What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-30 compared with 2024-07-31 · 213 added, 152 removed, 603 unchanged (38% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

29 unchanged sentences

(in millions, except par value)

September 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 352 $ 371

Receivables (net of allowance of $ 10.4 and $ 8.3 at June 30, 2024 and December 31, 2023, respectively)

Receivables (net of allowance of $ 10 and $ 8 at September 30, 2024 and December 31, 2023, respectively)

Inventories 1,222 1,186

21 unchanged sentences

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

issued 85.1 and 84.6 shares at June 30, 2024 and December 31, 2023, respectively

issued 85.1 and 84.6 shares at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 914 906

1 unchanged sentence

Accumulated other comprehensive income (loss) ( 279 ) ( 287 )

Less cost of shares of common stock in treasury – 18.8 and 18.5 shares at June 30, 2024 and December 31, 2023

Less cost of shares of common stock in treasury – 19.1 and 18.5 shares at September 30, 2024 and December 31, 2023

( 656 ) ( 623 )

22 unchanged sentences

Acquisition of treasury stock — — — — — ( 3 ) ( 3 )

Other — — 1 ( 1 ) — — —

Balance at March 31, 2024

8 unchanged sentences

66.3 $ 1 $ 909 $ 1,901 $ ( 343 ) $ ( 644 ) $ 1,824

Net income (loss) — — — 88 — — 88

Other comprehensive income (loss) – net of tax — — — — 64 — 64

Issuance of common stock related to compensation — — 1 — — — 1

Compensation under stock-based plans – net — — 4 — — — 4

Dividends — — — ( 11 ) — — ( 11 )

Acquisition of treasury stock ( 0.3 ) — — — — ( 12 ) ( 12 )

Other — — — ( 1 ) — — ( 1 )

Balance at September 30, 2024

66.0 $ 1 $ 914 $ 1,977 $ ( 279 ) $ ( 656 ) $ 1,957

Shares Common

15 unchanged sentences

Acquisition of treasury stock ( 0.1 ) — — — — ( 4 ) ( 4 )

Other — — — ( 1 ) 1 — —

Balance at March 31, 2023

2 unchanged sentences

Other comprehensive income (loss) – net of tax — — — — 10 — 10

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

Compensation under stock-based plans – net — — 10 — — — 10

1 unchanged sentence

Acquisition of treasury stock ( 0.6 ) — — — — ( 32 ) ( 32 )

Other — — — — — ( 0.1 ) ( 0.1 )

Balance at June 30, 2023

66.7 $ 1 $ 879 $ 1,452 $ ( 305 ) $ ( 595 ) $ 1,432

Net income (loss) — — — 119 — — 119

Other comprehensive income (loss) – net of tax — — — — ( 52 ) — ( 52 )

Compensation under stock-based plans – net — — 9 — — — 9

Dividends — — — ( 12 ) — — ( 12 )

Balance at September 30, 2023

66.7 $ 1 $ 888 $ 1,559 $ ( 357 ) $ ( 595 ) $ 1,496

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

2 unchanged sentences

(in millions)

Six Months Ended

Nine Months Ended

September 30,

Operating Activities

33 unchanged sentences

Basis of Presentation and Principles of Consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements of Terex Corporation and subsidiaries as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 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 September 30, 2024 and for the three and nine months ended September 30, 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 six months ended June 30, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024.

Accounting Standards to be Implemented.

5 unchanged sentences

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.

While adoption will result in additional disclosure, the Company does not expect adoption to have a material effect on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

4 unchanged sentences

Receivables and Allowance for Doubtful Accounts.

Receivables include $ 664.7 million and $ 493.8 million of trade accounts receivable at June 30, 2024 and December 31, 2023, respectively.

Receivables include $ 577 million and $ 494 million of trade accounts receivable at September 30, 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 3

Balance as of June 30, 2024

Balance as of September 30, 2024

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

3 unchanged sentences

The supplier invoices that have been confirmed as valid under the program require payment in full within 60-90 days of invoice date.

Confirmed obligation amounts outstanding were immaterial at June 30, 2024 and December 31, 2023.

Confirmed obligation amounts outstanding were $ 2 million at September 30, 2024.

