What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-04-29 compared with 2021-10-29 · 131 added, 333 removed, 487 unchanged (49% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net sales $ 1,002.5 $ 864.2

11 unchanged sentences

Income (loss) from continuing operations 52.3 39.7

Income (loss) from discontinued operations – net of tax — ( 0.1 ) — ( 1.3 )

Gain (loss) on disposition of discontinued operations – net of tax ( 0.4 ) 0.4

2 unchanged sentences

Income (loss) from continuing operations $ 0.75 $ 0.57

Income (loss) from discontinued operations – net of tax — — — ( 0.02 )

Gain (loss) on disposition of discontinued operations – net of tax ( 0.01 ) 0.01

2 unchanged sentences

Income (loss) from continuing operations $ 0.74 $ 0.56

Income (loss) from discontinued operations – net of tax — — — ( 0.02 )

Gain (loss) on disposition of discontinued operations – net of tax ( 0.01 ) 0.01

8 unchanged sentences

(in millions, except par value)

September 30,

2022 December 31,

1 unchanged sentence

Cash and cash equivalents $ 218.4 $ 266.9

Trade receivables (net of allowance of $ 10.5 and $ 9.5 at September 30, 2021 and December 31, 2020, respectively)

Trade receivables (net of allowance of $ 9.5 and $ 9.7 at March 31, 2022 and December 31, 2021, respectively)

Inventories 921.3 813.5

11 unchanged sentences

Trade accounts payable 571.5 537.7

Accrued compensation and benefits 108.4 85.8

Other current liabilities 346.1 366.6

7 unchanged sentences

Common stock, $ 0.01 par value – authorized 300.0 shares;

issued 83.4 and 82.9 shares at September 30, 2021 and December 31, 2020, respectively

issued 83.9 and 83.4 shares at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 860.7 860.0

1 unchanged sentence

Accumulated other comprehensive income (loss) ( 248.5 ) ( 228.5 )

Less cost of shares of common stock in treasury – 14.2 and 14.3 shares at September 30, 2021 and December 31, 2020, respectively

Less cost of shares of common stock in treasury – 14.6 and 14.2 shares at March 31, 2022 and December 31, 2021, respectively

( 478.5 ) ( 459.7 )

17 unchanged sentences

— — — — ( 20.0 ) — ( 20.0 )

Issuance of common stock 0.5 — 11.4 — — — 11.4

Issuance of common stock related to compensation 0.5 — 16.3 — — — 16.3

Compensation under stock-based plans – net

2 unchanged sentences

Acquisition of treasury stock ( 0.5 ) — — — — ( 19.8 ) ( 19.8 )

Other — — — ( 0.2 ) — — ( 0.2 )

Balance at March 31, 2022

69.3 $ 0.9 $ 860.7 $ 979.5 $ ( 248.5 ) $ ( 478.5 ) $ 1,114.1

Net income (loss) — — — 73.9 — — 73.9

Other comprehensive income (loss) – net of tax — — — — 15.5 — 15.5

Issuance of common stock — — 0.4 — — — 0.4

Compensation under stock-based plans – net — — 7.8 — — 0.1 7.9

Dividends — — 0.1 ( 8.5 ) — — ( 8.4 )

Acquisition of treasury stock — — — — — ( 1.4 ) ( 1.4 )

Other — — — ( 0.1 ) — — ( 0.1 )

Balance at June 30, 2021

69.2 $ 0.9 $ 844.0 $ 847.0 $ ( 200.0 ) $ ( 458.0 ) $ 1,033.9

Net income (loss) — — — 48.1 — — 48.1

Other comprehensive income (loss) – net of tax — — — — ( 29.3 ) — ( 29.3 )

Issuance of common stock — — 0.2 — — — 0.2

Compensation under stock-based plans – net — — 6.5 — — — 6.5

Dividends — — 0.1 ( 8.5 ) — — ( 8.4 )

Acquisition of treasury stock — — — — — ( 0.2 ) ( 0.2 )

Other — — — — — ( 0.1 ) ( 0.1 )

Balance at September 30, 2021

69.2 $ 0.9 $ 850.8 $ 886.6 $ ( 229.3 ) $ ( 458.3 ) $ 1,050.7

The accompanying notes are an integral part of these condensed consolidated financial statements .

TEREX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions)

Shares Common

10 unchanged sentences

— — — — ( 7.1 ) — ( 7.1 )

Issuance of common stock 0.6 0.1 26.4 — — — 26.5

Issuance of common stock related to compensation 0.5 — 11.4 — — — 11.4

Compensation under stock-based plans – net

5 unchanged sentences

69.2 $ 0.9 $ 835.7 $ 781.7 $ ( 215.5 ) $ ( 456.7 ) $ 946.1

Net income (loss) — — — ( 9.2 ) — — ( 9.2 )

Other comprehensive income (loss) – net of tax — — — — 18.9 — 18.9

Issuance of common stock 0.1 — 0.6 — — — 0.6

Compensation under stock-based plans – net — — 4.7 — — 0.1 4.8

Acquisition of treasury stock ( 0.1 ) — — — — ( 1.0 ) ( 1.0 )

Other — — — 0.1 — — 0.1

Balance at June 30, 2020

68.6 $ 0.9 $ 826.8 $ 726.9 $ ( 294.8 ) $ ( 459.4 ) $ 800.4

Net income (loss) — — — 5.8 — — 5.8

Other comprehensive income (loss) – net of tax — — — — 40.9 — 40.9

Issuance of common stock — — 0.7 — — — 0.7

Compensation under stock-based plans – net — — 4.7 — — 0.4 5.1

Acquisition of treasury stock — — — — — ( 0.1 ) ( 0.1 )

Other — — — ( 0.1 ) — — ( 0.1 )

Balance at September 30, 2020

$ 68.6 $ 0.9 $ 832.2 $ 732.6 $ ( 253.9 ) $ ( 459.1 ) $ 852.7

The accompanying notes are an integral part of these condensed consolidated financial statements .

2 unchanged sentences

(in millions)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities

3 unchanged sentences

(Gain) loss on disposition of discontinued operations 0.4 ( 0.4 )

Loss on early extinguishment of debt 27.7 —

Stock-based compensation expense 9.4 9.9

11 unchanged sentences

Acquisitions, net of cash acquired, and investments ( 3.1 ) —

Proceeds (payments) from disposition of discontinued operations — 11.4

Net cash provided by (used in) investing activities ( 23.2 ) ( 6.1 )

2 unchanged sentences

Proceeds from issuance of debt 65.0 —

Payment of debt extinguishment costs ( 16.9 ) —

Share repurchases ( 17.7 ) ( 0.2 )

11 unchanged sentences

Basis of Presentation and Principles of Consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements of Terex Corporation and subsidiaries as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

The accompanying unaudited Condensed Consolidated Financial Statements of Terex Corporation and subsidiaries as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X.

