UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 F O R M 10 - Q (Mark One) |X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2001 |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-10702 Terex Corporation (Exact name of registrant as specified in its charter) Delaware 34-1531521 (State of Incorporation) (IRS Employer Identification No.) 500 Post Road East, Suite 320, Westport, Connecticut 06880 (Address of principal executive offices) (203) 222-7170 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------ ------ Number of outstanding shares of common stock: 26.9 million as of May 11, 2001. The Exhibit Index appears on page 30.
INDEX TEREX CORPORATION AND SUBSIDIARIES GENERAL This Quarterly Report on Form 10-Q filed by Terex Corporation ("Terex" or the "Company") includes financial information with respect to the following subsidiaries of the Company (all of which are wholly-owned except PPM Cranes, Inc.) which are guarantors (the "Guarantors") of the Company's $300 million principal amount of 10-3/8% Senior Subordinated Notes due 2011 (the "10-3/8% Notes") and $250 million principal amount of 8-7/8% Senior Subordinated Notes due 2008 (the "8-7/8% Notes"). See Note J to the Company's March 31, 2001 Condensed Consolidated Financial Statements. State or other jurisdiction of I.R.S. employer Guarantor incorporation or organization identification number --------- ----------------------------- --------------------- Terex Cranes, Inc. Delaware 06-1513089 PPM Cranes, Inc. Delaware 39-1611683 Koehring Cranes, Inc. Delaware 06-1423888 Terex-Telelect, Inc. Delaware 41-1603748 Terex-RO Corporation Kansas 44-0565380 Terex Mining Equipment, Inc. Delaware 06-1503634 Payhauler Corp. Illinois 36-3195008 The American Crane Corporation North Carolina 56-1570091 O & K Orenstein & Koppel, Inc. Delaware 58-2084520 Amida Industries, Inc. South Carolina 57-0531390 Cedarapids, Inc. Iowa 42-0332910 Standard Havens, Inc Delaware 43-0913249 Standard Havens Products, Inc. Delaware 43-1435208 BL-Pegson (USA), Inc. Connecticut 31-1629830 Benford America, Inc. Delaware 76-0522879 Coleman Engineering, Inc. Tennessee 62-0949893 EarthKing, Inc. Delaware 06-1572433 Finlay Hydrascreen USA, Inc. New Jersey 22-2776883 Powerscreen Holdings USA, Inc. Delaware 61-1265609 Powerscreen International LLC Delaware 61-1340898 Powerscreen North America Inc. Delaware 61-1340891 Powerscreen USA, LLC Kentucky 31-1515625 Royer Industries, Inc. Pennsylvania 24-0708630 Terex Bartell, Inc. Delaware 34-1325948 Page No. PART I FINANCIAL INFORMATION Item 1 Condensed Consolidated Financial Statements TEREX CORPORATION Condensed Consolidated Statement of Operations -- Three months ended March 31, 2001 and 2000.....................4 Condensed Consolidated Balance Sheet - March 31, 2001 and December 31, 2000......................................5 Condensed Consolidated Statement of Cash Flows -- Three months ended March 31, 2001 and 2000.....................6 Notes to Condensed Consolidated Financial Statements -- March 31, 2001..........................................7 PPM CRANES, INC. Condensed Consolidated Statement of Operations -- Three months ended March 31, 2001 and 2000....................17 Condensed Consolidated Balance Sheet - March 31, 2001 and December 31, 2000.....................................18 Condensed Consolidated Statement of Cash Flows -- Three months ended March 31, 2001 and 2000....................19 Notes to Condensed Consolidated Financial Statements -- March 31, 2001.........................................20 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations.................................22 Item 3 Quantitative and Qualitative Disclosures About Market Risk...........26 2
Page No. PART II OTHER INFORMATION Item 1 Legal Proceedings....................................................27 Item 2 Changes in Securities and Use of Proceeds............................27 Item 3 Defaults Upon Senior Securities......................................27 Item 4 Submission of Matters to a Vote of Security Holders..................27 Item 5 Other Information....................................................27 Item 6 Exhibits and Reports on Form 8-K.....................................28 SIGNATURES....................................................................29 - ---------- EXHIBIT INDEX.................................................................30 - ------------- 3
PART 1. FINANCIAL INFORMATION ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TEREX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) (in millions, except per share data) For the Three Months Ended March 31, --------------------- 2001 2000 ---------- ---------- Net sales..................................................$ 477.4 $ 553.5 Cost of goods sold......................................... 398.8 456.8 ---------- ---------- Gross profit.......................................... 78.6 96.7 Selling, general and administrative expenses............... 40.6 41.7 ---------- ---------- Income from operations................................ 38.0 55.0 Other income (expense): Interest income....................................... 2.0 1.1 Interest expense...................................... (21.0) (26.0) Other income (expense) - net.......................... (0.8) (0.6) ---------- ---------- Income before income taxes and extraordinary items.... 18.2 29.5 Provision for income taxes................................. (5.8) (9.4) ---------- ---------- Income before extraordinary items..................... 12.4 20.1 Extraordinary loss on retirement of debt................... (2.3) --- ---------- ---------- Net income............................................$ 10.1 $ 20.1 ========== ========== Earnings per common share- Basic: Income before extraordinary items...................$ 0.46 $ 0.73 Extraordinary loss on retirement of debt............ ( 0.09) --- ---------- ---------- Net income........................................$ 0.37 $ 0.73 ========== ========== Diluted: Income before extraordinary items...................$ 0.45 $ 0.71 Extraordinary loss on retirement of debt............ (0.08) --- ---------- ---------- Net income........................................$ 0.37 $ 0.71 ========== ========== Weighted average number shares outstanding in per share calculation: Basic............................................... 26.8 27.5 Diluted............................................. 27.4 28.4 The accompanying notes are an integral part of these financial statements. 4
TEREX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) (in millions) March 31, December 31, 2001 2000 ---------- ------------ Assets Current assets Cash and cash equivalents.......................... $ 236.3 $ 181.4 Trade receivables (net of allowance of $7.8 at March 31, 2001 and $6.3 at December 31, 2000).... 371.0 360.2 Inventories........................................ 622.0 598.1 Deferred taxes..................................... 51.0 51.0 Other current assets............................... 51.2 51.7 --------- ---------- Total current assets........................... 1,331.5 1,242.4 Long-term assets Property, plant and equipment - net................ 147.4 153.9 Goodwill........................................... 479.9 491.4 Deferred taxes..................................... 17.4 21.2 Other assets....................................... 90.4 74.8 --------- ---------- Total assets............................................ $2,066.6 $1,983.7 ========= ========== Liabilities and Stockholders' Equity Current liabilities Notes payable and current portion of long-term debt.................................. $ 23.8 $ 20.5 Trade accounts payable............................. 328.5 311.2 Accrued compensation and benefits.................. 29.1 25.9 Accrued warranties and product liability........... 67.3 65.2 Other current liabilities.......................... 142.0 152.8 --------- ---------- Total current liabilities...................... 590.7 575.6 Non-current liabilities Long-term debt, less current portion............... 982.4 882.0 Other.............................................. 72.2 74.6 Commitments and contingencies Stockholders' equity Equity rights...................................... 0.7 0.7 Common stock, $.01 par value - authorized 150.0 shares; issued 27.9....................... 0.3 0.3 Additional paid-in capital......................... 358.9 358.9 Retained earnings.................................. 197.2 187.1 Accumulated other comprehensive income............. (118.8) (78.5) Less cost of shares of common stock in treasury (1.1 shares)........................ (17.0) (17.0) --------- ---------- Total stockholders' equity..................... 421.3 451.5 --------- ---------- Total liabilities and stockholders' equity.............. $2,066.6 $1,983.7 ========= ========== The accompanying notes are an integral part of these financial statements. 5
<TABLE> <CAPTION> TEREX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) (in millions) For the Three Months Ended March 31, --------------------------- 2001 2000 --------------------------- Operating Activities <S> <C> <C> Net income.................................................................... $ 10.1 $ 20.1 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation............................................................. 5.6 5.8 Amortization............................................................. 4.2 5.4 Extraordinary loss on retirement of debt................................. 2.3 --- Gain on sale of fixed assets............................................. (0.1) (0.2) Changes in operating assets and liabilities (net of effects of acquisitions): Trade receivables...................................................... (15.9) 9.3 Inventories............................................................ (33.8) 24.0 Trade accounts payable................................................. 18.6 21.3 Other, net............................................................. (16.6) (15.2) -------------- ------------- Net cash provided by (used in) operating activities................. (25.6) 70.5 -------------- ------------- Investing Activities Acquisition of businesses, net of cash acquired............................... (7.7) (0.3) Capital expenditures.......................................................... (3.6) (5.4) Proceeds from sale of assets.................................................. 0.8 7.7 -------------- ------------- Net cash provided by (used in) investing activities................. (10.5) 2.0 -------------- ------------- Financing Activities Proceeds from issuance of long-term debt, net of issuance costs............... 287.9 --- Principal repayments of long-term debt........................................ (194.2) (2.5) Net repayments under revolving line of credit agreements...................... (0.5) (15.3) Purchase of common stock held in treasury..................................... --- (1.1) Other......................................................................... (0.6) --- -------------- ------------- Net cash provided by (used in) financing activities................. 92.6 (18.9) -------------- ------------- Effect of Exchange Rate Changes on Cash and Cash Equivalents..................... (1.6) (0.7) -------------- ------------- Net Increase in Cash and Cash Equivalents........................................ 54.9 52.9 Cash and Cash Equivalents at Beginning of Period................................. 181.4 133.3 -------------- ------------- Cash and Cash Equivalents at End of Period....................................... $ 236.3 $ 186.2 ============== ============= </TABLE> The accompanying notes are an integral part of these financial statements. 6
