BUSINESS DESCRIPTION

We are a diversified global manufacturer of capital equipment with a mission to deliver value-added offerings that meet or exceed our customers' current and future needs. We manufacture a broad range of equipment for use in the construction, infrastructure, quarrying, recycling, mining, shipping, transportation, refining, utility and maintenance industries. We operate in four reportable segments: (i) Terex Aerial Work Platforms; (ii) Terex Construction;
(iii) Terex Cranes; and (iv) Terex Materials Processing & Mining.

Our Aerial Work Platforms segment designs, manufactures, markets and refurbishes aerial work platform equipment, telehandlers, power equipment, construction trailers and utility equipment. Construction, building maintenance, government and utility customers use these products to build and/or maintain large physical assets and structures, construct and maintain utility lines, trim trees and for other commercial operations. Additionally, we own much of the North American distribution channel for our utility products group and operate a fleet of rental utility products in the United States and Canada.

Our Construction segment designs, manufactures and markets heavy and compact construction equipment, asphalt and concrete equipment, landfill compactors and bridge inspection equipment. Construction, logging, mining, industrial and government customers use these products in construction and infrastructure projects, in coal, minerals, sand and gravel operations and to build roads. We acquired A.S.V., Inc. ("ASV") on February 26, 2008. The results of ASV are included in the Construction segment from its date of acquisition.

Our Cranes segment designs, manufactures and markets mobile telescopic cranes, tower cranes, lattice boom crawler cranes, truck-mounted cranes (boom trucks and loading cranes) and telescopic container stackers. These products are used primarily for construction, repair and maintenance of infrastructure, building and manufacturing facilities.

Our Materials Processing & Mining segment designs, manufactures and markets crushing and screening equipment, hydraulic mining excavators, highwall mining equipment, high capacity surface mining trucks, drilling equipment and other products. Construction, mining, quarrying and government customers use these products in construction and commodity mining.

We also assist customers in their rental, leasing and acquisition of our products through Terex Financial Services, Inc. ("TFS").

On January 1, 2009, we realigned certain operations in an effort to capture market synergies and streamline our cost structure. The Roadbuilding businesses, formerly part of our Roadbuilding, Utility Products and Other ("RBUO") segment, are now consolidated within the Construction segment. The Utility Products businesses, formerly part of the RBUO segment, are now consolidated within the Aerial Work Platforms segment. Additionally, our truck-mounted articulated hydraulic crane line of business produced in Delmenhorst and Vechta, Germany, formerly part of the Construction segment, is now consolidated within the Cranes segment. Certain other businesses that were included in the RBUO segment are now reported in Corporate and Other, which includes eliminations among our segments, and prior period amounts have been retrospectively adjusted to conform to this presentation.

Overview

We continue to experience many challenges in the current operating environment, as the deterioration in the fundamentals of the global economy, combined with the global credit constriction, is having a more significant impact on our business. Each of our segments experienced significantly weaker results in the first quarter of 2009 than in the comparable period in 2008. Profits in our Cranes and Materials Processing & Mining ("MPM") segments during the first quarter of 2009 were more than offset by losses in our Aerial Work Platforms ("AWP") and Construction segments. The turmoil from the global credit crisis and economic slowdown has quickly and deeply impacted sales for both the Company and the industry as a whole, with certain businesses down almost 75% from year ago levels. As a result, we continue to aggressively target and implement cost reduction activities. We are realigning our businesses for the current demand environment by reducing headcount, lowering production levels and production capacity, and consolidating facilities.

The global economy remains under stress and our expectations for the remainder for 2009 have been lowered as we expect the remainder of 2009 to continue to be challenging. The depth and duration of the global economic decline is not known, although some stability is beginning to develop in a number of our businesses. While we remain confident that our strategy of product and geographic diversity is the right one to deliver positive shareholder returns for the long term, the current environment presents unique challenges.