9 unchanged sentences

Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature.

Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021.

Cash and cash equivalents include $ 3.3 million and $ 5.0 million at September 30, 2021 and December 31, 2020, respectively, which were not immediately available for use.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022.

Cash and cash equivalents include $ 3.2 million and $ 3.7 million at March 31, 2022 and December 31, 2021, respectively, which were not immediately available for use.

These consist primarily of cash balances held in escrow to secure various obligations of the Company .

The following table provides amounts of cash and cash equivalents presented in the Condensed Consolidated Statement of Cash Flows (in millions):

September 30, 2021 December 31, 2020

Cash and cash equivalents:

Cash and cash equivalents - continuing operations $ 553.2 $ 665.0

Cash and cash equivalents - held for sale (1)

Total cash and cash equivalents $ 558.2 $ 670.1

(1) Amounts relate to the Company’s utility hot lines tools business located in South America.

Recently Issued Accounting Standards

Accounting Standards Implemented in 2021

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740.

The Company adopted ASU 2019-12 on January 1, 2021.

Adoption did not have a material effect on the Company’s consolidated financial statements.

Accounting Standards to be Implemented

Recently Issued Accounting Standards to be Implemented.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met to ease an entity’s financial reporting burden as the market transitions from LIBOR and other interbank offered rates to alternative reference rates.

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met to ease an entity’s financial reporting burden as the market transitions from London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

The FASB further issued ASU 2021-01 in January 2021 to clarify the scope of Topic 848.

10 unchanged sentences

Other adjustments ( 0.6 )

Balance as of September 30, 2021

Finance Receivables.

The Company’s net finance receivable balances include both sales-type leases and commercial loans.

The Company had $ 12.9 million and $ 129.8 million of gross finance receivables at September 30, 2021 and December 31, 2020, respectively.

The allowance for credit losses on finance receivables was $ 8.0 million and $ 13.8 million at September 30, 2021 and December 31, 2020, respectively.

In February 2021, the Company transferred finance receivables of $ 89.7 million to a U.S.

regional bank, which qualified for sales treatment under ASC 860.

The Company received $ 99.4 million cash proceeds from the sale and recognized a net gain of $ 5.6 million.

Balance as of March 31, 2022

The Company issues guarantees to financial institutions related to financing of equipment purchases by customers.

The expectation of losses or non-performance is assessed based on consideration of historical customer reviews, current financial conditions, reasonable and supportable forecasts, equipment collateral value and other factors.

The expectation of losses or non-performance is evaluated based on consideration of historical customer assessments, current financial conditions, reasonable and supportable forecasts, equipment collateral value and other factors.

Reserves are recorded for expected loss over the contractual period of risk exposure.

See Note L – “Litigation and Contingencies” for additional information regarding guarantees issued to financial institutions.

See Note K – “Litigation and Contingencies” for additional information regarding guarantees issued to financial institutions.

Accrued Warranties .

15 unchanged sentences

Foreign exchange effect/other ( 0.4 )

Balance as of September 30, 2021

Balance as of March 31, 2022

Fair Value Measurements.

Assets and liabilities measured at fair value on a recurring basis under the provisions of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement and Disclosure” (“ASC 820”) include interest rate caps, commodity swaps, cross currency swaps and foreign exchange contracts, discussed in Note I – “Derivative Financial Instruments” and debt discussed in Note J – “Long-term Obligations”.

These instruments are valued using a market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis under the provisions of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement and Disclosure” (“ASC 820”) include commodity swaps, cross currency swaps and foreign exchange contracts, discussed in Note H – “Derivative Financial Instruments” and debt discussed in Note I – “Long-term Obligations”.

These instruments are valued using observable market data for similar assets and liabilities or the present value of future cash payments and receipts.

ASC 820 establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs).

7 unchanged sentences

NOTE B – BUSINESS SEGMENT INFORMATION

Terex is a global manufacturer of aerial work platforms and materials processing machinery.

The Company designs, builds and supports products used in construction, maintenance, manufacturing, energy, minerals and materials management applications.

Terex’s products are manufactured in North and South America, Europe, Australia and Asia and sold worldwide.

The Company engages with customers through all stages of the product life cycle, from initial specification and financing to parts and service support.

Terex is a global manufacturer of materials processing machinery and aerial work platforms.

The Company designs, builds and supports products used in construction, maintenance, manufacturing, energy, recycling, minerals and materials management applications.

Certain Terex products and solutions enable customers to reduce their environmental impact including electric and hybrid offerings that deliver quiet and emission-free performance, products that support renewable energy, and products that aid in the recovery of useful materials from various types of waste.

The Company’s products are manufactured in North America, Europe, Australia and Asia and sold worldwide.

Terex engages with customers through all stages of the product life cycle, from initial specification and financing to parts and service support.

The Company identifies its operating segments according to how business activities are managed and evaluated, and has identified three operating segments:

Aerials, Utilities and Materials Processing (“MP”).

Materials Processing (“MP”), Aerials and Utilities.

As Aerials and Utilities operating segments share similar economic characteristics, these operating segments are aggregated into one operating segment, Aerial Work Platforms (“AWP”).

The Company operates in two reportable segments:

(i) AWP and (ii) MP.

(i) MP and (ii) AWP.

MP designs, manufactures, services and markets materials processing and specialty equipment, including crushers, washing systems, screens, trommels, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and their related components and replacement parts.

Customers use these products in construction, infrastructure and recycling projects, in various quarrying and mining applications, as well as in landscaping and biomass production industries, material handling applications, maintenance applications to lift equipment or material, moving materials and equipment on rugged or uneven terrain, lifting construction material and placing material at point of use.

AWP designs, manufactures, services and markets aerial work platform equipment, utility equipment and telehandlers as well as their related components and replacement parts.

Customers use these products to construct and maintain industrial, commercial, institutional and residential buildings and facilities, for construction and maintenance of utility and telecommunication lines, tree trimming, certain construction and foundation drilling applications, and for other commercial operations, as well as in a wide range of infrastructure projects.

MP designs, manufactures, services and markets materials processing and specialty equipment, including crushers, washing systems, screens, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and their related components and replacement parts.

The Company assists customers in their rental, leasing and acquisition of its products through Terex Financial Services (“TFS”).

