TEREX CORP 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure information required to be disclosed in reports we file under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms, and such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required financial disclosure. In connection with the preparation of this Annual Report on Form 10-K, our management carried out an evaluation, under supervision and with participation of our management, including the CEO and CFO, as of December 31, 2023, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) under the Exchange Act. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2023. 43 Management’s Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that: pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management has conducted an assessment, including testing, of the effectiveness of our internal control over financial reporting as of December 31, 2023. In making its assessment of internal control over financial reporting, management used the criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, the Company’s management has concluded that, as of December 31, 2023, the Company’s internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance our controls and procedures will detect all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives of the control system will be attained. ITEM 9B. OTHER INFORMATION During the three months ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 44 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 10 is incorporated by reference from the definitive Terex Corporation Proxy Statement to be filed with the SEC within 120 days after the year covered by this Annual Report on Form 10-K. Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report required by Section 16(a) of the Exchange Act. To the extent disclosure for delinquent reports is being made, it can be found under the caption “Delinquent Section 16(a) Reports” in the Terex Corporation Proxy Statement to be filed with the SEC within 120 days after the year covered by this Annual Report on Form 10-K and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 is incorporated by reference from the definitive Terex Corporation Proxy Statement to be filed with the SEC within 120 days after the year covered by this Annual Report on Form 10-K. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Equity Compensation Plan Information The following table summarizes information about the Company’s equity compensation plans as of December 31, 2023: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by stockholders __ (1) $— 2,395,490 Equity compensation plans not approved by stockholders — — — Total — 2,395,490 (1) This does not include 1,615,314 shares of restricted stock awards and 750,048 shares held in a rabbi trust for a deferred compensation plan. The other information required by Item 12 is incorporated by reference from the definitive Terex Corporation Proxy Statement to be filed with the SEC within 120 days after the year covered by this Annual Report on Form 10-K. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by Item 13 is incorporated by reference from the definitive Terex Corporation Proxy Statement to be filed with the SEC within 120 days after the year covered by this Annual Report on Form 10-K. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Our independent registered public accounting firm is KPMG LLP , New York, NY , Auditor ID: 185 . The information required by Item 14 is incorporated by reference from the definitive Terex Corporation Proxy Statement to be filed with the SEC within 120 days after the year covered by this Annual Report on Form 10-K. 45 PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES (a) (1) and (2) Financial Statements and Financial Statement Schedules. See “Index to Consolidated Financial Statements and Financial Statement Schedule” on Page F-1. (3) Exhibits The exhibits set forth below are filed as part of this Annual Report on Form 10-K . Exhibit No. Exhibit 3.1 Restated Certificate of Incorporation of Terex Corporation (incorporated by reference to Exhibit 3.1 of the Form S-1 Registration Statement of Terex Corporation, Registration No. 33-52297). 3.2 Certificate of Elimination with respect to the Series B Preferred Stock (incorporated by reference to Exhibit 4.3 of the Form 10-K for the year ended December 31, 1997 of Terex Corporation, Commission File No. 1-10702). 3.3 Certificate of Amendment to Certificate of Incorporation of Terex Corporation dated September 5, 1998 (incorporated by reference to Exhibit 3.3 of the Form 10-K for the year ended December 31, 1998 of Terex Corporation, Commission File No. 1-10702). 3.4 Certificate of Amendment of the Certificate of Incorporation of Terex Corporation dated July 17, 2007 (incorporated by reference to Exhibit 3.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated July 17, 2007 and filed with the Commission on July 17, 2007). 3.5 Amended and Restated Bylaws of Terex Corporation (incorporated by reference to Exhibit 3.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated October 15, 2015 and filed with the Commission on October 19, 2015). 4.1 Indenture, dated July 20, 2007, between Terex Corporation and HSBC Bank USA, National Association, as Trustee, relating to senior debt securities (incorporated by reference to Exhibit 4.1 of the Form S-3 Registration Statement of Terex Corporation, Registration No. 333-144796). 4.2 Indenture, dated July 20, 2007, between Terex Corporation and HSBC Bank USA, National Association, as Trustee, relating to subordinated debt securities (incorporated by reference to Exhibit 4.2 of the Form S-3 Registration Statement of Terex Corporation, Registration No. 333-144796). 4.3 Indenture, dated April 1, 2021, among Terex Corporation, the guarantors named therein and HSBC Bank USA, National Association, as Trustee, relating to 5% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated April 1, 2021 and filed with the Commission on April 6, 2021). 4.4 Description of Capital Stock. * 10.1 Terex Corporation Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated May 11, 2017 and filed with the Commission on May 15, 2017). *** 10.2 Terex Corporation Amended and Restated Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.10 of the Form 10-K for the year ended December 31, 2008 of Terex Corporation, Commission File No. 1-10702). *** 10.3 Terex Corporation Amended and Restated Deferred Compensation Plan (incorporated by reference to Exhibit 10.11 of the Form 10-Q for the quarter ended June 30, 2004 of Terex Corporation, Commission File No. 1-10702). *** 10.4 Amendment to the Terex Corporation Amended and Restated Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated October 14, 2008 and filed with the Commission on October 17, 2008). *** 46 10.5 Terex Corporation Deferred Compensation Plan dated as of March 3, 2022 (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated May 19, 2022 and filed with the Commission May 23, 2022). *** 10.6 Employment Letter from Terex Corporation signed by John Garrison on October 15, 2015 (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated October 15, 2015 and filed with the Commission on October 19, 2015). *** 10.7 Employment Letter from Terex Corporation signed by Julie A. Beck on February 9, 2022 (incorporated by reference to Exhibit 10.16 of the Form 10-K for the year ended December 31, 2021). *** 10.8 Form of Restricted Stock Agreement (time based granted 2019) under the Terex Corporation 2018 Omnibus Incentive Plan between Terex Corporation and participants of the 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 of the Form 10-Q for the quarter ended March 31, 2019 of Terex Corporation, Commission File No. 1-10702). *** 10.9 Form of Restricted Stock Agreement (performance based granted 2019) under the Terex Corporation 2018 Omnibus Incentive Plan between Terex Corporation and participants of the 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 of the Form 10-Q for the quarter ended March 31, 2019 of Terex Corporation, Commission File No. 1-10702). *** 10.10 Terex Corporation Amended and Restated 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated May 6, 2021 and filed with the Commission May 11, 2021). *** 10.11 Form of Change in Control and Severance Agreement between Terex Corporation and certain executive officers (incorporated by reference to Exhibit 10.4 of the Form 10-Q for the quarter ended March 31, 2019 of Terex Corporation, Commission File No. 1-10702). *** 10.12 Form of Change in Control and Severance Agreement between Terex Corporation and certain executive officers (incorporated by reference to Exhibit 10.5 of the Form 10-Q for the quarter ended March 31, 2019 of Terex Corporation, Commission File No. 1-10702). *** 10.13 Amendment and Restatement Agreement dated as of April 1, 2021, relating to the Credit Agreement dated as of January 31, 2017, among Terex Corporation and certain of its subsidiaries, the Lenders and Issuing Banks named therein and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated April 1, 2021 and filed with the Commission April 6, 2021). 10.14 Amended and Restated Credit Agreement dated as of April 1, 2021, among Terex Corporation and certain of its subsidiaries, the Lenders and Issuing Banks named therein and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.2 of the Form 8-K Current Report, Commission File No. 1-10702, dated April 1, 2021 and filed with the Commission April 6, 2021). 10.15 Amendment No. 1 dated as of May 8, 2023 to the Amended and Restated Credit Agreement dated as of April 1, 2021, among Terex Corporation, certain of its subsidiaries, the Lenders and Issuing Banks named therein and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated May 8, 2023 and filed with the Commission May 10, 2023). 10.16 Guarantee and Collateral Agreement dated as of January 31, 2017, among Terex Corporation, certain of its subsidiaries, and Credit Suisse AG, Cayman Islands Branch, as Collateral Agent (incorporated by reference to Exhibit 10.2 of the Form 8-K Current Report, Commission File No. 1-10702, dated January 31, 2017 and filed with the Commission February 2, 2017). 10.17 Amendment dated as of December 29, 2022, relating to the Guarantee and Collateral Agreement dated as of January 31, 2017, among Terex Corporation, certain of its subsidiaries, the Lenders and Issuing Banks named therein and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated December 29, 2022 and filed with the Commission December 30, 2022). 10.18 E mployment Letter from Terex Corporation signed by Simon Meester on October 1 2 , 202 3 (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated October 1 2 , 2023 and filed with the Commission on October 1 7 , 2 023). *** 47 10.19 C onsulting Agreement between Terex Corpora tion and John L. Garrison , Jr. , dated December 1 4 , 2023 (incorporated by reference to Exhibit 10.1 of the Form 8-K Current Report, Commission File No. 1-10702, dated December 1 4 , 2023 and filed with the Commission on Dec ember 1 8 , 2023). *** 21.1 Subsidiaries of Terex Corporation. * 23.1 Consent of Independent Registered Public Accounting Firm KPMG LLP, New York, NY. * 24.1 Power of Attorney. * 31.1 Chief Executive Officer Certification pursuant to Rule 13a-14(a)/15d-14(a). * 31.2 Chief Financial Officer Certification pursuant to Rule 13a-14(a)/15d-14(a). * 32 Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002. ** 97 Terex Corporation Clawback Policy. * 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document. * 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. * 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. * 101.LAB XBRL Taxonomy Extension Label Linkbase Document. * 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. * 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Exhibit filed with this document. ** Exhibit furnished with this document. *** Denotes a management contract or compensatory plan or arrangement. ITEM 16. FORM 10-K SUMMARY Not applicable. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TEREX CORPORATION By: /s/ Simon A. Meester February 9, 2024 Simon A. Meester President, Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. NAME TITLE DATE /s/ Simon A. Meester President, Chief Executive Officer and Director February 9, 2024 Simon A. Meester (Principal Executive Officer) /s/ Julie A. Beck Senior Vice President and Chief Financial Officer February 9, 2024 Julie A. Beck (Principal Financial Officer) /s/ Stephen A. Johnston Vice President, Chief Accounting Officer and Controller February 9, 2024 Stephen A. Johnston (Principal Accounting Officer) */s/ Paula H. J. Cholmondeley Director Paula H. J. Cholmondeley */s/ Don DeFosset Director Don DeFosset */s/ Thomas J. Hansen Director Thomas J. Hansen */s/ Sandie O’Connor Director Sandie O’Connor */s/ Christopher Rossi Director Christopher Rossi */s/ Andra Rush Director Andra Rush */s/ David A. Sachs Non-Executive Chairman David A. Sachs */s/ Oluseun Salami Director Oluseun Salami *By /s/ Julie A. Beck February 9, 2024 Julie A. Beck, as Attorney-in-Fact 49 THIS PAGE IS INTENTIONALLY BLANK NEXT PAGE IS NUMBERED “F-1” 50 TEREX CORPORATION AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE TEREX CORPORATION CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2023 AND 2022 AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2023 Page Reports of Independent Registered Public Accounting Firms F- 2 Consolidated Statement of Income (Loss) F-5 Consolidated Statement of Comprehensive Income (Loss) F- 5 Consolidated Balance Sheet F- 6 Consolidated Statement of Changes in Stockholders’ Equity F- 7 Consolidated Statement of Cash Flows F- 8 Notes to Consolidated Financial Statements F- 9 FINANCIAL STATEMENT SCHEDULE Schedule II – Valuation and Qualifying Accounts and Reserves F- 42 All other schedules for which provision is made in the applicable regulations of the Securities and Exchange Commission (“SEC”) are not required under the related instructions, or are not applicable, and therefore have been omitted. F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Terex Corporation: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Terex Corporation and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income (loss), comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. F-2 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Identification of uncertain tax positions and the recoverability of deferred tax assets As described in Note C – “Income Taxes” to the consolidated financial statements, the Company reported a liability of $6.4 million related to unrecognized tax benefits and net deferred tax assets of $174.7 million as of December 31, 2023. The Company conducts business globally, and exercises judgment in its assessment of uncertain tax positions and in its evaluation of the recoverability of deferred tax assets, particularly for certain foreign jurisdictions. The Company assesses the net realizable value of its deferred tax assets based on available evidence, including historical information that is supplemented by currently available information about future tax years. Where the Company has determined that a tax return filing position does not satisfy the more likely than not recognition threshold, it has recorded no tax benefits. We identified the identification of uncertain tax positions and evaluation of the recoverability of deferred tax assets in certain foreign jurisdictions as a critical audit matter. A high degree of auditor judgment, including the involvement of tax professionals with specialized skills and knowledge, was required in evaluating (i) the identification of uncertain tax positions and (ii) the estimated future taxable income and other evidence used in the evaluation of the recovery of deferred tax assets. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the identification of uncertain tax positions and the recoverability of deferred tax assets. This included controls related to management’s analysis of relevant tax law and the estimated future taxable income used in assessing recoverability. For the identification of uncertain tax positions, tax professionals with specialized skills and knowledge assisted in evaluating management’s identification of uncertain tax positions, including interpretation of relevant tax law and consideration of ongoing and completed examinations by tax authorities. For the evaluation of the recoverability of deferred tax assets, we evaluated the Company’s estimated future taxable income in certain foreign jurisdictions primarily by comparing estimated amounts to historical amounts, prior estimates and trends, and by performing sensitivity analysis. We involved tax professionals with specialized skills and knowledge, who assisted in evaluating the recoverability of deferred tax assets by assessing the application of relevant tax law and the extent to which the deferred tax assets are subject to limitation on usage or expiry. We have served as the Company’s auditor since 2021. /s/KPMG LLP New York, New York February 9, 2024 F-3 TEREX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (LOSS) (in millions, except per share data) Year Ended December 31, 2023 2022 2021 Net sales $ 5,151.5 $ 4,417.7 $ 3,886.8 Cost of goods sold ( 3,974.9 ) ( 3,546.5 ) ( 3,129.4 ) Gross profit 1,176.6 871.2 757.4 Selling, general and administrative expenses ( 540.1 ) ( 451.2 ) ( 429.4 ) Income (loss) from operations 636.5 420.0 328.0 Other income (expense) Interest income 7.6 2.8 3.7 Interest expense ( 63.3 ) ( 49.1 ) ( 51.5 ) Loss on early extinguishment of debt — ( 0.3 ) ( 29.4 ) Other income (expense) – net ( 1.1 ) ( 6.8 ) 13.0 Income (loss) from continuing operations before income taxes 579.7 366.6 263.8 (Provision for) benefit from income taxes ( 63.0 ) ( 66.4 ) ( 46.3 ) Income (loss) from continuing operations 516.7 300.2 217.5 Gain (loss) on disposition of discontinued operations – net of tax 1.3 ( 0.2 ) 3.4 Net income (loss) $ 518.0 $ 300.0 $ 220.9 Basic earnings (loss) per share: Income (loss) from continuing operations $ 7.65 $ 4.38 $ 3.12 Gain (loss) on disposition of discontinued operations – net of tax 0.02 — 0.05 Net income (loss) $ 7.67 $ 4.38 $ 3.17 Diluted earnings (loss) per share: Income (loss) from continuing operations $ 7.56 $ 4.32 $ 3.07 Gain (loss) on disposition of discontinued operations – net of tax 0.02 — 0.05 Net income (loss) $ 7.58 $ 4.32 $ 3.12 Weighted average number of shares outstanding in per share calculation Basic 67.5 68.5 69.7 Diluted 68.3 69.4 70.9 The accompanying notes are an integral part of these consolidated financial statements. F-4 TEREX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (in millions) Year Ended December 31, 2023 2022 2021 Net income (loss) $ 518.0 $ 300.0 $ 220.9 Other comprehensive income (loss), net of tax: Cumulative translation adjustment, net of (provision for) benefit from taxes of $( 0.6 ), $( 2.3 ) and $ 5.4 for the years ended December 31, 2023, 2022 and 2021, respectively 57.2 ( 97.5 ) ( 42.8 ) Derivative hedging adjustment, net of (provision for) benefit from taxes of $( 0.2 ), $ 2.9 and $( 2.7 ) for the years ended December 31, 2023, 2022 and 2021, respectively 1.0 ( 10.4 ) 10.0 Debt and equity securities adjustment, net of (provision for) benefit from taxes of $( 0.2 ), $ 1.0 and $ 0.0 for the years ended December 31, 2023, 2022 and 2021, respectively 0.8 ( 3.5 ) ( 1.2 ) Pension liability adjustment: Net gain (loss), net of (provision for) benefit from taxes of $ 0.7 , $( 0.1 ) and $( 1.6 ) for the years ended December 31, 2023, 2022 and 2021, respectively ( 3.5 ) ( 6.7 ) 10.6 Amortization of actuarial (gain) loss, net of provision for (benefit from) taxes of $( 0.3 ), $( 0.2 ) and $( 0.3 ) for the years ended December 31, 2023, 2022 and 2021, respectively 1.7 1.2 2.0 Foreign exchange and other effects, net of (provision for) benefit from taxes of $ 0.3 , $( 0.1 ) and $ 0.1 for the years ended December 31, 2023, 2022 and 2021, respectively ( 2.7 ) 3.8 1.3 Total pension liability adjustment ( 4.5 ) ( 1.7 ) 13.9 Other comprehensive income (loss) 54.5 ( 113.1 ) ( 20.1 ) Comprehensive income (loss) $ 572.5 $ 186.9 $ 200.8 The accompanying notes are an integral part of these consolidated financial statements. F-5 TEREX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in millions, except par value) December 31, 2023 2022 Assets Current assets Cash and cash equivalents $ 370.7 $ 304.1 Receivables (net of allowance of $ 8.3 and $ 9.4 at December 31, 2023 and 2022, respectively) 547.8 547.5 Inventories 1,186.0 988.4 Prepaid and other current assets 140.7 122.0 Total current assets 2,245.2 1,962.0 Non-current assets Property, plant and equipment – net 569.8 465.6 Goodwill 294.6 284.4 Intangible assets – net 15.7 17.4 Other assets 490.2 388.7 Total assets $ 3,615.5 $ 3,118.1 Liabilities and Stockholders’ Equity Current liabilities Current portion of long-term debt $ 2.8 $ 1.9 Trade accounts payable 702.6 624.6 Accrued compensation and benefits 135.6 103.0 Other current liabilities 278.2 269.1 Total current liabilities 1,119.2 998.6 Non-current liabilities Long-term debt, less current portion 620.4 773.6 Other non-current liabilities 203.6 164.7 Total liabilities 1,943.2 1,936.9 Commitments and contingencies Stockholders’ equity Common stock, $ .01 par value – authorized 300.0 shares; issued 84.6 and 84.0 shares at December 31, 2023 and 2022, respectively 0.9 0.9 Additional paid-in capital 906.1 881.6 Retained earnings 1,674.8 1,200.6 Accumulated other comprehensive income (loss) ( 287.1 ) ( 341.6 ) Less cost of shares of common stock in treasury – 18.5 and 17.2 shares at December 31, 2023 and 2022, respectively ( 622.4 ) ( 560.3 ) Total stockholders’ equity 1,672.3 1,181.2 Total liabilities and stockholders’ equity $ 3,615.5 $ 3,118.1 The accompanying notes are an integral part of these consolidated financial statements. F-6 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (in millions) Outstanding Shares Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Stock in Treasury Total Balance at December 30, 2020 68.6 $ 0.9 $ 837.9 $ 750.3 $ ( 208.4 ) $ ( 459.2 ) $ 921.5 Net income (loss) — — — 220.9 — — 220.9 Other comprehensive income (loss) – net of tax — — — — ( 20.1 ) — ( 20.1 ) Issuance of common stock related to compensation 0.6 — 12.2 — — — 12.2 Compensation under stock-based plans – net 0.1 — 9.3 — — 2.9 12.2 Dividends — — 0.6 ( 34.1 ) — — ( 33.5 ) Acquisition of treasury stock ( 0.1 ) — — — — ( 3.3 ) ( 3.3 ) Other — — — ( 0.2 ) — ( 0.1 ) ( 0.3 ) Balance at December 31, 2021 69.2 0.9 860.0 936.9 ( 228.5 ) ( 459.7 ) 1,109.6 Net income (loss) — — — 300.0 — — 300.0 Other comprehensive income (loss) – net of tax — — — — ( 113.1 ) — ( 113.1 ) Issuance of common stock related to compensation 0.6 — 18.7 — — — 18.7 Compensation under stock-based plans – net — — 2.3 — — 1.0 3.3 Dividends — — 0.6 ( 36.2 ) — — ( 35.6 ) Acquisition of treasury stock ( 3.0 ) — — — — ( 101.6 ) ( 101.6 ) Other — — — ( 0.1 ) — — ( 0.1 ) Balance at December 31, 2022 66.8 0.9 881.6 1,200.6 ( 341.6 ) ( 560.3 ) 1,181.2 Net income (loss) — — — 518.0 — — 518.0 Other comprehensive income (loss) – net of tax — — — — 54.5 — 54.5 Issuance of common stock related to compensation 0.6 — 10.4 — — — 10.4 Compensation under stock-based plans – net — — 13.4 — — 1.4 14.8 Dividends — — 0.7 ( 43.8 ) — — ( 43.1 ) Acquisition of treasury stock ( 1.3 ) — — — — ( 63.3 ) ( 63.3 ) Other — — — — — ( 0.2 ) ( 0.2 ) Balance at December 31, 2023 66.1 $ 0.9 $ 906.1 $ 1,674.8 $ ( 287.1 ) $ ( 622.4 ) $ 1,672.3 The accompanying notes are an integral part of these consolidated financial statements. F-7 TEREX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (in millions) Year Ended December 31, 2023 2022 2021 Operating Activities Net income (loss) $ 518.0 $ 300.0 $ 220.9 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 56.4 47.2 50.2 Deferred taxes ( 38.1 ) ( 0.6 ) 1.2 Stock-based compensation expense 43.6 30.3 33.1 Inventory and other non-cash charges 9.4 22.6 39.6 Changes in operating assets and liabilities (net of effects of acquisitions and divestitures): Receivables 11.0 ( 54.7 ) ( 139.0 ) Inventories ( 199.6 ) ( 206.1 ) ( 229.5 ) Trade accounts payable 57.5 96.3 173.0 Other assets and liabilities 2.3 37.5 140.7 Foreign exchange and other operating activities, net ( 1.2 ) ( 11.3 ) 3.2 Net cash provided by (used in) operating activities 459.3 261.2 293.4 Investing Activities Capital expenditures ( 127.2 ) ( 109.6 ) ( 59.7 ) Proceeds from sale of capital assets 33.6 0.2 1.9 Acquisitions, net of cash acquired, and investments ( 23.8 ) ( 50.1 ) ( 42.7 ) Other investing activities, net 3.0 5.4 ( 1.7 ) Net cash provided by (used in) investing activities ( 114.4 ) ( 154.1 ) ( 102.2 ) Financing Activities Repayments of debt ( 401.5 ) ( 224.4 ) ( 1,103.5 ) Proceeds from issuance of debt 242.8 320.9 600.1 Share repurchases ( 62.8 ) ( 101.3 ) ( 3.0 ) Dividends paid ( 43.2 ) ( 35.6 ) ( 33.5 ) Other financing activities, net ( 23.1 ) ( 14.5 ) ( 40.2 ) Net cash provided by (used in) financing activities ( 287.8 ) ( 54.9 ) ( 580.1 ) Effect of Exchange Rate Changes on Cash and Cash Equivalents 9.5 ( 15.0 ) ( 14.3 ) Net Increase (Decrease) in Cash and Cash Equivalents 66.6 37.2 ( 403.2 ) Cash and Cash Equivalents at Beginning of Year 304.1 266.9 670.1 Cash and Cash Equivalents at End of Year $ 370.7 $ 304.1 $ 266.9 The accompanying notes are an integral part of these consolidated financial statements. F-8 TEREX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A – BASIS OF PRESENTATION Basis of Presentation and Principles of Consolidation . The consolidated financial statements include the accounts of Terex Corporation, its majority-owned subsidiaries and other controlled subsidiaries (“Terex” or the “Company”). The Company consolidates all majority-owned and controlled subsidiaries, applies equity method of accounting for investments in which the Company is able to exercise significant influence and applies the cost method for investments which do not have readily determinable fair values. All intercompany balances, transactions and profits have been eliminated. Certain prior period amounts have been reclassified to conform with the 2023 presentation. Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Cash and Cash Equivalents. Cash equivalents consist of highly liquid investments with original maturities of three months or less. Carrying amount of cash and cash equivalents approximates its fair value. Cash and cash equivalents include $ 0.4 million and $ 3.5 million at December 31, 2023 and 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. Inventories. Inventories are stated at the lower of cost or net realizable value (“NRV”). Cost is determined by the first-in, first-out (“FIFO”) and average cost methods (approximately 91 % and 9 %, respectively). In valuing inventory, the Company is required to make assumptions regarding the level of reserves required to value potentially obsolete or over-valued items at lower of cost or NRV. These assumptions require the Company to analyze the aging of and forecasted demand for its inventory, forecast future product sales prices, pricing trends and margins, and to make judgments and estimates regarding excess and obsolete (“E&O”) inventory. Future product sales prices, pricing trends and margins are based on historical experience and actual orders received. The Company’s judgments and estimates for E&O inventory are based on analysis of actual and forecasted usage. Valuation of used equipment taken in trade from customers requires the Company to use the best information available to determine the value of the equipment to potential customers. This value is subject to change based on numerous conditions. Inventory reserves are established taking into account age, frequency of use, or sale, and in the case of repair parts, installed base of machines. While calculations are made involving these factors, significant management judgment regarding expectations for future events is involved. Future events that could significantly influence the Company’s judgment and related estimates include general economic conditions in markets where the Company’s products are sold, new equipment price fluctuations, actions of the Company’s competitors, including introduction of new products and technological advances, as well as new products and design changes the Company introduces. The Company makes adjustments to its inventory reserves based on identification of specific situations and increases its inventory reserves accordingly. As further changes in future economic or industry conditions occur, the Company may revise estimates that were used to calculate its inventory reserves. At December 31, 2023 and 2022, reserves for lower of cost or NRV, E&O inventory totaled $ 70.5 million and $ 61.0 million, respectively. If actual conditions are less favorable than those the Company has projected, the Company will increase its reserves for lower of cost or NRV, E&O inventory accordingly. Any increase in the Company’s reserves will adversely impact its results of operations. Establishment of a reserve for lower of cost or NRV, E&O inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. Shipping and handling costs for product shipments to customers are recorded in Cost of goods sold (“COGS”). Debt Issuance Costs. Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized over the term of the associated debt. Debt issuance costs related to senior notes and term loans are presented in the balance sheet as a direct deduction from the carrying amount of the borrowing, consistent with debt discounts. Debt issuance costs related to securing the Company’s revolving line of credit are presented in Other assets. Debt issuance costs related to debt that is extinguished early are charged to expense at the time of retirement. Debt issuance costs were $ 7.5 million and $ 9.5 million (net of accumulated amortization of $ 5.6 million and $ 3.6 million) at December 31, 2023 and 2022, respectively. F-9 Intangible Assets. Intangible assets include purchased patents, trademarks, customer relationships and other specifically identifiable assets and are amortized on a straight-line basis over the respective estimated useful lives, which range from one to ninety-nine years . Intangible assets are reviewed for impairment when events or changes in circumstances indicate that their carrying amount may not be recoverable. Goodwill. Goodwill represents the excess of purchase price over the fair value of assets acquired and liabilities assumed as part of a business combination. Goodwill is assigned to one or more reporting segments on the date of acquisition. The Company reviews its goodwill for impairment annually during the fourth quarter of each fiscal year or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of any one of its reporting units below its respective carrying amount. In performing the goodwill impairment test, the Company may first perform a qualitative assessment or bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. A qualitative assessment requires the Company to consider events or circumstances including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting segment’s net assets and changes in its stock price. If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair values of its reporting units are greater than the carrying amounts, then a quantitative impairment test does not need to be performed. If the qualitative assessment indicates a quantitative analysis should be performed or a quantitative analysis is directly elected, the Company evaluates goodwill for impairment by comparing the fair value of each of its reporting units to its carrying value, including the associated goodwill. To determine the fair values, the Company uses an income approach, along with other relevant market information, derived from a discounted cash flow model to estimate fair value of its reporting units. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any, would be recognized. The loss recognized would not exceed total amount of goodwill allocated to that reporting unit. In connection with the annual impairment test conducted as of October 1, 2023, the Company bypassed the qualitative assessment and proceeded directly to the quantitative impairment test. The quantitative assessment indicated that each reporting unit had an estimated fair value which substantially exceeded its respective carrying amount. Property, Plant and Equipment . Property, plant and equipment are stated at cost. Expenditures for major renewals and improvements are capitalized while expenditures for maintenance and repairs not expected to extend the life of an asset beyond its normal useful life are charged to expense when incurred. Plant and equipment are depreciated over the estimated useful lives ( 1 - 40 years and 2 - 20 years, respectively) of the assets under the straight-line method of depreciation for financial reporting purposes and both straight-line and other methods for tax purposes. Long-Lived Assets. The Company assesses the realizability of its long-lived assets, including definite-lived intangible assets, and evaluates such assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets (or group of assets) may not be recoverable. Impairment is determined to exist if estimated future undiscounted cash flows are less than carrying value. If an impairment is indicated, assets are written down to their fair value, which is typically determined by a discounted cash flow analysis. Future cash flow projections include assumptions regarding future sales levels and the level of working capital needed to support the assets. The Company uses data developed by business segment management as well as macroeconomic data in making these calculations. There are no assurances that future cash flow assumptions will be achieved. The amount of any impairment then recognized would be calculated as the difference between estimated fair value and carrying value of the asset. Included in Selling, general & administrative expenses (“SG&A”) in the Consolidated Statement of Income (Loss) are $ 0.3 million, $ 1.1 million and $ 6.3 million of asset impairments for the years ended December 31, 2023, 2022 and 2021, respectively. Assets Held for Sale. The Company classifies its long-lived assets to be sold as held for sale in the period (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation expense on the asset. The Company assesses the fair value of a long-lived asset less any costs to sell at each reporting period and until the asset is no longer classified as held for sale. F-10 Receivables and Allowance for Doubtful Accounts. Receivables includes $ 493.8 million and $ 501.2 million of trade accounts receivable at December 31, 2023 and 2022, respectively. Trade accounts receivable are recorded at invoiced amount and do not bear interest. Allowance for doubtful accounts is the Company’s estimate of current expected credit losses on its existing accounts receivable and determined based on historical customer assessments, current financial conditions, and reasonable and supportable forecasts. Account balances are charged off against the allowance when the Company determines the receivable will not be recovered. There can be no assurance that the Company’s estimate of accounts receivable collection will be indicative of future results. The following table summarizes changes in the consolidated allowance for doubtful accounts (in millions): Balance as of December 31, 2021 $ 9.7 Provision for credit losses 1.1 Other (1) ( 1.4 ) Balance as of December 31, 2022 $ 9.4 Provision for credit losses ( 0.1 ) Other (1) ( 1.0 ) Balance as of December 31, 2023 $ 8.3 (1) Includes utilization of established reserves, net of recoveries and the impact of foreign exchange rate changes. Pursuant to terms of the Company’s trade accounts receivable factoring arrangements, certain of the Company’s subsidiaries may sell their trade accounts receivable. These trade accounts receivable qualify for sales treatment under Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing” (“ASC 860”) and accordingly, the proceeds are included in net cash provided by operating activities. The gross amount of trade accounts receivable sold for years ended December 31, 2023, 2022 and 2021 totaled $ 834.8 million, $ 664.7 million and $ 527.0 million, respectively. The factoring discount paid upon sale is recorded as interest expense in the Consolidated Statement of Income (Loss). As of December 31, 2023 and 2022, $ 162.2 million and $ 76.5 million, respectively, of receivables qualifying for sale treatment were outstanding and continued to be serviced by the Company. Revenue Recognition. The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. In the U.S., the Company has the ability to enter into a security agreement and receive a security interest in the product by filing an appropriate Uniform Commercial Code (“UCC”) financing statement. However, a significant portion of the Company’s revenue is generated outside of the U.S. In many countries outside of the U.S., as a matter of statutory law, a seller retains title to a product until payment is made. The laws do not provide for a seller’s retention of a security interest in goods in the same manner as established in the UCC. In these countries, the Company retains title to goods delivered to a customer until the customer makes payment so that it can recover the goods in the event of customer default on payment. The Company considers the following events in order to determine when it is appropriate to recognize revenue: (i) the customer has physical possession of the product; (ii) the customer has legal title to the product; (iii) the customer has assumed the risks and rewards of ownership, (iv) the customer has communicated acceptance of the product and (v) the Company has a right to payment. These events serve as indicators, along with the details contained within the contract, that it is appropriate to recognize revenue. The Company generates revenue through the sale of machines, parts and service, and extended warranties. Revenue from product sales is recorded when the performance obligation is fulfilled, usually at the time of shipment, at the net sales price (transaction price). Estimates of variable consideration, such as volume discounts and rebates, reduce transaction price when it is probable that a customer will attain these types of sales incentives. These estimates are primarily derived from contractual terms and historical experience. The Company elected to present revenue net of sales tax and other similar taxes and account for shipping and handling as activities to fulfill the promise to transfer goods rather than separate performance obligations. Payments are typically due either 30 or 60 days, depending on geography, following delivery of products or completion of services. F-11 Revenue from extended warranties is recognized over time on a straight line basis because the customer benefits evenly from the extended warranty throughout the period; beginning upon expiration of the standard warranty and through end of the term. Revenue from services is recognized based on cost input method as the time and materials used in the repair portrays the most accurate depiction of completion of the performance obligation. During the full year ended December 31, 2023, revenues generated from the sale of extended warranties and services were an immaterial portion of revenue. The Company sells equipment subject to leases and related lease payments. Income from operating leases is recognized ratably over the lease term. Revenue from sales-type leases is recognized at the inception of the lease. For detailed sales information see Note B – “Business Segment Information”. Leases. Terex leases approximately 100 real properties, approximately 400 vehicles and approximately 400 pieces of office and industrial equipment. As the lessee, Terex will classify a lease which it has substantially all the risks and rewards of ownership as a finance lease. The Company determines if an arrangement contains a lease at contract inception. With the exception of short-term leases (leases with terms less than 12 months), all leases with contractual fixed costs are recorded on the balance sheet on the lease commencement date as a right-of-use asset and a lease liability. Lease liabilities are initially measured at the present value of the minimum lease payments and subsequently increased to reflect the interest accrued and reduced by the lease payments affected. Right-of-use assets are initially measured at the present value of the minimum lease payments adjusted for any prior lease payments, lease incentives and initial direct costs. The Company does not separate lease and non-lease components of a contract for any class of leases. Certain leases contain escalation, renewal and/or termination options that are factored into the right-of-use asset as appropriate. Operating leases result in a straight-line rent expense over the life of the lease. For finance leases, right-of-use assets are amortized on a straight-line basis over the life of the lease and interest accretes to the lease liability which results in a higher interest expense at lease inception that declines over the life of the lease. Generally, variable lease costs are expensed as incurred and are not included in the determination of right-of-use assets or lease liabilities. Short-term leases for real property, vehicles and industrial and office equipment are recognized in the income statement on a straight-line basis over the lease term. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments, if the rate is not implicit in the lease. Consideration is given to the Company’s recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating incremental borrowing rates. For detailed lease information see Note K – “Leases”. Supplier Finance. The Company has a supplier finance program to pay a third-party bank the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices. Terex or the bank may terminate the agreement upon 30 days notice. The supplier invoices that have been confirmed as valid under the program require payment in full within 60-90 days of invoice date. There is no confirmed obligation outstanding at December 31, 2023. Guarantees . The Company issues guarantees to financial institutions related to financing of equipment purchases by customers. 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 N – “Litigation and Contingencies” for additional information regarding guarantees issued to financial institutions. Accrued Warranties . The Company records accruals for potential warranty claims based on its claim experience. The Company’s products are typically sold with a standard warranty covering defects that arise during a fixed period. Each business provides a warranty specific to products it offers. The specific warranty offered by a business is a function of customer expectations and competitive forces. Warranty length is generally a fixed period of time, a fixed number of operating hours or both. A liability for estimated warranty claims is accrued at the time of sale. The current portion of the product warranty liability is included in Other current liabilities and the non-current portion is included in Other non-current liabilities in the Company’s Consolidated Balance Sheet. The liability is established using historical warranty claims experience for each product sold. Historical claims experience may be adjusted for known design improvements or for the impact of unusual product quality issues. Assumptions are updated for known events that may affect the potential warranty liability. F-12 The following table summarizes changes in the consolidated product warranty liability (in millions): Balance as of December 31, 2021 $ 44.1 Accruals for warranties issued during the period 39.7 Changes in estimates ( 3.4 ) Settlements during the period ( 35.1 ) Foreign exchange effect/other ( 1.4 ) Balance as of December 31, 2022 $ 43.9 Accruals for warranties issued during the period 40.1 Changes in estimates 7.0 Settlements during the period ( 43.8 ) Foreign exchange effect/other 0.6 Balance as of December 31, 2023 $ 47.8 Accrued Product Liability. The Company records accruals for product liability claims when deemed probable and estimable based on facts and circumstances, and prior claims experience. Accruals for product liability claims are valued based upon litigation trends, the Company’s prior claims experience, including consideration of jurisdiction, circumstances of the accident, type of loss or injury, identity of plaintiff, other potential responsible parties, analysis of outside legal counsel, analysis of internal product liability counsel and experience of the Company’s product safety employees. Actual product liability costs could be different due to a number of variables such as the decisions of juries or judges. Defined Benefit Pension and Other Post-retirement Benefits. The Company provides post-retirement benefits to certain former salaried and hourly employees and certain hourly employees covered by bargaining unit contracts that provide such