UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, ~~2012~~2013

oTransition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number

1-11978

The Manitowoc Company, Inc.

(Exact name of registrant as specified in its charter)

~~Wisconsin~~		~~39-0448110~~

Wisconsin	39-0448110
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification Number)



2400 South 44th Street,
Manitowoc, Wisconsin		54221-0066
(Address of principal executive offices)		(Zip Code)

(920) 684-4410

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x		Accelerated filer o

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No xý

The number of shares outstanding of the Registrant’s common stock, $.01 par value, as of June ~~29, 2012,~~30, 2013, the most recent practicable date, was ~~132,304,552.~~

133,535,508.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE MANITOWOC COMPANY, INC.

Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, ~~2012~~2013 and ~~2011~~

2012

(Unaudited)

(In millions, except per-share and average shares data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

Net sales

$
1,005.9

$
949.8

$
1,866.0

$
1,682.0

Costs and expenses:

Cost of sales

756.2

724.8

1,410.1

1,276.5

Engineering, selling and administrative expenses

151.1

145.4

299.5

285.6

Restructuring expense

0.2

2.0

0.9

2.9

Amortization expense

9.5

9.6

19.1

19.3

Other

0.1

0.1

0.1

0.1

Total operating costs and expenses

917.1

881.9

1,729.7

1,584.4

Earnings (loss) from operations

88.8

67.9

136.3

97.6

Other income (expenses):

Amortization of deferred financing fees

(2.1
)
(2.7
)
(4.1
)
(6.0
)
Interest expense

(33.8
)
(38.3
)
(66.8
)
(77.7
)
Loss on debt extinguishment

—

(24.2
)
—

(27.8
)
Other income (expense), net

1.9

0.3

0.3

1.1

Total other income (expenses)

(34.0
)
(64.9
)
(70.6
)
(110.4
)

Earnings (loss) from continuing operations before taxes on income

54.8

3.0

65.7

(12.8
)
Provision (benefit) for taxes on income

14.4

0.6

26.8

2.0

Earnings (loss) from continuing operations

40.4

2.4

38.9

(14.8
)

Discontinued operations:

Earnings (loss) from discontinued operations, net of income taxes of $0.0, ($0.2), ($0.2) and ($1.9), respectively

(0.2
)
(0.3
)
(0.5
)
(3.0
)
Gain (loss) on sale of discontinued operations, net of income taxes of $0.0, ($0.7), $0.0 and $29.0, respectively

—

(0.2
)
—

(33.6
)
Net earnings (loss)

40.2

1.9

38.4

(51.4
)
Less: Net loss attributable to noncontrolling interest, net of income taxes

(2.3
)
(1.1
)
(4.2
)
(2.0
)
Net earnings (loss) attributable to Manitowoc

$
42.5

$
3.0

$
42.6

$
(49.4
)

Amounts attributable to the Manitowoc common shareholders:

Earnings (loss) from continuing operations

$
42.7

$
3.5

$
43.1

$
(12.8
)
Earnings (loss) from discontinued operations, net of income taxes

(0.2
)
(0.3
)
(0.5
)
(3.0
)
Loss on sale of discontinued operations, net of income taxes

—

(0.2
)
—

(33.6
)
Net earnings (loss) attributable to Manitowoc

$
42.5

$
3.0

$
42.6

$
(49.4
)

Basic earnings (loss) per common share:

Earnings (loss) from continuing operations attributable to Manitowoc common shareholders

$
0.33

$
0.03

$
0.33

$
(0.10
)
Earnings (loss) from discontinued operations attributable to Manitowoc common shareholders

(0.00
)
(0.00
)
(0.00
)
(0.02
)
Loss on sale of discontinued operations, net of income taxes

—

(0.00
)
—

(0.26
)
Earnings (loss) per share attributable to Manitowoc common shareholders

$
0.33

$
0.02

$
0.33

$
(0.38
)

Diluted earnings (loss) per common share:

Earnings (loss) from continuing operations attributable to Manitowoc common shareholders

$
0.32

$
0.03

$
0.32

$
(0.10
)
Earnings (loss) from discontinued operations attributable to Manitowoc common shareholders

(0.00
)
(0.00
)
(0.00
)
(0.02
)
Loss on sale of discontinued operations, net of income taxes

—

(0.00
)
—

(0.26
)
Earnings (loss) per share attributable to Manitowoc common shareholders

$
0.32

$
0.02

$
0.32

$
(0.38
)

Weighted average shares outstanding — basic

130,575,165

130,457,059

130,562,923

130,440,221

Weighted average shares outstanding — diluted

133,392,079

133,822,522

133,552,797

130,440,221



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net sales	$	1,046.6		$	997.2		$	1,944.6		$	1,849.1
Costs and expenses:
Cost of sales	773.8			746.0			1,451.8			1,394.6
Engineering, selling and administrative expenses	161.3			149.6			319.4			296.5
Amortization expense	9.0			9.3			18.1			18.6
Restructuring expense	0.9			0.2			1.2			0.9
Other	—			0.1			0.3			0.1
Total operating costs and expenses	945.0			905.2			1,790.8			1,710.7

Earnings from operations	101.6			92.0			153.8			138.4

Other income (expenses):
Interest expense	(32.6		)	(33.8		)	(65.9		)	(66.8		)
Amortization of deferred financing fees	(1.7		)	(2.1		)	(3.5		)	(4.1		)
Loss on debt extinguishment	—			—			(0.4		)	—
Other income (expense), net	(1.4		)	2.0			0.2			0.2
Total other income (expenses)	(35.7		)	(33.9		)	(69.6		)	(70.7		)

Earnings from continuing operations before taxes on income	65.9			58.1			84.2			67.7
Provision for taxes on income	9.3			15.5			17.8			26.9
Earnings from continuing operations	56.6			42.6			66.4			40.8

Discontinued operations:
Earnings (loss) from discontinued operations, net of income taxes of $(1.2), $0.1, $(1.3) and $0.2, respectively	(2.1		)	0.4			(2.2		)	—
Loss on sale of discontinued operations, net of income taxes of $0.0, $0.0, $3.3 and $0.0, respectively	—			—			(1.6		)	—
Net earnings	54.5			43.0			62.6			40.8
Less: Net loss attributable to noncontrolling interest, net of income taxes	(3.1		)	(2.3		)	(5.4		)	(4.2		)
Net earnings attributable to Manitowoc	$	57.6		$	45.3		$	68.0		$	45.0

Amounts attributable to the Manitowoc common shareholders:
Earnings from continuing operations	$	59.7		$	44.9		$	71.8		$	45.0
Earnings (loss) from discontinued operations, net of income taxes	(2.1		)	0.4			(2.2		)	—
Loss on sale of discontinued operations, net of income taxes	—			—			(1.6		)	—
Net earnings attributable to Manitowoc	$	57.6		$	45.3		$	68.0		$	45.0

Basic earnings (loss) per common share:
Earnings from continuing operations attributable to Manitowoc common shareholders	$	0.45		$	0.34		$	0.54		$	0.34
Earnings (loss) from discontinued operations attributable to Manitowoc common shareholders	(0.02		)	—			(0.02		)	—
Loss on sale of discontinued operations, net of income taxes	—			—			(0.01		)	—
Earnings per share attributable to Manitowoc common shareholders	$	0.43		$	0.35		$	0.51		$	0.34

Diluted earnings (loss) per common share:
Earnings from continuing operations attributable to Manitowoc common shareholders	$	0.44		$	0.34		$	0.53		$	0.34
Earnings (loss) from discontinued operations attributable to Manitowoc common shareholders	(0.02		)	—			(0.02		)	—
Loss on sale of discontinued operations, net of income taxes	—			—			(0.01		)	—
Earnings per share attributable to Manitowoc common shareholders	$	0.43		$	0.34		$	0.50		$	0.34

Weighted average shares outstanding — basic	132,999,781			130,575,165			132,655,172			130,562,923
Weighted average shares outstanding — diluted	135,112,730			133,392,079			135,029,444			133,552,797

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MANITOWOC COMPANY, INC.

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~

For the Three and Six Months Ended June 30, ~~2012~~2013 and ~~2011~~

2012

(Unaudited)

(In millions)

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

Net earnings (loss)

$
40.2

$
1.9

$
38.4

$
(51.4
)
Other comprehensive income (loss), net of tax

Derivative instrument fair market value adjustment, net of income taxes of $(1.7), $5.0, $(0.3) and $6.6, respectively

(4.0
)
8.5

(0.9
)
13.4

Foreign currency translation adjustments

(39.4
)
6.7

(22.9
)
40.2

Total other comprehensive income (loss), net of tax

(43.4
)
15.2

(23.8
)
53.6

Comprehensive income (loss)

(3.2
)
17.1

14.6

2.2

Comprehensive income (loss) attributable to noncontrolling interest

(2.3
)
(1.1
)
(4.2
)
(2.0
)

Comprehensive income (loss) attributable to Manitowoc

$
(0.9
)
$
18.2

$
18.8

$
4.2



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net earnings	$	54.5		$	43.0		$	62.6		$	40.8
Other comprehensive income (loss), net of tax
Derivative instrument fair market value adjustment, net of income taxes of $0.2, $(1.7), $(1.2) and $(0.3), respectively	0.5			(4.0		)	(2.1		)	(0.9		)
Employee pension and postretirement benefits, net of income taxes of $0.4, $0.2, $0.7 and $0.4, respectively.	1.1			0.8			2.1			1.6
Foreign currency translation adjustments	(1.5		)	(39.4		)	(16.1		)	(22.9		)
Total other comprehensive income (loss), net of tax	0.1			(42.6		)	(16.1		)	(22.2		)
Comprehensive income	54.6			0.4			46.5			18.6
Comprehensive loss attributable to noncontrolling interest	(3.1		)	(2.3		)	(5.4		)	(4.2		)
Comprehensive income attributable to Manitowoc	$	57.7		$	2.7		$	51.9		$	22.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MANITOWOC COMPANY, INC.

Condensed Consolidated Balance Sheets

As of June 30, ~~2012~~2013 and December 31, ~~2011~~2012

(Unaudited)

(In millions, except share data)

June 30,

December 31,

2012

2011

Assets

Current Assets:

Cash and cash equivalents

$
56.8

$
68.6

Marketable securities

2.6

2.7

Restricted cash

10.1

7.2

Accounts receivable, less allowances of $12.5 and $12.8, respectively

326.3

297.0

Inventories — net

808.6

668.7

Deferred income taxes

120.0

117.8

Other current assets

98.2

77.8

Total current assets

1,422.6

1,239.8

Property, plant and equipment — net

555.8

568.2

Goodwill

1,157.9

1,164.8

Other intangible assets — net

826.3

851.8

Other non-current assets

149.1

140.6

Total assets

$
4,111.7

$
3,965.2

Liabilities and Equity

Current Liabilities:

Accounts payable and accrued expenses

$
847.3

$
869.8

Current portion of long-term debt and short-term borrowings

116.6

79.1

Product warranties

92.4

93.8

Customer advances

23.6

35.1

Product liabilities

27.0

26.8

Total current liabilities

1,106.9

1,104.6

Non-Current Liabilities:

Long-term debt

1,946.2

1,810.9

Deferred income taxes

215.8

215.8

Pension obligations

88.3

90.6

Postretirement health and other benefit obligations

60.5

59.8

Long-term deferred revenue

32.4

34.2

Other non-current liabilities

163.2

175.8

Total non-current liabilities

2,506.4

2,387.1

Commitments and contingencies (Note 14)

Total Equity:

Common stock (300,000,000 shares authorized, 163,175,928 shares issued, 132,304,552 and 131,884,765 shares outstanding, respectively)

1.4

1.4

Additional paid-in capital

480.5

470.8

Accumulated other comprehensive income (loss)

(38.8
)
(15.0
)
Retained earnings

156.2

113.6

Treasury stock, at cost (30,871,376 and 31,291,163 shares, respectively)

(86.8
)
(87.4
)
Total Manitowoc stockholders’ equity

512.5

483.4

Noncontrolling interest

(14.1
)
(9.9
)
Total equity

498.4

473.5

Total liabilities and equity

$
4,111.7

$
3,965.2



	June 30, 2013			December 31, 2012
Assets
Current Assets:
Cash and cash equivalents	$	91.7		$	73.4
Marketable securities	2.7			2.7
Restricted cash	10.7			10.6
Accounts receivable, less allowances of $15.2 and $13.5, respectively	340.5			332.7
Inventories — net	815.9			707.6
Deferred income taxes	89.1			89.0
Other current assets	107.9			105.2
Current assets of discontinued operation	—			6.8
Total current assets	1,458.5			1,328.0

Property, plant and equipment — net	559.9			556.1
Goodwill	1,206.9			1,210.7
Other intangible assets — net	776.6			796.4
Other non-current assets	149.3			130.3
Long-term assets of discontinued operation	—			35.8
Total assets	$	4,151.2		$	4,057.3
Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses	$	878.2		$	912.9
Current portion of long-term debt and short-term borrowings	96.2			92.8
Product warranties	82.1			82.1
Customer advances	25.0			24.2
Product liabilities	28.6			27.9
Current liabilities of discontinued operation	—			6.0
Total current liabilities	1,110.1			1,145.9
Non-Current Liabilities:
Long-term debt	1,800.9			1,732.0
Deferred income taxes	226.1			223.0
Pension obligations	113.5			114.3
Postretirement health and other benefit obligations	53.1			53.4
Long-term deferred revenue	41.3			37.7
Other non-current liabilities	166.5			161.1
Long-term liabilities of discontinued operation	—			8.6
Total non-current liabilities	2,401.4			2,330.1
Commitments and contingencies (Note 14)
Total Equity:
Common stock (300,000,000 shares authorized, 163,175,928 shares issued, 133,535,508 and 132,769,478 shares outstanding, respectively)	1.4			1.4
Additional paid-in capital	496.8			486.9
Accumulated other comprehensive loss	(45.5		)	(29.4		)
Retained earnings	290.1			222.1
Treasury stock, at cost (29,640,420 and 30,406,450 shares, respectively)	(78.7		)	(80.7		)
Total Manitowoc stockholders’ equity	664.1			600.3
Noncontrolling interest	(24.4		)	(19.0		)
Total equity	639.7			581.3
Total liabilities and equity	$	4,151.2		$	4,057.3

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MANITOWOC COMPANY, INC.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, ~~2012~~2013 and ~~2011~~

2012

(Unaudited)

(In millions)

Six Months Ended

June 30,

2012

2011

Cash Flows from Operations:

Net earnings (loss)

$
38.4

$
(51.4
)
Adjustments to reconcile net earnings (loss) to cash provided by (used for) operating activities of continuing operations:

Discontinued operations, net of income taxes

0.5

3.0

Depreciation

34.4

41.1

Amortization of intangible assets

19.1

19.3

Deferred income taxes

(0.7
)
(5.0
)
Loss (gain) on sale of property, plant and equipment

1.0

(0.5
)
Restructuring expense

0.9

2.9

Amortization of deferred financing fees

4.1

6.0

Loss on debt extinguishment

—

27.8

Loss on sale of discontinued operations

—

33.6

Other

8.8

8.5

Changes in operating assets and liabilities, excluding effects of business acquisitions and divestitures:

Accounts receivable

(34.7
)
(163.7
)
Inventories

(153.0
)
(160.0
)
Other assets

(20.9
)
20.5

Accounts payable

7.4

111.9

Accrued expenses and other liabilities

(26.6
)
(62.8
)
Net cash provided by (used for) operating activities of continuing operations

(121.3
)
(168.8
)
Net cash provided by (used for) operating activities of discontinued operations

(0.5
)
(18.5
)
Net cash provided by (used for) operating activities

(121.8
)
(187.3
)

Cash Flows from Investing:

Capital expenditures

(34.8
)
(18.6
)
Restricted cash

(3.0
)
(0.1
)
Proceeds from sale of business

—

143.6

Proceeds from sale of property, plant and equipment

0.2

2.9

Net cash provided by (used for) investing activities

(37.6
)
127.8

Cash Flows from Financing:

Proceeds from revolving credit facility

148.8

91.6

(Payments on) long-term debt

(48.3
)
(827.9
)
Proceeds from long-term debt

64.9

805.8

(Payments on) notes financing

(18.7
)
(1.4
)
Debt issuance costs

—

(13.6
)
Exercises of stock options, including windfall tax benefits

1.6

1.5

Net cash provided by (used for) financing activities of continuing operations

148.3

56.0

Effect of exchange rate changes on cash

(0.7
)
0.9

Net increase (decrease) in cash and cash equivalents

(11.8
)
(2.6
)
Balance at beginning of period

68.6

83.7

Balance at end of period

$
56.8

$
81.1



	Six Months Ended June 30,
	2013			2012
Cash Flows from Operations:
Net earnings	$	62.6		$	40.8
Adjustments to reconcile net earnings to cash used for operating activities of continuing operations:
Discontinued operations, net of income taxes	2.2			—
Depreciation	38.2			34.2
Amortization of intangible assets	18.1			18.6
Amortization of deferred financing fees	3.5			4.1
Deferred income taxes	(1.3		)	(1.3		)
Loss on early debt extinguishment	0.4			—
Loss on sale of property, plant and equipment	3.3			1.0
Loss on sale of discontinued operations	1.6			—
Stock-based compensation expense	9.0			8.6
Changes in operating assets and liabilities, excluding effects of business acquisitions and divestitures:
Accounts receivable	(14.6		)	(34.5		)
Inventories	(115.7		)	(156.2		)
Other assets	(30.5		)	(21.2		)
Accounts payable	9.2			6.7
Accrued expenses and other liabilities	(44.5		)	(24.2		)
Net cash used for operating activities of continuing operations	(58.5		)	(123.4		)
Net cash provided by (used for) operating activities of discontinued operations	(4.0		)	1.6
Net cash used for operating activities	(62.5		)	(121.8		)

Cash Flows from Investing:
Capital expenditures	(46.9		)	(34.7		)
Proceeds from sale of property, plant and equipment	0.9			0.2
Restricted cash	(0.2		)	(3.0		)
Proceeds from sale of business	39.2			—
Net cash used for investing activities of continuing operations	(7.0		)	(37.5		)
Net cash used for investing activities of discontinued operations	—			(0.1		)
Net cash used for investing activities	(7.0		)	(37.6		)

Cash Flows from Financing:
Proceeds from revolving credit facility	104.1			148.8
Payments on long-term debt	(38.8		)	(48.3		)
Proceeds from long-term debt	19.3			64.9
Proceeds (payments) on notes financing	2.3			(18.7		)
Exercises of stock options	2.9			1.6
Net cash provided by financing activities	89.8			148.3

Effect of exchange rate changes on cash	(2.0		)	(0.7		)

Net increase (decrease) in cash and cash equivalents	18.3			(11.8		)
Balance at beginning of period	73.4			68.6
Balance at end of period	$	91.7		$	56.8

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE MANITOWOC COMPANY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

For the Three and Six Months Ended June 30, ~~2012~~2013 and ~~2011~~

2012

1. Accounting Policies

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive income for the three and six months ended June 30, ~~2012~~2013 and ~~2011,~~2012, the cash flows for the same six-month periods, and the financial position at June 30, 2013 and December 31, 2012, and except as otherwise discussed such adjustments consist of only those of a normal recurring nature. The interim results are not necessarily indicative of results for a full year and do not contain information included in the company’s annual ~~condensed~~ consolidated financial statements and notes for the year ended December 31, ~~2011. The~~2012. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to SEC’s rules and regulations dealing with interim financial statements. However, the company believes that the disclosures made in the condensed consolidated ~~balance sheet as of December 31, 2011 was derived from audited~~ financial statements ~~but does~~included herein are adequate to make the information presented not ~~include all disclosures required by accounting principles generally accepted in the United States of America.~~misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the company’s latest annual report on Form 10-K.

All dollar amounts, except share and per share amounts, are in millions of dollars throughout the tables included in these notes unless otherwise indicated.

Certain prior period amounts have been reclassified to conform to current presentation.

~~Prior Period Adjustment:~~

During the ~~second~~third quarter of 2012 the company ~~recorded~~identified errors related to its deferred tax liability and goodwill accounts that originated in connection with certain acquisitions five to eleven years ago, resulting in an understatement of these accounts, and a ~~$4.0 million adjustment~~cumulative overstatement of income tax expense. During the fourth quarter of 2012, the company also identified a classification error between goodwill and accumulated other comprehensive income accounts with respect to ~~correct~~pensions and postretirement health and other benefits in relation to a certain acquisition completed in 2008. In addition, the company had previously identified an error related to the overstatement of inventory ~~whereby for~~in the ~~year ended December 31, 2011 and~~Crane segment that had been corrected as an out-of-period adjustment in the second quarter ~~ended March 31, 2012, the company had incorrectly overstated inventory and understated cost~~ of ~~goods sold by $2.9 million and $1.1 million, respectively.~~2012. The company does not believe ~~that this error is~~these errors to be material to ~~its~~the company’s results of operations, financial position, or cash flows for any of the company’s previously filed annual or quarterly financial statements. The company has revised the condensed consolidated financial statements included herein and revisions have been reflected in past filings containing affected financial information to correct for these errors. These revisions impacted the condensed consolidated financial statements as follows (Note: The figures noted below have not been adjusted for the ~~quarter~~results of the Jackson business, which has been classified as discontinued operations for all periods presented. See further detail at Note 2, "Discontinued Operations."):

(a) Decrease to cost of sales and increase to earnings from continuing operations before taxes on earnings of $4.0 million and $2.9 million for the three and six months ended ~~March 31,~~June 30, 2012 ~~or its 2011 annual or quarterly financial statements.~~

, respectively.

(b) Increase to provision for taxes on income of $1.2 million and $0.5 million for the three and six months ended June 30, 2012, respectively and increase to net earnings and net earnings attributable to Manitowoc of $2.8 million and $2.4 million for the three and six months ended June 30, 2012.

(c) Increase to basic and diluted earnings per share from continuing operations and basic and diluted earnings per share attributable to Manitowoc common shareholders for both the three and six months ended June 30, 2012 of $0.02.

2. Discontinued Operations

On January ~~14, 2011,~~28, 2013, the company ~~closed the previously announced divestiture of~~sold its ~~Kysor/Warren~~Jackson business, which designed, manufactured and ~~Kysor/Warren de Mexico (collectively “Kysor/Warren”) businesses, which manufacture frozen, medium temperature~~sold warewashing equipment and ~~heated display merchandisers, mechanical refrigeration systems~~other equipment including racks and ~~remote mechanical and electrical houses~~tables, to ~~Lennox International~~Hoshizaki USA Holdings, Inc. for approximately ~~$145~~$38.5 million ~~including a preliminary working capital adjustment.~~. Proceeds, net of estimated tax liability, were used to reduce ratably the then-outstanding balances of Term Loans A and B. The transaction resulted in a ~~$34.6~~$1.6 million loss on sale, ~~primarily consisting of $29.9~~which included $3.3 million of income tax expense. ~~The net proceeds from the sale were used to pay down outstanding term debt. On July 1, 2011, the company~~During March 2013, Hoshizaki USA Holdings, Inc. made a payment to ~~Lennox International~~the company of ~~$2.4~~$0.7 million as the final working capital adjustment under the sale agreement. The results of these operations have been classified as discontinued operations.

The following selected financial data of the ~~Kysor/Warren~~Jackson business for the three and six months ended June 30, 2013 and 2012 is presented for informational purposes only and does not necessarily reflect what the results of operations would have been had the business operated as a stand-alone entity. There was no general corporate expense or interest expense allocated to discontinued operations for this business during the periods presented.



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2013		2012		2013		2012
Net sales	$	—	$	8.7	$	2.5	$	16.9

Pretax earnings from discontinued operation	$	—	$	0.7	$	0.1	$	0.9
Provision for taxes on earnings	—		0.1		—		0.4
Net earnings from discontinued operation	$	—	$	0.6	$	0.1	$	0.5

The following selected financial data of various other businesses disposed of prior to 2012, primarily consisting of administrative costs and the settlement of a product liability claim in the second quarter of 2013, for the three and six months ended June 30, ~~2012~~2013 and ~~2011,~~2012, is presented for informational purposes only and does not necessarily reflect what the results of operations would have been had the businesses operated as a stand-alone ~~entity. There was no general corporate expense or interest expense allocated to discontinued operations for this business during the periods presented.~~

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2012

2011

2012

2011

Net sales

$
—

$
—

$
—

$
3.3

Pretax earnings (loss) from discontinued operation

$
(0.2
)
$
(0.1
)
$
(0.4
)
$
(4.1
)
Provision (benefit) for taxes on earnings

—

—

(0.1
)
(1.6
)
Net earnings (loss) from discontinued operation

$
(0.2
)
$
(0.1
)
$
(0.3
)
$
(2.5
)

The following selected financial data of various other businesses disposed of prior to 2012, primarily consisting of administrative costs, for the three and six months ended June 30, 2012 and 2011, is presented for informational purposes only and does not necessarily reflect what the results of operations would have been had the businesses operated as a stand-alone entity.entities. There was no general corporate expense or interest expense allocated to discontinued operations for these businesses during the periods presented.