TEREX CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 (unaudited) (in millions, unless otherwise noted) NOTE A -- BASIS OF PRESENTATION Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Terex Corporation and subsidiaries as of March 31, 2001 and for the three months ended March 31, 2001 and 2000 have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles to be included in full year financial statements. The accompanying condensed consolidated balance sheet as of December 31, 2000 has been derived from the audited consolidated balance sheet as of that date. The condensed consolidated financial statements include the accounts of Terex Corporation and its majority owned subsidiaries ("Terex" or the "Company"). All material intercompany balances, transactions and profits have been eliminated. In the opinion of management, all adjustments considered necessary for a fair presentation have been made. Such adjustments consist only of those of a normal recurring nature. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. Cash and cash equivalents at March 31, 2001 and December 31, 2000 include $8.1 and $11.7, respectively, which was not immediately available for use. NOTE B -- ACCOUNTING CHANGE - DERIVATIVE FINANCIAL INSTRUMENTS Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," and its related amendment, Statement of Financial Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities" (collectively "SFAS No. 133"). These standards require that all derivative financial instruments be recorded on the consolidated balance sheets at their fair value as either assets or liabilities. Changes in the fair value of derivatives will be recorded each period in earnings or accumulated other comprehensive income, depending on whether a derivative is designated and effective as part of a hedge transaction and, if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in accumulated other comprehensive income will be included in earnings in the periods in which earnings are affected by the hedged item. As of January 1, 2001, the adoption of these new standards resulted in no cumulative effect of an accounting change on net earnings. The cumulative effect of the accounting change increased accumulated other comprehensive income by $0.9, net of income taxes. The Company operates internationally, with manufacturing and sales facilitates in various locations around the world, and utilizes certain financial instruments to manage its foreign currency and interest rate exposures, primarily related to forecasted transactions. To qualify a derivative as a hedge at inception and throughout the hedge period, the Company formally documents the nature and relationships between the hedging instruments and hedged items, as well as its risk-management objectives, strategies for undertaking the various hedge transactions and method of assessing hedge effectiveness. Additionally, for hedges of forecasted transactions, the significant characteristics and expected terms of a forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction would occur. If it were deemed probable that the forecasted transaction will not occur, the gain or loss would be recognized in earnings currently. Financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. The Company does not engage in trading or other speculative use of financial instruments. The Company uses forward contracts and options to mitigate its exposure to changes in foreign currency exchange rates on third-party and inter-company forecasted transactions. The primary currencies to which the Company is exposed include the Euro, British Pound, German Mark, French Franc, Irish Punt, Italian Lira and Australian Dollar. When using options as a hedging instrument, the Company excludes the time value from the assessment of effectiveness. The effective portion of unrealized gains and losses associated with forward 7
contracts and the intrinsic value of option contracts are deferred as a component of accumulated other comprehensive income until the underlying hedged transactions are reported on the Company's consolidated statement of operations. The Company uses interest rates swaps to mitigate its exposure to changes in interest rates related to existing issuances of variable rate debt. Primary exposure includes movements in the U.S. prime rate and London Interbank Offer Rate ("LIBOR"). The effective portion of unrealized gains and losses associated with interest rates swaps and the intrinsic value of swaps are deferred as a component of accumulated other comprehensive income until the underlying hedged transactions are reported on the Company's consolidated statement of operations. During the quarter ended March 31, 2001, ineffectiveness related to cash flow hedges was not material. The Company is hedging forecasted transactions for periods not exceeding the next eighteen months. The Company expects $1.4 reported in accumulated other comprehensive income to be reclassified to the consolidated statement of operations within the next twelve months. During the quarter ended March 31, 2001, accumulated other comprehensive income decreased by $3.0, net of income taxes, which was all due to hedging transactions; there were no amounts reclassified to the consolidated statement of operations. For further information on accounting policies related to derivative financial instruments, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2000. NOTE C -- DEBT ISSUANCE On March 29, 2001, the Company issued and sold $300 aggregate principal amount of 10-3/8% Senior Subordinated Notes Due 2011 (the "10-3/8% Notes"). Additionally, on March 29, 2001, the Company increased the availability under its revolving bank credit facilities maturing March 2004 from $125 to $300. The Company used approximately $194 of the net proceeds from the offering of the 10-3/8% Notes to prepay a portion of its existing term loans. The Company recorded a charge of $2.3, net of income taxes, to recognize a loss on the write-off of unamortized debt acquisition costs for the early extinguishment of debt in connection with the prepayment of such existing term loans. The 10-3/8% Notes were issued in a private placement made in reliance upon an exemption from registration under the Securities Act of 1933, as amended. NOTE D -- INVENTORIES Inventories consist of the following: March 31, December 31, 2001 2000 --------------- --------------- Finished equipment............................ $ 200.8 $ 215.1 Replacement parts............................. 170.7 161.9 Work-in-process............................... 79.4 63.9 Raw materials and supplies.................... 171.1 157.2 -------------- --------------- Inventories................................... $ 622.0 $ 598.1 ============== =============== 8
NOTE E -- PROPERTY, PLANT AND EQUIPMENT Net property, plant and equipment consists of the following: March 31, December 31, 2001 2000 -------------- ------------- Property........................................... $ 23.1 $ 20.8 Plant.............................................. 88.8 87.9 Equipment.......................................... 110.1 118.6 ------------- ------------- 222.0 227.3 Less: Accumulated depreciation.................... (74.6) (73.4) ------------- ------------- Net property, plant and equipment.................. $ 147.4 $ 153.9 ============= ============= NOTE F -- EARNINGS PER SHARE <TABLE> <CAPTION> Three Months Ended March 31, (in millions, except per share data) ------------------------------------------------------------------------- 2001 2000 ------------------------------------------------------------------------- Per-Share Per-Share Income Shares Amount Income Shares Amount ---------- ----------- ----------- ----------- ----------- ------------ Basic earnings per share <S> <C> <C> <C> <C> <C> <C> Income before extraordinary items......$ 12.4 26.8 $ 0.46 $ 20.1 27.5 $ 0.73 Effect of dilutive securities Warrants............................... --- --- --- 0.1 Stock Options.......................... --- 0.5 --- 0.6 Equity Rights.......................... --- 0.1 --- 0.2 ---------- ----------- ----------- ----------- Income before extraordinary items - diluted..............................$ 12.4 27.4 $ 0.45 $ 20.1 28.4 $ 0.71 ========== =========== =========== =========== ============ =========== </TABLE> Options to purchase 540 thousand and 526 thousand shares of common stock were outstanding during the three months ended March 31, 2001 and 2000, respectively, but were not included in the computation of diluted earnings per share because the exercise price of options was greater than the average market price of the common shares and therefore, the effect would be anti-dilutive. NOTE G -- STOCKHOLDER'S EQUITY Total non-shareowner changes in equity (comprehensive income) include all changes in equity during a period except those resulting from investments by, and distributions to, shareowners. The specific components include: net income, deferred gains and losses resulting from foreign currency translation, deferred gains and losses resulting from derivative hedging transactions and minimum pension liability adjustments. For the three months ended March 31, 2001 and March 31, 2000, total non-shareowner changes in equity were as follows. For the Three Months Ended March 31, ---------------------- 2001 2000 --------- ----------- Net income........................................ $ 10.1 $ 20.1 Other comprehensive income: Translation adjustment....................... (38.2) (15.5) Pension liability adjustment................. --- --- Derivative hedging adjustment................ (2.1) --- --------- ----------- Comprehensive income.............................. $ (30.2) $ 4.6 ========= =========== In March 2000, the Company's Board of Directors authorized the purchase of up to 2.0 shares of the Company's outstanding common stock. As of March 31, 2001, the Company had acquired 1.3 shares at a total cost of $20.2. During the fourth 9
