1 Terex Corporation Overview
2 Terex Corporation At-A-Glance
4 Chairman’s Message
8 Terex Aerial Work Platforms
12 Terex Construction
16 Terex Cranes
20 Terex Materials Processing & Mining
24 Terex Roadbuilding, Utility Products and Other
28 Directors, Officers and Business Operations
31 Annual Report on Form 10-K
IBC Shareholder Information
T E R E X C O R P O R AT I O N
Terex Corporation is a diversified global
manufacturer of a broad range of equip-
ment for the construction, infrastructure,
quarrying, recycling, surface mining,
shipping, transportation, refining, utility,
and maintenance industries.
We are driven by our mission statement
of delighting customers with value added
offerings that exceed their current and
Our products are manufactured in
50 facilities in North America, South
America, Europe, Asia, and Australia
and are marketed in more than 170
countries. They are sold primarily
through a global network of dealers
and distributors, major accounts, and
direct sales to customers.
TEREX CORPORATION AT - A-GLANCE
AERIAL WORK PLATFORMS Telescopic Booms 24%
Articulating Booms 25%
Scissor Lifts 23%
Light Construction 6%
Portable Aerial Work Platforms 4%
Compact Construction 40%
Off-Highway Trucks 24%
Heavy Construction 36%
Mobile Telescopic Cranes 53%
Lattice Boom Crawler Cranes 14%
Truck-Mounted Cranes 11%
Tower Cranes 15%
MATERIALS PROCESSING & MINING Hydraulic Mining Shovels 25%
Mining Trucks 13%
Drills and Drilling Tools 11%
Crushing and Screening 51%
Utility Equipment 44%
PRODUCTS AND OTHER Asphalt and Concrete 28%
Concrete Mixing Trucks 24%
2 TEREX CORPORATION 2006 ANNUAL REPORT
PRODUCTS MANUFACTURING FACILITIES
Aerial work platforms Redmond & Moses Lake, Washington, USA; Perugia, Italy
Telehandlers Baraga, Michigan, USA; Redmond, Washington, USA; Perugia, Italy
Trailer-mounted light towers Rock Hill, South Carolina, USA
Generators Rock Hill, South Carolina, USA
Construction trailers Elk Point, South Dakota, USA
Power buggies Rock Hill, South Carolina, USA
Articulated and off-highway rigid haul trucks Motherwell, Scotland
Excavators Ganderkesee, Germany
Wheel loaders Crailsheim, Germany
Truck-mounted articulated hydraulic cranes Delmenhorst, Germany
Material handlers Bad Schoenborn & Ganderkesee, Germany; Coventry, England
Loader backhoes Coventry, England
Compaction equipment, site dumpers Coventry, England
Mini and midi excavators Gerabronn & Rothenburg, Germany
Scrapers Motherwell, Scotland
Pumps and gear boxes Peterhead, Scotland
Rough terrain cranes Waverly, Iowa, USA; Crespellano, Italy
Truck cranes Waverly, Iowa, USA; Luzhou, China; Montceau-les-Mines, France
All-terrain cranes Montceau-les-Mines, France; Zweibruecken & Wallerscheid, Germany
Lift and carry cranes Brisbane, Australia
Tower cranes Fontanafredda & Milan, Italy; Zweibruecken, Germany; Wilmington, North Carolina, USA
Lattice boom crawler cranes Wilmington, North Carolina, USA; Zweibruecken, Germany
Truck-mounted cranes Waverly, Iowa, USA
Telescopic container stackers Montceau-les-Mines, France
Hydraulic mining excavators Dortmund, Germany
High capacity surface mining trucks Acuña, Mexico
Mobile screens and trommels Dungannon & Omagh, Northern Ireland
Mobile crushers Coalville, England
Crushers and screening equipment Cedar Rapids, Iowa, USA; Durand, Michigan, USA; Melbourne, Australia;
Subang Jaya, Malaysia; Chomburi, Thailand
Drilling equipment Denison, Texas, USA; Southowram, England
Asphalt pavers Cedar Rapids, Iowa, USA; Cachoerinha, Brazil
Asphalt plants Oklahoma City, Oklahoma, USA; Cachoerinha, Brazil
Concrete plants Oklahoma City, Oklahoma, USA
Concrete mixer trucks Fort Wayne, Indiana, USA
Concrete pavers Oklahoma City, Oklahoma, USA; Canton, South Dakota, USA; Opglabbeek, Belgium
Pavement profilers, reclaimers/stabilizers Oklahoma City, Oklahoma, USA
Landfill compactors Oklahoma City, Oklahoma, USA
Utility aerial devices, digger derricks, cable placers Watertown, South Dakota, USA
For Terex, 2006 was a very good year. We reported record net We are proud of our accomplishments. We are excited about
sales of more than $7.6 billion, propelled by a strengthening and our prospects. And we are eager to implement change.
powerful global economic tailwind. We improved our balance
WHAT HAVE WE ACCOMPLISHED SO FAR?
