UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended September 30, 2026
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
Commission file number 1-10702
Terex Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 34-1531521 | |||||||
| (State of Incorporation) | (IRS Employer Identification No.) | |||||||
301 Merritt 7, 4th Floor, Norwalk, Connecticut 06851
(Address of principal executive offices)
(203) 222-7170
(Registrant’s telephone number, including area code)
_______________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock ($0.01 par value) | TEX | New York Stock Exchange | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | ||||||||||||||||||
| Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
Number of outstanding shares of common stock: 112.4 million as of October 27, 2026.
GENERAL
This Quarterly Report on Form 10-Q filed by Terex Corporation generally speaks as of September 30, 2026 unless specifically noted otherwise. Unless otherwise indicated, Terex Corporation, together with its consolidated subsidiaries, is hereinafter referred to as “Terex,” the “Registrant,” “us,” “we,” “our” or the “Company.”
Forward-Looking Information
Certain information in this Quarterly Report includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and the Private Securities Litigation Reform Act of 1995) regarding future events or our future financial performance that involve certain contingencies and uncertainties, including those discussed below in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contingencies and Uncertainties.” In addition, when included in this Quarterly Report or in documents incorporated herein by reference, the words “may,” “expects,” “should,” “intends,” “anticipates,” “believes,” “plans,” “projects,” “estimates,” “will” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. We have based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Such risks and uncertainties, many of which are beyond our control, include, among others:
•we may be unable to successfully integrate acquired or merged businesses, including REV Group, Inc. (“REV”), and we may not realize the anticipated benefits of any merged or acquired business;
•we may be unable to effectively manage our expanded operations following the completion of the recent transaction with REV;
•potential divestitures and any retained liabilities related thereto may negatively impact our business;
•the timing and amount of benefits from our strategic initiatives may not be as expected;
•our industry is highly competitive and subject to pricing pressure, and we may fail to compete effectively;
•we may experience disruptions within our dealer network;
•the imposition of new, postponed or increased international tariffs;
•general economic conditions, government spending priorities and the cyclical nature of markets we serve;
•our outstanding debt and need to comply with covenants contained in our debt agreements;
•we may be unable to generate sufficient cash flow to service our debt obligations and operate our business;
•our access to capital markets and borrowing capacity could be limited;
•we may face cancellations, reductions or delays in customer orders, customer breaches of purchase agreements, backlog reductions or be unable to meet customer delivery schedules;
•currency exchange and translation risk;
•the financial condition of customers and dealers and their continued access to capital;
•exposure from providing credit support for some of our customers and dealers;
•we may experience losses in excess of recorded reserves;
•our common stock may be affected by factors different from those previously disclosed, and may decline as a result of the transaction with REV;
•political, economic and other risks that arise from operating a multinational business;
•changes in the availability and price of certain materials and components, which may result in supply chain disruptions;
•consolidation within our customer base and suppliers;
•failure of our equipment to perform as expected;
•a material disruption to one of our significant facilities;
•a failure of a key information technology system or a breach of our information security from increased cybersecurity threats and more sophisticated computer crime;
•issues related to the development, deployment and use of artificial intelligence technologies in our business operations, information systems, products and services;
•increased regulatory focus on privacy and data security issues and expanding laws;
•product liability claims, litigation and other liabilities;
•compliance with the United States (“U.S.”) Foreign Corrupt Practices Act, the U.K. Bribery Act and similar worldwide anti-corruption laws;
•compliance with environmental, health and safety laws and regulations and failure to meet sustainability requirements or expectations;
•compliance with an injunction and related obligations imposed by the U.S. Securities and Exchange Commission (“SEC”);
•our ability to attract, develop, engage and retain qualified team members;
•possible work stoppages and other labor matters; and
•other factors.
Actual events or our actual future results may differ materially from any forward-looking statement due to these and other risks, uncertainties and material factors. The forward-looking statements contained herein speak only as of the date of this Quarterly Report and the forward-looking statements contained in documents incorporated herein by reference speak only as of the date of the respective documents. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained or incorporated by reference in this Quarterly Report to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
2
TEREX CORPORATION AND SUBSIDIARIES
Index to Quarterly Report on Form 10-Q
For the Quarterly Period Ended September 30, 2026
| PAGE | ||||||||
3
PART I.FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS | ||||
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(unaudited)
(in millions, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | $ | 2,197 | $ | 1,387 | $ | 6,169 | $ | 4,103 | |||||||||||||||
| Cost of goods sold | (1,762) | (1,088) | (5,083) | (3,248) | |||||||||||||||||||
| Gross profit | 435 | 299 | 1,086 | 855 | |||||||||||||||||||
| Selling, general and administrative expenses | (199) | (142) | (650) | (465) | |||||||||||||||||||
Amortization of purchased intangibles | (53) | (17) | (148) | (52) | |||||||||||||||||||
| Operating profit | 183 | 140 | 288 | 338 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest income | 5 | 3 | 14 | 7 | |||||||||||||||||||
| Interest expense | (49) | (45) | (147) | (132) | |||||||||||||||||||
| Other (expense) income – net | (4) | (4) | (8) | (4) | |||||||||||||||||||
| Income before income taxes | 135 | 94 | 147 | 209 | |||||||||||||||||||
| Provision for income taxes | (21) | (29) | (16) | (51) | |||||||||||||||||||
| Income from continuing operations | 114 | 65 | 131 | 158 | |||||||||||||||||||
| Income from discontinued operations – net of tax | — | — | 4 | — | |||||||||||||||||||
| Net income | $ | 114 | $ | 65 | $ | 135 | $ | 158 | |||||||||||||||
| Basic earnings per share | |||||||||||||||||||||||
| Income from continuing operations | $ | 1.01 | $ | 0.99 | $ | 1.22 | $ | 2.40 | |||||||||||||||
| Income from discontinued operations – net of tax | — | — | 0.04 | — | |||||||||||||||||||
| Net income | $ | 1.01 | $ | 0.99 | $ | 1.26 | $ | 2.40 | |||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Income from continuing operations | $ | 1.00 | $ | 0.98 | $ | 1.21 | $ | 2.38 | |||||||||||||||
| Income from discontinued operations – net of tax | — | — | 0.04 | — | |||||||||||||||||||
| Net income | $ | 1.00 | $ | 0.98 | $ | 1.25 | $ | 2.38 | |||||||||||||||
| Weighted average number of shares outstanding in per share calculation | |||||||||||||||||||||||
| Basic | 113.3 | 65.6 | 107.5 | 65.9 | |||||||||||||||||||
| Diluted | 114.0 | 66.2 | 108.3 | 66.4 | |||||||||||||||||||
| Net income | $ | 114 | $ | 65 | $ | 135 | $ | 158 | |||||||||||||||
| Other comprehensive income (loss) | 1 | (8) | (11) | 98 | |||||||||||||||||||
| Comprehensive income | $ | 115 | $ | 57 | $ | 124 | $ | 256 | |||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions, except par value)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 407 | $ | 772 | |||||||
Receivables (net of allowance of $9 at September 30, 2026 and December 31, 2025) | 1,124 | 712 | |||||||||
| Inventories | 1,631 | 1,109 | |||||||||
| Prepaid and other current assets | 236 | 132 | |||||||||
| Total current assets | 3,398 | 2,725 | |||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment – net | 966 | 760 | |||||||||
| Goodwill | 2,513 | 1,091 | |||||||||
| Intangible assets – net | 2,901 | 1,027 | |||||||||
| Long-term deferred tax asset | 151 | 207 | |||||||||
| Other assets | 367 | 329 | |||||||||
| Total assets | $ | 10,296 | $ | 6,139 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities | |||||||||||
| Current portion of long-term debt | $ | 24 | $ | 6 | |||||||
| Trade accounts payable | 986 | 683 | |||||||||
| Accrued compensation and benefits | 172 | 123 | |||||||||
| Short-term customer advances | 271 | 44 | |||||||||
| Other current liabilities | 476 | 331 | |||||||||
| Total current liabilities | 1,929 | 1,187 | |||||||||
| Non-current liabilities | |||||||||||
| Long-term debt, less current portion | 2,554 | 2,578 | |||||||||
| Long-term customer advances | 176 | 20 | |||||||||
| Long-term deferred tax liabilities | 411 | 8 | |||||||||
| Other non-current liabilities | 268 | 251 | |||||||||
| Total liabilities | 5,338 | 4,044 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity | |||||||||||
Common stock, $0.01 par value – authorized 300.0 shares; issued 134.4 and 85.5 shares at September 30, 2026 and December 31, 2025, respectively | 1 | 1 | |||||||||
| Additional paid-in capital | 3,829 | 942 | |||||||||
| Retained earnings | 2,216 | 2,139 | |||||||||
| Accumulated other comprehensive loss | (276) | (265) | |||||||||
Shares of common stock in treasury – 22.0 and 20.6 shares at September 30, 2026 and December 31, 2025 | (812) | (722) | |||||||||
| Total stockholders’ equity | 4,958 | 2,095 | |||||||||
| Total liabilities and stockholders’ equity | $ | 10,296 | $ | 6,139 | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited)
(in millions)
| Outstanding Shares | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Common Stock in Treasury | Total | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2025 | 64.9 | $ | 1 | $ | 942 | $ | 2,139 | $ | (265) | $ | (722) | $ | 2,095 | ||||||||||||||||||||||||||||
Net loss | — | — | — | (89) | — | — | (89) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss – net of tax | — | — | — | — | (12) | — | (12) | ||||||||||||||||||||||||||||||||||
Stock compensation expense | — | — | 36 | — | — | — | 36 | ||||||||||||||||||||||||||||||||||
Vestings of restricted stock, net of employee tax withholdings | 0.7 | — | (12) | — | — | (13) | (25) | ||||||||||||||||||||||||||||||||||
Compensation under stock-based plans – net | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | (19) | — | — | (19) | ||||||||||||||||||||||||||||||||||
Issuance of common stock related to merger(1) | 47.9 | — | 2,836 | — | — | — | 2,836 | ||||||||||||||||||||||||||||||||||
| Other | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2026 | 113.5 | $ | 1 | $ | 3,801 | $ | 2,031 | $ | (277) | $ | (734) | $ | 4,822 | ||||||||||||||||||||||||||||
| Net income | — | — | — | 110 | — | — | 110 | ||||||||||||||||||||||||||||||||||
| Stock compensation expense | — | — | 15 | — | — | — | 15 | ||||||||||||||||||||||||||||||||||
| Vestings of restricted stock, net of employee tax withholdings | 0.1 | — | (1) | — | — | (1) | (2) | ||||||||||||||||||||||||||||||||||
| Compensation under stock-based plans – net | — | — | 2 | — | — | — | 2 | ||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | (20) | — | — | (20) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | — | — | — | — | — | (3) | (3) | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2026 | 113.6 | $ | 1 | $ | 3,817 | $ | 2,121 | $ | (277) | $ | (737) | $ | 4,925 | ||||||||||||||||||||||||||||
| Net income | — | — | — | 114 | — | — | 114 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income – net of tax | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||||||||||
| Stock compensation expense | — | — | 12 | — | — | — | 12 | ||||||||||||||||||||||||||||||||||
| Vestings of restricted stock, net of employee tax withholdings | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | (19) | — | — | (19) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | (1.2) | — | — | — | — | (74) | (74) | ||||||||||||||||||||||||||||||||||
| Other | — | — | 1 | — | — | (1) | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2026 | 112.4 | $ | 1 | $ | 3,829 | $ | 2,216 | $ | (276) | $ | (812) | $ | 4,958 | ||||||||||||||||||||||||||||
(1) Includes stock-based compensation attributable to pre-combination services. | |||||||||||||||||||||||||||||||||||||||||
6
| Outstanding Shares | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Common Stock in Treasury | Total | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | 65.7 | $ | 1 | $ | 921 | $ | 1,964 | $ | (382) | $ | (672) | $ | 1,832 | ||||||||||||||||||||||||||||
Net income | — | — | — | 21 | — | — | 21 | ||||||||||||||||||||||||||||||||||
Other comprehensive income – net of tax | — | — | — | — | 32 | — | 32 | ||||||||||||||||||||||||||||||||||
Stock compensation expense | — | — | 10 | — | — | — | 10 | ||||||||||||||||||||||||||||||||||
Vestings of restricted stock, net of employee tax withholdings | 0.4 | — | (8) | — | — | — | (8) | ||||||||||||||||||||||||||||||||||
Compensation under stock-based plans – net | 0.2 | — | (5) | — | — | 6 | 1 | ||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | (11) | — | — | (11) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | (0.8) | — | — | — | — | (33) | (33) | ||||||||||||||||||||||||||||||||||
| Other | — | — | 1 | — | — | (1) | — | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2025 | 65.5 | $ | 1 | $ | 919 | $ | 1,974 | $ | (350) | $ | (700) | $ | 1,844 | ||||||||||||||||||||||||||||
| Net income | — | — | — | 72 | — | — | 72 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income – net of tax | — | — | — | — | 74 | — | 74 | ||||||||||||||||||||||||||||||||||
| Stock compensation expense | — | — | 8 | — | — | — | 8 | ||||||||||||||||||||||||||||||||||
| Vestings of restricted stock, net of employee tax withholdings | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Compensation under stock-based plans – net | — | — | 2 | — | — | — | 2 | ||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | (11) | — | — | (11) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | (0.6) | — | — | — | — | (22) | (22) | ||||||||||||||||||||||||||||||||||
| Other | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2025 | 64.9 | $ | 1 | $ | 927 | $ | 2,035 | $ | (276) | $ | (722) | $ | 1,965 | ||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | 65 | — | — | 65 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) – net of tax | — | — | — | — | (8) | — | (8) | ||||||||||||||||||||||||||||||||||
| Stock compensation expense | — | — | 7 | — | — | — | 7 | ||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | (12) | — | — | (12) | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | (1) | — | 1 | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2025 | 64.9 | $ | 1 | $ | 934 | $ | 2,087 | $ | (284) | $ | (721) | $ | 2,017 | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in millions)
Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating Activities | |||||||||||
| Net income | $ | 135 | $ | 158 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 246 | 113 | |||||||||
| Deferred taxes | (35) | 13 | |||||||||
| Stock-based compensation expense | 63 | 25 | |||||||||
| Inventory and other non-cash charges | 102 | 14 | |||||||||
| Changes in operating assets and liabilities (net of effects of acquisitions and divestitures): | |||||||||||
| Receivables | (251) | (163) | |||||||||
| Inventories | (48) | (73) | |||||||||
| Trade accounts payable | 136 | 140 | |||||||||
| Other assets and liabilities | (14) | 9 | |||||||||
| Foreign exchange and other operating activities, net | 4 | (1) | |||||||||
| Net cash provided by operating activities | 338 | 235 | |||||||||
| Investing Activities | |||||||||||
| Capital expenditures | (90) | (84) | |||||||||
| Acquisitions, net of cash acquired, and investments | (467) | — | |||||||||
| Other investing activities, net | 38 | 40 | |||||||||
| Net cash used in investing activities | (519) | (44) | |||||||||
| Financing Activities | |||||||||||
| Repayments of debt | (311) | (92) | |||||||||
| Proceeds from issuance of debt | 300 | 95 | |||||||||
| Share repurchases | (75) | (55) | |||||||||
| Dividends paid | (58) | (34) | |||||||||
| Other financing activities, net | (33) | (12) | |||||||||
| Net cash used in financing activities | (177) | (98) | |||||||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | (7) | 28 | |||||||||
| Net (Decrease) Increase in Cash and Cash Equivalents | (365) | 121 | |||||||||
| Cash and Cash Equivalents at Beginning of Period | 772 | 388 | |||||||||
| Cash and Cash Equivalents at End of Period | $ | 407 | $ | 509 | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
TEREX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE A – BASIS OF PRESENTATION
Basis of Presentation and Principles of Consolidation. The accompanying unaudited Condensed Consolidated Financial Statements of Terex Corporation and subsidiaries as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. The accompanying Condensed Consolidated Balance Sheet as of December 31, 2025 has been derived from audited consolidated financial statements as of that date, but does not include all disclosures required by U.S. GAAP. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The Condensed Consolidated Financial Statements include accounts of Terex Corporation, its majority-owned subsidiaries and other controlled subsidiaries (“Terex” or the “Company”).
