Greetings, and welcome to the Terex Corporation fourth quarter and full year 2021 results conference call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Randy Wilson, Director of Investor Relations for Terex Corporation. Thank you, sir. You may begin. Good morning, and welcome to the Terex fourth quarter and year-end 2021 earnings conference call. A copy of the press release and presentation slides are posted on our investor relations website at investors.terex.com. In addition, the replay and slide presentation will be available on our website. I'm joined by John Garrison, Chairman and Chief Executive Officer, and Julie Beck, Senior Vice President and Chief Financial Officer. Their prepared remarks will be followed by Q&A. Please turn to slide two of the presentation, which reflects our safe harbor statement. Today's conference call contains forward-looking statements which are subject to risks that could cause actual results to be materially different from those expressed or implied. In addition, we'll be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures can be found in the conference call materials. Please turn to slide three, and I'll turn it over to John Garrison. Thank you, Randy, and good morning. I'd like to welcome everyone to our earnings call, and thank you for your interest in Terex. We are proud of all Terex team members who are keeping themselves and others safe, meeting the needs of customers, and helping our communities. I would like to thank our team members around the world for their continued commitment to our Zero Harm safety culture and Terex Way values. Safety remains the top priority of the company, driven by Think Safe, Work Safe, Home Safe. Our strong commitment to Zero Harm is driving improvement of safety metrics, such as total recordable incident rates, which has significantly improved over the past five years. This is a testament to the hard work and dedication of our team members. Please turn to slide four. Our strong environmental, social, and governance foundation drives stakeholder value. A few highlights as we progress on our ESG journey. First, environmental. Terex products help our customers to meet their sustainability goals. 2/3 of Genie Scissors, 1/3 of Genie Booms, and 60% of materials processing products have an electric option. Turning to social. Diversity, equity, and inclusion is being embraced and driven throughout the organization. Next, leading with strong governance. Our ESG efforts are led by senior management with oversight from our board of directors. We are firm believers in our actions matching our words, whether it's producing sustainable products, promoting diversity, equity, and inclusion, or being good global citizens. The team recognizes there is more work to do around this important topic, and we will provide updates throughout the year. Please turn to slide five to review our Q4 2021 financial highlights. We had an excellent quarter. EPS of $0.82 nearly quadrupled year-over-year. Sales were up 26% year-over-year, and we ended 2021 with a record backlog of $3 billion, up 122%, driven by strong customer global demand. Focused cost management continued, resulting in 300 basis points of operating margin improvement. Overall, the fourth quarter financial performance demonstrated strong execution by our team members in a dynamic and challenging operating environment. Please turn to slide six. Our execute, innovate, and growth strategy has strengthened our business operations in 2021. On execution, the team proactively managed supply chain disruptions to deliver sales growth of 26% year-over-year, aggressively managed costs to deliver a 430 basis point improvement in SG&A as a percent of sales, and improved Genie's future cost competitiveness as our temporary Mexico facility is now producing telehandlers and continues to ramp up. Turning to innovation. We introduced new products, including environmental and recycling solutions in Materials Processing, new electric offerings in Genie, and electric grid products in Utilities. We continue to invest in connected assets and digital capabilities, such as customer dealer integration and telematics across the enterprise to better serve customers. We invested in our business for future growth, both organically and inorganically. The team expanded production capabilities of mobile crushing and screening equipment in China and Northern Ireland, acquired MDS International, offering adjacent products for our MP customers, and continued expansion of service facilities such as our new Houston, Texas, location for Utilities customers. Please turn to slide seven. Materials Processing segment is a consistent strong performer. It is a diversified, high-performing portfolio of businesses which continues to invest for future growth. MP brands have leading positions in their respective markets with excellent end market product and geographic diversification. We have a great opportunity to grow organically through innovation, product and service development, and expanding into product adjacencies, including conveying, washing, environmental, and recycling. Parts and service remains a focus for the segment as it continues to develop digital offerings for dealers and customers. More than 8,000 of MP's machines are fitted with telematics hardware, and the number of dealers using customer dealer integration or CDI has doubled in 2021. MP's end market diversification is a strength. Whether it's aggregates, construction, recycling or global infrastructure, all of these markets are growing. Please turn to slide eight and I will review AWP offerings and end markets. Starting with our utilities business, it has excellent growth prospects. The need to maintain and grow the electric grid, along with continued 5G rollout will drive multiyear demand. Some key product lines for Terex Utilities include bucket trucks, digger derricks, and tree trimmers used for the maintenance and expansion of electrical grids. Also, we recently invested in Viatec's battery technology for utility trucks called Smart Power Takeoff or Smart PTO. This environmentally friendly solution allows our utility booms to operate without truck idling. As a result, our customers can reduce vehicle maintenance and carbon emissions. Turning to our Genie