Gabelli Best Ideas Conference
December 4, 2008
Forward Looking Statements &
 Non-GAAP Measures
The following presentation contains forward-looking information based on t...
Purpose       To improve the lives of people around the world
          •


Mission       To delight construction, infrast...
Terex Is…

            •   A diversified portfolio of equipment businesses
            •   Positioned for continuing long ...
Terex is Diversified

          Diversified Portfolio of Equipment Businesses
                                            ...
Positioned for Continuing
Long - Term Trends
                       Near Term Price Volatility                            ...
Positioned for Continuing
Long - Term Trends
                                                               EXPENDITURES B...
Positioned for Continuing
    Long-Term Trends
                                                                           ...
Terex is a Leader in Our Industry

$31.6


                  $19.7

                                $10.4            $9.1 ...
Terex is a Leader in Our Industry

      Over 75% of sales for the last 12 months through Sep 30, 2008 were
      generate...
Terex is a Leader in Our Industry
            Q3 2008 LTM After-Tax ROIC-Machinery Industry

                             ...
Leveraging the Power of One Company




                              • Our framework to build
                           ...
Financial Perspective


• 5+ years of strong growth, driven by market conditions and
  an increasingly robust portfolio

•...
Terex to Date:
    Consistent Sales Growth
                          Sales growth since 2003 has been ~90% organic
  Sales...
Developing Markets Growth to Date

                                                DEVELOPING MARKET
        DEVELOPING MA...
Terex to Date:
  Broad-based Profit Growth

Operating Income
 (USD billions)
     $1.2


     $1.0


     $0.8
           ...
Terex to Date:
Growth with Moderate Leverage

                                                                            ...
Return on Invested Capital

        50%
                                                                                  ...
Near Term Outlook

Next four quarters net sales expectations beginning 4Q’08:

    • Mining and Cranes continuing favorabl...
Near Term Actions

Cost Reduction:
    Production level and headcount reductions
•

    Discretionary spending curtailment...
Cash Priorities

 Maintain financial flexibility in current environment
   • No near term debt maturities
   • Current lev...
Summary


• Diversified portfolio – geographic and product

• Positioned for long-term trends

   • Infrastructure

   • D...
Questions?




