Terex Announces Record Second Quarter Results

-- Record revenue of $2.1 billion, an increase of 18% versus the second quarter of 2005

-- Earnings per share increased 66% to $1.16 versus the prior year's second quarter

-- Backlog increased 67% versus June 30, 2005, to $2.4 billion

-- Conference call to be held to discuss this release on Thursday, July 27, at 8:30 a.m.

Terex Corporation (NYSE: TEX) today announced net income for thesecond quarter of 2006 of $119.2 million, or $1.16 per share, comparedto net income of $71.2 million, or $0.70 per share, for the secondquarter of 2005. Net income for the second quarter of 2006 included a$3.6 million net charge related to the early extinguishment of $100million of the Company's 10-3/8% senior subordinated notes, whichnegatively impacted earnings per share by $0.04. All per share amountsreflect the July 2006 two-for-one split of the Company's common stock.Net sales reached $2,080.6 million in the second quarter of 2006, anincrease of 18.3% from $1,759.1 million in the second quarter of 2005.Net debt(1) decreased in the first half of 2006 by $40 million fromDecember 31, 2005 levels, reflecting strong cash from operationsperformance, partially offset by the acquisition of a 50% controllinginterest in a Chinese crane manufacturer in the quarter, the callpremium on the early extinguishment of debt, and period capitalexpenditures.

"We are very pleased with this record setting quarter for Terex,but we remain hard at work looking for continued improvement in all ofour businesses," commented Ronald M. DeFeo, Terex's Chairman and ChiefExecutive Officer. "While this quarter marks a record level of revenueand net income, it best highlights the potential of our team membersand products. Lean manufacturing principles continue to be implementedacross the organization, purchasing and pricing disciplines continueto improve, and customer service and support continues to enhance ourcustomers' experience with Terex."

"Our improvement in earnings was broad based, both in terms ofproduct and geography. While our Terex Aerial Work Platforms segmentclearly had a superb quarter, we also saw dramatic improvements inmost of our businesses. However, we also have several businesses thatare underperforming, including some of our construction product lines.For these businesses, we expect improvements in their near termcontribution to Terex. Geographically, we have seen strength in demandoutside of North America, with sales of certain products in Europe,Australia and Asia accelerating and contributing significantly to ourcontinued backlog growth," added Mr. DeFeo. "This fact, along with therecovery in North American non-residential spending, drives a veryoptimistic view of our end markets. Commodity prices are expected toremain relatively high -- driving demand for our equipment. Largeinfrastructure projects continue to be undertaken around the world --driving demand for our equipment. The energy businesses, bothelectrical and petro-chemical, continue to rebuild and improve theirinfrastructure -- driving demand for our equipment. Consequently, weexpect strong demand for at least a few more years."

"For the second quarter, we experienced a 3.5 percentage pointimprovement, excluding special items, in our gross margin over theprior year, driven by a combination of better manufacturing leverageand pricing initiatives in excess of cost pressures. Consistent withthe first quarter, improvements in gross profit translated to a strongincrease in overall operating profitability, with operating marginposting a 2.2 percentage point increase over the comparable 2005quarter, again excluding special items. This represents an incrementaloperating margin (2) of 23% excluding special items, and results in aReturn on Invested Capital (3) ("ROIC") of over 29% for the twelvemonths ended June 30, 2006. Clearly, this quarter's results illustratethat we have taken another major step towards our longer term goals ofachieving a 10% operating margin for the full year, as well asdelivering ROIC in excess of 30% during strong economic times."

Mr. DeFeo continued, "We are raising our outlook for 2006 from ourprevious guidance provided in May. We now expect sales to be up 17 to22 percent from our 2005 results to a range of $7.5 to $7.8 billion.We are raising our earnings per share expectations for the year to$3.55 to $3.75 from our previous indication of $3.20 to $3.40 pershare, excluding costs related to the early extinguishment of theCompany's 10-3/8% senior subordinated notes. The increase in profitexpectations reflects continued favorable economic conditions and theinternal progress we are making on improving costs, marketdevelopment, and price realization."

