TEREX CORP MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

ACTIVITY DESCRITION

Terex is a global manufacturer of materials processing machinery and aerial work
platforms. We design, build and support products used in construction,
maintenance, manufacturing, energy, recycling, minerals and materials management
applications. Certain Terex products and solutions enable customers to reduce
their environmental impact including electric and hybrid offerings that deliver
quiet and emission-free performance, products that support renewable energy, and
products that aid in the recovery of useful materials from various types of
waste. Our products are manufactured in North America, Europe, Australia and
Asia and sold worldwide. We engage with customers through all stages of the
product life cycle, from initial specification and financing to parts and
service support. We report our business in the following segments: (i) Materials
Processing ("MP") and (ii) Aerial Work Platforms ("AWP").

Further information about our reportable segments appears below and in Note B -
"Business Segment Information" in the Notes to Condensed Consolidated Financial
Statements.

Non-GAAP Measures

In this document, we refer to various GAAP (United States ("U.S.") generally
accepted accounting principles) and non-GAAP financial measures. These non-GAAP
measures may not be comparable to similarly titled measures disclosed by other
companies. We present non-GAAP financial measures in reporting our financial
results to provide investors with additional analytical tools which we believe
are useful in evaluating our operating results and the ongoing performance of
our underlying businesses. We do not, nor do we suggest that investors consider,
such non-GAAP financial measures in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP.

Non-GAAP measures that we may use include the translation effect of changes in foreign exchange rates on net sales, gross profit, selling, general and administrative (“SG&A”) expenses and operating income. , as well as net sales, gross margin, SG&A expenses and operating income excluding the impact of acquisitions and divestitures.

As changes in foreign currency exchange rates have a non-operating impact on our
financial results, we believe excluding effects of these changes assists in
assessment of our business results between periods. We calculate the translation
effect of foreign currency exchange rate changes by translating current period
results using rates that the comparable prior periods were translated at to
isolate the foreign exchange component of fluctuation from the operational
component. Similarly, impact of changes in our results from acquisitions and
divestitures not included in comparable prior periods may be subtracted from the
absolute change in results to allow for better comparability of results between
periods.

We calculate a non-GAAP measure of free cash flow. We define free cash flow as
Net cash provided by (used in) operating activities less Capital expenditures,
net of proceeds from sale of capital assets. We believe this measure of free
cash flow provides management and investors further useful information on cash
generation or use in our primary operations.

We discuss forward-looking information related to expected earnings per share
("EPS") excluding the impact of potential future acquisitions, divestitures,
restructuring and other unusual items. Our 2022 outlook for earnings per share
is a non-GAAP financial measure because it excludes unusual items. The Company
is not able to reconcile these forward-looking non-GAAP financial measures to
their most directly comparable forward-looking GAAP financial measures without
unreasonable efforts because the Company is unable to predict with a reasonable
degree of certainty the exact timing and impact of such items. The unavailable
information could have a significant impact on the Company's full year 2022 GAAP
financial results. This forward-looking information provides guidance to
investors about our EPS expectations excluding these unusual items that we do
not believe are reflective of our ongoing operations.

Working capital is calculated using the Condensed Consolidated Balance Sheet
amounts for Trade receivables (net of allowance) plus Inventories, less Trade
accounts payable and Customer advances. We view excessive working capital as an
inefficient use of resources, and seek to minimize the level of investment
without adversely impacting ongoing operations of the business. Trailing three
months annualized net sales is calculated using net sales for the most recent
quarter end multiplied by four. The ratio calculated by dividing working capital
by trailing three months annualized net sales is a non-GAAP measure we believe
measures our resource use efficiency.

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Non-GAAP measures we also use include adjusted net operating income after tax (“NOPAT”), adjusted annualized effective tax rate and adjusted cash and cash equivalents, which are used in the calculation our after-tax return on invested capital (“ROIC”) (collectively the “Non-GAAP Measures”), which are described in detail below.