In the opinion of management, adjustments considered necessary for the fair statement of these interim financial statements have been made. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of results that may be expected for the year ending December 31, 2026.
Effective January 1, 2026, the Company made a voluntary change to classify and present the amortization of finite-lived intangibles related to Customer relationships and Trade names as operating expenses rather than in Cost of goods sold. The amortization expense related to Technology, Land use rights, and Other intangible assets will remain classified and presented in Cost of goods sold. We believe this change in classification and presentation better aligns the costs that are directly associated with generating revenue. The change in classification and presentation has been reflected in the Condensed Consolidated Statements of Income and Comprehensive Income, with retrospective application of the change to the prior periods presented. The impact of this change to the comparative period was an increase to operating expense and related decrease to Cost of goods sold of $17 million and $52 million for the three and nine months ended September 30, 2025, respectively.
Merger Transaction. On October 29, 2025, the Company entered into a definitive merger agreement with REV Group, Inc. (“REV”), a publicly traded manufacturer and distributor of specialty vehicles and related aftermarket parts and services, in a stock-and-cash transaction (the “REV Transaction”), in which the Company acquired 100% of the issued and outstanding stock of REV. On February 2, 2026 (the “Closing Date”), the Company completed the REV Transaction in accordance with the terms of the agreement. See Note D - “Acquisitions and Held for Sale” in our Notes to Condensed Consolidated Financial Statements for additional information regarding the REV Transaction.
Accounting Standards Implemented in 2026. In July 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The guidance is effective for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2025-05 on January 1, 2026 on a prospective basis and elected the practical expedient provided by ASU 2025-05. The adoption of ASU 2025-05 did not have a material effect on the Company’s condensed consolidated financial statements or disclosures.
Accounting Standards to be Implemented. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires more detailed disclosures about specified categories of expenses (including purchases of inventory, employee compensation, intangible asset amortization, and depreciation) included in certain expense captions presented on the face of the income statement (such as cost of sales and SG&A expenses). The guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance on its disclosures to the consolidated financial statements.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326). The amendments in this update expand the use of the gross-up approach to certain acquired loans beyond purchased financial assets with credit
9
deterioration. The new guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within those fiscal years, with early adoption permitted. The amendments in this update must be adopted prospectively to loans that are acquired on or after the initial application date. The Company does not expect adoption to have a material effect on its consolidated financial statements.
Receivables and Allowance for Doubtful Accounts. Receivables include $1,015 million and $627 million of trade accounts receivable at September 30, 2026 and December 31, 2025, respectively. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Allowance for doubtful accounts is the Company’s estimate of current expected credit losses on its existing accounts receivable and is determined based on historical customer assessments, current financial conditions, and reasonable and supportable forecasts. Account balances are written off against the allowance when the Company determines the receivable will not be recovered. There can be no assurance that the Company’s estimate of accounts receivable collection will be indicative of future results.
The following table summarizes changes in the consolidated allowance for doubtful accounts (in millions):
Revenue Recognition.
Contract Liabilities
Contract liabilities, referred to as Customer advances in the Condensed Consolidated Balance Sheets, relate to instances where a customer pays consideration in advance of the Company satisfying the related performance obligation. Contract liabilities are reduced when the performance obligation is complete and the associated revenue from the contract is recognized. Revenue recognized during the period related to contract liabilities outstanding as of December 31, 2025 and December 31, 2024 was as follows (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2026(1) | September 30, 2025 | September 30, 2026(1) | September 30, 2025 | ||||||||||||||||||||
| Contract liabilities recognized in period | $ | 41 | $ | 4 | $ | 135 | $ | 31 | |||||||||||||||
(1) Includes $37 million and $104 million for the three and nine months ended September 30, 2026, respectively, that were included in the contract liabilities balance of $359 million assumed in connection with the REV Transaction. See Note D - “Acquisitions and Held for Sale” in our Condensed Consolidated Financial Statements for additional information regarding the REV Transaction. | |||||||||||||||||||||||
Within the Specialty Vehicles segment, customers earn interest on customer advances at a rate determined at contract inception. Interest charges incurred on customer advances were $5 million and $11 million, respectively, for the three and nine months ended September 30, 2026 and are recorded in Interest expense in the Condensed Consolidated Statements of Income and Comprehensive Income.
Contract assets were $38 million as of September 30, 2026 and were not significant as of December 31, 2025.
Remaining Performance Obligation
The Company estimated that $3,531 million and $39 million at September 30, 2026 and December 31, 2025, respectively, in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) at the end of the reporting period. We expect to recognize approximately 42% of the Company’s unsatisfied (or partially satisfied) performance obligations as revenue in the next twelve months, with the remaining balance to be recognized thereafter. The Company applied the standard’s practical expedient that permits the omission of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.
10
Supplier Finance. The Company has unsecured agreements with third-party financial institutions to facilitate supplier finance programs. These programs allow qualifying suppliers to sell their receivables due from the Company, on an invoice level at the selection of the supplier, to the financial institution and negotiate their outstanding receivable arrangements and associated fees directly with the financial institution. The Company is not party to the agreements between the supplier and the financial institution. Terex or the bank may terminate the agreement upon 30 days’ notice. The supplier invoices that have been confirmed as valid under the programs require payment in full within 120 days of the invoice date. Confirmed obligation amounts outstanding were $51 million and $36 million at September 30, 2026 and December 31, 2025, respectively. Confirmed obligation amounts outstanding under these programs were included in Trade accounts payable in the Company’s Condensed Consolidated Balance Sheets.
Guarantees. The Company issues guarantees to financial institutions related to the financing of equipment purchases by customers. The expectation of losses or non-performance is evaluated based on consideration of historical customer assessments, current financial conditions, reasonable and supportable forecasts, equipment collateral value and other factors. Reserves are recorded for expected loss over the contractual period of risk exposure. See Note J – “Litigation and Contingencies” for additional information regarding guarantees issued to financial institutions.
Accrued Warranties. The Company records accruals for potential warranty claims based on its claim experience. The Company’s products are typically sold with a standard warranty covering defects that arise during a fixed period of time, a fixed number of operating hours or both. Each business provides a warranty specific to the products it offers. The specific warranty offered by a business is a function of customer expectations and competitive forces.
A liability for estimated warranty claims is accrued at the time of sale. The current portion of the product warranty liability is included in Other current liabilities and the non-current portion is included in Other non-current liabilities in the Company’s Condensed Consolidated Balance Sheets. The liability is established using historical warranty claims experience for each product sold. Historical claims experience may be adjusted for known design improvements or for the impact of unusual product quality issues. Assumptions are updated for known events that may affect the potential warranty liability.
The following table summarizes changes in the consolidated product warranty liability (in millions):
| Nine Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Balance at beginning of period | $ | 50 | $ | 54 | |||||||
| Liabilities assumed due to business acquisition | 53 | — | |||||||||
| Accruals for warranties issued during the period | 70 | 37 | |||||||||
| Changes in estimates | 5 | 7 | |||||||||
| Settlements during the period | (68) | (47) | |||||||||
| Foreign exchange effect/other | (3) | (1) | |||||||||
| Balance at end of period | $ | 107 | $ | 50 | |||||||
Derivatives. Derivative financial instruments are recorded in the Condensed Consolidated Balance Sheets at their fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded each period in earnings or Accumulated other comprehensive income (loss) (“AOCI”), depending on whether a derivative is designated and effective as part of a hedge transaction and, if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in AOCI are included in earnings in the periods in which earnings are affected by the hedged item. Derivatives designated as net investment hedging instruments include cross currency swaps with outstanding notional value of $470 million at September 30, 2026 and December 31, 2025. The Company had $180 million and $114 million notional value of foreign exchange contracts outstanding that were not designated as hedging instruments at September 30, 2026 and December 31, 2025, respectively. Net gains and losses recognized in earnings on derivative financial instruments that do not qualify for hedge accounting were not material to our results of operations during the three and nine months ended September 30, 2026 and 2025. Net gains and losses reclassified to earnings from AOCI related to qualified hedges were not material to our results of operations during the three and nine months ended September 30, 2026 and 2025 and the Company does not expect the amount of these gains and losses that will be reclassified to earnings during the next year to be material.
Fair Value Measurements. Assets and liabilities measured at fair value on a recurring basis under the provisions of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement and Disclosure” (“ASC 820”) include commodity swaps, cross currency swaps, foreign exchange contracts, investments in marketable securities, and non-qualified supplemental executive retirement plans (“SERPs”), among others. These assets and liabilities are valued using observable market data for
11
similar assets and liabilities or the present value of future cash payments and receipts. ASC 820 establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
Determining which category an asset or liability falls within this hierarchy requires judgment. The Company evaluates its hierarchy disclosures each quarter. The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements.
The Company has investments held in a Rabbi Trust for the Company’s non-qualified SERPs. The total value of these investments was $31 million as of September 30, 2026 and $33 million as of December 31, 2025, and was considered to be measured at Level 1. The Rabbi trust assets are subject to claims of the Company's creditors. One of the SERPs (the defined benefit plan) is frozen to future entrants.
NOTE B – BUSINESS SEGMENT INFORMATION
The Company identifies its operating segments according to how business activities are managed and evaluated. Effective February 2, 2026 in connection with the REV Transaction, the Company reports its business in the following reportable segments: (i) Environmental Solutions (“ES”), (ii) Materials Processing (“MP”), (iii) Specialty Vehicles (“SV”) and (iv) Aerials. The Company’s Environmental Solutions Group (“ESG”) and Utilities operating segments share similar economic characteristics and are aggregated into one reportable segment, ES.
ES designs, manufactures, services and markets waste, recycling and utility equipment and solutions, including refuse collection bodies, hydraulic cart lifters, automated carry cans, compaction, balers and recycling equipment, digger derricks, insulated aerial devices, and cameras with integrated smart technology, as well as related components and replacement parts, and waste hauler software solutions. Customers use these products in the solid waste and recycling industry, and for construction and maintenance of transmission and distribution lines, tree trimming, and foundation drilling applications.
MP designs, manufactures, services and markets materials processing and specialty equipment, including crushers, washing systems, screens, trommels, apron feeders, material handlers, pick and carry cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and their related components and replacement parts. Customers use these products in construction, infrastructure and recycling projects, in various quarrying and mining applications, as well as in landscaping and biomass production industries, material handling applications, and applications to lift equipment or material.
SV designs, manufactures, services and markets commercial and custom fire and ambulance vehicles primarily for fire departments, airports, other governmental units, contractors, hospitals and other care providers, trucks used in terminal type operations, i.e., rail yards, warehouses, rail terminals and shipping terminals/ports; and industrial sweepers for both the commercial and rental markets. SV also manufactures, markets and distributes Class A recreational vehicles (“RVs”) (motorhomes built on a heavy-duty chassis with either diesel or gas engine configurations), as well as Class C RVs (motorhomes built on a van or commercial truck chassis).
Aerials designs, manufactures, services and markets aerial work platform equipment and telehandlers as well as their related components and replacement parts. Customers use these products to construct and maintain industrial, commercial, institutional and residential buildings and facilities, for purposes within the entertainment industry, and for other commercial operations, as well as in a wide range of infrastructure projects.
The Company assists customers in their rental, leasing and acquisition of its products through Terex Financial Services (“TFS”). TFS uses its equipment financing expertise to facilitate financial products and services to assist customers in the procurement of the Terex equipment. TFS is included in Corporate and Other.
Corporate and Other also includes eliminations among the four reportable segments, as well as general and corporate items.
12
The Company’s chief operating decision maker (“CODM”) uses both Adjusted operating profit and Adjusted EBITDA to evaluate segment performance and allocate resources. In accordance with ASC 280, the Company assessed the measure of segment profit or loss required to be reported and determined that Adjusted operating profit is the measure that is most consistent with U.S. GAAP. Accordingly, Adjusted operating profit is presented as the Company’s required measure of segment profit or loss in the accompanying segment information. This change in presentation has been applied retrospectively, and prior‑period segment information has been recast to conform to the current‑year presentation. This change did not affect the Company’s condensed consolidated financial statements.
Business segment information is presented below (in millions):
Three Months Ended September 30, 2026 | |||||||||||||||||||||||||||||||||||
ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | 400 | $ | 434 | $ | 657 | $ | 709 | $ | (3) | $ | 2,197 | |||||||||||||||||||||||
Less: (1) | |||||||||||||||||||||||||||||||||||
Adjusted cost of goods sold | 309 | 314 | 527 | 609 | 1,759 | ||||||||||||||||||||||||||||||
Adjusted selling, general and administrative expenses | 35 | 41 | 31 | 45 | 152 | ||||||||||||||||||||||||||||||
| Adjusted segment operating profit | $ | 56 | $ | 79 | $ | 99 | $ | 55 | $ | 289 | |||||||||||||||||||||||||
| Corporate and Other / Eliminations | (41) | ||||||||||||||||||||||||||||||||||
Restructuring and other | 15 | ||||||||||||||||||||||||||||||||||
Purchase Price Accounting | (57) | ||||||||||||||||||||||||||||||||||
Divestitures | (23) | ||||||||||||||||||||||||||||||||||
| Consolidated operating profit | $ | 183 | |||||||||||||||||||||||||||||||||
| Interest expense - net | (44) | ||||||||||||||||||||||||||||||||||
| Other expense - net | (4) | ||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 135 | |||||||||||||||||||||||||||||||||
(1) Significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown. Adjusted cost of goods sold and Adjusted selling, general and administrative expenses exclude the impact of certain one-time costs and other items that affect the comparability of segment performance between periods, which are reflected as reconciling items in the reconciliation to Consolidated operating profit.