sheet, resulting in a record low debt (less cash)-to-capital ratio
We have a strong record of organic and acquisition related
of 4.7 percent.1 For our shareholders, it was a year of record
growth. Since 1995, we have grown our net sales, on average,
positive stock performance, including the addition of our stock
28 percent each year, and since 2002, which marked the
to the prestigious Standard & Poor’s 500 Index.
end of our last significant acquisition, we have continued to
However, as we have said before, the best is yet to come. That’s grow our net sales 28 percent each year with just a few
not to say that there won’t be downturns or significant issues, small acquisitions. The strength of many of our end-markets
or even surprises, in the future. These are as inevitable as definitely helped our recent growth, but so did the choices
they are unwanted. Even Wall Street can be fickle in its view we made that positioned Terex to take advantage of
over the short term. Consequently, the best protection for our growth opportunities.
shareholders, team members and customers is for us to focus
Add to this growth story a strong record of profitability. Since
on our operating and financial performance, eliminate waste,
1996, we have grown our net income at a 32 percent average
and strive for continuous improvement.
annual rate. On a Return on Invested Capital2 basis, we
We continue to view Terex as a young company, with significantly delivered a very strong 38 percent performance in 2006;
more potential in front of us than past successes behind us. that’s almost quadruple the results we posted in 2002! We
There is no doubt that Terex is maturing. We are building the think we have implemented a winning model for returns.
operating capability and strength of our franchise. We are doing
In an effort to establish a franchise that is well positioned to
this with great leadership and a global footprint. And we are
produce profitability over the course of an economic cycle,
still in the early days of this evolution.
we have assembled a diverse franchise of construction,
4 TEREX CORPORATION 2006 ANNUAL REPORT
WE CONTINUE TO VIEW TEREX AS A YOUNG COMPANY,
WITH SIGNIFICANTLY MORE POTENTIAL IN FRONT OF US
THAN PAST SUCCESSES BEHIND US.
mining and infrastructure products. Today we are the third operations, and financial results. This requires continuous
largest company in the construction, mining and infrastructure leadership improvements. This also requires a level of financial
equipment industry. With the historic driver of our product investment on initiatives that we simply could not have pursued
breadth being acquisitions, we have successfully taken in years past when we did not have the capability or the financial
disparate product lines and weaved them together into a resources to support such projects.
well-rounded product portfolio. There is, however, more
We need to become more of a learning organization to add
work to do in this process.
to our action based orientation. The Terex culture has been
great at making things happen, and making them happen
As a result of the actions and events mentioned above, we
quickly. Now we need to make sure we make the right
have delivered excellent returns to our shareholders. Since
things happen, and that we are continuous learners and
1995, our total shareholder returns have averaged 35 per-
strive for continuous improvement in everything we do. And
cent per year through year end 2006, superior results when
we need to sustain our rapid pace of activity to avoid the
compared with all others in our peer machinery group.
plague of bureaucracy.
WHAT DO WE NEED TO ACCOMPLISH?
HOW DO WE PLAN TO ACCOMPLISH THIS?
First, we need to simply continue what we have started. Growth,
We will employ the Terex Business System, or TBS, as the
profit improvement, geographic diversification, and shareholder
framework for change and improvement of our Company.
returns remain the important focus areas of our business.
TBS provides a blueprint for us to build a process around
These measures reflect our success with the multitude of
continuous improvement and provides the tools we will use
integration and operational improvement initiatives that are
to shape the Company’s future. See Page 7 for a detailed
ongoing in our business today. And there is significant upside
description of TBS.
yet to be realized.
We will continue to challenge the status quo. We have been
We need to deepen our capabilities, meaning our development
a change agent within our industry. We need to continue to
toward world class and sustainable achievements in marketing,
TBS PROVIDES A BLUEPRINT FOR US TO BUILD A PROCESS
AROUND CONTINUOUS IMPROVEMENT AND PROVIDES THE
TOOLS WE WILL USE TO SHAPE THE COMPANY’S FUTURE.
take risks and seek openings that can be exploited in the And finally, we plan to stretch and challenge the Terex
marketplace. We firmly believe the future looks positive for organization of more than 18,000 team members worldwide.
our industry, but we need to get a bigger share of the pie and We have established a “12x12 in ’10” goal, meaning $12
establish ourselves as a company of prominence among the billion of net sales with a 12 percent operating margin in
customer base. Delivering value and challenging the incumbent 2010. This will not happen easily, and we have to be
is part of our make-up. willing to fail (and learn!) if we want to mature. We have
challenged our team to achieve lofty goals in the past, and
We will continue to work on governance and leadership. Our
our organization rose to the challenge and delivered.
Board of Directors has been strengthened by the addition of
Oren Shaffer, and we thank J.C. Watts for his service. The To you, our shareholders, we cannot promise consistent
additions of Tom Riordan, (President and Chief Operating success. But we can promise an unwavering commitment
Officer), Tim Ford (President, Aerial Work Platforms), and Bob to building value into everything we do. We believe that
Isaman (President, Construction) to the Terex management hard work, creativity, and integrity produce results.
team strengthen our leadership. And we will continue to
We remain proud of our historical achievements and excited
broaden our team’s bench strength. We have been fortunate
about our future prospects. We thank you for your support in
to have little unplanned turnover and we want to keep it this
the past and we hope we can earn your continued support.
way as we continue to strengthen all areas of our business.
