Greetings, welcome to the Terex first quarter 2023 results Conference Call. At this time, all participants are in a 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, Paretosh Misra, Head of Investor Relations. Please go ahead. Good morning, and welcome to the Terex first quarter 2023 Earnings Conference Call. A copy of the press release and presentation slides are posted on our investor relations website at investors.terex.com. The replay and slide presentation will be available on our website. We are 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. We will be discussing non-GAAP information 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. I'll turn it over to John Garrison. Thank you, Paretosh, and good morning. I would like to welcome everyone to our earnings call and appreciate your interest in Terex. I would like to begin by thanking all Terex team members for their exceptional efforts in this challenging global macroeconomic environment and for their continued commitment to our Zero Harm safety culture and Terex Way values. Safety remains a top priority of the company, driven by think safe, work safe, home safe. Terex team members continue to work tirelessly to improve our performance for our customers, dealers, and shareholders while maintaining a safe working environment. Please turn to slide 4 to review our strong financial results. The team delivered excellent financial performance for the quarter. Sales of $1.2 billion were up 23% from last year and up 27% on an FX neutral basis. Operating margins of 12% expanded 460 basis points from the prior year. Earnings per share of $1.60 more than doubled year-over-year. As a result of our team members' continued strong execution in the first quarter and our strong backlog, we are raising full year earnings per share outlook to a range of $5.60-$6.00. Please turn to slide 5. I'm excited about the future of Terex and the opportunities in front of us. Our MP and AWP segments participate in global diverse end markets and are well positioned for profitable growth. Infrastructure investments are increasing throughout the world, but in particular in the United States. In fact, the Infrastructure Investment and Jobs Act alone is expected to drive $1.2 trillion of spending over 10 years. The CHIPS Act and Inflation Reduction Act are going to be supportive of additional spending in construction and infrastructure that should drive growth for our businesses. Our Powerscreen and Finlay brands have leading positions in global mobile crushing and screening markets that will benefit from growth in aggregates. Our Genie products are needed for general maintenance, infrastructure and construction projects, and will benefit from increased government-sponsored spending throughout the globe. Another important growth driver are initiatives that support circular economy goals. The global demand for waste recycling solutions is increasing, driven by regulatory and societal changes. Our MP brands, including Ecotec, CBI, Terex Washing Systems, and our recycling systems are at the forefront of meeting demand for sustainability initiatives. The increasing reliance on electrification to reduce greenhouse gas emissions requires grid capacity expansion. Terex Utilities has a wide portfolio of products well positioned to capitalize on the investments needed to enhance the electrical grid. Our Genie business in particular will benefit from increasing digitization, including data warehouses and chip manufacturing onshoring projects in the United States. Despite the near-term macroeconomic issues, we continue to be optimistic and excited about the opportunities for Terex growth. Please turn to slide 6 to review our backlog. Our Q1 backlog remains strong at $4.1 billion, up 2% from year-end. In fact, our backlog has remained relatively consistent for the last five quarters, and we've had minimal customer and dealer pushouts and cancellations. Our current level of backlog is consistent with Q1 of 2022, the highest backlog for Q1 in our recent history. Our backlog demonstrates the strength of our end markets and supports our outlook for the remainder of the year and gives us visibility into early 2024. Elevated customer fleet ages and historic low dealer inventory levels continue to support robust demand. Consolidated Q1 bookings remained healthy at $1.3 billion, resulting in a book-to-bill ratio of 105%. Turning to slide 7 for an update on our strategic operational priorities. We continue to make progress on our execute, innovate, and grow strategic initiatives that continue to strengthen our company. Our operations team had excellent execution in the first quarter, demonstrating adaptability and flexibility to overcome the dynamic supply chain environment. Our permanent Monterrey facility is on time and on budget. The new facility is an important element of our strategy to improve Genie's through-cycle performance. Starting in March, Genie began to transfer product lines from our temporary facility in Monterrey to our new permanent facility. Moves from other factories in our network will take place over the next 12 to 18 months. While these moves will have significant long-term benefits, this process will result in short-term manufacturing inefficiencies, which the Genie team is working hard to overcome. The company continues to make capital investments in our facilities around the world. These investments are paying off, and we are proud of a return on invested capital of 24%, which remains significantly above our cost of capital. We showcased 20 new innovative products at CONEXPO, ARA, World of Concrete, and Bauma India. Our investments in the development of environmentally friendly new products with superior performance will help to deliver growth. Our parts and service teams are investing in digital offerings for dealers and customers, including My Terex and Lift Connect. We now have more than 70,000 machines fitted with our telematics technology. Execution of our EIG strategy enabled our strong organic sales growth for the quarter. We continue to supplement our organic growth with inorganic investments. We recently acquired MARCO, a manufacturer of both material handling conveyors, further growing MP segment's offerings with products that complement the existing portfolio. In February, we completed an equity investment in Apptronik, a robotics company, reaffirming our commitment to invest in technologies that enhance our product and solution offerings. Turning to slide 8. During the quarter, our team members were active in trade shows. We saw high attendance and interest in our products. Attendance hit a new record at two of the biggest trade shows, CONEXPO and bauma India. The