(State or Other Jurisdiction | (Commission | (IRS Employer | ||||||
of Incorporation) | File Number) | Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
NOT APPLICABLE | ||
(Former Name or Former Address, if Changed Since Last Report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). | |||||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
23.1 | ||||||||
99.1 | Part I. Item 1 Business Part I. Item 2 Properties Part II. Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Part IV. Item 15(a)(1) and (2) Financial Statements and Financial Statement Schedules | |||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document** | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document** | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document** | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document** | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document** | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
TEREX CORPORATION | ||
By: /s/ John D. Sheehan | ||
John D. Sheehan | ||
Senior Vice President and Chief Financial Officer |
PAGE | ||||||||
December 31, | |||||||||||
2019 | 2018 | ||||||||||
(in millions) | |||||||||||
AWP | $ | 752.5 | $ | 1,098.1 | |||||||
MP | 328.7 | 563.3 | |||||||||
Total | $ | 1,081.2 | $ | 1,661.4 |
BUSINESS SEGMENT | PRODUCTS | PRIMARY COMPETITORS | ||||||||||||
Aerial Work Platforms | Portable Material Lifts and Portable Aerial Work Platforms | Oshkosh (JLG), Vestil, Sumner and Wesco | ||||||||||||
Boom Lifts | Oshkosh (JLG), Haulotte, Linamar (Skyjack), Xtreme/Tanfield (Snorkel), JCB and Aichi | |||||||||||||
Scissor Lifts | Oshkosh (JLG), Linamar (Skyjack), Haulotte, Manitou and Xtreme/Tanfield (Snorkel), JCB and Dingli | |||||||||||||
Telehandlers | Oshkosh (JLG), Skytrak, Caterpillar and Lull brands), JCB, CNH, Merlo and Manitou (Gehl) | |||||||||||||
Trailer-mounted Light Towers | Allmand Bros., Generac, Wacker Neuson and Doosan | |||||||||||||
Utility Equipment | Altec and Time Manufacturing | |||||||||||||
Materials Processing | Crushing & Screening Equipment | Metso, Sandvik, Deere (Kleeman), Astec Industries, Keestrack, Rubble Master and Portafill | ||||||||||||
Washing Systems | CDE Global, Metso, McLanahan, Azfab, Phoenix Process Equipment, Matec, Weir/Trio and Superior | |||||||||||||
Wood Processing, Biomass and Recycling Equipment | Doppstadt, Komptech, Morbark, Vermeer, Astec Industries, Eggersmann, Jenz and Bandit | |||||||||||||
Conveyors | Superior, Astec/Telestack, Metso/McCloskey, Puzzulona Thor, Deere (Kleeman), Weir/Trio and Edge | |||||||||||||
Material Handlers | Sennebogen, Liebherr and Caterpillar | |||||||||||||
Concrete Pavers | Gomaco, Deere (Wirtgen), Power Curbers, Guntert & Zimmerman and Allen Equipment | |||||||||||||
Concrete Mixer Trucks | Oshkosh, Kimble and Continental Manufacturing and McNeilus | |||||||||||||
Pick and Carry Cranes | TIDD and Humma | |||||||||||||
Rough Terrain Cranes | Liebherr, Manitowoc (Grove), Tadano-Faun, Link-Belt, XCMG, Kato, Zoomlion and Sany | |||||||||||||
Tower Cranes | Liebherr, Manitowoc (Potain), Comansa, Jaso, Zoomlion, XCMG and Wolffkran |
BUSINESS SEGMENT | FACILITY LOCATION | BUSINESS SEGMENT | FACILITY LOCATION | |||||||||||||||||
Corporate/Other | Westport, Connecticut (1) | MP (continued) | Hosur, India | |||||||||||||||||
Schaffhausen, Switzerland (1) | Subang Jaya, Malaysia (1) | |||||||||||||||||||
AWP | Rock Hill, South Carolina | Ballymoney, Northern Ireland | ||||||||||||||||||
Moses Lake, Washington (1) | Campsie, Northern Ireland | |||||||||||||||||||
North Bend, Washington (1) | Dungannon, Northern Ireland (1) | |||||||||||||||||||
Redmond, Washington (1) | Omagh, Northern Ireland (1) | |||||||||||||||||||
Changzhou, China | Newton, New Hampshire | |||||||||||||||||||
Umbertide, Italy | Canton, South Dakota | |||||||||||||||||||
Darra, Australia (1) | Fort Wayne, Indiana | |||||||||||||||||||
Watertown, South Dakota (1) | Bad Schönborn, Germany | |||||||||||||||||||
Huron, South Dakota | Brisbane, Australia (1) | |||||||||||||||||||
Betim, Brazil (1) (2) | Crespellano, Italy | |||||||||||||||||||
MP | Louisville, Kentucky | Fontanafredda, Italy | ||||||||||||||||||
Durand, Michigan | Multiple Business Segments | Southaven, Mississippi (1) | ||||||||||||||||||
Coalville, England | Oklahoma City, Oklahoma | |||||||||||||||||||
Dec '19 | Sep '19 | Jun '19 | Mar '19 | Dec '18 | |||||||||||||
Annualized effective tax rate as adjusted | 15.6 | % | 15.6 | % | 15.6 | % | 15.6 | % | |||||||||
Income (loss) from operations as adjusted | $ | 35.3 | $ | 86.2 | $ | 127.9 | $ | 104.8 | |||||||||
Multiplied by: 1 minus annualized effective tax rate | 84.4 | % | 84.4 | % | 84.4 | % | 84.4 | % | |||||||||
Adjusted net operating income (loss) after tax | $ | 29.8 | $ | 72.8 | $ | 107.9 | $ | 88.5 | |||||||||
Debt as adjusted | $ | 1,175.7 | $ | 1,175.6 | $ | 1,351.9 | $ | 1,477.8 | $ | 1,219.4 | |||||||
Less: Cash and cash equivalents as adjusted | (540.1) | (475.5) | (394.6) | (330.2) | (372.1) | ||||||||||||
Debt less Cash and cash equivalents as adjusted | $ | 635.6 | $ | 700.1 | $ | 957.3 | $ | 1,147.6 | $ | 847.3 | |||||||
Total Terex Corporation stockholders’ equity as adjusted | $ | 963.7 | $ | 881.3 | $ | 852.2 | $ | 743.4 | $ | 752.5 | |||||||
Debt less Cash and cash equivalents plus Total Terex Corporation stockholders’ equity as adjusted | $ | 1,599.3 | $ | 1,581.4 | $ | 1,809.5 | $ | 1,891.0 | $ | 1,599.8 |
December 31, 2019 ROIC | 17.6 | % | |||
NOPAT as adjusted (last 4 quarters) | $ | 299.0 | |||
Average Debt less Cash and cash equivalents plus Total Terex Corporation stockholders’ equity, as adjusted (5 quarters) | $ | 1,696.2 |
Three months ended 12/31/19 | Three months ended 9/30/19 | Three months ended 6/30/19 | Three months ended 3/31/19 | ||||||||||||||
Reconciliation of income (loss) from operations: | |||||||||||||||||
Income (loss) from operations as reported | $ | 22.9 | $ | 86.4 | $ | 126.0 | $ | 99.7 | |||||||||
Adjustments: | |||||||||||||||||
Deal related | — | (0.9) | (7.0) | 0.2 | |||||||||||||
Restructuring and related | 9.8 | 2.2 | 8.7 | 1.7 | |||||||||||||
Transformation | 3.4 | 2.2 | 4.0 | 4.1 | |||||||||||||
Other | 0.2 | — | — | — | |||||||||||||
(Income) loss from TFS | (1.0) | (3.7) | (3.8) | (0.9) | |||||||||||||
Income (loss) from operations as adjusted | $ | 35.3 | $ | 86.2 | $ | 127.9 | $ | 104.8 | |||||||||
As of 12/31/19 | As of 9/30/19 | As of 6/30/19 | As of 3/31/19 | As of 12/31/18 | |||||||||||||
Reconciliation of Cash and cash equivalents: | |||||||||||||||||
Cash and cash equivalents - continuing operations | $ | 535.1 | $ | 470.6 | $ | 367.5 | $ | 304.6 | $ | 339.5 | |||||||
Cash and cash equivalents - assets held for sale | 5.0 | 4.9 | 27.1 | 25.6 | 32.6 | ||||||||||||
Cash and cash equivalents as adjusted | $ | 540.1 | $ | 475.5 | $ | 394.6 | $ | 330.2 | $ | 372.1 | |||||||
Reconciliation of Debt: | |||||||||||||||||
Debt - continuing operations | $ | 1,175.7 | $ | 1,175.6 | $ | 1,347.7 | $ | 1,473.4 | $ | 1,214.7 | |||||||
Debt - liabilities held for sale | — | — | 4.2 | 4.4 | 4.7 | ||||||||||||
Debt as adjusted | $ | 1,175.7 | $ | 1,175.6 | $ | 1,351.9 | $ | 1,477.8 | $ | 1,219.4 | |||||||
Reconciliation of Terex Corporation stockholders’ equity: | |||||||||||||||||
Terex Corporation stockholders’ equity as reported | $ | 932.3 | $ | 866.3 | $ | 860.1 | $ | 781.8 | $ | 860.5 | |||||||
TFS Assets | (154.0) | (159.0) | (180.2) | (204.6) | (185.1) | ||||||||||||
Effects of adjustments, net of tax: | |||||||||||||||||
Deal related | 75.3 | 75.3 | 75.8 | 83.1 | — | ||||||||||||
Restructuring and related | 31.0 | 22.7 | 19.2 | 9.5 | 6.8 | ||||||||||||
Transformation | 23.5 | 20.6 | 18.4 | 13.9 | 9.1 | ||||||||||||
Pension annuitization | 56.3 | 56.3 | 56.3 | 56.3 | 56.3 | ||||||||||||
Other | 7.4 | 6.4 | 6.8 | 4.4 | 5.1 | ||||||||||||
(Income) loss from TFS | (8.1) | (7.3) | (4.2) | (1.0) | (0.2) | ||||||||||||
Terex Corporation stockholders’ equity as adjusted | $ | 963.7 | $ | 881.3 | $ | 852.2 | $ | 743.4 | $ | 752.5 |
Year Ended December 31, 2019 | Income (loss) from continuing operations before income taxes | (Provision for) benefit from income taxes | Income tax rate | |||||||||||
Reconciliation of annualized effective tax rate: | ||||||||||||||
As reported | $ | 247.5 | $ | (37.8) | 15.3 | % | ||||||||
Effect of adjustments: | ||||||||||||||
Deal related | (7.5) | 0.2 | ||||||||||||
Restructuring and related | 22.4 | (4.7) | ||||||||||||
Transformation | 13.7 | (2.8) | ||||||||||||
Other | 0.6 | (0.1) | ||||||||||||
Tax related | — | 2.0 | ||||||||||||
As adjusted | 276.7 | (43.2) | 15.6 | % |
2019 | 2018 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 4,353.1 | — | $ | 4,517.2 | — | (3.6) | % | |||||||||||||||||||||
Gross profit | $ | 887.8 | 20.4 | % | $ | 961.9 | 21.3 | % | (7.7) | % | |||||||||||||||||||
SG&A | $ | 552.8 | 12.7 | % | $ | 549.4 | 12.2 | % | 0.6 | % | |||||||||||||||||||
Income (loss) from operations | $ | 335.0 | 7.7 | % | $ | 412.5 | 9.1 | % | (18.8) | % |
2019 | 2018 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 2,726.6 | — | $ | 2,950.4 | — | (7.6) | % | |||||||||||||||||||||
Income from operations | $ | 196.2 | 7.2 | % | $ | 300.5 | 10.2 | % | (34.7) | % |
2019 | 2018 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 1,602.6 | — | $ | 1,576.8 | — | 1.6 | % | |||||||||||||||||||||
Income from operations | $ | 227.9 | 14.2 | % | $ | 211.1 | 13.4 | % | 8.0 | % |
2019 | 2018 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 23.9 | — | $ | (10.0) | — | 339.0 | % | |||||||||||||||||||||
Loss from operations | $ | (89.1) | * | $ | (99.1) | * | 10.1 | % |
2018 | 2017 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 4,517.2 | — | $ | 3,793.7 | — | 19.1 | % | |||||||||||||||||||||
Gross profit | $ | 961.9 | 21.3 | % | $ | 767.3 | 20.2 | % | 25.4 | % | |||||||||||||||||||
SG&A | $ | 549.4 | 12.2 | % | $ | 539.1 | 14.2 | % | 1.9 | % | |||||||||||||||||||
Income (loss) from operations | $ | 412.5 | 9.1 | % | $ | 228.2 | 6.0 | % | 80.8 | % |
2018 | 2017 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 2,950.4 | — | $ | 2,433.2 | — | 21.3 | % | |||||||||||||||||||||
Income (loss) from operations | $ | 300.5 | 10.2 | % | $ | 199.8 | 8.2 | % | 50.4 | % |
2018 | 2017 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | 1,576.8 | — | $ | 1,326.3 | — | 18.9 | % | |||||||||||||||||||||
Income (loss) from operations | $ | 211.1 | 13.4 | % | $ | 148.9 | 11.2 | % | 41.8 | % |
2018 | 2017 | ||||||||||||||||||||||||||||
% of Sales | % of Sales | % Change In Reported Amounts | |||||||||||||||||||||||||||
($ amounts in millions) | |||||||||||||||||||||||||||||
Net sales | $ | (10.0) | — | $ | 34.2 | — | (129.2) | % | |||||||||||||||||||||
Income (loss) from operations | $ | (99.1) | * | $ | (120.5) | * | 17.8 | % |
($ amounts in millions) | Increase | Decrease | |||||||||||||||||||||
Discount Rate | Expected long- term rate of return | Discount Rate | Expected long- term rate of return | ||||||||||||||||||||
U. S. Plan: | |||||||||||||||||||||||
Net pension expense | $ | (0.2) | $ | — | $ | 0.2 | $ | — | |||||||||||||||
Projected benefit obligation | $ | (1.2) | $ | — | $ | 1.2 | — | ||||||||||||||||
Non-U.S. Plans: | |||||||||||||||||||||||
Net pension expense | $ | 0.2 | $ | (0.3) | $ | (0.1) | $ | 0.3 | |||||||||||||||
Projected benefit obligation | $ | (5.9) | $ | — | $ | 6.3 | — |
Year Ended 12/31/2019 | ||||||||
Net cash provided by (used in) operating activities | 173.4 | |||||||
Increase (decrease) in TFS assets | (31.1) | |||||||
Capital expenditures, net of proceeds from sale of capital assets (1) | (94.4) | |||||||
Deal related net working capital adjustment | 38.5 | |||||||
Free cash flow | $ | 86.4 |
Three months ended 12/31/19 | |||||
Net Sales | $ | 885.0 | |||
x | 4 | ||||
Trailing Three Month Annualized Net Sales | $ | 3,540.0 |
As of 12/31/19 | |||||
Inventories | $ | 847.7 | |||
Trade Receivables | 401.9 | ||||
Trade Accounts Payable | (508.1) | ||||
Customer Advances | (17.9) | ||||
Working Capital | $ | 723.6 |
Payments due by period | |||||||||||||||||||||||||||||
Total | < 1 year | 1-3 years | 3-5 years | > 5 years | |||||||||||||||||||||||||
Long-term debt obligations | $ | 1,450.9 | $ | 63.2 | $ | 123.7 | $ | 659.5 | $ | 604.5 | |||||||||||||||||||
Finance lease obligations | 4.1 | 1.0 | 2.0 | 1.0 | 0.1 | ||||||||||||||||||||||||
Operating lease obligations | 153.2 | 34.2 | 52.6 | 38.8 | 27.6 | ||||||||||||||||||||||||
Purchase obligations (1) | 528.5 | 527.8 | 0.6 | 0.1 | — | ||||||||||||||||||||||||
Total | $ | 2,136.7 | $ | 626.2 | $ | 178.9 | $ | 699.4 | $ | 632.2 |
Page | |||||
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Cost of goods sold | ( | ( | ( | ||||||||||||||
Gross profit | |||||||||||||||||
Selling, general and administrative expenses | ( | ( | ( | ||||||||||||||
Income (loss) from operations | |||||||||||||||||
Other income (expense) | |||||||||||||||||
Interest income | |||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||
Loss on early extinguishment of debt | ( | ( | |||||||||||||||
Other income (expense) – net | ( | ( | |||||||||||||||
Income (loss) from continuing operations before income taxes | |||||||||||||||||
(Provision for) benefit from income taxes | ( | ( | ( | ||||||||||||||
Income (loss) from continuing operations | |||||||||||||||||
Income (loss) from discontinued operations – net of tax | ( | ( | ( | ||||||||||||||
Gain (loss) on disposition of discontinued operations – net of tax | |||||||||||||||||
Net income (loss) | $ | $ | $ | ||||||||||||||
Basic earnings (loss) per share: | |||||||||||||||||
Income (loss) from continuing operations | $ | $ | $ | ||||||||||||||
Income (loss) from discontinued operations – net of tax | ( | ( | ( | ||||||||||||||
Gain (loss) on disposition of discontinued operations – net of tax | |||||||||||||||||
Net income (loss) | $ | $ | $ | ||||||||||||||
Diluted earnings (loss) per share: | |||||||||||||||||
Income (loss) from continuing operations | $ | $ | $ | ||||||||||||||
Income (loss) from discontinued operations – net of tax | ( | ( | ( | ||||||||||||||
Gain (loss) on disposition of discontinued operations – net of tax | |||||||||||||||||
Net income (loss) | $ | $ | $ | ||||||||||||||
Weighted average number of shares outstanding in per share calculation | |||||||||||||||||
Basic | |||||||||||||||||
Diluted |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Net income (loss) | $ | $ | $ | |||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Cumulative translation adjustment, net of (provision for) benefit from taxes of $(3.9), $0.0 and $(7.5), respectively | ( | |||||||||||||||||||
Derivative hedging adjustment, net of (provision for) benefit from taxes of $(1.6), $1.7 and $(1.2), respectively | ( | |||||||||||||||||||
Debt and equity securities adjustment, net of (provision for) benefit from taxes of $0.0, $0.0 and $0.0, respectively | ( | |||||||||||||||||||
Pension liability adjustment: | ||||||||||||||||||||
Net gain (loss), net of (provision for) benefit from taxes of $1.9, $1.0 and $(2.8), respectively | ( | ( | ||||||||||||||||||
Amortization of actuarial (gain) loss, net of provision for (benefit from) taxes of $(0.6), $(1.7) and $(2.2), respectively | ||||||||||||||||||||
Settlement of U.S. defined benefit pension obligations, net of provision for (benefit from) taxes of $0.0, $(24.4) and $0.0, respectively | ||||||||||||||||||||
Divestiture of business, net of provision for (benefit from) taxes of $(5.3), $0.0 and $(23.9), respectively | ||||||||||||||||||||
Foreign exchange and other effects, net of (provision for) benefit from taxes of $(0.7), $0.2 and $1.9, respectively | ( | ( | ||||||||||||||||||
Total pension liability adjustment | ||||||||||||||||||||
Other comprehensive income (loss) | ( | |||||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | |||||||||||||||||
December 31, | |||||||||||
2019 | 2018 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade receivables (net of allowance of $9.9 and $9.1 at December 31, 2019 and 2018, respectively) | |||||||||||
Inventories | |||||||||||
Prepaid and other current assets | |||||||||||
Current assets held for sale | |||||||||||
Total current assets | |||||||||||
Non-current assets | |||||||||||
Property, plant and equipment – net | |||||||||||
Goodwill | |||||||||||
Intangible assets – net | |||||||||||
Other assets | |||||||||||
Non-current assets held for sale | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Trade accounts payable | |||||||||||
Accrued compensation and benefits | |||||||||||
Other current liabilities | |||||||||||
Current liabilities held for sale | |||||||||||
Total current liabilities | |||||||||||
Non-current liabilities | |||||||||||
Long-term debt, less current portion | |||||||||||
Other non-current liabilities | |||||||||||
Non-current liabilities held for sale | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity | |||||||||||
Common stock, $.01 par value – authorized 300.0 shares; issued 82.2 and 81.3 shares at December 31, 2019 and 2018, respectively | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Less cost of shares of common stock in treasury – 11.8 and 11.7 shares at December 31, 2019 and 2018, respectively | ( | ( | |||||||||
Total Terex Corporation stockholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Outstanding Shares | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock in Treasury | Non-controlling Interest | Total | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2016 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) – net of tax | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | |||||||||||||||||||||||||||||||||||||||||||||||
Compensation under stock-based plans – net | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Divestiture | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) – net of tax | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | |||||||||||||||||||||||||||||||||||||||||||||||
Compensation under stock-based plans – net | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury stock | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) – net of tax | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | |||||||||||||||||||||||||||||||||||||||||||||||
Compensation under stock-based plans – net | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Divestiture | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Operating Activities | |||||||||||||||||
Net income (loss) | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
(Gain) loss on disposition of discontinued operations | ( | ( | ( | ||||||||||||||
Deferred taxes | ( | ( | |||||||||||||||
Impairments | |||||||||||||||||
(Gain) loss on sale of assets | ( | ( | ( | ||||||||||||||
Loss on early extinguishment of debt | |||||||||||||||||
Stock-based compensation expense | |||||||||||||||||
Pension plan settlements | |||||||||||||||||
Inventory and other non-cash charges | |||||||||||||||||
Changes in operating assets and liabilities (net of effects of acquisitions and divestitures): | |||||||||||||||||
Trade receivables | ( | ( | |||||||||||||||
Inventories | ( | ( | |||||||||||||||
Trade accounts payable | ( | ||||||||||||||||
Other assets and liabilities | ( | ( | ( | ||||||||||||||
Foreign exchange and other operating activities, net | ( | ( | |||||||||||||||
Net cash provided by (used in) operating activities | |||||||||||||||||
Investing Activities | |||||||||||||||||
Capital expenditures | ( | ( | ( | ||||||||||||||
Proceeds from sale of capital assets | |||||||||||||||||
Proceeds from disposition of investments | |||||||||||||||||
Proceeds (payments) from disposition of discontinued operations | |||||||||||||||||
Other investing activities, net | ( | ||||||||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||||||||
Financing Activities | |||||||||||||||||
Repayments of debt | ( | ( | ( | ||||||||||||||
Proceeds from issuance of debt | |||||||||||||||||
Payment of debt extinguishment costs | ( | ( | |||||||||||||||
Share repurchases | ( | ( | ( | ||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Other financing activities, net | ( | ( | ( | ||||||||||||||
Net cash provided by (used in) financing activities | ( | ( | ( | ||||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | ( | ( | |||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | ( | ||||||||||||||||
Cash and Cash Equivalents at Beginning of Period | |||||||||||||||||
Cash and Cash Equivalents at End of Period | $ | $ | $ |
Balance as of December 31, 2017 | $ | ||||
Accruals for warranties issued during the period | |||||
Changes in estimates | |||||
Settlements during the period | ( | ||||
Foreign exchange effect/other | ( | ||||
Balance as of December 31, 2018 | |||||
Accruals for warranties issued during the period | |||||
Changes in estimates | |||||
Settlements during the period | ( | ||||
Foreign exchange effect/other | |||||
Balance as of December 31, 2019 | $ |
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Net sales | |||||||||||||||||
AWP | $ | $ | $ | ||||||||||||||
MP | |||||||||||||||||
Corporate and Other / Eliminations | ( | ||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Income (loss) from operations | |||||||||||||||||
AWP | $ | $ | $ | ||||||||||||||
MP | |||||||||||||||||
Corporate and Other / Eliminations | ( | ( | ( | ||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Depreciation and amortization | |||||||||||||||||
AWP | $ | $ | $ | ||||||||||||||
MP | |||||||||||||||||
Corporate | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Capital expenditures | |||||||||||||||||
AWP | $ | $ | $ | ||||||||||||||
MP | |||||||||||||||||
Corporate | |||||||||||||||||
Total | $ | $ | $ |
December 31, | |||||||||||
2019 | 2018 | ||||||||||
Identifiable assets | |||||||||||
AWP | $ | $ | |||||||||
MP | |||||||||||
Corporate and Other / Eliminations (1) | ( | ( | |||||||||
Assets held for sale (2) | |||||||||||
Total | $ | $ |
December 31, | |||||||||||
2019 | 2018 | ||||||||||
Long-lived Assets | |||||||||||
United States | $ | $ | |||||||||
United Kingdom | |||||||||||
Germany | |||||||||||
Other European countries | |||||||||||
All other | |||||||||||
Total | $ | $ |
Year Ended December 31, 2019 | |||||||||||||||||||||||
AWP | MP | Corporate and Other / Eliminations | Total | ||||||||||||||||||||
Net sales by region | |||||||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
Western Europe | |||||||||||||||||||||||
Asia-Pacific | |||||||||||||||||||||||
Rest of World (1) | ( | ||||||||||||||||||||||
Total (2) | $ | $ | $ | $ |
Year Ended December 31, 2018 | |||||||||||||||||||||||
AWP | MP | Corporate and Other / Eliminations | Total | ||||||||||||||||||||
Net sales by region | |||||||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
Western Europe | |||||||||||||||||||||||
Asia-Pacific | |||||||||||||||||||||||
Rest of World (1) | ( | ||||||||||||||||||||||
Total (2) | $ | $ | $ | ( | $ |
Year Ended December 31, 2017 | |||||||||||||||||||||||
AWP | MP | Corporate and Other / Eliminations | Total | ||||||||||||||||||||
Net sales by region | |||||||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
Western Europe | |||||||||||||||||||||||
Asia-Pacific | |||||||||||||||||||||||
Rest of World (1) | ( | ||||||||||||||||||||||
Total (2) | $ | $ | $ | $ |
Year Ended December 31, 2019 | |||||||||||||||||||||||
AWP | MP | Corporate and Other / Eliminations | Total | ||||||||||||||||||||
Net sales by product type | |||||||||||||||||||||||
Aerial Work Platforms | $ | $ | $ | $ | |||||||||||||||||||
Materials Processing Equipment | |||||||||||||||||||||||
Specialty Equipment | |||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Year Ended December 31, 2018 | |||||||||||||||||||||||
AWP | MP | Corporate and Other / Eliminations | Total | ||||||||||||||||||||
Net sales by product type | |||||||||||||||||||||||
Aerial Work Platforms | $ | $ | $ | $ | |||||||||||||||||||
Materials Processing Equipment | |||||||||||||||||||||||
Specialty Equipment | |||||||||||||||||||||||
Other (1) | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Year Ended December 31, 2017 | |||||||||||||||||||||||
AWP | MP | Corporate and Other / Eliminations | Total | ||||||||||||||||||||
Net sales by product type | |||||||||||||||||||||||
Aerial Work Platforms | $ | $ | $ | $ | |||||||||||||||||||
