Q1 2016 Conference Call April 27, 2016
Forward-Looking Statements
& Non-GAAP Measures
2
This presentation contains forward-looking information regarding future events or the Company’s future financial performance based on the current expectations of Terex Corporation. In addition, when included in this presentation, the words “may,” “expects,” “intends,” “anticipates,” “plans,” “projects,” “estimates” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. The Company has based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance. Because forward-looking statements involve risks and uncertainties, actual results could differ materially. Such risks and uncertainties, many of which are beyond the control of Terex, include among others: Our business is cyclical and weak general economic conditions affect the sales of our products and financial results; the effect of the announcement and pendency of the merger with Konecranes Plc (“Konecranes”) and the non-binding proposal from Zoomlion Heavy Industry Science and Technology Co. on our customers, employees, suppliers, vendors, distributors, dealers retailers, operating results and business generally, and the diversion of management’s time and attention; our ability to successfully integrate acquired businesses, including the pending merger with Konecranes; the need to comply with restrictive covenants contained in our debt agreements; our ability to generate sufficient cash flow to service our debt obligations and operate our business; our ability to access the capital markets to raise funds and provide liquidity; our business is sensitive to government spending; our business is very competitive and is affected by our cost structure, pricing, product initiatives and other actions taken by competitors; our retention of key management personnel; the financial condition of suppliers and customers, and their continued access to capital; our providing financing and credit support for some of our customers; we may experience losses in excess of recorded reserves; the carrying value of goodwill and other indefinite-lived intangible assets could become impaired; our ability to obtain parts and components from suppliers on a timely basis at competitive prices; our business is global and subject to changes in exchange rates between currencies, commodity price changes, regional economic conditions and trade restrictions; our operations are subject to a number of potential risks that arise from operating a multinational business, including compliance with changing regulatory environments, the Foreign Corrupt Practices Act and other similar laws and political instability; a material disruption to one of our significant facilities; possible work stoppages and other labor matters; compliance with changing laws and regulations, particularly environmental and tax laws and regulations; litigation, product liability claims, intellectual property claims, class action lawsuits and other liabilities; our ability to comply with an injunction and related obligations imposed by the United States Securities and Exchange Commission (“SEC”); disruption or breach in our information technology systems; and other factors, risks and uncertainties that are more specifically set forth in our public filings with the SEC. Non-GAAP Measures: Terex from time to time refers to various non-GAAP (generally accepted accounting principles) financial measures in this presentation. Terex believes that this information is useful to understanding its operating results and the ongoing performance of its underlying businesses without the impact of special items. See the appendix at the end of this presentation as well as the Terex first quarter 2016 earnings release on the Investor Relations section of our website www.terex.com for a description and/or reconciliation of these measures.
3
M&A Update
• In March we received a revised non-
binding proposal from Zoomlion
Heavy Industry to acquire all of the
outstanding shares of Terex for
$31.00 per share in cash
‒ Active due diligence process underway
‒ Pursuing a binding and definitive
proposal
‒ Focus on certainty of closure
• Terex Board of Directors has not
changed its recommendation in
support of the proposed combination
with Konecranes
‒ Moving ahead with the necessary
filings to achieve antitrust, regulatory
and shareholder approvals
4
Executing to Win
5
Financial Summary
• Sales declined 4.6% in the
quarter, 3.1% related to
currency translation
• Q1 loss per share of $0.05 as
adjusted(1), reported loss per
share of $0.68
• Free cash flow(1) of
($146 million) in the quarter
• Backlog down 1% from Q4-15
and down 20% year on year
(1) See the appendix for reconciliation to US GAAP
Q1 Continuing Operations Results
USD Millions, except Earnings per Share
6
Q1 2016 Q1 2016 Q1 2015
As Reported As Adjusted(1)
Net Sales $1,426.9 $1,426.9 $1,495.6
% Change vs 2015 (4.6%) (4.6%)
Income (loss) from Operations (41.7) 25.4 44.2
Operating Margin (2.9%) 1.8% 3.0%
Interest & Other Income (Expense) (27.7) (20.2) (34.1)
Effective Tax Rate (7.2%) 211.5% 114.9%
Earnings (loss) per Share ($0.68) ($0.05) ($0.02)
EBITDA ($13.1) $54.0 $75.8
% Net Sales (0.9%) 3.8% 5.1%
ROIC 5.4% 9.8%
(1) See the appendix for reconciliation to US GAAP
7
BAUMA 2016
North America
Western Europe Asia/
Pacific
E. Europe, Middle
East & Africa
LATAM
Sales by Geography 2016 vs 2015
8
(7)%
Actual FX-Adj.