13
Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||||||||||||
ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | 1,267 | $ | 1,317 | $ | 1,744 | $ | 1,851 | $ | (10) | $ | 6,169 | |||||||||||||||||||||||
Less: (1) | |||||||||||||||||||||||||||||||||||
Adjusted cost of goods sold | 962 | 971 | 1,409 | 1,630 | 4,972 | ||||||||||||||||||||||||||||||
Adjusted selling, general and administrative expenses | 104 | 127 | 89 | 141 | 461 | ||||||||||||||||||||||||||||||
| Adjusted segment operating profit | $ | 201 | $ | 219 | $ | 246 | $ | 80 | $ | 746 | |||||||||||||||||||||||||
| Corporate and Other / Eliminations | (190) | ||||||||||||||||||||||||||||||||||
Restructuring and other | 8 | ||||||||||||||||||||||||||||||||||
Purchase Price Accounting | (256) | ||||||||||||||||||||||||||||||||||
Divestitures | (20) | ||||||||||||||||||||||||||||||||||
| Consolidated operating profit | $ | 288 | |||||||||||||||||||||||||||||||||
| Interest expense - net | (133) | ||||||||||||||||||||||||||||||||||
| Other expense - net | (8) | ||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 147 | |||||||||||||||||||||||||||||||||
(1) Significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown. Adjusted cost of goods sold and Adjusted selling, general and administrative expenses exclude the impact of certain one-time costs and other items that affect the comparability of segment performance between periods, which are reflected as reconciling items in the reconciliation to Consolidated operating profit.
Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | 435 | $ | 417 | $ | — | $ | 537 | $ | (2) | $ | 1,387 | |||||||||||||||||||||||
Less: (1) | |||||||||||||||||||||||||||||||||||
Adjusted cost of goods sold | 320 | 321 | — | 442 | 1,083 | ||||||||||||||||||||||||||||||
Adjusted selling, general and administrative expenses | 36 | 45 | — | 45 | 126 | ||||||||||||||||||||||||||||||
Adjusted segment operating profit | $ | 79 | $ | 51 | $ | — | $ | 50 | $ | 180 | |||||||||||||||||||||||||
| Corporate and Other / Eliminations | (15) | ||||||||||||||||||||||||||||||||||
Restructuring and other | (5) | ||||||||||||||||||||||||||||||||||
Purchase Price Accounting | (20) | ||||||||||||||||||||||||||||||||||
Consolidated operating profit | $ | 140 | |||||||||||||||||||||||||||||||||
| Interest expense - net | (42) | ||||||||||||||||||||||||||||||||||
| Other expense - net | (4) | ||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 94 | |||||||||||||||||||||||||||||||||
(1) Significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown. Adjusted cost of goods sold and Adjusted selling, general and administrative expenses exclude the impact of certain one-time costs and other items that affect the comparability of segment performance between periods, which are reflected as reconciling items in the reconciliation to Consolidated operating profit.
14
Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | 1,264 | $ | 1,253 | $ | — | $ | 1,594 | $ | (8) | $ | 4,103 | |||||||||||||||||||||||
Less: (1) | |||||||||||||||||||||||||||||||||||
Adjusted cost of goods sold | 921 | 970 | — | 1,341 | 3,232 | ||||||||||||||||||||||||||||||
Adjusted selling, general and administrative expenses | 105 | 136 | — | 141 | 382 | ||||||||||||||||||||||||||||||
Adjusted segment operating profit | $ | 238 | $ | 147 | $ | — | $ | 112 | $ | 497 | |||||||||||||||||||||||||
| Corporate and Other / Eliminations | (67) | ||||||||||||||||||||||||||||||||||
Restructuring and other | (20) | ||||||||||||||||||||||||||||||||||
Purchase Price Accounting | (62) | ||||||||||||||||||||||||||||||||||
Litigation related | (10) | ||||||||||||||||||||||||||||||||||
Consolidated operating profit | $ | 338 | |||||||||||||||||||||||||||||||||
| Interest expense - net | (125) | ||||||||||||||||||||||||||||||||||
| Other expense - net | (4) | ||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 209 | |||||||||||||||||||||||||||||||||
(1) Significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown. Adjusted cost of goods sold and Adjusted selling, general and administrative expenses exclude the impact of certain one-time costs and other items that affect the comparability of segment performance between periods, which are reflected as reconciling items in the reconciliation to Consolidated operating profit.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
ES | $ | 25 | $ | 24 | $ | 74 | $ | 73 | ||||||||||||||||||
| MP | 5 | 5 | 15 | 15 | ||||||||||||||||||||||
SV | 47 | — | 125 | — | ||||||||||||||||||||||
Aerials | 7 | 7 | 20 | 19 | ||||||||||||||||||||||
| Corporate | 4 | 2 | 12 | 6 | ||||||||||||||||||||||
| Total | $ | 88 | $ | 38 | $ | 246 | $ | 113 | ||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||||
ES | $ | 9 | $ | 9 | $ | 24 | $ | 23 | ||||||||||||||||||
| MP | 4 | 4 | 8 | 12 | ||||||||||||||||||||||
SV | 15 | — | 36 | — | ||||||||||||||||||||||
Aerials | 3 | 6 | 15 | 36 | ||||||||||||||||||||||
| Corporate | — | 5 | 7 | 13 | ||||||||||||||||||||||
| Total | $ | 31 | $ | 24 | $ | 90 | $ | 84 | ||||||||||||||||||
15
| September 30, 2026 | December 31, 2025 | ||||||||||
| Identifiable assets | |||||||||||
ES | $ | 2,526 | $ | 2,523 | |||||||
| MP | 1,003 | 979 | |||||||||
SV | 4,362 | — | |||||||||
Aerials | 1,582 | 1,443 | |||||||||
Corporate | 823 | 1,194 | |||||||||
| Total | $ | 10,296 | $ | 6,139 | |||||||
Sales between segments are generally priced to recover costs plus a reasonable markup for profit, which is eliminated in consolidation.
Geographic net sales information is presented below (in millions):
Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | |||||||||||||||||||||||||||||||||
| Net sales by region | ||||||||||||||||||||||||||||||||||||||
| North America | $ | 393 | $ | 197 | $ | 647 | $ | 570 | $ | — | $ | 1,807 | ||||||||||||||||||||||||||
| Western Europe | — | 103 | — | 87 | — | 190 | ||||||||||||||||||||||||||||||||
| Asia-Pacific | 1 | 96 | 3 | 25 | — | 125 | ||||||||||||||||||||||||||||||||
Rest of World (1) | 6 | 38 | 7 | 27 | (3) | 75 | ||||||||||||||||||||||||||||||||
Total (2) | $ | 400 | $ | 434 | $ | 657 | $ | 709 | $ | (3) | $ | 2,197 | ||||||||||||||||||||||||||
(1) Includes intercompany sales and eliminations.
(2) Total sales for all segments in the aggregate include $1,713 million for the three months ended September 30, 2026 attributable to the U.S., the Company’s country of domicile.
Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | |||||||||||||||||||||||||||||||||
| Net sales by region | ||||||||||||||||||||||||||||||||||||||
| North America | $ | 1,246 | $ | 602 | $ | 1,724 | $ | 1,434 | $ | — | $ | 5,006 | ||||||||||||||||||||||||||
| Western Europe | — | 311 | — | 275 | — | 586 | ||||||||||||||||||||||||||||||||
| Asia-Pacific | 5 | 287 | 5 | 66 | — | 363 | ||||||||||||||||||||||||||||||||
Rest of World (1) | 16 | 117 | 15 | 76 | (10) | 214 | ||||||||||||||||||||||||||||||||
Total (2) | $ | 1,267 | $ | 1,317 | $ | 1,744 | $ | 1,851 | $ | (10) | $ | 6,169 | ||||||||||||||||||||||||||
(1) Includes intercompany sales and eliminations.
(2) Total sales for all segments in the aggregate include $4,718 million for the nine months ended September 30, 2026 attributable to the U.S., the Company’s country of domicile.
16
Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | |||||||||||||||||||||||||||||||||
| Net sales by region | ||||||||||||||||||||||||||||||||||||||
| North America | $ | 430 | $ | 179 | $ | — | $ | 387 | $ | — | $ | 996 | ||||||||||||||||||||||||||
| Western Europe | — | 105 | — | 92 | — | 197 | ||||||||||||||||||||||||||||||||
| Asia-Pacific | 2 | 90 | — | 28 | — | 120 | ||||||||||||||||||||||||||||||||
Rest of World (1) | 3 | 43 | — | 30 | (2) | 74 | ||||||||||||||||||||||||||||||||
Total (2) | $ | 435 | $ | 417 | $ | — | $ | 537 | $ | (2) | $ | 1,387 | ||||||||||||||||||||||||||
(1) Includes intercompany sales and eliminations.
(2) Total sales for all segments in the aggregate include $929 million for the three months ended September 30, 2025 attributable to the U.S., the Company’s country of domicile.
Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| ES | MP | SV | Aerials | Corporate and Other / Eliminations | Total | |||||||||||||||||||||||||||||||||
| Net sales by region | ||||||||||||||||||||||||||||||||||||||
| North America | $ | 1,252 | $ | 551 | $ | — | $ | 1,176 | $ | 2 | $ | 2,981 | ||||||||||||||||||||||||||
| Western Europe | — | 328 | — | 246 | — | 574 | ||||||||||||||||||||||||||||||||
| Asia-Pacific | 4 | 246 | — | 82 | — | 332 | ||||||||||||||||||||||||||||||||
Rest of World (1) | 8 | 128 | — | 90 | (10) | 216 | ||||||||||||||||||||||||||||||||
Total (2) | $ | 1,264 | $ | 1,253 | $ | — | $ | 1,594 | $ | (8) | $ | 4,103 | ||||||||||||||||||||||||||
(1) Includes intercompany sales and eliminations.
(2) Total sales for all segments in the aggregate include $2,737 million for the nine months ended September 30, 2025 attributable to the U.S., the Company’s country of domicile.
The Company attributes sales to unaffiliated customers in different geographical areas based on the location of the customer.
NOTE C – INCOME TAXES
During the three months ended September 30, 2026, the Company recognized income tax expense of $21 million on pretax income of $135 million, an effective tax rate of 15.6%, as compared to income tax expense of $29 million on pretax income of $94 million, an effective tax rate of 31.4%, for the three months ended September 30, 2025. The lower effective tax rate for the three months ended September 30, 2026 when compared with the three months ended September 30, 2025 is primarily due to an increase in favorable discrete items.
During the nine months ended September 30, 2026, the Company recognized income tax expense of $16 million on pretax income of $147 million, an effective tax rate of 11.0%, as compared to income tax expense of $51 million on pretax income of $209 million, an effective tax rate of 24.5%, for the nine months ended September 30, 2025. The lower effective tax rate for the nine months ended September 30, 2026 when compared with the nine months ended September 30, 2025 is primarily due to an increase in favorable discrete items.
On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15% for large corporations, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework. A number of countries in which we operate have adopted legislation subject to the OECD transitional safe harbor rules, while other countries are still in the process of introducing legislation. In addition, the OECD continues to issue guidance on this matter including the technical documents released on January 5, 2026. In this release, the OECD issued Administrative Guidance which includes a “Side by Side” System designed to align the U.S. tax regime with Pillar Two for U.S.-parented multinational groups, effective for tax years beginning on or after January 1, 2026. While the Company has determined the impact of enacted Pillar Two legislation on its financial statements is not material, the Company will continue to evaluate the financial statement impacts as additional Pillar Two rules are enacted and OECD guidance is issued.
17
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) (H.R.1) was signed into law by the President of the United States. The OBBBA contains significant provisions impacting corporate taxation in the U.S. with multiple effective dates. Among the changes that were effective in 2025 were modifications to capitalization of domestic research and development costs, accelerated depreciation of fixed assets and other qualifying property, as well as limitations on deductions for interest expense. Changes effective in 2026 include, among others, modifications to certain international tax provisions. The impacts of OBBBA are reflected in our results for the three and nine months ended September 30, 2026. There was no material effect on our income tax expense or effective tax rate.
NOTE D – ACQUISITIONS AND HELD FOR SALE
REV Group, Inc. Acquisition
On the Closing Date, the Company completed the REV Transaction in accordance with the terms of the definitive merger agreement with REV. The results of REV have been included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income from the Closing Date. The provisional purchase consideration of $3,384 million is based on the conversion of each outstanding share of REV into 0.9809 of a share of Terex and $8.71 in cash ($426 million in total), the settlement of REV’s outstanding debt owed to a third-party bank that was required to be repaid at closing, and estimated fair value of converted unvested share based awards attributable to pre-combination service. In connection with the REV Transaction, there were an additional 47.9 million shares of Terex issued upon conversion of REV shares.
REV serves a diversified customer base primarily in the U.S., and its products are sold to municipalities, government agencies, private contractors, consumers, and industrial and commercial end users. REV provides customized vehicle solutions for applications, including essential needs for public services (ambulances and fire apparatus), commercial infrastructure (terminal trucks and industrial sweepers) and consumer leisure (motorized recreational vehicles). The REV Transaction created a diversified specialty equipment manufacturer of emergency, waste, utilities, environmental, material processing equipment and mobile elevating work platforms with attractive end markets characterized by low cyclicality and long-term growth profiles.
