What changed in this filing

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Item 1. Financial Statements

2024-04-26 compared with 2023-10-27 · 99 added, 260 removed, 521 unchanged (41% of the section changed)

4 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

2023 2022 2023 2022

Net sales $ 1,292.5 $ 1,235.7

28 unchanged sentences

(in millions, except par value)

September 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 364.9 $ 370.7

Receivables (net of allowance of $ 9.9 and $ 9.4 at September 30, 2023 and December 31, 2022, respectively)

Receivables (net of allowance of $ 9.1 and $ 8.3 at March 31, 2024 and December 31, 2023, respectively)

Inventories 1,217.6 1,186.0

15 unchanged sentences

Long-term debt, less current portion 720.9 620.4

Non-current operating leases 91.4 62.8

Other non-current liabilities 201.9 203.6

3 unchanged sentences

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

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

issued 85.1 and 84.6 shares at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 900.1 906.1

1 unchanged sentence

Accumulated other comprehensive income (loss) ( 315.9 ) ( 287.1 )

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

Less cost of shares of common stock in treasury – 18.5 shares at March 31, 2024 and December 31, 2023

( 624.9 ) ( 622.4 )

24 unchanged sentences

66.6 $ 0.9 $ 900.1 $ 1,771.7 $ ( 315.9 ) $ ( 624.9 ) $ 1,731.9

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

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

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

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

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

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

Other — — — — — ( 0.1 ) ( 0.1 )

Balance at June 30, 2023

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

Net income (loss) — — — 119.2 — — 119.2

Other comprehensive income (loss) – net of tax — — — — ( 52.0 ) — ( 52.0 )

Compensation under stock-based plans – net — — 8.7 — — — 8.7

Dividends — — 0.2 ( 11.6 ) — — ( 11.4 )

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

Other — — — ( 0.1 ) — 0.1 —

Balance at September 30, 2023

66.7 $ 0.9 $ 888.0 $ 1,559.5 $ ( 357.3 ) $ ( 594.9 ) $ 1,496.2

Shares Common

17 unchanged sentences

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

Net income (loss) — — — 74.1 — — 74.1

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

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

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

Dividends — — 0.2 ( 9.1 ) — — ( 8.9 )

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

Other — — — 0.1 — — 0.1

Balance at June 30, 2022

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

Net income (loss) — — — 81.8 — — 81.8

Other comprehensive income (loss) – net of tax — — — — ( 80.4 ) — ( 80.4 )

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

Compensation under stock-based plans – net — — 6.4 — — — 6.4

Dividends — — 0.2 ( 9.0 ) — — ( 8.8 )

Acquisition of treasury stock ( 0.5 ) — — — — ( 13.6 ) ( 13.6 )

Balance at September 30, 2022

66.9 $ 0.9 $ 874.0 $ 1,117.4 $ ( 401.3 ) $ ( 556.3 ) $ 1,034.7

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

2 unchanged sentences

(in millions)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities

13 unchanged sentences

Capital expenditures ( 35.0 ) ( 20.3 )

Proceeds from sale of capital assets 33.6 —

Acquisitions, net of cash acquired, and investments ( 1.8 ) ( 10.0 )

17 unchanged sentences

Basis of Presentation and Principles of Consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements of Terex Corporation and subsidiaries as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

The accompanying unaudited Condensed Consolidated Financial Statements of Terex Corporation and subsidiaries as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

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

9 unchanged sentences

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

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

Cash and cash equivalents include $ 2.1 million and $ 3.5 million at September 30, 2023 and December 31, 2022, respectively, which were not immediately available for use.

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

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.

Accounts Receivable and Allowance for Doubtful Accounts.

Operating results for the three months ended March 31, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024.

Accounting Standards to be Implemented.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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.

Receivables and Allowance for Doubtful Accounts.

Receivables include $ 633.5 million and $ 493.8 million of trade accounts receivable at March 31, 2024 and December 31, 2023, respectively.

Trade accounts receivable are recorded at invoiced amount and do not bear interest.

5 unchanged sentences

Provision for credit losses 1.1

Balance as of September 30, 2023

Balance as of March 31, 2024

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

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 March 31, 2024 and December 31, 2023, respectively.

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

1 unchanged sentence

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

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

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

Accrued Warranties .

15 unchanged sentences

Foreign exchange effect/other ( 0.5 )

Balance as of September 30, 2023

Assets Held for Sale .

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

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

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

Balance as of March 31, 2024

Fair Value Measurements.