	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2013			2012			2013			2012
Net sales	$	—		$	—		$	—		$	—

Pretax loss from discontinued operations	$	(3.3	)	$	(0.2	)	$	(3.6	)	$	(0.7	)
Benefit for taxes on earnings	(1.2		)	—			(1.3		)	(0.2		)
Net loss from discontinued operations	$	(2.1	)	$	(0.2	)	$	(2.3	)	$	(0.5	)

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2012

2011

2012

2011

Net sales

$
—

$
—

$
—

$
—

Pretax earnings (loss) from discontinued operation

$
—

$
(0.4
)
$
(0.3
)
$
(0.8
)
Provision (benefit) for taxes on earnings

—

(0.2
)
(0.1
)
(0.3
)
Net earnings (loss) from discontinued operation

$
—

$
(0.2
)
$
(0.2
)
$
(0.5
)

3. Fair Value of Financial Instruments

The following tables set forth the company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Fair Value as of June 30, 2012

(in millions)

Level 1

Level 2

Level 3

Total

Current Assets:

Foreign currency exchange contracts

$
—

$
0.9

$
—

$
0.9

Marketable securities

2.6

—

—

2.6

Total current assets at fair value

$
2.6

$
0.9

$
—

$
3.5

Non-Current Assets:

Interest rate swap contracts

$
—

$
12.0

$
—

$
12.0

Total non-current assets at fair value

$
—

$
12.0

$
—

$
12.0

Current Liabilities:

Foreign currency exchange contracts

$
—

$
6.3

$
—

$
6.3

Commodity contracts

—

2.7

—

2.7

Interest rate swap contracts

—

4.8

—

4.8

Total current liabilities at fair value

$
—

$
13.8

$
—

$
13.8

Fair Value as of December 31, 2011

(in millions)

Level 1

Level 2

Level 3

Total

Current Assets:

Foreign currency exchange contracts

$
—

$
0.8

$
—

$
0.8

Marketable securities

2.7

—

—

2.7

Total current assets at fair value

$
2.7

$
0.8

$
—

$
3.5

Non-current Assets:

Interest rate swap contracts

$
—

$
0.5

$
—

$
0.5

Interest rate cap contracts

—

0.3

—

0.3

Total non-current assets at fair value

$
—

$
0.8

$
—

$
0.8

Current Liabilities:

Foreign currency exchange contracts

$
—

$
6.7

$
—

$
6.7

Commodity contracts

—

2.4

—

2.4

Total current liabilities at fair value

$
—

$
9.1

$
—

$
9.1

Non-current Liabilities:

Interest rate swap contracts

$
—

$
9.5

$
—

$
9.5

Total non-current liabilities at fair value

$
—

$
9.5

$
—

$
9.5

The carrying value of the amounts reported in the Condensed Consolidated Balance Sheets for cash, accounts receivable, accounts payable, deferred purchase price notes on receivables sold (see Note 9, “Accounts Receivable Securitization” for further discussion of deferred purchase price notes on receivables sold) and short-term variable debt, including any amounts outstanding under our revolving credit facility, approximate fair value, without being discounted, due to the short periods during which these amounts are outstanding.



	Fair Value as of June 30, 2013
(in millions)	Level 1		Level 2		Level 3		Total
Current Assets:
Foreign currency exchange contracts	$	—	$	1.4	$	—	$	1.4
Marketable securities	2.7		—		—		2.7
Total current assets at fair value	$	2.7	$	1.4	$	—	$	4.1
Current Liabilities:
Foreign currency exchange contracts	$	—	$	2.9	$	—	$	2.9
Commodity contracts	—		1.4		—		1.4
Total current liabilities at fair value	$	—	$	4.3	$	—	$	4.3

Non-current Liabilities:
Interest rate swap contracts	$	—	$	8.4	$	—	$	8.4
Total Non-current liabilities at fair value	$	—	$	8.4	$	—	$	8.4



	Fair Value as of December 31, 2012
(in millions)	Level 1		Level 2		Level 3		Total
Current Assets:
Foreign currency exchange contracts	$	—	$	2.9	$	—	$	2.9
Marketable securities	2.7		—		—		2.7
Total current assets at fair value	$	2.7	$	2.9	$	—	$	5.6
Current Liabilities:
Foreign currency exchange contracts	$	—	$	0.9	$	—	$	0.9
Commodity contracts	—		0.8		—		0.8
Interest rate swap contracts	—		0.3		—		0.3
Total current liabilities at fair value	$	—	$	2.0	$	—	$	2.0
Non-current Liabilities:
Interest rate swap contracts	$	—	$	1.1	$	—	$	1.1
Total non-current liabilities at fair value	$	—	$	1.1	$	—	$	1.1

The fair value of the company’s ~~7.125%~~9.50% Senior Notes due ~~2013~~2018 was approximately ~~$150.5~~$433.8 million and ~~$146.6~~$447.5 million at as of June 30, ~~2012~~

20137

and December 31, ~~2011,~~2012, respectively. The fair value of the company’s ~~9.50%~~8.50% Senior Notes due ~~2018~~2020 was approximately ~~$439.8~~$657.0 million and ~~$434.0~~$675.0 million at as of June 30, ~~2012~~2013 and December 31, ~~2011,~~2012, respectively. The fair value of the company’s ~~8.50%~~5.875% Senior Notes due ~~2020~~2022 was approximately ~~$649.5~~$301.5 million and ~~$634.9~~$307.5 million at as of June 30, ~~2012~~2013 and December 31, ~~2011,~~2012, respectively. The fair values of the company’s Term Loans under ~~the current~~its Senior Credit Facility were as follows at as of June 30, ~~2012~~2013 and December 31, ~~2011,~~2012, respectively: Term Loan A — ~~$311.8~~$275.9 million and ~~$318.6 million;~~$296.0 million; and Term Loan B — ~~$330.2~~$75.5 million and ~~$324.1 million.~~$81.4 million. See Note 8, “Debt,” for a description of the debt instruments and their related carrying values.

ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820-10 classifies the inputs used to measure fair value into the following hierarchy:



Level 1		Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2		Unadjusted quoted prices in active markets for similar assets or liabilities, or

		Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or

		Inputs other than quoted prices that are observable for the asset or liability

Level 3		Unobservable inputs for the asset or liability

The company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The company estimates fair value of its Term Loans and Senior Notes based on quoted market prices of the instruments; though these markets are typically thinly traded, the liabilities are therefore classified as Level 2 within the valuation hierarchy. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, deferred purchase price notes on receivables sold (See Note 9, “Accounts Receivable Securitization”) and short-term variable debt, including any amounts outstanding under our revolving credit facility, approximate fair value, without being discounted as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 due to the short-term nature of these instruments.

As a result of its global operating and financing activities, the company is exposed to market risks from changes in interest rates, foreign currency exchange rates, and commodity prices, which may adversely affect the company’s operating results and financial position. When deemed appropriate, the company minimizes these risks through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes, and the company does not use leveraged derivative financial instruments. The ~~forward~~ foreign currency exchange, ~~and~~ interest rate, ~~swap and cap contracts~~ and commodity contracts are valued using broker quotations. As such, these derivative instruments are classified within Level 2.

4. Derivative Financial Instruments

The company’s risk management objective is to ensure that business exposures to ~~risk~~risks that have been identified and measured and are capable of being controlled are minimized using what it believes to be the most effective and efficient methods to eliminate, reduce, or transfer such exposures. Operating decisions consider associated risks and ~~structure~~ transactions are structured to minimize or manage risk whenever possible.

Use of derivative instruments is consistent with the overall business and risk management objectives of the company. Derivative instruments may be used to manage business risk within limits specified by the company’s risk policy and manage exposures that have been identified through the risk identification and measurement process, provided that they clearly qualify as “hedging” activities as defined in the risk policy. Use of derivative instruments is not automatic, nor is it necessarily the only response to managing pertinent business risk. Use is permitted only after the risks that have been identified are determined to exceed defined tolerance levels and are considered to be unavoidable.

The primary risks managed by the company by using derivative instruments are interest rate risk, commodity price risk and foreign currency exchange risk. Interest rate swap and cap instruments are entered into to manage interest rate or fair value risk. ~~Forward~~Swap contracts on various commodities are entered into to manage the price risk associated with forecasted purchases of materials used in the company’s manufacturing ~~process.~~processes. The company also enters into various foreign currency derivative instruments to manage foreign currency risk associated with the company’s projected foreign currency denominated purchases, sales, and receivable and payable balances.

ASC Topic 815-10, “Derivatives and Hedging,” requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. In accordance with ASC Topic 815-10, the company designates commodity swaps, foreign currency exchange contracts, and interest rate ~~cap~~derivative contracts as cash flow hedges of forecasted purchases of commodities and currencies, and variable rate interest payments. Also in accordance with ASC Topic 815-10, the company designates fixed-to-float

interest rate swaps as fair market value hedges of fixed rate debt, which synthetically swap the company’s fixed rate debt to floating rate debt.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of ~~other comprehensive income~~Other Comprehensive Income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative instruments representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in current earnings. In the next twelve months the company estimates ~~$4.7~~$1.1 million of unrealized ~~and realized~~ losses net of tax related to commodity price and currency exchange rate hedging will be reclassified from other comprehensive income into earnings. Foreign currency and commodity hedging is generally completed prospectively on a rolling basis for between twelve and twenty-four months, respectively, depending on the type of risk being hedged.

The risk management objective for the company’s fair market value interest rate hedges is to effectively change the amount of the underlying debt equal to the notional value of the hedges from a fixed to a floating interest rate based on the benchmark ~~six-month~~one-month U.S. LIBOR rate. These swaps include an embedded call feature to match the terms of the call schedule embedded in the Senior Notes. Changes in the fair value of the interest rate swap are expected to offset changes in the fair value of the debt due to changes in the U.S. ~~six-month~~one-month LIBOR benchmark interest rate.

As of June 30, ~~2012~~2013 and December 31, ~~2011,~~2012, the company had the following outstanding commodity and foreign currency ~~forward~~exchange contracts that were entered ~~into~~ to hedge forecasted transactions:

Units Hedged

Commodity

June 30, 2012

December 31, 2011

Type

Aluminum

1,851

1,254

MT

Cash Flow

Copper

657

684

MT

Cash Flow

Natural Gas

228,144

346,902

MMBtu

Cash Flow

Steel

11,177

8,231

Tons

Cash Flow

Units Hedged

Short Currency

June 30, 2012

December 31, 2011

Type

Canadian Dollar

12,867,509

25,083,644

Cash Flow

European Euro

110,154,200

67,565,453

Cash Flow

South Korean Won

2,917,017,180

3,224,015,436

Cash Flow

Singapore Dollar

4,800,000

4,800,000

Cash Flow

United States Dollar

4,625,664

5,538,777

Cash Flow

Chinese Renminbi

108,083,900

111,177,800

Cash Flow



	Units Hedged
Commodity	June 30, 2013	December 31, 2012		Type
Aluminum	1,851	1,382	MT	Cash Flow
Copper	385	515	MT	Cash Flow
Natural Gas	200,491	158,670	MMBtu	Cash Flow
Steel	9,051	10,041	Tons	Cash Flow



	Units Hedged
Short Currency	June 30, 2013	December 31, 2012	Type
Canadian Dollar	12,875,224	9,351,126	Cash Flow
European Euro	62,108,650	66,389,190	Cash Flow
South Korean Won	2,160,482,518	2,595,874,455	Cash Flow
Singapore Dollar	4,800,000	4,800,000	Cash Flow
United States Dollar	680,397	2,398,273	Cash Flow
Chinese Renminbi	127,645,962	187,640,472	Cash Flow

As of June 30, ~~2011, the company offset, dedesignated~~2013 and wrote-off all of its previous interest rate swaps against Term Loan A and B interest due to the amendment of its Senior Credit Facility (See Note 8, “Debt,” for a description of the Senior Credit Facility). As of June 30,December 31, 2012, the company had outstanding ~~$450.0~~$225.0 million notional amount of 3.00%LIBOR caps related to the term loan portion of the Senior Credit Facility. The remaining unhedged portions of Term Loans A and B continue to bear interest according to the terms of the Senior Credit ~~Facility. The~~Facility without the benefit of the interest rate cap.

As of December 31, 2012, the company ~~is also party to various~~had $100.0 million notional amount of fixed-to-float interest rate swaps ~~in connection with its 2018~~outstanding related to the Senior Notes due 2022 that were designated as fair value hedges. In the second quarter of 2013, the company entered into and designated as fair value hedges $75.0 million and $25.0 million notional amount of additional fixed-to-float interest rate swaps relating to the Senior Notes due 2020 ~~Notes. At~~ and 2022, respectively.

As of June 30, ~~2012, $200.0~~2013, the company had $75.0 million and ~~$300.0~~$125.0 million total notional amount of fixed-to-float interest rate swaps outstanding related to the ~~2018~~Senior Notes due 2020 and ~~2020 Notes,~~2022, respectively, that were ~~swapped to floating rate interest (See~~designated as fair value hedges.

See Note 8, ~~“Debt,”~~"Debt," for a description of the 2018 and 2020 Notes). The 2018 Notes accrue interest at a rate of 9.50% on the fixed portion and 7.45% plus the six-month LIBOR reset in arrears on the variable portion. The 2020 Notes accrue interest at a rate of 8.50% on the fixed portion and 6.02% plus the six-month LIBOR reset in arrears on the variable portion. At June 30, 2012, the weighted average interest rates for the 2018 and 2020 Notes taking into consideration the impact of floating rate hedges, was 8.84% and 7.63%, respectively. Both aforementioned swap contracts related to the 2018 and 2020 Notes include a call premium schedule that mirrors that of the respective debt ~~and includes an optional early termination cash settlement at five years from the trade date.~~

The company monetized the derivative asset related to the fixed-to-float interest rate swaps in connection with the 2018 and 2020 Notes and received $21.5 million in the third quarter of 2011. The gain is treated as an increase to the debt balances for each of the 2018 and 2020 Notes and will be amortized to interest expense over the life of the original swap.

instruments.

For derivative instruments that are not designated as hedging instruments under ASC Topic 815-10, the gains or losses on the derivatives are recognized in current earnings within cost of sales or other income, net in the Condensed Consolidated Statements of Operations. As of June 30, ~~2012~~2013 and December 31, ~~2011,~~2012, the company had the following outstanding foreign currency ~~forward~~exchange contracts that were not designated as hedging instruments:



	Units Hedged
Short Currency	June 30, 2013	December 31, 2012	Recognized Location	Purpose
Euro	30,541,078	24,540,841	Other income, net	Accounts Payable and Receivable Settlement
United States Dollar	16,735,000	6,432,000	Other income, net	Accounts Payable and Receivable Settlement
Pound Sterling	6,502,980	11,100,000	Other income, net	Accounts Payable and Receivable Settlement
Chinese Renminbi	125,000,000	—	Other income, net	Accounts Payable and Receivable Settlement
Indian Rupee	358,108	—	Other income, net	Accounts Payable and Receivable Settlement
Mexican Peso	1,032,780	—	Other income, net	Accounts Payable and Receivable Settlement
Canadian Dollar	57,246	—	Other income, net	Accounts Payable and Receivable Settlement
Japanese Yen	100,000,000	—	Other income, net	Accounts Payable and Receivable Settlement

Units Hedged

Short Currency

June 30, 2012

December 31,
2011

Recognized Location

Purpose

British Pound

6,198,616

—

Other income, net

Accounts Payable and Receivable Settlement

Euro

15,764,548

33,150,213

Other income, net

Accounts Payable and Receivable Settlement

United States Dollar

10,800,000

6,000,000

Other income, net

Accounts Payable and Receivable Settlement

Australian Dollar

—

7,569,912

Other income, net

Accounts Payable and Receivable Settlement

Mexican Peso

739,584

—

Other income, net

Accounts Payable and Receivable Settlement

The fair value of outstanding derivative contracts recorded as assets in the accompanying Condensed Consolidated Balance ~~Sheet~~Sheets as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 was as follows:

ASSET DERIVATIVES

June 30, 2012

December 31, 2011

(in millions)

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments

Foreign exchange contracts

Other current assets

$
0.8

$
0.6

Interest rate swap contracts: Fixed-to-float

Other non-current assets

12.0

0.5

Interest rate cap contracts

Other non-current assets

—

0.3

Total derivatives designated as hedging instruments

$
12.8

$
1.4

ASSET DERIVATIVES

June 30, 2012

December 31, 2011

(in millions)

Balance Sheet Location

Fair Value

Derivatives NOT designated as hedging instruments

Foreign exchange contracts

Other current assets

$
0.1

$
0.1

Total derivatives NOT designated as hedging instruments

$
0.1

$
0.1

Total asset derivatives

$
12.9

$
1.5



		ASSET DERIVATIVES
		June 30, 2013		December 31, 2012
(in millions)	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign exchange contracts	Other current assets	$	1.3	$	2.6
Total derivatives designated as hedging instruments		$	1.3	$	2.6



		ASSET DERIVATIVES
		June 30, 2013		December 31, 2012
(in millions)	Balance Sheet Location	Fair Value
Derivatives NOT designated as hedging instruments
Foreign exchange contracts	Other current assets	$	0.1	$	0.3
Total derivatives NOT designated as hedging instruments		$	0.1	$	0.3

Total asset derivatives		$	1.4	$	2.9

The fair value of outstanding derivative contracts recorded as liabilities in the accompanying Condensed Consolidated Balance ~~Sheet~~Sheets as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 was as follows:

LIABILITY DERIVATIVES

June 30, 2012

December 31, 2011

(in millions)

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments

Foreign exchange contracts

Accounts payable and accrued expenses

$
5.5

$
5.2

Commodity contracts

Accounts payable and accrued expenses

2.7

2.5

Total derivatives designated as hedging instruments

$
8.2

$
7.7

LIABILITY DERIVATIVES

June 30, 2012

December 31, 2011

(in millions)

Balance Sheet Location

Fair Value

Derivatives NOT designated as hedging instruments

Foreign exchange contracts

Accounts payable and accrued expenses

$
0.8

$
1.6

Interest rate swap contracts: Float-to-fixed

Accounts payable and accrued expenses

4.8

9.5

Total derivatives NOT designated as hedging instruments

$
5.6

$
11.1

Total liability derivatives

$
13.8

$
18.8



		LIABILITY DERIVATIVES
		June 30, 2013		December 31, 2012
(in millions)	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign exchange contracts	Accounts payable and accrued expenses	$	1.9	$	0.4
Commodity contracts	Accounts payable and accrued expenses	1.4		0.8
Interest rate swap contracts: Fixed-to-float	Other non-current liabilities	$	8.4	$	1.1
Total derivatives designated as hedging instruments		$	11.7	$	2.3



		LIABILITY DERIVATIVES
		June 30, 2013		December 31, 2012
(in millions)	Balance Sheet Location	Fair Value
Derivatives NOT designated as hedging instruments
Foreign exchange contracts	Accounts payable and accrued expenses	$	1.0	$	0.5
Interest rate swap contracts: Float-to-fixed	Accounts payable and accrued expenses	—		0.3
Interest rate swap contracts: Fixed-to-float	Other non-current liabilities	—		—
Total derivatives NOT designated as hedging instruments		$	1.0	$	0.8

Total liability derivatives		$	12.7	$	3.1

The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the three months ended June 30, ~~2012~~2013 and June 30, ~~2011~~2012 for gains or losses initially recognized in Other Comprehensive Income (OCI) in the Condensed Consolidated Balance ~~Sheet~~Sheets was as follows:

Derivatives in Cash Flow Hedging

Amount of Gain or (Loss) on Derivative
Recognized in OCI (Effective Portion,
net of tax)

Location of Gain or (Loss)
Reclassified from
Accumulated
OCI into Income

Amount of Gain or (Loss) Reclassified
from Accumulated OCI into Income
(Effective Portion)

Relationships (in millions)

June 30, 2012

June 30, 2011

(Effective Portion)

June 30, 2012

June 30, 2011

Foreign exchange contracts

$
(2.4
)
$
(1.0
)
Cost of sales

$
(2.5
)
$
2.7

Interest rate swap & cap contracts

(0.1
)
—

Interest expense

—

(2.7
)
Commodity contracts

(2.7
)
(0.3
)
Cost of sales

(0.6
)
0.2

Total

$
(5.2
)
$
(1.3
)

$
(3.1
)
$
0.2

Derivatives

Location of Gain or (Loss)
on Derivative Recognized in
Income (Ineffective Portion
and Amount Excluded from

Amount of Gain or (Loss) on Derivative Recognized in
Income (Ineffective Portion and Amount Excluded
from
Effectiveness Testing)

Relationships (in millions)

Effectiveness Testing)

June 30, 2012

June 30, 2011

Commodity contracts

Cost of sales

$
(0.1
)
$
—

Total

$
(0.1
)
$
—

Derivatives Not Designated as

Location of Gain or (Loss)
Recognized on Derivative in

Amount of Gain or (Loss) on Derivative Recognized in
Income

Hedging Instruments (in millions)

Income

June 30, 2012

June 30, 2011

Foreign exchange contracts

Other income

$
(0.6
)
$
(0.6
)
Interest rate swaps

Other income

2.4

—

Total

$
1.8

$
(0.6
)

Amount of Gain or (Loss) on Derivative
Recognized in OCI (Effective Portion,
net of tax)

Location of Gain or (Loss)
Reclassified from
Accumulated

Amount of Gain or (Loss) Reclassified
from Accumulated OCI into Income
(Effective Portion)
Derivatives in Cash Flow Hedging
Relationships (in millions)
June 30, 2013 June 30, 2012
OCI into Income
(Effective Portion)
June 30, 2013 June 30, 2012
Foreign exchange contracts $ 0.5
$ (2.4 ) Cost of sales $ 0.5
$ (2.5 )
Interest rate swap & cap contracts —
(0.1 ) Interest expense —
—
Commodity contracts (0.2 ) (2.7 ) Cost of sales (0.6 ) (0.6 )
Total $ 0.3
$ (5.2 ) $ (0.1 ) $ (3.1 )



Derivatives	Location of Gain or (Loss) on Derivative Recognized in Income (Ineffective Portion and Amount Excluded from	Amount of Gain or (Loss) on Derivative Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Relationships (in millions)	Effectiveness Testing)	June 30, 2013			June 30, 2012
Commodity contracts	Cost of sales	$	(0.1	)	$	(0.1	)
Total		$	(0.1	)	$	(0.1	)



Derivatives Not Designated as	Location of Gain or (Loss) Recognized on Derivative in	Amount of Gain or (Loss) on Derivative Recognized in Income
Hedging Instruments (in millions)	Income	June 30, 2013			June 30, 2012
Foreign exchange contracts	Other income	$	(0.6	)	$	(0.6	)
Interest rate swaps	Other income	—			2.4
Total		$	(0.6	)	$	1.8

The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the six months ended June 30, ~~2012~~2013 and June 30, ~~2011~~2012 for gains or losses initially recognized in Other Comprehensive Income (OCI) in the Condensed Consolidated Balance ~~Sheet~~Sheets was as follows:

Derivatives in Cash Flow Hedging

Amount of Gain or (Loss) on Derivative
Recognized in OCI (Effective Portion,
net of tax)

Location of Gain or (Loss)
Reclassified from
Accumulated
OCI into Income

Amount of Gain or (Loss) Reclassified
from Accumulated OCI into Income
(Effective Portion)

Relationships (in millions)

June 30, 2012

June 30, 2011

(Effective Portion)

June 30, 2012

June 30, 2011

Foreign exchange contracts

$
(0.2
)
$
0.9

Cost of sales

$
(3.3
)
$
3.4

Interest rate swap & cap contracts

(0.2
)
1.1

Interest expense

—

(5.3
)
Commodity contracts

(0.2
)
(0.4
)
Cost of sales

(1.3
)
0.3

Total

$
(0.6
)
$
1.6

$
(4.6
)
$
(1.6
)

Derivatives

Location of Gain or (Loss)
Recognized in Income on
Derivative (Ineffective
Portion and Amount
Excluded from

Amount of Gain or (Loss) Recognized in Income on
Derivative (Ineffective Portion and Amount Excluded
from
Effectiveness Testing)

Relationships (in millions)

Effectiveness Testing)

June 30, 2012

June 30, 2011

Commodity contracts

Cost of sales

$
(0.2
)
$
—

Total

$
(0.2
)
$
—

Derivatives Not Designated as

Location of Gain or (Loss)
Recognized
in Income on

Amount of Gain or (Loss) Recognized in Income on
Derivative

Hedging Instruments (in millions)

Derivative

June 30, 2012

June 30, 2011

Foreign exchange contracts

Other income

$
(1.4
)
$
(2.7
)
Interest rate swaps

Other income

4.7

$
—

Total

$
3.3

$
(2.7
)



	Amount of Gain or (Loss) on Derivative Recognized in OCI (Effective Portion, net of tax)						Location of Gain or (Loss) Reclassified from Accumulated	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships (in millions)	June 30, 2013			June 30, 2012			OCI into Income (Effective Portion)	June 30, 2013			June 30, 2012
Foreign exchange contracts	$	(1.8	)	$	(0.2	)	Cost of sales	$	0.8		$	(3.3	)
Interest rate swap & cap contracts	—			(0.2		)	Interest expense	—			—
Commodity contracts	(0.3		)	(0.2		)	Cost of sales	(1.1		)	(1.3		)
Total	$	(2.1	)	$	(0.6	)		$	(0.3	)	$	(4.6	)



Derivatives	Location of Gain or (Loss) on Derivative Recognized in Income (Ineffective Portion and Amount Excluded from	Amount of Gain or (Loss) on Derivative Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Relationships (in millions)	Effectiveness Testing)	June 30, 2013			June 30, 2012
Commodity contracts	Cost of sales	$	(0.1	)	$	(0.2	)
Total		$	(0.1	)	$	(0.2	)



Derivatives Not Designated as	Location of Gain or (Loss) Recognized on Derivative in	Amount of Gain or (Loss) on Derivative Recognized in Income
Hedging Instruments (in millions)	Income	June 30, 2013			June 30, 2012
Foreign exchange contracts	Other income	$	(0.8	)	$	(1.4	)
Interest rate swaps	Other income	—			$	4.7
Total		$	(0.8	)	$	3.3