The following table summarizes the components of the provisional purchase consideration (in millions except per-share information and the exchange ratio):
REV shares outstanding(1) | 48.9 | ||||
| Cash consideration (per REV share) | $ | 8.71 | |||
| Cash portion of purchase price | $ | 426 | |||
| Settlement of REV’s outstanding debt | 122 | ||||
| Total cash consideration transferred | $ | 548 | |||
REV shares outstanding(1) | 48.9 | ||||
| Exchange ratio | 0.9809 | ||||
| Total Terex common shares issued | 47.9 | ||||
Terex's share price(2) | $ | 58.99 | |||
| Equity portion of purchase price | $ | 2,828 | |||
Fair value of converted unvested share based awards attributable to pre-combination services(3) | $ | 8 | |||
| Total provisional consideration transferred | $ | 3,384 | |||
(1) Represents REV’s outstanding shares as of February 1, 2026. (2) Represents Terex's share price as of February 2, 2026. (3) Represents fair value estimate as of February 2, 2026. | |||||
18
Net Assets Acquired
The application of purchase accounting under ASC 805 requires the recognition and measurement of the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. Goodwill is calculated as the excess of the aggregate of the fair value of the consideration transferred over the fair value of the net assets recognized. The net assets and liabilities of REV were recorded at their estimated fair value using Level 3 inputs. In valuing acquired assets and liabilities, fair value estimates are based on, but are not limited to, future expected cash flows, market rate assumptions for contractual obligations, future revenue growth, profitability, appropriate discount rates, attrition rates, royalty rates, growth rates and economic lives. The Company believes that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the purchase accounting remains provisional and is subject to change during the measurement period, which extends for up to one year from the Closing Date, as the Company continues to evaluate certain assets acquired and liabilities assumed and finalize the related independent valuations. As a result, the provisional amounts recognized for certain assets acquired and liabilities assumed, such as contingencies and income tax positions, may change materially as the analysis is completed.
The following table summarizes the preliminary estimated fair values of the REV assets acquired and liabilities assumed and related deferred income taxes as of the Closing Date (in millions).
February 2, 2026 | |||||
Cash acquired | $ | 81 | |||
Receivables, net | 183 | ||||
Inventories, net | 615 | ||||
Prepaid and other current assets | 71 | ||||
Property, plant & equipment, net | 203 | ||||
Goodwill | 1,428 | ||||
| Identified intangibles subject to amortization | 1,266 | ||||
Identified indefinite-lived intangibles | 786 | ||||
Other assets | 43 | ||||
Total assets acquired | $ | 4,676 | |||
Trade accounts payable | 193 | ||||
Short-term customer advances | 176 | ||||
Other current liabilities | 184 | ||||
Long-term deferred tax liabilities | 484 | ||||
| Long-term customer advances | 183 | ||||
Other non-current liabilities | 72 | ||||
Total liabilities assumed | $ | 1,292 | |||
Net assets acquired | $ | 3,384 | |||
As a result of the Company's continued evaluation of facts and circumstances that existed as of the acquisition date, preliminary purchase accounting estimates made in the prior period were revised during the quarter ended September 30, 2026. These measurement period adjustments resulted in a decrease of approximately $4 million to inventories, and a $63 million increase to identifiable intangible assets with a corresponding increase to long-term deferred tax liabilities of $14 million. These adjustments, among others, resulted in a corresponding decrease of approximately $42 million to goodwill. The income statement impact of all measurement period adjustments was recognized in current period income, within Amortization expense or Cost of goods sold, as applicable. These updates would not have had a material impact on the Company’s results of operations for the three months ended March 31, 2026 and the three and six months ended June 30, 2026, had the measurement period adjustments been known at that time.
19
Goodwill of $1,428 million resulting from the merger was assigned to the newly created SV segment. Goodwill consists of intangible assets that do not qualify for separate recognition which include assembled workforce and expected synergies from the business combination. The Company will finalize the allocation of goodwill to the SV segment’s reporting units during the measurement period as additional information becomes available.
The following table summarizes the preliminary determination of the fair values of identifiable indefinite and finite-lived intangible assets acquired (in millions):
| Weighted Average Life (in years) | Gross Carrying Amount | ||||||||||
Indefinite-lived intangible assets: | |||||||||||
Trade names | N/A | $ | 786 | ||||||||
Finite-lived intangible assets: | |||||||||||
| Backlog | 2 | 232 | |||||||||
Trade names | 20 | 17 | |||||||||
Customer relationships | 15 | 830 | |||||||||
| Non-competition agreements | 3 | 19 | |||||||||
Technology | 12 | 168 | |||||||||
Total Indefinite and Finite-lived intangible assets | $ | 2,052 | |||||||||
Acquisition-Related Expenses
The Company has incurred transaction costs directly related to the REV Transaction of $1 million and $19 million for the three and nine months ended September 30, 2026, which are recorded in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income.
Unaudited Actual and Pro Forma Information
The Company’s consolidated Net sales and Net income attributable to Terex Corporation for the three months ended September 30, 2026 include $657 million and $39 million, respectively, related to the REV business. For the period from February 2, 2026 through September 30, 2026, the Company’s consolidated Net sales and Net income attributable to Terex Corporation include $1,744 million and $17 million, respectively, related to the REV business.
The following unaudited pro forma information has been presented as if the REV Transaction occurred on January 1, 2025. This information is based on historical results of operations, which were adjusted for acquisition-related expenses, acceleration of stock-based compensation, amortization of finite-lived intangible assets, fair value step-up of inventory and depreciation of property, plant, and equipment, all related to the REV Transaction, among other adjustments. The unaudited pro forma information is not necessarily indicative of what the results would have been had the Company operated the business since January 1, 2025, nor does it intend to be a projection of future results.
(in millions, except per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Net sales | $ | 2,197 | $ | 2,017 | $ | 6,359 | $ | 5,981 | |||||||||||||||
Net income | 112 | 68 | 247 | 20 | |||||||||||||||||||
| Basic earnings per share | 0.99 | 0.60 | 2.18 | 0.18 | |||||||||||||||||||
| Diluted earnings per share | 0.98 | 0.59 | 2.16 | 0.17 | |||||||||||||||||||
20
Held for Sale
In connection with a strategic review of the product portfolio, the Company was pursuing the sale of certain assets and liabilities of Capacity of Texas, Inc. (“Capacity”) and Mobile Products, Inc. (“LayMor”), two businesses within the Specialty Vehicles segment. The assets and liabilities to be divested in connection with this transaction met the held for sale criteria as of September 30, 2026. The carrying value of the assets and liabilities held for sale was greater than the estimated sales proceeds, less expected costs to sell, resulting in a non-cash loss of $17 million. As part of contract negotiations the Company also agreed to indemnify the buyer for certain items which increased the total loss by $3 million. The total loss of $20 million is included in Selling, general and administrative expenses in the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended September 30, 2026.
As of September 30, 2026, assets and liabilities held for sale were included in Prepaid and other current assets and Other current liabilities, respectively, in the Unaudited Condensed Consolidated Balance Sheet. Assets and liabilities held for sale consisted of the following balances:
The Company completed the sale of Capacity and LayMor on October 23, 2026. Refer to Note L, Subsequent Events, for further details.
21
NOTE E – EARNINGS PER SHARE
| (in millions, except per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Income from continuing operations | $ | 114 | $ | 65 | $ | 131 | $ | 158 | |||||||||||||||
| Income from discontinued operations – net of tax | $ | — | $ | — | $ | 4 | $ | — | |||||||||||||||
| Net income | $ | 114 | $ | 65 | $ | 135 | $ | 158 | |||||||||||||||
Basic: | |||||||||||||||||||||||
Weighted average shares outstanding | 113.3 | 65.6 | 107.5 | 65.9 | |||||||||||||||||||
| Earnings per share – basic: | |||||||||||||||||||||||
| Income from continuing operations | $ | 1.01 | $ | 0.99 | $ | 1.22 | $ | 2.40 | |||||||||||||||
| Income from discontinued operations – net of tax | — | — | 0.04 | — | |||||||||||||||||||
| Earnings per share | $ | 1.01 | $ | 0.99 | $ | 1.26 | $ | 2.40 | |||||||||||||||
Diluted: | |||||||||||||||||||||||
Basic weighted average shares outstanding | 113.3 | 65.6 | 107.5 | 65.9 | |||||||||||||||||||
Effect of dilutive restricted stock | 0.7 | 0.6 | 0.8 | 0.5 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 114.0 | 66.2 | 108.3 | 66.4 | |||||||||||||||||||
| Earnings per share – diluted: | |||||||||||||||||||||||
| Income from continuing operations | $ | 1.00 | $ | 0.98 | $ | 1.21 | $ | 2.38 | |||||||||||||||
| Income from discontinued operations – net of tax | — | — | 0.04 | — | |||||||||||||||||||
| Earnings per share | $ | 1.00 | $ | 0.98 | $ | 1.25 | $ | 2.38 | |||||||||||||||
Non-vested restricted stock awards and restricted stock units (“Restricted Stock”) granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share using the treasury stock method. Weighted average Restricted Stock of approximately 0.4 million and 0.1 million were outstanding during the three months ended September 30, 2026 and 2025, respectively, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance. Weighted average Restricted Stock of approximately 0.3 million and 0.3 million were outstanding during the nine months ended September 30, 2026 and 2025, respectively, but were not included in the computation of diluted shares as the effect would be anti-dilutive or performance targets were not expected to be achieved for awards contingent upon performance.
22
NOTE F – INVENTORIES
Inventories consist of the following (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Finished equipment | $ | 370 | $ | 373 | |||||||
| Replacement parts | 208 | 190 | |||||||||
| Work-in-process | 364 | 107 | |||||||||
Raw materials, chassis, and supplies | 689 | 439 | |||||||||
Inventories | $ | 1,631 | $ | 1,109 | |||||||
Inventory reserves were $81 million and $68 million at September 30, 2026 and December 31, 2025, respectively.
NOTE G – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment – net consist of the following (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||
Property - Land and land improvements | $ | 123 | $ | 93 | |||||||
Plant - Building and building improvements | 466 | 374 | |||||||||
| Equipment | 814 | 666 | |||||||||
| Leasehold improvements | 67 | 63 | |||||||||
| Construction in progress | 78 | 79 | |||||||||
| Property, plant and equipment – gross | 1,548 | 1,275 | |||||||||
| Less: Accumulated depreciation | (582) | (515) | |||||||||
| Property, plant and equipment – net | $ | 966 | $ | 760 | |||||||
Depreciation expense was $26 million and $18 million for the three months ended September 30, 2026 and 2025, respectively, and $73 million and $50 million for the nine months ended September 30, 2026 and 2025, respectively.
23
NOTE H – GOODWILL AND INTANGIBLE ASSETS
The Company’s goodwill by business segment is as follows (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
Goodwill, Gross | Accumulated Impairment | Goodwill, Net | Goodwill, Gross | Accumulated Impairment | Goodwill, Net | ||||||||||||||||||||||||||||||
ES | $ | 796 | $ | — | $ | 796 | $ | 796 | $ | — | $ | 796 | |||||||||||||||||||||||
MP | 214 | (23) | 191 | 217 | (23) | 194 | |||||||||||||||||||||||||||||
SV | 1,425 | — | 1,425 | — | — | — | |||||||||||||||||||||||||||||
Aerials | 140 | (39) | 101 | 140 | (39) | 101 | |||||||||||||||||||||||||||||
Total | $ | 2,575 | $ | (62) | $ | 2,513 | $ | 1,153 | $ | (62) | $ | 1,091 | |||||||||||||||||||||||
An analysis of changes in the Company’s net carrying value of goodwill by business segment is as follows (in millions):
| ES | MP | SV | Aerials | Total | |||||||||||||||||||||||||
Balance at December 31, 2025, net | $ | 796 | $ | 194 | $ | — | $ | 101 | $ | 1,091 | |||||||||||||||||||
| Acquisitions | — | — | 1,428 | — | 1,428 | ||||||||||||||||||||||||
| Reclass to held-for-sale | — | — | (3) | — | (3) | ||||||||||||||||||||||||
| Foreign exchange effect and other | — | (3) | — | — | (3) | ||||||||||||||||||||||||
Balance at September 30, 2026, net | $ | 796 | $ | 191 | $ | 1,425 | $ | 101 | $ | 2,513 | |||||||||||||||||||
Intangible assets, net were comprised of the following (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||||||||||||
| Technology | $ | 320 | $ | (41) | $ | 279 | $ | 153 | $ | (19) | $ | 134 | |||||||||||||||||||||||
Customer relationships | 1,683 | (151) | 1,532 | 860 | (103) | 757 | |||||||||||||||||||||||||||||
Trade names | 169 | (31) | 138 | 153 | (21) | 132 | |||||||||||||||||||||||||||||
Land use rights | 4 | (1) | 3 | 4 | (1) | 3 | |||||||||||||||||||||||||||||
Backlog | 232 | (84) | 148 | — | — | — | |||||||||||||||||||||||||||||
Non-competition agreement | 19 | (5) | 14 | — | — | — | |||||||||||||||||||||||||||||
| Other | 18 | (17) | 1 | 17 | (16) | 1 | |||||||||||||||||||||||||||||
Total finite-lived intangible assets | $ | 2,445 | $ | (330) | $ | 2,115 | $ | 1,187 | $ | (160) | $ | 1,027 | |||||||||||||||||||||||
Indefinite-lived trade names | 786 | — | 786 | — | — | — | |||||||||||||||||||||||||||||
Total intangible assets | $ | 3,231 | $ | (330) | $ | 2,901 | $ | 1,187 | $ | (160) | $ | 1,027 | |||||||||||||||||||||||
Aggregate intangible asset amortization expense, which is recognized based upon the pattern in which the economic benefits of the related intangible assets are consumed or, for certain intangibles, on a straight-line basis, was $62 million and $20 million for the three months ended September 30, 2026 and 2025, respectively, of which $9 million and $3 million, respectively, was recorded in Cost of goods sold in the Condensed Consolidated Statements of Income and Comprehensive Income.
Aggregate intangible asset amortization expense was $172 million and $61 million for the nine months ended September 30, 2026 and 2025, respectively, of which $24 million and $9 million, respectively, was recorded in Cost of goods sold in the Condensed Consolidated Statements of Income and Comprehensive Income.
