The Manitowoc Company, Inc. 2008 Annual Report Changing the Balance

Heavy Lifting The Manitowoc Company, Inc. The Manitowoc Company, Inc. 2008 Annual Report A mega-crane like the 31000 2400 South 44th Street The Manitowoc Company, Inc. 2008 Annual Report requires a mega-sized load P.O. Box 66 block. Designed and manufac- Manitowoc, WI 54221-0066 tured in the Netherlands, the Changing the Balance 31000’s load block is 12 feet wide, measures 30 feet tall, and weighs 110,000 pounds. It is equipped with 22 sheaves that are reeved with two-inch diameter wire rope to provide the 44 parts of line the 31000 requires for its 2,500-ton maximum capacity. Financial Highlights Investor Information

Corporate Headquarters CEO Certifi cation to the New York Stock Exchange The Manitowoc Company, Inc. During 2008, the chief executive offi cer of the company timely 2400 South 44th Street submitted to the New York Stock Exchange the CEO certifi cation P.O. Box 66 required by Section 12(a) of the NYSE corporate governance listing Net Sales EBITDA Manitowoc, WI 54221-0066 standards. The certifi cation was not qualifi ed in any way. Additionally, ($ Millions) Since 2003, our EBITDA Telephone: 920-684-4410 the company’s principal executive offi cer and principal fi nancial offi cer has grown 522%, the Telefax: 920-652-9778 have timely submitted the certifi cations required by Section 302 of the result of increased Sarbanes-Oxley Act as exhibits to the company’s annual report on $1,331 $1,468 $2,028 $2,651 $3,684 $4,503 Independent Registered Public Accounting Firm profitability and value- Form 10-K. enhancing investments. PricewaterhouseCoopers LLP Millions of dollars, except employee, shareholder, 100 East Wisconsin Avenue Corporate Governance Guidelines, Code of Conduct & debt-to-capitalization, shares, per share, and return data For the Years Ended December 31 Suite 1800 Code of Ethics Milwaukee, WI 53202 The Manitowoc Company’s corporate governance guidelines, committee For the Year 2008 2007 % Change Stock Transfer Agent charters, code of conduct, and code of ethics are posted in the investor Net sales $4,503.0 $3,684.0 22.2% Computershare Trust Company, N.A. relations section of our Web site: www.manitowoc.com. This information Operating earnings from continuing operations $ 519.8 $ 475.8 9.2% may also be obtained by any shareholder, without charge, upon written First Class, Registered & Certifi ed Mail: request to: 03 04 05 06 07 08 EBITDA 639.8 573.6 11.5% P.O. Box 43078 Maurice D. Jones For the 14th consecutive Number of employees (approximate) 18,400 10,500 75.2% Providence, RI 02940-5068 Senior Vice President, General Counsel & Secretary year, Manitowoc reported Number of registered shareholders 2,512 2,520 -0.3% Overnight or Other Delivery: The Manitowoc Company, Inc. record revenues, with net P.O. Box 66 EVA® 250 Royall Street sales increasing 22% to Financial Position Canton, MA 02021-1011 Manitowoc, WI 54221-0066 $4.5 billion in 2008. ($ Millions) EVA $ 268.5 $ 207.0 29.7% Telephone: Dividends 4.6 15.6 22.6 Manitowoc has paid continuous dividends, without interruption, since -$ Total assets $6,065.4 $2,871.4 111.2% $ 1-866-641-4263 -$ Debt to capitalization 67.1% 14.6% — $116.9 $207.0 $268.5 1-800-952-9245 (Hearing impaired in US) 1971. The amount and timing of any dividend will be determined by the Board of Directors. Stockholders’ equity $1,299.8 $1,349.9 -3.7% 1-781-575-4592 (Hearing impaired outside US) Average shares outstanding (diluted) 129,930,749 127,489,416 1.9% Web site: Dividend Reinvestment & Stock Purchase Plan www.computershare.com/investor Computershare sponsors and administers a Dividend Reinvestment and Diluted Earnings per Share Stock Purchase Plan for The Manitowoc Company’s common stock. Annual Meeting Under this plan, shareholders may also purchase shares by investing Earnings from continuing operations $ 0.61 $ 2.47 The annual meeting of The Manitowoc Company shareholders will cash, as often as once a month, in varying amounts from $10 up to a be held at 9:00 a.m., CDT, Tuesday, May 5, 2009, at the Holiday Inn, Gain (loss) from discontinued operations, net of income taxes (1.10) 0.17 maximum of $120,000 each calendar year. Participation is voluntary. 03 04 05 06 07 08 4601 Calumet Avenue, Manitowoc, WI 54220. We encourage our To receive an information booklet and enrollment form, please Gain (loss) on sale or closure of discontinued operations, shareholders to participate in this meeting either in person or by proxy. contact our stock transfer agent, Computershare. net of income taxes 0.41 — Manitowoc’s commitment to generating shareholder Stock Listing & Related Information Investor Inquiries Net earnings $ (0.08) $ 2.64 value was reflected in the Manitowoc’s common stock is traded on the New York Stock Exchange Security analysts, portfolio managers, individual investors, and media 30% gain in EVA that the and is identifi ed by the ticker symbol MTW. Current trading volume, professionals seeking information about Manitowoc are encouraged to Diluted Earnings per Share Before Special Items company generated in share price, dividends, and related information can be found in the visit our Web site, or contact the following individuals: 2008. Rising $61 million fi nancial section of most daily newspapers. Diluted earnings (loss) per share $ (0.08) $ 2.64 above 2007’s results, Quarterly common stock price information for our three most recent Analysts & Portfolio Managers: Special items, net of tax: Manitowoc’s 2008 EVA fi scal years can be found on page 15 of our Form 10-K, which is part Carl J. Laurino Senior Vice President & Chief Financial Offi cer Loss (gain) on currency hedge 1.87 (0.01) set a single-year record of this annual report. Shares of Manitowoc’s common stock have been of $268.5 million. publicly traded since 1971. Telephone: 920-652-1720 Enodis results (net of interest expense) 0.25 — Telefax: 920-652-9775 Manitowoc Shareholders Pension settlements — 0.03 Media Inquiries: Crane segment restructuring expense 0.11 — On December 31, 2008, there were 130,359,554 shares of Mani- towoc common stock outstanding. On that date, there were 2,512 Steven C. Khail Early extinguishment of debt 0.02 0.06 shareholders of record. Director of Investor Relations & Corporate Communications Gain on sale of parts line — (0.02) Telephone: 920-652-1713 Form 10-K Report Telefax: 920-652-9775 Gain on sale of Marine segment (0.41) — Each year, Manitowoc fi les its Annual Report on Form 10-K with the Impairment charge related to discontinued operation 1.33 (0.02) Securities and Exchange Commission. Most of the fi nancial information General Inquiries: contained in that report is included in this Annual Report to Shareholders. Joan E. Risch Diluted earnings per share before special items $ 3.10 $ 2.68 Shareholder Relations A copy of Form 10-K, as fi led with the Securities and Exchange Commission for 2008, may be obtained by any shareholder, without Telephone: 920-652-1731 Other Information Telefax: 920-652-9775 Cash Flow charge, upon written request to: Net cash provided by operating activities $ 309.0 $ 244.0 26.6% from Operations Steven C. Khail Join MTW on the Internet Director of Investor Relations & Corporate Communications About the Cover Property, plant and equipment, net $ 728.8 $ 468.9 55.4% Solid cash flow gives Manitowoc provides a variety of information about its businesses, The Manitowoc Company, Inc. Our 2008 acquisition Capital expenditures $ 150.3 $ 112.8 33.2% us the flexibility to fund products, and markets at its Web site address: www.manitowoc.com. P.O. Box 66 of Enodis plc—the largest Depreciation $ 80.2 $ 80.2 0.0% capital investments that Equal Opportunity fuel our growth and to Manitowoc, WI 54221-0066 in our history—coupled Amortization $ 11.6 $ 5.8 100.0% Manitowoc believes that a diverse workforce is required to compete with the divestiture of our reduce our debt. It also successfully in today’s global marketplace. The company provides equal former Marine segment, Dividends paid $ 10.4 $ 9.5 9.5% reflects our operational employment opportunities in its global operations without regard to has changed the face of Net debt $2,482.3 $ (136.3) — efficiency, global scale, race, color, age, gender, religion, national origin, or physical disability. The Manitowoc Company. Return on invested capital 18.5% 23.8% and expanding revenue It gives our Foodservice Return on equity of continuing operations 6.1% 23.3% base. In 2008, Manitowoc generated $309 million portfolio greater balance Return on assets of continuing operations 1.3% 11.0% between hot and cold in cash from its operating equipment. It also gives activities, a 27% improve- us two global growth ment over 2007. platforms in Cranes and Foodservice that will generate more stable earnings going forward. This report is printed on recycled and recyclable paper using soy-based ink.

1103637_Cover03637_Cover 2 33/19/09/19/09 77:58:37:58:37 PPMM Business Segment Manitowoc’s Revenues 2008 Manitowoc’s Strategic Balance Corporate Values Cranes Foodservice • Integrity 86% 14% • Commitment to Stakeholders • Passion for Excellence

Growth Lifting Global Global market Economies Balanced Growth leadership in Manitowoc Cranes Since 1995, Manitowoc the Crane and continues to introduce has used organic growth Foodservice powerful new products and strategic acquisitions businesses. that do the heavy lifting to build two fast-growing, to expand the infra- global platforms. Our structures and energy Crane and Foodservice Innovation grids of developed and businesses bring power- Continuous emerging economies ful, innovative brands to development around the world. every market segment of new and in- Pages 10-13 we serve. Pages 6-9 novative products, processes, and services.

Customer Focus Letter to Shareholders Fully integrated Chairman, President, and global company CEO Glen Tellock dis- that is a flexible cusses how Manitowoc business partner. will continue to manage through the current Excellence business cycle to emerge in Operations as a stronger company. Drive world-class Pages 2-3 performance in our manufactur- New Ideas ing and business Manitowoc Foodservice practices. is partnering with customers to develop appetizing Aftermarket new menus and to create Services the high performance Deliver superior kitchens of the future. value through Pages 14-17 world-class after- New Talent market service Mike Kachmer, President and support. of Manitowoc Foodservice, is leading the integration People and of two entrepreneurial, Organizational customer-focused busi- Development nesses. Page 5 Attract, engage, and develop top talent to lead global businesses.

Value Creation Generate year-over- year improvement in Economic Value- Financial Discipline Added. Senior Vice President and Partners in Success CFO Carl Laurino puts the Eric Etchart, President Enodis acquisition in per- of Manitowoc Cranes, spective and discusses explains how superior Manitowoc’s financial products and aftermar- priorities for 2009. ket services create a Pages 18-19 sustainable competitive advantage. Page 4

1 Letter to Shareholders Dear Fellow Shareholders Large-scale construction and foodservice are forward-looking businesses. Our cranes stand at the forefront of economic growth, doing the heavy lifting that builds infrastructure, expands industry, and delivers energy and other vital resources to developed and emerging markets. And customers in the foodservice sector rely on constant innovation to stay ahead of consumer trends and make their operations faster, safer, and more efﬁ cient. We recognize that in these difﬁ cult economic times, we must continue to listen to the “voice of the customer” and work even more closely with them. Our solutions will help their businesses prosper while driving revenue opportunities for Manitowoc. It’s our responsibility to also make tough decisions to keep The Manitowoc Company moving forward. That means adapting our growth strategy to respond to changing business conditions. Knowing our costs and working relentlessly to optimize the returns on our capital and assets. And looking beyond the current market cycle to anticipate the products, technologies, and services our customers will need, and where they will need them.

“Manitowoc enters Fiscal 2008 was no exception. Before the near to achieve it. We have already extinguished $300 2009 as a more collapse of the banking industry, we completed million of Enodis debt and plan to reduce our total balanced busi- the largest single acquisition in our history—a debt aggressively by the end of 2009. We have ness, with global bold move that sets the table for leadership in the also identified $80 million in synergies in the scale and product global foodservice equipment industry. We built Foodservice business that we expect to achieve leadership in two manufacturing capacity in emerging markets to by 2011, with approximately one-third of them industries tied to meet demand for our high-performance cranes. attainable in 2009. The integration of Enodis is economic growth.” We divested our legacy shipbuilding business under way and on track, and we are managing to achieve a more balanced portfolio and create it proactively. room to grow. We continued to implement a We also draw confidence from our 14 proven business strategy to deliver solid EVA per- consecutive years of record revenues. Our formance. And once again, we managed through installed base of cranes and foodservice a very challenging economic cycle to generate equipment testifies to the strength of both record financial results: our brands and our long-standing customer relationships. It also provides a solid founda- • Net sales from continuing operations increased tion to generate revenues by refurbishing, to a record $4.5 billion, up 22% from $3.7 replacing, and servicing equipment. Though billion in 2007; it’s impossible to predict when many projects • Operating earnings from continuing operations and orders will move forward, we continue to reached a record $519.8 million, up 9% from maintain a backlog of crane orders, a global the previous year; platform, and two market-leading businesses • Cash from operations increased 27% to $309 that can generate significant cash flow in good million; and times and bad. “Our installed • EVA totaled $268.5 million, up 30% from $207 base of cranes million in 2007. A Proven Strategy and foodservice In 1990, Manitowoc was a company at the cross- equipment testifies Under normal circumstances, this performance roads. With sales of $225.8 million and operating to the strength of would result in higher demand for Manitowoc earnings of $25.3 million, we needed a strategic both our brands stock. But these are extraordinary times. Some path to growth. We responded by developing and our long- investors express concern about our newly disciplined strategies, executing them relentlessly, standing customer leveraged balance sheet at a time when debt has and delivering on our promises. We completed relationships.” become unfashionable. Others question whether and successfully integrated large acquisitions, tight credit markets and global economic uncer- while investing in organic growth. Our commit- tainty will reduce demand for our products and ment to EVA has consistently yielded strong services. Amid this external uncertainty, we ended cash flow and earnings. We built the scale the year with the company’s stock price at $8.66, to grow with our global customers, with greater Glen E. Tellock down 82% from the $48.83 at the end of 2007. access to global end markets, market-leading Chairman, President & We take a long-term perspective that’s rooted product lines on both sides of our business, and Chief Executive Officer in our direct experience. As with past acquisitions, support services that deliver real value. Over this we’ve made immediate debt reduction our highest period, both sales and operating earnings have priority and are implementing a focused strategy grown twentyfold.

2 In this context, the Enodis acquisition was not Our Foodservice business will integrate its only opportunistic, but it was the right decision to worldwide facilities and extend its leadership in drive our future growth. It provides greater stabil- technology and innovation to meet the changing ity to our underlying earnings power at a time needs of local, regional, and global customers. and when demand for cranes is softening. It increases We will support global restaurant chains as they Foodservice revenues to a projected $1.7 billion introduce new menu items and target growth in 2009. It expands our global manufacturing economies in Asia and Latin America. We will mi- capabilities and worldwide distribution network. grate certain products across divisions to a single Q A And our shared focus on innovation is taking us platform that supports the high performance beyond products and services to “Kitchenology.” kitchen—and collaborate with customers to bring I speak for all of us at What is your strategy for growing that deliver greater capacities, efficiency, and Manitowoc in expressing Working closely with customers, we’re developing together people, food, and equipment. We will Q Manitowoc’s crane business? Crane Segment performance. our deepest gratitude as For example, we designed our new Potain high-performance solutions that combine culinary also cross-sell our hot and cold products to global Terry Growcock retires Over the last eight years, we’ve generated Questions and Answers MDT 368 tower crane to accelerate erecting and research and development with innovations that customers who seek to replace aging installed after 15 years of inspired “ …we’ve made imme- conserve energy, enhance safety, and improve equipment with new technologies that improve leadership. A consistent growth by combining disciplined dismantling times by developing an innovative diate debt reduction operating efficiency. food safety, conserve energy, enhance perfor- Terry had a clear vision acquisitions with investments in organic growth. hinge that enables the crane’s counterjib to fold our highest priority After two years of emphasizing growth during mance, and respond to environmental concerns. of Manitowoc as a truly This strategy has increased our revenues for transport. Equally impressive, our new 31000 and are implementing the most recent up cycle, we’re ready to imple- Market challenges in 2009 may slow our growth, global company. He was twelvefold, culminating with 20% top line growth crawler crane features a patented counterweight a focused strategy to ment other levers of our strategy to control all but we are encouraged by this industry’s positive devoted to the strategies in 2008 and record revenues of $3.88 billion. system that minimizes its tailswing and reduces achieve it.” the variables we can. The senior management long-term trends. put together with his teams We’ve made prudent investments in China, India, ground-bearing pressure, while providing up to team understands very clearly our responsibility Years from now, we will look back on 2008 and brought the needed and Slovakia. We’ve modernized and expanded 2,500 tons of lift capacity. focus to successfully for future success—and for making the most of as a transformative year in which bold decisions our capacity in the United States and Europe. implement those strate- We’ve nurtured a new product pipeline that in- What measures are you taking to ad- what we’ve done in both businesses. In today’s shaped our future. We moved forward with the gies. He also displayed the cludes 29 new products that will come to market Q dress the economic downturn? economic environment, the following business Enodis acquisition and transformed Manitowoc utmost confi dence in his objectives will guide us as we continue to focus Foodservice into a global leader. By divesting our team to carry forward. in the near future. These initiatives—along with on our customers and generate cash: legacy Marine segment, we gave that business— Looking back, it’s clear ongoing investments in Lean Manufacturing and We manage through up and down cycles by and ours—better opportunities to grow. We con- that these elements—and other process improvements—give us the global A staying focused on the strategic imperatives • Target $1 billion of debt reduction since funding solidated our customer finance capabilities under Terry’s drive to execute infrastructure and market-leading products to that drive our success. In 2008, we saw a reces- the Enodis acquisition; Manitowoc Finance and positioned it to support our strategies—have respond to opportunities in both developed and sion grip our key European and North American • Successfully integrate the Enodis businesses both our Crane and Foodservice customers. We positioned Manitowoc to emerging markets. markets, while certain emerging markets began and realize $29 million of synergies in 2009; continued to invest in aftermarket services such weather these diffi cult to lose momentum. We acted quickly to reduce times and come out stron- • Finalize detailed plans to realize $77 million as CraneSTAR and upgraded our support infra- What are your key competitive advantages in our fixed costs and increase our focus on quality ger than our competitors. of synergies in 2010; structure to give customers 24/7/365 access to Q this business? and operational excellence. For example, we As our company strengthened our global procurement process, • Apply internally focused objectives in Cranes crane parts, service, technical support, technical continues to evolve, we Our large and growing installed base of so we can maintain pricing and protect margins to support operational excellence; and publications, and training. And when economic will remember fondly the • Continue to monitor business conditions and conditions deteriorated, we took the tough, but exciting, challenging, and A cranes testifies to the value we deliver to in the face of today’s high steel costs. We also “ Years from now, we take appropriate actions. necessary, steps to reduce our expenses. In the fulfi lling experiences we customers around the world. We listen constantly invested in operational excellence. Across our will look back on 2008 process, we positioned Manitowoc as a company shared—and draw inspira- to our customers and turn customer needs into global network, Lean Manufacturing and Six as a transformative Changing the Balance that will reward shareholders as economic condition from Terry’s unwaver- such new market-focused products as the in- Sigma initiatives are improving quality and accel- year in which bold Manitowoc enters 2009 as a more balanced tions improve. ing passion for Manitowoc. novative GTK1100 and our 31000 mega-crawler erating our time to market. Over the longer term, decisions shaped business, with global scale and product leader- Success like this cannot happen without the crane, both of which target major opportunities in we will benefit from a global ERP program, which With appreciation and our future.” ship in two industries tied to economic growth. talent and commitment of associates across the the energy sector. will begin to roll out in Portugal this spring. best wishes, In the crane business, we will grow our cus- organization. Their efforts to improve quality, We also leverage our flexible global manu- What opportunities does the economic tomer base by delivering superior value in difficult control costs, and support our customers truly set facturing network to shift work to meet local Glen Tellock downturn present? times. We will differentiate ourselves based on our us apart and drive our financial performance. We demand, while sourcing components and com- Q strong brands, market-leading positions, robust are committed to listening to their ideas and doing modities and manufacturing products close to In tough economic times, customers turn pipeline of 29 new products, and strong customer what it takes to make Manitowoc a great place their points of use. to brands they can trust and seek partners relationships. We will create operating efficien- to work. Lastly, we also thank our customers, Our aftermarket services represent another A who deliver the greatest overall value. Today, cus- cies by rationalizing our global manufacturing suppliers, and shareholders for their continued competitive strength. With Manitowoc Crane tomers are demanding shorter build and delivery operations to take better advantage of low-cost support and encouragement. Together, we will Care, we operate the industry’s broadest after- times. Our unique global manufacturing footprint production in our Asian and Central European fac- channel our experience and determination to market product support system. Our network combined with Lean Manufacturing programs, tories. Programs are already under way to transfer manage through the current business cycle and of 22 logistics and distribution centers provide a new global ERP system, and optimized supply skills and production capabilities between regions, embrace the opportunities ahead. 24/7/365 access, and use active displays to chain management will enable us to respond to so we can deliver design, production, and service monitor quality and performance. In 2009, we’ll accelerated timetables. We’re also partnering close to our customers. We will also benefit from introduce CraneSTAR to help customers improve with customers on quality initiatives, including the strength of our global Crane Care aftermarket fleet maintenance and uptime even further. new field reliability tests for new products and service network, which will provide steady rev- Glen E. Tellock an innovative fleet management program. Finally, enue as we help customers optimize their existing Chairman, President & Chief Executive Officer How are customer needs driving product we’re giving customers the financial support they equipment. Though challenges in 2009 will not be Q innovation? need in today’s tight credit environment. Mani- limited to specific geographies and product lines, towoc Finance has just introduced a financing we are uniquely able to create value by providing New products are our lifeblood, and program for smaller retail customers in the total life cycle support through remanufacturing, A customers are a leading source of new United States and for large distributors who Crane Care, and other aftermarket services. ideas. We understand their strategic needs and Eric Etchart the requirements of different markets, and we President need to upgrade their rental fleets. turn these insights into innovative products Manitowoc Cranes