Definitions:

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

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

(3) Return on invested capital (ROIC) is calculated as thetrailing four quarters operating income divided by the sum of thetrailing four quarters average stockholders' equity and the trailingfour 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 second quarters and first six months of2006 and 2005 and the reported numbers excluding special items. Terexbelieves that this information is useful to understanding itsoperating results and the ongoing performance of its underlyingbusinesses without the impact of special items. Terex also disclosesEBITDA and net debt, as they are commonly referred to financialmetrics used in the investing community. Terex believes thatdisclosure of EBITDA and net debt will be helpful to those reviewingits performance and that of other comparable companies, as EBITDA andnet debt provide information on Terex's leverage position, ability tomeet debt service and capital expenditure and working capitalrequirements, and EBITDA is also an indicator of profitability. EBITDAis calculated as income from operations plus depreciation andamortization included in income from operations.

All financial results reflect the impact of Terex's 2-for-1 stocksplit that occurred during July 2006. Backlog figures as of June 30,2005 have been adjusted from prior available information to reflect anincrease in backlog in the Terex Construction segment that existed atthat time.

A financial summary is shown below:

Three months ended June 30,
------------------------------------------------
2006 2005
----------------------- ------------------------
(in millions, except per share amounts)

Spe- Ex- Spe- Ex-
cial cluding cial cluding
Re- Items Special Items Special
ported (1) Items Reported (2) Items
------------------------------------------------
Sales $2,080.6 $ --- $2,080.6 $1,759.1 $ --- $1,759.1
-------- ----- -------- -------- ----- --------
Gross profit $ 407.2 $ --- $ 407.2 $ 282.2 $ 1.3 $ 283.5
SG&A 194.0 --- 194.0 145.3 (2.5) 142.8
-------- ----- -------- -------- ----- --------
Income from operations 213.2 --- 213.2 136.9 3.8 140.7
Interest and other 22.3 1.1 23.4 22.9 --- 22.9
Loss on early
extinguishment of
debt 6.7 (6.7) --- --- --- ---
-------- ----- -------- -------- ----- --------
Income before income
taxes 184.2 5.6 189.8 114.0 3.8 117.8
Income taxes 65.0 2.0 67.0 42.8 1.4 44.2
-------- ----- -------- -------- ----- --------
Net income $ 119.2 $ 3.6 $ 122.8 $ 71.2 $ 2.4 $ 73.6
======== ===== ======== ======== ===== ========
Earnings per share $ 1.16 $ 1.20 $ 0.70 $ 0.72
EBITDA $ 231.3 $ --- $ 231.3 $ 156.2 $ 3.8 $ 160.0
Backlog $2,378.1 $2,378.1 $1,424.0 $1,424.0
Average Fully Diluted
Shares Outstanding 102.6 102.6 101.8 101.8


(1) Special items relate to costs associated with the early
extinguishment of $100 million of the Company's 10-3/8% senior
subordinated notes due 2011.

(2) Special items, net of tax, relate to charges for investigation
costs associated with the Company's internal review ($0.3
million), charges related to restructuring activities, namely at
the corporate level, and at the business units of Cedarapids and
Terex UK ($1.4 million), and a loss on the sale of a non-core
operation ($0.7 million).


Six months ended June 30,
------------------------------------------------
2006 2005
----------------------- ------------------------
(in millions, except per share amounts)

Spe- Ex- Spe- Ex-
cial cluding cial cluding
Re- Items Special Items Special
ported (1) Items Reported (2) Items
------------------------------------------------

Sales $3,829.8 $ --- $3,829.8 $3,210.2 $ --- $3,210.2
-------- ----- -------- -------- ----- --------
Gross profit $ 722.5 $ --- $ 722.5 $ 488.4 $ 1.4 $ 489.8
SG&A 364.5 --- 364.5 280.0 (3.1) 276.9
-------- ----- -------- -------- ----- --------
Income from operations 358.0 --- 358.0 208.4 4.5 212.9
Interest and other 43.6 1.1 44.7 47.2 --- 47.2
Loss on early
extinguishment of
debt 6.7 (6.7) --- --- --- ---
-------- ----- -------- -------- ----- --------
Income before income
taxes 307.7 5.6 313.3 161.2 4.5 165.7
Income taxes 109.7 2.0 111.7 59.4 1.7 61.1
-------- ----- -------- -------- ----- --------
Net income $ 198.0 $ 3.6 $ 201.6 $ 101.8 $ 2.8 $ 104.6
======== ===== ======== ======== ===== ========
Earnings per share $ 1.93 $ 1.96 $ 1.00 $ 1.03
EBITDA $ 394.8 $ --- $ 394.8 $ 246.3 $ 4.5 $ 250.8
Backlog $2,378.1 $2,378.1 $1,424.0 $1,424.0
Average Fully Diluted
Shares Outstanding 102.6 102.6 102.0 102.0

(1) Special items relate to costs associated with the early
extinguishment of $100 million of the Company's 10-3/8% senior
subordinated notes due 2011.