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terex Gabelli120408

  1. 1. Gabelli Best Ideas Conference December 4, 2008
  2. 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. 3. Purpose To improve the lives of people around the world • Mission To delight construction, infrastructure, mining and • other customers with value-added offerings that exceed their needs To attract the best people by creating a culture that • is safe, exciting, creative, fun, and embraces continuous improvement Vision To be the most responsive company in the industry • as determined by the customer To be the most profitable company in the industry as • measured by Return on Invested Capital (ROIC) To be the best place to work in our industry as • determined by our team members 3
  4. 4. 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 4
  5. 5. Terex is Diversified Diversified Portfolio of Equipment Businesses 2008 YTD Sales by Geography 2008 LTM* Sales by Segment RBU 7% Developing AWP Markets 22% W. Europe Construction 24% 32% 20% Japan / ANZ 9% USA / Cranes MP&M Canada 27% 24% 35% $ 10.4 billion $ 7.8 billion $ 10.4 billion $ 7.8 billion Balanced by business; Balanced geographically 5 * Last Twelve Months sales through Sep 30, 2008
  6. 6. Positioned for Continuing Long - Term Trends Near Term Price Volatility LONG TERM OUTLOOK 160 Oil ($/bbl) Coal (Near Term Futures Contract) 140 120 100 80 60 40 20 0 12/1/97 12/1/98 12/1/99 12/1/00 12/1/01 12/1/02 12/1/03 12/1/04 12/1/05 12/1/06 12/1/07 12/1/08 • Near term commodity price volatility is challenging, as lower anticipated consumption brings down prices, impacting short term production levels • Robust long term outlook for energy remains – driven by advancing consumption in the developing world and continued demand elsewhere • Terex is well positioned to capitalize in Cranes, Mining, and Other businesses * Source: International Energy Agency, Oil Price is average global price, Coal futures price is the NYMEX contract for Central Appalachian Coal 6
  7. 7. Positioned for Continuing Long - Term Trends EXPENDITURES BY TOP 40 MINING COMPANIES ($ Billions) CAPEX* OPEX* 200 $176 60 180 $51 160 $141 50 $134 140 $125 $37 120 40 $95 100 $28 $75 30 80 60 20 40 10 20 0 0 '02 '03 '04 '05 '06 '07 '05 '06 '07 • Recent aggressive investment in global commodities will likely slow near term, but leading producers remain committed to expanding capacity • Per capita commodity consumption in developing countries remains well below developed country norms and will continue to increase over time • This trend directly benefits Terex in Mining, Materials Processing, and other businesses that sell equipment into the mining industry *Source: PWC: “Mine: As Good as it Gets?”, 2008 – capex excludes acquisitions 7
  8. 8. Positioned for Continuing Long-Term Trends GLOBAL RESIDENTIAL GLOBAL NON-RESIDENTIAL $Billions $Billions CONSTRUCTION (REAL 2008 $)* CONSTRUCTION (REAL 2008 $)* $7,000 $8,000 $7,000 $6,000 5.6% CAGR $6,000 3.4 % $5,000 CAGR $5,000 5.6 % $4,000 CAGR 4.2 % 2.2 % $4,000 -3.8 % CAGR CAGR 6.8 % $3,000 CAGR CAGR 1.9 % $3,000 3.6 % CAGR CAGR $2,000 $2,000 $1,000 $1,000 $0 $0 '90'91'92'93'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09'10'11'12'13'14'15'16'17'18 '90'91'92'93'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09'10'11'12'13'14'15'16'17'18 Infrastructure Industrial Other Non-Residential Total Residential • Global non-residential construction growth continuing, at a slower than recent rate but still above historicals • Residential in decline but expected to bottom in 2009 • Long term prospects in construction equipment remain positive * Source: Global Insights, October 30, 2008; 69 countries tracked by GI + 5% to account for rest of world … consistent with global GDP’s 8
  9. 9. Terex is a Leader in Our Industry $31.6 $19.7 $10.4 $9.1 $8.7 $8.1 $5.2 $5.1 $4.8 $4.5 $4.4 $3.7 Caterpillar (1) Hitachi (3) Volvo Liebherr (7) Sandvik (10) CNH Global (8) Deere (5) JCB (7) Doosan (6) (4) Komatsu (2) Terex Oshkosh (9) Based on last twelve months of available Construction Equipment Sales ($’s in Billions) (7) Estimated, as these are privately owned companies: (1) Represents Machinery sales for the last twelve months ended Sep 30, 2008; excludes JCB: 2007 sales of GBP 2.25 billion converted at Dec 31, 2007 GBP/USD rate of Engine and Financial Product sales. 1.9870 (2) Represents Komatsu’s Construction, Mining & Utility Equipment segment as of June 30, Liebherr: 2007 Cranes/Mining/Construction sales of EUR 5.5 billion converted at Dec 2008 converted at an exchange rate of JPY/USD of 106.18 31, 2007 EUR/USD rate of 1.4598 (3) Exchange rate used as of June 30, 2008 of USD/JPY 106.18 (8) Represents CNH Global’s Construction Equipment Segment as of Sep 30, 2008 (4) Represents Volvo’s Construction Equipment segment as of Sep 30, 2008 converted at (9) Represents Access & Concrete Placement equipment sales for the 9 months ended an exchange rate of USD/SEK 6.9252 June 30, 2008 plus Access & Commercial (both concrete & refuse trucks) for the 3 (5) Represents Deere’s Construction and Forestry segment as of October 31, 2008 months ended Sep 30, 2007. (6) Represents 2007 Construction Equipment sales of $1.5 billion converted at an exchange (10) Represents Mining & Construction sales through Jun 30, 2008 converted at an rate at Dec 31, 2007 of KRW/USD 936.07 plus estimated 2007 bobcat sales of $2.9 exchange rate of SEK/USD 6.9252 billion 9