attitude of our customers was upbeat. The MP team displayed a Powerscreen Gladiator product at CONEXPO, a fully electric wheel crushing and screening machine. After significant success with this product in North America, we recently launched the Gladiator World Series this year for sales around the world. The Genie team introduced our highest capacity telehandler at the ARA show. The 12,000-pound telehandler is engineered to offer superior productivity and low total cost of ownership. We also introduced our first all-electric mini mixer at Conexpo, expanding MP's concrete offering. Similar to our all-electric utility truck, the mini mixer leverages our investment in Viatec to develop zero emission products. If you had the opportunity to visit our booth at these trade shows, I hope you took away from your visit that Terex team members are engaged with our customers, our products and services offer the features and benefits that provide value. Turning to slide 9. At Terex, we are intently focused on developing and delivering sustainable solutions for our customers. In this example, Terex Recycling Systems sold the first all-electric powered waste separation solution to a customer site in the U.K. The installation combines our waste feeder, conveyors, screens, sorters, and separators. The system efficiently recovers products of higher value, including metals, aggregates, plastics, and cardboards from waste, thus diverting more material from the landfill. This is another example of Terex products making the circular economy a reality. Please turn to slide 10. Our environmental, social, and governance programs deliver stakeholder value. We continue to progress on our ESG journey and recently completed our materiality assessment. We heard from our stakeholders that product development, stewardship, and innovation are core business differentiators. Stakeholders regard our product quality and safety as critical for meeting regulatory requirements and customer expectations. Team member health, safety, and well-being are important. We know that Zero Harm is possible. It's not just an aspiration. We designated April as safety month for teams across the globe and scheduled a variety of events to reinforce and rededicate ourselves to Zero Harm. I want to thank our stakeholders who participated in our materiality assessment, which provided us valuable insights. Please turn to slide 11. We continue to operate in a challenging macroeconomic environment with inflationary pressures and supply chain constraints. We did see slight supply chain improvements. However, our hospital inventories increased in the first quarter after declining in the fourth quarter of last year. It's a clear indication of the level of disruption our teams continue to face and overcome. Overall, our market demand remains strong. I am confident in the team's ability to continue to adapt and overcome the macroeconomic challenges that we have been facing. With that, let me turn it over to Julie. Thanks, John. Good morning, everyone. Let's take a look at our first quarter financial performance found on slide 12. Terex is in a strong financial position. We demonstrated excellent execution in a dynamic environment. Sales of $1.2 billion were up 23% year-over-year on higher volume and improved price realization necessary to mitigate rising costs. Sales in constant currency were up 27% as foreign currency translation negatively impacted sales by $42 million or approximately 4% in the quarter as the euro and British pound weakened against the dollar. Gross margins increased by 410 basis points in the quarter as volume, pricing, favorable product mix, improved manufacturing efficiencies, and strict expense discipline helped to offset cost increases and the negative impact of foreign exchange rates. Both segments recorded a year-over-year increase in gross margin. SG&A was 10.6% of sales and decreased by 50 basis points from the prior year as business investment and marketing costs were coupled with continued expense management. SG&A increased over the prior year due to inflation, unfavorable foreign exchange, incremental spend on new acquisitions, and increased marketing expenses on trade shows. Income from operations of $148 million was up 98% year-over-year. Operating margin of 12% was up 460 basis points compared to the prior year. Our incremental margin was 31% compared to last year. Interest and other expense of $15 million increased $4 million from the prior year due to increased interest rates. The first quarter global effective tax rate was 17.5%. First quarter earnings per share of $1.60 more than doubled, representing an $0.86 improvement over last year. This strong performance was driven by increased volume, disciplined pricing, and continued cost management. This quarter includes an unfavorable earnings per share impact of $0.10 from foreign exchange translation. Free cash flow for the quarter was negative $11 million, representing a significant improvement over the prior year. I will discuss free cash flow later in more detail. Let's look at our segment results, starting with our Materials Processing segment found on slide 13. MP had yet another excellent quarter with consistently strong operational execution. Sales of $554 million increased 22% compared to the first quarter of 2022, with healthy demand for our products across multiple businesses. On a foreign exchange neutral basis, sales were up 28%. Bookings were up 6% sequentially. MP ended the quarter with backlog of $1.2 billion. The backlog remains robust and is approximately 3 times historical norms. MP delivered operating profit of 15.4%, up 120 basis points over the prior year, driven by higher sales volumes, favorable product mix, and disciplined cost management, resulting in an incremental margin of 21%. On slide 14, see our Aerial Work Platforms segment financial results. AWP had an excellent quarter with sales of $686 million, up 24% compared to the prior year on higher demand. On a foreign exchange neutral basis, sales increased 27%. Backlog at quarter end was $3 billion, up 4% from the prior year. Bookings remained strong with a book-to-bill ratio of 112%. AWP more than doubled their operating profit and delivered operating margins of 12.1% in the quarter, up 620 basis points from last year with an incremental margin of 38%. The improvement was a result of higher sales volumes, favorable mix, cost reduction initiatives, manufacturing efficiencies, and disciplined pricing actions to offset material supplier costs. Please see slide 15 for an overview of our disciplined capital allocation strategy. The company's strong balance sheet provides us with financial flexibility for the future. As