work Platform business, and the price increases that I mentioned will be key to offsetting what has been a rather significant run-up in our component costs. We do see the steel costs abating somewhat, which will be positive for us, and we see an ability to push back and get some cost reduction from our supply base. So pricing action of 4.5% that coupled with the June should drive our margins as well as some of the supply costs. This is going to be a big driver of profit improvement, I think, in this segment and get us back to the kind of leverage in the segment that we would normally expect. The Construction business, I made a point in my commentary to emphasize that we are not going to focus on growth. We are actually going to pull back from certain markets and not compete in those markets where either the currency or the cost of selling in those markets offsets the amount of margin that we can make. So there will be some change in volume. Either the trajectory will slow or in fact perhaps go down, but we believe the margins will go up and this business will turn positive in 2012. We’re also taking a layer of management out. That’s already happened in the…

Material Handling.

Material Handling & Port Solutions business. I guess it’s early for me to comment on that business, but I’ve been very positive about the leadership team that that business has had. They’ve driven both growth and profit improvement, and I would expect that to continue. Ted Grace – Susquehanna: Great. That was very helpful. Thanks a lot, guys. Best of luck this quarter.

Thank you.

Your next question comes from the line of David Raso with ISI Group. David Raso – ISI Group: Hi. Good morning. My question relates to the fourth quarter guidance and maybe that’ll give us a little insight into the beginning of ‘012. When I look at the fourth quarter guidance versus what you just did in the third, the $0.30 going to the low 20s of EPS is basically the Demag business being accretive, we’ll call $0.05 to $0.10; in the fourth quarter, it will be more neutral. So in the core business, I’m just trying to understand, ex-Demag, you’re basically looking at flat sales sequentially, and really no major change at all in your operating margins? So I’m trying to figure first on the revenue, you’re implying the core business for sales in the fourth quarter are up about 17% year-over-year, but you just put up orders ex-Demag up 26% and a backlog ex-Demag, up 38%. So why the sales growth of only 17%, if your backlog and orders are running 25% to 35%? :

Okay. David, it’s Phil. Let me start and Ron will probably add some comments. The third quarter to fourth quarter, as you point out, Demag AG, the third quarter is very year-end, which traditionally is their largest period. So we picked up half of that quarter in their results. The expectations for the fourth quarter is a very low quarter. So they will have a detriment relative to what the performance was in the third. So – and we pick up a full quarter of the amortization that’s there. The other impact that we have is the port equipment portion of cranes goes up 50% in revenue from the third quarter to the fourth quarter. Now 50% is a big percentage. That’s $50 million to $75 million. And their margins are not as high as the rest of the crane segment delivery. That’s one of the significant pieces that are in here. The order rate that we’ve included – going into the fourth quarter in cranes we had 87% of the orders already in backlog, pretty much at the end of August as opposed to September, and the backlog increase overall is largely driven by AWP where most of that is really for next year’s delivery. Very little for this year in the fourth quarter as it’s a seasonally down period, and deliveries are actually down somewhat from the prior period. So some of the mix of that higher profitability in AWP versus port equipment causes some of the overall margin decline that we have in the group. We have an expectation that construction does have margin improvement but again, they’re fairly low levels relative to the rest of the company. And material processing with that softening and crushing equipment – we’ve taken our production levels down and that’s causing some under-absorption relative to the third quarter. So we feel that we’re realistic about the volume expectation and the margin expectation and the combination of businesses that we have there. I don’t know if you want to add anything.

I would add a bit of color and just say it’s important that we set the company up for substantial improved performance in 2012 by not producing more than we need to produce in the fourth quarter and positioning ourselves to generate cash. Okay? And I think that’s more important than a couple of pennies here or there. So what we’re really trying to do is trying to get all of our businesses on a sounder, more fundamental footing. Again, managing for profit and cash generation as opposed to pure growth. A large portion of the backlog increase, as Phil has already said, comes from the AWP business. And while we’re delighted to have that, because it reflects big orders at decent pricing, but mostly for next year is for next year. So we may get out a little bit more in AWP but it’s not certain at this stage. David Raso – ISI Group: That was extremely helpful. That said, the AWP backlog, which is more of a first-quarter shift maybe partly second-quarter shift. Can you give us some indication of how you feel about the profitability of that backlog versus the margins we’ve just got in the last quarter or two from AWP? While the pricing’s locked in.

Tim, why don’t you comment on that? Tim Ford?

Okay. David, it’s Tim. I think as we look at our performance on a sequential basis, we’re seeing continued improvement and I expect that will – and you should expect that will continue as well. I think two things to keep in mind, here. One, Ron noted in his comments that when we announced the price increase in the spring, we said that price would lag the costs that we’ve incurred. And that’s absolutely the way this is playing out. The pricing that we’ve put in place in the spring, and the price increases that we’ve announced for January, we believe are sticking. In fact, just this week I’ve been involved in discussions with several large rental companies for their acquisition needs for next year. And while many of them are dangling large orders out there to try and get us to bend, we’re holding the line on price and we believe our competitors are as well. So I feel like the direction we’re going from a margin standpoint is on the right trajectory. And I think if we keep going quarter-over-quarter we’ll see continued sequential margin growth. David Raso – ISI Group: All right. I appreciate it. Thank you.