The effect of Fair Market Value designated derivative instruments on the Condensed Consolidated Statements of Operations for the three months ended June 30, ~~2012~~2013 and June 30, ~~2011~~2012 for gains or losses recognized through income was as follows:

Derivatives Designated as Fair Market Value

Location of Gain or (Loss)
on Derivative

Amount of Gain or (Loss) on Derivative Recognized in
Income

Instruments under ASC 815 (in millions)

Recognized in Income

June 30, 2012

June 30, 2011

Interest rate swap contracts

Interest expense

$
15.3

$
14.3

Total

$
15.3

$
14.3

Derivatives Designated as Fair Market Value
Location of Gain or (Loss)
on Derivative

Amount of Gain or (Loss) on Derivative Recognized in
Income
Instruments under ASC 815 (in millions) Recognized in Income June 30, 2013 June 30, 2012
Interest rate swap contracts Interest expense $ (6.0 ) $ 15.3
Total $ (6.0 ) $ 15.3

The effect of Fair Market Value designated derivative instruments on the Condensed Consolidated ~~Statement~~Statements of Operations for the ~~six-months~~six months ended June 30, ~~2012~~2013 and June 30, ~~2011~~2012 for gains or losses recognized through income was as follows:

5. Inventories

The components of inventories at as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 are summarized as follows:

June 30,

December 31,

(in millions)

2012

2011

Inventories — gross:

Raw materials

$
245.7

$
249.7

Work-in-process

217.5

168.1

Finished goods

451.4

357.6

Total inventories — gross

914.6

775.4

Excess and obsolete inventory reserve

(72.8
)
(75.3
)
Net inventories at FIFO cost

841.8

700.1

Excess of FIFO costs over LIFO value

(33.2
)
(31.4
)
Inventories — net

$
808.6

$
668.7

(in millions) June 30, 2013 December 31, 2012
Inventories — gross:

Raw materials $ 237.5
$ 231.1
Work-in-process 190.1
149.7
Finished goods 495.4
437.6
Total inventories — gross 923.0
818.4
Excess and obsolete inventory reserve (71.4 ) (74.2 )
Net inventories at FIFO cost 851.6
744.2
Excess of FIFO costs over LIFO value (35.7 ) (36.6 )
Inventories — net $ 815.9
$ 707.6

6. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment for the year ended December 31, ~~2011,~~2012 and the ~~three~~six months ended ~~March 31, 2012, and~~ June 30, ~~2012~~2013 are as follows:

(in millions)

Crane

Foodservice

Total

Gross balance as of January 1, 2011

$
279.0

$
1,414.5

$
1,693.5

Restructuring reserve adjustment

—

(3.0
)
(3.0
)
Foreign currency impact

(5.1
)
(0.3
)
(5.4
)
Gross balance as of December 31, 2011

$
273.9

$
1,411.2

$
1,685.1

Asset impairments

—

(520.3
)
(520.3
)
Net balance as of December 31, 2011

$
273.9

$
890.9

$
1,164.8

Foreign currency impact

$
3.8

$
0.2

$
4.0

Gross balance as of March 31, 2012

$
277.7

$
1,411.4

$
1,689.1

Foreign currency impact

(10.8
)
(0.1
)
(10.9
)
Gross balance as of June 30, 2012

$
266.9

$
1,411.3

$
1,678.2

Asset impairments

—

(520.3
)
(520.3
)
Net balance as of June 30, 2012

$
266.9

$
891.0

$
1,157.9



(in millions)	Crane			Foodservice			Total
Gross balance as of January 1, 2012	$	338.8		$	1,384.9		$	1,723.7
Accumulated asset impairments	—			(515.7		)	(515.7		)
Net balance as of January 1, 2012	338.8			869.2			1,208.0
Restructuring reserve adjustment	—			(0.6		)	(0.6		)
Foreign currency impact	2.9			0.4			3.3
Gross balance as of December 31, 2012	$	341.7		$	1,384.7		$	1,726.4
Accumulated asset impairments	—			(515.7		)	(515.7		)
Net balance as of December 31, 2012	$	341.7		$	869.0		$	1,210.7
Restructuring reserve adjustment	—			(0.7		)	(0.7		)
Foreign currency impact	(3.2		)	0.1			(3.1		)
Gross balance as of June 30, 2013	$	338.5		$	1,384.1		$	1,722.6
Accumulated asset impairments	—			(515.7		)	(515.7		)
Net balance as of June 30, 2013	$	338.5		$	868.4		$	1,206.9

The company accounts for goodwill and other intangible assets under the guidance of ASC Topic 350, “Intangibles — Goodwill and Other.” ~~Under ASC Topic 350, goodwill is not amortized; however, the~~The company performs an annual impairment review at June 30 of every year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The company performs impairment reviews for its reporting units, which are Cranes Americas; Cranes Europe, Middle East, and Africa; Cranes China; Cranes Greater Asia Pacific; Crane Care; Foodservice Americas; Foodservice Europe, Middle East, and Africa; and Foodservice Asia, using a fair-value method based on the present value of future cash flows, which involves management’s judgments and assumptions about the amounts of those cash flows and the discount rates used. The estimated fair value is then compared with the carrying amount of the reporting unit, including recorded goodwill. Goodwill is then subject to risk of write-down to the extent that the carrying amount exceeds the estimated fair value.

As of June 30, ~~2012,~~2013, the company performed its annual impairment analysis relative to goodwill and indefinite-lived intangible assets,

and based on those results, no impairment was indicated. The company will continue to monitor market conditions and determine if any additional interim reviews of goodwill, other intangibles or long-lived assets are warranted. In the event the company determines that assets are impaired in the future, the company would recognize a non-cash impairment charge, which could have a material adverse effect on the company’s condensed consolidated balance sheet and results of operations.

The gross carrying amount, accumulated amortization and net book value of the company’s intangible assets other than goodwill at June 30, ~~2012~~2013 and December 31, ~~2011~~2012 are as follows:

June 30, 2012

December 31, 2011

(in millions)

Gross
Carrying
Amount

Accumulated
Amortization

Net
Book
Value

Gross
Carrying
Amount

Accumulated
Amortization

Net
Book
Value

Trademarks and tradenames

$
310.5

$
—

$
310.5

$
315.0

$
—

$
315.0

Customer relationships

437.3

(84.9
)
352.4

437.7

(73.8
)
363.9

Patents

32.4

(23.9
)
8.5

33.1

(23.3
)
9.8

Engineering drawings

10.8

(7.5
)
3.3

11.1

(7.3
)
3.8

Distribution network

19.9

—

19.9

20.4

—

20.4

Other intangibles

180.8

(49.1
)
131.7

182.7

(43.8
)
138.9

Total

$
991.7

$
(165.4
)
$
826.3

$
1,000.0

$
(148.2
)
$
851.8



	June 30, 2013							December 31, 2012
(in millions)	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
Trademarks and tradenames	$	307.7	$	—		$	307.7	$	309.4	$	—		$	309.4
Customer relationships	426.2		(104.7		)	321.5		426.7		(94.1		)	332.6
Patents	34.1		(26.9		)	7.2		33.6		(26.1		)	7.5
Engineering drawings	11.1		(8.4		)	2.7		11.1		(8.1		)	3.0
Distribution network	20.5		—			20.5		20.6		—			20.6
Other intangibles	177.1		(60.1		)	117.0		178.2		(54.9		)	123.3
Total	$	976.7	$	(200.1	)	$	776.6	$	979.6	$	(183.2	)	$	796.4

Amortization expense for the three months ended June 30, ~~2012~~2013 and ~~2011~~2012 was ~~$9.5~~$9.0 million and ~~$9.6~~$9.3 million, respectively.

Amortization expense for the six months ended June 30, ~~2012~~2013 and ~~2011~~2012 was ~~$19.1~~$18.1 million and ~~$19.3~~$18.6 million, respectively. ~~Amortization expense related to intangible assets for each of the five succeeding years is estimated to be approximately $40 million per year.~~

7. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at June 30, ~~2012~~2013 and December 31, ~~2011~~2012 are summarized as follows:

June 30,

December 31,

(in millions)

2012

2011

Trade accounts payable and interest payable

$
481.5

$
482.2

Employee related expenses

105.8

96.7

Restructuring expenses

20.0

21.9

Profit sharing and incentives

23.5

33.4

Accrued rebates

27.9

39.3

Deferred revenue - current

23.9

27.0

Derivative liabilities

13.8

18.8

Income taxes payable

15.9

—

Miscellaneous accrued expenses

135.0

150.5

$
847.3

$
869.8

(in millions) June 30, 2013 December 31, 2012
Trade accounts payable and interest payable $ 514.9
$ 510.2
Employee related expenses 108.9
96.9
Restructuring expenses 22.5
25.3
Profit sharing and incentives 25.1
42.9
Accrued rebates 30.3
39.7
Deferred revenue - current 24.1
29.5
Derivative liabilities 4.3
1.9
Income taxes payable 35.9
37.6
Miscellaneous accrued expenses 112.2
128.9
$ 878.2
$ 912.9

8. Debt

Outstanding debt at June 30, ~~2012~~2013 and December 31, ~~2011~~2012 is summarized as follows:

(in millions)

June 30, 2012

December 31, 2011

Revolving credit facility

$
146.6

$
—

Term loan A

315.0

332.5

Term loan B

332.0

332.0

Senior notes due 2013

150.0

150.0

Senior notes due 2018

410.9

407.7

Senior notes due 2020

620.2

613.5

Other

88.1

54.3

Total debt

2,062.8

1,890.0

Less current portion and short-term borrowings

(116.6
)
(79.1
)
Long-term debt

$
1,946.2

$
1,810.9

~~The company’s Senior Credit Facility originally became effective November 6, 2008 and initially included four loan facilities — a~~

revolving facility of $400.0 million with a five-year term, a Term Loan A of $1,025.0 million with a five-year term, a Term Loan B of $1,200.0 million with a six-year term, and a Term Loan X of $300.0 million with an eighteen-month term. The balance of Term Loan X was repaid in 2009.
(in millions) June 30, 2013 December 31, 2012
Revolving credit facility $ 138.3
$ 34.4
Term loan A 277.1
297.5
Term loan B 75.4
81.0
Senior notes due 2018 409.5
410.5
Senior notes due 2020 616.7
621.2
Senior notes due 2022 291.6
298.9
Other 88.5
81.3
Total debt 1,897.1
1,824.8
Less current portion and short-term borrowings (96.2 ) (92.8 )
Long-term debt $ 1,800.9
$ 1,732.0

On May 13, 2011, the company ~~amended and extended the maturities of its Senior Credit Facility and by entering~~entered into a ~~$1,250.0~~$1,250.0 million Second Amended and Restated Credit Agreement (the “Senior Credit Facility”).

The Senior Credit Facility currently includes three different loan facilities. The first is a revolving facility in the amount of ~~$500.0~~$500.0 million, with a term of five years. The second facility is an amortizing Term Loan A facility in the aggregate amount of ~~$350.0~~$350.0 million with a term of five years. The third facility is an amortizing Term Loan B facility in the amount of ~~$400.0~~$400.0 million with a term of 6.5 years. ~~Including~~Both including and excluding interest rate caps at as of June 30, ~~2012,~~2013, the weighted average interest rates for the Term Loan A and the Term Loan B loans were ~~3.25%~~3.00% and 4.25%, respectively. ~~Excluding~~The weighted average interest rates for the term loans including and excluding the impact of interest rate caps ~~Term Loan A and Term Loan B interest rates~~ were ~~3.25% and 4.25%, respectively, at~~ the same because the relevant one-month U.S. LIBOR rate was below the 3.00% cap level as of June 30, ~~2012.~~

2013.

The Senior Credit Facility contains financial covenants including (a) a Consolidated Interest Coverage Ratio, which measures the ratio of (i) consolidated earnings before interest, taxes, depreciation and amortization, and other adjustments (EBITDA), as defined in the credit agreement to (ii) consolidated cash interest expense, each for the most recent four fiscal quarters, and (b) a Consolidated Senior Secured Leverage Ratio, which measure the ratio of (i) consolidated senior secured indebtedness to (ii) consolidated EBITDA for the most recent four fiscal quarters. The current covenant levels of the financial covenants under the Senior Credit Facility are as set forth below:



Fiscal Quarter Ending	Consolidated Senior Secured Leverage Ratio (less than)	Consolidated Interest Coverage Ratio (greater than)
~~June 30, 2012~~	~~3.50:1.00~~	~~1.875:1.00~~
~~September 30, 2012~~	~~3.50:1.00~~	~~2.00:1.00~~
~~December 31, 2012~~	~~3.50:1.00~~	~~2.00:1.00~~
~~March 31, 2013~~	~~3.50:1.00~~	~~2.25:1.00~~
June 30, 2013	3.25:1.00	2.25:1.00
September 30, 2013	3.25:1.00	2.50:1.00
December 31, 2013	3.25:1.00	2.50:1.00
March 31, 2014	3.25:1.00	2.75:1.00
June 30, 2014	3.25:1.00	2.75:1.00
September 30, 2014	3.25:1.00	2.75:1.00
December 31, 2014, and thereafter	3.00:1.00	3.00:1.00

The Senior Credit Facility includes customary representations and warranties and events of default and customary covenants, including without limitation (i) a requirement that the company prepay the term loan facilities from the net proceeds of asset sales, casualty losses, equity offerings, and new indebtedness for borrowed money, and from a portion of its excess cash flow, subject to certain exceptions; and (ii) limitations on indebtedness, capital expenditures, restricted payments, and acquisitions.

The company has the following three series of Senior Notes outstanding ~~including the 2013, 2018, and 2020 Notes~~ (collectively the “Senior Notes”):

•5.875% Senior Notes due 2022 (the "2022 Notes"); ~~see below for~~original principal amount: $300.0 million

•8.50% Senior Notes due 2020 (the "2020 Notes"); original principal amount: $600.0 million

•9.50% Senior Notes due 2018 (the "2018 Notes"); original principal amount: $400.0 million

Interest on the ~~description~~2022 Notes is payable semiannually in April and October of each year; interest on the ~~2013,~~2020 Notes is payable semiannually in May and November of each year; and interest on the 2018 Notes is payable semiannually in February and ~~2020 Notes).~~ August of each year.

Each series of Senior Notes is an unsecured senior obligation ranking subordinate to all existing senior secured indebtedness and equal to all existing senior unsecured obligations. Each series of Senior Notes is guaranteed by certain of the company’s 100% owned domestic subsidiaries; ~~which~~these subsidiaries also guaranty the company’s obligations under the Senior Credit Facility. Each series of Senior Notes contains affirmative and negative covenants which limit, among other things, the company’s ability to redeem or repurchase its debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, repurchase capital stock, and create or become subject to liens. Each series of Senior Notes also includes customary events of default. If an event of default occurs and is continuing with respect to the Senior Notes, then the ~~Trustee~~trustee or the holders of at least 25% of the principal amount of the outstanding Senior Notes may declare the principal and accrued interest on all of the Senior Notes to be due and payable immediately. In addition, in the case of an event of default arising from certain events of bankruptcy, all unpaid principal of, and premium, if any, and accrued and unpaid interest on all outstanding Senior Notes will become due and payable immediately.

~~On June 30, 2012, the~~

The company had outstanding $150.0 million of 7.125% Senior Notes due 2013 (the “2013 Notes”). Interest on the 2013 Notes is payable semiannually in May and November each year. As of November 1, 2011, the company is permitted tomay redeem the ~~2013~~2022 Notes in whole or in part for a premium at any time ~~with no prepayment premium.~~

~~On February 8, 2010,~~on or after October 15, 2017. The following would be the principal and premium paid by the company, ~~completed~~expressed as percentages of the ~~sale~~principal amount thereof, if it redeems the 2022 Notes during the 12-month period commencing on October 15 of ~~$400.0 million~~the year set forth below:



Year	Percentage
2017	102.938	%
2018	101.958	%
2019	100.979	%
2020 and thereafter	100.000	%

In addition, at any time prior to October 15, 2015, the company is permitted to, at its option, use the net cash proceeds of one or more public equity offerings to redeem up to 35% of the 2022 Notes at a redemption price of 105.875%, plus accrued but unpaid interest, if any, to the date of redemption; provided that (1) at least 65% of the principal amount of the 2022 Notes outstanding remains outstanding immediately after any such redemption; and (2) the company makes such redemptions not more than 90 days after the consummation of any such public offering. Further, the company is required to offer to repurchase the 2022 Notes for cash at a price of 101% of the aggregate principal amount of the 2022 Notes, plus accrued and unpaid interest, if any, upon the occurrence of a change of control triggering event.

The company may redeem the 2020 Notes in whole or in part for a premium at any time on or after November 1, 2015. The following would be the principal and the premium paid by the company, expressed as a percentage of the principal amount, if it redeems the 2020 Notes during the 12-month period commencing on November 1 of the year set forth below:



Year	Percentage
2015	104.250	%
2016	102.833	%
2017	101.417	%
2018 and thereafter	100.000	%

In addition, at any time, or from time to time, on or prior to November 1, 2013, the company may, at its ~~9.50% Senior Notes due 2018 (the “2018 Notes”). Net~~option, use the net cash proceeds of ~~$392.0 million from this offering were used~~one or more public equity offerings to ~~partially pay down ratably~~redeem up to 35% of the ~~then~~principal amount of the 2020 Notes outstanding ~~balances on Term Loan A~~at a redemption price of 108.5% of the principal amount thereof, plus accrued but unpaid interest, if any, to the date of redemption; provided that (1) at least 65% of the principal amount of the 2020 Notes outstanding remains outstanding immediately after any such redemption; and ~~Term Loan B. Interest on~~(2) the ~~2018 Notes is payable semiannually in February and August~~

company makes such redemption not more than 1490

days after the consummation of ~~each year.~~ any such public offering.

The 2018 Notes may be redeemed in whole or in part by the company for a premium at any time on or after February 15, 2014. The following would be the principal and the premium paid by the company, expressed as a percentage of the principal amount, if it redeems the 2018 Notes during the 12-month period commencing on February 15 of the year set forth below:



Year	Percentage
2014	104.750	%
2015	102.375	%
2016 and thereafter	100.000	%

In addition, at any time, or from time to time, on or prior to February 15, 2013, the company ~~may,~~would have been able to, at its option, use the net cash proceeds of one or more public equity offerings to redeem up to 35% of the principal amount of the 2018 Notes outstanding at a redemption price of 109.5% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided that (1) at least 65% of the principal amount of the 2018 Notes outstanding remains outstanding immediately after any such redemption; and (2) the company makes such redemption not more than 90 days after the consummation of any such public offering.

On October 18, 2010, the company completed the sale of $600.0 million aggregate principal amount of its 8.50% Senior Notes due 2020 (the “2020 Notes”). Net proceeds of $583.7 million from this offering were used to pay down ratably the then outstanding balances of Term Loans A and B. Interest on the 2020 Notes is payable semi-annually in May and November of each year. The company may redeem the 2020 Notes in whole or in part for a premium at any time on or after November 1, 2015. The following would be the principal and the premium paid by the company, expressed as a percentagedid not make use of ~~the principal amount, if it redeems the 2020 Notes during the 12-month period commencing on November 1 of the year set forth below:~~

Year

Percentage

2015

104.250
%
2016

102.833
%
2017

101.417
%
2018 and thereafter

100.000
%

~~In addition, at any time, or from time to time,~~this equity redemption provision on or prior to ~~November 1, 2013,~~February 15, 2013. Therefore this equity clawback redemption option is no longer available for the company may, at its option, use the net cash proceeds of one or more public equity offerings to redeem up to 35% of the principal amount of the 2020 Notes outstanding at a redemption price of 108.5% of the principal amount thereof, plus accrued but unpaid interest, if any, to the date of redemption; provided that (1) at least 65% of the principal amount of the 2020 Notes outstanding remains outstanding immediately after any such redemption; and (2) the company makes such redemption not more than 90 days after the consummation of any such public offering.

2018 Notes.

As of June 30, ~~2012,~~2013, the company had outstanding ~~$88.1~~$88.5 million of other indebtedness that has a weighted-average interest rate of approximately ~~6.2%~~6.5%. This debt includes outstanding ~~overdraft~~line of credit balances and capital lease obligations in its Americas, Asia-Pacific and European regions.

As of June 30, ~~2011, the company offset all of its previous interest rate swaps against Term Loan A and B interest due to the amendment of its Senior Credit Facility. As of June 30, 2012,~~2013, the company had outstanding ~~$450.0~~$225.0 million notional amount of 3.00%LIBOR caps related to the ~~term loan~~Term Loan portion of the Senior Credit Facility. The remaining unhedged portions of Term Loans A and B continue to bear interest according to the terms of the Senior Credit Facility. ~~The company is also party to various fixed-to-float interest rate swaps in connection with its 2018 and 2020 Notes. At~~ As of June 30, ~~2012, $200.0~~2013, 75.0 million and ~~$300.0~~$125.0 million of the ~~2018~~2020 and ~~2020~~2022 Notes, respectively, were swapped to floating rate interest. The 2018 Notes accrue interest at a rate of 9.50% on the fixed portion and 7.45% plus the six-month LIBOR reset in arrears on the variable portion. The 2020 Notes accrue interest at a rate of 8.50% on the fixed portion and 6.02% plus the six-month LIBOR reset in arrears on the variable portion. At June 30, 2012, the weighted average interest rates for the 2018 and 2020 Notes, taking into considerationIncluding the impact of these floating rate ~~hedges, was 8.84%~~swaps, the 2020 and ~~7.63%~~2022 Notes have an all-in interest rate of 8.31% and 5.20%, respectively. Both aforementioned swap contracts related to the 2018 and 2020 Notes include a call premium schedule that mirrors that of the respective debt and includes an optional early termination cash settlement at five years from the trade date.

The balance sheet values of the ~~2018 and 2020~~Senior Notes at as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 are not equal to the face value of the Notes due to the fact that the monetized value and the fair market value of the fixed-to-float interest rate hedges on these Notes isare included in the applicable balance sheet ~~value (See~~values (see Note 4, “Derivative Financial Instruments” for more information).

As of June 30, ~~2012,~~2013, the company was in compliance with all affirmative and negative covenants in its debt instruments inclusive of the financial covenants pertaining to the Senior Credit Facility, the ~~2013~~2018 Notes, the ~~2018~~2020 Notes, and the ~~2020~~2022 Notes. Based upon ~~our~~the company's current plans and outlook, ~~we believe we~~management believes the company will be able to comply with these covenants during the subsequent 12 months. As of June 30, ~~2012~~2013 our Consolidated Senior Secured Leverage Ratio was ~~2.69:~~1.67:1, while the maximum ratio is ~~3.50:~~3.25:1 and our Consolidated Interest Coverage Ratio was ~~2.88:~~3.22:1, above the minimum ratio of ~~1.875:1.~~

152.25:1.

9. Accounts Receivable Securitization

~~Effective September 27, 2011, the~~

The company ~~entered into a Third Amended and Restated Receivables Purchase Agreement related to its~~maintains an accounts receivable securitization program with ~~various lenders and servicers. The company’s accounts receivable securitization program has~~ a ~~maximum capacity~~commitment size of ~~$125.0~~$150.0 million ~~and includes certain of the company’s U.S.~~, Canadian and German Foodservice and U.S. Crane segment businesses. Trade accounts receivables sold to a third-party financial institution (“Purchaser”) and being serviced by the company totaled $124.3 million at June 30, 2012 and $121.1 million at December 31, 2011.

~~Transactions~~whereby transactions under the ~~accounts receivable securitization~~ program are accounted for as sales in accordance with ASC Topic 860, “Transfers and Servicing.” Sales of trade receivables tounder the ~~Purchaser~~program are reflected as a reduction of accounts receivable in the accompanying Condensed Consolidated Balance Sheets and the proceeds received, including collections on the deferred purchase price notes, are included in cash flows from operating activities in the accompanying Condensed Consolidated Statements of Cash Flows. The company deems the interest rate risk related to the deferred purchase price notes to be de minimis, primarily due to the short average collection cycle of the related receivables (i.e., 60 days) as noted below.

Trade accounts receivables sold to a third-party financial institution (“Purchaser”) and being serviced by the company totaled $149.4 million as of June 30, 2013 and $149.2 million at December 31, 2012.

Due to an average collection cycle of less than 60 days for such accounts receivable as well as the company’s collection history, the fair value of the company’s deferred purchase price notes approximates book value. The fair value of the deferred purchase price notes recorded at as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 was ~~$76.9~~$66.7 million and ~~$40.3~~$34.3 million, respectively, and is included in accounts receivable in the accompanying Condensed Consolidated Balance Sheets.

The accounts receivable securitization program also contains customary affirmative and negative covenants. Among other restrictions, these covenants require the company to meet specified financial tests, which include a consolidated interest coverage ratio and a consolidated senior secured leverage ratio that are the same as the covenant ratios required per the Senior Credit Facility. As of June 30, ~~2012,~~2013, the company was in compliance with all affirmative and negative covenants inclusive of the financial covenants pertaining to the accounts receivable securitization program. Based on ~~our~~the company's current plans and outlook, ~~we believe we~~management believes the company will be able to comply with these covenants during the subsequent 12twelve months.

10. Income Taxes

For the six months ended June 30, ~~2012,~~2013, the company recorded an income tax expense of ~~$26.8~~$17.8 million as, compared to an income tax expense of ~~$2.0~~$26.9 million for the six months ended June 30, ~~2011.~~2012. The ~~increase~~decrease in the ~~company’s~~company's tax expense for the six months ended June 30, ~~2012~~2013 relative to the prior year resulted primarily from ~~an increase in~~the jurisdictional mix of pre-tax ~~earnings.~~earnings and net discrete items, principally the effect of the American Tax Relief Act of 2012 signed into law on January 2, 2013, reserve releases related to statute of limitations expirations, a favorable audit settlement, and the effective settlement of other state uncertain tax benefits. The effective tax rate varies from the U.S. federal statutory rate of 35% due to results of foreign operations that are subject to income taxes at different statutory rates and certain jurisdictions where the company cannot recognize tax benefits on current losses.