a reminder, although Terex does provide customer financing solutions through our banking partners, in February of 2021, we sold our TFS assets and no longer carry this exposure on our balance sheet. We remain diligent in monitoring counterparty exposure and risk as well as regional, customer, and supplier risk. To date, we have not seen a negative impact due to current market conditions. Free cash flow for the quarter was negative $11 million compared to negative $72 million a year ago. The $61 million year-over-year improvement in free cash flow was due to increased operating profit. Hospital inventory at the end of the first quarter was $48 million, an increase of $12 million from the fourth quarter of last year, and down slightly from a year ago, reflecting continued supply chain disruptions. We continued to invest in our business with capital expenditures and investments of $30 million. We increased our quarterly dividend per share to $0.15, a 15% increase over the prior year. We repurchased $3 million of shares in the first quarter. In April, we have continued our share repurchase program and purchased $14 million of shares, partially offsetting the dilution from our compensation programs in March. Through April, we have returned $28 million to shareholders and have $175 million remaining on our share repurchase program. We will offset dilution and take advantage of market dislocation in these volatile times. We have no debt maturities until 2026, and 77% of our debt is at a fixed rate of 5% until the end of the decade. Our net leverage remains low at 1x, which is well below our 2.5x target through the cycle. We have ample liquidity of $677 million. The company is in an excellent position to run and grow the business. Turning to slide 16 and our updated full year outlook. It is important to realize we are operating in a challenging macro environment with many variables and geopolitical uncertainties, so results could change negatively or positively. With that said, this updated outlook represents our best estimate as of today. Thanks to the strong execution of our team members and our robust backlog, we are pleased to raise our 2023 outlook. We now expect earnings per share of $5.60-$6.00. Our increased sales outlook of $4.8 billion-$5 billion incorporates the latest dialogue with our customers and our suppliers. We anticipate higher volumes as customer demand remains strong. Our sales are expected to be relatively consistent in Q2 and Q3, and down slightly in Q4 due to lower production days. Our operating margin outlook has increased to a range of 11.4%-11.8%. This reflects our excellent performance in the first quarter, continued strong customer demand, the latest information from our supply chain, cost out benefits, and continued strict expense management. We expect improved free cash flow in the next three quarters. We are raising our outlook to $300 million-$350 million, primarily due to higher earnings. Let's take a look at our updated segment outlook. Based upon MP's continued strong execution, which includes continued mitigation of cost pressures and supply chain challenges, we are increasing our sales outlook to a range of $2.1 billion-$2.2 billion with an increased operating margin of approximately 15.8%. We expect MP sales and margin to be relatively consistent for the remainder of the year. The AWT team has increased their factory output, as a result, we are increasing our sales outlook to a range of $2.7 billion-$2.8 billion. Incorporating the increased volumes, the team's cost reduction activities, pricing actions, and improved manufacturing efficiencies, we are raising our full year operating margin outlook to approximately 11.5%. We anticipate AWP sales to be relatively consistent in Q2 and Q3 down slightly in Q4 due to normal seasonality and lower production days. AWP margins are expected to be negatively impacted by manufacturing inefficiencies due to scheduled production moves to our Monterrey facility, which will have a greater impact in the second half of the year. With that, I will turn it back to you, John. Thanks, Julie. Turn to slide 17 to conclude my prepared remarks. Terex is well positioned for growth to deliver value for our stakeholders in 2023 and beyond because we participate in strong end markets, including infrastructure, electrification, and environmental. We'll continue to execute our disciplined capital allocation strategy while investing in new products and manufacturing capability along with strategic inorganic growth. We have demonstrated resiliency and adaptability in a challenging environment. Most importantly, we have great team members, businesses, strong brands, and strong market positions. With that, let me turn it back to Paretosh. Thanks, John. As a reminder, during the question and answer session, we ask you to limit your questions to 1 to ensure we have time to answer as many as possible this morning. With that, I would like to open it up for questions. Operator? Thank you. At this time, if you would like to ask a question, press the star, then 1 on your telephone keypad. We'll take our first question from Stanley Elliott at Stifel. Hey, good morning, everyone. Good morning. Thank you for Thank you for questioning. Congratulations. Can you talk about the 250 basis? Increase. There you go. You know, how much of that is price? How much of that is throughput? And kind of to what extent is the Mexico shift gonna be a negative detractor there? Thanks so much for the question, Stan. Good morning. you know, the AWT team just did you know, a great job in executing this quarter. They were able to get, you know, higher sales volumes, you know, coupled with, disciplined pricing actions. They had, you know, favorable, regional and product mix. Then, they really worked hard on cost reduction initiatives between the supply chain and engineering teams, and value engineering efforts, getting dual supply, those types of things. Then with the increased volume, they also had favorable manufacturing efficiencies. They had just strong execution, successful cost out actions, and that led to an incremental margin of 38%. The Genie team had very strong volume in the quarter, as we mentioned. We were able to raise. In terms of the Genie impact on the Monterrey move, you know, we started that move from the permanent to the new facility in March. More moves are going to happen over the coming quarters, and we expect their second half of the year to be impacted by manufacturing inefficiencies due to all of those product moves. Just a really great job in execution by the AWT team this quarter. Switching gears, on the MP business, you know, on one hand you're talking about inventories with