Materials Processing Equipment | |||||||||||||||||||||||
Specialty Equipment | |||||||||||||||||||||||
Other (1) | ( | ||||||||||||||||||||||
Compact Construction Equipment (2) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
United States | $ | ( | $ | ( | $ | ( | ||||||||||||||
Foreign | ||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | $ | $ |
Year Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Current: | ||||||||||||||||||||
Federal | $ | $ | $ | ( | ||||||||||||||||
State | ||||||||||||||||||||
Foreign | ||||||||||||||||||||
Current income tax provision (benefit) | ||||||||||||||||||||
Deferred: | ||||||||||||||||||||
Federal | ( | ( | ||||||||||||||||||
State | ( | ( | ||||||||||||||||||
Foreign | ||||||||||||||||||||
Deferred income tax (benefit) provision | ( | ( | ||||||||||||||||||
Provision for (benefit from) income taxes | $ | $ | $ |
2019 | 2018 | |||||||||||||
Property, plant and equipment | $ | ( | $ | ( | ||||||||||
Intangibles | ( | ( | ||||||||||||
Inventories | ||||||||||||||
Accrued warranties and product liability | ||||||||||||||
Loss carry forwards | ||||||||||||||
Retirement plans | ||||||||||||||
Accrued compensation and benefits | ||||||||||||||
Operating lease ROU asset | ( | — | ||||||||||||
Operating lease liability | — | |||||||||||||
Other | ||||||||||||||
Deferred tax assets valuation allowance | ( | ( | ||||||||||||
Net deferred tax assets (liabilities) | $ | $ |
Year Ended December 31, | |||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||
Tax at statutory federal income tax rate | $ | $ | $ | ||||||||||||||||||||
State taxes | ( | ||||||||||||||||||||||
Change in valuation allowance | ( | ( | ( | ||||||||||||||||||||
Foreign tax differential on income/losses of foreign subsidiaries | ( | ( | ( | ||||||||||||||||||||
U.S. tax on multi-national operations | |||||||||||||||||||||||
Change in foreign tax rates | |||||||||||||||||||||||
Tax effect of dispositions | ( | ||||||||||||||||||||||
2017 Federal Tax Act | (1) | ||||||||||||||||||||||
Expired stock awards | |||||||||||||||||||||||
Pension plan settlement | ( | ||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||
Provision for (benefit from) income taxes | $ | $ | $ | ||||||||||||||||||||
Balance as of January 1, 2017 | $ | ||||
Additions for current year tax positions | |||||
Additions for prior year tax positions | |||||
Reductions for prior year tax positions | ( | ||||
Reductions for current year tax positions | |||||
Reductions for expiration of statute of limitations | ( | ||||
Settlements | ( | ||||
Balance as of December 31, 2017 | |||||
Additions for current year tax positions | |||||
Additions for prior year tax positions | |||||
Reductions for prior year tax positions | ( | ||||
Reductions for current year tax positions | |||||
Reductions for expiration of statute of limitations | ( | ||||
Settlements | ( | ||||
Balance as of December 31, 2018 | |||||
Additions for current year tax positions | |||||
Additions for prior year tax positions | |||||
Reductions for prior year tax positions | ( | ||||
Reductions for current year tax positions | |||||
Reductions for expiration of statute of limitations | ( | ||||
Settlements | |||||
Balance as of December 31, 2019 | $ |
Year ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Cranes | Cranes | Cranes | |||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Cost of sales | ( | ( | ( | ||||||||||||||
Selling, general and administrative expenses | ( | ( | ( | ||||||||||||||
Impairment of Mobile Cranes disposal group | ( | ||||||||||||||||
Asset impairments | ( | ||||||||||||||||
Other income (expense) | ( | ( | ( | ||||||||||||||
Income (loss) from discontinued operations before income taxes | ( | ( | ( | ||||||||||||||
(Provision for) benefit from income taxes | |||||||||||||||||
Gain (loss) on disposition of discontinued operations – net of tax | |||||||||||||||||
Income (loss) from discontinued operations – net of tax | $ | ( | $ | ( | $ | ( | |||||||||||
December 31, 2019 | December 31, 2018 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade receivables – net | |||||||||||
Inventories | |||||||||||
Prepaid and other current assets | |||||||||||
Impairment reserve | ( | ( | |||||||||
Current assets held for sale | $ | $ | |||||||||
Property, plant and equipment – net | $ | $ | |||||||||
Intangible assets – net | |||||||||||
Impairment reserve | ( | ( | |||||||||
Other assets | |||||||||||
Non-current assets held for sale | $ | $ | |||||||||
Liabilities | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Trade accounts payable | |||||||||||
Accruals and other current liabilities | |||||||||||
Current liabilities held for sale | $ | $ | |||||||||
Long-term debt, less current portion | $ | $ | |||||||||
Retirement plans | |||||||||||
Other non-current liabilities | |||||||||||
Non-current liabilities held for sale | $ | $ | |||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash and cash equivalents - continuing operations | $ | $ | $ | ||||||||||||||
Cash and cash equivalents - held for sale | |||||||||||||||||
Total cash and cash equivalents | $ | $ | $ | ||||||||||||||
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Non-cash operating items: | |||||||||||||||||
Depreciation and amortization | $ | $ | $ | ||||||||||||||
Gain (loss) on disposition of discontinued operations | $ | $ | $ | ( | |||||||||||||
Deferred taxes | $ | ( | $ | ( | $ | ( | |||||||||||
Impairments | $ | $ | $ | ( | |||||||||||||
Investing activities: | |||||||||||||||||
Capital expenditures | $ | ( | $ | ( | $ | ( |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||||||
Cranes | MHPS | Other | Total | MHPS | Atlas | Other | Total | MHPS | Atlas | Total | |||||||||||||||||||||||||||||||
Gain (loss) on disposition of discontinued operations | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
(Provision for) benefit from income taxes | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||
Gain (loss) on disposition of discontinued operations – net of tax | $ | $ | ( | $ | $ | $ | ( | $ | $ | $ | $ | $ | $ |
For the year ended December 31, | |||||||||||||||||
(in millions, except per share data) | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Income (loss) from continuing operations | $ | $ | $ | ||||||||||||||
Income (loss) from discontinued operations-net of tax | ( | ( | ( | ||||||||||||||
Gain (loss) on disposition of discontinued operations-net of tax | |||||||||||||||||
Net income (loss) | $ | $ | $ | ||||||||||||||
Basic shares: | |||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||
Earnings (loss) per share - basic: | |||||||||||||||||
Income (loss) from continuing operations | $ | $ | $ | ||||||||||||||
Income (loss) from discontinued operations-net of tax | ( | ( | ( | ||||||||||||||
Gain (loss) on disposition of discontinued operations-net of tax | |||||||||||||||||
Net income (loss) | $ | $ | $ | ||||||||||||||
Diluted shares: | |||||||||||||||||
Weighted average shares outstanding - basic | |||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Restricted stock awards | |||||||||||||||||
Diluted weighted average shares outstanding | |||||||||||||||||
Earnings (loss) per share - diluted: | |||||||||||||||||
Income (loss) from continuing operations | $ | $ | $ | ||||||||||||||
Income (loss) from discontinued operations-net of tax | ( | ( | ( | ||||||||||||||
Gain (loss) on disposition of discontinued operations-net of tax | |||||||||||||||||
Net income (loss) | $ | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||||||
Commercial loans | $ | $ | |||||||||
Sales-type leases | |||||||||||
Total finance receivables, gross | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Total finance receivables, net | $ | $ |
Year Ended December 31, 2019 | Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial Loans | Sales-Type Leases | Total | Commercial Loans | Sales-Type Leases | Total | Commercial Loans | Sales-Type Leases | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charge offs | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial Loans | Sales-Type Leases | Total | Commercial Loans | Sales-Type Leases | Total | Commercial Loans | Sales-Type Leases | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Related allowance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average recorded investment |
December 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||
Allowance for credit losses, ending balance: | Commercial Loans | Sales-Type Leases | Total | Commercial Loans | Sales-Type Leases | Total | ||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||||
Total allowance for credit losses | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Finance receivables, ending balance: | ||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | ||||||||||||||||||||||||||||||||||||||
Total finance receivables | $ | $ | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Current | 31-60 days past due | 61-90 days past due | Greater than 90 days past due | Total past due | Total Finance Receivables | ||||||||||||||||||||||||||||||
Commercial loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Sales-type leases | |||||||||||||||||||||||||||||||||||
Total finance receivables | $ | $ | $ | $ | $ | $ |
December 31, 2018 | |||||||||||||||||||||||||||||||||||
Current | 31-60 days past due | 61-90 days past due | Greater than 90 days past due | Total past due | Total Finance Receivables | ||||||||||||||||||||||||||||||
Commercial loans | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Sales-type leases | |||||||||||||||||||||||||||||||||||
Total finance receivables | $ | $ | $ | $ | $ | $ |
Rating | December 31, 2019 | December 31, 2018 | ||||||||||||
Superior | $ | $ | ||||||||||||
Above Average | ||||||||||||||
Average | ||||||||||||||
Below Average | ||||||||||||||
Sub Standard | ||||||||||||||
Total | $ | $ |
December 31, | |||||||||||
2019 | 2018 | ||||||||||
Finished equipment | $ | $ | |||||||||
Replacement parts | |||||||||||
Work-in-process | |||||||||||
Raw materials and supplies | |||||||||||
Inventories | $ | $ |
December 31, | |||||||||||
2019 | 2018 | ||||||||||
Property | $ | $ | |||||||||
Plant | |||||||||||
Equipment | |||||||||||
Leasehold improvements | |||||||||||
Construction in progress | |||||||||||
Property, plant and equipment – gross | |||||||||||
Less: Accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment – net | $ | $ |
AWP | MP | Total | |||||||||||||||
Balance at December 31, 2017, gross | $ | $ | $ | ||||||||||||||
Accumulated impairment | ( | ( | ( | ||||||||||||||
Balance at December 31, 2017, net | |||||||||||||||||
Foreign exchange effect and other | ( | ( | ( | ||||||||||||||
Balance at December 31, 2018, gross | |||||||||||||||||
Accumulated impairment | ( | ( | ( | ||||||||||||||
Balance at December 31, 2018, net | |||||||||||||||||
Foreign exchange effect and other | |||||||||||||||||
Balance at December 31, 2019, gross | |||||||||||||||||
Accumulated impairment | ( | ( | ( | ||||||||||||||
Balance at December 31, 2019, net | $ | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||||||||
Weighted Average Life (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||
Definite-lived intangible assets: | |||||||||||||||||||||||||||||||||||||||||
Technology | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Customer Relationships | ( | ( | |||||||||||||||||||||||||||||||||||||||
Land Use Rights | ( | ( | |||||||||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total definite-lived intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||||||||
Aggregate Amortization Expense | $ | $ | $ |
2020 | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 |
December 31, 2019 | December 31, 2018 | |||||||||||||||||||
Instrument (1) | Balance Sheet Account | Derivatives designated as hedges | Derivatives not designated as hedges | Derivatives designated as hedges | Derivatives not designated as hedges | |||||||||||||||
Foreign exchange contracts | Other current assets | $ | $ | $ | $ | |||||||||||||||
Cross currency swaps | Other current assets | |||||||||||||||||||
Debt conversion feature | Other assets | |||||||||||||||||||
Foreign exchange contracts | Other current liabilities | $ | ( | $ | $ | ( | $ | |||||||||||||
Commodity swaps | Other current liabilities | ( | ||||||||||||||||||
Cross currency swaps | Other non-current liabilities | ( | ||||||||||||||||||
Net derivative asset (liability) | $ | $ | $ | ( | $ |
Gain (Loss) Recognized on Derivatives in OCI, net of tax | Gain (Loss) Reclassified from AOCI into Income | ||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||
Instrument | 2019 | 2018 | Income Statement Account | 2019 | 2018 | ||||||||||||
Foreign exchange contracts | $ | $ | ( | Cost of goods sold | $ | ( | $ | ( | |||||||||
Commodity swaps | ( | Cost of goods sold | ( | ( | |||||||||||||
Cross currency swaps | Other income (expense) - net | ||||||||||||||||
Total | $ | $ | ( | Total | $ | ( | $ |
Gain (Loss) Recognized on Derivatives in OCI, net of tax: | Year Ended December 31, 2017 | ||||
Instrument | |||||
Foreign exchange contracts | $ | ||||
Cross currency swaps | ( | ||||
Total | $ | ||||
Gain (Loss) Reclassified from AOCI into Income (Loss) (Effective): | Year Ended December 31, 2017 | ||||
Income Statement Account | |||||
Cost of goods sold | $ | ||||
Other income (expense) – net | ( | ||||
Total | $ | ( | |||
Classification and amount of Gain or Loss Recognized in Income | |||||||||||||||||
Cost of goods sold | Other income (expense) - net | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Income Statement Accounts in which effects of cash flow hedges are recorded | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||
Gain (Loss) Reclassified from AOCI into Income (Loss): | |||||||||||||||||
Foreign exchange contracts | ( | ( | |||||||||||||||
Commodity swaps | ( | ( | |||||||||||||||
Cross currency swaps | |||||||||||||||||
Total | $ | ( | $ | ( | $ | $ |
Gain (Loss) Recognized on Derivatives (Ineffective) in Income (Loss): | December 31, 2017 | ||||
Income Statement Account | |||||
Cost of goods sold | $ | ||||
Other income (expense) – net | ( | ||||
Total | $ |
Year Ended December 31, | ||||||||||||||
Instrument | Income Statement Account | 2019 | 2018 | 2017 | ||||||||||
Foreign exchange contracts | Other income (expense) – net | $ | ( | $ | ( | $ | ( | |||||||
Debt conversion feature | Other income (expense) – net | $ | ( | $ | ( | $ | ||||||||
Total | $ | ( | $ | ( | $ | ( |
December 31, | |||||||||||
2019 | 2018 | ||||||||||
5-5/8% Senior Notes due February 1, 2025, net of unamortized debt issuance costs of $7.5 and $8.9 at December 31, 2019 and 2018, respectively | $ | $ | |||||||||
2017 Credit Agreement – term debt due January 31, 2024 (“Original Term Loan”, as defined below), net of unamortized debt issuance costs of $4.0 and $5.0 at December 31, 2019 and 2018, respectively | |||||||||||
2017 Credit Agreement – term debt due January 31, 2024 (“2019 Term Loan”, as defined below), net of unamortized debt issuance costs of $2.1 at December 31, 2019 | |||||||||||
2017 Credit Agreement – revolver | |||||||||||
Finance lease obligations | |||||||||||
Other | |||||||||||
Total debt | |||||||||||
Less: Current portion of long-term debt | ( | ( | |||||||||
Long-term debt, less current portion | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||
Continuing Operations | Discontinued Operations | Total | Continuing Operations | Discontinued Operations | Total | ||||||||||||||||||||||||||||||
$400 Million Facility | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
$300 Million Facility | |||||||||||||||||||||||||||||||||||
Bilateral Arrangements | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total Debt | |||||
Less: Unamortized debt issuance costs | $ | ( | |||
Net debt | $ |
2019 | Book Value | Quote | FV | ||||||||||||||
5-5/8% Notes | $ | $ | $ | ||||||||||||||
2017 Credit Agreement - Original Term Loan (net of discount) | $ | $ | $ | ||||||||||||||
2017 Credit Agreement - 2019 Term Loan (net of discount) | $ | $ | $ |
2018 | Book Value | Quote | FV | ||||||||||||||
5-5/8% Notes | $ | $ | $ | ||||||||||||||
2017 Credit Agreement - Original Term Loan (net of discount) | $ | $ | $ | ||||||||||||||
Year Ended | |||||
December 31, 2019 | |||||
Operating lease cost | $ | ||||
Variable lease cost | |||||
Short-term lease cost | |||||
Total operating lease costs | $ |
December 31, 2019 | |||||
Operating lease right-of-use assets included within Other assets | $ | ||||
Current maturities of operating leases included within Other current liabilities | $ | ||||
Non-current operating leases included within Other liabilities | |||||
Total operating lease liabilities | $ | ||||
Weighted average discount rate for operating leases | % | ||||
Weighted average remaining operating lease term in years | |||||
Years Ending December 31, | December 31, 2019 | ||||
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total undiscounted operating lease payments | |||||
Less: Imputed interest | ( | ||||
Total operating lease liabilities | |||||
Less: Current maturities of operating lease liabilities | ( | ||||
Non-current operating lease liabilities | $ |
Year Ended | |||||
December 31, 2019 | |||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | ||||
Operating right-of-use assets obtained in exchange for operating lease liabilities | $ |
2019 | $ | ||||
2020 | |||||
2021 | |||||
2022 | |||||
2023 | |||||
Thereafter | |||||
Total minimum obligations | $ | ||||
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Accumulated benefit obligation at end of year | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Service cost | |||||||||||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||
Transfer from held for sale | |||||||||||||||||||||||||||||||||||
Settlements | ( | ( | ( | ||||||||||||||||||||||||||||||||
Curtailments | ( | ||||||||||||||||||||||||||||||||||
Plan amendments | |||||||||||||||||||||||||||||||||||
Actuarial loss (gain) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Foreign exchange effect | ( | ||||||||||||||||||||||||||||||||||
Benefit obligation at end of year | |||||||||||||||||||||||||||||||||||
Change in plan assets: | |||||||||||||||||||||||||||||||||||
Fair value of plan assets at beginning of year | |||||||||||||||||||||||||||||||||||
Actual return on plan assets | ( | ( | |||||||||||||||||||||||||||||||||
Settlements | ( | ( | ( | ||||||||||||||||||||||||||||||||
Employer contribution | |||||||||||||||||||||||||||||||||||
Employee contribution | |||||||||||||||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Transfer to held for sale | ( | ||||||||||||||||||||||||||||||||||
Foreign exchange effect | ( | ||||||||||||||||||||||||||||||||||
Fair value of plan assets at end of year | |||||||||||||||||||||||||||||||||||
Funded status | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Amounts recognized in the statement of financial position are included in: | |||||||||||||||||||||||||||||||||||
Other current liabilities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Other non-current liabilities | |||||||||||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amounts recognized in accumulated other comprehensive loss consist of: | |||||||||||||||||||||||||||||||||||
Actuarial net loss | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Prior service cost | |||||||||||||||||||||||||||||||||||
Total amounts recognized in accumulated other comprehensive loss | $ | $ | ( | $ | $ | $ | $ |
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Weighted-average assumptions as of December 31: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Discount rate(1) | % | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||
Expected return on plan assets | % | % | % | % | % | % | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||
Rate of compensation increase(1) | % | % | % | % | % | % | N/A | N/A | N/A |
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic cost: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of prior service cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of actuarial loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Net periodic cost | $ | $ | $ | $ | $ | $ | $ | $ | $ | ( |
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss): | |||||||||||||||||||||||||||||||||||
Net (gain) loss | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||
Amortization of actuarial gain (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Amortization of prior service cost | ( | ( | |||||||||||||||||||||||||||||||||
Disposals | ( | ||||||||||||||||||||||||||||||||||
Settlements | ( | ( | ( | ||||||||||||||||||||||||||||||||
Foreign exchange effect | ( | ||||||||||||||||||||||||||||||||||
Total recognized in other comprehensive income (loss) | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Benefits | |||||||||||||||
Amounts expected to be recognized as components of net periodic cost for the year ending December 31, 2020: | |||||||||||||||||
Actuarial net loss | $ | $ | $ | ||||||||||||||
Prior service cost | |||||||||||||||||
Total amount expected to be recognized as components of net periodic cost for the year ending December 31, 2020 | $ | $ | $ |
U.S. Pension Benefits | Non-U.S. Pension Benefits | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Projected benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
Accumulated benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
Fair value of plan assets | $ | $ | $ | $ |
Non-U.S. Pension Plans | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Cash, including money market funds | $ | $ | $ | $ | |||||||||||||||||||
U.S. equities | |||||||||||||||||||||||
Non-U.S. equities | |||||||||||||||||||||||
Non-U.S. corporate bond funds | |||||||||||||||||||||||
Non-U.S. governmental fixed income funds | |||||||||||||||||||||||
Group annuity insurance contracts | |||||||||||||||||||||||
Real estate | |||||||||||||||||||||||
Other securities | |||||||||||||||||||||||
Total investments measured at fair value | $ | $ | $ | $ |
Non-U.S. Pension Plans | ||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Cash, including money market funds | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. equities | ||||||||||||||||||||||||||
Non-U.S. equities | ||||||||||||||||||||||||||
Non-U.S. corporate bond funds | ||||||||||||||||||||||||||
Non-U.S. governmental fixed income funds | ||||||||||||||||||||||||||
Real estate | ||||||||||||||||||||||||||
Other securities | ||||||||||||||||||||||||||
Total investments measured at fair value | $ | $ | $ | $ |
Non-U.S. Pension Benefits | ||||||||
Balance at beginning of year | $ | |||||||
Transfers into Level 3 | ||||||||
Balance at end of year | $ |
Year Ending December 31, | U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Benefits | |||||||||||||||||
2020 | $ | $ | $ | |||||||||||||||||
2021 | $ | $ | $ | |||||||||||||||||
2022 | $ | $ | $ | |||||||||||||||||
2023 | $ | $ | $ | |||||||||||||||||
2024 | $ | $ | $ | |||||||||||||||||
2025-2029 | $ | $ | $ |
Grant date | Grant date | Grant date | |||||||||||||||
March 12, 2019 | March 8, 2018 | March 2, 2017 | |||||||||||||||
Dividend yields | |||||||||||||||||
Expected historical volatility | |||||||||||||||||
Risk free interest rate | |||||||||||||||||
Expected life (in years) | |||||||||||||||||
Grant date fair value per share | $ | $ | $ |
Restricted Stock Awards | Weighted Average Grant Date Fair Value | |||||||||||||
Nonvested at December 31, 2018 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Canceled, expired or other | ( | $ | ||||||||||||
Nonvested at December 31, 2019 | $ |
Cumulative Translation Adjustment | Derivative Hedging Adjustment | Debt & Equity Securities Adjustment | Pension Liability Adjustment | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||
Balance at January 1, 2017 | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||
Current year change | ||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | ( | ( | ( | |||||||||||||||||||||||||||||
Current year change | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Balance at December 31, 2018 | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Current year change | ||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Year ended December 31, 2019 | Year ended December 31, 2018 | ||||||||||||||||||||||||||||||||||