Debt (less cash)-to-capital ratio is the ratio of net debt to the sum of net debt and total
Ronald M. DeFeo
stockholders’ equity. Net debt is calculated using the Consolidated Balance Sheet amounts
for Notes payable and current portion of Long-term debt plus Long-term debt, less current
portion, less Cash and Cash Equivalents.
Chairman and Chief Executive Officer
Return on Invested Capital is calculated by Terex by dividing the last four quarters’ Income
from operations by the average of the sum of Total stockholders’ equity plus Debt less Cash
and cash equivalents for the last five quarters ended Consolidated Balance Sheets.
6 TEREX CORPORATION 2006 ANNUAL REPORT
THE TEREX BUSINESS SYSTEM
This is a journey, and although we are still early in this
journey, I am pleased to see the enthusiasm with which the
Terex organization worldwide has rallied around this critical
and transformational strategic initiative.
TBS is based on lean principles and lean thinking as applied
to every aspect of our business. The core applications of
lean thinking involve the promotion of a culture of continuous
improvement and the removal of waste (anything that does
not add value) at every organizational level of the Company.
Terex intends to communicate these principles to all of our
personnel throughout the Company. This is a long-term project
In 2005, we introduced the Terex Business System or “TBS.”
— one that will support our activities for years to come.
The Terex Business System is the framework around which
we are building a better Company, enabling each of our USING TBS AS A FRAMEWORK, WE HAVE FOCUSED
businesses to reach levels of performance they could not ON A NUMBER OF KEY STRATEGIC INITIATIVES TO
achieve alone. While Terex has a history of buying businesses ADVANCE THE COMPANY. THESE ARE:
and making them better, this has been accomplished largely • Think Terex – Operating as a unified Company, rather
on a standalone operational basis. Going forward, TBS will than a portfolio of individual businesses, combining
provide the unifying focus. the strengths of many different people, products and
technologies under one global umbrella.
THESE FOUR MAIN PILLARS COMPRISE THE
• Developing Operational Excellence in the Supply Chain –
ESSENCE OF TBS:
Viewing the Company’s diverse supply base as potential
• Achieving Intense Customer Focus
suppliers for all of Terex’s operations, focusing on gaining
• Planning Excellence and Annual Deployment efficiencies based on our global purchasing power in a
way that transcends individual business units.
• Developing Operational Excellence Across the Entire
Value Chain • Customer Driven Business Processes – Becoming more
customer-centric and making it easier for customers to
• Rapidly Delivering New Products and Services
do business with us, with the goal of Terex being the
In addition to these pillars, we determined that in order to
most customer responsive company in our industry.
be successful in our transformation, TBS had to have as
• Delivering Diverse Products and Services to Diverse End-
its foundation: leadership commitment for competitive
Markets – Reducing the effect of potential cyclical changes
advantage, superb human resource practices, and an
in any one product category or geographic market through
unwavering mindset of continuous improvement dedicated
acquisitions, development of new products, and focused
to implementing customer driven business processes.
expansion of the geographic reach of our products.
TEREX AERIAL WORK PLATFORMS BLUEPRINT FOR
Full page: The Genie® GSTM-3232
electric self-propelled scissor offers
an outstanding solution for increasing
worksite productivity. An automatic
leveling hydraulic outrigger system
levels the machine on sloped surfaces
up to 5° for added versatility. With a
narrow 32 inch chassis, dual front-
wheel drive, and zero inside turning
radius, the GSTM-3232 can easily
maneuver into tight workspaces.
Our Terex Aerial Work Platforms (AWP) segment set records for for Terex® trailer-mounted light towers, construction trailers, power
both sales growth and profitability in 2006. This outstanding buggies, and generators. We integrated the sales and aftermarket
performance was driven by strong order volume from the North support teams for these various products during 2006 to further
American rental channel combined with increasing demand from improve our customer service.
international markets. Demand remained strong through the fourth
With the momentum of a strong year behind us, the AWP team
quarter, which historically is the slowest period for aerial work
introduced four new products at the 2007 American Rental
Association show in February: The ZTM40/23N Self-Propelled
The segment turned in a strong operating margin of 17.8 percent Articulating Boom; GSTM-3232 Self-Propelled Scissor Lift;
for the year, compared to 12.9 percent in 2005, a direct reflection redesigned GTHTM-1048 and GTHTM-1056 Telehandlers; and the
of the commitment shown by Terex team members to enhancing Terex® HFT 70RS Rental Equipment Trailer.
production efficiency and improving product design through the
We are forecasting that 2007 demand for our AWP products will
use of lean manufacturing techniques.
remain strong in the U.S. market, and we expect accelerating
International demand was robust for a variety of AWP products, growth from overseas markets. In fact, we expect overseas demand
with one third of AWP net sales in 2006 generated from outside of to account for about 40 percent of our AWP net sales in 2007, up
the United States. To meet increased European demand, we began from a third of AWP net sales in 2006.
production of an articulating Z-boom model in the first quarter of
Genie marked its 40th year in business in 2006 by winning
2007 at one of our facilities in Italy. We also see new interest in
key supplier awards from Hertz, Volvo and CAT Rental Stores. A
the AWP products from such markets as the Middle East and Russia,
leader in implementing the Terex Business System, our Aerial
increasing the geographic diversification of our customer base.
