TEREX CORP, S-3, 1997-05-23

TEREX CORP
S-3, 1997-05-23
INDUSTRIAL TRUCKS, TRACTORS, TRAILORS & STACKERS

Previous: TCC INDUSTRIES INC, 8-K, 1997-05-23

Next: AMERICAN CENTURY MUTUAL FUNDS INC, 497, 1997-05-23

<PAGE> 1
As filed with the Securities and Exchange Commission on May 23, 1997.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------------
TEREX CORPORATION
(Exact name of Registrant as specified in its charter)

<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 3537 34-1531521
(State or other jurisdiction of (Primary standard industrial (I.R.S. Employer
incorporation or organization) classification code number) Identification No.)
</TABLE>

500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

--------------------------------
Marvin B. Rosenberg, Esq.
TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------------

COPIES TO:

<TABLE>
<CAPTION>
<S> <C>
Robinson Silverman Pearce Aronsohn & Berman LLP Skadden, Arps, Slate, Meagher & Flom LLP
1290 Avenue of the Americas 919 Third Avenue
New York, New York 10104 New York, New York 10022
Attention: Stuart A. Gordon, Esq. Attention: Mark C. Smith, Esq.
Eric I Cohen, Esq.
</TABLE>
--------------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / /

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _____________

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _____________

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED (1) PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01
per share................................. 7,700,000 shares $15.3125 $117,906,250 $35,730
==================================================================================================================================
</TABLE>

(1) Includes shares that the Underwriters have a right to purchase to cover
over-allotments, if any.
(2) Estimated solely for the purposes of calculating the registration fee.
Pursuant to Rule 457(c), the offering price and registration fee are
computed on the basis of the average of the high and low prices of the
Common Stock on the New York Stock Exchange on May 22, 1997.
--------------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE. CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE
IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF
THE SECURITIES OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING
TRANSACTIONS, SYNDICATE SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

SUBJECT TO COMPLETION, DATED MAY 23, 1997

7,000,000 SHARES

TEREX CORPORATION

COMMON STOCK
($.01 PAR VALUE)

------------------------

Of the shares of common stock, par value $.01 per share ("Common Stock"), of
Terex Corporation ("Terex" or the "Company") offered hereby (the "Shares"),
5,000,000 are being sold by the Company and 2,000,000 are being sold by the
Selling Stockholder named herein under "Selling Stockholder" (the "Offering").
The Company will not receive any of the proceeds from the sale of Shares by the
Selling Stockholder. The Common Stock is listed on the New York Stock Exchange
(the "NYSE") under the symbol "TEX." On May 22, 1997, the last reported sale
price of the Common Stock on the NYSE Composite Tape was $15 3/8.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE 11
HEREIN.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS PROCEEDS TO
PRICE TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDER
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Per Share........................... $ $ $ $
Total(2)............................ $ $ $ $
</TABLE>

(1) Before deduction of expenses payable by the Company estimated at $1,062,500.

(2) The Company has granted the Underwriters an option, exercisable by Credit
Suisse First Boston Corporation for 30 days from the date of this
Prospectus, to purchase a maximum of 700,000 additional shares of Common
Stock from the Company solely to cover over-allotments of Shares. If the
option is exercised in full, the total Price to Public will be $ ,
Underwriting Discounts and Commissions will be $ , and Proceeds to
Company will be $ .

The Shares are offered by the several Underwriters when, as and if issued by the
Company, delivered to and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that the Shares will
be ready for delivery on or about , 1997, against payment in
immediately available funds.

CREDIT SUISSE FIRST BOSTON SALOMON BROTHERS INC

Prospectus dated , 1997.
<PAGE> 3

[PHOTO PAGE]

P&H IS A REGISTERED TRADEMARK OF HARNISCHFEGER CORPORATION. SIMON IS A
REGISTERED TRADEMARK OF SIMON ENGINEERING PLC. CELLA IS A TRADEMARK OF SERGIO
CELLA. EFFER IS A TRADEMARK OF EFFER SPA. ALL OTHER TRADEMARKS AND THE
TRADENAMES REFERRED TO IN THIS PROSPECTUS ARE REGISTERED TRADEMARKS OF TEREX
CORPORATION.

2
<PAGE> 4
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and financial statements
and the related notes thereto appearing elsewhere or incorporated by reference
in this Prospectus. Except as otherwise indicated, all information contained in
this Prospectus assumes no exercise of the over-allotment option of the
Underwriters. As used herein, unless otherwise indicated or unless the context
otherwise requires, the following terms shall have the respective meanings set
forth below: (i) "Terex" or the "Company" refers to Terex Corporation and its
subsidiaries, including the Simon Access Companies and the Square Shooter
Business; (ii) the "Simon Access Companies" and the "Simon Acquisition,"
respectively, refer to certain former subsidiaries of Simon Engineering plc and
the acquisition thereof by the Company on April 7, 1997; (iii) the "Square
Shooter Business" and the "Square Shooter Acquisition," respectively, refer to
Baraga Products, Inc. and M&M Enterprises of Baraga, Inc. and the acquisition
thereof by the Company on April 14, 1997; (iv) the "Clark Material Handling
Segment" and the "Clark Sale," respectively, refer to the former worldwide
material handling business of the Company and the sale thereof on November 27,
1996; and (v) "Continuing Operations" refers to the operations of the Company
excluding the Clark Material Handling Segment and all references in this
Prospectus to "actual sales" and "actual operating income" are to sales and
operating income from Continuing Operations. References in this Prospectus to
the Company's pro forma sales, pro forma results of operations and pro forma
indebtedness for 1996 and the quarter ended March 31, 1997 refer to or are
derived from the Company's Unaudited Pro Forma Condensed Consolidated Statements
of Operations for the year ended December 31, 1996 and for the quarter ended
March 31, 1997, respectively, and the Company's Unaudited Pro Forma Condensed
Consolidated Balance Sheet as of March 31, 1997, in each case, giving effect to
(1) the Simon Acquisition, (2) the Square Shooter Acquisition, (3) the
redemption of the Company's Series A Cumulative Redeemable Convertible Preferred
Stock, par value $.01 per share (the "Series A Preferred Stock"), (4) the New
Credit Facility (as defined below) and application of the net proceeds
therefrom, and (5) the completion of the Offering by the Company and the
application of the net proceeds therefrom; and, with respect to the year ended
December 31, 1996, the repayment of indebtedness with a portion of the net
proceeds from the Clark Sale, as if such application of proceeds had occurred at
the beginning of such period. References in this Prospectus to "pro forma"
market share and backlog information include the market shares and backlogs of
the Simon Access Companies and the Square Shooter Business.

THE COMPANY

-3-

<PAGE> 5
TEREX CRANES

Terex Cranes manufactures telescopic mobile cranes (including rough
terrain, truck and all terrain mobile cranes), aerial work platforms (including
scissor, articulated boom and straight telescoping boom aerial work platforms),
utility aerial devices (including digger derricks and articulated aerial
devices), telescopic material handlers (including container stackers and rough
terrain lift trucks), truck mounted cranes (boom trucks) and related components
and replacement parts. These products are primarily used by construction and
industrial customers, as well as utility companies. While Terex Cranes' market
share varies by product and geographic market, the Company believes it has
strong market share positions in the products and geographic markets which
account for the largest percentage of its annual sales. The Company believes
that it is the second largest manufacturer in the United States (with an
estimated 30% market share) and the leading manufacturer in France and Italy of
rough terrain, truck and all terrain telescopic mobile cranes. Terex Cranes is
comprised of a number of divisions and subsidiaries, and is headquartered in
Conway, South Carolina.

Terex Cranes generated approximately $573 million of pro forma 1996
sales (65% of total Company pro forma 1996 sales), as compared to actual 1995
sales of approximately $252 million (50% of total Company sales). Approximately
39% of such pro forma 1996 sales was generated outside North America.
Replacement parts and related business accounted for approximately 20% of Terex
Cranes' pro forma 1996 sales. Excluding $18.3 million of nonrecurring charges
during 1996 ($13.3 million related to goodwill and $5.0 million related to fixed
assets and other items), Terex Cranes' pro forma 1996 operating income was
approximately $38 million, as compared to actual operating income of
approximately $7 million in 1995.

TEREX TRUCKS

Terex Trucks manufactures articulated and rigid off-highway trucks,
high capacity surface mining trucks and related components and replacement
parts. These products are used primarily by construction, mining and government
customers. Terex Trucks is headquartered in Motherwell, Scotland and is
comprised of Terex Equipment Limited ("TEL"), located in Motherwell, Scotland,
and Unit Rig ("Unit Rig"), located in Tulsa, Oklahoma.

Terex Trucks generated approximately $315 million of sales in 1996 (35%
of total Company pro forma 1996 sales) as compared to actual sales of
approximately $250 million for 1995 (50% of total Company sales). Approximately
75% of Terex Trucks' 1996 sales were generated outside of North America.
Replacement parts and related business accounted for approximately 33% of Terex
Trucks' 1996 sales. Excluding approximately $10.4 million of nonrecurring
charges during 1996 ($8.5 million primarily to reduce the value of a production
facility to reflect changes in production and $1.9 million of goodwill), Terex
Trucks' 1996 operating income was approximately $16 million, as compared to
approximately $13 million in 1995.

INDUSTRY OVERVIEW AND OUTLOOK FOR PRINCIPAL PRODUCTS

Telescopic Mobile Cranes - Demand in the telescopic mobile crane
industry is primarily dependent upon construction activity and the replacement
cycle for the existing population of cranes. The Company believes that the
worldwide mobile crane industry is entering a period of growth due to a
combination of the following factors: (i) a strong and sustained period of
construction activity in North America and expected growth in construction
activity in Europe as well as in infrastructure development in emerging markets,
including the Pacific Rim; (ii) the unusually high number of telescopic mobile
cranes built in the late 1970s in North America are beginning to reach the ends
of their useful lives (which the Company estimates to be approximately 20
years); and (iii) higher rental fleet utilization. Because construction projects
require differing boom lengths and lifting capacities and the ownership by
contractors of a full fleet of machines with varying capabilities is
impractical, the market for telescopic mobile cranes is increasingly dominated
by rental fleets. The Company believes that rental fleet operators, which
according to industry sources represent approximately 85% of the new telescopic
mobile crane market in North America and approximately 55% in France and Italy,
desire products which are low cost, simple to use and easy to maintain,
enabling them to generate higher returns on their

-4-

<PAGE> 6
investments. The Company seeks to capitalize on these trends with its low cost,
best value strategy which focuses on improving customer productivity and
investment returns.

Aerial Work Platforms - The aerial work platform industry in North
America has developed over the past 20 years as an efficient alternative to
scaffolding and ladders. As with the telescopic mobile crane industry, the
aerial work platform market has been increasingly dominated by rental fleets
because contractors require workers to be elevated only for limited times during
a given job and different jobs require different platform heights, making
ownership of a single machine impractical. The Company believes that
approximately 90% of all aerial work platform sales in North America are to
rental fleets. Recently, the equipment rental industry has been undergoing a
process of consolidation. As a result, the larger aerial work platform rental
fleet owners are increasingly demanding products that are low cost, simple to
use and easy to maintain. To meet the objectives of the equipment rental
industry the Company has designed its aerial work platforms to incorporate these
characteristics.

Utility Aerial Devices - The Company also manufactures utility aerial
devices which are used to set telephone poles and move transformers and other
material to work areas at the top of poles, and to elevate workers to work areas
at the top of poles or in trees. Customers include electric utilities, local
telephone companies, private utility repair contractors and tree trimmers. The
Company believes that the utility industry is moving toward outsourcing its
maintenance functions to independent maintenance contractors, and that it is
well positioned to capitalize on this trend due to its strategy to manufacture
simplified products at lower cost, its existing dealer relationships and its
direct relationships with major private contractors.

Off-Highway Trucks - According to industry sources, the global market
for off-highway trucks is concentrated in three main regions: North America
(approximately 35%), Europe (approximately 28%) and the Pacific Rim
(approximately 22%). These markets are dependent on large private construction
project activity and public infrastructure development, both of which have been
soft in Europe in recent years and strong in the United States and the Pacific
Rim. The Company expects relatively strong consumption of trucks in the United
States and the Pacific Rim markets to continue, and believes that it is well
positioned to capitalize on such sustained demand. Terex believes that fleet
operators in the United States and large construction companies in the Pacific
Rim generally prefer products that are low cost, simple to use and easy to
maintain, and that its products exhibit these characteristics. The Company also
believes that it is well positioned to capitalize on future growth in Europe
through an existing private label supply agreement and in China through an
existing joint venture relationship.

High Capacity Surface Mining Trucks - High capacity surface mining
trucks are typically operated around the clock, seven days a week, often running
several weeks between maintenance stops. Accordingly, availability, reliability
and hauling efficiency are of critical concern to mine operators. The Company
offers electric drive trucks in which a diesel engine drives an alternator which
powers two wheel motors, and believes that electric drive vehicles are more
reliable and less expensive to operate than mechanical drive trucks. Terex
believes that the current demand levels will continue, with earnings
opportunities from the development of more cost efficient designs and
manufacturing processes. The Company is taking several strategic actions to
reduce the cost of its trucks which include component outsourcing, modular
assembly process implementation and development of a larger capacity truck with
a new generation electric drive system.

BUSINESS STRATEGY

The Company has undergone significant management changes since 1992.
Ronald M. DeFeo joined the Company in May 1992, was appointed President and
Chief Operating Officer in October 1993 and was named Chief Executive Officer in
March 1995. Since joining the Company, Mr. DeFeo has recruited several new
senior executives to Terex, and under the direction of this new management team,
Terex has implemented a series of interrelated strategic initiatives designed to
increase sales, earnings and shareholder value.

-5-

<PAGE> 7
Focus on Core Operations - For most of 1996, Terex was comprised of
three operating businesses: Terex Cranes, Terex Trucks and the Clark Material
Handling Segment, which manufactured internal combustion and electric lift
trucks, electric walkies and related components and replacement parts. Given the
growth prospects, higher margins and stronger competitive positions of the Terex
Cranes and Terex Trucks segments, as compared to the relatively low margins and
market share of its material handling business, in November 1996 Terex sold the
Clark Material Handling Segment for approximately $140 million in cash. The
Clark Sale has enabled management to focus on growing and improving the
operations of its core crane and truck businesses.

Reduce Costs and Improve Manufacturing Efficiency - Over the past few
years, the Company has initiated several programs to increase profitability
through cost reductions and improved manufacturing efficiency. The Company's
cost cutting has enabled it to increase profitability at its core operations and
rapidly overhaul and integrate acquisitions. The Company follows a disciplined
acquisition integration strategy in order to improve profitability. As part of
the integration strategy, the Company evaluates every cost component of the
acquired business and typically (i) consolidates manufacturing operations, (ii)
increases the efficiency of manufacturing processes through improved material
flow and outsourcing, (iii) reduces overhead and (iv) emphasizes those products
that yield the highest margins, including the replacement parts and related
business. More specifically, this strategy involves eliminating marginally
profitable or unprofitable product lines, closing underutilized and inefficient
plants, liquidating excess inventories and substantially reducing both hourly
and salaried indirect personnel. The Company has also been able to apply its
cost reduction strategy, developed through acquisition integration, to its
existing businesses. Management believes it has established a philosophy of
continuous cost reduction in all of its operations. Recent examples of cost
reduction initiatives are listed below.

- When the Company acquired PPM (as defined below) in May 1995,
total headcount at PPM was approximately 840, including
approximately 430 employees categorized as indirect. As a
result of numerous cost reduction initiatives, total headcount
at PPM was reduced to approximately 640 at December 31, 1996,
while the indirect headcount at PPM was reduced to
approximately 260. During that same period sales at PPM
increased.

- The Company has streamlined many of its manufacturing
facilities by outsourcing capital intensive, low value added
production processes enabling the Company to focus on product
design and integration. For example, by outsourcing certain
welding operations at its Conway, South Carolina telescopic
mobile crane manufacturing facility, the Company believes it
has achieved over $2 million of annualized savings.

- Cost reductions at the newly acquired Simon Access Companies
have already begun, including reduction of headcount by
approximately 130 as of May 15, 1997, primarily in indirect
personnel. The Company estimates initiatives already
implemented will reduce annual operating expenses by
approximately $7 million and the Company anticipates further
cost savings as the Simon Access Companies are more completely
integrated into the Terex family.

Increase Sales Through Best Value Strategy - The Company tailors its
pricing strategy by product line to provide customers with an attractive
cost/benefit relationship. In general, the Company has focused its product lines
on products with simplified designs which it can manufacture at low cost. The
Company has streamlined its product lines, manufacturing fewer models, and has
increased the number of interchangeable parts between models. This strategy has
enabled the Company to offer its products at prices that it believes are often
10% to 15% below those offered by its competitors. The Company believes that by
offering its customers a simplified product design at a lower price, it can
increase sales and gain market share. For example, Terex Cranes' primary
customers, rental companies, are generally unable to charge a premium rental
rate for equipment that has sophisticated, but nonessential features.
Consequently, the Company believes its products offer virtually the same utility
and marketability as the competition's products, but at a lower cost to the
customer.

-6-

<PAGE> 8
Improve Financial Flexibility - The Company has initiated a strategy to
improve significantly its financial flexibility and strengthen its capital
structure. These efforts are intended to provide the Company with sufficient
credit quality and liquidity to execute its growth initiatives. The Company used
approximately $45 million of proceeds from the Clark Sale to redeem all of its
Series A Preferred Stock (which had a 13% per annum accretion rate) and
approximately $70 million to retire outstanding bank debt. In addition, on April
7, 1997, the Company and certain of its subsidiaries entered into the New Credit
Facility which increased the Company's borrowing capacity, reduced its cost of
funds and reduced the covenant restrictions relative to the Company's then
existing credit facility. The Company intends to use the proceeds of the
Offering to reduce the Company's total debt outstanding as described in "Use of
Proceeds."

Expand Core Operations - Over the past several years, the Company has
expanded the size and scope of its core crane and truck operations through both
acquisitions and new product development in order to increase the Company's
market share of targeted products and geographic markets and to insulate the
Company from potential cyclical changes in any one market. These initiatives
have expanded the Company's product lines, added new technology and improved the
Company's distribution network. The Company expects that acquisitions and new
product development will continue to be important components of its growth
strategy.

During the past several years, the Company has spent approximately $200
million to strengthen its core businesses by purchasing the businesses listed
below:

<TABLE>
<CAPTION>
Acquired
or Licensed
Year Acquisition Operating Locations Products Brand Names
- ---- ----------- ------------------- -------- -----------
<S> <C> <C> <C> <C>
1995 PPM South Carolina, France, Italy Telescopic Mobile Cranes P&H, PPM, BENDINI

1997 Simon Access Kansas, Ohio, South Dakota, Aerial Work Platforms, SIMON, TELELECT,
Companies Wisconsin, Ireland, Italy Utility Aerial Devices, RO, CELLA
Boom Trucks

1997 Square Shooter Michigan Telescopic Rough Terrain SQUARE SHOOTER
Business Lift Trucks
</TABLE>

-7-

<PAGE> 9
THE OFFERING

Common Stock offered by the
Company (1)............................ 5,000,000 shares

Common Stock offered by the
Selling Stockholders................... 2,000,000 shares

Common Stock to be outstanding after the
Offering (1)(2)........................ 18,646,699 shares

Use of proceeds.......................... The net proceeds from the sale of
the Common Stock offered by the
Company will be used to redeem a
portion of the Senior Secured Notes
(as defined below), subject to the
terms of the New Credit Facility
(as defined below), and for general
corporate purposes.

Dividend policy.......................... It is the Company's current policy
to retain earnings, if any, to repay
indebtedness and to fund the
development and growth of its
business. The Company does not plan
on paying dividends on the Common
Stock in the foreseeable future.
Certain of the Company's debt
agreements contain restrictions as
to the payment of cash dividends.
The terms of the Company's
outstanding Series B Preferred
Stock (as defined below) also
restrict the Company's ability to
pay cash dividends on the Common
Stock.

NYSE symbol.............................. TEX

Risk factors............................. Prospective investors should
carefully consider all the
information set forth in this
Prospectus and, in particular,
should evaluate the specific factors
set forth under "Risk Factors"
before purchasing any of the Common
Stock.

- --------------------

(1) If the over-allotment option of the Underwriters is exercised in full,
the total number of Shares to be offered by the Company and the total
number of shares of Common Stock to be outstanding after the Offering
would be 5,700,000 and 19,346,699 respectively.

(2) Does not include (a) up to an aggregate of 957,788 shares of Common
Stock reserved for issuance under the Company's incentive and other
benefit plans; (b) 309,598 shares of Common Stock issuable upon
exercise or redemption of the Company's issued and outstanding warrants
to purchase Common Stock; (c) 87,300 shares of Common Stock issuable
upon conversion of the Company's issued and outstanding preferred
stock; and (d) 326,588 shares of Common Stock issuable under the
Company's outstanding Common Stock Appreciation Rights ("Rights")
assuming all holders exercised their Rights on April 30, 1997 and the
Company elected to issue shares of Common Stock to satisfy its
obligations thereunder.

-8-
<PAGE> 10
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in millions except per share amounts)
HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The summary historical consolidated financial data of the Company set
forth below as of and for the years ended December 31, 1994, 1995 and 1996 have
been derived from the audited historical consolidated financial statements of
the Company and the related notes thereto incorporated by reference in this
Prospectus. The summary historical consolidated financial data as of and for the
quarters ended March 31, 1996 and 1997 have been derived from unaudited interim
financial statements of the Company and the related notes thereto incorporated
by reference in this Prospectus. Operating results for interim periods are not
necessarily indicative of results for the entire fiscal year. The summary pro
forma data as of and for the year ended December 31, 1996 and the quarter ended
March 31, 1997 have been derived from the unaudited pro forma financial
statements included elsewhere in this Prospectus. The following pro forma
financial information is not necessarily indicative of what the actual financial
position and results of operations of the Company would have been as of and for
the periods indicated, nor does it purport to represent the financial position
or results of operations for future periods. The following data should be read
in conjunction with the "Selected Consolidated Financial Data," "Pro Forma
Financial Information" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Prospectus.