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

AWP $ 572.5 $ 445.0 $ 1,644.4 $ 1,370.6

MP $ 452.7 $ 378.2

AWP 551.5 476.7

Corporate and Other / Eliminations ( 1.7 ) 9.3

1 unchanged sentence

Income (loss) from operations

AWP $ 34.9 $ 13.3 $ 126.7 $ 2.4

MP $ 64.5 $ 49.1

AWP 32.5 26.6

Corporate and Other / Eliminations ( 22.5 ) ( 14.2 )

Total $ 74.5 $ 61.5

Sales between segments are generally priced to recover costs plus a reasonable markup for profit, which is eliminated in consolidation.

September 30,

2022 December 31,

Identifiable assets

$ 1,814.3 $ 1,541.0

MP $ 1,693.3 $ 1,648.0

AWP 1,901.4 1,870.8

Corporate and Other / Eliminations ( 654.8 ) ( 655.3 )

( 428.9 ) ( 111.8 )

Assets held for sale 7.0 6.3

Total $ 2,939.9 $ 2,863.5

(1) Increase primarily due to higher trade receivable and inventory balances.

(2) Change primarily due to lower cash and finance receivable balances and higher intercompany eliminations.

Sales between segments are generally priced to recover costs plus a reasonable markup for profit, which is eliminated in consolidation.

Geographic net sales information is presented below (in millions):

Three Months Ended

September 30, 2021 Three Months Ended

September 30, 2020

AWP MP Corporate and Other / Eliminations Total AWP MP Corporate and Other / Eliminations Total

Net sales by region

North America $ 377.5 $ 159.8 $ 8.3 $ 545.6 $ 278.4 $ 123.3 $ 16.0 $ 417.7

Western Europe 81.8 117.9 0.2 199.9 55.6 94.6 — 150.2

Asia-Pacific 80.5 95.5 0.5 176.5 89.3 64.3 0.2 153.8

Rest of World (1)

32.7 45.5 ( 6.4 ) 71.8 21.7 29.1 ( 6.9 ) 43.9

$ 572.5 $ 418.7 $ 2.6 $ 993.8 $ 445.0 $ 311.3 $ 9.3 $ 765.6

(1) Includes intercompany sales and eliminations.

(2) Total sales include $ 490.3 million and $ 386.2 million for the three months ended September 30, 2021 and 2020, respectively, attributable to the U.S., the Company’s country of domicile.

Nine Months Ended

September 30, 2021 Nine Months Ended

September 30, 2020

AWP MP Corporate and Other / Eliminations Total AWP MP Corporate and Other / Eliminations Total

March 31, 2022 Three Months Ended

March 31, 2021

MP AWP Corporate and Other / Eliminations Total MP AWP Corporate and Other / Eliminations Total

Net sales by region

6 unchanged sentences

(1) Includes intercompany sales and eliminations.

(2) Total sales include $ 1.4 billion and $ 1.2 billion for the nine months ended September 30, 2021 and 2020, respectively, attributable to the U.S., the Company’s country of domicile.

(2) Total sales include $ 487.7 million and $ 415.7 million for the three months ended March 31, 2022 and 2021, respectively, attributable to the U.S., the Company’s country of domicile.

The Company attributes sales to unaffiliated customers in different geographical areas based on the location of the customer.

1 unchanged sentence

Three Months Ended

September 30, 2021 Three Months Ended

September 30, 2020

AWP MP Corporate and Other / Eliminations Total AWP MP Corporate and Other / Eliminations Total

Net sales by product type

Aerial Work Platforms $ 413.7 $ — $ 0.2 $ 413.9 $ 321.1 $ — $ 0.3 $ 321.4

Materials Processing Equipment — 245.5 — 245.5 — 194.7 — 194.7

Specialty Equipment — 173.1 0.3 173.4 — 116.4 0.4 116.8

158.8 0.1 2.1 161.0 123.9 0.2 8.6 132.7

Total $ 572.5 $ 418.7 $ 2.6 $ 993.8 $ 445.0 $ 311.3 $ 9.3 $ 765.6

(1) Includes other product types, intercompany sales and eliminations.

Nine Months Ended

September 30, 2021 Nine Months Ended

September 30, 2020

AWP MP Corporate and Other / Eliminations Total AWP MP Corporate and Other / Eliminations Total

March 31, 2022 Three Months Ended

March 31, 2021

MP AWP Corporate and Other / Eliminations Total MP AWP Corporate and Other / Eliminations Total

Net sales by product type

2 unchanged sentences

Specialty Equipment 184.4 — 0.4 184.8 149.1 — 0.7 149.8

Utility Equipment — 111.2 — 111.2 — 91.8 0.6 92.4

1.1 37.3 ( 2.9 ) 35.5 0.5 28.1 7.6 36.2

2 unchanged sentences

NOTE C – INCOME TAXES

During the three months ended September 30, 2021, the Company recognized income tax expense of $ 13.9 million on income of $ 61.4 million, an effective tax rate of 22.6 %, as compared to income tax benefit of $ 1.1 million on income of $ 20.9 million, an effective tax rate of ( 5.3 )%, for the three months ended September 30, 2020.

The higher effective tax rate for the three months ended September 30, 2021 when compared with the three months ended September 30, 2020 is primarily due to U.S.

tax on foreign income, the 2020 benefit of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and geographic mix.

During the nine months ended September 30, 2021, the Company recognized income tax expense of $ 36.0 million on income of $ 195.5 million, an effective tax rate of 18.4 %, as compared to income tax benefit of $ 4.9 million on loss of $ 10.8 million, an effective tax rate of 45.4 %, for the nine months ended September 30, 2020.

The lower effective tax rate for the nine months ended September 30, 2021 when compared with the nine months ended September 30, 2020 is primarily due to geographic mix and the 2020 benefit of the CARES Act, partially offset by U.S.

During the three months ended March 31, 2022, the Company recognized income tax expense of $ 11.9 million on income of $ 64.2 million, an effective tax rate of 18.5 %, as compared to income tax expense of $ 7.7 million on income of $ 47.4 million, an effective tax rate of 16.2 %, for the three months ended March 31, 2021.

The higher effective tax rate for the three months ended March 31, 2022 when compared with the three months ended March 31, 2021 is primarily due to increased tax on the geographic distribution of income partially offset by reduced U.S.

tax on foreign income.

NOTE D – ACQUISITIONS AND DISCONTINUED OPERATIONS

On July 6, 2021, the Company acquired all of the outstanding shares of Murray Design & Engineering, Ltd (“MDS”), a manufacturer of heavy duty aggregate and recycling trommels, apron feeders and conveyor systems, based in the Republic of Ireland.

Total cash consideration transferred was approximately $ 19 million.

The transaction was recorded as a business combination using the acquisition method which requires measurement of identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.