CTA (1) | Derivative Hedging Adj. | Debt & Equity Securities Adj. | Pension Liability Adj. (2) | Total | CTA | Derivative Hedging Adj. | Debt & Equity Securities Adj. | Pension Liability Adj. (3) | Total | ||||||||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||
Amounts reclassified from AOCI | ( | ||||||||||||||||||||||||||||||||||
Net other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Other (4) | ( | ( | |||||||||||||||||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( |
Balance Beginning of Year | Charges to Earnings | Other (1) | Deductions (2) | Balance End of Year | |||||||||||||||||||||||||
Year ended December 31, 2019 | |||||||||||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||||||||||
Allowance for doubtful accounts - Current | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Allowance for doubtful accounts - Non-current | ( | ||||||||||||||||||||||||||||
Reserve for inventory | ( | ||||||||||||||||||||||||||||
Valuation allowances for deferred tax assets | ( | ( | |||||||||||||||||||||||||||
Totals | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Year ended December 31, 2018 | |||||||||||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||||||||||
Allowance for doubtful accounts - Current | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Allowance for doubtful accounts - Non-current | ( | ||||||||||||||||||||||||||||
Reserve for inventory | ( | ( | |||||||||||||||||||||||||||
Valuation allowances for deferred tax assets | ( | ( | |||||||||||||||||||||||||||
Totals | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||
Year ended December 31, 2017 | |||||||||||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||||||||||
Allowance for doubtful accounts - Current | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Allowance for doubtful accounts - Non-current | ( | ||||||||||||||||||||||||||||
Reserve for inventory | ( | ||||||||||||||||||||||||||||
Valuation allowances for deferred tax assets | ( | ||||||||||||||||||||||||||||
Totals | $ | $ | $ | ( | $ | ( | $ |
Cover Page Cover page |
Aug. 07, 2020 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Aug. 07, 2020 |
Entity File Number | 1-10702 |
Entity Registrant Name | TEREX CORP |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 34-1531521 |
Entity Address, Address Line One | 200 Nyala Farm Road |
Entity Address, City or Town | Westport |
Entity Address, State or Province | CT |
Entity Address, Postal Zip Code | 06880 |
City Area Code | 203 |
Local Phone Number | 222-7170 |
Title of 12(b) Security | Common Stock ($0.01 par value) |
Trading Symbol | TEX |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000097216 |
Amendment Flag | false |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (PARENTHETICAL) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Statement of Comprehensive Income [Abstract] | |||
Cumulative translation adjustment, tax portion | $ (3.9) | $ 0.0 | $ (7.5) |
Derivative hedging adjustment, tax portion | (1.6) | 1.7 | (1.2) |
Debt and equity securities adjustment, tax portion | 0.0 | 0.0 | 0.0 |
Pension - Net gain (loss), tax portion | 1.9 | 1.0 | (2.8) |
Pension - Amortization of actuarial (gain) loss, tax portion | (0.6) | (1.7) | (2.2) |
Pension - Settlement of U.S. defined benefit pension obligations, tax portion | 0.0 | (24.4) | 0.0 |
Pension - Divestitiure of business, tax portion | (5.3) | 0.0 | (23.9) |
Pension - Foreign exchange and other effects, tax portion | $ (0.7) | $ 0.2 | $ 1.9 |
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Current assets | ||
Allowance for Doubtful Accounts Receivable, Current | $ 9.9 | $ 9.1 |
Stockholders’ equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 300,000,000.0 | 300,000,000.0 |
Common Stock, Shares, Issued | 82,200,000 | 81,300,000 |
Treasury Stock, Shares | 11,800,000 | 11,700,000 |
BASIS OF PRESENTATION |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation and Principles of Consolidation. The Consolidated Financial Statements include the accounts of Terex Corporation, its majority-owned subsidiaries and other controlled subsidiaries (“Terex” or the “Company”). The Company consolidates all majority-owned and controlled subsidiaries, applies equity method of accounting for investments in which the Company is able to exercise significant influence, and applies the cost method for all other investments. All intercompany balances, transactions and profits have been eliminated. Certain prior period amounts have been reclassified to conform with the 2019 presentation. As further described in Note D - “Discontinued Operations and Assets and Liabilities Held for Sale”, on July 31, 2019, the Company completed the disposition of its Demag® mobile cranes business (“Demag”) to Tadano Ltd. and certain of its subsidiaries (“Tadano”). During 2019, the Company also exited North American mobile crane product lines manufactured in its Oklahoma City facility. As a result, the Company reported these operations, formerly part of the Cranes segment, in discontinued operations in the Consolidated Statement of Income (Loss) for all periods presented, and in assets and liabilities held for sale in the Consolidated Balance Sheet at December 31, 2019 and 2018. Other operations formerly part of the Cranes segment were reorganized to align with the Company’s new management and reporting structure. The utilities business has been consolidated within Aerial Work Platforms (“AWP”) and the pick and carry, rough terrain and tower cranes businesses have been consolidated within Materials Processing (“MP”). The Company now manages and reports its business in the following segments: (i) AWP and (ii) MP. Prior period amounts have been reclassified to conform with the 2019 presentation. See Note B - “Business Segment Information” and Note D - “Discontinued Operations and Assets and Liabilities Held for Sale” for further information. Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Cash and Cash Equivalents. Cash equivalents consist of highly liquid investments with original maturities of three months or less. Carrying amount of cash and cash equivalents approximates its fair value. Cash and cash equivalents at December 31, 2019 and 2018 include $4.6 million and $12.6 million, respectively, which were not immediately available for use. These consist primarily of cash balances held in escrow to secure various obligations of the Company. Inventories. Inventories are stated at the lower of cost or net realizable value (“NRV”). Cost is determined by the average cost and first-in, first-out (“FIFO”) methods (approximately 10% and 90%, respectively). In valuing inventory, the Company is required to make assumptions regarding the level of reserves required to value potentially obsolete or over-valued items at lower of cost or NRV. These assumptions require the Company to analyze aging of and forecasted demand for its inventory, forecasted future product sales prices, pricing trends and margins, and to make judgments and estimates regarding obsolete or excess inventory. Future product sales prices, pricing trends and margins are based on the best available information at that time including actual orders received, negotiations with the Company’s customers for future orders, including their plans for expenditures, and market trends for similar products. The Company’s judgments and estimates for excess or obsolete inventory are based on analysis of actual and forecasted usage. The valuation of used equipment taken in trade from customers requires the Company to use best information available to determine the value of the equipment to potential customers. This value is subject to change based on numerous conditions. Inventory reserves are established taking into account age, frequency of use, or sale, and in the case of repair parts, installed base of machines. While calculations are made involving these factors, significant management judgment regarding expectations for future events is involved. Future events that could significantly influence the Company’s judgment and related estimates include general economic conditions in markets where the Company’s products are sold, new equipment price fluctuations, actions of the Company’s competitors, including introduction of new products and technological advances, as well as new products and design changes the Company introduces. The Company makes adjustments to its inventory reserves based on the identification of specific situations and increases its inventory reserves accordingly. As further changes in future economic or industry conditions occur, the Company may revise estimates that were used to calculate its inventory reserves. At December 31, 2019 and 2018, reserves for lower of cost or NRV, excess and obsolete inventory totaled $53.2 million and $49.8 million, respectively. If actual conditions are less favorable than those the Company has projected, the Company will increase its reserves for lower of cost or NRV, excess and obsolete inventory accordingly. Any increase in the Company’s reserves will adversely impact its results of operations. Establishment of a reserve for lower of cost or NRV, excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. Shipping and handling costs for product shipments to customers are recorded in Cost of goods sold (“COGS”). Debt Issuance Costs. Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized over the term of the associated debt. Debt issuance costs related to senior notes and term loans are presented in the balance sheet as a direct deduction from the carrying amount of the borrowing, consistent with debt discounts. Debt issuance costs related to securing the Company’s revolving line of credit are presented in Other assets. Debt issuance costs related to debt that is extinguished early are charged to expense at the time of retirement. Debt issuance costs were $17.0 million and $19.0 million (net of accumulated amortization of $12.2 million and $7.6 million) at December 31, 2019 and 2018, respectively. Intangible Assets. Intangible assets include purchased patents, trademarks, customer relationships and other specifically identifiable assets and are amortized on a straight-line basis over the respective estimated useful lives, which range from one to ninety-nine years. Intangible assets are reviewed for impairment when circumstances warrant. Goodwill. Goodwill is assigned to one or more reporting segments on the date of acquisition. The Company reviews its goodwill for impairment annually during the fourth quarter of each fiscal year and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of any one of its reporting units below its respective carrying amount. In performing the goodwill impairment test, the Company first performs a qualitative assessment, which requires that it consider events or circumstances including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting segment’s net assets and changes in its stock price. If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair values of its reporting segments are greater than the carrying amounts, then the quantitative goodwill impairment test is not performed. If the qualitative assessment indicates that the quantitative analysis should be performed, the Company then evaluates goodwill for impairment by comparing the fair value of each of its reporting segments to its carrying value, including the associated goodwill. To determine the fair values, the Company uses an income approach, along with other relevant market information, derived from a discounted cash flow model to estimate fair value of its reporting units. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any, would be recognized. The loss recognized would not exceed total amount of goodwill allocated to that reporting unit. The Company completed its annual impairment test in the fourth quarter of 2019. The Company determined, after performing a qualitative review of each reporting segment, that it is more likely than not that the fair value of each of its reporting segments substantially exceeds the respective carrying amounts. Accordingly, there was no indication of impairment and the quantitative goodwill impairment test was not performed. Property, Plant and Equipment. Property, plant and equipment are stated at cost. Expenditures for major renewals and improvements are capitalized while expenditures for maintenance and repairs not expected to extend the life of an asset beyond its normal useful life are charged to expense when incurred. Plant and equipment are depreciated over the estimated useful lives (1-40 years and 2-20 years, respectively) of the assets under the straight-line method of depreciation for financial reporting purposes and both straight-line and other methods for tax purposes. Impairment of Long-Lived Assets. The Company’s policy is to assess the realizability of its long-lived assets, including definite-lived intangible assets, and to evaluate such assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets (or group of assets) may not be recoverable. Impairment is determined to exist if estimated future undiscounted cash flows are less than carrying value. If an impairment is indicated, assets are written down to their fair value, which is typically determined by a discounted cash flow analysis. Future cash flow projections include assumptions regarding future sales levels and the level of working capital needed to support the assets. The Company uses data developed by business segment management as well as macroeconomic data in making these calculations. There are no assurances that future cash flow assumptions will be achieved. The amount of any impairment then recognized would be calculated as the difference between estimated fair value and carrying value of the asset. Included in Selling, general & administrative expenses (“SG&A”) are $1.5 million, $2.5 million and $7.3 million of asset impairments for the year ended December 31, 2019, 2018 and 2017, respectively. Accounts Receivable and Allowance for Doubtful Accounts. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical customer review and current financial conditions. The Company reviews its allowance for doubtful accounts at least quarterly. Account balances are charged off against the allowance when the Company determines it is probable the receivable will not be recovered. There can be no assurance that the Company’s historical accounts receivable collection experience will be indicative of future results. The Company has off-balance sheet credit exposure related to guarantees provided to financial institutions as disclosed in Note O – “Litigation and Contingencies.” Substantially all receivables were trade receivables at December 31, 2019 and 2018. Pursuant to terms of the Company’s trade accounts receivable factoring arrangements, certain of the Company’s subsidiaries may sell their trade accounts receivable. In certain cases, the Company continues to service such accounts. These trade receivables qualify for sales treatment under Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing” (“ASC 860”) and accordingly, the proceeds are included in net cash provided by operating activities. The gross amount of trade receivables sold for years ended December 31, 2019, 2018 and 2017 totaled $1,108.0 million ($1.1 million related to discontinued operations), $940.1 million ($1.3 million related to discontinued operations) and $631.1 million ($1.5 million related to discontinued operations), respectively. The factoring discount paid upon sale is recorded as interest expense in the Consolidated Statement of Income (Loss). As of December 31, 2019 and 2018, $83.9 million and $85.1 million ($0.2 million related to discontinued operations), respectively, of receivables qualifying for sale treatment and continuing to be serviced by the Company were outstanding. Revenue Recognition. The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. In the United States, we have the ability to enter into a security agreement and receive a security interest in the product by filing an appropriate Uniform Commercial Code (“UCC”) financing statement. However, a significant portion of the Company’s revenue is generated outside of the United States. In many countries outside of the United States, as a matter of statutory law, a seller retains title to a product until payment is made. The laws do not provide for a seller’s retention of a security interest in goods in the same manner as established in the UCC. In these countries, we retain title to goods delivered to a customer until the customer makes payment so that we can recover the goods in the event of customer default on payment. The Company considers the following events in order to determine when it is appropriate to recognize revenue: (i) the customer has physical possession of the product; (ii) the customer has legal title to the product; (iii) the customer has assumed the risks and rewards of ownership and (iv) the customer has communicated acceptance of the product. These events serve as indicators, along with the details contained within the contract, that it is appropriate to recognize revenue. The Company generates revenue through the sale of machines, parts and service, and extended warranties. Revenue from product sales is recorded when the performance obligation is fulfilled, usually at the time of shipment, at the net sales price (transaction price). Estimates of variable consideration, such as volume discounts and rebates, reduce transaction price when it is probable that a customer will attain these types of sales incentives. These estimates are primarily derived from contractual terms and historical experience. The Company elected to present revenue net of sales tax and other similar taxes and account for shipping and handling as activities to fulfill the promise to transfer goods rather than separate performance obligations. Payments are typically due either 30 or 60 days, depending on geography, following delivery of products or completion of services. Revenue from extended warranties is recognized over time on a straight line basis because the customer benefits evenly from the extended warranty throughout the period; beginning upon expiration of the standard warranty and through end of the term. Revenue from services is recognized based on cost input method as the time and materials used in the repair portrays the most accurate depiction of completion of the performance obligation. During the full year ended December 31, 2019, revenues generated from the sale of extended warranties and services were an immaterial portion of revenue. The Company sells equipment subject to leases and related lease payments. Income from operating leases is recognized ratably over the lease term. Revenue from sales-type leases is recognized at the inception of the lease. For detailed sales information see Note B - “Business Segment Information”. Leases. Terex leases approximately 100 real properties, approximately 500 vehicles, and approximately 400 pieces of office and industrial equipment. As the lessee, Terex will classify a lease which it has substantially all the risks and rewards of ownership as a finance lease. The Company determines if an arrangement contains a lease at contract inception. With the exception of short-term leases (leases with terms less than 12 months), all leases with contractual fixed costs are recorded on the balance sheet on the lease commencement date as a right-of-use (“ROU”) asset and a lease liability. Lease liabilities are initially measured at the present value of the minimum lease payments and subsequently increased to reflect the interest accrued and reduced by the lease payments affected. ROU assets are initially measured at the present value of the minimum lease payments adjusted for any prior lease payments, lease incentives and initial direct costs. The Company does not separate lease and non-lease components of a contract for any class of leases. Certain leases contain escalation, renewal and/or termination options that are factored into the ROU asset as appropriate. Operating leases result in a straight-line rent expense over the life of the lease. For finance leases, ROU assets are amortized on a straight-line basis over the life of the lease and interest accretes to the lease liability which results in a higher interest expense at lease inception that declines over the life of the lease. Variable lease costs are expensed as incurred and are not included in the determination of ROU assets or lease liabilities. Short-term leases for real property, vehicles and industrial and office equipment are recognized in the income statement on a straight-line basis over the lease term. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments, if the rate is not implicit in the lease. Consideration is given to the Company’s recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating incremental borrowing rates. For detailed lease information see Note L - “Leases”. Guarantees. The Company records a liability for the estimated fair value of guarantees issued pursuant to ASC 460. The Company recognizes a loss under a guarantee when its obligation to make payment under the guarantee is probable and the amount of the loss can be estimated. A loss would be recognized if the Company’s payment obligation under the guarantee exceeds the value it can expect to recover to offset such payment, primarily through the sale of the equipment underlying the guarantee. Accrued Warranties. The Company records accruals for potential warranty claims based on its claim experience. The Company’s products are typically sold with a standard warranty covering defects that arise during a fixed period. Each business provides a warranty specific to products it offers. The specific warranty offered by a business is a function of customer expectations and competitive forces. Warranty length is generally a fixed period of time, a fixed number of operating hours or both. A liability for estimated warranty claims is accrued at the time of sale. The current portion of the product warranty liability is included in Other current liabilities and the non-current portion is included in Other non-current liabilities in the Company’s Consolidated Balance Sheet. The liability is established using historical warranty claims experience for each product sold. Historical claims experience may be adjusted for known design improvements or for the impact of unusual product quality issues. Warranty reserves are reviewed quarterly to ensure critical assumptions are updated for known events that may affect the potential warranty liability. The following table summarizes the changes in the consolidated product warranty liability (in millions):