business. Genie is a globally recognized brand with great products. The 60-foot J boom was named a Contractor's Top 50 new product. Hybrid power options on scissors and booms provide indoor and outdoor job site flexibility and quiet emission-free performance. Our new telehandler offers increased lift capacity and lower cost of ownership. These products demonstrate Genie's strength in listening to customers and responding with innovative industry-leading products. Genie's end markets of construction, infrastructure, and industrial applications will drive demand. Further, we are at the beginning of a new multi-year replacement cycle in North America and European rental markets. Please turn to slide nine and I will discuss the supply chain environment. Like most other industrial companies, we are facing shortages and cost pressures for materials, logistics, freight and labor. These headwinds have constrained our growth in the short term. The significant increase in COVID cases in January and February around the world are impacting our production and supplier deliveries. However, we are aggressively managing these challenges. The team continues to mitigate cost pressures and minimize production disruption by staying close to our existing suppliers and expanding our supply base. Redesign components to maximize availability of critical inputs to improve production, provide transparent communication of delivery and cost headwinds to our customers, and we have taken pricing actions, but they have not been sufficient to offset unprecedented material and logistics inflation, which accelerated in the back half of 2021. We anticipate these challenges to continue in the first half of 2022. However, for the full year, we anticipate material costs stabilizing and being price cost neutral as price realization improves throughout the year. Our production and supply chain team members are working tirelessly. They are demonstrating resilience and flexibility to increase customer deliveries. With that, I'll turn it over to Julie for her first earnings call with Terex. Julie. Thanks, John, and good morning to everyone. I am very excited to have joined Terex with its great brand, Terex Way values, strong history, and strong balance sheet. I look forward to working with the team to drive operational margin improvement, free cash flow generation, growth and enhancing value for all stakeholders. Now turning to slide 10. I want to congratulate the team on posting excellent fourth quarter results. Looking at the fourth quarter, sales of $990 million were up 26% year-over-year as year-end market demand remained strong. For the quarter, we recorded an operating profit of $70 million, more than double our operating profit of $32 million in the fourth quarter of last year. Operating profit increased due to strong sales and $3 million of positive financial call-outs. Operating margins improved 300 basis points in the quarter, driven by actions to prudently manage and reduce costs. We achieved this positive operating result through disciplined cost control while adapting to a dynamic market environment. Interest and other expense was approximately $8 million lower than the fourth quarter of 2020 due to a gain related to the relocation of our Genie administrative office and reduced debt levels. Our effective tax rate of approximately 15% benefited from discrete items audit. Our EPS of $0.82 increased nearly 4x representing a $0.61 improvement over last. Highlight on this slide represents a $0.16 benefit in the quarter. Free cash flow for the quarter was. First, we have not yet received an approved $39 million IRS refund. Second, inventories increased due to disruption and logistics delays. Turning to slide 11 and our materials processing segment financial results. MP continues to perform very well with sales of $450 million compared to the fourth quarter of 2020, and the business ended the year with a backlog of $1 billion, which is nearly double that of a year ago. These results were driven by continued strong customer demand in all end markets and geographies. MP delivered 13.8% operating margins by driving sales growth while managing material costs and manufacturing headwinds. This is a testament to the team's operational execution. Turning to slide 12 and our aerial work platforms segment financial results. Percent compared to last year, driven by strong global end market demand. AWP fourth-quarter bookings of $922 million were up 23% year-over-year, while backlog at quarter end was nearly $2 billion, up 137% from the prior year. AWP delivered improved operating margin of 4.8% in the quarter, driven by strong customer demand and prudent expense management. Turning to slide 13 and full year 2021 financial highlights. Our performance in 2021 reflected strong improvement in the business and the extraordinary efforts of our team members. Earnings per share increased significantly from $0.13 to $3.07, or a $2.94 improvement. Sales of $3.9 billion were up 26% year-over-year as end markets recovered. Operating margin of 8.4% expanded 620 basis points driven by strict expense discipline. SG&A spending was $42 million lower year-over-year at 11% of sales, beating our 12.5%, exceeding our 25% target, and we repaid $500 million of debt, reducing net. This slide financial results and call outs. Included in our operating profit were $5 million of positive call outs. Below the line, there were $29 million of non-cash charges associated with our debt refinancing and term loan repayment. This was partially offset by a $12 million cash gain related to our Genie administrative office relocation. Turning to slide 15. I want to reaffirm our disciplined capital allocation strategy, including flow generation to enable growth. Our team members remain vigilant and aggressively manage all costs, generating $125 million of free cash flow in the year. Our strong free cash flow generation and proceeds from the sale of our Terex Financial Services portfolio in February 2021 allowed us to repay $500 million of debt this year, resulting in net leverage of 1x in 2024. We continue to invest in the business in 2021 with $60 million of capital expenditures. Our strong balance sheet and free cash flow generation allowed our board of directors to reinstate and pay out