What changed in this filing

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Item 1. Financial Statements

2023-08-02 compared with 2023-05-02 · 219 added, 69 removed, 530 unchanged (35% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

2023 2022 2023 2022

Net sales $ 1,403.1 $ 1,077.1 $ 2,638.8 $ 2,079.6

31 unchanged sentences

Cash and cash equivalents $ 297.7 $ 304.1

Trade receivables (net of allowance of $ 10.1 and $ 9.4 at March 31, 2023 and December 31, 2022, respectively)

Receivables (net of allowance of $ 10.5 and $ 9.4 at June 30, 2023 and December 31, 2022, respectively)

Inventories 1,122.0 988.4

20 unchanged sentences

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

issued 84.6 and 84.0 shares at March 31, 2023 and December 31, 2022, respectively

issued 84.6 and 84.0 shares at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 879.1 881.6

1 unchanged sentence

Accumulated other comprehensive income (loss) ( 305.3 ) ( 341.6 )

Less cost of shares of common stock in treasury – 17.3 and 17.2 shares at March 31, 2023 and December 31, 2022, respectively

Less cost of shares of common stock in treasury – 17.9 and 17.2 shares at June 30, 2023 and December 31, 2022, respectively

( 594.5 ) ( 560.3 )

24 unchanged sentences

67.3 $ 0.9 $ 868.9 $ 1,302.9 $ ( 315.3 ) $ ( 562.8 ) $ 1,294.6

Net income (loss) — — — 159.4 — — 159.4

Other comprehensive income (loss) – net of tax — — — — 10.0 — 10.0

Issuance of common stock related to compensation — — 0.4 — — — 0.4

Compensation under stock-based plans – net — — 9.6 — — — 9.6

Dividends — — 0.2 ( 10.3 ) — — ( 10.1 )

Acquisition of treasury stock ( 0.6 ) — — — — ( 31.6 ) ( 31.6 )

Other — — — — — ( 0.1 ) ( 0.1 )

Balance at June 30, 2023

66.7 $ 0.9 $ 879.1 $ 1,452.0 $ ( 305.3 ) $ ( 594.5 ) $ 1,432.2

Shares Common

17 unchanged sentences

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

Net income (loss) — — — 74.1 — — 74.1

Other comprehensive income (loss) – net of tax — — — — ( 72.4 ) — ( 72.4 )

Issuance of common stock related to compensation 0.1 — 1.8 — — — 1.8

Compensation under stock-based plans – net ( 0.1 ) — 4.3 — — 0.1 4.4

Dividends — — 0.2 ( 9.1 ) — — ( 8.9 )

Acquisition of treasury stock ( 1.9 ) — — — — ( 64.3 ) ( 64.3 )

Other — — — 0.1 — — 0.1

Balance at June 30, 2022

67.4 $ 0.9 $ 867.0 $ 1,044.6 $ ( 320.9 ) $ ( 542.7 ) $ 1,048.9

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

2 unchanged sentences

(in millions)

Three Months Ended

Six Months Ended

Operating Activities

5 unchanged sentences

Changes in operating assets and liabilities (net of effects of acquisitions and divestitures):

Trade receivables ( 79.3 ) ( 20.9 )

Receivables ( 128.8 ) ( 68.8 )

Inventories ( 141.2 ) ( 193.4 )

5 unchanged sentences

Capital expenditures ( 39.1 ) ( 47.0 )

Proceeds from sale of capital assets 33.5 0.1

Acquisitions, net of cash acquired, and investments ( 15.8 ) ( 8.2 )

17 unchanged sentences

Basis of Presentation and Principles of Consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements of Terex Corporation and subsidiaries as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 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 June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 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 months ended March 31, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023.

Cash and cash equivalents include $ 8.2 million and $ 3.5 million at March 31, 2023 and December 31, 2022, respectively, which were not immediately available for use.

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023.

Cash and cash equivalents include $ 2.5 million and $ 3.5 million at June 30, 2023 and December 31, 2022, respectively, which were not immediately available for use.

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

Recently Issued Accounting Standards to be Implemented.