Thank you, Dave.

Your next question comes from the line of Henry Kirn with UBS. Henry Kirn – UBS: Morning, guys.

Good morning, Henry. Henry Kirn – UBS: Since you’re going back to the supply base to resource components, can you update us on the thoughts related to the Tier 4 changeover and with that, how much cost could you recently target to get out at this point?

Tier 4 changeover is a fairly complicated discussion. And what I would say on Tier 4 changeover is we’re probably not going to get a lot of cost out on the Tier 4 topic, but – so we’ve got to find cost reductions in other places and in other areas. What Tier 4 is doing to us, however, is it’s jacking up our inventory. Just in our Construction business alone we’ll probably have $40 million to $50 million of extra inventory that we carry into next year because we’ve bought Tier 3 engines to carry over a time period for the conversion, and we’ve really had no choice. : So at the end of the day, it’s driven by regulators, and we have to adapt and we are adapting. But it means running double production lines, because Tier 3 markets – Brazil’s, Russia, the Middle East, Africa, they don’t want Tier 4 engines nor can they have Tier 4 engines. And then, of course, the developed markets, that’s all we’ll produce for them depending upon the size class. I would say, Henry, Tier 4 is nothing but a complication for us; unlikely for us to get real cost reduction from that. But I think we’ve got it so that at least it’s not going to get any worse from here. Henry Kirn – UBS: That’s helpful. And on the Chinese JV partner that you mentioned earlier, over what timeframe would you evaluate your steps you’ll take? And then would there be any charges or penalties for ending the JV?

Yeah. At this stage we’re hoping that we can resolve our JV partner issues without any substantial charges or penalties, but it’s difficult to predict and nothing can be assured, as I mentioned earlier. What we’re trying to do is find a different partner, and we’re trying to find a different partner who is focused along the same – with the same vision that we have. And that is not an easy thing to construct. This JV is now a loss-making JV and so we’ve been suffering losses in the range of a few million dollars a quarter, and so it’s fundamental for us to try and fix this. Whatever decision we make we think it will have a positive return on our performance, but it’s likely to take a little while yet. Henry Kirn – UBS: That’s helpful. Thanks a lot, Ron.

Your next question comes from the line of Robert McCarthy with Robert W. Baird. Robert McCarthy – Robert W. Baird: Good morning, gentlemen.

Good morning, Robert. Robert McCarthy – Robert W. Baird: I wonder if you could – if we could dig into Demag’s results a little bit more and how they influence you. First, can you give us a dollar number for their contribution to inventory and working capital at the end of the quarter?

Let’s see. Why don’t you move on and I’ll come back to you. Robert McCarthy – Robert W. Baird: Okay. While you’re looking that up, Phil, the first half of the calendar year for this company featured, I think, something like 25% to 30% year-on-year order growth. But it looks like the comparisons get more difficult in the second half. And so I wonder what you saw in the – with a view of the full third quarter, did indeed their new order bookings slow down at least as measured by a percentage growth. And if that’s the case, was it mostly in equipment, or was it evenly spread across equipment and service?

Are we talking about Demag AG? Robert McCarthy – Robert W. Baird: Yes.

Okay. Let me answer the first question. They’re a little more than $400 million of working capital, Robert. Robert McCarthy – Robert W. Baird: Okay.

All right. And I think what we’d like to say at this stage is this is a company that’s in its quiet period in Germany. I know Aloysius Rauen is on the phone, and Rom is on the phone and he could probably give you a feel for the market conditions, but I think other than what’s been published and is public information as reported in IFRS, until we get out our 8-K next week, we really don’t want to give any more detail than that, or are not comfortable giving any more detail, because it’s a complicated subject. We want to report in U.S. GAAP and we have an obligation to go about reporting in U.S. GAAP and then to provide that all the way back to the beginning of 2010, which we will do. So, to give you any more information other than what’s out in the public market, I think, Robert, we really are not ready to do. Robert McCarthy – Robert W. Baird: Okay, Ron. And to follow-up, in terms of some details that might help all of us, can you break down the non-recurring items impact on segment operating profit for us? In other words, how much of the unusual items affected Construction versus the rest of the businesses? And also could you give us a reminder, maybe, on how much of their respective segments are accounted for by the off-highway truck business in Construction and the mobile crusher business in Material Processing?

Okay. I’ll do my best on that.

Well, give me a minute on the other one because we’ve got it in the press release.

On what other one, Phil?

The special items.

Okay.

George, what percentage of your business is rigid or in our articulated truck business?