The company’s unrecognized tax benefits, excluding interest and penalties, were ~~$55.8~~$38.7 million as of June 30, 2013, and $55.8 million as of June 30, 2012 ~~and $45.8 million as of June 30, 2011.~~. All of the company’s unrecognized tax benefits as of June 30, ~~2012,~~2013, if recognized, would impact the effective tax rate. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce unrecognized tax benefits and income tax expense by up to ~~$16.0~~$6.9 million, either because the company’s tax positions are sustained on audit or settled, or the applicable statute of limitations closes.

~~There~~

Among other regular and ongoing examinations by federal and state jurisdictions globally, the company is under examination by the Internal Revenue Service (“IRS”) for the calendar years 2008 through 2011. In August 2012, the company received a Notice of Proposed Assessment (“NOPA”) related to the disallowance of the deductibility of a $380.9 million foreign currency loss incurred in calendar year 2008. In September 2012, the company responded to the NOPA indicating its formal disagreement and subsequently received an Examination Report which includes the proposed disallowance. The largest potential adjustment for this matter could, if the IRS were to prevail, increase the company’s potential federal tax expense and cash outflow by approximately $134.0 million plus interest and penalties, if any. The company filed a formal protest to the proposed adjustment during the fourth quarter of 2012. In January 2013, the company received a formal rebuttal from the IRS and notification of the assignment of this matter to its Appeals division. The opening Appeals conference was held with the IRS on July 18, 2013. The company will continue to pursue all administrative and, if necessary, judicial remedies with respect to resolving this matter. However, there can be no assurance that this matter will be resolved in the company’s favor. The IRS also examined and proposed adjustments to the research and development credit generated in 2009; the company also formally disagreed with these adjustments.

The company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. As of June 30, 2013, the company believes that it is more-likely-than-not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position and the results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the company’s estimates and/or from its historical income tax provisions and accruals and

could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments.

As of June 30, 2013, there have been no significant developments in the quarter with respect to the company’s other ongoing tax audits in various jurisdictions.

11. Earnings Per Share

The following is a reconciliation of the average shares outstanding used to compute basic and diluted earnings per ~~share:~~

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

Basic weighted average common shares outstanding

130,575,165

130,457,059

130,562,923

130,440,221

Effect of dilutive securities - stock options and restricted stock

2,816,914

3,365,463

2,989,874

—

Diluted weighted average common shares outstanding

133,392,079

133,822,522

133,552,797

130,440,221

share.



	Three Months Ended June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
Basic weighted average common shares outstanding	132,999,781	130,575,165	132,655,172	130,562,923
Effect of dilutive securities	2,112,949	2,816,914	2,374,272	2,989,874
Diluted weighted average common shares outstanding	135,112,730	133,392,079	135,029,444	133,552,797

For the ~~six~~three months ended June 30, 2011, the total number of potential dilutive securities was 3.3 million. However, these securities were not included in the computation of diluted net loss per common share, since to do so would decrease the loss per share. For the three2013 and ~~six months ended~~ June 30, 2012, 2.3 million and 3.4 million, respectively, of common shares issuable upon the exercise of stock options were anti-dilutive and were excluded from the calculation of diluted earnings per share.

For the six months ended June 30, 2013 and June 30, 2012, 2.7 million and 3.4 million, respectively, of common shares issuable upon the exercise of stock options were anti-dilutive and were excluded from the calculation of diluted earnings per share.

No dividends were paid during each of the ~~three and six-month periods~~six months ended June 30, ~~2012~~2013 and June 30, ~~2011.~~

201216.

12. Stockholders’ Equity

The following is a roll forward of retained earnings and noncontrolling interest for the six months ended June 30, ~~2012~~2013 and ~~2011:~~

(in millions)

Retained Earnings

Noncontrolling
Interest

Balance at December 31, 2011

$
113.6

$
(9.9
)
Net earnings (loss)

42.6

(4.2
)
Balance at June 30, 2012

$
156.2

$
(14.1
)

(in millions)

Retained Earnings

Noncontrolling
Interest

Balance at December 31, 2010

$
134.7

$
(3.4
)
Net earnings (loss)

(49.4
)
(2.0
)
Balance at June 30, 2011

$
85.3

$
(5.4
)

2012:



(in millions)	Retained Earnings		Noncontrolling Interest
Balance at December 31, 2012	$	222.1	$	(19.0	)
Net earnings (loss)	68.0		(5.4		)
Balance at June 30, 2013	$	290.1	$	(24.4	)



(in millions)	Retained Earnings		Noncontrolling Interest
Balance at December 31, 2011	$	131.0	$	(9.9	)
Net earnings (loss)	45.0		(4.2		)
Balance at June 30, 2012	$	176.0	$	(14.1	)

Authorized capitalization consists of 300 million shares of ~~$0.01~~$0.01 par value common stock and 3.5 million shares of ~~$0.01~~$0.01 par value preferred stock. None of the preferred shares have been issued.

Currently, the company has authorization to purchase up to 10 million shares of common stock at management’s discretion. As of June 30, ~~2012,~~2013, the company has purchased approximately 7.6 million shares at a cost of ~~$49.8~~$49.8 million pursuant to this authorization; however, the company has not purchased any shares of its common stock under this authorization since 2006.

~~13. Stock-Based Compensation~~

Stock-based compensation expense is calculated by estimating the fair value of incentive and non-qualified stock options at the time of grant and amortized over the stock options’ vesting period. Stock-based compensation expense was $3.7 million and $4.8 millionA reconciliation for the changes in accumulated other comprehensive income (loss), net of tax, by component for the three and six months ended June 30, 2013 is as follows:



(in millions)	Gains and Losses on Cash Flow Hedges			Pension & Postretirement			Foreign Currency Translation			Total
Balance at December 31, 2012	$	0.6		$	(80.3	)	$	50.3		$	(29.4	)
Other comprehensive loss before reclassifications	(2.5		)	—			(14.6		)	(17.1		)
Amounts reclassified from accumulated other comprehensive income	(0.1		)	1.0			—			0.9
Net current period other comprehensive income (loss)	(2.6		)	1.0			(14.6		)	(16.2		)
Balance at March 31, 2013	$	(2.0	)	$	(79.3	)	$	35.7		$	(45.6	)
Other comprehensive loss before reclassifications	0.6			—			(1.5		)	(0.9		)
Amounts reclassified from accumulated other comprehensive income	(0.1		)	1.1			—			1.0
Net current period other comprehensive income (loss)	0.5			1.1			(1.5		)	0.1
Balance at June 30, 2013	$	(1.5	)	$	(78.2	)	$	34.2		$	(45.5	)

A reconciliation for the reclassifications out of accumulated other comprehensive income, net of tax, for the three months ended June 30, ~~2012~~2013 is as follows:



(in millions)	Amount Reclassified from Accumulated Other Comprehensive Income				Recognized Location
Gains and losses on cash flow hedges
Foreign exchange contracts	$	(0.5	)		Cost of sales
Commodity contracts	0.6				Cost of sales
	0.1				Total before tax
	—				Tax expense
	$	0.1			Net of tax
Amortization of pension and postretirement items
Actuarial losses	(1.5		)	(a)
	(1.5		)		Total before tax
	0.4				Tax benefit
	$	(1.1	)		Net of Tax

Total reclassifications for the period	$	(1.0	)		Net of Tax

(a) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 16, "Employee Benefit Plans" for further details).

A reconciliation for the reclassifications out of accumulated other comprehensive income, net of tax, for the six months ended June 30, 2013 is as follows:



(in millions)	Amount Reclassified from Accumulated Other Comprehensive Income				Recognized Location
Gains and losses on cash flow hedges
Foreign exchange contracts	$	(0.8	)		Cost of sales
Commodity contracts	1.1				Cost of sales
	0.3				Total before tax
	(0.1		)		Tax expense
	$	0.2			Net of tax
Amortization of pension and postretirement items
Actuarial losses	(2.8		)	(a)
	(2.8		)		Total before tax
	0.7				Tax benefit
	$	(2.1	)		Net of Tax

Total reclassifications for the period	$	(1.9	)		Net of Tax

(a) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 16, "Employee Benefit Plans" for further details).

13. Stock-Based Compensation

The company's 2013 Omnibus Incentive Plan (the "2013 Omnibus Plan") was approved by shareholders on May 7, 2013 during the 2013 annual meeting and ~~2011,~~replaces the 2003 Incentive Stock and Awards Plan (the "2003 Stock Plan") and 2004 Non-Employee Director Stock and Awards Plan (the "2004 Stock Plan") as of May 7, 2013. The 2013 Omnibus Plan also replaces the company's Short-Term Incentive Plan (the "STIP") as of December 31, 2013. The 2003 Stock Plan, the 2004 Stock Plan and the STIP may be effectively referred to as the "Existing Plans." No new awards may be granted under the Existing Plans and after the respective termination dates, but the Existing Plans will continue to govern awards outstanding as of the date they are terminated and outstanding awards will continue in force and effect until vested, exercised or forfeited pursuant to their terms. The 2013 Omnibus Plan provides for both short-term and long-term incentive awards for employees and Non-Employee Directors. Stock-based awards may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units, and performance share or performance unit awards. The total number of shares of the company's common stock originally available for awards under the 2013 Omnibus Plan is 8.0 million shares and is subject to adjustments for stock splits, stock dividends and certain other transactions or events in the future.

Stock-based compensation expense was $4.5 million and $3.7 million for the three months ended June 30, 2013 and 2012, respectively. Stock-based compensation expense was ~~$8.6~~$9.0 million and ~~$8.4~~$8.6 million for the six months ended June 30, ~~2012~~2013 and ~~2011,~~2012, respectively. The company granted options to acquire 0.4 million and 0.7 million ~~and 1.0 million~~ shares of common stock to officers and employees during the first two quarters of 2013 and 2012, ~~and 2011,~~ respectively. The company does not currently grant options to directors; however, prior to 2011, any option grants to directors were exercisable immediately upon granting and expire ten years subsequent to the grant date. For all outstanding grants made to officers and employees prior to 2011, options become exercisable in 25% increments annually over a four-year period beginning on the second anniversary of the grant date and expire ten years subsequent to the grant date. Starting with 2011 grants, any options become exercisable in 25% increments annually over a four-year period beginning on the first anniversary of the grant date and expire ten years subsequent to the grant date. In addition, the company issued a total of ~~0.5~~0.1 million ~~and 0.8 million~~ shares of restricted stock to directors ~~officers~~during the first two quarters of 2013, and 0.2 million shares of restricted stock to directors and employees during the first two quarters of ~~2012 and 2011, respectively.~~2012. The restrictions on all shares of restricted stock expire on the third anniversary of the applicable grant date.

Performance shares granted are earned based on the extent to which performance goals are met over the applicable performance period. The performance goals and the applicable performance period vary for each grant year. The performance shares granted in ~~2011~~2013 and 2012 are earned based on the extent to which performance goals are met by the company over ~~a two-year period~~three-year periods from January 1, ~~2011~~2013 to December 31, ~~2012.~~2015, and January 1, 2012 to December 31, 2014, respectively. The performance goals for the performance shares granted in ~~2011~~2013 are based fifty percent ~~(50%~~(50%) on ~~2012 EVA® results~~total shareholder return relative to a peer group of companies over the three-year period and fifty percent ~~(50%~~(50%) on debt reduction over the ~~two-year~~three-year period. Seventy-five percent (75%) of the shares earned by an employee will be paid out after the end of the two-year period and the remaining twenty-five percent (25%) of the shares earned are subject to the further requirement that the employee be continuously employed by the company during the entire 2013 calendar year. If that criterion is met then the twenty-five percent (25%) will be paid out to the employee after the end of the 2013 calendar year. The performance shares granted in 2012 are earned based on the extent which performance goals are met by the company over a three-year period from January 1, 2012 to December 31, 2014. The performance goals for the performance shares granted in 2012 are based fifty percent ~~(50%~~(50%) on total shareholder return relative to a peer group of companies over the ~~three-year~~three-year period and fifty percent ~~(50%~~(50%) on improvement in the company’s total

leverage ratio over the ~~three-year~~three-year period. Depending on the foregoing factors, the number of shares awarded could range from zero to ~~0.9~~0.8 million and zero to 0.7 million for the ~~2011~~2013 and 2012 performance share grants, respectively.

The company recognizes stock-based compensation expense over the stock-based awards’ vesting period.

14. Contingencies and Significant Estimates

As of June 30, ~~2012,~~2013, the company held reserves for environmental matters related to Enodis locations of approximately ~~$0.9 million.~~

17$0.4 million

. At certain of the company’s other facilities, the company has identified potential contaminants in soil and groundwater. The ultimate cost of any remediation required will depend upon the results of future investigation. Based upon available information, the company does not expect the ultimate costs at any of these locations will have a material adverse effect on its financial condition, results of operations, or cash flows individually and in the aggregate.

The company believes that it has obtained and is in substantial compliance with those material environmental permits and approvals necessary to conduct its various businesses. Based on the facts presently known, the company does not expect environmental compliance costs to have a material adverse effect on its financial condition, results of operations, or cash flows.

As of June 30, ~~2012,~~2013, various product-related lawsuits were pending. To the extent permitted under applicable law, all of these are insured with self-insurance retention levels. The company’s self-insurance retention levels vary by business, and have fluctuated over the last five years. The range of the company’s self-insured retention levels is ~~$0.1~~$0.1 million to ~~$3.0~~$3.0 million per occurrence. The high-end of the company’s self-insurance retention level is a legacy product liability insurance program inherited in the Grove acquisition for cranes manufactured in the United States for occurrences from January 2000 through October 2002. As of June 30, ~~2012,~~2013, the largest self-insured retention level for new occurrences currently maintained by the company is ~~$2.0~~$2.0 million per occurrence and applies to product liability claims for cranes manufactured in the United States.

Product liability reserves in the Condensed Consolidated Balance ~~Sheet at~~ Sheets as of June 30, 2013 and December 31, 2012 were ~~$27.0 million; $5.7~~$28.6 million and $27.9 million, respectively; $7.7 million and $6.3 million, respectively, was reserved specifically for actual cases and ~~$21.3~~$20.9 million and $21.6 million, respectively, for claims incurred but not reported, which were estimated using actuarial methods. Based on the company’s experience in defending product liability claims, management believes the current reserves are adequate for estimated case resolutions on aggregate self-insured claims and insured claims. Any recoveries from insurance carriers are dependent upon the legal sufficiency of claims and solvency of insurance carriers.

As of June 30, ~~2012~~2013 and December 31, ~~2011,~~2012, the company had reserved ~~$102.1~~$100.5 million and ~~$104.4~~$101.4 million, respectively, for warranty claims included in product warranties and other non-current liabilities in the Condensed Consolidated Balance Sheets. Certain of these ~~warranty~~warranties and other related claims involve matters in dispute that ultimately are resolved by negotiation, arbitration, or litigation.

It is reasonably possible that the estimates for environmental remediation, product liability and warranty costs may change in the near future based upon new information that may arise or matters that are beyond the scope of the company’s historical experience. Presently, there are no reliable methods to estimate the amount of any such potential changes.

The company is involved in numerous lawsuits involving asbestos-related claims in which the company is one of numerous defendants. After taking into consideration legal counsel’s evaluation of such actions, the current political environment with respect to asbestos related claims, and the liabilities accrued with respect to such matters, in the opinion of management, ultimate resolution is not expected to have a material adverse effect on the financial condition, results of operations, or cash flows of the company.

The company is also involved in various legal actions arising out of the normal course of business, which, taking into account the liabilities accrued and legal counsel’s evaluation of such actions, in the opinion of management, the ultimate resolution, individually and in the aggregate, is not expected to have a material adverse effect on the company’s financial condition, results of operations, or cash flows.

15. Guarantees

The company periodically enters into transactions with customers that provide for residual value guarantees and buyback commitments. These initial transactions are recorded as deferred revenue and are amortized to income on a straight-line basis over a period equal to that of the customer’s third party financing agreement. The deferred revenue included in other current and non-current liabilities at as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 was ~~$56.3~~$65.4 million and ~~$61.2~~$67.2 million, respectively. The total amount of residual value guarantees and buyback commitments given by the company and outstanding at as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 was ~~$74.9~~$54.2 million and ~~$89.5~~$80.5 million, respectively. These amounts are not reduced for amounts

the company would recover from repossession and subsequent resale of the units. The residual value guarantees and buyback commitments expire at various times through ~~2016.~~

2017.

During the six months ended June 30, ~~2012 and 2011,~~2013 the company sold no$20.4 million of additional long term notes receivable to third party financing ~~companies.~~companies; the company did not sell any long term notes receivable during the six months ended June 30, 2012. Related to notes sold, ~~in other periods,~~ the company guarantees some percentage, up to 100%, of collection of the notes to the financing companies. The company has accounted for the sales of the notes as a financing of receivables. The receivables remain on the company’s Condensed Consolidated Balance Sheets, net of payments made, in other current and non-current assets, and the company has recognized an obligation equal to the net outstanding balance of the notes in other current and non-current liabilities in the Condensed Consolidated Balance Sheets. The cash flow benefit of these transactions is reflected as financing activities in the Condensed Consolidated Statements of Cash Flows. During the ~~three and~~ six months ended June 30, 2013 and 2012, the customers paid ~~$4.5~~$18.1 million and ~~$13.5~~$18.7 million ~~respectively, on the notes to the third party financing companies. During the three and six months ended~~

~~June 30, 2011, the customers paid $0.7 million and $1.4 million,~~, respectively, on the notes to the third party financing companies. As of June 30, ~~2012~~2013 and December 31, ~~2011,~~2012, the outstanding balance of the notes receivable guaranteed by the company was ~~$0.9~~$29.1 million and ~~$14.1~~$27.1 million, respectively.

In the normal course of business, the company provides its customers a warranty covering workmanship, and in some cases materials, on products manufactured by the company. The warranty generally provides that products will be free from defects for periods ranging from 12 to 60 months with certain equipment having longer-term warranties. If a product fails to comply with the company’s warranty, the company may be obligated, at its expense, to correct any defect by repairing or replacing such defective products. The company provides for an estimate of costs that may be incurred under its warranty at the time product revenue is recognized. These costs primarily include labor and materials, as necessary, associated with repair or replacement. The primary factors that affect the company’s warranty liability include the number of units shipped and historical and anticipated warranty claims. As these factors are impacted by actual experience and future expectations, the company assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. Below is a table summarizing the warranty activity for the six months ended June 30, ~~2012~~2013 and the year ended December 31, ~~2011:~~

(in millions)

Six Months Ended
June 30, 2012

Year Ended December
31, 2011

Balance at beginning of period

$
104.4

$
99.9

Accruals for warranties issued during the period

31.4

66.8

Settlements made (in cash or in kind) during the period

(32.6
)
(62.3
)
Currency translation

(1.1
)
—

Balance at end of period

$
102.1

$
104.4

2012:

(in millions)
Six Months Ended
June 30, 2013

Year Ended
December 31, 2012
Balance at beginning of period $ 101.4
$ 103.7
Accruals for warranties issued during the period 30.9
57.1
Settlements made (in cash or in kind) during the period (31.3 ) (59.9 )
Currency translation (0.5 ) 0.5
Balance at end of period $ 100.5
$ 101.4

16. Employee Benefit Plans

The company provides certain pension, health care and death benefits for eligible retirees and their dependents. The pension benefits are funded, while the health care and death benefits are not funded but are paid as incurred. Eligibility for coverage is based on meeting certain years of service and retirement qualifications. These benefits may be subject to deductibles, co-payment provisions, and other limitations. The company has reserved the right to modify these benefits.

The components of periodic benefit costs for the three and six months ended June 30, ~~2012~~2013 and June 30, ~~2011~~2012 are as follows:

Three Months Ended June 30, 2012

Six Months Ended June 30, 2012

U.S.

Non-U.S.

Postretirement

U.S.

Non-U.S.

Postretirement

Pension

Pension

Health and

Pension

Pension

Health and

(in millions)

Plans

Plans

Other Plans

Plans

Plans

Other Plans

Service cost - benefits earned during the period

$
—

$
0.6

$
0.2

$
—

$
1.1

$
0.4

Interest cost of projected benefit obligations

2.6

2.5

0.7

5.1

5.0

1.4

Expected return on plan assets

(2.6
)
(2.0
)
—

(5.1
)
(4.0
)
—

Amortization of actuarial net (gain) loss

0.7

0.2

0.1

1.4

0.4

0.2

Net periodic benefit costs

$
0.7

$
1.3

$
1.0

$
1.4

$
2.5

$
2.0

Three Months Ended June 30, 2011

Six Months Ended June 30, 2011

U.S.

Non-U.S.

Postretirement

U.S.

Non-U.S.

Postretirement

Pension

Pension

Health and

Pension

Pension

Health and

(in millions)

Plans

Plans

Other Plans

Plans

Plans

Other Plans

Service cost - benefits earned during the period

$
—

$
0.5

$
0.2

$
—

$
0.9

$
0.4

Interest cost of projected benefit obligations

2.6

2.5

0.8

5.2

5.1

1.6

Expected return on plan assets

(2.4
)
(2.3
)
—

(4.8
)
(4.5
)
—

Amortization of actuarial net (gain) loss

0.4

0.1

0.1

0.8

0.2

0.2

Net periodic benefit costs

$
0.6

$
0.8

$
1.1

$
1.2

$
1.7

$
2.2



	Three Months Ended June 30, 2013								Six Months Ended June 30, 2013
	U.S.			Non-U.S.			Postretirement		U.S.			Non-U.S.			Postretirement
	Pension			Pension			Health and		Pension			Pension			Health and
(in millions)	Plans			Plans			Other Plans		Plans			Plans			Other Plans
Service cost - benefits earned during the period	$	—		$	0.6		$	0.1	$	—		$	1.2		$	0.3
Interest cost of projected benefit obligations	2.4			2.4			0.5		4.8			4.9			1.0
Expected return on plan assets	(2.6		)	(1.9		)	—		(5.1		)	(3.8		)	—
Amortization of actuarial net loss	1.0			0.5			—		1.8			1.0			—
Net periodic benefit costs	$	0.8		$	1.6		$	0.6	$	1.5		$	3.3		$	1.3

Three Months Ended June 30, 2012 Six Months Ended June 30, 2012
U.S. Non-U.S. Postretirement U.S. Non-U.S. Postretirement
Pension Pension Health and Pension Pension Health and
(in millions) Plans Plans Other Plans Plans Plans Other Plans
Service cost - benefits earned during the period $ —
$ 0.6
$ 0.2
$ —
$ 1.1
$ 0.4
Interest cost of projected benefit obligations 2.6
2.5
0.7
5.1
5.0
1.4
Expected return on plan assets (2.6 ) (2.0 ) —
(5.1 ) (4.0 ) —
Amortization of actuarial net loss 0.7
0.2
0.1
1.4
0.4
0.2
Net periodic benefit costs $ 0.7
$ 1.3
$ 1.0
$ 1.4
$ 2.5
$ 2.0

17. Restructuring

The following is a rollforward of all restructuring activities relating to the Crane segment for the ~~six-month period~~six months ended June 30, ~~2012~~2013 (in millions):

Restructuring Reserve
Balance as of
December 31, 2011

Restructuring
Charges

Use of Reserve

Reserve Revisions

Restructuring Reserve
Balance as of
June 30, 2012

$
4.3

$
—

$
(1.8
)
$
—

$
2.5



Restructuring Reserve Balance as of December 31, 2012		Restructuring Charges		Use of Reserve			Reserve Revisions		Restructuring Reserve Balance as of June 30, 2013
$	8.4	$	0.3	$	(1.3	)	$	—	$	7.4

The following is a rollforward of all restructuring activities relating to the Foodservice segment for the ~~six-month period~~six months ended June 30, ~~2012~~2013 (in millions):

Restructuring Reserve
Balance as of
December 31, 2011

Restructuring
Charges

Use of Reserve

Reserve Revisions

Restructuring Reserve
Balance as of
June 30, 2012

$
17.6

$
—

$
(0.1
)
$
—

$
17.5

Restructuring Reserve
Balance as of
December 31, 2012

Restructuring
Charges
Use of Reserve Reserve Revisions
Restructuring Reserve
Balance as of
June 30, 2013
$ 16.9
$ 0.9
$ (2.0 ) $ (0.7 ) $ 15.1

18. Recent Accounting Changes and Pronouncements

In ~~September 2011,~~July 2013, the FASB issued Accounting Standard Update ("ASU") No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This new standard generally requires the netting of unrecognized tax benefits (UTBs) against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. Under the new standard, UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. The amendments in this ASU 2011-08 which provides an entity the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test for goodwill impairment. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The revised standard isare effective ~~for the company’s annual and interim goodwill impairment tests performed~~prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, ~~2011.~~2013. The adoption of this ASU ~~did~~is not ~~significantly~~expected to have a material impact on the ~~company’s condensed~~company's consolidated financial statements.