Accrued Product Liability. The Company records accruals for product liability claims when deemed probable and estimable based on facts and circumstances, and prior claims experience. Accruals for product liability claims are valued based upon the Company’s prior claims experience, including consideration of jurisdiction, circumstances of the accident, type of loss or injury, identity of plaintiff, other potential responsible parties, analysis of outside legal counsel, analysis of internal product liability counsel and experience of the Company’s product safety employees. Actual product liability costs could be different due to a number of variables such as the decisions of juries or judges. Defined Benefit Pension and Other Post-retirement Benefits. The Company provides post-retirement benefits to certain former salaried and hourly employees and certain hourly employees covered by bargaining unit contracts that provide such benefits. The Company accounts for these benefits under ASC 715, “Compensation-Retirement Benefits” (“ASC 715”). ASC 715 requires balance sheet recognition of the overfunded or underfunded status of pension and post-retirement benefit plans. Under ASC 715, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in Accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic benefit cost. See Note M – “Retirement Plans and Other Benefits.” Deferred Compensation. The Company maintains a deferred compensation plan, which is described more fully in Note M – “Retirement Plans and Other Benefits.” The Company’s common stock held in a rabbi trust pursuant to the Company’s deferred compensation plan, is treated in a manner similar to treasury stock and is recorded at cost within Stockholders’ equity as of December 31, 2019 and 2018. The plan obligations for participant deferrals in common stock are classified as Additional paid-in capital and deferrals in the bond fund investment are classified as Accrued compensation and benefits and Other non-current liabilities in the Consolidated Balance Sheet. The total of common stock required to settle this deferred compensation obligation is included in the denominator in both basic and diluted earnings per share calculations. Stock-Based Compensation. At December 31, 2019, the Company had stock-based employee compensation plans, which are described more fully in Note N – “Stockholders’ Equity.” The Company accounts for those plans under the recognition and measurement principles of ASC 718, “Compensation–Stock Compensation” (“ASC 718”). ASC 718 requires that expense resulting from all share-based payment transactions be recognized in the financial statements at fair value. The Company recognizes forfeitures as they occur. Foreign Currency Translation. Assets and liabilities of the Company’s non-U.S. operations are translated at year-end exchange rates. Income and expenses are translated at average exchange rates during the year. For operations whose functional currency is the local currency, translation adjustments are recorded in the Accumulated other comprehensive income component of Stockholders’ equity. Gains or losses resulting from foreign currency transactions are recorded in the accounts based on the underlying transaction. Derivatives. Derivative financial instruments are recorded in the Consolidated Balance Sheet at their fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded each period in earnings or Accumulated other comprehensive income, depending on whether a derivative is designated and effective as part of a hedge transaction and, if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in Accumulated other comprehensive income are included in earnings in the periods in which earnings are affected by the hedged item. See Note J – “Derivative Financial Instruments.” Environmental Policies. Environmental expenditures that relate to current operations are either expensed or capitalized depending on the nature of the expenditure. Expenditures relating to conditions caused by past operations that do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial actions are probable and the costs can be reasonably estimated. Such amounts were not material at December 31, 2019 and 2018. Research, Development and Engineering Costs. Research, development and engineering costs are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products are included in SG&A. Research, development and engineering costs were $72.4 million, $63.2 million and $55.6 million during 2019, 2018 and 2017, respectively. Income Taxes. The Company accounts for income taxes using the asset and liability method. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax bases of assets and liabilities. See Note C – “Income Taxes.” Earnings Per Share. Basic earnings (loss) per share is computed by dividing Net income (loss) attributable to Terex Corporation for the period by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per share is computed by dividing Net income (loss) attributable to Terex Corporation for the period by the weighted average number of shares of common stock outstanding and potential dilutive common shares. See Note E – “Earnings Per Share.” Fair Value Measurements. Assets and liabilities measured at fair value on a recurring basis under the provisions of ASC 820, “Fair Value Measurement and Disclosure” (“ASC 820”), include foreign exchange contracts, cross currency and commodity swaps and a debt conversion feature on a convertible promissory note discussed in Note J – “Derivative Financial Instruments”, debt discussed in Note K – “Long-term Obligations” and defined benefit plan assets discussed in Note M – “Retirement Plans and Other Benefits”. These instruments are valued using a market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. ASC 820 establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). Determining which category an asset or liability falls within this hierarchy requires judgment. The Company evaluates its hierarchy disclosures each quarter. Recently Issued Accounting Standards Accounting Standards Implemented in 2019 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, “Leases (Topic 842),” (“ASU 2016-02”). The standard establishes a ROU model that requires a lessee to recognize an ROU asset and a lease liability on the balance sheet for all leases with a term longer than 12 months and requires the disclosure of key information about leasing arrangements. Leases are classified as finance or operating, with classification affecting the subsequent expense pattern and presentation of expense recognition in the income statement. Subsequently, the FASB issued the following standards related to ASU 2016-02: ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842”, ASU 2018-10, “Codification Improvements to Topic 842, Leases”, ASU 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), ASU 2018-20, “Narrow-Scope Improvements for Lessors” and ASU 2019-01, “Leases (Topic 842): Codification Improvements”, which provided additional guidance and clarity to ASU 2016-02 (collectively, the “Lease Standard”). The Company adopted the Lease Standard on January 1, 2019 under the alternative transition method permitted by ASU 2018-11. This transition method allowed the Company to initially apply the requirements of the Lease Standard at the adoption date, versus at the beginning of the earliest period presented. The Company elected the transition package of practical expedients, the practical expedient to not separate lease and non-lease components for all of its leases, the short-term lease recognition exemption for all of its leases that qualify and the land easement practical expedient; it did not elect the use of hindsight practical expedient. Adoption of the Lease Standard had a material effect on the Company’s consolidated financial statements due to the recognition of approximately $138 million of operating lease liabilities (approximately $6 million related to discontinued operations) with corresponding ROU assets. The Company implemented a global lease accounting system and updated internal controls over financial reporting, as necessary, to accommodate modifications to its business processes and accounting procedures as a result of the Lease Standard. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” (“ASU 2018-02”). ASU 2018-02 allows reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from H.R. 1 “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”. The Company adopted ASU 2018-02 on January 1, 2019. Adoption did not have a material effect on the Company’s consolidated financial statements. In July 2018, the FASB issued ASU 2018-09, “Codification Improvements,” (“ASU 2018-09”). ASU 2018-09 provides technical corrections, clarifications and other improvements across a variety of accounting topics. Certain amendments were applicable immediately while others provide transition guidance and are effective in the first quarter of fiscal year 2019. The Company completed the adoption of ASU 2018-09 on January 1, 2019. Adoption did not have a material effect on the Company’s consolidated financial statements. Accounting Standards to be Implemented In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”). ASU 2016-13 sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. The guidance in this standard replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. Subsequently, the FASB issued the following standards related to ASU 2016-13: ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU 2019-05, “Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief,” and ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which provided additional guidance and clarity to ASU 2016-13 (collectively, the “Credit Loss Standard”). The effective date will be the first quarter of fiscal year 2020 and early adoption is permitted. The Credit Loss Standard will be applied using a modified retrospective approach. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans,” (“ASU 2018-14”). ASU 2018-14 adds, removes and clarifies disclosure requirements related to defined benefit pension plans and other postretirement plans. The guidance is effective for our fiscal year ending December 31, 2020 and early adoption is permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The effective date will be the first quarter of fiscal year 2020 and early adoption is permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” (“ASU 2019-04”). ASU 2019-04 provides narrow scope amendments for Topics 326, 815 and 825. The effective date will be the first quarter of fiscal year 2020 and early adoption is permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. The effective date will be the first quarter of fiscal year 2021 and early adoption is permitted. The Company is currently evaluating the impact that the amendments to Topic 740 will have on its consolidated financial statements.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION Terex is a global manufacturer of aerial work platforms and materials processing machinery. The Company designs, builds and supports products used in construction, maintenance, manufacturing, energy, minerals and materials management applications. Terex’s products are manufactured in North and South America, Europe, Australia and Asia and sold worldwide. The Company engages with customers through all stages of the product life cycle, from initial specification and financing to parts and service support. The Company operates in two reportable segments: (i) AWP and (ii) MP. The AWP segment designs, manufactures, services and markets aerial work platform equipment, utility equipment, telehandlers and light towers as well as their related components and replacement parts. Customers use these products to construct and maintain industrial, commercial, institutional and residential buildings and facilities, for construction and maintenance of utility and telecommunication lines, tree trimming, certain construction and foundation drilling applications, and for other commercial operations, as well as in a wide range of infrastructure projects. The MP segment designs, manufactures, services and markets materials processing and specialty equipment, including crushers, washing systems, screens, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and their related components and replacement parts. Customers use these products in construction, infrastructure and recycling projects, in various quarrying and mining applications, as well as in landscaping and biomass production industries, material handling applications, maintenance applications to lift equipment or material, moving materials and equipment on rugged or uneven terrain, lifting construction material and placing material at point of use. The Company’s rough terrain and tower cranes operations were consolidated within MP for financial reporting periods beginning on January 1, 2020, to align with its new management and reporting structure. Reportable segment information for all periods presented have been recast to reflect the realignment of operations. The Company assists customers in their rental, leasing and acquisition of its products through Terex Financial Services (“TFS”). TFS uses its equipment financing experience to provide financing solutions to customers who purchase the Company’s equipment. TFS is included in Corporate and Other. Corporate and Other also includes eliminations among the two segments, various construction product lines, as well as general and corporate items. None of the Company’s customers individually accounted for more than 10% of consolidated net sales in 2019, 2018 or 2017. Business segment information is presented below (in millions):
Sales between segments are generally priced to recover costs plus a reasonable markup for profit, which is eliminated in consolidation.
(1) Increase primarily due to cash from the sales of Demag and ASV Holdings, Inc. shares, Section 301 tariff receivables and recognition of ROU assets. (2) Decrease in assets from the sale of Demag. See Note D - “Discontinued Operations and Assets and Liabilities Held For Sale”.
Long-lived assets consist of net fixed assets, which can be attributed to the specific geographic regions. Geographic net sales information is presented below (in millions):
(1) Includes intercompany sales and eliminations. (2) Total sales include $2.3 billion attributable to the U.S., the Company’s country of domicile.
(1) Includes intercompany sales and eliminations. (2) Total sales include $2.4 billion attributable to the U.S., the Company’s country of domicile.
(1) Includes intercompany sales and eliminations. (2) Total sales include $2.1 billion attributable to the U.S., the Company’s country of domicile. The Company attributes sales to unaffiliated customers in different geographical areas based on the location of the customer. Product type net sales information is presented below (in millions):
(1) Includes other product types, intercompany sales and eliminations.
(1) Includes other product types, intercompany sales and eliminations.
(1) Includes other product types, intercompany sales and eliminations. (2) Remaining Compact Construction product lines divested in 2017.
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of income (loss) from continuing operations before income taxes are as follows (in millions):
The Company recorded Income (loss) from discontinued operations and Gain (loss) on disposition of discontinued operations before income taxes of $(175.8) million, $(136.3) million, and $40.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. The major components of the Company’s provision for (benefit from) income taxes on continuing operations before income taxes are summarized below (in millions):
The elimination of tax from intercompany transactions is included in current tax expense. The Company recorded Provision for (benefit from) income taxes of $(20.5) million, $(8.3) million and $24.3 million from discontinued operations and on disposition of discontinued operations for the years ended December 31, 2019, 2018 and 2017, respectively. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP when a SEC registrant does not have the necessary information available, compiled, analyzed, or reviewed in sufficient detail to complete the accounting for certain income tax effects from H.R. 1 “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (the “2017 Federal Tax Act”). During the fourth quarter of 2017, the Company recorded $29.8 million as a provisional tax charge for the deemed repatriation transition tax and $20.6 million as a provisional tax charge for the re-measurement of its U.S. deferred tax balances. The Company recorded measurement period adjustments during 2018 which did not have material effect on its consolidated financial statements. The 2017 provisional amounts were finalized in the fourth quarter of 2018. In January 2018, the FASB released guidance on the accounting for tax on Global Intangible Low-taxed Income (“GILTI”). The guidance indicates that either accounting for deferred taxes related to GILTI or treating any taxes on GILTI as period costs are both acceptable accounting policy elections. Terex elected to treat taxes on GILTI inclusions as period costs. Deferred tax assets and liabilities result from differences in the bases of assets and liabilities for tax and financial reporting purposes. The tax effects of the basis differences and loss carry forwards as of December 31, 2019 and 2018 for continuing operations are summarized below for major balance sheet captions (in millions):
Deferred tax assets for continuing operations were $243.6 million ($0.3 million for discontinued operations) before valuation allowances of $107.0 million, partially offset by deferred tax liabilities for continuing operations of $2.3 million at December 31, 2019. Deferred tax assets for continuing operations were $239.0 million ($24.1 million for discontinued operations) before valuation allowances of $114.3 million, partially offset by deferred tax liabilities for continuing operations of $1.9 million at December 31, 2018. There were no deferred tax liabilities for discontinued operations at December 31, 2019 and 2018. The Company evaluates the net realizable value of its deferred tax assets each reporting period. The Company must consider all objective evidence, both positive and negative, in evaluating the future realization of its deferred tax assets, including tax loss carry forwards. Historical information is supplemented by currently available information about future tax years. Realization of deferred tax assets requires sufficient taxable income of the appropriate character. To the extent estimates of future taxable income decrease or do not materialize, additional valuation allowances may be required. The Company records a valuation allowance for each deferred tax asset for which realization is not assessed as more likely than not. The valuation allowance for deferred tax assets as of December 31, 2019 and 2018 was $107.0 million and $114.3 million, respectively. The net change in the total valuation allowance for the years ended December 31, 2019 and 2018 was a decrease of $7.3 million and $20.3 million, respectively. The Company’s Provision for (benefit from) income taxes is different from the amount that would be provided by applying the statutory federal income tax rate to the Company’s Income (loss) from continuing operations before income taxes. The reasons for the difference are summarized as follows (in millions):
(1) The impact of the 2017 Federal Tax Act is $50.4 million. Impacts of $1.3 million and $2.1 million are included in State taxes and Change in valuation allowance, respectively. The Company does not provide for foreign income and withholding, U.S. Federal, or state income taxes or tax benefits on the financial reporting basis over the tax basis of its investments in foreign subsidiaries to the extent such amounts are indefinitely reinvested to support operations and continued growth plans outside the U.S. The Company reviews its plan to indefinitely reinvest on a quarterly basis. In making its decision to indefinitely reinvest, the Company evaluates its plans of reinvestment, its ability to control repatriation and to mobilize funds without triggering basis differences, and the profitability of U.S. operations and their cash requirements and the need, if any, to repatriate funds. If the assessment of the Company with respect to earnings of non-U.S. subsidiaries changes, deferred U.S. income taxes, foreign income taxes, and foreign withholding taxes may have to be accrued. As a result of the 2017 Federal Tax Act, the Company changed its indefinite reinvestment assertion related to foreign earnings that have been taxed in the U.S. and now considers these earnings no longer indefinitely reinvested. The Company has recorded foreign, federal and state tax expense with respect to earnings which have been subject to federal income tax and which are no longer indefinitely reinvested. Any adjustments related to the change of indefinite reinvestment assertion for foreign earnings accumulated as of December 31, 2017 has been included in income from continuing operations as an adjustment to tax expense during the measurement period in 2018. The Company plans to indefinitely reinvest all undistributed foreign earnings in excess of those previously taxed in the U.S. For the year ended December 31, 2019, the Company’s estimate of its remaining unremitted earnings of its foreign subsidiary ownership chains that have positive retained earnings and have not been subject to tax in the U.S. was approximately $90 million. At this time, determination of the unrecognized deferred tax liabilities for temporary differences related to the Company’s investment in non-U.S. subsidiaries is not practicable. At December 31, 2019, the Company has various state net operating loss carry forwards available to reduce future state taxable income and income taxes, the majority of which will expire at various dates through 2039. At December 31, 2019, the Company has approximately $536 million of loss carry forwards, consisting of $245 million in Germany, $161 million in Italy, $52 million in China, $30 million in Spain, and $48 million in other countries, which are available to offset future taxable income. The majority of these tax loss carry forwards are available without expiration. In addition, the gross amount of the Australian capital loss carryforward is $21 million, and it has an unlimited carryforward period. The Company made total net income tax payments including discontinued operations of $46.8 million, $52.7 million and $29.0 million in 2019, 2018 and 2017, respectively. At December 31, 2019 and 2018, Other current assets included net income tax receivable amounts of $24.3 million and $13.5 million, respectively. The Company and its subsidiaries conduct business globally and file income tax returns in U.S. federal, state and foreign jurisdictions, as required. From a tax perspective, major jurisdictions where the Company is often subject to examination by tax authorities include Germany, Italy, the United Kingdom, China, India and the U.S. Currently, various entities of the Company are under audit in Germany, Italy, India, the U.S. and elsewhere. With few exceptions, the statute of limitations for the Company and most of its subsidiaries has expired for tax years prior to 2011. The Company assesses uncertain tax positions for recognition, measurement and effective settlement. Where the Company has determined that its tax return filing position does not satisfy the more likely than not recognition threshold of ASC 740, “Income Taxes,” it has recorded no tax benefits. Where the Company has determined that its tax return filing positions are more likely than not to be sustained, the Company has measured and recorded the largest amount of tax benefit greater than 50% likely to be realized. The Company recognizes accrued interest and penalties, if any, related to income taxes as (Provision for) benefit from income taxes in its Consolidated Statement of Income (Loss). The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions).
The Company evaluates each reporting period whether it is reasonably possible material changes to its uncertain tax position liability could occur in the next 12 months. Changes may occur as a result of uncertain tax positions being considered effectively settled, re-measured, paid, acquired or divested, as a result of a change in accounting rules, tax law or judicial decision, or due to expiration of the relevant statute of limitations. It is not possible to predict which uncertain tax positions, if any, may be challenged by tax authorities. Timing and impact of income tax audits and their resolution is uncertain. New facts, laws, pronouncements and judicial decisions can change assessments concerning technical merit and measurement. The amounts of or periods in which changes to reserves for uncertain tax positions will occur is difficult to predict. The Company believes it is reasonably possible the amount of unrecognized tax benefits disclosed as of December 31, 2019 may decrease approximately $6 million in the year ending December 31, 2020. Such possible decrease relates to anticipated tax audit settlements. As of December 31, 2019 and 2018, the Company had $14.3 million and $13.5 million, respectively, of unrecognized tax benefits. Of the $14.3 million at December 31, 2019, $4.0 million, if recognized, would affect the effective tax rate. As of December 31, 2019 and 2018, the liability for potential interest and penalties was $1.2 million and $1.0 million, respectively. During the years ended December 31, 2019 and 2018, the Company recognized total tax expense of $0.2 million and tax benefit of $6.6 million for interest and penalties, respectively.
