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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
FOR ANNUAL AND TRANSITIONAL REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
|X| OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2003
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
|_| OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number 1-10702
TEREX CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 34-1531521
(State of incorporation) (I.R.S. Employer Identification No.)
500 Post Road East, Suite 320, Westport, Connecticut 06880
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (203) 222-7170
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 par value
(Title of Class)
New York Stock Exchange
(Name of Exchange on which Registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES X NO
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |_|
Indicate by check mark whether the Registrant is an accelerated filers (as
defined in Exchange Act Rule 12b -2). YES X NO
----- -----
The aggregate market value of the voting and non-voting common equity stock held
by non-affiliates of the Registrant was approximately $890 million based on the
last sale price on June 30, 2003.
The number of shares of the Registrant's Common Stock outstanding was 49,128,386
as of March 1, 2004.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Terex Corporation Proxy Statement to be filed with the
Securities and Exchange Commission within 120 days after the year covered
by this Form 10-K with respect to the 2004 Annual Meeting of Stockholders
are incorporated by reference into Part III hereof.
TEREX CORPORATION AND SUBSIDIARIES
Index to Annual Report on Form 10-K
For the Year Ended December 31, 2003
Page
----
PART I
Item 1 Business....................................................... 3
Item 2 Properties..................................................... 28
Item 3 Legal Proceedings.............................................. 30
Item 4 Submission of Matters to a Vote of Security Holders............ 30
PART II
Item 5 Market for Registrant's Common Stock, Related Stockholder
Matters and Issuer Purchases of Equity Securities............ 31
Item 6 Selected Financial Data........................................ 32
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 33
Item 7A Quantitative and Qualitative Disclosure about Market Risk...... 57
Item 8 Financial Statements and Supplementary Data.................... 58
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure......................................... 59
Item 9A Controls and Procedures........................................ 59
PART III
Item 10 Directors and Executive Officers of the Registrant............. 59
Item 11 Executive Compensation......................................... 59
Item 12 Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.............................. 59
Item 13 Certain Relationships and Related Transactions................. 59
Item 14 Principal Accountant Fees and Services......................... 60
PART IV
Item 15 Exhibits, Financial Statement Schedules and Reports
on Form 8-K.................................................. 61
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As used in this Annual Report on Form 10-K, unless otherwise indicated, Terex
Corporation, together with its consolidated subsidiaries, is hereinafter
referred to as "Terex," the "Registrant," or the "Company."
PART I
ITEM 1. BUSINESS
General
Terex is a diversified global manufacturer of a broad range of equipment
primarily for the construction, infrastructure and surface mining industries.
The Company is building a growing franchise under the Terex brand name. The
Company remains focused on its mission of delivering products that are reliable
and cost-effective and producing equipment that improves its customers' return
on invested capital. The Company's products are manufactured at plants in the
United States, Canada, Europe, Australia, Asia and South America, and are sold
primarily through a worldwide distribution network serving the global
construction, infrastructure and surface mining markets.
Over the past several years, the Company has implemented a series of
interrelated operational and strategic initiatives designed to create a
competitive advantage in the marketplace. These initiatives include: (i)
providing customers with products that increase their return on invested capital
through lower life cycle costs; (ii) implementing a variable cost structure with
over 70% of cost of sales from purchased components; (iii) reducing selling
expense and eliminating non-value-added functions throughout the organization;
and (iv) increasing product and geographic diversity through internal
development and acquisitions. Additionally, the Company recently announced an
internal improvement process focusing on matters that are intended to benefit
the Company's customers, investors and employees.
The Company operates in five business segments: Terex Construction, Terex
Cranes, Terex Aerial Work Platforms, Terex Mining and Terex Roadbuilding,
Utility Products and Other.
For financial information about the Company's industry and geographic segments,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note T -- "Business Segment Information" in the Notes to the
Consolidated Financial Statements.
Terex Construction
The Terex Construction segment designs, manufactures and markets three primary
categories of equipment and their related components and replacement parts:
heavy construction equipment (including off-highway trucks and scrapers),
compact equipment (including loader backhoes, compaction equipment, mini and
midi excavators, loading machines, site dumpers, telehandlers and wheel
loaders); and mobile crushing and screening equipment (including jaw crushers,
cone crushers, washing screens and trommels). These products are primarily used
by construction, logging, mining, industrial and government customers in
construction and infrastructure projects and supplying coal, minerals, sand and
gravel. Terex Construction products are currently marketed principally under the
following brand names: Terex, Atlas, Benford, Fermec, Finlay, Fuchs, Pegson,
Powerscreen, Schaeff and TerexLift. The Company's strategy going forward is to
build the Terex brand. As part of that effort, Terex will, over time, be
migrating historic brand names to Terex, and may include the use of the historic
brand name in conjunction with the Terex brand name for a transitional period of
time.
Terex Construction has 17 significant manufacturing operations:
o Atlas Terex GmbH ("Atlas Terex"), located in Delmenhorst, Ganderkasee,
Loeningen and Vechta, Germany, at which excavators and truck mounted
articulated hydraulic cranes are manufactured under the ATLAS and
TEREX brand names;
o Atlas Terex UK Limited ("Atlas UK"), located in Hamilton, Scotland, at
which truck mounted articulated hydraulic cranes are manufactured
under the ATLAS and TEREX trade names;
o BL-Pegson Ltd. ("B.L. Pegson"), located in Coalville, England, which
manufactures crushers under the PEGSON brand name;
o Finlay Hydrascreens (Omagh) Limited ("Finlay"), located in Omagh,
Northern Ireland, at which crushers, washing systems, screens and
trommels are manufactured under the FINLAY brand name;
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o Fuchs-Bagger GmbH & Co. KG ("Fuchs"), located in Bad Schoenborn,
Germany, at which loading machines are manufactured under the FUCHS
and TEREX brand names;
o Powerscreen International Distribution Ltd. and Powerscreen Limited
("Powerscreen"), located in Dungannon, Northern Ireland, manufacture
and sell washing systems, screens and trommels under the POWERSCREEN
brand name;
o The Schaeff Group of Companies ("Schaeff"), located in Langenburg,
Gerabron, Rothenburg, Crailsheim and Clausnitz, Germany, at which
small wheel loaders, mini excavators and midi excavators are
manufactured under the SCHAEFF, ATLAS and TEREX brand names;
o Terex Compact Equipment, located in Coventry, England, at which
Benford Limited ("Benford") manufactures dumpers, compaction equipment
and material handlers under the Company's AMIDA, BENFORD and TEREX
brand names, and Fermec Manufacturing Limited ("Fermec") manufactures
loader backhoes under the TEREX and FERMEC brand names;
o Terex Equipment Limited ("TEL"), located in Motherwell, Scotland,
which manufactures off-highway rigid haul trucks and articulated haul
trucks, having capacities ranging from 25 to 100 tons, and scrapers
under the TEREX brand name; and
o TerexLift S.r.l. ("TerexLift"), located near Perugia, Italy, at which
rough terrain telescopic material handlers (also known as
telehandlers) are manufactured under the TEREXLIFT and TEREX brand
names.
Terex Cranes
The Terex Cranes segment designs, manufactures and markets mobile telescopic
cranes, tower cranes, lattice boom crawler cranes, truck mounted cranes (boom
trucks) and telescopic container stackers, as well as their related replacements
parts and components. These products are used primarily for construction, repair
and maintenance of infrastructure, building and manufacturing facilities.
Currently, Terex Cranes products are marketed principally under the following
brand names: Terex, American, Bendini, Comedil, Demag, Franna, Lorain, P&H,
Peiner, PPM and RO-Stinger. The Company's strategy going forward is to build the
Terex brand. As part of that effort, Terex will, over time, be migrating
historic brand names to Terex, and may include the use of the historic brand
name in conjunction with the Terex brand name for a transitional period of time.
Terex Cranes has 11 significant manufacturing operations:
o The American Crane Corporation ("American Crane") located in
Wilmington, North Carolina, at which lattice boom crawler cranes and
tower cranes are manufactured under the AMERICAN, TEREX TOWER and
DEMAG trade names;
o Demag Mobile Cranes GmbH & Co. KG ("Demag") located in Zweibrucken,
Wallerscheid and Bierbach, Germany, and Pecs, Hungary, at which
lattice boom crawler cranes and mobile telescopic cranes are
manufactured under the DEMAG, PEINER and TEREX trade names, and at
which large tower cranes are manufactured under the PEINER and TEREX
brand names;
o Gru Comedil S.r.l. ("Comedil"), located in Fontanafredda and Milan,
Italy, at which tower cranes are manufactured under the COMEDIL and
TEREX trade names;
o PPM S.A.S., located in Montceau-les-Mines, France, at which mobile
cranes and container stackers under the brand names TEREX and PPM are
manufactured;
o Terex Italia S.r.l. ("Terex Italia"), located in Crespellano, Italy,
at which mobile telescopic cranes are manufactured under the TEREX and
BENDINI brand names;
o Terex Lifting Australia Pty. Ltd. ("Terex Lifting Australia"), located
in Brisbane, Australia, at which lift and carry cranes are
manufactured under the FRANNA trade name; and
o Terex Cranes - Waverly, located in Waverly, Iowa, at which rough
terrain hydraulic telescoping mobile cranes and truck cranes are
manufactured under the brand names TEREX, LORAIN and P&H (a licensed
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trademark of Joy Global Inc.), and at which truck mounted cranes are
manufactured under the RO-STINGER brand name.
Terex Aerial Work Platforms
The Terex Aerial Work Platforms segment was formed upon the completion of the
acquisition of Genie Holdings, Inc. and its affiliates ("Genie") on September
18, 2002. The Terex Aerial Work Platforms segment designs, manufactures and
markets aerial work platform equipment and telehandlers. Products include
material lifts, portable aerial work platforms, trailer mounted booms,
articulating booms, stick booms, scissor lifts, telehandlers, related components
and replacement parts, and other products. Terex Aerial Work Platforms products
currently are marketed principally under the GENIE and TEREX brand names. These
products are used primarily by customers in the construction and building
maintenance industries to lift people and/or equipment as required to build
and/or maintain large physical assets and structures.