There were no confirmed obligations outstanding at December 31, 2023.

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

1 unchanged sentence

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

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

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

Accrued Warranties .

15 unchanged sentences

Foreign exchange effect/other 1

Balance as of June 30, 2024

Balance as of September 30, 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 H – “Derivative Financial Instruments” and debt discussed in Note I – “Long-Term Obligations”.

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

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

8 unchanged sentences

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 and materials management, and construction applications.

Terex is a global industrial equipment manufacturer of materials processing machinery, waste and recycling solutions, mobile elevating work platforms (MEWPs), and equipment for the electric utility industry.

The Company designs, builds, and supports products used in maintenance, manufacturing, energy, minerals and materials management, construction, waste and recycling, and the entertainment industry.

Terex provides lifecycle support to our customers through its global parts and services organization, and offer complementary digital solutions, designed to help customers maximize their return on their investment.

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.

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

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

7 unchanged sentences

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.

Customers use these products to construct and maintain industrial, commercial, institutional and residential buildings and facilities, for purposes within the entertainment industry, 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”).

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

8 unchanged sentences

Total $ 122 $ 163 $ 473 $ 521

September 30,

2024 December 31,

1 unchanged sentence

MP $ 2,039 $ 2,091

2,414.1 2,216.2

Corporate and Other / Eliminations ( 608 ) ( 692 )

3 unchanged sentences

Three Months Ended

June 30, 2024

September 30, 2024

Three Months Ended

June 30, 2023

September 30, 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 $ 809.8 million and $ 771.4 million for the three months ended June 30, 2024 and 2023, respectively, attributable to the U.S., the Company’s country of domicile.

Six Months Ended

June 30, 2024

Six Months Ended

June 30, 2023

(2) Total sales include $ 748 million and $ 717 million for the three months ended September 30, 2024 and 2023, respectively, attributable to the U.S., the Company’s country of domicile.

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 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 $ 1.5 billion and $ 1.4 billion for the six months ended June 30, 2024 and 2023, respectively, attributable to the U.S., the Company’s country of domicile.

(2) Total sales include $ 2.3 billion and $ 2.1 billion for the nine months ended September 30, 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

June 30, 2024

September 30, 2024

Three Months Ended

June 30, 2023

September 30, 2023

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

7 unchanged sentences

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

Six Months Ended

June 30, 2024

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 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 June 30, 2024, the Company recognized income tax expense of $ 33.4 million on income of $ 174.1 million, an effective tax rate of 19.2 %, as compared to income tax expense of $ 32.0 million on income of $ 191.8 million, an effective tax rate of 16.7 %, for the three months ended June 30, 2023.

The higher effective tax rate for the three months ended June 30, 2024 when compared with the three months ended June 30, 2023 is primarily due to higher tax related to geographic distribution of income and less favorable discrete items.

During the six months ended June 30, 2024, the Company recognized income tax expense of $ 61.4 million on income of $ 310.6 million, an effective tax rate of 19.8 %, as compared to income tax expense of $ 55.3 million on income of $ 325.0 million, an effective tax rate of 17.0 %, for the six months ended June 30, 2023.

The higher effective tax rate for the six months ended June 30, 2024 when compared with the six months ended June 30, 2023 is primarily due to higher tax related to geographic distribution of income and less favorable discrete items.

During the three months ended September 30, 2024, the Company recognized income tax expense of $ 11 million on income of $ 99 million, an effective tax rate of 11.1 %, as compared to income tax expense of $ 30 million on income of $ 149 million, an effective tax rate of 20.0 %, for the three months ended September 30, 2023.

The lower effective tax rate for the three months ended September 30, 2024 when compared with the three months ended September 30, 2023 is primarily due to an increase in favorable discrete items, partially offset by higher tax related to geographic distribution of income.

During the nine months ended September 30, 2024, the Company recognized income tax expense of $ 73 million on income of $ 410 million, an effective tax rate of 17.8 %, as compared to income tax expense of $ 85 million on income of $ 474 million, an effective tax rate of 18.0 %, for the nine months ended September 30, 2023.

The lower effective tax rate for the nine months ended September 30, 2024 when compared with the nine months ended September 30, 2023 is primarily due to an increase in 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.