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

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

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

9 unchanged sentences

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

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

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

3 unchanged sentences

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

As Aerials and Utilities operating segments share similar economic characteristics, these operating segments are aggregated into one operating segment, AWP, for the purpose of determining reportable segments.

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:

10 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

2023 2022 2023 2022

MP $ 520.0 $ 553.8

7 unchanged sentences

Total $ 158.3 $ 147.7

September 30,

2024 December 31,

7 unchanged sentences

Three Months Ended

September 30, 2023

March 31, 2024

Three Months Ended

September 30, 2022

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

Net sales by region

North America $ 243.2 $ 533.1 $ 4.3 $ 780.6 $ 189.9 $ 444.8 $ 7.4 $ 642.1

Western Europe 142.5 103.2 — 245.7 137.1 98.4 0.1 235.6

Asia-Pacific 105.4 64.4 — 169.8 95.0 65.9 0.5 161.4

Rest of World (1)

50.0 50.3 ( 6.3 ) 94.0 35.9 53.5 ( 8.0 ) 81.4

$ 541.1 $ 751.0 $ ( 2.0 ) $ 1,290.1 $ 457.9 $ 662.6 $ — $ 1,120.5

(1) Includes intercompany sales and eliminations.

(2) Total sales include $ 716.9 million and $ 568.6 million for the three months ended September 30, 2023 and 2022, respectively, attributable to the U.S., the Company’s country of domicile.

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2022

March 31, 2023

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

7 unchanged sentences

(1) Includes intercompany sales and eliminations.

(2) Total sales include $ 2.1 billion and $ 1.6 billion for the nine months ended September 30, 2023 and 2022, respectively, attributable to the U.S., the Company’s country of domicile.

(2) Total sales include $ 732.5 million and $ 628.8 million for the three months ended March 31, 2024 and 2023, respectively, attributable to the U.S., the Company’s country of domicile.

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

1 unchanged sentence

Three Months Ended

September 30, 2023

March 31, 2024

Three Months Ended

September 30, 2022

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

Net sales by product type

Aerial Work Platforms $ — $ 527.6 $ 0.6 $ 528.2 $ — $ 505.5 $ 0.3 $ 505.8

Materials Processing Equipment 371.3 — — 371.3 277.3 — — 277.3

Specialty Equipment 169.4 — 0.3 169.7 179.7 — 0.3 180.0

Utility Equipment — 143.3 — 143.3 — 116.7 — 116.7

0.4 80.1 ( 2.9 ) 77.6 0.9 40.4 ( 0.6 ) 40.7

Total $ 541.1 $ 751.0 $ ( 2.0 ) $ 1,290.1 $ 457.9 $ 662.6 $ — $ 1,120.5

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

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2022

March 31, 2023

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

8 unchanged sentences

NOTE C – INCOME TAXES

During the three months ended September 30, 2023, the Company recognized income tax expense of $ 29.8 million on income of $ 149.0 million, an effective tax rate of 20.0 %, as compared to income tax expense of $ 25.6 million on income of $ 107.4 million, an effective tax rate of 23.8 %, for the three months ended September 30, 2022.

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

During the nine months ended September 30, 2023, the Company recognized income tax expense of $ 85.2 million on income of $ 474.0 million, an effective tax rate of 18.0 %, as compared to income tax expense of $ 52.6 million on income of $ 260.8 million, an effective tax rate of 20.2 %, for the nine months ended September 30, 2022.

The lower effective tax rate for the nine months ended September 30, 2023 when compared with the nine months ended September 30, 2022 is primarily due to lower tax expense on permanent items.

During the three months ended March 31, 2024, the Company recognized income tax expense of $ 28.0 million on income of $ 136.5 million, an effective tax rate of 20.5 %, as compared to income tax expense of $ 23.3 million on income of $ 133.2 million, an effective tax rate of 17.5 %, for the three months ended March 31, 2023.

The higher effective tax rate for the three months ended March 31, 2024 when compared with the three months ended March 31, 2023 is primarily due to higher tax related to geographic distribution of income and lower favorable discrete items.

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

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

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

NOTE D – ACQUISITIONS

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

Total cash consideration was approximately $ 6 million.

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

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

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

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

NOTE E – EARNINGS PER SHARE

A number of countries in which we operate have adopted legislation, many of which are effective in 2024 subject to the OECD transitional safe harbor rules, while other countries are still in the process of introducing legislation.

The Company has determined the impact of enacted Pillar Two legislation on its financial statements is not material.

The Company will continue to evaluate the financial statement impacts as additional Pillar Two rules are enacted.