In ~~June 2011 and December 2011,~~March 2013, the FASB issued ASU No. 2013-05, "Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an ~~update~~Investment in a Foreign Entity." This ASU changes to ~~ASC Topic No. 220, “Presentation~~a parent entity's accounting for the cumulative translation adjustment upon derecognition of ~~Comprehensive Income,” which eliminates the option~~certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. A parent entity is required to ~~present~~release any related cumulative foreign currency translation adjustment from accumulated other comprehensive income ~~and its components~~into net income in the ~~statement of shareholders’ equity. The company can elect~~following circumstances: (i) a parent entity ceases to ~~present the items of net income and other comprehensive income~~have a controlling financial interest in a ~~single continuous statement~~subsidiary or group of ~~comprehensive income~~assets that is a business within a foreign entity if the sale or transfer results in ~~two separate, but consecutive, statements. Under either~~the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided; (ii) a partial sale of an equity method investment that is a foreign entity; (iii) a partial sale of an equity method investment that is not a foreign entity whereby the ~~statement would need to be presented with equal prominence as~~partial sale represents a complete or substantially complete liquidation of the ~~other primary financial statements.~~foreign entity that held the equity method investment; and (iv) the sale of an investment in a foreign entity. The ~~amended guidance, which must be applied retroactively, is~~amendments in this ASU are effective prospectively for fiscal years ~~and~~(and interim reporting periods within those ~~years,~~years) beginning after December 15, ~~2011,~~2013. The adoption of this ASU is not expected to have a material impact on the company's consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This ASU adds new disclosure requirements for items reclassified out of accumulated other

comprehensive income. The updated standard is effective prospectively for the company's annual and ~~has been incorporated into these~~interim periods beginning after December 15, 2012. The adoption of this new ASU did not impact the company's consolidated financial statements.

See Note 12, “Stockholders' Equity” for related disclosures.

19. Business Segments

The company identifies its segments using the “management approach,” which designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the company’s reportable segments. The company has two reportable segments: Crane and Foodservice. The company has not aggregated individual operating segments within these reportable segments. Net sales and earnings from operations by segment are summarized as follows:

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2012

2011

2012

2011

Net sales:

Crane

$
610.7

$
554.8

$
1,118.6

$
947.6

Foodservice

395.2

395.0

747.4

734.4

Total net sales

$
1,005.9

$
949.8

$
1,866.0

$
1,682.0

Earnings (loss) from operations:

Crane

$
46.5

$
30.8

$
67.4

$
41.6

Foodservice

59.1

54.7

102.4

87.9

Corporate expense

(16.5
)
(15.5
)
(32.5
)
(28.9
)
Restructuring expense

(0.2
)
(2.0
)
(0.9
)
(2.9
)
Other

(0.1
)
(0.1
)
(0.1
)
(0.1
)
Earnings (loss) from operations

$
88.8

$
67.9

$
136.3

$
97.6

~~Crane segment operating earnings for the three and six months ended~~



	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2013			2012			2013			2012
Net sales:
Crane	$	656.9		$	610.7		$	1,204.3		$	1,118.6
Foodservice	389.7			386.5			740.3			730.5
Total net sales	$	1,046.6		$	997.2		$	1,944.6		$	1,849.1
Earnings (loss) from continuing operations:
Crane	$	65.0		$	52.0		$	96.3		$	73.4
Foodservice	63.0			66.1			112.1			117.1
Corporate expense	(16.5		)	(16.5		)	(35.0		)	(32.5		)
Amortization expense	(9.0		)	(9.3		)	(18.1		)	(18.6		)
Restructuring expense	(0.9		)	(0.2		)	(1.2		)	(0.9		)
Other	—			(0.1		)	(0.3		)	(0.1		)
Earnings from continuing operations	$	101.6		$	92.0		$	153.8		$	138.4
Other income (expenses):
Interest expense	$	(32.6	)	$	(33.8	)	$	(65.9	)	$	(66.8	)
Amortization of deferred financing fees	(1.7		)	(2.1		)	(3.5		)	(4.1		)
Loss on debt extinguishment	—			—			(0.4		)	—
Other income (expense)-net	(1.4		)	2.0			0.2			0.2
Earnings from continuing operations before taxes on earnings	$	65.9		$	58.1		$	84.2		$	67.7

As of June 30, ~~2012 includes amortization expense of $1.5 million~~2013 and ~~$3.0 million, respectively. Crane segment operating earnings for the three and six months ended June 30, 2011 includes amortization~~

expense of $1.7 million and $3.3 million, respectively. Foodservice segment operating earnings for the three and six months ended June 30, 2012 includes amortization expense of $8.0 million and $16.1 million, respectively. Foodservice segment operating earnings for the three and six months ended June 30, 2011 includes amortization expense of $7.9 million and $16.0 million, respectively.

~~As of June 30, 2012 and~~ December 31, ~~2011,~~2012, the total assets by segment were as follows:

(in millions)

June 30, 2012

December 31, 2011

Crane

$
1,793.2

$
1,698.8

Foodservice

1,997.7

2,201.2

Corporate

320.8

65.2

Total

$
4,111.7

$
3,965.2

(in millions) June 30, 2013 December 31, 2012
Crane $ 1,988.0
$ 1,903.3
Foodservice 1,936.2
1,956.8
Corporate 227.0
197.2
Total $ 4,151.2
$ 4,057.3

20. ~~Subsequent Events~~

~~The company monetized the derivative asset related to its fixed-to-float interest rate swaps related to its~~Subsidiary Guarantors of 2018 ~~and~~Notes, 2020 Notes and ~~received $14.8 million in the third quarter of 2012. The gain is treated as an increase to the debt balances for each of the 2018 and 2020~~2022 Notes ~~and will be amortized to interest expense over the life of the original swap.~~

~~21. Subsidiary Guarantors of 2013 Notes, 2018 Notes and 2020 Notes~~

The following tables present condensed consolidating financial information for (a) The Manitowoc Company, Inc. (Parent); (b) the guarantors of the ~~2013 Notes,~~ 2018 Notes, 2020 Notes and ~~2020~~2022 Notes, which include substantially all of the domestic, 100% owned subsidiaries of the company (Subsidiary Guarantors); and (c) the wholly- and partially-owned foreign subsidiaries of the Parent, which do not guarantee the ~~2013 Notes,~~ 2018 Notes, 2020 Notes and ~~2020~~2022 Notes (Non-Guarantor Subsidiaries). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are fully and unconditionally, jointly and severally liable under the guarantees, except for normal and customary release provisions.

The Manitowoc Company, Inc.

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, ~~2012~~2013

(In millions)

Non-

Guarantor

Guarantor
��

Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
664.1

$
499.9

$
(158.1
)
$
1,005.9

Costs and expenses:

Cost of sales

—

506.3

408.0

(158.1
)
756.2

Engineering, selling and administrative expenses

15.8

60.1

75.2

—

151.1

Restructuring expense

—

—

0.2

—

0.2

Amortization expense

—

7.7

1.8

—

9.5

Other

—

0.1

—

—

0.1

Equity in (earnings) loss of subsidiaries

(52.5
)
(5.7
)
—

58.2

—

Total costs and expenses

(36.7
)
568.5

485.2

(99.9
)
917.1

Operating earnings (loss) from continuing operations

36.7

95.6

14.7

(58.2
)
88.8

Other income (expenses):

Interest expense

(32.4
)
(0.4
)
(3.1
)
—

(35.9
)
Management fee income (expense)

15.4

(19.3
)
3.9

—

—

Other income (expense), net

12.5

(12.7
)
2.1

—

1.9

Total other income (expenses)

(4.5
)
(32.4
)
2.9

—

(34.0
)

Earnings (loss) from continuing operations before taxes on earnings

32.2

63.2

17.6

(58.2
)
54.8

Provision (benefit) for taxes on income

(10.3
)
22.5

2.2

—

14.4

Earnings (loss) from continuing operations

42.5

40.7

15.4

(58.2
)
40.4

Discontinued operations:

Earnings (loss) from discontinued operations, net of income taxes

—

(0.2
)
—

—

(0.2
)
Net earnings (loss)

42.5

40.5

15.4

(58.2
)
40.2

Less: Net gain (loss) attributable to noncontrolling interest

—

—

(2.3
)
—

(2.3
)
Net earnings (loss) attributable to Manitowoc

$
42.5

$
40.5

$
17.7

$
(58.2
)
$
42.5

Comprehensive income (loss) attributable to Manitowoc

$
(0.9
)
$
40.6

$
26.9

$
(67.5
)
$
(0.9
)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	682.3		$	527.0		$	(162.7	)	$	1,046.6
Costs and expenses:
Cost of sales	—			511.1			425.4			(162.7		)	773.8
Engineering, selling and administrative expenses	15.5			66.2			79.6			—			161.3
Amortization expense	—			7.4			1.6			—			9.0
Restructuring expense	—			0.1			0.8			—			0.9
Other	—			—			—			—			—
Equity in (earnings) loss of subsidiaries	(61.1		)	(5.7		)	—			66.8			—
Total costs and expenses	(45.6		)	579.1			507.4			(95.9		)	945.0

Operating earnings (loss) from continuing operations	45.6			103.2			19.6			(66.8		)	101.6

Other income (expenses):
Interest expense	(29.9		)	(0.4		)	(2.3		)	—			(32.6		)
Amortization of deferred financing fees	(1.7		)	—			—			—			(1.7		)
Loss on debt extinguishment	—			—			—			—			—
Management fee income (expense)	14.9			(18.7		)	3.8			—			—
Other income (expense), net	1.5			(8.7		)	5.8			—			(1.4		)
Total other income (expenses)	(15.2		)	(27.8		)	7.3			—			(35.7		)

Earnings (loss) from continuing operations before taxes on earnings	30.4			75.4			26.9			(66.8		)	65.9
Provision (benefit) for taxes on income	(27.2		)	26.1			10.4			—			9.3
Earnings (loss) from continuing operations	57.6			49.3			16.5			(66.8		)	56.6

Discontinued operations:
Loss from discontinued operations, net of income taxes	—			(2.0		)	(0.1		)	—			(2.1		)
Loss on sale of discontinued operations, net of income taxes	—			—			—			—			—
Net earnings (loss)	57.6			47.3			16.4			(66.8		)	54.5
Less: Net loss attributable to noncontrolling interest	—			—			(3.1		)	—			(3.1		)
Net earnings (loss) attributable to Manitowoc	$	57.6		$	47.3		$	19.5		$	(66.8	)	$	57.6

Comprehensive income (loss) attributable to Manitowoc	$	57.7		$	47.2		$	2.6		$	(49.8	)	$	57.7

The Manitowoc Company, Inc.

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, ~~2011~~2012

(In millions)

Non-

Guarantor

Guarantor

Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
553.8

$
526.0

$
(130.0
)
$
949.8

Costs and expenses:

Cost of sales

—

419.8

435.0

(130.0
)
724.8

Engineering, selling and administrative expenses

14.9

57.5

73.0

—

145.4

Restructuring expense

—

—

2.0

—

2.0

Amortization expense

—

7.5

2.1

—

9.6

Other

—

0.1

—

—

0.1

Equity in (earnings) loss of subsidiaries

(42.6
)
(6.5
)
—

49.1

—

Total costs and expenses

(27.7
)
478.4

512.1

(80.9
)
881.9

Operating earnings (loss) from continuing operations

27.7

75.4

13.9

(49.1
)
67.9

Other income (expenses):

Interest expense

(37.3
)
(0.4
)
(3.3
)
—

(41.0
)
Loss on debt extinguishment

(24.2
)
—

—

—

(24.2
)
Management fee income (expense)

11.8

(15.0
)
3.2

—

—

Other income (expense), net

1.2

(11.2
)
10.3

—

0.3

Total other income (expenses)

(48.5
)
(26.6
)
10.2

—

(64.9
)

Earnings (loss) from continuing operations before taxes on earnings

(20.8
)
48.8

24.1

(49.1
)
3.0

Provision (benefit) for taxes on earnings

(23.8
)
15.2

9.2

—

0.6

Earnings (loss) from continuing operations

3.0

33.6

14.9

(49.1
)
2.4

Discontinued operations:

Earnings (loss) from discontinued operations, net of income taxes

—

(0.3
)
—

—

(0.3
)
Loss on sale of discontinued operations, net of income taxes

—

(0.2
)
—

—

(0.2
)
Net earnings (loss)

3.0

33.1

14.9

(49.1
)
1.9

Less: Net gain (loss) attributable to noncontrolling interest

—

—

(1.1
)
—

(1.1
)
Net earnings (loss) attributable to Manitowoc

$
3.0

$
33.1

$
16.0

$
(49.1
)
$
3.0

Comprehensive income (loss) attributable to Manitowoc

$
18.2

$
33.0

$
16.6

$
(49.6
)
$
18.2



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	664.1		$	491.2		$	(158.1	)	$	997.2
Costs and expenses:
Cost of sales	—			502.3			401.8			(158.1		)	746.0
Engineering, selling and administrative expenses	15.8			60.1			73.7			—			149.6
Amortization expense	—			7.5			1.8			—			9.3
Restructuring expense	—			—			0.2			—			0.2
Other	—			0.1			—			—			0.1
Equity in (earnings) loss of subsidiaries	(55.3		)	(5.8		)	—			61.1			—
Total costs and expenses	(39.5		)	564.2			477.5			(97.0		)	905.2

Operating earnings (loss) from continuing operations	39.5			99.9			13.7			(61.1		)	92.0

Other income (expenses):
Interest expense	(30.3		)	(0.4		)	(3.1		)	—			(33.8		)
Amortization of deferred financing fees	(2.1		)	—			—			—			(2.1		)
Management fee income (expense)	15.4			(19.3		)	3.9			—			—
Other income (expense), net	12.5			(12.7		)	2.2			—			2.0
Total other income (expenses)	(4.5		)	(32.4		)	3.0			—			(33.9		)

Earnings (loss) from continuing operations before taxes on earnings	35.0			67.5			16.7			(61.1		)	58.1
Provision (benefit) for taxes on earnings	(10.3		)	23.9			1.9			—			15.5
Earnings (loss) from continuing operations	45.3			43.6			14.8			(61.1		)	42.6

Discontinued operations:
Earnings (loss) from discontinued operations, net of income taxes	—			(0.2		)	0.6			—			0.4
Net earnings (loss)	45.3			43.4			15.4			(61.1		)	43.0
Less: Net loss attributable to noncontrolling interest	—			—			(2.3		)	—			(2.3		)
Net earnings (loss) attributable to Manitowoc	$	45.3		$	43.4		$	17.7		$	(61.1	)	$	45.3

Comprehensive income (loss) attributable to Manitowoc	$	2.7		$	44.3		$	26.0		$	(70.3	)	$	2.7

The Manitowoc Company, Inc.

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, ~~2012~~2013

(In millions)

Non-

Guarantor

Guarantor

Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
1,248.1

$
916.2

$
(298.3
)
$
1,866.0

Costs and expenses:

Cost of sales

—

954.3

754.1

(298.3
)
1,410.1

Engineering, selling and administrative expenses

31.2

120.1

148.2

—

299.5

Restructuring expense

—

0.2

0.7

—

0.9

Amortization expense

—

15.4

3.7

—

19.1

Other

—

0.1

—

—

0.1

Equity in (earnings) loss of subsidiaries

(61.9
)
(20.1
)
—

82.0

—

Total costs and expenses

(30.7
)
1,070.0

906.7

(216.3
)
1,729.7

Operating earnings (loss) from continuing operations

30.7

178.1

9.5

(82.0
)
136.3

Other income (expenses):

Interest expense

(64.4
)
(0.9
)
(5.6
)
—

(70.9
)
Management fee income (expense)

30.8

(37.8
)
7.0

—

—

Other income (expense), net

29.5

(30.5
)
1.3

—

0.3

Total other income (expenses)

(4.1
)
(69.2
)
2.7

—

(70.6
)

Earnings (loss) from continuing operations before taxes on earnings

26.6

108.9

12.2

(82.0
)
65.7

Provision (benefit) for taxes on earnings

(16.0
)
34.5

8.3

—

26.8

Earnings (loss) from continuing operations

42.6

74.4

3.9

(82.0
)
38.9

Discontinued operations:

Earnings from discontinued operations, net of income taxes

—

(0.5
)
—

—

(0.5
)
Net earnings (loss)

42.6

73.9

3.9

(82.0
)
38.4

Less: Net gain (loss) attributable to noncontrolling interest

—

—

(4.2
)
—

(4.2
)
Net earnings (loss) attributable to Manitowoc

$
42.6

$
73.9

$
8.1

$
(82.0
)
$
42.6

Comprehensive income (loss) attributable to Manitowoc

$
18.8

$
74.0

$
20.7

$
(94.7
)
$
18.8



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,302.1		$	974.5		$	(332.0	)	$	1,944.6
Costs and expenses:
Cost of sales	—			990.7			793.1			(332.0		)	1,451.8
Engineering, selling and administrative expenses	33.2			130.5			155.7			—			319.4
Amortization expense	—			14.8			3.3			—			18.1
Restructuring expense	—			0.1			1.1			—			1.2
Other	—			0.3			—			—			0.3
Equity in (earnings) loss of subsidiaries	(86.6		)	(18.5		)	—			105.1			—
Total costs and expenses	(53.4		)	1,117.9			953.2			(226.9		)	1,790.8

Operating earnings (loss) from continuing operations	53.4			184.2			21.3			(105.1		)	153.8

Other income (expenses):
Interest expense	(60.3		)	(0.6		)	(5.0		)	—			(65.9		)
Amortization of deferred financing fees	(3.5		)	—			—			—			(3.5		)
Loss on debt extinguishment	(0.4		)	—			—			—			(0.4		)
Management fee income (expense)	29.7			(36.1		)	6.4			—			—
Other income (expense), net	5.9			(16.4		)	10.7			—			0.2
Total other income (expenses)	(28.6		)	(53.1		)	12.1			—			(69.6		)

Earnings (loss) from continuing operations before taxes on earnings	24.8			131.1			33.4			(105.1		)	84.2
Provision (benefit) for taxes on income	(43.2		)	45.3			15.7			—			17.8
Earnings (loss) from continuing operations	68.0			85.8			17.7			(105.1		)	66.4

Discontinued operations:
Earnings (loss) from discontinued operations, net of income taxes	—			(2.2		)	—			—			(2.2		)
Loss on sale of discontinued operations, net of income taxes	—			—			(1.6		)	—			(1.6		)
Net earnings (loss)	68.0			83.6			16.1			(105.1		)	62.6
Less: Net loss attributable to noncontrolling interest	—			—			(5.4		)	—			(5.4		)
Net earnings (loss) attributable to Manitowoc	$	68.0		$	83.6		$	21.5		$	(105.1	)	$	68.0

Comprehensive income (loss) attributable to Manitowoc	$	51.9		$	83.5		$	10.7		$	(94.2	)	$	51.9

The Manitowoc Company, Inc.

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, ~~2011~~2012

(In millions)

Non-

Guarantor

Guarantor

Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
987.1

$
895.9

$
(201.0
)
$
1,682.0

Costs and expenses:

Cost of sales

—

740.3

737.2

(201.0
)
1,276.5

Engineering, selling and administrative expenses

27.8

115.2

142.6

—

285.6

Restructuring expense

—

0.1

2.8

—

2.9

Amortization expense

—

15.3

4.0

—

19.3

Other

—

0.1

—

—

0.1

Equity in (earnings) loss of subsidiaries

(19.0
)
(14.2
)
—

33.2

—

Total costs and expenses

8.8

856.8

886.6

(167.8
)
1,584.4

Operating earnings (loss) from continuing operations

(8.8
)
130.3

9.3

(33.2
)
97.6

Other income (expenses):

Interest expense

(77.7
)
(0.7
)
(5.3
)
—

(83.7
)
Loss on debt extinguishment

(27.8
)
—

—

—

(27.8
)
Management fee income (expense)

23.4

(29.1
)
5.7

—

—

Other income (expense), net

2.7

(21.4
)
19.8

—

1.1

Total other income (expenses)

(79.4
)
(51.2
)
20.2

—

(110.4
)

Earnings (loss) from continuing operations before taxes on earnings

(88.2
)
79.1

29.5

(33.2
)
(12.8
)
Provision (benefit) for taxes on earnings

(38.8
)
24.1

16.7

—

2.0

Earnings (loss) from continuing operations

(49.4
)
55.0

12.8

(33.2
)
(14.8
)

Discontinued operations:

Earnings from discontinued operations, net of income taxes

—

(0.5
)
(2.5
)
—

(3.0
)
Loss on sale of discontinued operations, net of income taxes

—

(33.6
)
—

—

(33.6
)
Net earnings (loss)

(49.4
)
20.9

10.3

(33.2
)
(51.4
)
Less: Net gain (loss) attributable to noncontrolling interest

—

—

(2.0
)
—

(2.0
)
Net earnings (loss) attributable to Manitowoc

$
(49.4
)
$
20.9

$
12.3

$
(33.2
)
$
(49.4
)

Comprehensive income (loss) attributable to Manitowoc

$
4.2

$
20.6

$
6.7

$
(27.3
)
$
4.2



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,248.1		$	899.3		$	(298.3	)	$	1,849.1
Costs and expenses:
Cost of sales	—			951.4			741.5			(298.3		)	1,394.6
Engineering, selling and administrative expenses	31.2			120.1			145.2			—			296.5
Amortization expense	—			14.9			3.7			—			18.6
Restructuring expense	—			0.2			0.7			—			0.9
Other	—			0.1			—			—			0.1
Equity in (earnings) loss of subsidiaries	(64.3		)	(20.0		)	—			84.3			—
Total costs and expenses	(33.1		)	1,066.7			891.1			(214.0		)	1,710.7

Operating earnings (loss) from continuing operations	33.1			181.4			8.2			(84.3		)	138.4

Other income (expenses):
Interest expense	(60.3		)	(0.9		)	(5.6		)	—			(66.8		)
Amortization of deferred financing fees	(4.1		)	—			—			—			(4.1		)
Management fee income (expense)	30.8			(37.8		)	7.0			—			—
Other income (expense), net	29.5			(30.5		)	1.2			—			0.2
Total other income (expenses)	(4.1		)	(69.2		)	2.6			—			(70.7		)

Earnings (loss) from continuing operations before taxes on earnings	29.0			112.2			10.8			(84.3		)	67.7
Provision (benefit) for taxes on earnings	(16.0		)	35.4			7.5			—			26.9
Earnings (loss) from continuing operations	45.0			76.8			3.3			(84.3		)	40.8

Discontinued operations:
Earnings (loss) from discontinued operations, net of income taxes	—			(0.5		)	0.5			—			—
Net earnings (loss)	45.0			76.3			3.8			(84.3		)	40.8
Less: Net loss attributable to noncontrolling interest	—			—			(4.2		)	—			(4.2		)
Net earnings (loss) attributable to Manitowoc	$	45.0		$	76.3		$	8.0		$	(84.3	)	$	45.0

Comprehensive income (loss) attributable to Manitowoc	$	22.8		$	77.5		$	19.6		$	(97.1	)	$	22.8

The Manitowoc Company, Inc.

Condensed Consolidating Balance Sheet

as of June 30, ~~2012~~2013

(In millions)

Non-

Guarantor

Guarantor

Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Assets

Current Assets:

Cash and cash equivalents

$
5.7

$
14.8

$
36.3

$
—

$
56.8

Marketable securities

2.6

—

—

—

2.6

Restricted cash

6.4

—

3.7

—

10.1

Accounts receivable — net

—

32.6

293.7

—

326.3

Intercompany interest receivable

22.6

3.1

—

(25.7
)
—

Inventories — net

—

370.4

438.2

—

808.6

Deferred income taxes

99.7

—

20.3

—

120.0

Other current assets

2.1

5.6

90.5

—

98.2

Total current assets

139.1

426.5

882.7

(25.7
)
1,422.6

Property, plant and equipment — net

7.0

291.4

257.4

—

555.8

Goodwill

—

961.0

196.9

—

1,157.9

Other intangible assets — net

—

655.7

170.6

—

826.3

Intercompany long-term receivable

877.1

158.6

887.0

(1,922.7
)
—

Intercompany accounts receivable

—

1,230.7

1,611.6

(2,842.3
)
—

Other non-current assets

65.3

7.5

76.3

—

149.1

Investment in affiliates

4,837.0

3,424.2

—

(8,261.2
)
—

Total assets

$
5,925.5

$
7,155.6

$
4,082.5

$
(13,051.9
)
$
4,111.7

Liabilities and Equity

Current Liabilities:

Accounts payable and accrued expenses

$
79.2

$
421.9

$
346.2

$
—

$
847.3

Short-term borrowings and securitization liabilities

37.5

0.7

78.4

—

116.6

Intercompany interest payable

3.1

4.7

17.9

(25.7
)
—

Product warranties

—

54.1

38.3

—

92.4

Customer advances

—

7.6

16.0

—

23.6

Product liabilities

—

22.7

4.3

—

27.0

Total current liabilities

119.8

511.7

501.1

(25.7
)
1,106.9

Non-Current Liabilities:

Long-term debt, less current portion

1,898.7

3.3

44.2

—

1,946.2

Deferred income taxes

200.3

—

15.5

—

215.8

Pension obligations

57.6

12.2

18.5

—

88.3

Postretirement health and other benefit obligations

56.5

—

4.0

—

60.5

Long-term deferred revenue

—

7.1

25.3

—

32.4

Intercompany long-term note payable

183.3

819.2

920.2

(1,922.7
)
—

Intercompany accounts payable

2,784.5

—

57.8

(2,842.3
)
—

Other non-current liabilities

112.3

30.2

20.7

—

163.2

Total non-current liabilities

5,293.2

872.0

1,106.2

(4,765.0
)
2,506.4

Equity

Manitowoc stockholders’ equity

512.5

5,771.9

2,489.3

(8,261.2
)
512.5

Noncontrolling interest

—

—

(14.1
)
—

(14.1
)
Total equity

512.5

5,771.9

2,475.2

(8,261.2
)
498.4

Total liabilities and equity

$
5,925.5

$
7,155.6

$
4,082.5

$
(13,051.9
)
$
4,111.7



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	7.3	$	10.2	$	74.2		$	—		$	91.7
Marketable securities	2.7		—		—			—			2.7
Restricted cash	5.3		—		5.4			—			10.7
Accounts receivable — net	—		34.7		305.8			—			340.5
Intercompany interest receivable	20.0		3.1		—			(23.1		)	—
Inventories — net	—		383.7		432.2			—			815.9
Deferred income taxes	73.0		—		16.1			—			89.1
Other current assets	2.8		2.2		102.9			—			107.9
Total current assets	111.1		433.9		936.6			(23.1		)	1,458.5

Property, plant and equipment — net	5.9		279.7		274.3			—			559.9
Goodwill	—		969.1		237.8			—			1,206.9
Other intangible assets — net	—		606.1		170.5			—			776.6
Intercompany long-term receivable	922.5		158.6		899.6			(1,980.7		)	—
Intercompany accounts receivable	—		1,415.0		1,677.5			(3,092.5		)	—
Other non-current assets	46.6		4.2		98.5			—			149.3
Investment in affiliates	5,164.1		3,453.5		—			(8,617.6		)	—
Total assets	$	6,250.2	$	7,320.1	$	4,294.8		$	(13,713.9	)	$	4,151.2

Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses	$	88.3	$	400.7	$	389.2		$	—		$	878.2
Short-term borrowings and current portion of long-term debt	32.5		0.7		63.0			—			96.2
Intercompany interest payable	3.1		—		20.0			(23.1		)	—
Product warranties	—		46.1		36.0			—			82.1
Customer advances	—		7.2		17.8			—			25.0
Product liabilities	—		23.3		5.3			—			28.6
Total current liabilities	123.9		478.0		531.3			(23.1		)	1,110.1
Non-Current Liabilities:
Long-term debt, less current portion	1,776.1		2.6		22.2			—			1,800.9
Deferred income taxes	179.8		—		46.3			—			226.1
Pension obligations	81.5		11.8		20.2			—			113.5
Postretirement health and other benefit obligations	49.6		—		3.5			—			53.1
Long-term deferred revenue	—		10.4		30.9			—			41.3
Intercompany long-term note payable	183.2		829.8		967.7			(1,980.7		)	—
Intercompany accounts payable	3,092.5		—		—			(3,092.5		)	—
Other non-current liabilities	99.5		15.1		51.9			—			166.5
Total non-current liabilities	5,462.2		869.7		1,142.7			(5,073.2		)	2,401.4
Equity
Manitowoc stockholders’ equity	664.1		5,972.4		2,645.2			(8,617.6		)	664.1
Noncontrolling interest	—		—		(24.4		)	—			(24.4		)
Total equity	664.1		5,972.4		2,620.8			(8,617.6		)	639.7
Total liabilities and equity	$	6,250.2	$	7,320.1	$	4,294.8		$	(13,713.9	)	$	4,151.2

The Manitowoc Company, Inc.

