STOCKHOLDERS’ EQUITY

On December 31, 2017, there were 130.4 million shares of Common Stock issued and 80.2 million shares of Common Stock outstanding. Of the 169.6 million unissued shares of Common Stock at that date, 3.1 million shares of Common Stock were reserved for issuance for the exercise of stock options and the vesting of restricted stock.

Common Stock in Treasury. The Company values treasury stock on an average cost basis. As of December 31, 2017, the Company held 50.2 million shares of Common Stock in treasury totaling $1,857.7 million, including 0.8 million shares held in a trust for the benefit of the Company’s Deferred Compensation Plan totaling $18.6 million. During the year ended December 31, 2017, the Company issued 38 thousand shares of its outstanding Common Stock which were contributed into a deferred compensation plan under a Rabbi Trust.

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, 2017 and 2016, there were no shares of preferred stock outstanding.

Long-Term Incentive Plans. In May 2009, the stockholders approved the Terex Corporation 2009 Omnibus Incentive Plan (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 of Common Stock, (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 is 8.0 million shares plus the number of shares remaining available for issuance under the Terex Corporation 2000 Incentive Plan (the “2000 Plan”) and the 1996 Terex Corporation Long-Term Incentive Plan (the “1996 Plan”). As of December 31, 2017, 2.2 million shares were available for grant under the 2009 Plan.

In May 2000, the stockholders approved the 2000 Plan. The purpose of the 2000 Plan is to assist the Company in attracting and retaining selected individuals to serve as directors, officers, consultants, advisers and employees 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 additional incentive inherent in ownership of Common Stock. The maximum number of shares available for issuance under the 2000 Plan was 12.0 million shares plus any shares related to awards under the 2000 Plan that were not issued or were subsequently forfeited, expired or otherwise terminated.

Under the 2009 Plan, approximately 60% of these awards are time-based and vest ratably on each of the first three anniversary dates. Approximately 25% cliff vest and are based on performance targets containing a market condition. Approximately 15% 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.

Substantially all stock option grants under the 2000 Plan had a contractual life of ten years. There were no options granted during the years ended December 31, 2017, 2016 or 2015, and the intrinsic value of all options outstanding is zero.

The following table is a summary of stock options under all of the Company’s plans.



	Number of Options		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2016	13,059		$	65.17
Exercised	—		$	—
Canceled or expired	(10,472	)	$	65.07
Outstanding at December 31, 2017	2,587		$	65.57	0.00	$	—
Exercisable at December 31, 2017	2,587		$	65.57	0.00	$	—
Vested at December 31, 2017	2,587		$	65.57	0.00	$	—

The fair value of restricted stock awards is based on the market price at the date of grant approval except for 0.7 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:



	Grant date	Grant date	Grant date	Grant date
	March 2, 2017	March 3, 2016	March 5, 2015	March 5, 2015
Dividend yields	1.01%	1.22%	0.91%	0.91%
Expected volatility	42.78%	45.59%	45.48%	37.00%
Risk free interest rate	1.55%	0.97%	0.98%	0.58%
Expected life (in years)	3	3	3	2
Grant date fair value per share	$36.48	$29.24	$28.10	$25.60

The following table is a summary of restricted stock awards under all of the Company’s plans:



	Restricted Stock Awards		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2016	3,531,188		$	25.42
Granted	1,542,697		$	32.54
Vested	(1,252,563	)	$	28.76
Canceled, expired or other	(710,265	)	$	21.86
Nonvested at December 31, 2017	3,111,057		$	28.68

As of December 31, 2017, unrecognized compensation costs related to restricted stock totaled approximately $40 million, which will be expensed over a weighted average period of 1.8 years. The grant date weighted average fair value for restricted stock awards during the years ended December 31, 2017, 2016 and 2015 was $32.54, $23.95 and $26.83, respectively. The total fair value of shares vested for restricted stock awards was $36.0 million, $35.1 million and $42.6 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Tax benefits associated with stock-based compensation were $11.8 million, $12.6 million and $12.4 million for the years ended December 31, 2017, 2016 and 2015, 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):

Accumulated Other Comprehensive Income (Loss) Attributable to Terex Corporation



	Cumulative Translation Adjustment			Derivative Hedging Adjustment			Debt & Equity Securities Adjustment			Pension Liability Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2015	$	(245.5	)	$	(0.7	)	$	1.6		$	(185.2	)	$	(429.8	)
Current year change	(247.2		)	3.0			(7.9		)	32.3			(219.8		)
Balance at December 31, 2015	(492.7		)	2.3			(6.3		)	(152.9		)	(649.6		)
Current year change	(122.6		)	(4.7		)	6.9			(9.4		)	(129.8		)
Balance at December 31, 2016	(615.3		)	(2.4		)	0.6			(162.3		)	(779.4		)
Current year change	470.6			4.5			3.7			61.1			539.9
Balance at December 31, 2017	$	(144.7	)	$	2.1		$	4.3		$	(101.2	)	$	(239.5	)