a quarterly dividend of $0.13 per share as we continue to return cash to our shareholders. We have ample liquidity of $7 million available to us at year-end, so we can manage and grow the business. Our full year 2021. I'd like to update you on how we currently anticipate 2022 to develop financially. It is important to realize we are operating in an unprecedented supply chain environment and a pandemic, so results could change negatively or positively. We anticipate earnings per share of $3.55-$4.05 to $4.1 billion-$4.3 billion. Traditional seasonality of sales is less applicable in 2022 as the supply chain environment has extended product deliveries. This sales outlook reflects the latest dialogue with our suppliers. Our 2022 sales are not a function of demand, rather the ability of the supply chain. $2.3 billion-$2.4 billion and MP sales of $1.8 billion-$1.9 billion reflect strong customer demand, but with the constraint presented by the supply chain. Turning to operating margin. We expect operating margin for the year to be in the range of 8.8%-9.5%. Operating margin is expected to be lower in the first half of 2022 and higher in the second half as supply chain headwinds abate and pricing actions taken are realized as backlog is shipped. To help frame the development of operating margin in 2022, the first quarter of 2022 will see increased cost pressures compared to the fourth quarter of 2021. MP's margin of 14%-14.5% will be relatively balanced throughout 2022, but the first quarter will be challenged by supply chain constraints. AWP margins of 7.8%-8.5% higher input costs, peaking in the first quarter with price realization improving throughout the year as we work through the backlog. In the first quarter of 2022 meaningfully improving throughout the year. Based upon global tax laws, we expect a 2022 effective tax rate of approximately 20.5% due to higher U.S. benefit, partially offset by lower local and U.S. tax on rest of world income. For 2022, we are estimating free cash flow of $175 million-$225 million, reflecting another year of positive cash generation. We also estimate capital expenditures net of asset dispositions will be approximately $90 million, the largest component being our Genie Mexico facility. Corporate and other costs are planned to occur relatively. Overall, our 2022 guidance represents a continued improvement in operating performance when compared to supply chain environment [audio distortion]. Our 2022 earnings per share outlook reflects the following assumptions. From an operational perspective, sales will increase as customer demand remains strong. Pricing actions along with manufacturing efficiencies will offset cost pressures. SG&A in the business, including our new product development, engineering, and remains at 11% of sales. Further, non-operational impacts include unfavorable foreign exchange to euro exchange rate when compared to 2021. In addition, we have an unfavorable tax impact as our full year effective tax rate are not expected to repeat. These two items cents per share headwinds. Favorable interest and other expense due to lower debt levels and interest rates. Finally, one-time items, both positive and negative, related not expected to reoccur. These assumptions result in our 2022 earnings per share outlook of $3.55-$4.05. This outlook is the best view at this time and can be impacted positively or negatively 2022. Before I finish, I would like to thank John Sheehan for his support and teaching me all things Terex and leaving me such a strong finance team. Happy retirement, Duffy. With that, I will turn it back. Our Execute, Innovate, and Growth is the foundation to deliver on our commitments to our team members. We must and will continue to drive operational improvements. Turning to innovation. We are investing in new product development, whether it's electrification of our products or new end market applications such as recycling and environmental. We're also investing in digital in multiple facets of the business, improving our internal business processes and enhancing the ease of doing business with Terex. Growing Terex is a focus for all team members. We are investing in parts and service capabilities and expanding manufacturing capacity as we look to better serve our customers. We have a disciplined M&A process and are looking to grow from acquisitions. Turning to slide 19 to conclude my prepared remarks. Terex's strong brands and strong cash can grow. We will add products and manufacturing capacity where demand calls for it. We have demonstrated resiliency and adaptability in a challenging environment. This will result in Terex being an even stronger company. Randy. Thanks, John. As a reminder, during the question and answer session, we ask you to limit your questions to one and a follow-up to ensure we answer as many questions as possible this morning. With that, I'd like to open it up for questions. Operator? I'd like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Comes from Stephen Volkmann from Jefferies. Please go ahead. You talked about sort of more demand in 2022 if you could get more out the door. I guess my question is, it looks like things did improve a little bit in the fourth quarter from a supply chain perspective, and we're kinda hearing that from other companies. Can you just maybe take us through what you're actually seeing in the supply chain? I'm curious if your revenue guidance is kind of backed up by kind of firm commitments from suppliers, or are you being kind of conservative about how this plays out through 2022? Thanks, Stephen, and good morning. If, you know, if we just take a step back and look at the supply chain, and it's. We're not unique. Demand outpaced production really across the supply chain. Similar to other constraints, disruptions in our plants, either component shortages and logistics-related delays. You know, the reality was, Stephen, in the fourth quarter, we actually didn't see an improvement. We saw, you know, a modest decrease, frankly, in key metrics like supplier on-time deliveries, number of parts. That did impact our output, and it continues to impact us going forward. Now, what are we doing about this is, you know, first, everybody in the organization is engaged. We have an escalation process, and