3 4 In this context, the Enodis acquisition was not Our Foodservice business will integrate its only opportunistic, but it was the right decision to worldwide facilities and extend its leadership in drive our future growth. It provides greater stabil- technology and innovation to meet the changing ity to our underlying earnings power at a time needs of local, regional, and global customers. and when demand for cranes is softening. It increases We will support global restaurant chains as they Foodservice revenues to a projected $1.7 billion introduce new menu items and target growth in 2009. It expands our global manufacturing economies in Asia and Latin America. We will mi- capabilities and worldwide distribution network. grate certain products across divisions to a single Q A And our shared focus on innovation is taking us platform that supports the high performance beyond products and services to “Kitchenology.” kitchen—and collaborate with customers to bring I speak for all of us at What is your strategy for growing that deliver greater capacities, efficiency, and Manitowoc in expressing Working closely with customers, we’re developing together people, food, and equipment. We will Q Manitowoc’s crane business? Crane Segment performance. our deepest gratitude as For example, we designed our new Potain high-performance solutions that combine culinary also cross-sell our hot and cold products to global Terry Growcock retires Over the last eight years, we’ve generated Questions and Answers MDT 368 tower crane to accelerate erecting and research and development with innovations that customers who seek to replace aging installed after 15 years of inspired “ …we’ve made imme- conserve energy, enhance safety, and improve equipment with new technologies that improve leadership. A consistent growth by combining disciplined dismantling times by developing an innovative diate debt reduction operating efficiency. food safety, conserve energy, enhance perfor- Terry had a clear vision acquisitions with investments in organic growth. hinge that enables the crane’s counterjib to fold our highest priority After two years of emphasizing growth during mance, and respond to environmental concerns. of Manitowoc as a truly This strategy has increased our revenues for transport. Equally impressive, our new 31000 and are implementing the most recent up cycle, we’re ready to imple- Market challenges in 2009 may slow our growth, global company. He was twelvefold, culminating with 20% top line growth crawler crane features a patented counterweight a focused strategy to ment other levers of our strategy to control all but we are encouraged by this industry’s positive devoted to the strategies in 2008 and record revenues of $3.88 billion. system that minimizes its tailswing and reduces achieve it.” the variables we can. The senior management long-term trends. put together with his teams We’ve made prudent investments in China, India, ground-bearing pressure, while providing up to team understands very clearly our responsibility Years from now, we will look back on 2008 and brought the needed and Slovakia. We’ve modernized and expanded 2,500 tons of lift capacity. focus to successfully for future success—and for making the most of as a transformative year in which bold decisions our capacity in the United States and Europe. implement those strate- We’ve nurtured a new product pipeline that in- What measures are you taking to ad- what we’ve done in both businesses. In today’s shaped our future. We moved forward with the gies. He also displayed the cludes 29 new products that will come to market Q dress the economic downturn? economic environment, the following business Enodis acquisition and transformed Manitowoc utmost confi dence in his objectives will guide us as we continue to focus Foodservice into a global leader. By divesting our team to carry forward. in the near future. These initiatives—along with on our customers and generate cash: legacy Marine segment, we gave that business— Looking back, it’s clear ongoing investments in Lean Manufacturing and We manage through up and down cycles by and ours—better opportunities to grow. We con- that these elements—and other process improvements—give us the global A staying focused on the strategic imperatives • Target $1 billion of debt reduction since funding solidated our customer finance capabilities under Terry’s drive to execute infrastructure and market-leading products to that drive our success. In 2008, we saw a reces- the Enodis acquisition; Manitowoc Finance and positioned it to support our strategies—have respond to opportunities in both developed and sion grip our key European and North American • Successfully integrate the Enodis businesses both our Crane and Foodservice customers. We positioned Manitowoc to emerging markets. markets, while certain emerging markets began and realize $29 million of synergies in 2009; continued to invest in aftermarket services such weather these diffi cult to lose momentum. We acted quickly to reduce times and come out stron- • Finalize detailed plans to realize $77 million as CraneSTAR and upgraded our support infra- What are your key competitive advantages in our fixed costs and increase our focus on quality ger than our competitors. of synergies in 2010; structure to give customers 24/7/365 access to Q this business? and operational excellence. For example, we As our company strengthened our global procurement process, • Apply internally focused objectives in Cranes crane parts, service, technical support, technical continues to evolve, we Our large and growing installed base of so we can maintain pricing and protect margins to support operational excellence; and publications, and training. And when economic will remember fondly the • Continue to monitor business conditions and conditions deteriorated, we took the tough, but exciting, challenging, and A cranes testifies to the value we deliver to in the face of today’s high steel costs. We also “ Years from now, we take appropriate actions. necessary, steps to reduce our expenses. In the fulfi lling experiences we customers around the world. We listen constantly invested in operational excellence. Across our will look back on 2008 process, we positioned Manitowoc as a company shared—and draw inspira- to our customers and turn customer needs into global network, Lean Manufacturing and Six as a transformative Changing the Balance that will reward shareholders as economic condition from Terry’s unwaver- such new market-focused products as the in- Sigma initiatives are improving quality and accel- year in which bold Manitowoc enters 2009 as a more balanced tions improve. ing passion for Manitowoc. novative GTK1100 and our 31000 mega-crawler erating our time to market. Over the longer term, decisions shaped business, with global scale and product leader- Success like this cannot happen without the crane, both of which target major opportunities in we will benefit from a global ERP program, which With appreciation and our future.” ship in two industries tied to economic growth. talent and commitment of associates across the the energy sector. will begin to roll out in Portugal this spring. best wishes, In the crane business, we will grow our cus- organization. Their efforts to improve quality, We also leverage our flexible global manu- What opportunities does the economic tomer base by delivering superior value in difficult control costs, and support our customers truly set facturing network to shift work to meet local Glen Tellock downturn present? times. We will differentiate ourselves based on our us apart and drive our financial performance. We demand, while sourcing components and com- Q strong brands, market-leading positions, robust are committed to listening to their ideas and doing modities and manufacturing products close to In tough economic times, customers turn pipeline of 29 new products, and strong customer what it takes to make Manitowoc a great place their points of use. to brands they can trust and seek partners relationships. We will create operating efficien- to work. Lastly, we also thank our customers, Our aftermarket services represent another A who deliver the greatest overall value. Today, cus- cies by rationalizing our global manufacturing suppliers, and shareholders for their continued competitive strength. With Manitowoc Crane tomers are demanding shorter build and delivery operations to take better advantage of low-cost support and encouragement. Together, we will Care, we operate the industry’s broadest after- times. Our unique global manufacturing footprint production in our Asian and Central European fac- channel our experience and determination to market product support system. Our network combined with Lean Manufacturing programs, tories. Programs are already under way to transfer manage through the current business cycle and of 22 logistics and distribution centers provide a new global ERP system, and optimized supply skills and production capabilities between regions, embrace the opportunities ahead. 24/7/365 access, and use active displays to chain management will enable us to respond to so we can deliver design, production, and service monitor quality and performance. In 2009, we’ll accelerated timetables. We’re also partnering close to our customers. We will also benefit from introduce CraneSTAR to help customers improve with customers on quality initiatives, including the strength of our global Crane Care aftermarket fleet maintenance and uptime even further. new field reliability tests for new products and service network, which will provide steady rev- Glen E. Tellock an innovative fleet management program. Finally, enue as we help customers optimize their existing Chairman, President & Chief Executive Officer How are customer needs driving product we’re giving customers the financial support they equipment. Though challenges in 2009 will not be Q innovation? need in today’s tight credit environment. Mani- limited to specific geographies and product lines, towoc Finance has just introduced a financing we are uniquely able to create value by providing New products are our lifeblood, and program for smaller retail customers in the total life cycle support through remanufacturing, A customers are a leading source of new United States and for large distributors who Crane Care, and other aftermarket services. ideas. We understand their strategic needs and Eric Etchart the requirements of different markets, and we President need to upgrade their rental fleets. turn these insights into innovative products Manitowoc Cranes

3 4 Cranes Balancing Strength and Versatility

Giving Economies a Lift—Around the world, The Rion-Antirion Bridge in Greece, the world’s and governments are stimulating their economies longest cable-stayed bridge, features over 9,400 by making massive infrastructure invest- feet of suspended deck and a primary span of 1,837 feet. Potain tower cranes were instrumental ments. In the United States, the new eco- in constructing four reinforced concrete pylons for nomic stimulus bill will release almost $85 this six-lane, billion-dollar structure, which links Q A billion immediately for highway and bridge the Peloponnese peninsula to the Greek mainland. What is your long-term vision for teams and supported by some of the industry’s best construction alone, while China recently Q Manitowoc Foodservice? Foodservice Segment engineering and sales talent. We are now focusing the announced a wide-ranging $586 billion plan Questions and Answers knowledge and best practices of 230 product design that includes significant near-term funding Our vision is to leverage our market- professionals behind a shared innovation platform. of infrastructure and rural development proj- A leading brands, culinary expertise, and close The new Manitowoc Foodservice is drawing ects. When these projects begin, they will customer relationships to engineer and integrate enthusiastic responses from customers of all sizes boost demand for our new and remanufac- “next generation” high performance kitchens. and in all global markets. That’s the best indicator tured cranes and generate steady revenues We will create value by improving the consumer we have that we made the right strategic decision. for our Crane Care aftermarket service. experience, driving same-store sales growth, Manitowoc Crane Segment Revenue making labor more productive, enhancing food How is the integration of Enodis by End Market safety, and supporting environmental goals. We Q progressing? will also work with customers to address their Residential Construction Manufacturing 5% specific operational challenges—everything from We are following a proven process that 10% increasing the speed of service at drive-through A focuses on two key objectives: optimize the Road & Highway Commercial windows to integrating advanced technologies synergies between the two businesses and de- 16% Construction liver the expertise and service customers expect. 23% into smaller physical footprints. Utilities 8% The most powerful quality that unites us is our Industrial/ What are your most powerful examples of entrepreneurial energy and our shared culture Power Plants 17% Petrochemical 21% Q innovation in foodservice equipment? of customer-driven innovation. By using a single playbook for new product development, we can Manitowoc’s innovative and diverse line of crawler, tower, and mobile telescopic cranes are well suited Our innovation pipeline includes 32 new share technologies across brands, focus innova- for global infrastructure and energy projects. These A products planned for 2009, spread across our tion on the best market-based opportunities, two end markets represent 62% of our Crane seg- warming, cooking, refrigeration, ice, and bever- and accelerate time to market. In addition, we’re ment revenues. age categories. We’re also thinking outside the creating a new, information-based sales and box to help customers develop new menu items marketing organization that will operate even and processes that optimize their investments. closer to our customers and channel partners. Our Convotherm® technology enables banquet We are managing the process carefully—with kitchens to cook food in advance and rethermal- clear metrics and specific accountability for ize it rapidly to create a better dining experience. results—and the integration is right on schedule. Merrychef® ovens cook foods to gourmet quality in a tenth of the time using computer controls What parts of your business are the and built-in recognition capabilities. Kysor//Warren Q most promising in the current economic refrigerated display cases deliver meaningful en- environment? ergy savings, as do hundreds of other products in our EnerLogicTM program. And our new Multiplex® Many quick-service restaurant chains con- smoothie equipment supports a new beverage A tinue to deliver solid revenue growth, fueled category for restaurants and c-stores. in part by expansion into emerging markets. We are working closely with these large custom- Why was Enodis the “right” acquisition for ers to develop new menu items supported by Q Manitowoc’s Foodservice business? next-generation equipment. In addition, the retail and convenience segments are also transform- Simply put, no other company could have ing their menus in response to higher demand A catapulted Manitowoc Foodservice to world for value selections. They’re adding more “grab leadership in both hot and cold equipment and and go” foods, and we’re helping them select service. Enodis has executed a successful “roll- new equipment that extends holding times and up” strategy to combine powerful brands with a enhances merchandising appeal. global manufacturing, distribution, and service Across all industry segments, we’re also network. Together, we can now sell and service seeing increased demand for our large portfolio over 35 market-leading brands—including of energy- and resource-efficient products. Manitowoc®, Kolpak®, Servend®, Frymaster®, Our advanced refrigeration systems, energy- Delfield®, Merrychef®, Garland®, Lincoln, and efficient restaurant ranges and char broilers, In the Zone—As part of its comprehensive array of services, Manitowoc Crane Care offers contracted Cleveland—and grow with our customers by de- and resource-conserving ice machines deliver maintenance programs to its customers anywhere livering these products in the markets they serve. Mike Kachmer a higher return on investment, while meeting in the world. Here, a Crane Care technician is per- Enodis also brings us tremendous innovation President customer preferences for healthier foods forming a periodic inspection of a Potain tower capability, driven by industry-leading management Manitowoc Foodservice produced in a “green” environment. crane in India.

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Market-leadingMarket-leading Brands WeWe also began a series ooff acquisi- PrimarilyPrimarily tthroughhrough organorganicic growtgrowthh BrandBr and NNamesames ManitowocManitowoc BBalancealance CaCapacitypacity and Reach tionstions that added pproductroduct lines and and the Potain and Grove acquisitions,acquisitions, NationalNational 800800DD National 500E2 TThirteenhirteen years aago,go, Manitowoc Cranes openedopened new international markets. we have increased Crane sesegmentgment boomboom trtruckuck & 600E2 boom PotainPotain truckstrucks GroveGrove bbeganegan an iinnovationnnovation anandd growtgrowthh iini-ni- InIn 2001, our acquisition ooff Potain revenues ffourfold,ourfold, strengthened NatNationalional 14127A NationalNational 500E NatNationalional 1300H ttiativeiative that has transtransformedformed this expandedexpanded our global manumanufacturingfacturing customer rerelationships,lationships, anandd movemovedd & 1412714127HH bboomoom & 600600EE bboomoom NationalNational 11300A300A & 1400 bboomoom NationalNational 600H & NationalNational 900H NationalNational CCranerane tructrucksks truckstrucks boomboom trucktruck tructrucksks 800D800D bboomoom truckstrucks ShuttleliftShuttlelift bbusinessusiness into a global leader in basebase and added market-leadinmarket-leadingg tower closer to our customers by expandinexpandingg NationalNational boomboom trucktruck YardBossYardBoss vvirtuallyirtually all the markets we serve. cranecrane technologiestechnologies to our product line. and diversifyingdiversifying our ggloballobal manufacmanufac-- GroveGrove TThroughhrough customer-focused innova- OurOur acacquisitionquisition of Grove one yyearear later turingturing base. GGroverove GGMK7450MK7450 GGroverove TMTMS900ES900E GroveGrove GGMK3050-1,MK3050-1, GroveGrove TMTMS800ES800E GroveGrove RTRT535E535E GGroverove GGTK1100TK1100 GroveGrove RTRT880E880E ManitowocManitowoc CCranerane CaCarere all-terrain crane truck crane GMK3055,GMK3055, & truck crane rough-terrainrough-terrain rough-terrain all-terrain crane truck crane truck crane Grove RT530E-2 rough-terrain ManitowocManitowoc FinFinanceance ttion,ion, we transtransformedformed our portportfoliofolio ooff furtherfurther expanded our global presence GMK5130-1GMK5130-1 aall-ll- cranecrane crane Grove RT9130E Grove RT890E & RT540E rough- crane CraneCrane SSTARTAR llattice-boomattice-boom cranes wwithith sucsuchh bbreak-reak- andand added the leading brands ofof allall-- terrainterrain ccranesranes rrough-terrainough-terrain rrough-terrainough-terrain Grove GMK4080-1, tterrainerrain ccranesranes GroveGrove GMK5095,GMK5095, tthroughhrough products as the Manitowoc terrainterrain cranes, rough-terrainrough-terrain cranes, crane crane Grove RT875E GMK4100, & GMK5110-1, crane crane GrGroveove GMK4100-L GMK5110-1, Products & ServiceServicess MM-250-250 all-hydraulic, self-erectinself-erectingg andand boom trucks to our pportfolio.ortfolio. rough-terrainrough-terrain GMK5220GMK5220 aall-ll- GMK5130-2, & aall-terrainll-terrain crane GMK5130-2, & • LLattice-boomattice-boom ccranesranes ccrawlerrawler crane; thethe strong anandd versatversatileile cranecrane terrainterrain ccranesranes GMK5170GMK5170 aall-ll- in ccrawler-rawler- aandnd PPotainotain MD 3200 tower crane, anandd terrainterrain ccranesranes trtruck-mounteduck-mounted mmostost recently the GGroverove GGTKTK 1100 GroveGrove TMS9000E conconﬁﬁ ggurations,urations, plus hhigh-reachigh-reach telescopic hydraulic crane. & TMS500E-2 trucktruck cranes comcomplementaryplementary PotainPotain aattachmentsttachments