benefits. The Company accounts for these benefits under ASC 715, “Compensation-Retirement Benefits” (“ASC 715”). ASC 715 requires balance sheet recognition of the overfunded or underfunded status of pension and post-retirement benefit plans. Under ASC 715, actuarial gains and losses and prior service costs or credits must be recognized in Accumulated other comprehensive income (loss) (“AOCI”), net of tax effects, until they are amortized as a component of net periodic benefit cost. See Note L – “Retirement Plans and Other Benefits.” Deferred Compensation. The Company maintains a deferred compensation plan. The Company’s common stock held in a rabbi trust pursuant to the Company’s deferred compensation plan, is treated in a manner similar to treasury stock and is recorded at cost within Stockholders’ equity as of December 31, 2023 and 2022. The plan obligations for participant deferrals in common stock are classified as Additional paid-in capital and deferrals in the bond fund investment are classified as Accrued compensation and benefits and Other non-current liabilities in the Consolidated Balance Sheet. The total of common stock required to settle this deferred compensation obligation is included in the denominator in both basic and diluted earnings per share calculations. Stock-Based Compensation . At December 31, 2023, the Company had stock-based employee compensation plans, which are described more fully in Note M – “Stockholders’ Equity.” The Company accounts for those plans under the recognition and measurement principles of ASC 718, “Compensation–Stock Compensation” (“ASC 718”). ASC 718 requires that expense resulting from all share-based payment transactions be recognized in the consolidated financial statements at fair value over the service period. The Company recognizes forfeitures as they occur. Foreign Currency Translation. Assets and liabilities of the Company’s non-U.S. operations are translated at year-end exchange rates. Income and expenses are translated at average exchange rates during the year. For operations whose functional currency is the local currency, translation adjustments are recorded in the AOCI component of Stockholders’ equity. Gains or losses resulting from foreign currency transactions are recorded in income statement accounts based on the underlying transaction. Derivatives. Derivative financial instruments are recorded in the Consolidated Balance Sheet at their fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded each period in earnings or AOCI, depending on whether a derivative is designated and effective as part of a hedge transaction and, if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in AOCI are included in earnings in the periods in which earnings are affected by the hedged item. See Note I – “Derivative Financial Instruments.” F-13 Research, Development and Engineering Costs. Research, development and engineering costs are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products are included in SG&A. Research, development and engineering costs were $ 66.7 million, $ 55.8 million and $ 52.2 million during 2023, 2022 and 2021, respectively. Income Taxes . The Company accounts for income taxes using the asset and liability method. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax bases of assets and liabilities. The Company evaluates the net realizable value of its deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character, amount and timing to result in the use of its deferred tax assets. “Character” refers to the type (ordinary income versus capital gain) as well as the source (foreign vs. domestic) of the income the Company generates. “Timing” refers to the period in which future income is expected to be generated. Timing is important because, in certain jurisdictions, net operating losses or other tax attributes expire if not used within an established statutory time frame. The Company records a valuation allowance for each deferred tax asset for which realization is not assessed as more likely than not. The Company must consider all objective evidence, both positive and negative, in evaluating the future realization of its deferred tax assets, including tax loss carry forwards. Available evidence, including historical information is supplemented by currently obtainable information about future tax years. Realization of deferred tax assets requires sufficient taxable income of the appropriate character. Based on these evaluations, the Company has determined that it is more likely than not that expected future earnings will be sufficient to use most of its deferred tax assets. To the extent estimates of future taxable income decrease or do not materialize, additional valuation allowances may be required. The Company conducts business globally and files income tax returns in U.S. federal, state and foreign jurisdictions, as required. The Company assesses uncertain tax positions for recognition, measurement and effective settlement. Where the Company has determined that its tax return filing position does not satisfy the more likely than not recognition threshold of ASC 740, “Income Taxes,” it has recorded no tax benefits. Where the Company had determined that its tax return filing positions are more likely than not to be sustained, it has measured and recorded the largest amount of tax benefit greater than 50% likely to be realized. The Company evaluates each reporting period whether it is reasonably possible material changes to its uncertain tax position liability could occur in the next 12 months. Changes may occur as a result of uncertain tax positions being considered effectively settled, re-measured, paid, acquired or divested, as a result of a change in tax law or judicial decision, or due to expiration of the relevant statute of limitations. It is not possible to predict which uncertain tax positions, if any, may be challenged by tax authorities. Timing and impact of income tax audits and their resolution is uncertain. New facts, laws, pronouncements and judicial decisions can change assessments concerning technical merit and measurement. The amounts of or periods in which changes to reserves for uncertain tax positions will occur is difficult to predict. In January 2018, the FASB released guidance on the accounting for tax on Global Intangible Low-taxed Income (“GILTI”). The guidance indicates that either accounting for deferred taxes related to GILTI or treating any taxes on GILTI as period costs are both acceptable accounting policy elections. Terex elected to treat taxes on GILTI inclusions as period costs. The Company does not provide for foreign income and withholding, U.S. federal, or state income taxes or tax benefits on the financial reporting basis over the tax basis of its investments in foreign subsidiaries to the extent such amounts are indefinitely reinvested outside the U.S. The Company considers foreign earnings that have been taxed in the U.S. and certain earnings that have qualified for the high tax exception not to be indefinitely reinvested and thus, has accrued foreign income and withholding, U.S. federal and state tax expense with respect to such earnings. The Company plans to indefinitely reinvest substantially all undistributed foreign earnings in excess of those previously taxed in the U.S. If the assessment of the Company with respect to earnings of non-U.S. subsidiaries changes, deferred taxes for foreign income taxes and withholding, U.S. federal or state income taxes or tax benefits may have to be recorded. The Company recognizes accrued interest and penalties, if any, related to income taxes as (Provision for) benefit from income taxes in its Consolidated Statement of Income (Loss). See Note C – “Income Taxes”. Earnings Per Share. Basic earnings (loss) per share is computed by dividing Net income (loss) for the period by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per share is computed by dividing Net income (loss) for the period by the weighted average number of shares of common stock outstanding and potential dilutive common shares. See Note E – “Earnings Per Share.” F-14 Fair Value Measurements. Assets and liabilities measured at fair value on a recurring basis under the provisions of 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. 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). The hierarchy consists of three levels: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). Determining which category an asset or liability falls within this hierarchy requires judgment. The Company evaluates its hierarchy disclosures each quarter. 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): 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 London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. 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. Adoption did not have a material effect on the Company’s consolidated financial statements. In September 2022, the FASB issued ASU 2022-04, Supplier Finance Program (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about the use of supplier finance programs. Under the ASU, an entity that provides for a supplier finance program in connection with the purchase of goods and services is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a roll forward of such amounts during each annual period and a description of where in the financial statements outstanding amounts are presented. The amendments in ASU 2022-04 are effective for all entities for fiscal years beginning after December 15, 2022, including interim periods within those financial years, except for the disclosure of roll forward information, which is effective for fiscal years beginning after December 15, 2023. The Company has adopted the general disclosures of ASU 2022-04 in the current fiscal year and will adopt the roll forward disclosure in 2024. Accounting Standards to be Implemented In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires additional segment reporting disclosures, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires that companies disclose, at the reportable segment level, the significant segment expenses regularly provided to the chief operating decision maker (“CODM”), as well as the amount and composition of other segment items. The ASU also requires companies to disclose the title and position of the CODM and how the CODM uses the reported measures of a segment’s profit or loss when assessing performance and deciding how to allocate resources. Additionally, the ASU mandates that all segment disclosures currently required annually by Topic 280, including the enhancements outlined in the ASU, be disclosed on an interim basis. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of this guidance on its disclosures to consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure in the rate reconciliation table additional categories of information about federal, state and foreign income taxes and provide more details about the reconciliation items in some categories if the items meet a quantitative threshold. The guidance also requires disclosure of income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this guidance on its disclosures to consolidated financial statements. F-15 NOTE B – BUSINESS SEGMENT INFORMATION Terex is a global manufacturer of materials processing machinery and aerial work platforms. The Company designs, builds and supports products used in maintenance, manufacturing, energy, recycling, minerals, materials management and construction applications. Certain Terex products and solutions enable customers to reduce their impact on the environment 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 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: Materials Processing (“MP”), Aerials and Utilities. As Aerials and Utilities operating segments share similar economic characteristics, these operating segments are aggregated into one reportable segment, Aerial Work Platforms (“AWP”). The Company operates in two reportable segments: (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 transmission and distribution lines, tree trimming, certain construction and foundation drilling applications, and for other commercial operations, as well as in a wide range of infrastructure projects. The Company assists customers in their rental, leasing and acquisition of its products through Terex Financial Services (“TFS”). TFS uses its equipment financing experience to facilitate financial products and services to assist customers in the acquisition of the Company’s equipment. TFS is included in Corporate and Other. Corporate and Other also includes eliminations among the two reportable segments, as well as general and corporate items. None of the Company’s customers individually accounted for more than 10% of consolidated net sales in 2023, 2022 or 2021. F-16 Business segment information is presented below (in millions): Year Ended December 31, 2023 2022 2021 Net sales MP $ 2,227.0 $ 1,941.6 $ 1,691.8 AWP 2,921.7 2,483.6 2,178.8 Corporate and Other / Eliminations 2.8 ( 7.5 ) 16.2 Total $ 5,151.5 $ 4,417.7 $ 3,886.8 Income (loss) from operations MP $ 358.6 $ 297.8 $ 240.9 AWP 371.3 196.2 152.1 Corporate and Other / Eliminations ( 93.4 ) ( 74.0 ) ( 65.0 ) Total $ 636.5 $ 420.0 $ 328.0 Depreciation and amortization MP $ 16.2 $ 14.4 $ 13.3 AWP 31.7 24.8 25.9 Corporate 8.5 8.0 11.0 Total $ 56.4 $ 47.2 $ 50.2 Capital expenditures MP $ 37.6 $ 25.2 $ 15.8 AWP 79.3 77.6 41.2 Corporate 10.3 6.8 2.7 Total $ 127.2 $ 109.6 $ 59.7 December 31, 2023 2022 Identifiable assets MP (1) $ 2,091.4 $ 1,800.1 AWP (1) 2,216.2 1,959.5 Corporate and Other / Eliminations ( 692.1 ) ( 641.5 ) Total $ 3,615.5 $ 3,118.1 (1) Increase primarily due to higher receivables and inventory. Sales between segments are generally priced to recover costs plus a reasonable markup for profit, which is eliminated in consolidation. Certain eliminations that were previously presented within the AWP segment are now eliminated within Corporate and Other / Eliminations and this change in presentation has been applied retrospectively. Long-lived assets consist of net fixed assets, which can be attributed to the specific geographic regions (in millions): December 31, 2023 2022 Long-lived Assets U.S. $ 192.1 $ 187.6 United Kingdom 96.4 81.8 Mexico 125.4 82.6 China 65.2 54.1 Other European countries 62.0 40.2 All other 28.7 19.3 Total $ 569.8 $ 465.6 F-17 Geographic net sales information is presented below (in millions): Year Ended December 31, 2023 MP AWP Corporate and Other / Eliminations Total Net sales by region North America $ 973.9 $ 2,042.6 $ 14.5 $ 3,031.0 Western Europe 609.4 434.0 0.2 1,043.6 Asia-Pacific 426.3 235.1 0.2 661.6 Rest of World (1) 217.4 210.0 ( 12.1 ) 415.3 Total (2) $ 2,227.0 $ 2,921.7 $ 2.8 $ 5,151.5 (1) Includes intercompany sales and eliminations. (2) Total sales include $ 2.8 billion attributable to the U.S., the Company’s country of domicile. Year Ended December 31, 2022 MP AWP Corporate and Other / Eliminations Total Net sales by region North America $ 818.6 $ 1,666.4 $ 12.2 $ 2,497.2 Western Europe 566.6 386.9 0.4 