Terex Announces First Quarter Results

-- Record revenue of $1.75 billion, an increase of 21%

-- Earnings per share increased 166% to $1.57 when compared with March 31, 2005

-- Backlog increased 36% versus March 31, 2005, to $2.14 billion

-- Conference call to be held to discuss this release on Friday, May 5 at 10:00 a.m.

Terex Corporation (NYSE: TEX) today announced net income for thefirst quarter of 2006 of $80.6 million, or $1.57 per share, comparedto net income of $29.9 million, or $0.59 per share, for the firstquarter of 2005. Net income was $30.3 million, or $0.59 per share, forthe first quarter of 2005, excluding special items. There were nospecial items during the first quarter of 2006. Special items for thefirst quarter of 2005 included charges for investigation costsassociated with the Company's internal review and the restatement ofits financial statements and charges relating to the closure ofcertain Terex Utilities branches. As discussed in the "CapitalStructure and Taxes" section of this release, for the period endedMarch 31, 2006, the Company is using an estimated tax rate of 35%. Netsales reached $1,749.5 million in the first quarter of 2006, anincrease of 20.6% from $1,451.1 million in the first quarter of 2005.Net debt (1) increased in the first quarter of 2006 by $45 millionfrom December 31, 2005 levels.

"As announced last week, we are very pleased with the strongperformance of our overall business, especially the fact that therecovery is becoming broad-based in terms of our contributingbusinesses," commented Ronald M. DeFeo, Terex's Chairman and ChiefExecutive Officer. "In addition to our strong operating results, Terexcontinues to make real progress towards its objectives of leanmanufacturing principles and stronger cash management performance. Ourfocus on working capital and our Terex Business System (TBS)initiatives have led not only to increased margin, but have directlycontributed to our improved cash performance in most of ourbusinesses. Our increase in net debt in the first quarter was $45million, an extremely positive result given our rapid increase indemand during this seasonally strong delivery period."

"It is important to stress the improvements made in terms ofprofitability of the Company as a whole," added Mr. DeFeo. "We made a3.9 percentage point improvement in our gross margin, driven by acombination of better manufacturing leverage and pricing initiativesin excess of cost pressures. The improvements in gross profittranslated to a strong increase in overall operating profitability,with operating margin posting a 3.4 percentage point increase over thecomparable 2005 quarter. This represents an incremental operatingmargin(2) of almost 25%, and results in a Return on InvestedCapital(3) of approximately 24% for the twelve months ended March 31,2006. Not only is this strong current performance, but this alsoboosts our confidence with respect to our longer term goals ofachieving a 10% operating margin and delivering ROIC in excess of 30%during strong economic times."

"We recently provided earnings guidance for our 2006 performance,indicating that we anticipate earnings per share for 2006 to bebetween $6.40 and $6.80 per share," Mr. DeFeo continued. "Thisrepresents a 60-70% EPS increase versus 2005, excluding special items.We are pleased with the strength of our end markets, but recognizethat growth will moderate somewhat from these strong levels. In orderto address this, the Terex of tomorrow will be more diversified,better integrated, built around lean principles and have a strongercustomer franchise. What we are doing now will help us to continuestrong earnings progress despite a somewhat slowing growth rate.Fundamentally, we continue to build a better business, and thisquarter's results are a reflection of our progress to date. We remaincommitted to achieving a 10% operating margin for 2007 and feel thatmany of our businesses are well positioned to show meaningful progresstowards that goal in 2006. We remain confident about our businessprospects and future successes in 2007 and beyond."
Definitions:

(1) Net debt consists of long-term debt, including current
portion of long-term debt, less cash and cash equivalents.

(2) Incremental operating margin is defined as the year over
year change in income from operations divided by the year over
year change in net sales.

(3) Return on invested capital (ROIC) is calculated as the
trailing four quarters operating income divided by the sum of
the trailing four quarters average shareholders' equity and
the trailing four quarter average net debt.