In response to the present economic environment, we have taken and will continue to take aggressive actions to reduce costs and preserve cash in all of our businesses. These actions include the following:

• reducing our workforce, including full-time, temporary and contract workers:

• the AWP global workforce has been reduced by more than 40% since June 2008;

• the Construction global workforce has been reduced by approximately 20% since June 2008;

• the Materials Processing global workforce has been reduced by approximately 28% since June 2008;

• the Cranes North American workforce has been reduced by approximately 28% since the beginning of 2009;

• reductions in staffing levels and expenses at the Corporate office have been implemented; and

• additional reductions in our workforce were initiated in the second quarter of 2009 and will continue as needed in response to market changes during the remainder of 2009;

• temporary shutdowns of manufacturing facilities and shortened work weeks have been used extensively and will continue to be used to reduce production output as necessary;

• reviewing existing facilities for potential consolidation, transfer or sale;

• implementing up to 10% salary reductions for the balance of this year for most team members, combined with reductions in benefits;

• significantly reducing executive long-term compensation;

• delaying or cutting capital expenditures;

• tightly managing travel expenditures and reducing non-essential spending; and

• improving production and administrative process efficiencies.

These actions have already resulted in a $208 million quarterly manufacturing and selling, general and administrative spending reduction, as compared to peak spending levels in the second quarter of 2008, with a target to exceed a per quarter spending reduction of $300 million by year-end 2009.

The marketplace for each of our businesses is somewhat different, but there is a common approach we are taking throughout the Company. In the remainder of 2009, we will be managing our business even more aggressively than normal for cash. We are operating with a build-to-order approach as we tightly manage inventory levels. All of our businesses are working closely with our suppliers to minimize raw material deliveries and with our customers and dealers to confirm existing orders in an effort to minimize the level of inventory in the distribution channel. We continue to operate at reduced production levels, in many instances at levels well below current demand, with the primary objective to reduce inventory. We believe that this strategy, along with significant reductions in production scheduling, should generate significant cash flow from operations during the remainder of 2009. We continue to expect to reduce inventory levels by more than $500 million by the end of 2009 as compared to year-end 2008. With the actions we are taking to reduce costs and increase cash generated from operations, we expect to have sufficient liquidity to execute our key business plans.

Although we have begun to witness some moderation regarding input costs, any potential benefits from lower input costs are not expected to be realized until the second half of 2009. Existing raw material inventory must be utilized before significant new raw material purchases are initiated. Given lower production levels, it will take a number of months for the existing raw material inventory to be utilized.

Our Construction businesses are experiencing a number of significant challenges in this very difficult environment and we are making changes to improve these businesses to meet these challenges. While we currently are implementing the necessary changes to overcome these obstacles, we may consider other strategies to better allow these businesses to recover. We are also evaluating strategic options for these businesses and the Construction segment as a whole.

Due to the economic uncertainty, customers are ordering equipment when needed, rather than planning purchases in advance as they did in prior periods, resulting in minimal levels of backlog. As a result, year-over-year backlog for all of our segments is down significantly, with AWP and Construction backlogs down approximately 80%. Demand for high capacity cranes remained stable, as these cranes are utilized in infrastructure and energy related projects, while demand for tower cranes and smaller capacity cranes has significantly slowed. Demand for mining equipment is being driven by strength in select commodities such as thermal coal and gold, although new order intake for the second half of 2009 for our Mining business has slowed, particularly for trucks and drills.

Uncertainty around the depth and duration of the current economic decline makes it difficult to forecast our expectations for the remainder of 2009 with a reasonable degree of certainty. However, we are planning for continued softness in demand as a result of weak global end markets, combined with continued constrained credit availability worldwide. We expect our overall 2009 net sales to decline in the range of 40%-45% as compared to 2008, approximately 14% of which is the estimated translation effect of foreign currency exchange rate changes.

As external access to credit remains uncertain in the current financial environment, we are focusing on improving liquidity by aggressively reducing costs and working capital and slowing capital spending, as described above. We are not purchasing shares of our common stock under our previously announced share repurchase program.

