WESTPORT, CT, April 21, 1999 - Terex Corporation (NYSE: TEX) today announced that the United States Securities and Exchange Commission ("SEC") has concluded its investigation of Terex's accounting treatment and reporting of certain transactions which occurred seven years ago or longer and primarily concerned Terex's former subsidiary, Fruehauf Trailer Corporation ("Fruehauf"). Since 1995, Terex has disclosed in its public filings the existence of this investigation which was initiated in 1994 relating to years prior to 1994.
Without admitting or denying to the SEC's findings or any wrongdoing on the part of Terex or its then officers or directors, Terex has consented to the entry of an administrative cease and desist order ("the Order") prohibiting future violations of certain provisions of the federal securities laws. There is no finding in the Order of an intent to deceive, defraud or manipulate on the part of Terex or any of its officers and directors, and the SEC did not find involvement on the part of any current member of management involved in the conduct discussed in the Order. The Order confirms that all of the accounting issues in question were reviewed and approved at the time by a "Big Six" accounting firm, who had served as independent auditors for Terex and Fruehauf and issued unqualified audit opinions that Terex's financial statements for the periods affected (1989- 1993) were fairly presented in accordance with GAAP.
The Order does not provide for any monetary or other sanctions against Terex. The resolution of this matter will not impact Terex's financial statements or results of operations, and will not require the restatement of Terex's financial statements.
Ronald M. DeFeo, Terex's Chairman and CEO said, "I am pleased to be able to report that the SEC has concluded its investigation. As part of the transformation of Terex since my becoming CEO in 1995, management has long believed that it would be in the best interests of Terex and its shareholders to put this matter behind us. The investigation primarily relates to accounting treatment with respect to Terex's former Fruehauf Trailer subsidiary as far back as ten years ago, and Terex divested its interest in Fruehauf Trailer more than five years ago."
Mr. DeFeo continued, "The conclusion of the SEC investigation will allow members of our senior management and staff to focus on our business without the diversion created by the investigation, as well as eliminate the substantial cost associated with the investigation."
Terex Corporation is a diversified global manufacturer based in Westport, Connecticut, with 1998 revenues of in excess of $1.2 billion. Terex is involved in a broad range of construction and mining-related capital equipment operating in two segments -- Terex Earthmoving and Terex Lifting. Terex Earthmoving manufactures and sells heavy-duty off-road trucks and high-capacity surface mining trucks under the brand names of Terex, Unit Rig and Payhauler, as well as large hydraulic mining shovels under the brand name O&K. Terex Lifting manufactures and sells telescopic mobile cranes, aerial work platforms, utility aerial devices, telescopic material handlers, truck mounted cranes and tower cranes, and related products, under the brand names Terex, Lorain, PPM, P&H, Marklift, Koehring, Bendini, Simon, RO, Telelect, Square Shooter, Holland Lift, American, Italmacchine, Peiner and Gru Comedil.