In this press release Terex refers to various non-GAAP (generallyaccepted accounting principles) financial measures. These measures maynot be comparable to similarly titled measures being disclosed byother companies. The table below provides a reconciliation of thereported GAAP numbers for the first quarters of 2006 and 2005 and thereported numbers excluding special items. Terex believes that thisinformation is useful to understanding its operating results and theongoing performance of its underlying businesses without the impact ofspecial items. Terex also discloses EBITDA and net debt, as they arecommonly referred to financial metrics used in the investingcommunity. Terex believes that disclosure of EBITDA and net debt willbe helpful to those reviewing its performance and that of othercomparable companies, as EBITDA and net debt provide information onTerex's leverage position, ability to meet debt service and capitalexpenditure and working capital requirements, and EBITDA is also anindicator of profitability.

The financial results for the first quarter of 2005 reflect theimpact of Terex's restatement process, as well as the results to dateof the Company's 2005 consolidation and review process. As such, theresults differ slightly from those previously published in theCompany's first quarter of 2005 earnings release.
A financial summary is shown below:

Three months ended March 31,
--------------------------------------------------------
2006 2005
--------------------------- ----------------------------
(in millions, except per share amounts)
Excluding Excluding
Special Special Special Special
Reported Items Items Reported Items(2) Items
-------------------------- ---------------------------
Net Sales $1,749.5 $ --- $ 1,749.5 $1,451.1 $ --- $ 1,451.1
======== ======= ========= ======== ======== =========
Gross profit $ 316.1 $ --- $ 316.1 $ 206.2 $ 0.1 $ 206.3
SG&A 170.6 --- 170.6 134.7 (0.6) 134.1
-------- ------- --------- -------- -------- ---------
Income from
Operations 145.5 --- 145.5 71.5 0.7 72.2
Other income
(expense) (21.5) --- (21.5) (24.3) --- (24.3)
Provision for
income taxes (43.4) --- (43.4) (17.3) (0.3) (17.6)
-------- ------- --------- -------- -------- ---------
Net income $ 80.6 $ --- $ 80.6 $ 29.9 $ 0.4 $ 30.3
======== ======= ========= ======== ======== =========
Earnings per
share $ 1.57 $ 1.57 $ 0.59 --- $ 0.59
EBITDA (1) $ 163.1 $ --- $ 163.1 $ 89.2 $ 0.7 $ 89.9
Backlog $2,140.1 $ 2,140.1 $1,568.7 $ 1,568.7

Average Fully
Diluted
Shares
Outstanding 51.3 51.3 51.0 51.0

(1) EBITDA is calculated as income from operations plus depreciation
and amortization included in income from operations, including
depreciation related to rental equipment.
(2) Special items, net of tax, relate to charges for investigation
costs associated with the Company's internal review ($0.4), and
charges related to the closure of certain Terex Utilities branch
locations ($0.1).

Segment Performance

As previously announced, starting with the first quarter of 2006,Terex has realigned certain operations in an effort to strengthen itsability to service customers and to recognize certain organizationalefficiencies. The mobile crushing and screening group, formerly partof the Terex Construction segment, is now consolidated with the TerexMaterials Processing & Mining segment. The European telehandlerbusiness, formerly part of the Terex Construction segment, is now partof the Terex Aerial Work Platforms segment. The comparative segmentperformance data below reflects this current organization, and priorperiod amounts have been reclassified to conform with thispresentation. Comparative segment performance data also excludesspecial items.