NOTE D – EARNINGS PER SHARE

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

September 30,

Nine Months Ended

September 30,

2023 2022 2023 2022

Income (loss) from continuing operations

1 unchanged sentence

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

— — 2.3 ( 0.4 )

Net income (loss) $ 108.5 $ 112.6

4 unchanged sentences

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

— — 0.04 ( 0.01 )

Net income (loss) $ 1.62 $ 1.66

2 unchanged sentences

Effect of dilutive securities:

Restricted stock awards

0.8 0.6 0.8 0.8

Restricted stock

Diluted weighted average shares outstanding 67.9 68.8

3 unchanged sentences

Net income (loss) $ 1.60 $ 1.64

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 three months ended September 30, 2023 that would have an anti-dilutive effect.

Weighted average Restricted Stock Awards of approximately 0.5 million were outstanding during the three months ended September 30, 2022, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance.

Weighted average Restricted Stock Awards of approximately 0.3 million and 0.6 million were outstanding during the nine months ended September 30, 2023 and 2022, respectively, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance.

NOTE F – INVENTORIES

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

Weighted average Restricted Stock of approximately 0.3 million and 0.1 million were outstanding during the three months ended March 31, 2024 and 2023, respectively, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance.

NOTE E – INVENTORIES

Inventories consist of the following (in millions):

September 30,

2024 December 31,

4 unchanged sentences

Inventories $ 1,217.6 $ 1,186.0

Work-in-process inventory includes approximately $ 20 million and $ 36 million of substantially completed inventory awaiting installation of final components at September 30, 2023 and December 31, 2022, respectively.

Reserves for lower of cost or net realizable value and excess and obsolete inventory were $ 65.5 million and $ 61.0 million at September 30, 2023 and December 31, 2022, respectively.

NOTE G – PROPERTY, PLANT AND EQUIPMENT

Inventory reserves were $ 70.1 million and $ 70.5 million at March 31, 2024 and December 31, 2023, respectively.

NOTE F – PROPERTY, PLANT AND EQUIPMENT

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

September 30,

2024 December 31,

7 unchanged sentences

Property, plant and equipment – net $ 573.7 $ 569.8

NOTE H – GOODWILL AND INTANGIBLE ASSETS

NOTE G – GOODWILL AND INTANGIBLE ASSETS

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

4 unchanged sentences

194.3 100.3 294.6

Acquisitions 0.3 — 0.3

Foreign exchange effect and other ( 2.2 ) ( 0.4 ) ( 2.6 )

Balance at September 30, 2023, gross

Balance at March 31, 2024, gross

215.3 138.5 353.8

Accumulated impairment ( 23.2 ) ( 38.6 ) ( 61.8 )

Balance at September 30, 2023, net

Balance at March 31, 2024, net

$ 192.1 $ 99.9 $ 292.0

In connection with the MARCO acquisition, the Company recognized goodwill of $ 0.3 million in April 2023.

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

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

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

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Weighted Average Life

8 unchanged sentences

$ 78.6 $ ( 63.8 ) $ 14.8 $ 79.3 $ ( 63.6 ) $ 15.7

In connection with the MARCO acquisition, the Company recognized customer relationships of $ 0.2 million with an estimated useful life of four years and trademarks of $ 0.3 million with an estimated useful life of ten years in April 2023.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2024 2023

1 unchanged sentence

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

NOTE I – DERIVATIVE FINANCIAL INSTRUMENTS

NOTE H – DERIVATIVE FINANCIAL INSTRUMENTS

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

7 unchanged sentences

Commodity Swaps

Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 25.6 million and $ 22.5 million at September 30, 2023 and December 31, 2022, respectively.

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

Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 16.8 million and $ 22.2 million at March 31, 2024 and December 31, 2023, respectively.

Commodity swaps outstanding at March 31, 2024 mature on or before August 31, 2025.

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

3 unchanged sentences

Cross Currency Swaps

Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 216.0 million and $ 121.4 million at September 30, 2023 and December 31, 2022, respectively.

Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 248.7 million and $ 250.0 million at March 31, 2024 and December 31, 2023, respectively.

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

6 unchanged sentences

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

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

The Company had $ 23.6 million and $ 7.8 million notional value of foreign exchange contracts outstanding that were designated as cash flow hedging instruments at September 30, 2023 and December 31, 2022, respectively.

Foreign exchange contracts outstanding at March 31, 2024 mature on or before June 21, 2024.

The Company had $ 1.6 million and $ 4.6 million notional value of foreign exchange contracts outstanding that were designated as cash flow hedging instruments at March 31, 2024 and December 31, 2023, respectively.