Goodwill was calculated as the excess of the aggregate of the fair value of the consideration transferred over the fair value of the net assets recognized.

See Note H – “Goodwill and Intangible Assets, Net” for additional information regarding goodwill recognized as a result of the acquisition.

MDS’s results of operations are consolidated within the MP segment in the Condensed Consolidated Financial Statements from the date of acquisition.

On May 25, 2021, the Company acquired assets to facilitate manufacturing of certain MP products in China.

Total cash consideration transferred was approximately $ 17 million.

The transaction was recorded as an asset acquisition at cost, with the consideration allocated to individual assets acquired.

Discontinued Operations

On July 31, 2019, the Company completed the disposition of Demag ® mobile cranes business to Tadano Ltd.

and certain of its subsidiaries.

During 2019, the Company also exited North American mobile crane product lines manufactured in its Oklahoma City facility.

As a result, the Company reported these operations, formerly part of the Cranes segment, in discontinued operations in the Condensed Consolidated Statement of Comprehensive Income (Loss) for all periods presented.

During the three and nine months ended September 30, 2020, the Company recorded income (loss) from discontinued operations, net of tax of $( 0.1 ) million and $( 1.3 ) million, respectively.

Gain (Loss) on Disposition of Discontinued Operations - net of tax is presented below (in millions):

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Cranes Material Handling and Port Solutions Total Cranes Cranes Material Handling and Port Solutions Total Cranes

Gain (loss) on disposition of discontinued operations $ 0.8 $ — $ 0.8 $ ( 20.5 ) $ 1.4 $ 1.2 $ 2.6 $ ( 27.7 )

(Provision for) benefit from income taxes ( 0.2 ) — ( 0.2 ) 4.4 ( 0.4 ) 0.4 — 6.6

Gain (loss) on disposition of discontinued operations – net of tax $ 0.6 $ — $ 0.6 $ ( 16.1 ) $ 1.0 $ 1.6 $ 2.6 $ ( 21.1 )

NOTE E – EARNINGS PER SHARE

NOTE D – EARNINGS PER SHARE

(in millions, except per share data) Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Income (loss) from continuing operations

$ 52.3 $ 39.7

Income (loss) from discontinued operations – net of tax — ( 0.1 ) — ( 1.3 )

Gain (loss) on disposition of discontinued operations – net of tax

0.6 ( 16.1 ) 2.6 ( 21.1 )

Net income (loss) $ 51.9 $ 40.1

3 unchanged sentences

Income (loss) from continuing operations $ 0.75 $ 0.57

Income (loss) from discontinued operations – net of tax — — — ( 0.02 )

Gain (loss) on disposition of discontinued operations – net of tax

5 unchanged sentences

Restricted stock awards

1.1 0.2 1.1 —

Diluted weighted average shares outstanding 70.9 70.8

1 unchanged sentence

Income (loss) from continuing operations $ 0.74 $ 0.56

Income (loss) from discontinued operations – net of tax — — — ( 0.02 )

Gain (loss) on disposition of discontinued operations – net of tax

1 unchanged sentence

Net income (loss) $ 0.73 $ 0.57

Non-vested restricted stock and restricted stock units granted (“restricted stock awards”) by the Company are treated as potential common shares outstanding in computing diluted earnings per share using the treasury stock method.

Weighted average restricted stock awards of approximately 0.1 million and 0.9 million were outstanding during the three months ended September 30, 2021 and 2020, respectively, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance.

Weighted average restricted stock awards of approximately 0.1 million and 2.0 million were outstanding during the nine months ended September 30, 2021 and 2020, respectively, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance.

NOTE F – INVENTORIES

Non-vested restricted stock awards and restricted stock units (“restricted stock awards”) granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share using the treasury stock method.

Weighted average restricted stock awards of approximately 0.3 million and 0.1 million were outstanding during the three months ended March 31, 2022 and 2021, respectively, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance.

NOTE E – INVENTORIES

Inventories consist of the following (in millions):

September 30,

2022 December 31,

4 unchanged sentences

Inventories $ 921.3 $ 813.5

Reserves for lower of cost or net realizable value and excess and obsolete inventory were $ 57.2 million and $ 61.8 million at September 30, 2021 and December 31, 2020, respectively.

NOTE G – PROPERTY, PLANT AND EQUIPMENT

Work-in-process inventory includes approximately $ 52 million and $ 10 million of substantially completed inventory awaiting installation of final components at March 31, 2022 and December 31, 2021, respectively.

Information regarding principal materials, components and commodities and any risks associated with these items are included in Item 3.

– “Quantitative and Qualitative Disclosures about Market Risk – Commodities Risk.”

Reserves for lower of cost or net realizable value and excess and obsolete inventory were $ 59.6 million and $ 57.8 million at March 31, 2022 and December 31, 2021, respectively.

NOTE F – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment – net consist of the following (in millions):

September 30,

2022 December 31,

7 unchanged sentences

Property, plant and equipment – net $ 433.9 $ 429.6

NOTE H – GOODWILL AND INTANGIBLE ASSETS

NOTE G – GOODWILL AND INTANGIBLE ASSETS

An analysis of changes in the Company’s goodwill by business segment is as follows (in millions):

4 unchanged sentences

179.0 101.1 280.1

Acquisitions — 7.3 7.3

Foreign exchange effect and other ( 4.1 ) ( 0.6 ) ( 4.7 )

Balance at September 30, 2021, gross

Balance at March 31, 2022, gross

198.1 139.1 337.2

Accumulated impairment ( 23.2 ) ( 38.6 ) ( 61.8 )

Balance at September 30, 2021, net

Balance at March 31, 2022, net

$ 174.9 $ 100.5 $ 275.4

In connection with the MDS acquisition, the Company recognized goodwill of $ 7.3 million during the period.

The goodwill was assigned to the MP reporting unit and attributable primarily to the assembled workforce and expected synergies from the business combination.

The goodwill is not expected to be deductible for income tax purposes.

See Note D – “Acquisitions and Discontinued Operations” for additional information regarding the MDS acquisition.

Intangible assets, net were comprised of the following (in millions):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Weighted Average Life

8 unchanged sentences

$ 71.7 $ ( 59.0 ) $ 12.7 $ 72.4 $ ( 59.0 ) $ 13.4

In connection with the MDS acquisition, the Company recognized customer relationships and trademarks of $ 6.3 million with an estimated useful life of 7 years and $ 1.3 million with an estimated useful life of 10 years during the period.

See Note D – “Acquisitions and Discontinued Operations” for additional information regarding the MDS acquisition.

