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Terex cuts debt by $600 million, expects $100 million free cash flow
By Devika Patel
Knoxville, Tenn., Feb. 14 – Terex Corp. has reduced its debt by about $600 million in the past year and plans to continue its “disciplined” capital allocation strategy in 2018, which the company’s management expects will result in $100 million of free cash flow.
The company also plans a financial restructuring in 2018.
“We reduced debt by about $600 million, refinanced at the lowest interest rates in the company’s history and returned capital to shareholders [in 2017],” president and chief executive officer John L. Garrison said on the company’s fourth quarter and year ended Dec. 31, 2017 earnings conference call on Wednesday.
“In 2017, we delivered on our commitment to follow our disciplined capital allocation strategy and, in doing so, we dramatically improved our balance sheet, reduced our interest expense and rates and returned $920 million to shareholders through share repurchases,” senior vice president and chief financial officer John D. Sheehan said on the call.
“We are committed to following the same, disciplined capital allocation strategy in 2018,” Sheehan said.
The company expects $100 million of free cash flow in 2018, which includes spending capital on a planned restructuring.
“We expect to nearly double our free cash flow to approximately $100 million,” Sheehan said.
“Importantly, this free cash flow guidance includes spending roughly $46 million on transformation and previously announced restructuring, which will strengthen Terex in 2018 and over the long term,” Sheehan said.
Terex is a Westport, Conn.-based lifting and material handling solutions company.
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