12.03.2006

Terex expect $7billion in 2006

Terex has announced its 2005 results, which are subject to finalisation and may change. Group revenues were $6.4 billion, an increase of 28 percent on 2004. Full year earnings are expected to be at least 64 percent up on 2004 with Backlogs 62 percent higher at $1.6 billion. Net debt was reduced by $209 million to $571 million.

Terex Crane’s revenues increased approximately 18 percent, compared with 2004, thanks to a strong tower crane market. The company’s crane backlog as of December 31, 2005 was approximately $452 million, 80 percent higher than year end 2004.

Terex Aerial Work Platforms increased its sales by over 56 percent, continuing to reflect the sharp increase in demand in both Europe and North America. Platform backlog as of December 31, 2005 was approximately $482 million, triple that at the end of 2004.

Terex says that it will provide detailed full-year 2005 financial results when these results are completed and audited, the timing of which is discussed in more detail below.

“In general, 2005 was a very good year for Terex, reflecting continued strengthening end markets in many of our product categories and the early stages of a recovery in others,” commented Ronald M. DeFeo, Terex’s chairman and chief executive officer.

“In 2003, we set out to achieve $6 billion in revenue by 2006. We have already surpassed that objective in 2005. We continue to benefit from an operating environment that is poised to produce another year of significant growth, as evidenced by our backlog of approximately $1.6 billion at the end of 2005, up 62 percent from our backlog at the end of 2004.

We have maintained our focus on improving the balance sheet, and thus have reduced our net debt by $209 million in 2005 and anticipate a net debt to total capitalization ratio of approximately 33 percent at December 31, 2005, a significant accomplishment for Terex.”

DeFeo added, “Our strong business performance in the fourth quarter of 2005, particularly in the Terex Aerial Work Platforms segment, which outperformed our operating profit expectations by approximately $15 million in the quarter, unfortunately was more than offset by certain charges we incurred during the quarter.

“Terex Construction segment incurred charges in the quarter related to physical inventory results at four locations of approximately $4 million, additional inventory valuation charges of approximately $6 million, and an increased bad debt provision largely related to customers of the compact construction business of approximately $4 million”.

“Terex Crane’s segment had a field retrofit program, which caused the Company to accrue approximately $4 million in the quarter”.

“Terex Road building, Utility Products and Other segment was impacted by expenses at the American Truck Company (“ATC”) and Tatra and the write-down of certain assets at Tatra related to the inability of ATC to complete the tender for a U.S. Marine Corps truck procurement, and the fact that the Israeli Ministry of Defense did not exercise its option to purchase additional trucks from ATC".

"Lastly, the Company incurred charges of approximately $9 million resulting from increased accruals for equity based compensation and other plans, as well as audit and other professional fees largely related to the Company’s ongoing effort to improve its financial reporting process.”

“During 2005, Terex experienced a second consecutive year of sharp increase in demand for many of our products,” said DeFeo.

“Additionally, the pricing actions we have taken and the cost environments of our markets began to yield improvements in margin for many of our businesses. We see meaningful growth in revenue in 2006, and our expectation is for the growth to be more broadly based across our segments, as early indications are for a strong start to 2006 for our later cycle businesses, such as Terex Cranes.”

Out look for 2006

“It is our expectation that Terex’s total revenue for 2006 will be between $6.7 and $7.1 billion, as we continue to focus on margin improvement over increases in volume alone, said DeFeo. “Expectations are for earnings in the first half of 2006 to be slightly less than our earnings in the second half of 2006.