Accounting Standards Implemented in 2023.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848):

2 unchanged sentences

Subsequently, the FASB issued ASU 2021-01 to clarify the scope of Topic 848 and ASU 2022-06 to defer the sunset date of Topic 848.

The guidance was effective upon issuance and may be applied through December 31, 2024.

Adoption is not expected to have a material effect on the Company’s consolidated financial statements.

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

Accounts Receivable and Allowance for Doubtful Accounts.

6 unchanged sentences

Provision for credit losses 1.5

Balance as of March 31, 2023

Balance as of June 30, 2023

(1 Includes utilization of established reserves, net of recoveries and the impact of foreign exchange rate changes.

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

1 unchanged sentence

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

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

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

Accrued Warranties .

15 unchanged sentences

Foreign exchange effect/other 0.1

Balance as of March 31, 2023

Balance as of June 30, 2023

Assets Held for Sale .

Long-lived assets expected to be sold or otherwise disposed of within one year are classified as assets held for sale and included in Other assets in the Consolidated Balance Sheet.

The Company classified a facility as an asset held for sale in its Aerial Work Platforms (“AWP”) segment with a carrying value of approximately $ 31 million at March 31, 2023 and December 31, 2022.

In April 2023, the Company completed the sale of the facility and expects to recognize a gain of approximately $ 2 million.

The Company classified a facility as an asset held for sale in its Aerial Work Platforms (“AWP”) segment with a carrying value of approximately $ 31 million at December 31, 2022.

In April 2023, the Company completed the sale of the facility and recognized a gain of approximately $ 2 million, included in Selling, general and administrative expenses.

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 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”.

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 I – “Derivative Financial Instruments” and debt discussed in Note J – “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.

28 unchanged sentences

Three Months Ended

June 30, 2023,

Six Months Ended

June 30, 2023,

2023 2022 2023 2022

MP $ 577.4 $ 480.7 $ 1,131.2 $ 933.4

16 unchanged sentences

Three Months Ended

March 31, 2023

June 30, 2023

Three Months Ended

March 31, 2022

June 30, 2022

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

7 unchanged sentences

(1) Includes intercompany sales and eliminations.

(2) Total sales include $ 628.8 million and $ 487.7 million for the three months ended March 31, 2023 and 2022, respectively, attributable to the U.S., the Company’s country of domicile.

(2) Total sales include $ 771.4 million and $ 564.1 million for the three months ended June 30, 2023 and 2022, respectively, attributable to the U.S., the Company’s country of domicile.

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

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

Net sales by region

North America $ 508.6 $ 1,017.9 $ 6.2 $ 1,532.7 $ 371.8 $ 782.0 $ 3.4 $ 1,157.2

Western Europe 315.1 263.5 0.1 578.7 294.7 194.6 0.2 489.5

Asia-Pacific 200.7 112.0 0.2 312.9 187.9 95.6 — 283.5

Rest of World (1)

106.8 117.4 ( 9.7 ) 214.5 79.0 77.0 ( 6.6 ) 149.4

$ 1,131.2 $ 1,510.8 $ ( 3.2 ) $ 2,638.8 $ 933.4 $ 1,149.2 $ ( 3.0 ) $ 2,079.6

(1) Includes intercompany sales and eliminations.

(2) Total sales include $ 1.4 billion and $ 1.1 billion for the six months ended June 30, 2023 and 2022, 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

March 31, 2023

June 30, 2023

Three Months Ended

March 31, 2022

June 30, 2022

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

7 unchanged sentences

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

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

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

Net sales by product type

Aerial Work Platforms $ — $ 1,069.4 $ 1.1 $ 1,070.5 $ — $ 839.0 $ 0.8 $ 839.8

Materials Processing Equipment 672.0 — — 672.0 549.3 — 0.5 549.8

Specialty Equipment 455.7 — 0.6 456.3 382.7 — 0.7 383.4

Utility Equipment — 285.3 — 285.3 — 226.6 — 226.6

3.5 156.1 ( 4.9 ) 154.7 1.4 83.6 ( 5.0 ) 80.0

Total $ 1,131.2 $ 1,510.8 $ ( 3.2 ) $ 2,638.8 $ 933.4 $ 1,149.2 $ ( 3.0 ) $ 2,079.6

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

NOTE C – INCOME TAXES

During the three months ended March 31, 2023, the Company recognized income tax expense of $ 23.3 million on income of $ 133.2 million, an effective tax rate of 17.5 %, as compared to income tax expense of $ 11.9 million on income of $ 64.2 million, an effective tax rate of 18.5 %, for the three months ended March 31, 2022.