Condensed Consolidating Balance Sheet

as of December 31, ~~2011~~2012

(In millions)

Non-

Guarantor

Guarantor

Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Assets

Current Assets:

Cash and cash equivalents

$
4.2

$
8.5

$
55.9

$
—

$
68.6

Marketable securities

2.7

—

—

—

2.7

Restricted cash

6.4

—

0.8

—

7.2

Accounts receivable — net

0.1

41.2

255.7

—

297.0

Intercompany interest receivable

89.0

3.2

—

(92.2
)
—

Inventories — net

—

312.4

356.3

—

668.7

Deferred income taxes

99.4

—

18.4

—

117.8

Other current assets

1.6

5.5

70.7

—

77.8

Total current assets

203.4

370.8

757.8

(92.2
)
1,239.8

Property, plant and equipment — net

7.6

287.8

272.8

—

568.2

Goodwill

—

961.0

203.8

—

1,164.8

Other intangible assets — net

—

671.1

180.7

—

851.8

Intercompany long-term receivable

1,544.0

158.5

819.5

(2,522.0
)
—

Intercompany accounts receivable

—

1,252.5

1,661.1

(2,913.6
)
—

Other non-current assets

56.9

7.8

75.9

—

140.6

Investment in affiliates

4,045.0

3,399.2

—

(7,444.2
)
—

Total assets

$
5,856.9

$
7,108.7

$
3,971.6

$
(12,972.0
)
$
3,965.2

Liabilities and Equity

Current Liabilities:

Accounts payable and accrued expenses

$
71.7

$
402.3

$
395.8

$
—

$
869.8

Short-term borrowings and securitization liabilities

35.0

0.7

43.4

—

79.1

Intercompany interest payable

3.2

86.0

3.0

(92.2
)
—

Product warranties

—

52.9

40.9

—

93.8

Customer advances

—

11.7

23.4

—

35.1

Product liabilities

—

22.7

4.1

—

26.8

Total current liabilities

109.9

576.3

510.6

(92.2
)
1,104.6

Non-Current Liabilities:

Long-term debt, less current portion

1,800.6

3.6

6.7

—

1,810.9

Deferred income taxes

200.3

—

15.5

—

215.8

Pension obligations

55.8

12.7

22.1

—

90.6

Postretirement health and other benefit obligations

55.9

—

3.9

—

59.8

Long-term deferred revenue

—

5.9

28.3

—

34.2

Intercompany long-term note payable

183.3

1,379.9

958.8

(2,522.0
)
—

Intercompany accounts payable

2,855.7

—

57.9

(2,913.6
)
—

Other non-current liabilities

112.0

39.1

24.7

—

175.8

Total non-current liabilities

5,263.6

1,441.2

1,117.9

(5,435.6
)
2,387.1

Equity

Manitowoc stockholders’ equity

483.4

5,091.2

2,353.0

(7,444.2
)
483.4

Noncontrolling interest

—

—

(9.9
)
—

(9.9
)
Total equity

483.4

5,091.2

2,343.1

(7,444.2
)
473.5

Total liabilities and equity

$
5,856.9

$
7,108.7

$
3,971.6

$
(12,972.0
)
$
3,965.2



	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	12.0	$	4.0	$	57.4		$	—		$	73.4
Marketable securities	2.7		—		—			—			2.7
Restricted cash	5.3		—		5.3			—			10.6
Accounts receivable — net	0.4		29.0		303.3			—			332.7
Intercompany interest receivable	4.1		3.2		—			(7.3		)	—
Inventories — net	—		338.3		369.3			—			707.6
Deferred income taxes	70.9		—		18.1			—			89.0
Other current assets	3.8		3.5		107.9			(10.0		)	105.2
Current assets of discontinued operations	—		—		6.8			—			6.8
Total current assets	99.2		378.0		868.1			(17.3		)	1,328.0

Property, plant and equipment — net	6.8		271.3		278.0			—			556.1
Goodwill	—		969.1		241.6			—			1,210.7
Other intangible assets — net	—		620.9		175.5			—			796.4
Intercompany long-term notes receivable	928.6		158.6		897.5			(1,984.7		)	—
Intercompany accounts receivable	—		924.1		1,260.3			(2,184.4		)	—
Other non-current assets	49.3		4.5		76.5			—			130.3
Long-term assets of discontinued operations	—		—		35.8			—			35.8
Investment in affiliates	4,985.4		3,443.6		—			(8,429.0		)	—
Total assets	$	6,069.3	$	6,770.1	$	3,833.3		$	(12,615.4	)	$	4,057.3

Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses	$	93.6	$	410.6	$	408.7		$	—		$	912.9
Short-term borrowings and current portion of long-term debt	45.2		0.7		56.9			(10.0		)	92.8
Intercompany interest payable	3.2		—		4.1			(7.3		)	—
Product warranties	—		44.5		37.6			—			82.1
Customer advances	—		7.8		16.4			—			24.2
Product liabilities	—		23.5		4.4			—			27.9
Current liabilities of discontinued operation	—		—		6.0			—			6.0
Total current liabilities	142.0		487.1		534.1			(17.3		)	1,145.9
Non-Current Liabilities:
Long-term debt, less current portion	1,708.3		3.0		20.7			—			1,732.0
Deferred income taxes	176.0		—		47.0			—			223.0
Pension obligations	80.0		12.2		22.1			—			114.3
Postretirement health and other benefit obligations	49.8		—		3.6			—			53.4
Long-term deferred revenue	—		6.0		31.7			—			37.7
Intercompany long-term note payable	183.3		827.5		973.9			(1,984.7		)	—
Intercompany accounts payable	3,024.9		—		57.9			(3,082.8		)	—
Other non-current liabilities	104.7		15.6		40.8			—			161.1
Long-term liabilities of discontinued operations	—		—		8.6			—			8.6
Total non-current liabilities	5,327.0		864.3		1,206.3			(5,067.5		)	2,330.1
Equity
Manitowoc stockholders' equity	600.3		5,418.7		2,111.9			(7,530.6		)	600.3
Noncontrolling interest	—		—		(19.0		)	—			(19.0		)
Total equity	600.3		5,418.7		2,092.9			(7,530.6		)	581.3
Total liabilities and equity	$	6,069.3	$	6,770.1	$	3,833.3		$	(12,615.4	)	$	4,057.3

The Manitowoc Company, Inc.

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, ~~2012~~2013

(In millions)

Non-

Subsidiary

Guarantor

Parent

Guarantors

Subsidiaries

Eliminations

Consolidated

Net cash provided by (used for) operating activities of continuing operations

$
(27.8
)
$
52.1

$
(145.6
)
$
—

$
(121.3
)
Cash provided by (used for) operating activities of discontinued operations

—

(0.5
)
—

—

(0.5
)
Net cash provided by (used for) operating activities

(27.8
)
51.6

(145.6
)
—

(121.8
)

Cash Flows from Investing:

Capital expenditures

(0.5
)
(17.0
)
(17.3
)
—

(34.8
)
Restricted cash

—

—

(3.0
)
—

(3.0
)
Proceeds from sale of property, plant and equipment

—

—

0.2

—

0.2

Intercompany investments

(60.8
)
(73.5
)
96.8

37.5

—

Net cash provided by (used for) investing activities

(61.3
)
(90.5
)
76.7

37.5

(37.6
)

Cash Flows from Financing:

Proceeds from revolving credit facility—net

107.9

—

40.9

—

148.8

Proceeds from long-term debt

—

—

64.9

—

64.9

(Payments on) long-term debt

(18.9
)
(0.3
)
(29.1
)
—

(48.3
)
Proceeds from (payments on) notes financing—net

(0.1
)
(1.3
)
(17.3
)
—

(18.7
)
Intercompany financing

0.1

46.8

(9.4
)
(37.5
)
—

Options exercised

1.6

—

—

—

1.6

Net cash provided by (used for) financing activities

90.6

45.2

50.0

(37.5
)
148.3

Effect of exchange rate changes on cash

—

—

(0.7
)
—

(0.7
)

Net increase (decrease) in cash and cash equivalents

1.5

6.3

(19.6
)
—

(11.8
)

Balance at beginning of period

4.2

8.5

55.9

—

68.6

Balance at end of period

$
5.7

$
14.8

$
36.3

$
—

$
56.8



	Parent			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used for) operating activities of continuing operations	$	(37.8	)	$	45.4		$	(66.1	)	$	—		$	(58.5	)
Cash provided by (used for) operating activities of discontinued operations	—			(2.2		)	(1.8		)	—			(4.0		)
Net cash provided by (used for) operating activities	$	(37.8	)	$	43.2		$	(67.9	)	$	—		$	(62.5	)

Cash Flows from Investing:
Capital expenditures	$	—		$	(27.2	)	$	(19.7	)	$	—		$	(46.9	)
Proceeds from sale of property, plant and equipment	—			0.2			0.7			—			0.9
Restricted cash	—			—			(0.2		)	—			(0.2		)
Proceeds from sale of business	—			—			39.2			—			39.2
Intercompany investments	(45.3		)	1.6			61.3			(17.6		)	—
Net cash provided by (used for) investing activities	(45.3		)	(25.4		)	81.3			(17.6		)	(7.0		)

Cash Flows from Financing:
Payments on long-term debt	$	(28.4	)	$	(0.3	)	$	(10.1	)	$	—		$	(38.8	)
Proceeds from long-term debt	—			—			19.3			—			19.3
Proceeds on revolving credit facility—net	103.9			—			0.2			—			104.1
Proceeds (payments) on notes financing—net	—			—			2.3			—			2.3
Exercises of stock options	2.9			—			—			—			2.9
Intercompany financing	—			(11.3		)	(6.3		)	17.6			—
Net cash provided by (used for) financing activities	78.4			(11.6		)	5.4			17.6			89.8

Effect of exchange rate changes on cash	—			—			(2.0		)	—			(2.0		)

Net increase (decrease) in cash and cash equivalents	(4.7		)	6.2			16.8			—			18.3

Balance at beginning of period	12.0			4.0			57.4			—			73.4
Balance at end of period	$	7.3		$	10.2		$	74.2		$	—		$	91.7

The Manitowoc Company, Inc.

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, ~~2011~~2012

(In millions)

Non-

Subsidiary

Guarantor

Parent

Guarantors

Subsidiaries

Eliminations

Consolidated

Net cash provided by (used for) operating activities of continuing operations

$
(54.7
)
$
(8.9
)
$
(105.2
)
$
—

$
(168.8
)
Cash provided by (used for) operating activities of discontinued operations

—

(0.6
)
(17.9
)
—

(18.5
)
Net cash provided by (used for) operating activities

(54.7
)
(9.5
)
(123.1
)
—

(187.3
)

Cash Flows from Investing:

Capital expenditures

(0.2
)
(7.5
)
(10.9
)
—

(18.6
)
Restricted cash

(0.3
)
—

0.2

—

(0.1
)
Proceeds from sale of business

—

143.6

—

—

143.6

Proceeds from sale of property, plant and equipment

—

0.1

2.8

—

2.9

Intercompany investments

98.7

(84.3
)
31.9

(46.3
)
—

Net cash provided by (used for) investing activities

98.2

51.9

24.0

(46.3
)
127.8

Cash Flows from Financing:

Proceeds from revolving credit facility—net

17.5

—

74.1

—

91.6

Proceeds from long-term debt

750.0

—

55.8

—

805.8

(Payments on) long-term debt

(797.8
)
(0.3
)
(29.8
)
—

(827.9
)
Proceeds from (payments on) notes financing—net

—

(1.4
)
—

—

(1.4
)
Debt issue costs

(13.6
)
—

—

—

(13.6
)
Intercompany financing

(0.1
)
(51.3
)
5.1

46.3

—

Options exercised

1.5

—

—

—

1.5

Net cash provided by (used for) financing activities

(42.5
)
(53.0
)
105.2

46.3

56.0

Effect of exchange rate changes on cash

—

—

0.9

—

0.9

Net increase (decrease) in cash and cash equivalents

1.0

(10.6
)
7.0

—

(2.6
)

Balance at beginning of period

5.3

19.7

58.7

—

83.7

Balance at end of period

$
6.3

$
9.1

$
65.7

$
—

$
81.1



	Parent			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used for) operating activities of continuing operations	$	(27.8	)	$	52.1		$	(147.7	)	$	—		$	(123.4	)
Cash provided by (used for) operating activities of discontinued operations	—			(0.5		)	2.1			—			1.6
Net cash provided by (used for) operating activities	$	(27.8	)	$	51.6		$	(145.6	)	$	—		$	(121.8	)

Cash Flows from Investing:
Capital expenditures	$	(0.5	)	$	(17.0	)	$	(17.2	)	$	—		$	(34.7	)
Proceeds from sale of property, plant and equipment	—			—			0.2			—			0.2
Restricted cash	—			—			(3.0		)	—			(3.0		)
Intercompany investments	(60.8		)	(73.5		)	96.8			37.5			—
Net cash provided by (used for) investing activities of continuing operations	(61.3		)	(90.5		)	76.8			37.5			(37.5		)
Net cash provided by (used for) investing activities of discontinued operations	—			—			(0.1		)	—			(0.1		)
Net cash provided by (used for) investing activities	$	(61.3	)	$	(90.5	)	$	76.7		$	37.5		$	(37.6	)

Cash Flows from Financing:
Payments on long-term debt	$	(18.9	)	$	(0.3	)	$	(29.1	)	$	—		$	(48.3	)
Proceeds from long-term debt	—			—			64.9			—			64.9
Proceeds from (payments on) revolving credit facility—net	107.9			—			40.9			—			148.8
Proceeds from (payments on) notes financing—net	(0.1		)	(1.3		)	(17.3		)	—			(18.7		)
Exercises of stock options	1.6			—			—			—			1.6
Intercompany financing	0.1			46.8			(9.4		)	(37.5		)	—
Net cash provided by (used for) financing activities	90.6			45.2			50.0			(37.5		)	148.3

Effect of exchange rate changes on cash	—			—			(0.7		)	—			(0.7		)

Net increase (decrease) in cash and cash equivalents	1.5			6.3			(19.6		)	—			(11.8		)

Balance at beginning of period	4.2			8.5			55.9			—			68.6
Balance at end of period	$	5.7		$	14.8		$	36.3		$	—		$	56.8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

Results of Operations for the Three and Six Months Ended June 30, ~~2012~~2013 and ~~2011~~

2012

Analysis of Net Sales

The following table presents net sales by business segment:



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2013		2012		2013		2012
Net sales:
Crane	$	656.9	$	610.7	$	1,204.3	$	1,118.6
Foodservice	389.7		386.5		740.3		730.5
Total net sales	$	1,046.6	$	997.2	$	1,944.6	$	1,849.1

Consolidated net sales for the three months ended June 30, ~~2012~~ 2013increased ~~5.9%~~5.0% to ~~$1,005.9~~$1,046.6 million from ~~$949.8~~$997.2 million for the same period in ~~2011.~~2012. Consolidated net sales for the six months ended June 30, ~~2012~~ 2013increased ~~10.9%~~5.2% to ~~$1,866.0~~$1,944.6 million from ~~$1,682.0~~$1,849.1 million for the same period in ~~2011.~~2012. The ~~increase~~increases in net sales ~~was~~were primarily driven by ~~10.1%~~7.6% and ~~18.0% increases~~7.7%increases in the Crane segment for the three and ~~six-month periods~~six months ended June 30, ~~2012,~~2013, respectively, compared to the same periods in ~~2011.~~2012. Foodservice segment net sales for the ~~second quarter of 2012 were even with net sales from the second quarter of 2011, while net sales for the first~~ three and six months ~~of 2012 were 1.8% higher as~~ended June 30, 2013increased by 0.8% and 1.3%, respectively, compared ~~with~~to the ~~same period in 2011.~~

prior year periods.

Crane segment net sales increased ~~10.1%~~7.6% for the three months ended June 30, ~~2012~~2013 to ~~$610.7~~$656.9 million versus ~~$554.8~~$610.7 million for the same period in ~~2011. Net~~2012. Crane segment net sales ~~from the Crane segment~~increased7.7% for the six months ended June 30, ~~2012 increased 18.0%~~2013 to ~~$1,118.6~~$1,204.3 million ~~compared to $947.6~~ versus $1,118.6 million for the ~~corresponding~~same period in ~~2011.~~2012. The increases in net sales ~~improvement was~~were primarily driven by ~~performance~~continued growth in the Americas ~~and Greater Asia Pacific (GAP) regions,~~region, partially offset by sales decreases in the ~~China~~Greater Asia Pacific region as a result of volume reductions. Crane segment sales for the three and ~~Europe, Middle East~~six months ended June 30, 2013 were favorably impacted by $4.2 million and ~~Africa (EMEA) regions. Volatility~~$3.9 million, respectively, from the volatility of ~~the Euro and select Asian~~foreign currencies in relation to the U.S. ~~Dollar, had a negative $31.5 million and $37.4 million impact on crane segment sales for the three and six months ended~~ Dollar.

As of June 30, ~~2012, respectively.~~

~~As of June 30, 2012,~~2013, total Crane segment backlog was ~~$943.6~~$726.2 million, a ~~1.4% increase~~6.4%decrease over the March 31, ~~2012~~2013 backlog of ~~$931.0~~$776.1 million, and a ~~12.5% increase~~23.0%decrease over the ~~June 30, 2011 backlog of $838.8 million. The backlog increase at~~ June 30, 2012 ~~compared to March 31, 2012 and June 30, 2011 was primarily driven by robust order activity in North America and Latin America as a result~~ backlog of ~~continued improvements in end-market demand in those regions due to strength in the energy and infrastructure sectors.~~

$943.6 million.

Net sales from the Foodservice segment for the three months ended June 30, ~~2012~~ 2013 increased ~~0.1%~~0.8% to ~~$395.2~~$389.7 million versus ~~$395.0~~$386.5 million for the same time period in ~~2011.~~2012. Net sales from the Foodservice segment for the six months ended June 30, ~~2012~~ 2013 increased ~~1.8%~~1.3% to ~~$747.4~~$740.3 million versus ~~$734.4~~$730.5 million for the same time period in ~~2011 as the increase~~2012. The increases in net sales ~~was~~were primarily driven by ~~increased~~ volume ~~in the Americas~~increases as a result of new product roll outs and ~~Asia regions. This volume increase was~~pricing actions, partially offset by increases in rebates as a ~~decline in customer rollouts in~~result of the ~~first half of 2012 versus the same period in 2011, exit of~~sales increases through certain ~~low margin product lines and negative impact of foreign currency.~~market channels. Foodservice segment sales for the three and six months ended June 30, ~~2012 received $5.1~~2013 were unfavorably impacted by $0.5 million ~~unfavorable impact~~and $0.7 million, respectively, from the volatility of foreign currencies in relation to the U.S. Dollar. ~~Similar foreign currency volatility accounted for a $7.0 million unfavorable impact on segment sales during the six months ended June 30, 2012.~~

Analysis of Operating Earnings

The following table presents operating earnings by business ~~segment:~~

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2012

2011

2012

2011

Earnings from operations:

Crane

$
46.5

$
30.8

$
67.4

$
41.6

Foodservice

59.1

54.7

102.4

87.9

Corporate expense

(16.5
)
(15.5
)
(32.5
)
(28.9
)
Restructuring expense

(0.2
)
(2.0
)
(0.9
)
(2.9
)
Other

(0.1
)
(0.1
)
(0.1
)
(0.1
)
Total

$
88.8

$
67.9

$
136.3

$
97.6

segment. The results for the three and six months ended June 30, 2012 have been revised to reflect the correction of errors related to these periods and all periods reflect reclassifications due to discontinued operations. See Note 1, “Accounting Policies” for further discussion of these revisions, and Note 2, "Discontinued Operations," for further discussion of the reclassifications.



	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2013			2012			2013			2012
Earnings from operations:
Crane	$	65.0		$	52.0		$	96.3		$	73.4
Foodservice	63.0			66.1			112.1			117.1
Corporate expense	(16.5		)	(16.5		)	(35.0		)	(32.5		)
Amortization expense	(9.0		)	(9.3		)	(18.1		)	(18.6		)
Restructuring expense	(0.9		)	(0.2		)	(1.2		)	(0.9		)
Other	—			(0.1		)	(0.3		)	(0.1		)
Total	$	101.6		$	92.0		$	153.8		$	138.4

Consolidated gross profit for the three months ended June 30, ~~2012~~2013 was ~~$249.7~~$272.8 million, an increase of ~~$24.7~~$21.6 million as compared to

the ~~$225.0~~$251.2 million of consolidated gross profit for the same period in ~~2011.~~2012. Consolidated gross profit for the six months ended June 30, ~~2012~~2013 was ~~$455.9~~$492.8 million, an increase of ~~$50.4~~$38.3 million as compared to the ~~$405.5~~$454.5 million of consolidated gross profit for the same period in ~~2011. The~~2012. These increases in consolidated gross profit ~~increases~~ were primarily driven ~~primarily~~ by ~~the sales~~an 18.3% and 16.4% increases in ~~the Crane segment for the three and six month periods ended June 30, 2012.~~

~~For the three and six-month periods ended June 30, 2012 versus the same periods in 2011, the~~ Crane segment gross profit increased by $21.7 million and $41.9 million, respectively. Net sales increases, pricing actions and lower warranty expenses, partially offset by a prior period inventory adjustment in the Americas region in the second quarter of 2012 (see “Prior Period Adjustment” at Note 1 of the company’s condensed consolidated financial statements for ~~further discussion) drove the increase in gross profit for the three and six month periods in 2012 compared to the same periods in 2011.~~

~~For~~ the three and six months ended June 30, 2013, respectively, compared to prior year periods.

For the three months ended June 30, 2013 compared to the same period in 2012, the Crane segment gross profit increased$22.2 million. For the six months ended June 30, 2013 compared to the same period in 2012, the Crane segment gross profit increased$34.8 million. The sales volume increases coupled with manufacturing cost reduction initiatives and pricing actions, drove the increases in gross profit for the three and six months ended June 30, 2013 compared to the same periods in 2012.

For the three months ended June 30, 2013, the Foodservice segment gross profit ~~increased $3.0~~decreased$0.6 million ~~and $8.5 million, respectively, versus~~ compared to the same ~~periods~~period last year. ~~Net sales~~This decrease was primarily due to increases in rebates, new facility expenses, facility consolidation expenses and manufacturing costs, partially offset by product cost takeout initiatives and pricing actions. For the six months ended June 30, 2013, the Foodservice segment gross profit increased$3.5 million compared to the same period last year. Cost reduction initiatives, pricing actions, and ~~cost reductions,~~increases in volumes primarily ~~in the Americas region,~~ drove the increase in gross profit for the Foodservice segment ~~during both periods.~~

for the six months ended June 30, 2013, partially offset by increases in rebates and discounts, certain manufacturing costs, facility consolidation expenses and new facility expenses.