TEREX CORPORATION
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
(in millions except per share amounts)

<TABLE>
<CAPTION>
Three Months Ended March 31,
Year Ended December 31, (unaudited)
----------------------------------------------------- ----------------------------------------
Pro Forma Pro Forma
as Adjusted as Adjusted
before the Pro Forma before the Pro Forma
Offering as Adjusted Offering as Adjusted
1994 1995 1996 1996 1996 1996 1997 1997 1997
------ ------ ------ --------- ----------- ------ ------ ---------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales........................... $314.1 $501.4 $678.5 $887.1 $887.1 $173.2 $176.3 $227.3 $227.3
Cost of goods sold.................. 266.0 431.0 609.3(1) 781.0 781.0 149.8 148.8 193.1 193.1
------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit........................ 48.1 70.4 69.2(1) 106.1 106.1 23.4 27.5 34.2 34.2
Engineering, selling and
administrative expenses.......... 37.7 57.6 64.1(2) 86.0 86.0 16.3 14.1 20.5 20.5
------ ------ ------ ------ ------ ------ ------ ------ ------
Income from operations.............. 10.4 12.8 5.1(3) 20.1 20.1 7.1 13.4 13.7 13.7
Interest income..................... 0.5 0.7 1.2 1.2 1.2 0.1 0.6 0.6 0.6
Interest expense.................... (28.3) (38.7) (44.8) (44.1) (35.6) (11.4) (9.5) (10.9) (8.8)
Amortization of debt issuance costs. (2.3) (2.3) (2.6) (2.8) (2.3) (0.6) (0.7) (0.7) (0.6)
Gain on sale of stock of former 26.0 1.0 -- -- -- -- -- -- --
subsidiary.......................
Other income (expense), net......... (1.4) (5.6) (1.1) (1.1) (1.1) 2.1 0.3 0.3 0.3
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from continuing
operations before income
taxes and extraordinary items.... 4.9 (32.1) (42.2) (26.7) (17.7) (2.7) 4.1 3.0 5.2
Provision for income taxes.......... -- -- (12.1)(4) (12.4) (12.4) -- (0.2) (0.2) (0.2)
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from continuing
operations before
extraordinary items.............. 4.9 (32.1) (54.3) (39.1) (30.1) (2.7) 3.9 2.8 5.0
Income (loss) from discontinued
operations....................... (3.7) 4.4 102.0 (5) -- -- 3.2 -- --- ---
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before
extraordinary items.............. 1.2 (27.7) 47.7 (39.1) (30.1) 0.5 3.9 2.8 5.0
Extraordinary loss on retirement of
debt............................. (0.7) (7.5) -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)................... 0.5 (35.2) 47.7 (39.1) (30.1) 0.5 3.9 2.8 5.0
Less preferred stock accretion...... (6.0) (7.3) (22.9)(6) (0.7) (0.7) (1.9) (0.4) (0.4) (0.4)
------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) applicable to common
stock............................ $ (5.5) $(42.5) $ 24.8 $(39.8) $(30.8) $ (1.4) $ 3.5 $ 2.4 $ 4.6
====== ====== ====== ====== ====== ====== ====== ====== ======
Per Common and Common Equivalent
Share:
Income (loss) from
continuing operations.......... $(0.10) $(3.79) $(5.81) $(2.99) $(1.68) $(0.43) $ 0.24 $ 0.17 $ 0.24
Income (loss) from discontinued
operations..................... (0.36) 0.42 7.67 -- -- 0.30 -- --- ---
------ ------ ------ ------ ------ ------ ------ ------ ------
Loss before extraordinary items.. (0.46) (3.37) 1.86 (2.99) (1.68) (0.13) 0.24 0.17 0.24
Extraordinary loss on retirement
of debt........................ (0.07) (0.72) -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)................... $(0.53) $(4.09) $ 1.86 $(2.99) $(1.68) $(0.13) $ 0.24 $ 0.17 $ 0.24
====== ====== ====== ====== ====== ====== ====== ====== ======

Average Number of Common and Common
Equivalent Shares Outstanding in
Per Share Calculation............ 10.3 10.4 13.3 13.3 18.3 10.6 14.4 14.4 19.4
------ ------ ------ ------ ------ ------ ------ ------ ------

SEGMENT DATA:
Net sales
Terex Cranes..................... $ 90.4 $252.3 $363.9 $572.5 $572.5 $102.5 $ 97.1 $148.1 $148.1
Terex Trucks..................... 226.8 250.3 314.9 314.9 314.9 70.9 77.7 77.7 77.7
General/Corporate/Eliminations... (3.1) (1.2) (0.3) (0.3) (0.3) (0.2) 1.5 1.5 1.5
------ ------ ------ ------ ------ ------ ------ ------ ------
Total.......................... $314.1 $501.4 $678.5 $887.1 $887.1 $173.2 $176.3 $227.3 $227.3
====== ====== ====== ====== ====== ====== ====== ====== ======

Income from operations
Terex Cranes..................... $ 7.9 $ 7.2 $ 4.8 (7) $ 19.8 $ 19.8 $ 6.2 $ 7.5 $ 7.8 $ 7.8
Terex Trucks..................... 11.2 13.0 5.6 (8) 5.6 5.6 2.9 6.4 6.4 6.4
General/Corporate/Eliminations... (8.7) (7.4) (5.3)(9) (5.3) (5.3) (2.0) (0.5) (0.5) (0.5)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total.......................... $ 10.4 $ 12.8 $ 5.1 $ 20.1 $ 20.1 $ 7.1 $ 13.4 $ 13.7 $ 13.7
====== ====== ====== ====== ====== ====== ====== ====== =======

BALANCE SHEET DATA (AT END OF PERIOD):
Working capital.................. $ 56.5 $115.7 $195.2 $116.6 $148.9 $120.8 $120.8
Total assets..................... 401.6 478.9 471.2 491.4 430.6 543.1 540.1
Total debt....................... 190.9 329.9 281.3 334.6 283.8 350.3 291.3
Stockholders' deficit............ (55.7) (96.9) (71.7) (97.1) (73.5) (76.1) (15.1)

</TABLE>

(footnotes on following page)

-9-

<PAGE> 11
Notes to Summary Historical and Pro Forma Financial Information

(1) As disclosed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," cost of goods sold includes $27.2
million in nonrecurring charges. Excluding these charges, gross profit
would have been $96.4 million or 14.2% of net sales.

(2) As disclosed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," engineering, selling and
administrative expenses includes $2.8 million in nonrecurring charges.
Excluding these charges, engineering, selling and administrative
expenses would have been $61.3 million.

(3) Includes the effect of the nonrecurring charges set forth in (1) and
(2) above. Excluding these charges, income from operations would have
been $35.1 million.

(4) This charge reflects the utilization of acquired net operating losses
by P.P.M. S.A.

(5) Represents the income from operations of the Clark Material Handling
Segment ($17.5 million) and the gain on the Clark Sale ($84.5 million).

(6) Includes annual accretion of the Series A Preferred Stock of $7.7
million, annual accretion of the issued and outstanding redeemable
preferred stock of the Company and redeemable preferred stock of a
subsidiary aggregating $0.7 million, and a $14.5 million nonrecurring
charge as a result of the redemption of the Series A Preferred Stock.

(7) Includes nonrecurring charges of $18.3 million. The nonrecurring
charges are primarily comprised of the write-down of goodwill and fixed
assets at the Terex Cranes - Conway Operations (as defined below).
Excluding these items, income from operations at Terex Cranes would
have been $23.1 million.

(8) Includes nonrecurring charges of $10.4 million. The nonrecurring
charges are primarily comprised of the write-down of fixed assets used
at Unit Rig due to the outsourcing of certain manufacturing processes
to third parties. Excluding these items, income from operations at
Terex Trucks would have been $16.0 million.

(9) Includes nonrecurring charges of $1.3 million. Excluding these charges,
General/Corporate/Eliminations would have been $4.0 million.

-10-

<PAGE> 12
RISK FACTORS

Certain information in this Prospectus includes forward looking
statements regarding future events or the future financial performance of the
Company that involve certain risks and uncertainties, including, but not limited
to, those discussed below and in "Management's Discussion and Analysis of
Financial Condition and Results of Operations." In addition, the Company's
expectations are predominantly based on what it considers key economic
assumptions. Construction and mining activity are sensitive to interest rates,
government spending and general economic conditions. Some of the other
significant factors for the Company include integration of acquired businesses,
retention of key management, foreign currency movements, pricing, product
initiatives and other actions taken by competitors, the effects of changes in
laws and regulations, continued use of net operating loss carryovers and other
factors. Actual events or the actual future results of the Company may differ
materially from any forward looking statement due to these and other risks,
uncertainties and significant factors.

In addition to other matters described in this Prospectus, the
following should be carefully considered in connection with an investment in the
Common Stock:

SIGNIFICANT LEVERAGE

The Company is highly leveraged. As of March 31, 1997, on a pro forma
basis, the Company would have been approximately $291.3 million of indebtedness,
and the ratio of the Company's indebtedness to total capitalization would have
been 101%.

This substantial leverage has several important consequences, including
the following: (i) a substantial portion of the Company's operating cash flow
will be dedicated to servicing its indebtedness, (ii) the covenants contained in
the Company's debt agreements impose certain restrictions on the Company which,
among other things, may limit its ability to borrow additional funds or dispose
of assets, (iii) the Company's ability to obtain additional financing to fund
future working capital requirements, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired and (iv) the Company's
ability to withstand competitive pressures, adverse economic conditions and
adverse changes in governmental regulations, to make acquisitions, and to take
advantage of significant business opportunities that may arise, may be
negatively affected. The Company's ability to meet its debt service obligations
and to reduce its total indebtedness will be dependent upon future performance,
which will be subject to general economic conditions, its ability to achieve
cost savings and other financial, business and other factors affecting the
operations of the Company, many of which are beyond its control. If the Company
is unable to generate sufficient operating cash flow in the future to service
its debt, it may be required to refinance all or a portion of such debt or to
obtain additional financing. There can be no assurance, however, that any
refinancing would be possible or that any additional financing could be
obtained.

INDUSTRY CYCLICALITY AND SUBSTANTIAL COMPETITION

Sales of products manufactured and sold by the Company have
historically been subject to substantial cyclical variation extending over a
number of years based on general economic conditions. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

The markets in which the Company competes are highly competitive. To
successfully compete, the Company must remain competitive in the areas of
quality, price, product line, ease of use, safety, comfort and customer service.
Many of the Company's competitors have greater financial resources than the
Company. See "Business -- Competition."

-11-

<PAGE> 13
ACQUISITION STRATEGY; INTEGRATION OF ACQUIRED BUSINESSES

The Company expects to continue a strategy of identifying and acquiring
businesses with complementary products and services which could be expected to
enhance the Company's operations and profitability. There can be no assurance,
however that the Company will continue to identify suitable new acquisition
candidates, obtain financing necessary to complete such acquisitions or acquire
businesses on satisfactory terms, or that any business acquired by the Company
will be integrated successfully into the Company's operations or prove to be
profitable. Moreover, the Company's ability to obtain financing adequate to
enable the completion of suitable acquisitions may be limited by its current
debt structure and leverage. Successful integration of businesses acquired,
including the Simon Access Companies and the Square Shooter Business, will
depend, in part, on the Company's ability to manage these additional businesses
and eliminate redundancies and excess costs. Material failure or substantial
delay in accomplishing such integration could have a material adverse effect on
the Company's results of operations and financial condition.

TAX AUDIT ISSUES

The Internal Revenue Service (the "IRS") is currently examining the
Company's federal tax returns for the years 1987 through 1989. In December 1994,
the Company received an examination report from the IRS proposing a substantial
tax deficiency. The examination report raised a variety of issues, including the
Company's substantiation for certain deductions taken during this period, the
Company's utilization of certain net operating loss carryovers ("NOLs") and the
availability of such NOLs to offset future taxable income. If the IRS were to
prevail on all the issues raised, the amount of the tax assessment would be
approximately $56 million plus interest and penalties, which interest and
penalties would significantly exceed the amount of any tax assessment. If the
Company were required to pay a significant portion of the assessment with
related interest and penalties, such payment would exceed the Company's
resources. The Company filed its administrative appeal to the examination report
in April 1995. As a result of a meeting with the Manhattan division of the IRS
in July 1995, in June 1996 the Company was advised that the matter was being
referred back to the Milwaukee audit division of the IRS. The Milwaukee audit
division of the IRS is currently reviewing information provided by the Company
over the past 18 months. Although management believes that the Company will be
able to provide adequate documentation for a substantial portion of the
deductions questioned by the IRS and that there is substantial support for the
Company's past and future utilization of the NOLs, the ultimate outcome of this
matter is subject to the resolution of significant legal and factual issues. If
the Company's positions prevail on the most significant issues, the Company
believes that the outcome of the examination report will not have a material
adverse effect on its financial condition or results of operations. No
additional accruals have been made for any amounts which might be due as a
result of this matter because the possible loss ranges from zero to $56 million
plus interest and penalties and the ultimate outcome cannot presently be
determined or estimated.

Under the terms of the Company's Revolving Credit Agreement, dated as
of April 7, 1997, with The First National Bank of Boston, as Agent, and the
other lending institutions party thereto (the "New Credit Facility"), an event
of default will occur if the Company incurs any liability for federal income
taxes which results in an expenditure of cash of more than $15 million in excess
of the amounts shown as owed on tax returns filed by the Company prior to April
7, 1997. If this were to occur, the Company might be required to refinance the
indebtedness outstanding under the New Credit Facility. There can be no
assurance, however, that any refinancing would be obtainable or, if obtainable,
that the terms of such refinancing would be acceptable to the Company.

SIGNIFICANT STOCKHOLDER

As of March 31, 1997, Randolph W. Lenz is the beneficial owner of
approximately 32% of the outstanding Common Stock, and after consummation of
this Offering will be the beneficial owner of approximately 12.6% (12.2% if the
over-allotment option of the Underwriters is

-12-

<PAGE> 14
exercised in full). Mr. Lenz retired as the Chairman of the Board and as a
Director of the Company on August 28, 1995, and currently serves as a consultant
to the Company. In connection with his retirement, Mr. Lenz entered into an
agreement with the Company pursuant to which, among other things, he agreed that
he will not compete with the Company until November 2000, and will vote his
shares of Common Stock in the manner recommended by the Board of Directors and
will not acquire any additional shares of Common Stock other than pursuant to
the agreement until November 1998. See "Selling Stockholders."

Mr. Lenz currently pledges, and may in the future pledge, shares of
Common Stock owned by him as collateral for loans. If Mr. Lenz does not pay such
loans when due, the pledgee may have the right to sell the shares of Common
Stock pledged to it in satisfaction of Mr. Lenz's obligations. The sale or other
disposition of a substantial amount of such shares of Common Stock in the public
market could adversely affect the prevailing market price for the Common Stock.
Prior to the consummation of the Offering, however, the Company expects to enter
into an agreement (the "Standstill Agreement") with Mr. Lenz and his affiliates
which will place certain limitations on the ability of Mr. Lenz and his
affiliates to sell or otherwise dispose of shares of Common Stock. See "--
Shares Eligible for Future Sales."

CONTINUATION OF NET OPERATING LOSS CARRYOVERS

The Company currently has NOLs of approximately $200 million. The
Company would be subject to an annual limitation (described below) on its
ability to utilize its NOLs to offset future taxable income if the Company
undergoes an ownership change within the meaning of Section 382 of the Internal
Revenue Code of 1986, as amended ("Section 382") (the "Ownership Change").
Generally, an Ownership Change is deemed to occur if the aggregate cumulative
increase in the percentage ownership of the capital stock of the Company (which
generally includes for this purpose, but is not limited to, the Common Stock and
certain options and warrants) by persons owning five percent or more of such
capital stock and certain public groups (within the meaning of Section 382) is
more than 50 percentage points in any three-year testing period. In the event of
an Ownership Change, the Company's utilization of its NOLs would be limited to
an annual amount (without extending the applicable 15-year carryforward period
for NOLs) equal to the product of the fair market value of the Company
immediately before such Ownership Change (as determined pursuant to Section 382,
which may provide for certain reductions in value) multiplied by the long-term
tax-exempt rate, which is an interest-indexed rate that is published monthly by
the IRS and which is approximately 5.64% as of the date of this Prospectus. NOLs
arising after the date that any Ownership Change occurs will be unaffected by
such Ownership Change.

While the issuance of Common Stock by the Company and the sale by the
Selling Stockholders of Common Stock in the Offering, together with other events
that have previously occurred, will not constitute an Ownership Change, the
consummation of the Offering will significantly increase the possibility that an
Ownership Change may occur within the three-year testing period. It is
impossible for the Company to ensure that such an Ownership Change will not
occur in the future, in part because the Company has no ability to restrict the
acquisition or disposition of the Company's capital stock by persons whose
ownership could cause an Ownership Change. If Mr. Lenz and/or his affiliates
(see "-- Significant Stockholder") were to sell all or substantially all of
their remaining shares of the Company's capital stock prior to November 1998 in
a manner other than as contemplated by the Standstill Agreement, there would be
a substantial likelihood that an Ownership Change would occur. As a result, as
set forth more fully under "-- Shares Eligible for Future Sale," prior to the
consummation of the Offering, the Company expects to enter into the Standstill
Agreement with Mr. Lenz and his affiliates which will, among other things,
reduce the likelihood that future sales of the Company's capital stock by Mr.
Lenz or his affiliates will, by themselves, cause an Ownership Change. However,
there can be no assurance that the Standstill Agreement will in fact prevent an
Ownership Change from occurring. In addition, the Company may in the future take
certain actions which, alone or coupled with other events, could give rise to an
Ownership Change, if in the exercise of the business judgment of the Company
such actions (which may include future issuances of equity securities) are
necessary or desirable. If an Ownership Change were to occur subsequent to the
Offering, the NOL annual limitation under Section 382 could substantially reduce
the Company's future after tax earnings and cash flow.

-13-

<PAGE> 15
RELIANCE ON KEY MANAGEMENT

The success of the Company's business is dependent upon the management
and leadership skills of Ronald M. DeFeo, the Company's President and Chief
Executive Officer, as well as other members of the Company's senior management
team. The Company does not have employment agreements with any members of senior
management. The loss of Mr. DeFeo or other members of the senior management team
or an inability to attract and retain additional personnel could have a material
adverse effect on the Company. There can be no assurance that the Company will
be able to retain its existing senior management personnel or to continue to
attract additional qualified personnel.

SEC INVESTIGATION

In March 1994, the Securities and Exchange Commission (the
"Commission") initiated a private investigation, which included the Company and
certain of its affiliates, to determine whether violations of certain aspects of
the Federal securities laws had occurred. To date, the inquiry of the Commission
has primarily focused on accounting treatment and reporting matters relating to
various transactions which took place in the late 1980s and early 1990s. The
Company is cooperating with the Commission in its investigation and it is not
possible at this time to determine the outcome of the Commission's
investigation.

ENVIRONMENTAL AND RELATED MATTERS

The Company generates hazardous and nonhazardous wastes in the normal
course of its manufacturing operations. As a result, the Company is subject to a
wide range of federal, state, local and foreign environmental laws and
regulations, including the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), that (i) govern activities or operations that may
have adverse environmental effects, such as discharges to air and water, as well
as handling and disposal practices for hazardous and nonhazardous wastes, and
(ii) impose liability for the costs of cleaning up, and certain damages
resulting from, sites of past spills, disposals or other releases of hazardous
substances. Compliance with such laws and regulations has, and will, require
expenditures by the Company on a continuing basis. The Company does not expect
that these expenditures will have a material adverse effect on its financial
condition or results of operations.

FOREIGN CURRENCIES AND INTEREST RATE RISK

The Company's products are sold in over 50 countries around the world
and, accordingly, revenues of the Company are generated in foreign currencies,
while the costs associated with those revenues are only partly incurred in the
same currencies. The major foreign currencies, among others, in which the
Company does business are the German Mark, the Pound Sterling, and the French
Franc. The Company may, from time to time, hedge specifically identified
committed cash flows in foreign currencies using forward currency sale or
purchase contracts. Consequently, the Company has a net exposure to fluctuations
between the U.S. dollar and such foreign currencies, which impacts the financial
performance of the Company. Although revenues and costs of the Company may be
partially hedged, currency fluctuations will impact the Company's financial
performance in the future. In addition, international operations are subject to
a number of potential risks, including, among others, currency exchange
controls, transfer restrictions and rate fluctuations, trade barriers, the
effects of income and withholding tax, and governmental expropriation.

The Company's borrowings are at both fixed and floating rates of
interest. For the floating rate portion of the borrowings, the Company is at
risk for fluctuations in interest rates. The Company does not currently hedge
any interest rate risk.

RESTRICTIONS ON DIVIDENDS

-14-

<PAGE> 16
Contractual restrictions exist under the Company's 13.25% Senior
Secured Notes due May 15, 2002 (the "Senior Secured Notes") and the New Credit
Facility which limit the Company's ability to pay dividends on its capital
stock. The terms of the Company's Series B Cumulative Redeemable Convertible
Preferred Stock (the "Series B Preferred Stock") also limit the Company's
ability to pay cash dividends on any class of capital stock of the Company
junior to or on a parity with the Series B Preferred Stock. See "Description of
Securities-Preferred Stock." In addition, under Delaware law the Company's
ability to pay dividends is subject to the statutory limitation that such
payment be made either (i) out of its surplus (the excess of its net assets over
its total liabilities plus stated capital) or (ii) in the event that there is no
surplus, out of its net profits for the fiscal year in which the dividend is
declared and/or the preceding fiscal year. The Company intends generally to
retain earnings, if any, to repay indebtedness and to fund the development and
growth of its business. The Company does not plan on paying dividends on the
Common Stock in the foreseeable future. Any future payments of cash dividends
will depend upon the financial condition, capital requirements and earnings of
the Company, as well as other factors that the Board of Directors may deem
relevant.

EFFECT OF COMMON STOCK APPRECIATION RIGHTS ON FUTURE EARNINGS

As of March 31, 1997, the Company has outstanding 1,000,000 Common
Stock Appreciation Rights (the "Rights"), each of which entitles the holder
thereof, upon exercise at any time on or prior to May 15, 2002, to receive cash
or, at the election of the Company, Common Stock in an amount equal to the
average closing sale price per share of the Common Stock for the 60 consecutive
trading days prior to the date of the exercise (the "Current Price"), less
$7.288 per share, subject to adjustment in certain circumstances. The Company
has a reserve on its books and records to cover the cost to the Company of the
exercise of the Rights up to a Current Price of $11.632 per share. The Company
will be required to record charges to earnings if the Current Price of the
Common Stock increases above $11.632 per share, and such charges could have a
material adverse effect on the Company's earnings for periods in which they are
recorded. If the Current Price of the Common Stock decreases below $11.632 per
share, then the Company may be required to record increased earnings as a result
thereof. As of March 31, 1997, the Current Price of the Common Stock was
$10.727.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, 18,646,699 shares (19,346,699 shares
if the over-allotment option of the Underwriters is exercised in full) of Common
Stock will be outstanding (based on the number of shares outstanding as of March
31, 1997). As of March 31, 1997, there were also (a) up to an aggregate of
957,788 shares of Common Stock reserved for issuance under the Company's
incentive and other benefit plans; (b) an aggregate of 309,598 shares of Common
Stock reserved for issuance upon exercise of Series A Warrants (as described
under "Description of Capital Stock - Common Stock Purchase Warrants"); (c) an
aggregate of 87,300 shares of Common Stock reserved for issuance upon conversion
of Series B Preferred Stock (as described under "Description of Capital Stock --
Preferred Stock"); and (d) 326,558 shares of Common Stock issuable under the
Rights assuming all holders exercised their Rights on April 30, 1997 and the
Company elected to issue shares of Common Stock to satisfy its obligations
thereunder.

The Company and certain of its executive officers and directors have
agreed with the Underwriters that they will not, directly or indirectly, offer,
sell, contract to sell, announce their intention to sell, or otherwise dispose
of, and the Company has agreed that it will not file with the Commission a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), relating to any shares of Common Stock or securities
convertible or exchangeable into or exercisable for any shares of Common Stock,
without the prior written consent of Credit Suisse First Boston Corporation for
a period of 180 days after the date of this Prospectus except (i) any shares
of Common Stock issuable upon the exercise or redemption of an option or warrant
or the conversion or exchange of a security, in each case outstanding on the
date of this Prospectus and in accordance with the terms of the respective
securities, (ii) any securities of the Company sold or granted pursuant to the
Company's incentive and other benefit plans as in effect as of the date of this
Prospectus, (iii) any shares of Common Stock issued upon exercise of the
Company's issued and outstanding Rights in accordance with the terms thereof and
(iv) any warrants

-15-

<PAGE> 17
or securities convertible into Common Stock issued in exchange for any of the
Company's warrants, options or stock appreciation rights outstanding on the date
of this Prospectus.

Prior to the consummation of the Offering, the Company expects to enter
into an agreement (the "Standstill Agreement") with Mr. Randolph W. Lenz and his
affiliates pursuant to which they will agree to certain restrictions on the
disposition of their remaining shares of Common Stock upon completion of the
Offering.

The effect, if any, that future market sales of shares of Common Stock
or the availability of shares for sale will have on the market price prevailing
from time to time cannot be predicted. Nevertheless, sales of substantial
additional amounts of Common Stock in the public market, or the perception that
such sales could occur, could adversely affect the prevailing market price for
the Common Stock.

-16-
<PAGE> 18
THE COMPANY

Terex is a global manufacturer of a broad range of construction and
mining related capital equipment. The Company strives to manufacture machines
which are low cost, simple to use and easy to maintain. The Company's principal
products include telescopic mobile cranes, aerial work platforms, utility aerial
devices, telescopic material handlers, truck mounted cranes, rigid and
articulated off-highway trucks and high capacity surface mining trucks and
related components and replacement parts. The Company's products are
manufactured at 12 plants in the United States and Europe and are sold primarily
through a worldwide network of dealers in over 750 locations to the global
construction, infrastructure and surface mining markets. The Company's
operations began in 1983 with the purchase of Northwest Engineering Company, the
Company's original business and name. Since 1983, management has expanded and
changed the Company's business through a series of acquisitions and
dispositions. In 1988, Northwest Engineering Company merged into a subsidiary
acquired in 1986 named Terex Corporation, with Terex Corporation as the
surviving entity. As a result of the completion of the PPM Acquisition (as
defined below) in May 1995, the Company's operations were divided into three
principal segments: Material Handling, Heavy Equipment and Mobile Cranes. On
November 27, 1996, the Company completed the sale of the Clark Material Handling
Segment, which was originally acquired in July 1992 (see "Business-Discontinued
Operations" below), and currently operates two business segments: Terex Cranes
and Terex Trucks. Terex Cranes manufactures telescopic mobile cranes (including
rough terrain, truck and all terrain mobile cranes), aerial work platforms
(including scissor, articulated boom and straight telescoping boom aerial work
platforms), utility aerial devices (including digger derricks and articulated
aerial devices), telescopic material handlers (including container stackers,
scrap handlers and telescopic rough terrain boom forklifts), truck mounted
cranes (boom trucks) and related components and replacement parts. These
products are primarily used by construction and industrial customers and utility
companies. Terex Cranes is comprised of a number of divisions and subsidiaries,
and is headquartered in Conway, South Carolina. Terex Trucks manufactures
articulated and rigid off-highway trucks and high capacity surface mining trucks
and related components and replacement parts. These products are used primarily
by construction, mining and government customers. Terex Trucks is headquartered
in Motherwell, Scotland and is comprised of TEL, located in Motherwell,
Scotland, and Unit Rig, located in Tulsa, Oklahoma. The principal executive
offices of the Company are located at 500 Post Road East, Westport, Connecticut
06880 and its telephone number is (203) 222-7170.