frankly, all the way up to my level over the last year on supply chain related issues more than frankly I have dealing with customer related issues because that's where we are. We've done a lot of engineering redesigns, and that's really helped, especially around our electronic components, working with our suppliers to make availability or use what is available in the marketplace. As a result of our strategic sourcing initiatives, we did expand our supply base, so we know where to go now for secondary and third suppliers for parts, so we continue to execute that. Then our teams are just really doing a heck of a job, you know, being adaptable and modifying schedules. The number of schedule changes that we have to implement is frankly daily. The team's become pretty confident at modifying schedules to get as much out as we can for our customers. We're staying very close with our suppliers. We're communicating with our customers in terms of where we are. Our outlook, Steve, is guided by supply chain. We are hedging to some extent. It is higher than our current outlook, if you will. We've factored that into our outlook, Steve, so this is our best look that we have as of today in terms of delivering more for our customers because this is really a, you know, it's a supply chain driven situation. I think the other important comment around the supply chain and working with our supply chain teams and my interaction with CEOs is, you know, we're driving not just to drive improvement in our supply chain in 2022. We believe strong demand environment across our businesses. It's not just 2022 that we need to increase the availability of supply. It's for 2023 and beyond. This is an incredibly focused effort on the team. We believe we're going to see improvement as we go through the year. W e didn't see that improvement in Q4, so we have to be prepared for it. Again, the team's done a heck of a job being adaptable and resilient to the significant changes they've had to absorb on a day-to-day basis. That's how I'd describe the situation. Again, Stephen, I don't think it's that much different than most industrial manufacturing companies around the world today. Okay, great. That's helpful color. For the quick follow-up, I'm just curious on steel specifically. You know, how much of your 2022 steel do you see that benefit? Thanks. You know, we have a steel hedging program, but again, Stephen, it really is just for HRC or hot rolled coil for the U.S. Our AWP business specifically plate. We have been hedged. We continue to hedge, but we hedge to have price visibility, not to speculate. You know, the good news is that steel was, especially in North America and Europe, in the middle high, you know, $1,800-$2,000. We are seeing the steel indices and markets come off of that high, thankfully. We're anticipating that continues as we go into 2022. Thanks, Steve. Appreciate it. We'll talk to you soon. Your next question comes from Mig Dobre with Baird. Please go ahead. Thank you, and good morning, everyone. Good morning, Mig. Good morning. My question is on slide 17. I appreciate that break and all the details here. Two things. The $2.30 worth of cost pressure, I'm curious if there's any way to sort of delineate the major buckets in here in terms of what's raw materials versus freight. It would just be helpful for us. We can make our own assumptions in terms of where things go from here. I guess the second part of the question is, as we're thinking beyond 2022, the price and efficiency component that you have here, $2.55, do you think that gain that you've got on this slide? Thanks, Mig. I'll try to take them in sequence, and if I don't, please jump back in. In terms of the cost elements, you know, it is both. Cost pressure is included both in materials, components and freight. You know, we've seen substantial increases, especially in the back half of 2021, and that's what our current outlook reflects. It does reflect looking at forward indices, which again, we do believe in that case, you know, we are gonna see some abatement of the rapid increase that we've seen in material costs. As you look to, you know, our pricing actions and then can this pricing action continue. If you just take a step back, our pricing actions have really been designed across our global businesses to offset our material and logistics cost increases. Mig, we have taken pricing actions throughout 2021 and now obviously taking pricing action into 2022. These are not easy conversations with customers, but we've been very transparent with our customers and distribution partners of the level of inflation that we're seeing. You know, basically showing all the way down to showing invoices, so that's the action we've taken. If you look at our respective businesses, Mig, on the AWP side, we've instituted a combination of pricing. Look at the results in 2021. Those pricing actions did not offset all the material and freight cost increases that we had. We saw that acceleration of inflation in the back half. In 2022, with further increased pricing, we believe that price realization. We ship some of the backlog that was at 2021. We're supposed to deliver that 2021 pricing. We believe price realization will improve. We did a good job offsetting most of the material globally. The nature of their business, they've been able to be more dynamic in updating their pricing on an ongoing basis. If you look at their results, they were, you know, pretty close to price-cost neutral in 2021. Cost neutral in 2022. With that said, they've got the challenge of the, you know, inflation spiking in the second half of the year. The first half of the year is gonna be a little bit more of a challenge. We think that improves in the back half of the year. Now, the other good question is, are these prices going to stick? I think the answer is yes, Mig. Why do we believe that? Well, first, global industry. Our customers are not just seeing price increases from us, they're across the spectrum. We've been very transparent. Our pricing actions, again, are designed to offset significant material cost increases that we're seeing and freight costs, freight increases that we're seeing. Thus far, Mig, I would say, especially across the line of MP businesses, we've seen good pricing discipline in the