Terex Construction
Three months ended March 31,
------------------------------------
(in millions)
------------------------------------
2006 2005
----------------- -----------------
% of % of
sales sales
------- -------
Net sales $ 333.5 $ 332.1
========= =========
Gross profit $ 38.1 11.4% $ 38.9 11.7%
SG&A 34.9 10.5% 31.8 9.6%
--------- ---------
Income from operations $ 3.2 1.0% $ 7.1 2.1%
========= =========
Backlog $ 250.2 $ 254.4

Net sales in the Terex Construction segment for the first quarterof 2006 increased $1.4 million to $333.5 million, from $332.1 millionin the first quarter of 2005. The slight increase in net salesreflects a mixture of results, with strong year over year performanceby the off-highway truck and loader backhoe product lines,substantially offset by weakness in various other businesses,including the scrap handler product line. Gross margin deterioratedslightly to 11.4% versus 11.7% for the first quarter of 2005, againdue to the declining performance of the scrap handling business, whichwas a strong contributor to the 2005 results. SG&A expenses for thefirst quarter of 2006 were $34.9 million, or 10.5% of sales, comparedto $31.8 million, or 9.6% of sales, in the first quarter of 2005, withthe increase being mainly due to investments in engineering ahead ofthe new product launch scheduled for the second quarter, as well ashigher warranty costs on the compact construction product line. Incomefrom operations for the quarter was $3.2 million, or 1.0% of sales,compared to $7.1 million, or 2.1% of sales, for the first quarter of2005.

"Terex Construction had a challenging start to the year, althoughmuch of this was anticipated as we upgraded a number of core productsand introduced, but did not ship, these new models in the quarter,"commented Fergus Baillie, Acting President - Terex Construction."Furthermore, our scrap handling product experienced a pullback fromyear ago levels as this sub-market has slowed and competitionintensified. We introduced a new crawler hydraulic excavator,wheel-loader, 40-ton articulated truck and motor grader at a uniquenew product launch in Spain this past January. We had a slow start toour compact equipment line, but this is fairly typical early in theyear."

Mr. Baillie continued, "Looking forward, there are clear reasonsfor Terex Construction to be excited about the prospects for theremainder of 2006 and improving our profit margin. The demand for ourscrap handling product line has improved, moderating the pressuresthat faced this business in North America over the past few quarters.The North American construction business continues to deal with anunfavorable currency situation, as the equipment sold by thesebusinesses are manufactured in Europe and imported to North America.We are continuing to make improvements in the products, and with thesenew product offerings and a sourcing strategy that will lower the costbase of these products, we are confident that we can be competitive inthe North American marketplace."

Terex Cranes
Three months ended March 31,
------------------------------------
(in millions)
------------------------------------
2006 2005
----------------- -----------------
% of % of
sales sales
------- -------
Net sales $ 368.7 $ 298.8
========= =========
Gross profit $ 55.2 15.0% $ 31.0 10.4%
SG&A 29.2 7.9% 25.8 8.6%
--------- ---------
Income from operations $ 26.0 7.1% $ 5.2 1.7%
========= =========
Backlog $ 634.2 $ 307.0

Net sales in the Terex Cranes segment for the first quarter of2006 increased $69.9 million to $368.7 million from $298.8 million inthe first quarter of 2005, reflecting improvement in all businesses,and particularly strength in the North American crane market and thetower crane business. SG&A expenses increased in the first quarter of2006 to $29.2 million, or 7.9% of sales, lower as a percentage ofsales when compared to the first quarter of 2005 rate of 8.6% on $25.8million of SG&A expenses, mainly due to higher sales levels. Incomefrom operations increased $20.8 million to $26.0 million, or 7.1% ofsales, for the first quarter of 2006, from $5.2 million, or 1.7% ofsales, for the first quarter of 2005.

"The Terex Cranes segment continued to show strong revenue growthfrom its recent cyclical lows," commented Steve Filipov, President -Terex Cranes. "Our first quarter net sales for the North Americanbusiness, which has been struggling for the past few years, wereapproximately 90% higher than the same quarter the prior year, whichwas partially impacted by a strike at our Waverly, Iowa location. Thetower crane business continues to operate well in a strong demandmarket, posting stronger than anticipated net sales increases versusthe prior year. The international crane business, led mainly by ourGerman business, as well as our Australian operations, had modestrevenue growth, but improved profitability through better sourcing ofcomponents and pricing actions."