TFS provides assistance to our customers in financing purchases of our equipment, largely through the use of financial institutions. We utilize the flexibility, expertise and capacity of multiple financial institutions to secure financing. TFS continues to obtain financing for our customers, even in this difficult market. For example, TFS is helping to solidify our Cranes backlog for retail crane customers that may be facing challenges with obtaining financing from their traditional financing sources. In certain cases, TFS will also originate and sell financing transactions to these same financial institutions to increase the velocity of transaction processing and to preserve and grow our customer relationships. As of March 31, 2009, TFS retained approximately $3 million of these assets on our balance sheet.

After tax Return on Invested Capital ("ROIC") continues to be the unifying metric we use to measure our operating performance. ROIC measures how effectively we utilize the capital invested in our operations. After tax ROIC is determined by dividing the sum of Net Operating Profit After Tax ("NOPAT") (as defined below) for each of the previous four quarters by the average of the sum of Total stockholders' equity plus Debt (as defined below) less Cash and cash equivalents for the previous five quarters. NOPAT, which is a non-GAAP measure, for each quarter is calculated by multiplying Income (loss) from operations by a figure equal to one minus the effective tax rate of the Company. The effective tax rate is equal to the (Provision for) benefit from income taxes divided by Income (loss) before income taxes for the respective quarter. Debt is calculated using the amounts for Notes payable and current portion of long-term debt plus Long-term debt, less current portion. We calculate ROIC using the last four quarters' NOPAT as this represents the most recent twelve-month period at any given point of determination. In order for the denominator of the ROIC ratio to properly match the operational period reflected in the numerator, we include the average of five quarters' ending balance sheet amounts so that the denominator includes the average of the opening through ending balances (on a quarterly basis) over the same time period as the numerator (four quarters of average invested capital).

We use ROIC as a unifying metric because we feel that it measures how effectively we invest our capital and provides a better measure to compare ourselves to peer companies to assist in assessing how we drive operational improvement. We believe that ROIC measures return on the full enterprise-wide amount of capital invested in our business, as opposed to another metric such as return on stockholders' equity that only incorporates book equity, and is thus a more accurate and descriptive measure of our performance. We also believe that adding Debt less Cash and cash equivalents to Total stockholders' equity provides a better comparison across similar businesses regarding total capitalization, and ROIC highlights the level of value creation as a percentage of capital invested. Consistent with this belief, we use ROIC in evaluating executive performance and compensation, as we have disclosed in the Compensation Discussion and Analysis in our proxy statement for the 2009 annual meeting of stockholders. As of October 1, 2008, we performed our annual goodwill impairment test, which resulted in a non-cash impairment charge for goodwill of $459.9 million, which represented all of the goodwill recorded in the Construction segment and former RBUO segment. However, we do not believe that non-cash impairment charges are indicative of returns on our invested capital. Therefore, we have excluded the effect of these impairment charges from the metrics used in our calculation of ROIC. As the tables below show, our ROIC at March 31, 2009 was 11.8%, down from 27.4% at March 31, 2008. The decrease reflects reduced NOPAT performance from approximately $687 million to approximately $377 million and the increased invested capital impact of 2008 acquisitions of approximately $482 million.

                                     Mar '09     Dec '08     Sep '08     Jun '08     Mar '08
(Benefit from) provision for
income taxes as adjusted           $ (24.0)    $ (1.0)     $ 44.9      $ 116.8
Divided by: Income (loss) before
income taxes as adjusted             (98.5)      37.0        139.4       353.8
Effective tax rate as adjusted       24.4%       (2.7)%      32.2%       33.0%

Income (loss) from operations as
adjusted                           $ (72.5)    $ 68.1      $ 167.2     $ 370.9
Multiplied by: 1 minus Effective
tax rate as adjusted                 75.6%       102.7%      67.8%       67.0%
Adjusted net operating profit
(loss) after tax                   $ (54.8)    $ 69.9      $ 113.4     $ 248.5

Debt (as defined above)            $ 1,482.8   $ 1,435.8   $ 1,568.2   $ 1,355.9   $ 1,373.4
Less: Cash and cash equivalents      (344.3)     (484.4)     (487.9)     (590.0)     (604.2)
Debt less Cash and cash
equivalents                        $ 1,138.5   $ 951.4     $ 1,080.3   $ 765.9     $ 769.2

