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terex B3DAF876-6925-4067-A6D4-892916E9F918_TEX021909

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  • 1. Investor Presentation February 19, 2009
  • 2. Forward Looking Statements & Non-GAAP Measures The following presentation contains forward-looking information based on the current expectations of Terex Corporation. Because forward-looking statements involve risks and uncertainties, actual results could differ materially. Such risks and uncertainties, many of which are beyond the control of Terex, include among others: our business is highly cyclical and weak general economic conditions may affect the sales of its products and its financial results; our business is sensitive to fluctuations in interest rates and government spending; the ability to successfully integrate acquired businesses; the retention of key management personnel; our businesses are very competitive and may be affected by pricing, product initiatives and other actions taken by competitors; the effects of changes in laws and regulations; our business is international in nature and is subject to changes in exchange rates between currencies, as well as international politics; our continued access to capital and ability to obtain parts and components from suppliers on a timely basis at competitive prices; the financial condition of suppliers and customers, and their continued access to capital; our ability to timely manufacture and deliver products to customers; possible work stoppages and other labor matters; our debt outstanding and the need to comply with restrictive covenants contained in our debt agreements; our ability to maintain adequate disclosure controls and procedures, maintain adequate internal controls over financial reporting and file its periodic reports with the SEC on a timely basis; the previously announced investigations by the SEC and the Department of Justice; compliance with applicable environmental laws and regulations; product liability claims and other liabilities arising out of our business; and other factors, risks, uncertainties more specifically set forth in our public filings with the SEC. Actual events or the actual future results of Terex may differ materially from any forward looking statement due to those and other risks, uncertainties and significant factors. The forward-looking statements speak only as of the date of this presentation. Terex expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement included in this presentation to reflect any changes in expectations with regard thereto or any changes in events, conditions, or circumstances on which any such statement is based. Non-GAAP Measures: Terex from time to time refers to various non-GAAP (generally accepted accounting principles) financial measures in this presentation. Terex believes that this information is useful to understanding its operating results and the ongoing performance of its underlying businesses without the impact of special items. See the Investors section of our website www.terex.com for a complete reconciliation. 2
  • 3. Terex Is… • A diversified portfolio of equipment businesses • Positioned for continuing long - term trends • A leader in our industry • Leveraging the Power of One Company AERIAL WORK MATERIALS PROC. CRANES PLATFORMS AND MINING ROADBUILDING AND CONSTRUCTION UTILITIES 3
  • 4. Terex Is Diversified Diversified Portfolio of Equipment Businesses 2008 Sales by Segment 2008 Sales by Geography RBU 7% AWP Developing 21% Markets W. Europe Construction 23% 32% 19% Japan / ANZ 10% MP&M Cranes USA / 24% 29% Canada 35% Balanced by business; Balanced geographically 4
  • 5. Positioned for Long Term Trends 2009 GDP Forecasts: October 2008 versus Current Period % 2009 Global GDP outlook has worsened but remains positive for developing markets *Source: The Economist (economic intelligence unit) 5