quarter of 2000, the Company reissued from Treasury 0.2 shares of its common stock as partial payment for an acquired company. As of March 31, 2001, the Company held 1.1 shares of its common stock in Treasury. NOTE H -- LITIGATION AND CONTINGENCIES The Company is subject to a number of contingencies and uncertainties including product liability claims, self-insurance obligations, tax examinations and guarantees. Many of the exposures are unasserted or proceedings are at a preliminary stage, and it is not presently possible to estimate the amount or timing of any cost to the Company. However, management does not believe that these contingencies and uncertainties will, in the aggregate, have a material adverse effect on the Company. When it is probable that a loss has been incurred and possible to make reasonable estimates of the Company's liability with respect to such matters, a provision is recorded for the amount of such estimate or for the minimum amount of a range of estimates when it is not possible to estimate the amount within the range that is most likely to occur. The Company generates hazardous and nonhazardous wastes in the normal course of its operations. As a result, the Company is subject to a wide range of federal, state, local and foreign environmental laws and regulations, including the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), that (i) govern activities or operations that may have adverse environmental effects, such as discharges to air and water, as well as handling and disposal practices for hazardous and nonhazardous wastes, and (ii) impose liability for the costs of cleaning up, and certain damages resulting from, sites of past spills, disposals or other releases of hazardous substances. Compliance with such laws and regulations has, and will, require expenditures by the Company on a continuing basis. The Company is party to an action commenced in the United States District Court for the District of Delaware by End of Road Trust, a creditor liquidating trust formed to liquidate the assets of Fruehauf Trailer Corporation ("Fruehauf"), a former subsidiary of the Company and currently a reorganized debtor in bankruptcy, and Pension Transfer Corporation, as sponsor and administrator for certain Fruehauf pension plans (collectively, the "Plaintiffs") against the Company and certain former officers and directors of Fruehauf and Terex (collectively, the "Defendants"). The Plaintiffs allege, in essence, that the Defendants breached fiduciary duties owed to Fruehauf and made certain misrepresentations in connection with certain accounting matters arising from the Company's 1989 acquisition of Fruehauf and the 1991 initial public offering of Fruehauf stock, and that the Defendants were unjustly enriched thereby. Plaintiffs also allege that certain pension investments made on behalf of the Fruehauf pension plans violated ERISA. The action is currently in the early stages of discovery. The Company believes that it has meritorious defenses and that the outcome of the case will not have a material adverse effect on the Company's operations. NOTE I -- BUSINESS SEGMENT INFORMATION The Company operates primarily in two industry segments: Terex Lifting and Terex Earthmoving. Included in Other are the results of Amida Industries, Inc., Terex Bartell, Ltd. and Terex Bartell Inc., as well as the results of Coleman Engineering, Inc. since October 23, 2000, its date of acquisition, as well as general and corporate items for the three months ended March 31, 2001 and 2000. Industry segment information is presented below: Three Months Ended March 31, ------------------------- 2001 2000 ------------ ------------ Sales Terex Lifting...................................... $ 192.2 $ 223.7 Terex Earthmoving.................................. 271.0 316.2 Other.............................................. 14.2 13.6 ------------ ------------ Total............................................ $ 477.4 $ 553.5 ============ ============ Income (Loss) from Operations Terex Lifting...................................... $ 15.2 $ 22.5 Terex Earthmoving.................................. 22.9 31.4 Other.............................................. (0.1) 1.1 ------------ ------------ Total............................................ $ 38.0 $ 55.0 ============ ============ 10
NOTE J -- CONSOLIDATING FINANCIAL STATEMENTS On March 29, 2001, the Company issued and sold the 10-3/8% Notes. On March 31, 1998 and March 9, 1999, the Company issued and sold $150 aggregate principal amount and $100 aggregate principal amount, respectively, of 8-7/8% Senior Subordinated Notes due 2008 (the "8-7/8% Notes"). The 10-3/8% Notes and 8-7/8% Notes are each jointly and severally guaranteed by the following wholly-owned subsidiaries of the Company (the "Wholly-owned Guarantors"): Terex Cranes, Inc., Koehring Cranes, Inc., Terex-Telelect, Inc., Terex-RO Corporation, Terex Mining Equipment, Inc., Payhauler Corp., O & K Orenstein & Koppel, Inc., The American Crane Corporation, Amida Industries, Inc., Cedarapids, Inc., Standard Havens, Inc., Standard Havens Products, Inc., BL-Pegson (USA), Inc., Benford America, Inc., Coleman Engineering, Inc., EarthKing, Inc., Finlay Hydrascreen USA, Inc., Powerscreen Holdings USA, Inc., Powerscreen International LLC, Powerscreen North America Inc., Powerscreen USA, LLC, Royer Industries, Inc. and Terex Bartell, Inc. The 10-3/8% Notes and the 8-7/8% Notes are each also jointly and severally guaranteed by PPM Cranes, Inc., which is 92.4% owned by Terex. The following summarized condensed consolidating financial information for the Company segregates the financial information of Terex Corporation, the Wholly-owned Guarantors, PPM Cranes, Inc. and the Non-guarantor Subsidiaries. Terex Corporation consists of parent company operations. Subsidiaries of the parent company are reported on the equity basis. Wholly-owned Guarantors combine the operations of the Wholly-owned Guarantor subsidiaries. Subsidiaries of Wholly-owned Guarantors that are not themselves guarantors are reported on the equity basis. PPM Cranes, Inc. consists of the operations of PPM Cranes, Inc. Its subsidiary is reported on the equity basis. Non-guarantor Subsidiaries combine the operations of subsidiaries which have not provided a guarantee of the obligations of Terex Corporation under the 10-3/8% Notes and the 8-7/8% Notes. Debt and Goodwill allocated to subsidiaries is presented on an accounting "push-down" basis. 11
<TABLE> <CAPTION> TEREX CORPORATION CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2001 (in millions) Wholly- Non- Terex owned PPM guarantor Intercompany Corporation Guarantors Cranes, Inc. Subsidiaries Eliminations Consolidated ------------- ------------- ------------- ------------- ------------- ------------- <S> <C> <C> <C> <C> <C> <C> Net sales............................... $ 48.2 $ 193.2 $ 12.3 $ 223.7 $ --- $ 477.4 Cost of goods sold................... 46.7 164.0 10.9 177.2 --- 398.8 ------------- ------------- ------------- ------------- ------------- ------------- Gross profit............................ 1.5 29.2 1.4 46.5 --- 78.6 Selling, general & administrative 5.2 10.7 2.2 22.5 --- 40.6 expenses ------------- ------------- ------------- ------------- ------------- ------------- Income (loss) from operations........... (3.7) 18.5 (0.8) 24.0 --- 38.0 Interest income....................... 1.5 0.1 --- 0.4 --- 2.0 Interest expense...................... (4.2) (2.9) (1.6) (12.3) --- (21.0) Gain on sale of businesses............ --- --- --- --- --- --- Income (loss) from equity investees... 21.6 --- --- (0.1) (21.5) --- Other income (expense) - net.......... 0.5 (0.2) --- (1.1) --- (0.8) ------------- ------------- ------------- ------------- ------------- ------------- Income (loss) from continuing operations 15.7 15.5 (2.4) 10.9 (21.5) 18.2 before income taxes and extraordinary items................................. Provision for income taxes............ (4.6) --- --- (1.2) --- (5.8) ------------- ------------- ------------- ------------- ------------- ------------- Income (loss) from continuing operations 11.1 15.5 (2.4) 9.7 (21.5) 12.4 before extraordinary items............ Extraordinary loss on retirement of debt (1.0) (0.6) --- (0.7) --- (2.3) ------------- ------------- ------------- ------------- ------------- ------------- Net income (loss)....................... $ 10.1 $ 14.9 $ (2.4) $ 9.0 $ (21.5) $ 10.1 ============= ============= ============= ============= ============= ============= </TABLE> <TABLE> <CAPTION> TEREX CORPORATION CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2000 (in millions) Wholly- Non- Terex owned PPM guarantor Intercompany Corporation Guarantors Cranes, Inc. Subsidiaries Eliminations Consolidated ------------- ------------- ------------- ------------- ------------- ------------- <S> <C> <C> <C> <C> <C> <C> Net sales............................... $ 93.7 $ 171.2 $ 11.9 $ 312.2 $ (35.5) $ 553.5 Cost of goods sold................... 81.3 144.3 10.6 256.9 (36.3) 456.8 ------------- ------------- ------------- ------------- ------------- ------------- Gross profit............................ 12.4 26.9 1.3 55.3 0.8 96.7 Selling, general & administrative 5.3 9.4 1.4 25.6 --- 41.7 expenses ------------- ------------- ------------- ------------- ------------- ------------- Income (loss) from operations........... 7.1 17.5 (0.1) 29.7 0.8 55.0 Interest income....................... 0.6 0.1 --- 0.4 --- 1.1 Interest expense...................... (6.1) (4.9) (1.3) (13.7) --- (26.0) Income (loss) from equity investees... 25.5 (0.1) --- (2.7) (22.7) --- Other income (expense) - net.......... 1.0 (0.5) --- (1.1) --- (0.6) ------------- ------------- ------------- ------------- ------------- ------------- Income (loss) from continuing operations 28.1 12.1 (1.4) 12.6 (21.9) 29.5 before income taxes and extraordinary items................................. Provision for income taxes............ (8.0) (0.1) --- (1.3) --- (9.4) ------------- ------------- ------------- ------------- ------------- ------------- Income (loss) from continuing operations 20.1 12.0 (1.4) 11.3 (21.9) 20.1 before extraordinary items............ Extraordinary loss on retirement of debt --- --- --- --- --- --- ------------- ------------- ------------- ------------- ------------- ------------- Net income (loss)....................... $ 20.1 $ 12.0 (1.4) 11.3 (21.9) $ 20.1 ============= ============= ============= ============= ============= ============= </TABLE> 12
<TABLE> <CAPTION> TEREX CORPORATION CONDENSED CONSOLIDATING BALANCE SHEET MARCH 31, 2001 (in millions) Wholly- Non- Terex owned PPM guarantor Intercompany Corporation Guarantors Cranes, Inc. Subsidiaries Eliminations Consolidated -------------- ------------- ------------- ------------ -------------- -------------- <S> <C> <C> <C> <C> <C> <C> Assets Current assets Cash and cash equivalents.......... $ 162.1 $ 0.5 $ 0.2 $ 73.5 $ --- $ 236.3 Trade receivables.................. 14.2 120.7 7.3 228.8 --- 371.0 Intercompany receivables........... 37.1 29.9 16.0 79.2 (162.2) --- Inventories........................ 80.2 201.9 17.5 329.4 (7.0) 622.0 Current deferred tax assets........ 50.5 0.5 --- --- --- 51.0 Other current assets............... 7.7 2.1 1.0 40.4 --- 51.2 ------------- ------------- ------------- ------------- ------------- ------------- Total current assets............. 351.8 355.6 42.0 751.3 (169.2) 1,331.5 Long-term assets Property, plant and equipment - net 9.2 47.0 0.5 90.7 --- 147.4 Investment in and advances to (from) subsidiaries.............. 362.4 (142.8) (1.1) (141.7) (76.8) --- Deferred taxes..................... 17.4 --- --- --- --- 17.4 Goodwill........................... 7.0 173.4 11.6 287.9 --- 479.9 Other assets....................... 21.4 40.7 0.7 27.6 --- 90.4 ------------- ------------- ------------- ------------- ------------- ------------- Total assets............................ $ 769.2 $ 473.9 $ 53.7 $ 1,015.8 $ (246.0) $ 2,066.6 ============= ============= ============= ============= ============= ============= Liabilities and stockholders' equity (deficit) Current liabilities Notes payable and current portion of long-term debt................ $ 0.6 $ 0.2 $ 0.5 $ 22.5 $ --- $ 23.8 Trade accounts payable............. 30.1 83.8 9.8 204.8 --- 328.5 Intercompany payables.............. 3.6 45.6 11.1 101.9 (162.2) --- Accruals and other current liabilities...................... 70.4 39.1 8.0 120.9 --- 238.4 ------------- ------------- ------------- ------------- ------------- ------------- Total current liabilities........ 104.7 168.7 29.4 450.1 (162.2) 590.7 Non-current liabilities Long-term debt, less current portion 228.4 173.7 62.6 517.7 --- 982.4 Other.............................. 14.8 15.6 0.7 41.1 --- 72.2 Stockholders' equity (deficit)....... 421.3 115.9 (39.0) 6.9 (83.8) 421.3 ------------- ------------- ------------- ------------- ------------- ------------- Total liabilities and stockholders' equity (deficit)..................... $ 769.2 $ 473.9 $ 53.7 $ 1,015.8 $ (246.0) $ 2,066.6 ============= ============= ============= ============= ============= ============= </TABLE> 13