It would be around 15%.

Around 15%. Okay, that answers that. Robert McCarthy – Robert W. Baird: And the mobile crusher piece?

Mobile crushing is what percentage of your business, Kieran?

Approximately 30% to 35%, Ron.

Okay. And in Construction, we have a lot of pluses and minuses in the Construction business to report in reporting that $6.3 million or $6.4 million loss. What I’d say there is that $6 million loss probably represents how the business did in the quarter. And other than the fact that there were a few one-time items that Phil has called out, there were some pluses and there were some minuses. The problem in the Construction business right now is a roadbuilding business in North America, that has not come back at all, we’re losing money. The Brazilian business has lost money in the quarter, but we expect that to change and improve. Its loss-making in the quarter was really a result of a slowdown in government financing, but that’s being resolved. And our compact equipment business has had some production issues and that’s being addressed. Furthermore, we’ve got too high of an SG&A level in that business, which is why I said we’re taking out an entire layer of management, which George has done. So, I don’t know if I can give you any more detail than that or, George, you want to add anything more to that?

I’d say, Ron, I’d say you covered it. Robert McCarthy – Robert W. Baird: Ron, all I’m trying to get at is if we take out all of the unusual items that were called out for the quarter, did the business make money or not? And I guess the answer is no and the size of the loss was pretty close to the reported number.

That’s what I would say. Robert McCarthy – Robert W. Baird: Okay.

That’s exactly what I would say. But I’d also quickly come back and emphasize that this is the reality we’re dealing with. And we’re not going to grow our way out of the problem. We’re going to fix it by taking cost out and structure out and by not selling in markets where we lose money. Robert McCarthy – Robert W. Baird: That’s loud and clear. Where are those markets, Ron? Can you be any more specific about it?

I’d prefer not to be more specific about it. We do have competition. Robert McCarthy – Robert W. Baird: Okay. Thank you.

Robert, just to answer your question by segment on the OP, Material Processing had a $2.2 million impairment regarding one of our facilities. Construction is a little more than a million bucks net of some settlements of litigation and prior equity issues and restructuring. And Material Handling & Port Solutions is roughly a little more than $2 million in that segment. It rounds to $6 million. Robert McCarthy – Robert W. Baird: All right. Thank you, Phil.

All right.

Your next question comes from the line of Ann Duignan with JPMorgan. Ann Duignan – JPMorgan: Hi. Good morning. And, Ron, thanks for the words on John McGinty. I think we all concur.

Yep. Ann Duignan – JPMorgan: Can you just give us a little bit more color on the slowdown in the Mobile Material Processing businesses; where, what? You know just a little bit of a deeper dig on that business, please.

Sure. Sure, Ann. I’m going to ask Kieran Hegarty to give some perspective on that because he’s pretty on top of his business. I think he can give you kind of a sense of what’s happening. Kieran?

Yeah, just to give a bit more flavor in terms of the Mobile Processing, both crushing and screening, it probably makes up about approximately 70% of Material Process in revenues with the remainder being made up by stationary processing equipment. All of that 70%, approximately half of that would be mobile crushing, the other half would be screening. Typically a mobile crusher, the typical retail value would be about triple the price of a screen. And probably the biggest sort of trend we’ve seen in the last couple of months is probably a reluctance for customers to finance. For example, in North America we would have – our dealers would rent the equipment. Typically a sales process would be renting the equipment to sell it. And what we’re finding is a reluctance of many purchasers, we believe, as I like to just say, uncertainty out there, many purchasers to convert that rental into a sale. And we’re seeing that more on the crusher. We believe it’s simply because the capital acquisition cost is about three times the price of the screen and we’re starting to see it there. We’re also offsetting some of that decline in demand in crushers by increasing mining demand for crushers, but that typically comes from our larger end crushers. So we’re kind of seeing a mixed picture but certainly the decline is probably in our volume end, which tends to be used by the contractors. So that’s, and again, we’re seeing also the same effect in Europe, to be quite honest, in the sense that there seems to be a reluctance from purchasers to finance larger crushers. Maybe on screens they tend to finance out of their own cash flow, as opposed to bank finance. So that’s the main issue.

All right? Ann Duignan – JPMorgan: Okay. So customers, if I were to summarize, customers who would normally purchase this equipment for aggregates, maybe road construction-related and housing-related, again, in both regions, is that the right way to think about it?

It is but what we’re seeing that’s probably strange is that the screening demand hasn’t really slowed, right? Which is, I think the demand is there, right, but there’s a reluctance to finance. Typically when they buy a crusher, they finance it, and there appears to be more reluctance to finance the asset because of the price of it. So I’m not sure if that’s directly related to the finance climate, for want of a better word, but we still believe the underlying demand is there. And I’ve seen, that’s primarily seen in the high utilization, that those dealers who have this product in rental are expansion at the moment.