24
Estimated aggregate intangible asset amortization expense for each of the next five years is as follows (in millions):
| 2026 (remaining three months) | $ | 61 | |||
| 2027 | 255 | ||||
| 2028 | 239 | ||||
| 2029 | 220 | ||||
| 2030 | 203 | ||||
NOTE I – LONG-TERM OBLIGATIONS
Long-term debt is summarized as follows (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||
5% Senior Notes due May 15, 2029, net of unamortized debt issuance costs of $2 million and $3 million at September 30, 2026 and December 31, 2025, respectively | $ | 598 | $ | 597 | |||||||
6.25% Senior Notes due October 15, 2032, net of unamortized debt issuance costs of $13 million and $15 million at September 30, 2026 and December 31, 2025, respectively | 737 | 735 | |||||||||
Credit Agreement – term debt due October 8, 2031 (“New Term Facility”, as defined below), net of unamortized debt issuance costs of $15 million and $17 million at September 30, 2026 and December 31, 2025, respectively; and unamortized original issue discount of $4 million and $5 million at September 30, 2026 and December 31, 2025, respectively | 1,212 | 1,218 | |||||||||
Credit Agreement - revolving line of credit expires on October 8, 2029 | — | — | |||||||||
| Secured borrowings | 20 | 21 | |||||||||
| Finance lease obligations | 11 | 11 | |||||||||
| Other | — | 2 | |||||||||
| Total debt | 2,578 | 2,584 | |||||||||
| Less: Current portion of long-term debt | (24) | (6) | |||||||||
| Long-term debt, less current portion | $ | 2,554 | $ | 2,578 | |||||||
Credit Agreement
On October 8, 2024, the Company entered into an Incremental Assumption Agreement, Borrowing Subsidiary Agreement and Amendment No. 2 to its Amended and Restated Credit Agreement dated April 1, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) with certain of the Company’s subsidiaries, the lenders and issuing banks party thereto and UBS AG as successor administrative agent and successor collateral agent. The amendment increased the Company’s existing revolving credit facilities (the “Revolver”) to $800 million and extended the maturity of the Company’s existing revolving credit facilities to expire on October 8, 2029 (the “New Revolving Credit Facilities”) and provided for a new seven-year term loan facility in an aggregate principal amount of $1,250 million with a maturity date of October 8, 2031 (the “New Term Facility”, together with the New Revolving Credit Facilities, the “New Credit Facilities”). In addition, the amendment increased the size of the letter of credit facility, provides for the issuance of letters of credit (the “L/C Facility”) of up to $500 million (the utilization of which would decrease availability under the New Revolving Credit Facilities) and permits the Company to have additional secured facilities for the issuance of letters of credit outside of the Amended Credit Agreement (the “Additional L/C Facility”) of up to $400 million (the utilization of which would not decrease availability under the New Revolving Credit Facilities). The aggregate amount of letters of credit which the Company may issue under the L/C Facility and the Additional L/C Facility may not at any time exceed $500 million, of which up to $400 million may be issued under the Additional L/C Facility. Borrowings under the New Term Facility initially bear interest at a per annum rate equal to Term SOFR, plus 2.00% subject to a stepdown of 0.25% based on achieving and maintaining a first lien net leverage ratio equal to or less than 0.50x. On August 12, 2025, the borrowing rate of the New Term Facility was amended by a Refinancing Facility Agreement and additional amendment to the Credit Agreement (the “Amended Credit Agreement”), that lowered the Company’s U.S. Dollar denominated term loans to bear interest at a rate of SOFR plus 1.75%, and reduced the spread on the revolving credit facilities by 12.5 to 25 basis points. The Company’s obligations under the Credit Agreement are guaranteed by its material domestic subsidiaries and secured by substantially all domestic assets of the Company and such subsidiaries, as well as certain equity interests in material foreign subsidiaries, in each case subject to certain exceptions.
25
The Amended Credit Agreement contains customary representations and warranties, negative and affirmative covenants and default provisions. The covenants limit, in certain circumstances, the Company’s ability to take a variety of actions, including, but not limited to: incurring or guaranteeing additional indebtedness or issuing preferred equity; creating or maintaining liens; making investments; paying dividends or making other restricted payments; consolidating or merging or transferring all or substantially all of the Company’s assets and the assets of the Company’s subsidiaries; transferring or selling assets, including stock of the Company’s subsidiaries; and redeeming debt. In particular, the New Revolving Credit Facilities require the Company to maintain a first lien net leverage ratio of not more than 3.00x, which will be tested only if more than 30% of the total revolving credit commitments extended under the New Revolving Credit Facilities are utilized as of the last day of any fiscal quarter, subject to certain exclusions. The New Term Facility does not have the benefit of, or have any rights with respect to, the financial maintenance covenant. The Amended Credit Agreement provides for customary events of default which include, among other things, (subject in certain cases to customary grace and cure periods) defaults based on (i) the failure to make payments under the Indenture when due, (ii) breach of covenants, (iii) the occurrence of a default under other material indebtedness, (iv) a change of control, (v) bankruptcy events and (vi) material judgments. The Company was in compliance with all covenants contained in the Amended Credit Agreement as of September 30, 2026.
The Company obtains letters of credit that generally serve as collateral for certain liabilities included in the Condensed Consolidated Balance Sheets and guarantee the Company’s performance under contracts. Letters of credit can be issued under two facilities provided in the Amended Credit Agreement and via bilateral arrangements outside the Amended Credit Agreement.
The Company also has bilateral arrangements to issue letters of credit with various other financial institutions (the “Bilateral Arrangements”). The Bilateral Arrangements are not secured under the Amended Credit Agreement and do not decrease availability under the Revolver.
Letters of credit outstanding (in millions):
| September 30, 2026 | December 31, 2025 | ||||||||||
$500 Million Facility | $ | — | $ | — | |||||||
$400 Million Facility | 149 | 45 | |||||||||
| Bilateral Arrangements | 7 | 5 | |||||||||
| Total | $ | 156 | $ | 50 | |||||||
5% Senior Notes
In April 2021, the Company sold and issued $600 million aggregate principal amount of Senior Notes Due 2029 (“5% Notes”) at par in a private offering. The proceeds from the 5% Notes, together with cash on hand, were used: (i) to fund redemption and discharge of 5-5/8% Senior Notes and (ii) to pay related premiums, fees, discounts and expenses. The 5% Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. The proceeds from the offering are presented in Long-term debt in the Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025. The Company may redeem the 5% Notes in whole or in part, on or after May 15, 2024, at the redemption prices set forth in an indenture dated as of April 1, 2021.
6.25% Senior Notes
On October 8, 2024, the Company sold and issued $750 million aggregate principal amount of Senior Notes Due 2032 (“6.25% Notes”) at par in a private offering. The proceeds from the 6.25% Notes, together with new term loan borrowings under the New Term Facility and cash on hand, were used to consummate the Company’s acquisition of ESG, and to pay the related fees, costs, and expenses. The 6.25% Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. The proceeds from the offering are presented in Long-term debt in the Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025.
The Company may redeem the 6.25% Notes in whole or in part, on or after October 15, 2027, at the redemption prices set forth in an indenture dated as of October 8, 2024 (the “Indenture”). Prior to October 15, 2027, the Company may redeem the 6.25% Notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium set forth in the Indenture. In addition, prior to October 15, 2027, the Company may redeem up to 40% of the 6.25% Notes with an amount equal to the proceeds of certain equity offerings.
26
Secured Borrowings
In October 2023, the Company entered into a Framework Agreement to transfer value added tax (“VAT”) receivables to a financial institution in exchange for cash in advance. This arrangement was accounted for as a secured borrowing with a pledge of collateral for the cash proceeds received as the transfer does not meet the criteria for sale accounting. As a result, the VAT receivables pledged as collateral remain in receivables and a liability of $20 million and $21 million is presented in Current portion of long-term debt in the Condensed Consolidated Balance Sheets as of September 30, 2026 and in Long-term debt in the Consolidated Balance Sheet as of December 31, 2025, respectively. The short term debt classification as of September 30, 2026 is based on estimated timing of VAT refund from the Italian government which is expected to occur within 12 months.
Fair Value of Debt
The Company estimates the fair value of its debt set forth below as of September 30, 2026, as follows (in millions, except for quotes):
| Book Value | Quote | Fair Value | |||||||||||||||
| 5% Notes | $ | 600 | 0.96625 | $ | 580 | ||||||||||||
6.25% Notes | 750 | 0.97125 | 728 | ||||||||||||||
New Term Facility (net of discount) | 1,227 | 1.00000 | 1,227 | ||||||||||||||
The fair value of debt reported in the table above is based on adjusted price quotations on the debt instruments in an inactive market. The Company believes that the carrying value of its other borrowings, including amounts outstanding, if any, for the revolving credit line under the Credit Agreement, approximates fair market value based on maturities for debt of similar terms. Fair values of debt reported in the table above are categorized under Level 2 of the ASC 820 hierarchy. See Note A – “Basis of Presentation” for an explanation of ASC 820 hierarchy.
NOTE J – LITIGATION AND CONTINGENCIES
General
The Company is involved in various legal proceedings, including product liability, general liability, workers’ compensation liability, employment, commercial, class actions, intellectual property and tax litigation, which arise in the normal course of operations. The Company is insured for product liability, general liability, workers’ compensation, employer’s liability, property damage and other insurable risks required by law or contract, with retained liability or deductibles. The Company records and maintains an estimated liability in the amount of management’s estimate of the Company’s aggregate exposure for such retained liabilities and deductibles. For such retained liabilities and deductibles, the Company determines its exposure based on probable loss estimations, which requires such losses to be both probable and the amount or range of probable loss to be estimable. The Company believes it has made appropriate and adequate reserves and accruals for its current contingencies and the likelihood of a material loss beyond amounts accrued is remote. The Company believes the outcome of such matters, individually and in aggregate, will not have a material adverse effect on its condensed consolidated financial statements. However, outcomes of lawsuits cannot be predicted and, if determined adversely, could ultimately result in the Company incurring significant liabilities which could have a material adverse effect on its results of operations.
Performance, Bid and Specialty Bonds
The Company is contingently liable under bid, performance and specialty bonds issued by the Company’s surety company. The balance of outstanding performance, bid and specialty bonds was $619 million and $35 million at September 30, 2026 and December 31, 2025, respectively. The September 30, 2026 balance primarily relates to REV. Losses incurred related to these arrangements have not been significant.
27
Credit Guarantees
The Company may assist customers in their rental, leasing and acquisition of its products by facilitating financing transactions directly between (i) end-user customers, distributors and rental companies and (ii) third-party financial institutions, providing recourse in certain circumstances. The current amount of the maximum liability is generally limited to our customer’s remaining payments due to the third-party financial institutions at the time of default; however, it cannot be reasonably estimated due to limited availability of the unique facts and circumstances of each arrangement, such as whether changes have been made to the structure of the contractual obligation between the funder and customer.
The maximum exposure determined for credit guarantees outstanding was $52 million as of September 30, 2026 and $53 million as of December 31, 2025. Terms of these guarantees coincide with the financing arranged by the customer and generally do not exceed five years. The allowance for credit losses on credit guarantees was $6 million at September 30, 2026 and $5 million at December 31, 2025.
Certain businesses within the SV segment have repurchase agreements with certain lending institutions. The repurchase commitments are on an individual unit basis with a term from the date it is financed by the lending institution through the payment date by the dealer or other customer, generally not exceeding two years. The Company also repurchases inventory from dealers from time to time due to state law or regulatory requirements that require manufacturers to repurchase inventory if a dealership exits the business. The Company’s maximum contingent liability under such agreements was $460 million as of September 30, 2026, which represents the gross value of all vehicles under repurchase agreements. Such agreements are customary in the industries in which the Company operates and the Company’s exposure to loss under such agreements is limited by the resale value of the units which are required to be repurchased. Losses incurred under such arrangements have not been significant. The reserve for losses included in other liabilities on contracts outstanding was $2 million as of September 30, 2026.
There can be no assurance that historical experience in used equipment markets will be indicative of future results. The Company’s ability to recover losses experienced from its guarantees and repurchase agreements may be affected by economic conditions in used equipment markets at the time of loss.
Customer Owned Chassis
In certain businesses, the Company’s customers may provide their own vehicle chassis, at their sole discretion, in connection with specific vehicle orders. These vehicle chassis are stored at the Company’s various production facilities until the related value-added work is completed and the finished unit is shipped back to the customer. The customer does not transfer the vehicle chassis certificate of origin to the Company. Accordingly, such chassis are not owned by the Company when delivered or throughout the production process, and are, therefore, excluded from the Company’s inventory. The Company’s maximum contingent liability related to these vehicle chassis was $244 million as of September 30, 2026. Losses incurred related to these arrangements have not been significant; accordingly, no reserve has been recorded.
Tariffs
In February 2026, the U.S. Supreme Court issued a ruling invalidating tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). As a result of this ruling, the U.S. Court of International Trade issued an order directing the U.S. Customs and Border Protection (“CBP”) agency to begin formalizing a process for refunds. The CBP launched an online portal that can be used to submit IEEPA tariff refund requests. All requests, including the Company’s submitted claims, will be reviewed by the CBP to determine validity prior to the issuance of any refunds.
The Company accounts for potential recoveries of previously paid IEEPA tariffs in accordance with ASC 450-30, Gain Contingencies. Under this model, a potential recovery of previously paid IEEPA tariffs is not recognized until it is considered realized or realizable. Any refund recognized would be recorded as a reduction of Inventory to the extent the related inventory remains on hand, or as a reduction of Cost of goods sold for tariffs associated with inventory that has already been sold to the extent the refund amount is expected to be realized.
During the three and nine months ended September 30, 2026, the Company recognized benefits of $14 million and $40 million, respectively, for IEEPA tariff refunds received and realized during those periods. The Company will continue to monitor developments related to the refund process and assess their potential impact on its financial statements.
28
NOTE K – STOCKHOLDERS’ EQUITY
Changes in Accumulated Other Comprehensive Income (Loss)
The table below presents changes in AOCI by component for the three and nine months ended September 30, 2026 and 2025. All amounts are net of tax (in millions).
Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| CTA | Derivative Hedging Adj. | Debt & Equity Securities Adj. | Pension Liability Adj. | Total | CTA | Derivative Hedging Adj. | Debt & Equity Securities Adj. | Pension Liability Adj. | Total | ||||||||||||||||||||||||||
| Beginning balance | $ | (194) | $ | (30) | $ | (2) | $ | (51) | $ | (277) | $ | (180) | $ | (41) | $ | (2) | $ | (53) | $ | (276) | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | (2) | 4 | (1) | — | 1 | (13) | 3 | — | 1 | (9) | |||||||||||||||||||||||||
Amounts reclassified from AOCI | — | — | — | — | — | — | — | — | 1 | 1 | |||||||||||||||||||||||||
| Net other comprehensive (loss) income | (2) | 4 | (1) | — | 1 | (13) | 3 | — | 2 | (8) | |||||||||||||||||||||||||
Ending balance | $ | (196) | $ | (26) | $ | (3) | $ | (51) | $ | (276) | $ | (193) | $ | (38) | $ | (2) | $ | (51) | $ | (284) | |||||||||||||||
Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| CTA | Derivative Hedging Adj. | Debt & Equity Securities Adj. | Pension Liability Adj. | Total | CTA | Derivative Hedging Adj. | Debt & Equity Securities Adj. | Pension Liability Adj. | Total | ||||||||||||||||||||||||||
| Beginning balance | $ | (172) | $ | (37) | $ | (2) | $ | (54) | $ | (265) | $ | (338) | $ | 7 | $ | (3) | $ | (48) | $ | (382) | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | (24) | 11 | (1) | 1 | (13) | 145 | (47) | 1 | (5) | 94 | |||||||||||||||||||||||||
Amounts reclassified from AOCI | — | — | — | 2 | 2 | — | 2 | — | 2 | 4 | |||||||||||||||||||||||||
| Net other comprehensive (loss) income | (24) | 11 | (1) | 3 | (11) | 145 | (45) | 1 | (3) | 98 | |||||||||||||||||||||||||
| Ending balance | $ | (196) | $ | (26) | $ | (3) | $ | (51) | $ | (276) | $ | (193) | $ | (38) | $ | (2) | $ | (51) | $ | (284) | |||||||||||||||
Common Stock in Treasury
The Company values treasury stock on a cost basis. As of September 30, 2026, the Company held 22 million shares of common stock in treasury totaling $812 million, which include 0.7 million shares held in a trust for the benefit of the Company’s deferred compensation plan totaling $24 million.