(2) Special items, net of tax, relate to charges for investigation
costs associated with the Company's internal review ($0.7
million), charges related to restructuring activities, namely at
the corporate level, and at the business units of Cedarapids,
Terex Utilities and Terex UK ($1.4 million), and a loss on the
sale of a non-core operation ($0.7 million).

Segment Performance

As previously announced, commencing with the first quarter of2006, Terex has realigned certain operations in an effort tostrengthen its ability to service customers and to recognize certainorganizational efficiencies. The mobile crushing and screening group,formerly part of the Terex Construction segment, is now consolidatedwith the Terex Materials Processing & Mining segment. The Europeantelehandler business, formerly part of the Terex Construction segment,is now part of the Terex Aerial Work Platforms segment. Thecomparative segment performance data below reflects this currentorganization, and prior period amounts have been reclassified toconform with this presentation. Comparative segment performance dataalso excludes special items.


Terex Aerial Work Platforms

Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2006 2005 2006 2005
------------- ------------- ------------- -------------
% of % of % of % of
sales sales sales sales
----- ----- ----- -----
Net sales $579.6 $392.5 $1,038.1 $700.5
======= ======= ========= =======
Gross
profit $147.9 25.5% $ 74.7 19.0% $ 264.9 25.5% $128.5 18.3%
SG&A 37.8 6.5% 23.0 5.9% 74.9 7.2% 47.4 6.8%
------- ------- --------- -------
Income from
operations $110.1 19.0% $ 51.7 13.2% $ 190.0 18.3% $ 81.1 11.6%
======= ======= ========= =======
Backlog $543.6 $434.4 $ 543.6 $434.4

Net sales for the Terex Aerial Work Platforms segment for thesecond quarter of 2006 increased $187.1 million to $579.6 million from$392.5 million in the second quarter of 2005. The increase in netsales was driven by continued strong order activity from the rentalchannel, including demand for the Company's telehandler product line.Gross margin for the quarter was 25.5%, compared to 19.0% for thequarter ended June 30, 2005, and was favorably impacted by pricingactions and volume leverage on manufacturing costs, although partiallyoffset by continued cost pressures. Income from operations increasedto $110.1 million, or 19.0% of sales, in the second quarter of 2006,from $51.7 million, or 13.2% of sales, in the second quarter of 2005.

"The second quarter results were simply outstanding," said BobWilkerson, President-Terex Aerial Work Platforms. "Our sales were upalmost 50% for the second quarter in a row, and our backlog was upapproximately 25% when compared to the second quarter of 2005. Ourbusiness continues to become more global than in the past, withapproximately one-third of our revenue now coming from internationalmarkets, such as Europe and Australia. In addition to the excellentfinancial performance of our aerial product lines, our telehandlerproduct line posted another strong quarter of growth andprofitability. We will continue to invest resources to improve ourlight construction and trailer businesses in an effort to strengthentheir contribution to this segment's results." Mr. Wilkersoncontinued, "While we remain cautious about various dynamics that canweigh negatively on our business, the overall strength of theinternational market and the fact that most of our business is tied tonon-residential construction reinforces our confidence about prospectsfor the upcoming few years. This quarter's results demonstrate ourability to perform and meet current demand, and we are prepared tomeet the growing global demand for our products."