Insight

Safety remains our top priority; driven by Think Safe – Work Safe – Home Safe. All members of the Terex team have contributed to our efforts to continue to provide products and services to our customers, while maintaining a safe working environment.

Our strategic operational priorities of execution, innovation, and growth
continue to make excellent progress. We continue to drive penetration of new
markets and geographies, which have high growth potential, including recycling,
material handling and electrification. Parts and service remain a focus as we
enhance our digital offerings for dealers and customers. We also expanded our
Utilities customer service footprint in the quarter with a new Atlanta, Georgia
facility. In addition to technology and customer experience, we continue to
invest for future growth, both organically and inorganically. An important part
of our organic growth is our investment in the new Monterrey, Mexico facility.
Our Mexico operation has ramped up production and is shipping telehandlers.

Our performance in the first quarter of 2022 reflected strong, global customer
demand in our businesses and good execution by our team members in a dynamic and
challenging environment. Net sales of $1 billion were up 16% year-over-year as
end-markets remained strong. Despite the high inflationary environment, SG&A
spending was $3 million lower year-over-year at 11.1% of net sales, reflecting
focused cost management. Operating margin of 7.4% expanded 30 basis points
driven by higher sales and strict expense discipline. This led to earnings per
share ("EPS") increasing by 32% year-over-year to $0.74 in the first quarter of
2022.

Overall, first quarter financial performance demonstrated continued, strong
execution. We continued to experience global supply chain disruptions and
significant inflationary pressures due to COVID-19 and geopolitical risks. These
issues are causing increased disruptions and cost pressures in materials,
logistics, freight and labor. These headwinds have constrained our growth and
became more pronounced at the end of the quarter. However, we are aggressively
managing these challenges. We have taken pricing actions, but they were only
able to partially offset the cost increases we experienced in the quarter. We
still anticipate being price cost negative in the first half of 2022 but being
price cost neutral for all of 2022.

MP had another strong quarter with net sales up 20% from the prior year period
driven by strong customer sentiment across all end-markets and geographies. Our
mobile crushing and screening businesses are benefiting from the strength of
aggregates demand for infrastructure and sand for silicon used in
semiconductors. Secular growth of environmental and waste recycling solutions is
driving demand for our wood processing, biomass and recycling equipment. The
strength of residential construction is driving demand for our cement products
in the U.S. Our material handlers are benefiting from strong scrap steel prices
as steel prices remain elevated. The strength of commodity prices is driving
demand for our pick and carry cranes in Australia. MP has been aggressively
managing all elements of cost resulting in a 14.2% operating margin for the
quarter. We are encouraged by MP's backlog of $1.2 billion, which is up 66%
compared to the prior year period.

AWP's first quarter 2022 net sales increased 16% compared to last year, driven
by strong global end market demand. Construction, infrastructure, and industrial
applications are driving demand for Genie products. In addition, the
fundamentals of the North American and European replacement cycle are strong as
fleets age and customers have strong utilization rates. Globally, increased
adoption continues to improve labor efficiency and jobsite safety. Except for
China, demand remains strong for Genie products in all regions. Our Utilities
business is benefiting from electric grid expansion as well as the demand for 5G
telecom across the United States. AWP delivered operating margins of 5.9% in the
quarter driven by strict expense management. AWP's end market strength is
demonstrated by its backlog of $2.3 billion, up 77% year-over-year.

In the first quarter of 2022, our largest market remained North America, which
represented approximately 54% of our global sales. As compared to the prior year
period, our sales were up double digits in every major geography except for Asia
Pacific which was down single digits.

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We continued to execute our disciplined capital allocation strategy in the first
quarter of 2022. We are making strategic investments in our businesses as
described above and we also continued to return capital to shareholders. In
February 2022, our Board of Directors approved increasing our quarterly dividend
by 8% to $0.13 per share. We also completed $20 million of share repurchases in
the quarter. We typically use cash in the first quarter of the year and had a
negative free cash flow of $72 million in the first quarter of 2022. We continue
to maintain ample liquidity and as of March 31, 2022, we had $753 million in
available liquidity, with no near-term debt maturities. See "Liquidity and
Capital Resources" for a detailed description of liquidity and working capital
levels, including the primary factors affecting such levels, as well as a
reconciliation of net cash provided by (used in) operating activities to free
cash flow.

Customer demand remains strong globally for our products and services. However,
the global operating environment, became increasingly difficult and
unpredictable as the quarter progressed and it continues here into the second
quarter. Despite these challenges, we are maintaining our outlook for 2022 EPS
to be between $3.55 and $4.05, on net sales between $4.1 billion and $4.3
billion. We are operating in an unprecedented environment with supply chain
challenges, inflationary pressures, geopolitical uncertainty, and highly
restrictive China COVID-19 policies, so results could change, positively or
negatively.

ROIC

ROIC and other Non-GAAP Measures (as calculated below) assist in showing how
effectively we utilize capital invested in our operations. ROIC is determined by
dividing the sum of NOPAT for each of the previous four quarters by the average
of Debt less Cash and cash equivalents plus Stockholders' equity for the
previous five quarters. NOPAT for each quarter is calculated by multiplying
Income (loss) from operations by one minus the annualized effective tax rate.

In the calculation of ROIC, we adjust annualized effective tax rate to reflect
management's expectation of the full year effective tax rate to create a measure
that is more useful to understanding our operating results and the ongoing
performance of our underlying business as shown in the tables below. Cash and
cash equivalents is adjusted to include amounts recorded as held for sale.
Furthermore, debt is calculated using amounts for Current portion of long-term
debt plus Long-term debt, less current portion. We calculate ROIC using the last
four quarters' adjusted NOPAT as this represents the most recent 12-month period
at any given point of determination. In order for the denominator of the ROIC
ratio to properly match the operational period reflected in the numerator, we
include the average of five quarters' ending balance sheet amounts so that the
denominator includes the average of the opening through ending balances (on a
quarterly basis) thereby providing, over the same time period as the numerator,
four quarters of average invested capital.

Terex management and Board of Directors use ROIC as one measure to assess
operational performance, including in connection with certain compensation
programs. We use ROIC as a metric because we believe it measures how effectively
we invest our capital and provides a better measure to compare ourselves to peer
companies to assist in assessing how we drive operational improvement. We
believe ROIC measures return on the amount of capital invested in our businesses
and is an accurate and descriptive measure of our performance. We also believe
adding Debt less Cash and cash equivalents to Stockholders' equity provides a
better comparison across similar businesses regarding total capitalization, and
ROIC highlights the level of value creation as a percentage of capital invested.
As the tables below show, our ROIC at March 31, 2022 was 19.2%.

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Amounts described below are reported in millions of U.S. dollars, except for the
annualized effective tax rates. Amounts are as of and for the three months ended
for the periods referenced in the tables below.
                                                   Mar '22      Dec '21     

Sep ’21 Jun ’21 Mar ’21

Adjusted annualized effective tax rate(1) 20.5% 17.6%

     17.6  %      17.6  %
Income (loss) from operations                    $    74.5    $    69.8    $    74.2    $   122.5
Multiplied by: 1 minus annualized effective tax
rate                                                  79.5  %      82.4  %      82.4  %      82.4  %
Adjusted net operating income (loss) after tax   $    59.2    $    57.5    $    61.1    $   100.9
Debt                                             $   740.3    $   674.1    $   893.4    $   894.2    $   979.2
Less: Cash and cash equivalents as adjusted         (218.4)      (266.9)      (558.2)      (547.5)      (577.8)
Debt less Cash and cash equivalents as adjusted      521.9        407.2        335.2        346.7        401.4
Stockholders' equity                               1,114.1      1,109.6      1,050.7      1,033.9        946.1
Debt less Cash and cash equivalents as adjusted
plus Stockholders' equity                        $ 1,636.0    $ 1,516.8    

$1,385.9 $1,380.6 $1,347.5

(1) The annualized effective tax rate for each 2021 period represents the effective effective tax rate for the full year 2021.

                          March 31, 2022 ROIC                                       19.2  %
NOPAT as adjusted (last 4 quarters)                                     $   

278.7

Average debt less cash and adjusted cash equivalents plus equity (5 quarters)

                                       $        1,453.4



                                                  As of 3/31/22    As of 12/31/21     As of 9/30/21     As of 6/30/21     As of 3/31/21
Reconciliation of Cash and cash equivalents:
Cash and cash equivalents - continuing
operations                                      $        218.4    $        

266.9 $553.2 $542.2 $572.9
Cash and cash equivalents – assets held for sale

                                                         -                 -               5.0               5.3               4.9
Cash and cash equivalents as adjusted           $        218.4    $        266.9    $        558.2    $        547.5    $        577.8


                                                        Income (loss) from
                                                            continuing      (Provision for)
                  Three Months Ended                    operations before     benefit from
                    March 31, 2022                         income taxes       income taxes    Income tax rate
Reconciliation of annualized effective tax rate:
As reported                                             $          64.2    $         (11.9)            18.5  %
Effect of adjustments:

Tax related                                                           -               (1.3)

As adjusted                                             $          64.2    $         (13.2)            20.5  %






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RESULTS OF OPERATIONS

Three Months Ended March 31, 2022 Compared with Three Months Ended March 31,
2021

Consolidated
                                                                 Three Months Ended March 31,
                                                          2022                                      2021
                                                                       % of                                  % of              % Change In
                                                                      Sales                                 Sales            Reported Amounts
                                                                    ($ amounts in millions)
Net sales                                $       1,002.5                    -          $ 864.2                    -                   16.0  %
Gross profit                             $         185.8                 18.5  %       $ 175.4                 20.3  %                 5.9  %
SG&A                                     $         111.3                 11.1  %       $ 113.9                 13.2  %                (2.3) %
Income from operations                   $          74.5                  7.4  %       $  61.5                  7.1  %                21.1  %



Net sales for the three months ended March 31, 2022 increased $138.3 million
when compared to the same period in 2021. The increase in net sales was
primarily due to strong demand for our products across multiple businesses.
Changes in foreign exchange rates negatively impacted consolidated net sales by
approximately $32 million.

Gross profit for the three months ended March 31, 2022 increased $10.4 million
compared to the same period in 2021. The increase is mainly due to higher sales volume. However, price realization was more than offset by increases in material, labor and freight costs due to global supply chain disruptions, significant inflationary pressures and the impact negative for changes in exchange rates.

SG&A costs for the three months ended March 31, 2022 decreased $2.6 million when
compared to the same period in 2021 primarily due to continued cost discipline
across all areas of our business.

Income from operations for the three months ended March 31, 2022 increased $13.0
million when compared to the same period in 2021. The increase was primarily due
to higher sales volume. However, price realization was more than offset by cost
increases and the negative impact of changes in foreign exchange rates.

Materials processing

                                                                Three 

Months ended March, 31st,

                                                         2022                                     2021
                                                                     % of                                  % of              % Change In
                                                                    Sales                                 Sales            Reported Amounts
                                                                   ($ amounts in millions)
Net sales                                $       452.7                    -          $ 378.2                    -                   19.7  %

Income from operations                   $        64.5                 14.2  %       $  49.1                 13.0  %                31.4  %



Net sales for the MP segment for the three months ended March 31, 2022 increased
$74.5 million when compared to the same period in 2021 primarily due to robust
end-market demand for aggregates and material handlers in all major geographies,
cranes in Asia-Pacific, and concrete mixer trucks and environmental equipment in
North America. Net sales were negatively impacted by the effects of foreign
exchange rate changes of approximately $17 million.

Income from operations for the three months ended March 31, 2022 increased $15.4
million when compared to the same period in 2021 primarily due to higher sales
volume. Price realization offset material, labor and freight cost increases due
to global supply chain disruptions and significant inflationary pressures.

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Aerial Work Platforms
                                                               Three Months Ended March 31,
                                                         2022                                    2021
                                                                    % of                                 % of              % Change In
                                                                    Sales                                Sales           Reported Amounts
                                                                  ($ amounts in millions)
Net sales                                $       551.5                   -          $ 476.7                   -                   15.7  %

Income from operations                   $        32.5                 5.9  %       $  26.6                 5.6  %                22.2  %



Net sales for the AWP segment for the three months ended March 31, 2022
increased $74.8 million when compared to the same period in 2021 primarily due
to higher demand driven by fleet replacement and end-market growth for aerial
work platforms, utility products and telehandlers in North America, partially
offset by lower demand for aerial work platforms in China. Net sales were
negatively impacted by the effects of foreign exchange rate changes of
approximately $15 million.

Income from operations for the three months ended March 31, 2022 increased $5.9
million when compared to the same period in 2021 primarily due to higher sales
volume. However, price realization was more than offset by material, labor and
freight cost increases due to global supply chain disruptions and significant
inflationary pressures.

Business and others / Eliminations

                                                            Three Months Ended March 31,
                                                      2022                                2021
                                                               % of                                % of             % Change In
                                                              Sales                               Sales           Reported Amounts
                                                              ($ amounts in millions)
Net sales                                $   (1.7)                -           $   9.3                 -                  (118.3) %
Loss from operations                     $  (22.5)                    *       $ (14.2)                    *               (58.5) %

* Not a significant percentage

Net revenues include listed financing activities Terex Financial Services
(“TFS”), government sales and the elimination of intercompany sales activities between segments. The decrease in net sales is mainly attributable to lower revenues from TFS.

Loss from operations for the three months ended March 31, 2022 increased $8.3
million when compared to the same period in 2021. The increase in operating loss
is primarily due to a gain on the sale of assets in the prior period and the
negative impact of changes in foreign exchange rates, provision for litigation
on former product lines and restructuring charges in the current year, partially
offset by lower SG&A.

Interest expense, net of interest income

In the three months ended March 31, 2022our interest expense, net of interest income, has been $10.0 millionor $4.6 million lower than the same period last year mainly due to a decrease in average borrowings.

Loss on early extinguishment of debt

In the three months ended March 31, 2021we recorded a loss on early extinguishment of debt of $2.1 million related to the early repayment of the 2019 Term Loan, as defined in Note I – “Long-Term Obligations”.

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Other income (expenses) – Net

Other income (expense) - net for the three months ended March 31, 2022 was
expense of $0.3 million compared to income of $2.6 million in the same period in
the prior year. The increase in expense was primarily due to lower
mark-to-market gains recorded on an equity investment and higher foreign
exchange translation losses in the current year compared to the same period in
the prior year.

Income Taxes

During the three months ended March 31, 2022, we recognized income tax expense
of $11.9 million on income of $64.2 million, an effective tax rate of 18.5%, as
compared to income tax expense of $7.7 million on income of $47.4 million, an
effective tax rate of 16.2%, for the three months ended March 31, 2021. The
higher effective tax rate for the three months ended March 31, 2022 when
compared with the three months ended March 31, 2021 is primarily due to
increased tax on the geographic distribution of income partially offset by
reduced U.S. tax on foreign income.

CASH AND CAPITAL RESOURCES

We are focused on generating cash and maintaining liquidity (cash and
availability under our revolving line of credit) for the efficient operation of
our business. At March 31, 2022, we had cash and cash equivalents of $218.4
million and undrawn availability under our revolving line of credit of $535
million, giving us total liquidity of approximately $753 million. During the
three months ended March 31, 2022, our liquidity decreased by approximately
$114 million from December 31, 2021 primarily due to cash used in our operating
activities, share repurchases and capital expenditures.

Our main sources of funding are cash generated from operations, including cash
generated from the sale of receivables, loans from our bank credit facilities
and funds raised in capital markets. We have no significant debt maturities
until 2024 and we have increased our focus on free cash flow generation. Our
actions to maintain liquidity include disciplined management of costs and
working capital. We believe these measures will provide us with adequate
liquidity to comply with our financial covenants under our bank credit facility,
continue to support internal operating initiatives and meet our operating and
debt service requirements for at least the next 12 months from the date of
issuance of this quarterly report. See Part I, Item 1A. - "Risk Factors" of our
Annual Report on Form 10-K for the year ended December 31, 2021 for a detailed
description of the risks resulting from our debt and our ability to generate
sufficient cash flow to operate our business.

Our ability to generate operating cash flow is subject to many factors, including the following:

•The duration and depth of the global economic uncertainty resulting from
COVID-19.
•As our sales change, the amount of working capital needed to support our
business may change.
•Many of our customers fund their purchases through third-party finance
companies that extend credit based on the credit-worthiness of customers and
expected residual value of our equipment. Changes either in customers' credit
profile or used equipment values may affect the ability of customers to purchase
equipment. There can be no assurance that third-party finance companies will
continue to extend credit to our customers as they have in the past.
•Our suppliers extend payment terms to us primarily based on our overall credit
rating. Deterioration in our credit rating may influence suppliers' willingness
to extend terms and in turn accelerate cash requirements of our business.
•Sales of our products are subject to general economic conditions, weather,
competition, translation effect of foreign currency exchange rate changes, and
other factors that in many cases are outside our direct control. For example,
during periods of economic uncertainty, our customers have delayed purchasing
decisions, which reduces cash generated from operations.
•Availability and utilization of other sources of liquidity such as trade
receivables sales programs.

Generally, we have invested our cash in a combination of liquid, highly rated money market funds and short-term bank deposits with large, highly rated banks. Our investment objective is to preserve capital and liquidity while earning a market rate of interest.

We seek to use cash held by our foreign subsidiaries to support our operations
and continued growth plans outside and inside the U.S. through funding of
capital expenditures, operating expenses or other similar cash needs of these
operations. Most of this cash could be used in the U.S., if necessary, without
additional tax expense. Incremental cash repatriated to the U.S. would not be
expected to result in material foreign, Federal or state tax cost. We will
continue to seek opportunities to tax-efficiently mobilize and redeploy funds.

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We used free cash flow from $71.8 million for the three months ended March 31, 2022.

The following table reconciles net cash provided by (used in) operating activities with free cash flow (in millions):

                                                                                        Three Months Ended
                                                                                            3/31/2022
Net cash provided by (used in) operating activities                                   $             (51.7)

Capital expenditures, net of proceeds from sale of capital assets

                        (20.1)

Free cash flow (use)                                                                  $             (71.8)


In accordance with the terms of our accounts receivable factoring agreements, during the three months ended March 31, 2022we sold, without material recourse, approximately $141 million accounts receivable to improve liquidity.

Working capital as a percentage of annualized net sales for the last three months was 21.2% at March 31, 2022.

The following tables show the calculation of our working capital and annualized sales for the last three months at March 31, 2022 (in millions):

                                              Three Months Ended
                                                  3/31/2022
Net Sales                                    $          1,002.5
                                           x                  4

Annualized net sales over the last three months $4,010.0


                          As of 3/31/22
Inventories              $        921.3
Trade Receivables                 525.6
Trade Accounts Payable           (571.5)
Customer Advances                 (25.6)
Working Capital          $        849.8



On January 31, 2017, we entered into a credit agreement which was subsequently
amended to include (i) a $600 million revolving line of credit (the "Revolver")
and (ii) senior secured term loans totaling $600 million with a maturity date of
January 31, 2024. On April 1, 2021, we entered into an amendment and restatement
of the credit agreement (as amended and restated, the "Credit Agreement") which
included the following principal changes to the original credit agreement: (i)
extension of the term of the Revolver to expire on April 1, 2026, which maturity
will spring forward to November 1, 2023 if the principal outstanding under the
$400 million senior secured term loan (the "Original Term Loan") is not repaid
or the maturity date is not extended, (ii) reinstatement of financial covenants
that were waived in 2020, (iii) decrease in the interest rate on the drawn
Revolver by 25 basis points and (iv) certain other technical changes, including
additional language regarding the potential cessation of the London Interbank
Offered Rate as a benchmark rate. See Note I - "Long-Term Obligations" in our
Condensed Consolidated Financial Statements for additional information regarding
the Credit Agreement.

Borrowings under the Credit Agreement at March 31, 2022 were $77.9 million, net
of discount, on the Original Term Loan and $65.0 million on the Revolver. At
March 31, 2022, the weighted average interest rate was 2.75% on the Original
Term Loan and 2.17% on the Revolver.

We remain focused on expanding customer financing solutions in key markets like
the U.S., Europe and China. We also anticipate our continued use of TFS to drive
incremental sales by increasing customer financing facilitated through TFS in
certain instances.

In July 2018, our Board of Directors authorized the repurchase up to $300
million of our outstanding shares of common stock. During the three months ended
March 31, 2022, we repurchased - shares for $17.5 million under this
authorization leaving approximately $122 million available for repurchase under
this program. In the first quarter of 2022, our Board of Directors declared a
dividend of $0.13 per share, which was paid to the Company's shareholders.

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Our ability to access capital markets to raise funds, through sale of equity or
debt securities, is subject to various factors, some specific to us and others
related to general economic and/or financial market conditions. These include
results of operations, projected operating results for future periods and debt
to equity leverage. Our ability to access capital markets is also subject to our
timely filing of periodic reports with the Securities and Exchange Commission.
In addition, terms of our bank credit facilities, senior notes and senior
subordinated notes contain restrictions on our ability to make further
borrowings and to sell substantial portions of our assets.

Cash flow

Cash used in operations for the three months ended March 31, 2022 totaled $51.7
million, compared to cash provided by operations of $138.1 million for the three
months ended March 31, 2021. The change in operating cash was primarily driven
by proceeds from the sale of finance receivables received in the prior year and
higher working capital and incentive compensation payments in the current year.

Cash used in investing activities was $23.2 million and $6.1 million for the
three months ended March 31, 2022 and 2021, respectively. The increase in cash
used in investing activities relates primarily to higher capital expenditures
and investment activity.

Cash provided by financing activities was $28.0 million for the three months
ended March 31, 2022, compared to cash used in financing activities of $214.9
million for the three months ended March 31, 2021. The increase in cash provided
by financing activities was primarily due to debt prepayments in the prior year
compared to borrowings in the current year, partially offset by share
repurchases.

OFF-BALANCE SHEET ARRANGEMENTS

Warranties

We may assist customers in their rental, leasing and acquisition of our products
by facilitating financing transactions directly between (i) end-user customers,
distributors and rental companies and (ii) third-party financial institutions,
providing recourse in certain circumstances. The expectation of losses or
non-performance is evaluated based on consideration of historical customer
assessments, current financial conditions, reasonable and supportable forecasts,
equipment collateral value and other factors. Many of these factors, including
the assessment of a customer's ability to pay, are influenced by economic and
market factors that cannot be predicted with certainty. Our maximum liability is
generally limited to our customer's remaining payments due to the third-party
financial institutions at the time of default. In the event of a customer
default, we are generally able to recover and dispose of the equipment at a
minimum loss, if any, to us. Reserves are recorded for expected loss over the
contractual period of risk exposure.