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2022 2021

1 unchanged sentence

Estimated aggregate intangible asset amortization expense for each of the next five years is as follows (in millions):

NOTE I – DERIVATIVE FINANCIAL INSTRUMENTS

NOTE H – DERIVATIVE FINANCIAL INSTRUMENTS

The Company operates internationally, with manufacturing and sales facilities in various locations around the world.

6 unchanged sentences

The Company records all derivative contracts at fair value on a recurring basis.

The Company’s derivative financial instruments are categorized under the ASC 820 hierarchy;

see Note A - “Basis of Presentation” for an explanation of the hierarchy.

Interest Rate Caps and Commodity Swaps

Derivatives designated as cash flow hedging instruments include interest rate caps and commodity swaps with outstanding notional value of $ 300.0 million and $ 18.6 million, respectively, at September 30, 2021.

Commodity swaps outstanding at September 30, 2021 mature on or before August 31, 2022.

The outstanding notional value of interest rate caps and commodity swaps was $ 300.0 million and $ 26.0 million, respectively, at December 31, 2020.

The Company uses interest rate caps to mitigate its exposure to changes in interest rates related to variable rate debt and commodity swaps to mitigate price risk for hot rolled coil steel.

Fair values of interest rate caps are based on the present value of future cash payments and receipts.

Fair values of commodity swaps are based on observable market data for similar assets and liabilities.

Changes in the fair value of interest rate caps and commodity swaps are deferred in Accumulated other comprehensive income (loss) (“AOCI”).

Gains or losses on interest rate caps are reclassified to Interest expense in the Condensed Consolidated Statement of Comprehensive Income (Loss) when the underlying hedged transactions occur.

Commodity Swaps

Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 19.2 million and $ 22.5 million at March 31, 2022 and December 31, 2021, respectively.

Commodity swaps outstanding at March 31, 2022 mature on or before August 31, 2022.

The Company uses commodity swaps to mitigate price risk for hot rolled coil steel.

Fair value of commodity swaps are based on observable market data for similar assets and liabilities.

Changes in the fair value of commodity swaps are deferred in Accumulated other comprehensive income (loss) (“AOCI”).

Gains or losses on commodity swaps are reclassified to Cost of goods sold (“COGS”) in the Condensed Consolidated Statement of Comprehensive Income (Loss) when the hedged transaction affects earnings.

In October 2021, the Company terminated all outstanding interest rate caps.

Cross Currency Swaps

Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 92.6 million and $ 97.7 million at September 30, 2021 and December 31, 2020, respectively.

Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 66.4 million and $ 68.2 million at March 31, 2022 and December 31, 2021, respectively.

The Company uses these cross currency swaps to mitigate its exposure to changes in foreign currency exchange rates related to a net investment in a Euro-denominated functional currency subsidiary.

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Fair values of these contracts are derived using quoted forward foreign exchange prices to interpolate values of outstanding trades at the reporting date based on their maturities.

Foreign exchange contracts outstanding at September 30, 2021 mature during the fourth quarter of 2021.

At December 31, 2020, the Company had $ 7.8 million notional value, respectively, of foreign exchange contracts outstanding that were designated as cash flow hedge contracts.

There were no foreign exchange contracts that were designated as cash flow hedge contracts outstanding at September 30, 2021.

Foreign exchange contracts outstanding at March 31, 2022 mature during the second quarter of 2022.

The Company had $ 23.7 million and $ 19.4 million notional value of foreign exchange contracts outstanding that were designated as cash flow hedging instruments at March 31, 2022 and December 31, 2021, respectively.

For effective hedging instruments, changes in the fair value of foreign exchange contracts are deferred in AOCI until the underlying hedged transactions settle.

Gains or losses on foreign exchange contracts are reclassified to COGS in the Company’s Condensed Consolidated Statement of Comprehensive Income (Loss).

The Company had $ 38.0 million and $ 54.2 million notional value of foreign exchange contracts outstanding that were not designated as hedging instruments at September 30, 2021 and December 31, 2020, respectively.

Gains or losses on foreign exchange contracts are reclassified to COGS in the Condensed Consolidated Statement of Comprehensive Income (Loss).

The Company had $ 194.0 million and $ 139.7 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at March 31, 2022 and December 31, 2021, respectively.

The majority of gains and losses recognized from foreign exchange contracts not designated as hedging instruments are offset by changes in the underlying hedged items, resulting in no material net impact on earnings.

Changes in the fair value of these derivative financial instruments are recognized as gains or losses in COGS and Other income (expense) – net in the Condensed Consolidated Statement of Comprehensive Income (Loss).

Interest Rate Caps

In October 2021, the Company terminated all outstanding interest rate caps.

The Company used interest rate caps to mitigate its exposure to changes in interest rates related to variable rate debt.

Fair value of interest rate caps were based on the present value of future cash payments and receipts.

Changes in the fair value of interest rate were deferred in AOCI.

Gains or losses on interest rate caps were reclassified to Interest expense in the Condensed Consolidated Statement of Comprehensive Income (Loss) when the underlying hedged transactions occur.

The following table provides the location and fair value amounts of derivative instruments designated and not designated as hedging instruments that are reported in the Condensed Consolidated Balance Sheet (in millions):

September 30,

2022 December 31,

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Balance Sheet Account Derivatives designated as hedges Derivatives not designated as hedges Derivatives designated as hedges Derivatives not designated as hedges

Foreign exchange contracts Other current assets $ 0.1 $ 1.0 $ ( 0.1 ) $ 0.7

Commodity swaps Other current assets 6.9 — 4.3 —

Commodity swaps Other non-current assets — — 0.3 —

Interest rate caps Other non-current assets 0.8 — — —

Foreign exchange contracts Other current liabilities ( 0.1 ) ( 0.3 ) — —

Cross currency swaps - net investment hedge Other current liabilities ( 0.1 ) — ( 0.5 ) —

Interest rate caps Other current liabilities ( 1.2 ) — ( 1.2 ) —

Commodity swaps Other current liabilities ( 0.1 ) — ( 1.1 ) —

Cross currency swaps - net investment hedge Other non-current liabilities ( 2.0 ) — ( 2.4 ) —

Interest rate caps Other non-current liabilities — — ( 2.6 ) —

Net derivative asset (liability) $ 4.7 $ 0.7 $ 0.2 $ 0.7

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Instrument Three Months Ended

September 30, 2021 Nine Months Ended

September 30, 2021 Income Statement Account Three Months Ended

September 30, 2021 Nine Months Ended

September 30, 2021

Foreign exchange contracts $ — $ — Cost of goods sold $ — $ 0.1

Commodity swaps ( 5.8 ) 9.1 Cost of goods sold 6.9 8.3

Cross currency swaps - net investment hedge 1.8 4.0 Selling, general and administrative expenses — —