Terex Cranes was established as a separate business segment as a result
of the acquisition (the "PPM Acquisition") in May 1995 of substantially all of
the shares of P.P.M. S.A. and certain of its subsidiaries, including P.P.M. SpA,
Brimont Agraire S.A., a specialized trailer manufacturer in France, PPM Krane
GmbH, a sales organization in Germany, and Baulift Baumaschinen Und Krane
Handels GmbH, a parts distributor in Germany (collectively, "PPM Europe") from
Potain S.A., and all of the capital stock of Legris Industries, Inc., which
owned 92.4% of the capital stock of PPM Cranes, Inc. ("PPM North America" or
"Terex Cranes - Conway Operations"); and PPM Europe and PPM North America are
collectively referred to herein as "PPM"), from Legris Industries, S.A.
Concurrently with the completion of the PPM Acquisition, the Company contributed
the assets (subject to liabilities) of its Koehring Cranes and Excavators and
Mark Industries division to Terex Cranes, Inc., a wholly-owned subsidiary of the
Company. The former division now operates as Koehring Cranes, Inc. ("Koehring"
or "Terex Cranes-Waverly Operations"), a wholly owned subsidiary of Terex
Cranes, Inc.

The Company recently completed two acquisitions to augment its Terex
Cranes segment. On April 7, 1997, the Company completed the Simon Acquisition,
pursuant to which the Company acquired substantially all of the capital stock of
the Simon Access Companies for $90 million (subject to adjustment under certain
circumstances). The Simon Access Companies consist principally of business units
in the United States and Europe engaged in the manufacture, sale and worldwide
distribution of access equipment designed to position people and materials to
work at heights. The Simon Access Companies' products include utility aerial
devices, aerial work platforms and truck mounted cranes (boom trucks) which are
sold to customers in the industrial and construction markets, as well as utility
companies. Specifically, the Company acquired 100% of the outstanding common
stock of (i) Simon Telelect, Inc. (now named Terex Telelect Inc.), a Delaware
corporation ("Telelect"), (ii) Simon Aerials, Inc. (now named Terex Aerials,
Inc.), a Wisconsin corporation and parent company of Terex RO

-17-
<PAGE> 19

("Aerials"), (iii) Sim-Tech Management Limited, a private limited company
incorporated under the laws of Hong Kong ("Sim-Tech"), (iv) Simon Cella, S.r.l.,
a company incorporated under the laws of Italy ("Cella"), and (v) Simon Aerials
Limited, a company incorporated under the laws of Ireland ("Aerials Limited");
and 60% of the outstanding common stock of Simon-Tomen Engineering Company
Limited, a limited liability stock company organized under the laws of Japan
("Tomen-Engineering"). On April 14, 1997, the Company completed the Square
Shooter Acquisition. The Square Shooter Business manufactures the Square
Shooter, a rough terrain telescopic lift truck designed to lift materials to
heights where they are used in construction.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock is listed on the NYSE under the symbol "TEX." The
following table sets forth, for the quarters indicated, the high and low sales
prices of the Common Stock as reported on the NYSE Composite Tape.

<TABLE>
<CAPTION>
Price Range
Low High
--- ----
<S> <C> <C>
1995
First Quarter ended March 31, 1995 $ 5 7/8 $ 7 1/8
Second Quarter ended June 30, 1995 4 1/2 6 3/4
Third Quarter ended September 30, 1995 3 1/8 5 3/4
Fourth Quarter ended December 31, 1995 4 5 1/2

1996
First Quarter ended March 31, 1996 $ 4 1/8 $ 7 1/8
Second Quarter ended June 30, 1996 6 3/8 9 1/4
Third Quarter ended September 30, 1996 6 1/2 9 3/8
Fourth Quarter ended December 31, 1996 6 5/8 10 1/8

1997
First Quarter ended March 31, 1997 $ 9 1/2 $ 13 1/2
Second Quarter (through May 22, 1997) 13 1/8 16 1/2
</TABLE>

The last reported sale price of the Common Stock on the NYSE Composite
Tape on May 22, 1997 was $15 3/8 per share.

No dividends were declared or paid in 1995 or 1996. Certain of the
Company's debt agreements contain restrictions as to the payment of cash
dividends. The terms of the Company's outstanding Series B Preferred Stock also
restrict the Company's ability to pay cash dividends on the Common Stock. In
addition, payment of dividends is limited by Delaware law. The Company intends
generally to retain earnings, if any, to repay indebtedness and to fund the
development and growth of its business. The Company does not plan on paying
dividends on the Common Stock in the foreseeable future. Any future payments of
cash dividends will depend upon the financial condition, capital requirements
and earnings of the Company, as well as other factors that the Board of
Directors may deem relevant.

-18-
<PAGE> 20

USE OF PROCEEDS

Assuming a public offering price of $15 per share, the net proceeds
from the sale of the Common Stock offered by the Company hereby are estimated to
be approximately $70.0 million (or approximately $80.0 million if the
Underwriters' over-allotment option is exercised in full), and will be used by
the Company, subject to the terms of the New Credit Facility described below, to
redeem $________ million (or $_____ million if the Underwriters over-allotment
option is exercised in full) of Senior Secured Notes, and for general corporate
purposes. The redemption price of the Senior Secured Notes is 109.46% of the
principal amount thereof. The Senior Secured Notes were issued in May 1995,
bear interest at the rate of 13.25% per annum, and mature on May 15, 2002. No
amortization of principal is required prior to the maturity of the Senior
Secured Notes.

Pursuant to the terms of the New Credit Facility, under certain
circumstances the Company may be required to apply up to a maximum of $30
million of the net proceeds from the sale of the Common Stock offered hereby to
reduce outstanding indebtedness under the New Credit Facility. Interest on
amounts borrowed under the New Credit Facility fluctuates between 0.5% and 1.5%
per annum in excess of the prime rate for a prime rate loan, or between 2.0% and
3.0% per annum in excess of the adjusted eurodollar rate for a eurodollar rate
loan. The margin over the prime rate or eurodollar rate paid by the Company is
based upon the Company's fixed charge coverage ratio from time to time. The New
Credit Facility matures on April 7, 2000, and no amortization of principal is
required prior thereto. The proceeds of the New Credit Facility were used for
working capital and general corporate purposes, including the repayment of
existing indebtedness, the Simon Acquisition and the Square Shooter Acquisition.
Any portion of the net proceeds from the sale of Common Stock offered hereby
used to repay amounts borrowed under the New Credit Facility will reduce the
amount of Senior Secured Notes to be redeemed by the Company with the net
proceeds of this Offering.

Pending application of the net proceeds from the Offering, the Company
will invest such net proceeds in interest bearing accounts and short-term,
interest bearing securities.

The Company will not receive any of the proceeds from the sale of the
Common Stock offered by the Selling Stockholders hereby.

-19-
<PAGE> 21

CAPITALIZATION

The following table sets forth (i) the consolidated capitalization of
the Company as of March 31, 1997, (ii) adjustments to the capitalization of the
Company to give pro forma effect to the Simon Acquisition, the Square Shooter
Acquisition (collectively, the "Acquisitions") and the New Credit Facility and
application of the net proceeds therefrom, (iii) adjustments to the
capitalization of the Company to give pro forma effect to the Offering by the
Company and the application of the estimated net proceeds therefrom as described
in "Use of Proceeds" and (iv) the consolidated pro forma capitalization of the
Company as of March 31, 1997. The table should be read in conjunction with
"Selected Consolidated Financial Data" and "Pro Forma Financial Information"
included elsewhere in this Prospectus and the historical financial statements of
the Company and the related notes thereto and the historical combined financial
statements of the Simon Access Companies and the related notes thereto
incorporated by reference in this Prospectus.

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
-----------------------------------------------------------------------
(dollars in millions)
ADJUSTMENTS
FOR ACQUISITIONS
TEREX AND NEW CREDIT ADJUSTMENTS FOR PRO FORMA
HISTORICAL FACILITY THE OFFERING AS ADJUSTED
---------- ---------------- --------------- -----------
<S> <C> <C> <C> <C>
Cash and cash equivalents ......................... $ 39.6 $(38.7)(1) $ -- $ 0.9
====== ====== ====== ======
Notes payable and current portion of long-term debt $ 22.7 $ -- $ -- $ 22.7
Long-term debt, less current portion .............. 261.1 71.5(2) (64.0)(4) 268.6
Minority interest, including redeemable preferred
stock of a subsidiary ........................ 10.4 -- -- 10.4
Redeemable convertible preferred stock ............ 0.8 -- -- 0.8
Stockholders' Deficit
Warrants to purchase common stock .............. 3.2 -- -- 3.2
Common stock, $0.01 par value -
authorized 30 million shares;
13,306,692 shares issued and outstanding;
18,306,692 shares issued and outstanding
pro forma .................................... 0.1 -- 0.1(5) 0.2
Additional paid-in capital ..................... 56.0 -- 69.9(5) 125.9
Accumulated deficit ............................ (122.6) (2.6)(3) (9.0)(6) (134.2)
Pension liability adjustment ................... (2.0) -- -- (2.0)
Cumulative translation adjustment .............. (8.2) -- -- (8.2)
------ ------ ------ ------
Total Stockholders' Deficit .................. (73.5) (2.6) 61.0 (15.1)
------ ------ ------ ------
Total Capitalization .............................. $221.5 $ 68.9 $ (3.0) $287.4
====== ====== ====== ======
</TABLE>

- ----------------

(1) Represents cash used in the Acquisitions and termination of the then
existing credit facility.

(2) Represents borrowings under the New Credit Facility in connection with
the Acquisitions, plus the refinancing and assumption of certain debt
of the Acquired Companies, plus the issuance of a purchase money
promissory note in connection with the Square Shooter Acquisition,
which is payable over three years with interest at a rate of 8% per
annum.

(3) Represents the effect on equity of the $2.0 million prepayment penalty
and the write-off of $0.6 million of debt origination fees related to
the termination of the then existing credit facility.

(4) Represents the principal amount of the Senior Secured Notes to be
redeemed with the net proceeds of the Offering, assuming the full
amount of the net proceeds of the Offering by the Company are available
to redeem the Senior Secured Notes.

(5) Assumes the sale of 5,000,000 shares of Common Stock by the Company at
$15 per share ($0.1 million of which is attributed to the par value of
the Common Stock) less approximately $5 million in fees and expenses
related to the Offering.

(6) Represents the effect on equity of the 9.46% redemption premium ($6.0
million) on the Senior Secured Notes to be redeemed, plus the pro rata
write-off of $3.0 million in debt origination costs related to the
redemption of such Senior Secured Notes.

-20-
<PAGE> 22

PRO FORMA FINANCIAL INFORMATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(Dollars in millions except per share amounts)

The following pro forma condensed consolidated statement of operations
(the "1996 Pro Forma Statement of Operations") is based on the historical
audited consolidated financial statements of the Company for the year ended
December 31, 1996 and the related notes thereto incorporated by reference in
this Prospectus, adjusted to give effect to the following transactions as if
they had occurred on January 1, 1996: (i) the application of the net proceeds
from the Clark Sale; (ii) the Acquisitions, and the New Credit Facility and
application of the net proceeds therefrom, except for $2.6 million of
extraordinary charges related to the prepayment of the then existing credit
facility; and (iii) the completion of the Offering by the Company and the
application of the net proceeds therefrom as described in "Use of Proceeds,"
except for extraordinary charges of $9.0 million related to the redemption of
Senior Secured Notes with the net proceeds to the Company of the Offering. The
1996 Pro Forma Statement of Operations does not purport to represent what the
Company's results of operations would have been had the transactions listed
above actually occurred on the dates indicated or to predict the Company's
results of operations in the future. This statement is qualified in its entirety
by, and should be read in conjunction with, the historical consolidated
financial statements of the Company and the related notes thereto and the
historical combined financial statements of the Simon Access Companies and the
related notes thereto incorporated by reference in this Prospectus and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus. As used herein, the "Acquired
Companies" refers collectively to the Simon Access Companies and the Square
Shooter Business.

YEAR ENDED DECEMBER 31, 1996
(in millions except per share amounts)

<TABLE>
<CAPTION>
Adjustments for Pro Forma
Application Historical Acquisitions as Adjusted Adjustments
Historical of Clark Sale Acquired and New before the for the Pro Forma
Terex Proceeds(3) Companies Credit Facility Offering Offering(10) as Adjusted
---------- ------------- ---------- ---------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales.................. $678.5 $ $208.6 $ $887.1 $ $887.1

Cost of goods sold......... 609.3 170.7 1.0 (5) 781.0 781.0
------- ---- ------ ----- ------- ---- -------
Gross profit............. 69.2 37.9 (1.0) 106.1 106.1

Engineering, selling and
administrative expenses.. 64.1 28.9 (7.0)(6) 86.0 86.0
------- ---- ------ ----- ------- ---- -------
Income from operations... 5.1 9.0 6.0 20.1 20.1

Other income (expense)
Interest income.......... 1.2 0.2 (0.2)(7) 1.2 1.2
Interest expense......... (44.8)(1) 6.3 (5.9) 0.3 (8) (44.1) 8.5 (35.6)
Amortization of debt
issuance costs......... (2.6) -- (0.2)(9) (2.8) 0.5 (2.3)
Other income
(expense) - net........ (1.1) -- (1.1) (1.1)
------- ---- ------ ----- ------- ---- -------
Income (loss) from
Continuing Operations
before income taxes.... (42.2) 6.3 3.3 5.9 (26.7) 9.0 (17.7)

Provision for
income taxes............ (12.1) (0.3) (12.4) (12.4)
------- ---- ------ ---- ------- ---- -------
Income (loss) from
Continuing Operations.. $(54.3) $6.3 $ 3.0 $ 5.9 $(39.1) $9.0 $(30.1)
======= ==== ====== ===== ======= ==== =======
Per common and common
equivalent share......... $ (5.81)(2) $2.14(4) $ 0.23 $0.44 $ (2.99) $0.49 $(1.68)
======= ===== ====== ===== ======= ===== =======
Average number of common
and common equivalent
shares outstanding in
per share calculation.... 13.3 13.3 13.3 13.3 13.3 18.3 18.3
======= ==== ==== ===== ======= ==== =======
</TABLE>

-21-
<PAGE> 23

NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996

The following table sets forth the reconciliation of income from
Continuing Operations to earnings per share, reflecting adjustments to the
historical results of operations of the Company to exclude nonrecurring charges.

<TABLE>
<CAPTION>
Adjustments
Adjustments for
for Acquisitions Pro Forma
Adjusted Application Historical and New as Adjusted Adjustments
Historical of Clark Sale Acquired Credit before the for the Pro Forma
Terex Proceeds Companies Facility Offering Offering as Adjusted
---------- ------------- --------- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from
continuing operations .. $(13.0) $ 6.3 $ 3.0 $ 5.9 $ 2.2 $ 9.0 $ 11.2
Less preferred
stock accretion ........ (22.9) 22.2 -- -- (0.7) -- (0.7)
====== ====== ====== ====== ====== ====== ======
Income (loss) applicable to
common stock ........... $(35.9) $ 28.5 $ 3.0 $ 5.9 $ 1.5 $ 9.0 $ 10.5
====== ====== ====== ====== ====== ====== ======
Per Common and Common
Equivalent Share:
Income (loss) from continuing
operations ............. $(2.70) $ 2.14 $ 0.23 $ 0.44 $ 0.11 $ 0.49 $ 0.57

Average number of Common
and Common Equivalent
Shares Outstanding in
Per Share Calculation... 13.3 13.3 13.3 13.3 13.3 18.3 18.3
</TABLE>

(1) On November 27, 1996, the Company consummated the Clark Sale. As a
result, the Clark Material Handling Segment was accounted for as a
discontinued operation for the year ended December 31, 1996. Generally
accepted accounting principles permit, but do not require, the
allocation of interest expense between continuing operations and
discontinued operations. The Company has elected not to allocate
interest expense to discontinued operations because, such allocation,
although permitted by generally accepted accounting principles, would
not necessarily be indicative of the use of proceeds from the Clark
Sale and the effect on interest expense of Continuing Operations. As a
result, loss from Continuing Operations includes substantially all of
the interest expense of the Company, and income from discontinued
operations does not include any material interest expense.

(2) Includes annual accretion of the Series A Preferred Stock of $7.7
million, annual accretion of the Series B Preferred Stock and
redeemable preferred stock of a subsidiary aggregating $0.7 million,
and a $14.5 million nonrecurring charge as a result of the redemption
of the Series A Preferred Stock.

(3) Reflects the effect of the application of a portion of the proceeds
from the Clark Sale to repay the amounts outstanding under the then
existing credit facility, as if such application had taken place on
January 1, 1996.

(4) Reflects the adjustment discussed in (3) above and the effect of the
application of a portion of the net proceeds of the Clark Sale to
redeem the Series A Preferred Stock, as if each such application had
taken place on January 1, 1996.

(5) Reflects the adjustment of historical goodwill amortization of the
Simon Access Companies and the Square Shooter Business to equal the
amortization over 40 years of goodwill arising as a result of the
Acquisitions.

(6) Represents reductions in costs and expenses resulting from the
elimination of overstaffing and redundant staffing throughout the Simon
Access Companies, primarily through the elimination of the
administrative headquarters, foreign sales offices and plant closures,
which initiatives have already been implemented. Liabilities related to
these employee terminations have been accrued in connection with the
Simon Acquisition pursuant to EITF 95-3 "Recognition of Liabilities in
Connection with a Business Combination."

(7) Represents the elimination of interest income on cash on hand at the
Simon Access Companies as such cash was not included as part of the
assets acquired by the Company in the Simon Acquisition.

(8) Represents the additional interest expense related to the $71.5 million
of debt incurred at the time of the Acquisitions as though such debt
was incurred on January 1, 1996.

(9) Represents the amortization of the net additional debt origination fees
related to the New Credit Facility.

(10) Represents the effect of the proposed sale of 5,000,000 shares of
Common Stock by the Company at $15 per share ($0.1 million of which is
attributed to the par value of the Common Stock) less an estimated $5
million in fees. Assumes all of the net proceeds of the Offering to the
Company of $70 million are applied to redeem Senior Secured Notes at a
price of 109.46% of the principal amount thereof. This will result in a
reduction of the interest expense related to the Senior Secured Notes
as set forth. The decrease in amortization of debt issuance costs
results from the pro rata reduction of the debt issuance costs of the
Senior Secured Notes for those Senior Secured Notes redeemed using the
net proceeds of the Offering to the Company.

-22-
<PAGE> 24

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
AS OF AND FOR THE QUARTER ENDED MARCH 31, 1997

The following unaudited pro forma condensed consolidated financial
statements (the "First Quarter Pro Forma Financial Statements") are
based on the historical unaudited consolidated financial statements of
the Company as of and for the quarter ended March 31, 1997 and the
related notes thereto incorporated by reference in this Prospectus,
adjusted to give effect to the following transactions as if they had
occurred on January 1, 1997 (March 31, 1997 for Balance Sheet Data):
(i) the Acquisitions, and the New Credit Facility and application of
the net proceeds therefrom, except, with respect to the statement of
operations, for $2.6 million of extraordinary charges related to the
prepayment of the then existing credit facility; and (ii) the
completion of the Offering by the Company and the application of the
net proceeds therefrom as described in "Use of Proceeds," except,
with respect to the statement of operations, for extraordinary
charges of $9.0 million related to the redemption of Senior Secured
Notes with the net proceeds to the Company of the Offering. The First
Quarter Pro Forma Financial Statements do not purport to represent what
the Company's results of operations or financial condition would have
been had the transactions listed above actually occurred on the dates
indicated or to predict the Company's results of operations or
financial condition in the future. These statements are qualified in
their entirety by, and should be read in conjunction with, the
historical consolidated financial statements of the Company and the
related notes thereto and the historical combined financial statements
of the Simon Access Companies and the related notes thereto
incorporated by reference in this Prospectus and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

Three Months Ended March 31, 1997
(in millions except per share amounts)
<TABLE>
<CAPTION>

Adjustments for Pro Forma
Historical Acquisitions as Adjusted Adjustments
Historical Acquired and New before the for the Pro Forma
Terex Companies Credit Facility Offering Offering(5) as Adjusted
----------- ---------- --------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net sales................................. $176.3 $51.0 $ -- $227.3 $ 227.3
Cost of goods sold........................ 148.8 44.0 0.3(1) 193.1 193.1
------ ----- ----- ------ ---- -----
Gross profit............................ 27.5 7.0 (0.3) 34.2 34.2

Engineering, selling and
administrative expenses................. 14.1 8.2 (1.8)(2) 20.5 20.5
------ ----- ----- ------ ---- -----
Income (loss) from operations........... 13.4 (1.2) 1.5 13.7 13.7

Other income (expense)
Interest income......................... 0.6 0.2 (0.2)(3) 0.6 0.6
Interest expense........................ (9.5) (1.3) (0.1)(4) (10.9) 2.1 (8.8)
Amortization of debt inssuance costs.... (0.7) -- (0.7) 0.1 (0.6)
Other income (expense) - net............ 0.3 -- 0.3 0.3
------ ----- ----- ------ ---- -----
Income (loss) from Continuing
Operations before income taxes........ 4.1 (2.3) 1.2 3.0 2.2 5.2

Provision for income taxes................ (0.2) -- -- (0.2) (0.2)
------ ----- ----- ------ ---- -----
Income (loss) from
Continuing Operations................. $ 3.9 $(2.3) $ 1.2 $ 2.8 $2.2 $ 5.0
====== ===== ===== ====== ==== =====
Per common and common
equivalent share........................ $ 0.24 $(0.16) $ 0.08 $ 0.17 $0.11 $0.24
====== ====== ====== ====== ===== =====

Average number of common and common
equivalent shares outstanding
in per share calculation................ 14.4 14.4 14.4 14.4 19.4 19.4
====== ====== ====== ====== ===== =====

</TABLE>

-23-

<PAGE> 25

NOTES TO TEREX CORPORATION AND SUBSIDIARIES UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997

(1) Reflects the adjustment of historical goodwill amortization of the
Simon Access Companies and the Square Shooter Business to equal the
amortization over 40 years of goodwill arising as a result of the
Acquisitions.

(2) Represents reductions in costs and expenses resulting from the
elimination of overstaffing and redundant staffing throughout the Simon
Access Companies, primarily through the elimination of the
administrative headquarters, foreign sales offices and plant closures,
which initiatives have already been implemented. Liabilities related to
these employee terminations have been accrued in connection with the
Simon Acquisition pursuant to EITF 95-3 "Recognition of Liabilities in
Connection with a Business Combination."

(3) Represents the elimination of interest income on cash on hand at the
Simon Access Companies as such cash was not included as part of the
assets acquired by the Company in the Simon Acquisition.

(4) Represents the additional interest expense related to the $71.5 million
of debt incurred at the time of the Acquisitions as though such debt
was incurred on January 1, 1997.

(5) Represents the effect of the proposed sale of 5,000,000 shares of
Common Stock by the Company at $15 per share of ($0.1 million of which
is attributed to the par value of the Common Stock) less an estimated
$5 million in fees and expenses. Assumes all of the net proceeds of
the Offering to the Company of $70 million are applied to redeem
Senior Secured Notes at a price of 109.46% of the principal amount
thereof. This will result in a reduction of the interest expense
related to the Senior Secured Notes as set forth. The decrease in
amortization of debt issuance costs results from the pro rata
reduction of the debt issuance costs of the Senior Secured Notes for
those Senior Secured Notes redeemed using the net proceeds of the
Offering to the Company.