your channel partners being exceptionally low. You're looking at your backlogs three times kind of what normal would end up being. When do we think that we'll get right sized within that channel? I'm assuming that most of those orders still are for retail use as opposed to any sort of stocking. It just sounds like there's a lot of, of visibility for that part of the business going forward. Stan, you're right. There is a significant visibility with, you know, MP's backlog being at about $1.2 billion, which is similar to prior year. You know, it's also important to note, you know, given the fact that we have about 3 times the normal backlog, that is changing our order policies within the business. For example, in our aggregates business in the quarter, our order book wasn't open for the whole quarter to fill, you know, Q3 and Q4 because we're still in the position of slotting orders that we had received. The reality of it is, in this business, and it's not dissimilar in AWP business, we really are in an allocation mode. As the orders come in, we have to allocate to ensure that all dealers have the opportunity to take product, and we don't cut off a dealer in a certain part of the world with no product. Demand remains strong. Dealer inventories are low. Remember, about 75% of the MP business goes through a dealer channel. Their inventories are not stocking dealers in the sense they're not putting equipment on the line. Most of the equipment here goes into their specialized rental fleets. It turns into rental purchase type contracts, RPO type, you know, contracts. Again, the challenge for them is those contracts has been converting to sales, and we haven't been able to get the product back to them that they need, so they're seeing that depletion in their network, in their rental fleets. That's helping to sustain. Again, it's global strength. You know, literally across the globe, we're seeing strength in the MP segment. Did see strength in North America, which you would expect, given the strength in the overall North American market. As we continue to see improvement in the supply chain, supply output, you know, continues to improve, you know, we'll see that return to more normal. Right now, quite strong backlog, extended visibility, historic level of visibility going forward. I think it's also important, Stan, that, you know, what's really important in both businesses and the backlog is, and we comment on this, is what happens within the backlog in terms of order pushouts and order cancellations. We're just not seeing that, you know, at this time. You know, good, robust backlog. We know the, you know, book-to-bill overall company was 100%. It was down a little bit in MP, but that's coming off an exceptionally high Q1 of last year, really in both businesses. Overall demand remains robust. We're not seeing cancellations and pushouts. Frankly, we're still in an allocation mode. And we'll be continuing to open up the order book as we progress through the, you know, through the remainder of the year. Perfect. Thanks so much for the time, and best of luck. We'll move next to Stephen Volkmann at Jefferies. Great. Good morning, everybody. Thanks for taking the question. John, I just wanna pull on that thread a little bit because I feel like if we were gonna see any signs of weakness or pushout, as you just noted, it would be in the AWP and probably specifically with the smaller customers. I guess I just wanted to hear your comments around what you're seeing from sort of the small independents on AWP orders. Thanks, Steve. Similar market dynamics. Both the nationals and the independent customers continue to see strong market fundamentals and growth across both segments. Continue to see good, you know, strong utilization. Again, similar dynamic industry constraints that led to the increase in fleet ages. We've talked about the replacement cycle on numerous times and the fact that that replacement cycle, you know, has been delayed. I think that shows up in relatively strong used equipment values. Right now, customers are still requesting more than we can deliver, you know, due to the supply constraints. We've talked about customers as supply constraints alleviate. There may be an opportunity to get more supply, and that's both with the nationals and the independents. Again, here, if you look at the AWP segment, again, against a very tough comp in 2022, you know, our book-to-bill ratio was, you know, 112% in this segment. Good backlog, good recovery. Again, the reality here is that we're still in an allocation mode. I know this is gonna sound strange, but, you know, we're in a position where we're trying to keep customers equally unhappy with the distributions we're giving. We're trying to keep things relatively consistent against historical patterns, for the nationals and the independents. Again, I think that speaks to the relative tightness that we've had in the market. Still constrained, and, you know, the team's working to, you know, to reduce the constraints. Backlog market environment continues to appear robust across the customer base, not just in the, in the large, national accounts. Understood. Thank you so much. Just to follow up there on AWP, I was a little surprised to see the channel inventory actually up, but also of course, the margin much stronger than what we were looking for. I usually sort of assume channel inventory means, you know, headwinds to margin. Maybe you can square that with us. Specifically, I'm trying to think about as those hospital inventories normalize, is there margin upside that might be sort of in our back pocket here? As Julie started with her comments, you know, the team really did execute well. You're right, Steve, we did see a modest increase in our channel inventory to about $48 million, up from $36 million at the end of Q4. I think that speaks to the level of disruption the team is seeing. They're continuing to work to improve the continuity of supply. We are seeing improvement, a modest improvement in the supply base in terms of on-time delivery. We are seeing modest improvements in the quantity or the level of supply. You know, our teams are driving that. There was a tremendous amount of work going on on our supply chain teams around the world to really increase the number of suppliers that we're working with, dual sourcing, modifying design. All of that work is occurring. Despite that, because we're in the business where you need 100% of the parts to ship a product, despite that, we still saw a slight increase in the channel inventory in the quarter. That does create disruption, but as Julie said in her comments, they had good efficiency on the higher output that we were able to