Terex to Restate Earnings from 2001 to 2003

January 19, 2005—Terex Corporation, Westport, Conn., announced last week that financial statements for 2001 to 2003 need to be restated to correct errors. The company began an internal examination of its transactions last October in an effort to reconcile imbalances in certain accounts.

 

While Terex's review is ongoing, significant progress has been made. Terex currently believes that most adjustments relate to periods in 2002 and earlier and that the cumulative adjustments are not expected to be material to total shareholders' equity.

 

As part of its review, Terex has determined that a "material weakness" existed in its internal controls over financial reporting as they relate to recording certain inter-company transactions. A new financial reporting system was put in place in late 2003 allowing for a more detailed review of accounts. Additionally, internal controls have been modified to require, among other things, monthly activity balancing and prompt resolution of any unreconciled items. Operating financial personnel now report directly to the corporate financial group, and Terex will provide enhanced training for all financial personnel. These measures are consistent with the principles of Terex's previously announced Terex Improvement Process and are intended to prevent this type of situation from occurring in the future.

 

Upon completion of its examination, Terex intends to file appropriate amendments to its filings with the SEC for the applicable periods as may be necessary, including restated financial statements for such periods to the extent required.