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.

In addition, the OECD continues to issue guidance on this matter.

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

The Company will continue to evaluate the financial statement impacts as additional Pillar Two rules are enacted and OECD guidance is issued.

NOTE D – ACQUISITIONS

On October 8, 2024 (the “Closing Date”), in accordance with the Transaction Agreement, dated as of July 21, 2024, as amended by the First Amendment to the Transaction Agreement, dated as of October 8, 2024 (and as may be further amended, the “TA”), by and between the Company and Dover Corporation (“Dover”), the Company completed its acquisition of the subsidiaries and assets that constitute ESG from Dover for a purchase price of $ 2 billion in cash, subject to customary closing adjustments to be finalized after the Closing Date.

The Company financed the purchase price and related fees and expenses using the net proceeds from the 6.25 % Senior Notes, new term loan borrowings under the New Term Facility and cash on hand.

See Note J – “Long-Term Obligations” for additional details on financing transactions.

The transaction will be 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 will be 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 initial accounting for the transaction is not complete due to the proximity of the Closing Date of the acquisition to the date of this filing.

The Company is therefore unable to disclose certain information including the provisional fair value estimates of the identifiable net assets acquired and goodwill at this time.

Additionally, the Company did not present the supplemental pro forma information for this transaction since it is impracticable to prepare such financial statements considering the timing of the transaction.

The Company will provide a preliminary purchase price allocation and pro forma financial information within its Annual Report on Form 10-K for the year ended December 31, 2024.

During the three and nine months ended September 30, 2024, the Company recognized transaction costs of $ 7 million and $ 10 million, respectively, which are recorded within Other income (expense) – net, in the Condensed Consolidated Statement of Comprehensive Income (Loss).

ESG designs and manufactures refuse collection vehicles, waste compaction equipment, and associated parts and digital solutions.

ESG's industry leading product brands include Heil, Marathon, Curotto-Can, Bayne Thinline, and Parts Central as well as digital solutions offerings 3rd Eye and Soft-Pak.

ESG's turnkey products and services across equipment, digital, and aftermarket offerings are complementary to Terex's businesses, and will allow Terex to expand its customer base, providing customers with a broader suite of environmental equipment solutions, and realizing economies of scale.

ESG will also complement and strengthen Terex’s portfolio with synergies in the fast-growing waste and recycling end market.

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.

Goodwill recognized as a result of this acquisition was immaterial.

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.

NOTE E – EARNINGS PER SHARE

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

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

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

— ( 0.4 ) — 2.3

Net income (loss) $ 88 $ 119 $ 337 $ 391

14 unchanged sentences

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

— ( 0.01 ) — 0.03

Net income (loss) $ 1.31 $ 1.75 $ 4.98 $ 5.72

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 0.1 million and 0.5 million were outstanding during the three months ended June 30, 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.

Weighted average Restricted Stock of approximately 0.1 million and 0.3 million were outstanding during the six months ended June 30, 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

Weighted average Restricted Stock of approximately 0.1 million were outstanding during the three months ended September 30, 2024, 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.

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 of approximately 0.1 million and 0.3 million were outstanding during the nine months ended September 30, 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 F – INVENTORIES

Inventories consist of the following (in millions):

September 30,

2024 December 31,

4 unchanged sentences

Inventories $ 1,222 $ 1,186

Inventory reserves were $ 71.3 million and $ 70.5 million at June 30, 2024 and December 31, 2023, respectively.

NOTE F – PROPERTY, PLANT AND EQUIPMENT

Inventory reserves were $ 76 million and $ 71 million at September 30, 2024 and December 31, 2023, respectively.