(7)% 3%
Q1
Actual FX-Adj.
Q1
Actual FX-Adj.
Q1
(28)%
Actual FX-Adj.
(23)% Q1
Actual FX-Adj.
Q1 6% 14%
Operating Summary
34%
11%
8%4%
43%
2016 Q1
Western Europe
Asia / Pacific
Other
LATAM
North America
32%
10%
10%3%
45%
2015 Q1
2% 8%
2% 15%
Aerial Work Platforms
USD Millions
Q1 '16 Q1 '15
Net Sales 520.7 517.5
% Change vs. '15 0.6%
Operating Profit, as adjusted(1) 44.1 44.6
Operating Margin % 8.5% 8.6%
Operating Profit, as reported 38.1 44.6
Operating Margin % 7.3% 8.6%
Backlog 517 706
% Change vs. '15 (26.8%)
• Cautious NA
market,
particularly
the nationals
• Growth in
Western
Europe
• Pricing
pressure
• Material cost
and
productivity
offsets
799 614 392 947 512 383 444 701 418
138%
85%
66%
206%
100% 57%
80%
162%
83%
0%
50%
100%
150%
200%
250%
0
200
400
600
800
1,000
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16
Net Bookings Book-to-Bill Ratio
9
(1) See the appendix for reconciliation to US GAAP
Cranes
• NA market very weak
• Moderate growth in Western Europe
– Redesigned Demag® AT gaining
acceptance
• Growth in Towers
• Utilities softening
10
Q1 '16 Q1 '15
Net Sales 307.3 353.3
% Change vs. '15 (13.0%)
Operating Profit, as adjusted(1) (13.8) 2.4
Operating Margin % (4.5%) 0.7%
Operating Profit, as reported (16.6) 2.4
Operating Margin % (5.4%) 0.7%
Backlog 398 535
% Change vs. '15 (25.6%)
USD Millions
506 462 252 423 340 400 272 416 293
142%
99%
67%
97%
97%
95%
74%
103%
97%
0%
20%
40%
60%
80%
100%
120%
140%
160%
0
100
200
300
400
500
600
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16
Net Bookings Book-to-Bill Ratio
(1) See the appendix for reconciliation to US GAAP
Material Handling & Port Solutions
USD Millions
• Material Handling market mixed
• Lower growth rates in global
container traffic
• Focus on aligning cost structure
with business volumes
11
Q1 '16 Q1 '15
Net Sales 317.7 344.3
% Change vs. '15 (7.7%)
Operating Profit, as adjusted(1) (12.2) (4.4)
Operating Margin % (3.8%) (1.3%)
Operating Profit, as reported (61.8) (4.4)
Operating Margin % (19.5%) (1.3%)
Backlog 554 617
% Change vs. '15 (10.2%)
425 444 327 378 332 419 361 314 307
109%98%
67% 71%
98%
109%
94%
77%
98%
0%
20%
40%
60%
80%
100%
120%
0
50
100
150
200
250
300
350
400
450
500
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16
Net Bookings Book-to-Bill Ratio
(1) See the appendix for reconciliation to US GAAP
Materials Processing
12
• Performance as expected
• Good execution
– cost management
• New products and expanded
distribution lifting Fuchs ®
• Persistent weakness in mining sector
USD Millions
Q1 '16 Q1 '15
Net Sales 177.3 181.1
% Change vs. '15 (2.1%)
Operating Profit, as adjusted(1) 10.5 9.3
Operating Margin % 5.9% 5.1%
Operating Profit, as reported 10.1 9.3
Operating Margin % 5.7% 5.1%
Backlog 114 132
% Change vs. '15 (13.6%)195 194 175 197 225 164 174 180 217
103%
89%93%
98%
128%
80%
91% 91%
125%
0%
20%
40%
60%
80%
100%
120%
140%
0
40
80
120
160
200
240
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16
Net Bookings Book-to-Bill Ratio
(1) See the appendix for reconciliation to US GAAP
Construction
• Growth in NA concrete business
continues
• New and improved products
driving sales
• German compact market
remains weak
USD Millions
13
Q1 '16 Q1 '15
Net Sales 142.5 122.2
% Change vs. '15 16.6%
Operating Profit, as adjusted(1) 2.1 (3.6)
Operating Margin % 1.5% (2.9%)
Operating Profit, as reported 1.3 (3.6)
Operating Margin % 0.9% (2.9%)
Backlog 131 151
% Change vs. '15 (13.2%)
191 164 98 146 144 93 91 138 126
140%
95%
64%
105%
142%
76% 75%
138%
105%
0%
20%
40%
60%
80%
100%
120%
140%
160%
0
50
100
150
200
250
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16
Net Bookings Book-to-Bill Ratio
(1) See the appendix for reconciliation to US GAAP
Summary
($ in Millions, except Earnings per Share)
USD Millions
Mixed global markets:
• Pockets of stability, but many markets
remain weak
• Caution prevails in NA rental channel
• Oil & gas and commodity slump
constraining investment
Focus on what we can control:
• Investing through the cycle – new
product development
• Manufacturing footprint / supply chain
• General & administrative expenses
• Restructuring actions
14
14
Questions?