Mr. Filipov continued, "Similar to 2005, we continue to see strongresults from our tower crane business and our French operation, wherewe have a strong backlog. The North American business, specificallyrough terrain cranes and boom trucks, have rebounded sharply in termsof demand compared with this time last year, and the backlog for ourGerman large crawler cranes has increased, in response to largeinfrastructure projects being approved in Asia, the Middle East andAfrica. Unlike last year, where orders from customers were scarce, weare now faced with the challenge of increasing production andcomponent constraints as a limiting factor on net sales andprofitability. Our management team has put together a plan thataddresses the concern on the supply side, and the Waverly, Iowafacility is primed for an even stronger second quarter."

Terex Aerial Work Platforms

Three months ended March 31,
------------------------------------
(in millions)
------------------------------------
2006 2005
----------------- -----------------
% of % of
sales sales
------- -------
Net sales $ 458.5 $ 308.0
========= =========
Gross profit $ 117.0 25.5% $ 53.8 17.5%
SG&A 37.1 8.1% 24.4 7.9%
--------- ---------
Income from operations $ 79.9 17.4% $ 29.4 9.5%
========= =========
Backlog $ 660.7 $ 514.0

Net sales for the Terex Aerial Work Platforms segment for thefirst quarter of 2006 increased $150.5 million to $458.5 million, from$308.0 million in the first quarter of 2005. The increase in net saleswas driven by continued strong order activity from the rental channel,including demand for the Company's telehandler product line. Grossmargin for the quarter was 25.5%, compared to 17.5% for the quarterended March 31, 2005, and was favorably impacted by pricing actionsand volume leverage on manufacturing costs, although partially offsetby continued cost pressures. Income from operations increased to $79.9million, or 17.4% of sales, in the first quarter of 2006, from $29.4million, or 9.5% of sales, in the first quarter of 2005.

"Our first quarter performance was outstanding" said BobWilkerson, President-Terex Aerial Work Platforms. "Our sales were upalmost 50% and our backlog was up approximately 29% when compared tothe first quarter of 2005, clearly highlighting the continued strongdemand for our products. In addition to the excellent financialperformance of our aerial product lines, our telehandler product lineposted year over year revenue increases in excess of 65%, and ourlight construction and trailer businesses also posted strongeroperating performances." Mr. Wilkerson continued, "However, asmentioned previously, we continue to closely watch various componentcost pressures, mainly steel. The cost of steel has begun to increasein the first quarter, similar to the trends we saw in 2004. Ourability to mitigate this pressure is vital to continued improvementsin our future operational performance."

Mr. Wilkerson added, "During 2005, we revisited our pricingstructure. This, along with continued improvements in our factories,has delivered results that more reflect the demand environment inwhich we find ourselves. The first quarter performance demonstratesour ability to perform and meet demand, and we remain optimistic aboutour continued positive performance throughout 2006 and into 2007."

Terex Materials Processing & Mining
Three months ended March 31,
------------------------------------
(in millions)
------------------------------------
2006 2005
----------------- -----------------
% of % of
sales sales
------- -------
Net sales $ 380.9 $ 315.7
========= =========
Gross profit $ 76.4 20.1% $ 49.0 15.5%
SG&A 35.3 9.3% 29.1 9.2%
--------- ---------
Income from operations $ 41.1 10.8% $ 19.9 6.3%
========= =========
Backlog $ 323.5 $ 311.0

Net sales for the Terex Materials Processing & Mining segment forthe first quarter of 2006 increased $65.2 million to $380.9 millionfrom $315.7 million in the first quarter of 2005. The increase in netsales was attributable to the overall strong demand for miningproducts, mainly the mining hydraulic excavators manufactured inDortmund, Germany, and the continued growth of the mobile crushing andscreening product lines. This increased sales volume had a positiveimpact, as income from operations increased to $41.1 million, or 10.8%of sales, in the first quarter of 2006, from $19.9 million, or 6.3% ofsales, in the first quarter of 2005.