NOTE G – 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 $ 602 $ 570

NOTE G – GOODWILL AND INTANGIBLE ASSETS

NOTE H – GOODWILL AND INTANGIBLE ASSETS

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

3 unchanged sentences

Balance at December 31, 2023, net

194.3 100.3 294.6

Foreign exchange effect and other 6 — 6

Balance at June 30, 2024, gross

214.8 138.3 353.1

Balance at September 30, 2024, gross

Accumulated impairment ( 23 ) ( 39 ) ( 62 )

Balance at June 30, 2024, net

Balance at September 30, 2024, net

$ 201 $ 100 $ 301

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Weighted Average Life

8 unchanged sentences

$ 80 $ ( 66 ) $ 14 $ 80 $ ( 64 ) $ 16

Three Months Ended June 30, Six Months Ended

Three Months Ended September 30,

Nine Months Ended

September 30,

(in millions) 2024 2023 2024 2023

1 unchanged sentence

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

NOTE H – DERIVATIVE FINANCIAL INSTRUMENTS

NOTE I – DERIVATIVE FINANCIAL INSTRUMENTS

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

7 unchanged sentences

Commodity Swaps

Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 12.5 million and $ 22.2 million at June 30, 2024 and December 31, 2023, respectively.

Commodity swaps outstanding at June 30, 2024 mature on or before August 31, 2025.

Derivatives designated as cash flow hedging instruments include commodity swaps with outstanding notional value of $ 11 million and $ 22 million at September 30, 2024 and December 31, 2023, respectively.

Commodity swaps outstanding at September 30, 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 $ 278.1 million and $ 250.0 million at June 30, 2024 and December 31, 2023, respectively.

Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $ 280 million and $ 250 million at September 30, 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 June 30, 2024 mature on or before December 31, 2024.

The Company had no foreign exchange contracts outstanding that were designated as cash flow hedging instruments at June 30, 2024.

Foreign exchange contracts outstanding at September 30, 2024 mature on or before December 31, 2024.

The Company had no foreign exchange contracts outstanding that were designated as cash flow hedging instruments at September 30, 2024.

The Company had $ 5 million notional value of foreign exchange contracts outstanding that were designated as cash flow hedging instruments at December 31, 2023.

1 unchanged sentence

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

The Company had $ 303.8 million and $ 300.1 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at June 30, 2024 and December 31, 2023, respectively.

The Company had $ 357 million and $ 300 million notional value of foreign exchange contracts outstanding that were not designated as cash flow hedging instruments at September 30, 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,

4 unchanged sentences

Commodity swaps Other current assets — — 2 —

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

Foreign exchange contracts Other current liabilities — ( 1 ) — ( 1 )

7 unchanged sentences

Instrument Three Months Ended

June 30, 2024

Six Months Ended

June 30, 2024 Income Statement Account Three Months Ended

June 30, 2024

Six Months Ended

June 30, 2024

Foreign exchange contracts $ ( 0.2 ) $ ( 0.1 ) Cost of goods sold $ — $ —

September 30, 2024

Nine Months Ended

September 30, 2024 Income Statement Account Three Months Ended

September 30, 2024

Nine Months Ended

September 30, 2024

Commodity swaps ( 1 ) ( 4 ) Cost of goods sold — 1

3 unchanged sentences

Instrument Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

September 30, 2023

Nine Months Ended

September 30, 2023

Income Statement Account Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

September 30, 2023

Nine Months Ended

September 30, 2023

Foreign exchange contracts $ 1 $ — Cost of goods sold $ — $ —

6 unchanged sentences

Three Months Ended

June 30, 2024

Six Months Ended

June 30, 2024

September 30, 2024

Nine Months Ended

September 30, 2024

Three Months Ended

June 30, 2024

Six Months Ended

June 30, 2024

September 30, 2024

Nine Months Ended

September 30, 2024

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 967 ) $ ( 3,015 ) $ ( 13 ) $ ( 44 )

7 unchanged sentences

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

September 30, 2023

Nine Months Ended

September 30, 2023

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

September 30, 2023

Nine Months Ended

September 30, 2023

Income Statement Accounts in which effects of cash flow hedges are recorded $ ( 998 ) $ ( 3,015 ) $ ( 17 ) $ ( 47 )

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

Foreign exchange contracts ( 0.2 ) ( 0.2 ) — —

Commodity swaps — ( 3 ) — —

6 unchanged sentences

Three Months Ended

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

Within unrealized net gains (losses) included in AOCI as of June 30, 2024, it is estimated that approximately $ 2 million of losses are expected to be reclassified into earnings in the next twelve months.