Terex Construction

Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2006 2005 2006 2005
------------- ------------- ------------- -------------
% of % of % of % of
sales sales sales sales
----- ----- ----- -----
Net sales $ 428.9 $450.0 $762.4 $782.1
========== ======= ======= =======
Gross
profit $ 58.1 13.5% $ 61.1 13.6% $ 96.0 12.6% $100.0 12.8%
SG&A 41.5 9.7% 32.1 7.1% 76.4 10.0% 63.9 8.2%
---------- ------- ------- -------
Income from
operations $ 16.6 3.9% $ 29.0 6.4% $ 19.6 2.6% $ 36.1 4.6%
========== ======= ======= =======
Backlog $ 316.2 $211.4 $316.2 $211.4

Net sales in the Terex Construction segment for the second quarterof 2006 decreased $21.1 million to $428.9 million from $450.0 millionin the second quarter of 2005. The decrease is mainly due to the scraphandler product line and production ramp-up delays regarding the nextgeneration of certain construction product lines scheduled during thesecond quarter. Gross margin for the second quarter of 2006 remainedrelatively flat at 13.5% versus the prior year's results. SG&Aexpenses for the second quarter of 2006 were $41.5 million, or 9.7% ofsales, compared to $32.1 million, or 7.1% of sales, in the secondquarter of 2005, with the increase being mainly due to increasedengineering costs associated with new product development, certainperiod restructuring activities, costs associated with developing theChinese market, the negative translation impact of currency, as wellas increased bad debt expense versus the prior year. Income fromoperations for the quarter was $16.6 million, or 3.9% of sales,compared to $29.0 million, or 6.4% of sales, for the second quarter of2005.

"While the second quarter performance was a step forward from ourprevious quarter's results, Terex Construction remains short of itspotential, and we are working tirelessly to implement solutions to theissues that confront us," commented Fergus Baillie, Acting President -Terex Construction. "We previously disclosed an extensive product lineupgrade for a number of core products, but supplier constraints, aswell as a few internal start-up issues, limited the effectiveness ofnew product launches on the quarter's results. Furthermore, our scraphandling product results, while improving from the pullback that tookplace in the past few quarters, still reflects a more aggressivecompetitive situation, negatively impacting our operating marginsversus year ago levels."

Mr. Baillie continued, "Looking forward from here, we continue tofocus on the few areas we believe will contribute meaningfully towardimproving results for the remainder of 2006. Our operating team ishard at work tackling the challenges facing our German-built excavatorproduct, working with suppliers to ensure a more timely deliveryschedule of components, and we are confident that recentreorganization activities will benefit this business during thebalance of the year. Lastly, we are accelerating our plans to bringcomponents for our key excavator and loader backhoe products from ourown factories in China and India, and look for this to be additive tothe other margin enhancement programs already underway."

Terex Cranes

Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2006 2005 2006 2005
------------- ------------- ------------- -------------
% of % of % of % of
sales sales sales sales
----- ----- ----- -----
Net sales $440.6 $336.2 $809.3 $635.0
======= ======= ======= =======
Gross profit $ 70.7 16.0% $ 45.5 13.5% $125.9 15.6% $ 76.5 12.0%
SG&A 33.8 7.7% 29.1 8.7% 63.0 7.8% 54.9 8.6%
------- ------- ------- -------
Income from
operations $ 36.9 8.4% $ 16.4 4.9% $ 62.9 7.8% $ 21.6 3.4%
======= ======= ======= =======
Backlog $807.2 $314.7 $807.2 $314.7

Net sales in the Terex Cranes segment for the second quarter of2006 increased $104.4 million to $440.6 million from $336.2 million inthe second quarter of 2005, reflecting improvement in all businesses,and particularly year over year improvement in Terex's internationalmobile and crawler crane businesses. The Chinese crane acquisitionaccounted for approximately 10% of the growth in net sales in thesecond quarter. SG&A expenses increased in the second quarter of 2006,mainly due to higher sales levels, to $33.8 million, or 7.7% of sales,which is lower as a percentage of sales when compared to the secondquarter of 2005 rate of 8.7% on $29.1 million of SG&A expenses Incomefrom operations increased $20.5 million to $36.9 million, or 8.4% ofsales, for the second quarter of 2006, from $16.4 million, or 4.9% ofsales, for the second quarter of 2005.

"The Terex Cranes segment had an excellent quarter, with strongrevenue growth of over 30% versus the prior year's results," commentedSteve Filipov, President - Terex Cranes. "The performance improvementwas in revenue and, more importantly, in operating profit, where weimproved approximately 125% over the prior year's results, which is atremendous accomplishment. Best of all, the positive performance wasbroad based, with all product lines contributing significantly to thisquarter's improvements. Also, during this quarter Terex completed theacquisition of a 50% controlling interest in Sichuan ChangjiangEngineering Crane Co, Ltd., a Chinese crane manufacturer. Thispositions Terex to more actively participate in the domestic Chinesecrane market, a market that comprises a substantial portion of theglobal growth in equipment sales."

Mr. Filipov continued, "It would be easy to step back and enjoyour recent successes; however, the crane market has only recentlybegun to recover in terms of new equipment demand, and there stillexists a supply / demand imbalance in many product ranges. We areworking to improve our production rates by improving our supplier baseto ensure that our products are the timely, reliable andcost-effective equipment our customers expect. There are storiespublished every day regarding the massive infrastructure expansionbeing undertaken globally that will require cranes, among other piecesof equipment. This demand, from China to the Middle East, as well asEurope and a newly recovered North America, is unlikely to soften inthe near future, and adds to our confidence that Terex Cranes canachieve a 10% operating margin in the foreseeable future."

Terex Materials Processing & Mining

Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2006 2005 2006 2005
------------- ------------- ------------- -------------
% of % of % of % of
sales sales sales sales
----- ----- ----- -----
Net sales $406.1 $358.3 $787.0 $674.0
======= ======= ======= =======
Gross profit $ 85.8 21.1% $ 65.9 18.4% $162.1 20.6% $114.9 17.0%
SG&A 36.7 9.0% 30.1 8.4% 72.0 9.1% 59.2 8.8%
------- ------- ------- -------
Income from
operations $ 49.1 12.1% $ 35.8 10.0% $ 90.1 11.4% $ 55.7 8.3%
======= ======= ======= =======
Backlog $376.1 $296.0 $376.1 $296.0

Net sales for the Terex Materials Processing & Mining segment forthe second quarter of 2006 increased $47.8 million to $406.1 millionfrom $358.3 million in the second 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 $49.1 million, or 12.1%of sales, in the second quarter of 2006, from $35.8 million, or 10.0%of sales, in the second quarter of 2005.

"The Terex Materials Processing & Mining segment had an excellentquarter, and this positive performance came from all products andbusinesses," commented Rick Nichols, President - Terex MaterialsProcessing & Mining. "For our mining products, new equipment demandcontinues to drive our increased revenue, and we continue to grow ourfleet population. Long term, this will drive the performance of ourparts business, which will be instrumental in delivering strongincremental margin in the years to come."

Mr. Nichols continued, "The hydraulic shovel, mining truck anddrilling businesses continued to perform favorably in this strongdemand market. Our Materials Processing businesses had an outstandingquarter, driven by increased demand for mobile commercial gradecrushing and screening equipment, as well as increased activity by ourquarry customers, which reflects the positive impact of increasedinfrastructure spending. Overall, we continue to believe that therequirements for energy and growth in emerging markets, underpinned bysolid commodity prices, are at a level where we should expect soliddemand for our machine sales for the foreseeable future. As we statedlast quarter, we are quite positive on the outlook for our business,and our industry, for the next several years."

Terex Roadbuilding, Utility Products and Other

Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2006 2005 2006 2005
------------- ------------- ------------- -------------
% of % of % of % of
sales sales sales sales
----- ----- ----- -----
Net sales $255.2 $250.9 $489.5 $470.1
======= ======= ======= =======
Gross profit $ 44.7 17.5% $ 33.3 13.3% $ 76.5 15.6% $ 67.9 14.4%
SG&A 27.1 10.6% 23.0 9.2% 48.5 9.9% 46.1 9.8%
------- ------- ------- -------
Income from
operations $ 17.6 6.9% $ 10.3 4.1% $ 28.0 5.7% $ 21.8 4.6%
======= ======= ======= =======
Backlog $335.0 $190.4 $335.0 $190.4

Net sales for the Terex Roadbuilding, Utility Products and Othersegment for the second quarter of 2006 increased slightly from theprior year's results to $255.2 million, with meaningful growth in thecore product categories of Roadbuilding and Utility Products. Grossmargin for the quarter was 17.5%, a meaningful increase when comparedwith prior year results of 13.3%, and was favorably impacted bypricing actions and volume leverage on manufacturing costs. SG&Aexpense for the second quarter of 2006 was $27.1 million, or 10.6% ofsales, compared to $23.0 million, or 9.2% of sales, in the secondquarter of 2005, reflecting the consolidation of a distribution jointventure, increased selling expenses related to the BrazilianRoadbuilding operation resulting from strong year over year net salesimprovement, as well as increased spending in support of TerexBusiness System and lean manufacturing initiatives. Income fromoperations increased to $17.6 million, or 6.9% of sales, from $10.3million, or 4.1% of sales, in the second quarter of 2005.

"The Terex Roadbuilding, Utility Products and Other group had amuch improved second quarter," commented Chris Ragot, President -Terex Roadbuilding and Utility Products. "Our core Utility Productsand Roadbuilding businesses both posted revenue growth in excess of10%, and the Utility Products business continued to demonstratesignificantly improved profitability. The Utilities business clearlyis experiencing increased bid activity and a surging backlog versus ayear ago, and our ability to produce to the stronger demand isimproving every day. On the Roadbuilding front, our operations haveaggressively adopted lean manufacturing principles, and we arewell-prepared to participate in a strengthening Roadbuildingend-market. Specifically, our concrete and asphalt plant businesseshave done an excellent job in driving operational improvement in theirbusinesses, and our Brazilian operation has successfully started todevelop a market presence throughout all of South America."

Mr. DeFeo added, "As we mentioned previously, we view the Tatracommercial and military truck business as a non-core operation andhave been reviewing our alternatives with respect to this business. Atthis time, we have reached an agreement to sell Tatra to a group ofprivate equity investors, including both American and Czech investorswho are familiar with Tatra's operations and have long term plans tobuild that business. Consummation of that transaction is subject tocustomary closing conditions, and the Company currently anticipatesthat this transaction will close in the third quarter of 2006. Moreinformation will be provided when this transaction is completed."

Terex Corporate / Eliminations

Second Quarter Year-to-Date
------------------- -----------------
(dollars in millions)
2006 2005 2006 2005
--------- --------- --------- -------

Net sales $(29.8) $(28.8) $(56.5) $(51.5)
======= ======= ======= =======
Gross profit $ 0.0 $ 3.0 $ (2.9) $ 2.0
SG&A 17.1 5.5 29.7 5.4
------- ------- ------- -------
Loss from operations $(17.1) $ (2.5) $(32.6) $ (3.4)
======= ======= ======= =======

The Company's consolidated results throughout 2006 will show amore significant amount 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.

Capital Structure and Taxes

"Net debt at the end of the second quarter of 2006 decreased $40million to $530 million, down from $570 million at the end of 2005,"commented Phil Widman, Senior Vice President and Chief FinancialOfficer. "Our cash performance was very strong, considering that thenet debt position reflects the use of cash for our Chinese craneacquisition in April, as well as investment in working capital toachieve our volume growth. Most importantly, our Company took twomajor steps towards a much more efficient and cost effective capitalstructure. At the end of June 2006, we redeemed $100 million principalamount of our 10-3/8% senior subordinated notes, and subsequent to thesecond quarter close, we initiated the process to retire the remaining$200 million principal amount of these notes by mid-August 2006. Wealso closed a new, larger senior credit facility in July 2006,allowing us to reduce the level of cash with which we havehistorically operated and to instead utilize a lower cost revolver tomeet our funding needs for working capital movements."

Mr. Widman continued, "Net debt was $204 million lower whencompared with the same period last year, reflecting the strong cashflow of the past twelve months, despite our rapid increase in revenue.We remain optimistic about our cash generation prospects for 2006.Working capital as a percent of trailing three month annualized saleswas approximately 17.5% at the end of the second quarter of 2006, aslight increase when compared to approximately 17.0% at the end of thesecond quarter in 2005. While we are making progress, inventory levelsare still too high, and with our continued focus on world-classpractices, we can provide an improved cash generation profile goingforward. This quarter's performance has led the Company to a ratio ofnet debt to total capitalization of approximately 26% at the end ofthe second quarter of 2006, meaningful progress when compared to theapproximate 40% result achieved at June 30, 2005."

Commenting on the effective tax rate, Mr. Widman stated, "Theeffective tax rate for the second quarter of 2006 was 35.3%, comparedto 37.5% in the prior year's second quarter."