"The Terex Materials Processing & Mining segment is continuing tosee significant improvement in both order and bid activity," commentedRick Nichols, President - Terex Materials Processing & Mining. "Ourparts volume continues to increase, reflecting the increasinginstalled base of our products, and has been instrumental indelivering strong incremental margin. The hydraulic shovel, miningtruck and drilling businesses continued to perform favorably in thisstrong demand market. Lastly, the materials processing businesses,which now contains all of our crushing and screening products, posteda solid increase in earnings year over year, reflecting pricingactions taken during 2005 in reaction to the higher costs ofcomponents and raw materials, namely steel." Mr. Nichols continued,"We continue to believe that commodity prices are at a level where weshould expect solid demand for our machine sales for the foreseeablefuture, which, in turn, will drive our parts business, a criticalcomponent to our overall profitability. We are quite positive on theoutlook for our business, and our industry, for the next severalyears."

Terex Roadbuilding, Utility Products and Other

Three months ended March 31,
------------------------------------
(in millions)
------------------------------------
2006 2005
----------------- -----------------
% of % of
sales sales
------- -------
Net sales $ 234.6 $ 219.2
========= =========
Gross profit $ 32.2 13.7% $ 34.5 15.7%
SG&A 21.7 9.2% 23.1 10.5%
--------- ---------
Income from operations $ 10.5 4.5% $ 11.4 5.2%
========= =========
Backlog $ 271.5 $ 210.7

Net sales for the Terex Roadbuilding, Utility Products and Othersegment for the first quarter of 2006 increased $15.4 million to$234.6 million from $219.2 million for the first quarter of 2005, withmeaningful growth in the core product categories of Roadbuilding andUtility Products. SG&A expenses for the first quarter of 2006 was$21.7 million, or 9.2% of sales, compared to $23.1 million, or 10.5%of sales, in the first quarter of 2005, reflecting reduced operatingcosts associated with many of the businesses, including the AmericanTruck Company joint venture, which has substantially reduced itsactivity level in 2006. Income from operations decreased to $10.5million, or 4.5% of sales, from $11.4 million, or 5.2% of sales, inthe first quarter of 2005.

"The Terex Roadbuilding, Utility Products and Other group had agenerally positive quarter," commented Chris Ragot, President - TerexRoadbuilding and Utility Products. "Both the Utility Products andRoadbuilding businesses had excellent growth in terms of sales, andthe Utility Products business also had substantial growth inprofitability. We are seeing the end-markets turn slightly in ourfavor, and when combined with the internal actions we have taken, weare optimistic about the balance of the year, and are even moreexcited about 2007 and beyond."

Mr. DeFeo added, "The positive performance in this quarter versusour 2005 performance was somewhat masked by other businesses that arereported in this segment, including the Tatra and American Truckbusinesses. As we mentioned previously, we believe that thesebusinesses are non-core operations and are reviewing alternatives. Wewill determine the future of these businesses over the upcomingmonths."

Terex Corporate / Eliminations

Three months ended March
31,
-------------------------
(in millions)
-------------------------
2006 2005
------------ ------------

Net sales $ (26.7) $ (22.7)
============ ============
Gross profit $ (2.8) $ (1.0)
SG&A 12.4 0.5
------------ ------------
Income from operations $ (15.2) $ (1.5)
============ ============
Backlog (1) $ --- $ (28.4)

The Company's consolidated results throughout 2006 will show amore significant balance of general and administrative costs notreflected in the total segment detail. The unallocated expense isprimarily attributable to certain equity and long term compensationprograms, as well as certain unallocated expenses related to Terex'sglobal enterprise system implementation. A significant portion of theunallocated SG&A expense incurred during 2006 is not expected toreoccur during 2007.
(1) The method of reporting backlog has been revised starting in 2006
to better reflect third party backlog in the respective business
segments.