Terex Aerial Work Platforms has three significant manufacturing operations
located in Redmond and Moses Lake, Washington, at which aerial work platform
equipment is manufactured, and a manufacturing location in Baraga, Michigan, at
which rough terrain telescopic boom material handlers (also known as
telehandlers) are manufactured.
Terex Mining
The Terex Mining segment designs, manufactures and markets large hydraulic
excavators and high capacity surface mining trucks, related components and
replacement parts, and other products. These products are used primarily by
construction, mining, quarrying and government customers in construction,
excavation and supplying coal and minerals. Currently, Terex Mining products are
marketed principally under the following brand names: O&K, PAYHAULER, TEREX and
UNIT RIG. The Company's strategy going forward is to build the Terex brand. As
part of that effort, Terex will, over time, be migrating historic brand names to
Terex, and may include the use of the historic brand name in conjunction with
the Terex brand name for a transitional period of time.
Terex Mining has one significant manufacturing operation, located in Dortmund,
Germany, at which it manufactures large hydraulic mining excavators under the
Terex and O&K brand names. Terex Mining markets high capacity surface mining
trucks that are manufactured for Terex Mining by a third party supplier.
Terex Roadbuilding, Utility Products and Other
The Terex Roadbuilding, Utility Products and Other segment designs, manufactures
and markets fixed installation crushing and screening equipment (including
crushers, impactors, screens and feeders), asphalt and concrete equipment
(including pavers, plants, mixers, reclaimers, stabilizers and profilers),
utility equipment (including digger derricks, aerial devices and cable placers),
light construction equipment (including light towers, trowels, power buggies,
generators and arrow boards), construction trailers and on/off road heavy-duty
vehicles, as well as related components and replacement parts. These products
are used primarily by government, utility and construction customers to build
roads, maintain utility lines, trim trees and for commercial and military
applications. These products are currently marketed principally under the
following brand names: Terex, Advance, American Truck Company, Amida, ATC,
Bartell, Benford, Bid-Well, Canica, Cedarapids, Cedarapids/Standard Havens, CMI
Johnson Ross, CMI Terex, CMI-Cifali, Grayhound, Hi-Ranger, Jaques, Load King,
Morrison, Re-Tech, Royer, Simplicity, Tatra, Terex Power, Terex Recycling and
Terex Telelect. The Company's strategy going forward is to build the Terex
brand. As part of that effort, Terex will, over time, be migrating historic
brand names to Terex, and may include the use of the historic brand name in
conjunction with the Terex brand name for a transitional period of time.
Terex also owns much of the North American distribution channel for the utility
products group through the distributors Terex Utilities South and Terex
Utilities West. Terex also owns 40% of Intercontinental Equipment Company
("INECO"), another distributor of utility products. These operations distribute
and install the Company's utility aerial devices as well as other products that
service the utility industry. The Company also operates a fleet of rental
utility products under the name Terex Utilities Rental.
Terex is a majority shareholder of Tatra a.s. ("Tatra"), a company incorporated
under the laws of the Czech Republic. Tatra, which is located in Koprivnice,
Czech Republic, manufactures a range of 4x4 to 12x12 heavy-duty on and off-road
vehicles for military and commercial applications under the Tatra brand name.
The Company also participates in a joint venture under the name American Truck
Company ("ATC"). ATC assembles vehicles based on the Tatra design and technology
incorporating U.S. components under the following brand names: Terex, American
Truck and ATC. ATC manufactures its products at the Company's Terex Advance
Mixer facility in Fort Wayne, Indiana.
The Company also leases and rents a variety of heavy equipment to third parties
under the Terex Re-Rentals brand name.
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In January 2003, the Company launched the operations of Terex Financial
Services, Inc. ("TFS"). TFS offers customers a complete line of loans and leases
to assist in the acquisition of all of the Company's products. In North America,
TFS, the Company and the Company's other domestic subsidiaries have entered into
an arrangement with General Electric Capital Corporation Vendor Financial
Services ("GE Capital"), whereby GE Capital acts as the preferred provider of
all such loans and leases and provides a dedicated team to work with TFS and the
Company's customers. All such loans and leases are originated by GE Capital on a
non-recourse private label basis under the licensed trade name "TFS Capital
Funding" and GE Capital bears all credit risk in connection with such loans and
leases. Terex receives fee and expense reimbursements from GE Capital, and TFS
shares in the profitability of the loan and lease portfolio originated by GE
Capital to purchasers of Terex products. As a result, TFS participates in the
benefits associated with the financing of the Company's products with marginal
expense and without adding any additional debt or credit risk to Terex.
Terex Roadbuilding, Utility Products and Other has 15 significant manufacturing
operations:
o Amida Industries, Inc. ("Amida") located in Rock Hill, South Carolina,
which manufactures and sells portable floodlighting systems, concrete
power trowels, concrete placement systems, concrete finishing systems,
concrete mixers, generators and traffic control products under the
AMIDA, BARTELL, MORRISON, BENFORD, TEREX and TEREX POWER brand names;
o Bid-Well, located in Canton, South Dakota, at which concrete pavers
are manufactured under the BID-WELL brand name;
o Cedarapids, Inc. ("Cedarapids") located in Cedar Rapids, Iowa, which
manufactures crushing and screening equipment, trommels, and asphalt
pavers under the CEDARAPIDS, GRAYHOUND, ROYER and RE-TECH brand names;
o CMI-Cifali Equipmentamentos, Ltda. ("CMI-Cifali"), located in
Cachoeirinha, Brazil, which manufactures asphalt pavers and asphalt
plants under the CMI-CIFALI brand name;
o CMI Terex Corporation ("CMI"), located in Oklahoma City, Oklahoma, at
which pavement profilers, reclaimers/trimmers, asphalt plants,
concrete plants and concrete pavers are manufactured under the CMI
TEREX, CMI JOHNSON-ROSS and CEDARAPIDS/STANDARD HAVENS brand names;
o Jaques International ("Jaques"), located in Melbourne, Australia,
which manufactures crushing and screening equipment under the JAQUES
brand name;
o Jaques International Sdn Bhd ("Jaques Malaysia"), located in Subang
Jaya, Malaysia, which manufactures crushing and screening equipment
under the JAQUES brand name;
o Jaques (Thailand) Limited ("Jaques Thailand"), located in Chomburi,
Thailand, which manufactures crushing and screening equipment under
the JAQUES brand name;
o Load King, located in Elk Point, South Dakota, at which construction
trailers are manufactured under the LOAD KING brand name;
o Simplicity Engineering ("Simplicity"), located in Durand, Michigan, at
which crushing and screening equipment and recycling systems are
manufactured under the SIMPLICITY, CANICA and TEREX RECYCLING brand
names;
o Tatra, located in Koprivnice, Czech Republic, at which a range of 4x4
to 12x12 heavy duty on and off-road vehicles for military and
commercial applications are manufactured under the TATRA brand name;
o Terex Advance Mixer, Inc. ("Terex Advance Mixer"), located in Fort
Wayne, Indiana, which manufactures and sells front and rear discharge
concrete mixer trucks under the TEREX and ADVANCE brand names, and at
which ATC manufactures heavy-duty on and off-road vehicles for
military and commercial applications under the TEREX, ATC and AMERICAN
TRUCK brand names;
o Terex Bartell, Ltd. ("Bartell"), located in Brampton, Ontario, Canada,
which manufactures and sells concrete power trowels and concrete
finishing systems under the BARTELL brand name; and
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o Terex-Telelect, Inc. ("Telelect"), located in Watertown and Huron,
South Dakota, at which utility aerial devices and digger derricks are
manufactured under the TEREX TELELECT and HI-RANGER brand names.
Other Businesses
Terex has a minority interest in Inner Mongolia North Hauler Joint Stock Company
Limited ("North Hauler"), a company incorporated under the laws of China, which
manufactures rigid and articulated haulers in China. Trucks manufactured by
North Hauler, which is located in Baotou, Inner Mongolia, are principally used
in the People's Republic of China under the TEREX brand name.
As discussed in Note J - "Investment in Joint Venture" in the Notes to the
Consolidated Financial Statements, the Company has a 49% ownership interest in a
joint venture, Genie Financial Solutions Holding B.V. ("GFSH B.V."). The other
51% of GFSH B.V. is owned by a European financial institution. GFSH B.V. was
established to facilitate the financing of Genie's products sold in Europe by
offering loans and leases to purchasers of Genie products.
The Company has an interest in a joint venture in India under the name Terex
Vectra Equipment Pvt. Ltd., which will manufacture and market compact
construction equipment. Production is expected to begin in the first half of
2004.
Terex also participates in joint ventures in China under the names Wieland
International Trading (Shanghai) Co. Ltd. and Shanghai Wieland Engineering Co.
Ltd., which manufacture replacement and wear parts for crushing equipment.
The Company owns an interest in DuvalPilot Equipment Outfitters, LLC, a
distributor of the Company's products and other light construction equipment
located in Florida.
Business Strategy
Over the past several years, Terex has implemented a series of interrelated
operational and strategic initiatives designed to create a competitive advantage
in the marketplace and maximize its financial performance. These initiatives
include: (i) providing customers with lower cost products that increase their
return on invested capital through a lower life cycle cost; (ii) implementing a
variable cost structure with over 70% of cost of sales from purchased
components; (iii) reducing selling expense and eliminating non-value-added
functions throughout the organization; and (iv) increasing product and
geographic diversity through internal development and acquisitions.
Additionally, the Company recently announced an internal improvement process,
known as the Terex Improvement Process or "TIP", focusing on matters that are
intended to benefit the Company's customers, investors and employees.