  10. 10. Terex is a Leader in Our Industry Over 75% of sales for the last 12 months through Sep 30, 2008 were generated in markets where Terex has significant market presence AERIAL WORK MP&M CRANES PLATFORMS • Hydraulic Excavators (top 3) • All Terrain Cranes (top 2) • Articulated boom lifts (top 2) • Mining Trucks (#3) • Rough Terrain Cranes (top 3) • Telescopic boom lifts (top 2) • Surface Drills (# 3) • Tower Cranes (#3) • Scissor lifts (top 3) • Crushing & Screening (#1)* • Large Crawlers (#1) • NA Telehandlers (#2) • Highwall Miners (#1) ROADBUILDING AND CONSTRUCTION UTILITIES • Compact Track Loaders (#1) • Front Discharge Mixers (#1) • Material Handlers (#2 or 3) • Insulated Aerials (#2) * Mobile equipment 10
  11. 11. Terex is a Leader in Our Industry Q3 2008 LTM After-Tax ROIC-Machinery Industry • In-line with larger, 40% more vertically 30% 32.9% 32.5% integrated competitors 26.9% 24.4% 20% 23.6% 20.2% 18.1% 10% 8.9% 0% Manit owoc Joy Global Deere Cat erpillar Terex Bucyrus Ast ec Oshkosh Q3 2008 LTM After-Tax ROIC-Diversified Industrials • Better than diversified 30% industrials with higher 23.6% 20% valuations 18.9% 16.9% 13.9% 10% 11.8% 0% Terex Unit ed Technologies Illinois Tool Works Dover Corp. Danaher Corp ROIC is calculated by dividing the sum of the last four quarters’ net operating income after tax by the average of the sum of total stockholders’ equity plus debt less cash and cash equivalents for the most recent last five quarters ended. DE is as of 10/31/08 and JOYG is as of 7/31/08, the remainder are at 9/30/08. CAT and DE do not include the finance arms above. Including the finance arms, DE ROIC is 10.8% and CAT ROIC is 9.7%. MTW Q3 2008 excludes the $198 million loss on currency hedge; OSK excludes $175 million goodwill impairment charge incurred during Q3 2008. 11
  12. 12. Leveraging the Power of One Company • Our framework to build a stronger Terex • Process improvements will assure long term success 12
  13. 13. Financial Perspective • 5+ years of strong growth, driven by market conditions and an increasingly robust portfolio • Committed to core financial principles – Growth with moderate debt leverage – ROIC focused • Near term outlook is mixed but long term remains positive • Core business initiatives that will enhance long-term results 13
  14. 14. Terex to Date: Consistent Sales Growth Sales growth since 2003 has been ~90% organic Sales (USD billions) Operating Income (USD billions) $1.2 $10.0 $1.0 $8.0 $0.8 $6.0 $0.6 $4.0 $0.4 $2.0 $0.2 $0.0 $0.0 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 Q3 LTM Acquisitions: PPM Simon O&K Reedrill Powerscreen, Cedarapids ASV Hydra Fermec SHM CMI, Atlas Schaeff, Demag, Genie 14
  15. 15. Developing Markets Growth to Date DEVELOPING MARKET DEVELOPING MARKET SALES BY BUSINESS ($) SALES GROWTH ($) RBU AWP Africa Construction Middle East S/C America MP&M Russia/ E. Europe Cranes Asia, ex. Japan 2004 2005 2006 2007 2004 2005 2006 2007 Broad Based Global Growth 22% of 2007 sales Strongest In 3 Businesses 42% CAGR 2004 - 2007 15
  16. 16. Terex to Date: Broad-based Profit Growth Operating Income (USD billions) $1.2 $1.0 $0.8 CAGR 82% $0.6 $0.4 $0.2 $0.0 2002 2003 2004 2005 2006 2007 LTM Q3 2008 Aerial Work Platforms Construction Cranes Material Processing & Mining Roadbuilding, Utilities & Other 16
  17. 17. Terex to Date: Growth with Moderate Leverage $10.4 Net Debt Sales $9.1 ($ in billions) $7.6 $6.2 $4.8 $3.9 $2.8 $2.0 $1.9 $1.8 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q3 2008* Net leverage of 1.0x at Q3 2008 provides flexibility • Q3 2008 sales is based on last 12 months sales as of Sept 30, 2008; Net Debt is as of Sept 30, 2008 • Net leverage ratio is defined as debt less cash and cash equivalents divided by last twelve months EBITDA 17
  18. 18. Return on Invested Capital 50% 43% 38% 40% 35% 30% 29% Pre-tax 25% 21% After-tax 24% 20% 12% 14% 10% 10% 3% 0% 2003 2004 2005 2006 2007 Q3 LTM Recent acquisitions of SHM and ASV dampen returns in the short term ROIC is calculated by dividing the sum of the last four quarters’ net operating income after tax by the average of the sum of total stockholders’ equity plus debt less cash and cash equivalents for the last five quarters ended. 18
  19. 19. Near Term Outlook Next four quarters net sales expectations beginning 4Q’08: • Mining and Cranes continuing favorable trends • AWP (30%-40%), Construction (25%-35%) and Materials Processing (15%-20%) negatively impacted by current market conditions • Continued strong US$ would have a negative translation impact Material Cost pressure continues ahead of pricing actions in short term Cost reduction actions underway to adjust to market expectations Focus on Cash 19
  20. 20. Near Term Actions Cost Reduction: Production level and headcount reductions • Discretionary spending curtailment • Facility rationalization • Segment realignment • Cash Generation: Material inflow constrained • Focus on reducing finished goods inventory • Slowing capital spending • 20
  21. 21. Cash Priorities Maintain financial flexibility in current environment • No near term debt maturities • Current leverage of 1x net debt / EBITDA Internal investment with vigilance Value generating acquisitions Returning cash to shareholders • Currently suspended share repurchase program, pending access to credit markets • $1.2 billion authorized through June 2009 ($0.6 B to date) 21
  22. 22. Summary • Diversified portfolio – geographic and product • Positioned for long-term trends • Infrastructure • Developing markets • Leadership position in over 75% of revenue base • Internal initiatives will enhance operating performance • Aggressively responding to changing market and credit conditions 22
  23. 23. Questions? 23
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