-24-
<PAGE> 26

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)

As of March 31, 1997
(dollars in millions except per share amounts)

<TABLE>
<CAPTION>
Adjustments for Pro Forma
Historical Acquisitions as Adjusted Adjustments
Historical Acquired and New before the for the Pro Forma
Terex Companies Credit Facility Offering Offering as Adjusted
---------- ---------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents............ $ 39.6 $ 1.0 $(39.7)(1) $ 0.9 $ $ 0.9
Cash securing letters of credit...... 2.9 -- 2.9 2.9
Net trade receivables................ 109.9 23.1 132.7 132.7
Net inventories...................... 188.5 38.8 227.3 227.3
Other current assets................. 11.0 0.9 11.9 11.9
------- ------ ------ ------- ------ -------
Total Current Assets........... 351.6 63.8 (39.7) 375.7 375.7

Long-Term Assets
Property, plant and equipment - net.. 30.7 23.1 (2.0)(2) 51.8 51.8
Goodwill - net....................... 31.8 14.4 40.1 (3) 86.3 86.3
Debt issuance costs - net............ 12.5 -- 1.0 (4) 13.5 (3.0)(9) 10.5
Other assets......................... 4.0 11.8 -- 15.8 15.8
------- ------ ------ ------ ------- -------
Total Assets........................... $ 430.6 $113.1 $ (0.6) $543.1 $ (3.0) $ 540.1
======= ====== ====== ====== ======= =======

Current Liabilities
Notes payable and current portion of
long-term debt..................... $ 22.7 $ 51.5 $(51.5) $ 22.7 $ $ 22.7
Trade accounts payable............... 103.0 28.4 131.4 131.4
Due to affiliates.................... -- 3.6 (3.6)(5) -- --
Accrued compensation and benefits.... 14.9 2.3 17.2 17.2
Accrued warranties and product
liability.......................... 19.6 4.9 24.5 24.5
Other current liabilities............ 42.5 3.5 3.0 (6) 49.0 49.0
------- ------ ------ ------- ------- -------
Total Current Liabilities...... 202.7 94.2 (52.1) 244.8 244.8

Non-Current Liabilities
Long-term debt, less current
portion............................ 261.1 4.9 66.6 (7) 332.6 (64.0)(10) 268.6

Other................................ 29.1 1.5 30.6 30.6

Minority Interest, Including Redeemable
Preferred Stock of a subsidiary...... 10.4 -- 10.4 10.4

Redeemable Convertible Preferred
Stock................................ 0.8 -- 0.8 0.8

Commitments and Contingencies

Stockholders' Deficit
Warrants to purchase Common Stock.... 3.2 -- 3.2 3.2
Common Stock......................... 0.1 4.0 (4.0)(8) 0.1 0.1 (11) 0.2
Additional paid-in capital........... 56.0 25.5 (25.5)(8) 56.0 69.9 (11) 125.9
Accumulated deficit.................. (122.6) (17.0) 14.4 (8) (125.2) (9.0)(12) (134.2)
Pension liability adjustment......... (2.0) -- (2.0) (2.0)
Cumulative translation adjustment.... (8.2) -- (8.2) (8.2)
------- ------ ------ ------- ------- -------
Total Stockholders' Equity
(Deficit)................... (73.5) 12.5 (15.1) (76.1) 61.0 (15.1)
------- ------ ------ ------- ------- -------

Total Liabilities and Stockholders'
Deficit............................. $ 430.6 $113.1 $ (0.6) $ 543.1 $ (3.0) $ 540.1
======= ====== ====== ======= ======= =======
</TABLE>

-25-

<PAGE> 27
NOTES TO TEREX CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET AS OF MARCH 31, 1997

(1) Represents cash used in the Acquisitions and termination of the then
existing credit facility. Also reflects the elimination of cash on hand
at the Acquired Companies as such cash was not included as part of the
assets acquired by the Company in the Acquisitions.

(2) Represents a reduction in value of the fixed assets of the Simon Access
Companies due to plant closure.

(3) Represents the net increase in goodwill at the Acquired Companies as a
result of the Acquisitions.

(4) Represents the net increase in debt issuance costs as a result of the
New Credit Facility.

(5) Represents the forgiveness of amounts due to affiliates as part of the
Simon Acquisition.

(6) Represents additional liabilities incurred, primarily for termination
payments, on account of the Simon Acquisition.

(7) Represents borrowings under the New Credit Facility in connection with
the Acquisitions plus the issuance of a purchase money promissory note
in connection with the Square Shooter Acquisition, which is payable
over three years with interest at a rate of 8% per annum.

(8) Represents the elimination of the equity accounts of the Acquired
Companies, and the impact on equity of the fees and expenses incurred
in connection with the early termination of the Company's then existing
credit facility.

(9) Represents the pro rata write-off of $3.0 million in debt origination
costs related to the redemption of a portion of the Senior Secured
Notes with the net proceeds of the Offering, assuming the full amount
of the net proceeds of the Offering are available to redeem Senior
Secured Notes.

(10) Represents the principal amount of the Senior Secured Notes to be
redeemed with the net proceeds of the Offering, assuming the full
amount of the net proceeds of the Offering by the Company are available
to redeem the Senior Secured Notes.

(11) Represents the effect of the proposed sale of 5,000,000 shares of
Common Stock by the Company at $15 per share ($0.1 million of which is
attributed to the par value of the Common Stock) less approximately $5
million in fees and expenses related to the Offering.

(12) Represents the effect on equity of the 9.46% redemption premium ($6.0
million) on the Senior Secured Notes to be redeemed, plus the pro rata
write-off of $3.0 million in debt origination costs related to the
redemption of such Senior Secured Notes.

-26-
<PAGE> 28

SELECTED CONSOLIDATED FINANCIAL DATA
(in millions except per share amounts and employees)
SELECTED HISTORICAL FINANCIAL INFORMATION

The selected historical consolidated financial data of the Company set
forth below as of and for the five years ended December 31, 1996 have been
derived from the audited historical consolidated financial statements of the
Company and the related notes thereto incorporated by reference in this
Prospectus. The selected historical consolidated financial data as of and for
the quarters ended March 31, 1996 and 1997 have been derived from unaudited
interim financial statements of the Company and the notes thereto incorporated
by reference in this Prospectus. Operating results for interim periods are not
necessarily indicative of results for the entire fiscal year. The following data
should be read in conjunction with the historical financial statements of the
Company and the related notes thereto incorporated by reference in this
Prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus.

TEREX CORPORATION
SELECTED HISTORICAL FINANCIAL INFORMATION
(in millions except per share amounts and employees)

<TABLE>
<CAPTION>
Three Months Ended
March 31,
Year Ended December 31, (unaudited)
-------------------------------------------------------- ------------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales ................................. $ 282.4 $ 274.7 $ 314.1 $ 501.4 $ 678.5 $ 173.2 $ 176.3
Cost of goods sold ........................ 252.8 242.2 266.0 431.0 609.3(1) 149.8 148.8
--------- --------- --------- --------- --------- --------- ---------
Gross profit .............................. 29.6 32.5 48.1 70.4 69.2(1) 23.4 27.5
Engineering, selling and administrative
expenses ............................. 36.3 40.7 37.7 57.6 64.1(2) 16.3 14.1
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from operations ............. (6.7) (8.2) 10.4 12.8 5.1(3) 7.1 13.4
Interest income ........................... 1.3 0.9 0.5 0.7 1.2 0.1 0.6
Interest expense .......................... (22.9) (30.0) (28.3) (38.7) (44.8)(4) (11.4) (9.5)
Amortization of debt issuance costs ....... (1.7) (3.4) (2.3) (2.3) (2.6) (0.6) (0.7)
Gain on sale of stock of former subsidiary -- 3.0 26.0 1.0 -- -- --
Other income (expense), net ............... 30.6 (3.0) (1.4) (5.6) (1.1) 2.1 0.3
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from continuing operations
before income taxes and extraordinary
items ................................ 0.6 (40.7) 4.9 (32.1) (42.2) (2.7) 4.1
Provision for income taxes ................ 0.1 -- -- -- (12.1)(5) -- (0.2)
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from continuing operations
before extraordinary items ........... 0.7 (40.7) 4.9 (32.1) (54.3) (2.7) 3.9
Income (loss) from discontinued
operations ............................. 2.2 (24.3) (3.7) 4.4 102.0(6) 3.2 --
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before extraordinary items .. 2.9 (65.0) 1.2 (27.7) 47.7 0.5 3.9
Extraordinary loss on retirement of debt .. -- (1.5) (0.7) (7.5) -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) ......................... 2.9 (66.5) 0.5 (35.2) 47.7 0.5 3.9
Less preferred stock accretion ............ -- (0.2) (6.0) (7.3) (22.9)(7) (1.9) (0.4)
--------- --------- --------- --------- --------- --------- ---------
Income (loss) applicable to common stock .. $ 2.9 $ (66.7) $ (5.5) $ (42.5) $ 24.8 $ (1.4) $ 3.5
========= ========= ========= ========= ========= ========= =========
Per Common and Common Equivalent Share:
Income (loss) from continuing
operations ........................... $ 0.07 $ (4.11) $ (0.10) $ (3.79) $ (5.81) $ (0.43) $ 0.24
Income (loss) from discontinued
operations ........................... 0.22 (2.44) (0.36) 0.42 7.67 0.30 --
--------- --------- --------- --------- --------- --------- ---------
Loss before extraordinary items ........ 0.29 (6.55) (0.46) (3.37) 1.86 (0.13) 0.24
Extraordinary loss on retirement of debt -- (0.15) (0.07) (0.72) -- -- --
========= ========= ========= ========= ========= ========= =========
Net income (loss) ......................... $ 0.29 $ (6.70) $ (0.53) $ (4.09) $ 1.86 $ (0.13) $ 0.24
========= ========= ========= ========= ========= ========= =========
Average Number of Common and Common
Equivalent Shares Outstanding in Per
Share Calculation ....................... 9.9 10.0 10.3 10.4 13.3 10.6 14.4
========= ========= ========= ========= ========= ========= =========
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital ........................ $ 97.2 $ 69.5 $ 56.5 $ 115.7 $ 195.2 $ 116.6 $ 148.9
Total assets ........................... 477.3 390.7 401.6 478.9 471.2 491.4 430.6
Total debt ............................. 217.6 218.0 190.9 329.9 281.3 334.6 283.8
Stockholders' deficit .................. (9.1) (62.3) (55.7) (96.9) (71.7) (97.1) (73.5)
</TABLE>

-27-

<PAGE> 29

NOTES TO SELECTED HISTORICAL
FINANCIAL INFORMATION

(3) Includes the effect of the nonrecurring charges set forth in (1) and
(2) above. Excluding these charges, income from operations would have
been $35.1 million.

(4) On November 27, 1996, the Company consummated the Clark Sale. As a
result, the Clark Material Handling Segment was accounted for as a
discontinued operation for the year ended December 31, 1996. Generally
accepted accounting principles permit, but do not require, the
allocation of interest expense between continuing operations and
discontinued operations. The Company has elected not to allocate
interest expense to discontinued operations because such allocation,
although permitted by generally accepted accounting principles, would
not necessarily be indicative of the use of proceeds from the Clark
Sale and the effect on interest expense of Continuing Operations. As a
result, loss from Continuing Operations includes substantially all of
the interest expense of the Company, and income from discontinued
operations does not include any material interest expense.

(5) This charge reflects the utilization of acquired net operating losses
by P.P.M. S.A.

(6) Represents the income from operations of the Clark Material Handling
Segment ($17.5 million) and the gain on the Clark Sale ($84.5 million).

(7) Includes annual accretion of the Series A Preferred Stock of $7.7
million, annual accretion of the Series B Preferred Stock and
redeemable preferred stock of a subsidiary aggregating $0.7 million,
and a $14.5 million nonrecurring charge as a result of the redemption
of the Series A Preferred Stock.

-28-
<PAGE> 30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The Company currently operates in two industry segments: Terex Cranes
and Terex Trucks. The Company previously operated a third industry segment, the
Clark Material Handling Segment, the results of which are accounted for as
Income from Discontinued Operations. Terex Cranes consists of Terex Cranes -
Waverly Operations, Terex Cranes - Conway Operations and PPM Europe. Terex
Trucks consists of TEL and Unit Rig.

THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997

The table below is a comparison of net sales, gross profit,
engineering, selling and administrative expenses, income from operations and
income from discontinued operations, by segment, for the three months ended
March 31, 1996 and 1997.

<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------- Increase
1996 1997 (Decrease) % Change
-------- -------- ---------- --------
(in millions of dollars)
<S> <C> <C> <C> <C>
NET SALES
Terex Cranes ................. $ 102.5 $ 97.1 $ (5.4) (5.3%)
Terex Trucks ................. 70.9 77.7 6.8 9.6
General/Corporate/Eliminations (0.2) 1.5 1.7 --
-------- -------- ------
Total ...................... $ 173.2 $ 176.3 $ 3.1 1.8%
======== ======== ======

GROSS PROFIT
Terex Cranes ................. $ 14.9 $ 14.3 $ (0.6) (4.0%)
Terex Trucks ................. 9.1 12.8 3.7 40.7
General/Corporate/Eliminations (0.6) 0.4 1.0 --
-------- -------- ------
Total ...................... $ 23.4 $ 27.5 $ 4.1 17.5%
======== ======== ======

ENGINEERING, SELLING AND
ADMINISTRATIVE EXPENSES
Terex Cranes ................. $ 8.7 $ 6.8 $ (1.9) (21.8%)
Terex Trucks ................. 6.2 6.4 0.2 3.2
General/Corporate/Eliminations 1.4 0.9 (0.5) --
-------- -------- ------
Total ...................... $ 16.3 $ 14.1 $ (2.2) (13.5%)
======== ======== ======

INCOME FROM OPERATIONS
Terex Cranes ................. $ 6.2 $ 7.5 $ 1.3 21.0%
Terex Trucks ................. 2.9 6.4 3.5 120.7
General/Corporate/Eliminations (2.0) (0.5) 1.5 --
-------- -------- ------
Total ...................... $ 7.1 $ 13.4 $ 6.3 88.7%
======== ======== ======

INCOME FROM
DISCONTINUED OPERATIONS ..... $ 3.2 $ -- $ (3.2)
======== ======== ======
</TABLE>

-29-
<PAGE> 31
NET SALES

Sales increased $3.1 million, or approximately 2%, to $176.3 million
for the three months ended March 31, 1997 over the comparable 1996 period,
reflecting a strong sales quarter at TEL, partially offset by a decrease in
sales for Terex Cranes.

Terex Cranes' sales were $97.1 million for the three months ended March
31, 1997, a decrease of $5.4 million from $102.5 million for the three months
ended March 31, 1996. The decrease in Terex Cranes' sales was due to the timing
of shipments and the weakening of the French Franc. Sales were strong at Terex
Cranes - Waverly Operations, including the aerial work platform product line,
but were offset by weaker sales at PPM Europe and Terex Cranes- Conway
Operations, particularly in Europe. Terex Cranes' backlog was $101.0 million at
March 31, 1997, as compared to $67.2 million at December 31, 1996 and $57.3
million at March 31, 1996. Backlog levels at March 31, 1997 increased from
December 31, 1996 for all Terex Cranes operations. Backlog was particularly
strong in the aerial work platform product line. The sales mix between machines
and parts for the first quarter of 1997 was relatively unchanged from the
comparable period in the prior year.

Terex Trucks' sales increased $6.8 million to $77.7 million for the
three months ended March 31, 1997 from $70.9 million for the three months ended
March 31, 1996. The increase in sales was primarily in the TEL product line.
Sales in Europe were lower than the 1996 quarter reflecting continued weakness
in the European construction sector. This weakness was offset by sales growth in
North America and the developing regions of Southeast Asia. Machine sales
increased 15.4%, and parts sales increased 2.2%. Parts sales have higher margins
than machine sales. The sales mix was approximately 29% parts for the three
months ended March 31, 1997 compared to 31% parts for the comparable 1996
period. Backlog was $69.1 million at March 31, 1997 compared to $53.4 million at
December 31, 1996 and $87.0 million at March 31, 1996. The March 31, 1996
backlog included a single order for about $25.0 million, which was subsequently
canceled. Adjusting for that event, backlog at March 31, 1996 was $62.0 million.

Net sales for corporate are service revenues of $1.5 million generated
by Terex's parts distribution center. These services were provided to the
purchaser of the Clark Material Handling Segment during the three months ended
March 31, 1997 pursuant to a service contract entered into with the purchaser as
part of the Clark Sale. The contract expires in November 1999.

GROSS PROFIT

Gross profit for the three months ended March 31, 1997 increased $4.1
million to $27.5 million as compared to $23.4 million for the three months ended
March 31, 1996. The gross profit at Terex Trucks was partially offset by a
decrease in gross profit at Terex Cranes.

Terex Cranes' gross profit decreased $0.6 million to $14.3 million for
the three months ended March 31, 1997, compared to $14.9 million for the three
months ended March 31, 1996. The decrease was due to the decrease in sales; the
gross margin percentage at Terex Cranes was 14.7% for the three months ended
March 31, 1997 versus 14.5% for the comparable 1996 period.

Terex Trucks' gross profit increased $3.7 million to $12.8 million for
the three months ended March 31, 1997 compared to $9.1 million for the three
months ended March 31, 1996. The increase in gross profit was primarily due to
increased manufacturing efficiencies and an increased share of higher margin TEL
machines. The gross margin percentage at Terex Trucks was 16.5% for the three
months ended March 31, 1997, as compared to 12.8% for the three months ended
March 31, 1996.

ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES

Engineering, selling and administrative expenses decreased to $14.1
million for the three months ended March 31, 1997 from $16.3 million for the
three months ended March 31, 1996, reflecting cost reductions at the corporate
level and at Terex Cranes. Terex Cranes' engineering, selling and administrative
expenses decreased to $6.8 million for the three months ended March 31, 1997
from $8.7 million for the three months ended March 31, 1996, reflecting the
effect of cost reduction actions at PPM Europe and Terex Cranes - Conway
Operations. Engineering, selling and administrative expenses as a percentage of
sales at Terex Cranes decreased to 7.0% for the three months ended March 31,
1997, as compared to 8.5% for the comparable 1996 period. Terex Trucks'
engineering, selling and administrative expenses

-30-
<PAGE> 32
increased $0.2 million to $6.4 million for the three months ended March 31,
1997, as compared to $6.2 million for the same period in 1996. However, Terex
Trucks' expenses decreased to 8.2% of sales for the three months ended March 31,
1997 from 8.7% of sales for the comparable 1996 period.

INCOME FROM OPERATIONS

On a consolidated basis, the Company had operating income from
Continuing Operations of $13.4 million for the three months ended March 31,
1997, compared to operating income of $7.1 million for the three months ended
March 31, 1996, for the reasons mentioned below. For the three months ended
March 31, 1997, unallocated corporate expense declined by $0.5 million versus
the three months ended March 31, 1996.

Terex Cranes' income from operations of $7.5 million for the three
months ended March 31, 1997 increased by $1.3 million as compared with the three
months ended March 31, 1996, primarily due to the effect of cost control
initiatives implemented at PPM Europe and Terex Cranes - Conway Operations, and
continued strong performance by Terex Cranes - Waverly Operations.

Terex Trucks' income from operations increased by $3.5 million to $6.4
million for the three months ended March 31, 1997 from $2.9 million for the
three months ended March 31, 1996, primarily due to the realization of increased
revenues, improved gross margin percentages, and level engineering, selling and
administrative charges. Improved gross margin percentages were seen at Unit Rig
as a result of the outsourcing of certain manufacturing processes, and in the
TEL product line due to manufacturing efficiencies at the Motherwell, Scotland
facility.

OTHER INCOME (EXPENSE)

During the three months ended March 31, 1997, the Company's interest
expense decreased $1.9 million to $9.5 million from $11.4 million for the three
months ended March 31, 1996. This decrease was primarily due to the $139.5
million of cash provided by the Clark Sale, which allowed the Company to
eliminate borrowings under its revolving credit facility. Similarly, the Company
was able to invest excess cash during the period, and, accordingly, interest
income for the three months ended March 31, 1997 increased $0.5 million to $0.6
million from $0.1 million for the three months ended March 31, 1996.

Other income (expense) for the three months ended March 31, 1997 was
primarily amortization of debt issue costs. During the three months ended March
31, 1996 the Company realized a gain of $2.4 million on the sale of excess
property in Scotland.

INCOME FROM DISCONTINUED OPERATIONS

As a result of the Clark Sale, the Company did not have any income from
discontinued operations for the three months ended March 31, 1997 compared to
$3.2 million for the comparable period in the prior year.

YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER 31, 1996

The table below is a comparison of net sales, gross profit,
engineering, selling and administrative expenses, income (loss) from operations,
and income (loss) from discontinued operations, by segment, for 1995 and 1996.
The 1996 amounts include $30.0 million in nonrecurring charges comprised of
$18.4 million at Terex Cranes ($16.8 million gross profit; $1.6 million
engineering, selling and administrative expenses), $10.4 million at Terex Trucks
(gross profit), and $1.2 million General/Corporate/Eliminations (engineering,
selling and administrative expenses).

-31-
<PAGE> 33
<TABLE>
<CAPTION>
Year Ended
December 31,
----------------------- Increase
1995 1996 (Decrease) % Change
-------- -------- ---------- --------
(in millions of dollars)
<S> <C> <C> <C> <C>

NET SALES
Terex Cranes ................. $ 252.3 $ 363.9 $ 111.6 44.2%
Terex Trucks ................. 250.3 314.9 64.6 25.8
General/Corporate/Eliminations (1.2) (0.3) 0.9 --
-------- -------- --------
Total ..................... $ 501.4 $ 678.5 $ 177.1 35.3%
======== ======== ========

GROSS PROFIT
Terex Cranes ................. $ 35.2 $ 38.1 $ 2.9 8.2%
Terex Trucks ................. 35.9 31.3 (4.6) (12.8)
General/Corporate/Eliminations (0.7) (0.2) 0.5 --
-------- -------- --------
Total ..................... $ 70.4 $ 69.2 $ (1.2) (1.7%)
======== ======== ========

GROSS PROFIT (EXCLUDING
NONRECURRING CHARGES)
Terex Cranes ................. $ 35.2 $ 54.9 $ 19.7 56.0%
Terex Trucks ................. 35.9 41.7 5.8 16.2
General/Corporate/Eliminations (0.7) (0.2) 0.5 --
-------- -------- --------
$ 70.4 $ 96.4 $ 26.0 36.9%
======== ======== ========

ENGINEERING, SELLING AND
ADMINISTRATIVE EXPENSES
Terex Cranes ................. $ 28.0 33.3 $ 5.3 18.9%
Terex Trucks ................. 22.9 25.7 2.8 12.2
General/Corporate/Eliminations 6.7 5.1 (1.6) --
-------- -------- --------
Total ..................... $ 57.6 $ 64.1 $ 6.5 11.3%
======== ======== ========

INCOME (LOSS) FROM OPERATIONS
Terex Cranes ................. $ 7.2 $ 4.8 $ (2.4) (33.3%)
Terex Trucks ................. 13.0 5.6 (7.4) (56.9)
General/Corporate/Eliminations (7.4) (5.3) 2.1 --
-------- -------- --------
Total ..................... $ 12.8 $ 5.1 $ (7.7) (60.2%)
======== ======== ========

INCOME (LOSS) FROM OPERATIONS
(EXCLUDING NONRECURRING CHARGES)
Terex Cranes ................. $ 7.2 $ 23.2 $ 16.0 222.2%
Terex Trucks ................. 13.0 16.0 3.0 23.1
General/Corporate/Eliminations (7.4) (4.1) 3.3 44.6
-------- -------- --------
Total ..................... $ 12.8 $ 35.1 $ 22.3 174.2%
======== ======== ========

INCOME (LOSS) FROM
DISCONTINUED OPERATIONS ........ $ 4.4 $ 102.0 $ 97.6
======== ======== ========
</TABLE>

-32-
<PAGE> 34
NET SALES

Sales increased $177.1 million, or approximately 35.3%, to $678.5 million
from $501.4 million in 1995, reflecting the PPM Acquisition in the second
quarter of 1995.