Accumulated Other Comprehensive Income (Loss) Attributable to Noncontrolling Interest



	Cumulative Translation Adjustment			Derivative Hedging Adjustment		Debt & Equity Securities Adjustment		Pension Liability Adjustment		Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2015	$	0.8		$	—	$	—	$	—	$	0.8
Current year change	(0.1		)	—		—		—		(0.1		)
Balance at December 31, 2015	0.7			—		—		—		0.7
Current year change	(0.4		)	—		—		—		(0.4		)
Balance at December 31, 2016	0.3			—		—		—		0.3
Current year change	—			—		—		—		—
Balance at December 31, 2017	$	0.3		$	—	$	—	$	—	$	0.3

Accumulated Other Comprehensive Income (Loss)



	Cumulative Translation Adjustment			Derivative Hedging Adjustment			Debt & Equity Securities Adjustment			Pension Liability Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2015	$	(244.7	)	$	(0.7	)	$	1.6		$	(185.2	)	$	(429.0	)
Current year change	(247.3		)	3.0			(7.9		)	32.3			(219.9		)
Balance at December 31, 2015	(492.0		)	2.3			(6.3		)	(152.9		)	(648.9		)
Current year change	(123.0		)	(4.7		)	6.9			(9.4		)	(130.2		)
Balance at December 31, 2016	(615.0		)	(2.4		)	0.6			(162.3		)	(779.1		)
Current year change	470.6			4.5			3.7			61.1			539.9
Balance at December 31, 2017	$	(144.4	)	$	2.1		$	4.3		$	(101.2	)	$	(239.2	)

As of December 31, 2017, accumulated other comprehensive income 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 $11.5 million, $(0.5) million, $(0.1) million and $32.8 million, respectively.

Changes in Accumulated Other Comprehensive Income (Loss)

The table below presents changes in AOCI by component for the year ended December 31, 2017 and 2016. All amounts are net of tax (in millions).



	Year ended December 31, 2017														Year ended December 31, 2016
	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.			Total
Beginning balance	$	(615.0	)	$	(2.4	)	$	0.6	$	(162.3	)	$	(779.1	)	$	(492.0	)	$	2.3		$	(6.3	)	$	(152.9	)	$	(648.9	)
Other comprehensive income before reclassifications	114.1			4.3			3.6		(0.1		)	121.9			(121.1		)	(5.7		)	3.9			(16.1		)	(139.0		)
Amounts reclassified from AOCI	356.5			0.2			0.1		61.2			418.0			(1.9		)	1.0			3.0			6.7			8.8
Net Other Comprehensive Income (Loss)	470.6			4.5			3.7		61.1			539.9			(123.0		)	(4.7		)	6.9			(9.4		)	(130.2		)
Ending balance	$	(144.4	)	$	2.1		$	4.3	$	(101.2	)	$	(239.2	)	$	(615.0	)	$	(2.4	)	$	0.6		$	(162.3	)	$	(779.1	)

(1) Reclassifications primarily relate to $352.1 million of losses (net of $1.5 million of tax benefits) reclassified from AOCI to Gain (loss) on disposition of discontinued operations - net of tax in connection with the sale of the MHPS business.

(2) Reclassifications primarily relate to $55.4 million of losses (net of $23.9 million of tax benefits) reclassified from AOCI to Gain (loss) on disposition of discontinued operations - net of tax in connection with the sale of the MHPS business.

Share Repurchases and Dividends

In February 2015, the Company announced authorization by its Board of Directors for the repurchase of up to $200 million of the Company’s outstanding shares of common stock of which approximately $131 million of this authorization was utilized prior to January 1, 2017. In February 2017, the Company announced authorization by its Board of Directors for the repurchase of up to an additional $350 million of the Company’s outstanding shares of common stock. In May 2017, the Company announced the completion of the February 2015 and February 2017 authorizations and subsequently that the Company’s Board of Directors had authorized the repurchase of up to an additional $280 million of our outstanding shares of common stock. In September 2017, the Company announced the completion of the May 2017 authorization and subsequently that the Company’s Board of Directors had authorized the repurchase of up to an additional $225 million of our outstanding shares of common stock. During the year ended December 31, 2017, the Company repurchased 25.7 million shares for $923.7 million under the programs. During the year ended December 31, 2016, the Company repurchased 3.5 million shares for $81.3 million under the programs. During the year ended December 31, 2015, the Company repurchased 1.9 million shares for $50.0 million under the programs. In the first quarter of 2018, the Company’s Board of Directors announced authorization for the repurchase of up to an additional $325 million of the Company’s outstanding shares of common stock. The Company’s Board of Directors declared and paid a dividend of $0.08, $0.07 and $0.06 per share in each quarter of 2017, 2016 and 2015, respectively. Additionally, in the first quarter of 2018 the Company’s Board of Directors declared a dividend of $0.10 per share which will be paid on March 19, 2018.