<TABLE> <CAPTION> TEREX CORPORATION CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2000 (in millions) Wholly- Non- Terex owned PPM guarantor Intercompany Corporation Guarantors Cranes, Inc. Subsidiaries Eliminations Consolidated ------------- ------------- ------------- ------------- ------------- ------------- <S> <C> <C> <C> <C> <C> <C> Assets Current assets Cash and cash equivalents.......... $ 108.7 $ 0.3 $ 0.1 $ 72.3 $ --- $ 181.4 Trade receivables.................. 22.2 70.7 8.7 258.6 --- 360.2 Intercompany receivables........... 36.4 28.9 17.5 60.7 (143.5) --- Inventories........................ 75.2 157.0 16.3 360.4 (10.8) 598.1 Current deferred tax assets........ 51.0 --- --- --- --- 51.0 Other current assets............... 4.5 1.6 0.3 45.3 --- 51.7 ------------- ------------- ------------- ------------- ------------- ------------- Total current assets............. 298.0 258.5 42.9 797.3 (154.3) 1,242.4 Long-term assets Property, plant and equipment - net 12.7 40.7 0.6 99.9 --- 153.9 Investment in and advances to (from) subsidiaries............ 346.1 (117.6) (1.5) (137.3) (89.7) --- Deferred taxes..................... 21.2 --- --- --- --- 21.2 Goodwill........................... 11.1 168.1 11.9 300.3 --- 491.4 Other assets....................... 8.1 35.2 0.7 30.8 --- 74.8 ------------- ------------- ------------- ------------- ------------- ------------- Total assets............................ $ 697.2 $ 384.9 $ 54.6 $ 1,091.0 $ (244.0) $ 1,983.7 ============= ============= ============= ============= ============= ============= Liabilities and stockholders' equity (deficit) Current liabilities Notes payable and current portion of long-term debt................ $ 0.8 $ --- $ 0.5 $ 19.2 $ --- $ 20.5 Trade accounts payable............. 32.7 57.0 10.2 211.3 --- 311.2 Intercompany payables.............. 3.8 15.2 9.3 115.2 (143.5) --- Accruals and other current liabilities...................... 74.8 35.7 7.4 126.0 --- 243.9 ------------- ------------- ------------- ------------- ------------- ------------- Total current liabilities........ 112.1 107.9 27.4 471.7 (143.5) 575.6 Non-current liabilities Long-term debt, less current portion 117.0 163.9 62.6 538.5 --- 882.0 Other.............................. 16.6 12.1 1.2 44.7 --- 74.6 Stockholders' equity (deficit)....... 451.5 101.0 (36.6) 36.1 (100.5) 451.5 ------------- ------------- ------------- ------------- ------------- ------------- Total liabilities and stockholders' equity (deficit)..................... $ 697.2 $ 384.9 $ 54.6 $ 1,091.0 $ (244.0) $ 1,983.7 ============= ============= ============= ============= ============= ============= </TABLE> 14
<TABLE> <CAPTION> TEREX CORPORATION CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2001 (in millions) Wholly- Non- Terex owned PPM guarantor Intercompany Corporation Guarantors Cranes, Inc. Subsidiaries Eliminations Consolidated ------------- ------------- ------------- ------------- ------------- -------------- <S> <C> <C> <C> <C> <C> <C> Net cash provided by (used in) operating activities................. $ (28.3) $ (20.1) $ 0.1 $ 22.7 $ --- $ (25.6) ------------- ------------- ------------- ------------- ------------- ------------- Cash flows from investing activities Acquisition of businesses, net of cash acquired...................... (2.6) --- --- (5.1) --- (7.7) Capital expenditures................. (0.8) (1.2) --- (1.6) --- (3.6) Proceeds from sale of excess assets.. --- --- --- 0.8 --- 0.8 ------------- ------------- ------------- ------------- ------------- ------------- Net cash provided by (used in) investing activities.............. (3.4) (1.2) --- (5.9) --- (10.5) ------------- ------------- ------------- ------------- ------------- ------------- Cash flows from financing activities Proceeds from issuance of long-term debt, net of issuance costs....... 123.8 74.9 --- 89.2 --- 287.9 Principal repayments of long-term debt (38.5) (53.4) --- (102.3) --- (194.2) Net repayments under revolving line of credit agreements............... --- --- --- (0.5) --- (0.5) Other................................ (0.2) --- --- (0.4) --- (0.6) ------------- ------------- ------------- ------------- ------------- ------------- Net cash provided by (used in) financing activities............. 85.1 21.5 --- (14.0) --- 92.6 ------------- ------------- ------------- ------------- ------------- ------------- Effect of exchange rates on cash and --- --- --- (1.6) (1.6) cash equivalents..................... --- ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in cash and cash 53.4 0.2 0.1 1.2 54.9 equivalents.......................... --- Cash and cash equivalents, beginning of period............................... 108.7 0.3 0.1 72.3 --- 181.4 ------------- ------------- ------------- ------------- ------------- ------------- Cash and cash equivalents, end of period........................ $ 162.1 $ 0.5 $ 0.2 $ 73.5 $ --- $ 236.3 ============= ============= ============= ============= ============= ============= </TABLE> 15
<TABLE> <CAPTION> TEREX CORPORATION CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2000 (in millions) Wholly- Non- Terex owned PPM guarantor Intercompany Corporation Guarantors Cranes, Inc. Subsidiaries Eliminations Consolidated ------------- ------------- ------------- ------------ -------------- -------------- <S> <C> <C> <C> <C> <C> <C> Net cash provided by (used in) operating activities................. $ 85.9 $ (4.3) $ 0.1 $ (11.2) $ --- $ 70.5 ------------- ------------- ------------- ------------- ------------- ------------- Cash flows from investing activities Acquisition of businesses, net of cash acquired...................... --- (0.1) --- (0.2) --- (0.3) Capital expenditures................. (0.9) (1.6) --- (2.9) --- (5.4) Proceeds from sale of assets......... --- 6.6 --- 1.1 --- 7.7 ------------- ------------- ------------- ------------- ------------- ------------- Net cash provided by (used in) investing activities........... (0.9) 4.9 --- (2.0) --- 2.0 ------------- ------------- ------------- ------------- ------------- ------------- Cash flows from financing activities Principal repayments of long-term debt (2.5) --- --- --- --- (2.5) Net incremental borrowings (repayments) under revolving line of credit agreements --- --- --- (15.3) --- (15.3) Purchase of common stock held in treasury........................... (1.1) --- --- --- --- (1.1) Other................................ --- --- --- --- --- --- ------------- ------------- ------------- ------------- ------------- ------------- Net cash provided by (used in) financing activities............. (3.6) --- --- (15.3) --- (18.9) ------------- ------------- ------------- ------------- ------------- ------------- Effect of exchange rates on cash and cash equivalents..................... --- --- --- (0.7) --- (0.7) ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in cash and cash equivalents.......................... 81.4 0.6 0.1 (29.2) --- 52.9 Cash and cash equivalents, beginning of period............................... 64.3 1.7 0.1 67.2 --- 133.3 ------------- ------------- ------------- ------------- ------------- ------------- Cash and cash equivalents, end of period........................ $ 145.7 $ 2.3 $ 0.2 $ 38.0 $ --- $ 186.2 ============= ============= ============= ============= ============= ============= </TABLE> 16
PPM CRANES, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) (in millions) For the Three Months Ended March 31, --------------------------- 2001 2000 ------------- ------------- Net sales............................................$ 12.3 $ 11.9 Cost of goods sold................................... 10.9 10.6 ------------- ------------- Gross profit.................................... 1.4 1.3 Selling, general and administrative expenses......... 2.2 1.4 ------------- ------------- Income from operations.......................... (0.8) (0.1) Other income (expense): Interest expense................................ (1.6) (1.3) Amortization of debt issuance costs............. --- --- ------------- ------------- Loss before income taxes............................. (2.4) (1.4) Provision for income taxes........................... --- --- ------------- ------------- Net loss.............................................$ (2.4) $ (1.4) ============= ============= The accompanying notes are an integral part of these financial statements. 17
<TABLE> <CAPTION> PPM CRANES, INC. CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) (in millions, except share amounts) March 31, December 31, 2001 2000 ---------------- --------------- <S> <C> <C> ASSETS Current assets: Cash and cash equivalents........................................... $ 0.2 $ 0.1 Trade accounts receivables (net of allowance of $0.7 at March 31, 2001 and $0.6 at December 31, 2000)............................... 7.3 8.7 Inventories......................................................... 17.5 16.3 Due from affiliates................................................. 16.0 17.5 Other current assets ............................................... 1.0 0.3 ---------------- ----------------- Total current assets.............................................. 42.0 42.9 Long-term assets: Property, plant and equipment - net................................. 0.5 0.6 Goodwill............................................................ 11.6 11.9 Other assets........................................................ 0.7 0.7 ---------------- ----------------- Total assets........................................................... $ 54.8 $ 56.1 ================ ================= LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Trade accounts payable.............................................. $ 9.8 $ 10.2 Accrued warranties and product liability............................ 5.7 5.5 Accrued expenses.................................................... 2.3 1.9 Due to affiliates................................................... 11.1 9.3 Due to Terex Corporation............................................ 1.1 1.7 Current portion of long-term debt................................... 0.5 0.5 ---------------- ----------------- Total current liabilities......................................... 30.5 29.1 ---------------- ----------------- Non-current liabilities: Long-term debt, less current portion................................ 62.6 62.6 Other............................................................... 0.7 1.0 ---------------- ----------------- Total non-current liabilities..................................... 63.3 63.6 ---------------- ----------------- Commitments and contingencies Shareholders' deficit Common stock, Class A, $.01 par value - authorized 8,000 shares; issued and outstanding 5,000 shares...... --- --- Common stock, Class B, $.01 par value - authorized 2,000 shares; issued and outstanding 413 shares........ --- --- Accumulated deficit................................................. (39.0) (36.6) Accumulated other comprehensive income.............................. --- --- ---------------- ----------------- Total shareholders' deficit...................................... (39.0) (36.6) ---------------- ----------------- Total liabilities and shareholders' deficit............................ $ 54.8 $ 56.1 ================ ================= </TABLE> The accompanying notes are an integral part of these financial statements. 18