15
Appendix
16
Backlog Trend
Backlog shown is less than 12 months
USD Millions
17
$ % $ %
Terex (24) (1%) (427) (20%)
MP 43 61% (18) (14%)
MHPS (7) (1%) (63) (10%)
Cranes (9) (2%) (137) (26%)
Constr. 2 2% (20) (13%)
AWP (53) (9%) (189) (27%)
Sequential
Change
Year on Year
Change
524 421
218
704 706
441 301
570 517
166
155
102
108 151
121
92
129 131
652
636
527
512535
514
401
407398
899
888
771
595617
653
599
561
554
123
99
86
82
132
106
89
71114
March 2014 June 2014 September 2014 December 2014 March 2015 June 2015 September 2015 December 2015 March 2016
AWP Construction Cranes MHPS MP
1,835
2,001
2,141
1,482
2,364
1,704 1,738
2,199
1,714
Q1 2016 Adjustments
18
USD Millions, except Earnings per Share
Q1 2016 Q1 2016
As Reported As Adjusted
Net Sales 1,426.9$ - - 1,426.9$
Income (loss) from Operations (41.7) 3.0 64.1 25.4
Interest & Other Income (Expense) (27.7) 7.5 - (20.2)
Income (Loss) from Cont. Ops. Before Taxes (69.4) 10.5 64.1 5.2
Benefit from (Provision for) Income Taxes (5.0) (1.6) (4.4) (11.0)
Non Controlling Interest 0.2 - - 0.2
Income (Loss) from Continuing Operations (74.2)$ 8.9 59.7 (5.6)$
Earnings (loss) per Share (0.68)$ 0.08$ 0.55$ (0.05)$
Merger
Related
Restructuring
& Related
Q1 2016 Adjusted OP by Segment
USD Millions
19
Q1 2016 Q1 2016
As Reported As Adjusted
AWP $ 38.1 $ 6.0 $ 44.1
Cranes (16.6) 2.8 (13.8)
MHPS (61.8) 49.6 (12.2)
MP 10.1 0.4 10.5
Construction 1.3 0.8 2.1
Corporate / Other (12.8) 7.5 (5.3)
Consolidated (41.7)$ 67.1$ 25.4$
Adjustments
Glossary
20
In an effort to provide investors with additional information regarding the Company’s results,
Terex refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP
financial measures which management believes provides useful information to investors.
These non-GAAP measures may not be comparable to similarly titled measures being
disclosed by other companies. In addition, the Company believes that non-GAAP financial
measures should be considered in addition to, and not in lieu of, GAAP financial measures.
Terex believes that this non-GAAP information is useful to understanding its operating results
and the ongoing performance of its underlying businesses. Management of Terex uses both
GAAP and non-GAAP financial measures to establish internal budgets and targets and to
evaluate the Company’s financial performance against such budgets and targets.
The amounts described below are unaudited, are reported in millions of U.S. dollars (except
per share data and percentages), and are as of or for the period ended March 31, 2016, unless
otherwise indicated.