Interest rate caps 0.1 2.7 Interest expense ( 0.3 ) ( 0.9 )

Total $ ( 3.9 ) $ 15.8 Total $ 6.6 $ 7.5

Gain (Loss) Recognized on Derivatives in OCI, net of tax Gain (Loss) Reclassified from AOCI into Income (Loss)

Instrument Three Months Ended

September 30, 2020 Nine Months Ended

September 30, 2020 Income Statement Account Three Months Ended

September 30, 2020 Nine Months Ended

September 30, 2020

March 31, 2022 Three Months Ended

March 31, 2021 Income Statement Account Three Months Ended

March 31, 2022 Three Months Ended

March 31, 2021

Foreign exchange contracts $ 0.1 $ — Cost of goods sold $ — $ —

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Three Months Ended

September 30, 2021 Nine Months Ended

September 30, 2021 Three Months Ended

September 30, 2021 Nine Months Ended

September 30, 2021

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 815.3 ) $ ( 2,311.2 ) $ ( 12.3 ) $ ( 40.6 )

Gain (loss) reclassified from AOCI into Income (loss):

Foreign exchange contracts — 0.1 — —

Commodity swaps 6.9 8.3 — —

Interest rate caps — — ( 0.3 ) ( 0.9 )

Amount excluded from effectiveness testing recognized in Income (loss) based on amortization approach:

Cross currency swaps - net investment hedge — — 0.2 0.5

Total $ 6.9 $ 8.4 $ ( 0.1 ) $ ( 0.4 )

Classification and amount of Gain (Loss) Recognized in Income (Loss)

Cost of goods sold Interest expense

Three Months Ended

September 30, 2020 Nine Months Ended

September 30, 2020 Three Months Ended

September 30, 2020 Nine Months Ended

September 30, 2020

March 31, 2022 Three Months Ended

March 31, 2021 Three Months Ended

March 31, 2022 Three Months Ended

March 31, 2021

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 816.7 ) $ ( 688.8 ) $ ( 10.6 ) $ ( 15.3 )

Gain (loss) reclassified from AOCI into Income (loss):

Foreign exchange contracts 0.3 ( 2.1 ) — —

Commodity swaps 5.0 ( 0.3 ) — —

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Derivatives not designated as hedges are used to offset foreign exchange gains or losses resulting from the underlying exposures of foreign currency denominated assets and liabilities.

The following table provides the effect of non-designated derivatives outstanding at the end of the period in the Condensed Consolidated Statement of Comprehensive Income (Loss) (in millions):

The following table provides the effect of non-designated derivatives in the Condensed Consolidated Statement of Comprehensive Income (Loss) (in millions):

Gain (Loss) Recognized in Income (Loss)

Three Months Ended

September 30, Nine Months Ended

September 30,

Instrument Income Statement Account 2022 2021

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Foreign exchange contracts Other income (expense) – net ( 0.7 ) ( 0.1 )

Debt conversion feature Other income (expense) – net — ( 0.1 ) — —

Total $ ( 0.8 ) $ ( 0.3 )

In the Condensed Consolidated Statement of Comprehensive Income (Loss), the Company records hedging activity related to interest rate caps, commodity swaps, cross currency swaps, foreign exchange contracts and the debt conversion feature in the accounts for which the hedged items are recorded.

In the Condensed Consolidated Statement of Comprehensive Income (Loss), the Company records hedging activity related to commodity swaps, cross currency swaps, foreign exchange contracts and interest rate caps in the accounts for which the hedged items are recorded.

On the Condensed Consolidated Statement of Cash Flows, the Company presents cash flows from hedging activities in the same manner as it records the underlying item being hedged.

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Management continues to monitor counterparty risk and believes the risk of incurring losses on derivative contracts related to credit risk is unlikely and any losses would be immaterial.

See Note M - “Stockholders’ Equity” for unrealized net gains (losses), net of tax, included in AOCI.

Within unrealized net gains (losses) included in AOCI as of September 30, 2021, it is estimated that $ 12.3 million of gains are expected to be reclassified into earnings in the next twelve months.

NOTE J – LONG-TERM OBLIGATIONS

See Note L - “Stockholders’ Equity” for unrealized net gains (losses), net of tax, included in AOCI.

Within unrealized net gains (losses) included in AOCI as of March 31, 2022, it is estimated that approximately $ 5 million of gains are expected to be reclassified into earnings in the next twelve months.

NOTE I – LONG-TERM OBLIGATIONS

Credit Agreement

The credit agreement included (i) a $ 600 million revolving line of credit (the “Revolver”) and (ii) senior secured term loans totaling $ 600 million with a maturity date of January 31, 2024 (the “Term Loans”).

On January 31, 2017, the Company entered into a credit agreement with the lenders and issuing banks party thereto and Credit Suisse AG, Cayman Islands Branch (“CSAG”), as administrative agent and collateral agent, which was subsequently amended to include (i) a $ 600 million revolving line of credit (the “Revolver”) and (ii) senior secured term loans totaling $ 600 million with a maturity date of January 31, 2024 (the “Term Loans”).

On April 1, 2021, the Company entered into an amendment and restatement of the credit agreement (as amended and restated, the “Credit Agreement”) which included the following principal changes to the original credit agreement:

(i) extension of the term of the Revolver to expire on April 1, 2026, which maturity will spring forward to November 1, 2023 if the $ 400 million senior secured term loan (the “Original Term Loan”) outstanding is not repaid or its maturity date is not extended, (ii) reinstatement of financial covenants that were waived in 2020, (iii) decrease in the interest rate on the drawn Revolver by 25 basis points and (iv) certain other technical changes, including additional language regarding the potential cessation of LIBOR as a benchmark rate.

The Company recorded a loss on early extinguishment of debt related to the amendment and restatement of the Credit Agreement of $ 2.4 million in the second quarter of 2021.

During the first quarter of 2021, the Company prepaid the $ 200 million term loan (the “2019 Term Loan”) under the Credit Agreement prior to its maturity date to reduce the Company’s outstanding debt and lower its leverage.

(i) extension of the term of the Revolver to expire on April 1, 2026, which maturity will spring forward to November 1, 2023 if the principal outstanding under the $ 400 million senior secured term loan (the “Original Term Loan”) is not repaid or its maturity date is not extended, (ii) reinstatement of financial covenants that were waived in 2020, (iii) decrease in the interest rate on the drawn Revolver by 25 basis points and (iv) certain other technical changes, including additional language regarding the potential cessation of LIBOR as a benchmark rate.