NOTE I – LONG-TERM OBLIGATIONS

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

Within unrealized net gains (losses) included in AOCI as of September 30, 2024, it is estimated that approximately $ 4 million of losses are expected to be reclassified into earnings in the next twelve months.

NOTE J – LONG-TERM OBLIGATIONS

Credit Agreement

4 unchanged sentences

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

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.

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.

1 (“Amendment No.

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

The principal changes contained in the Amendment No.

1 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:

As of September 30, 2024, the Credit Agreement required the Company to comply with a number of covenants which limited, in certain circumstances, the Company’s ability to take a variety of actions, including but not limited to:

incur indebtedness;

4 unchanged sentences

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:

If the Company’s borrowings under the Revolver were greater than 30 % of the total revolving credit commitments, the Credit Agreement required 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 June 30, 2024.

The Company had $ 40.0 million and no Revolver amounts outstanding at June 30, 2024 and December 31, 2023, respectively.

The weighted average interest rate on the Revolver was 7.09 % at June 30, 2024.

The Credit Agreement also contained customary default provisions.

The Company was in compliance with all covenants contained in the Credit Agreement as of September 30, 2024.

The Company had no Revolver amounts outstanding at September 30, 2024 and December 31, 2023, respectively.

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

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”).

As of September 30, 2024, the Credit Agreement incorporated 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”).

The Credit Agreement also permitted 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.

2 unchanged sentences

Letters of credit outstanding (in millions):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

$400 Million Facility $ — $ —

2 unchanged sentences

Total $ 119 $ 120

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:

On July 21, 2024, the Company and certain of its subsidiaries entered into an Incremental Assumption and Amendment Agreement and Amendment with UBS AG, Stamford Branch ("UBS AG") (the “Incremental Agreement”) relating to the Credit Agreement among the Company, certain of its subsidiaries, the lenders and issuing banks party thereto and CSAG, as administrative agent and collateral agent.

The Incremental Agreement, among other things, established delayed draw term loan commitments in the amount of $ 455 million to be provided by UBS AG as the initial delayed draw term lender.

The Incremental Agreement also amended the Credit Agreement to, among other things, establish the delayed draw term loan commitments and provide for the Company’s acquisition of ESG to be considered a limited condition acquisition pursuant to the Credit Agreement.

On October 8, 2024, the Company entered into an Incremental Assumption Agreement, Borrowing Subsidiary Agreement and Amendment No.

2 (the “Amendment No.

2”) to the Credit Agreement dated as of April 1, 2021 (as amended from time to time including by the Amendment No.

2, the “Amended Credit Agreement”), with certain of its subsidiaries, the lenders and issuing banks party thereto and UBS AG as successor administrative agent and successor collateral agent.

The Amendment No.

2 (i) increased the size of the Company’s existing revolving credit facilities to $ 800 million and extended the maturity of the Company’s existing revolving credit facilities to expire on October 8, 2029 (the “New Revolving Credit Facilities”) and (ii) provided for a new seven-year term loan facility in an aggregate principal amount of $ 1,250 million with a maturity date of October 8, 2031 (the “New Term Facility” and, together with the New Revolving Credit Facilities, the “New Credit Facilities”).

In addition, the Amended Credit Agreement increased the size of the letter of credit facility.

The Amended Credit Agreement provides for the issuance of letters of credit (the “L/C Facility”) of up to $ 500 million (the utilization of which would decrease availability under the New Revolving Credit Facilities) and permits the Company to have additional secured facilities for the issuance of letters of credit outside of the Amended Credit Agreement (the “Additional L/C Facility”) of up to $ 400 million (the utilization of which would not decrease availability under the New Revolving Credit Facilities).

The aggregate amount of letters of credit which the Company may issue under the L/C Facility and the Additional L/C Facility may not at any time exceed $ 500 million, of which up to $ 400 million may be issued under the Additional L/C Facility.

The Amended Credit Agreement contains customary representations and warranties, negative and affirmative covenants and default provisions.

The covenants limit, in certain circumstances, the Company’s ability to take a variety of actions, including, but not limited to:

incurring or guaranteeing additional indebtedness or issuing preferred equity;

creating or maintaining liens;

making investments;

pay dividends or make other restricted payments;

consolidating or merging or transferring all or substantially all of the Company’s assets and the assets of the Company’s subsidiaries;

transferring or selling assets, including stock of the Company’s subsidiaries;

and redeeming debt.