industry. I would say in the AWP business, I would say we've seen reasonable pricing discipline reflecting the dynamic environment in North America, a little less in Europe. Frankly, the only place we're not seeing strong price discipline is in China. Chinese competitors are very aggressive on price. I f we look around the world and across the business, I would say we're seeing good price discipline now. Given that everyone is seeing inflation, I do believe going forward that these prices are gonna be able to stay. Got it. That's helpful color. My follow-up is on Materials Processing. Maybe get a little more color on how you see demand progressing here. Just optically looking at the orders a little bit softer this quarter. I'm wondering kind of what drove that and the outlook going forward. Thanks. Yeah. Thanks, Mig. I'm gonna be a little, you know, I'm gonna take some time on this one too, because, you know, yes, we did see a little softening on the orders, but that's really timing. We're seeing strong global markets and strong customer demand across our MP portfolio. Actually, we have record backlog. Frankly, our backlog's too high. We wanna ship more product to our customer. If we look at our crushing and screening business, our backlog more than doubled versus the prior year, and we're seeing good growth around the world. In our concrete business, backlog is up tremendously. A year ago, we had several large orders that did not repeat in at the end of the year, and so that was a partial reason for the bookings falling off slightly. Our materials handling business, what we call Fuchs. You've heard me say this, the only benefit of high steel prices is, scrap metal prices are up, and that backlog's up almost fourfold. We're seeing great demand literally around the world for our Fuchs product. In our environmental business, the investments we've made there, we're seeing our backlog up, significantly. We believe we're gonna continue to be able to grow that business. Our lifting businesses, our pick-and-carry Franna business down in Australia has been strong throughout the pandemic. We actually saw a rebound in our RTs and our tower businesses, from an order rate in a backlog standpoint. Overall, we're seeing strength. We did see some. It's just timing, we believe, with the bookings that declined. The backlog's exceptionally strong and we're not seeing any weakness, frankly, across any of those businesses around the world. Thanks, Mig. Understood. Thank you. Operator, next question. Your next question comes from Stanley Elliott with Stifel. Please go ahead. Hey, good morning, everyone. Thank you all for taking the question and good morning and welcome, Julie. A quick question for you. You know, when we think about the two businesses performing from a margin perspective, I mean, it looks like the incremental margins. Understand what's happening and the dynamics between. Okay. Sure. Thanks, Stan. Just as we think about our incremental margins, obviously we had some really strong performance with 32% incremental margin, you know, particularly strong in the AWP business. The MP business has been strong in terms of absolute margin performance. I just wanna emphasize percent incremental margin. What you saw in 2021 was higher incremental margins in the first half and then lower in the second half as we started to. When you look at the year-over-year comparison and we talk about going forward into 2022, the framework is challenged in the first half of 2022 as accelerating inflation happened in the back half, and it continues into the first half of 2022. That's a summary of where we're at. If we look at AWP, you know, we're looking for our AWP business in 210 basis points year-over-year. Again, as a result of the price-cost in the first half, we'll see incremental margins substantially below our target in the first half of 2022 and substantially above our target in the second half of 2022. For the MP business, we're continuing to invest in new products like conveying, environmental, and recycling, such as in places in Northern Ireland and China and India. We're pleased with MP's absolute level of performance at about 14% operating margin, and we're making growth investments in the business. This business has been offsetting inflationary pressures. It's done a really nice job, and they're maintaining strong operating margins. Again, they too will be a little bit pressed in the first half of the year. The team understands our 25% incremental margin framework. We're working hard to achieve those long-term goals. As the new CFO, I fully support the target of 25% incremental margins going. Hashing that out 'cause I was really getting around the level of investment on the MP side given the comments that it being more price-cost, you know, favorable or neutral. Then along those lines, there's lots of talk about how do we balance kind of some of the growth investments you've got on the MP side? You know, could we look at a sizable sort of a temperature there? I'll have. Yeah. Thanks. In terms of the good news is the very strong cash flow generation, strong balance sheet. We have balance sheet capacity to do M&A related activities. Our focus is in and around the MP business. If you look at the structure of the different MP again, there's still a pretty high degree of fragmentation. As we build out our pipeline, you know, looks to in and around the MP space. We did two smaller acquisitions in 2021. The MDS International is a great example. It's a near to, you know, near to our plant in Northern Ireland, which is good. It's in Southern Ireland. It's also a near adjacent thing in terms of products. We're able to put that product line through our existing distribution and really get a substantial increase in the sales. We would look to do M&A. We're gonna drive organic growth across both businesses, AWP and MP, and we're looking for inorganic growth. Right now we're looking more around the pipeline associated with our MP business and perhaps our parts and service business because we think there may be some opportunities there. Great. Thanks, Stan. Operator, next question, please. Your next question comes from David Raso with Evercore ISI. Please go ahead. Hi. Good morning. Thank you for taking the question. Morning, David. My