On March 7, 2019, the Company entered into an Incremental Assumption Agreement and Amendment No.

3 (“Amendment No.

3”) to its credit agreement.

Amendment No.

3 provided the Company with an additional term loan (the “2019 Term Loan”) in the amount of $ 200 million.

The Original Term Loan bears interest at a rate of LIBOR plus 2.00 % with a 0.75 % LIBOR floor.

During the first quarter of 2021, the Company prepaid the 2019 Term Loan prior to its maturity date to reduce the Company’s outstanding debt and lower its leverage.

The Company recorded a loss on early extinguishment of debt related to prepayment of $ 2.1 million for accelerated amortization of debt acquisition costs and original issue discount.

The 2019 Term Loan bore interest at a rate of LIBOR plus 2.75 % with a 0.75 % LIBOR floor.

The Original Term Loan under the Credit Agreement bears interest at a rate of LIBOR plus 2.00 % with a 0.75 % LIBOR floor.

During the second quarter of 2021, the Company prepaid $ 83.0 million of the amount outstanding on the Original Term Loan prior to its maturity date to reduce the Company’s outstanding debt and lower its leverage.

The Company recorded a loss on early extinguishment of debt related to prepayment of $ 0.7 million for accelerated amortization of debt acquisition costs and original issue discount.

Unlimited incremental commitments may be extended at the option of the existing or new lenders and can be in the form of revolving credit commitments, term loan commitments, or a combination of both, with incremental amounts in excess of $ 300 million as long as the Company satisfies the maximum permitted level of the senior secured leverage as defined in the Credit Agreement.

Unlimited incremental commitments may be extended at the option of the existing or new lenders and can be in the form of revolving credit commitments, term loan commitments, or a combination of both, with incremental amounts in excess of $ 300 million as long as the Company satisfies the maximum permitted level of senior secured leverage as defined in the Credit Agreement.

The Credit Agreement requires the Company to comply with a number of covenants which limit, in certain circumstances, the Company’s ability to take a variety of actions, including but not limited to:

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The Credit Agreement also contains customary default provisions.

The Company was in compliance with all covenants contained in the Credit Agreement as of September 30, 2021.

As of September 30, 2021 and December 31, 2020, the Company had $ 298.4 million and $ 579.9 million, net of discount, respectively, in Term Loans outstanding under the Credit Agreement.

The weighted average interest rate on the Term Loans at September 30, 2021 and December 31, 2020 was 2.75 % and 3.00 %, respectively.

The Company had no revolving credit amounts outstanding as of September 30, 2021 and December 31, 2020.

In October 2021, the Company prepaid an additional $ 150 million of the Original Term Loan prior to its maturity date to reduce the Company’s outstanding debt and lower its leverage.

The Company expects to record a loss on early extinguishment of debt related to prepayment of approximately $ 1 million for accelerated amortization of debt acquisition costs and original issue discount in the fourth quarter of 2021.

The Company issues letters of credit that generally serve as collateral for certain liabilities included in the Condensed Consolidated Balance Sheet and guaranteeing the Company’s performance under contracts.

The Company was in compliance with all covenants contained in the Credit Agreement as of March 31, 2022.

As of March 31, 2022 and December 31, 2021, the Company had $ 77.9 million and $ 77.8 million, net of discount, respectively, in Term Loans outstanding under the Credit Agreement.

The weighted average interest rate on the Term Loans at March 31, 2022 and December 31, 2021 was 2.75 %.

The Company had $ 65.0 million of revolving credit amounts outstanding as of March 31, 2022 and no revolving credit amounts outstanding as of December 31, 2021.

The weighted average interest rate on the revolving credit amounts at March 31, 2022 was 2.17 %.

The Company obtains letters of credit that generally serve as collateral for certain liabilities included in the Condensed Consolidated Balance Sheet and guaranteeing the Company’s performance under contracts.

Letters of credit can be issued under two facilities provided in the Credit Agreement and via bilateral arrangements outside the Credit Agreement.

6 unchanged sentences

Letters of credit outstanding (in millions):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

$400 Million Facility $ — $ —

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On April 5, 2021, the Company redeemed the 5-5/8% Notes in full for $ 622.9 million, including redemption premiums of $ 16.9 million and accrued but unpaid interest of $ 6.0 million.

The Company recorded a loss on early extinguishment of debt related to the redemption of the 5-5/8% Notes of $ 22.5 million in the second quarter of 2021.

5% Senior Notes

4 unchanged sentences

Fair Value of Debt

Based on indicative price quotations from financial institutions multiplied by the amount recorded on the Company’s Condensed Consolidated Balance Sheet (“Book Value”), the Company estimates the fair values of its debt set forth below as of September 30, 2021, as follows (in millions, except for quotes):

The Company estimates the fair values of its debt set forth below as of March 31, 2022, as follows (in millions, except for quotes):

Book Value Quote Fair Value

1 unchanged sentence

Original Term Loan (net of discount) $ 77.9 $ 0.99875 $ 77.8

The fair value of the 5% Notes and Original Term Loan is based on adjusted price quotations on the debt instruments in an active market.

The fair value of debt reported in the table above is based on adjusted price quotations on the debt instruments in an active market.

The Company believes that the carrying value of its other borrowings, including amounts outstanding, if any, for the revolving credit line under the Credit Agreement, approximate fair market value based on maturities for debt of similar terms.

Fair value of 5% Notes, Original Term Loan and these other borrowings are categorized under Level 2 of the ASC 820 hierarchy.

Fair values of debt reported in the table above are categorized under Level 2 of the ASC 820 hierarchy.

See Note A – “Basis of Presentation” for an explanation of ASC 820 hierarchy.

NOTE K – RETIREMENT PLANS AND OTHER BENEFITS

NOTE J – RETIREMENT PLANS AND OTHER BENEFITS

The Company maintains defined benefit plans in France, Germany, India, Switzerland and the United Kingdom for some of its subsidiaries, as well as a nonqualified Supplemental Executive Retirement Plan in the U.S.

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Pension Non-U.S.

1 unchanged sentence

Pension Non-U.S.

Pension Other U.S.

Pension Non-U.S.

Pension Other U.S.

Pension Non-U.S.

Pension Other

9 unchanged sentences

The Service cost component is included in the same line item or items as other compensation costs arising from services rendered by pertinent employees during the period.

NOTE L – LITIGATION AND CONTINGENCIES

NOTE K – LITIGATION AND CONTINGENCIES

The Company is involved in various legal proceedings, including product liability, general liability, workers’ compensation liability, employment, commercial and intellectual property litigation, which have arisen in the normal course of operations.