In particular, the New Revolving Credit Facilities requires the Company to maintain a first lien net leverage ratio of not more than 3.00 x, which will be tested only if more than 30 % of the total revolving credit commitments extended under the New Revolving Credit Facilities are utilized as of the last day of any fiscal quarter, subject to certain exclusions.

The New Term Facility does not have the benefit of, or have any rights with respect to, the financial maintenance covenant.

The Amended Credit Agreement provides for customary events of default which include, among other things, (subject in certain cases to customary grace and cure periods) defaults based on (i) the failure to make payments under the Indenture when due, (ii) breach of covenants, (iii) the occurrence of a default under other material indebtedness, (iv) a change of control, (v) bankruptcy events and (vi) material judgments.

5% Senior Notes

3 unchanged sentences

The 5 % Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries.

The Company may redeem the 5 % Notes in whole or in part, on or after May 15, 2024, at the redemption prices set forth in an indenture dated as of April 1, 2021.

6.25% Senior Notes

On October 8, 2024, the Company sold and issued $ 750 million aggregate principal amount of Senior Notes Due 2032 (“6.25% Notes”) at par in a private offering.

The proceeds from the 6.25 % Notes, together with new term loan borrowings under the New Term Facility and cash on hand, were used to consummate the Company’s acquisition of ESG, and to pay the related fees, costs, and expenses.

The 6.25 % Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries.

The proceeds from the offering will be included in the Consolidated Balance Sheet in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The Company may redeem the 6.25 % Notes in whole or in part, on or after October 15, 2027, at the redemption prices set forth in an indenture dated as of October 8, 2024 (the “Indenture”).

Prior to October 15, 2027, the Company may redeem the 6.25 % Notes, in whole or in part, at a price equal to 100 % of the principal amount thereof plus a “make-whole” premium set forth in the Indenture.

In addition, prior to October 15, 2027, the Company may redeem up to 40 % of the 6.25 % Notes with an amount equal to the proceeds of certain equity offerings.

Secured Borrowings

1 unchanged sentence

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 $ 18.4 million and $ 19.0 million are presented in long term debt in the Condensed Consolidated Balance Sheet as of June 30, 2024 and December 31, 2023, respectively.

As a result, the VAT receivables pledged as collateral remain in receivables and the liability associated with the cash proceeds of $ 19 million are presented in long term debt in the Condensed Consolidated Balance Sheet as of September 30, 2024 and December 31, 2023.

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 June 30, 2024, as follows (in millions, except for quotes):

The Company estimates the fair value of its debt set forth below as of September 30, 2024, as follows (in millions, except for quotes):

Book Value Quote Fair Value

4 unchanged sentences

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

See Note M – “Subsequent Events” for additional information on the committed debt financing for the Environmental Solutions Group (“ESG”) transaction, incremental term loan agreement and amendment to the credit agreement.

NOTE J – RETIREMENT PLANS AND OTHER BENEFITS

NOTE K – RETIREMENT PLANS AND OTHER BENEFITS

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

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

Pension Non-U.S.

Pension Other U.S.

Pension Non-U.S.

Pension Other U.S.

Pension Non-U.S.

Pension Other U.S.

Pension Non-U.S.

Pension Other

Components of net periodic cost:

3 unchanged sentences

— ( 1 ) — ( 1 ) — ( 3 ) — ( 2 )

Amortization of prior service cost

— 0.1 — — 0.1 — — 0.1 — — 0.1 —

Amortization of actuarial (gain) loss

3 unchanged sentences

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

NOTE K – LITIGATION AND CONTINGENCIES

NOTE L – LITIGATION AND CONTINGENCIES

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

18 unchanged sentences

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

For credit guarantees outstanding as of June 30, 2024 and December 31, 2023, the maximum exposure determined was $ 78.1 million and $ 89.4 million, respectively.

For credit guarantees outstanding as of September 30, 2024 and December 31, 2023, the maximum exposure determined was $ 81 million and $ 89 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 $ 5.0 million and $ 5.3 million at June 30, 2024 and December 31, 2023, respectively.