get, that we were able to take, the team was able to take to the bottom line. We're continuing to work hard around the globe in both segments to drive continuity, reduce the disruptions, and increase the quantity supply. A lot of hard work, but again, you know, the disruptions we're seeing are evident in that channel inventory. Again, it just takes one part for us not to be able to ship to a customer. Got it. Thank you. We'll move to our next question from Steve Barger at KeyBank. Hey, good morning. Sorry, I missed your prepared comments. With you already guiding this year above FY 2024 consensus, people are gonna be wondering around longer term thoughts on your ability to drive growth. To the extent that you can, what are your general thoughts on cycle longevity and just how you're positioning Terex for the next few years? Yeah, thanks. It, you know, good question. Again, it's early, you know, to talk about 2024, again, if you look at our strong backlog coverage that we've seen, you know, it's pretty much consistent the last five quarters. You know, governments around the world are pointing to infrastructure as a stimulus, and we're seeing this as a robust, you know, nature around the world. Then when you put that on top of what's transpiring in the U.S., I mentioned this, Steve, in my opening comments about the Infrastructure Act, the Inflation Reduction Act, the CHIP Act, those are massive sums of money that, you know, are tailwinds against the current headwind of the macroeconomic rising interest rate environment. If you, if you look at the mega trends that we're dealing with in that area, if you look at the consistent performance of our MP business and then the increase in sustainability, what we're doing in some of our environmental, you know, as we highlighted one of the solutions, you know, this time. There the mega trends provide some degree of tailwind for us to potentially offset the headwinds that we have of a rising interest rate environment. If I look at MP, again, consistent performance around the globe, multiple verticals that we compete in, and we believe in that environment, we're gonna be able to drive, you know, growth. AWP, you know, that has been constrained. Replacement cycle, both in North America and in Europe, has been constrained by overall market supply. The backdrop of those, you know, major infrastructure bills provide a tailwind against the headwind of a rising interest rate environment. As we look out with the replacement cycle, rental companies continuing to win, the industry continuing to grow, you know, yes, we do believe as we laid out in December that we can be a growth company over the coming period of time. We all know, and as I said in December, it's not always linear. As we set the company up, we believe we're set up to take advantage of the mega trends that are ahead of us to drive growth into the future. Obviously, too early to talk about 2024 from a financial standpoint, but we have $1.1 billion of backlog for 2024. That is unheard of for us, for our business. We know there's a lot of crosscurrents out there. Not the least of which is this rising interest rate environment, tightening credit conditions. There's also some pretty significant tailwinds, and we think we'll position the business and we'll do the right course of action irrespective of what that macroeconomic environment is. Right now, you know, it looks pretty strong for 2023. Again, we're not gonna give guidance for 2024 and outlook, but we also never had $1.1 billion booked for the subsequent year. I think that also indicates there's an opportunity to potentially grow despite, and we're not naive, despite the macroeconomic headwinds of a rising interest rate environment. Yeah, that's really great context. To your point about the interest rate environment, you know, I know this will be hard to answer, but there's a lot of concerns around commercial real estate and specifically office. Have you ever tried to quantify your end market exposure by project type? Do you have a guess how much of your fleet has been allocated in the past to office construction? I'm just wondering, do challenges in that specific area create a fleet overhang for your customers, or is that relatively small? Steve, I think First of all, with Tribe, we don't have precise information, so I can't give you a percentage. I do know that our, especially on the AWP side, our larger customers report out where they believe their products are going, i.e., you know, our products. If you look at that macro environment on non-resi construction, clearly office and retail is gonna have a headwind in a rising interest rate environment. That part of the business will be impacted. However, if you look at non-resi in totality, 40% + of that is public. That's not gonna be impacted in a rising interest rate environment. If you look at the CHIPS Act and the onshoring of chip manufacturing, the onshoring of battery manufacturing, those are being done for geopolitical reasons to improve the surety of supply. A rising interest rate environment is not gonna adversely impact those projects. They're gonna go forward. That's why I say there's clearly the cross current out there. There's the headwind of a rising interest rate environment, it definitely will impact things like commercial real estate, office, no doubt. The other parts of the business are larger, that's the macro tailwind, and that's, you know, that's the headwinds, tailwinds that we have, and we'll continue to position the business to be able to take advantage of that. Overall, non-resi construction, especially in North America, we think is gonna be strong for the next couple of years as a result of these mega, you know, investments. You know, my predecessor, Ron, he said, "John, don't ever talk about the, you know, the infrastructure bill because I talked about it for 20 years, it never happened." This is the first time we've actually had it. I get it. It creates uncertainty. We understand that. We'll position the business. We will take the appropriate actions irrespective of the environment. We believe we'll position the business to take advantage of some positive headwinds. Tailwinds, I should say. If they don't materialize, we'll take the appropriate action. Right now, $1.1 billion going into 2024 is highly unusual for us. We think that speaks to the overall strength of the non-resi market. That's great. Appreciate the time. We'll go next to Timothy Thein at Citigroup. Great. Thank you. Good morning. John, the first one just is on AWP, and I totally get it's very early to talk anything about 2024, but I'm just curious how the team at Genie is planning with respect to that fourth quarter production levels