Total Terex Corporation
stockholders' equity as adjusted   $ 1,569.8   $ 2,181.2   $ 2,302.9   $ 2,664.6   $ 2,538.1

Debt less Cash and cash
equivalents plus Total Terex
Corporation stockholders' equity
as adjusted                        $ 2,708.3   $ 3,132.6   $ 3,383.2   $ 3,430.5   $ 3,307.3

        March 31, 2009 ROIC              11.8%
Adjusted net operating profit (loss) $  377.0
after tax (last 4 quarters)
Average Debt less Cash and cash
equivalents plus Total Terex
Corporation stockholders' equity as
adjusted (5 quarters)                $  3,192.4

Reconciliation of the December 2008 column (above) of ROIC adjusted for goodwill impairment as of and for the three months ended December 31, 2008.

                                                                                                                                        12/31/08
Loss before income taxes as reported                                                                                                $ (422.9)
Less: Goodwill impairment                                                                                                             (459.9)
Income before income taxes as adjusted                                                                                              $ 37.0

Benefit from income taxes as reported                                                                                               $ 2.7
Less: Benefit from income taxes on impairment                                                                                         1.7
Benefit from income taxes as adjusted                                                                                               $ 1.0

Income before income taxes as adjusted                                                                                              $ 37.0
Plus: Benefit from income taxes as adjusted                                                                                           1.0
Net income as adjusted                                                                                                              $ 38.0

Loss from operations as reported                                                                                                    $ (391.8)
Less: Goodwill impairment                                                                                                             (459.9)
Income from operations as adjusted                                                                                                  $ 68.1

Total Terex Corporation stockholders' equity as reported                                                                            $ 1,721.7
Less: Net loss as reported                                                                                                            (421.5)
Add: Net income as adjusted                                                                                                           38.0
Total Terex Corporation stockholders' equity as adjusted                                                                            $ 2,181.2

Effective tax rate reconciliation excluding impairment

                                                Three months ended 12/31/08
                                             As reported   Impairment As adjusted
(Loss) income before income taxes             $    (422.9) $  (459.9)   $    37.0
Benefit from income taxes                              2.7        1.7         1.0
Net (loss) income                             $    (420.2)              $    38.0

Effective tax rate                                    0.6%       0.4%      (2.7)%

                                  Mar '08      Dec '07      Sep '07     Jun '07     Mar '07
Provision for income taxes      $ 83.2      $ 62.0        $ 78.5      $ 96.7
Divided by: Income before
income taxes                      247.5       235.5         231.6       272.3
Effective tax rate                33.6%       26.3%         33.9%       35.5%

Income from operations          $ 256.3     $ 239.9       $ 236.3     $ 284.5
Multiplied by: 1 minus
Effective tax rate                66.4%       73.7%         66.1%       64.5%
Net operating profit after tax  $ 170.2     $ 176.8       $ 156.2     $ 183.5

Debt (as defined above)         $ 1,373.4   $ 1,352.0     $ 705.6     $ 651.7     $ 678.4
Less: Cash and cash equivalents   (604.2)     (1,272.4)     (516.6)     (453.4)     (431.2)
Debt less Cash and cash
equivalents                     $ 769.2     $ 79.6        $ 189.0     $ 198.3     $ 247.2

Total Terex Corporation
stockholders' equity            $ 2,538.1   $ 2,343.2     $ 2,254.4   $ 2,073.4   $ 1,851.9

Debt less Cash and cash
equivalents plus Total Terex
Corporation stockholders'
equity                          $ 3,307.3   $ 2,422.8     $ 2,443.4   $ 2,271.7   $ 2,099.1




      March 31, 2008 ROIC            27.4%
Net operating profit after tax   $  686.7
(last 4 quarters)
Average Debt less Cash and cash
equivalents plus Total Terex
Corporation stockholders' equity
(5 quarters)                     $  2,508.9

RESULTS OF OPERATIONS

Three Months Ended March 31, 2009 Compared with Three Months Ended March 31, 2008