17 unchanged sentences

Credit Guarantees

Customers of the Company may fund the acquisition of the Company’s equipment through third-party finance companies.

In certain instances, the Company may provide a credit guarantee to the finance company, by which the Company agrees to make payments to the finance company should the customer default.

These may require the Company to:

(i) pay-off the customer’s obligations, (ii) assume the customer’s payments or (iii) pay a predetermined percentage of the customer’s outstanding obligation.

The current amount of the maximum potential liability under these credit guarantees cannot be reasonably estimated due to limited availability of the unique facts and circumstances of each arrangement, such as whether changes have been made to the structure of the contractual obligation between the funder and customer.

For credit guarantees outstanding as of September 30, 2021 and December 31, 2020, the maximum exposure determined at inception was $ 163.3 million and $ 143.8 million, respectively.

The Company may assist customers in their rental, leasing and acquisition of its products by facilitating financing transactions directly between (i) end-user customers, distributors and rental companies and (ii) third-party financial institutions, providing recourse in certain circumstances.

The current amount of the maximum liability is generally limited to our customer’s remaining payments due to the third-party financial institutions at the time of default;

however, it cannot be reasonably estimated due to limited availability of the unique facts and circumstances of each arrangement, such as whether changes have been made to the structure of the contractual obligation between the funder and customer.

For credit guarantees outstanding as of March 31, 2022 and December 31, 2021, the maximum exposure determined was $ 140.0 million and $ 143.5 million, respectively.

Terms of these guarantees coincide with the financing arranged by the customer and generally do not exceed five years .

The allowance for credit losses on credit guarantees was $ 10.2 million and $ 8.3 million at September 30, 2021 and December 31, 2020, respectively.

There can be no assurance that historical credit default experience will be indicative of future results.

The Company’s ability to recover losses experienced from its guarantees may be affected by economic conditions in effect at the time of loss.

NOTE M – STOCKHOLDERS’ EQUITY

The allowance for credit losses on credit guarantees was $ 6.6 million and $ 6.3 million at March 31, 2022 and December 31, 2021, respectively.

There can be no assurance that historical experience in used equipment markets will be indicative of future results.

The Company’s ability to recover losses experienced from its guarantees may be affected by economic conditions in used equipment markets at the time of loss.

NOTE L – STOCKHOLDERS’ EQUITY

Changes in Accumulated Other Comprehensive Income (Loss)

The table below presents changes in AOCI by component for the three and nine months ended September 30, 2021 and 2020.

The table below presents changes in AOCI by component for the three months ended March 31, 2022 and 2021.

All amounts are net of tax (in millions).

Three Months Ended

September 30, 2021 Three Months Ended

September 30, 2020

March 31, 2022 Three Months Ended

March 31, 2021

CTA Derivative Hedging Adj.

13 unchanged sentences

$ ( 206.9 ) $ 3.0 $ ( 1.7 ) $ ( 42.9 ) $ ( 248.5 ) $ ( 165.4 ) $ 7.8 $ 0.1 $ ( 58.0 ) $ ( 215.5 )

Nine Months Ended

September 30, 2021 Nine Months Ended

September 30, 2020

CTA Derivative Hedging Adj.

Debt & Equity Securities Adj.

Pension Liability Adj.

Total CTA Derivative Hedging Adj.

Debt & Equity Securities Adj.

Pension Liability Adj.

Beginning balance $ ( 145.2 ) $ ( 6.0 ) $ 1.2 $ ( 58.4 ) $ ( 208.4 ) $ ( 208.2 ) $ ( 0.8 ) $ 2.6 $ ( 51.1 ) $ ( 257.5 )

Other comprehensive income (loss) before reclassifications

( 38.5 ) 21.6 ( 0.8 ) 1.1 ( 16.6 ) 9.7 ( 12.5 ) 1.3 0.5 ( 1.0 )

Amounts reclassified from AOCI

— ( 5.8 ) — 1.5 ( 4.3 ) — 3.4 — 1.2 4.6

Net other comprehensive income (loss)

( 38.5 ) 15.8 ( 0.8 ) 2.6 ( 20.9 ) 9.7 ( 9.1 ) 1.3 1.7 3.6

Ending balance $ ( 183.7 ) $ 9.8 $ 0.4 $ ( 55.8 ) $ ( 229.3 ) $ ( 198.5 ) $ ( 9.9 ) $ 3.9 $ ( 49.4 ) $ ( 253.9 )

Stock-Based Compensation

During the nine months ended September 30, 2021, the Company awarded 0.6 million shares of restricted stock awards to its employees with a weighted average grant date fair value of $ 44.56 per share.

During the three months ended March 31, 2022, the Company awarded 0.7 million shares of restricted stock awards to its employees with a weighted average grant date fair value of $ 40.46 per share.

Approximately 58 % of these awards are time-based and vest ratably on each of the first three anniversary dates of the grants.

1 unchanged sentence

Approximately 14 % cliff vest and are based on performance targets containing a market condition determined over a three-year period.

The Company used the Monte Carlo method to determine grant date fair value of $ 54.92 per share for restricted stock awards with a market condition granted on March 4, 2021.

Fair value of restricted stock awards is based on the market price at the date of grant approval except for awards based on a market condition.

The Company used the Monte Carlo method to determine grant date fair value of $ 44.25 per share for awards with a market condition granted on March 17, 2022.

The Monte Carlo method is a statistical simulation technique used to provide the grant date fair value of an award.

5 unchanged sentences

Expected life (in years) 3

Share Repurchases and Dividends

In July 2018, Terex’s Board of Directors authorized the Company to repurchase up to $ 300 million of the Company’s outstanding shares of common stock.

During the nine months ended September 30, 2021, the Company did no t repurchase shares under these programs.

During the nine months ended September 30, 2020, the Company repurchased 2.5 million shares for $ 54.6 million under these programs.

Terex’s Board of Directors declared a dividend of $ 0.12 per share in the first, second and third quarters of 2021, which was paid to the Company’s shareholders.

In October 2021, Terex’s Board of Directors declared a dividend of $ 0.12 per share, which will be paid to the Company’s shareholders on December 17, 2021.

Share Repurchases

In July 2018, Terex’s Board of Directors authorized the repurchase up to $ 300 million of the Company’s outstanding shares of common stock.

The table below presents shares repurchased, inclusive of transactions executed but not settled, by the Company under this program.

Quarter Ended

March 31 Total Number of

Shares Repurchased Amount of Shares Repurchased

(in millions)

2022 508,892 $ 19.6

The table below presents dividends declared by Terex’s Board of Directors and paid to the Company’s shareholders:

Year First Quarter

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements