A Terex TX51-19 telehandler

by US correspondent Roger Renstrom
Equipment manufacturer Terex Corp has made progress in restating several financial statements - with adjustments to correct errors - and is now dealing with a US Securities & Exchange Commission (SEC) private investigation of the company's accounting practices (Forkliftaction.com News #228).

Among numerous actions, Westport-based Terex has changed the reporting relationship for operating financial personnel, taken selective accounting-related disciplinary actions and implemented a requirement for periodic activity balancing for intercompany transactions.

The company added a vice president of information technology and a human resources director focusing on the firm's financial organisation. Both report to Terex chief financial officer Phillip Widman.

Terex appointed a new chief accounting officer and controller and hired a new vice president of internal audit and an intercompany controller. About 350 executives attended mandatory meetings on business practices and the company's code of ethics and conduct.

After scrutinising multiple transactions over 15 months, Terex completed restatements for its 2000-2003 calendar-year financials and filed its 2004 annual and quarterly reports. As a result, "Terex believes it is now in compliance with the material listing requirements of the NYSE [New York Stock Exchange] and is thus no longer at risk for delisting on March 31, 2006", the company said.

Terex said it expected to file its 2005 annual and quarterly financial statements "in the near future".

The SEC investigation concerns four transactions during 2000 and 2001 between major Terex customer United Rentals Inc and Terex or a Terex subsidiary. United Rentals, of Greenwich, Connecticut, USA, has more than 740 North American locations serving 1.9 million commercial and industrial customers. The SEC notified Terex of the investigation verbally last year and with a written order on February 1.

"Terex has been voluntarily cooperating with the SEC and will continue to cooperate fully to furnish SEC staff with information needed to complete the review," the company said.

"With the completion of our restatement, we have a solid foundation on which to move forward with our business," DeFeo said. "The restatement has been a monumental task, both complex and demanding."

In its 2003 restatement, the Terex loss was USD226.6 million rather than the loss of USD25.5 million in the original filing. The 2003 sales figure remained at USD3.9 billion. Terex reported a profit of USD324.1 million on 2004 sales of USD5 billion.