There can be no assurance that our historical experience in the used equipment markets will be indicative of future results. Our ability to recover losses incurred under our warranties may be affected by economic conditions in the used equipment markets at the time of the loss.

See Note K – “Litigation and contingencies” in the Notes to the condensed consolidated financial statements for more information regarding our guarantees.

CONTINGENCIES AND UNCERTAINTIES

Currency and interest rate risk

Our products are sold in over 100 countries around the world and, accordingly,
our revenues are generated in foreign currencies, while costs associated with
those revenues are only partly incurred in the same currencies. Primary
currencies to which we are exposed are the Euro, British Pound, Chinese Yuan,
Australian Dollar and Mexican Peso. We purchase hedging instruments to manage
variability of future cash flows associated with recognized assets or
liabilities due to changing currency exchange rates.

We manage our exposure to interest rate risk by establishing a mix of
indebtedness bearing interest at both floating and fixed rates at inception and
maintain a ratio of floating and fixed rates on this mix of indebtedness using
interest rate derivatives when necessary.

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See Note H - "Derivative Financial Instruments" in the Notes to Condensed
Consolidated Financial Statements for further information regarding our
derivatives and Item 3 "Quantitative and Qualitative Disclosures About Market
Risk" for a discussion of the impact changes in foreign currency exchange rates
and interest rates may have on our financial performance.

Other

We are subject to a number of contingencies and uncertainties including, without
limitation, product liability claims, workers' compensation liability,
intellectual property litigation, self-insurance obligations, tax examinations,
guarantees, class action lawsuits and other matters. See Note K - "Litigation
and Contingencies" in the Notes to Condensed Consolidated Financial Statements
for more information regarding contingencies and uncertainties, including our
proceedings involving a claim in Brazil regarding payment of ICMS tax, penalties
and related interest. We are insured for product liability, general liability,
workers' compensation, employer's liability, property damage, intellectual
property and other insurable risks required by law or contract with retained
liability to us or deductibles. Many of the exposures are unasserted or
proceedings are at a preliminary stage, and it is not presently possible to
estimate the amount or timing of any liability. However, we do not believe these
contingencies and uncertainties will, individually or in aggregate, have a
material adverse effect on our operations. For contingencies and uncertainties
other than income taxes, when it is probable a loss will be incurred and
possible to make reasonable estimates of our liability with respect to such
matters, a provision is recorded for the amount of such estimate or for the
minimum amount of a range of estimates when it is not possible to estimate the
amount within the range that is most likely to occur.

We generate hazardous and non-hazardous wastes in the normal course of our
manufacturing operations. As a result, we are subject to a wide range of
environmental laws and regulations. All of our employees are required to obey
all applicable health, safety and environmental laws and regulations and must
observe the proper safety rules and environmental practices in work situations.
These laws and regulations govern actions that may have adverse environmental
effects, such as discharges to air and water, and require compliance with
certain practices when handling and disposing of hazardous and non-hazardous
wastes. These laws and regulations would also impose liability for the costs of,
and damages resulting from, cleaning up sites, past spills, disposals and other
releases of hazardous substances, should any such events occur. We are committed
to complying with these standards and monitoring our workplaces to determine if
equipment, machinery and facilities meet specified safety standards. Each of our
manufacturing facilities is subject to an environmental audit at least once
every five years to monitor compliance. Also, no incidents have occurred which
required us to pay material amounts to comply with such laws and regulations. We
are dedicated to ensuring that safety and health hazards are adequately
addressed through appropriate work practices, training and procedures. We are
committed to reducing injuries and working towards a world-class level of safety
practices in our industry.

RECENT ACCOUNTING STANDARDS

Please refer to Note A - "Basis of Presentation" in the accompanying Condensed
Consolidated Financial Statements for a summary of recently issued accounting
standards.

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