Increase Sales and Market Share Through Best Value Strategy
Terex has increased its sales and gained market share by pursuing its best value
strategy of providing comparable or superior products at a lower total cost of
ownership and with higher returns on invested capital as compared to its
competitors. Terex typically prices its products aggressively relative to its
competition while providing the same level of functionality.
Reduce Costs and Improve Manufacturing Efficiency
The Company's best value strategy is supported by ongoing efforts to reduce
costs and improve manufacturing efficiency. Over the past few years, it has
initiated several programs to consolidate manufacturing operations, minimize
selling costs, outsource non-critical manufacturing processes and rationalize
product lines in order to increase profitability and reduce fixed costs. The
Company believes its focus on reducing costs and improving manufacturing
efficiency has yielded significantly more efficient and flexible operations than
its competitors as measured by its comparatively low selling, general and
administrative expense-to-sales ratio, significantly higher sales per employee,
and greater capital efficiency (based on the ratio of capital expenditures to
sales).
Focus on Geographic, Product and End-Market Diversification
Over the past several years, the Company has focused on growing and improving
the operations of its core business segments. The Company also has expanded the
size and scope of its core businesses both through acquisitions and through
development of new products in order to increase its market share. Management
believes that these initiatives have helped to reduce the effect of potential
cyclical changes in any one product category or geographic market. These
initiatives have also expanded the Company's product lines within its core
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businesses, added new technology and improved its distribution network. As a
result, the Company has developed a geographically diverse revenue base with
approximately 61% of its revenues derived outside the United States and Canada,
and has built a diverse product portfolio addressing a range of end-markets as
illustrated by the Company's sales by product category in:
Percentage of Sales
-------------------
Product Category 2003 2002 2001
---------------- ---- ---- ----
Hydraulic Mobile Cranes 18 16 13
Compact Construction Equipment 17 18 9
Crushing, Screening & Paving Equipment 15 20 23
Aerial Work Platforms 14 5 3
Surface Mining Equipment 8 9 14
Off-Highway Construction Trucks 6 9 11
Utility Equipment 6 7 7
Lattice Boom & Tower Cranes 6 6 7
Boom Trucks 3 2 3
Material Handlers & Container Stackers 2 5 7
On/Off Road Heavy Duty Vehicles 2 --- ---
Other 3 3 3
------- ------- ------
Total 100% 100% 100%
======= ======= ======
Grow through Acquisitions
Since 1995, the Company has invested over $1.9 billion to strengthen its core
business segments and complementary businesses through over 25 strategic
acquisitions. Acquisitions and new product development have been important
components of the Company's growth strategy. The Company is currently focused on
completing the integration of its recent acquisitions and growing organically by
turning its portfolio of individual businesses into an integrated franchise. The
Company may make additional acquisitions in the future, particularly those that
would complement the Company's existing operations, and expects acquisitions to
be part of the Company's future. The Company feels that any future acquisitions
would need to be of significant strategic importance, such as expanding the
Company's geographic range or product diversity.
Some recent examples of the Company's acquisition strategy include:
o The acquisition during 2003 of the utility products distributors
Commercial Body Corporation ("Commercial Body") and Combatel
Distribution, Inc. ("Combatel") (now part of Terex Utilities South)
and the majority interests in Tatra and ATC.
o The acquisition during 2002 of Genie, Demag, Schaeff (including
Fuchs), Terex Advance Mixer, and the utility product distributors
Pacific Utility Equipment Company ("Pacific Utility") (now part of
Terex Utilities West) and Telelect Southeast Distribution, Inc.
("Telelect Southeast") (now part of Terex Utilities South).
o The acquisition during 2001 of Jaques (including Jaques Malaysia and
Jaques Thailand), CMI (including Bid-Well, Load King and CMI-Cifali)
and Atlas Terex (including Atlas UK).
Internal Improvement Process
Terex recently launched a series of initiatives intended to transform the
Company over the next several years. The Terex Improvement Process ("TIP") will
focus on improving the Company's internal processes and helping the Company
become more customer-centric. The Company has created several TIP teams of
cross-functional and operational managers to build the Terex of tomorrow. The
teams will focus on leadership and talent development, the customer experience,
the Company's product value proposition and returns delivered to the Company's
investors. Some areas of concentration include improving the workplace, better
management of the Company's assets, improving operating margins, making Terex an
easier partner to do business with, and new branding and marketing strategies.
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Terex's goal is to become the most customer responsive company in its industry
and a preferred place to work.
Products
Terex Construction
Heavy Construction Equipment. Terex Construction manufactures off-highway trucks
and scrapers, and also markets excavators and wheel loaders, used in earthmoving
applications.
[Graphic] Articulated off-highway trucks are three-axle, six-wheel
drive machines with a capacity range of 25 to 40 tons. An
oscillating connection between the cab and body allows the
cab and body to move independently, enabling all six tires
to maintain ground contact for traction on rough terrain.
This allows the truck to move effectively through extremely
rough or muddy off-road conditions. Articulated off-highway
trucks are typically used together with an excavator or
wheel loader to move dirt in connection with road, tunnel or
other infrastructure construction and commercial, industrial
or major residential construction projects. Terex
articulated off-highway trucks are manufactured in
Motherwell, Scotland, under the brand name TEREX.
[Graphic] Rigid off-highway trucks are two axle machines which
generally have larger capacities than articulated
off-highway trucks, but can operate only on improved or
graded surfaces. The capacities of rigid off-highway trucks
range from 35 to 100 tons, and are used in large
construction or infrastructure projects, aggregates and
smaller surface mines. Terex's rigid trucks are manufactured
in Motherwell, Scotland, under the TEREX brand name.
[Graphic] Scrapers move dirt by elevating it from the ground to a bowl
located between the two axles of the machine. Scrapers are
used most often in relatively dry, flat terrains. Terex
scrapers are manufactured in Motherwell, Scotland, under the
TEREX brand name.
[Graphic] Excavators are used for a wide variety of construction
applications, including non-residential construction (such
as commercial sites and road construction) and residential
construction. These machines are crawler type excavators
ranging in size from 13 to 47 tons. They are manufactured
for Terex in South Korea and are sold under the TEREX brand
name.
[Graphic] Wheel Loaders are used for loading and unloading materials.
Applications include mining and quarrying, non-residential
construction, airport and industrial snow removal, waste
management and general construction. These machines range in
size from three to five cubic yards capacity, and are
manufactured for Terex in South Korea and are sold under the
TEREX brand name.
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Compact Equipment. Terex Construction manufactures a wide variety of compact
equipment used primarily in the construction and rental industries. Products
include loader backhoes, compaction equipment, excavators, loading machines,
site dumpers, European telehandlers and wheel loaders.
[Graphic] Loader backhoes incorporate a front-end loader and rear
excavator arm. They are used for loading, excavating and
lifting in many construction and agricultural related
applications. Terex offers four models of loader backhoes,
ranging from 69 to 90 horsepower. Terex loader backhoes are
currently manufactured under the TEREX and FERMEC brand
names in Coventry, England.
[Graphic] Compaction equipment manufactured by Terex ranges from small
portable plates to heavy duty ride-on rollers. Single and
reversible direction plates are used in the compaction of
trench backfill material, paths and driveways. A range of
tandem rollers from 1.5 to 10 tons covers larger
applications, including road formation, construction and
asphalt surfacing. Self-propelled rollers from six to 12
tons are used in landfill site construction and on soil and
sub-base materials. Included in the range are sophisticated
infrared trench compactors that enable the operator to use
the machine at a distance. Terex compaction equipment is
currently manufactured in Coventry, England, under the TEREX
and BENFORD brand names.
[Graphic] Excavators in the compact equipment category include mini
and midi excavators used in the general construction,
landscaping and rental businesses. Mini excavators are
crawler type excavators ranging in size from 1.6 tons to 5.5
tons. These machines are equipped with either rubber or
steel tracks. Midi excavators are manufactured in a mobile
(wheeled) version in the six to 11 ton sizes for the
European market. These excavators are commonly used for
excavation and lifting in confined areas in communities and
in rental businesses. Midi excavators are also manufactured
as crawler excavators in sizes between 5.5 tons and 11.0
tons. In the six to eight ton sizes Terex offers standard
steel tracks and optional rubber tracks. These excavators
are manufactured in Germany under the TEREX, ATLAS and
SCHAEFF brand names.
[Graphic] Loading machines are designed for handling logs, scrap and
other bulky materials with clamshell, magnet or grapple
attachments. There are stationary and mobile models for
loading barges and various operations in scrap,
manufacturing and materials handling. Terex produces loading
machines ranging from 11 tons to 66 tons at its facilities
in Bad Schoenborn and Ganderkasee, Germany, under the TEREX,
FUCHS and ATLAS brand names.
- 10 -
[Graphic] Site dumpers are used to move smaller quantities of
materials from one location to another, and are primarily
used for landscaping and concrete applications. Terex offers
a variety of two wheel and four wheel drive models. Site
dumpers are manufactured in Coventry, England, under the
BENFORD and TEREX brand names.
[Graphic] Wheel Loaders are used for loading and unloading materials.
Due to the large variety of attachments, these machines are
also multi-equipment carriers used not only in the field of
construction but also in industrial, rental and landscaping
business. Terex wheel loaders are manufactured under the
brand names of SCHAEFF and TEREX at its facility in
Crailsheim, Germany.
Crushing and Screening Equipment. Crushing and screening equipment offered by
Terex Construction is used in the quarry, demolition and recycling industries.
Crushing and screening plants can be either stationary or portable. Portable
crushing and screening plants are configured with a variety of components to
provide easy site-to-site mobility, application versatility, flexible on-demand
finished product and reduced set-up time.
Terex Construction manufactures crushing equipment under the PEGSON brand name
in Coalville, England.
[Graphic] Jaw crushers are primary crushers with reduction ratios of
6:1 for crushing larger rock. Applications include hard
rock, sand and gravel and recycled materials. Models offered
yield a range of production capacities: up to 265 tons per
hour for the smallest unit, and up to 1,700 tons per hour
for the largest.