As changes in foreign currency exchange rates have a non-operating impact on the translation
of our financial results, we believe excluding the effect of these changes assists in the
assessment of our business results between periods. We calculate the translation effect of
foreign currency exchange rate changes by translating the current period results at the rates
that the comparable prior periods were translated to isolate the foreign exchange component of
the fluctuation from the operational component.
Glossary: Free Cash Flow
USD Millions
21
Free Cash Flow is defined as the sum of net cash provided by (used in) operating activities,
the change in TFS assets, less capital expenditures. The company includes changes in TFS
assets in its definition to more closely align with how companies with captive finance
companies calculate free cash flow. We believe that the measure of free cash flow provides
management and investors further information on cash generation or use in our primary
operations.
Net cash provided by (used in) operating activities $ (129.2) $ (110.7)
Plus: Increase/(decrease) in TFS Assets 4.7 41.8
Less: Increase in cash for securitization settlement 0.5 —
Less: Capital expenditures (22.2) (26.2)
Free Cash Flow $ (146.2) $ (95.1)
Three Months
Ended March 31,
2016 2015
Glossary: Debt & Net Debt
USD Millions
22
Debt is calculated using the Condensed Consolidated Balance Sheet amounts for Notes
payable and current portion of long-term debt plus Long-term debt, less current portion.
Net Debt is calculated as Debt less Cash and cash equivalents. These measures aid in
the evaluation of the Company’s financial condition.
Long-term debt, less current portion $ 1,668.9 $ 1,729.9
Notes payable and current portion of long-term debt 162.0 80.2
Debt 1,830.9 1,810.1
Less: Cash and cash equivalents (323.6) (466.5)
Net Debt $ 1,507.3 $ 1,343.6
March 31,
2016
December 31,
2015
Glossary: EBITDA
USD Millions
23
EBITDA is defined as earnings, before interest, taxes, depreciation and amortization. The
Company calculates this by adding the amount of depreciation and amortization expenses
that have been deducted from income from operations back into income from operations to
arrive at EBITDA. Depreciation and amortization amounts reported in the Consolidated
Statement of Cash Flows include amortization of debt issuance costs that are recorded in
Interest expense and, therefore, are not included in EBITDA. Terex believes that
disclosure of EBITDA will be helpful to those reviewing its performance, as EBITDA
provides information on Terex’s ability to meet debt service, capital expenditure and
working capital requirements, and is also an indicator of profitability.
Income (loss) from operations $ (41.7) $ 44.2
Depreciation 22.6 25.3
Amortization 7.3 7.6
Bank fee amortization not included in Income (loss) from
operations (1.3) (1.3)
EBITDA (13.1) 75.8
Operating profit adjustments 67.1 -
Adjusted EBITDA $ 54.0 $ 75.8
Three Months
Ended March 31,
2016 2015
Glossary: ROIC
24
Return on Invested Capital (“ROIC”) is determined by dividing the sum of Net Operating Profit After Tax
(“NOPAT”)(as defined below) for each of the previous four quarters by the average of the sum of Total Terex
Corporation stockholders’ equity plus Debt (as defined above) less Cash and cash equivalents for the previous
five quarters. NOPAT for each quarter is calculated by multiplying Income (loss) from operations by a figure
equal to one minus the effective tax rate of the Company. The Company believes that returns on capital
deployed in Terex Financial Services (“TFS”) does not represent its primary operations and, therefore, TFS
finance receivable assets and results from operations have been excluded from the calculation below. The
effective tax rate is equal to the (Provision for) benefit from income taxes divided by Income (loss) from
continuing operations before income taxes for the respective quarter. The Company calculates ROIC using
the last four quarters’ adjusted NOPAT as this represents the most recent 12-month period at any given point of
determination. In order for the denominator of the ROIC ratio to properly match the operational period reflected
in the numerator, the Company includes the average of five quarters’ ending balance sheet amounts so that the
denominator includes the average of the opening through ending balances (on a quarterly basis) thereby
providing, over the same time period as the numerator, four quarters of average invested capital.