Potain Igo 32 Potain Igo 12, Potain Igo 24, 26, Potain Igo 50, PPotainotain Igo 10, Potain MC 13 PotainPotain Igo T70 PPotainotain Igo 42 & T85 • Tower cranes in top-top- self-erecting 13, 21, & 36 & 28 self-erecting MA 13, MB 13, 111,1, 22, & 2828AA self-erecting self-erectingself-erecting sself-erectingelf-erecting slewing, luffiluffi ng jib, tower crancranee self-erecting tower cranes & MA 21 sself-erectingelf-erecting towertower crancranee tower crane ttowerower cranecraness totopless,pless, and PotaPotainin MD 208208,, tower cranes PotainPotain MD 4485B85B self-erectingself-erecting tower cranecraness PotainPotain MD 11110000 PotainPotain MCTMCT 7788 PPotainotain MMCTCT 5050,, selself-erectingf-erecting towertower cracranesnes MD 550550,, PPotainotain MD 3310B10B top-slewingtop-slewing PPotainotain MDT 9898,, top-slewingtop-slewing & MMCTCT 88 MMCTCT 5858,, & MMCTCT 68 confi ggurationsurations & MD 650 top-slewtop-slewinging towertower ccranerane PotainPotain GTMRGTMR 3346B46B MD 225225,, & MD towertower ccranerane top-slewingtop-slewing ttop-slewingop-slewing • M Mobileobile tetelescopiclescopic top-slewtop-slewinging totowerwer ccranerane Potain MDT 178 self-erectingself-erecting 238A top-slewtop-slewinging Potain MR 295 towertower cranescranes totowerwer ccranesranes totowerwer ccranesranes Potain MR 415 top-slewing towertower ccranerane totowerwer ccranesranes luffiluffi ng tower PotainPotain MD 400400CC PPotainotain MD 310310C,C, cranes iinn rougrough-h- terraterrain,in, aall-terrain,ll-terrain, luluffiffi ng towetowerr towertower crancranee Potain PotainPotain MD 208208AA & MDT 218 MDT 268, & MDT MDTMDT 128 top-slewingtop-slewing top-slewing 308 top-slewing tructruck-mounted,k-mounted, top-slewingtop-slewing towertower crancranee towertower cranescranes ttowerower cranecraness anandd iindustrialndustrial towertower cracranene PotainPotain MD 33200200 PotainPotain MR 615 PoPotaintain MR 90C conconfifi gurations luffi ngng tower lluffiuffi nngg towetowerr top-slewing • HHydraulicydraulic telescotelescopicpic towertower ccranerane ManitowocManitowoc booboomm trtrucksucks Manitowoc 888 Manitowoc Manitowoc 777777 Manitowoc 2250 Manitowoc 111111 MManitowocanitowoc 999999 Manitowoc 999 Manitowoc 555 Manitowoc 15000 ManitowocManitowoc 16000 Manitowoc 16000 ManitowocManitowoc 14000 ManitowocManitowoc 31000 • A Aftermarketftermarket parts crawlercrawler ccranerane 888 luluffiffi ng jib crawlercrawler ccranerane crawlercrawler ccranerane & ccrawlerrawler ccranerane ccrawlerrawler ccranerane luffiluffi ng jijibb crawlercrawler cranecrane & crawlercrawler cranecrane crawlercrawler ccranerane & luffiluffi ng jibjib crawlercrawler cranecrane crawlercrawler ccranerane & andand servservice,ice, iinclud-nclud- West-ManitowocWest-Manitowoc ManitowocManitowoc 888 luffiluffi ng jijibb ManManitowocitowoc 222 MManitowocanitowoc 222 luffiluffi ng jijibb ManitowocManitowoc 18000 windwind applicationapplication ManitowocManitowoc 16000 ManitowocManitowoc variablevariable ppositionosition inging repreplacementlacement attachmentattachment counterweightcounterweight 100100 crawcrawlerler crane RINGERRINGER ManitowocManitowoc crawcrawlerler crancranee luffi nngg jib ManitowocManitowoc 10110155 luffiluffi nngg jibjib MAX-ERMAX-ER 14000 parts,parts, engengineering,ineering, 2250T2250T MManitowocanitowoc 777T MaManitowocnitowoc duty-cycleduty-cycle crane ManitowocManitowoc 1800018000 luffi ngng training,training, tectechnicalhnical trucktruck crancranee jibjib ttruckruck crane & MMAX-ERAX-ER 22000000 ManitowocManitowoc 1180008000 MAX-ERMAX-ER service,service, anandd crane ManitowocManitowoc 777777 lluffiuffi nngg jijibb MManitowocanitowoc crawlercrawler cranecrane rebuildingrebuilding anandd luffiluffi nngg jijibb ManManitowocitowoc 21000 MAXMAX-ER-ER 2000 remanufacturingremanufacturing crawcrawlerler crane & luffi ng jib servicesservices lluffiuffi ng jijibb MaManitowocnitowoc 2210001000 MAX-ER - nery s hi ac M t n crane, n crane, i n crane, n crane, n cranes, n cranes, n cranes, i i i

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uired U. uired G n MAX-ER attachment boom trucks, d new truck crane, and new truck crane, q q ) ) ) ffi ompleted global integration of cranes na cqu ranes, ranes, ng jib (1) luffi (4) top-slewing tower cranes, rane, om ompleted Dubai remanufacturing cente om ranes, ranes, 1) crawler crane, (3) sel 1) crawler crane, and ng jib, (1) luffi 2) top-slewing tower cranes, 1 2 (4) self-erecting tower cranes, 1) boom truck, ntro ntro 1 1) ib attachments u ntro ntro ntro ntro ntro (1) crawler crane, (3) self-erecting tower cranes, (3) self-erecting tower cranes, (1) crawler crane, and ng jib, (1) luffi (2) top-slewing tower cranes, (1) MAX-ER attachment (5) self-erecting tower cranes, (2) boom trucks, and (1) top-slewing tower crane (4) self-erecting tower cranes, (1) boom truck, and (3) top-slewing tower cranes (1) self-erecting tower (2) boom trucks, cranes, ng jib (1) luffi (4) top-slewing tower cranes, crane, and (1) MAX-ER attachment attachment, ( ( ( I ( an I ( and c c and attachment, C A “South Works” crane facility Works” “South ng and (2) luffi (1) new truck crane, jib attachments and (2) new (1) new truck crane, ng jib attachments luffi ng jib attachments and (2) luffi attachments, (2) top-slewing tower (4) self-erecting tower cranes, (2) crawler cranes, (3) boom trucks, cranes, ng jib attachment and (1) luffi crane, (1) duty-cycle (2) self- (1) boom truck, (1) crawler crane, (2) truck cranes, and (7) top-slewing tower cranes erecting tower cranes, C crane facility Works” “South I and (2) lu (1) new truck crane, j ( l I ng jib attachments and (2) luffi attachments, I (2) top-slewing tower (4) self-erecting tower cranes, c and (1) lu crane, (1) duty-cycle I (2) self (1) boom truck, (1) crawler crane, (2) truck cranes, erectin C Fi I ( (1) sel C (1) GTK1100, (1) crawler crane and luffi ng jib, (4) boom trucks, ng jib, (1) crawler crane and luffi (1) GTK1100, and (5) top-slewing tower cranes (1) self-erecting tower crane, • Completed global integration of cranes (1) truck crane, Introduced (1) rough-terrain crane, • a manufacturing alliance for small crawler cranes Formed • (1) rough-terrain crane, Introduced (3) all-terrain cranes, • CraneCREDIT organization • Formed (1) crawler crane, Introduced (1) truck crane, • Inc. Acquired ExacTech, • China facility • Completed Zhangjiagang, (3) all-terrain Introduced (1) rough-terrain crane, • • Introduced • a manu Formed • • • Formed • • China facility • Completed Zhangjiagang, Introduced • • Introduced (2) new crawler• Introduced (2) new crawler cranes cranes Completed modernization of Manitowoc’s • • ng jib attachment n Introduced new luffi Introduced new luffi • • Introduced (1) new crawlerIntroduced (1) new crawler crane crane • • Introduced Introduced (1) new RINGER attachment • • Crane • Acquired Truck Ac U.S. Introduced (1) new crawler crane, • • Introduced (3) new crawlerIntroduced (3) new crawler cranes, cranes, • • LLC Acquired Pioneer Holdi Acquired Pioneer Holdings, • • (2) MAX-ER Introduced (1) new crawler crane, • • • Launched • Launched Crane Care aftermarket support (tower (tower cranes) cranes Acquired Potain Acquired Potain • • • Launched Pro-E engineering • Launched Pro-E en ng jib attachment, • Introduced (1) luffi • Introduced (1) lu (1) self-erecting tower (1) self-erecting tower crane, crane, and and (3) top-slewing tower cranes Acquired Grove (mobile telescopic cranes) • Acquired • Acquired National Crane (boom trucks) • Acquired • National (1) all-terrain crane, Introduced (1) rough-terrain crane, • • • Completed Dubai remanufacturing center • Dongyue Heavy Machinery TaiAn joint venture with • Finalized • (4) all-terrain cranes, Introduced (1) rough-terrain crane, • • • Acquired Carrydeck line of mobile industrial cranes • • Ac • • • Acquired Carrydeck line of mobile industrial cranes • Acquired Shirke Construction Equipment • eld development • Completed Slovakia brownfi (2) rough-terrain cranes, Introduced (1) all-terrain crane, • 1995 1996 19971997 19981998 19991999 20002000 20012001 2002 2003 20042004 20052005 2006 2007 2008

6 7 2008 The acquisition of Enodis has added hundreds Brand Names Foodservice Product Portfolio at a Glance of new products to our foodservice portfolio. by Function Chill/Store Product Innovation Makes Kitchens Manitowoc, Servend, Kolpak, and by adding dozens of market-leading Selected Enodis product additions Fast, Flexible, and Efficient McCall brands, we’ve steadily built the brands on both the heating and cook- Convochill Delfi eld® Over the years, Manitowoc’s Food- scale necessary to serve customers ing side of the kitchen. With 28 manu- Enodis Cook Convotherm® acquisition Combi-ovens Harford service business has built a solid worldwide as they expand their facturing facilities in eight countries, Kolpak® reputation as a leading innovator of operations. Enodis also opens new opportunities Dean® fryers Koolaire® ® ice machines, refrigeration equipment, In 2008, our acquisition of Enodis to serve markets throughout Europe ® Kysor Panel Systems Servend LP-3 Frymaster ® and beverage dispensers. In 1995, transformed our Foodservice business and Asia. low profi le Protector fryer Kysor//Warren ® Manitowoc Foodservice began a ice/beverage Servend McCall Servend QSV ® dispenser Flav’r Pic Garland RDI series of acquisitions that added new Servend MD-250 Servend soft drink Servend ice/beverage Restaurant ranges brands and extended our geographic Flomatic 454 Quick Draw 302/402 bever- system Servend technology Flex Tower SV-200 & SV-250 ™ Prep/Hold footprint in the “cold” business. Each dispensing valve dispenser age dispensers Flavor Magic Lincoln Fusion Toaster Servend UC-300 Servend CEV 30j ice/beverage ® drink non-carbonated Servend Delfi eld acquisition provided us with access Servend Servend Gen II Servend ice/beverage electric juice dispensers ® enhance- beverage CF-1522 Lincoln Impinger Fabristeel MDH-302 1522 drop-in MD Series dispenser dispenser to new technologies that have brought Servend ment system dispenser Servend drop-in 3255 Conveyor oven Guyon dispenser dispenser Intellicarb dispenser us closer to our customers. With our MD-65 & Servend CEV-30 Servend CEV-40 Chillz SV-250 QD ® Lincoln Smallwares dispenser Merrychef 402S MD-175 Servend Gen II Servend countertop countertop Servend Servend frozen ice/beverage Multiplex Accelerated oven McCall® beverage 2325 drop-in Servend iced MDH-402 Flomatic 464 electric bever- electric bever- Flavor Shot icepic beverage dispenser with MPX-50 soda Varimixer® dispensers dispenser tea dispenser dispenser dispensing valve age dispenser age dispenser technology technology dispenser portion control factory Savory Synergy Toaster Servend Steam Chef™ Cook Convection steamers Cleveland Convotherm® ® Prep/Hold Convotherm Dean® T-5 blast chillers Frymaster® Delfi eld® Dual Rail Garland® prep stations Lincoln Merrychef® QM-45, 130, & 270 ® ® ice machines Delfi eld LiquiTec Moorwood Vulcan® QM-20 QPA-310 S-Series ice SM-50 Visi-Kooler refrigeration/freezer undercounter QPA-160 ice machine residential glass door Savory fl oor-standing Manitowoc drawers J-1300 ice machine ice dispenser dispenser introduction ice machine merchandiser Technyform Koolaire Manitowoc Ice Manitowoc self- builds Delfi eld® Versa Drawer™ U.S. Range ice machine ® Q-Series QM-30 under- Quiet Qube reach-in transitions to contained & EC line of 190,000 sq. ft. SM-10 SN-12 & SN-20 Manitowoc Manitowoc Viscount J-1800 ice machine counter ice (CVD) ice refrigerators demand fl ow large-capacity undercounter ice machine countertop ice & water 1470C & 1870C Quadzilla Fabristeel ice machine launch machine machines & freezers manufacturing ice fl akers ice machines facility in China ice dispenser dispensers ice machines ice machine chilling cabinets Manitowoc Hold/Merchandise Lincoln smallwares Delfi eld® ® Merco holding cabinets Kolpak Koolaire® Kolpak Varimixer® fl oor and McCall® Express pre- counter model mixers Merco assembled Clean Jackson walk-ins McCall wide- Ice/Dispense Shannon body line of fl ight machines Kolpak rack acquisition reach-ins MBS refrigeration Jackson Manitowoc® McCall NSF-7 system conveyor dish machines McCann’s prep tables McCall McCall -15º F Multiplex® Smoothie Kolpak Polar- McCall countertop McCall -10º F Kolpak R-Series Kolpak S-Series ice cream Scotsman Beverage® prep table Chill walk-ins refrigerators reach-in freezer walk-ins reach-ins merchandiser Servend® TruPour®

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™ Manitowoc Finance STAR Service Flavor Magic drink enhancement system, Flavor Magic drink enhancement system, le ice/beverage dispenser and LP-3 low-profi and -15° F ice cream merchandiser factory, SV-200 and SV-250 ice/beverage dispensers, ice/beverage dispensers, and SV-250 SV-200 QD ice/beverage dispensers with portion control SV-250 ice machine technology Gen II 1522 drop-in Quick Draw beverage dispensers, and MDH-402 beverage dispensers beverage dispensers, manufacturing frozen 464 dispensing valve technology, and beverage dispensing systems, -10° F reach-in freezers Chinese ice machine joint venture and UC-300 ice/beverage dispenser, akers, ice fl countertop electric beverage dispensers countertop electric undercounter ice machines, countertop electric beverage juice dispensers, and a new line of walk-in refrigerators dispenser, and freezers icepic countertop ice dispenser, in partnership with Hangzhou Household Electric Appliance Industrial Corporation ice machines and automatic-cleaning featuring HFC refrigerants Express walk-ins and rack refrigeration systems China facility in Hangzhou, countertop beverage tower technology, dispensers, and S-Series reach-in refrigerators and freezers countertop ice and beverage dispensers, Visi-Kooler water dispensers, and Chillz merchandisers, dispensers Flav’r Pic Apparecchiature per la Produzione del Ghiaccio • Acquisition of McCann’s Engineering & Mfg. Co. Engineering & Mfg. Acquisition of McCann’s • Introduction of FlexTower • • Introduced selectable icepic technology, Introduced selectable icepic technology, • Acquisition of Enodis plc • Introduced new Quadzilla • • Acquisition of Beverage Equipment Supply Company • LLC Acquisition of Harford Duracool, • Inc. Acquisition of Multiplex Company, • Introduced new reach-in refrigerators and freezers, • ow Manitowoc Ice transitions to demand-fl • Introduced Intellicarb ice/beverage dispensers, • Manitowoc acquires full ownership of • Introduced new self-contained and large-capacity • Introduced new S-Series line of ice machines, • Introduced new residential ice machines, • • Acquisition of The Shannon Group Acquisition of • Began manufacturing Manitowoc ice machines • Introduced patented self-cleaning • Introduced J-Series ice machines • Inc. Acquisition of Servend International, • • Introduced Q-Series ice machines pre-assembled Introduced new Kolpak • Introduction of MDH-302 beverage dispenser • Polar-Chill Introduction of Kolpak • ice machine ft. Construction of new 190,000 sq. • new hotel ice Introduced Flavor Shot technology, • • Formation of Blue Star alliance Formation • Acquired 50% interest in Fabbrica • LLC Acquisition of Purchasing Support Group, • Inc. Aluminum, Acquisition of Kyees • Defrost (CVD Vapor Introduced new Cool • 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

8 9 Cranes Balancing Strength and Versatility

5 10 Built to Last—The new eight-lane Arthur Rav- enel Bridge in Charleston, SC, has the built-in strength to withstand earthquakes, hurricanes and ship collisions. During this 44-month project, Manitowoc 999 crawler cranes erected the base sections of two 573-foot support pylons, while Manitowoc 2250s worked on shore to erect massive steel girders for the approach ramps. The $541-million bridge is South Caro- lina’s largest infrastructure project—and North America’s longest cable-stayed bridge.

A Tight Fit—Grove designs its all-terrain cranes to meet the performance challenges of urban infrastructure and construction projects. Provid- ing up to 100 tons of lifting capacity, these Grove GMK5100s work in unison to handle a prefabricated bridge module.

11 Cranes High-value Cranes Generate Balanced Growth

Global Power—Energy is a crane-intensive Winds of Change—Around the world, wind energy is business. From the giant tower and emerging as a cost-effective, “green” alternative for crawler cranes that build nuclear plants, meeting rising energy demand. We designed our innovative Model 16000 crawler crane to meet the many to the rough-terrain cranes and boom on-site challenges of erecting wind turbines, including trucks used to expand electrical grids, those at this 40-unit wind farm in Mountain Air, NM. high-performance Manitowoc cranes do the demanding work that helps developed and emerging economies generate economic growth. Recent investments to develop new market-focused products, to modernize and enhance our global manufacturing and service infrastructure, and to share best practices across our organization have positioned us to meet this demand.

World Market Energy Consumption 800 700 695

600 652 608

500 563 512

400 462 398 365 300 347 309 284 200 100

0 ’80 ’85 ’90 ’95 ’00 ’05 ’10 ’15 ’20 ’25 ’30 History Quadrillion Btu Projections Between 2005 and 2030, global demand for energy will increase an estimated 50% to a projected 695 quadrillion Btu.

Grove all-terrain cranes combine reach and capacity with highway mobility. This GMK7550 traveled over 100 miles to erect preassembled modules weighing over 60 tons each for a natural gas transfer station in Oregon.