[Graphic] Cone crushers are used in secondary and tertiary
applications to reduce a number of materials, including
quarry rock and riverbed gravel. High production, low
maintenance and enhanced final material cubicle shape are
the principal features of these compression-type roller
bearing crushers.
Terex Construction manufactures screening equipment in Dungannon, Northern
Ireland and Omagh, Northern Ireland under the brand names POWERSCREEN and
FINLAY.
[Graphic] Dry screening is used to process materials such as sand,
gravel, quarry rock, coal, construction and demolition
waste, soil, compost and wood chips.
- 11 -
[Graphic] Washing screens are used to separate, wash, scrub, dewater
and stockpile sand and gravel. Products manufactured by
Terex include a completely mobile single chassis washing
plant incorporating separation, washing, dewatering and
stockpiling, mobile and stationary screening rinsers,
bucket-wheel dewaterers, scrubbing devices for aggregate, a
mobile cyclone for maximum retention of sand particles, silt
extraction systems, stockpiling conveyors and a sand screw
system as an alternative option to the bucket-wheel
dewaterers.
[Graphic] Trommels are used in the recycling of construction and
demolition waste materials, as well as soil, compost and
wood chips. Trommels incorporate conveyors and variable
speed fingertip control of the belts and rotating drum to
separate the various materials. Terex manufactures a range
of trommel and soil shredding equipment. Trommels are also
used to process construction and demolition waste, as well
as decasing, segmenting and processing empty bottles. The
soil shredding units are mainly used by landscape
contractors and provide a high specification end product.
Terex Cranes
Terex Cranes offers a wide variety of cranes, including mobile telescopic
cranes, tower cranes, lattice boom crawler cranes, boom trucks and telescopic
container stackers.
Mobile Telescopic Cranes. Mobile telescopic cranes are used primarily for
industrial applications, in commercial and public works construction and in
maintenance applications, to lift equipment or material to heights in excess of
490 feet. Terex Cranes offers a complete line of mobile telescopic cranes,
including rough terrain cranes, truck cranes, all terrain cranes, and lift and
carry cranes.
[Graphic] All terrain cranes were developed in Europe as a cross
between rough terrain and truck cranes, and are designed to
travel across both rough terrain and highways. All terrain
cranes manufactured by Terex have lifting capacities of up
to 800 tons and maximum tip heights of up to 490 feet. Terex
manufactures all terrain cranes at its Montceau-les-Mines,
France, and Zweibrucken and Wallerscheid, Germany,
facilities under the brand names TEREX, PPM and DEMAG.
[Graphic] Rough terrain cranes move materials and equipment on rough
or uneven terrain, and are often located on a single
construction or work site such as a building site, a highway
or a utility project for long periods of time. Rough terrain
cranes cannot be driven on highways and accordingly must be
transported by truck to the work site. Terex offers rough
terrain cranes with lifting capacities ranging from 20 to
100 tons and maximum tip heights of up to 195 feet. Terex
- 12 -
manufactures its rough terrain cranes at its facilities
located in Waverly, Iowa, and Crespellano, Italy, under the
brand names TEREX, LORAIN, P&H and BENDINI.
[Graphic] Truck cranes have two cabs and can travel rapidly from job
site to job site at highway speeds. Truck cranes are often
used for multiple local jobs, primarily in urban or suburban
areas. Truck cranes manufactured by Terex have maximum
lifting capacities of up to 90 tons and maximum tip heights
of up to 202 feet. Terex manufactures truck cranes at its
Waverly, Iowa, facility under the brand names TEREX, P&H and
LORAIN.
[Graphic] Lift and carry cranes are designed primarily for site work,
such as at mine sites, big fabrication yards and building
and construction sites. Terex offers five models of lift and
carry cranes with lifting capacities ranging from 11 to 22
tons. Lift and carry cranes are manufactured in Terex's
Brisbane, Australia, facility under the brand name FRANNA.
Tower Cranes. Tower cranes are often used in urban areas where space is
constrained and in long-term or very high building sites. Tower cranes lift
construction material and place the material at the point where it is being
used. They include a vertical tower with a horizontal jib with a counterweight
at the top (except for self-erecting tower cranes where the counter weight is at
the bottom and the entire tower rotates). On the jib is a trolley through which
runs a load carrying cable and which moves the load along the jib length. On
larger cranes, the operator is located above the work site where the tower and
jib meet, providing superior visibility. The jib also rotates 360 degrees,
creating a large working area equal to twice the jib length. Tower cranes are
currently produced by Terex in Fontanafredda and Milan, Italy, under the COMEDIL
and TEREX brand names, and in Zweibrucken, Germany, under the PEINER and TEREX
brand names. Terex produces the following types of tower cranes:
[Graphic] Self-erecting tower cranes are trailer-mounted and unfold
from four sections (two for the tower and two for the jib);
certain larger models have a telescopic tower and folding
jib. These cranes can be assembled on site in a few hours.
Applications include residential and small commercial
construction. Crane heights range from 50 feet to 90 feet
and jib lengths from 60 feet to 125 feet.
[Graphic] Hammerhead tower cranes have a tower and a horizontal jib
assembled from sections. The tower extends above the jib to
which suspension cables supporting the jib are attached.
These cranes are assembled on-site in one to three days
depending on height, and can increase in height with the
project; they have a maximum free-standing height of 250
feet to 300 feet and a maximum jib length of 240 feet.
- 13 -
[Graphic] Flat top tower cranes have a tower and a horizontal jib
assembled from sections. There is no A-frame above the jib,
which reduces cost and facilities assembly; the jib is
self-supporting and consists of reinforced jib sections.
These cranes are assembled on site in one to two days, and
can increase in height with the project; they have a maximum
freestanding height of 305 feet and a maximum jib length of
280 feet.
[Graphic] Luffing jib tower cranes have a tower and an angled jib
assembled from sections. There is one A-frame above the jib
to which suspension cables supporting the jib are attached.
Unlike other tower cranes, there is no trolley to control
lateral movement of the load, which is accomplished by
changing the jib angle. These cranes are assembled on site
in two to three days, and can increase in height with the
project; they have a maximum freestanding height of 185 feet
and a maximum jib length of 200 feet. Luffing jib tower
cranes operate like a traditional lattice boom crane mounted
on a tower.
Lattice Boom Crawler Cranes. Lattice boom crawler cranes are designed to lift
material on rough terrain and can maneuver while bearing a load. The boom is
made of tubular steel sections, which are transported to and erected, together
with the base unit, at a construction site.
[Graphic] Hydraulic lattice boom crawler cranes manufactured in
Wilmington, North Carolina, under the TEREX and AMERICAN
brand names have lifting capacities from 50 to 275 tons.
Larger crawler cranes manufactured in Zweibrucken, Germany,
under the DEMAG and TEREX brand names have lifting
capacities ranging from 300 to 1750 tons.
Truck Mounted Cranes (Boom Trucks). Terex Cranes manufactures telescopic boom
cranes for mounting on commercial truck chassis. Truck mounted cranes are used
primarily in the construction industry to lift equipment or materials to various
heights. Boom trucks are generally lighter and have less lifting capacity than
truck cranes, and are used for many of the same applications when lower lifting
capabilities are required. An advantage of a boom truck is that the equipment or
material to be lifted by the crane can be transported by the truck, which can
travel at highway speeds. Applications include the installation of air
conditioners and other roof equipment. Terex Cranes manufactures both telescopic
and articulated boom truck mounted cranes.
[Graphic] Telescopic boom truck mounted cranes enable an operator to
reach heights of up to 166 feet and have a maximum lifting
capacity of up to 35 tons. Terex manufactures its telescopic
boom truck mounted cranes at its Waverly, Iowa facility
under the brand names RO-STINGER and TEREX.
- 14 -
Telescopic Container Stackers. Telescopic container stackers are used to pick up
and stack containers at dock and terminal facilities. At the end of a telescopic
container stacker's boom is a spreader which enables it to attach to containers
of varying lengths and weights and to rotate the container up to 360 degrees.
[Graphic] Telescopic container stackers manufactured by Terex have
lifting capacities up to 49.5 tons, can stack up to five
full or eight empty containers and are able to maneuver
through very narrow areas. Terex manufactures its telescopic
container stackers under the brand names PPM and TEREX at
its Montceau-les-Mines, France, facility.
Terex Aerial Work Platforms
Aerial work platforms are pieces of equipment that position workers and
materials easily and quickly to elevated work areas. These products have
developed over the past twenty years as alternatives to scaffolding and ladders.
Terex offers a variety of aerial lifts that are categorized into six product
families: material lifts; portable aerial work platforms; trailer mounted booms;
articulating booms; stick booms; and scissor lifts. All of these aerial lifts
are manufactured under the brand name GENIE in Redmond and Moses Lake,
Washington. The Aerial Work Platforms segment also manufactures and markets
rough terrain telescopic boom material handlers (also known as telehandlers)
under the TEREX brand name at its facility in Baraga, Michigan.
[Graphic] Material lifts are used primarily indoors in the
construction, industrial and home owner markets. They safely
and easily lift up to 1,000 pounds from ground level to
heights of up to 26 feet.
[Graphic] Portable aerial work platforms are used primarily indoors in
a variety of markets to perform overhead maintenance. These
aerial work platforms lift one or two people to working
heights up to 46 feet. Most models will roll through a
standard doorway and can be transported in the back of a
pick-up truck. Some models are drivable when fully elevated.
[Graphic] Trailer mounted booms are used outdoors and provide the same
versatile reach of an articulating boom, plus the ability to
be towed. Terex trailer mounted booms have lift capacities
of 500 pounds and a working height of up to 56 feet.