The lower effective tax rate for the three months ended March 31, 2023 when compared with the three months ended March 31, 2022 is primarily due to reduced tax expense on permanent items partially offset by lower favorable discrete items.

NOTE D – EARNINGS PER SHARE

During the three months ended June 30, 2023, the Company recognized income tax expense of $ 32.0 million on income of $ 191.8 million, an effective tax rate of 16.7 %, as compared to income tax expense of $ 15.1 million on income of $ 89.2 million, an effective tax rate of 16.9 %, for the three months ended June 30, 2022.

The lower effective tax rate for the three months ended June 30, 2023 when compared with the three months ended June 30, 2022 is primarily due to lower tax expense on permanent items partially offset by higher tax related to geographic distribution of income.

During the six months ended June 30, 2023, the Company recognized income tax expense of $ 55.3 million on income of $ 325.0 million, an effective tax rate of 17.0 %, as compared to income tax expense of $ 27.0 million on income of $ 153.4 million, an effective tax rate of 17.6 %, for the six months ended June 30, 2022.

The lower effective tax rate for the six months ended June 30, 2023 when compared with the six months ended June 30, 2022 is primarily due to lower tax expense on permanent items partially offset by higher tax related to geographic distribution of income.

On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15% for large corporations, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework.

The OECD continues to release additional guidance on the two-pillar approach with widespread implementation anticipated by 2026.

The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework.

NOTE D – ACQUISITIONS

On April 1, 2023, the Company acquired assets and liabilities of Continental Manufacturing Company, a manufacturer of bulk material handling conveyors based in Missouri, and real estate from Continental Real Estate LLC (collectively “MARCO”), to expand manufacturing capacity for mobile conveying equipment in North America and the Company’s product offerings that complement the existing portfolio.

Total cash consideration was approximately $ 6 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.

The results of operations associated with the business are consolidated within the MP segment in the Condensed Consolidated Financial Statements from the date of acquisition.

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

NOTE E – EARNINGS PER SHARE

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

Six Months Ended

2023 2022 2023 2022

Income (loss) from continuing operations

1 unchanged sentence

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

( 0.4 ) — 2.3 ( 0.4 )

Net income (loss) $ 159.4 $ 74.1 $ 272.0 $ 126.0

4 unchanged sentences

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

0.04 ( 0.01 )

Net income (loss) $ 2.36 $ 1.08 $ 4.02 $ 1.82

3 unchanged sentences

Restricted stock awards

0.5 0.4 0.8 0.8

Diluted weighted average shares outstanding 68.1 69.3 68.5 70.1

5 unchanged sentences

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 0.1 million and 0.3 million were outstanding during the three months ended March 31, 2023 and 2022, 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

Weighted average Restricted Stock Awards of approximately 0.5 million and 0.9 million were outstanding during the three months ended June 30, 2023 and 2022, 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 0.3 million and 0.6 million were outstanding during the six months ended June 30, 2023 and 2022, 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

Inventories consist of the following (in millions):

5 unchanged sentences

Inventories $ 1,122.0 $ 988.4

Work-in-process inventory includes approximately $ 48 million and $ 36 million of substantially completed inventory awaiting installation of final components at March 31, 2023 and December 31, 2022, respectively.

Reserves for lower of cost or net realizable value and excess and obsolete inventory were $ 64.4 million and $ 61.0 million at March 31, 2023 and December 31, 2022, respectively.

NOTE F – PROPERTY, PLANT AND EQUIPMENT

Work-in-process inventory includes approximately $ 23 million and $ 36 million of substantially completed inventory awaiting installation of final components at June 30, 2023 and December 31, 2022, respectively.

Reserves for lower of cost or net realizable value and excess and obsolete inventory were $ 65.7 million and $ 61.0 million at June 30, 2023 and December 31, 2022, respectively.