Stock-Based Compensation
During the nine months ended September 30, 2026, the Company awarded 2 million shares of Restricted Stock to its employees with a weighted average fair value of $60.12 per share. Approximately 84% of these awards are time-based and vest ratably on each of the first three anniversary dates of the grants. Approximately 11% cliff vest at the end of a three-year period and are subject to performance targets that may or may not be met and for which the performance period has not yet been completed. Approximately 5% cliff vest and are based on performance targets containing a market condition determined over a three-year period. Included within these amounts were approximately 1 million shares of replacement Restricted Stock awards issued to former REV employees in connection with the REV Transaction. Additionally, during the nine months ended September 30, 2026, the acceleration of certain awards related to the REV Transaction contributed incremental stock compensation expense of $25 million.
29
Fair value of time-based awards is based on the market price of our common stock at the date of grant approval. The fair value of performance-based awards, except for awards based on a market condition, is based on the market price of our common stock at the date of grant approval, except fair values are multiplied by the probability of achievement as of the period-end date. For awards based on a market condition, fair value is based on the Monte Carlo method at grant date. The Monte Carlo method is a statistical simulation technique used to provide the grant date fair value of an award. The Company used the Monte Carlo method to determine grant date fair value of $73.99 per share for awards with a market condition granted on March 15, 2026.
The following table presents the weighted-average assumptions used in the valuations:
| Grant date | |||||
| March 15, 2026 | |||||
| Dividend yields | 1.14 | % | |||
| Expected volatility | 44.12 | % | |||
| Risk-free interest rate | 3.70 | % | |||
| Expected life (in years) | 3 | ||||
Share Repurchases
In December 2022, Terex’s Board of Directors (“Board”) authorized the repurchase of up to $150 million of the Company’s outstanding shares of common stock. In July 2025, the Board authorized a further repurchase of up to $150 million of the Company’s outstanding shares of common stock. The table below presents shares repurchased, based on trading date, inclusive of transactions executed but not settled, by the Company under these programs.
Nine Months Ended September 30 | Total Number of Shares Repurchased | Amount of Shares Repurchased (in millions) | ||||||
2026 | 1,202,425 | $74 | ||||||
2025 | 1,360,706 | $53 | ||||||
The amounts presented in the table above exclude 44,598 and 64,134 shares of common stock purchased during the nine months ended September 30, 2026 and 2025, respectively, to satisfy requirements under the Company’s deferred compensation obligations to employees and non-employees.
Dividends
The table below presents the per share dividends declared by Terex’s Board and paid to the Company’s stockholders:
| Year | First Quarter | Second Quarter | Third Quarter | ||||||||
2026 | $ | 0.17 | $ | 0.17 | $ | 0.17 | |||||
2025 | $ | 0.17 | $ | 0.17 | $ | 0.17 | |||||
In October 2026, the Board declared a dividend of $0.17 per share, which will be paid on December 18, 2026 to the Company’s stockholders of record as of November 9, 2026.
30
NOTE L – SUBSEQUENT EVENTS
On October 23, 2026, the Company completed the sale of the Capacity and LayMor businesses to Right Lane Industries for total consideration of approximately $33 million, pursuant to the terms of the related purchase agreement. Capacity and LayMor were previously reported within the SV segment. During the three and nine months ended September 30, 2026, the Company recognized a non-cash loss of $20 million to adjust the carrying value of the assets and liabilities of these businesses that were classified as held for sale as of September 30, 2026 to their fair value. The Company will recognize any adjustments to this non-cash loss in the fourth quarter 2026.
In October 2026, the Board authorized additional repurchases of up to $500 million of the Company’s outstanding shares of common stock. This authorization is in addition to the Company’s existing share repurchase programs of $150 million each, authorized in December 2022 and July 2025.
31
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ||||
BUSINESS DESCRIPTION
Terex is a global industrial equipment manufacturer of materials processing machinery, waste and recycling solutions, customized vehicle solutions, mobile elevating work platforms (MEWPs), equipment for the electric utility industry, commercial and custom fire and ambulance vehicles, and recreational vehicles. We design, build, and support products used in maintenance, manufacturing, energy, waste and recycling, minerals and materials management, construction, the entertainment industry, emergency response, and the recreational vehicles market. We provide lifecycle support to our customers through our global parts and services organization, and offer complementary digital solutions, designed to help our customers maximize their return on their investment. Certain Terex products and solutions enable customers to reduce their impact on the environment including electric and hybrid offerings that deliver quiet and emission-free performance, products that support renewable energy, and products that aid in the recovery of useful materials from various types of waste. Our products are manufactured in North America, Europe, and Asia Pacific and sold worldwide. We engage with customers through all stages of the product life cycle, from initial specification to parts and service support. We report our business in the following segments: (i) Environmental Solutions (“ES”), (ii) Materials Processing (“MP”), (iii) Specialty Vehicles (“SV”) and (iv) Aerials.
Overview
During the third quarter of 2026, the Company remained focused on executing its operating plan, integrating the legacy Terex and REV organizations, and deploying the Terex Operating System (“TOS”) across the enterprise to improve operational execution, reduce fixed costs, and drive productivity. The REV Transaction, which closed in the first quarter of 2026, significantly expanded our portfolio of specialty equipment businesses and strengthened our position in resilient, high-demand markets with attractive long-term growth potential. The operating results of REV are included in the newly created SV segment. We remain focused on realizing synergies, improving operational consistency, and leveraging the combined scale of the Company. See Note D - “Acquisitions and Held for Sale” in our Notes to Condensed Consolidated Financial Statements for additional information regarding the REV Transaction.
Terex delivered solid results in the third quarter of 2026. Net sales for the three months ended September 30, 2026 were $2,197 million including $657 million generated by SV, compared to total Net sales of $1,387 million in the same period in the prior year. Adjusted operating profit for the three months ended September 30, 2026 was $260 million including $99 million generated by SV, compared to Adjusted operating profit of $168 million in the same period in 2025. Adjusted EBITDA for the three months ended September 30, 2026 was $286 million including adjusted EBITDA generated by SV of $105 million, compared to Adjusted EBITDA of $186 million in the same period in 2025. Additional information regarding segment specific results is provided in the “Results of Operations” section below. The Company’s free cash flow for the three months ended September 30, 2026 was $209 million compared to $130 million in the same period in 2025, reflecting higher profitability excluding the impact of purchase accounting for the three months ended September 30, 2026. Backlog as of September 30, 2026 was $7.0 billion, providing solid forward visibility.
North America remained our largest market, representing approximately 81% of total sales during the third quarter of 2026 and reflecting our deliberate shift toward more U.S.-based, resilient and predictable sectors. We continue to execute our capital allocation strategy by generating additional operating cash through improved net working capital management and returning value to shareholders through dividends and opportunistic share repurchases. Net working capital as a percentage of trailing three month annualized net sales was 15.0% as of September 30, 2026 compared to 23.2% from the same period in the prior year. We maintained ample liquidity with approximately $1,207 million available as of September 30, 2026. See “Liquidity and Capital Resources” for a detailed description of liquidity and working capital levels, including the primary factors affecting such levels, as well as a reconciliation of net cash provided by operating activities to free cash flow.
Our key end markets remain resilient, supported by consistent replacement and aftermarket demand. In waste and recycling, long-term demand is supported by fleet replacement, innovation and demographic trends, although certain customers continue to manage capital spending and absorb recently delivered fleets. We expect utility market demand to remain supported by long-term investment in the U.S. electrical grid, including transmission expansion and future data-center-related growth. Demand for fire and emergency vehicles remains stable, supported by municipal budgets and replacement demand. In Aerials and MP, infrastructure activity remains robust, supported by government funding and a growing pipeline of mega projects that we expect to continue to provide a tailwind.
32
We continue to identify opportunities to improve operating performance across the portfolio by advancing the integration process, deploying TOS, investing in productivity-enhancing technology and leveraging our broader portfolio and scale to better serve customers.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2026 Compared with Three Months Ended September 30, 2025
Consolidated
Three Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 2,197 | — | $ | 1,387 | — | 58.4 | % | |||||||||||||||||||||
Gross profit | 435 | 19.8 | % | 299 | 21.6 | % | 45.5 | % | |||||||||||||||||||||
Selling, general and administrative expenses | 199 | 9.1 | % | 142 | 10.2 | % | 40.1 | % | |||||||||||||||||||||
Amortization of purchased intangibles | 53 | 2.4 | % | 17 | 1.2 | % | 211.8 | % | |||||||||||||||||||||
| Operating profit | 183 | 8.3 | % | 140 | 10.1 | % | 30.7 | % | |||||||||||||||||||||
Interest expense, net of interest income | 44 | 2.0 | % | 42 | 3.0 | % | 4.8 | % | |||||||||||||||||||||
| Income taxes | (21) | (1.0) | % | (29) | (2.1) | % | (27.6) | % | |||||||||||||||||||||
| Net income | 114 | 5.2 | % | 65 | 4.7 | % | 75.4 | % | |||||||||||||||||||||
Adjusted operating profit | 260 | 11.9 | % | 168 | 12.1 | % | 54.8 | % | |||||||||||||||||||||
Adjusted EBITDA | 286 | 13.0 | % | 186 | 13.4 | % | 53.8 | % | |||||||||||||||||||||
Net Sales
Net sales for the three months ended September 30, 2026 increased $810 million when compared to the same period in 2025, including sales generated from SV of $657 million. Excluding the impact of SV, and the impact of $27 million of sales in the prior year period from the Company’s tower and rough terrain cranes businesses which were sold on October 31, 2025, the increase in Net sales of $180 million was primarily due to higher sales in Aerials, MP and utilities products in ES, partially offset by lower shipment of refuse collection vehicles in ES.
Gross Profit
Gross profit for the three months ended September 30, 2026 increased $136 million when compared to the same period in 2025, primarily driven by the gross profit contribution of $128 million from SV. Excluding the impact of SV, the increase in gross profit of $8 million was primarily due to higher shipment volumes, favorable mix, price cost discipline and higher production volumes in MP. These favorable impacts were partially offset by an unfavorable mix in Aerials, inefficiencies related to a production ramp up in Utilities, under-absorption associated with lower refuse collection vehicle production volume within ES, inflationary pressures in both ES and Aerials, and tariff pressures in Aerials.
Selling, general, and administrative expense
Selling, general and administrative expenses for the three months ended September 30, 2026 increased $57 million when compared to the same period in 2025, driven by the SG&A contribution of $50 million from SV. Excluding the impact of SV, the increase in selling, general, and administrative expense of $7 million was primarily due to loss on held-for-sale business, deal related costs and higher compensation costs primarily driven by the inclusion of REV corporate activities. These increases were partially offset by the one-time release of a contingent liability in ES, and lower costs within MP due to the absence of the Company’s tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior‑year period results.
33
Amortization of purchased intangibles
Amortization of purchased intangibles for the three months ended September 30, 2026 increased $36 million when compared to the same period in 2025, which was directly related to the additional amortization expense from purchased intangibles resulting from the REV Transaction.
Operating profit
Operating profit for the three months ended September 30, 2026 increased $43 million when compared to the same period in 2025, primarily driven by the operating profit contribution of $43 million from SV. Excluding the impact of SV, operating profit was flat year over year, primarily due to the factors detailed above.
Interest expense, net of interest income
Interest expense, net of interest income, for the three months ended September 30, 2026 and 2025 was $44 million and $42 million, respectively. The increase in expense is primarily due to interest accrued on customer deposits which primarily relate to the SV segment.
Provision for income taxes
Income tax expense for the three months ended September 30, 2026 was $21 million on pretax income of $135 million, resulting in an effective tax rate of 15.6%, as compared to income tax expense of $29 million on pretax income of $94 million, resulting in an effective tax rate of 31.4%, for the three months ended September 30, 2025. The lower effective tax rate for the three months ended September 30, 2026 when compared with the three months ended September 30, 2025 is primarily due to an increase in favorable discrete items.
Net income
Net income for the three months ended September 30, 2026 was $114 million compared to Net income of $65 million in the same period in 2025. The increase in Net income of $49 million was primarily due to the factors detailed above.
Adjusted operating profit
Adjusted operating profit for the three months ended September 30, 2026 increased $92 million when compared to the same period in 2025, primarily due to the Adjusted operating profit generated by SV of $99 million. Excluding the impact of SV, Adjusted operating profit decreased by $7 million, primarily due to the factors detailed above, excluding a one-time release of a contingent liability in ES and deal related costs.
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2026 increased $100 million when compared to the same period in 2025, primarily due to Adjusted EBITDA generated by SV of $105 million. Excluding the impact of SV, Adjusted EBITDA decreased by $5 million, driven by a decrease in ES and Corporate, partially offset by increases in MP and Aerials, the latter of which was primarily related to higher production volume and cost out actions.
Environmental Solutions
Three Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 400 | — | $ | 435 | — | (8.0) | % | |||||||||||||||||||||
Adjusted EBITDA | $ | 61 | 15.3 | % | $ | 83 | 19.2 | % | (26.5) | % | |||||||||||||||||||
Net sales for the three months ended September 30, 2026 decreased $35 million when compared to the same period in 2025, primarily due to lower shipments of refuse collection vehicles, partially offset by higher utilities product sales.
Adjusted EBITDA for the three months ended September 30, 2026 decreased $22 million when compared to the same period in 2025, primarily due to unfavorable mix, inefficiencies related to a production ramp up in Utilities, under-absorption associated with lower refuse collection vehicle production volume and inflationary pressures.
34
Materials Processing
Three Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 434 | — | $ | 417 | — | 4.1 | % | |||||||||||||||||||||
Adjusted EBITDA | $ | 84 | 19.3 | % | $ | 56 | 13.5 | % | 50.0 | % | |||||||||||||||||||
Net sales for the three months ended September 30, 2026 increased $17 million when compared to the same period in 2025. Excluding the sales impact from the Company’s tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior‑year period results, net sales increased $44 million. The improvement was primarily driven by increased shipments across most product categories, with the largest increase coming from Aggregates in North America.