And historically, we might have just continued to try and push product into our distribution channel, and we’re not going to do that. That’s just not our plan. We don’t think that’s a smart thing to do. So, that’s why I said it’s difficult for us to tell right now whether this is just a pause related to some uncertainty, or a real issue relative to end demand. I think it’s more of exactly what Kieran said, some uncertainty, some financing reluctance. There’s enough product in the channel to do the job, and we’ll see how 2012 begins. Ann Duignan – JPMorgan: Okay. That’s great. And just a follow up on Demag, then. Could you just walk us through, in a normal year, what the seasonality might look like? It does sound like, from Q3 it’s significantly higher than Q4. If you could just give us some sense of, as we look into 2012, the quarters, how should we think about the seasonality in the business?

Okay. I will give you my sense from having looked at the business, but then I’ll ask Aloysius to correct me or reinforce what I’ve said. Typically, our third quarter, which is July through September, or historically the Demag fourth quarter, is the strongest quarter of the year, okay? And that is as we presented in the press release, because the industrial part of their business is probably two-thirds of the business, and there’s a lot of factory shutdowns that take place in the summer. I can’t give you a percentage, I’m not sure we can exactly articulate a percentage, but it is the strongest quarter. And typically, our fourth quarter, or historically the Demag first quarter, is the weakest quarter of the year, with probably our first and second quarters being somewhat similar. Aloysius, is there anything you’d add to that?

Ron, no, I don’t think so. You have covered it perfectly. Maybe it might be a hint that if you want, if somebody wants to have a look in history, I can’t see that this year we have a totally different development, completely different development than in the other years. But no, you have covered it all.

Okay. And the history is public, so that’s just out there. And it won’t change from U.S. dollars or euros, looking at it that way. Okay, Ann? Ann Duignan – JPMorgan: Okay. Thank you. I’ll get back in queue.

Okay.

Your next question comes from the line of Andy Casey with Wells Fargo Securities. Andrew Casey – Wells Fargo Securities: Thanks, and good morning, everyone.

Good morning, Andrew. Andrew Casey – Wells Fargo Securities: A question on the Cranes business and your comments about that being somewhat mixed and a competitor’s recent comment about some sluggish demand prospects for the next 12 months. Ex the port crane business, are you seeing any evidence of either a North American rough terrain customer order growth moderation, or – and then an attempt, rather, to square crane market dynamics with earth-moving type producers? Are you seeing any slower regional growth order activity outside of China?

Okay. I’m going to turn it over to Kevin Bradley in a second, but just to frame it, Andy, historically the crane product range usually is a 12 to 24-month lag from the earth-moving products. So they usually go down after the earth-moving products slow down, and pick up after the earth-moving products pick up. So, Kevin, you want to comment on that?

Yeah. I would say, overall, order intake is pretty stable, right? Actually, I think the quality of the order intake has actually improved from my perspective. Specifically on RTs in North America. What I would say is changing slightly is we’re seeing an increase in export of that product, particularly into Latin America and even into some parts of Europe for global, to supply global demand. But right now, we’re pretty comfortable with the intake level, and the quality or mix actually looks improved. Andrew Casey – Wells Fargo Securities: Okay. Thanks. And then could you also, if you could, comment on channel inventory for both new and used, outside of the port cranes?

Yeah, okay. Channel inventory, I think, is in a good place for the Crane business. We’ve gone through the major adjustment period following the 2009, 2010 period, where I think inventory has gotten to a level where we’re into replacement demand. Probably a little bit too high inventory still in Europe in some of the channels, but beyond that, I think inventory is in pretty good shape. Kevin?

No, I would agree. I think, to be honest, our distribution partners have been very disciplined since the crisis, with a lot of actual influence from the banking community who won’t let them be undisciplined. The reality is channel inventories are not an issue for us. We’re seeing much more orders based on the real demand and almost pass-through type sales, especially as you get into the bigger cranes. There’s no one that’s really stocking big cranes. It’s all based on real external third-party demand.

China, on the other hand, is probably an entirely different story. But our position in China probably doesn’t warrant much conversation for us here, other than the big cranes required are imported in China that we import, and that’s still showing some pretty positive signs.

Yeah, I would say what Ron said earlier is very true. We want healthy distributors, right? And our job is to make sure that they don’t do things that are going to put them in harm’s way from a financial health perspective. So we like to base our capacity on real third-party demand, and the channel is really just a pass-through. Andrew Casey – Wells Fargo Securities: Okay. Thank you very much.

Your next question comes from the line of Andrew Obin with Bank of America Merrill Lynch. Andrew Obin – Bank of America Merrill Lynch: Yes, guys, good morning.

Hello, Andrew. Andrew Obin – Bank of America Merrill Lynch: Hi. Just a question, just to follow up, because I’m not entirely clear. As I look at core operating profit for heritage Terex, Demag issues aside, just directionally, which businesses are going to be up in absolute operating profit versus 3Q, and which businesses will be down based on your guidance? Because I’m just not entirely clear what’s happening with the core Terex business. I apologize for that.