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DISCONTINUED OPERATIONS AND OTHER DIVESTITURES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES | DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE MOBILE CRANES On July 31, 2019, the Company completed the disposition of Demag to Tadano. The Company received approximately $215 million of consideration, as adjusted for estimated amounts of cash, debt, working capital and certain other items. The final consideration will be adjusted based on the actual amounts of cash, debt and working capital. Products divested are Demag® all terrain cranes and large lattice boom crawler cranes. During the year ended December 31, 2019, the Company recognized a charge of approximately $82 million, net of tax, to write-down Demag to its fair value, less costs to sell. During the year ended December 31, 2019, the Company recorded a loss on disposition of discontinued operations, net of tax, of $11.6 million. During 2019, the Company also exited North American mobile crane product lines manufactured in its Oklahoma City facility. The Company’s actions to sell Demag and cease manufacturing mobile crane product lines in its Oklahoma City facility represent a significant strategic shift in its business away from mobile cranes as these businesses constituted a significant part of its operations and financial results. The Company believes these actions were necessary as it continues to execute its Focus, Simplify and Execute to Win strategy. In connection with the disposition of Demag, the Company completed a legal entity restructuring and entered into certain ancillary agreements with Tadano, including a Transition Services Agreement (“TSA”), dated as of July 31, 2019, under which the parties will provide one another certain transition services to facilitate the separation of Demag from the Company. Agreements covered under the TSA are generally 12 months or less in duration but certain agreements extend for 36 months. Fees related to these agreements are for reimbursement of services provided. In addition to selling Demag, the Company sold its boom truck, truck crane and crossover product lines and related inventory previously manufactured in its Oklahoma City facility on April 24, 2019. The Company received notes and receivables totaling $27.7 million and recorded a gain, net of tax, of $12.8 million during the year ended December 31, 2019. MHPS On May 16, 2016, Terex agreed to sell its Material Handling and Port Solutions (“MHPS”) business to Konecranes Plc (“Konecranes”) by entering into a Stock and Asset Purchase Agreement, as amended (the “SAPA”), with Konecranes. On January 4, 2017, the Company completed the Disposition, pursuant to the SAPA, effective as of January 1, 2017. In connection with the Disposition, the Company received 19.6 million newly issued Class B shares of Konecranes and approximately $835 million in cash after adjustments for estimated cash, debt and net working capital at closing and the divestiture of Konecranes’ Stahl Crane Systems business, which was undertaken by Konecranes in connection with the Disposition. During the years ended December 31, 2019, 2018 and 2017, the Company recognized a (loss) gain on the Disposition (net of tax) of $(1.2) million, $(3.1) million and $64.3 million, respectively. The Company sold all shares received in connection with the Disposition for net proceeds of approximately $770 million and recorded a $42.0 million net gain on sale of shares which included a gain of $41.6 million attributable to foreign exchange rate changes during the year ended December 31, 2017. The net gain is recorded as a component of Other income (expense) - net in the Consolidated Statement of Income (Loss). On March 23, 2017, Konecranes declared a dividend of €1.05 per share to holders of record as of March 27, 2017, which was paid on April 4, 2017. During the year ended December 31, 2017, the Company recognized dividend income of $13.5 million as a component of Other income (expense) - net in the Consolidated Statement of Income (Loss). Loss Contract Related to the Disposition, the Company and Konecranes entered into an agreement for Konecranes to manufacture certain crane products on behalf of the Company for an original period of 12 months, which was subsequently amended for a total of 36 months on October 11, 2017. The Company recorded an expense of $7.9 million related to losses expected to be incurred over the original agreement’s life during the year ended December 31, 2017. Income (loss) from discontinued operations The following amounts related to discontinued operations were derived from historical financial information and have been segregated from continuing operations and reported as discontinued operations in the Consolidated Statement of Income (Loss) (in millions):
Other Divestitures The Company is actively seeking a buyer for its utility hot lines tools business located in South America and, accordingly, assets and liabilities have been reported as held for sale. Non-cash impairment charges of $1.8 million and $6.7 million, were recorded to adjust net asset value to estimated fair value in 2018 and 2017, respectively. The operating results for the hot lines tools business are reported in continuing operations, within the AWP segment in the Company’s segment disclosures. In August 2017, the Company entered into an agreement to sell its manufacturing facility in Jinan, China. The sale was completed during the third quarter of 2017 and the Company recorded a gain on sale of $5.7 million in its Corporate and Other category as a component of Selling, general and administrative expenses (“SG&A”) in the Consolidated Statement of Income (Loss). Construction During the year ended December 31, 2017, the Company completed the sale of its Coventry, U.K.-based compact construction business and remaining U.K.-based compact construction product lines and recognized a loss of $1.2 million within SG&A in the Consolidated Statement of Income (Loss) related to the sale. In March 2017, the Company signed a sale agreement with a buyer to sell its Indian compact construction business. The Company completed the sale during the year ended December 31, 2017 and a loss of $1.6 million was recognized within SG&A related to the sale. The operating results for these construction product lines are reported in continuing operations, within the Corporate and Other category in the Company’s segment disclosures. During the year ended December 31, 2016, the Company sold certain additional portions of its former Construction segment, including the following products: midi/mini excavators, wheeled excavators, compact wheel loaders, and components, primarily in Europe. During the year ended December 31, 2017, the Company recognized a gain of $5.8 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. The operating results for these construction product lines are reported in continuing operations, within the Corporate and Other category in the Company’s segment disclosures. Assets and Liabilities Held for Sale Assets and liabilities held for sale consist of mobile cranes product lines manufactured in Oklahoma City, the Company’s utility hot lines tools business located in South America and Demag, all previously contained in its former Cranes 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 Consolidated Balance Sheet (in millions):
The following table provides amounts of cash and cash equivalents presented in the Consolidated Statement of Cash Flows (in millions):
The following table provides supplemental cash flow information related to discontinued operations (in millions):
Gain (Loss) on Disposition of Discontinued Operations - net of tax (in millions):
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE
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FINANCE RECEIVABLES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCE RECEIVABLES | FINANCE RECEIVABLES The Company, primarily through TFS, leases equipment and provides financing to customers for the purchase and use of Terex equipment. In the normal course of business, TFS assesses credit risk, establishes structure and pricing of financing transactions, documents the finance receivable, and records and funds the transactions. The Company bills and collects cash from the end customer. The Company primarily conducts on-book business in the U.S., with limited business in China, Brazil and Germany. The Company does business with various types of customers consisting of rental houses, end user customers and Terex equipment dealers. The Company’s net finance receivable balances include both sales-type leases and commercial loans. Finance receivables that management intends to hold until maturity are stated at their outstanding unpaid principal balances, net of an allowance for loan losses as well as any deferred fees and costs. Finance receivables originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value, on an individual asset basis. During the years ended December 31, 2019, 2018 and 2017, the Company transferred finance receivables of $226.2 million, $290.5 million and $266.6 million, respectively, to third-party financial institutions, which qualified for sales treatment under ASC 860. During the years ended December 31, 2019, 2018 and 2017, the Company recorded gains on transferred finance receivables of $5.4 million, $3.3 million, and $11.3 million, respectively, which were recorded as sales by TFS and were reported in the Corporate and Other category. At December 31, 2019 and 2018, the Company had $17.6 million and $19.2 million, respectively, of held for sale finance receivables recorded in Prepaid and other current assets in the Consolidated Balance Sheet. Revenue attributable to finance receivables management intends to hold until maturity is recognized on the accrual basis using the effective interest method. The Company bills customers and accrues interest income monthly on the unpaid principal balance. The accrual of interest is generally discontinued when the contractual payment of principal or interest has become 90 days past due or management has significant doubts about further collectability of contractual payments, even though the loan may be currently performing. A receivable may remain on accrual status if it is in the process of collection and is either guaranteed or secured. Interest received on non-accrual finance receivables is typically applied against principal. Finance receivables are generally restored to accrual status when the obligation is brought current and the borrower has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The Company has a history of enforcing the terms of these separate financing agreements. Finance receivables, net consisted of the following (in millions):
Approximately $52 million and $72 million of finance receivables are recorded in Prepaid and other current assets at December 31, 2019 and 2018. Approximately $103 million and $122 million are recorded in Other assets in the Consolidated Balance Sheet at December 31, 2019 and 2018, respectively. Credit losses are charged against the allowance for credit losses when management ceases active collection efforts. Subsequent recoveries, if any, are credited to earnings. The allowance for credit losses is maintained at a level set by management which represents evaluation of known and inherent risks in the portfolio at the consolidated balance sheet date. Management’s periodic evaluation of the adequacy of the allowance is based on the Company’s past loan loss experience, market-based loss experience, specific customer situations, estimated value of any underlying collateral, current economic conditions, and other relevant factors. This evaluation is inherently subjective, since it requires estimates that may be susceptible to significant change. Although specific and general loss allowances are established in accordance with management’s best estimate, actual losses are dependent upon future events and, as such, further additions to or decreases from the level of loss allowances may be necessary. The following table presents an analysis of the allowance for credit losses (in millions):
The Company utilizes a two-tier approach to set allowances: (1) identification of impaired finance receivables and establishment of specific loss allowances on such receivables; and (2) establishment of general loss allowances on the remainder of its portfolio. Specific loss allowances are established based on circumstances and factors of specific receivables. The Company regularly reviews the portfolio which allows for early identification of potentially impaired receivables. The process takes into consideration, among other things, delinquency status, type of collateral and other factors specific to the borrower. General loss allowance levels are determined based upon a combination of factors including, but not limited to, TFS experience, general market loss experience, performance of the portfolio, current economic conditions, and management's judgment. The two primary risk characteristics inherent in the portfolio are (1) the customer's ability to meet contractual payment terms, and (2) the liquidation values of the underlying primary and secondary collaterals. The Company records a general or unallocated loss allowance that is calculated by applying a reserve rate to its portfolio, net of individually impaired finance receivables. All delinquent accounts are reviewed for potential impairment. A receivable is deemed to be impaired when based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Amount of impairment is measured as the difference between the balance outstanding and underlying collateral value of equipment being financed, as well as any other collateral. All finance receivables identified as impaired are evaluated individually. Generally, the Company does not change terms and conditions of existing finance receivables. The following table presents individually impaired finance receivables (in millions):
The allowance for credit losses and finance receivables by portfolio, segregated by those amounts that are individually evaluated for impairment and those that are collectively evaluated for impairment, was as follows (in millions):
Accounts are considered delinquent when the billed periodic payments of the finance receivables exceed 30 days past the due date. The following tables present analysis of aging of recorded investment in finance receivables (in millions):
Commercial loans in the amount of $27.1 million and $6.0 million were on non-accrual status as of December 31, 2019 and 2018, respectively. Sales-type leases in the amount of $0.3 million were on non-accrual status as of December 31, 2019 and there were no sales-type leases on non-accrual status as of December 31, 2018. Credit Quality Information Credit quality is reviewed periodically based on customers’ payment status. In addition to delinquency status, any information received regarding a customer (such as bankruptcy filings, etc.) will also be considered to determine the credit quality of the customer. Collateral asset values are also monitored regularly to determine the potential loss exposures on any given transaction. The Company uses the following internal credit quality indicators, based on an internal risk rating system, using certain external credit data, listed from the lowest level of risk to highest level of risk. The internal rating system considers factors affecting specific borrowers’ ability to repay. Finance receivables by risk rating (in millions):
The Company believes the finance receivables retained, net of allowance for credit losses, are collectible.
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INVENTORIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories consist of the following (in millions):
Reserves for lower of cost or NRV and excess and obsolete inventory were $53.2 million and $49.8 million at December 31, 2019 and 2018, respectively.
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PROPERTY, PLANT AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment – net consist of the following (in millions):
Depreciation expense for the years ended December 31, 2019, 2018 and 2017, was $39.6 million, $39.0 million and $47.0 million, respectively.
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GOODWILL AND INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET An analysis of changes in the Company’s goodwill by business segment is as follows (in millions):
Intangible assets, net were comprised of the following as of December 31, 2019 and 2018 (in millions):
Estimated aggregate intangible asset amortization expense (in millions) for each of the next five years is as follows:
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DERIVATIVE FINANCIAL INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company operates internationally, with manufacturing and sales facilities in various locations around the world. In the normal course of business, the Company primarily uses cash flow derivatives to manage foreign currency and price risk exposures on third party and intercompany forecasted transactions. For a derivative to qualify for hedge accounting treatment at inception and throughout the hedge period, the Company formally documents the nature and relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions, and method of assessing hedge effectiveness. Additionally, for hedges of forecasted transactions, significant characteristics and expected terms of a forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction will occur. If it is deemed probable the forecasted transaction will not occur, then the gain or loss would be recognized in current earnings. Financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged. The Company does not engage in trading or other speculative use of financial instruments. The Company records all derivative contracts at fair value on a recurring basis. The Company’s derivative financial instruments are categorized under the ASC 820 hierarchy; see Note A - “Basis of Presentation” for an explanation of the hierarchy. Foreign Exchange Contracts The Company enters into foreign exchange contracts to manage variability of future cash flows associated with recognized assets or liabilities or forecasted transactions due to changing currency exchange rates. Primary currencies to which the Company is exposed are the Euro, British Pound and Australian Dollar. These foreign exchange contracts are designated as cash flow hedging instruments. Fair values of these contracts are derived using quoted forward foreign exchange prices to interpolate values of outstanding trades at the reporting date based on their maturities. Foreign exchange contracts outstanding as of December 31, 2019 mature on or before December 31, 2020. At December 31, 2019 and 2018, the Company had $233.0 million and $368.2 million notional amount, respectively, of foreign exchange contracts outstanding that were designated as cash flow hedge contracts. For effective hedging instruments, unrealized gains and losses associated with foreign exchange contracts are deferred as a component of Accumulated other comprehensive income (loss) (“AOCI”) until the underlying hedged transactions settle and are reclassified to COGS in the Company’s Consolidated Statement of Income (Loss). Certain foreign exchange contracts entered into by the Company have not been designated as hedging instruments to mitigate its exposure to changes in foreign currency exchange rates on recognized assets and liabilities. The Company had $121.2 million and $107.8 million notional amount of foreign exchange contracts outstanding that were not designated as hedging instruments at December 31, 2019 and 2018, respectively. The majority of gains and losses recognized from foreign exchange contracts not designated as hedging instruments were offset by changes in the underlying hedged items, resulting in no material net impact on earnings. Changes in the fair value of these derivative financial instruments were recognized as gains or losses in Other income (expense) – net in the Consolidated Statement of Income (Loss). Other Other derivatives designated as cash flow hedging instruments include cross currency and commodity swaps. The outstanding notional amount of commodity swaps was $7.0 million at December 31, 2019. There were no cross currency swaps outstanding at December 31, 2019. The outstanding notional amount of cross currency and commodity swaps was $45.9 million and $11.2 million , respectively, at December 31, 2018. The Company uses cross currency swaps to mitigate its exposure to changes in foreign currency exchange rates and commodity swaps to mitigate price risk for hot rolled coil steel. Fair values of cross currency swaps are based on the present value of future cash payments and receipts. Fair values of commodity swaps are based on observable market data for similar assets and liabilities. Changes in the fair value of cross currency and commodity swaps are deferred in AOCI. Gains or losses on cross currency swaps are reclassified to Other income (expense) - net in the Consolidated Statement of Income (Loss) when the underlying hedged item is re-measured. Gains or losses on commodity swaps are reclassified to COGS in the Consolidated Statement of Income (Loss) when the hedged transaction affects earnings. Other derivatives not designated as hedging instruments include a debt conversion feature on a convertible promissory note held by the Company for which changes in fair value are recorded in Other income (expense) - net in the Consolidated Statement of Income (Loss). The following table provides the location and fair value amounts of derivative instruments designated and not designated as hedging instruments that are reported in the Consolidated Balance Sheet (in millions):
(1) Categorized as Level 2 under the ASC 820 Fair Value Hierarchy. The following tables provide the effect of derivative instruments that are designated as hedges in AOCI (in millions):
The following tables provide the effect of derivative instruments that are designated as hedges in the Consolidated Statement of Income (Loss) (in millions):
Derivatives not designated as hedges are used to offset foreign exchange gains or losses resulting from the underlying exposures of foreign currency denominated assets and liabilities. The following table provides the effect of non-designated derivatives outstanding at the end of the period in the Consolidated Statement of Income (Loss) (in millions):
In the Consolidated Statement of Income (Loss), the Company records hedging activity related to foreign exchange contracts, cross currency and commodity swaps, and the debt conversion feature in the accounts for which the hedged items are recorded. On the Consolidated Statement of Cash Flows, the Company presents cash flows from hedging activities in the same manner as it records the underlying item being hedged. Counterparties to the Company’s derivative financial instruments are major financial institutions and commodity trading companies with credit ratings of investment grade or better and no collateral is required. There are no significant risk concentrations. Management continues to monitor counterparty risk and believes the risk of incurring losses on derivative contracts related to credit risk is unlikely and any losses would be immaterial. See Note N - “Stockholders’ Equity” for unrealized net gains (losses), net of tax, included in AOCI. Within the unrealized net gains (losses) included in AOCI as of December 31, 2019, it is estimated that $0.8 million of losses are expected to be reclassified into earnings in the next twelve months.
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LONG-TERM OBLIGATIONS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM OBLIGATIONS | LONG-TERM OBLIGATIONS Long-term debt is summarized as follows (in millions):
2017 Credit Agreement On January 31, 2017, the Company entered into a credit agreement (as amended, the “2017 Credit Agreement”) with the lenders and issuing banks party thereto and Credit Suisse AG, Cayman Islands Branch (“CSAG”), as administrative agent and collateral agent. The 2017 Credit Agreement includes (i) a $600 million revolving line of credit (the “Revolver”) and (ii) senior secured term loans totaling $600 million that will mature on January 31, 2024 (the “Term Loans”); both are further described below. In connection with the 2017 Credit Agreement, the Company terminated its previous credit agreement with the lenders party thereto and CSAG, as administrative agent and collateral agent and related agreements and documents (the “2014 Credit Agreement”). The 2017 Credit Agreement contains a $400 million senior secured term loan (the “Original Term Loan”). On August 17, 2017, the Company entered into an Incremental Assumption Agreement and Amendment No. 1 to the 2017 Credit Agreement which lowered the interest rate on the Original Term Loan by 25 basis points. On February 28, 2018, the Company entered into an Incremental Assumption Agreement and Amendment No. 2 (“Amendment No. 2”) to the 2017 Credit Agreement which lowered the interest rate on the Original Term Loan by an additional 25 basis points. The Original Term Loan portion of the 2017 Credit Agreement bears interest at a rate of London Interbank Offered Rate (“LIBOR”) plus 2.00% with a 0.75% LIBOR floor. On March 7, 2019, the Company entered into an Incremental Assumption Agreement and Amendment No. 3 (“Amendment No. 3”) to the 2017 Credit Agreement. Amendment No. 3 provided the Company with an additional term loan (the “2019 Term Loan”) under the 2017 Credit Agreement in the amount of $200 million. The 2019 Term Loan portion of the 2017 Credit Agreement bears interest at a rate of LIBOR plus 2.75% with a 0.75% LIBOR floor. On April 10, 2018, the Company entered into an Incremental Revolving Credit Assumption Agreement to the 2017 Credit Agreement which increased the size of the revolving line of credit from $450 million to $600 million available through January 31, 2022. The 2017 Credit Agreement allows unlimited incremental commitments, which may be extended at the option of the existing or new lenders and can be in the form of revolving credit commitments, term loan commitments, or a combination of both, with incremental amounts in excess of $300 million as long as the Company satisfies a senior secured leverage ratio contained in the 2017 Credit Agreement. The 2017 Credit Agreement requires the Company to comply with a number of covenants which limit, in certain circumstances, the Company’s ability to take a variety of actions, including but not limited to: incur indebtedness; create or maintain liens on its property or assets; make investments, loans and advances; repurchase shares of its common stock; engage in acquisitions, mergers, consolidations and asset sales; redeem debt; and pay dividends and distributions. If the Company’s borrowings under its revolving line of credit are greater than 30% of the total revolving credit commitments, the 2017 Credit Agreement requires the Company to comply with certain financial tests, as defined in the 2017 Credit Agreement. If applicable, the minimum required levels of the interest coverage ratio would be 2.5 to 1.0 and the maximum permitted levels of the senior secured leverage ratio would be 2.75 to 1.0. The 2017 Credit Agreement also contains customary default provisions. The Company was in compliance with the covenants contained in the 2017 Credit Agreement as of December 31, 2019. During the years ended December 31, 2018 and 2017, the Company recorded a loss on early extinguishment of debt related to Amendment No. 2 to the 2017 Credit Agreement of approximately $0.7 million and $0.7 million, respectively. As of December 31, 2019 and 2018, the Company had, $585.5 million and $391.4 million, net of discount, respectively, in Term Loans outstanding under the 2017 Credit Agreement. The weighted average interest rate on the Term Loans at December 31, 2019 and 2018 was 4.10% and 4.50%, respectively. The Company had no revolving credit amounts outstanding as of December 31, 2019 and $237.0 million outstanding as of December 31, 2018. The weighted average interest rate on the revolving credit amounts at December 31, 2018 was 5.98%. The Company issues letters of credit that generally serve as collateral for certain liabilities included in the Consolidated Balance Sheet and guaranteeing the Company’s performance under contracts. Letters of credit can be issued under two facilities provided in the 2017 Credit Agreement and via bilateral arrangements outside the 2017 Credit Agreement. The 2017 Credit Agreement incorporates secured facilities for issuance of letters of credit up to $400 million (the “$400 Million Facility”). Letters of credit issued under the $400 Million Facility decrease availability under the Revolver. The 2017 Credit Agreement also permits the Company to have additional secured facilities for the issuance of letters of credit up to $300 million (the “$300 Million Facility”). Letters of credit issued under the $300 Million Facility do not decrease availability under the Revolver. The Company also has bilateral arrangements to issue letters of credit with various other financial institutions (the “Bilateral Arrangements”). The Bilateral Arrangements are not secured under the 2017 Credit Agreement and do not decrease availability under the Revolver. Letters of credit outstanding (in millions):
Furthermore, the Company and certain of its subsidiaries agreed to take certain actions to secure borrowings under the 2017 Credit Agreement. As a result, on January 31, 2017, Terex and certain of its subsidiaries entered into a Guarantee and Collateral Agreement with CSAG, as collateral agent for the lenders, granting security and guarantees to the lenders for amounts borrowed under the 2017 Credit Agreement. Pursuant to the Guarantee and Collateral Agreement, Terex is required to (a) pledge as collateral the capital stock of the Company’s material domestic subsidiaries and 65% of the capital stock of certain of the Company’s material foreign subsidiaries, and (b) provide a first priority security interest in substantially all of the Company’s domestic assets. 2014 Credit Agreement On August 13, 2014 the Company entered into a credit agreement (as amended, the “2014 Credit Agreement”), with the lenders party thereto and CSAG, as administrative agent and collateral agent. The 2014 Credit Agreement provided the Company with a senior secured revolving line of credit of up to $600 million that was available through August 13, 2019, a $230.0 million senior secured term loan and a €200.0 million senior secured term loan. On January 31, 2017, in connection with the 2017 Credit Agreement, the Company terminated its 2014 Credit Agreement and related agreements and documents. During the year ended December 31, 2017, the Company recorded a loss on early extinguishment of debt related to its 2014 Credit Agreement of $8.2 million. 6-1/2% Senior Notes On March 27, 2012, the Company sold and issued $300 million aggregate principal amount of Senior Notes Due 2020 (“6-1/2% Notes”) at par. The proceeds from these notes were used for general corporate purposes. The 6-1/2% Notes became redeemable by the Company beginning in April 2016 at an initial redemption price of 103.25% of principal amount. The Company redeemed $45.8 million principal amount of the 6-1/2% Notes in the first quarter of 2017 for $47.9 million, including market premiums of $1.2 million and accrued but unpaid interest of $0.9 million. The Company redeemed the remaining $254.2 million principal amount of the 6-1/2% Notes on April 3, 2017 for $266.7 million, including accrued but unpaid interest of $8.4 million and a call premium of $4.1 million (which was recorded as Loss on early extinguishment of debt on that date). The 6-1/2% Notes were jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. 6% Senior Notes On November 26, 2012, the Company sold and issued $850 million aggregate principal amount of Senior Notes due 2021 (“6% Notes”) at par. The proceeds from this offering plus other cash were used to redeem all $800.0 million principal amount of the outstanding 8% Senior Subordinated Notes. During the first quarter of 2017, the Company redeemed all $850.0 million of the 6% Notes for $887.2 million, including redemption premiums of $25.9 million and accrued but unpaid interest of $11.3 million. 5-5/8% Senior Notes On January 31, 2017, the Company sold and issued $600.0 million aggregate principal amount of Senior Notes Due 2025 (“5-5/8% Notes”) at par in a private offering. The proceeds from the 5-5/8% Notes, together with cash on hand, including cash from the sale of its MHPS business, was used: (i) to complete a tender offer for up to $550.0 million of its 6% Notes, (ii) to redeem and discharge such portion of the 6% Notes not purchased in the tender offer, (iii) to fund a $300.0 million partial redemption of the 6% Notes, (iv) to fund repayment of all $300.0 million aggregate principal amount outstanding of its 6-1/2% Notes on or before April 3, 2017, (v) to pay related premiums, fees, discounts and expenses, and (vi) for general corporate purposes, including repayment of borrowings outstanding under the 2014 Credit Agreement. The 5-5/8% Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. During the year ended December 31, 2017, the Company recorded a loss on early extinguishment of debt related to its 6% Notes and its 6-1/2% Notes of $43.7 million. Schedule of Debt Maturities Scheduled annual maturities of the principal portion of long-term debt outstanding at December 31, 2019 in the successive five-year period and thereafter are summarized below. Amounts shown are exclusive of minimum lease payments for capital lease obligations (in millions):
Fair Value of Debt Based on indicative price quotations from financial institutions multiplied by the amount recorded on the Company’s Consolidated Balance Sheet (“Book Value”), the Company estimates the fair values (“FV”) of its debt set forth below as of December 31, 2019 and 2018, as follows (in millions, except for quotes):
The fair value of debt reported in the table above is based on price quotations on the debt instrument in an active market and therefore is categorized under Level 1 of the ASC 820 hierarchy. See Note A – “Basis of Presentation” for an explanation of ASC 820 hierarchy. The Company believes that the carrying value of its other borrowings, including amounts outstanding, if any, for the revolving credit line under the 2017 Credit Agreement approximate fair market value based on maturities for debt of similar terms. Fair value of these other borrowings are categorized under Level 2 of the ASC 820 hierarchy. The Company paid $70.9 million, $57.5 million and $59.2 million of interest in 2019, 2018 and 2017, respectively.