Work Platforms segment is better positioned than ever to compete
Our AWP segment designs, manufactures and markets a diverse on a global scale through high quality products, unrivaled
product line under the Genie brand that includes aerial work
customer service and support, and utilization of lean
platforms, material lifts, self-propelled telescopic and articulated manufacturing principles.
booms, scissor lifts, telehandlers, and trailer-mounted articulating
booms. In addition, this segment assumed responsibility in 2006
8 TEREX CORPORATION 2006 ANNUAL REPORT
AERIAL WORK PLATFORMS
04 05 06
SALES BY GEOGRAPHY
North America 63%
Top: The Genie® S™-60 HC increases productivity with industry leading-
capacity. Its three-person capacity platform holds 340 kg (750 lbs.) at
Rest of World 4%
the maximum horizontal outreach of 15.48 m (50 ft. 10 in.) or 567 kg
(1,250 lbs.) up to 12.39 m (40 ft. 8 in.).
Bottom: Powerful features such as four-wheel drive, four-wheel steer and
a turbo-charged diesel engine make the Genie® GTH™-844 a practical
choice for almost any worksite. A frame-leveling chassis allows it to pick
up or place loads on side slopes up to 10°.
TEREX C0NSTRUCTION BLUEPRINT FOR
The new Terex® TC210 LC crawler
excavator consumes less fuel thanks
to a new hydraulics system. The
standard air-conditioned cabin
provides the operator both comfort
and enhanced all-around visibility.
Our Construction segment introduced 26 new products during 2006. increase cash generation, will improve the performance of our
These product launches included a variety of product enhancements Construction group to a level more consistent with the rest of
designed to improve the performance and availability of our equipment the industry.
on the job site, which translates into improved financial returns for
Looking forward, the markets in China, India and the rest of Asia
our customers. We offer off-highway rigid and articulated haul
offer significant opportunities for growth for our Construction seg-
trucks, hydraulic excavators, wheel loaders, loader backhoes, mini
ment. Our Scotland-based heavy truck operation established a joint
and midi excavators, material handlers, pumps, gear boxes, scrap-
venture with Inner Mongolia-based North Hauler Limited 20 years
ers, truck mounted articulated hydraulic cranes, site dumpers, road
ago to sell older generation trucks into China. We recently have been
graders and compaction equipment. Our Construction segment man-
expanding this very successful relationship to include the latest gen-
ufactures its products in the United Kingdom and Germany, and is
eration in our German designed hydraulic excavators and products
developing a number of facilities in China.
outside of our Construction segment, including our Terex Mining haul
While our results for 2006 highlighted improvement in several of trucks. Our multiple joint ventures and “greenfield” developments in
our Construction businesses over the prior year, it is clear that China illustrate our commitment to becoming a significant participant
considerable work remains to be accomplished in order for this in the Asian market.
business to achieve its true potential. The fourth quarter showed the
We are also excited about our plans to improve our North American
most improvement versus the prior year, reflecting strong European
distribution network for Construction equipment. We are in the early
demand for compact construction equipment and global demand for
stages of our “Dealer of the Future” initiative. This initiative is
heavy trucks, spurred on by favorable non-residential construction
designed to improve the financial returns available to our dealers,
trends worldwide. Late in 2006, we hired a new President for the
allowing us to attract larger and more established partners. Dealers
Construction segment, an individual with extensive experience in
will benefit by minimizing their required investment in finished goods
production and sourcing in developing countries. We are aggressively
inventory and, instead, will be able to focus their capital on investing
attacking our costs through Terex-wide procurement initiatives and
in higher return service capabilities and rental fleets. Our customers
by seeking to source from lower cost countries. We are confident
will benefit from the greater service presence and opportunity to pur-
that our commitment to the Terex Business System and lean manufac-
chase the entire product line from a stronger dealer network. When
turing principles, along with focused programs to improve aftermarket
our dealers and customers benefit, we benefit too, through higher
support, accomplish geographic expansion, improve margins and
sales and improved profitability.
12 TEREX CORPORATION 2006 ANNUAL REPORT
Industrial Wheel Loader
04 05 06
SALES BY GEOGRAPHY
North America 19%
Top: Terex® TR 45 off-highway rigid frame trucks are used all over the
globe in large infrastructure and construction projects.
Rest of World 1%
Bottom: Terex® TL 260 industrial wheel loaders are at work in a wide
variety of applications including non-residential construction, quarries,
and airport and industrial facility snow removal.