Consolidated



                                  Three Months Ended March 31,
                                      2009             2008
                                          % of             % of      % Change In
                                          Sales            Sales   Reported Amounts
                                    ($ amounts in millions)
Net sales                     $ 1,302.6     -    $ 2,362.7   -     (44.9)%
Gross profit                  $ 144.5    11.1%   $ 514.0   21.8%   (71.9)%
SG&A                          $ 217.0    16.7%   $ 257.7   10.9%   (15.8)%
(Loss) income from operations $ (72.5)   (5.6)%  $ 256.3   10.8%   (128.3)%

Net sales for the three months ended March 31, 2009 decreased $1,060.1 million when compared to the same period in 2008. The unfavorable translation effect of foreign currency exchange rate changes contributed approximately $194 million to the net sales decrease. Excluding the unfavorable translation effect of foreign currency exchange rate changes, net sales in all segments declined by approximately $859 million from the prior year period, primarily due to lower net sales volumes as the global economy continued to deteriorate.

Gross profit for the three months ended March 31, 2009 decreased $369.5 million when compared to the same period in 2008. The unfavorable translation effect of foreign currency exchange rate changes decreased gross profit by approximately $28 million from the prior year period. Excluding the unfavorable translation effect of foreign currency exchange rate changes, the impact of lower net sales volume for new equipment decreased gross profit by approximately $232 million. Parts, service and used equipment margins also decreased gross profit by approximately $25 million. Charges, primarily related to production level and headcount reductions, decreased gross profit by approximately $30 million. Additionally, due to lower production levels, net manufacturing unabsorbed overhead increased, resulting in a reduction to gross profit of approximately $44 million.

Selling, general and administrative ("SG&A") costs decreased for the three months ended March 31, 2009 by $40.7 million when compared to the same period in 2008. Approximately $26 million of the decrease was due to the favorable translation effect of foreign currency exchange rate changes. Excluding the favorable translation effect of foreign currency exchange rate changes, SG&A costs in all of the segments decreased by approximately $23 million due to lower net sales volume and curtailment of non-essential spending. These decreases were partially offset by approximately $10 million of charges related to headcount reductions.

Aerial Work Platforms



                                  Three Months Ended March 31,
                                      2009              2008
                                          % of             % of      % Change In
                                          Sales            Sales   Reported Amounts
                                    ($ amounts in millions)
Net sales                     $ 228.5       -     $  664.7   -     (65.6)%
Gross profit                  $ 5.1     2.2%      $  176.4 26.5%   (97.1)%
SG&A                          $ 46.1    20.2%     $  67.7  10.2%   (31.9)%
(Loss) income from operations $ (41.0)  (17.9)%   $  108.7 16.4%   (137.7)%

Net sales for the Aerial Work Platforms segment for the three months ended March 31, 2009 decreased $436.2 million when compared to the same period in 2008. The unfavorable translation effect of foreign currency exchange rate changes accounted for approximately $12 million of the net sales decrease. Lower net sales volume of approximately $419 million across all products and regions primarily drove the decrease in net sales. The lower net sales volume was primarily due to rental customers aging their fleets and deferring purchases of new products, particularly for mid-size booms, scissor lifts and telehandlers.

Gross profit for the three months ended March 31, 2009 decreased $171.3 million when compared to the same period in 2008. The unfavorable translation effect of foreign currency exchange rate changes decreased gross profit by approximately $9 million from the prior year period. The impact of lower net sales volume decreased gross profit by approximately $128 million. Additionally, due to lower production levels, net manufacturing unabsorbed overhead increased, resulting in a reduction to gross profit of approximately $24 million. Charges, primarily related to production level and headcount reductions decreased gross profit by approximately $8 million.

SG&A costs for the three months ended March 31, 2009 decreased $21.6 million when compared to the same period in 2008. Approximately $3 million of the decrease was due to the favorable translation effect of foreign currency exchange rate changes. Selling, marketing and administrative costs were lower by approximately $9 million due to decreased volume and curtailment of non-essential spending. Additionally, the corporate cost allocation decreased by approximately $5 million over the prior year period.

Income (loss) from operations for the three months ended March 31, 2009 . . .