NOTE G – PROPERTY, PLANT AND EQUIPMENT

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

8 unchanged sentences

Property, plant and equipment – net $ 490.7 $ 465.6

NOTE G – GOODWILL AND INTANGIBLE ASSETS

NOTE H – GOODWILL AND INTANGIBLE ASSETS

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

4 unchanged sentences

185.0 99.4 284.4

Acquisitions 0.3 — 0.3

Foreign exchange effect and other 5.8 0.6 6.4

Balance at March 31, 2023, gross

Balance at June 30, 2023, gross

214.3 138.6 352.9

Accumulated impairment ( 23.2 ) ( 38.6 ) ( 61.8 )

Balance at March 31, 2023, net

Balance at June 30, 2023, net

$ 191.1 $ 100.0 $ 291.1

In connection with the MARCO acquisition, the Company recognized goodwill of $ 0.3 million.

The goodwill associated with the transaction was attributable primarily to the assembled workforce and expected synergies from the business combination.

The goodwill was assigned to the MP segment and is expected to be deductible for income tax purposes.

See Note D – “Acquisitions” for additional information regarding the acquisition.

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Weighted Average Life

8 unchanged sentences

$ 79.0 $ ( 62.2 ) $ 16.8 $ 77.9 $ ( 60.5 ) $ 17.4

In connection with the MARCO acquisition, the Company recognized customer relationships of $ 0.2 million with an estimated useful life of four years and trademarks of $ 0.3 million with an estimated useful life of ten years .

See Note D – “Acquisitions” for additional information regarding the acquisition.

Three Months Ended

June 30, Six Months Ended

(in millions) 2023 2022 2023 2022

1 unchanged sentence

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

NOTE H – DERIVATIVE FINANCIAL INSTRUMENTS

NOTE I – DERIVATIVE FINANCIAL INSTRUMENTS

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

7 unchanged sentences

Commodity Swaps

Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 27.8 million and $ 22.5 million at March 31, 2023 and December 31, 2022, respectively.

Commodity swaps outstanding at March 31, 2023 mature on or before November 30, 2024.

Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 29.4 million and $ 22.5 million at June 30, 2023 and December 31, 2022, respectively.

Commodity swaps outstanding at June 30, 2023 mature on or before November 30, 2024.

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

3 unchanged sentences

Cross Currency Swaps

Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 121.7 million and $ 121.4 million at March 31, 2023 and December 31, 2022, respectively.

Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 151.8 million and $ 121.4 million at June 30, 2023 and December 31, 2022, 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.

6 unchanged sentences

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 March 31, 2023 mature on or before February 2024.

The Company had $ 92.3 million and $ 7.8 million notional value of foreign exchange contracts outstanding that were designated as cash flow hedging instruments at March 31, 2023 and December 31, 2022, respectively.

Foreign exchange contracts outstanding at June 30, 2023 mature on or before June 2024.

The Company had $ 60.9 million and $ 7.8 million notional value of foreign exchange contracts outstanding that were designated as cash flow hedging instruments at June 30, 2023 and December 31, 2022, respectively.

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

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

The Company had $ 321.4 million and $ 241.1 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at March 31, 2023 and December 31, 2022, respectively.

The Company had $ 363.8 million and $ 241.1 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at June 30, 2023 and December 31, 2022, respectively.

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

5 unchanged sentences

Foreign exchange contracts Other current assets $ 0.1 $ 0.5 $ — $ 1.7

Cross currency swaps - net investment hedge Other current assets 0.2 — — —

Commodity swaps Other current assets 0.5 — 0.3 —

Cross currency swaps - net investment hedge Other non-current assets 0.1 — — —

Foreign exchange contracts Other current liabilities ( 0.6 ) ( 1.1 ) ( 0.3 ) ( 2.0 )

8 unchanged sentences

Instrument Three Months Ended

March 31, 2023 Three Months Ended

March 31, 2022 Income Statement Account Three Months Ended

March 31, 2023 Three Months Ended

March 31, 2022

June 30, 2023

Six Months Ended

June 30, 2023

Income Statement Account Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

Foreign exchange contracts $ — $ ( 0.4 ) Cost of goods sold $ ( 0.2 ) $ ( 0.2 )