In Q4, you’re talking about? Andrew Obin – Bank of America Merrill Lynch: Q4 versus Q3, just sequentially, right. That’s because I’m still not clear how the numbers work.

Andrew, relatively speaking, I’m not going to get into real specific numbers here. But I would expect that the Cranes business does come down a little bit from the performance in the third quarter. Construction is improving, again, relative to cost performance and the mix of products that are coming in the fourth quarter. AWP, relatively flat order of magnitude, and Material Processing is actually an improvement. Andrew Obin – Bank of America Merrill Lynch: Terrific. And just talking about free cash flow for the fourth quarter, what are the major buckets that will drive positive free cash flow in Q4?

Well, getting to the 27% of working capital to annualized sales will drive about $140 million of working capital improvement and the rest will really be the profitability of the company. I don’t expect a lot of contributions from customer advances, which we kind of calculate in there. The other area would be CapEx, which would be a slight drag. We’ve done $60 million through the third quarter we’ll probably have an order of magnitude $20 million to $25 million of CapEx with Demag AG included. Andrew Obin – Bank of America Merrill Lynch: So there’s not going to be a big shipment of finished goods in Q4, right? It’s just pure working capital?

Yeah, there will be shifts of inventory. The question is if we do it early enough to get out of receivables, so that’s why I’ve got to kind of look at the total working capital. There will be movement, obviously, through inventory, and that’s one of our main drivers. It’s just can we get it out fast enough to collect? A lot of the big shipments are on letter of credit terms or progress payments so, like the port equipment and the large crawlers, so (inaudible) the period.

But not just getting it out, it’s getting it out and keeping it out.

Yeah, yeah. The process changes, it’s not a one-time event on finished goods. The raw material is the area of activity of shutting down that incoming so we don’t have it around if we don’t really plan to build for it, and we’re taking some pretty significant action there. Andrew Obin – Bank of America Merrill Lynch: Okay, terrific. Thank you very much.

Your next question comes from the line of Seth Weber with RBC Capital Markets. Seth Weber – RBC Capital Markets: Hey, good morning.

Hey, Seth. Seth Weber – RBC Capital Markets: Hey. I wanted to talk AWPs and the, kind of, the situation with the independent rental guys. I mean, I assume the issue there is financing, so do these customers really have the appetite or the ability to absorb the price increases that you’re talking about? I assume that the bigger customers aren’t paying the 4.5% times two that you’ve put through so far. And I guess the second part of that question is, are you going to start to use, Terex Financials a little bit more as a lever to help those guys out?

Phil, you start at the last question and then we’ll turn it over to Tim.

All right. Yeah, Terex Financial Services, I would say that in the third quarter, globally we facilitated about $130 million to $140 million of financing for our customers. The balance sheet went up maybe $5 million to $10 million. So, I am consciously trying to use other people’s money as opposed to our own. Now, there are some situations where it may make sense for us to participate if we gain share, for example, or restructure a situation that may be, some of these independents in particular, such that we improve a collateral position and get more share. We have done that in the AWP business, specifically within these independents to facilitate transactions. So again, going for growth there. We are not being reckless and we are getting collateral positions improved. There is a hesitancy to finance from third parties. Some of the independents, again, mainly looking at the credit statistics that they have in place. But we work through the ones that we want to do business with and we’re taking calculated risk.

Our delinquency rates have been acceptable, not particularly remarkable. Tim, you want to comment on the overall health of the independents?

Yes. Virtually every customer we talk to, whether it’s a big guy or a small guy, is experiencing very high utilization rates and improving rental rates. And I think you’ve seen that in some of the public releases that have happened over the past couple of weeks for the larger guys. That trend is consistent with the medium-sized players and even some of the smaller ones. It’s true in North America. It’s true in Europe, but to a lesser extent. And I think that the uncertainty in Europe is having a little bit of a drag on things, but it’s not materially affecting our business to date. I would also say that the big players tend to have a bit more visibility out into the horizon and may be a bit more sophisticated in their fleet planning. And so they’re coming to the table sooner than some of the independents are to make those buys. I think the trend for independent purchases is beginning to change. We saw a slight shift in third quarter versus second quarter, in terms of what percentage of our business came from the larger guys. I think the fourth quarter will probably mirror the third. But as we get into next year, we’re hearing more and more from some of the medium and smaller guys that they recognize that the business is strong and going to stay strong. So I think that’s a healthy sign for us. On the price piece, you asked whether or not we’re going to get the full price increase. I think there will be certain cases where we’ll get virtually all of it, and there will be some cases where we get less than all of it. But we are being very vigilant in terms of holding the line on what we need and what we expect. The reality is material costs have been a big problem for us this year and most of our customers understand that. And, frankly, they’re getting price in the market and so, therefore, us getting price is something that they can understand. Seth Weber – RBC Capital Markets: That’s very helpful. Thanks. Could you just remind us what percentage of the business goes to the large national guys versus the medium or smaller independents?