TEREX CRANES BLUEPRINT FOR
Full page: The Terex® Demag AC 70
is the most compact 70-ton (80-ton
US) telescopic boom crane on the
market, with a transport length of
only 9.96 m (32.7 ft.). One of the
highly successful City class models, it
also features a 52 m (171 ft.) main
boom, the longest in its class.
Terex Cranes demonstrated its world class project management
Terex designs, builds and markets mobile telescopic cranes, tower
capabilities in 2006 with the delivery to the U.S. Marine Corps of
cranes, lattice boom crawler cranes, truck-mounted cranes and
the first MAC-50 all-terrain cranes. Based on the Terex® Demag
telescopic container stackers for the world market at facilities in
AC-50-1 commercial crane built in Germany, the military model
the United States, Germany, France, Australia, Italy and China.
was modified to provide salt water fording capability and meet
Terex Cranes enjoyed a truly outstanding year in 2006, recording
other tough specifications. These cranes will be supported
sales of better than $1.7 billion, up from approximately $1.3 billion
logistically through the Terex Cranes facility located in Wilmington,
in 2005. More importantly, Terex Cranes is well positioned for
North Carolina. A full contract for 130 cranes would be worth
additional growth in 2007 and beyond. The worldwide market for
cranes is robust and no other company offers our wide selection
The heritage of Terex Cranes can be traced back to the late 1800s.
of lifting equipment, including some of the most technologically
Today, our proven technologies and commitment to product support
advanced, powerful and reliable machines available. To address
continue to result in greater productivity, lower operational costs
our order backlog and improve our ability to meet world demand,
and a higher return on investment for our customers.
we have ramped up production at virtually all of our plants and are
continually looking for ways to expand production further.
In April 2006, Terex acquired a controlling 50 percent interest
in Sichuan Changjiang Engineering Crane Co., Ltd., a leading
producer in China of on-road truck cranes with lifting capacities
from 8 to 160 tons (9 to 176 US-tons). This investment is already
contributing positively to the segment, accounting for approxi-
mately 18 percent of the growth in net sales for Terex Cranes
during 2006. In addition to the Changjiang Crane acquisition
providing us with significant growth opportunities both within and
outside China, we hope to tap into Changjiang Crane’s supplier
base to help improve our component costs globally.
16 TEREX CORPORATION 2006 ANNUAL REPORT
04 05 06
SALES BY GEOGRAPHY
North America 26%
Asia/Middle East 19%
Top: Terex® Comedil flat top tower cranes have no A-frame above the
jib, reducing costs and assembly time. They are assembled on site in one
Rest of World 3% to two days and can increase in height with the project. The CTT 561A
models shown have a maximum freestanding height of 84 m (276 ft.).
Bottom: The Terex® American HC 165 crawler crane can lift 149.7 tons
(165 US-tons) and has a maximum jib length of 97.5 m (320 ft.). Lattice
boom crawler cranes are designed to lift materials on rough terrain and can
maneuver while bearing a load.
TEREX MATERIALS PROCESSING & MINING BLUEPRINT FOR
Full page: The Terex® O&K RH 200 is
a giant excavator designed to meet
the severe conditions of mining
applications. Its features include an
independent oil cooling system and
Terex designs, builds and markets hydraulic mining excavators, the Terex Reedrill drilling equipment operation to better serve
high capacity surface mining trucks, drilling equipment, crushers, customers around the globe. Improved customer service and
screens, feeders, washers and trommels at various plants worldwide, support, along with enhanced growth opportunities for the full
including in North America, Germany, Australia, the United Kingdom range of Terex products throughout Sub-Saharan Africa, provided
and in Asia. The Terex O&K RH series of excavators includes the
the rationale for the sale of our Southern Africa distribution
world’s largest mobile hydraulic excavator, capable of moving up to business to Imperial Holdings, which closed late in the year.
91 tons (100 US-tons) in a single pass. Terex is one of the world’s
In China, Terex received a $150 million order in April 2006 to
leading manufacturers of mobile crushing and screening equipment.