as you look into 2024. There's a lot of moving pieces with what's going on in Mexico. Just curious, you know, your initial thoughts. You have to be informed to some degree by what you've seen in terms of order intake and backlogs. I'm just curious how the plan is currently kinda laid out in terms of expectations as to how you're exiting the year, and thus, you know, the inventory position going into 2024. Thanks, Tim. As Julie said in her opening comments, we are anticipating lower volume in the fourth quarter, due to, you know, production days, in the AWP segment, specifically, the Genie business. As the supply chain begins to improve and we're able to improve, you know, our lead times, because that's the other issue going on, we have excessive lead times right now across the industry. As those begin to improve, I think you'll receive, return to some normalcy in customer order patterns. You know, customers, especially the larger customers, you know, they were taking gear ahead of what they normally do because that's when we as the in the industry could deliver that equipment, to them. They took things in the fourth quarter that they otherwise wouldn't. They took things in a early in the first quarter that perhaps they otherwise wouldn't. I think as the supply chain improves, demand stays strong, I think you'll see some more return to some degree of normalcy in production in rental companies in terms of in the Northern Hemisphere where they take their products. We're planning on in the fourth quarter for now, I mean, that could change, you know, lower production volumes in Q4, if for no other reason than lower number of production days due to the holidays. We're, you know, assuming a reduction in production in Q4, positioning us to, you know, improve or increase production in Q1 to meet the needs of the customers. Got it. Okay. Just on MP, you know, a lot of different product segments there and none of which have the same margin profile. I'm just curious, as you mentioned how you've reconfigured the, changed the order policy. Is that resulting in any... Actually we think about any, you know, from a mix standpoint, is there any- Major differences as we move to the balance of the year in terms of what you're, you know, what you expect to deliver out of that backlog? No, not anything fundamentally different. You know, as Julie said, we did have some favorable mix in the quarter, in the aggregate segment. We, you know, anticipating that continues through the year. No substantive change, I would say in the makeup. We did see some favorability in aggregates. Yes. All right. Thank you. Thanks, John. We'll go next to Steven Fisher at UBS. Thanks. Good morning. Wondering if you can comment on the price versus cost gap for the rest of the year? Are you expecting that to be wider, narrower, or steady? I guess to maybe make it meaningful, how would that look excluding any of the Monterrey costs that you're going to be incurring? Thanks for the question, Steve. You know, when you think about, you know, as for in 2022, you know, we were as a total company, we were price/cost negative in the first 6 months, and then we became price/cost neutral for the year of 2022. In particular, so our objective is to continue to be price/cost neutral for the year. We talk about offsetting material and freight and logistics costs. You know, we continue to see a dynamic inflationary environment. And we've seen container freight decline and while we've seen ro-ro increasing. We've taken multiple pricing actions throughout 2022. We took further pricing actions in 2023 across the company. We're being transparent with our customers and distribution partners regarding that level of inflation we're seeing and why we need to take pricing actions. If I look at it by business, you know, the MP group is that they do dynamic pricing, they've been price/cost neutral in 2022, and they continue to be price/cost neutral for 2023. For AWP, they were price/cost, you know, negative in the first 6 months of last year and were able to turn it to be neutral for the year. We see, you know, higher pricing in the first 6 months of this year, but with the objective of being price/cost neutral for the whole year. Again, you know, we're being transparent, and we expect to be price/cost neutral for the year. Okay. John, you mentioned a steady backlog. You know, when you look at the picture on slide 20, it really shows that well, kind of a general leveling off. What's your expectation for how this is gonna trend from here? I know you said there's gonna be some more normalization of ordering. Does that mean just generally kind of a continued steady backlog? Or if it were to break out from here, what would be the most likely driver of that? That's a great question. You know, let me answer it this way. Right now, we're not as reliable a supplier as we'd like to be for our customer because a lot of what we're continuing to deliver is late to our original customer promise. As the supply chain improves, we will, you know, we'll get back to our historic ability to when we say we're gonna deliver it, we deliver it versus being late. I would not be surprised over time if backlog would come down and would get back to more historical levels of backlog. I don't think that implies anything necessarily about the market. I think it implies we're getting our lead times back to more normal levels because right now, really across the business, our lead times are extended. Over time, I think, you know, as the supply chain improves, we'll get to more normal ability to deliver on our delivery commitments. Our lead times will come into more normal levels. I think, you know, it's clearly possible backlog does decline to more historic levels while the overall market remains, you know, buoyant. That would not surprise me if, you know, if that were to continue because it's showing that we're supply chain's finally coming back and balanced. We're finally getting out of the disruption mode and getting back to, you know, what we normally do, which is to deliver on our commitments to our customers. I think an improving supply chain is gonna help us do that. Terrific. Thank you. We'll go to our next question from David Raso at Evercore ISI. Yeah. Hi, thank you. Picking up on the order thoughts. Just curious, are you starting to see enough normalization of what you can promise on lead times? Or for whatever reason, customers a little skittish about 2024, that are they having conversations now that said, "Hey, look, if that's now the situation on lead time or whatever may be, let's push that conversation to, you know, September." Just trying to get a read here and level expectations about book-to-bill, particularly