[Graphic] Articulating booms are primarily used in construction and
industrial applications, both indoors and out. They feature
lifting versatility with up, out and over position
capabilities to access difficult to reach overhead areas
that typically cannot be reached with a scissor lift or
straight boom. Many options are available, including: two-
and four-wheel drive; rough terrain models; narrow access
- 15 -
models that roll through standard double doorways; gas/LPG,
diesel, electric, and hybrid capabilities. Models have
working heights from 26 feet to 86 feet and horizontal reach
up to 60 feet.
[Graphic] Stick booms are used outdoors in commercial and industrial
new construction and highway and bridge maintenance
projects. Terex stick booms offer working heights from 46
feet to 131 feet, articulated jibs on some models, and
options including two- and four-wheel drive, rough terrain
packages and multi-power capabilities.
[Graphic] Scissor lifts are used in outdoor and indoor applications in
a variety of construction, industrial and commercial
settings. Terex scissor lifts are offered in slab or rough
terrain models. Some of their features are narrow access
capability, slide-out platform extension, quiet electric
drives, rough terrain models, and working heights from 21
feet to 59 feet.
[Graphic] Telehandlers are used to move and place materials on new
residential and commercial job sites. Terex manufactures
telehandlers with load capacities of up to 11,000 pounds and
with a maximum extended reach of up to 62 feet and lift
capabilities of up to 78 feet.
Terex Mining
Terex Mining offers high capacity surface mining trucks and large hydraulic
excavators used in the surface mining industry.
[Graphic] Large hydraulic excavators in shovel or backhoe versions are
primarily used to dig overburden and minerals and load it
into trucks. These excavators are utilized in quarries,
surface mines and large construction sites around the world.
Terex Mining excavators have operating weights ranging from
58 to 1000 tons and bucket sizes ranging from six to 60
cubic yards. They are manufactured under the O&K and TEREX
brand names in Dortmund, Germany.
[Graphic] High capacity surface mining trucks are off-road dump trucks
with capacities in excess of 120 tons. They are powered by a
diesel engine driving an electric alternator that provides
power to individual electric motors in each of the rear
wheels. Terex's product line consists of a series of rear
dump trucks with payload capabilities ranging from 120 to
360 tons, and bottom dump trucks with payload capacities
ranging from 180 to 300 tons. Terex's high capacity surface
mining trucks are manufactured under the UNIT RIG and TEREX
brand names.
- 16 -
[Graphic] Terex also offers an all wheel drive, rear dump truck with
55 ton payload capacity that can operate in adverse
conditions. With high traction force and low ground bearing
pressure, this truck is found on construction sites, in
special applications and smaller mines. The Terex special
all wheel drive rear dump truck is manufactured under the
PAYHAULER brand name.
Terex Roadbuilding, Utility Products and Other
Terex offers a diverse range of products for the roadbuilding, utility and
construction industries and governments. Products in this group include crushing
and screening equipment, asphalt and concrete equipment, utility equipment,
light construction equipment, construction trailers and on/off road heavy-duty
vehicles.
Crushing and Screening Equipment. Crushing and screening equipment is used in
processing aggregate materials for roadbuilding materials. Typical crushing and
screening operations utilize a combination of components in reducing virgin
aggregate materials to required product sizes for final usage in road building
and related applications.
Terex Roadbuilding manufactures crushing equipment under the CEDARAPIDS, CANICA
and JAQUES brand names in Cedar Rapids, Iowa; Durand, Michigan; Melbourne,
Australia; and Subang Jaya, Malaysia. Crushing equipment manufactured by Terex
Roadbuilding includes jaw crushers, horizontal shaft impactors, vertical shaft
impactors and cone crushers.
[Graphic] Jaw crushers are primary crushers with reduction ratios of
6:1 for crushing larger rock. Applications include hard
rock, sand and gravel and recycled materials. Models offered
yield a range of production capacities: up to 265 tons per
hour for the smallest unit, and up to 1,700 tons per hour
for the largest.
[Graphic] Horizontal shaft impactors are secondary crushers which
utilize rotor impact bars and breaker plates to achieve high
production tonnages and improved aggregate particle shape.
They are typically applied to reduce soft to medium hard
materials.
[Graphic] Vertical shaft impactors are tertiary crushers which reduce
material utilizing various rotor configurations and are
highly adaptable to any application. Vertical shaft
impactors can be customized to material conditions and
desired product size/shape. A full range of models provides
customers with increased tonnages, better circuit balance
and screen efficiency.
- 17 -
[Graphic] Cone crushers are used in secondary and tertiary
applications to reduce a number of materials, including
quarry rock and riverbed gravel. High production, low
maintenance and enhanced final material cubicle shape are
the principal features of these compression-type roller
bearing crushers.
Terex Roadbuilding manufactures screening equipment in Durand, Michigan; Cedar
Rapids, Iowa; Melbourne, Australia; Subang Jaya, Malaysia; and Chomburi,
Thailand, under the brand names SIMPLICITY, CEDARAPIDS, ROYER, RE-TECH and
JAQUES.
[Graphic] Heavy duty inclined screens and feeders are found in high
tonnage applications. These units are typically custom
designed to meet the needs of each customer. Although
primarily found in stationary installations, Terex supplies
a variety of screens and feeders for use on heavy duty
portable crushing and screening spreads.
[Graphic] Inclined screens are used in all phases of plant design from
handling quarried material to fine screening. Capable of
handling much larger capacity than a flat screen, inclined
screens are most commonly found in large stationary
installations where maximum output is required. This
requires the ability to custom design and manufacture units
that meet both the engineering and application requirements
of the end user.
[Graphic] Feeders are generally situated at the primary end of the
processing facility, requiring rugged design in order to
handle the impact of the material being fed from front end
loaders, excavators, etc. The feeder moves material to the
crushing and screening equipment in a controlled fashion.
[Graphic] Flat screens combine the high efficiency of a horizontal
screen with the capacity, bearing life and low maintenance
of an inclined screen. They are adaptable for heavy
scalping, standard duty and fine screening applications and
are engineered for durability and user friendliness.
Asphalt and Concrete Equipment. Terex Roadbuilding manufactures asphalt mixing
plants, asphalt pavers, concrete production plants, concrete pavers, profilers,
stabilizers and reclaimers at its facilities in Cedar Rapids, Iowa; Oklahoma
City, Oklahoma; and Cachoeirinha, Brazil.
[Graphic] Asphalt pavers are available in rubber tire and steel or
rubber track designs. Terex sells asphalt pavers with
maximum widths from 18 feet to 30 feet. The smaller units
have a maximum paving width of 18 feet and are used for
commercial work such as parking lots, development streets
and construction overlay projects. Mid-sized pavers are used
for mainline and commercial projects and have maximum paving
widths ranging from 24 to 28 feet. High production pavers
are engineered and built for heavy-duty, mainline paving and
are capable of 30 foot maximum paving widths. All of the
above feature direct hydrostatic drive for maximum uptime,
patented frame raise for maneuverability and three-point
- 18 -
suspension for smooth, uniform mats. Terex asphalt pavers
are manufactured under the CEDARAPIDS and GRAYHOUND brand
names in Cedar Rapids, Iowa, and under the CMI-CIFALI brand
name in Cachoeirinha, Brazil.
[Graphic] Asphalt mixing plants are used by road construction
companies to produce hot mix asphalt. The mixing plants are
available in portable, relocatable and stationary
configurations. Associated plant components and control
systems are manufactured to offer customers a wide variety
of equipment to meet individual production requirements.
Asphalt mixing plants are manufactured under the CMI and
CEDARAPIDS/STANDARD HAVENS brand names in Oklahoma City,
Oklahoma, and under the CMI-CIFALI brand name in
Cachoeirinha, Brazil.
[Graphic] Concrete production plants are used in residential,
commercial, highway, airport and other markets. Terex
products include a full range of portable and stationary
transit mix and central mix production facilities. They are
manufactured in Oklahoma City, Oklahoma, and sold worldwide
under the CMI JOHNSON-ROSS brand name.
[Graphic] Concrete mixers are machines with a large revolving drum in
which cement is mixed with other materials to make concrete.
Terex offers models mounted on trucks with three, four,
five, six or seven axles. They are manufactured in Fort
Wayne, Indiana, under the brand name TEREX ADVANCE MIXER.
[Graphic] Concrete pavers produced by Terex are used by paving
contractors to place and finish concrete streets, highways
and airport surfaces. Terex manufactures slipform pavers,
which pave widths ranging from two feet to 35 feet in a
single pass. Terex also produces concrete pavers which
require paving forms, usually metal, to contain the paving
material. These pavers are used on bridge decks, elevated
highways and for general conduction paving needs. Concrete
pavers are manufactured under the CMI TEREX and BID-WELL
brand names in Oklahoma City, Oklahoma, and Canton, South
Dakota.
[Graphic] Reclaimers/Stabilizers produced by Terex are used to add
load-bearing strength to the base structures of new highways
and new building sites. They are also used for in-place
reclaiming of deteriorated asphalt pavement. Terex's
reclaimers/stabilizers are manufactured in Oklahoma City,
Oklahoma, under the CMI TEREX brand name.
- 19 -
[Graphic] Pavement profilers produced by Terex mill and reclaim
deteriorated asphalt pavement, leaving a level, textured
surface upon which new paving material is placed. The
process is less costly than complete removal, and produces a
by-product, RAP (Recycled Asphalt Product) that can be
processed through Terex hot mix asphalt plants to produce
lower cost paving materials. Terex produces pavement
profilers in Oklahoma City, Oklahoma, under the CMI TEREX
brand name.
Utility Equipment. Terex utility products include digger derricks, aerial
devices and cable placers. These products are used by electric utilities, tree
care companies, telecommunications companies, and the electric construction
industry as well as government organizations. The products are mounted on
commercial truck chassis. Digger derricks and aerial devices are primarily used
for the construction and maintenance of electric utility lines.
[Graphic] Digger derricks are used to dig holes and set utility poles.