  • 6. Terex Is A Leader In Our Industry $3 1.8 $2 2 .0 $9 .9 $9 .1 $8 .1 $7.2 $4 .9 $4 .8 $4 .5 $4 .5 $4 .4 $3 .6 Caterpillar (1) Komatsu (2) Terex (3) Hitachi (4) Liebherr (6) Volvo (5) Sandvik (7) Deere (8) CNH Global (9) JCB (6) Doosan (10) Oshkosh (11) Based on last twelve months of available Construction Equipment Sales ($’s in Billions) (1) Represents Machinery sales for the last twelve months ended December 31, 2008; excludes Engine and Financial Product sales (2) Represents Komatsu’s Construction, Mining & Utility Equipment segment ended December 31, 2008 converted at an exchange rate of JPY/USD of 90.727 (3) Last twelve months ended December 31, 2008 (4) Represents the Construction Machinery segment ended September 30, 2008 converted at an exchange rate of USD/JPY 106.349 (5) Represents Volvo’s Construction Equipment segment as of December 31, 2008 converted at an exchange rate of USD/SEK 7.8247 (6) Estimated, as these are privately owned companies: JCB: 2007 sales of GBP 2.25 billion converted at December 31, 2007 GBP/USD rate of 1.9870 Liebherr: 2007 Cranes/Mining/Construction sales of EUR 5.5 billion converted at December 31, 2007 EUR/USD rate of 1.4598 (7) Represents Mining & Construction sales through December 31, 2008 converted at an exchange rate of SEK/USD 7.8247 (8) Represents Deere’s Construction and Forestry segment last twelve months ended October 31, 2008 (9) Represents CNH Global’s Construction Equipment Segment last twelve months ended December 31, 2008 (10) Represents 2007 Construction Equipment sales of $1.5 billion converted at an exchange rate at December 31, 2007 of KRW/USD 936.07 plus estimated 2007 bobcat sales of $2.9 billion (11) Represents Access & Commercial (both concrete & refuse trucks) for the last twelve months ended December 31, 2008 6
  • 7. Leveraging The Power Of One Company • Our framework to build a stronger Terex • Process improvements for long term benefits 7
  • 8. Near Term Outlook Challenging • Sales trends continue to be impacted by current market conditions with 2009 net sales forecasted to be down 30- 35%, including currency translation of 13% • AWP / Utilities down 35% - 45% • Construction / Roadbuilding down 25% - 35% • Cranes down 25 - 35% • Materials Processing & Mining down 25% - 35% • Mining and Cranes not immune to credit crisis but some stability at the high end 8
  • 9. Aerial Work Platforms $B $2.5 30% 25% $2.0 Current Environment Current Environment 20% $1.5 •• Strong global market share position (top 2) Strong global market share position (top 2) 15% $1.0 10% •• N. America downturn and accelerated N. America downturn and accelerated $0.5 5% downturn in W. Europe back half of 2008 downturn in W. Europe back half of 2008 $0.0 0% •• Long-term growth expected in developing Long-term growth expected in developing 2004 2005 2006 2007 2008 markets markets Sales Gross Margin Op. Margin Terex Response Terex Response Sales by Product Sales by Geography •• Production and head-count reductions Production and head-count reductions 10% 10% 11% 5% •• Temporary factory shutdowns Temporary factory shutdowns 21% 28% •• Rescheduling/delaying of raw material Rescheduling/delaying of raw material deliveries deliveries •• Increased emphasis on refurbishment Increased emphasis on refurbishment 58% 57% •• Continued TBS / /improvement initiatives Continued TBS improvement initiatives 2008 2008 Portable & Other Developing Markets Telehandlers Japan / ANZ Scissors W. Europe Booms USA / Canada 9
  • 10. Construction $B 30% $2.0 25% Current Environment Current Environment $1.5 20% •• Largest market potential but small market Largest market potential but small market 15% position position 10% $1.0 5% •• N. America downturn and accelerated N. America downturn and accelerated 0% downturn in W. Europe back half of ’08 downturn in W. Europe back half of ’08 $0.5 -5% •• Operational improvements - -TBS, Operational improvements TBS, $0.0 -10% distribution, developing markets ––expected distribution, developing markets expected 2004 2005 2006 2007 2008* to drive future profit growth to drive future profit growth Sales Gross Margin Op. Margin Terex Response Terex Response * 2008 operating margin excludes goodwill impairment •• Production & head-count reductions Production & head-count reductions Sales by Product Sales by Geography •• Strong Dollar creates opportunity in N. Strong Dollar creates opportunity in N. 18% 24% America America 1% 17% •• Temporary factory shutdowns Temporary factory shutdowns 36% 58% •• Rescheduling/delaying of raw material Rescheduling/delaying of raw material deliveries deliveries 29% 17% •• Facility consolidations Facility consolidations 2008 2008 •• Continued TBS / /improvement initiatives Continued TBS improvement initiatives Trucks Developing Markets Material Handling Japan / ANZ Heavy W. Europe Compact USA / Canada 10