question is related to how you're thinking about the AWP cycle. By my math, the North American AWP business ended 2021 still not even within 25%-30% of where you were back in 2018. When I think about inflation, obviously where the backlog is versus your sales guide for this year, you seem relatively locked and loaded for 2022. It's just about execution on the factory floor and price cost. When you're thinking of investing in Mexico, when you think of the capacity that you're gonna need, I mean, it looks like at the end of 2022, your North American business, which is not just Aerials, right? It's Utilities as well, but you're still gonna be almost 20% below where you were in 2018. I'm just curious your confidence in the cycle beyond 2022, and not just qualitatively, but how are we thinking about the capacity exiting 2022 with these investments in Mexico? We're just trying to get a flavor for how much are you thinking about growth in 2023 and 2024 with some quantification and capacity is, you know, actions, not just qualitative. Thank you for that question, David. I'll speak within AWPs, both Genie and Utilities. As you clearly indicated, we are substantially below our demonstrated capacity in those businesses, based on if you know, just go back to 2018. As a result, we have increased our capacity since 2018. We've expanded our Changzhou, China facility, for example. Now, as you rightly call. Installed capacity, we believe we're gonna be appropriately sized for installed capacity going forward. We're not anywhere near where we were in 2018, and we've added capacity since then. We believe the AWP business, I'll talk specifically Genie, and then I'll talk Utilities, is going to grow. If you just look at the replacement cycle, David, for the AWP business and Genie business and think, you know, specifically, you know, U.S., North America, and Europe, the replacement cycle, frankly, was delayed by the pandemic, and now it's being delayed somewhat by constraints across the industry. If you look at the rental companies, they're growing. They need their fleets to grow. Their fleets are aging. Rental rates are doing great. Used equipment values are doing great. We believe that we're in the beginning of that replacement cycle. It's a seven to eight year replacement cycle. It's always difficult, as you know, David, you've been doing this a long time, to predict exactly what quarter or what half of the year. The economics in that industry are such that we are entering a pretty strong growth period in the replacement cycle, coupled with growth in other markets in the Genie business. We do believe we're in a growth phase in that business. You know, the replacement cycle with a little bit of growth is gonna give us a really strong tailwind for the next several years. That coupled with, David, the other investment we made was in our Utilities business. We have a brand-new facility there. We went from 11 buildings to one. We've increased our installed capacity there as well. Now we've got the same supply chain issues, so we've gotta break through those constraints. If you look at the Utilities business and the growth prospects of the Utilities business, you know, infrastructure bill, even without the infrastructure bill, there's significant investment required in the electrical grid, transmission, distribution, and maintenance. We think we're in a strong growth period as well in the Utilities business. We've committed capital over the last three to five, you know, three to five years to improve our manufacturing capability, improve our manufacturing capacity, because we do believe we're entering good years in that AWP segment. I might add, we're also bullish on our MP business. You know, we've made capacity expansions in Northern Ireland. We've made capacity expansions in India. For growth, because we also believe those macro trends are gonna continue in a positive fashion for the. We have, you know, had a fairly substantial CapEx budget the last couple years, in 2022 with our Mexico investment. We're doing that because we believe segments going forward. Right. I know some of these moves were not just incremental capacity. They were a more efficient, lower cost manufacturing. C an you help us with if my numbers are right and by the end of 2022 we're still, you know, almost 20% below where we were. Where is your c apacity at the end of this year? Like, Watertown's already built, you know, essentially it's up and running. Mexico, I assume, up and running fully by the end of this year. Where is your capacity exiting 2022 versus 2018? Just kinda ballpark. Is it similar? Just more efficient? Is it 15%, 20%? I'm just getting a sense of how you must be viewing the cycle to be adding that capacity and where your revenues are exiting 2022 versus that last peak. Right. Well, once or so, it's really supply chain. As you've said, we've got demonstrated capacity above. I don't want to necessarily. You know, if you just look at Watertown, we've substantially increased the capacity there for that business. We sit on the order of magnitude business, and we believe that over a year period of time. We expanded our Changzhou facility that gives us a good export for the China market and an export market. The only thing, David, I want to be clear on. Our Mexico facility, which we stood up our temporary facility right now. We've got our team in place. We're growing our team. We're producing telehandlers there. We are building a special purpose center that will take the next two to three years to complete, in Mexico. We believe we've got plenty of capacity, given the market needs, David, and that's why we're working so hard on the supply chain, not just the immediate, but working with the CEOs of our suppliers to have them understand that we believe we're in a strong growth cycle, and we need product not just. Hi. Good morning. I guess my question is I'm just trying to square your top-line guide for Aerial, 8%-9%. S ort of what are you assuming for price versus volume? I'm assuming little or no, you know, I think implying double-digit growth. I guess that's my first question. Provide a little more color on. I know the free cash flow was a little short of expectation. You talked about inventory build, you know, in 2022 and just, you