in AWP. Of course, the backlog's abnormally high, and people like the visibility on 2023, even in starting 2024. Just so we understand, are we starting to get what you're hearing around the sector broadly with supply chains normalizing? You know, you're gonna see orders come down as people kind of rethink how early they need to order for 2024, or have you not seen any change in behavior from your customers? Because the punchline, I think people are trying to figure out how much does book-to-bill go below 1, and are you seeing that already for 2Q? Just trying to level set those expectations. Right. You know, thanks, David, and you're right. In the AWP segment in the quarter, you know, our book-to-bill is 112%. We saw the Strong ... a strong book-to-bill in a quarter overtime. I think that probably does come down as supply chain continues to improve. Right now, customers are taking because there's still a percentage of what we're delivering, which is late to our original delivery commitments. It's improving, but not anywhere near the levels of our historical performance. As supply chain improves, lead times right now, David, still remain extended, and it's gonna take time to get those lead times. Again, we're being transparent with customers in terms of what our lead times are. As lead times improve, that will translate to customer, I think, buying behavior, getting back to the more seasonal pattern, that was seen, you know, historically. I think as things improve, I think we will see a more return to more seasonal normal discussions with customers. Now, I will say we do have customers, especially the larger ones, that are looking out beyond the year. We're not signing contracts beyond a year, but we're engaged in, you know, what does your demand look like for a multiyear period of time and having those dialogues. Let me be clear, we're not signing contracts that hasn't made that step. The dialogue about what their needs are across a multiyear environment, yes, those dialogues are absolutely taking place. I do think, you know, the book-to-bill probably come down as, you know, with the backlog as supply chain continues to improve. Again, I don't think, David, you need to read in that that's a, you know, a significant reduction in demand in the marketplace. I think that's returning to a more normal environment. I don't see that in next quarter. Yeah. All right. I do see, you know, improvement in supply chain. We're anticipating that in our outlook. We are seeing improved, supply chain improvement over the course of the year. That's our assumption today. Yeah, that's all logical. I mean, look, I think we're all just trying to dance with these backlogs are so big, the order comps are hard. It makes sense they're down. How much is it really a reflection on 2024 demand, or is it just normalizing behavior because supply chains are normalizing a bit? It's the latter, David. It's normalizing behavior. I mean. Q2, you're. Q2, you're not. You're not hearing that per se, like people pushing out conversations to. David. To think about 'twenty- In the AWP segment, we're pretty much booked out for 2023, with you know, potential conversations with if we're able to get a little bit better production, customers would actually take more than we've committed to. That's the current environment we're in right now within the AWP segment. All right. Thank you for the clarity. All right. Thank you, David. Appreciate it. We'll go next to Michael Feniger at Bank of America. Hey, guys. Thanks for taking my question, and apologies if you already kinda hit on this. With your access revenue now approaching about $2.8 billion for the year, you're kind of almost back in that 2018, 2019 period. Obviously, there's been a lot more price, it feels like this year in that revenue number. I'm just curious if production units are still below that 2018, 2019 level. Going forward with Monterrey, your strategy there, does that give you any ability to add incremental capacity above those 2018, 2019 levels? Thank you, Michael. We are currently producing below the 18, 19 levels within the Genie business. You know, with the investment we made in our Watertown facility, with an improved supply chain, we should be able to get increased production out of the Watertown facility. Right now, we're producing at lower levels than we produced in 2018 and 2019. On the Monterrey facility, I think this is very important. The Monterrey facility for Terex and Genie specifically was to improve our global competitiveness and diversify our global footprint. Yes, it will provide some incremental capacity, that's not why we made the investment. We made the investment to improve our global cost competitiveness and then to utilize a Mexico supply chain as well. We think that will put us in a strong position both for supplying our Monterrey facility, but also supplying our U.S.-based manufacturing. Monterrey was to diversify our global footprint, to improve our global cost competitiveness, to compete globally around the world from a cost competitiveness standpoint and modest incremental capacity. We have the capacity we need to support the growth that we have. We'll look to add in other regions of the world to be local for local in some instances. Again, that's our strategic rationale for Monterrey was not to add capacity. Yes, we get some incremental. It was to significantly improve our global cost competitiveness, diversify our footprint in a, you know, in a challenging, you know, global economic environment. That's why we made the investment in Monterrey. It's gonna be a major source over the next 10 years and beyond for Genie from a source of production for not just North America, but ultimately potentially global export as well. That's again, we invested to be globally cost competitive for the next decade, not for incremental capacity. We're not at 2018 and 2019 levels within the Genie footprint as we are today. We have opportunity to expand. Very helpful. Yeah. Just on Materials Processing, you highlighted how inventories of the dealers is still low. Just curious how that should finish the year for 2023. Is 2024 about replenishing those inventories? Any metrics you'd kind of help us with, you know, how low these inventories are for MP dealers compared to where they normally should be? They are lower than normal. I think we'll make progress as we move through 2023. Are we necessarily assuming we get all the way back to historical levels? No, not at this time. We will improve the situation. Again, you know, the order book for the MP business, you know, and our aggregates business was not open, you know, for the entire quarter because we were still slotting orders. Again, they're