DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE

MHPS

On January 4, 2017, the Company completed the disposition of its MHPS business to Konecranes. See Note B - “Sale of MHPS Business and Investment Carried at Fair Value” for further information on the Disposition. The Disposition represents a significant strategic shift in the Company’s business away from universal, process, mobile harbor and ship-to-shore cranes that will have a major effect on the Company’s future operating results, primarily because the MHPS business represented the entirety of one of the Company’s five previous reportable operating segments and comprised two of the Company’s six previous reporting units, representing a significant portion of the Company’s revenues and assets, and is therefore accounted for as a discontinued operation for all periods presented. MHPS products include universal cranes, process cranes and components, such as rope hoists, chain hoists, light crane systems, travel units and electric motors, primarily for industrial applications, and mobile harbor cranes, ship-to-shore gantry cranes, rubber tired and rail mounted gantry cranes, straddle carriers, sprinter carriers, reach stackers, container handlers, general cargo lift trucks, automated stacking cranes, automated guided vehicles and software solutions for logistics terminals.

Cash flows from discontinued operations are included in the Condensed Consolidated Statement of Cash Flows.

Income (loss) from discontinued operations

The following amounts related to the discontinued operations were derived from historical financial information and have been segregated from continuing operations and reported as discontinued operations in the Condensed Consolidated Statement of Comprehensive Income (Loss) (in millions):



	Three Months Ended
	March 31,
	2016
Net sales	$	312.6
Cost of sales	(270.8		)
Selling, general and administrative expenses	(94.8		)
Net interest (expense)	(0.4		)
Other income (expense)	2.1
Income (loss) from discontinued operations before income taxes	(51.3		)
(Provision for) benefit from income taxes	(1.1		)
Income (loss) from discontinued operations – net of tax	(52.4		)
Net loss (income) attributable to noncontrolling interest	0.2
Income (loss) from discontinued operations – net of tax attributable to Terex Corporation	$	(52.2	)

Cranes

As part of the transformation and improvement of its Cranes segment, the Company is actively seeking a buyer for a portion of its cranes business located in South America and, accordingly, the assets and liabilities are reported as held for sale.

Construction

In December 2016, the Company entered into an agreement to sell its Coventry, UK-based compact construction business. During the three months ended March 31, 2017, the Company completed the sale of the Coventry, UK-based compact construction business and a loss of $0.6 million was recognized within SG&A related to the sale. The sale of the remaining UK-based compact construction product line assets is expected to be completed during the second quarter of 2017. During the three months ended March 31, 2017, the Company recognized a gain of $5.6 million within SG&A resulting from a post-closing adjustment related to the 2016 sale of its midi/mini excavators, wheeled excavators, and compact wheel loader business in Germany. In addition, the Company signed a sale agreement with a buyer to sell its Indian compact construction business and expects to complete the sale during the second quarter of 2017. The operating results for these construction product lines are reported in continuing operations, within the Corporate and Other category in our segment disclosures, and the remaining assets and liabilities are reported as held for sale.

Assets and liabilities held for sale

Assets and liabilities held for sale consist of the Company’s former MHPS segment, portions of its Cranes segment and portions of its former Construction Segment. Such assets and liabilities are classified as held for sale upon meeting the requirements of ASC 360 - “Property, Plant and Equipment”, and are recorded at lower of carrying amounts or fair value less costs to sell. Assets are no longer depreciated once classified as held for sale.

The following table provides the amounts of assets and liabilities held for sale in the Condensed Consolidated Balance Sheet (in millions):



	March 31, 2017									December 31, 2016
	Cranes			Construction			Total			MHPS		Cranes			Construction			Total
Assets
Cash and cash equivalents	$	1.6		$	0.9		$	2.5		$	71.0	$	1.2		$	1.2		$	73.4
Trade receivables – net	2.8			10.0			12.8			243.5		3.1			24.4			271.0
Inventories	1.9			10.1			12.0			309.4		1.7			23.9			335.0
Prepaid and other current assets	0.5			2.2			2.7			49.9		0.5			3.1			53.5
Impairment reserve	—			(2.2		)	(2.2		)	—		—			—			—
Current assets held for sale	$	6.8		$	21.0		$	27.8		$	673.8	$	6.5		$	52.6		$	732.9

Property, plant and equipment – net	$	0.7		$	1.0		$	1.7		$	294.2	$	0.8		$	3.2		$	298.2
Goodwill	—			—			—			573.7		—			—			573.7
Intangible assets	3.0			—			3.0			212.6		2.9			—			215.5
Impairment reserve	(2.9		)	(1.9		)	(4.8		)	—		(1.7		)	(3.5		)	(5.2		)
Other assets	1.1			1.4			2.5			86.4		1.1			1.6			89.1
Non-current assets held for sale	$	1.9		$	0.5		$	2.4		$	1,166.9	$	3.1		$	1.3		$	1,171.3

Liabilities
Notes payable and current portion of long-term debt	$	—		$	—		$	—		$	13.1	$	—		$	1.3		$	14.4
Trade accounts payable	0.8			5.8			6.6			132.6		0.7			23.8			157.1
Accruals and other current liabilities	5.0			4.8			9.8			267.0		6.2			9.1			282.3
Current liabilities held for sale	$	5.8		$	10.6		$	16.4		$	412.7	$	6.9		$	34.2		$	453.8

Long-term debt, less current portion	$	—		$	—		$	—		$	2.4	$	—		$	—		$	2.4
Retirement plans and other non-current liabilities	0.7			1.0			1.7			235.3		0.7			0.9			236.9
Other non-current liabilities	0.4			0.5			0.9			71.7		0.4			0.7			72.8
Non-current liabilities held for sale	$	1.1		$	1.5		$	2.6		$	309.4	$	1.1		$	1.6		$	312.1

The following table provides amounts of cash and cash equivalents presented in the Condensed Consolidated Statement of Cash Flows (in millions):



	March 31, 2017		December 31, 2016
Cash and cash equivalents:
Cash and cash equivalents - continuing operations	$	813.9	$	428.5
Cash and cash equivalents - held for sale	2.5		73.4
Total cash and cash equivalents:	$	816.4	$	501.9

Cash and cash equivalents held for sale at March 31, 2017 includes no amounts which were not immediately available for use. Cash and cash equivalents held for sale at December 31, 2016 includes $14.0 million which were not immediately available for use. These consist primarily of cash balances held in escrow to secure various obligations of the Company.

The following table provides supplemental cash flow information related to discontinued operations (in millions):



	March 31,
	2016
Non-cash operating items:
Depreciation and amortization	$	13.3
Deferred taxes	$	0.1
Investing activities:
Capital expenditures	$	3.8

Gain (loss) on disposition of discontinued operations - net of tax



	Three Months Ended
	March 31,
	2017									2016
	MHPS			Atlas			Total			Total

Gain (loss) on disposition of discontinued operations	$	79.5		$	3.5		$	83.0		$	4.5
(Provision for) benefit from income taxes	(26.8		)	(0.5		)	(27.3		)	(1.1		)
Gain (loss) on disposition of discontinued operations – net of tax	$	52.7		$	3.0		$	55.7		$	3.4

During the three months ended March 31, 2017, the Company recognized a gain on disposition of discontinued operations - net of tax of $55.7 million, $52.7 million of which is due to the sale of the MHPS business. The remaining $3.0 million is related to the sale of its Atlas heavy construction equipment and knuckle-boom cranes businesses (“Atlas”), due to contractual earnout payments. During the three months ended March 31, 2016 the Company recognized a gain on disposition of discontinued operations - net of tax of $3.4 million due primarily to a gain of $3.0 million related to the sale of Atlas based on contractual earnout payments and a $0.5 million gain related to sale of its truck business.