  • 11. Cranes $B 30% $2.5 25% Current Environment Current Environment $2.0 20% •• Strong global market position (top 3) Strong global market position (top 3) $1.5 •• Infrastructure and energy projects 15% Infrastructure and energy projects $1.0 10% driving strength of larger cranes driving strength of larger cranes (crawlers, ATC’s, larger RT’s) (crawlers, ATC’s, larger RT’s) $0.5 5% •• Tower crane and smaller capacity Tower crane and smaller capacity $0.0 0% 2004 2005 2006 2007 2008 cranes have been negatively impacted cranes have been negatively impacted by credit crisis by credit crisis Sales Gross Margin Op. Margin Terex Response Terex Response Sales by Product Sales by Geography •• Production and head-count reductions Production and head-count reductions 13% 25% •• Facility consolidation Facility consolidation 22% 6% 8% •• Rescheduling/delaying of raw material Rescheduling/delaying of raw material 40% deliveries deliveries 57% •• Continued TBS / /improvement initiatives Continued TBS improvement initiatives 29% 2008 2008 Towers Developing Markets Crawlers Japan / ANZ Other Mobile & Stackers W. Europe ATC / RT USA / Canada 11
  • 12. Materials Processing & Mining $B Materials Processing Materials Processing $2.5 30% Current Environment Current Environment $2.0 25% • • Leading global market position in mobile products Leading global market position in mobile products 20% $1.5 • • Accelerated global downturn in back half of 2008 Accelerated global downturn in back half of 2008 15% • • Long-term growth expected in developing markets Long-term growth expected in developing markets $1.0 10% Terex Response Terex Response $0.5 5% • • Production and head-count reductions Production and head-count reductions $0.0 0% • • Temporary factory shutdowns Temporary factory shutdowns 2004 2005 2006 2007 2008 • • Rescheduling/delaying of raw material deliveries Rescheduling/delaying of raw material deliveries Sales Gross Margin Op. Margin • • Continued TBS / /improvement initiatives Continued TBS improvement initiatives Sales by Product Sales by Geography Mining Mining • • Strong global market position (top 3) Strong global market position (top 3) 40% 33% • • Significant commodities volatility Significant commodities volatility 11% 26% • • Some rescheduling / /cancellations of order backlog Some rescheduling cancellations of order backlog 14% 15% Terex Response Terex Response 35% • • Reconfirming backlog and delivery schedules Reconfirming backlog and delivery schedules 26% • • More stringent production scheduling More stringent production scheduling 2008 2008 • • Increased emphasis on customer support for installed Increased emphasis on customer support for installed Materials Processing Developing Markets base (parts & service) base (parts & service) Drills/ Other Japan / ANZ Trucks W. Europe • • Continued TBS / /improvement initiatives Continued TBS improvement initiatives Shovels USA / Canada 12
  • 13. Terex Response To Environment • Focus on customers • Developing markets distribution development, large infrastructure projects, localized service and support • Increased utilization of Terex Financial Services • Customer support / refurbishment / parts and service • Internal cash generation • Discipline on terms and conditions • Raw material demand planning and scheduling vigilance • Capital spending scrutiny • Discretionary spending – wage freeze, benefit reductions, travel curtailment and reduced trade show activity … • Internal improvement initiatives continue • Right-sizing business for anticipated demand levels – expect in excess of 5,000 jobs reduced from June 2008 employment levels 13
  • 14. Terex To Date: Growth With Moderate Leverage Net Debt $9.9 Sales $9.1 $7.6 ($ in billions) $6.2 $4.8 $3.9 $2.8 $1.9 $2.0 $1.8 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Net leverage of 1.0x at year end 2008 provides flexibility • Net leverage ratio is defined as debt less cash and cash equivalents divided by last twelve months EBITDA 14
  • 15. Terex Debt Profile Major components of debt include: • $700 million Revolver - July 2012 • $195 million Term Loan* - July 2013 • $300 million 7 3/8% Notes - January 2014 • $800 million 8.00% Notes - November 2017 Liquidity of $1,067 million at December 31, 2008, including: • Cash of $484 million • Revolver availability of $583 million • Working capital reductions Seeking waiver to amend fixed charge covenant related to credit facility No near-term debt maturities Adequate liquidity * Term Loan balance as of Dec 31, 2008 15
  • 16. Summary • Diversified portfolio – geographic and product • Leadership position in over 75% of revenue base • Positioned for long-term trends • Near term outlook challenging - aggressively responding to changing market conditions • Internal initiatives will enhance operating performance • No near term debt maturities, adequate liquidity 16
  • 17. Questions? 17