having to ensure that we don't cut off any dealer so that there's equal allocation, if you will, around the world. As production, you know, improves, you know, would expect to, you know, for that to improve for us as we go forward and less allocation. We're still in an allocating mode today. Very helpful. Thank you. We'll go next to Tami Zakaria at JPMorgan. Hi, good morning. Thank you so much for taking my questions. Just to clarify, and I'm sorry if you've already mentioned this, but price cost in the first quarter was it positive? My understanding was that the first half would see price cost sort of positive, but then it tapers in the back half to get you to a neutral level for the year. Is that the right way to think about it? I think if you think about that, you know, as we go through the year, what you see is that we took pricing actions throughout 2022, and that pricing comes through into 2023. There's a greater impact in the first half to the second half when you're thinking about, you know, incremental pricing for the AWP. For MP, they've been dynamically pricing all along. They've kept up with price costs throughout. Price costs will be neutral for the rest of the year for AWP? For AWP? Yes. Remember, our objective is to offset material freight and logistics costs. Got it. You raised the full year guidance by, call it, about $200 million. How much of that is a better volume outlook versus incremental pricing? From our original outlook, you know, almost all of that is increases is related to volume and not price. Got it. Okay. Thank you so much. We'll move next to Seth Weber at Wells Fargo. Hi, good morning, guys. This is Larry Stavitski on for Seth this morning. Just wanted to ask about the utility business. What, you know, some of the dynamics there in terms of what you're seeing with demand and supply chain and order trends? The Utilities business remains, you know, quite strong. You know, in terms of backlog, we're pretty much covered up for 2023 and looking well into 2024 in the Utilities business, especially in our highly customized units. We're really seeing strength across the segments that we serve. The transmission network, you know, continues to be strong. The independent utilities and public power utilities, their demand remains robust. The rental and contractor segment remains strong. Tree care, given everything that transpired in California, the tree care. Really across all four segments, we're continuing to see strong growth and tailwinds. Supply chain has started to improve there. We were significantly impacted in that business, especially around chassis and bodies, and the sequencing of receiving chassis, bodies, and then the booms that we put on there. We're beginning to see improvement in chassis availability. Body availability has improved as well, and we're beginning to see the hydraulics supply to improve. So we're beginning to see slowly but surely some increased output as supply chain improves in that business. Just very strong market demand across the segments that we compete in. You know, that makes sense as we talk about the electrification and the needs in North America are quite extensive. The investments are significant, and we anticipate that to be a strong market, a multi-year strong market, given the investments required in the electrical grid network just in the United States alone. Canada and Mexico also have to do. We also have, you know, some growth in China associated with that business. All in all, we think that's gonna be a multi-year tailwind given the needs of the electrical grid in that business. We see that in our backlog. Okay, great. That's great color. Appreciate it. Just switching gears a little bit, just in terms of your expectations for price cost neutrality for the year, what are your expectations for steel prices that are embedded in your guide? If you could remind us how you manage, you know, the movement in steel prices? Thanks for the question. We do have a hedging program. We hedge, you know, 60% of our North American HRC steel requirements for our Genie business. It's a rolling program, so we're hedging out and so we're averaging the cost. For the remainder of the year, we're anticipating about a $950 per ton assumption for the remainder of the year. Okay, great. Thanks so much. I appreciate the color. We'll go next to Jamie Cook at Credit Suisse. Hi, good morning. Congrats, on a nice quarter. I mean, most of the questions have been asked. I guess one, you know, Julie, just on the guidance, if you look at the, your guidance, it implies the first quarter is probably the highest EPS quarter, where generally it's the lowest and earnings generally improve, you know, sort of sequentially. Outside of, you know, Monterrey, I'm just trying to understand, why the first quarter would be, you know, one of the highest quarters versus, you know, normal seasonality for your business. Thanks. Thanks for the question. I mean, you know, we increased our sales outlook to, you know, $4.8 billion-$5 billion, you know, which, you know, includes all the latest dialogue with our customers and their suppliers. We anticipate that higher volume because customer demand remains strong, and we saw some slight improvement in supply chain. Our sales are expected though to be relatively consistent in Q2 and Q3 and down slightly in Q4 due to lower production days. We expect our MP sales and margins to be relatively consistent for the remainder of the year. We anticipate AWP sales to be relatively consistent in Q2 and Q3 and down slightly in Q4 due to normal seasonality and lower production days. The AWP margins are expected to be negatively impacted, you know, primarily due to the manufacturing inefficiencies due to those scheduled production moves to our Monterrey facility, that'll have a greater impact in the second half of the year than it does in the second quarter. You know, relatively, you know, that's what we're thinking, that's where we're at. Overall, we're pleased that we were able to increase the outlook and the, and the team executed really well. Okay, great. Thank you. That does conclude our question and answer session. At this time, I would like to turn the conference back over to John Garrison for closing remarks. Thank you, operator. And please, if there are additional questions, we know you have to drop and get on a couple more calls here this morning. If you have additional questions, please follow up with Julie and John or Paritosh, and stay safe, stay healthy, and thank you for your interest in Terex. Operator, please disconnect the call. Thank you. That does conclude today's conference. Again, thank you for your participation. You may now disconnect.