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LEASE COMMITMENTS |
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LEASE COMMITMENTS | LEASES Terex has operating leases for real property, vehicles and office and industrial equipment, generally expiring over terms from 1 to 15 years. Many of the leases held by Terex include options to extend or terminate the lease. Real property leases are used for office, administrative and industrial purposes. The base terms of these leases typically expire between 2 and 6 years, with options to renew between 1 and 15 years. Most of our renewal options are linked to market conditions and Terex cannot estimate how existing renewal options will affect the monthly payments. Residual value guarantees are not material. The vehicle leases mainly include cars and trucks. Term length for these leases typically varies between 1 and 7 years. Office and industrial equipment leases primarily include machinery used for conducting business at office locations and manufacturing sites worldwide. Term length for these leases typically varies between 1 and 6 years. Operating Leases Operating lease cost consists of the following (in millions):
Variable lease costs correspond to future period lease payments which are determined at fair market value at determined points in time. Operating lease obligations consist primarily of commitments to rent real properties. Supplemental balance sheet information related to leases (in millions, except lease term and discount rate):
Maturities of operating lease liabilities (in millions):
Supplemental cash flow and other information related to operating leases (in millions):
Disclosures related to periods prior to adoption of the Lease Standard Future minimum noncancellable operating lease payments at December 31, 2018 were as follows (in millions):
Most of the Company’s operating leases provide the Company with the option to renew the leases for varying periods after the initial lease terms. These renewal options enable the Company to renew the leases based upon the fair rental values at the date of expiration of the initial lease. Total rental expense under operating leases was $37.5 million and $36.5 million in 2018 and 2017, respectively.
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RETIREMENT PLANS AND OTHER BENEFITS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETIREMENT PLANS AND OTHER BENEFITS | RETIREMENT PLANS AND OTHER BENEFITS U.S. Pension Plan The Company maintains a nonqualified Supplemental Executive Retirement Plan (“U.S. SERP”). The U.S. SERP provides retirement benefits to certain former U.S. employees of the Company. Generally, the U.S. SERP provides a benefit based on average total compensation earned over a participant’s final five years of employment and years of service reduced by benefits earned under any Company retirement program, excluding salary deferrals and matching contributions. In addition, benefits are reduced by Social Security Primary Insurance Amounts attributable to Company contributions. The U.S. SERP is unfunded and participation in the U.S. SERP has been frozen. There is a defined contribution plan for certain senior executives of the Company. The Company maintained one qualified defined benefit pension plan covering certain domestic employees (the “Terex Plan”). Participation in the Terex Plan for all employees was frozen. Participants were credited with post-freeze service for purposes of determining vesting and retirement eligibility only. The benefits covering salaried employees were based primarily on years of service and employees’ qualifying compensation during the final years of employment. The benefits covering bargaining unit employees were based primarily on years of service and a flat dollar amount per year of service. The Company’s policy was generally to fund the Terex Plan based on the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). Plan assets consisted primarily of common stocks, bonds and short-term cash equivalent funds. In November 2018, the Company completed the termination of the Terex Plan as further described below. There were no minimum contribution requirements for the 2018 and 2017 plan years. Non-U.S. Plans The Company maintains defined benefit plans in France, Germany, India, Switzerland and the United Kingdom for some of its subsidiaries. Participation in the United Kingdom plan has been frozen. The United Kingdom plan is a funded plan and the Company funds this plan in accordance with funding regulations in the United Kingdom and a negotiated agreement between the Company and the plan’s trustee. The Switzerland plan is a funded plan and the Company funds this plan in accordance with funding regulations. The plans in France, Germany and India are unfunded plans. In Italy, there are mandatory termination indemnity plans providing a benefit that is payable upon termination of employment in substantially all cases of termination. The Company records this obligation based on mandated requirements. The measure of current obligation is not dependent on the employees’ future service and therefore is measured at current value. Other Post-employment Benefits The Company has several non-pension post-retirement benefit programs. The Company provides post-employment health and life insurance benefits to certain former salaried and hourly employees. The health care programs are contributory, with participants’ contributions adjusted annually, and the life insurance plan is noncontributory. Savings Plans The Company sponsors various tax deferred savings plans into which eligible employees may elect to contribute a portion of their compensation. The Company may, but is not obligated to, contribute to certain of these plans. Charges recognized for these savings plans were $20.8 million, $21.9 million and $16.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. For the years ended December 31, 2019, 2018 and 2017, Company matching contributions to tax deferred savings plans were invested at the direction of plan participants. Information regarding the Company’s plans, including U.S. SERP, was as follows (in millions, except percent values):
Guaranteed Minimum Pension (“GMP”) Payments On October 26, 2018, the High Court of Justice in the United Kingdom ruled that Lloyds Bank plc was required to provide equal benefits for men and women for GMP payments accrued after May 17, 1990 in pension plans liabilities. Inequalities arose from statutory differences between men and women in both the earliest age from which a GMP is payable and the rates of the GMP accrual. The Company estimated the cost of equalizing the GMP payments and increased its Non-U.S. pension benefit liability by $2.6 million at December 31, 2018 for GMP payments. This was recorded as prior service costs for 2018 and amortization began in 2019.
(1) The weighted average assumptions as of December 31 are used to calculate the funded status at the end of the current year and the net periodic cost for the subsequent year.
Components of Net periodic cost other than the Service cost component are included in Other income (expense) - Net in the Consolidated Statement of Comprehensive Income (Loss). The Service cost component is included in the same line item or items as other compensation costs arising from services rendered by pertinent employees during the period. Pension Settlements In November 2018, the Company entered into a contract for a group annuity to transfer the obligation to pay the remaining retirement benefits of all plan participants in the Terex Plan to an insurance company (the “Pension Annuitization”). The transfer of $108.5 million ($31.0 million related to discontinued operations), in both plan obligations and plan assets was completed on November 5, 2018. The Company contributed $4.7 million to the plan to facilitate the transaction, secure the remaining plan obligations and take advantage of certain tax benefits. Prior to the transaction, the Terex Plan had approximately 2,600 participants. As a result of the Pension Annuitization, the Company recorded a pretax non-cash settlement loss of $50.5 million (after tax $32.1 million) reflecting the accelerated recognition of unamortized losses in the Terex Plan as a result of the obligation that was settled. Participants in the Company’s U.K pension plan may elect to receive a lump-sum settlement of remaining pension benefits under the terms of the plan. As a result of participants electing the lump-sum option during the years ended December 31, 2019 and 2018, the Company settled $2.4 million and $2.7 million of Non-U.S. pension obligations, respectively. The settlements were paid from plan assets and did not require a cash contribution from the Company. As a result, the Company recorded settlement losses of $0.6 million and $0.8 million reflecting the accelerated recognition of unamortized losses in the plan proportionate to the obligation that was settled in 2019 and 2018, respectively.
For the Company’s plans, including the U.S. SERP, that have accumulated benefit obligations in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were (in millions):
Determination of plan obligations and associated expenses requires the use of actuarial valuations based on certain economic assumptions, which includes discount rates and expected rates of return on plan assets. The discount rate enables the Company to estimate the present value of expected future cash flows on the measurement date. The rate used reflects a rate of return on high-quality fixed income investments that matches the duration of expected benefit payments at the December 31 measurement date. The methodology used to determine the rate of return on non-U.S. pension plan assets was based on average rate of earnings on funds invested and to be invested. Based on historical returns and future expectations, the Company believes the investment return assumptions are reasonable. The expected rate of return of plan assets represents an estimate of long-term returns on the investment portfolio. This assumption is reviewed by the trustees and varies with each of the plans. The overall investment strategy for Non-U.S. defined benefit plans is to achieve a mix of investments to support long-term growth and minimize volatility while maximizing rates of return by diversification of asset types, fund strategies and fund managers. Fixed income investments include investments in European government securities and European corporate bonds and constitute approximately 72% and 76% of the portfolio at December 31, 2019 and 2018, respectively. Equity investments, multi-asset investment funds and real estate investments that invest in a diversified range of property principally in the retail, office and industrial/warehouse sectors constitute approximately 28% and 24% of the portfolio at December 31, 2019 and 2018, respectively. Investments of the plans primarily include investments in companies from diversified industries with 87% invested internationally and 13% invested in North America. The target investment allocations to support the Company’s investment strategy for 2020 are approximately 71% to 73% fixed income securities and approximately 27% to 29% equity securities, multi-asset investment funds and real estate investments. Fair value of cash in the table below is based on price quotations in an active market and therefore categorized under Level 1 of the ASC 820 hierarchy. Fair value of investment funds is priced on the market value of underlying investments in the portfolio and therefore categorized as Level 2 of the ASC 820 hierarchy. Fair value of group annuity insurance contracts is based on techniques that require inputs that are both significant to the fair value measurement and unobservable and therefore categorized as Level 3 of the ASC 820 hierarchy. Specifically, group annuity insurance contracts are valued at original buy in price adjusted for changes in discount rates and other actuarial assumptions. See Note A – “Basis of Presentation,” for an explanation of the ASC 820 hierarchy. The fair value of the Company’s plan assets at December 31, 2019 are as follows (in millions):
The fair value of the Company’s plan assets at December 31, 2018 are as follows (in millions):
Changes in fair value measurements of Level 3 investments during the year ended December 31, 2019 are as follows (in millions):
The Company plans to contribute approximately $2 million to its U.S. post-retirement plans and approximately $7 million to its non-U.S. defined benefit pension plans in 2020. During the year ended December 31, 2019, the Company contributed $1.4 million to its U.S. defined benefit pension plans and post-retirement plans and $7.1 million to its non-U.S. defined benefit pension plans. The Company’s estimated future benefit payments under its plans are as follows (in millions):
For the other benefits, for measurement purposes, a 7.50% rate of increase in the per capita cost of covered health care benefits was assumed for 2020, decreasing one-half percentage point per year until it reaches 4.50% for 2025 and thereafter. Assumed health care cost trend rates may have a significant effect on the amounts reported for health care plans. A one-percentage-point change in assumed health care cost trend rates would not have a material effect on total service and interest cost components or post-retirement benefit obligation.
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY On December 31, 2019, there were 82.2 million shares of common stock issued and 70.4 million shares of common stock outstanding. Of the 217.8 million unissued shares of common stock at that date, 2.4 million shares of common stock were reserved for issuance for the vesting of restricted stock. Common Stock in Treasury. The Company values treasury stock on an average cost basis. As of December 31, 2019, the Company held 11.8 million shares of common stock in treasury totaling $406.8 million, which include 0.8 million shares held in a trust for the benefit of the Company’s deferred compensation plan totaling $19.9 million. On December 21, 2018, the Company retired 50.0 million shares of its common stock held in treasury. The shares were returned to the status of authorized but unissued shares. As a result, the treasury stock balance decreased by $1,882.0 million. As a part of the retirement, the Company reduced its common stock, Additional paid-in capital and Retained earnings balances by $(0.5) million, $(549.2) million, and $(1,332.3) million, respectively. Preferred Stock. The Company’s certificate of incorporation was amended in June 1998 to authorize 50.0 million shares of preferred stock, $0.01 par value per share. As of December 31, 2019 and 2018, there were no shares of preferred stock outstanding. Long-Term Incentive Plans. In May 2018, the stockholders approved the Terex Corporation 2018 Omnibus Incentive Plan (the “2018 Plan”). The purpose of the 2018 Plan is to assist the Company in attracting and retaining selected individuals to serve as employees, directors, officers, consultants and advisors of the Company and its subsidiaries and affiliates who will contribute to the Company’s success and to achieve long-term objectives which will inure to the benefit of all stockholders of the Company through the additional incentive inherent in the ownership of the common stock. The 2018 Plan authorizes the granting of (i) options to purchase shares of common stock (“Shares”), (ii) stock appreciation rights, (iii) restricted stock awards, (iv) restricted stock units, (v) other stock awards, (vi) cash awards and (vii) performance awards. The maximum number of Shares that may be the subject of awards under the 2018 Plan is 1.2 million Shares, plus the number of Shares remaining available for issuance under the Terex Corporation 2009 Omnibus Incentive Plan (the “2009 Plan”) that are not subject to outstanding awards as of the date of stockholder approval, and the number of Shares subject to awards outstanding under the 2009 Plan as of such date but only to the extent that such outstanding awards are forfeited, expire, or otherwise terminate without the issuance of such Shares. Under the 2018 Plan, Shares covering restricted stock awards, restricted stock units and other stock awards shall only be counted as used to the extent that they are actually issued. As of December 31, 2019, 2.3 million shares were available for grant under the 2018 Plan. In May 2009, the stockholders approved the 2009 Plan. The purpose of the 2009 Plan is to provide a means whereby employees, directors and third-party service providers of the Company develop a sense of proprietorship and personal involvement in the development and financial success of the Company, and to encourage them to devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its stockholders. The 2009 Plan provides for incentive compensation in the form of (i) options to purchase Shares, (ii) stock appreciation rights, (iii) restricted stock awards and restricted stock units, (iv) other stock awards, (v) cash awards, and (vi) performance awards. The maximum number of Shares available for issuance under the 2009 Plan was 8.0 million Shares plus the number of Shares remaining available for issuance under the Terex Corporation 2000 Incentive Plan and the 1996 Terex Corporation Long-Term Incentive Plan. Under the 2018 and 2009 Plans, approximately 48% of outstanding awards are time-based and vest ratably on each of the first three anniversary dates. Approximately 35% cliff vest at the end of a three-year period and are subject to performance targets that may or may not be met and for which the performance period has not yet been completed. Approximately 17% cliff vest and are based on performance targets containing a market condition determined over a three-year period. Fair value of restricted stock awards is based on the market price at the date of grant approval except for 0.4 million shares based on a market condition. The Company uses the Monte Carlo method to provide grant date fair value for awards with a market condition. The Monte Carlo method is a statistical simulation technique used to provide the grant date fair value of an award. The following table presents the weighted-average assumptions used in the valuations:
The following table is a summary of restricted stock awards under all of the Company’s plans:
As of December 31, 2019, unrecognized compensation costs related to restricted stock totaled approximately $37 million, which will be expensed over a weighted average period of 1.7 years. The grant date weighted average fair value for restricted stock awards during the years ended December 31, 2019, 2018 and 2017 was $33.84, $40.06 and $32.54, respectively. The total fair value of shares vested for restricted stock awards was $44.1 million, $34.9 million and $36.0 million for the years ended December 31, 2019, 2018 and 2017, respectively. Tax benefits associated with stock-based compensation were $7.3 million, $4.6 million and $11.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. The excess tax benefit for all stock-based compensation is included in the Consolidated Statement of Cash Flows as an operating cash activity. Comprehensive Income (Loss). The following table reflects the accumulated balances of other comprehensive income (loss) (in millions):
As of December 31, 2019, accumulated other comprehensive income (loss) for the cumulative translation adjustment, derivative hedging adjustment, debt and equity securities adjustment and pension liability adjustment are net of a tax benefit/(provision) of $7.6 million, $(0.3) million, $(0.1) million and $3.2 million, respectively. Changes in Accumulated Other Comprehensive Income (Loss) The table below presents changes in AOCI by component for the year ended December 31, 2019 and 2018. All amounts are net of tax (in millions).
(1) Reclassifications relate to $26.1 million of losses (net of $2.8 million of tax benefits) reclassified from AOCI to Gain (loss) on disposition of discontinued operations - net of tax in connection with the sale of Demag. (2) Reclassifications primarily relate to $12.6 million of losses (net of $5.3 million of tax benefits) reclassified from AOCI to Gain (loss) on disposition of discontinued operations - net of tax in connection with the sale of Demag. (3) Reclassifications primarily relate to $42.6 million of losses (net of $24.4 million of tax benefits) reclassified from AOCI to Other income (expense) - net in connection with the settlement of U.S. defined benefit pension obligations. (4) Other relates to amounts reclassified from AOCI to Retained Earnings in connection with the adoption of ASU 2016-01 and 2016-16. Share Repurchases and Dividends Since February 2015, Terex’s Board of Directors authorized the Company to repurchase up to $1,680 million of its outstanding shares of common stock of which approximately $131 million of these authorizations was utilized prior to January 1, 2017. The Company repurchased 0.2 million shares for $4.9 million, 11.4 million shares for $425.0 million and 25.7 million shares for $923.7 million under these programs during the years ended December 31, 2019, 2018 and 2017, respectively. Terex’s Board of Directors declared a dividend of $0.11, $0.10 and $0.08 per share in each quarter of 2019, 2018 and 2017, respectively, which were paid to the Company’s shareholders. In February 2020, Terex’s Board of Directors declared a dividend of $0.12 per share which will be paid on March 19, 2020.
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LITIGATION AND CONTINGENCIES |
12 Months Ended |
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Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION AND CONTINGENCIES | LITIGATION AND CONTINGENCIES General The Company is involved in various legal proceedings, including product liability, general liability, workers’ compensation liability, employment, commercial and intellectual property litigation, which have arisen in the normal course of operations. The Company is insured for product liability, general liability, workers’ compensation, employer’s liability, property damage and other insurable risk required by law or contract, with retained liability or deductibles. The Company records and maintains an estimated liability in the amount of management’s estimate of the Company’s aggregate exposure for such retained liabilities and deductibles. For such retained liabilities and deductibles, the Company determines its exposure based on probable loss estimations, which requires such losses to be both probable and the amount or range of probable loss to be estimable. The Company believes it has made appropriate and adequate reserves and accruals for its current contingencies and the likelihood of a material loss beyond amounts accrued is remote. The Company believes the outcome of such matters, individually and in aggregate, will not have a material adverse effect on its financial statements as a whole. However, outcomes of lawsuits cannot be predicted and, if determined adversely, could ultimately result in the Company incurring significant liabilities which could have a material adverse effect on its results of operations. Securities and Stockholder Derivative Lawsuits In 2010, the Company received complaints seeking certification of class action lawsuits as follows: •A consolidated class action complaint for violations of securities laws was filed in the United States District Court, District of Connecticut on November 18, 2010 and is entitled Sheet Metal Workers Local 32 Pension Fund and Ironworkers St. Louis Council Pension Fund, individually and on behalf of all others similarly situated v. Terex Corporation, et al. •A stockholder derivative complaint for violation of the Securities and Exchange Act of 1934, breach of fiduciary duty, waste of corporate assets and unjust enrichment was filed on April 12, 2010 in the United States District Court, District of Connecticut and is entitled Peter Derrer, derivatively on behalf of Terex Corporation v. Ronald M. DeFeo, Phillip C. Widman, Thomas J. Riordan, G. Chris Andersen, Donald P. Jacobs, David A. Sachs, William H. Fike, Donald DeFosset, Helge H. Wehmeier, Paula H.J. Cholmondeley, Oren G. Shaffer, Thomas J. Hansen, and David C. Wang, and Terex Corporation. These lawsuits, which generally covered the time period from February 2008 to February 2009, alleged violations of federal securities laws and Delaware law claiming, among other things, that certain of the Company’s SEC filings and other public statements contained false and misleading statements which resulted in damages to the Company, the plaintiffs and the members of the purported class when they purchased the Company’s securities and that there were breaches of fiduciary duties. With respect to these claims, the Company believes that it acted at all times in compliance with all applicable laws and, without any admission of wrongdoing or liability, has settled the stockholder derivative and securities lawsuits. The settlement amounts with respect to each lawsuit were covered by the Company’s insurance policies and did not have a material effect on the Company’s financial results. As part of the stockholder derivative settlement, the Company has agreed to make certain amendments to its corporate governance procedures. Terex Latin América Equipamentos Ltda ICMS Proceedings Terex Latin America Equipamentos Ltda (“TLA”) imports Terex products into Brazil through the state of Espirito Santo to its facility in Sao Paulo. For the 2004 through March 2009 period TLA used a third-party trading company, SAB, as an agent to process the importation of Terex products. TLA properly paid the Espirito Santo ICMS tax (Brazilian state value-added tax) to SAB for payment to Espirito Santo, which would produce an ICMS credit to be used against imposition of Sao Paolo ICMS tax. SAB went into bankruptcy and may not have actually remitted to Espirito Santo the ICMS tax amounts paid to it by TLA. The Brazilian state of Sao Paulo challenged the credit against Sao Paolo ICMS that TLA claimed and assessed unpaid ICMS and related interest in the amount of approximately BRL 102 million ($24 million). TLA challenged the claim of Sao Paulo and learned in October 2019 that the Sao Paulo claim has survived the administrative tribunal process. TLA anticipates that it will receive notice for an amount due from Sao Paulo and expects to protest the Sao Paulo claim in litigation which is likely to commence in 2020. While the Company believes the position of the state of Sao Paulo is without merit and continues to vigorously oppose it, no assurance can be given as to the final resolution of the ICMS litigation or that TLA will not ultimately be required to pay ICMS and interest to the state of Sao Paulo. Other The Company is involved in various other legal proceedings which have arisen in the normal course of its operations. The Company has recorded provisions for estimated losses in circumstances where a loss is probable and the amount or range of possible amounts of the loss is estimable. Credit Guarantees Customers of the Company from time to time may fund the acquisition of the Company’s equipment through third-party finance companies. In certain instances, the Company may provide a credit guarantee to the finance company, by which the Company agrees to make payments to the finance company should the customer default. These may require the Company to: (i) pay-off the customer’s obligations, (ii) assume the customer’s payments or (iii) pay a predetermined percentage of the customer’s outstanding obligation. The current amount of the maximum potential liability under these credit guarantees cannot be reasonably estimated due to limited availability of the unique facts and circumstances of each arrangement, such as customer delinquency and whether changes have been made to the structure of the contractual obligation between the funder and customer. For credit guarantees outstanding as of December 31, 2019 and 2018, the maximum exposure determined at inception was $78.4 million and $59.2 million ($20.3 million related to discontinued operations), respectively. Terms of these guarantees coincide with the financing arranged by the customer and generally do not exceed five years. Given the Company’s position as original equipment manufacturer and its knowledge of end markets, the Company, when called upon to fulfill a guarantee, generally has been able to liquidate the financed equipment at a minimal loss, if any, to the Company. There can be no assurance that historical credit default experience will be indicative of future results. The Company’s ability to recover losses experienced from its guarantees may be affected by economic conditions in effect at the time of loss.
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES |
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Schedule II - Valuation and Qualifying Accounts and Reserves | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Amounts in millions)
(1)Primarily represents the impact of foreign currency exchange, business divestitures and other amounts recorded to accumulated other comprehensive income (loss). (2)Primarily represents the utilization of established reserves, net of recoveries.
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BASIS OF PRESENTATION (Policies) |
12 Months Ended |
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Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation. The Consolidated Financial Statements include the accounts of Terex Corporation, its majority-owned subsidiaries and other controlled subsidiaries (“Terex” or the “Company”). The Company consolidates all majority-owned and controlled subsidiaries, applies equity method of accounting for investments in which the Company is able to exercise significant influence, and applies the cost method for all other investments. All intercompany balances, transactions and profits have been eliminated. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash equivalents consist of highly liquid investments with original maturities of three months or less. Carrying amount of cash and cash equivalents approximates its fair value. Cash and cash equivalents at December 31, 2019 and 2018 include $4.6 million and $12.6 million, respectively, which were not immediately available for use. These consist primarily of cash balances held in escrow to secure various obligations of the Company. |
Inventories | Inventories. Inventories are stated at the lower of cost or net realizable value (“NRV”). Cost is determined by the average cost and first-in, first-out (“FIFO”) methods (approximately 10% and 90%, respectively). In valuing inventory, the Company is required to make assumptions regarding the level of reserves required to value potentially obsolete or over-valued items at lower of cost or NRV. These assumptions require the Company to analyze aging of and forecasted demand for its inventory, forecasted future product sales prices, pricing trends and margins, and to make judgments and estimates regarding obsolete or excess inventory. Future product sales prices, pricing trends and margins are based on the best available information at that time including actual orders received, negotiations with the Company’s customers for future orders, including their plans for expenditures, and market trends for similar products. The Company’s judgments and estimates for excess or obsolete inventory are based on analysis of actual and forecasted usage. The valuation of used equipment taken in trade from customers requires the Company to use best information available to determine the value of the equipment to potential customers. This value is subject to change based on numerous conditions. Inventory reserves are established taking into account age, frequency of use, or sale, and in the case of repair parts, installed base of machines. While calculations are made involving these factors, significant management judgment regarding expectations for future events is involved. Future events that could significantly influence the Company’s judgment and related estimates include general economic conditions in markets where the Company’s products are sold, new equipment price fluctuations, actions of the Company’s competitors, including introduction of new products and technological advances, as well as new products and design changes the Company introduces. The Company makes adjustments to its inventory reserves based on the identification of specific situations and increases its inventory reserves accordingly. As further changes in future economic or industry conditions occur, the Company may revise estimates that were used to calculate its inventory reserves. At December 31, 2019 and 2018, reserves for lower of cost or NRV, excess and obsolete inventory totaled $53.2 million and $49.8 million, respectively. If actual conditions are less favorable than those the Company has projected, the Company will increase its reserves for lower of cost or NRV, excess and obsolete inventory accordingly. Any increase in the Company’s reserves will adversely impact its results of operations. Establishment of a reserve for lower of cost or NRV, excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. Shipping and handling costs for product shipments to customers are recorded in Cost of goods sold (“COGS”).
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Debt Issuance Costs | Debt Issuance Costs. Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized over the term of the associated debt. Debt issuance costs related to senior notes and term loans are presented in the balance sheet as a direct deduction from the carrying amount of the borrowing, consistent with debt discounts. Debt issuance costs related to securing the Company’s revolving line of credit are presented in Other assets. Debt issuance costs related to debt that is extinguished early are charged to expense at the time of retirement. |
Intangible Assets | Intangible Assets. Intangible assets include purchased patents, trademarks, customer relationships and other specifically identifiable assets and are amortized on a straight-line basis over the respective estimated useful lives, which range from one to ninety-nine years. Intangible assets are reviewed for impairment when circumstances warrant. |
Goodwill | Goodwill. Goodwill is assigned to one or more reporting segments on the date of acquisition. The Company reviews its goodwill for impairment annually during the fourth quarter of each fiscal year and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of any one of its reporting units below its respective carrying amount. In performing the goodwill impairment test, the Company first performs a qualitative assessment, which requires that it consider events or circumstances including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting segment’s net assets and changes in its stock price. If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair values of its reporting segments are greater than the carrying amounts, then the quantitative goodwill impairment test is not performed. If the qualitative assessment indicates that the quantitative analysis should be performed, the Company then evaluates goodwill for impairment by comparing the fair value of each of its reporting segments to its carrying value, including the associated goodwill. To determine the fair values, the Company uses an income approach, along with other relevant market information, derived from a discounted cash flow model to estimate fair value of its reporting units. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any, would be recognized. The loss recognized would not exceed total amount of goodwill allocated to that reporting unit.
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Property, Plant and Equipment | Property, Plant and Equipment. Property, plant and equipment are stated at cost. Expenditures for major renewals and improvements are capitalized while expenditures for maintenance and repairs not expected to extend the life of an asset beyond its normal useful life are charged to expense when incurred. Plant and equipment are depreciated over the estimated useful lives (1-40 years and 2-20 years, respectively) of the assets under the straight-line method of depreciation for financial reporting purposes and both straight-line and other methods for tax purposes. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. The Company’s policy is to assess the realizability of its long-lived assets, including definite-lived intangible assets, and to evaluate such assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets (or group of assets) may not be recoverable. Impairment is determined to exist if estimated future undiscounted cash flows are less than carrying value. If an impairment is indicated, assets are written down to their fair value, which is typically determined by a discounted cash flow analysis. Future cash flow projections include assumptions regarding future sales levels and the level of working capital needed to support the assets. The Company uses data developed by business segment management as well as macroeconomic data in making these calculations. There are no assurances that future cash flow assumptions will be achieved. The amount of any impairment then recognized would be calculated as the difference between estimated fair value and carrying value of the asset. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical customer review and current financial conditions. The Company reviews its allowance for doubtful accounts at least quarterly. Account balances are charged off against the allowance when the Company determines it is probable the receivable will not be recovered. There can be no assurance that the Company’s historical accounts receivable collection experience will be indicative of future results. The Company has off-balance sheet credit exposure related to guarantees provided to financial institutions as disclosed in Note O – “Litigation and Contingencies.” Substantially all receivables were trade receivables at December 31, 2019 and 2018.Pursuant to terms of the Company’s trade accounts receivable factoring arrangements, certain of the Company’s subsidiaries may sell their trade accounts receivable. In certain cases, the Company continues to service such accounts. These trade receivables qualify for sales treatment under Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing” (“ASC 860”) and accordingly, the proceeds are included in net cash provided by operating activities. |
Revenue Recognition | Revenue Recognition. The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. In the United States, we have the ability to enter into a security agreement and receive a security interest in the product by filing an appropriate Uniform Commercial Code (“UCC”) financing statement. However, a significant portion of the Company’s revenue is generated outside of the United States. In many countries outside of the United States, as a matter of statutory law, a seller retains title to a product until payment is made. The laws do not provide for a seller’s retention of a security interest in goods in the same manner as established in the UCC. In these countries, we retain title to goods delivered to a customer until the customer makes payment so that we can recover the goods in the event of customer default on payment. The Company considers the following events in order to determine when it is appropriate to recognize revenue: (i) the customer has physical possession of the product; (ii) the customer has legal title to the product; (iii) the customer has assumed the risks and rewards of ownership and (iv) the customer has communicated acceptance of the product. These events serve as indicators, along with the details contained within the contract, that it is appropriate to recognize revenue. The Company generates revenue through the sale of machines, parts and service, and extended warranties. Revenue from product sales is recorded when the performance obligation is fulfilled, usually at the time of shipment, at the net sales price (transaction price). Estimates of variable consideration, such as volume discounts and rebates, reduce transaction price when it is probable that a customer will attain these types of sales incentives. These estimates are primarily derived from contractual terms and historical experience. The Company elected to present revenue net of sales tax and other similar taxes and account for shipping and handling as activities to fulfill the promise to transfer goods rather than separate performance obligations. Payments are typically due either 30 or 60 days, depending on geography, following delivery of products or completion of services. Revenue from extended warranties is recognized over time on a straight line basis because the customer benefits evenly from the extended warranty throughout the period; beginning upon expiration of the standard warranty and through end of the term. Revenue from services is recognized based on cost input method as the time and materials used in the repair portrays the most accurate depiction of completion of the performance obligation. During the full year ended December 31, 2019, revenues generated from the sale of extended warranties and services were an immaterial portion of revenue. The Company sells equipment subject to leases and related lease payments. Income from operating leases is recognized ratably over the lease term. Revenue from sales-type leases is recognized at the inception of the lease.
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Leases | Leases. Terex leases approximately 100 real properties, approximately 500 vehicles, and approximately 400 pieces of office and industrial equipment. As the lessee, Terex will classify a lease which it has substantially all the risks and rewards of ownership as a finance lease. The Company determines if an arrangement contains a lease at contract inception. With the exception of short-term leases (leases with terms less than 12 months), all leases with contractual fixed costs are recorded on the balance sheet on the lease commencement date as a right-of-use (“ROU”) asset and a lease liability. Lease liabilities are initially measured at the present value of the minimum lease payments and subsequently increased to reflect the interest accrued and reduced by the lease payments affected. ROU assets are initially measured at the present value of the minimum lease payments adjusted for any prior lease payments, lease incentives and initial direct costs. The Company does not separate lease and non-lease components of a contract for any class of leases. Certain leases contain escalation, renewal and/or termination options that are factored into the ROU asset as appropriate. Operating leases result in a straight-line rent expense over the life of the lease. For finance leases, ROU assets are amortized on a straight-line basis over the life of the lease and interest accretes to the lease liability which results in a higher interest expense at lease inception that declines over the life of the lease. Variable lease costs are expensed as incurred and are not included in the determination of ROU assets or lease liabilities. Short-term leases for real property, vehicles and industrial and office equipment are recognized in the income statement on a straight-line basis over the lease term. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments, if the rate is not implicit in the lease. Consideration is given to the Company’s recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating incremental borrowing rates. For detailed lease information see Note L - “Leases”.
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Guarantees | Guarantees. The Company records a liability for the estimated fair value of guarantees issued pursuant to ASC 460. The Company recognizes a loss under a guarantee when its obligation to make payment under the guarantee is probable and the amount of the loss can be estimated. A loss would be recognized if the Company’s payment obligation under the guarantee exceeds the value it can expect to recover to offset such payment, primarily through the sale of the equipment underlying the guarantee. |
Accrued Warranties | Accrued Warranties. The Company records accruals for potential warranty claims based on its claim experience. The Company’s products are typically sold with a standard warranty covering defects that arise during a fixed period. Each business provides a warranty specific to products it offers. The specific warranty offered by a business is a function of customer expectations and competitive forces. Warranty length is generally a fixed period of time, a fixed number of operating hours or both. A liability for estimated warranty claims is accrued at the time of sale. The current portion of the product warranty liability is included in Other current liabilities and the non-current portion is included in Other non-current liabilities in the Company’s Consolidated Balance Sheet. The liability is established using historical warranty claims experience for each product sold. Historical claims experience may be adjusted for known design improvements or for the impact of unusual product quality issues. Warranty reserves are reviewed quarterly to ensure critical assumptions are updated for known events that may affect the potential warranty liability.
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Accrued Product Liability | Accrued Product Liability. The Company records accruals for product liability claims when deemed probable and estimable based on facts and circumstances, and prior claims experience. Accruals for product liability claims are valued based upon the Company’s prior claims experience, including consideration of jurisdiction, circumstances of the accident, type of loss or injury, identity of plaintiff, other potential responsible parties, analysis of outside legal counsel, analysis of internal product liability counsel and experience of the Company’s product safety employees. Actual product liability costs could be different due to a number of variables such as the decisions of juries or judges. |
Defined Benefit Pension and Other Postretirement Benefits | Defined Benefit Pension and Other Post-retirement Benefits. The Company provides post-retirement benefits to certain former salaried and hourly employees and certain hourly employees covered by bargaining unit contracts that provide such benefits. The Company accounts for these benefits under ASC 715, “Compensation-Retirement Benefits” (“ASC 715”). ASC 715 requires balance sheet recognition of the overfunded or underfunded status of pension and post-retirement benefit plans. Under ASC 715, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in Accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic benefit cost. |
Deferred Compensation | Deferred Compensation. The Company maintains a deferred compensation plan, which is described more fully in Note M – “Retirement Plans and Other Benefits.” The Company’s common stock held in a rabbi trust pursuant to the Company’s deferred compensation plan, is treated in a manner similar to treasury stock and is recorded at cost within Stockholders’ equity as of December 31, 2019 and 2018. The plan obligations for participant deferrals in common stock are classified as Additional paid-in capital and deferrals in the bond fund investment are classified as Accrued compensation and benefits and Other non-current liabilities in the Consolidated Balance Sheet. The total of common stock required to settle this deferred compensation obligation is included in the denominator in both basic and diluted earnings per share calculations. |
Stock-Based Compensation | Stock-Based Compensation. At December 31, 2019, the Company had stock-based employee compensation plans, which are described more fully in Note N – “Stockholders’ Equity.” The Company accounts for those plans under the recognition and measurement principles of ASC 718, “Compensation–Stock Compensation” (“ASC 718”). ASC 718 requires that expense resulting from all share-based payment transactions be recognized in the financial statements at fair value. The Company recognizes forfeitures as they occur. |
Foreign Currency Translation | Foreign Currency Translation. Assets and liabilities of the Company’s non-U.S. operations are translated at year-end exchange rates. Income and expenses are translated at average exchange rates during the year. For operations whose functional currency is the local currency, translation adjustments are recorded in the Accumulated other comprehensive income component of Stockholders’ equity. Gains or losses resulting from foreign currency transactions are recorded in the accounts based on the underlying transaction. |
Derivatives | Derivatives. Derivative financial instruments are recorded in the Consolidated Balance Sheet at their fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded each period in earnings or Accumulated other comprehensive income, depending on whether a derivative is designated and effective as part of a hedge transaction and, if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in Accumulated other comprehensive income are included in earnings in the periods in which earnings are affected by the hedged item. |
Environmental Policies | Environmental Policies. Environmental expenditures that relate to current operations are either expensed or capitalized depending on the nature of the expenditure. Expenditures relating to conditions caused by past operations that do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial actions are probable and the costs can be reasonably estimated. |
Research and Development Costs | Research, Development and Engineering Costs. Research, development and engineering costs are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products are included in SG&A. |
Income Taxes | Income Taxes. The Company accounts for income taxes using the asset and liability method. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax bases of assets and liabilities. |
Earnings Per Share | Earnings Per Share. Basic earnings (loss) per share is computed by dividing Net income (loss) attributable to Terex Corporation for the period by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per share is computed by dividing Net income (loss) attributable to Terex Corporation for the period by the weighted average number of shares of common stock outstanding and potential dilutive common shares. |
Fair Value Measurements | Fair Value Measurements. Assets and liabilities measured at fair value on a recurring basis under the provisions of ASC 820, “Fair Value Measurement and Disclosure” (“ASC 820”), include foreign exchange contracts, cross currency and commodity swaps and a debt conversion feature on a convertible promissory note discussed in Note J – “Derivative Financial Instruments”, debt discussed in Note K – “Long-term Obligations” and defined benefit plan assets discussed in Note M – “Retirement Plans and Other Benefits”. These instruments are valued using a market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. ASC 820 establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). Determining which category an asset or liability falls within this hierarchy requires judgment. The Company evaluates its hierarchy disclosures each quarter.
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Standards Accounting Standards Implemented in 2019 In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, “Leases (Topic 842),” (“ASU 2016-02”). The standard establishes a ROU model that requires a lessee to recognize an ROU asset and a lease liability on the balance sheet for all leases with a term longer than 12 months and requires the disclosure of key information about leasing arrangements. Leases are classified as finance or operating, with classification affecting the subsequent expense pattern and presentation of expense recognition in the income statement. Subsequently, the FASB issued the following standards related to ASU 2016-02: ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842”, ASU 2018-10, “Codification Improvements to Topic 842, Leases”, ASU 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), ASU 2018-20, “Narrow-Scope Improvements for Lessors” and ASU 2019-01, “Leases (Topic 842): Codification Improvements”, which provided additional guidance and clarity to ASU 2016-02 (collectively, the “Lease Standard”). The Company adopted the Lease Standard on January 1, 2019 under the alternative transition method permitted by ASU 2018-11. This transition method allowed the Company to initially apply the requirements of the Lease Standard at the adoption date, versus at the beginning of the earliest period presented. The Company elected the transition package of practical expedients, the practical expedient to not separate lease and non-lease components for all of its leases, the short-term lease recognition exemption for all of its leases that qualify and the land easement practical expedient; it did not elect the use of hindsight practical expedient. Adoption of the Lease Standard had a material effect on the Company’s consolidated financial statements due to the recognition of approximately $138 million of operating lease liabilities (approximately $6 million related to discontinued operations) with corresponding ROU assets. The Company implemented a global lease accounting system and updated internal controls over financial reporting, as necessary, to accommodate modifications to its business processes and accounting procedures as a result of the Lease Standard. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” (“ASU 2018-02”). ASU 2018-02 allows reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from H.R. 1 “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”. The Company adopted ASU 2018-02 on January 1, 2019. Adoption did not have a material effect on the Company’s consolidated financial statements. In July 2018, the FASB issued ASU 2018-09, “Codification Improvements,” (“ASU 2018-09”). ASU 2018-09 provides technical corrections, clarifications and other improvements across a variety of accounting topics. Certain amendments were applicable immediately while others provide transition guidance and are effective in the first quarter of fiscal year 2019. The Company completed the adoption of ASU 2018-09 on January 1, 2019. Adoption did not have a material effect on the Company’s consolidated financial statements. Accounting Standards to be Implemented In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”). ASU 2016-13 sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. The guidance in this standard replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. Subsequently, the FASB issued the following standards related to ASU 2016-13: ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU 2019-05, “Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief,” and ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which provided additional guidance and clarity to ASU 2016-13 (collectively, the “Credit Loss Standard”). The effective date will be the first quarter of fiscal year 2020 and early adoption is permitted. The Credit Loss Standard will be applied using a modified retrospective approach. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans,” (“ASU 2018-14”). ASU 2018-14 adds, removes and clarifies disclosure requirements related to defined benefit pension plans and other postretirement plans. The guidance is effective for our fiscal year ending December 31, 2020 and early adoption is permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The effective date will be the first quarter of fiscal year 2020 and early adoption is permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” (“ASU 2019-04”). ASU 2019-04 provides narrow scope amendments for Topics 326, 815 and 825. The effective date will be the first quarter of fiscal year 2020 and early adoption is permitted. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. The effective date will be the first quarter of fiscal year 2021 and early adoption is permitted. The Company is currently evaluating the impact that the amendments to Topic 740 will have on its consolidated financial statements.
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BASIS OF PRESENTATION (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated current and non-current product warranty liability | The following table summarizes the changes in the consolidated product warranty liability (in millions):
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BUSINESS SEGMENT INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of business segment information | Business segment information is presented below (in millions):
Sales between segments are generally priced to recover costs plus a reasonable markup for profit, which is eliminated in consolidation.
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Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country |
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Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | Geographic net sales information is presented below (in millions):
(1) Includes intercompany sales and eliminations. (2) Total sales include $2.3 billion attributable to the U.S., the Company’s country of domicile.
(1) Includes intercompany sales and eliminations. (2) Total sales include $2.4 billion attributable to the U.S., the Company’s country of domicile.
(1) Includes intercompany sales and eliminations. (2) Total sales include $2.1 billion attributable to the U.S., the Company’s country of domicile. The Company attributes sales to unaffiliated customers in different geographical areas based on the location of the customer. Product type net sales information is presented below (in millions):
(1) Includes other product types, intercompany sales and eliminations.
(1) Includes other product types, intercompany sales and eliminations.
(1) Includes other product types, intercompany sales and eliminations. (2) Remaining Compact Construction product lines divested in 2017.
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INCOME TAXES INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | The components of income (loss) from continuing operations before income taxes are as follows (in millions):
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Schedule of Components of Income Tax Expense (Benefit) | The major components of the Company’s provision for (benefit from) income taxes on continuing operations before income taxes are summarized below (in millions):
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of the basis differences and loss carry forwards as of December 31, 2019 and 2018 for continuing operations are summarized below for major balance sheet captions (in millions):
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Schedule of Effective Income Tax Rate Reconciliation | The Company’s Provision for (benefit from) income taxes is different from the amount that would be provided by applying the statutory federal income tax rate to the Company’s Income (loss) from continuing operations before income taxes. The reasons for the difference are summarized as follows (in millions):
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Summary of Income Tax Contingencies | The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions).
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DISCONTINUED OPERATIONS AND OTHER DIVESTITURES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Assets and Liabilities Held for Sale | The following table provides the amounts of assets and liabilities held for sale in the Consolidated Balance Sheet (in millions):
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Schedule of Cash Flow, Supplemental Disclosures | The following table provides amounts of cash and cash equivalents presented in the Consolidated Statement of Cash Flows (in millions):
The following table provides supplemental cash flow information related to discontinued operations (in millions):
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Schedule of discontinued operations presented in the Consolidated Financial Statements | The following amounts related to discontinued operations were derived from historical financial information and have been segregated from continuing operations and reported as discontinued operations in the Consolidated Statement of Income (Loss) (in millions):
Gain (Loss) on Disposition of Discontinued Operations - net of tax (in millions):
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EARNINGS PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share |
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FINANCE RECEIVABLES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | Finance receivables, net consisted of the following (in millions):
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Impaired Financing Receivables | The following table presents individually impaired finance receivables (in millions):
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Allowance for Credit Losses on Financing Receivables | The following table presents an analysis of the allowance for credit losses (in millions):
The allowance for credit losses and finance receivables by portfolio, segregated by those amounts that are individually evaluated for impairment and those that are collectively evaluated for impairment, was as follows (in millions):
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Past Due Financing Receivables | The following tables present analysis of aging of recorded investment in finance receivables (in millions):
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Financing Receivable Credit Quality Indicators | Finance receivables by risk rating (in millions):
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INVENTORIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventories consist of the following (in millions):
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property, plant and equipment | Property, plant and equipment – net consist of the following (in millions):
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in goodwill by business segment | n analysis of changes in the Company’s goodwill by business segment is as follows (in millions):
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Schedule of intangible assets by class | Intangible assets, net were comprised of the following as of December 31, 2019 and 2018 (in millions):
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Finite-lived Intangible Assets Amortization Expense |
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Schedule of intangible assets amortization expense | Estimated aggregate intangible asset amortization expense (in millions) for each of the next five years is as follows:
|
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of derivative instruments designated as hedging instruments that are reported in the Consolidated Balance Sheet | The following table provides the location and fair value amounts of derivative instruments designated and not designated as hedging instruments that are reported in the Consolidated Balance Sheet (in millions):
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Schedule of derivative instruments that are designated as hedges in the Consolidated Statement of Income and Accumulated other comprehensive income (loss) ("OCI") | The following tables provide the effect of derivative instruments that are designated as hedges in AOCI (in millions):
The following tables provide the effect of derivative instruments that are designated as hedges in the Consolidated Statement of Income (Loss) (in millions):
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Schedule of derivative instruments that are not designated as hedges in the Consolidated Statement of Income and OCI | The following table provides the effect of non-designated derivatives outstanding at the end of the period in the Consolidated Statement of Income (Loss) (in millions):
|
LONG-TERM OBLIGATIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Letters of credit outstanding (in millions):
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Schedule of Long-term Debt Instruments | Long-term debt is summarized as follows (in millions):
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Schedule of Maturities of Long-term Debt | Amounts shown are exclusive of minimum lease payments for capital lease obligations (in millions):
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Based on indicative price quotations from financial institutions multiplied by the amount recorded on the Company’s Consolidated Balance Sheet (“Book Value”), the Company estimates the fair values (“FV”) of its debt set forth below as of December 31, 2019 and 2018, as follows (in millions, except for quotes):
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LEASE COMMITMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Commitments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases (in millions, except lease term and discount rate):
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Lease cost | Operating lease cost consists of the following (in millions):
Supplemental cash flow and other information related to operating leases (in millions):
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Maturities of operating lease liabilities | Maturities of operating lease liabilities (in millions):
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Future minimum operating lease payments under ASC 840 | Future minimum noncancellable operating lease payments at December 31, 2018 were as follows (in millions):
|
RETIREMENT PLANS AND OTHER BENEFITS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Information regarding the Company’s plans, including U.S. SERP, was as follows (in millions, except percent values):
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Schedule of Assumptions Used |
(1) The weighted average assumptions as of December 31 are used to calculate the funded status at the end of the current year and the net periodic cost for the subsequent year.
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Schedule of Net Periodic Benefit Cost Not yet Recognized |
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Schedule of Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income |
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Schedule of Amounts Recognized in Other Comprehensive Income (Loss) |
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Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | For the Company’s plans, including the U.S. SERP, that have accumulated benefit obligations in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were (in millions):
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Schedule of Fair Value of Plan Assets by Measurement Levels | Fair value of cash in the table below is based on price quotations in an active market and therefore categorized under Level 1 of the ASC 820 hierarchy. Fair value of investment funds is priced on the market value of underlying investments in the portfolio and therefore categorized as Level 2 of the ASC 820 hierarchy. Fair value of group annuity insurance contracts is based on techniques that require inputs that are both significant to the fair value measurement and unobservable and therefore categorized as Level 3 of the ASC 820 hierarchy. Specifically, group annuity insurance contracts are valued at original buy in price adjusted for changes in discount rates and other actuarial assumptions. See Note A – “Basis of Presentation,” for an explanation of the ASC 820 hierarchy. The fair value of the Company’s plan assets at December 31, 2019 are as follows (in millions):
The fair value of the Company’s plan assets at December 31, 2018 are as follows (in millions):
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Schedule of Expected Benefit Payments | The Company’s estimated future benefit payments under its plans are as follows (in millions):
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Schedule of changes in fair value measurements of Level 3 investments | Changes in fair value measurements of Level 3 investments during the year ended December 31, 2019 are as follows (in millions):
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STOCKHOLDERS' EQUITY (Tables) |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table presents the weighted-average assumptions used in the valuations:
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Schedule of Share-based Compensation Restricted Stock Awards Activity | The following table is a summary of restricted stock awards under all of the Company’s plans:
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Schedule of Accumulated Other Comprehensive Income (Loss) |
Changes in Accumulated Other Comprehensive Income (Loss) The table below presents changes in AOCI by component for the year ended December 31, 2019 and 2018. All amounts are net of tax (in millions).
(1) Reclassifications relate to $26.1 million of losses (net of $2.8 million of tax benefits) reclassified from AOCI to Gain (loss) on disposition of discontinued operations - net of tax in connection with the sale of Demag. (2) Reclassifications primarily relate to $12.6 million of losses (net of $5.3 million of tax benefits) reclassified from AOCI to Gain (loss) on disposition of discontinued operations - net of tax in connection with the sale of Demag. (3) Reclassifications primarily relate to $42.6 million of losses (net of $24.4 million of tax benefits) reclassified from AOCI to Other income (expense) - net in connection with the settlement of U.S. defined benefit pension obligations. (4) Other relates to amounts reclassified from AOCI to Retained Earnings in connection with the adoption of ASU 2016-01 and 2016-
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DISCONTINUED OPERATIONS AND OTHER DIVESTITURES - Cash and Cash Equivalents (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash and cash equivalents - continuing operations | $ 535.1 | $ 339.5 | $ 571.6 | |
Total cash and cash equivalents | 540.1 | 372.1 | 630.1 | $ 501.9 |
Demag-Mobile Cranes Business | Discontinued Operations, Held-for-sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash and cash equivalents | $ 5.0 | $ 32.6 | $ 58.5 |
DISCONTINUED OPERATIONS AND OTHER DIVESTITURES - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Non-cash operating items: | |||
Depreciation and amortization | $ 3.3 | $ 14.4 | $ 13.1 |
Gain (loss) on disposition of discontinued operations – net of tax | (0.1) | (2.4) | (67.3) |
Deferred taxes | (1.4) | (0.2) | (0.1) |
Impairments | 82.1 | 6.6 | (0.5) |
Capital expenditures | (3.4) | (12.8) | (13.4) |
Demag-Mobile Cranes Business | Discontinued Operations, Held-for-sale | |||
Non-cash operating items: | |||
Gain (loss) on disposition of discontinued operations – net of tax | $ 0.0 | $ 0.0 | $ (1.4) |
FINANCE RECEIVABLES - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Significant sales | $ 226.2 | $ 290.5 | $ 266.6 |
Gain on transferred finance receivables | 5.4 | 3.3 | $ 11.3 |
Loans receivable held-for-sale, net, not part of disposal group | 17.6 | 19.2 | |
Total finance receivables, net | 155.2 | 194.0 | |
Commercial Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Nonaccrual status | 27.1 | 6.0 | |
Sales-Type Leases | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Nonaccrual status | 0.3 | 0.0 | |
Prepaid Expenses and Other Current Assets | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total finance receivables, net | 52.0 | 72.0 | |
Other assets | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total finance receivables, net | $ 103.0 | $ 122.0 |
FINANCE RECEIVABLES - Schedule of Finance Receivables, Net (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total finance receivables, gross | $ 166.2 | $ 199.5 | ||
Allowance for credit losses | (11.0) | (5.5) | $ (6.6) | $ (6.3) |
Total finance receivables, net | 155.2 | 194.0 | ||
Commercial Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total finance receivables, gross | 145.7 | 154.0 | ||
Allowance for credit losses | (10.5) | (4.0) | (5.7) | (5.9) |
Sales-Type Leases | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total finance receivables, gross | 20.5 | 45.5 | ||
Allowance for credit losses | $ (0.5) | $ (1.5) | $ (0.9) | $ (0.4) |
FINANCE RECEIVABLES - Allowance for Credit Losses on Finance Receivables (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | $ 5.5 | $ 6.6 | $ 6.3 |
Provision for credit losses | 5.9 | 0.1 | 0.7 |
Charge offs | (0.4) | (1.1) | (0.4) |
Recoveries | 0.0 | (0.1) | 0.0 |
Ending balance | 11.0 | 5.5 | 6.6 |
Commercial Loans | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 4.0 | 5.7 | 5.9 |
Provision for credit losses | 6.9 | (0.5) | 0.2 |
Charge offs | (0.4) | (1.1) | (0.4) |
Recoveries | 0.0 | (0.1) | 0.0 |
Ending balance | 10.5 | 4.0 | 5.7 |
Sales-Type Leases | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 1.5 | 0.9 | 0.4 |
Provision for credit losses | (1.0) | 0.6 | 0.5 |
Charge offs | 0.0 | 0.0 | 0.0 |
Recoveries | 0.0 | 0.0 | 0.0 |
Ending balance | $ 0.5 | $ 1.5 | $ 0.9 |
FINANCE RECEIVABLES - Impaired Finance Receivables (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Financing Receivable, Impaired [Line Items] | |||
Recorded investment | $ 7.8 | $ 1.5 | $ 6.0 |
Related allowance | 7.8 | 0.6 | 2.4 |
Average recorded investment | 7.5 | 2.4 | 3.7 |
Commercial Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded investment | 7.8 | 1.5 | 6.0 |
Related allowance | 7.8 | 0.6 | 2.4 |
Average recorded investment | 7.5 | 2.4 | 3.7 |
Sales-Type Leases | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded investment | 0.0 | 0.0 | 0.0 |
Related allowance | 0.0 | 0.0 | 0.0 |
Average recorded investment | $ 0.0 | $ 0.0 | $ 0.0 |
FINANCE RECEIVABLES - Finance Receivable Credit Quality Indicators (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables, gross | $ 166.2 | $ 199.5 |
Superior | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables, gross | 1.7 | 7.5 |
Above Average | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables, gross | 17.3 | 30.7 |
Average | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables, gross | 42.1 | 56.9 |
Below Average | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables, gross | 96.2 | 94.5 |
Sub Standard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables, gross | $ 8.9 | $ 9.9 |
INVENTORIES (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished equipment | $ 408.1 | $ 478.4 |
Replacement parts | 160.8 | 143.3 |
Work-in-process | 78.7 | 86.5 |
Raw materials and supplies | 200.1 | 210.7 |
Inventories | 847.7 | 918.9 |
Inventory reserves | $ 53.2 | $ 49.8 |
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Property, plant and equipment. | |||
Gross property, plant and equipment | $ 724.2 | $ 629.5 | |
Less: Accumulated depreciation | (334.8) | (312.2) | |
Net property, plant and equipment | 389.4 | 317.3 | |
Depreciation | 39.6 | 39.0 | $ 47.0 |
Property | |||
Property, plant and equipment. | |||
Gross property, plant and equipment | 40.9 | 39.6 | |
Plant | |||
Property, plant and equipment. | |||
Gross property, plant and equipment | 168.1 | 161.3 | |
Equipment | |||
Property, plant and equipment. | |||
Gross property, plant and equipment | 358.3 | 337.3 | |
Leasehold improvements | |||
Property, plant and equipment. | |||
Gross property, plant and equipment | 55.8 | 49.1 | |
Construction in progress | |||
Property, plant and equipment. | |||
Gross property, plant and equipment | $ 101.1 | $ 42.2 |
DERIVATIVE FINANCIAL INSTRUMENTS - Narratives (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Derivative [Line Items] | ||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ (0.8) | |
Foreign exchange contracts | Derivatives designated as hedges | ||
Derivative [Line Items] | ||
Derivative, notional amount | 233.0 | $ 368.2 |
Foreign exchange contracts | Derivatives not designated as hedges | ||
Derivative [Line Items] | ||
Derivative, notional amount | 121.2 | 107.8 |
Cross currency swaps | Derivatives designated as hedges | ||
Derivative [Line Items] | ||
Derivative, notional amount | 0.0 | 45.9 |
Commodity Swap [Member] | Derivatives designated as hedges | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 7.0 | $ 11.2 |
LONG-TERM OBLIGATIONS - Schedule of Long-term Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt Issuance Costs, Net | $ 13.5 | |
Finance lease obligations | 3.7 | $ 0.0 |
Net debt | 1,172.0 | |
Total debt | 1,175.7 | 1,214.7 |
Notes payable and current portion of long-term debt | (6.9) | (4.1) |
Long-term debt, less current portion | 1,168.8 | 1,210.6 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Net debt | $ 0.0 | $ 237.0 |
Senior Notes | 5-5/8% Senior Notes due February 1, 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate of debt securities (as a percent) | 5.625% | 5.625% |
Debt Issuance Costs, Net | $ 7.5 | $ 8.9 |
Net debt | 592.5 | 591.1 |
Senior Notes | Original Term Loan | ||
Debt Instrument [Line Items] | ||
Debt Issuance Costs, Net | 4.0 | 5.0 |
Net debt | 383.8 | 386.4 |
Senior Notes | 2019 Term Loan (net of discount) | ||
Debt Instrument [Line Items] | ||
Debt Issuance Costs, Net | 2.1 | |
Net debt | 195.6 | 0.0 |
Other Debt Obligations | ||
Debt Instrument [Line Items] | ||
Net debt | $ 0.1 | $ 0.2 |
LONG-TERM OBLIGATIONS - Schedule of Fair Value (Details) - Senior Notes $ in Millions |
Dec. 31, 2019
USD ($)
$ / shares
|
Dec. 31, 2018
USD ($)
$ / shares
|
---|---|---|
5-5/8% Notes | ||
Debt Instrument [Line Items] | ||
Book Value | $ 600.0 | $ 600.0 |
FV | 620.0 | 560.0 |
2017 Credit Agreement - Original Term Loan (net of discount) | ||
Debt Instrument [Line Items] | ||
Book Value | 387.8 | 391.4 |
FV | 390.0 | $ 379.0 |
2019 Term Loan (net of discount) | ||
Debt Instrument [Line Items] | ||
Book Value | 197.7 | |
FV | $ 200.0 | |
Measurement Input, Quoted Price | 5-5/8% Notes | ||
Debt Instrument [Line Items] | ||
Quote | $ / shares | 1.03375 | 0.93250 |
Measurement Input, Quoted Price | 2017 Credit Agreement - Original Term Loan (net of discount) | ||
Debt Instrument [Line Items] | ||
Quote | $ / shares | 1.00656 | 0.96750 |
Measurement Input, Quoted Price | 2019 Term Loan (net of discount) | ||
Debt Instrument [Line Items] | ||
Quote | $ / shares | 1.00938 |
LEASE COMMITMENTS - Operating Lease Cost (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Lease Commitments [Abstract] | |
Operating lease cost | $ 33.8 |
Variable lease cost | 6.7 |
Short-term lease cost | 5.0 |
Total operating lease costs | $ 45.5 |
LEASE COMMITMENTS - Supplemental Balance Sheet Information Related to Leases (Details) $ in Millions |
Dec. 31, 2019
USD ($)
|
---|---|
Lease Commitments [Abstract] | |
Operating lease right-of-use assets included within Other assets | $ 122.9 |
Current maturities of operating leases included within Other current liabilities | 25.9 |
Non-current operating leases included within Other liabilities | 104.7 |
Total operating lease liabilities | $ 130.6 |
Weighted average discount rate for operating leases | 5.58% |
Weighted average remaining operating lease term in years | 6 years |
LEASE COMMITMENTS - Maturities of Operating Lease Liabilities (Details) $ in Millions |
Dec. 31, 2019
USD ($)
|
---|---|
Lease Commitments [Abstract] | |
2020 | $ 31.3 |
2021 | 27.8 |
2022 | 24.8 |
2023 | 21.9 |
2024 | 16.9 |
Thereafter | 27.6 |
Total undiscounted operating lease payments | 150.3 |
Less: Imputed interest | (19.7) |
Total operating lease liabilities | 130.6 |
Less: Current maturities of operating lease liabilities | (25.9) |
Non-current operating lease liabilities | $ 104.7 |
LEASE COMMITMENTS - Supplemental Cash Flow and Other Information Relating to Operating Leases (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Lease Commitments [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 36.6 |
Operating right-of-use assets obtained in exchange for operating lease liabilities | $ 22.9 |
LEASE COMMITMENTS - Schedule of Future Minimum Rental Payments for Operating Leases, Prior to Adoption of ASC 842 (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 30.5 |
2020 | 25.8 |
2021 | 22.9 |
2022 | 18.7 |
2023 | 16.4 |
Thereafter | 37.0 |
Total minimum obligations | $ 151.3 |
RETIREMENT PLANS AND OTHER BENEFITS - Sensitivity and Future Payments (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Continuing Operations | |
Schedule of estimated future benefit payments | |
Health Care Cost Trend Rate Assumed for Next Fiscal Year | 7.50% |
Ultimate Health Care Cost Trend Rate | 4.50% |
Pension Plan | Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated future employer contributions in next fiscal year | $ 7.0 |
Pension contributions | 7.1 |
Schedule of estimated future benefit payments | |
2020 | 6.0 |
2021 | 5.5 |
2022 | 5.6 |
2023 | 5.7 |
2024 | 6.1 |
2025-2029 | 31.6 |
Pension Plan | U.S. Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated future employer contributions in next fiscal year | 2.0 |
Pension and post-retirement company contributions | 1.4 |
Schedule of estimated future benefit payments | |
2020 | 2.4 |
2021 | 2.4 |
2022 | 2.3 |
2023 | 2.5 |
2024 | 2.5 |
2025-2029 | 12.3 |
Other Benefits | |
Schedule of estimated future benefit payments | |
2020 | 0.4 |
2021 | 0.3 |
2022 | 0.3 |
2023 | 0.3 |
2024 | 0.2 |
2025-2029 | $ 0.8 |
LITIGATION AND CONTINGENCIES (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Loss Contingencies and Guarantee Obligations | ||
Guarantee Terms Maximum | five years | |
Credit Guarantee | ||
Loss Contingencies and Guarantee Obligations | ||
Guarantees, maximum exposure | $ 78.4 | $ 59.2 |
Discontinued Operations | Credit Guarantee | ||
Loss Contingencies and Guarantee Obligations | ||
Guarantees, maximum exposure | $ 20.3 |
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