2 unchanged sentences

Total $ 0.1 $ 2.0 Total $ ( 1.3 ) $ ( 3.1 )

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

Instrument Three Months Ended

June 30, 2022

Six Months Ended

June 30, 2022

Income Statement Account Three Months Ended

June 30, 2022

Six Months Ended

June 30, 2022

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

Commodity swaps ( 5.1 ) ( 6.9 ) Cost of goods sold 2.3 7.3

Cross currency swaps - net investment hedge 3.0 3.7 Selling, general and administrative expenses — —

Total $ ( 2.2 ) $ ( 3.2 ) Total $ 2.4 $ 7.4

The following tables provide the effect of derivative instruments that are designated as hedges in the Condensed Consolidated Statement of Comprehensive Income (Loss) (in millions):

2 unchanged sentences

Three Months Ended

March 31, 2023 Three Months Ended

March 31, 2022 Three Months Ended

March 31, 2023 Three Months Ended

March 31, 2022

June 30, 2023

Six Months Ended

June 30, 2023

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 1,060.2 ) $ ( 2,017.2 ) $ ( 15.4 ) $ ( 30.3 )

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

Foreign exchange contracts ( 0.2 ) ( 0.2 ) — —

Commodity swaps ( 1.1 ) ( 2.9 ) — —

2 unchanged sentences

Total $ ( 1.3 ) $ ( 3.1 ) $ 0.4 $ 1.2

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

Cost of goods sold Interest expense

Three Months Ended

June 30, 2022

Six Months Ended

June 30, 2022

Three Months Ended

June 30, 2022

Six Months Ended

June 30, 2022

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 864.2 ) $ ( 1,680.9 ) $ ( 11.8 ) $ ( 22.4 )

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

Foreign exchange contracts 0.1 0.1 — —

Commodity swaps 2.3 7.3 — —

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

Cross currency swaps - net investment hedge — — 0.2 0.3

Total $ 2.4 $ 7.4 $ 0.2 $ 0.3

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.

2 unchanged sentences

Three Months Ended

Six Months Ended

Instrument Income Statement Account 2023

7 unchanged sentences

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 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, 2023, it is estimated that approximately $ 1 million of losses are expected to be reclassified into earnings in the next twelve months.

NOTE I – LONG-TERM OBLIGATIONS

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 June 30, 2023, it is estimated that approximately $ 3 million of losses are expected to be reclassified into earnings in the next twelve months.

NOTE J – LONG-TERM OBLIGATIONS

Credit Agreement

3 unchanged sentences

(i) extension of the term of the Revolver to expire on April 1, 2026, (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 May 8, 2023, the Company and certain of its subsidiaries entered into an Amendment No.

1 (“Amendment”) to the Credit Agreement, with the lenders and issuing banks party thereto and CSAG.

The principal changes contained in the Amendment relate to the replacement of the adjusted LIBOR with term Secured Overnight Financing Rate.

In 2019, the Company entered into an Incremental Assumption Agreement and Amendment to its credit agreement that provided the Company with an additional term loan (the “2019 Term Loan”) in the amount of $ 200 million.

11 unchanged sentences

The Credit Agreement also contains customary default provisions.

The Company was in compliance with all covenants contained in the Credit Agreement as of March 31, 2023.

The Company had $ 177.0 million of Revolver amounts outstanding at March 31, 2023 and December 31, 2022.

The weighted average interest rate on the Revolver amounts was 6.52 % and 6.10% at March 31, 2023 and December 31, 2022, respectively.

The Company was in compliance with all covenants contained in the Credit Agreement as of June 30, 2023.

The Company had $ 134.5 million and $ 177.0 million of Revolver amounts outstanding at June 30, 2023 and December 31, 2022, respectively.

The weighted average interest rate on the Revolver amounts was 6.84 % and 6.10 % at June 30, 2023 and December 31, 2022, respectively.

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.