12 The Best Tool—Potain tower cranes are ideal lifting solutions for virtually any energy application. Their ability to grow with the project, provide exceptional vertical and horizontal reach, and operate with an extremely small footprint makes them a frequent choice on nuclear projects. At this construction site in France, 17 Potain tower cranes are building a 1,750-megawatt nuclear power plant—the largest such facility in French history.

Fueling Growth—Petrochemical plants and other industrial facilities make frequent investments to replace and maintain their facilities, improve environmental performance, and meet changing regulatory and safety requirements. This Grove RT760E is helping complete a benzene plant in Oman.

13 Foodservice Hot and Cold: Bringing Balance to High Performance

From quick-service restaurants to institutions and fine dining establishments, operators stake their success on high performance kitchens that Innovative steam cooking equipment from As a pioneer in the application of help them conserve space, consolidate work Hot-hold, cold-hold, and prepa- Cleveland conserves space, energy, and microwave technology, Merrychef ration solutions from Fabristeel flow, reduce energy and labor costs, and produce water—and is easy to clean and use. The develops innovative combination help foodservice exceptional food that keeps customers coming new SteamChef™ 6 Boilerless Convection ovens that deliver maximum cooking customers in south- back. Our dedicated High Performance Kitchen Steamer automatically adjusts cook time power in a small footprint. east Asia keep food Group designs holistic kitchens that give chefs based on the volume of the food inside. safe, at the correct temperature, and extraordinary flexibility and control. By combining fresh for hours. existing equipment with the latest technologies, we create custom solutions that speed cooking Holding Cabinet times, eliminate bottlenecks, and create a com- fortable and productive environment. 402S Series Oven SteamChef™ 6 A Legacy of Innovation

Equipment

Food + People Beverage

At Manitowoc Foodservice, product innovation begins where equipment, people, and food and beverage intersect. By extending our analysis across entire kitchens, we’re creating game- changing beneﬁ ts while keeping our brands on the leading edge.

As a leading manufacturer of walk-in coolers, freezers, and displays, Kysor Panel Systems designs and custom-builds equipment to suit speciﬁ c kitchen conﬁ gurations as well as convenience stores and retail locations.

Operators specify Garland commercial In addition to Lincoln OPTIO cookware and small- Series 1 Walk-in Cooler ranges, grills, and induction units to pro- wares, our high-performance conveyor baking and duce the ﬂ avorful, “better for you” foods toasting platforms deliver rapid heating, cooking, customers prefer—up to 80% faster than baking, and crisping. Lincoln’s Impinger® II Ovens other ranges. use patented FastBake™ technology to transfer heat 40% better than standard conveyor ovens, cutting baking times by 10% to 30%.

Garland Restaurant Range Impinger® II Oven

14 Kitchens A Growing Market

While other industries experienced downturns in 2008, restaurant sales grew by 3.9%, led by the take-out and delivery segments. Once again, large Reliable, versatile Varimixer products give As the industry leader, Frymaster works as a “ﬁ t operators the power, control, and convenience frying” partner to deliver menu items that taste bet- chains in the Technomic Top 500 leveraged their they need to handle the toughest recipes, ter cooked in trans-fat-free oil. The Protector® line scale, technology, and proven formats to outper- batch after batch. of gas and electric fryers use advanced SMART4U™ form the industry with 5% growth. Historically, technology to fry more food with less oil. operators have responded to periods of slower growth by investing in equipment that gives them greater flexibility and efficiency. As these large chains consolidate suppliers, Manitowoc Foodser- vice has the leading technologies and global scale to emerge as their preferred partner in innovation.

W40 150-Quart Mixer Frymaster Protector® Source: Technomic Top 500 Chain Restaurant Report Foodservice Market Growth 9% 8% 7% 6% 5% 4% 3% 2% 1% 2000 2001 2002 2003 2004 20052006 2007 2008 Foodservice Market Technomic Top 500

Award-winning Performance—Based on its annual readers poll, Foodservice Equipment & Supplies maga- zine named multiple Manitowoc Foodservice products as “Best in Class.” For the eighth consecutive year, Manitowoc Ice, Kolpak, and Frymaster took top honors in the ice machine, walk-in, and fryer categories. Cleveland steamers garnered number one honors for the sixth consecutive year. Other Best in Class honors were also awarded to Delﬁ eld chef counters and Lincoln conveyor ovens.

During 2008, the National Restaurant Association bestowed Kitchen Innovation awards to four Manitowoc product lines. The award, which honors foodservice equipment recognized to be the most innovative in the world, was presented to the Frymaster Protector fryer, Energy-effi cient custom and reach-in refrigeration the Garland Restaurant Range, the Garland HE Broiler, units from Delfi eld give professional chefs highly and Lincoln’s 8005 Return Toaster. Our legacy of capable, sturdy performance under the most innovation is refl ected by our winning 12 NRA Kitchen demanding conditions. Individual drawers in the ™ Innovation awards since its inception in 2005, more Versa Drawer undercounter refrigeration units can than any other manufacturer in the industry. operate as refrigerators, freezers, thaw cabinets, or convenience chill units.

Dual Rail Prep Station

15 Food for Thought —In our test Balancing Accelerated Cooking kitchens, customers use our advanced kitchen technologies Technology with Inspired Recipes to prepare both new and familiar menu items on alternative cooking platforms. They discuss Our Kitchenology™ experts combine accelerated emerging consumer trends and menu dynamics with our culinary cooking and refrigeration equipment with network—comprised of nearly 40 chefs worldwide. And they return to their kitchens with new an endless menu of culinary ideas to hot and cold solutions that help them expand their menus, reduce help operators save space and time— preparation times, boost quality, and support the most demanding and improve proﬁ ts. applications.

Perfect Results—The Convo- therm® 6:10 Combi Oven Steamer cooks a variety of dishes to just the right moisture level, guaranteeing quality and on-demand freshness. Its patented “disappearing door” makes it easy to work around. The Mini Combi Oven delivers beauti- fully prepared foods at accelerated speeds—in just over three cubic feet of space.

Deep Chill —ConvoChill technology reduces the temperature at the core of cooked food to 38°F in just 90 minutes. It’s a smart way to extend the shelf life of food, organize work ﬂ ow for greater speed and efﬁ ciency, and give customers a full and varied menu.

16 Integrated Solutions— Flav’r PicTM is one of Market-leading Ice and Beverage Products many solutions Mani- towoc Foodservice has Put Customers in Control created for convenience store and restaurant chains. We look at the Today’s consumers are demanding more choices entire store footprint and recommend hot and from convenience stores, and innovative solutions cold equipment that is cost effective, promotes like Flav’r Pic beverage dispensers labor and energy sav- Monster Capacity— The new, energy- ings, and creates visual TM appeal. These solutions are hitting the mark. efﬁ cient Quadzilla range from coffee sta- S-Series ice machines tions and pizza kiosks, can produce up to to ice machines and 3,380 pounds of ice reach-in merchandis- in 24 hours. Featuring ers, to accelerated four vertical evapora- cooking technology and tors, this innovative ice energy-efﬁ cient holding machine now allows equipment. Manitowoc to serve the high-volume ice needs of caterers, commissaries, and institutions.

A World of Choices— Flav’r Pic is an innovative, easy-to-use concept that inspires customers to become mixologists and invent their own customized beverages. Starting with cubed or crushed ice produced by a Manitowoc ice machine, Flav’r Pic allows you to select from 16 fountain beverages plus eight ﬂ avor enhancements to create thousands of drink combinations to suit each customer’s personal taste.

A Small Footprint — The Flav’r Pic fountain beverage system helps convenience stores drive proﬁ tability by optimiz- ing every square inch of space. Its efﬁ cient 30-inch format is ideal for self-serve beverage applications.

Financial Review/Balanced for Value In October 2008, we completed the largest acquisition in our company’s history. Our $2.7-billion investment in Enodis makes us a global leader on both the hot and cold side of the commercial foodservice equipment industry. It also gives us a second market-leading growth platform to balance our crane business—and provide more stability to Manitowoc’s underlying earnings power.

Enodis is an excellent strategic fit that meets the Today, we are in a stronger position to reduce proven criteria we apply to all our acquisitions. debt, with two sizable reporting segments to It will fuel long-term growth by giving us access generate cash flow and earnings. We have far to new products, end markets, and geographic greater product depth and a much larger installed regions. It also meets our financial benchmarks base on both sides of our business. We also have of delivering EPS-accretive performance within better geographic balance, with 58% of our total two years, and EVA-positive results in three years. sales derived outside of the United States. Our This transaction raised our debt-to-capital ratio to solid positions in emerging markets provide a 67.1%. As we have done in the past, we plan to distinct advantage at a time when these markets use our significant free cash flow to pay down our account for a meaningful proportion of world debt. Our accelerated timetable calls for signifi- economic growth. Strategic Fit—Every cant debt reduction by the end of 2009. Our financial discipline—and our proven ability acquisition we make must Soon after we completed the Enodis acquisi- to convert a high percentage of our earnings meet a specific set of criteria for strategic fit and Debt-to-Capitalization Comparison Debt-to-Capitalization value creation. Enodis will Comparison— fuel long-term growth by 100% Manitowoc has created giving us access to new significant value for share- products, end markets, holders by accessing the and geographic regions. It 90% capital markets to make will also be EPS accretive strategic acquisitions. In within two years, and EVA 80% every instance, we have positive in three years. used our strong cash flow Grove to quickly delever our Potain Enodis 70% balance sheet and reduce Shannon interest expense.

Marinette 60% Servend 50%

40%

30%

20%

10%

1995 1996 1997 1998 19992000 2001 2002 2003 2004 2005 20062007 2008 2009E

tion, deteriorating economic conditions in markets into cash flow from operations—will enable around the world put an early end to a five-year us to rapidly pay down debt. We have already up cycle in the global construction industry. Con- applied the proceeds from the sale of our Marine ditions like these are nothing new to our manage- business and expect to divest the Enodis ice busi- ment team, and we have managed through down ness during the first half of 2009. We have also cycles and large acquisitions before. In 1995 identified $80 million in synergies within the new and 1997, we quickly paid down debt following Manitowoc Foodservice Group, with 90% of the our Shannon and Servend acquisitions. And in total amount attainable by 2010. 2002, Manitowoc’s peak debt-to-capital ratio Strengthened by our strong EVA-based culture, was greater than 70% following the acquisitions we have also stepped up our ongoing efforts to control costs, improve operating efficiency, Carl J. Laurino of Potain and Grove. Even in a down cycle, we Senior Vice President generated enough cash flow to reduce our net and optimize our returns on invested capital. & Chief Financial Ofﬁ cer debt by 60% within three years. These measures are helping us manage through

18 weaker demand for our cranes worldwide until foodservice and restaurant industry, as well as economic conditions improve. Corporate-wide, Manitowoc’s strong position with our customers. we have reduced SG&A as a percentage of The group also benefited from its large installed sales from 16.9% in 2003 to 10.1% in 2008. base and the strength of the replacement market We accomplished this by sizing our workforce to for both hot and cold equipment. market demand, using appropriate support from Manitowoc’s Crane and Foodservice business- outsourced manufacturing as well as implement- es are both well positioned to gain market share ing Lean Manufacturing and other operational by helping customers overcome tough market excellence initiatives. In addition, we are working conditions. We continue to invest in aftermarket on both sides of our business to optimize our services, which create value by improving uptime global manufacturing network, so we can reduce and lowering total cost of ownership. We’re also costs and operate as close to our customers as giving customers an important lever for growth possible. in today’s constrained banking environment. We This operating discipline contributed to the consolidated our equipment financing capabilities solid performance of our Crane and Foodservice under Manitowoc Finance and created new part- businesses. In 2008, Manitowoc Cranes recorded nerships to deliver branded, third-party financing its most successful operating performance ever around the world. with revenues of $3.88 billion. Recent initiatives We enter 2009 as a more balanced company, to streamline manufacturing and install new with two strong global platforms that position us robotics technology also contributed to strong to generate strong cash flow and earnings. As we margin performance. work to integrate Enodis within our disciplined Manitowoc Foodservice generated steady top EVA culture, we will drive greater efficiency line growth in a difficult economic environment. across both of our businesses and make the These results reflect the stability of the global most of the opportunities our markets present.

Cumulative Cash Flow Cumulative Cash Flow vs. Cumulative Earnings from Continuing Operations ($ Millions) vs. Cumulative Earnings $1,500 from Continuing Operations—Our strong $1,200 EVA focus enables us to generate consistent cash

$1,255.1 flow over the long term $900 and convert a high percentage of earnings into $946.1 cash. Strong cash flow $600 gives us the opportunity $702.1 $675.2

$280.8 to rapidly pay down debt. $595.6 $245.4 $300 $121.8 $94.5 $409.1 $55.4 $30.6 $25.7 $302.3 0 2002 2003 2004 2005 2006 2007 2008 Earnings Cash Flow

Sales by Region— Sales by Region 2000 Sales by Region 2008 Recent acquisitions have expanded our geographic Asia/Pacific 3% Asia/Pacific 12% footprint and diversified our revenue stream. Europe, Middle East We have upgraded our and Africa 3% Europe, Middle East facilities in such emerging and Africa 40% markets as China, India, and the Middle East to The Americas 94% The Americas 48% take advantage of growth opportunities.

Sources of Cash 2001– 2008 Uses of Cash 2001– 2008 Sources and Uses of Cash—Over the past seven years, cash from operations and borrowings Borrowings 65% Acquisitions 54% provided 87% of the cash used to fund our growth. Cash from Operations 22% Debt Paydown 33%

Other 5% Capital Expenditures 9%

Stock Issuances 4% Other 3%

Sales of Fixed Assets 4% Dividends 1%

19 Welcome to Our Form 10-K

Gross Profit At Manitowoc, we are committed to providing shareholders with comprehensive information EBITDA ($ Millions) about our company and its operations, performance, management, and financial results. We ($ Millions) want investors to know the factors that drive our performance, the risks we face, and how we $284 $336 $413 $611 $862 $102.8 $139.9 $208.4 $365.2 $573.6 $639.8 $1,016 are building the value of the company. We want shareholders to feel confident in Manitowoc and its management. To provide the most complete information possible, we have included a copy of the Form 10-K required by the Securities and Exchange Commission with this report. By doing so, we help to ensure that all shareholders have exactly the same information and we reduce the time and expense associated with preparing two, separate audited financial presentations. Reading

03 04 05 06 07 08 the Form 10-K provides the information needed to evaluate our performance and compare it to 03 04 05 06 07 08 For the 15th consecutive other businesses inside or outside of our industries. We also have included a number of charts Since 2003, earnings year, Manitowoc’s gross that allow readers to easily track our progress over the past several years. before interest, taxes, de- profi t reached record preciation, and amortization levels. In 2008, gross profi t have increased more than increased by $154 million 10-K Contents fi vefold, driven by increased and topped $1 billion for profi tability across our the fi rst time in our history. Our Business 1 Accounts Payable and business segments and value-adding investments. Risk Factors 8 Accrued Expenses 52 International Properties Owned 12 Debt 52 Capital Shipments Legal Proceedings 13 Accounts Receivable Securitization 54 ($ Millions) Expenditures Submission of Matters to a Income Taxes 54 ($ Millions)

$668 $863 Vote of Security Holders 14 Earnings Per Share 57 $1,076 $1,398 $2,057 $2,606 $31.0 $38.9 $50.8 $64.4

Market for Registrant’s Stockholders’ Equity 57 $112.8 $150.3 Common Equity 15 Stock-Based Compensation 58 Selected Financial Data 17 Contingencies and Signifi cant Estimates 60 Management’s Discussion and Guarantees 61 Analysis of Financial Condition and Restructuring 62 Results of Operations 19 Employee Benefi t Plans 62 03 04 05 06 07 08 Quantitative and Qualitative In 2008, Manitowoc gener- Disclosures About Market Risk 34 Leases 66 03 04 05 06 07 08 ated 58% of its revenues Financial Statements and Business Segments 66 Manitowoc’s capital ex- outside of the United Supplementary Data 35 Subsidiary Guarantors of Senior penditures grew to $150.3 States. This level of global million in 2008, primarily performance was driven Report of Independent Registered Public Notes Due 2013 67 to support plant expansion by strong demand for our Accounting Firm 36 Quarterly Financial Data (Unaudited) 76 and effi ciency initiatives crane products in non-US Subsequent Events 76 at our crane operations in markets and our ability Consolidated Statements of Operations 37 Wisconsin, Pennsylvania, to serve customers in Consolidated Balance Sheets 38 Changes In and Disagreements with and Germany. multiple emerging market Consolidated Statements of Cash Flows 39 Accountants on Accounting and economies. Financial Disclosure 77 Consolidated Statements of Stockholders’ Controls and Procedures 77 Research & Equity and Comprehensive Income 40 Development Other Information 77 SG&A as a Notes to Consolidated Financial ($ Millions) Percent of Sales Statements 41 Directors and Executive Offi cers

of the Registrant 77 $17.4 $21.2 $26.0 $31.2 $36.1 $40.0 Company and Basis of Presentation 41 16.9% 16.6% 13.2% 12.0% 10.3% 10.1% Executive Compensation 77 Summary of Signifi cant Accounting Policies 41 Security Ownership of Certain Benefi cial Acquisitions 46 Owners and Management 77 Discontinued Operations 48 Certain Relationships and Related Transactions, and Director Independence 78 Financial Instruments 49 Principal Accounting Fees and Service 78 Inventories 50 03 04 05 06 07 08 03 04 05 06 07 08 Exhibits and Financial Statement Property, Plant and Equipment 50 Innovative products Record revenue and effi - Schedules 79 increase sales, expand ciencies gained by cross- Goodwill and Other Intangible Assets 51 markets, and boost selling our products into market shares. In 2008, new markets have reduced Manitowoc invested $40 this metric to its lowest level million in research and in more than a decade. development, which resulted in a total of 50 new crane and foodservice products.

20 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:01 | 09-1275-2.aa | Sequence: 1 CHKSUM Content: 26505 Layout: 4371 Graphics: 43755 CLEAN

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2008 or Transition 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 (State or other jurisdiction of incorporation) (I.R.S. Employer 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)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered Common Stock, $.01 Par Value New York Stock Exchange Common Stock Purchase Rights

Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No 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 No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 Accelerated filer Non-accelerated filer Smaller reporting company (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 Act). Yes No The Aggregate Market Value on June 30, 2008, of the registrant’s Common Stock held by non-affiliates of the registrant was $4,237,869,497 based on the closing per share price of $32.53 on that date. The number of shares outstanding of the registrant’s Common Stock as of January 31, 2009, the most recent practicable date, was 130,359,554. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement, to be prepared and filed for the Annual Meeting of Shareholders, dated March 26, 2009 (the “2009 Proxy Statement”), are incorporated by reference in Part III of this report. See Index to Exhibits immediately following the signature page of this report, which is incorporated herein by reference.

