Terex Completes Restatement Process

February 17, 2006 — Terex Corp., Westport, Conn., announced that it has completed the restatement of its financial statements for the years ended December 31, 2000, 2001, 2002, and 2003; the filing of its Annual Report on Form 10-K, including its audited financial statements, for the year ended December 31, 2004; and the filing of its quarterly reports for the first, second and third quarters of 2004. Terex has placed an updated list of questions and answers on www.terex.com in the Investor Relations section to provide a summary of the items contained in the restatement.

 

Terex confirms 2004 revenues of $5 billion and announced net income of $324.1 million, or $6.34 per share, for 2004, as compared with 2003 revenues of $3.9 billion and restated net loss of $226.6 million, or ($4.75) per share, for 2003. Excluding the impact of special items for 2004, net income was $123.1 million, or $2.41 per share, in 2004, compared to net income of $48.8 million, or $0.99 per share, for 2003. Stockholders' equity as of December 31, 2004, was $1.135 billion, consistent with management's prior disclosure of approximately $1.1 billion.

 

As previously reported, Terex's 2003 net income includes a valuation allowance of $200.7 million, reducing its U.S. deferred tax assets and negatively impacting net income. This $200.7 million expense was reversed and has a positive effect in the 2004 period, representing $3.93 per share of net income. The establishment of the valuation allowance and the reversal of the valuation allowance each has been treated as a special item in the respective year.

 

A more detailed account of the Terex's 2004 performance, and a summary of the restatement impacts on financial results for 2000, 2001, 2002 and 2003, is included in its Annual Report on Form 10-K for the year ended December 31, 2004, filed with the Securities and Exchange Commission, which is accessible on www.terex.com. Terex anticipates filing its Quarterly Reports on Form 10-Q for the first, second and third quarters of 2005 and its Annual Report on Form 10-K for the year ended December 31, 2005, in the near future.

 

"With the completion of our restatement, we have a solid foundation on which to move forward with our business," said Ronald M. DeFeo, Terex's chairman and chief executive officer. “Terex is positioned to move forward, to implement the lessons learned from this experience, and to continue to improve our Company's internal controls. We will channel our efforts and resources toward Terex's transformation, and have already put in motion many improvement actions."

 

At the end of the fourth quarter of 2004, Terex's net debt to book capitalization was 40.7%, an all-time low, DeFeo added. The measurement continued to improve throughout 2005, which Defeo said is “a good indication that the company's operating focus on cash flow is yielding significant results.”

 

Update on SEC Investigation

Terex previously disclosed that it has been advised verbally by the SEC that it had commenced an investigation of Terex. On February 1, 2006, the company received a copy of a written order of a private investigation from the SEC. Terex has been voluntarily cooperating with the SEC and will continue to cooperate fully to furnish the SEC staff with information needed to complete their review. Terex management will provide future updates of this investigation as events dictate.