Terex Cranes' sales were $363.9 million for 1996, an increase of $111.6
million, or 44.2%, from $252.3 million in 1995 which did not include PPM prior
to the PPM Acquisition. Machine sales increased $94.9 million to $291.8 million
in 1996. Parts sales increased $11.4 million to $64.3 million in 1996. The
increase in sales was due to the addition of PPM Europe and Terex Cranes -
Conway Operations, growth in sales at PPM Europe and Terex Cranes - Conway
Operations, and continued strong performance by Terex Cranes - Waverly
Operations. Terex Cranes' bookings were $356.1 million for 1996, compared to
$236.7 million for 1995, an increase of $119.4 million.

Terex Trucks' sales increased $64.6 million in 1996 to $314.9 million.
Machines sales increased 36.2% primarily due to increased presence in the Asian
market and the United States rental market, and parts sales increased 8.5% in
1996. The sales mix was approximately 29% parts in 1996 compared to 34.6% parts
in 1995. Terex Trucks' bookings for 1996 were $277.9 million, a decrease of $3.0
million, or 1.1%, from 1995. Backlog decreased to $53.4 million at December 31,
1996 from $88.8 million in 1995 as a result of a large order which was placed
late in 1995. However, the average backlog increased slightly to $68.1 million
for 1996 as compared to $57.0 million for 1995.

GROSS PROFIT

Gross profit for 1996 decreased $1.2 million to $69.2 million. The decline
in the gross profit was primarily due to the $16.8 million write down of
goodwill and other long lived assets at Terex Cranes and $10.4 million of
nonrecurring charges recorded at Terex Trucks in the fourth quarter of 1996.
These charges substantially offset the increased gross profit from increased net
sales during 1996 as compared to 1995. Gross profit as a percentage of net sales
for 1996 decreased to 10.2% as compared to 14.0% for 1995 as a result of the
nonrecurring charges. However, excluding these $27.2 million charges in 1996,
gross profit as a percentage of sales increased to 14.2% and increased from
$70.4 million to $96.4 million.

Terex Cranes' gross profit increased $2.9 million to $38.1 million for
1996, compared to $35.2 million for 1995, reflecting the PPM Acquisition, the
effect of cost reduction actions put in place at PPM Europe and Terex Cranes
- - Conway Operations, and improved performance at Terex Cranes - Waverly
Operations. These improvements were substantially offset by an impairment charge
which resulted from a detailed analysis of future cash flows from operations
primarily at Terex Cranes - Conway Operations facility. Excluding the impairment
charge, Terex Cranes' gross profit in 1996 increased $19.7 million as compared
to 1995 and the gross profit percentage increased to 15.1% as compared to 14.0%
in 1995.

Terex Trucks' gross profit decreased $4.6 million to $31.3 million in 1996
compared to $35.9 million for 1995. Excluding the $10.4 million nonrecurring
charges noted above, Terex Trucks' gross profit increased $5.8 million in 1996
as compared to 1995. The $10.4 million nonrecurring charges are comprised mainly
of $8.6 million at Unit Rig for the reduction in value of the Unit Rig Tulsa
facility due to changes in production methods, and $1.9 million of goodwill
associated with TEL's acquisition of its UK distributor, IMACO, which was
written off and recorded as an impairment charge in 1996. Exclusive of these
nonrecurring charges, the gross profit percentage in 1996 decreased to 13.2%
from 14.3% in 1995 due to an increase in the proportion of machine sales as
compared to parts sales. Parts sales have higher margins than machine sales.

-33-

<PAGE> 35
ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES

Engineering, selling and administrative expenses increased to $64.1
million in 1996 from $57.6 million for 1995, reflecting the effects of the PPM
Acquisition. However, engineering, selling and administrative expenses as a
percentage of net sales decreased to 9.4% for 1996 from 11.5% for 1995. Terex
Trucks' engineering, selling and administrative expenses increased to $25.7
million for 1996 from $22.9 million for 1995 primarily due to costs associated
with a new parts sales office and a new U.K. dealership. Terex Cranes'
engineering, selling and administrative expenses increased to $33.3 million for
1996 from $28.0 million for 1995, reflecting the PPM Acquisition and
nonrecurring charges of $1.6 million.

INCOME (LOSS) FROM OPERATIONS

Terex Cranes' income from operations of $4.8 million for 1996 decreased by
$2.4 million over 1995, primarily due to the impairment charges at the Terex
Cranes - Conway Operations facility, which were offset somewhat by the increased
net sales and the effect of cost control initiatives implemented at all PPM
operations since they were acquired by the Company, and continued strong
performance by Terex Cranes - Waverly Operations.

Terex Trucks' income from operations decreased by $7.4 million to $5.6
million for 1996 from $13.0 million in 1995, primarily due to the nonrecurring
charges mentioned above under "Gross Profit." Excluding these charges, income
from operations increased to $16.0 million.

On a consolidated basis, the Company had operating income of $5.1 million
for 1996, compared to operating income of $12.8 million for 1995, for the
reasons mentioned above.

OTHER INCOME (EXPENSE)

Net interest expense increased to $43.6 million for 1996 from $38.0
million in 1995 as a result of incremental borrowings associated with the PPM
Acquisition. The Company realized gains in 1996 of $3.3 million from the sale of
excess property principally in Scotland and Italy.

During 1996, the Company recorded a provision for income taxes of $12.1
million; in 1995, the Company recorded no provision for income taxes. The 1996
provision for income taxes primarily relates to $11.3 million of tax expense
recognized at PPM Europe in connection with its recapitalization which required
the Company to utilize a net operating loss carryforward. The additional $0.8
million provision relates to taxes due on the sale of property in Europe.

In 1995, the Company had a gain of $1.0 million from the sale of stock of
a former subsidiary and recorded a charge of $0.5 million to recognize the
impairment in value of certain properties held for sale.

INCOME (LOSS) FROM DISCONTINUED OPERATIONS

Income from discontinued operations in the Clark Material Handling Segment
increased $97.6 million to $102.0 million for 1996 as compared to $4.4 million
in 1995. The increased income was primarily due to the gain realized on the
Clark Sale of $84.5 million. Gross profit for 1996 (through the date of the
Clark Sale) increased $1.4 million to $46.0 million as compared to 1995 even
though net sales decreased $45.9 million or 17%. Additionally, in 1995 the Clark
Material Handling Segment recorded charges of $6.0 million related to severance
costs, exit costs and the impairment in value of certain properties held for
sale.

EXTRAORDINARY ITEMS

The Company recorded a charge of $7.5 million in 1995 to recognize a loss
on the early extinguishment of debt in connection with its debt refinancing in
May 1995.

-34-

<PAGE> 36
YEAR ENDED DECEMBER 31, 1994 COMPARED WITH YEAR ENDED DECEMBER 31, 1995

The table below is a comparison of net sales, gross profit, engineering,
selling and administrative expenses, income (loss) from operations and income
(loss) from discontinued operations, by segment, for 1994 and 1995.

<TABLE>
<CAPTION>
Year Ended
December 31,
------------------- Increase
1994 1995 (Decrease) % Change
-------- ------- ---------- --------
(in millions of dollars)
<S> <C> <C> <C> <C>

NET SALES
Terex Cranes $ 90.4 $ 252.3 $ 161.9 179.1%
Terex Trucks 226.8 250.3 23.5 10.4
General/Corporate/Eliminations (3.1) (1.2) 1.9 --
-------- -------- --------
Total $ 314.1 $ 501.4 $ 187.3 59.6%
======== ======== ========

GROSS PROFIT
Terex Cranes $ 14.2 $ 35.2 $ 21.0 147.9%
Terex Trucks 33.9 35.9 2.0 5.9
General/Corporate/Eliminations -- (0.7) (0.7) --
-------- -------- --------
Total $ 48.1 $ 70.4 $ 22.3 46.4%
======== ======== ========

ENGINEERING, SELLING AND
ADMINISTRATIVE EXPENSES
Terex Cranes $ 6.3 $ 28.0 $ 21.7 344.4%
Terex Trucks 22.7 22.9 0.2 0.9
General/Corporate/Eliminations 8.7 6.7 (2.0) --
-------- -------- --------
Total $ 37.7 $ 57.6 $ 19.9 52.8%
======== ======== ========

INCOME (LOSS) FROM OPERATIONS
Terex Cranes $ 7.9 $ 7.2 $ (0.7) (8.9%)
Terex Trucks 11.2 13.0 1.8 16.1
General/Corporate/Eliminations (8.7) (7.4) 1.3 --
-------- -------- --------
Total $ 10.4 $ 12.8 $ 2.4 23.1%
======== ======== ========

INCOME (LOSS) FROM
DISCONTINUED OPERATIONS
Clark Material Handling Segment $ (3.7) $ 4.4 $ 8.1
-------- -------- --------
Total $ (3.7) $ 4.4 $ 8.1
======== ======== ========
</TABLE>

NET SALES

Sales increased $187.3 million to $501.4 million, or approximately 60%,
for 1995 as compared to 1994.

-35-

<PAGE> 37
Terex Cranes' sales were $252.3 million for 1995, an increase of $161.9
million from $90.4 million in 1994 due primarily to the PPM Acquisition. Terex
Cranes' backlog was $85.3 million at December 31, 1995, reflecting the
additional PPM backlog, compared to $11.7 million at December 31, 1994.

Terex Trucks' sales increased $23.5 million for 1995 over 1994. Machines
sales increased 8%, and parts sales increased 7%. The sales mix was
approximately 35% parts for 1995 compared to 36% parts for 1994. Terex Trucks'
parts sales were adversely affected by the strike at the Company's parts
distribution center. Terex Trucks' bookings for 1995 were $271.3 million, an
increase of $39.1 million, or 17%, from 1994. Terex Trucks' backlog was $88.8
million at December 31, 1995 compared to $67.8 million at December 31, 1994.

GROSS PROFIT

Gross profit of $70.4 million for 1995 was $22.3 million, or 46%, higher
than gross profit of $48.1 million for 1994.

Terex Cranes' gross profit increased $21.0 million to $35.2 million for
1995, compared to $14.2 million for 1994, primarily reflecting the addition of
the May through December 1995 results of PPM. The gross profit percentage for
Terex Cranes was 14% for 1995 and 16% for 1994. The gross profit percentage
decrease was primarily due to costs related to integrating PPM into Terex
Cranes.

Terex Trucks' gross profit increased $2.0 million to $35.9 million for
1995 compared to $33.9 million for 1994. The gross profit percentage for Terex
Trucks was 14% for 1995 and 15% for 1994.

ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES

Engineering, selling and administrative expenses increased to $57.6
million for 1995 from $37.7 million for 1994. Terex Cranes' engineering, selling
and administrative expenses increased to $28.0 million for 1995 from $6.3
million for 1994 reflecting the PPM Acquisition. Terex Trucks' engineering,
selling and administrative expenses increased to $22.9 million for 1995 from
$22.7 million for 1994 as a result of costs associated with the start-up of a
new parts service business, which substantially offset the cost savings at other
operations. Corporate administrative expenses in 1994 included a charge of $2.2
million in connection with the termination of a management contract with KCS
Industries, L.P. ("KCS"), a Connecticut limited partnership principally owned by
certain present and former officers of the Company, offset by allocations to
operating segments.

INCOME (LOSS) FROM OPERATIONS

Terex Cranes' income from operations of $7.2 million for 1995 decreased by
$0.7 million versus 1994, primarily due to losses at PPM. As a result of cost
reductions, improvements in inventory management and consolidation of model
offerings, PPM Europe, Terex Cranes - Conway Operations and Terex Cranes -
Waverly Operations were profitable in 1994 and 1995 after several years of
losses.

Terex Trucks' income from operations improved by $1.8 million to $13.0
million for 1995 from $11.2 million in 1994, primarily as a result of reduced
costs, offset by costs associated with the start-up of a new parts service
business.

On a consolidated basis, the Company realized operating income of $12.8
million for 1995, compared to $10.4 million for 1994.

-36-

<PAGE> 38
OTHER INCOME (EXPENSE)

Net interest expense increased to $38.0 million for 1995 from $27.8
million in 1994 as a result of incremental borrowings associated with the PPM
Acquisition. The Company realized gains of $1.0 million and $26.0 million from
sales of common stock of a former subsidiary during 1995 and 1994, respectively.

The Company recorded a charge of $0.5 million in 1995 to recognize the
impairment in value of certain properties held for sale.

The Company also incurred net foreign exchange losses of $1.9 million,
trademark-related expenses of $1.3 million, and $0.6 million of group retiree
expenses during 1995.

The Company recorded a charge of $2.5 million in 1995 for payments related
to the retirement of its former Chairman of the Board in August 1995, and future
payments related to the consulting obligations under the retirement agreement of
the former Chairman.

During 1995 and 1994, the Company recorded no provision for income taxes.

EXTRAORDINARY ITEMS

The Company recorded a charge of $7.5 million in 1995 to recognize a loss
on the early extinguishment of debt in connection with the May 1995 refinancing.
During 1994, the Company recognized extraordinary losses totaling $0.7 million
to write-off unamortized discount and debt issuance costs when it repurchased
$27.3 million of its old senior secured debt.

INCOME (LOSS) FROM DISCONTINUED OPERATIONS

Income from discontinued operations in the Clark Material Handling Segment
increased $8.1 million to $4.4 million for 1995, as compared to a loss of $3.7
million for 1994. The increased income was primarily due to increased sales and
to the success of the cost reduction programs put in place in the latter half of
1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company's businesses are working capital intensive and require funding
for purchases of production and replacement parts inventories, capital
expenditures for repair, replacement and upgrading of existing facilities as
well as financing of receivables from customers and dealers. The Company has
significant debt service requirements, including semi-annual interest payments
on the Senior Secured Notes and monthly interest payments on the New Credit
Facility.

Debt reduction and an improved capital structure are major focal points
for the Company. In this regard, the Company regularly reviews its alternatives
to improve its capital structure and to reduce debt through debt refinancings,
issuances of equity, asset sales, including the sale of business units, or any
combination thereof. As part of its strategy to strengthen its capital structure
and reduce debt, on November 27, 1996, the Company completed the Clark Sale for
an aggregate cash purchase price, subject to adjustments, of approximately $140
million. Upon closing, the Company immediately paid down its then existing
credit facility. In accordance with the indenture governing the Senior Secured
Notes (the "Indenture"), the Company offered to repurchase (the " Notes Offer")
$100 million principal amount of Senior Secured Notes at par plus accrued
interest. The Notes Offer expired on December 27, 1996, but no Senior Secured
Notes were tendered for repurchase.

-37-

<PAGE> 39
Consistent with its strategy of improving its capital structure, on
December 30, 1996, the Company called all of its issued and outstanding Series A
Preferred Stock for redemption on January 29, 1997 (the "Redemption Date"). The
Series A Stock was accreting initially at a rate of 13% per annum, which was to
increase to 18% per annum at the end of 1998. All 1,200,000 shares of the Series
A Preferred Stock outstanding on the Redemption Date were redeemed at a
redemption price of $37.80 per share, or approximately $45.4 million in
aggregate.

Net cash of $17.6 million was used in operating activities during 1996,
primarily due to an increase in working capital at year end for the expansion of
the Company's business. Net cash provided by investing activities was $135.7
million during 1996 principally due to the Clark Sale. Net cash used by
financing activities during 1996 was principally due to the repayment of the
Company's then existing credit facility ($70 million) with the proceeds from the
Clark Sale, offset partially by the use of the lending facilities in the United
Kingdom. Cash and cash equivalents totaled $72 million at December 31, 1996.

Net cash of $15 million was provided by operating activities during the
three months ended March 31, 1997, of which $7.0 million was provided by
operating results plus depreciation and amortization, plus an increase of
approximately $8.6 million in accrued interest payable. Net cash used in
investing activities was $0.4 million during the three months ended March 31,
1997. Net cash used by financing activities was $43.1 million during the three
months ended March 31, 1997, principally due to the redemption of the Series A
Preferred Stock in January 1997 for $45.4 million. Cash and cash equivalents
totaled $3.9 million at March 31, 1997.

As of March 31, 1997, the Company had no balance outstanding under its
then existing credit facility, letters of credit issued under that credit
facility totaled $7.5 million, and the additional amount that the Company could
have borrowed thereunder was $43.4 million.

Concurrently with the Simon Acquisition the Company entered into the New
Credit Facility. The New Credit Facility provides the Company with the ability
to borrow (in the form of revolving loans and up to $20 million in outstanding
letters of credit) up to $125 million. The New Credit Facility is secured by
substantially all of the Company's domestic receivables and inventory. The
amount of borrowings available under the New Credit Facility is limited to
established percentages of eligible receivables and eligible inventory of
certain of the Company's domestic subsidiaries. The New Credit Facility matures
on April 7, 2000. At the option of the Company, revolving loans may be in the
form of prime rate loans bearing interest at a rate of between 0.5% and 1.5% per
annum in excess of the prime rate or eurodollar rate loans bearing interest at a
rate of between 2.0% and 3.0% per annum in excess of the adjusted eurodollar
rate. The margin over the prime rate or eurodollar rate paid by the Company is
based upon the Company's fixed charge coverage ratio from time to time. As of
April 30, 1997, the Company had availability of $32.0 million under the New
Credit Facility. After application of proceeds of the Offering, the Company
estimates that it will have availability of at least $20 million under the New
Credit Facility.

TEL has a bank facility which provides, among other things, a working
capital facility of 6 million Pounds Sterling, and PPM Europe has working
capital facilities aggregating $6 million. Management intends to seek additional
working capital financing facilities for the Company's international operations
to provide additional liquidity worldwide.

Factors Affecting Future Liquidity

The Company currently has $250 million of Senior Secured Notes
outstanding. The Indenture places certain limits on the Company's ability to
incur additional indebtedness; permit the existence of liens; issue, pay
dividends on or redeem equity securities; utilize the proceeds of asset sales;
consolidate, merge or transfer assets to another entity; and enter into
transactions with affiliates. As part of the Company's efforts to improve its
capital structure, all or a substantial portion of the proceeds of the Offering
to the Company will be used to repay indebtedness, including the redemption of a
portion of the Senior Secured Notes.

-38-

<PAGE> 40
The New Credit Facility also places restrictions on the Company's ability
to incur additional indebtedness; permit the existence of liens; issue, pay
dividends and or redeem equity securities; utilize the proceeds of asset sales;
consolidate, merge or transfer assets to another entity; and enter into
transactions with affiliates.

In connection with the PPM Acquisition, Terex Cranes, Inc., a wholly owned
subsidiary of the Company established to complete the PPM Acquisition, issued
redeemable preferred stock, having an aggregate liquidation preference of
approximately $21.4 million, subject to adjustment. The number of shares of
Terex Cranes preferred stock issued is subject to adjustment calculated by
reference to Western European telescopic mobile crane demand in 1996 and 1997.
The preferred stock does not bear a dividend and, accordingly, the Company has
valued this stock at approximately $8.8 million (discounted at 15%) including
accretion.

The Company's debt service obligations for 1997 before taking into account
the use of proceeds from the Offering include approximately $16.6 million on May
15 and November 15, 1997 on the Senior Secured Notes and variable monthly
payments on the credit facilities, as applicable. Management believes that with
cash generated from operations, together with the New Credit Facility, the
Company has adequate liquidity to meet the Company's operating and debt service
requirements for the foreseeable future.

Foreign Currencies and Interest Rate Risk

The Company's products are sold in over 50 countries around the world and,
accordingly, revenues of the Company are generated in foreign currencies, while
the costs associated with those revenues are only partly incurred in the same
currencies. The major foreign currencies, among others, in which the Company
does business are the German Mark, the Pound Sterling, and the French Franc. The
Company may, from time to time, hedge specifically identified committed cash
flows in foreign currencies using forward currency sale or purchase contracts.
Such foreign currency contracts have not historically been material in amount.
The Company's borrowings are at both fixed and floating rates of interest. For
the floating rate portion of the borrowings, the Company is at risk for
fluctuations in interest rates. The Company does not currently hedge any
interest rate risk.

CONTINGENCIES AND UNCERTAINTIES

In March 1994, the Commission initiated a private investigation, which
included the Company and certain of its affiliates, to determine whether
violations of certain aspects of the Federal securities laws have taken place.
See "Risk Factors -- SEC Investigation." During 1996, the Company incurred $0.3
million of legal fees and expenses on behalf of the Company, directors and
executives of the Company, and KCS. In general, under the Company's by-laws, the
Company is obligated to indemnify officers and directors for all liabilities
arising in the course of their duties on behalf of the Company. To date, no
officer or director has had legal representation separate from the Company's
legal representation, and no allocation of the legal fees for such
representation has been made.

The Company is subject to a number of contingencies and uncertainties
including product liability claims, self-insurance obligations, tax examinations
and guarantees. 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 cost to the Company. However, management does not believe that
these contingencies and uncertainties will, in the aggregate, have a material
adverse effect on the Company. When it is probable that a loss has been incurred
and possible to make reasonable estimates of the Company's 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.

-39-

<PAGE> 41
The Company is also subject to certain contingencies and uncertainties
concerning net operating loss carryovers and environmental liabilities. See
"Risk Factors -- Tax Audit Issues," "--Continuation of Net Operating Loss
Carryovers" and "--Environmental and Related Matters."

INDUSTRY OVERVIEW AND OUTLOOK

TELESCOPIC MOBILE CRANES

Mobile cranes with telescoping booms were developed in the 1950s as
advanced hydraulics became available. Telescopic mobile cranes are generally
used only for a limited period during the later stages of a construction
project. As each project may require differing boom lengths and lifting
capacities, contractors tend to rent specific machines as needed rather than own
a fleet of machines of varying capabilities. As a result, according to industry
sources, approximately 85% of all new telescopic mobile crane sales in North
America are made to rental fleets. Because of the market's rental orientation
and that cranes are used in the later stages of construction projects, the
demand for new telescopic mobile cranes typically lags behind the demand for
other construction equipment by between 12 and 24 months during a cyclical
economic recovery. Initially in an economic recovery, rising end-user demand is
first reflected in rising rental fleet utilization rates rather than in new
crane orders. As rental fleet utilization reaches a practical maximum level,
generally new orders for telescopic mobile cranes increase. New telescopic
mobile crane orders also result from fleet replacement demand, which is affected
by the aging of the telescopic mobile crane population. From 1974 through 1981,
the North American telescopic mobile crane market consumed an average of over
3,500 machines per year. During the recession which began in 1982, the North
American telescopic mobile crane consumption declined to a low of 600 machines
and many competitors exited the industry. During the period from 1990 through
1996, the North American telescopic mobile crane market consumed an average of
approximately 1,300 machines per year, with a high of over 2,200 machines in
1990 and a low of approximately 1,000 machines in 1992 and 1993.

The Company believes that the North American telescopic mobile crane
industry is entering a period of growth due to a strong and sustained period of
construction activity in North America, high rental fleet utilizations, and the
fact that the unusually large number of telescopic mobile cranes that were built
in the late 1970s are beginning to reach the end of their useful lives (which
the Company estimates to be approximately 20 years). These factors have
contributed to a 26% increase in telescopic mobile crane shipments in 1996, as
compared with 1995. The Company believes that it is well positioned to
capitalize on the continued growth of the North American telescopic mobile crane
market. Terex Cranes offers products which are low cost, simple to use and easy
to maintain. The Company believes new cranes which incorporate these
characteristics enable rental fleet operators to generate higher returns on
their investments, which are critical to their success and ability to expand. By
pursuing a strategy oriented toward improving customers' productivity and
investment returns, Terex Cranes increased its market share in 1996, and
management believes that such a strategy will lead to its fuller participation
in the continued growth of the North American market.

The European telescopic mobile crane market, which is approximately the
same size as the North American market (ranging between 1,000 and 2,000 unit
shipments per year), has not had an increase in demand to the extent experienced
in North America during 1996. Excluding Germany, construction activity has
remained at recessionary levels for the last four years, which the Company
believes was due initially to a cyclical downturn and more recently to fiscal
tightening as European countries attempt to meet the budget deficit targets
established by the Maastricht Treaty. The Company's principal markets in Europe
are in France and Italy, where the Company believes it has the largest market
shares. The French and Italian markets are less dominated by rental fleets than
the North American market; the Company believes that approximately 55% of new
telescopic mobile crane sales in France and Italy are to rental fleet operators
with the balance to end users. An increase in construction activity in those
countries, therefore, would tend to have a more immediate impact on new
telescopic mobile crane sales than would a similar increase in North America.
The Company

-40-

<PAGE> 42
believes that it is well positioned to participate in any cyclical increase in
demand in France and Italy due to its local manufacturing, strong local
distribution and low cost relative to its major European competitors.