know, what happened during the quarter. Thanks. Thanks, Jamie, for the question. When we look at 2022 and compared to 2021, we're seeing you know, far more price increase than we are volume increase. Again, you know, the volume increase, it's due to those supply chain constraints, you know, that are holding back you know, some of that production. Far more on price than volume. In terms of free cash flow, yes, we had a disappointment in a shortfall for Q4. We had an approved IRS refund. We have an approval letter for $39 million, and we still have yet to receive that. We also had an increase in inventories in the quarter, and this again is due to those supply chain disruptions. There's you know, we have a machine sitting in the hospital being ready to ship, waiting for parts that haven't shown up yet. It's causing production disruptions as well. We have lots more inventory on the water and in transit than we have had in the past. We did have an increase in inventory. When we look to 2022 free cash flow year, we're expecting, anticipating our fourth year in a row of strong free cash flow. When we talk about it, we'll have increased earnings. In terms of a working capital, you know, as sales increase, but that working capital and inventory level will increase right along with that. Just to follow up, though, on the top-line guide, more price versus volume. John, just to be clear, this is more or you as well. Just to be clear, it's not you're assuming you're going to lose market share. It's more of a function of we're being conservative with the guide because of the, you know, challenges that are out there. Yeah. Thanks, Jamie. In the Genie business, you know, throughout 2021, we are not assuming any significant market share or any market share loss, and we're actually thinking a couple product lines we can gain some market share. For one product category, we did have some significant disruptions. This was in telehandlers, and we're working with our supply base to improve that. No, we're not anticipating any significant changes in market share on a year-over-year basis. It's basically based on the current constrained supply chain environment, and we got to work to break those constraints. All right, great. Thanks. I appreciate the color. Thanks. Thanks, Jamie. Appreciate it. Your next question comes from Steven Fisher with UBS. Please go ahead. Great. Thanks. Good morning. Good morning. Thanks, Julie, for the Q1 color in the first half, second half on incrementals. I guess with a low single digit margin in AWP in Q1, it seems like you should have a double-digit margin somewhere in the year. Would you agree with that? With the normal seasonality not as applicable this year, what do you think or what are you planning for is likely to be your highest margin quarter of the year in AWP? You're exactly correct. In the first quarter, we expect AWP margins to be in the low single digits% and meaningfully improve each quarter on a sequential basis throughout the year. It just improves as we go every quarter. Okay. Fourth quarter should be the highest quarter of the year, you think then? Okay. Yes. Great. Your AWP backlog is almost 85% of your revenue target just because of that supply chain constraint on the revenues. I guess how much of that backlog is for 2023 at this point? If very little is for 2023, are you expecting to be kind of fully booked on your revenue plan by the end of March? If the supply chain doesn't allow for any more upside, are you just gonna sort of stop taking orders, or are you gonna take orders and just give a 2023 delivery date on them? You're right. In terms of our coverage, it's historically high based on the constraints that we've described. In terms of our backlog, we only report backlog that's for 12 months. We do have some backlog that extends beyond that. Now, excuse me, it's not in our backlog because we only state what we expect to deliver in the next 12 months. We will be taking pricing actions as we go through 2022. Again, our pricing objective is to offset material and freight cost increases. If we're booking deliveries in 2023, those would be at a 2023 price level, not at a 2022 price level. Thanks, Jerry. Okay. Very helpful. Thank you. Appreciate it. Operator, next question. Your next question comes from Nicole DeBlase with Deutsche Bank. Please go ahead. Yeah, thanks. Good morning, guys. Morning. Morning, Nicole. You mentioned during the prepared remarks, Julie, that, you know, the quarterly cadence of revenue is going to look different this year, which makes sense. Is this kind of similar to what it feels like the margin progression is where you start off at a low point and each quarter gets better? Is it the same path for revenue? Yeah. It really, the revenue spread, I mean, is about half. The first half and second half are relatively consistent. You know, what really happens is that price cost mix gets better throughout the year. The first quarter, again, is really challenged as we ship stuff that's still, you know, we have some things in backlog at 2021 prices, and we're experiencing the higher costs in Q1. Really it improves throughout the year, but it's more because of the price cost as opposed to the revenue mix. They're relatively equal in the first half and the second half. Got it. Okay, that's clear. Thanks. On the SG&A to sales, so you know, you're guiding it a little bit below 11% in 2022. This is the second year in a row that, you know, the guidance looks well below like the original 12.5% target. How do we think about like the sustainability of 11% SG&A to sales beyond 2022? Yeah. Thanks, Nicole. You know, it's an internal debate, and we actually would think that the 11%-11.5% range, you know, given a growing revenue environment is perhaps a more reasonable target. Yes, we were at 12.5%. That was in the past. We've gotten a lot more efficient in our systems and our processes. I would say, you know, the 11%-11.5% range is probably a more realistic range for us, you know, subject to change. As we look at our strategic plan now, I would say 11%-11.5% is a better target for us than the 12.5%. Just to add, you know, the team's been really, you know, done a great job of lowering SG&A costs. You know, they're down $100 million from where they were in 2019. We're gonna