Adjusted EBITDA for the three months ended September 30, 2026 increased $28 million when compared to the same period in 2025, primarily due to higher shipment volume, favorable mix, price cost discipline, and improved absorption driven by higher production volumes. The adjusted EBITDA impact from the Company’s tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior period results, was $2 million.
Specialty Vehicles
Three Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 657 | — | $ | — | — | * | ||||||||||||||||||||||
Adjusted EBITDA | $ | 105 | 16.0 | % | $ | — | * | * | |||||||||||||||||||||
* Not a meaningful percentage
Net sales and Adjusted EBITDA represent the results of operations of REV from the REV Transaction for the three months ended September 30, 2026. See Note D - “Acquisitions and Held for Sale” in our Condensed Consolidated Financial Statements for additional information regarding the REV Transaction.
Aerials
Three Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 709 | — | $ | 537 | — | 32.0 | % | |||||||||||||||||||||
Adjusted EBITDA | $ | 62 | 8.7 | % | $ | 56 | 10.5 | % | 10.7 | % | |||||||||||||||||||
Net sales for the three months ended September 30, 2026 increased $172 million when compared to the same period in 2025, primarily due to higher shipment volume resulting from strong demand from national customers and increased customer capital spending on large projects.
Adjusted EBITDA for the three months ended September 30, 2026 increased $6 million when compared to the same period in 2025, primarily due to higher sales and cost out actions, partially offset by unfavorable customer mix, inflationary and tariff pressures.
35
Corporate and Other / Eliminations
Three Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | (3) | — | $ | (2) | — | (50.0) | % | |||||||||||||||||||||
Adjusted EBITDA | $ | (26) | * | $ | (9) | * | (188.9) | % | |||||||||||||||||||||
* Not a meaningful percentage
Adjusted EBITDA for the three months ended September 30, 2026 decreased $17 million when compared to the same period in 2025. The decrease is primarily due to higher compensation costs primarily driven by the inclusion of REV corporate activities and professional fees.
36
RESULTS OF OPERATIONS
Nine Months Ended September 30, 2026 Compared with Nine Months Ended September 30, 2025
Consolidated
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 6,169 | — | $ | 4,103 | — | 50.4 | % | |||||||||||||||||||||
| Gross profit | 1,086 | 17.6 | % | 855 | 20.8 | % | 27.0 | % | |||||||||||||||||||||
Selling, general and administrative expenses | 650 | 10.5 | % | 465 | 11.3 | % | 39.8 | % | |||||||||||||||||||||
| Amortization of purchased intangibles | 148 | 2.4 | % | 52 | 1.3 | % | 184.6 | % | |||||||||||||||||||||
| Operating profit | 288 | 4.7 | % | 338 | 8.2 | % | (14.8) | % | |||||||||||||||||||||
| Interest expense, net of interest income | 133 | 2.2 | % | 125 | 3.0 | % | 6.4 | % | |||||||||||||||||||||
| Income taxes | (16) | (0.3) | % | (51) | (1.2) | % | (68.6) | % | |||||||||||||||||||||
| Net income | 135 | 2.2 | % | 158 | 3.9 | % | (14.6) | % | |||||||||||||||||||||
| Adjusted operating profit | 655 | 10.6 | % | 443 | 10.8 | % | 47.9 | % | |||||||||||||||||||||
| Adjusted EBITDA | 727 | 11.8 | % | 495 | 12.1 | % | 46.9 | % | |||||||||||||||||||||
| * Not a meaningful percentage | |||||||||||||||||||||||||||||
Net Sales
Net sales for the nine months ended September 30, 2026 increased $2,066 million when compared to the same period in 2025, including sales generated from SV of $1,744 million. Excluding the impact of SV, and the impact of $91 million of sales in the prior year period from the Company’s tower and rough terrain cranes businesses which were sold on October 31, 2025, the increase in Net sales was primarily due to higher sales in Aerials, utilities products in ES and MP, as well as favorable foreign exchange rate movements, partially offset by lower sales of refuse collection vehicles in ES.
Gross Profit
Gross profit for the nine months ended September 30, 2026 increased $231 million when compared to the same period in 2025, primarily driven by the gross profit contribution of $233 million from SV. Excluding the impact of SV, the decrease in gross profit of $2 million was primarily due to unfavorable mix in ES and Aerials, inefficiencies related to a production ramp up in Utilities, under-absorption associated with lower refuse collection vehicle volume within ES, and higher tariff costs and inflationary pressures in Aerials. These unfavorable impacts were partially offset by higher sales volume, favorable mix, and lower SG&A costs in MP.
Selling, general, and administrative expense
Selling, general and administrative expenses for the nine months ended September 30, 2026 increased $185 million when compared to the same period in 2025, driven by the SG&A contribution of $112 million from SV. Excluding the impact of SV, the increase in selling, general, and administrative expense of $73 million was primarily due to deal related costs, loss on held-for-sale business and higher compensation costs primarily driven by the inclusion of REV corporate activities. These increases were partially offset by the one-time release of a contingent liability in ES, and lower costs within MP due to the absence of the Company’s tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior‑year period results.
Amortization of purchased intangibles
Amortization of purchased intangibles for the nine months ended September 30, 2026 increased $96 million when compared to the same period in 2025, which was directly attributable to the additional amortization expense from purchased intangibles resulting from the REV Transaction.
37
Operating profit
Operating profit for the nine months ended September 30, 2026 was $288 million compared to Operating profit of $338 million in the same period in 2025. Excluding the operating profit generated by SV of $28 million, operating profit decreased $78 million, primarily due to the factors detailed above.
Interest expense, net of interest income
Interest expense, net of interest income, for the nine months ended September 30, 2026 and 2025 was $133 million and $125 million, respectively. The increase in expense is primarily due to interest accrued on customer deposits which primarily relate to the SV segment.
Provision for income taxes
Income tax expense for the nine months ended September 30, 2026 was $16 million on pretax income of $147 million, resulting in an effective tax rate of 11.0%, as compared to income tax expense of $51 million on pretax income of $209 million, resulting in an effective tax rate of 24.5%, for the nine months ended September 30, 2025. The lower effective tax rate for the nine months ended September 30, 2026 when compared with the nine months ended September 30, 2025 is primarily due to an increase in favorable discrete items.
Net income
Net income for the nine months ended September 30, 2026 was $135 million compared to Net income of $158 million in the same period in 2025. The decrease in Net income of $23 million was primarily due to the factors detailed above.
Adjusted operating profit
Adjusted operating profit for the nine months ended September 30, 2026 increased $212 million when compared to the same period in 2025, primarily due to the Adjusted operating profit generated by SV of $246 million. Excluding the impact of SV, Adjusted operating profit decreased by $34 million, primarily due to the factors detailed above, excluding deal related costs, restructuring costs, and a one-time release of a contingent liability in ES.
Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2026 increased $232 million when compared to the same period in 2025, primarily due to Adjusted EBITDA generated by SV of $262 million. Excluding the impact of SV, Adjusted EBITDA decreased by $30 million, driven by a decrease in ES, Aerials and Corporate, partially offset by an increase in MP as detailed below.
Environmental Solutions
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 1,267 | — | $ | 1,264 | — | 0.2 | % | |||||||||||||||||||||
| Adjusted EBITDA | $ | 215 | 17.0 | % | $ | 251 | 19.8 | % | (14.3) | % | |||||||||||||||||||
Net sales for the nine months ended September 30, 2026 increased $3 million when compared to the same period in 2025, primarily due to increased throughput and shipments of utilities products, partially offset by lower shipments of refuse collection vehicles.
Adjusted EBITDA for the nine months ended September 30, 2026 decreased $36 million when compared to the same period in 2025, primarily due to unfavorable mix, inefficiencies related to a production ramp up in Utilities, under-absorption associated with lower refuse collection vehicle volume and inflationary pressures.
38
Materials Processing
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 1,317 | — | $ | 1,253 | — | 5.1 | % | |||||||||||||||||||||
| Adjusted EBITDA | $ | 234 | 17.8 | % | $ | 162 | 12.9 | % | 44.4 | % | |||||||||||||||||||
Net sales for the nine months ended September 30, 2026 increased $64 million when compared to the same period in 2025. Excluding the sales impact from the Company’s tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior‑year period results, net sales increased $155 million. The increase was primarily driven by higher shipment volume across all product categories, with the largest increase coming from Aggregates in North America, and favorable foreign exchange rate movements.
Adjusted EBITDA for the nine months ended September 30, 2026 increased $72 million when compared to the same period in 2025, primarily due to higher sales volume, favorable mix, improved absorption driven by higher production volumes, and lower SG&A costs driven by the sale of the Company’s tower and rough terrain cranes businesses, partially offset by inflationary pressures. The adjusted EBITDA impact from the Company’s tower and rough terrain crane businesses, which were sold on October 31, 2025 and are included in the prior period results, was $5 million.
Specialty Vehicles
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 1,744 | — | $ | — | — | * | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 262 | 15.0 | % | $ | — | * | * | |||||||||||||||||||||
* Not a meaningful percentage
Net sales and Adjusted EBITDA represent the results of operations of REV from the REV Transaction since February 2, 2026. See Note D - “Acquisitions and Held for Sale” in our Condensed Consolidated Financial Statements for additional information regarding the REV Transaction.
Aerials
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | 1,851 | — | $ | 1,594 | — | 16.1 | % | |||||||||||||||||||||
| Adjusted EBITDA | $ | 100 | 5.4 | % | $ | 131 | 8.2 | % | (23.7) | % | |||||||||||||||||||
Net sales for the nine months ended September 30, 2026 increased $257 million when compared to the same period in 2025, primarily due to higher shipments across most product lines, with the largest increase coming from booms in North America and Western Europe as well as favorable foreign exchange rate movements.
39
Adjusted EBITDA for the nine months ended September 30, 2026 decreased $31 million when compared to the same period in 2025, primarily due to higher tariff costs, unfavorable mix, and inflationary pressures, partially offset by higher sales volume and cost out actions.
Corporate and Other / Eliminations
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||
| % of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
| ($ amounts in millions) | |||||||||||||||||||||||||||||
| Net sales | $ | (10) | — | $ | (8) | — | (25.0) | % | |||||||||||||||||||||
| Adjusted EBITDA | $ | (84) | * | $ | (49) | * | (71.4) | % | |||||||||||||||||||||
* Not a meaningful percentage
Adjusted EBITDA for the nine months ended September 30, 2026 decreased $35 million when compared to the same period in 2025. The decrease is primarily due to higher compensation primarily driven by the inclusion of REV Corporate activities, legal and other professional fees.
Non-GAAP Measures
In this document, we refer to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. Management believes that presenting these non-GAAP financial measures provides investors with additional analytical tools which are useful in evaluating our operating results and the ongoing performance of our underlying businesses because they (i) provide meaningful supplemental information regarding financial performance by excluding the impact of one-time items and other items affecting comparability between periods, and non-cash items such as depreciation and amortization, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate our core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating our financial results. We do not, nor do we suggest that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
We discuss Adjusted operating profit, which is defined as Operating profit or loss as adjusted for acquisition or divestiture related items, restructuring, purchase price accounting, and other items that we believe are not indicative of our ongoing operating performance.
We also discuss Adjusted EBITDA. To determine Adjusted EBITDA, we adjust net income or net loss for the following items: non-cash depreciation and amortization, interest expense, income taxes, acquisition or divestiture related items, restructuring, purchase price accounting, and other items that we believe are not indicative of our ongoing operating performance.
We calculate a non-GAAP measure of free cash flow. We define free cash flow as Net cash provided by operating activities less Capital expenditures, net of proceeds from sale of capital assets. We believe this measure of free cash flow provides management and investors further useful information on cash generation in our primary operations.
Working capital is calculated using the Condensed Consolidated Balance Sheet amounts for Receivables (net of allowance) plus Inventories, less Trade accounts payable, and short and long-term Customer advances. We view excessive working capital as an inefficient use of resources, and seek to minimize the level of investment without adversely impacting ongoing operations of the business. Trailing three months annualized net sales is calculated using net sales for the most recent quarter end multiplied by four. The ratio calculated by dividing working capital by trailing three months annualized net sales is a non-GAAP measure we believe measures our resource use efficiency.
Non-GAAP measures also include the translation effect of foreign currency exchange rate changes on net sales, gross profit, selling, general & administrative expenses and operating profit, as well as net sales, gross profit, and SG&A costs and operating profit excluding the impact of acquisitions and divestitures.
40
The following table reconciles Net income to Adjusted operating profit for the periods presented:
Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net income | $ | 114 | $ | 65 | ||||||||||
| Provision for income taxes | (21) | (29) | ||||||||||||
| Interest income | 5 | 3 | ||||||||||||
| Interest expense | (49) | (45) | ||||||||||||
| Other expense – net | (4) | (4) | ||||||||||||
| Operating profit | 183 | 140 | ||||||||||||
Restructuring and other (a) | (15) | 5 | ||||||||||||
Deal related (b) | 9 | 3 | ||||||||||||
Purchase price accounting (c) | 60 | 20 | ||||||||||||
Divestitures (d) | 23 | — | ||||||||||||
Adjusted operating profit | $ | 260 | $ | 168 | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net income | $ | 135 | $ | 158 | ||||||||||
| Income from discontinued operations – net of tax | 4 | — | ||||||||||||
| Provision for income taxes | (16) | (51) | ||||||||||||
| Interest income | 14 | 7 | ||||||||||||
| Interest expense | (147) | (132) | ||||||||||||
| Other expense – net | (8) | (4) | ||||||||||||
| Operating profit | 288 | 338 | ||||||||||||
Restructuring and other (a) | (8) | 22 | ||||||||||||
Deal related (b) | 90 | 11 | ||||||||||||
Purchase price accounting (c) | 265 | 62 | ||||||||||||
Divestitures (d) | 20 | — | ||||||||||||
Litigation related (e) | — | 10 | ||||||||||||
Adjusted operating profit | $ | 655 | $ | 443 | ||||||||||
41
The following table reconciles Net income (loss) to Adjusted EBITDA for the periods presented:
42
The following notes apply to both the Adjusted operating profit and Adjusted EBITDA reconciliations above, as applicable:
a.Costs for the three months ended September 30, 2026 are primarily associated with the release of a contingent liability in ES and a reduction in force and a plant closure in the Aerials segment. Costs for the three months ended September 30, 2025 are associated with restructuring programs across the ES, MP and Aerials segments.
b.Costs for the three months ended September 30, 2026 relate to the REV Transaction and other strategic initiatives, including integration costs and other professional fees. Costs for the three months ended September 30, 2025 relate to costs incurred as part of the ESG integration.
c.Costs for the three months ended September 30, 2026 primarily relate to the REV Transaction, driven by the impact of adjusting inventory fair value step-ups in connection with purchase accounting related measurement period adjustments. Amortization of purchased intangibles is not included within Purchase price accounting in the reconciliation of Net income (loss) to Adjusted EBITDA, as amortization is a separate line item within the reconciliation.
d.Primarily relates to losses on held for sale businesses in the MP and SV segments.