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: box.eps, check box.eps, manitowoc_k_logo.eps V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 1 CHKSUM Content: 51142 Layout: 60163 Graphics: No Graphics CLEAN

PART I acquisition for the company, has established Manitowoc among the world’s top manufacturers of commercial food- ITEM 1. BUSINESS service equipment. With this acquisition, our Foodservice capabilities now span refrigeration, ice-making, cooking, General food-prep, and beverage-dispensing technologies. Mani- The Manitowoc Company, Inc. (referred to as the company, towoc is now able to equip entire commercial kitchens and MTW, Manitowoc, we, our, and us) was founded in 1902. serve the world’s growing demand for food prepared away We are a multi-industry, capital goods manufacturer in two from home. principal markets: Cranes and Related Products (Crane) and In order to secure clearance for the acquisition of Enodis Foodservice Equipment (Foodservice). Crane is recognized from the European Commission and United States Depart- as one of the world’s largest providers of lifting equipment ment of Justice, Manitowoc agreed to sell substantially all for the global construction industry, including lattice-boom of Enodis’ global ice machine operations following comple- cranes, tower cranes, mobile telescopic cranes, and boom tion of the transaction. The businesses that will be sold are trucks. Foodservice is one of the world’s leading innovators operated under the Scotsman, Ice-O-Matic, Simag, Barline, and manufacturers of commercial foodservice equipment Icematic, and Oref brand names. The company has also serving the ice, beverage, refrigeration, food prep, and agreed to sell certain non-ice businesses of Enodis located cooking needs of restaurants, convenience stores, hotels, in Italy that are operated under the Tecnomac and Icematic healthcare, and institutional applications. We have over a brand names. Prior to disposal, the antitrust clearances 100-year tradition of providing high-quality, customer-focused require that the ice businesses are treated as standalone products and support services to our markets worldwide. operations in competition with Manitowoc. The divestiture For the year ended December 31, 2008 we had net sales of of the businesses is expected to be completed during the approximately $4.5 billion. second quarter of 2009. The results of these operations Our Crane business is a global provider of engineered lift have been classified as discontinued operations. solutions, offering one of the broadest lines of lifting On December 31, 2008, the company completed the sale equipment in our industry. We design, manufacture, market, of its Marine segment to Fincantieri Marine Group Holdings and support a comprehensive line of crawler cranes, mobile Inc., a subsidiary of Fincantieri — Cantieri Navali Italiani SpA. telescopic cranes, tower cranes, and boom trucks. Our The sale price in the all-cash deal was approximately Crane products are marketed under the Manitowoc, Grove, $120 million. This transaction will allow the company to Potain, National, and Crane CARE brand names and are used focus its financial assets and managerial resources on the in a wide variety of applications, including energy, petro- growth of its increasingly global Crane and Foodservice busi- chemical and industrial projects, infrastructure development nesses. The company is reporting the Marine segment as a such as road, bridge and airport construction, and commer- discontinued operation for financial reporting purposes as of cial and high-rise residential construction. December 31, 2008, and for all prior periods presented in On October 27, 2008 we completed our acquisition of accordance with SFAS No. 144, “Accounting for the Impair- Enodis plc (Enodis), a global leader in the design and ment or Disposal of Long-Lived Assets”. After reclassifying manufacture of innovative equipment for the commercial the Marine segment to discontinued operations, the com- foodservice industry. The $2.7 billion acquisition, inclusive of pany has two remaining reportable segments, the Crane and the purchase of outstanding shares and rights to shares, Foodservice segments. acquired debt, the settlement of hedges related to the Our principal executive offices are located at 2400 South acquisition and transaction fees, the largest and most recent 44th Street, Manitowoc, Wisconsin 54220.

The Manitowoc Company, Inc. — 2008 Form 10-K 1

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Financial Information About Business Segments These unallocated expenses are corporate overhead, amorti- The following is financial information about the Crane and zation expense of intangible assets with definite lives, inter- Foodservice segments for the years ended December 31, est expense, and income tax expense. The company 2008, 2007 and 2006. The Consolidated Financial State- evaluates segment performance based upon profit and loss ments include the operating results of Enodis from the date before the aforementioned expenses. Restructuring costs of acquisition. The accounting policies of the segments are separately identified in the Consolidated Statements of the same as those described in the summary of significant Operations are included as reductions to the respective seg- accounting policies of the Notes to the Consolidated Finan- ment’s operating earnings for each year below. Amounts are cial Statements included in Item 8 of this Form 10-K, except shown in millions of dollars. that certain expenses are not allocated to the segments.

2008 2007 2006 Net sales from continuing operations: Crane $3,882.9 $3,245.7 $2,235.4 Foodservice 620.1 438.3 415.4 Total $4,503.0 $3,684.0 $2,650.8 Operating earnings (loss) from continuing operations: Crane $ 555.6 $ 470.5 $ 280.6 Foodservice 56.8 61.3 56.2 Corporate (51.7) (48.2) (42.4) Amortization expense (11.6) (5.8) (3.3) Gain on sale of parts line — 3.3 — Restructuring expense (21.7) — — Integration expense (7.6) — — Pension settlements — (5.3) — Operating earnings from continuing operations $ 519.8 $ 475.8 $ 291.1 Capital expenditures: Crane $ 129.4 $ 103.7 $ 51.3 Foodservice 10.9 3.7 10.9 Corporate 10.0 5.4 2.2 Total $ 150.3 $ 112.8 $ 64.4 Total depreciation: Crane $ 66.3 $ 70.4 $ 58.4 Foodservice 12.4 8.0 7.2 Corporate 1.5 1.8 1.8 Total $ 80.2 $ 80.2 $ 67.4 Total assets: Crane $2,223.7 $1,958.0 $1,572.4 Foodservice 3,389.4 341.5 340.1 Corporate 452.3 571.9 307.0 Total $6,065.4 $2,871.4 $2,219.5

2 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 3 CHKSUM Content: 36386 Layout: 23402 Graphics: No Graphics CLEAN

Products and Services We sell our products categorized in the following business segments:

Percentage of Business Segment 2008 Net Sales Key Products Key Brands Cranes and Related 86% Lattice-boom Cranes: which include crawler and truck mounted lattice- Manitowoc Products boom cranes, and crawler crane attachments; Tower Cranes: which include Potain top slewing luffing jib, topless, and self-erecting tower cranes; Mobile Grove Telescopic Cranes: including rough terrain, all-terrain, truck mounted and National industrial cranes; Boom Trucks: which include telescopic and articulated Shuttlelift boom trucks; Parts and Service: which include replacement parts, product Dongyue services, crane rebuilding and remanufacturing services. Crane Care

Foodservice Equipment 14% Primary cooking and warming equipment; Ice-cube machines, ice flaker Cleveland machines and storage bins; Refrigerator and Freezer Equipment; Convotherm Warewashing equipment; beverage dispensers and related products; Delfield serving and storage equipment; and food preparation equipment, cookware, Frymaster kitchen utensils and tools. Garland Jackson Kolpak Kysor Panel Systems Kysor//Warren Lincoln Manitowoc Merrychef Multiplex SerVend

Cranes and Related Products four chords and tubular lacings, mounted on a base which is Our Crane segment designs, manufactures and distributes a either crawler or truck mounted. Lattice-boom cranes weigh diversified line of crawler mounted lattice-boom cranes, less and provide higher lifting capacities than a telescopic which we sell under the Manitowoc name. Our Crane seg- boom of similar length. The lattice-boom cranes are the only ment also designs and manufactures a diversified line of top category of crane that can pick and move simultaneously. slewing and self erecting tower cranes, which we sell under The lattice-boom sections, together with the crane base, are the Potain name. We design and manufacture mobile tele- transported to and erected at a project site. scopic cranes, which we sell under the Grove, Shuttlelift, We currently offer models of lattice-boom cranes with lift- and Dongyue names, and a comprehensive line of hydrauli- ing capacities up to 2,500 U.S. tons, which are used to lift cally powered telescopic boom trucks, which we sell under material and equipment in a wide variety of applications and the National Crane brand name. We also provide crane end markets, including heavy construction, bridge and high- product parts and services, and crane rebuilding and reman- way, duty cycle and infrastructure and energy related proj- ufacturing services which are delivered under the Crane ects. These cranes are also used by the crane rental CARE brand name. In some cases our products are manu- industry, which serves all of the above end markets. factured for us or distributed for us under strategic alliances. Lattice-boom crawler cranes may be classified according Our crane products are used in a wide variety of applications to their lift capacity — low capacity and high capacity. Low throughout the world, including energy and utilities, petro- capacity crawler cranes with 150-U.S. ton capacity or less chemical and industrial projects, infrastructure development are often utilized for general construction and duty cycle such as road, bridge and airport construction, and commer- applications. High capacity crawler cranes with greater than cial and high-rise residential construction. Many of our cus- 150-U.S. ton capacity are utilized to lift materials in a wide tomers purchase one or more crane(s) together with several variety of applications and are often utilized in heavy con- attachments to permit use of the crane in a broader range of struction, energy-related, stadium construction, petro- lifting applications and other operations. Our largest crane chemical work, and dockside applications. We offer four model combined with available options has a lifting capacity low-capacity models and eight high-capacity models. up to 2,500 U.S. tons. Our primary growth drivers are our We also offer our lattice-boom crawler crane customers strength in energy, infrastructure, construction and petro- various attachments that provide our cranes with greater chemical related end markets. capacity in terms of height, movement and lifting. Our principal attachments are: MAX-ERTM attachment, luffing jibs, and Lattice-boom Cranes. Under the Manitowoc brand name RINGERTM attachments. The MAX-ER is a trailing, counter- we design, manufacture and distribute lattice-boom crawler weight, heavy-lift attachment that dramatically improves the cranes. Lattice-boom cranes consist of a lattice-boom, reach, capacity and lift dynamics of the basic crane to which which is a fabricated, high-strength steel structure that has it is mounted. It can be transferred between cranes of the

The Manitowoc Company, Inc. — 2008 Form 10-K 3

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 4 CHKSUM Content: 46325 Layout: 49227 Graphics: No Graphics CLEAN

same model for maximum economy and occupies less maximum jib lengths of 60 meters and lifting capabilities space than competitive heavy-lift systems. A luffing jib is a ranging between 90 and 600 meter-tons. fabricated structure similar to, but smaller than, a lattice- Self-erecting tower cranes are mounted on axles or trans- boom. Mounted at the tip of a lattice-boom, a luffing jib eas- ported on a trailer. The lower segment of the range (Igo ily adjusts its angle of operation permitting one crane with a cranes up to Igo36) unfolds in four sections, two for the luffing jib to make lifts at additional locations on the project tower and two for the jib. The smallest of our models site. It can be transferred between cranes of the same unfolds in less than 8 minutes; larger models erect in a few model to maximize utilization. A RINGER attachment is a hours. Self erecting cranes rotate from the bottom of their high-capacity lift attachment that distributes load reactions mast. We offer 25 models of self erecting cranes with over a large area to minimize ground-bearing pressure. It can maximum jib lengths of 50 meters and lifting capacities also be more economical than transporting and setting up a ranging between 10 and 120 meter-tons which are utilized larger crane. primarily in low to medium rise construction and residential applications. Tower Cranes. Under the Potain brand name we design and manufacture tower cranes utilized primarily in the building Mobile Telescopic Cranes. Under the Grove brand name we and construction industry. Tower cranes offer the ability to lift design and manufacture 35 models of mobile telescopic and distribute material at the point of use more quickly and cranes utilized primarily in industrial, commercial and con- accurately than other types of lifting machinery without utiliz- struction applications, as well as in maintenance applications ing substantial square footage on the ground. Tower cranes to lift and move material at job sites. Mobile telescopic include a stationary vertical tower and a horizontal jib with a cranes consist of a telescopic boom mounted on a wheeled counterweight, which is placed near the vertical tower. A carrier. Mobile telescopic cranes are similar to lattice-boom cable runs through a trolley which is on the jib, enabling the cranes in that they are designed to lift heavy loads using a load to move along the jib. The jib rotates 360 degrees, thus mobile carrier as a platform, enabling the crane to move on increasing the crane’s work area. Unless using a remote and around a job site without typically having to re-erect the control device, operators occupy a cabin, located where the crane for each particular job. Additionally, many mobile tele- jib and tower meet, which provides superior visibility above scopic cranes have the ability to drive between sites, and the worksite. We offer a complete line of tower crane prod- some are permitted on public roadways. We currently offer ucts, including top slewing, luffing jib, topless, self-erecting, the following four types of mobile telescopic cranes capable and special cranes for dams, harbors and other large building of reaching tip heights of 427 feet with lifting capacities up projects. Top slewing cranes are the most traditional form of to 550 tons: (i) rough terrain, (ii) all-terrain, (iii) truck tower cranes. Self-erecting cranes are bottom slewing cranes mounted, and (iv) industrial. which have counterweight located at the bottom of the Rough terrain cranes are designed to lift materials and tower and are able to be erected, used and dismantled on equipment on rough or uneven terrain. These cranes cannot job sites without assist cranes. be driven on public roadways, and, accordingly, must be Top slewing tower cranes have a tower and multi-sectioned transported by truck to a work site. We produce, under the horizontal jib. These cranes rotate from the top of their mast Grove brand name, 10 models of rough terrain cranes capa- and can increase in height with the project. Top slewing ble of tip heights of up to 279 feet and maximum load cranes are transported in separate pieces and assembled at capacities of up to 130 U.S. tons. the construction site in one to three days depending on the All-terrain cranes are versatile cranes designed to lift height. We offer 37 models of top slewing tower cranes materials and equipment on rough or uneven terrain and yet with maximum jib lengths of 85 meters and lifting capabili- are highly maneuverable and capable of highway speeds. ties ranging between 40 and 3,600 meter-tons. These cranes We produce, under the Grove brand name, 14 models of are generally sold to medium to large building and construc- all-terrain cranes capable of tip heights of up to 427 feet and tion groups, as well as rental companies. maximum load capacities of up to 550 tons. Topless tower cranes are a type of top slewing crane and, Truck mounted cranes are designed to provide simple unlike all others, have no cathead or jib tie-bars on the top of set-up and long reach high capacity booms and are capable the mast. The cranes are utilized primarily when overhead of traveling from site to site at highway speeds. These height is constrained or in situations where several cranes cranes are suitable for urban and suburban uses. We produce, are installed close together. We currently offer 7 models of under the Grove brand name, 4 models of truck mounted topless tower cranes with maximum jib lengths of 75 meters cranes capable of tip heights of up to 237 feet and maximum and lifting capabilities ranging between 90 and 300 meter-tons. load capacities of up to 90 U.S. tons. Luffing jib tower cranes, which are a type of top slewing Industrial cranes are designed primarily for plant mainte- crane, have an angled rather than horizontal jib. Unlike other nance, storage yard and material handling jobs. We manufac- tower cranes which have a trolley that controls the lateral ture, under the Grove and Shuttlelift brand names, 8 models movement of the load, luffing jib cranes move their load by of industrial cranes capable of tip heights of up to 92 feet changing the angle of the jib. The cranes are utilized prima- and maximum load capacities of up to 22 tons. rily in urban areas where space is constrained or in situations where several cranes are installed close together. We High Reach Telescopic Hydraulic Cranes. We launched a currently offer 7 models of luffing jib tower cranes with new crane concept in 2007 for heavy lifts that require a high reach, but with minimal ground space and greatly reduced

4 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 5 CHKSUM Content: 18777 Layout: 29962 Graphics: No Graphics CLEAN

erection time. The GTK 1100 is a high reach telescopic Ice-Cube Machines, Ice Flaker Machines and Storage Bins. hydraulic crane that can lift a 77 ton load up to 394 feet, only We design, manufacture and sell ice machines under the requires about six hours to erect and is based on a combina- Manitowoc brand name, serving the foodservice, convention of mobile crane and tower crane technology. ience store, healthcare, restaurant and lodging markets. Our ice machines make ice in cube and flake form, and range in Boom Trucks. We offer our hydraulic and articulated boom daily production capacities. The ice-cube machines are truck products under the National Crane product line. A either self-contained units, which make and store ice, or boom truck is a hydraulically powered telescopic crane or modular units, which make, but do not store ice. articulated crane mounted on a truck chassis. Telescopic boom trucks are used primarily for lifting material on a job Refrigerator and Freezer Equipment. We design, manufac- site, while articulated boom trucks are utilized primarily to ture and sell commercial upright and undercounter refrigera- load and unload truck beds at a job site. We currently offer, tors and freezers, blast freezers, blast chillers and cook-chill under the National Crane brand name, 15 models of tele- systems under the Delfield, McCall, Koolaire, Tecnomac and scoping cranes and 8 models of articulating cranes. The Sadia Refrigeration brand names. We also design, manufac- largest capacity cranes of these types are capable of reach- ture and sell refrigerated self-serve cases, service deli cases ing maximum heights of 176 feet and have lifting capacity and custom merchandisers as well as standard and cus- up to 40 U.S. tons. tomized refrigeration systems under the Kysor/Warren and RDI brand names. We manufacture under the brand names Backlog. The year-end backlog of crane products includes Kolpak, Kysor Panel Systems and Harford-Duracool modular accepted orders that have been placed on a production and fully assembled walk-in refrigerators, coolers and freez- schedule that we expect to be shipped and billed during the ers and prefabricated cooler and freezer panels for use in next year. Manitowoc’s backlog of unfilled orders for the the construction of refrigerated storage rooms and environ- Crane segment at December 31, 2008, 2007 and 2006 was mental systems. $1,948.0 million, $2,877.2 million and $1,534.3 million, respectively. Warewashing Equipment. Under the brand name Jackson, we design, manufacture and sell warewashing equipment Foodservice Equipment and other equipment including racks and tables. We offer a Our Foodservice Equipment business designs, manufac- full range of undercounter dishwashers, door-type dishwash- tures and sells primary cooking and warming equipment; ers and flight-type dishwashers. ice-cube machines, ice flaker machines and storage bins; refrigerator and freezer equipment; ware washing equip- Beverage Dispensers and Related Products. We produce ment; beverage dispensers and related products; serving beverage dispensers, ice/beverage dispensers, beer coolers, and storage equipment; and food preparation equipment, post-mix dispensing valves, backroom equipment and sup- cookware, kitchen utensils and tools. Our suite of products port system components and related equipment for use by is used by commercial and institutional foodservice opera- quick service restaurants, convenience stores, bottling oper- tors such as full service restaurants, quick-service restaurant ations, movie theaters, and the soft-drink industry. Our bev- (QSR) chains, hotels, industrial caterers, supermarkets, con- erage and related products are sold under the Servend, venience stores, hospitals, schools and other institutions. Multiplex, Scotsman Beverage System, TruPour, Manitowoc We have a presence throughout the world’s most significant Beverage Systems and McCann’s brand names. markets in the following product groups: Serving and Storage Equipment. We design, manufacture Primary Cooking and Warming Equipment. We design, and sell a range of buffet equipment and stations, cafete- manufacture and sell a broad array of ranges, griddles, grills, ria/buffet equipment stations, bins, boxes, warming cabi- combination ovens, convection ovens, conveyor ovens, nets, dish carts, utility carts, counters and counter tops, rotisseries, induction cookers, broilers, tilt fry mixer stands, tray dispensers, display and deli cases, heat- pans/kettles/skillets, braising pans, cheese melters/salaman- lamps, insulated and refrigerated salad/food bars, sneeze ders, cook stations, table top and counter top cooking/frying guards and warmers. Our equipment stations, cases, food systems, filtering systems, fryers, hotdog grills and steam- bars and food serving lines are marketed under the Delfield, ers, steam jacketed kettles, steamers and toasters. We sell Viscount and other brand names. traditional oven, combi oven, convection oven, conveyor Food Preparation Equipment, Cookware, Kitchen Utensils oven, accelerated cooking oven, range and grill products and Tools. We manufacture and distribute a wide range of under the Garland, Lincoln, Merrychef, U.S. Range, Techny- food preparation equipment such as tables, grinders, form, Moorwood Vulcan and other brand names. Fryers and shredders, food processors, mixers, dryers, washers, can frying systems are marketed under the Frymaster, Dean and openers, choppers, colanders, cookware, cutlery, egg cook- Moorwood Vulcan brand names while steam equipment is ers, skimmers and utensils. The key brand names for food manufactured and sold under the Cleveland and Con- preparation equipment include Varimixer, Lincoln, Centurion, votherm brands. In addition to cooking, we provide a range Wearever and Redco. of warming, holding, merchandising and serving equipment The end customer base for the Foodservice Equipment under the Delfield, Fabristeel, Frymaster, Merco, Savory, and segment is comprised of a wide variety of foodservice other brand names. providers, including, but not limited to, large multinational

The Manitowoc Company, Inc. — 2008 Form 10-K 5

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 6 CHKSUM Content: 22868 Layout: 23565 Graphics: No Graphics CLEAN

chain restaurants, convenience stores and retail stores; Backlog. The backlog for unfilled orders for our Foodservice chain and independent casual and family dining restaurants; segment at December 31, 2008 and 2007 was not signifi- independent restaurants and caterers; lodging, resort, cant because orders are generally filled shortly after receiv- leisure and convention facilities; health care facilities; ing the customer order. schools and universities; large business and industrial customers; and many other foodservice outlets. We cater to Raw Materials and Supplies some of the largest and most widely recognized multination- The primary raw materials that we use are structural and als in the foodservice and hospitality industries. We do not rolled steel, aluminum, and copper, which is purchased from typically have long term contracts with our customers; how- various domestic and international sources. We also pur- ever, large chains frequently authorize specific foodservice chase engines and electrical equipment and other semi- and equipment manufacturers as approved vendors for particular fully-processed materials. Our policy is to maintain, wher- products and thereafter, sales are made locally or regionally ever possible, alternate sources of supply for our important to end customers via kitchen equipment suppliers, dealers materials and parts. We maintain inventories of steel and or distributors. Many large QSR chains refurbish or open a other purchased material. We have been successful in our large number of outlets, or implement menu changes requir- goal to maintain alternative sources of raw materials and ing investment in new equipment, over a short period of time. supplies, and therefore are not dependent on a single When this occurs, these customers often choose a small source for any particular raw material or supply. number of manufacturers whose approved products may or must be purchased by restaurant operators. We work closely Patents, Trademarks, and Licenses with our customers to develop the products they need and to We hold numerous patents pertaining to our Crane and become the approved vendors for these products. Foodservice products, and have presently pending applica- Our end customers often need equipment upgrades that tions for additional patents in the United States and foreign enable them to improve productivity and food safety, reduce countries. In addition, we have various registered and unreg- labor costs, respond to enhanced hygiene, environmental istered trademarks and licenses that are of material impor- and menu requirements or reduce energy consumption. tance to our business and we believe our ownership of this These changes often require customized cooking and cool- intellectual property is adequately protected in customary ing and freezing equipment. In addition, many restaurants, fashions under applicable law. No single patent, trademark especially QSRs, seek to differentiate their products by or license is critical to our overall business. changing their menu and format. We believe that product development is important to our success because a sup- Seasonality plier’s ability to provide customized or innovative foodser- Typically, the second and third quarters represent our best vice equipment is a primary factor when customers are quarters for our consolidated financial results. In our Crane making their purchasing decisions. Recognizing the impor- segment, summer represents the main construction season. tance of providing innovative products to our customers, we Customers require new machines, parts, and service during invest significant time and resources into new product that season. Since the summer brings warmer weather, research and development. there is also an increase in the use and replacement of ice The Manitowoc Education and Technology Center (ETC) in machines, as well as new construction and remodeling New Port Richey, Florida contains computer assisted design within the foodservice industry. As a result, distributors build platforms, a model shop for on-site development of proto- inventories during the second quarter for the increased types, a laboratory for product testing and various display demand. More recently, the traditional seasonality for our areas for new products including a test kitchen for hands-on Crane segment has been slightly muted due to more diversi- testing of new products and kitchen design services for cus- fied product and geographic end markets. tomers. We also use the ETC to provide training for our customers, marketing representatives, service providers, Competition industry consultants, dealers and distributors. We sell all of our products in highly competitive industries. At our ETC and through outreach programs, we also work We compete in each of our industries based on product directly with our customers to provide customized solutions design, quality of products and aftermarket support serv- to meet their precise needs. When a customer requests a ices, product performance, maintenance costs, and price. new or refined product, our engineering team designs, pro- Some of our competitors may have greater financial, market- totypes, tests, demonstrates, evaluates and refines products ing, manufacturing or distribution resources than we do. We in our Technology Center with our customer. The ETC works believe that we benefit from the following competitive together with the new product development teams at our advantages: a strong brand name, a reputation for quality operating companies so that new products incorporate our products and aftermarket support services, an established overall product expertise and technological resources. We network of global distributors and customer relationships, also provide a fee-based consulting service team which broad product line offerings in the markets we serve, and a interacts with targeted customers to effectively integrate commitment to engineering design and product innovation. new technology, improve facility operation and labor However, we cannot be certain that our products and serv- processes and to assist in developing high performance ices will continue to compete successfully or that we will be kitchens of the future.

6 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 7 CHKSUM Content: 34311 Layout: 11103 Graphics: No Graphics CLEAN

able to retain our customer base or improve or maintain our table sets forth our primary competitors in each of our busi- profit margins on sales to our customers. The following ness segments:

Business Segment Products Primary Competitors Cranes and Related Products Lattice-boom Crawler Cranes Hitachi Sumitomo; Kobelco; Liebherr; Sumitomo/Link-Belt; Terex; XCMG; Fushun; Zoomlion; and Sany Tower Cranes Comansa; Terex Comedil/Peiner; Liebherr; FM Gru; Jaso; Raimondi; Viccario; Saez; Benezzato; Cattaneo; Sichuan Construction Machinery; Shenyang; Zoomlion; Jianglu; and Yongmao Mobile Telescopic Cranes Liebherr; Link-Belt; Terex; Tadano; XCMG; Kato; Locatelli; Marchetti; Luna; Broderson; Valla; Ormig; Bencini; and Zoomlion Boom Trucks Terex; Manitex; Altec; Elliott; Tadano; Fassi; Palfinger; Furukawa; and Hiab Foodservice Equipment Ice-Cube Machines, Ice Flaker Machines, Hoshizaki; Scotsman; Follet; Ice-O-Matic; Brema; Aucma; and Vogt Storage Bins Beverage Dispensers and Related Products Automatic Bar Controls; Celli; Cornelius; Hoshizaki/Lancer Corporation; and Vin Service Refrigerator and Freezer Equipment American Panel; ICS; Nor-Lake; Master-Bilt; Thermo-Kool; W.A. Brown; Bally; Arctic; Beverage Air; Traulsen; True Foodservice; TurboAir; and Masterbilt Primary Cooking Equipment Ali Group; Electrolux; Dover Industries; Duke; Henny Penny; ITW; Middleby; and Rational Serving, Warming and Storage Equipment Alto Shaam; Cambro; Duke; Hatco; ITW; Middleby; Standex; and Vollrath Food Preparation Equipment Ali Group; Bizerba; Electrolux; German Knife; Globe; ITW; and Univex Warewashing Equipment ADS; Auto-Chlor; Ali Group; Electrolux; Insinger; ITW; Meiko; and Winterhalter

Engineering, Research and Development Employee Relations Our extensive engineering, research and development capa- As of December 31, 2008, we employ approximately 18,400 bilities have been key drivers of our success. We engage in people and have labor agreements with 16 union locals in research and development activities at all of our significant North America. During the fourth quarter we added six facili- manufacturing facilities. We have a staff of engineers and ties represented by unions from the Enodis acquisition. In technicians on three continents that are responsible for addition, we reduced the number of unions by two with the improving existing products and developing new products. sale of the Marine segment. A large majority of our Euro- We incurred research and development costs of $40.0 million pean employees belong to European trade unions and dur- in 2008, $36.1 million in 2007 and $31.2 million in 2006. The ing 2008, a contract was signed by all unions for our French 2008 total includes research and development costs of Crane locations. The company has three trade unions in $4.5 million from the Enodis business since its acquisition China and a trade union in India. The Indian trade contract on October 27, 2008. will expire in June of 2009. There were only minor work Our team of engineers focuses on developing innovative, stoppages during 2008 and no work stoppages during 2007 high performance, low maintenance products that are or 2006. intended to create significant brand loyalty among customers. Design engineers work closely with our manufacturing and Available Information marketing staff, enabling us to identify changing end-user We make available, free of charge at our internet site requirements, implement new technologies and effectively (www.manitowoc.com), our annual report on Form 10-K, introduce product innovations. Close, carefully managed quarterly reports on Form 10-Q, current reports on Form 8-K, relationships with dealers, distributors and end users help our proxy statement and any amendments to those reports, us identify their needs, not only for products, but for the as soon as reasonably practicable after we electronically file service and support that is critical to their profitable opera- such material with, or furnish it to, the Securities and tions. As part of our ongoing commitment to provide supe- Exchange Commission (SEC). Our SEC reports can be rior products, we intend to continue our efforts to design accessed through the investor relations section of our web- products that meet evolving customer demands and reduce site. Although some documents available on our website are the period from product conception to product introduction. filed with the SEC, the information generally found on our

The Manitowoc Company, Inc. — 2008 Form 10-K 7

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 8 CHKSUM Content: 51817 Layout: 52099 Graphics: No Graphics CLEAN

website is not part of this or any other report we file with or maintains electronic versions of our reports on its website at furnish to the SEC. www.sec.gov. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room located at Geographic Areas 100 F Street NE, Washington, DC 20549. The public may Net sales from continuing operations and long-lived asset obtain information on the operation of the Public Reference information by geographic area as of and for the years Room by calling the SEC at 1-800-SEC-0330. The SEC also ended December 31 are as follows:

Net Sales Long-Lived Assets 2008 2007 2006 2008 2007 United States $1,896.6 $1,627.4 $1,252.6 $1,607.1 $ 609.0 Other North America 127.7 114.1 80.5 28.5 — Europe 1,444.2 1,215.0 817.0 2,105.5 483.5 Asia 395.0 299.5 170.4 177.2 118.7 Middle East 314.0 183.0 167.8 1.8 1.7 Central and South America 117.4 61.9 54.0 0.6 0.4 Africa 82.8 64.2 50.6 — — South Pacific and Caribbean 13.5 16.0 5.0 5.4 5.6 Australia 111.8 102.9 52.9 5.0 6.3 Total $4,503.0 $3,684.0 $2,650.8 $3,931.1 $1,225.2

ITEM 1A. RISK FACTORS demand for our products, which in turn can affect our performance. Weather conditions can substantially affect our The following are risk factors identified by management that Foodservice segment, as relatively cool summer weather if any events contemplated by the following risks actually and cooler-than-normal weather in hot climates tend to occur, then our business, financial condition or results of decrease sales of ice and beverage dispensers. Our sales operations could be materially adversely affected. depend in part upon our customers’ replacement or repair cycles. Adverse economic conditions may cause customers Some of our business segments are cyclical or are to forego or postpone new purchases in favor of repairing otherwise sensitive to volatile or variable factors. A existing machinery. downturn or weakness in overall economic activity or fluctuations in those other factors can have a material A substantial portion of our growth has come adverse effect on us. through acquisitions. We may not be able to identify Historically, sales of products that we manufacture and sell or complete future acquisitions, which could have been subject to cyclical variations caused by changes adversely affect our future growth. in general economic conditions and other factors. In particu- Our growth strategy historically has been based in part lar, the demand for our crane products is cyclical and is upon acquisitions. Our successful growth through acquisi- impacted by the strength of the economy generally, interest tions depends upon our ability to identify and successfully rates and other factors that may have an effect on the level negotiate suitable acquisitions, obtain financing for future of construction activity on an international, national or acquisitions on satisfactory terms or otherwise complete regional basis. During periods of expansion in construction acquisitions in the future. In addition, our level of indebted- activity, we generally have benefited from increased demand ness may increase in the future if we finance other acquisi- for our products. Conversely, during recessionary periods, tions with debt. This would cause us to incur additional we have been adversely affected by reduced demand for interest expense and could increase our vulnerability to our products. In addition, the strength of the economy gen- general adverse economic and industry conditions and limit erally may affect the rates of expansion, consolidation, reno- our ability to service our debt or obtain additional financing. vation and equipment replacement within the restaurant, We cannot assure that future acquisitions will not have a lodging, convenience store and healthcare industries, which material adverse effect on our financial condition, results of may affect the performance of our Foodservice segment. operations and cash flows. Furthermore, an economic recession may impact leveraged companies, as Manitowoc has been at times, more than Our future success depends on our ability to competing companies with less leverage and may have a effectively integrate acquired companies and material adverse effect on our financial condition, results of manage growth. operations and cash flows. Our growth has placed, and will continue to place, signifi- Products in our Crane segment depend in part on federal, cant demands on our management and operational and state, local and foreign governmental spending and appro- financial resources. We have made significant acquisitions priations, including infrastructure, security and defense since 1995. Future acquisitions will require integration of the outlays. Reductions in governmental spending can affect acquired companies’ sales and marketing, distribution,

8 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 9 CHKSUM Content: 60024 Layout: 46031 Graphics: No Graphics CLEAN

manufacturing, engineering, purchasing, finance and admin- particular, at times, we have experienced significant istrative organizations. Experience has taught us that the increases in steel, aluminum, foam, and copper prices in successful integration of acquired businesses requires sub- recent periods, which have increased our expenses. If we stantial attention from our senior management and the man- are not able to reduce product cost in other areas or pass agement of the acquired companies, which tends to reduce future raw material price increases on to our customers, our the time that they have to manage the ongoing business. margins could be adversely affected. In addition, because We are currently in the process of integrating the Enodis we maintain limited raw material and component inventories, acquisition. While we believe we have successfully inte- even brief unanticipated delays in delivery by suppliers — grated our acquisitions prior to Enodis, we cannot be including those due to capacity constraints, labor disputes, assured that we will be able to integrate any future acquisi- impaired financial condition of suppliers, weather emergen- tions successfully, that these acquired companies will cies or other natural disasters — may impair our ability to operate profitably or that the intended beneficial effect from satisfy our customers and could adversely affect our these acquisitions will be realized. Our financial condition, financial performance. results of operations and cash flows could be materially and adversely affected if we do not successfully integrate Enodis We increasingly manufacture and sell our products or any other future companies that we may acquire or if we outside of the United States, which may present do not manage our growth effectively. additional risks to our business. For the years ended December 31, 2008, 2007 and 2006, Because we participate in industries that are approximately 58%, 56% and 53%, respectively, of our net intensely competitive, our net sales and profits could sales were attributable to products sold outside of the decline as we respond to competition. United States. Expanding international sales is part of our We sell most of our products in highly competitive indus- growth strategy. We acquired several manufacturing facili- tries. We compete in each of those industries based on ties located in Europe, Asia and North America with the product design, quality of products, quality and responsive- Enodis acquisition. We ended 2008 with an additional 33 major ness of product support services, product performance, facilities; of which 20 are in North America, nine are in maintenance costs and price. Some of our competitors may Europe, and four are in Asia. See further detail related to the have greater financial, marketing, manufacturing and distri- facilities at Item 2 “Properties Owned”. International opera- bution resources than we do. We cannot be certain that our tions generally are subject to various risks, including politi- products and services will continue to compete successfully cal, military, religious and economic instability, local labor with those of our competitors or that we will be able to market conditions, the imposition of foreign tariffs, the retain our customer base or improve or maintain our profit impact of foreign government regulations, the effects of margins on sales to our customers, all of which could mate- income and withholding tax, governmental expropriation, rially and adversely affect our financial condition, results of and differences in business practices. We may incur operations and cash flows. increased costs and experience delays or disruptions in product deliveries and payments in connection with interna- If we fail to develop new and innovative products or tional manufacturing and the transfer to the new facilities if customers in our markets do not accept them, our and sales that could cause loss of revenue. Unfavorable results would be negatively affected. changes in the political, regulatory and business climate and Our products must be kept current to meet our customers’ currency devaluations of various foreign jurisdictions could needs. To remain competitive, we therefore must develop have a material adverse effect on our financial condition, new and innovative products on an on-going basis. If we fail results of operations and cash flows. to make innovations, or the market does not accept our new products, our sales and results would suffer. We depend on our key personnel and the loss of We invest significantly in the research and development of these personnel could have an adverse affect on our new products. These expenditures do not always result in business. products that will be accepted by the market. To the extent Our success depends to a large extent upon the continued they do not, whether as a function of the product or the services of our key executives, managers and skilled person- business cycle, we will have increased expenses without nel. Generally, these employees are not bound by employ- significant sales to benefit us. Failure to develop successful ment or non-competition agreements, and we cannot be new products may also cause potential customers to sure that we will be able to retain our key officers and choose to purchase used cranes or other equipment, or employees. We could be seriously harmed by the loss of key competitors’ products, rather than invest in new products personnel if it were to occur in the future. manufactured by us. Our operations and profitability could suffer if we Price increases in some materials and sources of experience labor relations problems. supply could affect our profitability. We employ approximately 18,400 people and have labor We use large amounts of steel, stainless steel, aluminum, agreements with 16 union locals in North America. In addi- copper and electronic controls among other items in the tion, a large majority of our European employees belong to manufacture of our products. Occaisionally, market prices European trade unions. These collective bargaining or simi- of some of our key raw materials increase significantly. In lar agreements expire at various times in each of the next