PPM CRANES, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) (in millions) <TABLE> <CAPTION> For the Three Months Ended March 31, -------------------------- 2001 2000 ------------- ------------ <S> <C> <C> OPERATING ACTIVITIES Net loss..................................................................... $ (2.4) $ (1.4) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation and amortization............................................ 0.4 0.3 Changes in operating assets and liabilities: Trade accounts receivable.............................................. 1.4 5.1 Inventories............................................................ (1.2) (4.7) Trade accounts payable................................................. (0.4) 2.0 Net amounts due to affiliates.......................................... 2.7 (1.8) Other, net............................................................. (0.4) 0.6 ------------- -------------- Net cash provided by operating activities............................ 0.1 0.1 INVESTING ACTIVITIES Net cash used in investing activities...................................... --- --- FINANCING ACTIVITIES Net cash used in financing activities...................................... --- --- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS.................................................... --- --- ------------- -------------- 0.1 0.1 NET INCREASE IN CASH AND CASH EQUIVALENTS....................................... CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................ 0.1 0.1 ------------- -------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD...................................... $ 0.2 $ 0.2 ============= ============== </TABLE> The accompanying notes are an integral part of these financial statements. 19
PPM CRANES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 (unaudited) (in millions unless otherwise denoted) NOTE 1 -- Description of the Business and Basis of Presentation PPM Cranes, Inc. (sometimes referred to as Terex Cranes - Conway Operations) (the "Company" or "PPM") is engaged in the design, manufacture, marketing and worldwide distribution and support of construction equipment, primarily hydraulic cranes and related spare parts. On May 9, 1995, Terex Corporation, through its wholly-owned subsidiary Terex Cranes, Inc., a Delaware corporation, completed the acquisition of all of the capital stock of Legris Industries, Inc., a Delaware corporation, which then owned 92.4% of the capital stock of PPM Cranes, Inc. The condensed consolidated financial statements reflect Terex Corporation's basis in the assets and liabilities of the Company which was accounted for as a purchase transaction. As a result, the debt and goodwill associated with the acquisition have been "pushed down" to the Company's financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been made. Such adjustments consist only of those of a normal recurring nature. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001. For further information, refer to the Company's consolidated financial statements and footnotes thereto for the year ended December 31, 2000. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned inactive subsidiary, PPM Far East Pte. Ltd. All material intercompany transactions and profits have been eliminated. NOTE 2 -- Inventories Inventories consist of the following: March 31, December 31, 2001 2000 ---------------- ---------------- Finished equipment......................... $ 6.2 $ 4.4 Replacement parts.......................... 5.9 6.2 Work in process............................ 1.5 0.7 Raw materials and supplies................. 3.9 5.0 ---------------- ----------------- $ 17.5 $ 16.3 ================ ================= note 3 -- Property, Plant and Equipment Net property, plant and equipment consists of the following: March 31, December 31, 2001 2000 ----------------- --------------- Property, plant and equipment.............. $ 0.8 $ 0.8 Less: Accumulated depreciation............ (0.3) (0.2) ----------------- --------------- Net property, plant and equipment.......... $ 0.5 $ 0.6 ================= =============== 20
NOTE 4 - COMMITMENTS AND Contingencies The Company is involved in product liability and other lawsuits incident to the operation of its business. Insurance with third parties is maintained for certain of these items. It is management's opinion that none of these lawsuits will have a materially adverse effect on the Company's financial position. On March 29, 2001, Terex Corporation issued and sold $300 aggregate principal amount of 10-3/8% Senior Subordinated Notes Due 2011 (the "10-3/8% Notes"). On March 31, 1998 and March 9, 1999, Terex Corporation issued and sold $150 aggregate principal amount and $100 aggregate principal amount, respectively, of 8-7/8% Senior Subordinated Notes due 2008 (the "8-7/8% Notes"). The 10-3/8% Notes and the 8-7/8% Notes are each jointly and severally guaranteed by certain domestic subsidiaries of Terex Corporation, including PPM. NOTE 5 - RELATED PARTY TRANSACTIONS During the three months ended March 31, 2001 and 2000, the Company had transactions with various unconsolidated affiliates as follows: Three Months Ended March 31, ---------------------------- 2001 2000 ------------ -------------- Product sales and service revenues $ --- $ 0.3 Management fee expense $ 0.3 $ 0.3 Interest expense $ 1.4 $ 1.3 Included in management fee expenses are expenses paid by Terex Corporation on behalf of the Company (e.g. legal, treasury and tax services expense). 21
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company operates primarily in two industry segments: Terex Lifting and Terex Earthmoving. The 2001 results for Terex Earthmoving include the operations of Jaques International and its affiliates (collectively the "Jaques Group") and Fermec Manufacturing Limited ("Fermec") since January 24, 2001 and December 28, 2000, their respective dates of acquisition. The 2000 results for Terex Lifting include the operations of Moffett Engineering Limited and the Company's Princeton/Kooi division (collectively the "Truck-mounted Forklift Business") which were sold on September 30, 2000. Included in Other are the results of the operations of Amida Industries, Inc. ("Amida"), Terex Bartell, Ltd. and Terex Bartell, Inc. (collectively "Bartell") as well as Coleman Engineering, Inc. ("Coleman"), since October 23, 2000, its date of acquisition, as well as general and corporate items for the three months ended March 31, 2001 and 2000. Three Months Ended March 31, 2001 Compared with the Three Months Ended March 31, 2000 The table below is a comparison of net sales, gross profit, selling, general and administrative expenses, and income from operations, by segment, for the three months ended March 31, 2001 and 2000. <TABLE> <CAPTION> Three Months Ended March 31, Increase --------------------------- 2001 2000 (Decrease) ------------- ------------- -------------- <S> <C> <C> <C> NET SALES Terex Lifting.....................................$ 192.2 $ 223.7 $ (31.5) Terex Earthmoving................................. 271.0 316.2 (45.2) Other............................................. 14.2 13.6 0.6 ------------- ------------- -------------- Total...........................................$ 477.4 $ 553.5 $ (76.1) ============= ============= ============== GROSS PROFIT Terex Lifting.....................................$ 29.0 $ 38.6 $ (9.6) Terex Earthmoving................................. 47.2 55.6 (8.4) Other............................................. 2.4 2.5 (0.1) ------------- ------------- -------------- Total...........................................$ 78.6 $ 96.7 $ (18.1) ============= ============= ============== SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Terex Lifting.....................................$ 13.8 $ 16.1 $ (2.3) Terex Earthmoving................................. 24.3 24.2 0.1 Other............................................. 2.5 1.4 1.1 ------------- ------------- -------------- Total...........................................$ 40.6 $ 41.7 $ (1.1) ============= ============= ============== INCOME FROM OPERATIONS Terex Lifting.....................................$ 15.2 $ 22.5 $ (7.3) Terex Earthmoving................................. 22.9 31.4 (8.5) Other............................................. (0.1) 1.1 (1.2) ------------- ------------- -------------- Total...........................................$ 38.0 $ 55.0 $ (17.0) ============= ============= ============== </TABLE> Net Sales Sales decreased $76.1 million, or approximately 14%, to $477.4 million for the three months ended March 31, 2001 over the comparable 2000 period. The net impact of acquisitions and divestitures were minimal on the comparison as the first quarter of 2001 included approximately $30 million of sales related to businesses acquired since the first quarter of 2000 and the three months ended March 31, 2000 included approximately $26 million of sales related to the Truck-mounted Forklift Business which was divested in September 2000. 22