43
The following notes apply to both the Adjusted operating profit and Adjusted EBITDA reconciliations above, as applicable:
a.Costs for the nine months ended September 30, 2026 are primarily associated with the release of a contingent liability in ES and a reduction in force and a plant closure in the Aerials segment. Costs for the nine months ended September 30, 2025 are associated with restructuring programs across the ES, MP, Aerials, and Corporate segments.
b.Costs for the nine months ended September 30, 2026 are primarily related to the REV Transaction, including acceleration of stock-based compensation awards, severance and retention costs, transaction and integration costs, and professional fees related to other strategic initiatives. Costs for the nine months ended September 30, 2025 relate to costs incurred as part of the ESG integration.
c.Costs for the nine months ended September 30, 2026 relate to the REV Transaction, and include amortization of the inventory step-up and incremental stock based compensation cost for replacement stock awards, both of which were recognized in connection with purchase accounting. Costs for the nine months ended September 30, 2025 primarily relate to purchase accounting related measurement period adjustments for ESG. Amortization of purchased intangibles is not included within Purchase price accounting in the reconciliation of Net income (loss) to Adjusted EBITDA, as amortization is a separate line item within the reconciliation.
d.Reflects a net gain realized on the previously disposed of Cranes business, partially offset by a loss on a held for sale business in the MP segment and losses on the sale of a business and a held for sale business in the SV segment.
e.Costs for the nine months ended September 30, 2025 reflect costs incurred to settle a claim which was outside the normal course of business.
LIQUIDITY AND CAPITAL RESOURCES
We are focused on generating cash and maintaining liquidity (cash and availability under our revolving line of credit) for the efficient operation of our business. At September 30, 2026, we had cash and cash equivalents of $407 million and undrawn availability under our revolving line of credit of $800 million, giving us total liquidity of approximately $1,207 million. During the nine months ended September 30, 2026, our liquidity decreased by approximately $365 million from December 31, 2025 primarily due to cash used for the REV Transaction, capital expenditures, share repurchases, dividend payments, and taxes paid on shares withheld in connection with stock vestings, partially offset by cash provided by operating activities.
44
Our main sources of funding are cash generated from operations, including cash generated from the sale of receivables, loans from our bank credit facilities and funds raised in capital markets. We have no significant debt maturities until 2029. Our actions to maintain liquidity include disciplined management of costs and working capital. We believe these measures will provide us with adequate liquidity to comply with our financial covenants under our bank credit facility, continue to support internal operating initiatives and meet our operating and debt service requirements for at least the next 12 months from the date of issuance of this quarterly report. See Part I, Item 1A. – “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II Item 1A – “Risk Factors” of this Quarterly Report for a detailed description of the risks resulting from our debt and our ability to generate sufficient cash flow to operate our business.
Our ability to generate cash from operations is subject to numerous factors, including the following:
•The duration and depth of the global economic volatility resulting from tariffs, trade war, geopolitical uncertainty, inflationary pressures, foreign exchange rate volatility and high interest rates.
•As our sales change, the amount of working capital needed to support our business may change.
•Many of our customers fund their purchases through third-party finance companies that extend credit based on the creditworthiness of customers and expected residual value of our equipment. Changes either in customers’ credit profile or used equipment values may affect the ability of customers to purchase equipment. There can be no assurance that third-party finance companies will continue to extend credit to our customers as they have in the past.
•Our suppliers extend payment terms to us primarily based on our overall credit rating. Deterioration in our credit rating may influence suppliers’ willingness to extend terms and in turn accelerate cash requirements of our business.
•Sales of our products are subject to general economic conditions, tariffs, weather, competition, translation effect of foreign currency exchange rate changes, and other factors that in many cases are outside our direct control. For example, during periods of economic uncertainty, our customers have delayed purchasing decisions, which in turn reduces cash generated from operations.
•Availability and utilization of other sources of liquidity such as trade account receivables sales programs.
Typically, we have invested our cash in a combination of highly rated, liquid money market funds and in short-term bank deposits with large, highly rated banks. Our investment objective is to preserve capital and liquidity while earning a market rate of interest.
We seek to use cash held by our foreign subsidiaries to support our operations and continued growth plans through the funding of capital expenditures, operating expenses or other similar cash needs of worldwide operations. Most of this cash could be used in the U.S., if necessary, without additional tax expense. Incremental cash repatriated to the U.S. would not be expected to result in material foreign income and withholding, U.S. federal or state income tax cost. We will continue to seek opportunities to tax-efficiently mobilize and redeploy funds.
We had free cash flow of $209 million and $253 million for the three and nine months ended September 30, 2026, respectively. The following table reconciles net cash provided by operating activities to free cash flow (in millions):
| Three Months Ended 9/30/2026 | Nine Months Ended 9/30/2026 | |||||||||||||
| Net cash provided by operating activities | $ | 241 | $ | 338 | ||||||||||
| Capital expenditures, net of proceeds from sale of capital assets | (32) | (85) | ||||||||||||
| Free cash flow | $ | 209 | $ | 253 | ||||||||||
Pursuant to the terms of our trade accounts receivable factoring arrangements, during the nine months ended September 30, 2026, we sold, without material recourse, approximately $562 million of trade accounts receivable to enhance liquidity.
45
Working capital as a percentage of trailing three month annualized net sales was 15.0% at September 30, 2026. The following tables show the calculation of our working capital and trailing three months annualized sales as of September 30, 2026 (in millions):
Three Months Ended September 30, 2026 | |||||
Net sales, as reported | $ | 2,197 | |||
| x | 4 | ||||
| Trailing three month annualized net sales | $ | 8,788 | |||
As of September 30, 2026 | |||||
| Inventories | $ | 1,631 | |||
| Receivables | 1,124 | ||||
Trade accounts payable | (986) | ||||
| Short and long-term customer advances | (447) | ||||
Working capital | $ | 1,322 | |||
During the nine months ended September 30, 2026, there were 1,164,795 shares of common stock repurchased under our Board authorized share repurchase programs, leaving approximately $111 million available for repurchase under such programs. Our Board declared a dividend of $0.17 per share in each of the first three quarters of 2026, which were paid to our stockholders during those periods. In October 2026, our Board declared a dividend of $0.17 per share, which will be paid on December 18, 2026 to our stockholders of record as of November 9, 2026.
Our ability to access capital markets to raise funds, through the sale of equity or debt securities, is subject to various factors, some specific to us and others related to general economic and/or financial market conditions. These include results of operations, projected operating results for future periods and debt to equity leverage. Our ability to access capital markets is also subject to our timely filing of periodic reports with the Securities and Exchange Commission. In addition, terms of our bank credit facilities and senior notes contain restrictions on our ability to make further borrowings and to sell substantial portions of our assets.
Cash Flows
Cash provided by operations was $338 million and $235 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in cash provided by operations was primarily driven by higher profitability excluding the impact of purchase accounting, partially offset by changes in working capital and payments of transaction costs and severance in connection with the REV Transaction.
Cash used in investing activities was $519 million and $44 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in cash used in investing activities relates primarily to cash consideration paid in connection with the REV Transaction.
Cash used in financing activities was $177 million and $98 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in cash used in financing activities was primarily driven by higher dividend payments, increased share repurchases and higher cash payments related to shares withheld for tax payment on Restricted Stock awards.
OFF-BALANCE SHEET ARRANGEMENTS
Guarantees
See Note J – “Litigation and Contingencies” in the Notes to Condensed Consolidated Financial Statements for information regarding our guarantees.
46
CONTINGENCIES AND UNCERTAINTIES
Foreign Exchange and Interest Rate Risk
Our products are sold in over 100 countries around the world and, accordingly, our revenues are generated in foreign currencies, while costs associated with those revenues are only partly incurred in the same currencies. Primary currencies to which we are exposed are the Euro, British Pound, Chinese Yuan, Australian Dollar, Indian Rupee and Mexican Peso. We purchase hedging instruments to manage the variability of future cash flows associated with recognized assets or liabilities due to changing currency exchange rates.
We manage our exposure to interest rate risk by establishing a mix of indebtedness bearing interest at both floating and fixed rates at inception and maintain a ratio of floating and fixed rates on this mix of indebtedness using interest rate derivatives when necessary.
See Item 3 “Quantitative and Qualitative Disclosures About Market Risk” for a discussion of the impact of changes in foreign currency exchange rates and interest rates may have on our financial performance.
Other
We are subject to a number of contingencies and uncertainties including, without limitation, product liability claims, workers’ compensation liability, intellectual property litigation, self-insurance obligations, tax examinations, guarantees, class action lawsuits and other matters. See Note J – “Litigation and Contingencies” in the Notes to Condensed Consolidated Financial Statements for more information regarding contingencies and uncertainties. We are insured for product liability, general liability, workers’ compensation, employer’s liability, property damage, intellectual property and other insurable risks required by law or contract with retained liability to us or deductibles. Many of the exposures are unasserted or proceedings are at a preliminary stage, and it is not presently possible to estimate the amount or timing of any liability. However, we do not believe these contingencies and uncertainties will, individually or in aggregate, have a material adverse effect on our operations. For contingencies and uncertainties other than income taxes, when it is probable a loss will be incurred and possible to make reasonable estimates of our liability with respect to such matters, a provision is recorded for the amount of such estimate or for the minimum amount of a range of estimates when it is not possible to estimate the amount within the range that is most likely to occur.
We generate hazardous and non-hazardous wastes in the normal course of our manufacturing operations. As a result, we are subject to a wide range of environmental laws and regulations. All of our employees are required to obey all applicable health, safety and environmental laws and regulations and must observe the proper safety rules and environmental practices in work situations. These laws and regulations govern actions that may have adverse environmental effects, such as discharges to air and water, and require compliance with certain practices when handling and disposing of hazardous and non-hazardous wastes. These laws and regulations would also impose liability for the costs of, and damages resulting from, cleaning up sites, past spills, disposals and other releases of hazardous substances, should any such events occur. We are committed to complying with these standards and monitoring our workplaces to determine if equipment, machinery and facilities meet specified safety standards. Each of our manufacturing facilities is subject to an environmental audit at least once every five years to monitor compliance. Also, no incidents have occurred which required us to pay material amounts to comply with such laws and regulations. We are dedicated to ensuring that safety and health hazards are adequately addressed through appropriate work practices, training and procedures. We are committed to reducing injuries and working towards a world-class level of safety practices in our industry.
RECENT ACCOUNTING STANDARDS
Please refer to Note A – “Basis of Presentation” in the accompanying Condensed Consolidated Financial Statements for a summary of recently issued accounting standards.
47
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | ||||
There have been no material changes in our exposure to interest rate risk, foreign exchange risk and commodity price risk from the information provided in our Annual Report on Form 10-K filed on February 13, 2026.
| ITEM 4. | CONTROLS AND PROCEDURES | ||||
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure information required to be disclosed in reports we file under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the Securities and Exchange Commission’s rules and forms, and such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required financial disclosure. In connection with the preparation of this Quarterly Report on Form 10-Q, we carried out an evaluation, under supervision and with participation of our management, including the CEO and CFO, as of September 30, 2026, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) under the Exchange Act. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control Over Financial Reporting
As a result of the acquisition of REV on February 2, 2026, our internal control over financial reporting, subsequent to the date of acquisition, includes certain additional controls related to REV. Except as described above, there were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance our controls and procedures will detect all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives of the control system will be attained.
48
PART II. OTHER INFORMATION
| Item 1. | Legal Proceedings | ||||
For information regarding litigation and other contingencies and uncertainties, see Note J - “Litigation and Contingencies,” in the Notes to Condensed Consolidated Financial Statements.
| Item 1A. | Risk Factors | ||||
There have been no material changes in our risk factors previously disclosed in Part I, Item 1A. – “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||
Purchases of Equity Securities
The following table provides information about our purchases during the quarter ended September 30, 2026 of our common stock that is registered by us pursuant to the Exchange Act.
| Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
| Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) (2) | ||||||||||||||||||||||
| July 1, 2026 - July 31, 2026 | 988 | $66.57 | — | $183,005 | ||||||||||||||||||||||
| August 1, 2026 - August 31, 2026 | 461,750 | $65.62 | 460,718 | $152,772 | ||||||||||||||||||||||
| September 1, 2026 - September 30, 2026 | 707,111 | $59.58 | 704,077 | $110,823 | ||||||||||||||||||||||
| Total | 1,169,849 | $61.97 | 1,164,795 | $110,823 | ||||||||||||||||||||||
(1)Amount includes shares of common stock purchased to satisfy requirements under the Company’s deferred compensation obligations to employees.
(2)In December 2022, our Board of Directors authorized the repurchase of up to $150 million of our outstanding shares of common stock. In July 2025, our Board authorized a further repurchase of up to $150 million of our outstanding shares of common stock.
| Item 3. | Defaults Upon Senior Securities | ||||
Not applicable.
| Item 4. | Mine Safety Disclosures | ||||
Not applicable.
| Item 5. | Other Information | ||||
During the three months ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.
49
| Item 6. | Exhibits | ||||
The exhibits set forth below are filed as part of this Form 10-Q.
| Exhibit No. | Exhibit | ||||
| 31.1 | |||||
| 31.2 | |||||
| 32 | |||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document. * | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. * | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. * | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. * | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. * | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||
| * | Exhibit filed with this document. | ||||
| ** | Exhibit furnished with this document. | ||||
50
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TEREX CORPORATION
(Registrant)
| Date: | October 29, 2026 | /s/ Simon A. Meester | ||||||
Simon A. Meester | ||||||||
President, Chief Executive Officer and Director | ||||||||
(Principal Executive Officer) | ||||||||
| Date: | October 29, 2026 | /s/ Jennifer Kong-Picarello | ||||||
Jennifer Kong-Picarello | ||||||||
| Senior Vice President and Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
| Date: | October 29, 2026 | /s/ Joseph LaDue | ||||||
Joseph LaDue | ||||||||
| Vice President, Chief Accounting Officer and Controller | ||||||||
| (Principal Accounting Officer) | ||||||||
51