953.9 Asia-Pacific 384.6 227.2 0.6 612.4 Rest of World (1) 171.8 203.1 ( 20.7 ) 354.2 Total (2) $ 1,941.6 $ 2,483.6 $ ( 7.5 ) $ 4,417.7 (1) Includes intercompany sales and eliminations. (2) Total sales include $ 2.2 billion attributable to the U.S., the Company’s country of domicile. Year Ended December 31, 2021 MP AWP Corporate and Other / Eliminations Total Net sales by region North America $ 667.4 $ 1,415.8 $ 26.3 $ 2,109.5 Western Europe 515.6 346.7 0.5 862.8 Asia-Pacific 349.3 310.3 3.1 662.7 Rest of World (1) 159.5 106.0 ( 13.7 ) 251.8 Total (2) $ 1,691.8 $ 2,178.8 $ 16.2 $ 3,886.8 (1) Includes intercompany sales and eliminations. (2) Total sales include $ 1.9 billion 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. Product type net sales information is presented below (in millions): Year Ended December 31, 2023 MP AWP Corporate and Other / Eliminations Total Net sales by product type Aerial Work Platforms $ — $ 2,033.3 $ 3.1 $ 2,036.4 Materials Processing Equipment 1,412.0 — — 1,412.0 Specialty Equipment 814.1 — 0.7 814.8 Utility Equipment — 574.8 — 574.8 Other (1) 0.9 313.6 ( 1.0 ) 313.5 Total $ 2,227.0 $ 2,921.7 $ 2.8 $ 5,151.5 (1) Includes other product types, intercompany sales and eliminations. F-18 Year Ended December 31, 2022 MP AWP Corporate and Other / Eliminations Total Net sales by product type Aerial Work Platforms $ — $ 1,798.8 $ 1.2 $ 1,800.0 Materials Processing Equipment 1,155.0 — 0.5 1,155.5 Specialty Equipment 780.7 — 1.3 782.0 Utility Equipment — 466.4 — 466.4 Other (1) 5.9 218.4 ( 10.5 ) 213.8 Total $ 1,941.6 $ 2,483.6 $ ( 7.5 ) $ 4,417.7 (1) Includes other product types, intercompany sales and eliminations. Year Ended December 31, 2021 MP AWP Corporate and Other / Eliminations Total Net sales by product type Aerial Work Platforms $ — $ 1,611.8 $ 1.6 $ 1,613.4 Materials Processing Equipment 995.9 — 1.3 997.2 Specialty Equipment 693.5 — 2.2 695.7 Utility Equipment — 380.6 0.6 381.2 Other (1) 2.4 186.4 10.5 199.3 Total $ 1,691.8 $ 2,178.8 $ 16.2 $ 3,886.8 (1) Includes other product types, intercompany sales and eliminations. F-19 NOTE C – INCOME TAXES The components of income (loss) from continuing operations before income taxes are as follows (in millions): Year Ended December 31, 2023 2022 2021 U.S. $ 89.3 $ ( 19.7 ) $ ( 16.7 ) Foreign 490.4 386.3 280.5 Income (loss) from continuing operations before income taxes $ 579.7 $ 366.6 $ 263.8 The Company recorded Income (loss) from discontinued operations and Gain (loss) on disposition of discontinued operations before income taxes of $ 2.5 million, $( 0.5 ) million and $ 2.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. The major components of the Company’s provision for (benefit from) income taxes on continuing operations before income taxes are summarized below (in millions): Year Ended December 31, 2023 2022 2021 Current: Federal $ 30.8 $ 6.9 $ 6.6 State 4.4 1.3 1.8 Foreign 65.9 58.8 36.7 Current income tax provision (benefit) 101.1 67.0 45.1 Deferred: Federal ( 4.4 ) 6.9 ( 3.8 ) State ( 3.4 ) 1.8 1.5 Foreign ( 30.3 ) ( 9.3 ) 3.5 Deferred income tax (benefit) provision ( 38.1 ) ( 0.6 ) 1.2 Provision for (benefit from) income taxes $ 63.0 $ 66.4 $ 46.3 The elimination of tax from intercompany transactions is included in current tax expense. The Company recorded Provision for (benefit from) income taxes of $ 1.3 million, $( 0.3 ) million and $( 0.8 ) million from discontinued operations and on disposition of discontinued operations for the years ended December 31, 2023, 2022 and 2021, respectively. The tax effects of the basis differences between tax and financial reporting purposes for assets, liabilities and loss carry forwards as of December 31, 2023 and 2022 for continuing operations are summarized below for major balance sheet captions (in millions): 2023 2022 Property, plant and equipment $ ( 23.3 ) $ ( 19.8 ) Intangibles ( 8.4 ) ( 8.1 ) Inventories 5.6 5.9 Accrued warranties and product liability 12.9 9.9 Loss carry forwards 188.5 152.0 Retirement plans 9.1 10.1 Accrued compensation and benefits 18.9 17.1 Operating lease right-of-use asset ( 28.4 ) ( 22.0 ) Operating lease liability 30.8 23.5 Other 13.6 18.0 Deferred tax assets valuation allowance ( 52.7 ) ( 63.0 ) Net deferred tax assets (liabilities) $ 166.6 $ 123.6 F-20 Deferred tax assets were $ 227.4 million before valuation allowances of $ 52.7 million, resulting in $ 174.7 million of net deferred tax assets which are partially offset by deferred tax liabilities of $ 8.1 million at December 31, 2023. Deferred tax assets for continuing operations were $ 190.9 million before valuation allowances of $ 63.0 million, resulting in $ 127.9 million of net deferred tax assets which are partially offset by deferred tax liabilities for continuing operations of $ 4.3 million at December 31, 2022. The net change in the total valuation allowance for the years ended December 31, 2023 and 2022 was a decrease of $ 10.3 million and $ 37.0 million, respectively. There were no deferred tax liabilities for discontinued operations at December 31, 2023 and 2022. The Company’s Provision for (benefit from) income taxes is different from the amount that would be provided by applying the statutory federal income tax rate to the Company’s Income (loss) from continuing operations before income taxes. The reasons for the difference are summarized as follows (in millions): Year Ended December 31, 2023 2022 2021 Tax at statutory U.S. federal income tax rate $ 121.7 $ 77.0 $ 55.4 State taxes 0.8 2.4 2.7 Change in valuation allowance ( 2.6 ) ( 21.0 ) ( 9.0 ) Foreign tax differential on income/losses of foreign subsidiaries ( 25.7 ) ( 10.2 ) ( 12.0 ) U.S. tax on multi-national operations 12.8 10.1 8.1 Change in foreign tax rates 0.4 — ( 0.6 ) Swiss cantonal tax attribute ( 42.3 ) — — Research and development ( 1.7 ) ( 1.0 ) ( 0.8 ) Provision to return adjustments ( 2.7 ) 6.8 0.5 Compensation 2.9 2.1 1.8 Other ( 0.6 ) 0.2 0.2 Provision for (benefit from) income taxes $ 63.0 $ 66.4 $ 46.3 The Company’s effective tax rate was 10.9 %, 18.1 % and 17.6 % for the years ended December 31, 2023, 2022 and 2021, respectively. 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. A number of countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation. As a result, the Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework. In November 2023, the Company concluded discussions with the Swiss cantonal taxing authorities with respect to the availability of future tax deductions resulting in the Company meeting the recognition criteria to record a deferred tax asset of $ 42.3 million. The Company considers foreign earnings that have been taxed in the U.S. and certain earnings that have qualified for the high tax exception not to be indefinitely reinvested and thus, has accrued foreign income and withholding, U.S. federal and state tax expense with respect to such earnings. The Company plans to indefinitely reinvest all undistributed foreign earnings in excess of those previously taxed in the U.S. which is approximately $ 118 million for the year ended December 31, 2023. At this time, determination of the unrecognized deferred tax liabilities for temporary differences related to the Company’s investment in non-U.S. subsidiaries is not practicable. At December 31, 2023, the Company has a state net operating loss carry forward deferred tax assets of $ 39 million available to reduce future taxable income and income taxes in various states, substantially all of which is offset by valuation allowances and the majority will expire at various dates through 2043. The Company has approximately $ 459 million of foreign operating loss carry forwards. The following operating loss carry forwards do not expire: $ 221 million in Germany, $ 160 million in Italy and $ 28 million in Spain. The remaining operating loss carry forwards of $ 50 million are partially offset by valuation allowances and the majority do not expire. Also, the Company has an Indian capital loss carry forward of $ 22 million expiring before 2028 and an Australian capital loss carry forward of $ 14 million which does not expire; both are offset by valuation allowances. The company does not have any material tax credit carry forwards. F-21 The Company made total net income tax payments of $ 86.0 million, $ 20.4 million and $ 28.4 million in 2023, 2022 and 2021, respectively. At December 31, 2023 and 2022, Other current assets included net income tax receivable amounts of $ 11.1 million and $ 14.7 million, respectively. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions). Balance as of January 1, 2021 $ 18.5 Additions for current year tax positions — Additions for prior year tax positions 0.6 Reductions for prior year tax positions ( 0.1 ) Reductions for current year tax positions — Reductions for expiration of statute of limitations ( 0.9 ) Settlements ( 15.5 ) Balance as of December 31, 2021 2.6 Additions for current year tax positions — Additions for prior year tax positions 1.8 Reductions for prior year tax positions ( 1.9 ) Reductions for current year tax positions — Reductions for expiration of statute of limitations — Settlements — Balance as of December 31, 2022 2.5 Additions for current year tax positions 0.1 Additions for prior year tax positions 5.6 Reductions for prior year tax positions ( 1.6 ) Reductions for current year tax positions — Reductions for expiration of statute of limitations ( 0.2 ) Settlements — Balance as of December 31, 2023 $ 6.4 The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The following tax years as described below remain subject to examination by the respective major tax jurisdictions. The Company does not expect the amount of unrecognized tax benefits disclosed as of December 31, 2023 to significantly change within the next twelve months. Major Tax Jurisdiction Open Tax Years Australia 2016 - present China 2013 - present Germany 2017 - present India 2005-2010, 2012, 2015-2016, 2018 - present Italy 2004-2005, 2009-2010, 2014, 2017 - present Switzerland 2020 - present United Kingdom 2019 - present United States - federal 2017 - present United States - states 2017 - present As of December 31, 2023 and 2022, the Company had $ 6.4 million and $ 2.5 million, respectively, of unrecognized tax benefits. Of the $ 6.4 million at December 31, 2023, $ 5.2 million, if recognized, would affect the effective tax rate. Potential interest and penalties were a liability of $ 1.4 million and $ 0.3 million as of December 31, 2023 and 2022, respectively. During the years ended December 31, 2023 and 2022, the Company recognized total tax expense of $ 1.0 million and $ 0.1 million for interest and penalties, respectively. F-22 NOTE D – ACQUISITIONS AND DISPOSITIONS 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. On April 22, 2022, the Company acquired a 100 % ownership interest in Steelweld Fabrications Limited (“Steelweld”), a manufacturer of heavy fabrications based in Northern Ireland, to facilitate manufacturing of certain MP products. Total cash consideration was approximately $ 6 million. On July 29, 2022, the Company acquired a 100 % ownership interest in ProAll International Mfg. Inc. and ProAll UK Limited and related assets (“ProAll”), a manufacturer of volumetric mixers based in Canada, to expand the Company’s concrete product offering. Total consideration, including estimated contingent consideration from earn out provisions, was approximately $ 40 million. 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. These transactions were recorded as business combinations 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 these businesses are consolidated within the MP segment in the Consolidated Financial Statements from the respective dates of acquisition. See Note H – “Goodwill and Intangible Assets” for additional information regarding goodwill recognized as a result of these acquisitions. 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. Dispositions On November 30, 2021, the Company sold its utility hot line tools business located in South America. The Company received consideration of $ 5.8 million from the sale at fair value and recognized a gain of $ 6.4 million included in SG&A in the Consolidated Statement of Income (Loss). Prior to disposition, the results of operations for the hot lines tools business, including any impairment reserves taken, were consolidated within the AWP segment in the consolidated financial statements. 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 AWP segment, as part of realignment of its manufacturing footprint, at December 31, 2022, with a carrying value of approximately $ 31 million. 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. F-23 NOTE E – EARNINGS PER SHARE For the year ended December 31, (in millions, except per share data) 2023 2022 2021 Income (loss) from continuing operations $ 516.7 $ 300.2 $ 217.5 Gain (loss) on disposition of discontinued operations – net of tax 1.3 ( 0.2 ) 3.4 Net income (loss) $ 518.0 $ 300.0 $ 220.9 Basic shares: Weighted average shares outstanding 67.5 68.5 69.7 Earnings (loss) per share – basic: Income (loss) from continuing operations $ 7.65 $ 4.38 $ 3.12 Gain (loss) on disposition of discontinued operations – net of tax 0.02 — 0.05 Net income (loss) $ 7.67 $ 4.38 $ 3.17 Diluted shares: Weighted average shares outstanding – basic 67.5 68.5 69.7 Effect of dilutive securities: Restricted stock awards 0.8 0.9 1.2 Diluted weighted average shares outstanding 68.3 69.4 70.9 Earnings (loss) per share – diluted: Income (loss) from continuing operations $ 7.56 $ 4.32 $ 3.07 Gain (loss) on disposition of discontinued operations – net of tax 0.02 — 0.05 Net income (loss) $ 7.58 $ 4.32 $ 3.12 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. There were no weighted average Restricted Stock Awards outstanding during the year ended December 31, 2023 that would have an anti-dilutive effect. Weighted average Restricted Stock Awards of approximately 0.1 million and 0.1 million were outstanding during the years ended December 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 F – INVENTORIES Inventories consist of the following (in millions): December 31, 2023 2022 Finished equipment $ 467.9 $ 319.2 Replacement parts 185.6 163.0 Work-in-process 131.5 153.5 Raw materials and supplies 401.0 352.7 Inventories $ 1,186.0 $ 988.4 Work-in-process inventory includes approximately $ 25 million and $ 36 million of substantially completed inventory awaiting installation of final components at December 31, 2023 and 2022, respectively. Inventory reserves were $ 70.5 million and $ 61.0 million at December 31, 2023 and 2022, respectively. F-24 NOTE G – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment – net consist of the following (in millions): December 31, 2023 2022 Property $ 75.1 $ 40.2 Plant 302.4 246.8 Equipment 492.3 418.9 Leasehold improvements 51.8 49.9 Construction in progress 73.4 92.9 Property, plant and equipment – gross 995.0 848.7 Less: Accumulated depreciation ( 425.2 ) ( 383.1 ) Property, plant and equipment – net $ 569.8 $ 465.6 Depreciation expense was $ 51.7 million, $ 42.4 million and $ 44.