Outside North America and Europe, the most active new telescopic mobile
crane markets are the Pacific Rim, the Middle East and South America. Terex
Cranes maintains distributors in each of these markets, and sells approximately
15% of its newly manufactured telescopic mobile cranes to these markets. The
Pacific Rim, particularly Indonesia, generated significant demand for telescopic
mobile cranes during 1996. This demand is expected to continue as infrastructure
development accelerates in that part of the world.

The Company also manufactures truck mounted cranes (boom trucks), which
are telescopic cranes mounted on production truck chassis. Over the past 20
years, boom trucks have replaced truck mobile cranes in the market for under 30
ton lifting devices. Conditions in the North American market for boom trucks
remain positive due to overall construction activity in North America.

AERIAL WORK PLATFORMS

The aerial work platform industry in North America has developed over the
past 20 years as an efficient alternative to scaffolding and ladders, and has
been supported by regulations mandating minimum safety standards for people
working at heights. Aerial work platforms are used for indoor or outdoor
applications in a variety of construction, industrial and commercial settings
which require workers to be lifted to heights to perform their jobs. The Company
believes that approximately 90% of all aerial work platform sales in North
America are to rental fleets. The aerial work platform market has developed into
a rental market because (i) contractors require workers to be elevated only for
limited times during a given job, and different jobs require different platform
heights making ownership of a single specification unit impractical, and (ii)
industrial customers are increasingly outsourcing their equipment requirements
to rental providers. Recently, the equipment rental industry has been undergoing
a process of consolidation. As a result, the larger aerial work platform rental
fleet operators are increasingly demanding products that are low cost, simple to
use and easy to maintain. To meet the objectives of the equipment rental
industry, the Company has designed its aerial work platforms to incorporate
these characteristics.

UTILITY AERIAL DEVICES

The Company also manufactures utility aerial devices which are used to set
telephone poles and move transformers and other material to work areas at the
top of poles (digger derricks), and to elevate workers to work areas at the top
of poles or in trees. Customers include electric utilities, local telephone
companies, private utility repair contractors and tree trimmers. The Company
believes that utilities are increasingly outsourcing maintenance to private
contractors in an effort to reduce costs, and that it is well positioned to
capitalize on this trend due to its strategy to manufacture simplified products
at lower cost, its existing dealer relationships and its direct relationships
with major private contractors.

TELESCOPIC CONTAINER STACKERS

Telescopic container stackers were developed in the early 1980s to
manipulate shipping containers efficiently in port storage areas and inland
terminals. Telescopic container stackers are particularly effective in storage
areas where containers are continually added and removed, and where the
efficient manipulation of, and access to, specific containers is required. The
Company believes that because of the efficiency of telescopic container
stackers, demand has steadily grown, primarily outside the United States in port
areas where storage capacity is constrained. Demand has been particularly strong
in South America, the Pacific Rim and Europe. The Company believes that the
United States market offers growth potential as the benefits of this product are
better recognized.

-41-

<PAGE> 43
OFF-HIGHWAY TRUCKS

Off-highway trucks, which include articulated trucks and rigid frame
trucks, are generally sold to construction companies, fleet contractors who
provide trucks to large construction companies, and to dealer rental fleets.
According to industry sources, the global market is concentrated in three main
regions: North America (approximately 35%), Europe (approximately 28%), and the
Pacific Rim (approximately 22%). These markets are dependent on large private
construction project activity and public infrastructure development, both of
which have been soft in Europe in recent years and strong in the United States
and the Pacific Rim. The Company expects relatively strong consumption of trucks
in the United States and the Pacific Rim markets to continue, and believes that
it is well positioned to capitalize on such sustained demand. Terex believes
that fleet operators in the United States and large construction companies in
the Pacific Rim generally prefer products that are low cost, simple to use and
easy to maintain, and that its products have these characteristics. The Company
also believes that it is well positioned to capitalize on future growth in
Europe through an existing private label supply agreement and in China through
an existing joint venture relationship.

HIGH CAPACITY SURFACE MINING TRUCKS

High capacity surface mining trucks are designed to haul coal or ore. They
range in capacities from 120 to 300 tons, and are used in larger surface mines
around the world. The trucks are typically operated around the clock, seven days
a week, often running several weeks between maintenance stops. Accordingly, of
critical concern to mine operators is (i) reliability - that the truck is
operating in excess of 90% of the time and (ii) hauling efficiency - the
operating cost per ton hauled, including fuel consumption, tire wear and
maintenance. There are two types of trucks offered: electric and mechanical
drive. The Company offers electric drive trucks in which a diesel engine drives
an alternator which powers two wheel motors, one in each rear wheel. Terex
believes that electric drive vehicles are more efficient than mechanical drive
trucks. As a result of the efficiency and reliability of its trucks, the Company
has been able to increase its market share slightly in recent years despite
difficult competitive conditions in the industry. The Company believes that it
is the third largest manufacturer with a global market share of approximately
15%. The worldwide market is approximately 270 units per year, with sales
generally direct to large surface mines. To respond to the continuing demand of
large mines to improve financial returns through lower costs and higher hauling
capacities, the Company is taking several strategic actions including reducing
the cost of its trucks through component outsourcing and modular assembly
process implementation, as well as development of a 320 ton capacity truck (as
compared to 260 tons, its current largest truck) with a new generation electric
drive system. The Company believes that the current demand levels will continue,
with earnings opportunities from the development of more cost efficient designs
and manufacturing processes.

BUSINESS

GENERAL

-42-

<PAGE> 44
PRODUCTS

Telescopic Mobile Cranes

Telescopic mobile cranes are used primarily in new industrial, commercial
construction and public works construction industries and in maintenance
applications, to lift equipment or material to heights in excess of 50 feet. The
Company's Terex Cranes segment manufactures the following types of telescopic
mobile cranes:

[Picture] Rough Terrain Cranes - are designed to lift materials and
equipment on rough or uneven terrain and are most often located
on a single construction or work site such as a building site, a
highway or a utility project for long periods of time. Rough
terrain cranes cannot be driven on highways and accordingly must
be transported by truck to the work site. Rough terrain cranes
manufactured by Terex Cranes have maximum lifting capacities of
up to 90 tons and maximum tip heights of up to 205 feet. Terex
Cranes manufactures its rough terrain cranes at its facilities
located at Waverly, Iowa, Conway, South Carolina, Montceau les
Mines, France, and Crespellano, Italy under the brand names
TEREX, LORAIN, P&H, PPM and BENDINI.

[Picture] Truck Cranes - have two cabs and can travel rapidly from job site
to job site at highway speeds. In contrast to rough terrain
cranes which are often located for extended periods at a single
work site, truck cranes are often used for multiple local jobs,
primarily in urban or suburban areas. Truck cranes manufactured
by Terex Cranes have maximum lifting capacities of up to 75 tons
and maximum tip heights of up to 193 feet. Terex Cranes
manufactures truck cranes at its Waverly, Iowa and Conway,
South Carolina facilities under the brand names P&H and LORAIN.

[Picture] All Terrain Cranes - were developed in Europe as a cross between
rough terrain and truck cranes in that they are designed to
travel across both rough terrain and highways. All terrain cranes
have two cabs and are versatile and highly maneuverable. All
terrain cranes manufactured by Terex Cranes have lifting
capacities of up to 130 tons and maximum tip heights of up to 223
feet. Terex Cranes manufactures its all terrain cranes at its
Montceau les Mines, France facility under the brand names TEREX
and PPM.

Truck Mounted Cranes (Boom Trucks)

Terex Cranes manufactures telescopic boom cranes for mounting on
commercial truck chassis. Terex also distributes truck mounted articulated
cranes under the EFFER brand name which are manufactured by EFFER SpA. Truck
mounted cranes are used primarily in the construction industry to lift equipment
or materials to various heights. Boom trucks are generally lighter and have a
lower lifting capacity than truck cranes, and are used for many of the same
applications when lower lifting capabilities are required. An advantage of a
boom truck is that the equipment or material to be lifted by the crane can be
transported by the truck which can travel at highway speeds. Applications
include the installation of air conditioners and other roof equipment. The
Company's Terex Cranes segment manufactures the following types of cranes for
installation on truck chassis:

-43-

<PAGE> 45

[Picture] Telescopic Boom Truck Mounted Cranes - enable an operator to
reach heights of up to 167 feet and have a maximum lifting
capacity of up to 37.5 tons. Terex Cranes manufactures its
telescopic boom truck mounted cranes at its Olathe, Kansas
facility under the brand name RO-STINGER.

[Picture] Articulated Boom Truck Mounted Cranes - are for users who prefer
greater capacities over the greater vertical reach provided by a
telescopic boom truck mounted crane. At its Olathe, Kansas
facility, Terex Cranes acts as the master distributor for the
EFFER brand line of articulated boom truck mounted cranes which
have maximum capacities up to 87,305 pounds and horizontal reach
to 66 feet.

Aerial Work Platforms

Aerial work platforms are self propelled devices which position workers
and materials easily and quickly to elevated work areas. These products have
developed over the past 20 years as alternatives to scaffolding and ladders. The
work platform is mounted on either a telescoping and/or articulating boom or on
a vertical lifting scissor mechanism.

[Picture] Scissor Lifts - are used in open areas in indoor or outdoor
applications in a variety of construction, industrial and
commercial settings. Scissor lifts manufactured by Terex Cranes
have maximum working heights of up to 52 feet and maximum load
capacities of up to 2,000 pounds. Terex Cranes manufactures
scissor aerial work platforms at its Waverly, Iowa, Bowerston,
Ohio and Milwaukee, Wisconsin facilities under the brand names
TEREX, SIMON and MARK.

[Picture] Straight Telescopic Boom Lifts - are used primarily outdoors in
residential, commercial and industrial new construction and
maintenance projects. Straight telescopic boom lifts manufactured
by Terex Cranes have maximum working heights of up to 126 feet
and maximum load capacities of up to 650 pounds. Terex Cranes
manufactures its straight telescopic aerial work platforms at its
Waverly, Iowa, Bowerston, Ohio and Milwaukee, Wisconsin
facilities under the brand names TEREX, SIMON and MARK.

[Picture] Articulating Telescopic Boom Lifts - are generally used in
industrial environments where the articulation allows the user to
access elevated areas over machines or structural obstacles which
prevent access with a scissor lift or straight boom. Articulating
lifts available from Terex Cranes have maximum working heights of
up to 70 feet and maximum load capacities of up to 500 pounds.
Terex Cranes manufactures its articulating telescopic boom lifts
at its Waverly, Iowa, Bowerston, Ohio and Milwaukee, Wisconsin
facilities under the brand names TEREX, SIMON and MARK.

Utility Aerial Devices

Utility aerial devices are used to set utility poles and move workers and
materials to work areas at the top of utility poles and towers. Utility aerial
devices are mounted on commercial truck chassis which include separately
installed steel cabinets for tool and material storage. Most utility aerial
devices are insulated to permit live wire work.

[Picture] Articulated Aerial Devices - are used to elevate workers to work
areas at the top of utility poles or in trees and include one or
two man baskets. Articulated aerial devices available from Terex
Cranes include telescopic, non-overcenter and overcenter models
and range in working heights

-44-

<PAGE> 46
from 32 to 203 feet. Articulated aerial devices are manufactured
by Terex Cranes at its Watertown, South Dakota facility under the
brand names TELELECT and HI-RANGER.

[Picture] Digger Derricks - are used to set telephone poles. The digger
derricks include a telescopic boom with an auger mounted at the
tip which digs a hole, and a device to grasp, manipulate and set
the pole. Digger derricks available from Terex Cranes have sheave
heights exceeding 70 feet and lifting capacities up to 48,000
pounds. Digger derricks are manufactured by Terex Cranes at its
Watertown, South Dakota facility under the brand names TELELECT
and HI-RANGER.

Telescopic Material Handlers

Telescopic material handlers are used to lift containers or other material
from one location to another at the same job site.

[Picture] Telescopic Container Stackers - are used to pick up and stack
containers at dock and terminal facilities. At the end of a
telescopic container stacker's boom is a spreader which enables
it to attach to containers of varying lengths and weights and to
rotate the container up to 360 degrees. Telescopic container
stackers are particularly effective in storage areas where
containers are continually added and removed, and where the
efficient manipulation of, and access to, specific containers is
required. Telescopic container stackers manufactured by Terex
Cranes have lifting capacities up to 49.5 tons, can stack up to
six full or nine empty containers and are able to maneuver
through very narrow areas. Terex Cranes manufactures its
telescopic container stackers under the brand names PPM and P&H
SUPERSTACKERS at its Conway, South Carolina and Montceau les
Mines, France facilities.

[Picture] Rough Terrain Telescopic Boom Forklifts - serve a similar
function as smaller size rough terrain telescopic mobile cranes
and are used exclusively to move and place materials on new
residential and commercial job sites. Terex Cranes manufactures
rough terrain telescopic boom forklifts with load capacities of
up to 10,000 pounds and with a maximum extended reach of up to 31
feet and lift capabilities of up to 48 feet. Terex Cranes
manufactures rough terrain telescopic boom forklifts at its
facility in Baraga, Michigan under the brand name SQUARE SHOOTER.

Rigid and Articulated Off-Highway Trucks

Terex Trucks manufactures two distinct types of off-highway trucks with
hauling capacities from 25 to 100 tons: articulated and rigid frame. Terex
Trucks manufactures rigid and articulated trucks at its TEL facility in
Motherwell, Scotland. TEL manufactures and markets articulated trucks and rigid
frame trucks under the TEREX brand name and sells to other truck manufacturers
on a private label basis.

[Picture] Articulated Off-Highway Trucks - are three axle, six wheel drive
machines with a capacity range of 25 to 40 tons. Their
differentiating feature is an oscillating connection between the
cab and body which allows the cab and body to move independently,
thereby enabling all six tires to maintain ground contact for
improved traction on rough terrain. This allows the truck to move
effectively through extremely rough or muddy off-road conditions.
Articulated off-highway trucks are typically used together with
an excavator or wheel loader to move dirt in connection with
road, tunnel or other infrastructure construction and commercial,
industrial or major residential construction projects.

[Picture] Rigid Off-Highway Trucks - are two axle machines which generally
have larger capacities than articulated trucks but can operate
only on improved or graded surfaces. The capacities of rigid

-45-

<PAGE> 47
off-highway trucks range from 35 to 100 tons, and off-highway
trucks have applications in large construction or infrastructure
projects, aggregates and smaller surface mines.

[Picture] High Capacity Surface Mining Trucks - are off road dump trucks
with capacities in excess of 120 tons primarily for surface
mining. Terex Trucks' haulers are powered by a diesel engine
driving an electric generator that provides power to individual
electric motors in each of the rear wheels. Unit Rig's current
LECTRA HAUL product line consists of a series of rear dump trucks
with payload capacities ranging from 120 to 260 tons, and bottom
dump trucks with capacities ranging from 180 to 270 tons. Terex
Trucks' high capacity surface mining trucks are manufactured at
Unit Rig, located in Tulsa, Oklahoma, under the UNIT RIG and
LECTRA HAUL brand names.

BUSINESS STRATEGY

Focus on Core Operations - For most of 1996, Terex was comprised of three
operating businesses: Terex Cranes, Terex Trucks and the Clark Material Handling
Segment, which manufactured internal combustion and electric lift trucks,
electric walkies and related components and replacement parts. Given the growth
prospects, higher margins and stronger competitive positions of the Terex Cranes
and Terex Trucks segments, as compared to the relatively low margins and market
share of its material handling business, in November 1996 Terex sold the Clark
Material Handling Segment for approximately $140 million in cash. The Clark Sale
has enabled management to focus on growing and improving the operations of its
core crane and truck businesses.

- When the Company acquired PPM in May 1995, total headcount at PPM
was approximately 840, including approximately 430 employees
categorized as indirect. As a result of numerous cost reduction
initiatives, total headcount at PPM was reduced to approximately 640
at December 31, 1996, while the indirect headcount at PPM was
reduced to approximately 260. During that same period sales at PPM
increased.

-46-

<PAGE> 48
example, by outsourcing certain welding operations at its Conway,
South Carolina telescopic mobile crane manufacturing facility, the
Company believes it has achieved over $2 million of annualized
savings.

- Cost reductions at the newly acquired Simon Access Companies have
already begun, including reduction of headcount by approximately 130
as of May 15, 1997, primarily in indirect personnel. The Company
estimates initiatives already implemented will reduce annual
operating expenses by approximately $7 million and the Company
anticipates further cost savings as the Simon Access Companies are
more completely integrated into the Terex family.

Increase Sales Through Best Value Strategy - The Company tailors its
pricing strategy by product line to provide customers with an attractive
cost/benefit relationship. In general, the Company has focused its product lines
on products with simplified designs which it can manufacture at low cost. The
Company has streamlined its product lines, manufacturing fewer models, and has
increased the number of interchangeable parts between models. This strategy has
enabled the Company to offer its products at prices that are often 10% to 15%
below those offered by its competitors. The Company believes that by offering
its customers a simplified product design at a lower price, it can increase
sales and gain market share. For example, Terex Cranes' primary customers,
rental companies, are generally unable to charge a premium rental rate for
equipment that has sophisticated, but nonessential features. Consequently, the
Company believes its products offer virtually the same utility and marketability
as the competition's products, but at a lower cost to the customer.

Improve Financial Flexibility - The Company has initiated a strategy to
improve significantly its financial flexibility and strengthen its capital
structure. These efforts are intended to provide the Company with sufficient
credit quality and liquidity to execute its growth initiatives. The Company used
approximately $45 million of proceeds from the Clark Sale to redeem all of its
Series A Preferred Stock (which had a 13% per annum accretion rate) and
approximately $70 million to retire outstanding bank debt. In addition, on April
7, 1997, the Company and certain of its subsidiaries entered into the New Credit
Facility which increased the Company's borrowing capacity, reduced its cost of
funds and reduced the covenant restrictions relative to the Company's then
existing credit facility. The Company intends to use the proceeds of the
Offering to reduce the Company's total debt outstanding. See "Use of Proceeds."

During the past several years, the Company has spent approximately $200
million to strengthen its core businesses by purchasing the businesses listed
below:

<TABLE>
<CAPTION>
Acquired
or Licensed
Year Acquisition Operating Locations Products Brand Names
- ---- ----------- ------------------- -------- -----------------

<S> <C> <C> <C> <C>
1995 PPM South Carolina, France, Italy Telescopic Mobile Cranes P&H, PPM, BENDINI

1997 Simon Access Kansas, Ohio, South Dakota, Aerial Work Platforms, SIMON, TELELECT,
Companies Wisconsin, Ireland, Italy Utility Aerial Devices, RO, CELLA
Boom Trucks

1997 Square Shooter Michigan Telescopic Rough Terrain SQUARE SHOOTER
</TABLE>

-47-

<PAGE> 49
<TABLE>
<CAPTION>
Acquired
or Licensed
Year Acquisition Operating Locations Products Brand Names
- ---- ----------- ------------------- -------- -----------------

<S> <C> <C> <C> <C>
Business Lift Trucks
</TABLE>

BACKLOG

The Company's backlog as of December 31, 1995 and 1996 and March 31, 1996
and 1997 was as follows:

<TABLE>
<CAPTION>
December 31, March 31,
------------------ -------------------
1995 1996 1996 1997
------- ------- ------- -------
(in millions of dollars)
<S> <C> <C> <C> <C>
Terex Cranes......................................... $ 85.3 $ 67.2 $ 57.3 $ 101.1
Terex Trucks......................................... 88.8 53.4 87.0 69.1
------- ------- ------- -------
Total.......................................... $ 174.1 $ 120.6 $ 144.3 $ 170.2
======= ======= ======= =======
</TABLE>

Substantially all of the Company's backlog orders are expected to be
filled within one year, although there can be no assurance that all such backlog
orders will be filled within that time period. The Company's backlog orders
represent primarily new machine orders. Parts orders are generally filled on an
as-ordered basis. Backlog in Terex Cranes decreased in 1996 as manufacturing
efficiencies reduced lead times, improving product availability for customers.
The backlog for the Terex Trucks' segment was unusually high at year end 1995 as
a result of a large order for Unit Rig equipment which was placed late in 1995,
and at March 31, 1996 due to a $25 million order at TEL which was subsequently
canceled. Backlog for both segments increased at March 31, 1997 over December
31, 1996 due to a significant increase in orders reflecting favorable industry
conditions and the Company's improved competitive position. Pro forma backlog
improved to $232 million at March 31, 1997 from $166 million at December 31,
1996.

DISTRIBUTION

Terex Cranes distributes its products primarily through a global network
of dealers in over 750 different locations. With respect to telescopic mobile
cranes in North America, Terex Cranes maintains extensive dealer networks. The
geographic strength of Terex Cranes' telescopic mobile cranes marketed under the
LORAIN brand name centers in the midwest and mid-Atlantic regions of the United
States and the geographic strength of telescopic mobile cranes marketed under
the P&H brand name centers in the southern and western regions of the United
States. Terex Cranes' European distribution is carried out primarily under three
brand names, TEREX, PPM and BENDINI, through a single distribution network
comprised of both distributors and a direct sales force. Terex Cranes sells its
utility aerial devices under the SIMON, TEREX and TELELECT brand names
principally through a network of North American distributors and through
Company-owned dealerships located in Fontana, California, Richmond, Virginia,
Charlotte, North Carolina, and Emmaus, Pennsylvania. Terex Cranes sells its
aerial work platform products through a distribution network that includes many
of the Aerials Limited and Aerials dealers throughout the world, but principally
in North America and Europe. Terex Cranes' aerial work platform products are
sold under the brand names TEREX, MARK and SIMON.

TEL markets machines and replacement parts primarily through worldwide
dealership networks. TEL's truck dealers are independent businesses which
generally serve the construction, mining, timber and/or scrap industries.
Although these dealers carry products of a variety of manufacturers, and may or
may not carry more than one of the Company's products, each dealer generally
carries only one manufacturer's "brand" of each particular type of product. The
Company employs sales representatives who service these dealers from offices
located throughout the world. Unit Rig distributes its products and services
directly to customers primarily through its own distribution system.

-48-

<PAGE> 50
RESEARCH AND DEVELOPMENT

The Company maintains engineering staffs at several of its locations who
design new products and improvements in existing product lines. Costs incurred
in the development of new products, significant improvements in existing
products and product cost reductions in Continuing Operations amounted to $6.1
million, $5.0 million and $2.1 million in 1996, 1995 and 1994, respectively.

MATERIALS

Principal materials used by the Company in its various manufacturing
processes include steel, castings, engines, tires, hydraulic cylinders, electric
controls and motors, and a variety of other fabricated or manufactured items. In
the absence of labor strikes or other unusual circumstances, substantially all
materials are normally available from multiple suppliers. Current and potential
suppliers are evaluated on a regular basis on their ability to meet the
Company's requirements and standards. Electric wheel motors and controls used in
the Unit Rig product line are currently supplied exclusively by General Electric
Company. The Company is endeavoring to develop alternative sources. If the
Company is unable to develop alternative sources, or if there is disruption or
termination of its relationship with General Electric Company, it could have a
material adverse effect on Unit Rig's operations.

COMPETITION

Telescopic Mobile Cranes - The domestic telescopic mobile crane industry
is comprised primarily of three manufacturers. The Company believes that Terex
Cranes is the second largest domestic manufacturer, with approximately a 30%
market share. The Company believes that the number one domestic manufacturer is
Grove Worldwide, and the number three domestic manufacturer is Link-Belt, a
subsidiary of Sumitomo Corp. The Company's principal markets in Europe are in
France and Italy, where the Company believes it has the largest market shares.
In Europe, Terex Cranes' primary competitors are Grove Cranes Ltd. (including
the recently acquired Krupp Mobilkran), Liebherr Werk Ehingen and DeMag. Outside
the United States and Europe, the most active new mobile crane markets are the
Pacific Rim, the Middle East and South America. Terex Cranes sells approximately
15% of its newly manufactured telescopic mobile cranes to those markets.

The United States boom truck industry is dominated by four manufacturers,
of which the Company believes Terex RO, with a 25% pro forma market share, is
the second largest behind Grove National.

Aerial Work Platforms - The aerial work platform industry in North America
is fragmented, with seven major competitors. The Company believes that its
approximate 7% pro forma market share makes it the fifth largest manufacturer of
aerial work platforms in North America, behind JLG, Genie, Grove Manlift and
Snorkel. The Company believes that approximately 41,000 aerial platforms were
sold in the United States during 1996, of which approximately 70% were scissor
lifts, 19% were articulated boom lifts, and 11% were straight boom lifts. The
Company believes that its market share in boom lifts is greater than its market
share in scissor lifts.

Utility Aerial Devices - The utility aerial device industry is comprised
primarily of three manufacturers. The Company believes that it has a 20% pro
forma market share of that industry and that it is the second largest
manufacturer in the United States of utility aerial devices behind Altec.
Outside the United States, the Company is focusing primarily on the Mexican and
Caribbean markets.

Telescopic Container Stackers - The Company believes that three
manufacturers account for approximately 66% of the global market for telescopic
container stackers. The Company believes that it has a global market share of
25% and that it is the second largest manufacturer behind Kalmar. Other
manufacturers include Valmet Belloti and Taylor.

-49-

<PAGE> 51
Telescopic Rough Terrain Lift Trucks - OmniQuip and Gradall are the
largest manufacturers of telescopic rough terrain lift trucks. The Company
believes that the Square Shooter Business has approximately a 4% pro forma
market share.

Off-Highway Trucks - The global market for off-highway trucks is
concentrated in three main regions: North America (approximately 35%), Europe
(approximately 28%) and the Pacific Rim (approximately 22%). Four manufacturers
dominate the global market. The Company believes that it is the third largest of
these manufacturers (behind Volvo and Caterpillar), with approximately a 10%
global market share.

High Capacity Surface Mining Trucks - The high capacity surface mining
truck industry includes three principal manufacturers: Caterpillar,
Komatsu-Dresser and the Company. The Company believes that it is the third
largest manufacturer with a global market share of approximately 15%.

EMPLOYEES

As of March 31, 1997, the Company had approximately 2,150 employees. The
Company considers its relations with its personnel to be satisfactory.
Approximately 44% of the Company's employees are represented by labor unions
which have entered into or are in the process of entering into various separate
collective bargaining agreements with the Company. The Company experienced a
labor strike at its parts distribution center in Southaven, Mississippi during
the second quarter of 1995 which was settled in February 1997. The strike had no
appreciable effect on the conduct of business or financial results of that
operation as a whole, although individual product line sales growth may have
been hindered. The National Labor Relations Board has filed an unfair labor
practice charge against the Company's Terex Cranes operation in Conway, South
Carolina. The Company does not anticipate that the outcome of such charge will
have a material adverse effect on the Company.

After giving effect to the Simon Acquisition, the Square Shooter
Acquisition and various cost cutting initiatives taken in connection with the
integration of those businesses, the Company had approximately 3,405.

PATENTS, LICENSES AND TRADEMARKS

Several of the trademarks and trade names of the Company, in particular
the TEREX, LORAIN, UNIT RIG, MARK, P&H, PPM, SIMON, TELELECT and SQUARE SHOOTER
trademarks, are important to the business of the Company. The Company owns and
maintains trademark registrations and patents in countries where it conducts
business, and monitors the status of its trademark registrations and patents to
maintain them in force and renews them as required. The Company also protects
its trademark, trade name and patent rights when circumstances warrant such
action, including the initiation of legal proceedings, if necessary. P&H is a
registered trademark of Harnischfeger Corporation which the Company has the
right to use for certain products pursuant to a license agreement until 2011.
Pursuant to the terms of the Simon Acquisition agreements, the Company has the
right to use the SIMON name for certain products until April 7, 2000.

SEASONAL FACTORS

The Company markets a large portion of its products in North America and
Europe, and its sales of trucks and cranes during the fourth quarter of each
year (i.e., October through December) to the construction industry are usually
lower than sales of such equipment during each of the first three quarters of
the year because of the normal winter slowdown of construction activity.
However, sales of trucks to the mining industry are generally less affected by
such seasonal factors.

DISCONTINUED OPERATIONS

-50-
<PAGE> 52
On November 27, 1996, the Company sold substantially all of the assets
and liabilities of the Clark Material Handling Segment for an aggregate cash
purchase price, subject to adjustments, of approximately $140 million. Prior to
the disposition the Clark Material Handling Segment consisted of Clark Material
Handling Company and certain affiliated companies which were acquired by the
Company in July 1992 from Clark Equipment Company. The Clark Material Handling
Segment designed, manufactured and marketed a complete line of internal
combustion and electric lift trucks, electric walkies and related components and
replacement parts under the CLARK trademark.

PROPERTIES

The following table outlines the principal manufacturing, warehouse and
office facilities owned or leased by the Company and its subsidiaries:

<TABLE>
<CAPTION>
ENTITY FACILITY LOCATION TYPE AND SIZE OF FACILITY
------ ----------------- -------------------------

<S> <C> <C>
Terex (Corporate Offices)......... Westport, Connecticut (1) Office; 14,898 sq. ft.
Terex (Distribution Center)...... Southaven, Mississippi (1) Warehouse and light manufacturing;
505,000 sq. ft. (2)

TEREX TRUCKS

Unit Rig.......................... Tulsa, Oklahoma Manufacturing, warehouse and office;
375,587 sq. ft.
TEL............................... Motherwell, Scotland Manufacturing, warehouse and
office; 473,000 sq. ft.

TEREX CRANES

Terex Cranes - Waverly Operations. Waverly, Iowa (3) Office, manufacturing and warehouse;
383,000 sq. ft.
Terex Cranes - Conway Operations.. Conway, South Carolina (1) Office, manufacturing and warehouse;
257,040 sq. ft.
PPM S.A........................... Montceau les Mines, France Office, manufacturing and warehouse;
419,764 sq. ft.
P.P.M. SpA........................ Crespellano, Italy Office, manufacturing and warehouse;
79,900 sq. ft.
PPM Europe Subsidiary............. Dortmund, Germany (1) Office and warehouse; 129,180 sq. ft.
PPM Europe Subsidiary............. Rethel, France Office, manufacturing and warehouse;
215,300 sq. ft.
Telelect.......................... Huron, South Dakota Manufacturing; 88,000 sq. ft.
Telelect.......................... Watertown, South Dakota Office, manufacturing and warehouse;
222,450 sq. ft.
Telelect.......................... Emmaus, Pennsylvania Office; 20,000 sq. ft.
Telelect.......................... Fontana, California Office; 36,000 sq. ft.
Telelect.......................... Richmond, Virginia (1) Office; 30,000 sq. ft.
Telelect.......................... Charlotte, North Carolina (1) Office; 7,800 sq. ft.
Telelect.......................... Milwaukee, Wisconsin Office; 3,200 sq. ft.
Cella............................. Brescia, Italy (1) Manufacturing and office; 64,000 sq. ft.
Aerials Limited................... Cork, Ireland (1) Manufacturing; 80,000 sq. ft
Sim-Tech.......................... Hong Kong (1) Office; 830 sq. ft.
Aerials (Terex Ro)................ Olathe, Kansas Manufacturing and office; 80,400 sq. ft.
Aerials........................... Bowerston, Ohio Manufacturing, office and warehouse; 47,000
sq. ft.
</TABLE>

-51-
<PAGE> 53
<TABLE>
<CAPTION>
ENTITY FACILITY LOCATION TYPE AND SIZE OF FACILITY
------ ----------------- -------------------------

<S> <C> <C>
Aerials........................... Milwaukee, Wisconsin Manufacturing, office and warehouse;
103,000 sq. ft.
</TABLE>

- -------------------------
(1) These facilities are either leased or subleased by the indicated
entity.
(2) Includes 239,400 sq. ft. of warehouse space which the Company currently
leases to others.
(3) The Company also owns a 66,000 sq. ft. facility in Waterloo, Iowa which
it currently leases to others.

Unit Rig also has 10 owned or leased locations for parts distribution
and rebuilding of components, of which two are in the United States, two are in
Canada and six are outside North America.

The properties listed above are suitable and adequate for the Company's
needs. The Company has determined that certain of its properties exceed its
requirements. Such properties may be sold, leased or utilized in another manner
and have been excluded from the above list.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following individuals are currently directors of the Company:

<TABLE>
<CAPTION>
POSITIONS AND FIRST YEAR
NAME AGE OFFICES WITH COMPANY ELECTED DIRECTOR
---- --- -------------------- ----------------

<S> <C> <C> <C>
Ronald M. DeFeo 45 President, Chief Executive 1993
Officer, Chief Operating Officer
and Director

Marvin B. Rosenberg 56 Senior Vice President, General 1992
Counsel, Secretary and Director

G. Chris Andersen 59 Director 1992

William H. Fike 60 Director 1995

Bruce I. Raben 43 Director 1992

David A. Sachs 37 Director 1992

Adam E. Wolf 83 Director 1983
</TABLE>

RONALD M. DEFEO was appointed a director of the Company in 1993 and was
appointed President and Chief Operating Officer of the Company on October 4,
1993, and Chief Executive Officer of the Company on March 24, 1995. Mr. DeFeo
joined the Company in May 1992 as President of the Company's Heavy Equipment
Group. A year later, he also assumed the responsibility of serving as the
President of Clark Material Handling Company. Prior to joining the Company on
May 1, 1992, Mr. DeFeo was a Senior Vice President of J.I. Case Company, the
farm and construction equipment division formerly of Tenneco Inc., and also
served as a Managing Director of Case Construction Equipment throughout Europe.
While at J.I. Case, Mr. DeFeo was also a Vice President of North American
Construction Equipment Sales and General Manager of Retail Operations.

-52-
<PAGE> 54
MARVIN B. ROSENBERG was appointed a director of the Company in 1992 and
was appointed a Senior Vice President of the Company effective January 1, 1994.
He has served as Secretary and General Counsel of the Company since 1987. From
1987 through 1993, Mr. Rosenberg served as General Counsel of KCS, an entity
that, until December 31, 1993, provided administrative, financial, marketing,
technical, real estate and legal services to the Company and its subsidiaries.

G. CHRIS ANDERSEN was appointed a director of the Company in 1992. Mr.
Andersen was a Vice Chairman of PaineWebber Incorporated from March 1990 through
1995. Mr. Andersen is currently a partner of Andersen, Weinroth & Co. L.P., an
investment banking firm, and also serves as a director of Sunshine Mining &
Refining Company, United Waste Systems, Inc. and Headway Corporation Services.

WILLIAM H. FIKE was appointed a director of the Company in 1995. Mr.
Fike is the Vice Chairman of Magna International, Inc., an automotive parts
manufacturer based in Ontario, Canada ("Magna"). Prior to joining Magna in
September 1994, Mr. Fike was employed by Ford Motor Company from 1966 to 1994,
where he served most recently as President of Ford Europe. Mr. Fike serves as a
director of Magna and AGCO Corporation.

BRUCE I. RABEN was appointed a director of the Company in 1992. Mr.
Raben is a managing director of CIBC Wood Gundy Securities Corp. Prior to
joining CIBC Wood Gundy Securities Corp. in February 1996, Mr. Raben was
employed as an Executive Vice President of Jefferies & Company, Inc. Mr. Raben
serves as a director of Equity Marketing Inc., Optical Security, Inc. and Talton
Holdings, Inc.

DAVID A. SACHS was appointed a director of the Company in 1992. Mr.
Sachs is a principal of Onyx Partners, Inc., a merchant banking firm. From 1990
to 1994, Mr. Sachs was employed at TMT-FW, Inc., an affiliate of Taylor & Co., a
private investment firm based in Fort Worth, Texas. Mr. Sachs serves as a
director of Talton Holdings, Inc.

ADAM E. WOLF became a director of the Company in 1983. Mr. Wolf has
been principally self-employed as an attorney throughout his career. He has
served on several boards of directors, including those of a telephone company, a
bank and a hospital.

The following table sets forth the respective names and ages of the
Company's current executive officers, indicating all positions and offices held
by each such person. Each officer is elected by the Board to hold office for one
year or until his successor is duly elected and qualified.

<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES HELD
- ---- --- --------------------------

<S> <C> <C>
Ronald M. DeFeo 45 President, Chief Executive Officer and
Chief Operating Officer and Director
David J. Langevin 46 Executive Vice President
Marvin B. Rosenberg 56 Senior Vice President, General Counsel, Secretary and Director
Joseph F. Apuzzo 41 Vice President - Finance and Controller
Brian J. Henry 38 Vice President - Finance, Treasurer and Director of Investor Relations
Steven E. Hooper 44 Vice President, Human Resources
</TABLE>

For information regarding Messrs. DeFeo and Rosenberg, refer to the
table listing directors above.

-53-
<PAGE> 55
DAVID J. LANGEVIN was appointed Executive Vice President of the Company
effective January 1, 1994, and served as Acting Chief Financial Officer of the
Company from March 1993 through December 1993. He had been employed as a Vice
President of KCS since 1988 until joining the Company in 1993.

JOSEPH F. APUZZO was appointed Vice President - Finance and Controller
of the Company on May 15, 1996. Mr. Apuzzo previously held the position of Vice
President, Corporate Controller since joining the Company on October 9, 1995.
Mr. Apuzzo was Vice President of Corporate Finance at D'Arcy Masius Benton &
Bowles, Inc. from September 1994 until October 1995. Mr. Apuzzo was employed by
Price Waterhouse LLP in various capacities from 1983 until September 1994.

BRIAN J. HENRY was appointed Vice President - Finance and Treasurer of
the Company on July 11, 1995. Mr. Henry also serves as the Company's Director of
Investor Relations. Mr. Henry formerly held the position of Vice President -
Corporate Development and Acquisitions and has been employed by the Company
since 1993. He was employed by KCS from 1990 until 1993.

STEVEN E. HOOPER was appointed Vice President, Human Resources of the
Company on September 15, 1995, after serving as Director of Human Resources of
the Company since January 1994. He was previously a Human Resources Director at
Allied Signal Aerospace from October 1992 to December 1993. Prior to October
1992, Mr. Hooper was with Tenneco Inc. for eight years in various senior level
human resources positions.

SELLING STOCKHOLDERS

Of the 7,000,000 shares of Common Stock being offered hereby, 2,000,000
shares are being offered by Mr. Randolph W. Lenz and/or certain affiliates of
Mr. Lenz (collectively, the "Selling Stockholders"). As of March 31, 1997, the
Selling Stockholders were the beneficial owners of approximately 4,314,317
shares, or 32.4%, of Common Stock. After consummation of the Offering, the
Selling Stockholders will be the beneficial owners of approximately 2,314,317
shares, or 12.6% (12.2% if the over-allotment option of the Underwriters is
exercised in full), of Common Stock. Prior to his retirement on August 28, 1995,
Mr. Lenz served as Chief Executive Officer, Chairman of the Board and a Director
of the Company. In connection with his retirement, Mr. Lenz entered into an
agreement with the Company pursuant to which an affiliate of Mr. Lenz provides
consulting services to the Company until the year 2000. In consideration
thereof, an affiliate of Mr. Lenz received a consulting fee equal to Mr. Lenz'
1995 base salary of $486,000 until December 31, 1996. In addition, the agreement
also provided for (i) the granting of a five-year $1.8 million forgivable loan
bearing interest at a rate of 6.56% per annum, subject to certain conditions,
and (ii) grants of Common Stock of up to an aggregate of 200,000 shares of
Common Stock conditioned upon the Company achieving certain financial and public
stock market price objectives. As of the date of this Prospectus, Mr. Lenz has
received 66,666 shares of Common Stock pursuant to the agreement. Mr. Lenz also
agreed not to compete with the Company until November 2000 and to vote his
shares of Common Stock as recommended by the Board of Directors until November
1998.

DESCRIPTION OF SECURITIES

The Company's authorized capital stock consists of 40,000,000 shares of
capital stock, $.01 par value, consisting of 30,000,000 shares of Common Stock
and 10,000,000 shares of preferred stock. As of April 30, 1997, 13,646,699
shares of Common Stock and 38,800 shares of Series B Preferred Stock were issued
and outstanding.

-54-
<PAGE> 56
COMMON STOCK

Each outstanding share of Common Stock entitles the holder to one vote,
either in person or by proxy, on all matters submitted to a vote of
stockholders, including the election of directors. There is no cumulative voting
in the election of directors, which means that the holders of a majority of the
outstanding shares of Common Stock can elect all of the directors then standing
for election. Subject to preferences which may be applicable to any outstanding
shares of preferred stock, holders of Common Stock have equal ratable rights to
such dividends as may be declared from time to time by the Board of Directors
out of funds legally available therefor.

Holders of Common Stock have no conversion, redemption or preemptive
rights to subscribe for any securities of the Company. All outstanding shares of
Common Stock are fully paid and nonassessable. In the event of any liquidation,
dissolution or winding-up of the affairs of the Company, holders of Common Stock
will be entitled to share ratably in the assets of the Company remaining after
provision for payment of liabilities to creditors and preferences applicable to
outstanding shares of preferred stock. The rights, preferences and privileges of
holders of Common Stock are subject to the rights of the holders of any
outstanding shares of preferred stock.

The Restated Certificate of Incorporation provides that directors of
the Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duties as a director except to the
extent otherwise required by Delaware law. The Restated By-laws of the Company
provide for indemnification of the officers and directors of the Company to the
fullest extent permitted by Delaware law.

PREFERRED STOCK

The Board of Directors of the Company is authorized to issue up to
10,000,000 shares of preferred stock, par value $.01 per share, in one or more
series, with such designations, powers, preferences and rights of such series
and the qualifications, limitations or restrictions thereon, including, but not
limited to, the fixing of dividend rights, dividend rates, conversion rights,
voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences, in
each case, if any, as the Board of Directors of the Company may by resolution
determine, without any further vote or action by the Company's stockholders.

By resolution adopted January 24, 1994, the Board of Directors of the
Company authorized the issuance of a series of preferred stock consisting of
89,800 shares of Series B Preferred Stock in connection with the termination of
a management contract with KCS, of which 38,800 are issued and outstanding as of
the date of this Prospectus and fixed the terms of such Series B Preferred
Stock. All of the currently outstanding Series B Preferred Stock was issued to
Mr. Randolph W. Lenz. The following summary of the terms and provisions of
the Series B Preferred Stock does not purport to be complete and is qualified in
its entirety by reference to the relevant sections of the Company's Certificate
of Designation of Preferences and Rights of the Series B Preferred Stock.

Liquidation Preference. In the event of the liquidation of the Company,
before any distribution or payment shall be made to the holders of Common Stock
or any other stock ranking junior to the Series B Preferred Stock, the holders
of the Series B Preferred Stock are entitled to be paid, out of the assets of
the Company available for distribution to its stockholders, a liquidation
preference (the "Series B Liquidation Preference"), equal to $25.00 per share,
plus all accrued and unpaid dividends thereon to such date, in cash. In
addition, the Series B Liquidation Preference accretes and accrues daily at the
rate of 13% per annum from December 9, 1994 through December 9, 1999 and 18% per
annum thereafter through the date (the "Series B Accretion Termination Date")

-55-
<PAGE> 57
on which the Company is required to pay current dividends on the Series B
Preferred Stock in accordance with its terms, which date is based primarily upon
the terms of the Company's debt instruments.

Dividends. Subject to the prior preferences and rights of any stock
ranking senior to the Series B Preferred Stock, holders of shares of the Series
B Preferred Stock are entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends,
cumulative cash dividends that will accrue from the Series B Accretion
Termination Date at the rate of (a) 13% per annum from the Series B Accretion
Termination Date through December 9, 1999 and (b) 18% per annum thereafter. So
long as any shares of Series B Preferred Stock shall be outstanding, the Company
shall not declare or pay any dividend whatsoever, whether in cash, property or
otherwise (other than dividends payable in shares of the class or series upon
which such dividends are declared or paid) on, purchase or redeem any stock
ranking junior to the Series B Preferred Stock in respect of the right to
receive dividends. In addition, the Company cannot pay dividends on the Common
Stock during any 12 month period exceeding 4% of the Current Market Price (as
defined) per share of the Common Stock on the trading day immediately prior to
the declaration of any cash dividend until the expiration of specified periods.

Redemption. The Series B Preferred Stock may be redeemed by the Company
in cash at any time in whole or from time to time, in part, at the option of the
Company, at a per share redemption price equal to the Series B Liquidation
Preference per share on the date of redemption plus all accrued but unpaid
dividends thereon to and including the date of redemption. The Company is
required to redeem all of the then outstanding shares of Series B Preferred
Stock on or prior to December 31, 2001.

Voting. Except for certain matters affecting the preferences, rights,
privileges, powers or benefits of the Series B Preferred Stock or as otherwise
required by law, the holders of the issued and outstanding shares of Series B
Preferred Stock shall have no voting rights.

Conversion Right. Each holder of shares of Series B Preferred Stock has
the right, at such holder's option, at any time or from time to time, to convert
any of such shares of Series B Preferred Stock into the number of fully paid and
nonassessable shares of Common Stock determined by dividing (i) $25.00 by (ii)
the conversion price, initially $11.11 and subject to adjustment in certain
circumstances, in effect on the date of conversion. At March 31, 1997, an
aggregate of 87,300 shares of Common Stock were issuable upon conversion in full
of the Series B Preferred Stock.

COMMON STOCK PURCHASE WARRANTS

In connection with the private placement of the Series A Preferred
Stock, the Company issued 1,300,000 Common Stock purchase warrants (the "Series
A Warrants") of which 128,464 warrants were outstanding at April 30, 1997. Each
Series A Warrant may be exercised, in whole or in part, at the option of the
holder at any time before December 31, 2000 and is redeemable by the Company
under certain circumstances. As of April 30, 1997, upon the exercise or
redemption of a Series A Warrant, the holder thereof was entitled to receive
2.41 shares of Common Stock. The exercise price for the Series A Warrants is
$.01 for each share of Common Stock. The number of shares of Common Stock
issuable upon exercise or redemption of the Series A Warrants is subject to
adjustment in certain circumstances. At April 30, 1997, an aggregate of 309,598
shares of Common Stock were issuable upon exercise in full of the outstanding
Series A Warrants.

COMMON STOCK APPRECIATION RIGHTS

Concurrently with the issuance of the Senior Secured Notes, the Company
issued 1,000,000 Common Stock Appreciation Rights pursuant to a Common Stock
Appreciation Rights Agreement between the Company and the United States Trust
Company of New York, as agent. The Rights are traded separately from the Senior
Secured Notes.

-56-
<PAGE> 58
Each Right entitles the holder thereof, upon exercise, to receive cash
or Common Stock (at the option of the Company) in an amount equal to the average
closing sale price of the Common Stock for the 60 consecutive trading days prior
to the date of exercise less $7.288, subject to adjustment in certain
circumstances. Each Right not exercised on or prior to 5:00 p.m., New York City
time, on May 15, 2002 will become void. Rights may be exercised by the holder
thereof in whole or in part.

The holders of Rights have no rights to vote on matters submitted to
the stockholders of the Company and have no rights to receive dividends. The
holders of Rights are not entitled to share in the assets of the Company in the
event of the liquidation or dissolution of the Company or the winding up of the
Company's affairs.

TRANSFER AGENT AND REGISTRAR

The registrar and transfer agent for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.

-57-
<PAGE> 59
UNDERWRITING

Under the terms and subject to the conditions contained in an
Underwriting Agreement dated , 1997 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), for whom Credit Suisse First
Boston Corporation and Salomon Brothers Inc are acting as representatives (the
"Representatives"), have severally but not jointly agreed to purchase from the
Company and the Selling Stockholders the following respective numbers of shares
of Common Stock:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
----------- ---------

<S> <C>
Credit Suisse First Boston Corporation...........
Salomon Brothers Inc.............................
---------
Total.......................................
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Common Stock
offered hereby (other than those shares covered by the over-allotment option
described below) if any are purchased. The Underwriting Agreement provides that,
in the event of a default by an Underwriter, in certain circumstances the
purchase commitments of non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.

The Company has granted to the Underwriters an option, expiring at the
close of business on the 30th day after the date of this Prospectus, to purchase
up to 700,000 additional shares at the initial public offering price less the
underwriting discounts and commissions, all as set forth on the cover page of
this Prospectus. Such option may be exercised only to cover over-allotments in
the sale of the shares of Common Stock. To the extent that such option is
exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares of Common Stock as it was obligated to purchase pursuant to the
Underwriting Agreement.

The Company and the Selling Stockholders have been advised by the
Representatives that the Underwriters propose to offer the Shares to the public
initially at the public offering price set forth on the cover page of this
Prospectus and, through the Representatives, to certain dealers at such price
less a concession of $ per Share, and the Underwriters and such dealers may
allow a discount of $ per Share on sales to certain other dealers. After
the initial public offering, the public offering price, concession and discount
to dealers may be changed by the Representatives.