Terex Lifting's sales were $192.2 million for the three months ended March 31, 2001, a decrease of $31.5 million or approximately 14% from $223.7 million for the three months ended March 31, 2000. Excluding sales of the Truck-mounted Forklift Business in the first quarter of 2000, net sales in the first quarter of 2001 were down approximately 3% from the first quarter of 2000. The decline in sales was due largely to weaker performance in the material handler business and the aerial work platform business. Terex Lifting's backlog was $112.8 million at March 31, 2001 and $181.8 million at March 31, 2000. The decrease in backlog is consistent with the weak performance in the material handler and aerial work platform businesses and was also impacted by the divestiture of the Truck-mounted Forklift Business. Backlog does not include any significant parts orders, which are normally filled in the period ordered. The sales mix was approximately 13% parts for the three months ended March 31, 2001 and 2000. Terex Earthmoving's sales were $271.0 million for the three months ended March 31, 2001, a decrease of $45.2 million from $316.2 million for the three months ended March 31, 2000. Excluding the impact of acquired businesses, sales decreased approximately $75 million, which was due primarily to the decline in the mining and in the articulated and rigid truck businesses. Backlog was $71.4 million at March 31, 2001 compared to $209.5 million at March 31, 2000. The decrease in backlog is primarily due to the decline in the mining and the articulated and rigid truck businesses and improvements in delivery performance and lead-times within the Company's crushing and screening business. The sales mix was approximately 22% parts for the three months ended March 31, 2001 compared to 19% parts for the comparable 2000 period, reflecting the decrease in machine sales. Net sales for Other in the three months ended March 31, 2001 consists of sales from Amida, Bartell and Coleman. In 2000, net sales for Other consisted of sales from Amida and Bartell and service revenues generated by Terex's parts distribution center for services provided to a third party. Gross Profit Gross profit for the three months ended March 31, 2001 decreased $18.1 million versus the comparable 2000 period, or approximately 19%, to $78.6 million. The decrease in gross profit is a combination of a decrease in sales compounded by lower gross profit percentages in both the Terex Lifting and Terex Earthmoving businesses. Terex Lifting's gross profit decreased $9.6 million to $29.0 million for the three months ended March 31, 2001, compared to $38.6 million for the three months ended March 31, 2000. Excluding the results of the Truck-mounted Forklift Business in the first quarter of 2000, gross profit in the first quarter of 2001 decreased $3.1 million from the first quarter of 2000. The decrease in gross profit was a result primarily of weak performance in the material handler business and the aerial work platform business. Gross profit as a percentage of sales decreased to 15.1% from 16.3% in 2000, excluding the results of the Truck-mounted Forklift Business. This decrease was due primarily to the sale of used equipment at reduced margins in Europe. Terex Earthmoving's gross profit decreased approximately 15% or $8.4 million to $47.2 million for the three months ended March 31, 2001, compared to $55.6 million for the three months ended March 31, 2000. The decrease in gross profit is due primarily to the decline in sales in the mining and in the articulated and rigid truck businesses. The gross margin percentage remained relatively flat at 17.4% in the three months ended March 31, 2001 as compared to 17.6% in 2000. Excluding the impact of acquired businesses, gross margin percentage increased to 18.0% in the three months ended March 31, 2001 over the comparable 2000 period. Selling, General and Administrative Expenses Selling, general and administrative expenses decreased to $40.6 million for the three months ended March 31, 2001 from $41.7 million for the three months ended March 31, 2000, principally reflecting the effect of the divestiture of the Truck-mounted Forklift Business and continued cost control within Terex Lifting and Terex Earthmoving businesses, offset somewhat by the businesses acquired in late 2000 and early 2001 and the Company's investments in its new EarthKing subsidiary, an independent e-commerce company that provides new tools for equipment owners and operators to maximize their return on investment. As a percentage of sales, selling, general and administrative expenses increased to 8.5% for the three months ended March 31, 2001 as compared to 7.5% for the three months ended March 31, 2000, as a result of decreased sales. Terex Lifting's selling, general and administrative expenses decreased to $13.8 million for the three months ended March 31, 2001 from $16.1 million for the three months ended March 31, 2000. This decrease in selling, general and administrative expenses was principally due to the sale of the Truck-mounted Forklift Business. As a percentage of sales, selling, general and administrative expenses for the quarter remained unchanged at 7.2% in the three months ending March 31, 2001 and 2000. 23
Terex Earthmoving's selling, general and administrative expenses increased slightly to $24.3 million for the three months ended March 31, 2001, from $24.2 million for the comparable period in 2000, principally due to the impact of the businesses acquired in late 2000 and early 2001 offsetting cost reductions at other business units. Absent acquired businesses, selling, general and administrative expenses would have been lower by approximately 10%. As a percentage of sales, selling, general and administrative expenses increased to 9.0% for the three months ended March 31, 2001, as compared to 7.7% in the comparable 2000 period, principally due to the lower sales volume. Selling, general and administrative expenses for Other increased $1.1 million to $2.5 million in the three months ended March 31, 2001 from $1.4 million in the comparable 2000 period. The increase in 2001 primarily reflects the Company's investments in its new EarthKing subsidiary. Income from Operations On a consolidated basis, the Company had income from operations of $38.0 million, or 8.0% of sales, for the three months ended March 31, 2001, compared to income from operations of $55.0 million, or 9.9% of sales, for the three months ended March 31, 2000. Terex Lifting's income from operations of $15.2 million for the three months ended March 31, 2001 decreased by $7.3 million versus the three months ended March 31, 2000. The decrease was due to the impact on operating income of the divestiture of the Truck-mounted Forklift Business, as well as weak performance in the material handler business and the aerial work platform business. Income from operations as a percentage of sales decreased to 7.9% for the three months ended March 31, 2001, from 10.1% (9.4% excluding the Truck-mounted Forklift Business) for the comparable 2000 period. Terex Earthmoving's income from operations decreased by $8.5 million to $22.9 million, or 8.5% of sales, for the three months ended March 31, 2001 from $31.4 million, or 9.9% of sales, for the three months ended March 31, 2000. The decrease in income from operations and operating margins is primarily due to the decline in sales. Excluding the businesses acquired in late 2000 and early 2001, operating margin was 8.9% for the three months ended March 31, 2001. Income from operations for Other decreased $1.2 million to a loss of $0.1 million in the three months ended March 31, 2001 from income of $1.1 million in the comparable 2000 period. The decrease in the three months ended March 31, 2001 primarily reflects the Company's investments in its new EarthKing subsidiary. Net Interest Expense During the three months ended March 31, 2001, the Company's net interest expense decreased $5.9 million to $19.0 million from $24.9 million for the comparable 2000 period. This decrease was primarily due to lower debt levels and lower interest rates in the three months ended March 31, 2001 versus the comparable period in 2000. Extraordinary Items During the three months ended March 31, 2001, the Company recorded a charge of $2.3 million, net of income taxes, to recognize a loss on the write-off of unamortized debt acquisition costs for the early extinguishment of debt in connection with the prepayment of principal of certain term loans under the Company's bank credit facilities. LIQUIDITY AND CAPITAL RESOURCES Net cash of $25.6 million was used in operating activities during the three months ended March 31, 2001. Approximately $31 million was invested in working capital, primarily in the tower crane and crushing and screening businesses. Net cash used in investing activities was $10.5 million during the three months ended March 31, 2001 and primarily represents the acquisition of the Jaques Group and capital expenditures. Net cash provided by financing activities was $92.6 million during the three months ended March 31, 2001, which primarily represents the net proceeds from the issuance of $300 million aggregate principal amount of 10-3/8% Senior Subordinated Notes due 2011 (the "10-3/8% Notes"), net of approximately $194 million of principal repayments of the Company's long-term debt. Cash and cash equivalents totaled $236.3 million at March 31, 2001. 24
Including the January 2001 acquisition of the Jaques Group and the 2000 acquisitions of Fermec and Coleman, since the beginning of 1995 Terex has invested approximately $1 billion to strengthen and expand its core businesses through more than 20 strategic acquisitions. Terex expects that acquisitions and new product development will continue to be important components of its growth strategy and is continually reviewing acquisition opportunities. The Company will continue to pursue strategic acquisitions, some of which could individually or in the aggregate be material, which complement the Company's core operations and offer cost reduction opportunities, distribution and purchasing synergies and product diversification. The Company's businesses are working capital intensive and require funding for purchases of production and replacement parts inventories, capital expenditures for repair, replacement and upgrading of existing facilities, as well as financing of receivables from customers and dealers. The Company has significant debt service requirements including semi-annual interest payments on the 10-3/8% Notes and on its 8-7/8% senior subordinated notes and monthly interest payments on the Company's bank credit facilities. Management believes that cash generated from operations, together with the Company's bank credit facilities and cash on hand, provides the Company with adequate liquidity to meet the Company's operating and debt service requirements. The Company continues to explore ways to improve its liquidity and capital structure. In this regard, on March 29, 2001, the Company issued the 10-3/8% Notes in the principal amount of $300 million. Additionally, on March 29, 2001, the Company increased the availability under its revolving bank credit facilities maturing March 2004 from $125 million to $300 million and amended its existing bank credit agreements to provide the Company with greater operating flexibility. The Company used approximately $194 million of the net proceeds from the offering of the 10-3/8% Notes to prepay a portion of its existing term loans. CONTINGENCIES AND UNCERTAINTIES Euro Currently, 12 of the 15 member countries of the European Union have established fixed conversion rates between their existing currencies ("legacy currencies") and one common currency, the euro. The euro now trades on currency exchanges and may be used in business transactions. Beginning in January 2002, new euro-denominated bills and coins will be issued, and legacy currencies will be withdrawn from circulation. The Company's operating subsidiaries affected by the euro conversion are assessing the systems and business issues raised by the euro currency conversion. These issues include, among others, (1) the need to adapt computer and other business systems and equipment to accommodate euro-denominated transactions and (2) the competitive impact of cross-border price transparency, which may make it more difficult for businesses to charge different prices for the same products on a country-by-country basis, particularly once the euro currency is issued in 2002. The Company believes that the euro conversion has not and will not have a material adverse impact on its financial condition or results of