supply 55 Terex® Unit Rig rigid 240-ton and 360-ton class off-
The emerging market economies of China, India, Latin America highway haul trucks to a Chinese state-owned company for use in
and Russia are helping to drive strong overall demand for Terex an open pit coal mine. The ability of the Terex MPM segment to
Materials Processing & Mining (MPM) equipment. Large hydraulic compete on a global scale was again demonstrated in February
mining excavator deliveries and the continued growth of our mobile 2007 when we were awarded a $93 million order by Fortescue
crushing and screening product lines led the segment’s impressive Metals Group Ltd. to supply twenty MT3700AC 205-ton capacity
net sales increase to over $1.6 billion in 2006, up from less than haul trucks, three RH170 excavators and four RH340 excavators
$1.4 billion in the previous year. The gross profit margin rose to to be used in a new iron ore mining operation in Australia. Most
21.0 percent in 2006 from 17.2 percent in 2005. of the equipment is scheduled to be delivered in the second half
Worldwide commodity demand and infrastructure building are
expected to remain strong over the next several years, providing The Terex MPM segment is well positioned to compete in the
the cornerstone for the MPM segment’s growth. In addition, world market as we ramp up production to meet growing demand,
the increasing volume of Terex MPM equipment in the field will utilize joint ventures and distribution agreements to better
simultaneously improve our future parts and service sales outlook. penetrate select markets and continue to strive to exceed our
In 2006, Terex completed the acquisition of Halco Holdings Limited,
a leading worldwide manufacturer of down-the-hole drill bits
and hammers for drills, and combined the Halco business with
20 TEREX CORPORATION 2006 ANNUAL REPORT
MATERIALS PROCESSING & MINING
Terex Unit Rig
04 05 06
SALES BY GEOGRAPHY
North America 30%
Asia/Middle East 11%
Top: Terex® Unit Rig surface mining trucks use huge diesel engines that
drive alternators providing power to drive electric motors in each of the
Rest of World 14% rear wheels. The MT 5500 can haul 326 tons (360 US-tons).
Bottom: The Terex® Powerscreen Horizon 6203 tracked vibratory screener
can process 800 tons (882 US-tons) an hour of sand, gravel, quarry
rock, construction waste and other materials.
TEREX ROADBUILDING, UTILITY PRODUCTS AND OTHER
Full page: The Terex® Cedarapids
CR462 paver with a 3.0 m (10 ft.)
electric screed features the patented
SmartracTM rubber track drive system
and includes the Terex® Cedarapids
exclusive Frame Raise and Three-Point
suspension systems. This versatile
commercial and mainline paver is
capable of paving a wide variety of
applications at widths ranging from
3.1 to 8.5 m (10 to 28 ft.).
This Terex business segment offers a diverse range of products for the Top 100 New Products, and Better Roads Top Rollout 2005. Terex
roadbuilding, utility and construction industries. These products include Roadbuilding awards also included the Construction Equipment Top
pavement profilers, reclaimers, stabilizers, asphalt plants, asphalt pavers, 100 New Products award for the PR950 Milling Machine, and two
concrete plants, concrete pavers, landfill compactors, front and rear from Better Roads Top Rollout 2005 for the E150P.
discharge concrete mixer trucks, utility aerial devices and digger derricks.
In 2006, the Company sold its controlling interest in Tatra a.s., a
Our plants are located in the United States, Belgium and Brazil.
Czech-based manufacturer of heavy duty on and off road trucks for
Our Terex Roadbuilding, Utility Products and Other segment demonstrated commercial and military applications, to a group of investors in that
marked improvement in 2006, with net sales of $746 million, up from country. After detailed analysis, we determined that Tatra was not a
$665 million in the prior year, with growth in most business units and core operation and no longer fit with our long-term strategy.
product categories. End markets in the United States showed improvement,
Our 2007 outlook for this segment is optimistic, due to increased
and our Brazilian roadbuilding operation continued to grow.
investment in United States infrastructure needs, including roadbuilding
Terex features the industry’s broadest line of asphalt and concrete and energy projects linked to passage of federal spending bills, tempered
equipment for preparing, paving, maintaining and reclaiming roads and somewhat by expected softness in the concrete mixer truck business
bridges. Our utility equipment features advanced technologies backed due to a slowdown in residential construction.
by a network of service centers and mobile technicians. In late 2006,
Terex Financial Services (TFS), whose financial results are consolidated
Terex Utilities introduced its HRX-55® Overcenter Material Handling
as part of this segment, provides a variety of competitive financing
Device outfitted for the first time on a Peterbuilt hybrid-electric medium
solutions to our customers to facilitate the sale of Terex equipment
duty truck in response to customer requirements for quieter equipment
worldwide. As a relatively new group within Terex, TFS has been
and greater fuel economy.
historically focused on the United States and Western European
Terex Roadbuilding continues its history of innovation and in 2006 was markets, but is aggressively working to expand its global presence.
the proud recipient of several prestigious equipment industry awards. Besides the obvious benefits of meeting and exceeding our customer
Our Terex® Cedarapids CR662 RoadMix machine received three awards expectations for financing solutions, TFS offers the potential for
– from Equipment World Innovations 2006, Construction Equipment generating a solid financial return in the future.
24 TEREX CORPORATION 2006 ANNUAL REPORT
ROADBUILDING, UTILITY PRODUCTS AND OTHER
Material Transfer Vehicle
Commander Digger Derrick
04 05 06
SALES BY GEOGRAPHY
North America 89%
Top: The Terex® Cedarapids CR662RM RoadMix combines a remix
anti-segregation system with a material transfer vehicle for non-contact,
Rest of World 5%
continuous and off-set paving. This machine is the only material transfer
vehicle on the market that doubles as a remix paver.
Bottom: The Terex® Commander series of digger derricks are used to dig
holes and set utility poles. They include a telescopic boom with mounted
auger to dig the hole and a winch with associated equipment to set the pole.