The Company and certain of its executive officers and directors have
agreed with the underwriters that they will not offer, sell, contract to sell,
announce their intention to sell, or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the
Securities Act relating to any shares of Common Stock or securities convertible
into or exchangeable into or exercisable for any shares of Common Stock, without
the prior written consent of Credit Suisse First Boston Corporation for a period
of 180 days after the date of this Prospectus except (i) any shares of Common
Stock issuable upon the exercise or redemption of an option or warrant or the
conversion or exchange of a security in each case outstanding on the date of
this Prospectus and in accordance with the terms of the respective securities,
(ii) any securities of the Company sold or granted pursuant to the Company's
incentive and other benefit plans as in effect as of the date of this
Prospectus, (iii) any shares of Common Stock issued upon exercise of the
Company's issued and outstanding Rights and (iv) any warrants or securities
convertible into Common Stock issued in exchange for any of the Company's
warrants, options or stock appreciation rights outstanding on the date of this
Prospectus.

-58-
<PAGE> 60
Prior to the consummation of the Offering, the Company expects to enter
into the Standstill Agreement with Mr. Randolph W. Lenz and his affiliates
pursuant to which they will agree to certain restrictions on the disposition of
their remaining shares of Common Stock upon completion of the Offering.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or to contribute to payments which the Underwriters may be
required to make in respect thereof.

Certain of the Underwriters and their affiliates have provided certain
financial advisory and investment banking services to the Company in the past.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase shares of Common Stock so long
as the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of Common Stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Representatives to reclaim a selling concession from a
syndicate member when the securities originally sold by such syndicate member
are purchased in a syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the securities to be higher than it would
otherwise be in the absence of such transactions. These transactions may be
effected on The New York Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Shares in Canada is being made only on a
private placement basis exempt from the requirement that the Company and the
Selling Stockholders prepare and file a prospectus with the securities
regulatory authorities in each province where trades of the Shares are
effected. Accordingly, any resale of the Shares in Canada must be made in
accordance with applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made in accordance
with available statutory exemptions or pursuant to a discretionary exemption
granted by the applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the Shares.

REPRESENTATIONS OF PURCHASERS

Each purchaser of Shares in Canada who receives a purchase confirmation
will be deemed to represent to the Company, the Selling Stockholders and the
dealer from whom such purchase confirmation is received that (i) such purchaser
is entitled under applicable provincial securities laws to purchase such Shares
without the benefit of a prospectus qualified under such securities laws, (ii)
where required by law, that such purchaser is purchasing as principal and not as
agent and (iii) such purchaser has reviewed the text above under "Resale
Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities offered hereby are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of

-59-
<PAGE> 61
action for damages or rescission or rights of action under the civil liability
provisions of the United States federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein and the Selling Stockholders may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer, such persons or the Selling Stockholders.
All or a substantial portion of the assets of the issuer, such persons and the
Selling Stockholders may be located outside of Canada and, as a result, it may
not be possible to satisfy a judgment against the issuer, such persons or the
Selling Stockholders in Canada or to enforce a judgment obtained in Canadian
courts against the issuer, such persons or the Selling Stockholders outside of
Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of Shares to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sales of any
Shares acquired by such purchaser pursuant to this offering. Such report must be
in the form attached to British Columbia Securities Commission Blanket Order BOR
#95/17, a copy of which may be obtained from the Company. Only one such report
must be filed in respect of Shares purchased on the same date and under the same
prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Shares should consult their own legal and tax
advisers with respect to the tax consequences of an investment in the Shares in
their particular circumstances and with respect to the eligibility of the Shares
for investment by the purchaser under relevant Canadian legislation.

CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

A general discussion of certain United States federal income and estate
tax consequences of the ownership and disposition of Common Stock applicable to
Non-U.S. Holders (as defined) of Common Stock is set forth below. In general, a
"Non-U.S. Holder" is a person other than: (i) a citizen or resident (as defined
for United States federal income or estate tax purposes, as the case may be) of
the United States; (ii) a corporation organized in or under the laws of the
United States or a political subdivision thereof; (iii) an estate the income of
which is subject to United States federal income taxation regardless of its
source or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more U.S.
trustees has the authority to control all substantial decisions of the trust.
The discussion is based on current law and is provided for general information
only. The discussion set forth in this section does not address aspects of
United States federal taxation other than income and estate taxation and does
not address all aspects of federal income and estate taxation. The discussion
does not consider any specific facts or circumstances that may apply to a
particular Non-U.S. Holder and does not address all aspects of United States
federal income tax law that may be relevant to Non-U.S. Holders that may be
subject to special treatment under such law (for example, insurance companies,
tax-exempt organizations, financial institutions or broker-dealers).
ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND NON-U.S. CURRENT AND
POSSIBLE FUTURE INCOME AND OTHER TAX CONSEQUENCES OF HOLDING AND DISPOSING OF
COMMON STOCK.

-60-
<PAGE> 62
DIVIDENDS

In general, the gross amount of dividends paid to a Non-U.S. Holder
will be subject to United States withholding tax at a 30% rate (or any lower
rate prescribed by an applicable tax treaty) unless the dividends are
effectively connected with a trade or business carried on by the Non-U.S. Holder
within the United States. In determining the applicability of a tax treaty that
provides for a lower rate of withholding, dividends paid to an address in a
foreign country are presumed under current regulations of the Treasury
Department to be paid to a resident of that country. Under proposed Treasury
regulations, however, a Non-U.S. Holder would be required to file certain forms
in order to claim the benefit of an applicable treaty rate. Dividends
effectively connected with a trade or business carried on by a Non-U.S. Holder
within the United States will generally not be subject to withholding (if the
Non-U.S. Holder properly files IRS Form 4224 with the payor of the dividend) and
will generally be subject to United States federal income tax at ordinary
federal income tax rates. Effectively connected dividends may be subject to
different treatment under an applicable tax treaty depending on whether such
dividends are attributable to a permanent establishment of the Non-U.S. Holder
in the United States. In the case of a Non-U.S. Holder which is a corporation,
effectively connected income may be subject to the branch profits tax (which is
generally imposed on a foreign corporation at a rate of 30% of the deemed
repatriation from the United States of "effectively connected earnings and
profits") except to the extent that an applicable tax treaty provides otherwise.
A Non-U.S. Holder eligible for a reduced rate of United States withholding tax
pursuant to an income tax treaty may obtain a refund of any excess amounts
withheld by filing an appropriate claim for refund with the IRS.

SALE OF COMMON STOCK

Generally, a Non-U.S. Holder will not be subject to United States
federal income tax on any gain realized upon the disposition of his Common Stock
unless: (i) the Company has been, is, or becomes a "U.S. real property holding
corporation" for federal income tax purposes and certain other requirements are
met; (ii) the gain is effectively connected with a trade or business carried on
by the Non-U.S. Holder (or by a partnership, trust or estate in which the
Non-U.S. Holder is a partner or beneficiary) within the United States; or (iii)
the Common Stock is disposed of by an individual Non-U.S. Holder, who holds the
Common Stock as a capital asset and is present in the United States for 183 days
or more in the taxable year of the disposition, and the gains are considered
derived from sources within the United States. The Company believes that it has
not been, is not currently and, based upon its current business plans, is not
likely to become a U.S. real property holding corporation. A Non-U.S. Holder
also may be subject to tax pursuant to the provisions of United States tax law
applicable to certain United States expatriates. Non-U.S. Holders should consult
applicable treaties, which may exempt from United States taxation gains realized
upon the disposition of Common Stock in certain cases.

ESTATE TAX

Common Stock owned or treated as owned by an individual Non-U.S. Holder
at the time of death will be includible in the individual's gross estate for
United States federal estate tax purposes, unless an applicable treaty provides
otherwise, and may be subject to United States federal estate tax.

BACKUP WITHHOLDING AND INFORMATION REPORTING

The Company must report annually to the IRS and to Non-U.S. Holders the
amount of dividends paid to, and the tax withheld with respect to, each Non-U.S.
Holder. These information reporting requirements apply regardless of whether
withholding was reduced by an applicable tax treaty or if withholding was not
required because the dividends were effectively connected with a trade or
business in the United States of the Non-U.S. Holder. Copies of these
information returns also may be made available under the provisions of a
specific treaty or agreement to the tax authorities in the country in which the
Non-U.S. Holder resides or is established. Under current law, United States
backup withholding tax (which generally is a withholding tax imposed at the rate
of 31% on certain payments to persons that fail to furnish the information
required under the United States

-61-
<PAGE> 63
information reporting and backup withholding rules) generally will not apply to
dividends paid on Common Stock to a Non-U.S. Holder at an address outside the
United States, absent actual knowledge by the payor that the payee is not a
Non-U.S. Holder or to dividends paid to Non-U.S. Holders that are either subject
to the U.S. withholding tax (whether at 30% or a reduced treaty rate) or that
are exempt from such withholding because such dividends constitute effectively
connected income. Under proposed United States Treasury regulations not
currently in effect, however, a Non-U.S. Holder will be subject to backup
withholding unless applicable certification requirements are met. Backup
withholding and information reporting generally will apply to dividends paid on
Common Stock to a Non-U.S. Holder at an address inside the United States unless
such Non-U.S. Holder owner, under penalties of perjury, certifies, among other
things, its status as a Non-U.S. Holder or otherwise establishes an exemption.

The payment of the proceeds from the disposition of Common Stock to or
through the United States office of a broker will be subject to information
reporting and backup withholding unless the owner certifies its foreign status
as described above or otherwise establishes an exemption. The payment of the
proceeds from the disposition of Common Stock to or through a foreign office of
a non-United States broker will not be subject to backup withholding and
generally will not be subject to information reporting. Unless the broker has
documentary evidence in its files that the owner is a Non-U.S. Holder and
certain conditions are met or the holder otherwise establishes an exemption,
information reporting generally will apply to dispositions through (a) a
non-United States office of a United States broker and (b) a non-United States
office of a non-United States broker that is either a "controlled foreign
corporation" for United States federal income tax purposes or a person 50% or
more of whose gross income from all sources for a three year testing period was
effectively connected with a United States trade or business.

The backup withholding and information reporting rules are currently
under review by the Treasury Department and their application to the Common
Stock is subject to change.

Any amount withheld under the backup withholding rules from a payment
to a Non-U.S. Holder would be allowed as a credit against such Non-U.S. Holder's
United States federal income tax and any amounts withheld in excess of such
Non-U.S. Holder's United States federal income tax liability would be refunded,
provided that required information is furnished to the IRS.

LEGAL MATTERS

Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed upon for the Company by Robinson Silverman Pearce
Aronsohn & Berman LLP, 1290 Avenue of the Americas, New York, New York 10104,
and for the Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, New York, New York 10022. Skadden, Arps, Slate, Meagher & Flom LLP has
from time to time represented, and is currently representing, the Company with
respect to various unrelated legal matters.

EXPERTS

The consolidated financial statements of the Company incorporated in
this Prospectus by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 have been so incorporated in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

The combined financial statements of Simon Access Companies as of
December 31, 1996 and for the year then ended, incorporated in this Prospectus
by reference to the Company's Current Report on Form 8-K/A dated May 22, 1997
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

-62-
<PAGE> 64
The consolidated financial statements of PPM Cranes, Inc. as of
December 31, 1996 and 1995 and for the year and eight months ended December 31,
1996 and 1995, respectively, incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The consolidated statements of operations, shareholders' equity and
cash flows for the year ended December 31, 1994 of PPM Cranes, Inc.,
incorporated by reference in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference elsewhere herein, which is based in
part on the report of Price Waterhouse (Australia), independent accountants. The
financial statements referred to above are incorporated by reference in reliance
upon such reports given upon the authority of such firms as experts in
accounting and auditing.

AVAILABLE INFORMATION

Terex Corporation is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at its offices at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials may also be obtained by mail
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Additionally,
the Commission maintains a Web site containing reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The address for such Web site is http://www.sec.gov.

In addition, the Common Stock is listed on the NYSE under the symbol
"TEX" and reports, proxy statements and other information concerning the Company
may also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.

The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments, exhibits, schedules, and supplements
thereto, the "Registration Statement") under the Securities Act, with respect to
the Common Stock offered hereby. This Prospectus, which constitutes a part of
the Registration Statement, does not contain all of the information set forth in
the Registration Statement, as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock offered hereby, reference is hereby made to the Registration Statement,
which may be inspected and copied at the Public Reference Section of the
Commission referred to above. Statements contained in this Prospectus as to the
contents of any contract or other document are not necessarily complete, and in
each instance reference is made to the full text of such contract or document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference.

The Company furnishes stockholders with annual reports containing
audited financial statements. The Company also furnishes its common stockholders
with proxy material for its annual meetings complying with the proxy
requirements of the Exchange Act.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents which have been filed by the Company with the
Commission are incorporated in this Prospectus by reference:

-63-
<PAGE> 65
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.

2. The Company's Notice of Annual Meeting of Stockholders and
Proxy Statement dated April 4, 1997.

3. The Company's Current Report on Form 8-K dated April 21, 1997,
as amended on Form 8-K/A dated May 22, 1997.

4. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997.

5. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated February 22, 1991.

All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the Offering shall be
deemed to be incorporated by reference in and to be a part of this Prospectus
from the date of filing of such reports and documents.

Any statement contained herein or in a document which is incorporated
by reference herein or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
that is also deemed to be incorporated by reference herein modifies or
supersedes such prior statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

This Prospectus incorporates documents by reference which are not
presented or delivered herewith. These documents (other than exhibits to such
documents) are available upon written or oral request from the Company, without
charge, to each person to whom a copy of this Prospectus has been delivered,
including a copy of its most recent Annual Report to Shareholders. Requests
should be directed to Terex Corporation, Attention: Secretary, 500 Post Road
East, Westport, Connecticut 06880 (telephone (203) 222-7170).

-64-
<PAGE> 66

======================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

---------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................ 3
Risk Factors.............................. 11
The Company............................... 17
Price Range of Common Stock and Dividend
Policy.................................. 18
Use of Proceeds........................... 19
Capitalization............................ 20
Pro Forma Financial Information........... 21
Selected Consolidated Financial Data...... 27
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 29
Industry Overview and Outlook............. 40
Business.................................. 42
Management................................ 52
Selling Stockholder....................... 54
Description of Securities................. 54
Underwriting.............................. 58
Notice to Canadian Residents.............. 59
Certain United States Tax Consequences to
Non-United States Holders............... 60
Legal Matters............................. 62
Experts................................... 62
Available Information..................... 63
Incorporation of Documents by Reference... 63
</TABLE>

======================================================
======================================================
TEREX CORPORATION
7,000,000 SHARES
Common Stock
($.01 par value)
-------------------------
PROSPECTUS
-------------------------
CREDIT SUISSE FIRST BOSTON

SALOMON BROTHERS INC
======================================================
<PAGE> 67
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table itemizes the expenses incurred by the Company in
connection with the offering of the Common Stock being registered. All the
amounts shown are estimates except the Securities and Exchange Commission
registration fee, the NASD fee, and the New York Stock Exchange listing fee.

<TABLE>
<CAPTION>
ITEM AMOUNT
---- ------

<S> <C>
SEC Registration Fee...................................... $35,730
NASD Fee.................................................. 12,291
NYSE Listing Fee.......................................... 44,800
Transfer Agent Fees and Expenses ......................... *
Printing and Engraving Expenses .......................... *
Legal Fees and Expenses (other than Blue Sky)............. *
Accounting Fees and Expenses.............................. *
Blue Sky Fees and Expenses (including fees of counsel).... *
Miscellaneous Expenses.................................... $ *
-----
TOTAL............................................... $ *
=====
</TABLE>
- ------------------------------
* To be filed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law ("DGCL") and
Article IX of the Company's Restated By-laws provide for the indemnification of
the Company's directors and officers in a variety of circumstances, which may
include liabilities under the Securities Act.

Article IX of the Company's Restated By-laws generally requires the
Company to indemnify its directors and officers against all liabilities
(including judgments, settlements, fines and penalties) and reasonable expenses
incurred in connection with the investigation, defense, settlement or appeal of
any type of action, whether instituted by a third party or a stockholder (either
directly or indirectly) and including specifically, but without limitation,
actions brought under the Securities Act, and/or the Exchange Act; provided that
no such indemnification will be allowed if such director or officer was not
successful in defending against any such action and it is determined that the
director or officer engaged in misconduct which constitutes (i) a willful breach
of his or her "duty of loyalty" (as further defined therein) to the Company or
its stockholders; (ii) acts or omissions not in "good faith" (as further defined
therein) or which involve intentional misconduct or a knowing violation of law;
(iii) the payment of an illegal dividend or the authorization of an unlawful
stock repurchase in violation of Delaware law; or (iv) a transaction from which
the executive derived a material improper personal financial profit.

Finally, the Company's Restated Certificate of Incorporation, as
amended, contains a provision which eliminates the personal liability of a
director to the Company and its stockholders for certain breaches of his or her
fiduciary duty of care as a director. This provision does not, however,
eliminate or limit the personal liability of a director (i) for any breach of
such director's "duty of loyalty" (as further defined therein) to the Company or
its stockholders, (ii) for acts or omissions not in "good faith" (as further
defined therein) or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL, relating in general to the willful
or negligent payment of an illegal dividend or the authorization of an unlawful
stock repurchase or redemption, or (iv) for any transaction from which the
director derived an improper personal profit to the extent of such profit. This
provision of the Restated Certificate of Incorporation offers persons who serve
on the Board of Directors of

-1-
<PAGE> 68
the Company protection against awards of monetary damages resulting from
negligent (except as indicated above) and "grossly" negligent actions taken in
the performance of their duty of care, including grossly negligent business
decisions made in connection with takeover proposals for the Company. As a
result of this provision, the ability of the Company or a stockholder thereof to
successfully prosecute an action against a director for a breach of his duty of
care has been limited. However, the provision does not affect the availability
of equitable remedies such as an injunction or rescission based upon a
director's breach of his duty of care. Although the validity and scope of
Section 145 of the DGCL has not been tested in court, the Commission has taken
the position that the provision will have no effect on claims arising under the
Federal securities laws.

The Company maintains a directors' and officers' insurance policy which
insures the officers and directors of the Company from any claim arising out of
an alleged wrongful act by such persons in their respective capacities as
officers and directors of the Company.

The form of Underwriting Agreement to be filed as Exhibit 1.1 to this
Registration Statement provides for the reciprocal indemnification (a) by the
Underwriters of the Company and its directors and officers and (b) by the
Company of the Underwriters and its directors and officers, against certain
liabilities under the Securities Act.

ITEM 16. EXHIBITS

1.1 Underwriting Agreement.*

3.1 Restated Certificate of Incorporation of Terex Corporation
(incorporated by reference to Exhibit 3.1 to the Registration Statement
on Form S-1 of Terex Corporation, Registration No. 33-52297).

3.2 Restated Bylaws of Terex Corporation (incorporated by reference to
Exhibit 3.2 to the Registration Statement on Form S-1 of Terex
Corporation, Registration No. 33-52297).

4.1 Specimen Common Stock certificate (incorporated be reference to Exhibit
4.1 to the Registration Statement on Form S-1 of Terex Corporation,
Registration No. 33-77484).

5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP as to
legality of securities being registered.*

23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP (included as
part of Exhibit 5.1).

23.2 Independent Accountants' consent of Price Waterhouse LLP (included
herewith as page II-5).

23.3 Consent of Ernst & Young LLP Independent Auditors (included herewith
as page II-6).

23.4 Independent Accountants' consent of Price Waterhouse -- Melbourne,
Australia (included herewith as page II-7).

24.1 Power of attorney (included on signature pages).

- -------------------------
* To be filed by amendment or by Current Report on Form 8-K.

ITEM 17. UNDERTAKINGS

The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's Annual Report pursuant to
Section 15(d) of the

II-2
<PAGE> 69
Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3
<PAGE> 70
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Westport, State of Connecticut, on May 23, 1997.

TEREX CORPORATION

By: /s/ Ronald M. DeFeo
---------------------------------
Ronald M. DeFeo, President,
Chief Executive Officer and
Chief Operating Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Ronald M. DeFeo and/or Marvin
B. Rosenberg as his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including, without limitation, post-effective amendments) to this Registration
Statement with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date(s) indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----

<S> <C> <C>
/s/ Ronald M. DeFeo President, Chief Executive May 23, 1997
- ---------------------------------- Officer, Chief Operating
(Ronald M. DeFeo) Officer and Director
(Principal Executive Officer)

/s/ David J. Langevin Executive Vice President, May 23, 1997
- ---------------------------------- (Acting Principal Financial
(David J. Langevin) Officer)

/s/ Joseph F. Apuzzo Vice President Finance May 23, 1997
- ---------------------------------- and Controller
(Joseph F. Apuzzo) (Principal Accounting Officer)

/s/ Marvin B. Rosenberg Senior Vice President, May 23, 1997
- ---------------------------------- Secretary, General
(Marvin B. Rosenberg) Counsel and Director

/s/ G. Chris Andersen Director May 23, 1997
- ----------------------------------
(G. Chris Andersen)

/s/ William H. Fike Director May 23, 1997
- ----------------------------------
(William H. Fike)

/s/ Bruce I. Raben Director May 23, 1997
- ----------------------------------
(Bruce I. Raben)

/s/ David A. Sachs Director May 23, 1997
- ----------------------------------
(David A. Sachs)

/s/ Adam E. Wolf Director May 23, 1997
- ----------------------------------
(Adam E. Wolf)
</TABLE>

II-4
<PAGE> 71
EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our reports
dated March 6, 1997 appearing on pages F-2 and F-34 of Terex Corporation's
Annual Report on Form 10-K for the year ended December 31, 1996.

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Terex
Corporation of our report dated May 22, 1997 relating to the combined financial
statements of Simon Telelect, Inc. and subsidiaries, Simon Aerials Inc. and
subsidiaries, Simon-Cella, S.r.l, Sim-Tech Management Limited, Simon Aerials
Limited and Simon Tomen Engineering Company Limited ("Simon Access"), which
appears in the Current Report on Form 8-K/A of Terex Corporation dated May 22,
1997.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

PRICE WATERHOUSE LLP

Stamford, Connecticut
May 23, 1997

II-5
<PAGE> 72
EXHIBIT 23.3

Consent Of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated August 22, 1995, with respect to the consolidated
statements of operations, shareholders' equity and cash flows for the year ended
December 31, 1994 of PPM Cranes, Inc. incorporated by reference in the
Registration Statement (Form S-3) and related Prospectus of Terex Corporation
for the registration of 7,700,000 shares of its common stock, par value $.01 per
share.

Greenville, South Carolina
May 23, 1997

II-6
<PAGE> 73
EXHIBIT 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Terex
Corporation of our report dated 30 January 1995 relating to the financial
statements of PPM of Australia Pty Ltd as at 31 December 1994. We also consent
to the reference to the Australian Firm of Price Waterhouse under the heading
"Experts" in the context as experts in accounting and auditing in such
Prospectus.

Price Waterhouse
Melbourne, Australia
21 May 1997

II-7
<PAGE> 74
EXHIBIT INDEX

ITEM 16. EXHIBITS

1.1 Underwriting Agreement.*

3.1 Restated Certificate of Incorporation of Terex Corporation
(incorporated by reference to Exhibit 3.1 to the Registration Statement
on Form S-1 of Terex Corporation, Registration No. 33-52297).

3.2 Restated Bylaws of Terex Corporation (incorporated by reference to
Exhibit 3.2 to the Registration Statement on Form S-1 of Terex
Corporation, Registration No. 33-52297).

4.1 Specimen Common Stock certificate (incorporated by reference to Exhibit
4.1 to the Company's Registration Statement on Form S-1 of Terex
Corporation, Registration No. 33-77484).

5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP as to
legality of securities being registered.*

23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP (included as
part of Exhibit 5.1).

23.2 Independent Accountants' consent of Price Waterhouse LLP (included
herewith as page II-5).

23.3 Consent of Ernst & Young LLP Independent Auditors (included herewith
as page II-6).

23.4 Independent Accountant's consent of Price Waterhouse--Melbourne,
Australia (included herewith as page II-7).

24.1 Power of attorney (included on signature pages).

- ----------------------------
* To be filed by amendment or by Current Report on Form 8-K.

II-8