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. NOTE H – GOODWILL AND INTANGIBLE ASSETS An analysis of changes in the Company’s goodwill by business segment is as follows (in millions): MP AWP Total Balance at December 31, 2021, gross $ 202.2 $ 139.7 $ 341.9 Accumulated impairment ( 23.2 ) ( 38.6 ) ( 61.8 ) Balance at December 31, 2021, net 179.0 101.1 280.1 Acquisitions 21.5 — 21.5 Foreign exchange effect and other ( 15.5 ) ( 1.7 ) ( 17.2 ) Balance at December 31, 2022, gross 208.2 138.0 346.2 Accumulated impairment ( 23.2 ) ( 38.6 ) ( 61.8 ) Balance at December 31, 2022, net 185.0 99.4 284.4 Acquisitions 1.7 — 1.7 Foreign exchange effect and other 7.6 0.9 8.5 Balance at December 31, 2023, gross 217.5 138.9 356.4 Accumulated impairment ( 23.2 ) ( 38.6 ) ( 61.8 ) Balance at December 31, 2023, net $ 194.3 $ 100.3 $ 294.6 During the year ended December 31, 2023, the Company recognized goodwill of $ 1.7 million in connection with the MARCO acquisition. During the year ended December 31, 2022, the Company recognized goodwill of $ 3.5 million in connection with the Steelweld acquisition and $ 18.0 million in connection with the ProAll acquisition. The goodwill associated with these transactions was attributable primarily to the assembled workforce and expected synergies from the business combinations and assigned to the MP segment. The goodwill recognized for MARCO is expected to be deductible for income tax purposes, while goodwill recognized for Steelweld and ProAll is not expected to be deductible for income tax purposes. See Note D – “Acquisitions and Dispositions” for additional information regarding the acquisitions. F-25 Intangible assets, net were comprised of the following (in millions): December 31, 2023 December 31, 2022 Weighted Average Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Technology 7 $ 9.6 $ ( 9.5 ) $ 0.1 $ 9.3 $ ( 9.2 ) $ 0.1 Customer Relationships 17 35.5 ( 28.7 ) 6.8 34.8 ( 26.8 ) 8.0 Land Use Rights 80 3.9 ( 0.8 ) 3.1 4.0 ( 0.8 ) 3.2 Other 9 30.3 ( 24.6 ) 5.7 29.8 ( 23.7 ) 6.1 Total definite-lived intangible assets $ 79.3 $ ( 63.6 ) $ 15.7 $ 77.9 $ ( 60.5 ) $ 17.4 During the year ended December 31, 2023, 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 in connection with the MARCO acquisition. During the year ended December 31, 2022, the Company recognized customer relationships of $ 0.6 million with an estimated useful life of three years in connection with the Steelweld acquisition and customer relationships of $ 3.2 million with an estimated useful life of nine years and trademarks of $ 3.7 million with an estimated useful life of ten years in connection with the ProAll acquisition. See Note D – “Acquisitions and Dispositions” for additional information regarding these acquisitions. For the Year Ended December 31, (in millions) 2023 2022 2021 Aggregate Amortization Expense $ 2.6 $ 2.6 $ 2.2 Estimated aggregate intangible asset amortization expense for each of the next five years is as follows (in millions): 2024 $ 2.4 2025 2.3 2026 2.1 2027 2.1 2028 1.2 NOTE I – DERIVATIVE FINANCIAL INSTRUMENTS The Company operates internationally, with manufacturing and sales facilities in various locations around the world. In the normal course of business, the Company uses derivatives to manage commodity, currency and interest rate exposures. For a derivative to qualify for hedge accounting treatment at inception and throughout the hedge period, the Company formally documents the nature and relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions, and methods of assessing hedge effectiveness. Additionally, for hedges of forecasted transactions, significant characteristics and expected terms of a forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction will occur. If it is deemed probable the forecasted transaction will not occur, then the gain or loss would be recognized in current earnings. Financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged. The Company does not engage in trading or other speculative use of financial instruments. The Company records all derivative contracts at fair value on a recurring basis. Commodity Swaps Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 22.2 million and $ 22.5 million at December 31, 2023 and 2022, respectively. Commodity swaps outstanding at December 31, 2023 mature on or before November 30, 2024. 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 AOCI. Gains or losses on commodity swaps are reclassified to COGS in the Consolidated Statement of Income (Loss) when the hedged transaction affects earnings. F-26 Cross Currency Swaps Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 250.0 million and $ 121.4 million at December 31, 2023 and 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. Fair values of cross currency swaps are based on the present value of future cash payments and receipts. Changes in the fair value of cross currency swaps are deferred in AOCI. Gains or losses on cross currency swaps are reclassified to Selling, general and administrative expenses in the Consolidated Statement of Income (Loss) when the net investment is liquidated. Foreign Exchange Contracts The Company enters into foreign exchange contracts to manage variability of future cash flows associated with changing currency exchange rates. Foreign currency exchange contracts, whether designated or not designated as cash flow hedges, are used to mitigate exposure to changes in foreign currency exchange rates on recognized assets and liabilities or forecasted transactions. 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 December 31, 2023 mature on or before June 2024. The Company had $ 4.6 million and $ 7.8 million notional value of foreign exchange contracts outstanding that were designated as cash flow hedging instruments at December 31, 2023 and 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 Consolidated Statement of Income (Loss). The Company had $ 300.1 million and $ 241.1 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at December 31, 2023 and 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. 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 Consolidated Statement of 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 caps were deferred in AOCI. Gains or losses on interest rate caps were reclassified to Interest expense in the Consolidated Statement of 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 Consolidated Balance Sheet (in millions): December 31, 2023 December 31, 2022 Instrument (1) 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 $ 1.7 $ — $ 1.7 Commodity swaps Other current assets 2.4 — 0.3 — Foreign exchange contracts Other current liabilities — ( 0.8 ) ( 0.3 ) ( 2.0 ) Cross currency swaps - net investment hedge Other current liabilities ( 5.1 ) — ( 1.7 ) — Commodity swaps Other current liabilities ( 0.2 ) — ( 1.5 ) — Cross currency swaps - net investment hedge Other non-current liabilities ( 5.1 ) — ( 3.0 ) — Commodity swaps Other non-current liabilities — — ( 0.4 ) — Net derivative asset (liability) $ ( 7.9 ) $ 0.9 $ ( 6.6 ) $ ( 0.3 ) (1) Categorized as Level 2 under the ASC 820 Fair Value Hierarchy. F-27 The following tables provide the effect of derivative instruments that are designated as hedges in AOCI (in millions): Gain (Loss) Recognized on Derivatives in OCI, net of tax Gain (Loss) Reclassified from AOCI into Income (Loss) Year Ended December 31, Year Ended December 31, Instrument 2023 2022 2021 Income Statement Account 2023 2022 2021 Foreign exchange contracts $ 0.4 $ ( 0.1 ) $ ( 0.1 ) Cost of goods sold $ ( 0.2 ) $ 0.1 $ 0.1 Commodity swaps 5.2 ( 12.1 ) $ 2.4 Cost of goods sold ( 1.6 ) 8.1 15.6 Cross currency swaps - net investment hedges ( 4.6 ) 1.8 4.8 Selling, general and administrative expenses — — — Interest rate caps — — 2.9 Interest expense — — ( 1.2 ) Total $ 1.0 $ ( 10.4 ) $ 10.0 Total $ ( 1.8 ) $ 8.2 $ 14.5 The following tables provide the effect of derivative instruments that are designated as hedges in the Consolidated Statement of Income (Loss) (in millions): Classification and amount of Gain (Loss) Recognized in Income (Loss) Cost of goods sold Interest expense Year Ended December 31, 2023 2022 2021 2023 2022 2021 Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 3,974.9 ) $ ( 3,546.5 ) $ ( 3,129.4 ) $ ( 63.3 ) $ ( 49.1 ) $ ( 51.5 ) Gain (loss) reclassified from AOCI into Income (loss): Foreign exchange contracts ( 0.2 ) 0.1 0.1 — — — Commodity swaps ( 1.6 ) 8.1 15.6 — — — Interest rate caps — — — — — ( 1.2 ) Amount excluded from effectiveness testing recognized in Income (loss) based on amortization approach: Cross currency swaps - net investment hedge — — — 0.8 0.7 0.6 Total $ ( 1.8 ) $ 8.2 $ 15.7 $ 0.8 $ 0.7 $ ( 0.6 ) 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 in the Consolidated Statement of Income (Loss) (in millions): Gain (Loss) Recognized in Income (Loss) Year Ended December 31, Instrument Income Statement Account 2023 2022 2021 Foreign exchange contracts Cost of goods sold $ ( 7.6 ) $ ( 2.2 ) $ ( 0.5 ) Foreign exchange contracts Other income (expense) – net ( 1.8 ) 0.1 0.5 Total $ ( 9.4 ) $ ( 2.1 ) $ — In the Consolidated Statement of Income (Loss), the Company records hedging activity related to commodity swaps, cross currency swaps, and foreign exchange contracts in the accounts for which the hedged items are recorded. On the 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. Counterparties to the Company’s derivative financial instruments are major financial institutions and commodity trading companies with credit ratings of investment grade or better and no collateral is required. There are no significant risk concentrations. 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. F-28 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 December 31, 2023, it is estimated that approximately $ 2 million of losses are expected to be reclassified into earnings in the next twelve months. NOTE J – LONG-TERM OBLIGATIONS Long-term debt is summarized as follows (in millions): December 31, 2023 2022 5% Senior Notes due May 15, 2029, net of unamortized debt issuance costs of $ 5.0 and $ 6.0 million at December 31, 2023 and 2022, respectively $ 595.0 $ 594.0 Credit Agreement - revolving line of credit expires on April 1, 2026 — 177.0 Secured borrowings 19.0 — Finance lease obligations 8.7 4.2 Other 0.5 0.3 Total debt 623.2 775.5 Less: Current portion of long-term debt ( 2.8 ) ( 1.9 ) Long-term debt, less current portion $ 620.4 $ 773.6 Credit Agreement 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, to provide the Company with a multi-currency revolving line of credit and senior secured term loans. This 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. In 2022, the Company completed the prepayment in full of the senior secured 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, (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. The Company recorded a loss on early extinguishment of debt related to prepayment in full of the senior secured term loans of $ 0.3 million and $ 4.5 million in 2022 and 2021, respectively, for accelerated amortization of debt acquisition costs and original issue discount. 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. The Credit Agreement contemplates uncommitted incremental amounts in excess of $ 300 million that may be extended by the lenders, at their option, 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: incur indebtedness; create or maintain liens on its property or assets; make investments, loans and advances; repurchase shares of its common stock; engage in acquisitions, mergers, consolidations and asset sales; redeem debt; and pay dividends and distributions. If the Company’s borrowings under the Revolver are greater than 30 % of the total revolving credit commitments, the Credit Agreement requires the Company to comply with the following financial tests: (i) minimum required level of the interest coverage ratio of 2.5 to 1.0 and (ii) maximum permitted level of the senior secured leverage ratio of 2.75 to 1.0. The Credit Agreement also contains customary default provisions. The Company was in compliance with all covenants contained in the Credit Agreement as of December 31, 2023. The Company had no Revolver amounts outstanding at December 31, 2023 and $ 177.0 million Revolver amounts outstanding at December 31, 2022. The weighted average interest rate on the Revolver was 6.10 % at December 31, 2022. F-29 The Company obtains letters of credit that generally serve as collateral for certain liabilities included in the 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. The Credit Agreement incorporates secured facilities for issuance of letters of credit up to $ 400 million (the “$400 Million Facility”). Letters of credit issued under the $400 Million Facility decrease availability under the Revolver. The Credit Agreement also permits the Company to have additional secured facilities for the issuance of letters of credit up to $ 300 million (the “$300 Million Facility”). Letters of credit issued under the $300 Million Facility do not decrease availability under the Revolver. The Company also has bilateral arrangements to issue letters of credit with various other financial institutions (the “Bilateral Arrangements”). The Bilateral Arrangements are not secured under the Credit Agreement and do not decrease availability under the Revolver. Letters of credit outstanding (in millions): December 31, 2023 December 31, 2022 $400 Million Facility $ — $ — $300 Million Facility 71.8 70.4 Bilateral Arrangements 48.1 48.0 Total $ 119.9 $ 118.4 On January 31, 2017, the Company entered into a Guarantee and Collateral Agreement with CSAG, as collateral agent for the lenders, granting security and guarantees to the lenders for amounts borrowed under the Credit Agreement. Pursuant to the Guarantee and Collateral Agreement, Terex is required to (a) pledge as collateral the capital stock of the Company’s material domestic subsidiaries and 65 % of the capital stock of certain of the Company’s material foreign subsidiaries and (b) provide a first priority security interest in substantially all of the Company’s domestic assets. On December 29, 2022, the Company entered into an amendment to the Guarantee and Collateral Agreement which included the following principal changes to the original agreement: (i) enabling a subsidiary to enter into hedging derivatives with external counterparties and (ii) inclusion of Terex subsidiary entities’ cash management services provided by lending banks to be secured under the Guarantee and Collateral Agreement. 5-5/8% Senior Notes On January 31, 2017, the Company sold and issued $ 600.0 million aggregate principal amount of Senior Notes Due 2025 (“5-5/8% Notes”) at par in a private offering. The 5-5/8% Notes were jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. On March 15, 2021, the Company delivered a notice for the conditional redemption of all of its outstanding 5-5/8% Notes. 