Terex management and the Board of Directors use ROIC as one of the primary measures to assess operational
performance and in connection with certain compensation programs. Terex utilizes ROIC as a metric because
management believes it measures how effectively the Company invests its capital and provides a better
measure to compare the Company to peer companies to assist in assessing how it drives operational
improvement. Management believes ROIC measures return on the amount of capital invested in the
Company’s primary businesses, excluding TFS, as opposed to another metric such as return on stockholders’
equity that only incorporates book equity, and is thus a more accurate and descriptive measure of the
Company’s performance. Terex also believes that adding Debt less Cash and cash equivalents to Total
stockholders’ equity provides a better comparison across similar businesses regarding total capitalization, and
ROIC highlights the level of value creation as a percentage of capital invested.
Glossary: ROIC Continued
USD Millions
25
See reconciliation of adjusted amounts below on table following ROIC table. Amounts are as of and for the three months ended for the
periods referenced in the table below.
Provision for (benefit from) income taxes $ 5.0 $ 5.6 $ 30.8 $ 33.0
Divided by: Income (loss) before income taxes (69.4) 20.3 76.9 119.3
Effective tax rate (7.2%) 27.6% 40.1% 27.7%
Income (loss) from operations as adjusted $ (43.4) $ 53.1 $ 109.4 $ 147.2
Multiplied by: 1 minus Effective tax rate 107.2% 72.4% 59.9% 72.3%
Adjusted net operating income (loss) after tax $ (46.5) $ 38.4 $ 65.5 $ 106.4
Debt (as defined above) $ 1,830.9 $ 1,810.1 $ 1,875.5 $ 1,883.5 $ 1,849.2
Less: Cash and cash equivalents (323.6) (466.5) (301.1) (332.7) (351.3)
Debt less Cash and cash equivalents $ 1,507.3 $ 1,343.6 $ 1,574.4 $ 1,550.8 $ 1,497.9
Total Terex Corporation stockholders’ equity as adjusted $ 1,501.0 $ 1,528.0 $ 1,549.7 $ 1,630.8 $ 1,543.3
Debt less Cash and cash equivalents plus Total Terex Corporation
stockholders’ equity as adjusted$ 3,008.3 $ 2,871.6 $ 3,124.1 $ 3,181.6 $ 3,041.2
March 31, 2016 ROIC 5.4%
Adjusted net operating income (loss) after tax (last 4 quarters) $ 163.8
Average Debt less Cash and cash equivalents plus Total Terex
Corporation stockholders’ equity as adjusted (5 quarters)$ 3,045.4
Reconciliation of income (loss) from operations:
Income (loss) from operations as reported $ (41.7) $ 50.8 $ 111.9 $ 148.3
(Income) loss from operations for TFS (1.7) 2.3 (2.5) (1.1)
Income (loss) from operations as adjusted $ (43.4) $ 53.1 $ 109.4 $ 147.2
Reconciliation of Terex Corporation stockholders’ equity:
Terex Corporation stockholders’ equity as reported $ 1,855.1 $ 1,877.4 $ 1,889.9 $ 1,915.0 $ 1,747.8
TFS assets (354.1) (349.4) (340.2) (284.2) (204.5)
Terex Corporation stockholders’ equity as adjusted $ 1,501.0 $ 1,528.0 $ 1,549.7 $ 1,630.8 $ 1,543.3
Mar '16 Dec '15 Sep '15 Jun '15 Mar '15
Dec '15Mar '16 Jun '15Sep '15
Glossary: Working Capital
USD Millions
26
Working Capital is calculated using the Consolidated Balance Sheet amounts for Trade receivables (net of allowance)
plus Inventories less Trade accounts payable and customer advances. The Company views excessive working capital
as an inefficient use of resources, and seeks to minimize the level of investment without adversely impacting the
ongoing operations of the business. For the periods below, working capital was:
Trailing Three Month Annualized Net Sales is calculated using the net sales for the quarter multiplied by four.
First Quarter Net Sales $ 1,426.9 $ 1,495.6
x 4 x 4
Trailing Three Month Annualized Net Sales $ 5,707.6 $ 5,982.4
Three months ended
March 31,
2016 2015
Inventories $ 1,554.3 $ 1,445.7 $ 1,520.7
Trade Receivables 1,018.6 939.2 1,131.4
Less: Trade Accounts Payable (751.9) (737.7) (738.1)
Less: Customer Advances (162.5) (142.7) (224.6)
Total Working Capital $ 1,658.5 $ 1,504.5 $ 1,689.4
March 31,
2016
December 31,
2015
March 31,
2015
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