The allowance for credit losses on credit guarantees was $ 7 million and $ 5 million at September 30, 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 L – STOCKHOLDERS’ EQUITY

NOTE M – STOCKHOLDERS’ EQUITY

Changes in Accumulated Other Comprehensive Income (Loss)

The table below presents changes in AOCI by component for the three and six months ended June 30, 2024 and 2023.

The table below presents changes in AOCI by component for the three and nine months ended September 30, 2024 and 2023.

All amounts are net of tax (in millions).

Three Months Ended

June 30, 2024

September 30, 2024

Three Months Ended

June 30, 2023

September 30, 2023

CTA Derivative Hedging Adj.

13 unchanged sentences

$ ( 215 ) $ ( 10 ) $ ( 2 ) $ ( 52 ) $ ( 279 ) $ ( 311 ) $ 3 $ ( 4 ) $ ( 45 ) $ ( 357 )

Six Months Ended

June 30, 2024

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

CTA Derivative Hedging Adj.

13 unchanged sentences

Stock-Based Compensation

During the six months ended June 30, 2024, the Company awarded 0.5 million shares of Restricted Stock to its employees with a weighted average fair value of $ 60.14 per share.

During the nine months ended September 30, 2024, the Company awarded 0.5 million shares of Restricted Stock to its employees with a weighted average fair value of $ 60.13 per share.

Approximately 62 % of these awards are time-based and vest ratably on each of the first three anniversary dates of the grants.

16 unchanged sentences

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

Six Months Ended

Nine Months Ended

Total Number of

1 unchanged sentence

(in millions)

345,274 $ 19.6

736,644 $ 33.8

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

Year First Quarter Second Quarter

Year First Quarter Second Quarter Third Quarter

$ 0.17 $ 0.17 $ 0.17

$ 0.15 $ 0.15 $ 0.17

In July 2024, Terex’s Board of Directors declared a dividend of $ 0.17 per share, which will be paid on September 19, 2024 to the Company’s shareholders of record as of August 9, 2024.

NOTE M – SUBSEQUENT EVENTS

Transaction Agreement

On July 21, 2024, Terex entered into a Transaction Agreement (the "TA") with Dover Corporation ("Dover").

Pursuant to the TA, Terex will acquire the subsidiaries of Dover that own and operate Dover’s ESG, a fully integrated equipment group serving the solid waste and recycling industry for a value of $ 2 billion (the “Transaction”).

ESG designs and manufactures refuse collection vehicles, waste compaction equipment, and associated parts and digital solutions.

The consideration is being paid in cash and Terex has received committed financing for the Transaction, as described below.

The purchase price is subject to post-closing adjustments based upon the level of net working capital, cash and debt in the ESG business at the closing date.

The Transaction, which is subject to regulatory clearance and other customary closing conditions, is targeted to close in the second half of 2024.

Commitment Letter

On July 21, 2024, Terex entered into a Commitment Letter (the "Commitment Letter") with UBS Securities LLC ("UBS Securities") and UBS AG, Stamford Branch ("UBS AG" and, together with UBS Securities and their respective affiliates, "UBS") in which UBS committed to provide Terex with an aggregate principal amount of up to $ 1,545 million.

Incremental Assumption and Amendment Agreement and Amendment

On July 21, 2024, Terex and certain of its subsidiaries entered into an Incremental Assumption and Amendment Agreement and Amendment with UBS AG (the “Incremental Agreement”) relating to the Credit Agreement among Terex, certain of its subsidiaries, the lenders and issuing banks party thereto and CSAG, as administrative agent and collateral agent.

The Incremental Agreement, among other things, establishes delayed draw term loan commitments in the amount of $ 455 million to be provided by UBS AG as the initial delayed draw term lender.

The Incremental Agreement also amends the Credit Agreement to, among other things, establish the delayed draw term loan commitments and provide for the Transaction to be considered a limited condition acquisition pursuant to the Credit Agreement.

In October 2024, Terex’s Board declared a dividend of $ 0.17 per share, which will be paid on December 19, 2024 to the Company’s shareholders of record as of November 8, 2024.

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