Capital Structure and Taxes

"Net debt at the end of the first quarter of 2006 increased $45million to $615 million, from $570 million at the end of 2005, as theCompany invested in working capital in preparation for seasonallystrong second quarter sales," commented Phil Widman, Senior VicePresident and Chief Financial Officer. "This level of cash usage inthe first quarter is consistent with our comments provided at thebeginning of the year that cash flow will continue to closely reflectthe seasonal trends of our business, and we are pleased with thislevel of cash utilization during this period of strong growth in netsales. Net debt was $257 million lower when compared with the sameperiod last year, reflecting the strong cash flow of 2005. We remainoptimistic about our cash generation prospects for 2006. We continueto target a 15% working capital to trailing three month annualizedsales level by the end of 2006, compared with the 17.6% figure weachieved at the end of 2005. Working capital as a percent of trailingthree month annualized sales was approximately 19% at the end of thefirst quarter of 2006, as compared to approximately 21% at the end ofthe first quarter in 2005. This performance has led the Company toanticipate a ratio of net debt to total capitalization ofapproximately 33% at the end of the first quarter of 2006, meaningfulprogress when compared to the approximate 44% result achieved at March31, 2005."

Commenting on the effective tax rate used in this release, Mr.Widman stated, "The effective tax rate for the first quarter of 2006is estimated to be 35%, and we do not expect the final effective taxrate for the period to be materially different. While the full yeareffective tax rate is expected to be approximately 35%, the rate canfluctuate quarter to quarter as a result of changes during the periodin the assumptions related to valuation allowances, the mix of incomeby jurisdiction, and other discrete items."

Safe Harbor Statement

The press release contains forward-looking information based onTerex's current expectations. Because forward-looking statementsinvolve risks and uncertainties, actual results could differmaterially. Such risks and uncertainties, many of which are beyondTerex's control, include among others: Terex's business is highlycyclical and weak general economic conditions may affect the sales ofits products and its financial results; Terex's business is sensitiveto fluctuations in interest rates and government spending; the abilityto successfully integrate acquired businesses; the retention of keymanagement personnel; Terex's businesses are very competitive and maybe affected by pricing, product initiatives and other actions taken bycompetitors; the effects of changes in laws and regulations; Terex'sbusiness is international in nature and is subject to changes inexchange rates between currencies, as well as international politics;Terex's continued access to capital and ability to obtain parts andcomponents from suppliers on a timely basis at competitive prices; thefinancial condition of suppliers and customers, and their continuedaccess to capital; Terex's ability to timely manufacture and deliverproducts to customers; possible work stoppages and other labormatters; Terex's debt outstanding and the need to comply withrestrictive covenants contained in Terex's debt agreements; Terex'sability to file its periodic reports with the SEC on a timely basis;the previously announced SEC investigation of Terex; Terex's abilityto maintain adequate disclosure controls and procedures and adequateinternal controls over financial reporting; Terex's implementation ofa global enterprise system and its performance; compliance withapplicable environmental laws and regulations; product liabilityclaims and other liabilities arising out of Terex's business; andother factors, risks, uncertainties more specifically set forth inTerex's public filings with the SEC. Actual events or the actualfuture results of Terex may differ materially from any forward lookingstatement due to those and other risks, uncertainties and significantfactors. The forward-looking statements speak only as of the date ofthis release. Terex expressly disclaims any obligation or undertakingto release publicly any updates or revisions to any forward-lookingstatement included in this release to reflect any changes in Terex'sexpectations with regard thereto or any changes in events, conditions,or circumstances on which any such statement is based.

Terex Corporation is a diversified global manufacturer with 2005revenue of approximately $6.4 billion. Terex operates in five businesssegments: Terex Construction, Terex Cranes, Terex Aerial WorkPlatforms, Terex Materials Processing & Mining, and TerexRoadbuilding, Utility Products and Other. Terex manufactures a broadrange of equipment for use in various industries, including theconstruction, infrastructure, quarrying, surface mining, shipping,transportation, refining and utility industries. Terex offers acomplete line of financial products and services to assist in theacquisition of Terex equipment through Terex Financial Services. Moreinformation on Terex can be found at www.terex.com.