For the three months ended June 30, ~~2012,~~2013, engineering, selling and administrative (ES&A) expenses increased ~~$5.7~~$11.7 million to ~~$151.1~~$161.3 million versus ~~$145.4~~$149.6 million for the three months ended June 30, ~~2011.~~2012. For the six months ended June 30, 2013, ES&A expenses increased$22.9 million to $319.4 million versus $296.5 million for the six months ended June 30, 2012. Crane segment ES&A ~~expenses~~ increased ~~$13.9~~$9.2 million ~~to $299.5~~ and $11.9 million ~~versus $285.6 million~~ for the three and six months ended June 30, ~~2011. Both Crane and Foodservice segments contributed~~2013, respectively, compared to the prior year periods. The three-month period increase in ES&A was primarily the result of increased employee compensation expense, increased levels of engineering expenses, and an increase in professional fees. The six-month period increase in ES&A was primarily a result of the aforementioned increases along with the recognition of reserves for a small number of discrete customer financing issues. Foodservice segment ES&A increased $2.5 million for the three months ended June 30, 2013 compared to the prior year period primarily as a result of an increase in headcount and increased investment in strategic projects. The Foodservice segment ES&A increased $8.5 million for the six ~~month~~months ended June 30, 2013 compared to the prior year period primarily as a result of an increase in headcount, an increase in pension expenses and increased investment in strategic projects. Corporate expenses were flat for the three months ended June 30, 2013 compared to the prior year period and higher for the six months ended June 30, 2013 versus the prior year period due to increased employee benefit costs and stock award compensation expense, partially offset by a decrease in professional fees.

For the three months ended June 30, 2013, Crane segment operating earnings were $65.0 million compared to $52.0 million for the three months ended June 30, 2012. For the six months ended June 30, 2013, Crane segment operating earnings were $96.3 million compared to $73.4 million for the six months ended June 30, 2012. The increases in operating earnings were a result of the increases in gross profit, partially offset by the ES&A increases described above.

For the three months ended June 30, 2013, Foodservice segment operating earnings were $63.0 million compared to $66.1 million for the three months ended June 30, 2012. The decrease in operating earnings was a result of the gross profit decrease and ES&A increase described above. For the six months ended June 30, 2013, Foodservice segment operating earnings were $112.1 million compared to $117.1 million for the six months ended June 30, 2012. The decrease in operating earnings was a result of the increase in ES&A, partially offset by the gross profit increase described above.

For both the three months ended June 30, 2013 and the three months ended June 30, 2012 corporate expenses were $16.5 million. For the six months ended June 30, 2013, corporate expenses were $35.0 million compared to $32.5 million for the six months ended June 30, 2012. The increase was due to higher employee benefit costs resulting from improved performance and continued investments in engineering. Corporate expenses were higher for the three and six-month periods ended June 30, 2012 versus prior periods due to higher stock-based compensation expenses. Additionally, the three-month period ended June 30, 2012 benefited from a settlement of a supplier related warranty claim in our crane segment and favorable settlement of a patent infringement lawsuit in our Foodservice segment.

For the three months ended June 30, 2012, Crane segment operating earnings were $46.5 million compared to $30.8 million for the three months ended June 30, 2011. For the six months ended June 30, 2012, Crane segment operating earnings were $67.4 million compared to $41.6 million for the six months ended June 30, 2011. Crane segment operating earnings increased in both 2012 periods due to the aforementioned increase in sales volume, pricing actions and decrease in warranty expenses, partially offset by increases in personnel expenses and continued investments in engineering.

For the three months ended June 30, 2012, Foodservice segment operating earnings were $59.1 million compared to $54.7 million for the three months ended June 30, 2011. For the six months ended June 30, 2012, Foodservice segment operating earnings were $102.4 million compared to $87.9 million for the six months ended June 30, 2011. Foodservice segment operating earnings increased in both periods due to the aforementioned increase in sales volume, pricing actions and the ongoing implementation of cost improvement initiatives.

For the three months ended June 30, 2012, corporate expenses were $16.5 million compared to $15.5 million for the three months ended June 30, 2011. For the six months ended June 30, 2012, corporate expenses were $32.5 million compared to $28.9 million for the six months ended June 30, 2011. Corporate expenses increased due to higher employee benefit and stock award compensation ~~costs.~~

The company accounts for goodwill and other intangible assets under the guidance of ASC Topic 350, “Intangibles — Goodwill and Other.” Under ASC Topic 350, goodwill is no longer amortized; however, the company performs an annual impairment review at June 30 of every year or more frequently if events or changesexpense, partially offset by decreases in circumstances indicate that the asset might be impaired. The company performs impairment reviews for its reporting units, which are Cranes Americas; Cranes Europe, Middle East, and Africa; Cranes China; Cranes Greater Asia Pacific; Crane Care; Foodservice Americas; Foodservice Europe, Middle East, and Africa; and Foodservice Asia, using a fair-value method based on the present value of future cash flows, which involves management’s judgment and assumptions about cash flows and the discount rates used. The estimated fair value is then compared with the carrying amount of the reporting unit, including recorded goodwill. Goodwill is then subject to risk of write-down to the extent that the carrying amount exceeds the estimated fair value.

The company will continue to monitor market conditions and determine if any additional interim reviews of goodwill, other intangibles or long-lived assets are warranted. Deterioration in the market or actual results compared to the company’s projections may ultimately result in a future impairment. In the event the company determines that assets are impaired in the future, the company would need to recognize a non-cash impairment charge, which could have a material adverse effect on the company’s condensed consolidated balance sheet and results of operations. The company completed its annual impairment review and determined that there was no impairment charge for the six months ended June 30, 2012.

professional fees.

Analysis of Non-Operating Income Statement Items

The loss on debt extinguishment for the ~~three and~~ six months ended June 30, ~~2011~~2013 was ~~$24.2~~$0.4 million. The loss related to the accelerated pay downs on Term Loans A and $27.8 million, respectively. On May 13, 2011 the company completed a refinancing of its Senior Credit Facility which resulted in an accelerated write-off of deferred financing fees associated with the credit facility previous to it being amended and the recognition of expense associated with interest rate hedges which were dedesignated.

Interest expense for the three months ended June 30, 2013 was $32.6 million versus $33.8 million for the three months ended June 30, 2012 ~~was $33.8 million versus $38.3 million for the three months ended June 30, 2011.~~. Interest expense for the ~~first six months of 2012 was $66.8 million versus $77.7 million for the~~ six months ended June 30, ~~2011.~~2013 was $65.9 million versus $66.8 million for the six months ended June 30, 2012. The decrease in interest expense for the ~~comparable periods of 2012 were~~three and six months ended June 30, 2013 was a result of the company's debt reduction ~~and the impact of the debt refinancing, which lowered the weighted average interest rates over the same period in 2011.~~efforts. Amortization expenses for deferred financing fees were ~~$4.1~~$1.7 million for the ~~six~~three months ended June 30, ~~2012 as~~2013 compared to ~~$6.0~~$2.1 million for the ~~six~~three months ended June 30, ~~2011.~~2012. Amortization expenses for deferred financing fees were ~~$2.1~~$3.5 million for the ~~quarter~~six months ended June 30, ~~2012 as~~2013 compared to ~~$2.7~~$4.1 million in for the ~~quarter ended June 30, 2011. The lower expense in the three and~~ six months ended June 30, 2012. The decrease in amortization expenses for the three and six months ended June 30, 2013 was related to the lower balance of deferred financing fees as a result of the accelerated pay downs of Term Loans in ~~2011.~~

2012.

Other income (expense), net for the three months ended June 30, 2013 was expense of $1.4 million compared to other income of $2.0 million for the same period ended 2012. Other income (expense), net for both the six months ended June 30, 2013and 2012 was income of $0.2 million. The increase in other expense for the three months ended June 30, 2013 compared to the same period in 2012 was primarily due to foreign currency exchange losses in the current year period compared to foreign currency exchange gains in the prior year period.

For the six months ended June 30, 2013, the company recorded income tax expense of $17.8 million, compared to income tax expense of $26.9 million for the six months ended June 30, 2012 ~~was $1.9 million and $0.3 million, respectively, versus other income, net of $0.3 million and $1.1 million for the same periods ended June 30, 2011.~~. The decrease in ~~other income for~~ the three months ended June 30, 2012 as compared to the same three month period in 2011 was primarily due to the volatility of foreign currency exchange rates and the increase in other income for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011.

For the six months ended June 30, 2012, the company recorded an income tax expense of $26.8 million, as compared to an income tax expense of $2.0 million for the six months ended June 30, 2011. The increase in the company’scompany's tax expense for the six months ended June 30, ~~2012~~2013 relative to the prior year resulted primarily from ~~an increase in~~the jurisdictional mix of pre-tax ~~earnings.~~earnings and net discrete items, principally the effect of the American Tax Relief Act of 2012 signed into law on January 2, 2013, reserve releases related to statute of limitations expirations, a favorable audit settlement, and the effective settlement of other state uncertain tax benefits. The effective tax rate varies from the U.S. federal statutory rate of 35% due to results of foreign operations that are subject to income taxes at different statutory rates and certain jurisdictions where the company cannot recognize tax benefits on current losses. Applying the provisions of ASC 740 may result in varying effective tax rates by quarter, based upon the jurisdictional mix of income in countries with varying statutory rates and timing of the company’s earnings.

The company’s unrecognized tax benefits, excluding interest and penalties, were ~~$55.8~~$38.7 million as of June 30, 2013, and $55.8 million as of June 30, 2012 ~~and $45.8 million as of June 30, 2011.~~. All of the company’s unrecognized tax benefits as of June 30, ~~2012,~~2013, if recognized, would impact ~~the~~its effective tax rate. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce unrecognized tax benefits and income tax expense by up to ~~$16.0~~$6.9 million, either because the company’s tax positions are sustained on audit or settled or the applicable statute of limitations closes.

~~There~~

addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments.

As of June 30, 2013 there have been no significant developments in the quarter with respect to the company’s other ongoing tax audits in various jurisdictions.

~~The result from loss on sale~~

Earnings (loss) from discontinued operations ~~was $33.6 million~~ for the three months ended June 30, 2013 was a loss of $2.1 million compared to earnings of $0.4 million for the same period ended 2012. Loss from discontinued operations for the six months ended June 30, ~~2011.~~2013 was a loss of $2.2 million. The increase in loss from discontinued operations for the three and six months ended June 30, 2013 compared to the same periods in 2012 was primarily due to the settlement of a product liability claim in the second quarter of 2013 related to a business disposed of prior to 2012.

Loss on sale of discontinued operations was $1.6 million for the six months ended June 30, 2013. The loss was primarily attributable to ~~the~~ tax expense of ~~$29.0~~$3.3 million on the sale of the ~~Kysor/Warren businesses~~Jackson business in January ~~2011.~~

2013. For more information regarding the sale of the Jackson business, see Note 2, "Discontinued Operations," of the condensed consolidated financial statements.

Financial Condition
First Six Months of 2013

Cash and cash equivalents balance as of

June 30, 2013 totaled $91.7 million, which was an increase of $18.3 million from the December 31, 2012 balance of $73.4 million. Cash flow used for operating activities of continuing operations for the first six months of 2013 was $58.5 million compared to cash used for continuing operations of $123.4 million for the first six months of 2012. During the first six months of 2013, cash flow used for continuing operations was primarily a result of working capital to support increased order activity. Inventory increases resulted in a use of cash of $115.7 million to support increased order activity primarily in the Crane segment.

Capital expenditures during the first six months of 2013 were $46.9 million versus $34.7 million during the first six months of 2012. The majority of the capital expenditures were related to equipment purchases for the Crane and Foodservice segments, continued investment in our facility in Brazil and the enterprise resource planning ("ERP") system implementation in the Crane segment.

First Six Months of 2012

Cash and cash equivalents balance as of June 30, 2012 totaled $56.8 million, which was a decrease of $11.8 million from the December 31, 2011 balance of $68.6 million. Cash flow used for operating activities of continuing operations for the first six months of 2012 was ~~$121.3~~$123.4 million compared to cash used of continuing operations of ~~$168.8~~$170.2 million for the first six months of 2011. During the first six months of 2012, cash flow from continuing operations was used primarily for working capital to support increased order activity in both segments. Inventory increases resulted in a use of cash of ~~$152.6~~$156.2 million, partially offset by increased payables of ~~$7.4~~$6.7 million; cash of ~~$34.7~~$34.5 million was used for increased receivables due to higher sales primarily in the Crane segment.

Capital expenditures during the first six months of 2012 were ~~$34.8~~$34.7 million versus $18.6 million during the first six months of 2011. The majority of the capital expenditures were related to our new facility in Brazil, our ~~enterprise resource planning (ERP)~~ERP system implementation in France and machinery and equipment purchases for the Crane and Foodservice segments.

~~First Six Months of 2011~~

Cash and cash equivalents balance as of June 30, 2011 totaled $81.1 million, which was a decrease of $2.6 million from the December 31, 2010 balance of $83.7 million. Cash flow used for operating activities of continuing operations for the first six months of 2011 was $168.8 million compared to cash provided by $2.8 million for the first six months of 2010. During the first six months of 2011, cash flow from continuing operations was used to support increased order activity in both segments through increased working capital. Inventory increases resulted in a use of cash of $160.0 million, partially offset by increased payables of $111.9 million; cash of $163.7 million used for increased receivables reflected the increased sales of both segments.

~~Capital expenditures during the first six months of 2011 were $18.6 million versus $14.4 million during the first six months of 2010.~~

~~The majority of the capital expenditures were related to machinery and equipment purchases and major repairs, for the Crane and Foodservice segments.~~

Liquidity and Capital Resources

Outstanding debt at as of June 30, ~~2012~~2013 and December 31, ~~2011~~2012 is summarized as follows:

The company’s Senior Credit Facility originally became effective November 6, 2008 and initially included four loan facilities — a revolving facility of $400.0 million with a five-year term, a Term Loan A of $1,025.0 million with a five-year term, a Term Loan B of $1,200.0 million with a six-year term, and a Term Loan X of $300.0 million with an eighteen-month term. The balance of Term Loan X was repaid in 2009.



(in millions)	June 30, 2013			December 31, 2012
Revolving credit facility	$	138.3		$	34.4
Term loan A	277.1			297.5
Term loan B	75.4			81.0
Senior notes due 2018	409.5			410.5
Senior notes due 2020	616.7			621.2
Senior notes due 2022	291.6			298.9
Other	88.5			81.3
Total debt	1,897.1			1,824.8
Less current portion and short-term borrowings	(96.2		)	(92.8		)
Long-term debt	$	1,800.9		$	1,732.0

On May 13, 2011, the company ~~amended and extended the maturities of its Senior Credit Facility and by entering~~entered into a $1,250.0 million Second Amended and Restated Credit Agreement (the “Senior Credit ~~Facility.”~~Facility”). The company's Senior Credit Facility currently includes three different loan facilities. The first is a revolving facility in the amount of $500.0 million, with a term of five years. The second facility is an amortizing Term Loan A facility in the aggregate amount of $350.0 million with a term of five years. The third facility is an amortizing Term Loan B facility in the amount of $400.0 million with a term of 6.5 years. Including interest rate caps as of June 30, 2013, the weighted average interest rates for the Term Loan A and the Term Loan B loans were 3.00% and 4.25%, respectively. Excluding interest rate caps, Term Loan A and Term Loan B interest rates were also 3.00% and 4.25%, respectively, as of June 30, 2013. The weighted average interest rates for the term loans including and excluding the impact of interest rate caps were the same because the relevant one-month U.S. LIBOR rate was below the 3.00% cap level as of June 30, 2013.

The company has the following three series of Senior Notes outstanding (collectively, the “Senior Notes”):

•5.875% Senior Notes due 2022 (the "2022 Notes"); original principal amount: $300.0 million

•8.50% Senior Notes due 2020 (the "2020 Notes"); original principal amount: $600.0 million

•9.50% Senior Notes due 2018 (the "2018 Notes"); original principal amount: $400.0 million

Interest on the 2022 Notes is payable semiannually in April and October of each year; interest on the 2020 Notes is payable semiannually in May and November of each year; and interest on the 2018 Notes is payable semiannually in February and August of each year.

See additional discussion of the Senior Credit Facility and the Senior Notes in Note 8, ~~“Debt.”~~

“Debt” of the condensed consolidated financial statements.

As of June 30, 2011, the company offset, dedesignated and wrote-off all of its previous interest rate swaps against Term Loan A and B interest due to the amendment of its Senior Credit Facility (See Note 8, “Debt,” for a description of the Senior Credit Facility). As of June 30, 2012,2013, the company had outstanding ~~$450.0~~$225.0 million notional amount of 3.00% LIBOR caps related to the ~~term loan~~Term Loan portion of the Senior Credit Facility. The remaining unhedged portions of Term Loans A and B continue to bear interest according to the terms of the Senior Credit Facility. ~~The company is also party to various fixed-to-float interest rate swaps in connection with its 2018 and 2020 Notes. At~~ As of June 30, ~~2012, $200.0~~2013, $75.0 million and ~~$300.0~~$125.0 million of the ~~2018 and~~ 2020 Notes ~~respectively,~~and 2022 Notes were swapped to floating rate interest (See Note 8, “Debt,” for a description of the 2018 and 2020 Notes). The 2018 Notes accrue interest at a rate of 9.50% on the fixed portion and 7.45% plus the six-month LIBOR reset in arrears on the variable portion. The 2020 Notes accrue interest at a rate of 8.50% on the fixed portion and 6.02% plus the six-month LIBOR reset in arrears on the variable portion. At June 30, 2012, the weighted average interest rates for the 2018 and 2020 Notes taking into considerationinterest. Including the impact of ~~floating rate hedges, was 8.84% and 7.62%, respectively. Both aforementioned swap contracts of~~these swaps, the ~~2018 and~~ 2020 Notes ~~include a call premium schedule that mirrors that~~and 2022 Notes have an all-in interest rate of ~~the respective debt~~8.31% and ~~includes an optional early termination cash settlement at five years from the trade date.~~

5.20%, respectively.

As of June 30, ~~2012,~~2013, the company was in compliance with all affirmative and negative covenants in its debt instruments inclusive of the financial covenants pertaining to the Senior Credit Facility, the ~~2013 Notes, the~~ 2018 Notes, 2020 Notes, and ~~the 2020~~2022 Notes. Based upon ~~our~~ current plans and outlook, ~~we believe we~~the company believes it will be able to comply with these covenants during the subsequent 12 months. As of June 30, ~~2012 our~~2013 the company’s Consolidated Senior Secured Leverage Ratio was ~~2.69:~~1.67:1, while the maximum ratio is ~~3.50:~~3.25:1 and our Consolidated Interest Coverage Ratio was ~~2.88:~~3.22:1, above the minimum ratio of ~~1.875:~~2.25:1.

The company defines Adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization, plus certain items such as pro-forma acquisition results and the addback of certain restructuring charges, that are adjustments per the credit agreement definition. The company’s trailing twelve-month Adjusted EBITDA for covenant compliance purposes as of June 30, ~~2012~~2013 was ~~$381.1 million.~~$425.3 million. The company believes this measure is useful to the reader in order to understand the basis for the company’s debt covenant calculations. The reconciliation of net earnings ~~(loss)~~ attributable to the ~~Company~~company to Adjusted EBITDA for the trailing twelve months ended June 30, ~~2012~~2013 was as follows:

Trailing Twelve
Months,

(in millions)

June 30, 2012

Net earnings (loss) attributable to Manitowoc

$
81.6

Loss from discontinued operations

1.1

Loss on sale of discontinued operations

1.0

Depreciation and amortization

114.0

Interest expense and amortization of deferred financing fees

144.3

Costs due to early extinguishment of debt

1.9

Restructuring charges

3.8

Income taxes

40.6

Other

(7.2
)
Adjusted EBITDA

$
381.1

~~Effective September 27, 2011, the~~

Trailing Twelve
Months,
(in millions) June 30, 2013
Net earnings attributable to Manitowoc $ 124.7
Loss from discontinued operations 1.9
Loss on sale of discontinued operations 1.6
Depreciation and amortization 110.1
Interest expense and amortization of deferred financing fees 143.8
Costs due to early extinguishment of debt 6.7
Restructuring charges 9.8
Income taxes 28.9
Other (2.2 )
Adjusted EBITDA $ 425.3

The company ~~entered into the Third Amended and Restated Receivables Purchase Agreement (the “Third Amended and Restated Receivables Purchase Agreement”) whereby it sells certain of its trade~~maintains an accounts receivable ~~to one~~securitization program with a commitment size of ~~two wholly owned, bankruptcy-remote special purpose subsidiaries which,~~$150.0 million, whereby transactions under the program are accounted for as sales in ~~turn, sells, conveys, transfers~~accordance with ASC Topic 860, “Transfers and ~~assigns all~~Servicing.” Sales of trade receivables under the ~~seller’s right, title~~program are reflected as a reduction of accounts receivable in the accompanying Condensed Consolidated Balance Sheets and ~~interest~~the proceeds received, including collections on the deferred purchase price notes, are included in ~~and to its pool~~cash flows from operating activities in the accompanying Condensed Consolidated Statements of ~~receivables to a third party financial institution (Purchaser).~~Cash Flows. See ~~discussion of the Third Amended and Restated Receivables Purchase Agreement in~~ Note ~~10,~~9, “Accounts Receivable ~~Securitization.~~Securitization,”

~~Our~~ for further details of program.

The company’s liquidity position at June 30, ~~2012~~2013 and December 31, ~~2011~~2012 is summarized as follows:

(in millions)

June 30, 2012

December 31, 2011

Cash and cash equivalents

$
56.8

$
71.3

Revolver borrowing capacity

500.0

500.0

Less: Borrowings on revolver

(146.6
)
—

Less: Outstanding letters of credit

(34.5
)
(34.5
)
Total liquidity

$
(375.7
)
$
536.8



(in millions)	June 30, 2013			December 31, 2012
Cash and cash equivalents	$	94.4		$	76.1
Revolver borrowing capacity	500.0			500.0
Less: Borrowings on revolver	(138.3		)	(34.4		)
Less: Outstanding letters of credit	(32.7		)	(38.2		)
Total liquidity	$	423.4		$	503.5

The company believes its liquidity and expected cash flows from operations should be sufficient to meet expected working capital, capital expenditure and other general ongoing operational needs.

The revolving facility under the Senior Credit Facility has a maximum borrowing capacity of ~~$500~~$500.0 million and expires in May 2016. As of June 30, ~~2012,~~2013, the revolving facility had a balance of ~~$146.6 million.~~$138.3 million. During the quarter the highest daily borrowing was ~~$299.9~~$306.7 million and the average borrowing was ~~$246.2~~$139.2 million, while the average interest rate was ~~2.86%~~3.33% per annum. The interest rate fluctuates based upon LIBOR or a Prime rate plus a spread, which is based upon the Consolidated Total Leverage Ratio of the company. As of June 30, ~~2012,~~2013, the ~~spread~~spreads for LIBOR and Prime borrowings ~~is 3.0%~~were 2.75% and ~~2.0%~~1.75%, respectively, given the effective Consolidated Total Leverage Ratio for this period.

The company has not provided for additional U.S. income taxes on approximately ~~$593.7~~$712.3 million of undistributed earnings of consolidated non-U.S. subsidiaries included in stockholders’ equity. Such earnings could become taxable upon sale or liquidation of these non-U.S. subsidiaries or upon dividend repatriation of cash balances. At As of June 30, ~~2012,~~2013, approximately ~~$32.9~~$53.1 million of our total cash and cash equivalents were held by our foreign subsidiaries. This cash is associated with earnings that we have asserted are permanently reinvested. We have no current plans to repatriate cash or cash equivalents held by our foreign subsidiaries because we plan to reinvest such cash and cash equivalents to support our operations and continued growth plans outside the United States through the funding of capital expenditures, acquisitions, research, operating expenses or other similar cash needs of these operations. Further, we do not currently forecast a need for these funds in the United States because ~~the~~

our U.S. operations and debt service isare supported by the cash generated by ~~the~~our U.S. operations. The company would only plan to repatriate foreign cash when it would beattract a low tax ~~effective through the utilization of foreign tax credits or when earnings qualify as previously taxed income.~~

cost.

Critical Accounting Policies

Our critical accounting policies have not materially changed since the ~~2011~~2012 Form 10-K was filed.

Cautionary Statements About Forward-Looking Information

Statements in this report and in other company communications that are not historical facts are forward-looking statements, which are based upon our current ~~expectations.~~ expectations, within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements involve risks and uncertainties that could cause actual results to differ materially from what appears within this quarterly report.

Forward-looking statements include descriptions of plans and objectives for future operations, and the assumptions behind those plans. The words “anticipates,” “believes,” “intends,” “estimates,” “targets” and “expects,” or similar expressions, usually identify forward-looking statements. Any and all projections of future performance are forward-looking statements.

In addition to the assumptions, uncertainties, and other information referred to specifically in the forward-looking statements, a number of factors relating to each business segment could cause actual results to be significantly different from what is presented in this quarterly report. Those factors include, without limitation, the following:

~~Crane—cyclicality~~

Crane-cyclicality of the construction industry; the effects of government spending on construction-related projects throughout the ~~world;~~world, including as a result of U.S. government budget sequestration; unanticipated changes in global demand for high-capacity lifting equipment; changes in demand for lifting equipment in emerging economies; the replacement cycle of technologically obsolete cranes; and demand for used equipment.

~~Foodservice—weather;~~

Foodservice-weather; global expansion of customers; commercial ice-cube machine and other foodservice equipment replacement cycles in the United States and other mature markets; unanticipated issues associated with refresh/renovation plans by national restaurant accounts and global chains; growth in demand for foodservice equipment by customers in emerging markets; and demand for quick service restaurants (QSR) chains and kiosks.