The Manitowoc Company, Inc. — 2008 Form 10-K 9

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 10 CHKSUM Content: 1199 Layout: 13526 Graphics: No Graphics CLEAN

several years. We believe that we have satisfactory relations process, we regularly consider the divestiture of non-core with our unions and, therefore, anticipate reaching new and non-strategic operations or facilities. Depending upon agreements on satisfactory terms as the existing agree- the circumstances and terms, the divestiture of a profitable ments expire. However, we may not be able to reach new operation or facility could negatively affect our earnings. agreements without a work stoppage or strike and any new agreements that are reached may not be reached on terms Environmental liabilities that may arise in the future satisfactory to us. A prolonged work stoppage or strike at could be material to us. any one of our manufacturing facilities could have a material Our operations, facilities and properties are subject to exten- adverse effect on our financial condition, results of opera- sive and evolving laws and regulations pertaining to air emis- tions and cash flows. sions, wastewater discharges, the handling and disposal of solid and hazardous materials and wastes, the remediation If we fail to protect our intellectual property rights or of contamination, and otherwise relating to health, safety maintain our rights to use licensed intellectual and the protection of the environment. As a result, we are property, our business could be adversely affected. involved from time to time in administrative or legal pro- Our patents, trademarks and licenses are important in the ceedings relating to environmental and health and safety operation of our businesses. Although we intend to protect matters, and have in the past and will continue to incur capi- our intellectual property rights vigorously, we cannot be cer- tal costs and other expenditures relating to such matters. tain that we will be successful in doing so. Third parties may Based on current information, we believe that any costs assert or prosecute infringement claims against us in con- we may incur relating to environmental matters will not be nection with the services and products that we offer, and we material, although we can give no assurances. We also can- may or may not be able to successfully defend these claims. not be certain that identification of presently unidentified Litigation, either to enforce our intellectual property rights or environmental conditions, more vigorous enforcement by to defend against claimed infringement of the rights of oth- regulatory authorities, or other unanticipated events will not ers, could result in substantial costs and in a diversion of our arise in the future and give rise to additional environmental resources. In addition, if a third party would prevail in an liabilities, compliance costs and/or penalties which could be infringement claim against us, then we would likely need to material. Further, environmental laws and regulations are obtain a license from the third party on commercial terms, constantly evolving and it is impossible to predict accurately which would likely increase our costs. Our failure to maintain the effect they may have upon our financial condition, or obtain necessary licenses or an adverse outcome in any results of operations or cash flows. litigation relating to patent infringement or other intellectual property matters could have a material adverse effect on our We are exposed to the risk of foreign currency financial condition, results of operations and cash flows. fluctuations. Some of our operations are or will be conducted by sub- Our results of operations may be negatively sidiaries in foreign countries. The results of the operations impacted by product liability lawsuits. and the financial position of these subsidiaries will be Our business exposes us to potential product liability risks reported in the relevant foreign currencies and then trans- that are inherent in the design, manufacture, sales and use lated into U.S. dollars at the applicable exchange rates for of our products, especially our crane products. Certain of inclusion in our consolidated financial statements, which are our businesses also have experienced claims relating to past stated in U.S. dollars. The exchange rates between many of asbestos exposure. Neither we nor our affiliates have to these currencies and the U.S. dollar have fluctuated signifi- date incurred material costs related to these asbestos cantly in recent years and may fluctuate significantly in the claims. We vigorously defend ourselves, however, a sub- future. Such fluctuations may have a material effect on our stantial increase in the number of claims that are made results of operations and financial position and may signifi- against us or the amounts of any judgments or settlements cantly affect the comparability of our results between finan- could materially and adversely affect our reputation and our cial periods. financial condition, results of operations and cash flows. In addition, we incur currency transaction risk whenever one of our operating subsidiaries enters into a transaction Some of our products are built under fixed-price using a different currency than its functional currency. We agreements; cost overruns therefore can hurt our attempt to reduce currency transaction risk whenever one of results. our operating subsidiaries enters into a transaction using a Some of our work is done under agreements on a fixed-price different currency than its functional currency by: basis. If we do not accurately estimate our costs, we may • matching cash flows and payments in the same currency; incur a loss under these contracts. Even if the agreements • direct foreign currency borrowing; and have provisions which allow reimbursement for cost over- • entering into foreign exchange contracts for hedging runs, we may not be able to recoup excess expenses. purposes. However, we may not be able to hedge this risk com- Strategic divestitures could negatively affect our pletely or at an acceptable cost, which may adversely affect results. our results of operations, financial condition and cash flows We regularly review our business units and evaluate them in future periods. against our core business strategies. As part of that

10 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 11 CHKSUM Content: 50199 Layout: 63642 Graphics: No Graphics CLEAN

Increased or unexpected product warranty claims substantially all of our assets. In addition, our senior credit could adversely affect us. facility requires us to maintain specified financial ratios and We provide our customers a warranty covering workmanship, satisfy certain financial condition tests. Our ability to comply and in some cases materials, on products we manufacture. with these covenants may be affected by events beyond our Our warranty generally provides that products will be free control, including prevailing economic, financial and industry from defects for periods ranging from 12 months to 60 months conditions. These covenants may also require that we take with certain equipment having longer term warranties. If a action to reduce our debt or to act in a manner contrary to product fails to comply with the warranty, we may be obli- our business objectives. We cannot be certain that we will gated, at our expense, to correct any defect by repairing or meet any future financial tests or that the lenders will waive replacing the defective product. Although we maintain war- any failure to meet those tests. See additional discussion in ranty reserves in an amount based primarily on the number of Note 10, “Debt.” units shipped and on historical and anticipated warranty If we default under our debt agreements, our lenders claims, there can be no assurance that future warranty claims could elect to declare all amounts outstanding under our will follow historical patterns or that we can accurately antici- debt agreements to be immediately due and payable and pate the level of future warranty claims. An increase in the could proceed against any collateral securing the debt. Under rate of warranty claims or the occurrence of unexpected war- those circumstances, in the absence of readily-available ranty claims could materially and adversely affect our financial refinancing on favorable terms, we might elect or be com- condition, results of operations and cash flows. pelled to enter bankruptcy proceedings, in which case our shareholders could lose the entire value of their investment Some of our customers rely on financing with third in our common stock. parties to purchase our products, and we may incur expenses associated with our assistance to We are in the process of implementing global ERP customers in securing third party financing. systems in our Foodservice and Crane segments. We rely principally on sales of our products to generate cash We are in the process of implementing a new global ERP from operations. A portion of our sales is financed by third- system in the Foodservice segment and a separate global party finance companies on behalf of our customers. The ERP system in the Crane segment. These systems will availability of financing by third parties is affected by general replace many of the company’s existing operating and economic conditions, the credit worthiness of our cus- financial systems. Such implementations are a major tomers and the estimated residual value of our equipment. undertaking both financially and from a management and In certain transactions we provide residual value guarantees personnel perspective. Should the systems not be imple- and buyback commitments to our customers or the third mented successfully and within budget or if the systems do party financial institutions. Deterioration in the credit quality not perform in a satisfactory manner, it could be disruptive of our customers could negatively impact their ability to and/or adversely affect the operations and results of opera- obtain the resources needed to make purchases of our tions of the company, including the ability of the company to equipment or their ability to obtain third-party financing. In report accurate and timely financial results. addition, if the actual value of the equipment for which we have provided a residual value guaranty declines below the Our inability to recover from natural or man made amount of our guaranty, we may incur additional costs, disaster could adversely affect our business. which may negatively impact our financial condition, results Our business and financial results may be affected by certain of operations and cash flows. events that we cannot anticipate or that are beyond our control, such as natural or man-made disasters, national emer- Our leverage may impair our operations and financial gencies, significant labor strikes, work stoppages, political condition. unrest, war or terrorist activities that could curtail production As of December 31, 2008, our total consolidated debt was at our facilities and cause delayed deliveries and canceled $2,655.3 million as compared to consolidated debt of orders. In addition, we purchase components and raw mate- $230.6 million as of December 31, 2007. The increase is rials and information technology and other services from related to our acquisition of Enodis on October 27, 2008. See numerous suppliers, and, even if our facilities are not directly further detail related to the debt at Note 10, “Debt.” Our debt affected by such events, we could be affected by interruptions could have important consequences, including increasing our at such suppliers. Such suppliers may be less likely than our vulnerability to general adverse economic and industry condi- own facilities to be able to quickly recover from such events tions; requiring a substantial portion of our cash flows from and may be subject to additional risks such as financial prob- operations be used for the payment of interest rather than to lems that limit their ability to conduct their operations. We fund working capital, capital expenditures, acquisitions and cannot assure you that we will have insurance to adequately general corporate requirements; limiting our ability to obtain compensate us for any of these events. additional financing; and limiting our flexibility in planning for, or reacting to, changes in our business and the industries in ITEM 1B. UNRESOLVED STAFF COMMENTS which we operate. The company has received no written comments regarding The agreements governing our debt include covenants its periodic or current reports from the staff of the Securities that restrict, among other things, our ability to incur addi- and Exchange Commission (SEC) that were issued 180 days tional debt; pay dividends on or repurchase our equity; or more preceding the end of our fiscal 2008 that remain make investments; and consolidate, merge or transfer all or unresolved.

The Manitowoc Company, Inc. — 2008 Form 10-K 11

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 12 CHKSUM Content: 54861 Layout: 49514 Graphics: No Graphics CLEAN

ITEM 2. PROPERTIES OWNED

The following table outlines the principal facilities we own or lease as of December 31, 2008. With the Enodis acquisition, the Foodservice segment added an additional 20 facilities in North America, nine facilities in Europe, and four facilities in Asia. Approximate Facility Location Type of Facility Square Footage Owned/Leased Cranes and Related Products Europe/Asia/Africa Wilhelmshaven, Germany Manufacturing/Office and Storage 410,000 Owned/Leased Moulins, France Manufacturing/Office 355,000 Owned/Leased Charlieu, France Manufacturing/Office 323,000 Owned/Leased Presov, Slovak Republic Manufacturing/Office 295,300 Owned Zhangjiagang, China Manufacturing 800,000 Owned Fanzeres, Portugal Manufacturing 183,000 Leased Baltar, Portugal Manufacturing 68,900 Owned Pune, India Manufacturing 190,000 Leased La Clayette, France Manufacturing/Office 161,000 Owned/Leased Niella Tanaro, Italy Manufacturing 370,016 Owned Ecully, France Office 85,000 Owned Alfena, Portugal Office 84,000 Owned Langenfeld, Germany Office/Storage and Field Testing 80,300 Leased Osny, France Office/Storage/Repair 43,000 Owned Decines, France Office/Storage 47,500 Leased Vaux-en-Velin, France Office/Workshop 17,000 Owned Naia, Portugal Manufacturing 17,000 Owned Vitrolles, France Office 16,000 Owned Buckingham, United Kingdom Office/Storage 78,000 Leased Lusigny, France Crane Testing Site 10,000 Owned Baudemont, France Office 8,000 Owned Singapore Office/Storage 49,000 Leased Tai’an, China (Joint Venture) Manufacturing 571,000 Owned Accra, Ghana Office 4,265 Leased Alger, Algeria Office 278 Leased Sydney, Australia Office/Storage 43,000 Leased Dubai, UAE Office/Workshop 10,000 Leased United States Shady Grove, Pennsylvania Manufacturing/Office 1,278,000 Owned Manitowoc, Wisconsin Manufacturing/Office 532,500 Owned Quincy, Pennsylvania Manufacturing 36,000 Owned Bauxite, Arkansas Manufacturing/Office 22,000 Owned Port Washington, Wisconsin Manufacturing 82,000 Owned Foodservice Equipment Europe/Asia Hangzhou, China Manufacturing/Office 260,000 Owned/Leased London, United Kingdom Office 4,600 Leased Eglfing, Germany Manufacturing/Office/Warehouse 130,000 Leased Longford Town, Ireland Manufacturing/Office 10,500 Leased Castelfranco, Italy Manufacturing/Office 242,000 Owned Milan, Italy Manufacturing/Office/Warehouse 150,000 Leased Pietrasanta (LU), Italy Manufacturing/Office 5,400 Leased Aldershot, United Kingdom Manufacturing/Office 20,000 Leased Halesowen, United Kingdom Manufacturing/Office 84,000 Leased Sheffield, United Kingdom Manufacturing/Office 100,000 Leased Shanghai, China Manufacturing/Office/Warehouse 62,500 Leased Foshan, China Manufacturing/Office/Warehouse 40,000 Leased Singapore Manufacturing/Office/Warehouse 40,000 Leased Bangkok, Thailand (Joint Venture) Manufacturing/Office 69,000 Owned

12 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 13 CHKSUM Content: 49353 Layout: 44764 Graphics: No Graphics CLEAN

Approximate Facility Location Type of Facility Square Footage Owned/Leased North America Manitowoc, Wisconsin Manufacturing/Office 376,000 Owned Parsons, Tennessee(1) Manufacturing 214,000 Owned Sellersburg, Indiana Manufacturing/Office 140,000 Owned La Mirada, California Manufacturing/Office 77,000 Leased Aberdeen, Maryland Manufacturing/Office 67,000 Owned Los Angeles, California Manufacturing/Office 90,000 Leased Los Angeles, California Manufacturing 29,000 Leased Manitowoc, Wisconsin Office 13,000 Leased Tijuana, Mexico Manufacturing 30,000 Leased New Port Richey, Florida Office/Technology Center 42,000 Owned Goodyear, Arizona Manufacturing/Office 50,000 Leased Denver, Colorado Manufacturing/Office 168,000 Owned Columbus, Georgia(1) Manufacturing/Office/Warehouse 540,000 Owned/Leased Fort Wayne, Indiana Manufacturing/Office 358,000 Leased Barbourville, Kentucky Manufacturing/Office 115,000 Owned Shreveport, Louisiana(2) Manufacturing/Office 384,000 Owned Mt. Pleasant, Michigan Manufacturing/Office 330,000 Owned Baltimore, Maryland Manufacturing/Office 16,000 Leased Cleveland, Ohio Manufacturing/Office 180,000 Owned Freeland, Pennsylvania Manufacturing/Office 150,000 Owned Fairfax, South Carolina Manufacturing/Warehouse 360,000 Owned Covington, Tennessee Manufacturing/Office 188,000 Owned Piney Flats, Tennessee Manufacturing/Office 110,000 Leased Fort Worth, Texas Manufacturing/Office 183,000 Leased Concord, Ontario, Canada Manufacturing/Office 116,000 Leased Mississauga, Ontario, Canada Manufacturing/Office 155,000 Leased Corporate Manitowoc, Wisconsin Office 34,000 Owned Manitowoc, Wisconsin Office 31,320 Leased Manitowoc, Wisconsin Hanger Ground Lease 31,320 Leased

(1) There are three separate locations within Parsons, Tennessee and Columbus, Georgia. (2) There are two separate locations within Shreveport, Louisiana.

In addition, we lease sales office and warehouse space for See Note 20, “Leases” to the Consolidated Financial State- our Crane segment in Breda, The Netherlands; Begles, France; ments included in Item 8 of this Form 10-K for additional Lille, France; Nantes, France; Toulouse, France; Nice, France; information regarding leases. Orleans, France; Persans, France; Parabiago, Italy; Lagenfeld, Germany; Munich, Germany; Budapest, Hungary; Warsaw, ITEM 3. LEGAL PROCEEDINGS Poland; Melbourne, Australia; Brisbane, Australia; Beijing, China; Xi’an, China; Dubai, UAE; Makati City, Philippines; Our global operations are governed by laws addressing the Cavite, Philippines; Harayana, India,; New Delhi, India; protection of the environment and employee safety and Hyderabad, India; Seoul, Korea; Moscow, Russia; Netvorice, health. Under various circumstances, these laws impose the Czech Republic; Manitowoc, Wisconsin; Shanghai, civil and criminal penalties and fines, as well as injunctive China; Monterrey, Mexico; Sao Paulo, Brazil; Reno, Nevada; and remedial relief, for noncompliance. They also may and North Las Vegas, Nevada. We lease office and warehouse require remediation at sites where company related sub- space for our Foodservice segment in Salem, Virginia; stances have been released into the environment. Irwindale, California; Paris, France; Madrid, Spain; Barcelona, We have expended substantial resources globally, both Spain; Langley, United Kingdom; and Ecully, France. We also financial and managerial, to comply with the applicable laws own sales offices and warehouse facilities for our Crane and regulations, and to protect the environment and our segment in Dole, France and Rouen, France. workers. We believe we are in substantial compliance with such laws and regulations and we maintain procedures

The Manitowoc Company, Inc. — 2008 Form 10-K 13

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 14 CHKSUM Content: 48039 Layout: 1227 Graphics: No Graphics CLEAN

designed to foster and ensure compliance. However, we resolved in various ways with the regulatory authorities with- have been and may in the future be subject to formal or out material commitments or penalties to the company. informal enforcement actions or proceedings regarding non- For information concerning other contingencies and compliance with such laws or regulations, whether or not uncertainties, see Note 16, “Contingencies and Significant determined to be ultimately responsible in the normal Estimates” to the Consolidated Financial Statements course of business. Historically, these actions have been included in Item 8 of this Form 10-K.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to security holders for a vote during the fourth quarter of our fiscal year ended December 31, 2008.

Executive Officers of the Registrant Each of the following officers of the company has been elected by the Board of Directors. The information presented is as of March 2, 2009.

Principal Position Name Age Position With The Registrant Held Since Glen E. Tellock 48 Chairman, President, and Chief Executive Officer 2009

Carl J. Laurino 47 Senior Vice President and Chief Financial Officer 2004

Thomas G. Musial 57 Senior Vice President of Human Resources and Administration 2000

Maurice D. Jones 49 Senior Vice President, General Counsel and Secretary 2004

Dean J. Nolden 40 Vice President of Finance and Assistant Treasurer 2005

Eric Etchart 52 Senior Vice President of the Company and President Crane Segment 2007

Michael J. Kachmer 50 Senior Vice President of the Company and President Foodservice Segment 2007

Glen E. Tellock has been the company’s president and manager of human resources (1987), and personnel/industrial chief executive officer since May 2007 and was elected as relations specialist (1976). chairman of the board effective February 13, 2009. He had Maurice D. Jones has been general counsel and secretary served as the senior vice president of The Manitowoc Com- since 1999 and was elected vice president in 2002 and a pany, Inc. and president and general manager of the Mani- senior vice president in 2004. Prior to joining the company, towoc Crane segment since 2002. Previously, he served as Mr. Jones was a shareholder in the law firm of Davis and the company’s senior vice president and chief financial offi- Kuelthau, S.C., and served as legal counsel for Banta cer (1999), vice president of finance and treasurer (1998), Corporation. corporate controller (1992) and director of accounting (1991). Dean J. Nolden was named vice president of finance and Prior to joining the company, Mr. Tellock served as financial assistant treasurer in May 2005. Mr. Nolden joined the com- planning manager with the Denver Post Corporation, and as pany in November 1998 as corporate controller and served an audit manager for Ernst & Whinney. in that capacity until his promotion to Vice President Finance Carl J. Laurino was named senior vice president and chief and Controller in May 2004. Prior to joining the company, financial officer in May 2004. He had served as Treasurer since Mr. Nolden spent eight years in public accounting in the May 2001. Mr. Laurino joined the company in January 2000 as audit practice of PricewaterhouseCoopers LLP. He left that assistant treasurer and served in that capacity until his promo- firm in 1998 as an audit manager. tion to treasurer. Previously, Mr. Laurino spent 15 years in the Eric Etchart was named senior vice president of The Mani- commercial banking industry with Firstar Bank (n/k/a US Bank), towoc Company, Inc. and president and general manager of Norwest Bank (n/k/a Wells Fargo), and Associated Bank. During the Manitowoc Crane segment in May 2007. Mr. Etchart pre- that period, Mr. Laurino held numerous positions of increasing viously served as executive vice president of the Manitowoc responsibility including commercial loan officer with Norwest Crane segment for the Asia/Pacific region since 2002. Prior Bank, Vice President — Business Banking with Associated to joining the company, Mr. Etchart served as managing Bank and Vice President and Commercial Banking Manager director in the Asia/Pacific region for Potain S.A.; as manag- with Firstar. ing director in Italy for Potain S.P.A.; and as vice president of Thomas G. Musial has been senior vice president of human international sales and marketing for PPM. resources and administration since 2000. Previously, he was Michael J. Kachmer joined the company in February of vice president of human resources and administration (1995), 2007 as senior vice president of The Manitowoc Company, Inc.