They include a telescopic boom with an auger mounted on the
boom, which digs the hole, and a winch and devices to lift,
maneuver and set the pole. Digger derricks available from
Terex have sheave heights up to 95 feet and lifting
capacities up to 48,000 pounds. Terex digger derricks are
manufactured in Watertown, South Dakota, under the brand
name TEREX TELELECT.
[Graphic] Aerial devices are used to elevate workers and may handle
material to work areas at the top of utility poles or
trimming trees away from electrical lines as well as
miscellaneous purposes such as sign maintenance. Aerial
devices available from Terex include telescopic,
non-overcenter and overcenter models that range in working
heights from 34 to 105 feet and material handling capacity
up to 2,000 pounds. Terex aerial devices are manufactured at
the Watertown, South Dakota, facility under the brand names
TEREX TELELECT and HI-RANGER.
[Graphic] Cable placers are used to install fiber optic, copper and
strand telephone and cable lines. The cable placer includes
a man basket with working height of 37 feet. They are
manufactured in Watertown, South Dakota, under the brand
name TEREX TELELECT.
Light Construction Equipment. Light construction equipment produced by Terex
includes mobile and portable light towers, concrete power trowels, concrete
placement systems, concrete finishing systems, generators and traffic control
products.
[Graphic] Light towers are used primarily to light work areas for
night construction activity. They are towed to the work-site
where the telescopic tower is extended and outriggers are
deployed for stability. They are diesel powered and provide
adequate light for construction activity for a radius of
approximately 300 feet from the tower. Light towers are
manufactured under the AMIDA and TEREX brand names in Rock
Hill, South Carolina.
- 20 -
[Graphic] Power trowels are used to provide a smooth finish on
concrete surfaces. They are used on soft cement as the
concrete hardens. The power trowels are manufactured as
walk-behind and ride-on models. Trowels are typically used
in conjunction with other products manufactured by Terex,
including light towers, power buggies, screed, and material
spreaders. Power trowels are manufactured under the BARTELL
brand name in Brampton, Ontario, Canada.
[Graphic] Power buggies are used primarily to transport concrete from
the mixer to the pouring site. Terex power buggies include
dump capacities from 10 to 21 cubic feet with both
walk-behind and ride-on models. Terex manufactures power
buggies under the AMIDA, MORRISON and TEREX brand names in
Rock Hill, South Carolina.
[Graphic] Generators are used to provide electric power on
construction sites and other remote locations. Generators up
to 2,000 kilowatt are manufactured under the TEREX brand
name in Rock Hill, South Carolina.
[Graphic] Arrow boards (or detour lights) are used to direct traffic
around road construction sites. They are primarily solar
powered, with solar panels continuously recharging batteries
which provide power during night hours. Terex arrow boards
include 15 and 25 light configurations, and are manufactured
under the TEREX and AMIDA brand names in Rock Hill, South
Carolina.
Construction Trailers. Terex produces construction trailers at its facility in
Elk Point, South Dakota under the LOAD KING brand name.
Construction trailers manufactured by Terex are used in the
construction industry to haul materials and equipment.
Bottom dump material trailers are used to transport raw
aggregates, crushed aggregates and finished hot mix asphalt
paving material. Lowbed trailers have capacities from 25
tons to 100 tons and are designed with several gooseneck
systems and are used primarily to transport construction
equipment.
- 21 -
On/Off Road Heavy Duty Vehicles. Terex produces, through its majority ownership
of Tatra, a range of 4x4 to 12x12 heavy duty on and off-road vehicles for
military and commercial applications at its facility in Koprivnice, Czech
Republic under the TATRA brand name. ATC manufactures vehicles based on the
Tatra design and technology incorporating U.S. components at the Company's Terex
Advance Mixer facility in Fort Wayne, Indiana.
[Graphic] On/off road heavy duty vehicles are produced for military
and commercial use with axle configurations of 4x4 up to
12x12. The main features of the vehicle design include an
air cooled engine, a sturdy central load-carrying tube and a
swinging half axle design that controls the independent
movement of each wheel. The kinematics of the axles,
together with the backbone tube, make a stable base to which
a body can be mounted that limits extreme side rocking,
making it possible for the truck to go off-road at high
speeds.
Backlog
The Company's backlog as of December 31, 2003 and 2002 was as follows:
December 31,
----------------------------
2003 2002
-------------- -------------
(in millions)
Terex Construction.................$ 109.0 $ 75.9
Terex Cranes....................... 138.8 146.2
Terex Aerial Work Platforms........ 22.2 10.0
Terex Mining....................... 33.6 47.8
Terex Roadbuilding, Utility
Products and Other.............. 164.7 120.0
Eliminations....................... (5.7) ---
-------------- -------------
Total.........................$ 462.6 $ 399.9
============== =============
Substantially all of the Company's backlog orders are expected to be filled
within one year, although there can be no assurance that all such backlog orders
will be filled within that time period. The Company's backlog orders represent
primarily new equipment orders. Parts orders are generally filled on an
as-ordered basis.
Terex Construction's backlog at December 31, 2003 increased $33.1 million to
$109.0 million, as compared to $75.9 million at December 31, 2002. The increase
in backlog was due primarily to increased customer orders at Atlas prior to a
model change scheduled for the first quarter of 2004. Additionally, backlog
increased significantly at Fuchs, Schaeff and Benford.
The backlog at Terex Cranes decreased $7.4 million to $138.8 million at December
31, 2003 from $146.2 million at December 31, 2002, principally due to the
reduction of backlog at Demag, which was partially offset by increased backlog
at the North American crane businesses. The reduction in Demag's backlog was due
to improvements in production and shipping efficiencies implemented after
Demag's acquisition by Terex.
The increase in the backlog at Terex Aerial Work Platforms to $22.2 million at
December 31, 2003 from $10.0 million at December 31, 2002 was due to increased
sales in the United States, particularly to the rental customer market.
Terex Mining's backlog at December 31, 2003 decreased $14.2 million to $33.6
million, as compared to $47.8 million at December 31, 2002. The decrease was
primarily due to a decrease in orders for surface mining trucks.
The backlog at Terex Roadbuilding, Utility Products and Other increased $44.7
million to $164.7 million at December 31, 2003 from $120.0 million at December
31, 2002, primarily as a result of the acquisitions during 2003 of Commercial
Body, Combatel, Tatra and ATC.
Distribution
Terex distributes its products through a global network of dealers, major
accounts and direct sales to customers.
- 22 -
Terex Construction
Terex distributes heavy construction equipment manufactured by TEL (trucks,
scrapers and replacement parts) primarily through worldwide dealership networks.
TEL's truck dealers are independent businesses, which generally serve the
construction, mining, timber and/or scrap industries. Although these dealers may
carry products from a variety of manufacturers, they generally carry only one
manufacturer's "brand" of each particular type of product. Excavators and wheel
loaders manufactured for Terex in South Korea are sold in North America, only,
through Terex's existing heavy construction equipment dealer network.
Terex distributes compact equipment primarily through a network of independent
dealers and distributors throughout the world. Although some dealers represent
only one of the Terex brands (such as Schaeff, Atlas, Fuchs or Fermec), the
Company has recently focused on developing the dealer network to represent the
full range of compact equipment under the TEREX brand name in both Europe and
North America. In addition, Terex has begun to distribute its compact equipment
in North America through the Terex Aerial Work Platforms segment's sales staff.
Mobile crushing and screening equipment is distributed separately by
Powerscreen, B.L. Pegson and Finlay. Each business maintains a global network of
dealers, predominantly in Europe and the United States. All three brands are
supported in North America by a distribution center located in Louisville,
Kentucky.
Terex Cranes
Terex Cranes markets its products globally, optimizing assorted channel
marketing systems including a distribution network and a direct sales force.
Direct sales are done in certain crane markets like the United States, United
Kingdom, Germany, Spain, Italy, France and Scandinavia to offer comprehensive
service and support to customers. Distribution via a dealer network is often
utilized in other geographic areas.
Terex Aerial Work Platforms
Terex aerial work platform products are distributed under the GENIE and TEREX
brand names principally through a global network of independent dealers, rental
houses and to a lesser extent, national accounts. Terex employs sales
representatives who service these dealers from offices located throughout the
world.
Terex Mining
Terex Mining distributes Unit Rig products and services directly to customers
through its own sales organization, as well as through independent dealers.
Payhauler products are distributed primarily through a dealership network. O&K
hydraulic excavators and after-market parts and services are sold primarily
through an export sales department in Dortmund, Germany, through a global
network of wholly-owned subsidiaries and through dealership networks.
Terex Roadbuilding, Utility Products and Other
Crushing and screening equipment and asphalt pavers are distributed principally
through a worldwide network of independent distributors and dealers.
CMI asphalt reclaimers, stabilizers, profilers and asphalt plants are
principally sold direct to end user customers by the CMI sales force and, to a
lesser extent, through independent dealers and distributors.
Terex sells utility equipment to the utility and municipal markets through a
network of primarily company-owned distributors in North America, including
Terex Utilities South and Terex Utilities West.
Terex sells concrete mixers primarily direct to customers, but concrete mixers
are also available through several dealers in the United States.
Terex light construction products are distributed through a global network of
dealers and national accounts. Terex employs sales representatives who service
these dealers throughout the world.
Construction trailers are distributed primarily through dealers in the United
States and are also sold directly to users when local dealers are not available.
On/off-road heavy duty vehicles for commercial applications are sold in Eastern
Europe, the Middle East and Asia through a network of existing dealers and joint
venture partners. Vehicles sold for military purposes are sold directly to
governments and may include a lengthy direct negotiation process.
- 23 -
Research and Development
The Company maintains engineering staffs at several of its locations who design
new products and improvements in existing product lines. The Company's
engineering expenses are primarily incurred in connection with the improvements
of existing products, efforts to reduce costs of existing products and, in
certain cases, the development of products which may have additional
applications or represent extensions of the existing product line. Such costs
incurred in the development of new products, cost reductions, or improvements to
existing products of continuing operations amounted to $38.6 million, $24.7
million and $6.2 million in 2003, 2002 and 2001, respectively. The increase is
mainly due to the inclusion of Demag and Genie for a full twelve months in 2003.