7 unchanged sentences

Letters of credit outstanding (in millions):

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

$400 Million Facility $ — $ —

12 unchanged sentences

Fair Value of Debt

The Company estimates the fair value of its debt set forth below as of March 31, 2023, as follows (in millions, except for quotes):

The Company estimates the fair value of its debt set forth below as of June 30, 2023, as follows (in millions, except for quotes):

Book Value Quote Fair Value

4 unchanged sentences

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

NOTE J – RETIREMENT PLANS AND OTHER BENEFITS

NOTE K – 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

Six Months Ended

2023 2022 2023 2022

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

4 unchanged sentences

— ( 0.8 ) — — ( 1.3 ) — — ( 1.6 ) — — ( 2.7 ) —

Amortization of prior service cost

— 0.1 — — — — — 0.1 — — — —

Amortization of actuarial (gain) loss

3 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 K – LITIGATION AND CONTINGENCIES

NOTE L – LITIGATION AND CONTINGENCIES

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

19 unchanged sentences

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, 2023 and December 31, 2022, the maximum exposure determined was $ 115.0 million and $ 121.4 million, respectively.

For credit guarantees outstanding as of June 30, 2023 and December 31, 2022, the maximum exposure determined was $ 103.3 million and $ 121.4 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 $ 6.0 million and $ 6.3 million at March 31, 2023 and December 31, 2022, respectively.

The allowance for credit losses on credit guarantees was $ 5.5 million and $ 6.3 million at June 30, 2023 and December 31, 2022, 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

NOTE M – STOCKHOLDERS’ EQUITY

Changes in Accumulated Other Comprehensive Income (Loss)

The table below presents changes in AOCI by component for the three months ended March 31, 2023 and 2022.

The table below presents changes in AOCI by component for the three and six months ended June 30, 2023 and 2022.

All amounts are net of tax (in millions).

Three Months Ended

March 31, 2023 Three Months Ended

March 31, 2022

June 30, 2023

Three Months Ended

June 30, 2022

CTA Derivative Hedging Adj.

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$ ( 250.0 ) $ ( 4.4 ) $ ( 3.2 ) $ ( 47.7 ) $ ( 305.3 ) $ ( 278.9 ) $ 0.8 $ ( 2.9 ) $ ( 39.9 ) $ ( 320.9 )

Six Months Ended

June 30, 2023

Six Months Ended

June 30, 2022

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 $ ( 285.5 ) $ ( 6.4 ) $ ( 3.5 ) $ ( 46.2 ) $ ( 341.6 ) $ ( 188.0 ) $ 4.0 $ — $ ( 44.5 ) $ ( 228.5 )

Other comprehensive income (loss) before reclassifications

35.5 ( 0.5 ) 0.3 ( 2.5 ) 32.8 ( 90.5 ) 2.6 ( 2.9 ) 3.9 ( 86.9 )

Amounts reclassified from AOCI

— 2.5 — 1.0 3.5 ( 0.4 ) ( 5.8 ) — 0.7 ( 5.5 )

Net other comprehensive income (loss)

35.5 2.0 0.3 ( 1.5 ) 36.3 ( 90.9 ) ( 3.2 ) ( 2.9 ) 4.6 ( 92.4 )

Ending balance $ ( 250.0 ) $ ( 4.4 ) $ ( 3.2 ) $ ( 47.7 ) $ ( 305.3 ) $ ( 278.9 ) $ 0.8 $ ( 2.9 ) $ ( 39.9 ) $ ( 320.9 )

Stock-Based Compensation

During the three months ended March 31, 2023, the Company awarded 0.6 million shares of Restricted Stock Awards to its employees with a weighted average fair value of $ 59.59 per share.

During the six months ended June 30, 2023, the Company awarded 0.6 million shares of Restricted Stock Awards to its employees with a weighted average fair value of $ 59.42 per share.

Approximately 60 % of these awards are time-based and vest ratably on each of the first three anniversary dates of the grants.

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

Three Months Ended

Six Months Ended

Total Number of

2 unchanged sentences

736,644 $ 33.8

2,298,050 $ 79.5

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

Year First Quarter

Year First Quarter Second Quarter

$ 0.15 $ 0.15

$ 0.13 $ 0.13

In July 2023, Terex’s Board of Directors declared a dividend of $ 0.17 per share, which will be paid on September 19, 2023 to the Company’s shareholders of record as of August 14, 2023.

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