D I R E C T O R S , O F F I C E R S A N D B U S I N E S S O P E R AT I O N S
BOARD OF DIRECTORS
Ronald M. DeFeo G. Chris Andersen Paula H.J.
Chairman and Chief Partner, G.C.Andersen
Executive Officer, Partners, LLC Private Consultant -
Terex Corporation Strategic Planning
G. Chris Andersen was
Ronald M. DeFeo was
a Vice Chairman of Paula H. J. Cholmondeley
appointed Chief Executive
PaineWebber Inc. from is currently a private con-
Officer of the Company
March 1990 through sultant on strategic plan-
on March 24, 1995 and
1995. Mr. Andersen ning. Ms. Cholmondeley
Chairman of the Board
has been a merchant served as Vice President
on March 4, 1998. Mr. DeFeo joined the Company in
banker since 1996 and is currently a partner of G.C. and General Manager of Sappi Fine Paper, North America
May 1992 as President of the Company’s then Heavy
Andersen Partners, LLC, a private merchant banking from 2000 through 2004, where she was responsible for
Equipment Group. A year later, he also assumed the
and advisory firm, and also serves as the non- their Specialty Products division. Ms. Cholmondeley held
responsibility of serving as the President of the
executive Chairman of the Board of Directors senior positions with various other companies from 1980
Company’s former Clark Material Handling Company
of Millennium Cell Inc. through 1998, including Owens Corning, The Faxon
subsidiary. He was appointed President and COO of the
Company, Blue Cross of Greater Philadelphia, and
Company on October 4, 1993. Prior to joining the
Westinghouse Elevator Company, and also served as a
Company on May 1, 1992, Mr. DeFeo was a Senior Vice
White House Fellow assisting the U.S. Trade
President of J.I. Case Company, the former Tenneco
Representative during the Reagan administration. Ms.
farm and construction equipment division, and also
Cholmondeley, a certified public accountant, is an alumnus
served as a Managing Director of Case Construction
of Howard University and received a Masters Degree in
Equipment throughout Europe. While at J.I. Case, Mr.
Accounting from the University of Pennsylvania, Wharton
DeFeo was also a Vice President of North American
School of Finance. Ms. Cholmondeley is also a director of
Construction Equipment Sales and General Manager of
Dentsply International Inc., Ultralife Batteries, Inc., Albany
Retail Operations. Mr. DeFeo serves as a director of
International Corp. and Minerals Technologies Inc., and is
Kennametal Inc. (a supplier of the Company).
an independent trustee of Gartmore Capital.
Donald DeFosset William H. Fike Dr. Donald P.
Chairman, President and President, Fike &
CEO (retired), Walter Associates Dean Emeritus and Gaylord
Industries, Inc. Freeman Distinguished
Professor of Banking,
William H. Fike has The Kellog Graduate
Don DeFosset retired been President of School of Management,
in November 2005 as Northwestern University
Fike & Associates, a
Chairman, President consulting firm, since
and Chief Executive Dr. Donald P. Jacobs is
January 2000. Mr. Fike
Officer of Walter Dean Emeritus and the
retired as the Vice
Industries, Inc., a diversified company with principal Gaylord Freeman Distinguished Professor of Banking
Chairman and Executive Vice President of Magna
operating businesses in homebuilding and home of the J.L. Kellogg Graduate School of Management
International Inc., an automotive parts manufacturer
financing, water transmission products and energy at Northwestern University, positions he has held
based in Ontario, Canada, in February 1999. Prior to
services. Mr. DeFosset had served since November since 2001. Prior to that, Dr. Jacobs was Dean of the
joining Magna International in August 1994, Mr. Fike
2000 as President and CEO, and since March 2002 Kellogg School from 1975 through 2001. Dr. Jacobs
was employed by Ford Motor Company from 1965 to
as Chairman, of Walter Industries. Previously, he was also serves as a director of ProLogis Trust and
1994, where he served most recently as a Corporate
Executive Vice President and Chief Operating Officer CDW Corporation.
Vice President and as President of Ford Europe.
of Dura Automotive Systems, Inc., a global supplier of Mr. Fike currently serves as a director of
engineered systems, from October 1999 through Magna International.
June 2000. Before joining Dura, Mr. DeFosset served
as a Corporate Executive Vice President, President of
the Truck Group and a member of the Office of Chief
Executive Officer of Navistar International Corporation
from October 1996 to August 1999. Mr. DeFosset
serves as a director of Regions Financial Corporation,
James Hardie Industries NV and Safelite Glass Corp.
28 TEREX CORPORATION 2006 ANNUAL REPORT
C O R P O R AT E O F F I C E R S
David A. Sachs Ronald M. DeFeo Colin Fox
Chairman and Chief Executive Officer Senior Vice President,
Ares Management LLC
Terex Business Systems
David A. Sachs is a Managing Director, Head of the President and Chief Operating Officer Brian J. Henry
Capital Markets Group and Co-Portfolio Manager of Senior Vice President,
Kevin A. Barr
Ares Management LLC, an investment management Finance and Business Development
Senior Vice President, Human
firm of which he was a founder in 1997. Mr. Sachs
Resources Hyeryun Lee Park
has been an investment banker and investment
President, Terex Asia
Eric I Cohen
manager since 1981.