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

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

The Company had $ 410.2 million and $ 241.1 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at September 30, 2023 and December 31, 2022, respectively.

The Company had $ 199.9 million and $ 300.1 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at March 31, 2024 and December 31, 2023, 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.

1 unchanged sentence

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

September 30,

2024 December 31,

9 unchanged sentences

Cross currency swaps - net investment hedge Other non-current liabilities ( 2.1 ) — ( 5.1 ) —

Commodity swaps Other non-current liabilities — — ( 0.4 ) —

Net derivative asset (liability) $ ( 3.3 ) $ ( 0.3 ) $ ( 7.9 ) $ 0.9

3 unchanged sentences

Instrument Three Months Ended

September 30, 2023

Nine Months Ended

September 30, 2023

Income Statement Account Three Months Ended

September 30, 2023

Nine Months Ended

September 30, 2023

Foreign exchange contracts $ 0.8 $ 0.4 Cost of goods sold $ — $ ( 0.2 )

Commodity swaps ( 0.5 ) 3.6 Cost of goods sold 0.2 ( 2.7 )

Cross currency swaps - net investment hedge 6.9 5.2 Selling, general and administrative expenses — —

Total $ 7.2 $ 9.2 Total $ 0.2 $ ( 2.9 )

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

Instrument Three Months Ended

September 30, 2022

Nine Months Ended

September 30, 2022

Income Statement Account Three Months Ended

September 30, 2022

Nine Months Ended

September 30, 2022

March 31, 2024

Three Months Ended

March 31, 2023 Income Statement Account Three Months Ended

March 31, 2024

Three Months Ended

March 31, 2023

Foreign exchange contracts $ 0.1 $ ( 0.4 ) Cost of goods sold $ — $ —

6 unchanged sentences

Three Months Ended

September 30, 2023

Nine Months Ended

September 30, 2023

March 31, 2024

Three Months Ended

September 30, 2023

Nine Months Ended

September 30, 2023

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 997.6 ) $ ( 3,014.8 ) $ ( 17.0 ) $ ( 47.3 )

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

Foreign exchange contracts — ( 0.2 ) — —

Commodity swaps 0.2 ( 2.7 ) — —

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

Cross currency swaps - net investment hedge — — 1.2 2.4

Total $ 0.2 $ ( 2.9 ) $ 1.2 $ 2.4

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

Cost of goods sold Interest expense

March 31, 2023

Three Months Ended

September 30, 2022

Nine Months Ended

September 30, 2022

March 31, 2024

Three Months Ended

September 30, 2022

Nine Months Ended

September 30, 2022

March 31, 2023

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 995.2 ) $ ( 957.0 ) $ ( 15.0 ) $ ( 14.9 )

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

Foreign exchange contracts — 0.1 — —

Commodity swaps ( 0.2 ) ( 1.8 ) — —

6 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Instrument Income Statement Account 2024

7 unchanged sentences

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

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

Within unrealized net gains (losses) included in AOCI as of September 30, 2023, it is estimated that approximately $ 2 million of gains are expected to be reclassified into earnings in the next twelve months.

NOTE J – LONG-TERM OBLIGATIONS

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

Within unrealized net gains (losses) included in AOCI as of March 31, 2024, it is estimated that approximately $ 1 million of losses are expected to be reclassified into earnings in the next twelve months.

NOTE I – LONG-TERM OBLIGATIONS

Credit Agreement

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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 prior periods, the Company prepaid in full the senior secured term loans prior to their maturity date to reduce the Company’s outstanding debt and lower its leverage.

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.

In 2022, the Company completed the prepayment in full of the senior secured term loans.

On May 8, 2023, the Company and certain of its subsidiaries entered into an Amendment No.

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

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

The Credit Agreement 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:

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The Credit Agreement also contains customary default provisions.

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

The Company had $ 106.0 million and $ 177.0 million of Revolver amounts outstanding at September 30, 2023 and December 31, 2022, respectively.

The weighted average interest rate on the Revolver amounts was 7.01 % and 6.10 % at September 30, 2023 and December 31, 2022, respectively.

The Company was in compliance with all covenants contained in the Credit Agreement as of March 31, 2024.

The Company had $ 99.1 million and no Revolver amounts outstanding at March 31, 2024 and December 31, 2023, respectively.

The weighted average interest rate on the Revolver was 6.67 % at March 31, 2024.

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

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Letters of credit outstanding (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

$400 Million Facility $ — $ —

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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 was accounted for as a secured borrowing with a pledge of collateral as the transfer does not meet the criteria for sale accounting.