Yeah, I know it by region but I’d have to do the math on, you know, to get it to you in aggregate. Seth Weber – RBC Capital Markets: Maybe just North America.

Let me – yeah, it tends to be about half the business in North America. Historically, it’s been about half the business in North America and this year it’s been somewhat more than that but, traditionally, I would say it’s about half the North American business. Seth Weber – RBC Capital Markets: Perfect. Thanks very much, guys.

Okay.

Your next question comes from the line of Jerry Revich with Goldman Sachs. Jerry Revich – Goldman Sachs: Good morning.

Hello, Jerry. Jerry Revich – Goldman Sachs: Ron, Demag management has had a 10% margin target, or about 8% if we include the higher depreciation that you’re going to be looking at now that you own 80% of the business. Over what time period do you think you can get to that target? And also can you just give us an update on how we should be thinking about timing on the transition of the Terex port crane business to be operated by the Demag management team? Thanks.

Okay. First of all nothing’s really going to happen until we complete the domination agreement and I just want to emphasize that we completed a business combination agreement when we agreed to purchase Demag Cranes AG. We’re going to live within the confines of that overall agreement and that we are targeted for a shareholder meeting in February of 2012 and that’s when we expect a key step for the domination agreement to take place and for – on a follow-up basis, that should get done a few months thereafter. I think the Demag public company, Demag AG public company has a very specific and very clear guidance out there on a multi-year plan on an IFRS basis. The translation from IFRS to U.S. GAAP is somewhat complicated, which is why we’re going to put out the 8-K/A next week in order to give clear and, as required by the SEC, to go back to 2010. So that ought to provide some specificity there. I think all Terex businesses, inclusive of Demag Cranes AG, are going to have a minimum of 10% operating profit guidance. Okay? You know, at some point in the future. How fast we get there is going to depend upon, you know, specific conditions and the specific situations. The Port Equipment business we have at Terex we’ve made a fundamental commitment to get that business profitable irrespective of any combination with Demag Cranes AG. We’re turning the corner in the fourth quarter. The changes we’ve made will get that business profitable in 2012. Following domination, there’s likely to be a combination of management teams but exactly when that happens, I can’t say. Jerry Revich – Goldman Sachs: Okay. Thanks. And can you comment broadly on interim Tier 4 that will impact the smaller product lines early part of next year? How comfortable are you with your ability to price ahead of those cost increases and in terms of any factory transitions that we should be thinking about or changes in production schedules because of the transition as we think about ‘12?

Yeah. One of the businesses that’s most affected by the interim Tier 4 is the construction business. So, George, why don’t you comment on that because I know you’re deeply engaged in this.

Yeah, thank you, Ron. Jerry, what we’re seeing is that we’re having to – as Ron mentioned earlier – basically set up two production processes to deal with this through next year. Depending on the size class of the machines, we have pre-bought engines to help bridge us as the Tier 4 engines do come in. We’ve been working plans constantly to be able to meet the expectations from the regulations and also supporting our developing market customers with the existing tier engines. So it’s just adding another layer of complexity and also working capital. I don’t see a significant impact to our customers but it is sure causing a lot of extra work and effort within our manufacturing facilities. Jerry Revich – Goldman Sachs: And, George, can you comment on the pricing point on a percentage basis for some of these product lines? Is it going to be pretty meaningful increases? Are you confident you can pass them through to your customers once you’re out of the Tier 3 engines?

Yeah. We, depending once again on the size class and the timing, we’ve been very up front with our distribution partners and end customers of what the impact we generally see. Some are in the range of 8% to 10%. Some are as high as 15% to 18% and our expectation is that we will have to move that on to the market place. Jerry Revich – Goldman Sachs: Thank you.

(Operator Instructions) Your next question comes from the line of Rob Wertheimer with Vertical Research Partners. Rob Wertheimer – Vertical Research Partners: Hey, good morning, everybody. Can you hear me?

Yes, we can, Rob. Rob Wertheimer – Vertical Research Partners: So AWPs look to be trending very, very positive. I have just one quick question. Is there any chance of a pre-buy and a backlog, just given the price increase? And did the price increase come because you have seen more favorable trends on not having to do some of those discounts to get the bigger deals? Thanks.

Tim, you want to answer that?

Yeah, I, just to be, make sure I’m clear on the question, Rob, you’re asking whether there’s some pre-buy in the backlog. Rob Wertheimer – Vertical Research Partners: Yeah, so whether people have heard about the price increase, and that’s why your orders trended up.

Yeah. I think there is some pre-buy for 2012 in the backlog from some customers that are trying to get in front of, frankly, availability and lead times. So, that we do have some, we do have some pre-buy in there. It’s not, it was not because of, or trying to get in front of, the pricing. It was more a lead-time question. So I think as we look at where we are, we feel like we’ve got a pretty good head start on 2012 and customers are reluctantly but accepting the price increases that we’ve announced.