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.


TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
(unaudited)


Three Months Six Months
Ended June 30, Ended June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------

Net sales $2,080.6 $1,759.1 $3,829.8 $3,210.2
Cost of goods sold 1,673.4 1,476.9 3,107.3 2,721.8
--------- --------- --------- ---------
Gross profit 407.2 282.2 722.5 488.4
Selling, general and
administrative expenses (194.0) (145.3) (364.5) (280.0)
--------- --------- --------- ---------
Income from operations 213.2 136.9 358.0 208.4
Other income (expense):
Interest income 4.8 1.6 6.7 3.6
Interest expense (26.4) (23.8) (51.1) (47.4)
Loss on early extinguishment
of debt (6.7) --- (6.7) ---
Other income (expense) - net (0.7) (0.7) 0.8 (3.4)
--------- --------- --------- ---------
Income before income taxes 184.2 114.0 307.7 161.2
Provision for income taxes (65.0) (42.8) (109.7) (59.4)
--------- --------- --------- ---------
Net income $ 119.2 $ 71.2 $ 198.0 $ 101.8
========= ========= ========= =========
EARNINGS PER SHARE: -
Basic: $ 1.19 $ 0.72 $ 1.98 $ 1.03
Diluted: $ 1.16 $ 0.70 $ 1.93 $ 1.00

Weighted average number of
common and common equivalent
shares outstanding in per
share calculation
Basic 100.2 99.4 100.0 99.2
Diluted 102.6 101.8 102.6 102.0



TEREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions, except par value)

June 30, December 31,
2006 2005
------------ -------------
CURRENT ASSETS
Cash and cash equivalents $ 525.7 $ 553.6
Trade receivables 1,029.4 735.0
Inventories 1,539.4 1,318.2
Deferred taxes 165.5 172.8
Other current assets 156.1 123.9
------------ -------------
Total Current Assets 3,416.1 2,903.5
LONG-TERM ASSETS
Property, plant and equipment 366.6 329.9
Goodwill 602.6 555.7
Deferred taxes 166.6 159.8
Other assets 267.2 251.4
------------ -------------

TOTAL ASSETS $ 4,819.1 $4,200.3
============ =============

CURRENT LIABILITIES
Notes payable and current portion of
long-term debt $ 295.4 $ 48.1
Trade accounts payable 1,111.5 913.4
Accrued compensation and benefits 153.9 133.3
Accrued warranties and product liability 93.0 82.8
Other current liabilities 459.3 347.0
------------ -------------
Total Current Liabilities 2,113.1 1,524.6
NON CURRENT LIABILITIES
Long-term debt, less current portion 760.4 1,075.8
Other 455.1 438.9
--------------------------

TOTAL LIABILITIES 3,328.6 3,039.3
------------ -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Common Stock, $0.01 par value --
Authorized 150.0 shares; issued 103.6
and 102.6 shares at June 30, 2006 and
December 31, 2005, respectively 0.5 0.5
Additional paid-in capital 894.8 861.9
Retained earnings 505.4 307.4
Accumulated other comprehensive income 125.5 26.2
Less cost of shares of common stock in
treasury (3.6 and 4.0 shares at June 30,
2006 and December 31, 2005,
respectively) (35.7) (35.0)
------------ -------------
Total Stockholders' Equity
1,490.5 1,161.0
------------ -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,819.1 $4,200.3
============ =============




TEREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(unaudited)

Six Months Ended
June 30,
----------------
2006 2005
------- -------
OPERATING ACTIVITIES
Net income $ 198.0 $ 101.8
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 30.4 31.3
Amortization 6.4 6.6
Loss on early extinguishment of debt 1.5 ---
Gain on sale of fixed assets (1.0) (0.5)
Stock-based compensation 24.1 3.5
Excess tax benefit from stock-based compensation (11.0) ---
Changes in operating assets and liabilities (net
of effects of acquisitions):
Trade receivables (255.5) (177.7)
Inventories (125.2) (81.0)
Trade accounts payable 131.7 103.3
Accrued compensation and benefits 14.7 19.2
Income taxes payable 41.7 33.4
Other, net 52.9 53.0
------- -------
Net cash provided by operating activities 108.7 92.9
------- -------
INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired (33.1) (0.1)
Capital expenditures (33.8) (25.2)
Investments in and advances to affiliates (6.8) (4.0)
Proceeds from sale of assets --- 1.6
------- -------
Net cash used in investing activities (73.7) (27.7)
------- -------
FINANCING ACTIVITIES
Principal repayments of long-term debt (100.0) ---
Excess tax benefit from stock-based compensation 11.0 ---
Proceeds from stock options exercised 6.1 1.4
Net borrowings (repayments) under revolving line of
credit agreements 0.2 (18.4)
Other (1.8) (14.9)
------- -------
Net cash used in financing activities (84.5) (31.9)
------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS 21.6 (26.2)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (27.9) 7.1