As a result, the VAT receivables pledged as collateral remain in receivables and the liability associated with the cash proceeds of $ 18.6 million and $19.0 million are presented in long term debt in the Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023, respectively.

The long term debt classification is based on estimated timing of VAT refund from the Italian government which is expected to be greater than 12 months.

Fair Value of Debt

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

The Company estimates the fair value of its debt set forth below as of March 31, 2024, as follows (in millions, except for quotes):

Book Value Quote Fair Value

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

NOTE K – RETIREMENT PLANS AND OTHER BENEFITS

NOTE J – RETIREMENT PLANS AND OTHER BENEFITS

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

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Three Months Ended

September 30,

Nine Months Ended

September 30,

2023 2022 2023 2022

Pension Non-U.S.

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Pension Non-U.S.

Pension Other U.S.

Pension Non-U.S.

Pension Other U.S.

Pension Non-U.S.

Pension Other

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— ( 0.9 ) — — ( 0.8 ) —

Amortization of prior service cost

— — — — — — — 0.1 — — — —

Amortization of actuarial (gain) loss

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

NOTE L – LITIGATION AND CONTINGENCIES

NOTE K – LITIGATION AND CONTINGENCIES

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

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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 September 30, 2023 and December 31, 2022, the maximum exposure determined was $ 89.5 million and $ 121.4 million, respectively.

For credit guarantees outstanding as of March 31, 2024 and December 31, 2023, the maximum exposure determined was $ 84.3 million and $ 89.4 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 $ 5.4 million and $ 6.3 million at September 30, 2023 and December 31, 2022, respectively.

The allowance for credit losses on credit guarantees was $ 5.2 million and $ 5.3 million at March 31, 2024 and December 31, 2023, respectively.

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

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

NOTE M – STOCKHOLDERS’ EQUITY

NOTE L – STOCKHOLDERS’ EQUITY

Changes in Accumulated Other Comprehensive Income (Loss)

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

The table below presents changes in AOCI by component for the three months ended March 31, 2024 and 2023.

All amounts are net of tax (in millions).

Three Months Ended

September 30, 2023

March 31, 2024

Three Months Ended

September 30, 2022

March 31, 2023

CTA Derivative Hedging Adj.

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$ ( 262.2 ) $ ( 1.1 ) $ ( 2.9 ) $ ( 49.7 ) $ ( 315.9 ) $ ( 261.1 ) $ ( 4.5 ) $ ( 3.0 ) $ ( 46.7 ) $ ( 315.3 )

Nine Months Ended

September 30, 2023

Nine Months Ended

September 30, 2022

CTA Derivative Hedging Adj.

Debt & Equity Securities Adj.

Pension Liability Adj.

Total CTA Derivative Hedging Adj.

Debt & Equity Securities Adj.

Pension Liability Adj.

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

Other comprehensive income (loss) before reclassifications

( 25.4 ) 6.6 ( 0.3 ) ( 0.7 ) ( 19.8 ) ( 171.3 ) 0.5 ( 3.9 ) 6.8 ( 167.9 )

Amounts reclassified from AOCI

— 2.6 — 1.5 4.1 ( 0.4 ) ( 5.5 ) — 1.0 ( 4.9 )

Net other comprehensive income (loss)

( 25.4 ) 9.2 ( 0.3 ) 0.8 ( 15.7 ) ( 171.7 ) ( 5.0 ) ( 3.9 ) 7.8 ( 172.8 )

Ending balance $ ( 310.9 ) $ 2.8 $ ( 3.8 ) $ ( 45.4 ) $ ( 357.3 ) $ ( 359.7 ) $ ( 1.0 ) $ ( 3.9 ) $ ( 36.7 ) $ ( 401.3 )

Stock-Based Compensation

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

During the three months ended March 31, 2024, the Company awarded 0.5 million shares of Restricted Stock to its employees with a weighted average fair value of $ 60.12 per share.

Approximately 61 % of these awards are time-based and vest ratably on each of the first three anniversary dates of the grants.

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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.

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

In December 2022, Terex’s Board authorized the repurchase of 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.

Nine Months Ended

Three Months Ended

Total Number of

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(in millions)

736,644 $ 33.8

2,747,751 $ 92.9

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

Year First Quarter Second Quarter Third Quarter

$ 0.15 $ 0.15 $ 0.17

$ 0.13 $ 0.13 $ 0.13

In October 2023, Terex’s Board of Directors declared a dividend of $ 0.17 per share, which will be paid on December 19, 2023 to the Company’s shareholders of record as of November 9, 2023.

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

Year First Quarter

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

What changed 10-Q

Item 1. Financial Statements