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 In April 2021, the Company sold and issued $ 600.0 million aggregate principal amount of Senior Notes Due 2029 (“5% Notes”) at par in a private offering. The proceeds from the 5% Notes, together with cash on hand, was used: (i) to fund redemption and discharge of the 5-5/8% Notes and (ii) to pay related premiums, fees, discounts and expenses. The 5% Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. Secured Borrowings In October 2023, the Company entered into a Framework Agreement to transfer value added tax (“VAT”) receivables to a financial institution in exchange for cash in advance. This arrangement is accounted for as a secured borrowing with a pledge of collateral as the transfer does not meet the criteria for a true sale. As a result, the VAT receivables pledged as collateral remain in receivables and the liability associated with the cash proceeds of $ 19.0 million is presented in long term debt in the Consolidated Balance Sheet as of December 31, 2023. The long term debt classification is based on estimated timing of VAT F-30 refund from the Italian government which is expected to be greater than 12 months. The cash proceeds are included in other financing activities within the Consolidated Statement of Cash Flows for the year ended December 31, 2023. Schedule of Debt Maturities Scheduled annual maturities of the principal portion of long-term debt outstanding at December 31, 2023 in the successive five-year period and thereafter are summarized below. Amounts shown are exclusive of minimum lease payments for capital lease obligations and secured borrowings (in millions): 2024 $ 0.2 2025 0.1 2026 0.1 2027 0.1 2028 — Thereafter 600.0 Total Debt 600.5 Less: Unamortized debt issuance costs ( 5.0 ) Net debt $ 595.5 Fair Value of Debt The Company estimates the fair value of its debt set forth below as of December 31, 2023 and 2022, as follows (in millions, except for quotes): 2023 Book Value Quote Fair Value 5% Notes $ 600.0 0.94375 $ 566.3 2022 Book Value Quote Fair Value 5% Notes $ 600.0 0.89250 $ 535.5 The fair value of debt reported in the table above is based on adjusted price quotations on the debt instruments in an inactive 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 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. The Company paid $ 39.0 million, $ 37.4 million and $ 51.3 million of interest in 2023, 2022 and 2021, respectively. NOTE K – LEASES Terex has operating leases for real property, vehicles and office and industrial equipment, generally expiring over terms from 1 to 15 years. Many of the leases held by Terex include options to extend or terminate the lease. Real property leases are used for office, administrative and industrial purposes. The base terms of these leases typically expire between 1 and 15 years, with options to renew between 2 and 15 years. Most of our renewal options are linked to market conditions and Terex cannot estimate how existing renewal options will affect the monthly payments. The vehicle leases mainly include cars and trucks. Term length for these leases typically varies between 1 and 7 years. Office and industrial equipment leases primarily include machinery used for conducting business at office locations and manufacturing sites worldwide. Term length for these leases typically varies between 1 and 6 years. Operating Leases Operating lease cost consists of the following (in millions): F-31 Year Ended December 31, 2023 2022 2021 Operating lease cost $ 37.7 $ 32.4 $ 31.3 Variable lease cost 4.7 4.3 4.1 Short-term lease cost 6.1 4.6 4.3 Total operating lease costs $ 48.5 $ 41.3 $ 39.7 Variable lease costs are expensed as incurred and are not included in the determination of right-of-use assets or lease liabilities. Operating lease obligations consist primarily of commitments to rent real properties. Supplemental balance sheet information related to leases (in millions, except lease term and discount rate): December 31, 2023 2022 Operating lease right-of-use assets included within Other assets $ 126.0 $ 89.4 Current maturities of operating leases included within Other current liabilities $ 28.4 $ 26.3 Non-current operating leases included within Other liabilities 92.4 62.8 Total operating lease liabilities $ 120.8 $ 89.1 Weighted average discount rate for operating leases 5.69 % 4.89 % Weighted average remaining operating lease term in years 5 5 Maturities of operating lease liabilities (in millions): 2024 $ 37.0 2025 31.3 2026 25.8 2027 17.8 2028 12.9 Thereafter 19.8 Total undiscounted operating lease payments 144.6 Less: Imputed interest ( 23.8 ) Total operating lease liabilities 120.8 Less: Current maturities of operating lease liabilities ( 28.4 ) Non-current operating lease liabilities $ 92.4 Supplemental cash flow and other information related to operating leases (in millions): December 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 46.5 $ 31.3 Operating right-of-use assets obtained in exchange for operating lease liabilities $ 67.7 $ 20.9 F-32 NOTE L – RETIREMENT PLANS AND OTHER BENEFITS U.S. Pension Plan The Company maintains a nonqualified Supplemental Executive Retirement Plan (“U.S. SERP”). The U.S. SERP provides retirement benefits to certain former U.S. employees of the Company. Generally, the U.S. SERP provides a benefit based on average total compensation earned over a participant’s final five years of employment and years of service reduced by benefits earned under any Company retirement program, excluding salary deferrals and matching contributions. In addition, benefits are reduced by Social Security Primary Insurance Amounts attributable to Company contributions. The U.S. SERP is unfunded and participation in the U.S. SERP has been frozen. There is also a defined contribution plan for certain senior executives of the Company. Non-U.S. Plans The Company maintains defined benefit plans in France, Germany, India, Switzerland and the U.K. for some of its subsidiaries. Participation in the U.K. plan has been frozen. The U.K. plan is a funded plan and the Company funds this plan in accordance with funding regulations in the U.K. and a negotiated agreement between the Company and the plan’s trustee. The Switzerland plan is a funded plan and the Company funds this plan in accordance with funding regulations. Participation in the German plans is frozen; however, eligible participants are credited with post-freeze service for purposes of determining vesting and the amount of benefits. The plans in France, Germany, and India are unfunded plans. In Italy and Mexico, there are mandatory termination indemnity plans providing a benefit that is payable upon termination of employment in substantially all cases of termination. The Company records this obligation based on mandated requirements. The measure of current obligation is not dependent on the employees’ future service and therefore is measured at current value. Other Post-employment Benefits The Company has several non-pension post-retirement benefit programs. The Company provides post-employment health and life insurance benefits to certain former salaried and hourly employees. The health care programs are contributory, with participants’ contributions adjusted annually, and the life insurance plan is noncontributory. Savings Plans The Company sponsors various tax deferred savings plans into which eligible employees may elect to contribute a portion of their compensation. The Company may, but is not obligated to, contribute to certain of these plans. Charges recognized for these savings plans were $ 22.3 million, $ 19.9 million and $ 17.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. For the years ended December 31, 2023, 2022 and 2021, Company matching contributions to tax deferred savings plans were invested at the direction of plan participants. F-33 Information regarding the Company’s plans, including U.S. SERP, was as follows (in millions, except percent values): U.S. Pension Benefits Non-U.S. Pension Benefits Other Benefits 2023 2022 2023 2022 2023 2022 Accumulated benefit obligation at end of year $ 32.2 $ 32.7 $ 103.7 $ 95.0 Change in benefit obligation: Benefit obligation at beginning of year $ 32.7 $ 43.6 $ 96.5 $ 151.3 $ 1.4 $ 2.1 Service cost — — 1.2 1.1 — — Interest cost 1.7 1.2 4.6 2.6 0.1 0.1 Plan amendments — — 0.1 0.5 — — Actuarial loss (gain) (1) 0.3 ( 9.7 ) 3.5 ( 36.0 ) ( 0.1 ) ( 0.6 ) Benefits paid ( 2.5 ) ( 2.4 ) ( 5.7 ) ( 7.6 ) ( 0.1 ) ( 0.2 ) Foreign exchange effect — — 5.5 ( 15.4 ) — — Benefit obligation at end of year 32.2 32.7 105.7 96.5 1.3 1.4 Change in plan assets: Fair value of plan assets at beginning of year — — 81.2 145.2 — — Actual return on plan assets — — 2.7 ( 47.7 ) — — Employer contribution 2.5 2.4 7.2 6.3 0.1 0.2 Employee contribution — — 0.3 0.3 — — Benefits paid ( 2.5 ) ( 2.4 ) ( 5.7 ) ( 7.6 ) ( 0.1 ) ( 0.2 ) Foreign exchange effect — — 4.9 ( 15.3 ) — — Fair value of plan assets at end of year — — 90.6 81.2 — — Funded status $ ( 32.2 ) $ ( 32.7 ) $ ( 15.1 ) $ ( 15.3 ) $ ( 1.3 ) $ ( 1.4 ) Amounts recognized in the statement of financial position are included in: Other assets $ — $ — $ — $ — $ — $ — Other current liabilities $ 2.5 $ 2.4 $ 0.7 $ 0.7 $ 0.2 $ 0.2 Other non-current liabilities 29.7 30.3 14.4 14.6 1.1 1.2 Total liabilities $ 32.2 $ 32.7 $ 15.1 $ 15.3 $ 1.3 $ 1.4 Amounts recognized in accumulated other comprehensive loss consist of: Actuarial net (gain) loss $ ( 4.0 ) $ ( 4.3 ) $ 54.8 $ 50.0 $ ( 0.5 ) $ ( 0.5 ) Prior service cost — — 2.8 2.7 — — Total amounts recognized in accumulated other comprehensive loss $ ( 4.0 ) $ ( 4.3 ) $ 57.6 $ 52.7 $ ( 0.5 ) $ ( 0.5 ) (1) Actuarial loss related to U.S. and non-U.S. pension benefits for the years ended December 31, 2023 and 2022 were due primarily to lower discount rates when compared to the rate used in the prior year. U.S. Pension Benefits Non-U.S. Pension Benefits Other Benefits 2023 2022 2021 2023 2022 2021 2023 2022 2021 Weighted-average assumptions as of December 31: Discount rate (1) 5.34 % 5.43 % 2.80 % 4.35 % 4.68 % 1.93 % 5.38 % 5.33 % 2.58 % Expected return on plan assets N/A N/A N/A 3.93 % 3.94 % 3.93 % N/A N/A N/A Rate of compensation increase (1) N/A N/A N/A 0.31 % 0.26 % 0.18 % N/A N/A N/A (1) The weighted average assumptions as of December 31 are used to calculate the funded status at the end of the current year and the net periodic cost for the subsequent year. F-34 U.S. Pension Benefits Non-U.S. Pension Benefits Other Benefits 2023 2022 2021 2023 2022 2021 2023 2022 2021 Components of net periodic cost: Service cost $ — $ — $ — $ 1.2 $ 1.1 $ 1.1 $ — $ — $ — Interest cost 1.7 1.2 1.1 4.6 2.6 2.3 0.1 0.1 0.1 Expected return on plan assets — — — ( 3.4 ) ( 5.1 ) ( 5.3 ) — — — Recognition of prior service cost — — — 0.2 0.1 0.1 — — — Amortization of actuarial loss ( 0.2 ) 0.2 0.3 2.3 1.1 2.1 ( 0.1 ) — — Other — — — ( 0.3 ) ( 0.3 ) ( 0.2 ) — — — Net periodic cost $ 1.5 $ 1.4 $ 1.4 $ 4.6 $ ( 0.5 ) $ 0.1 $ — $ 0.1 $ 0.1 Components of Net periodic cost other than the Service cost component are included in Other income (expense) - net in the Consolidated Statement of Income (Loss). 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. U.S. Pension Benefits Non-U.S. Pension Benefits Other Benefits 2023 2022 2023 2022 2023 2022 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): Net (gain) loss $ 0.1 $ ( 9.7 ) $ 4.2 $ 16.8 $ ( 0.1 ) $ ( 0.5 ) Amortization of actuarial gain (loss) 0.2 ( 0.2 ) ( 2.3 ) ( 1.2 ) 0.1 — Amortization of prior service cost — — ( 0.2 ) ( 0.1 ) — — Foreign exchange effect — — 3.2 ( 3.8 ) — — Total recognized in other comprehensive income (loss) $ 0.3 $ ( 9.9 ) $ 4.9 $ 11.7 $ — $ ( 0.5 ) For the Company’s plans, including the U.S. SERP, that have accumulated benefit obligations in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were (in millions): U.S. Pension Benefits Non-U.S. Pension Benefits 2023 2022 2023 2022 Projected benefit obligation $ 32.2 $ 32.7 $ 105.7 $ 96.5 Accumulated benefit obligation $ 32.2 $ 32.7 $ 103.7 $ 95.0 Fair value of plan assets $ — $ — $ 90.6 $ 81.2 Determination of plan obligations and associated expenses requires the use of actuarial valuations based on certain economic assumptions, which includes discount rates and expected rates of return on plan assets The discount rate enables the Company to estimate the present value of expected future cash flows on the measurement date. The rate used reflects a rate of return on high-quality fixed income investments that matches the duration of expected benefit payments at the December 31 measurement date. The methodology used to determine the rate of return on non-U.S. pension plan assets was based on average rate of earnings on funds invested and to be invested. Based on historical returns and future expectations, the Company believes the investment return assumptions are reasonable. The expected rate of return of plan assets represents an estimate of long-term returns on the investment portfolio. This assumption is reviewed by the trustees and varies with each of the plans. F-35 The overall investment strategy for non-U.S. defined benefit plans is to achieve a mix of investments to support long-term growth and minimize volatility while maximizing rates of return by diversification of asset types, fund strategies and fund managers. Fixed income investments include investments in European government securities and European corporate bonds and constitute approximately 90 % and 71 % of the portfolio at December 31, 2023 and 2022, respectively. Equity investments, multi-asset investment funds and real estate investments that invest in a diversified range of property principally in the retail, office and industrial/warehouse sectors constitute approximately 10 % and 29 % of the portfolio at December 31, 2023 and 2022, respectively. Investments of the plans primarily include investments in companies from diversified industries with 96 % invested internationally and 4 % invested in North America. The target investment allocations to support the Company’s investment strategy for 2024 are approximately 80 % to 81 % fixed income securities and approximately 19 % to 20 % equity securities, multi-asset investment funds and real estate investments. Fair value of cash in the table below is based on price quotations in an active market and therefore categorized under Level 1 of the ASC 820 hierarchy. Fair value of investment funds is priced on the market value of underlying investments in the portfolio and therefore categorized as Level 2 of the ASC 820 hierarchy. Fair value of group annuity insurance contracts is based on techniques that require inputs that are both significant to the fair value measurement and unobservable and therefore categorized as Level 3 of the ASC 820 hierarchy. Specifically, group annuity insurance contracts are valued at original buy in price adjusted for changes in discount rates and other actuarial assumptions. See Note A – “Basis of Presentation,” for an explanation of the ASC 820 hierarchy. The fair value of the Company’s plan assets at December 31, 2023 are as follows (in millions): Non-U.S. Pension Plans Total Level 1 Level 2 Level 3 Cash, including money market