I think, Tim, we can say with pretty, on a pretty straightforward basis, that deliveries in 2012 will carry higher prices than 2011.

That’s absolutely right. Rob Wertheimer – Vertical Research Partners: Thanks, everybody.

Your next question comes from the line of Charlie Brady with BMO Capital Markets. Charles Brady – BMO Capital Markets: Just in regards to the AWP business and the price increase hitting in the beginning of the year, when would you expect, given that you’ve got a chunk in backlog, maybe a little pre-buy in there, when do you think you get the impact of the new price increase? Are we looking at a kind of a back-half impact, when the costs get fully recovered? Or does it happen sooner than that? And then another question would be: what’s your guidance on the tax rate in Q4? Thanks.

Okay. Charlie, what I would say and Tim can correct me if I make a mistake on this is, that we’re going to get higher pricing from day one in 2012. It may be that some of that higher pricing is our June price increase that finally is taking place on the first of January for some customers, or it may be some that actually get a portion of both price increases. But there’s no – all the units that we ship will be at a higher price level in 2012 than 2011. I think that’s accurate, Tim. Am I not correct?

That’s 100% accurate.

Okay, Charlie. Does that answer that question? Charles Brady – BMO Capital Markets: Yeah, it does, but I’m assuming that as it goes through the year, though, that that profitability profile as the second price increase kicks in for all those shipments you ought to see more improvement more on the back half even than you would in the first half, correct?

What I would say, Charlie, is we had some price realization in the third quarter. We are going to see more price realization in the fourth quarter, and in the first quarter we’ll continue to see additional price realization in the first and second quarters of next year. So it is a first-half impact which started really in the third quarter of this year. Charles Brady – BMO Capital Markets: That’s helpful, thanks. And then the question on the tax rates...

Charlie, the rate we’d expect in the fourth quarter, based on how I’ve done the guidance without that inventory step up, should be about 47% and it’s mainly impacted by losses not benefited on the rate. And the non-tax deductibility of some of the full-year impact on the acquisition-related costs, so that’s an anomaly from some of the things that we’ve had this year. Charles Brady – BMO Capital Markets: Thank you.

Okay.

Your next question comes from the line of Joel Tiss with Buckingham. Joel Tiss – Buckingham: Thanks for staying on the line, just trying to be fast here. The mix in Material Handling and Ports between OEM and aftermarket and also just from a philosophical standpoint, can you give us a sense of flow in 2012? I’m not asking for guidance but just – is it logical to think that the first half might be a little bit off to a slower start than we would normally see? Thank you.

Overall, Joel, for the company, or ...? Joel Tiss – Buckingham: Yeah, when you put everything together and all the puts and takes, inventories, et cetera?

Yeah. I think what we’ll see in 2012 generally is a strengthening – second quarter is usually our strongest quarter of the year but I would expect that to be maybe not the case next year. It may be the third quarter. It really sort of depends because of the impact of Material Handling and of Port Solutions. So unlikely that it will be the same trend as we’ve historically had. And first quarter is a little bit uncertain at this stage; it’s going to depend on some crane deliveries and how we get the year started on our Construction business. The mix between aftermarket and, Aloysius, maybe you could just give kind of a general sense as to the mix between what we call aftermarket, which you’ve called historically the Services business, versus the finished goods or the new equipment?

You mean – Ron, just as a question, you mean for our overall business or just for industrial crane support?

For the overall business.

Overall business, we have somehow roughly 50% industrial cranes, 30% services and 20% port.

Right. So the services represent about 30% of the total end price.

Roughly. Joel Tiss – Buckingham: Thank you.

Yeah.

Your next question comes from the line of Andrew Kaplowitz with Barclays Capital. Matt Vatstriki – Barclays Capital: Hey, guys. It’s Matt Vatstriki on for Andy. Most of my questions have been answered. Just a quick question on the Cranes segment, where you mentioned seeing some improving demand for tower cranes. Can you talk about where you’re seeing some of that demand?

Probably mostly in developing markets. Steve, do you want to just comment maybe a little bit on that?

Yeah, exactly. Mainly in developing markets. Success is in Middle East, Latin America and turning to 2012 we’ll start focusing on some key markets in developed markets in Europe, specifically. So we’ll target some of those that are coming back. Matt Vatstriki – Barclays Capital: Okay, great. Thank you.

We’ve got two more questions that we’ll take, because I know it’s been a long call for everybody.

Your next question comes from the line of Alex Blanton with Clear Harbor Asset Management. Alex Blanton – Clear Harbor Asset Management: Hi. I’ll be fast. I was off for a minute, so you may have covered this, but could you give us some details on the component cost increases? Is it both raw materials and purchased components? And why would those costs for aerial work platforms be going up more than for other similar machines?