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 553.6 418.8
------- -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 525.7 $ 425.9
======= =======



Table I

TEREX CORPORATION AND SUBSIDIARIES - 2005 GAAP to Ex-Special Detail
(in millions)
(unaudited)


Three Months Ended Six Months Ended
June 30, 2005 June 30, 2005
----------------------- ------------------------
Ex- Ex-
Spe- cluding Spe- cluding
cial Special cial Special
GAAP Items Items GAAP Items Items
-------- ----- -------- -------- ----- ---------

Sales
Construction $ 450.0 $ --- $ 450.0 $ 782.1 $ --- $ 782.1
Cranes 336.2 --- 336.2 635.0 --- 635.0
Aerial Work
Platforms 392.5 --- 392.5 700.5 --- 700.5
Materials
Processing &
Mining 358.3 --- 358.3 674.0 --- 674.0
Roadbuilding,
Utility Products &
Other 250.9 --- 250.9 470.1 --- 470.1
Corp / Eliminations (28.8) --- (28.8) (51.5) --- (51.5)
-------- ----- -------- -------- ----- --------
Total $1,759.1 $ --- $1,759.1 $3,210.2 $ --- $3,210.2
======== ===== ======== ======== ===== ========

Gross Profit
Construction $ 60.9 $ 0.2 $ 61.1 $ 99.8 $ 0.2 $ 100.0
Cranes 45.5 --- 45.5 76.5 --- 76.5
Aerial Work
Platforms 74.7 --- 74.7 128.5 --- 128.5
Materials
Processing &
Mining 65.0 0.9 65.9 114.0 0.9 114.9
Roadbuilding,
Utility Products &
Other 33.1 0.2 33.3 67.6 0.3 67.9
Corp / Eliminations 3.0 --- 3.0 2.0 --- 2.0
-------- ----- -------- -------- ----- --------
Total $ 282.2 $ 1.3 $ 283.5 $ 488.4 $ 1.4 $ 489.8
======== ===== ======== ======== ===== ========

SG&A
Construction $ 32.1 $ --- $ 32.1 $ 63.9 $ --- $ 63.9
Cranes 29.1 --- 29.1 54.9 --- 54.9
Aerial Work
Platforms 23.0 --- 23.0 47.4 --- 47.4
Materials
Processing &
Mining 30.1 --- 30.1 59.2 --- 59.2
Roadbuilding,
Utility Products &
Other 24.1 (1.1) 23.0 47.2 (1.1) 46.1
Corp / Eliminations 6.9 (1.4) 5.5 7.4 (2.0) 5.4
-------- ----- -------- -------- ----- --------
Total $ 145.3 $(2.5)$ 142.8 $ 280.0 $(3.1)$ 276.9
======== ===== ======== ======== ===== ========

Income (Loss) from
Operations
Construction $ 28.8 $ 0.2 $ 29.0 $ 35.9 $ 0.2 $ 36.1
Cranes 16.4 --- 16.4 21.6 --- 21.6
Aerial Work
Platforms 51.7 --- 51.7 81.1 --- 81.1
Materials
Processing &
Mining 34.9 0.9 35.8 54.8 0.9 55.7
Roadbuilding,
Utility Products &
Other 9.0 1.3 10.3 20.4 1.4 21.8
Corp / Eliminations (3.9) 1.4 (2.5) (5.4) 2.0 (3.4)
-------- ----- -------- -------- ----- --------
Total $ 136.9 $ 3.8 $ 140.7 $ 208.4 $ 4.5 $ 212.9
======== ===== ======== ======== ===== ========