operations. Foreign Currencies and Interest Rate Risk The Company's products are sold in over 100 countries around the world and, accordingly, revenues of the Company are generated in foreign currencies, while the costs associated with those revenues are only partly incurred in the same currencies. The major foreign currencies, among others, in which the Company does business are the Euro, the British Pound, the French Franc, the German Mark, the Irish Punt, the Italian Lira and the Australian Dollar. The Company may, from time to time, hedge specifically identified committed cash flows in foreign currencies using forward currency sale or purchase contracts. Such foreign currency contracts have not historically been material in amount. Because certain of the Company's obligations, including indebtedness under the Company's bank credit facility, will bear interest at floating rates, an increase in interest rates could adversely affect, among other things, the results of operations of the Company. The Company has entered into interest protection arrangements with respect to approximately $127 million of the principal amount of its indebtedness under its bank credit facility fixing interest at various rates between 5.94% and 9.44%. Other The Company is subject to a number of contingencies and uncertainties including product liability claims, self-insurance obligations, tax examinations and guarantees. Many of the exposures are unasserted or proceedings are at a preliminary stage, and it is not presently possible to estimate the amount or timing of any cost to the Company. However, the Company does not believe that these contingencies and uncertainties will, in the aggregate, have a material adverse effect on the Company. When it is probable that a loss has been incurred and possible to make reasonable estimates of the Company's liability with 25
respect to such matters, a provision is recorded for the amount of such estimate or for the minimum amount of a range of estimates when it not possible to estimate the amount within the range that is most likely to occur. The Company generates hazardous and nonhazardous wastes in the normal course of its manufacturing operations. As a result, Terex is subject to a wide range of federal, state, local and foreign environmental laws and regulations. These laws and regulations govern actions that may have adverse environmental effects and also require compliance with certain practices when handling and disposing of hazardous and nonhazardous wastes. These laws and regulations also impose liability for the costs of, and damages resulting from, cleaning up sites, past spills, disposals and other releases of hazardous substances. Compliance with these laws and regulations has, and will continue require, the Company to make expenditures. The Company does not expect that these expenditures will have a material adverse effect on its business or profitability. The Company is party to an action commenced in the United States District Court for the District of Delaware by End of Road Trust, a creditor liquidating trust formed to liquidate the assets of Fruehauf Trailer Corporation ("Fruehauf"), a former subsidiary of the Company and currently a reorganized debtor in bankruptcy, and Pension Transfer Corporation, as sponsor and administrator for certain Fruehauf pension plans (collectively, the "Plaintiffs") against the Company and certain former officers and directors of Fruehauf and Terex (collectively, the "Defendants"). The Plaintiffs allege, in essence, that the Defendants breached fiduciary duties owed to Fruehauf and made certain misrepresentations in connection with certain accounting matters arising from the Company's 1989 acquisition of Fruehauf and the 1991 initial public offering of Fruehauf stock, and that the Defendants were unjustly enriched thereby. Plaintiffs also allege that certain pension investments made on behalf of the Fruehauf pension plans violated ERISA. The action is currently in the early stages of discovery. The Company believes that it has meritorious defenses and that the outcome of the case will not have a material adverse effect on the Company's operations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to certain market risks which exist as part of its ongoing business operations and the Company uses derivative financial instruments, where appropriate, to manage these risks. The Company, as a matter of policy, does not engage in trading or speculative transactions. For further information on accounting policies related to derivative financial instruments, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2000. Foreign Exchange Risk The Company is exposed to fluctuations in foreign currency cash flows related to third party purchases and sales, intercompany product shipments and intercompany loans. The Company is also exposed to fluctuations in the value of foreign currency investments in subsidiaries and cash flows related to repatriation of these investments. Additionally, the Company is exposed to volatility in the translation of foreign currency earnings to U.S. Dollars. Primary exposures include the U.S. Dollars versus functional currencies of the Company's major markets which include the Euro, British Pound, German Mark, French Franc, Irish Punt, Italian Lira and Australian Dollar. The Company assesses foreign currency risk based on transactional cash flows and identifies naturally offsetting positions and purchases hedging instruments to protect anticipated exposures. At March 31, 2001, the Company had foreign currency contracts with a notional value of $3.2 million. The fair market value of these arrangements, which represents the cost to settle these contracts, was a liability of approximately $0.1 million at March 31, 2001. Interest Rate Risk The Company is exposed to interest rate volatility with regard to future issuances of fixed rate debt and existing issuances of variable rate debt. Primary exposure includes movements in the U.S. prime rate and London Interbank Offer Rate ("LIBOR"). The Company uses interest rate swaps to reduce interest rate volatility. At March 31, 2001, the Company had approximately $127 million of interest rate swaps fixing interest rates between 5.94% and 9.44%. The fair market value of these arrangements, which represents the costs to settle these contracts, was a liability of approximately $2.0 million at March 31, 2001. At March 31, 2001, the Company performed a sensitivity analysis for the Company's derivatives and other financial instruments that have interest rate risk. The Company calculated the pretax earnings effect on its interest sensitive instruments. Based on this sensitivity analysis, the Company has determined that an increase of 10% in the Company's weighted average interest rates at March 31, 2001 would have increased interest expense by approximately $3 million in the three months ended March 31, 2001. 26
PART II OTHER INFORMATION Item 1. Legal Proceedings The Company is involved in certain claims and litigation arising in the ordinary course of business, which are not considered material to the financial operations or cash flow of the Company. For information concerning litigation and other contingencies see "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Contingencies and Uncertainties." Item 2. Changes in Securities and Use of Proceeds Not applicable. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. Item 5. Other Information On April 23, 2001, the Company announced that it was reorganizing its operations. Effective May 1, 2001, the Company will now categorize its business operations primarily in two segments: Terex Europe and Terex Americas and Mining. Forward Looking Information Certain information in this Quarterly Report includes forward-looking statements regarding future events or the future financial performance of the Company that involve certain contingencies and uncertainties, including those discussed above in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Contingencies and Uncertainties." In addition, when included in this Quarterly Report or in documents incorporated herein by reference, the words "may," "expects," "intends," "anticipates," "plans," "projects," "estimates" and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. The Company has based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Such risks and uncertainties, many of which are beyond the Company's control, include, among others: competitive pressures and adverse economic conditions are more likely to have a negative effect on the Company's business; the sensitivity of construction and mining activity to interest rates, government spending and general economic conditions; the ability to successfully integrate acquired businesses; the retention of key management personnel; foreign currency fluctuations; the Company's businesses are very competitive and may be affected by pricing, product initiatives and other actions taken by competitors; the effects of changes in laws and regulations; the Company's business is international in nature and is subject to exchange rates between currencies, as well as international politics; the ability of suppliers to timely supply parts and components at competitive prices and the Company's ability to timely manufacture and deliver products to customers; compliance with the restrictive covenants contained in the Company's debt agreements; continued use of net operating loss carryforwards; compliance with applicable environmental laws and regulations; and other factors. Actual events or the actual future results of the Company may differ materially from any forward looking statement due to these and other risks, uncertainties and significant factors. The forward-looking statements contained herein speak only as of the date of this Quarterly Report and the forward-looking statements contained in documents incorporated herein by reference speak only as of the date of the respective documents. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained or incorporated by reference in this Quarterly Report to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 27
Item 6. Exhibits and Reports on Form 8-K (a) The exhibits set forth on the accompanying Exhibit Index have been filed as part of this Form 10-Q. (b) Reports on Form 8-K. - - A report on Form 8-K dated March 14, 2001 was filed on March 15, 2001, announcing the Company's intention to issue approximately $200 million principal amount of Senior Subordinated Notes Due 2011, to increase the availability under its Revolving Credit Facilities to $300 million and to repay a portion of its existing term loans. - - A report on Form 8-K dated March 22, 2001 was filed on March 23, 2001, announcing the Company's intention to issue approximately $300 million principal amount of Senior Subordinated Notes Due 2011, to increase the availability under its Revolving Credit Facilities to $300 million and to repay a portion of its existing term loans. 28
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TEREX CORPORATION ----------------- (Registrant) Date: May 15, 2001 /s/ Joseph F. Apuzzo ----------------------- Joseph F. Apuzzo Chief Financial Officer (Principal Financial Officer) Date: May 15, 2001 /s/ Kevin M. O'Reilly ------------------------ Kevin M. O'Reilly Controller (Principal Accounting Officer) 29