Alex, first of all, there’s not much that I would say is that similar between an aerial work platform and other machines, other than the fact that they both depend upon steel. Alex Blanton – Clear Harbor Asset Management: Right.

The component basis for AWP is pretty discrete. You’ve got some clear suppliers that kind of dominate this product category, and I think those clear suppliers have seen the strength of the category and the consolidation that’s happened, and I think they’ve taken some pretty substantial price increases. And I suspect that has been true to both ourselves and the orange and beige. And so I think our job now is to push back a little bit where we can, and to benefit from some of the steel reductions that we expect to happen, to get further benefits. North American steel, I think, has been up more than European steel and that’s been a major contributor to what’s happened to our raw material costs there. Alex Blanton – Clear Harbor Asset Management: Okay. All right. So you and JLG essentially competing for limited supplier capacity in certain specialized components that go only into AWP, is that it?

Well, primarily, yeah, and what I would say with that is, that’s a good news, bad news story. It’s a good news story inasmuch as we’ve both got to get pricing from the marketplace. Alex Blanton – Clear Harbor Asset Management: Right.

One thing I would add, Ron, is that during the recession when we slowed our demand to 10% of what it was before, many of those suppliers that were supplying us went out and said I’ve got to survive so I’m going to go find new customers. And they diversified their customer base so when we go back to them and say we want to buy the same materials that we wanted to buy before, they’re saying, well, I’m selling to other industries now as well, so I’m going to charge you a higher price than I did before. So that is also playing into this as well. There are discrete products that are serving this product space but the suppliers have diversified somewhat as well. Alex Blanton – Clear Harbor Asset Management: Okay. Thank you.

Your final question comes from the line of Matt Vittorioso with Barclays Capital. Matt Vittorioso – Barclays Capital: Hi, guys. Thanks for taking my question. If you could just talk about the cash that you’ve got on your balance sheet, it looks like you’re going to generate a bunch of cash in the fourth quarter. I know that your credit agreement allows for more flexibility around the use of that cash once you get leveraged down to, I think, 3.75 times. So maybe just give us some of your thoughts on what this big cash balance might be used for and then, secondarily, I don’t know if you can provide the EBITDA that your credit agreement would have you at today pro forma for all the acquisition activity, et cetera. Thanks.

I’m not going to provide the EBITDA for the bank facility. It’s a separate calculation, but I think you can read our public documents to kind of figure out the credit agreement is public from that standpoint. From a cash utilization standpoint, I previously mentioned that we have a large tax payment in the first quarter of 2012 related to the sale to Bucyrus of our Mining business and since that was largely in Germany last year, the timing of the cash outflow is in the first quarter and that will range from about $160 million to $170 million. So I have to put in the piggy bank an amount to cover that in the first quarter. In terms of the leverage where we’re at on the 3.75, we are unfavorable for that in the third quarter. Again, I won’t give a specific amount but it’s order of magnitude a little over four times. And then the other restriction on use of cash that I mentioned in the release, the Demag Cranes AG facility is used for their operating names. Until we have a domination agreement in place and the effectiveness of that domination agreement will basically cause that credit facility either to go away or we’ll have to replace it would be the other nuance regarding the ongoing potential cash needs that we have. So at this stage and I’m saying three to six month kind of timeframe I will keep the cash as we go into next year to watch the demand that we have coming in and look for opportunities, if necessary, to repay debt if we have the opportunity.

No one should interpret that we are in an active hunt for acquisitions.

Right.

No one should interpret that. We’ve done a small bolt-on in Brazil. We have a small JV investment in Russia that’s planned, but beyond that no one should walk away thinking that our priority is anything but balance sheet improvement.

And the other nuance, given we have 82% of Demag Cranes AG, we would be required to – if we take out the remaining 18%, obviously that would be another cash utilization that we would have and that would be our desire. Matt Vittorioso – Barclays Capital: Okay. And if I can sneak one more in just around the construction and ,I guess specifically, road building. I know a while back you talked about either fixing road building and I think the construction segment in general or shredding it down or selling it, I can’t remember exactly what you said, but road building just seems like you’ve been waiting for a while for that to come back and it’s not materializing. Any consideration to either sell or shut that down?

Well, I think evaluating strategic alternatives on a business is something you have to do pretty regularly. I don’t think now is the right time to do that. I think what we’re doing is basically strapping the business down, getting it in a position where it is not a drain to the company and then once we get that in that shape, then we’ll look to see what the improvement prospects are but our first priority is to kind of get it into that shape and I think we’re still – we’ve still got a little work to do there. Matt Vittorioso – Barclays Capital: Great. Thanks and good luck.

Okay. Thank you, Matt. That should be it. Brandy?

Are there any closing remarks?

No. Thank you. Thank you everybody for their interest in Terex and please follow up with us as you need to.

This concludes today’s Terex Corporation Third Quarter 2011 Financial Results Conference call. You may now disconnect.