Both Demag and Genie design and manufacture products which require more
extensive engineering input than many of the Company's other products.
Materials
Principal materials used by the Company in its various manufacturing processes
include steel, castings, engines, tires, hydraulic cylinders, drive trains,
electric controls and motors, and a variety of other commodities and fabricated
or manufactured items. The Company's performance may be impacted from extreme
movements in material pricing and from availability of these materials. For
example, steel prices have increased and steel availability has decreased in
response to higher demand caused from a recovering end-market and higher
consumption of emerging market countries, such as China. In the absence of labor
strikes or other unusual circumstances, substantially all materials are normally
available from multiple suppliers. Current and potential suppliers are evaluated
on a regular basis on their ability to meet the Company's requirements and
standards. The Company actively manages its material supply sourcing and prices,
and may employ various methods to limit risk associated with commodity pricing
and availability.
Competition
The Company faces a competitive global manufacturing market for each of its
products. The Company competes with other manufacturers based on many factors,
in particular the price, performance and reliability of its products. The
Company operates under a best value strategy, where it generally attempts to
offer its customers lower cost products or products that have enhanced
performance characteristics to improve the customer's return on invested
capital. However, in some instances, customers may prefer the pricing,
performance or reliability aspects of a competitor's product despite the
Company's product pricing or performance. The following table shows the primary
competitors for the Company's products in the following categories:
- 24 -
- ------------------------------- ------------------------------------- ------------------------------------------------
Business Segment Products Primary Competitors
- ------------------------------- ------------------------------------- ------------------------------------------------
Terex Construction Articulated off-highway trucks & Volvo, Caterpillar, Moxy, John Deere and Bell
Rigid off-highway trucks
Scrapers Caterpillar and John Deere
Excavators Caterpillar, Komatsu, Volvo, John Deere,
Hitachi and CNH
Loader Backhoes Caterpillar, CNH (Case and New Holland
brands), JCB, Komatsu, Volvo and John Deere
Compaction Equipment Ingersoll-Rand, Caterpillar, Bomag, Amman,
Dynapac and Hamm
Mini Excavators Bobcat (Ingersoll-Rand), Yanmar, Volvo,
Takeuchi, IHI, CNH, Caterpillar, John Deere,
Neuson and Kubota
Midi Excavators Komatsu, Fiat-Hitachi, Volvo and Yanmar
Loading Machines Liebherr, Sennebogen and Caterpillar
Site Dumpers Thwaites and AUSA
Wheel Loaders Caterpillar, Volvo, Kubota, Kawasaki, John
Deere, Komatsu, Hitachi and CNH
Mobile Crushing and Screening Metso Corporation, Extec, McClusky Brothers,
Equipment Parker Plant and Viper International
- ------------------------------- ------------------------------------- ------------------------------------------------
Terex Cranes Mobile Telescopic Cranes Liebherr, Grove Worldwide (Manitowoc),
Tadano-Faun, Link-Belt (Sumitomo Corporation)
and Kato
Tower Cranes Liebherr, Potain (Manitowoc) and MAN Wolff
Lattice Boom Crawler Cranes Manitowoc, Link-Belt (Sumitomo Corporation),
Liebherr, Hitachi and Kobelco
Boom Trucks National Crane (Manitowoc), Palfinger, Hiab,
Fassi and PM
Telescopic Container Stackers Kalmar-Sisu, SMV, CVS Ferrari, Fantuzzi and
Linde
- ------------------------------- ------------------------------------- ------------------------------------------------
Terex Aerial Work Platforms Boom Lifts JLG and Haulotte
Scissor Lifts JLG, Skyjack and Haulotte
Telehandlers Skytrak (JLG), Lull (JLG), Caterpillar,
Gradall (JLG), Bobcat (Ingersoll-Rand), JCB,
CNH and Manitou
- 25 -
- ------------------------------- ------------------------------------- ------------------------------------------------
Terex Mining Large Hydraulic Excavators Hitachi, Komatsu, Liebherr and Caterpillar
High Capacity Surface Mining Trucks Caterpillar, Komatsu, Liebherr and
Euclid/Hitachi
- ------------------------------- ------------------------------------- ------------------------------------------------
Terex Roadbuilding, Utility Fixed Installation Crushing and Metso Corporation, Astec Industries, Ohio
Products & Other Screening Equipment Screen and Parker Plant
Asphalt Pavers Blaw-Knox (Ingersoll-Rand), Caterpillar and
Roadtec (Astec Industries)
Asphalt Mixing Plants Astec Industries, Gencor Corporation, All-Mix,
Dillman Equipment and ADM
Concrete Production Plants Con-E-Co, Erie Strayer, Helco,
Hagen and Stephens
Concrete Mixers McNeilus, Oshkosh, London and Continental
Manufacturing
Concrete Pavers Gomaco
Reclaimers/Stabilizers Caterpillar, Wirtgen and Bomag
Pavement Profilers Caterpillar, Wirtgen and Roadtec (Astec
Industries)
Utility Equipment Altec and Time Manufacturing
Light Towers Allmand Bros., Magnum and Ingersoll-Rand
Power Trowels Multiquip, Allen Engineering and Wacker
Power Buggies Multiquip, Allen Engineering and Wacker
Generators Ingersoll-Rand and Multiquip
Arrow Boards (Detour Lights) Ingersoll-Rand and Multiquip
Construction Trailers Trail King, Talbert, Fontaine, Rogers, Etnyre,
Ranco, Clement, CPS, as well as regional
suppliers
On/Off Road Heavy Duty Vehicles Oshkosh, Stewart and Stevenson
- ------------------------------- ------------------------------------- ------------------------------------------------
Employees
As of December 31, 2003, the Company had approximately 15,050 employees. The
Company considers its relations with its personnel to be good. Approximately 55%
of the Company's employees are represented by labor unions or similar employee
organizations outside the United States which have entered into various separate
collective bargaining agreements with the Company.
- 26 -
Patents, Licenses and Trademarks
The Company makes use of proprietary materials such as patents, trademarks and
trade names in its operations and takes action to protect these rights.
The Company makes use of several significant trademarks and trade names,
including the TEREX, ADVANCE, AMERICAN TRUCK COMPANY, AMERICAN, AMIDA, ATLAS,
BARTELL, BENDINI, BENFORD, BID-WELL, CANICA, CEDARAPIDS, CMI, CMI-CIFALI,
COMEDIL, DEMAG, FERMEC, FINLAY, FRANNA, FUCHS, GENIE, GRAYHOUND, HI-RANGER,
JAQUES, JOHNSON-ROSS, LOAD KING, LORAIN, MORRISON, O&K, P&H, PAYHAULER, PEGSON,
PEINER, POWERSCREEN, PPM, RE-TECH, ROYER, SCHAEFF, SIMPLICITY, STANDARD HAVENS,
TATRA, TELELECT, and UNIT RIG trademarks. The P&H trademark is a registered
trademark of Joy Global, Inc. that a subsidiary of the Company has the right to
use for certain products until 2011 pursuant to a license agreement. The Company
also has the right to use the O&K and Orenstein & Koppel names (which are
registered trademarks of O&K Orenstein & Koppel AG) for most applications in the
mining business for an unlimited period of time. All other trademarks and trade
names of the Company referred to in this Annual Report are registered trademarks
of Terex Corporation or its subsidiaries.
The Company has many patents that it uses in connection with its operations, and
most of the Company's products contain some proprietary components. Many of
these patents and related proprietary technology are important to the production
of particular products of the Company; however, on the whole, the Company's
patents, individually and in the aggregate, are not material to the business of
the Company or its financial results nor does the Company's proprietary
technology provide it with a competitive advantage over its competitors.
The Company protects its patent, trademark and trade name proprietary rights
through registration, confidentiality agreements and litigation to the extent
the Company deems appropriate. The Company owns and maintains trademark
registrations and patents in countries where it conducts business, and monitors
the status of its trademark registrations and patents to maintain them in force
and renew them as required. The duration of these registrations is the maximum
permitted under the law and varies based upon the relevant statutes in the
applicable jurisdiction. The Company also takes further actions to protect its
trademark, trade name and patent rights when circumstances warrant, including
the initiation of legal proceedings if necessary.
Environmental Considerations
The Company generates hazardous and non-hazardous wastes in the normal course of
its manufacturing operations. As a result, the Company is subject to a wide
range of federal, state, local and foreign environmental laws and regulations.
These laws and regulations govern actions that may have adverse environmental
effects, such as discharges to air and water, and also require compliance with
certain practices when handling and disposing of hazardous and non-hazardous
wastes. These laws and regulations would also impose liability for the costs of,
and damages resulting from, cleaning up sites, past spills, disposals and other
releases of hazardous substances, should any of such events occur. No such
incidents have occurred which required the Company to pay material amounts to
comply with such laws and regulations.
Compliance with such laws and regulations has required, and will continue to
require, the Company to make expenditures. The Company does not expect that
these expenditures will have a material adverse effect on its business or
profitability.
Financial Information about Industry Segments, Geographic Areas, Export Sales
and Major Customers
Information regarding foreign and domestic operations, export sales, segment
information and major customers is included in Note T -- "Business Segment
Information" in the Notes to the Consolidated Financial Statements.
Seasonal Factors
The Company's sales are seasonal, with more than half of the Company's sales
being generated in the first two quarters of a calendar year. This seasonality
is a result of the need of the Company's customers to have new equipment
available for the spring, summer and fall construction season. As a result, the
Company tends to use cash to fund its operations during the first half of a
calendar year and generate cash from operations during the second half of the
year.