be very disciplined about, you know, anything that we add, and only add on those value-creating projects and be very prudent in expense management always going forward as well. Good. Thanks. Operator, next question. Your next question comes from Courtney Yakavonis with Morgan Stanley. Please go ahead. Hi, good morning, guys. Thanks for the question. Morning. Morning. If we could just go back, John, to your comments that we're gonna see an improvement in some of the cost pressures as we go through the year. I think you mentioned you didn't see that improvement in the fourth quarter. Is the right way to understand that if you were carrying forward the fourth quarter's cost pressures, that $2.30 that's in your outlook would be significantly higher, and you are baking in an improvement? Or is that improvement mostly from lapping the tough or, you know, the easier compares that you're gonna have in the third and fourth quarter of the year? It reflects the cost increases that we're expecting in the year in 2022. Part of those cost increases were as a result of the inflationary increases that we saw in the back half of the year. You remember in a lot of the contracts deal, for example, it takes 120 days or so for it to flow through the P&L. It reflects the higher cost basis that we saw in Q4, and it reflects some of the amelioration or the abatement in cost increases that we're anticipating based on certain key indices that we follow closely. Okay, got it. To be clear, it is not the run rate from Q4. You are expecting the abatement. Is it primarily on the material side where you're baking in that improvement, or are you also baking in an improvement in the logistics? I think Mig had asked earlier just the breakdown, if you could give us, you know, of that $230, you know, what's logistics versus materials so we can, you know, put some of our own assumptions in. I would say, you know, just looking at it really is the material, the underlying material. We're not necessarily assuming any significant improvement in the logistics world right now. It's still significantly constrained, so it really is material play. We'll see on the material side, but that's not our operating assumption right now. For 2022. You know, a vast majority of that is increased with material costs, not the transportation. Thanks, Courtney. Operator. Your last question for today comes from Jerry Revich with Goldman Sachs. Please go ahead. Yes. Hi, good morning, everyone. Julie, welcome. Hi, Jerry. Thank you. I'm wondering if you could talk about the implications of that are coming up for you folks in terms of, you know, helping with on-site charging or anything along those lines, that's coming up as an opportunity as the electrification mix in the portfolio rises. You know, can you comment now that you're scaling the business, what the margin profile is, if there's any difference between electrics versus diesel. Thanks. Thanks, Jerry. Just, you know, longer term, our product portfolio across, as we said, you know, a lot of the Genie products are already electrified. What's changing there is going all electric and electric drives, changing, you know, from deep cycle batteries to lithium-ion batteries. You're seeing the evolution of battery technology that's playing a role in the Genie business. As the evolution of that technology continues, you will see that be adopted even into more product lines, you know, booms, scissors. Someday, I think telehandlers will be the laggard in that given their duty cycle. You will see that as well in the future. See that adoption in our MP business. It really depends on what specific products we're talking about. There is a lot of times we have an electric option if the electric, or Irish friends would say, the mains are available or the electric distribution is available. If it's not, then you're gonna remain with large diesel engines. A gain, across the product portfolio, on every product line, we have an electrification product development plan for those products as the world continues to move towards electrification. You know, incremental, Jerry, I don't know if it's necessarily incremental or not. I think it's just how the market is moving. Then in terms of the margin side and cost side, you know, originally, you know, if you know, lithium-ion was more expensive, frankly, and the battery solutions were more expensive. As that cost is coming down the cost curve because it's being utilized in so many other is competitive to other alternatives, especially internal combustion engine alternatives. As you see that continue, the greater move toward electrification as the life cycle costs come down with it. That's a key part of our product development efforts. You know, what's gonna happen in the next three, five, 10 years, and that's incorporated into our development plan. Incremental or not It's where the world is going. Okay. Terrific. You know, separately, on the supply chain side, can you talk about what are the critical components that you're concerned about today, if that's any different from three months ago? You alluded to having supplied components on the water. You know, to what extent for production to ramp up over the year in terms of what's at ports, et cetera? Right. Jerry, I think similar to what other manufacturers, we've had to do a lot there to modify, you know, chips, boards, circuits, and the like. Electronic components continue to be a challenge. Tied to electronic components is engines, the ECUs or ECMs, whichever manufacturer choice is used. Engine availability is the near term constraint that I think will work itself out, you know, but right now, that's a near term constraint. Hydraulic systems, there are several hydraulic systems that have been constraints for us, and that's caused a challenge. Our utility business, it's the only business where we use chassis. That was adversely impacted with the chassis supplier. Those are the primary, you know, commodities that we're dealing with. There's the odds and ends that creep up as well. Those are the key ones that we're working on to improve supply of so that we can increase our production to meet the needs of our customers. Thanks, Jerry. Operator? This is all the time that we had for today. Thank you for joining us. You may now disconnect.