funds $ 1.2 $ 1.2 $ — $ — U.S. equities 3.7 — 3.7 — Non-U.S. equities 2.2 — 2.2 — Non-U.S. corporate bond funds 2.3 — 2.3 — Non-U.S. governmental fixed income funds 36.0 — 36.0 — Group annuity insurance contracts 20.5 — — 20.5 Real estate 3.2 — 3.2 — Other securities 21.5 — 21.5 — Total investments measured at fair value $ 90.6 $ 1.2 $ 68.9 $ 20.5 The fair value of the Company’s plan assets at December 31, 2022 are as follows (in millions): Non-U.S. Pension Plans Total Level 1 Level 2 Level 3 Cash, including money market funds $ 2.5 $ 2.5 $ — $ — U.S. equities 12.0 — 12.0 — Non-U.S. equities 8.2 — 8.2 — Non-U.S. corporate bond funds 2.0 — 2.0 — Non-U.S. governmental fixed income funds 18.5 — 18.5 — Group annuity insurance contracts 20.6 — — 20.6 Real estate 3.3 — 3.3 — Other securities 14.1 — 14.1 — Total investments measured at fair value $ 81.2 $ 2.5 $ 58.1 $ 20.6 F-36 Changes in fair value measurements of Level 3 investments during the years ended December 31, 2023 and 2022 are as follows (in millions): December 31, 2023 December 31, 2022 Balance at beginning of year $ 20.6 $ 34.1 Actuarial gain (loss) 0.4 ( 7.7 ) Interest Income 0.8 0.1 Transfers into (out of) Level 3 ( 2.4 ) ( 2.3 ) Foreign exchange effect 1.1 ( 3.6 ) Balance at end of year $ 20.5 $ 20.6 The Company plans to contribute approximately $ 3 million to its U.S. defined benefit pension plan and post-retirement plans and approximately $ 7 million to its non-U.S. defined benefit pension plans in 2024. During the year ended December 31, 2023, the Company contributed $ 2.6 million to its U.S. defined benefit pension plan and post-retirement plans and $ 7.2 million to its non-U.S. defined benefit pension plans. The Company’s estimated future benefit payments under its plans are as follows (in millions): Year Ending December 31, U.S. Pension Benefits Non-U.S. Pension Benefits Other Benefits 2024 $ 2.5 $ 5.7 $ 0.2 2025 $ 2.5 $ 5.7 $ 0.1 2026 $ 2.5 $ 5.9 $ 0.1 2027 $ 2.5 $ 6.0 $ 0.1 2028 $ 2.5 $ 6.1 $ 0.1 2029-2033 $ 11.9 $ 31.9 $ 0.4 For the other benefits, for measurement purposes, a 6.50 % rate of increase in the per capita cost of covered health care benefits was assumed for 2023, dropping to 6 % in 2024 and then decreasing one-half percentage point per year until it reaches 4.50 % for 2027 and thereafter. A one-percentage-point change in assumed health care cost trend rates would not have a material effect on total service and interest cost components or post-retirement benefit obligation. F-37 NOTE M – STOCKHOLDERS’ EQUITY On December 31, 2023, there were 84.6 million shares of common stock issued and 66.1 million shares of common stock outstanding. Of the 215.4 million unissued shares of common stock at that date, 1.6 million shares of common stock were reserved for issuance for the vesting of restricted stock. Common Stock in Treasury The Company values treasury stock on a cost basis. As of December 31, 2023, the Company held 18.5 million shares of common stock in treasury totaling $ 622.4 million, which include 0.8 million shares held in a trust for the benefit of the Company’s deferred compensation plan totaling $ 22.1 million. Preferred Stock The Company’s certificate of incorporation was amended in June 1998 to authorize 50.0 million shares of preferred stock, $ 0.01 par value per share. As of December 31, 2023 and 2022, there were no shares of preferred stock outstanding. Stock-Based Compensation In May 2021, the stockholders approved the Terex Corporation Amended and Restated 2018 Omnibus Incentive Plan (the “2018 Plan”) which increased the number of shares of common stock (“Shares”) authorized for issuance by 2.0 million. The purpose of the 2018 Plan is to assist the Company in attracting and retaining selected individuals to serve as employees, directors, officers, consultants and advisors of the Company and its subsidiaries and affiliates who will contribute to the Company’s success and to achieve long-term objectives which will inure to the benefit of all stockholders of the Company through the additional incentive inherent in the ownership of the common stock. The 2018 Plan authorizes the granting of (i) options to purchase shares of common stock, (ii) stock appreciation rights, (iii) restricted stock awards, (iv) restricted stock units, (v) other stock awards, (vi) cash awards and (vii) performance awards. Under the 2018 Plan, Shares covering restricted stock awards, restricted stock units and other stock awards shall only be counted as used to the extent that they are actually issued. As of December 31, 2023, 2.4 million shares were available for grant under the 2018 Plan. During the year ended December 31, 2023, the Company awarded 0.7 million shares of Restricted Stock Awards to its employees with a weighted average fair value of $ 57.53 per share. Approximately 64 % of these awards are time-based and vest ratably on each of the first three anniversary dates of the grants. Approximately 24 % cliff vest at the end of a three-year period and are subject to performance targets that may or may not be met and for which the performance period has not yet been completed. Approximately 12 % cliff vest and are based on performance targets containing a market condition determined over a three-year period. Fair value of time-based awards is based on the market price of our common stock at the date of grant approval. The fair value of performance-based awards, except for awards based on a market condition, is based on the market price of our common stock at the date of grant approval, except fair values are multiplied by the probability of achievement as of the period-end date. For awards based on a market condition, fair value is based on the Monte Carlo method at grant date. The Monte Carlo method is a statistical simulation technique used to provide the grant date fair value of an award. The Company used the Monte Carlo method to determine grant date fair value of $ 63.33 per share for awards with a market condition granted on March 15, 2023. The following table presents the weighted-average assumptions used in the valuations: Grant date Grant date Grant date March 15, 2023 March 17, 2022 March 4, 2021 Dividend yields 1.21 % 1.31 % 1.12 % Expected volatility 46.54 % 54.25 % 53.03 % Risk free interest rate 3.81 % 2.09 % 0.29 % Expected life (in years) 3 3 3 Grant date fair value per share $ 63.33 $ 44.25 $ 54.92 F-38 The following table is a summary of restricted stock awards under all of the Company’s plans: Restricted Stock Awards Weighted Average Grant Date Fair Value Nonvested at December 31, 2022 1,849,796 $ 37.36 Granted 687,893 $ 57.53 Vested ( 976,154 ) $ 31.71 Canceled, expired or other 53,779 $ 43.34 Nonvested at December 31, 2023 1,615,314 $ 51.61 As of December 31, 2023, unrecognized compensation costs related to restricted stock totaled approximately $ 39.9 million, which will be expensed over a weighted average period of 1.7 years. The grant date weighted average fair value for restricted stock awards during the years ended December 31, 2023, 2022 and 2021 was $ 57.53 , $ 40.16 and $ 44.26 , respectively. The total fair value of shares vested for restricted stock awards was $ 31.0 million, $ 31.2 million and $ 23.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. Tax benefits associated with stock-based compensation were $ 5.5 million, $ 4.5 million and $ 5.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. The excess tax benefit for all stock-based compensation is included in the Consolidated Statement of Cash Flows as an operating cash activity. Comprehensive Income (Loss) The following table reflects the accumulated balances of other comprehensive income (loss) (in millions): Cumulative Translation Adjustment Derivative Hedging Adjustment Debt & Equity Securities Adjustment Pension Liability Adjustment Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2021 $ ( 145.2 ) $ ( 6.0 ) $ 1.2 $ ( 58.4 ) $ ( 208.4 ) Current year change ( 42.8 ) 10.0 ( 1.2 ) 13.9 ( 20.1 ) Balance at December 31, 2021 ( 188.0 ) 4.0 — ( 44.5 ) ( 228.5 ) Current year change ( 97.5 ) ( 10.4 ) ( 3.5 ) ( 1.7 ) ( 113.1 ) Balance at December 31, 2022 ( 285.5 ) ( 6.4 ) ( 3.5 ) ( 46.2 ) ( 341.6 ) Current year change 57.2 1.0 0.8 ( 4.5 ) 54.5 Balance at December 31, 2023 $ ( 228.3 ) $ ( 5.4 ) $ ( 2.7 ) $ ( 50.7 ) $ ( 287.1 ) As of December 31, 2023, AOCI for the cumulative translation adjustment, derivative hedging adjustment, debt and equity securities adjustment and pension liability adjustment are net of a tax benefit/(provision) of $ 7.0 million, $ 1.3 million, $ 0.7 million and $ 2.4 million, respectively. F-39 Changes in Accumulated Other Comprehensive Income (Loss) The table below presents changes in AOCI by component for the year ended December 31, 2023 and 2022. All amounts are net of tax (in millions). Year ended December 31, 2023 Year ended December 31, 2022 CTA Derivative Hedging Adj. Debt & Equity Securities Adj. Pension Liability Adj. Total CTA Derivative Hedging Adj. Debt & Equity Securities Adj. Pension Liability Adj. Total 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 57.2 ( 0.9 ) 0.8 ( 6.2 ) 50.9 ( 97.1 ) ( 4.0 ) ( 3.5 ) ( 2.9 ) ( 107.5 ) Amounts reclassified from AOCI — 1.9 — 1.7 3.6 ( 0.4 ) ( 6.4 ) — 1.2 ( 5.6 ) Net other comprehensive income (loss) 57.2 1.0 0.8 ( 4.5 ) 54.5 ( 97.5 ) ( 10.4 ) ( 3.5 ) ( 1.7 ) ( 113.1 ) Ending balance $ ( 228.3 ) $ ( 5.4 ) $ ( 2.7 ) $ ( 50.7 ) $ ( 287.1 ) $ ( 285.5 ) $ ( 6.4 ) $ ( 3.5 ) $ ( 46.2 ) $ ( 341.6 ) 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. In December 2022, Terex’s Board of Directors authorized the additional repurchase up to $ 150 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 these programs. Year Ended December 31, Total Number of Shares Repurchased Amount of Shares Repurchased (in millions) 2023 1,287,214 $ 60.7 2022 2,862,650 $ 96.6 2021 28,688 $ 1.2 Dividends The table below presents dividends declared by Terex’s Board of Directors and paid to the Company’s stockholders: Year First Quarter Second Quarter Third Quarter Fourth Quarter 2023 $ 0.15 $ 0.15 $ 0.17 $ 0.17 2022 $ 0.13 $ 0.13 $ 0.13 $ 0.13 2021 $ 0.12 $ 0.12 $ 0.12 $ 0.12 In February 2024, Terex’s Board of Directors declared a dividend of $ 0.17 per share, which will be paid on March 19, 2024 to the Company’s stockholders of record as of March 8, 2024. F-40 NOTE N – LITIGATION AND CONTINGENCIES General 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. The Company is insured for product liability, general liability, workers’ compensation, employer’s liability, property damage and other insurable risks required by law or contract, with retained liability or deductibles. The Company records and maintains an estimated liability in the amount of management’s estimate of the Company’s aggregate exposure for such retained liabilities and deductibles. For such retained liabilities and deductibles, the Company determines its exposure based on probable loss estimations, which requires such losses to be both probable and the amount or range of probable loss to be estimable. The Company believes it has made appropriate and adequate reserves and accruals for its current contingencies and the likelihood of a material loss beyond amounts accrued is remote. The Company believes the outcome of such matters, individually and in aggregate, will not have a material adverse effect on its consolidated financial statements. However, outcomes of lawsuits cannot be predicted and, if determined adversely, could ultimately result in the Company incurring significant liabilities which could have a material adverse effect on its results of operations. Terex Latin América Equipamentos Ltda ICMS Proceedings Terex Latin America Equipamentos Ltda (“TLA”) imports Terex products into Brazil through the state of Espirito Santo to its facility in Sao Paulo. For the 2004 through March 2009 period, TLA used a third-party trading company, SAB, as an agent to process the importation of Terex products. TLA properly paid the Espirito Santo ICMS tax (Brazilian state value-added tax) to SAB for payment to Espirito Santo, which would produce an ICMS credit to be used against imposition of Sao Paolo ICMS tax. SAB went into bankruptcy and may not have actually remitted to Espirito Santo the ICMS tax amounts paid to it by TLA. The Brazilian state of Sao Paulo challenged the credit against Sao Paolo ICMS that TLA claimed and assessed unpaid ICMS tax, penalties and related interest in the amount of approximately BRL 114 million ($ 24 million). TLA challenged the claim of Sao Paulo and learned in October 2019 that the Sao Paulo claim has survived the administrative tribunal process. While the Company continues to strongly oppose the state of Sao Paulo and plans to assert vigorous defenses, no assurance can be given as to the final resolution of the ICMS litigation or that TLA will not ultimately be required to pay the ICMS tax and interest to the state of Sao Paulo. Other The Company is involved in various other legal proceedings which have arisen in the normal course of its operations. The Company has recorded provisions for estimated losses in circumstances where a loss is probable and the amount or range of possible amounts of the loss is estimable. Credit Guarantees 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 December 31, 2023 and 2022, the maximum exposure determined was $ 89.4 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 $ 5.3 million and $ 6.3 million at December 31, 2023 and 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. F-41 SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (in millions) Balance Beginning of Year Charges to Earnings Other (1) Deductions (2) Balance End of Year Year ended December 31, 2023 Deducted from asset accounts: Allowance for doubtful accounts - Current $ 9.4 $ ( 0.1 ) $ 0.2 $ ( 1.2 ) $ 8.3 Allowance for doubtful accounts - Non-current 0.3 — — — 0.3 Reserve for inventory 61.0 24.6 1.8 ( 16.9 ) 70.5 Valuation allowances for deferred tax assets 63.0 ( 9.1 ) 0.2 ( 1.4 ) 52.7 Totals $ 133.7 $ 15.4 $ 2.2 $ ( 19.5 ) $ 131.8 Year ended December 31, 2022 Deducted from asset accounts: Allowance for doubtful accounts - Current $ 9.7 $ 1.1 $ ( 0.4 ) $ ( 1.0 ) $ 9.4 Allowance for doubtful accounts - Non-current 10.7 — ( 0.6 ) ( 9.8 ) 0.3 Reserve for inventory 57.8 21.6 ( 2.8 ) ( 15.6 ) 61.0 Valuation allowances for deferred tax assets 100.0 ( 24.3 ) ( 1.1 ) ( 11.6 ) 63.0 Totals $ 178.2 $ ( 1.6 ) $ ( 4.9 ) $ ( 38.0 ) $ 133.7 Year ended December 31, 2021 Deducted from asset accounts: Allowance for doubtful accounts - Current $ 9.5 $ 2.5 $ ( 0.8 ) $ ( 1.5 ) $ 9.7 Allowance for doubtful accounts - Non-current 11.5 — ( 0.8 ) — 10.7 Reserve for inventory 61.8 15.0 ( 2.9 ) ( 16.1 ) 57.8 Valuation allowances for deferred tax assets 112.1 ( 12.0 ) ( 0.1 ) — 100.0 Totals $ 194.9 $ 5.5 $ ( 4.6 ) $ ( 17.6 ) $ 178.2 (1) Primarily represents the impact of foreign currency exchange, business divestitures and other amounts recorded to accumulated other comprehensive income (loss). (2) Primarily represents the utilization of established reserves, net of recoveries. F-42