Corporate (including factors that may affect both of our segments)~~—changes~~-changes in laws and regulations, as well as their enforcement, throughout the world; the ability to finance, complete, successfully integrate, and/or ~~successfully integrate,~~transition, restructure and consolidate acquisitions, divestitures, strategic alliances and joint ventures; in connection with acquisitions, divestitures, strategic alliances and joint ventures, the finalization of the price and other terms, the realization of contingencies consistent with any established reserves, unanticipated issues associated with transitional services, realization of anticipated earnings enhancements, cost savings, strategic options and other synergies, and the anticipated timing to realize those savings, synergies, and options; the successful development of innovative products and market acceptance of new and innovative products; the ability to focus and actualize on product quality and reliability; issues ~~related~~relating to the ability to timely and efficiently execute on manufacturing strategies, including issues relating to new plant start-ups, plant closings, and/or ~~consolidation~~consolidations of existing ~~facilities;~~facilities and operations; efficiencies and capacity utilization of facilities; actions of competitors, including competitive pricing; availability of certain raw materials; changes in raw materials and commodity prices; unexpected issues associated with the quality of materials and components sourced from third parties and resolution of those issues; ~~issues associated with new product introductions;~~ matters impacting the successful and timely implementation of ERP systems; changes in domestic and international economic and industry conditions, including steel industry conditions; changes in the markets we serve; unexpected issues associated with the availability of local suppliers and skilled labor; changes in the interest rate environment; risks associated with growth; foreign currency fluctuations and their impact on reported results and hedges in place; world-wide political risk; geographic factors and economic risks; pressure of additional financing leverage; ~~success in increasing manufacturing efficiencies and capacities;~~ unanticipated changes in revenue, margins, costs and capital expenditures; work stoppages, labor negotiations, rates and temporary labor; issues associated with workforce reductions and subsequent ramp-up; ~~actions of competitors;~~ unanticipated changes in consumer spending; the ability of our customers to obtain financing; the state of financial and credit markets; the ability to generate cash and manage working capital consistent with our stated goals; non-compliance with debt covenants; ~~changes in tax laws;~~ unexpected issues affecting the effective tax rate for the year; unanticipated issues associated with the resolution or settlement of uncertain tax positions; unfavorable resolution of a tax matter with the IRS related to the calendar years 2008 and 2009; unanticipated changes in customer demand; the ability to increase operational efficiencies across each of the ~~company’s~~company's business segments and capitalize on those efficiencies; the ability to capitalize on key strategic opportunities; natural disasters disrupting commerce in one or more regions of the world; acts of terrorism; government approval and funding of projects and the effects of U.S. government budget sequestration; and other events outside our control.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

The company’s market risk disclosures have not materially changed since the ~~2011~~2012 Form 10-K was filed. The company’s quantitative and qualitative disclosures about market risk are incorporated by reference from Part II, Item 7A of the company’s Annual Report on Form 10-K, for the year ended December 31, ~~2011.~~

2012.

Item 4. Controls and Procedures

Disclosure Controls and Procedures: The company’s management, with the participation of the company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the company’s disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the company in the reports that it files or submits under the Exchange Act, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

Changes in Internal Control Over Financial Reporting: Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). During the period covered by this report, we made no changes which have materially affected, or which are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

The company’s risk factors disclosures have not materially changed since the ~~2011~~2012 Form 10-K was filed. The company’s risk factors are incorporated by reference from Part I, Item 1A of the company’s Annual Report on Form 10-K for the year ended December 31, ~~2011.~~

2012.

Item 6. Exhibits

(a) Exhibits: See exhibit index following the signature page of this Report, which is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: August ~~7, 2012~~ 2, 2013	The Manitowoc Company, Inc.
	(Registrant)


	/s/ Glen E. Tellock
	Glen E. Tellock
	Chairman and Chief Executive Officer

	/s/ Carl J. Laurino
	Carl J. Laurino
	Senior Vice President and Chief Financial Officer

THE MANITOWOC COMPANY, INC.

EXHIBIT INDEX

TO FORM 10-Q

FOR QUARTERLY PERIOD ENDED

~~JUNE~~June 30, ~~2012~~2013

Exhibit No.

Description

Filed/Furnished
Herewith

31

Rule 13a - 14(a)/15d - 14(a) Certifications

X
(1)

32.1

Certification of CEO pursuant to 18 U.S.C. Section 1350

X
(2)

32.2

Certification of CFO pursuant to 18 U.S.C. Section 1350

X
(2)

101

The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) related notes.

X
(1)



Exhibit No.	Description	Filed/Furnished Herewith

3.1	The Manitowoc Company, Inc. Amended and Restated Articles of Incorporation, effective as of May 7, 2013. (Reflects correction of a clerical error included in previous filing of this exhibit.)	X	(1)

10.1	Form of Performance Share Award Agreement under The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan.	X	(1)

10.2	Form of Restricted Stock Award Agreement for Directors under The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan.	X	(1)

10.3	Form of Restricted Stock Award Agreement for Employees under The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan.	X	(1)

10.4	Form of Restricted Stock Unit Award Agreement for Directors under The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan.	X	(1)

10.5	Form of Restricted Stock Unit Award Agreement for Employees under The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan.	X	(1)

10.6	Form of Non-Qualified Stock Option Award Agreement under The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan.	X	(1)

10.7	Form of Incentive Award Agreement under The Manitowoc Company, Inc. 2013 Omnibus Incentive Plan.	X	(1)

31	Rule 13a - 14(a)/15d - 14(a) Certifications	X	(1)

32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350	X	(2)

32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350	X	(2)

101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) related notes.	X	(1)

(1)Filed Herewith

(2)Furnished Herewith

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
Net sales	$	1,005.9		$	949.8		$	1,866.0		$	1,682.0

Costs and expenses:
Cost of sales	756.2			724.8			1,410.1			1,276.5
Engineering, selling and administrative expenses	151.1			145.4			299.5			285.6
Restructuring expense	0.2			2.0			0.9			2.9
Amortization expense	9.5			9.6			19.1			19.3
Other	0.1			0.1			0.1			0.1
Total operating costs and expenses	917.1			881.9			1,729.7			1,584.4

Earnings (loss) from operations	88.8			67.9			136.3			97.6

Other income (expenses):
Amortization of deferred financing fees	(2.1		)	(2.7		)	(4.1		)	(6.0		)
Interest expense	(33.8		)	(38.3		)	(66.8		)	(77.7		)
Loss on debt extinguishment	—			(24.2		)	—			(27.8		)
Other income (expense), net	1.9			0.3			0.3			1.1
Total other income (expenses)	(34.0		)	(64.9		)	(70.6		)	(110.4		)

Earnings (loss) from continuing operations before taxes on income	54.8			3.0			65.7			(12.8		)
Provision (benefit) for taxes on income	14.4			0.6			26.8			2.0
Earnings (loss) from continuing operations	40.4			2.4			38.9			(14.8		)

Discontinued operations:
Earnings (loss) from discontinued operations, net of income taxes of $0.0, ($0.2), ($0.2) and ($1.9), respectively	(0.2		)	(0.3		)	(0.5		)	(3.0		)
Gain (loss) on sale of discontinued operations, net of income taxes of $0.0, ($0.7), $0.0 and $29.0, respectively	—			(0.2		)	—			(33.6		)
Net earnings (loss)	40.2			1.9			38.4			(51.4		)
Less: Net loss attributable to noncontrolling interest, net of income taxes	(2.3		)	(1.1		)	(4.2		)	(2.0		)
Net earnings (loss) attributable to Manitowoc	$	42.5		$	3.0		$	42.6		$	(49.4	)

Amounts attributable to the Manitowoc common shareholders:
Earnings (loss) from continuing operations	$	42.7		$	3.5		$	43.1		$	(12.8	)
Earnings (loss) from discontinued operations, net of income taxes	(0.2		)	(0.3		)	(0.5		)	(3.0		)
Loss on sale of discontinued operations, net of income taxes	—			(0.2		)	—			(33.6		)
Net earnings (loss) attributable to Manitowoc	$	42.5		$	3.0		$	42.6		$	(49.4	)

Basic earnings (loss) per common share:
Earnings (loss) from continuing operations attributable to Manitowoc common shareholders	$	0.33		$	0.03		$	0.33		$	(0.10	)
Earnings (loss) from discontinued operations attributable to Manitowoc common shareholders	(0.00		)	(0.00		)	(0.00		)	(0.02		)
Loss on sale of discontinued operations, net of income taxes	—			(0.00		)	—			(0.26		)
Earnings (loss) per share attributable to Manitowoc common shareholders	$	0.33		$	0.02		$	0.33		$	(0.38	)

Diluted earnings (loss) per common share:
Earnings (loss) from continuing operations attributable to Manitowoc common shareholders	$	0.32		$	0.03		$	0.32		$	(0.10	)
Earnings (loss) from discontinued operations attributable to Manitowoc common shareholders	(0.00		)	(0.00		)	(0.00		)	(0.02		)
Loss on sale of discontinued operations, net of income taxes	—			(0.00		)	—			(0.26		)
Earnings (loss) per share attributable to Manitowoc common shareholders	$	0.32		$	0.02		$	0.32		$	(0.38	)

Weighted average shares outstanding — basic	130,575,165			130,457,059			130,562,923			130,440,221
Weighted average shares outstanding — diluted	133,392,079			133,822,522			133,552,797			130,440,221

	June 30,			December 31,
	2012			2011
Assets
Current Assets:
Cash and cash equivalents	$	56.8		$	68.6
Marketable securities	2.6			2.7
Restricted cash	10.1			7.2
Accounts receivable, less allowances of $12.5 and $12.8, respectively	326.3			297.0
Inventories — net	808.6			668.7
Deferred income taxes	120.0			117.8
Other current assets	98.2			77.8
Total current assets	1,422.6			1,239.8

Property, plant and equipment — net	555.8			568.2
Goodwill	1,157.9			1,164.8
Other intangible assets — net	826.3			851.8
Other non-current assets	149.1			140.6
Total assets	$	4,111.7		$	3,965.2

Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses	$	847.3		$	869.8
Current portion of long-term debt and short-term borrowings	116.6			79.1
Product warranties	92.4			93.8
Customer advances	23.6			35.1
Product liabilities	27.0			26.8
Total current liabilities	1,106.9			1,104.6
Non-Current Liabilities:
Long-term debt	1,946.2			1,810.9
Deferred income taxes	215.8			215.8
Pension obligations	88.3			90.6
Postretirement health and other benefit obligations	60.5			59.8
Long-term deferred revenue	32.4			34.2
Other non-current liabilities	163.2			175.8
Total non-current liabilities	2,506.4			2,387.1

Commitments and contingencies (Note 14)

Total Equity:
Common stock (300,000,000 shares authorized, 163,175,928 shares issued, 132,304,552 and 131,884,765 shares outstanding, respectively)	1.4			1.4
Additional paid-in capital	480.5			470.8
Accumulated other comprehensive income (loss)	(38.8		)	(15.0		)
Retained earnings	156.2			113.6
Treasury stock, at cost (30,871,376 and 31,291,163 shares, respectively)	(86.8		)	(87.4		)
Total Manitowoc stockholders’ equity	512.5			483.4
Noncontrolling interest	(14.1		)	(9.9		)
Total equity	498.4			473.5
Total liabilities and equity	$	4,111.7		$	3,965.2

	Fair Value as of June 30, 2012
(in millions)	Level 1		Level 2		Level 3		Total

Current Assets:
Foreign currency exchange contracts	$	—	$	0.9	$	—	$	0.9
Marketable securities	2.6		—		—		2.6
Total current assets at fair value	$	2.6	$	0.9	$	—	$	3.5

Non-Current Assets:
Interest rate swap contracts	$	—	$	12.0	$	—	$	12.0
Total non-current assets at fair value	$	—	$	12.0	$	—	$	12.0

Current Liabilities:
Foreign currency exchange contracts	$	—	$	6.3	$	—	$	6.3
Commodity contracts	—		2.7		—		2.7
Interest rate swap contracts	—		4.8		—		4.8
Total current liabilities at fair value	$	—	$	13.8	$	—	$	13.8

	Fair Value as of December 31, 2011
(in millions)	Level 1		Level 2		Level 3		Total

Current Assets:
Foreign currency exchange contracts	$	—	$	0.8	$	—	$	0.8
Marketable securities	2.7		—		—		2.7
Total current assets at fair value	$	2.7	$	0.8	$	—	$	3.5

Non-current Assets:
Interest rate swap contracts	$	—	$	0.5	$	—	$	0.5
Interest rate cap contracts	—		0.3		—		0.3
Total non-current assets at fair value	$	—	$	0.8	$	—	$	0.8

Current Liabilities:
Foreign currency exchange contracts	$	—	$	6.7	$	—	$	6.7
Commodity contracts	—		2.4		—		2.4
Total current liabilities at fair value	$	—	$	9.1	$	—	$	9.1

Non-current Liabilities:
Interest rate swap contracts	$	—	$	9.5	$	—	$	9.5
Total non-current liabilities at fair value	$	—	$	9.5	$	—	$	9.5

	Units Hedged
Commodity	June 30, 2012	December 31, 2011		Type
Aluminum	1,851	1,254	MT	Cash Flow
Copper	657	684	MT	Cash Flow
Natural Gas	228,144	346,902	MMBtu	Cash Flow
Steel	11,177	8,231	Tons	Cash Flow

	Units Hedged
Short Currency	June 30, 2012	December 31, 2011	Type
Canadian Dollar	12,867,509	25,083,644	Cash Flow
European Euro	110,154,200	67,565,453	Cash Flow
South Korean Won	2,917,017,180	3,224,015,436	Cash Flow
Singapore Dollar	4,800,000	4,800,000	Cash Flow
United States Dollar	4,625,664	5,538,777	Cash Flow
Chinese Renminbi	108,083,900	111,177,800	Cash Flow

		ASSET DERIVATIVES
		June 30, 2012		December 31, 2011
(in millions)	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign exchange contracts	Other current assets	$	0.8	$	0.6
Interest rate swap contracts: Fixed-to-float	Other non-current assets	12.0		0.5
Interest rate cap contracts	Other non-current assets	—		0.3
Total derivatives designated as hedging instruments		$	12.8	$	1.4

		LIABILITY DERIVATIVES
		June 30, 2012		December 31, 2011
(in millions)	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Foreign exchange contracts	Accounts payable and accrued expenses	$	5.5	$	5.2
Commodity contracts	Accounts payable and accrued expenses	2.7		2.5
Total derivatives designated as hedging instruments		$	8.2	$	7.7

Derivatives in Cash Flow Hedging	Amount of Gain or (Loss) on Derivative Recognized in OCI (Effective Portion, net of tax)						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Relationships (in millions)	June 30, 2012			June 30, 2011			(Effective Portion)	June 30, 2012			June 30, 2011
Foreign exchange contracts	$	(2.4	)	$	(1.0	)	Cost of sales	$	(2.5	)	$	2.7
Interest rate swap & cap contracts	(0.1		)	—			Interest expense	—			(2.7		)
Commodity contracts	(2.7		)	(0.3		)	Cost of sales	(0.6		)	0.2
Total	$	(5.2	)	$	(1.3	)		$	(3.1	)	$	0.2

Derivatives	Location of Gain or (Loss) on Derivative Recognized in Income (Ineffective Portion and Amount Excluded from	Amount of Gain or (Loss) on Derivative Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Relationships (in millions)	Effectiveness Testing)	June 30, 2012			June 30, 2011
Commodity contracts	Cost of sales	$	(0.1	)	$	—
Total		$	(0.1	)	$	—

Derivatives Not Designated as	Location of Gain or (Loss) Recognized on Derivative in	Amount of Gain or (Loss) on Derivative Recognized in Income
Hedging Instruments (in millions)	Income	June 30, 2012			June 30, 2011
Foreign exchange contracts	Other income	$	(0.6	)	$	(0.6	)
Interest rate swaps	Other income	2.4			—
Total		$	1.8		$	(0.6	)

Derivatives	Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Relationships (in millions)	Effectiveness Testing)	June 30, 2012			June 30, 2011
Commodity contracts	Cost of sales	$	(0.2	)	$	—
Total		$	(0.2	)	$	—

Derivatives Not Designated as	Location of Gain or (Loss) Recognized in Income on	Amount of Gain or (Loss) Recognized in Income on Derivative
Hedging Instruments (in millions)	Derivative	June 30, 2012			June 30, 2011
Foreign exchange contracts	Other income	$	(1.4	)	$	(2.7	)
Interest rate swaps	Other income	4.7			$	—
Total		$	3.3		$	(2.7	)

(in millions)	Crane			Foodservice			Total
Gross balance as of January 1, 2011	$	279.0		$	1,414.5		$	1,693.5
Restructuring reserve adjustment	—			(3.0		)	(3.0		)
Foreign currency impact	(5.1		)	(0.3		)	(5.4		)
Gross balance as of December 31, 2011	$	273.9		$	1,411.2		$	1,685.1
Asset impairments	—			(520.3		)	(520.3		)
Net balance as of December 31, 2011	$	273.9		$	890.9		$	1,164.8

Foreign currency impact	$	3.8		$	0.2		$	4.0
Gross balance as of March 31, 2012	$	277.7		$	1,411.4		$	1,689.1
Foreign currency impact	(10.8		)	(0.1		)	(10.9		)
Gross balance as of June 30, 2012	$	266.9		$	1,411.3		$	1,678.2
Asset impairments	—			(520.3		)	(520.3		)
Net balance as of June 30, 2012	$	266.9		$	891.0		$	1,157.9

Year	Percentage
2015	104.250	%
2016	102.833	%
2017	101.417	%
2018 and thereafter	100.000	%

(in millions)	Retained Earnings		Noncontrolling Interest
Balance at December 31, 2011	$	113.6	$	(9.9	)
Net earnings (loss)	42.6		(4.2		)
Balance at June 30, 2012	$	156.2	$	(14.1	)

(in millions)	Six Months Ended June 30, 2012			Year Ended December 31, 2011
Balance at beginning of period	$	104.4		$	99.9
Accruals for warranties issued during the period	31.4			66.8
Settlements made (in cash or in kind) during the period	(32.6		)	(62.3		)
Currency translation	(1.1		)	—
Balance at end of period	$	102.1		$	104.4



(in millions)	Six Months Ended June 30, 2013			Year Ended December 31, 2012
Balance at beginning of period	$	101.4		$	103.7
Accruals for warranties issued during the period	30.9			57.1
Settlements made (in cash or in kind) during the period	(31.3		)	(59.9		)
Currency translation	(0.5		)	0.5
Balance at end of period	$	100.5		$	101.4

	Three Months Ended June 30, 2012								Six Months Ended June 30, 2012
	U.S.			Non-U.S.			Postretirement		U.S.			Non-U.S.			Postretirement
	Pension			Pension			Health and		Pension			Pension			Health and
(in millions)	Plans			Plans			Other Plans		Plans			Plans			Other Plans
Service cost - benefits earned during the period	$	—		$	0.6		$	0.2	$	—		$	1.1		$	0.4
Interest cost of projected benefit obligations	2.6			2.5			0.7		5.1			5.0			1.4
Expected return on plan assets	(2.6		)	(2.0		)	—		(5.1		)	(4.0		)	—
Amortization of actuarial net (gain) loss	0.7			0.2			0.1		1.4			0.4			0.2
Net periodic benefit costs	$	0.7		$	1.3		$	1.0	$	1.4		$	2.5		$	2.0

	Three Months Ended June 30, 2011								Six Months Ended June 30, 2011
	U.S.			Non-U.S.			Postretirement		U.S.			Non-U.S.			Postretirement
	Pension			Pension			Health and		Pension			Pension			Health and
(in millions)	Plans			Plans			Other Plans		Plans			Plans			Other Plans
Service cost - benefits earned during the period	$	—		$	0.5		$	0.2	$	—		$	0.9		$	0.4
Interest cost of projected benefit obligations	2.6			2.5			0.8		5.2			5.1			1.6
Expected return on plan assets	(2.4		)	(2.3		)	—		(4.8		)	(4.5		)	—
Amortization of actuarial net (gain) loss	0.4			0.1			0.1		0.8			0.2			0.2
Net periodic benefit costs	$	0.6		$	0.8		$	1.1	$	1.2		$	1.7		$	2.2



	Three Months Ended June 30, 2012								Six Months Ended June 30, 2012
	U.S.			Non-U.S.			Postretirement		U.S.			Non-U.S.			Postretirement
	Pension			Pension			Health and		Pension			Pension			Health and
(in millions)	Plans			Plans			Other Plans		Plans			Plans			Other Plans
Service cost - benefits earned during the period	$	—		$	0.6		$	0.2	$	—		$	1.1		$	0.4
Interest cost of projected benefit obligations	2.6			2.5			0.7		5.1			5.0			1.4
Expected return on plan assets	(2.6		)	(2.0		)	—		(5.1		)	(4.0		)	—
Amortization of actuarial net loss	0.7			0.2			0.1		1.4			0.4			0.2
Net periodic benefit costs	$	0.7		$	1.3		$	1.0	$	1.4		$	2.5		$	2.0

Restructuring Reserve Balance as of December 31, 2011		Restructuring Charges		Use of Reserve			Reserve Revisions		Restructuring Reserve Balance as of June 30, 2012
$	4.3	$	—	$	(1.8	)	$	—	$	2.5

							Non-
				Guarantor			Guarantor		��
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	664.1		$	499.9		$	(158.1	)	$	1,005.9
Costs and expenses:
Cost of sales	—			506.3			408.0			(158.1		)	756.2
Engineering, selling and administrative expenses	15.8			60.1			75.2			—			151.1
Restructuring expense	—			—			0.2			—			0.2
Amortization expense	—			7.7			1.8			—			9.5
Other	—			0.1			—			—			0.1
Equity in (earnings) loss of subsidiaries	(52.5		)	(5.7		)	—			58.2			—
Total costs and expenses	(36.7		)	568.5			485.2			(99.9		)	917.1

Operating earnings (loss) from continuing operations	36.7			95.6			14.7			(58.2		)	88.8

Other income (expenses):
Interest expense	(32.4		)	(0.4		)	(3.1		)	—			(35.9		)
Management fee income (expense)	15.4			(19.3		)	3.9			—			—
Other income (expense), net	12.5			(12.7		)	2.1			—			1.9
Total other income (expenses)	(4.5		)	(32.4		)	2.9			—			(34.0		)

Earnings (loss) from continuing operations before taxes on earnings	32.2			63.2			17.6			(58.2		)	54.8
Provision (benefit) for taxes on income	(10.3		)	22.5			2.2			—			14.4
Earnings (loss) from continuing operations	42.5			40.7			15.4			(58.2		)	40.4

Discontinued operations:
Earnings (loss) from discontinued operations, net of income taxes	—			(0.2		)	—			—			(0.2		)
Net earnings (loss)	42.5			40.5			15.4			(58.2		)	40.2
Less: Net gain (loss) attributable to noncontrolling interest	—			—			(2.3		)	—			(2.3		)
Net earnings (loss) attributable to Manitowoc	$	42.5		$	40.5		$	17.7		$	(58.2	)	$	42.5

Comprehensive income (loss) attributable to Manitowoc	$	(0.9	)	$	40.6		$	26.9		$	(67.5	)	$	(0.9	)

							Non-
				Subsidiary			Guarantor
	Parent			Guarantors			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used for) operating activities of continuing operations	$	(27.8	)	$	52.1		$	(145.6	)	$	—		$	(121.3	)
Cash provided by (used for) operating activities of discontinued operations	—			(0.5		)	—			—			(0.5		)
Net cash provided by (used for) operating activities	(27.8		)	51.6			(145.6		)	—			(121.8		)

Cash Flows from Investing:
Capital expenditures	(0.5		)	(17.0		)	(17.3		)	—			(34.8		)
Restricted cash	—			—			(3.0		)	—			(3.0		)
Proceeds from sale of property, plant and equipment	—			—			0.2			—			0.2
Intercompany investments	(60.8		)	(73.5		)	96.8			37.5			—
Net cash provided by (used for) investing activities	(61.3		)	(90.5		)	76.7			37.5			(37.6		)

Cash Flows from Financing:
Proceeds from revolving credit facility—net	107.9			—			40.9			—			148.8
Proceeds from long-term debt	—			—			64.9			—			64.9
(Payments on) long-term debt	(18.9		)	(0.3		)	(29.1		)	—			(48.3		)
Proceeds from (payments on) notes financing—net	(0.1		)	(1.3		)	(17.3		)	—			(18.7		)
Intercompany financing	0.1			46.8			(9.4		)	(37.5		)	—
Options exercised	1.6			—			—			—			1.6
Net cash provided by (used for) financing activities	90.6			45.2			50.0			(37.5		)	148.3

Effect of exchange rate changes on cash	—			—			(0.7		)	—			(0.7		)

Net increase (decrease) in cash and cash equivalents	1.5			6.3			(19.6		)	—			(11.8		)

Balance at beginning of period	4.2			8.5			55.9			—			68.6
Balance at end of period	$	5.7		$	14.8		$	36.3		$	—		$	56.8

	Trailing Twelve Months,
(in millions)	June 30, 2012
Net earnings (loss) attributable to Manitowoc	$	81.6
Loss from discontinued operations	1.1
Loss on sale of discontinued operations	1.0
Depreciation and amortization	114.0
Interest expense and amortization of deferred financing fees	144.3
Costs due to early extinguishment of debt	1.9
Restructuring charges	3.8
Income taxes	40.6
Other	(7.2		)
Adjusted EBITDA	$	381.1

Exhibit No.	Description	Filed/Furnished Herewith

31	Rule 13a - 14(a)/15d - 14(a) Certifications	X	(1)

32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350	X	(2)

32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350	X	(2)

101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) related notes.	X	(1)