Working Capital
The Company's businesses are working capital intensive and require funding for
- 27 -
purchases of production and replacement parts inventories, capital expenditures
for repair, replacement and upgrading of existing facilities, as well as trade
financing for receivables from customers and dealers. The Company has
significant debt service requirements, including semi-annual interest payments
on its senior subordinated notes and monthly interest payments on its bank
credit facilities. Management believes that cash generated from operations,
together with availability under the Company's bank credit facilities and cash
on hand, provide the Company with adequate liquidity to meet the Company's
operating and debt service requirements. For more detail on working capital
matters, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
Available Information
The Company maintains a website at www.terex.com. The Company makes available on
its website under "Investors" - "SEC Filings", free of charge, its annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K, and amendments to those reports as soon as reasonably practicable after it
electronically files or furnishes such material with the Securities and Exchange
Commission. In addition, the Company makes available on its website under
"Investors" - "Corporate Governance," free of charge, its Audit Committee
Charter, Compensation Committee Charter, Governance and Nominating Committee
Charter, Corporate Governance Guidelines and Code of Ethics and Conduct. In
addition, the foregoing information is available in print, without charge, to
any stockholder who requests these materials from the Company.
ITEM 2. PROPERTIES
The following table outlines the principal manufacturing, warehouse and office
facilities owned or leased (as indicated below) by the Company and its
subsidiaries:
Business Unit Facility Location Type and Size of Facility
------------- ----------------- -------------------------
Terex (Corporate Offices)...................Westport, Connecticut (1) Office; 19,898 sq. ft.
Terex Construction
Atlas Terex.................................Delmenhorst, Germany Office, manufacturing and warehouse;
224,255 sq. ft.
Atlas Terex.................................Ganderkasee, Germany Office, manufacturing and warehouse;
362,281 sq. ft.
Atlas Terex.................................Loeningen, Germany Manufacturing and warehouse;
130,254 sq. ft.
Atlas Terex.................................Vechta, Germany Manufacturing and warehouse;
280,238 sq. ft.
Atlas UK....................................Hamilton, Scotland Office, manufacturing and warehouse;
118,486 sq. ft.
B. L. Pegson................................Coalville, England Office, manufacturing and warehouse;
204,486 sq. ft.
Finlay......................................Omagh, Northern Ireland (1) Office, manufacturing and warehouse;
152,863 sq. ft.
Fuchs.......................................Bad Schoenborn, Germany Office, manufacturing and warehouse;
237,839 sq. ft.
Powerscreen.................................Dungannon, Northern Ireland (1) Office, manufacturing and warehouse;
330,000 sq. ft.
Schaeff ....................................Langenburg, Germany Office, manufacturing and warehouse;
102,102 sq. ft.
Schaeff ....................................Gerabronn, Germany Office, manufacturing and warehouse;
146,842 sq. ft.
Schaeff ....................................Rothenburg, Germany (2) Office, manufacturing and warehouse;
97,303 sq. ft.
Schaeff ....................................Crailsheim, Germany Office, manufacturing and warehouse;
185,384 sq. ft.
Schaeff.....................................Clausnitz, Germany Office, manufacturing and warehouse;
83,573 sq. ft.
TEL.........................................Motherwell, Scotland (1) Office, manufacturing and warehouse;
473,000 sq. ft.
- 28 -
Terex Compact Equipment,
Benford & Fermec..........................Coventry, England (1) Office, manufacturing and warehouse;
326,000 sq. ft.
TerexLift...................................Perugia, Italy Office, manufacturing and warehouse;
113,834 sq. ft.
Terex Parts Distribution Center.............Southaven, Mississippi (1) Office and warehouse; 505,000 sq. ft.
Terex Cranes
American Crane..............................Wilmington, North Carolina Office, manufacturing and warehouse;
572,200 sq. ft.
Comedil ...................................Fontanafredda, Italy Office, manufacturing and warehouse;
100,682 sq. ft.
Comedil ...................................Milan, Italy (1) Manufacturing and warehouse;
27,000 sq. ft.
Demag.......................................Bierbach, Germany (1) Warehouse and manufacturing;
186,676 sq. ft.
Demag.......................................Pecs, Hungary (1) Office and manufacturing;
75,987 sq. ft.
Demag.......................................Wallerscheid, Germany (1) Office, warehouse and manufacturing;
350,336 sq. ft.
Demag.......................................Zweibrucken, Germany Office, manufacturing and warehouse;
445,203 sq. ft.
PPM S.A.S. .................................Montceau-les-Mines, France Office, manufacturing and warehouse;
418,376 sq. ft.
Terex Cranes - Waverly......................Waverly, Iowa Office, manufacturing and warehouse;
311,920 sq. ft.
Terex Italia................................Crespellano, Italy Office, manufacturing and warehouse;
68,501 sq. ft.
Terex Lifting Australia.....................Brisbane, Australia (1) Office, manufacturing and warehouse;
42,495 sq. ft.
Terex Aerial Work Platforms
Genie.......................................Redmond, Washington (1) Office, manufacturing and warehouse;
1,012,052 sq. ft. (3)
Genie.......................................Moses Lake, Washington (1) Office, manufacturing and warehouse;
422,334 sq. ft. (4)
Terex Handlers..............................Baraga, Michigan Office, manufacturing and warehouse;
53,620 sq. ft.
Terex Mining
O&K Mining..................................Dortmund, Germany (1) Office, manufacturing and warehouse;
775,000 sq. ft.
Unit Rig & Payhauler........................Tulsa, Oklahoma Office and warehouse; 375,587 sq.ft.
Terex Roadbuilding, Utility Products and Other
Amida.......................................Rock Hill, South Carolina. Office, manufacturing and warehouse;
121,020 sq. ft.
Bartell.....................................Brampton, Ontario, Canada Office, manufacturing and warehouse;
32,509 sq. ft.
Bid-Well....................................Canton, South Dakota Office, manufacturing and warehouse;
70,760 sq. ft.
Cedarapids..................................Cedar Rapids, Iowa Office, manufacturing and warehouse;
608,423 sq. ft.
CMI.........................................Oklahoma City, Oklahoma Office, manufacturing and warehouse;
634,592 sq. ft.
- 29 -
CMI--Cifali.................................Cachoeirinha, Brazil Office, manufacturing and warehouse;
83,000 sq. ft.
Jaques......................................Melbourne, Australia (1) Office, manufacturing and warehouse;
36,000 sq. ft.
Jaques Malaysia.............................Subang Jaya, Malaysia (1) Manufacturing and warehouse;
111,200 sq. ft.
Jaques Thailand.............................Chomburi, Thailand Manufacturing;
79,500 sq. ft.
Load King...................................Elk Point, South Dakota Office, manufacturing and warehouse;
92,700 sq. ft.
Simplicity..................................Durand, Michigan Office, manufacturing and warehouse;
167,000 sq. ft.
Tatra.......................................Koprivnice, Czech Republic Office, manufacturing and warehouse;
4,886,907 sq. ft.
Telelect....................................Watertown, South Dakota Office, manufacturing and warehouse;
219,350 sq. ft.
Telelect (Terex Manufacturing)..............Huron, South Dakota Manufacturing;
88,000 sq. ft.
Terex Advance Mixer & ATC...................Fort Wayne, Indiana Office, manufacturing and warehouse;
160,000 sq. ft.
(1) These facilities are either leased or subleased by the indicated entity.
(2) Includes 54,134 sq.ft. which are leased by the indicated entity.
(3) Includes 122,944 sq.ft. of warehouse space subleased to others.
(4) Includes 105,584 sq. ft. of warehouse space subleased to others.
The Company also has numerous owned or leased locations for new machine and
parts sales and distribution and rebuilding of components located worldwide. In
2002 and 2003, the Company acquired the utility equipment distributors Pacific
Utility, Telelect Southeast, Commercial Body and Combatel (which now operate
under the names Terex Utilities South and Terex Utilities West). These
distributors have sales locations throughout the United States.
Management believes that the properties listed above are suitable and adequate
for the Company's use. The Company has determined that certain of its properties
in the United States and elsewhere exceed its requirements. Such properties may
be sold, leased or utilized in another manner and have been excluded from the
above list. The Company is actively marketing a number of these properties.
The majority of the Company's U.S. properties are subject to mortgages in favor
of its bank lenders in connection with its bank credit facilities.
ITEM 3. LEGAL PROCEEDINGS
As described in Note R -- "Litigation and Contingencies" in the Notes to the
Consolidated Financial Statements, the Company is involved in various legal
proceedings, including product liability and workers' compensation liability,
which have arisen in the normal course of its operations and to which the
Company is self-insured for up to $5.0 million and $250 thousand per incident,
respectively. Management believes that the final outcome of such matters will
not have a material adverse effect on the Company's consolidated financial
position.
For information concerning other contingencies and uncertainties, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Contingencies and Uncertainties."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
- 30 -
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
(a) The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the symbol "TEX." The high and low stock prices for the Company's
Common Stock on the NYSE Composite Tape (for the last two completed years) are
as follows:
2003 2002
-------------------------------------- ---------------------------------------
Fourth Third Second First Fourth Third Second First
High........................................ $29.63 $23.50 $21.25 $13.43 $17.82 $22.49 $27.40 $23.79
Low......................................... $18.65 $16.53 $12.34 $9.50 $9.90 $16.33 $21.20 $15.00
No dividends were declared or paid in 2003 or in 2002. Certain of the Company's
debt agreements contain restrictions as to the payment of cash dividends. In
addition, payment of dividends is limited by Delaware law. The Company intends
generally to retain earnings, if any, to fund the development and growth of its
business and to pay down debt. The Company does not plan on paying dividends on
the Common Stock in the near term. Any future payments of cash dividends will
depend upon the financial condition, capital requirements and earnings of the
Company, as well as other factors that the Board of Directors may deem relevant.
As of March 1, 2004, there were 1,397 stockholders of record of the Company's
Common Stock.
On October 21, 2003, the Company issued 98,287 shares of its common stock that
were not registered under the Securities Act of 1933, as amended (the
"Securities Act"). These shares, having a value of approximately $2 million at
the time of issuance, were issued to the five form