Senior Vice President, Phillip C. Widman
Secretary and General Counsel Senior Vice President and
Chief Financial Officer
Senior Vice President and
Chief Marketing Officer
Oren G. Shaffer B U S I N E S S O P E R AT I O N S
Vice Chairman and Chief Financial Officer,
Qwest Communications International Inc.
TEREX AERIAL WORK TEREX ROADBUILDING, UTILITY
Oren G. Shaffer has been the Vice Chairman and PLATFORMS PRODUCTS AND OTHER
Chief Financial Officer of Qwest Communications
International Inc. since July 2002. Prior to joining
President, Terex Utilities
President, Terex Aerial
Qwest, Mr. Shaffer was President and Chief
Work Platforms Dale Jones
Operating Officer of Sorrento Networks, a maker of
President, Terex Roadbuilding
optical products, beginning in 2000. From 1994 to
1999, he was Chief Financial Officer of Ameritech Corporation, a telecommunications
TEREX FINANCIAL SERVICES
provider that was acquired by SBC Communications Inc. in 1999. He has also
President, Terex Construction
served as President of Virgo Cap Inc., an investment firm, and from 1968 to 1992 Kevin Bradley
in various positions at Goodyear Tire & Rubber Co. Mr. Shaffer serves on
President, Terex Financial Services
the boards of directors of Belgacom SA, the Daiwa family of mutual funds
and Intermec, Inc. Steve Filipov
President, Terex Cranes
Helge H. Wehmeier
PROCESSING & MINING
President and Chief Executive Officer (retired),
President, Terex Materials
Helge H. Wehmeier retired in December 2004 as
Processing & Mining
Vice-Chairman of Bayer Corporation, a post he held
since July 1, 2002. Prior to that, Mr. Wehmeier
served as President and Chief Executive Officer of
Bayer Corporation from 1991 through June 2002.
C O R P O R AT E I N F O R M AT I O N
Mr. Wehmeier spent more than 35 years with Bayer
AG, a diversified, international chemicals and health care group, in various positions
of increasing responsibility, including senior management positions in both Europe Terex Corporation Terex Team Members Worldwide
and the United States. Mr. Wehmeier is an alumnus of the International 200 Nyala Farm Road 18,200 Full-time
Management Development Institute, Lausanne, Switzerland and Institut European Westport, Connecticut 06880, USA
d’Administration des Affaires, Fontainebleau, France. Mr. Wehmeier is also a Telephone: 203-222-7170
director of PNC Financial Services Group, Inc., a diversified banking and financial Fax: 203-222-7976
services company, and Owens Illinois, Inc., a manufacturer of glass containers. Website: www.terex.com
To improve the lives of people around the world
To delight construction, infrastructure, mining and other
customers with value added offerings that exceed
their current and future needs
To achieve our mission we must attract the best people by
creating a Terex culture that is safe, exciting, creative, fun
and embraces continuous improvement
Customer – to be the most customer responsive company in
the industry as determined by the customer
Financial – to be the most profitable company in the
industry as measured by Return on Invested Capital
Team Member – to be the best place to work in
the industry as determined by our team members
30 TEREX CORPORATION 2006 ANNUAL REPORT
Terex Corporation 2006 Annual Report on Form 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FOR ANNUAL AND TRANSITIONAL REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2006
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
(Exact Name of Registrant as Specified in Charter)
(State of incorporation) (I.R.S. Employer Identification No.)
200 NYALA FARM ROAD, 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 if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act.
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 ⌧ 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 a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition
of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ⌧ Accelerated Filer Non-accelerated Filer
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the Registrant was
approximately $4,819 million based on the last sale price on June 30, 2006.
THE NUMBER OF SHARES OF THE REGISTRANT’S COMMON STOCK OUTSTANDING WAS
102.6 MILLION AS OF FEBRUARY 22, 2007.
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 2007 Annual Meeting of Stockholders are incorporated by reference into Part III
TEREX CORPORATION AND SUBSIDIARIES
Index to Annual Report on Form 10-K
For the Year Ended December 31, 2006
Item 1 Business 3
Item 1A Risk Factors 22
Item 1B Unresolved Staff Comments 25
Item 2 Properties 26
Item 3 Legal Proceedings 28
Item 4 Submission of Matters to a Vote of Security Holders 28
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
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 56
Item 8 Financial Statements and Supplementary Data 58
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 58
Item 9A Controls and Procedures 59
Item 9B Other Information 62
Item 10 Directors, Executive Officers and Corporate Governance 63
Item 11 Executive Compensation 63
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 63
Item 13 Certain Relationships and Related Transactions, and Director Independence 63
Item 14 Principal Accountant Fees and Services 63
Item 15 Exhibits and Financial Statement Schedules 64