EXHIBIT INDEX 3.1 Restated Certificate of Incorporation of Terex Corporation (incorporated by reference to Exhibit 3.1 to the Form S-1 Registration Statement of Terex Corporation, Registration No. 33-52297). 3.2 Certificate of Elimination with respect to the Series B Preferred Stock (incorporated by reference to Exhibit 4.3 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 3.3 Certificate of Amendment to Certificate of Incorporation of Terex Corporation dated September 5, 1998 (incorporated by reference to Exhibit 3.3 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 3.4 Amended and Restated Bylaws of Terex Corporation (incorporated by reference to Exhibit 3.2 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 4.1 Indenture dated as of March 31, 1998 among Terex Corporation, the Guarantors named therein and United States Trust Company of New York, as Trustee (incorporated by reference to Exhibit 4.6 of Amendment No. 1 to the Form S-4 Registration Statement of Terex Corporation, Registration No. 333-53561). 4.2 First Supplemental Indenture, dated as of September 23, 1998, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 31, 1998) (incorporated by reference to Exhibit 4.4 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 4.3 Second Supplemental Indenture, dated as of April 1, 1999, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 31, 1998) (incorporated by reference to Exhibit 4.5 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 4.4 Third Supplemental Indenture, dated as of July 29, 1999, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 31, 1998) (incorporated by reference to Exhibit 4.6 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 4.5 Fourth Supplemental Indenture, dated as of August 26, 1999, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 31, 1998) (incorporated by reference to Exhibit 4.7 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 4.6 Fifth Supplemental Indenture, dated as of March 29, 2001, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 31, 1998).* 4.7 Indenture dated as of March 9, 1999 among Terex Corporation, the Guarantors named therein and United States Trust Company of New York, as Trustee (incorporated by reference to Exhibit 4.4 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 4.8 First Supplemental Indenture, dated as of April 1, 1999, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 9, 1999) (incorporated by reference to Exhibit 4.8 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 4.9 Second Supplemental Indenture, dated as of July 30, 1999, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 9, 1999) (incorporated by reference to Exhibit 4.9 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 4.10 Third Supplemental Indenture, dated as of August 26, 1999, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 9, 1999) (incorporated by reference to Exhibit 4.11 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 4.11 Fourth Supplemental Indenture, dated as of March 29, 2001, between Terex Corporation and United States Trust Company of New York, as Trustee (to Indenture dated as of March 9, 1999).* 30
4.12 Indenture, dated as of March 29, 2001, between Terex Corporation and United States Trust Company of New York, as Trustee.* 10.1 Terex Corporation Incentive Stock Option Plan, as amended (incorporated by reference to Exhibit 4.1 to the Form S-8 Registration Statement of Terex Corporation, Registration No. 33-21483). 10.2 1994 Terex Corporation Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Form 10-K for the year ended December 31, 1994 of Terex Corporation, Commission File No. 1-10702). 10.3 Terex Corporation Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.3 to the Form 10-K for the year ended December 31, 1994 of Terex Corporation, Commission File No. 1-10702). 10.4 1996 Terex Corporation Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Form S-8 Registration Statement of Terex Corporation, Registration No. 333-03983). 10.5 Amendment No. 1 to 1996 Terex Corporation Long Term Incentive Plan (incorporated by reference to Exhibit 10.5 to the Form 10-K for the year ended December 31, 1999 of Terex Corporation, Commission File No. 1-10702). 10.6 Amendment No. 2 to 1996 Terex Corporation Long Term Incentive Plan (incorporated by reference to Exhibit 10.6 to the Form 10-K for the year ended December 31, 1999 of Terex Corporation, Commission File No. 1-10702). 10.7 Terex Corporation 1999 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.7 to the Form 10-Q for the quarter ended March 31, 2000 of Terex Corporation, Commission File No. 1-10702). 10.8 Terex Corporation 2000 Incentive Plan (incorporated by reference to Exhibit 10.8 to the Form 10-Q for the quarter ended June 30, 2000 of Terex Corporation, Commission File No. 1-10702). 10.9 Common Stock Appreciation Rights Agreement dated as of May 9, 1995 between the Company and United States Trust Company of New York, as Rights Agents (incorporated by reference to Exhibit 10.29 of the Amendment No. 1 to the Form S-1 Registration Statement of Terex Corporation, Registration No. 33-52711). 10.10 SAR Registration Rights Agreement dated as of May 9, 1995 among the Company and the Purchasers, as defined therein (incorporated by reference to Exhibit 10.31 of the Amendment No. 1 to the Form S-1 Registration Statement of Terex Corporation, Registration No. 33-52711). 10.11 Amended and Restated Credit Agreement, dated as of March 29, 2001, among Terex Corporation, certain of its Subsidiaries, the Lenders named therein, and Credit Suisse First Boston, as Administrative Agent.* 10.12 Amended and Restated Tranche C Credit Agreement, dated as of March 29, 2001, among Terex Corporation, the Lenders named therein, and Credit Suisse First Boston, as Administrative Agent and Collateral Agent.* 10.13 Guarantee Agreement dated as of March 6, 1998 of Terex Corporation and Credit Suisse First Boston, as Collateral Agent (incorporated by reference to Exhibit 10.14 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 10.14 Guarantee Agreement dated as of March 6, 1998 of Terex Corporation, each of the subsidiaries of Terex Corporation listed therein and Credit Suisse First Boston, as Collateral Agent (incorporated by reference to Exhibit 10.15 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 10.15 Security Agreement dated as of March 6, 1998 of Terex Corporation, each of the subsidiaries of Terex Corporation listed therein and Credit Suisse First Boston, as Collateral Agent (incorporated by reference to Exhibit 10.16 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 10.16 Pledge Agreement dated as of March 6, 1998 of Terex Corporation, each of the subsidiaries of Terex Corporation listed therein and Credit Suisse First Boston, as Collateral Agent (incorporated by reference to Exhibit 10.17 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 10.17 Form Mortgage, Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Financing entered into by Terex Corporation and certain of the subsidiaries of Terex Corporation, as Mortgagor, and Credit Suisse First Boston, as Mortgagee (incorporated by reference to Exhibit 10.18 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 31
10.18 Purchase Agreement dated as of March 9, 1999 among the Company and the Initial Purchasers, as defined therein (incorporated by reference to Exhibit 10.20 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 10.19 Registration Rights Agreement dated as of March 9, 1999 among the Company and the Purchasers, as defined therein (incorporated by reference to Exhibit 10.21 to the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 10.20 Underwriting Agreement, dated as of September 17, 1999, between Terex Corporation and Salomon Smith Barney Inc. (incorporated by reference to Exhibit 1 of the Form 8-K Current Report, Commission File No. 1-10702, dated and filed with the Commission on September 18, 1999). 10.21 Stock Purchase Agreement between Raytheon Engineers & Constructors International, Inc. and Terex Corporation, dated as of July 19, 1999 (incorporated by reference to Exhibit 10.27 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 10.22 Stock Purchase Agreement between Terex Corporation and Hartford Capital Appreciation Fund, Inc., dated July 23, 1999 (incorporated by reference to Exhibit 10.28 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 10.23 Asset Purchase and Sale Agreement between Terex Corporation and Partek Acquisition Company, Inc., dated as of July 20, 2000 (incorporated by reference to Exhibit 1 of the Form 8-K Current Report, Commission File No. 1-10702, dated September 30, 2000 and filed with the Commission on October 5, 2000). 10.24 Share Purchase and Sale Agreement among Powerscreen International plc, Partek Cargotec Holding Ltd and, for purposes of Article 9 only, Moffett Engineering Limited, dated as of July 20, 2000 (incorporated by reference to Exhibit 2 of the Form 8-K Current Report, Commission File No. 1-10702, dated September 30, 2000 and filed with the Commission on October 5, 2000). 10.25 Share Purchase and Sale Agreement among Holland Lift International B.V., Partek Cargotec Holding Netherlands B.V. and, for purposes of Article 9 only, Kooi B.V., dated as of July 20, 2000 (incorporated by reference to Exhibit 3 of the Form 8-K Current Report, Commission File No. 1-10702, dated September 30, 2000 and filed with the Commission on October 5, 2000). 10.26 Asset Purchase and Sale Agreement among PPM Deutschland GmbH Terex Cranes, Hiab GmbH and, for purposes of Section 2.3 only, Holland Lift International B.V., Partek Cargotec Holding Netherlands B.V. and Kooi B.V., dated as of September 29, 2000 (incorporated by reference to Exhibit 4 of the Form 8-K Current Report, Commission File No. 1-10702, dated September 30, 2000 and filed with the Commission on October 5, 2000). 10.27 Purchase Agreement dated as of March 22, 2001 among the Company and the Purchasers, as defined therein.* 10.28 Registration Rights Agreement dated as of March 29, 2001 among the Company and the Initial Purchasers, as defined therein.* 10.29 Contract of Employment, dated as of September 1, 1999, between Terex Corporation and Filip Filipov (incorporated by reference to Exhibit 10.29 to the Form 10-Q for the quarter ended September 30, 1999 of Terex Corporation, Commission File No. 1-10702). 10.30 Supplement to Contract of Employment, dated as of April 1, 2000, between Terex Corporation and Filip Filipov (incorporated by reference to Exhibit 10.37 to the Form 10-Q for the quarter ended September 30, 2000 of Terex Corporation, Commission File No. 1-10702). 10.31 Amended and Restated Employment and Compensation Agreement, dated as of April 1, 2000, between Terex Corporation and Ronald M. DeFeo (incorporated by reference to Exhibit 10.38 to the Form 10-Q for the quarter ended September 30, 2000 of Terex Corporation, Commission File No 1-10702). 10.32 Form of Change in Control and Severance Agreement dated as of April 1, 2000 between Terex Corporation and certain executive officers (incorporated by reference to Exhibit 10.34 to the Form 10-Q for the quarter ended June 30, 2000 of Terex Corporation, Commission File No. 1-10702). 12.1 Calculation of Ratio of Earnings to Fixed Charges. * * Exhibit filed with this document. 32