14 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 15 CHKSUM Content: 58113 Layout: 26946 Graphics: No Graphics CLEAN

and president and general manager of the Manitowoc dividends in the amount of $0.018 per share were paid in Foodservice segment. Prior to joining the company, March, June, September and December of 2006 and in Mr. Kachmer held executive positions for Culligan Interna- March and June of 2007. tional Company since 2000 and most recently served as the At its July 2007 meeting, the board of directors approved chief operating officer. In addition, Mr. Kachmer has held a pre-split quarterly dividend of $0.04 per share of common executive and operational roles in a number of global manu- stock ($0.02 per share of common stock post-split) payable facturing companies, including Ball Corporation and Firestone on September 10, 2007, to shareholders of record on Tire & Rubber. August 31, 2007. Quarterly dividends in the amount of $0.02 per share were paid in September and December of 2007 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY and for March, June, September, and December of 2008. AND RELATED STOCKHOLDER MATTERS On July 26, 2007, the board of directors authorized a two-for-one split of the company’s common stock. Record The company’s common stock is traded on the New York holders of Manitowoc’s common stock at the close of busi- Stock Exchange under the symbol MTW. At December 31, ness on August 31, 2007 received on September 10, 2007 2008, the approximate number of record shareholders of one additional share of common stock for every share of common stock was 2,512. The amount and timing of the Manitowoc common stock they owned as of August 31, annual dividend is determined by the board of directors at 2007. Manitowoc shares outstanding at the close of busi- regular times each year. At its February 2005 meeting, the ness on August 31, 2007 totaled 62,787,642. The company’s board of directors approved the return to a quarterly dividend common stock began trading at its post-split price at the payment beginning with the first quarter of 2005. Quarterly beginning of trading on September 11, 2007.

The high and low sales prices of the common stock were as follows for 2008, 2007 and 2006 (amounts have been adjusted for the two-for-one stock split discussed above):

Year Ended 2008 2007 2006 December 31 High Low Close High Low Close High Low Close 1st Quarter $48.90 $30.07 $40.80 $32.64 $25.67 $31.77 $23.85 $12.41 $22.79 2nd Quarter 45.47 30.82 32.53 42.20 31.45 40.19 28.02 17.00 22.25 3rd Quarter 32.00 15.01 15.55 44.96 32.96 44.28 23.58 17.33 22.40 4th Quarter 15.90 4.56 8.66 51.49 37.50 48.83 31.33 22.31 29.72

Under our current bank credit agreement, we are limited 2.00 to 1.00, dividend payments, in addition to other on the amount of dividends we may pay out in any one year. restricted payments as defined, can not exceed $75.0 million The amount of dividend payments is restricted based on our in any given year. If the consolidated leverage ratio is greater consolidated total leverage ratio as defined in the credit than or equal to 2.00 to 1.00 these payments can not exceed agreement. If the consolidated leverage ratio is less than $35.0 million.

The Manitowoc Company, Inc. — 2008 Form 10-K 15

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 16 CHKSUM Content: 29036 Layout: 41847 Graphics: 44936 CLEAN

Comparison of Cumulative Five-year Total Return

$700

$600

$500

$400

$300

$200

$100

$0 2003 2004 2005 2006 2007 2008

The Manitowoc Company, Inc. S&P 500 Index S&P 600 Industrial Machinery Index

Total Return to Shareholders (Includes reinvestment of dividends)

Annual Return Percentages Years Ending December 31, 2004 2005 2006 2007 2008 The Manitowoc Company, Inc. 21.58% 34.24% 137.37% 64.65% (82.19)% S&P 500 Index 10.88% 4.91% 15.79% 5.49% (37.00)% S&P 600 Industrial Machinery 28.39% 9.20% 20.77% 12.18% (32.86)%

Indexed Returns Years Ending December 31, 2003 2004 2005 2006 2007 2008 The Manitowoc Company, Inc. 100.00 121.58 163.20 387.39 637.84 113.61 S&P 500 Index 100.00 110.88 116.33 134.70 142.10 89.53 S&P 600 Industrial Machinery 100.00 128.39 140.20 169.33 189.98 127.53

16 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: 1275-2_5y_tot_ret_k_line.eps V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 17 CHKSUM Content: 20588 Layout: 52182 Graphics: No Graphics CLEAN

ITEM 6. SELECTED FINANCIAL DATA discontinued in the Consolidated Financial Statements to exclude the results from continuing operations. In addition, The following selected historical financial data have been the information presented reflects all business units other derived from the Consolidated Financial Statements of The than DRI, Toledo Ship Repair, Manitowoc Boom Trucks, Inc., Manitowoc Company, Inc. The data should be read in con- Femco Machine Company, Inc., North Central Crane & Exca- junction with these financial statements and “Manage- vator Sales Corporation, and the Aerial Work Platform busi- ment’s Discussion and Analysis of Financial Condition and nesses, which were either sold or closed during 2005, 2004, Results of Operations.” Results of the Marine segment in or 2003 and are reported in discontinued operations in the the current and prior periods and the results of substantially accompanying Consolidated Financial Statements. For busi- all Enodis ice businesses and certain Enodis non-ice businesses acquired during the time periods presented, results nesses in the current period have been classified as are included in the table from their acquisition date. Amounts are in millions except share and per share data.

2008 2007 2006 2005 2004 2003 Net Sales Cranes and Related Products $ 3,882.9 $ 3,245.7 $ 2,235.4 $ 1,628.7 $ 1,248.5 $ 962.7 Foodservice Equipment 620.1 438.3 415.4 399.6 219.2 368.6 Total 4,503.0 3,684.0 2,650.8 2,028.3 1,467.7 1,331.3 Gross Profit 1,015.8 861.5 611.3 413.2 335.8 283.7 Earnings (Loss) from Operations Cranes and Related Products 555.6 470.5 280.6 115.5 57.0 24.4 Foodservice Equipment 56.8 61.3 56.2 54.9 55.7 53.3 Corporate (51.7) (48.2) (42.4) (24.8) (21.2) (19.2) Amortization expense (11.6) (5.8) (3.3) (3.1) (3.1) (2.9) Gain on sales of parts line — 3.3 — — — — Restructuring expense (21.7) — — — — — Integration expense (7.6) — — — — — Pension settlements — (5.3) — — — — Curtailment gain — — — — — 12.9 Total 519.8 475.8 291.1 142.5 88.4 68.5 Interest expense (54.1) (36.2) (46.3) (53.8) (56.0) (55.7) Loss on debt extinguishment (4.1) (12.5) (14.4) (9.1) (1.0) (7.3) Loss on purchase price hedges (379.4) — — — — — Other income (expense) — net (3.0) 9.8 3.4 3.4 (0.8) 0.5 Earnings from continuing operations before income taxes and minority interest 79.2 436.9 233.8 83.0 30.6 6.0 Provision for taxes on income 1.5 122.1 74.8 16.6 5.8 1.1 Earnings from continuing operations before minority interest 77.7 314.8 159.0 66.4 24.8 4.9 Minority interest, net of income taxes (1.9) — — — — — Earnings from continuing operations 79.6 314.8 159.0 66.4 24.8 4.9 Discontinued operations: Earnings (loss) from discontinued operations, net of income taxes (143.4) 21.9 7.2 (6.4) 13.1 10.7 Gain (loss) on sale or closure of discontinued operations, net of income taxes 53.1 — — 5.8 1.2 (12.0) Net earnings (loss) $ (10.7) $ 336.7 $ 166.2 $ 65.8 $ 39.1 $ 3.6 Cash Flows Cash flow from operations $ 309.0 $ 244.0 $ 293.0 $ 106.7 $ 57.0 $ 150.9 Identifiable Assets Cranes and Related Products $ 2,223.7 $ 1,958.0 $ 1,572.4 $ 1,224.7 $ 1,279.7 $ 1,151.8 Foodservice Equipment 3,389.4 341.5 340.1 313.2 302.9 290.6 Corporate 452.3 571.9 307.0 423.9 345.5 217.8 Total $ 6,065.4 $ 2,871.4 $ 2,219.5 $ 1,961.8 $ 1,928.1 $ 1,660.2 Long-term Obligations $ 2,597.5 $ 272.0 $ 264.3 $ 474.0 $ 512.2 $ 567.1 Depreciation Cranes and Related Products $ 66.3 $ 70.4 $ 58.4 $ 51.8 $ 42.9 $ 36.8 Foodservice Equipment 12.4 8.0 7.2 6.1 4.9 5.9 Corporate 1.5 1.8 1.8 1.5 1.4 1.1 Total $ 80.2 $ 80.2 $ 67.4 $ 59.4 $ 49.2 $ 43.8 Capital Expenditures Cranes and Related Products 129.4 103.7 51.3 32.9 24.2 25.0 Foodservice Equipment 10.9 3.7 10.9 16.9 11.8 4.7 Corporate 10.0 5.4 2.2 1.0 2.9 1.3 Total $ 150.3 $ 112.8 $ 64.4 $ 50.8 $ 38.9 $ 31.0 Per Share Basic earnings (loss) per share: Earnings from continuing operations $ 0.61 $ 2.53 $ 1.30 $ 0.55 $ 0.23 $ 0.05 Earnings (loss) from discontinued operations, net of income taxes (1.10) 0.18 0.06 (0.05) 0.12 0.10 Gain (loss) on sale or closure of discontinued operations, net of income taxes 0.41 — — 0.05 0.01 (0.11) Net earnings (loss) $ (0.08) $ 2.70 $ 1.36 $ 0.55 $ 0.36 $ 0.03

The Manitowoc Company, Inc. — 2008 Form 10-K 17

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 18 CHKSUM Content: 26031 Layout: 37857 Graphics: No Graphics CLEAN

2008 2007 2006 2005 2004 2003 Diluted earnings (loss) per share: Earnings from continuing operations $ 0.61 $ 2.47 $ 1.27 $ 0.54 $ 0.23 $ 0.05 Earnings (loss) from discontinued operations, net of income taxes (1.10) 0.17 0.06 (0.06) 0.12 0.10 Gain (loss) on sale or closure of discontinued operations, net of income taxes 0.41 — — 0.05 0.01 (0.11) Net earnings (loss) $ (0.08) $ 2.64 $ 1.32 $ 0.53 $ 0.36 $ 0.03 Avg Shares Outstanding Basic 129,930,749 124,667,931 122,449,148 120,586,420 107,602,520 106,301,800 Diluted 129,930,749 127,489,416 125,571,532 123,052,068 109,508,720 106,811,408

(1) Discontinued operations represent the results of operations and gain or loss on sale or closure of the Marine segment, substantially all Enodis ice businesses and certain Enodis non-ice businesses, DRI, Toledo Ship Repair, Manitowoc Boom Trucks, Inc., Femco Machine Company, Inc., North Central Crane & Excavator Sales Corporation, and the Aerial Work Platform businesses, which either qualified for discontinued operations treatment, or were sold or closed during 2008, 2005, 2004, or 2003. (2) On July 26, 2007, the board of directors authorized a two-for-one split of the company’s common stock. Record holders of Manitowoc’s common stock at the close of business on August 31, 2007 received on September 10, 2007 one additional share of common stock for every share of Manitowoc common stock they owned as of August 31, 2007. Manitowoc shares outstanding at the close of business on August 31, 2007 totaled 62,787,642. The company’s common stock began trading at its post-split price at the beginning of trading on September 11, 2007. Per share, share and stock option amounts within this Annual Report on Form 10-K for all periods presented have been adjusted to reflect the stock split. (3) We acquired two businesses during 2008, two businesses during 2007, and two businesses during 2006. (4) Cash dividends per share for 2003 through 2008 were as follows: $0.07 (2003 through 2006), $0.075 (2007), and $0.08 (2008)

18 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 19 CHKSUM Content: 34865 Layout: 26894 Graphics: No Graphics CLEAN

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS operated under the Scotsman, Ice-O-Matic, Simag, Barline, OF FINANCIAL CONDITION AND RESULTS OF Icematic, and Oref brand names. The company has also OPERATIONS agreed to sell certain non-ice businesses of Enodis located in Italy that are operated under the Tecnomac and Icematic The following discussion and analysis should be read in con- brand names. Prior to disposal, the antitrust clearances junction with the consolidated financial statements and require that the ice businesses are treated as standalone related notes appearing in Item 8 of the Annual Report on operations in competition with Manitowoc. The divestiture Form 10-K. of the businesses is expected to be completed during the second quarter of 2009. The results of these operations Overview The Manitowoc Company, Inc. is a multi-industry, have been classified as discontinued operations. See further capital goods manufacturer in two principal markets: Cranes detail related to these businesses held for sale at Note 4, and Related Products (Crane) and Foodservice Equipment “Discontinued Operations.” (Foodservice). Crane is recognized as one of the world’s During the third quarter of 2005, we decided to close largest providers of lifting equipment for the global construc- Toledo Ship Repair Company (Toledo Ship Repair), a division tion industry, including lattice-boom cranes, tower cranes, of the company’s previously wholly-owned subsidiary, Mani- mobile telescopic cranes, and boom trucks. Foodservice is towoc Marine Group, LLC. The $0.3 million loss represents one of the world’s leading innovators and manufacturers of the final disposition of Toledo Ship Repair in 2006. We have commercial foodservice equipment serving the ice, bever- reported the results of these operations as discontinued in age, refrigeration, food preparation, and cooking needs of accordance with Statement of Financial Accounting Stan- restaurants, convenience stores, hotels, healthcare, and dards (SFAS) No. 144, “Accounting for the Impairment of institutional applications. Long-Lived Assets.” See further detail related to Toledo Ship Certain prior period amounts have been reclassified to Repair at Note 4, “Discontinued Operations.” conform to the current period presentation as a result of the The following discussion and analysis covers key drivers sale of the Marine segment on December 31, 2008. The behind our results for 2006 through 2008 and is broken company’s Consolidated Financial Statements, accompany- down into three major sections. First, we provide an ing notes and other information provided in this Form 10-K overview of our results of operations for the years 2006 reflect the Marine segment as a discontinued operation for through 2008 on a consolidated basis and by business seg- all periods presented. After reclassifying the Marine segment. Next we discuss our market conditions, liquidity and ment to discontinued operations, the company has two capital resources, off balance sheet arrangements, and obli- remaining reportable segments, the Crane and Foodservice gations and commitments. Finally, we provide a discussion segments. See further detail related to the Marine segment of risk management techniques, contingent liability issues, at Note 4, “Discontinued Operations.” critical accounting policies, impacts of future accounting In order to secure clearance for the acquisition of Enodis changes, and cautionary statements. from the European Commission and United States Depart- All dollar amounts, except per share amounts, are in mil- ment of Justice, Manitowoc agreed to sell substantially all of lions of dollars throughout the tables included in this Man- Enodis’ global ice machine operations following completion agement’s Discussion and Analysis of Financial Conditions of the transaction. The businesses that will be sold are and Results of Operations unless otherwise indicated.

Results of Consolidated Operations

2008 2007 2006 Net sales $4,503.0 $3,684.0 $2,650.8 Costs and expenses: Cost of sales 3,487.2 2,822.5 2,039.5 Engineering, selling and administrative expenses 455.1 377.9 316.9 Amortization expense 11.6 5.8 3.3 Gain on sale of parts line — (3.3) — Pension settlements — 5.3 — Integration expense 7.6—— Restructuring expense 21.7 — — Total costs and expenses 3,983.2 3,208.2 2,359.7 Operating earnings from continuing operations 519.8 475.8 291.1 Other income (expenses): Interest expense (54.1) (36.2) (46.3) Loss on debt extinguishment (4.1) (12.5) (14.4) Loss on purchase price hedges (379.4) — — Other income (expense)-net (3.0) 9.8 3.4 Total other expenses (440.6) (38.9) (57.3)

The Manitowoc Company, Inc. — 2008 Form 10-K 19

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 20 CHKSUM Content: 54480 Layout: 23523 Graphics: No Graphics CLEAN

2008 2007 2006 Earnings from continuing operations before taxes on income before taxes and minority interest 79.2 436.9 233.8 Provision for taxes on income 1.5 122.1 74.8 Earnings from continuing operations before minority interest 77.7 314.8 159.0 Minority interest, net of income taxes (1.9) — — Earnings from continuing operations 79.6 314.8 159.0 Discontinued operations Earnings (loss) from discontinued operations, net of income taxes (143.4) 21.9 7.2 Gain on sale or closure of discontinued operations, net of income taxes 53.1 — — Net earnings (loss) $ (10.7) $ 336.7 $ 166.2

Year Ended December 31, 2008 Compared to 2007 Amortization expense for the year ended December 31, Consolidated net sales increased 22.2% in 2008 to $4.5 bil- 2008 was $11.6 million as compared to $5.8 million for 2007 lion from $3.7 billion in 2007. This increase was the result of primarily as a result of the additional intangible assets from higher year-over-year sales in the Crane segment and due to the Enodis acquisition (see further detail related to the higher sales in the Foodservice segment as a result of sales intangible assets at Note 3, “Acquisitions”). Integration from our newly acquired Enodis business. This business expense for the year ended December 31, 2008 was generated net sales of approximately $179.1 million since its $7.6 million and was related to the integration activities acquisition on October 27, 2008. Sales in our Crane segment associated with the Enodis acquisition. There was no inte- increased 19.6% for the year ended December 31, 2008 com- gration expense in 2007. pared to 2007. The stronger Euro currency compared to the Restructuring expense for the year ended December 31, U.S. Dollar had a favorable impact on sales of approximately 2008 was $21.7 million as compared to no restructuring $154.0 million or 3.4% for the year ended December 31, 2008 expense in 2007. The restructuring expense is in response compared to the year ended December 31, 2007. Further to the accelerated decline in demand in Western and South- analysis of the increases in sales by segment is presented in ern Europe where market conditions have negatively the Sales and Operating Earnings by Segment section below. impacted our tower crane product sales. The tower crane Gross profit increased for the year ended December 31, backlog in Europe has declined by almost 80% in 2008 2008 to $1.0 billion compared to $861.5 million for the year compared to the same period in 2007. To better align the ended December 31, 2007, an increase of 17.9%. Gross company’s resources with the current demand in Europe margin decreased in 2008 to 22.6% from 23.4% in 2007. the company committed to a restructuring plan in the The increase in consolidated gross profit was driven by both fourth quarter of 2008 to reduce the cost structure of its segments as a result of higher sales volumes in the Crane French and Portuguese facilities. The plan includes work- segment and the inclusion of gross profit results of the force reductions of approximately 350 employees in France Enodis business for two months. The decrease in gross mar- and 120 employees in Portugal. As of December 31, 2008, gin occurred as a result of higher material costs for both no significant benefit payments have been made in segments. Crane segment gross profit increased in 2008 to connection with such workforce reductions. $856.4 million from $729.4 million in 2007, while gross mar- On April 3, 2007, we sold all of our aftermarket replace- gin decreased to 22.1% from 22.5% over the same period. ment parts and rights to manufacture, sell and service after- The Foodservice segment’s gross profit increased in 2008 to market replacement parts for all the models of the Grove $156.5 million from $131.6 million, while gross margin Manlift aerial work platform product line around the world to decreased from 30.0% in 2007 to 25.2% in 2008. The MinnPar LLC (MinnPar). We received $4.9 million in proceeds strength in the Euro currency resulted in an increase on and recognized a gain of $3.3 million, which is recorded in gross profit of approximately $28.6 million or 2.8% for the gain on sale of parts line in the Consolidated Statement of year ended December 31, 2008. Operations for the year ended December 31, 2007. Engineering, selling and administrative (ES&A) expenses During the second quarter of 2007, we made a $15.1 million for the year ended December 31, 2008 increased approxi- pension contribution to our U.K. defined benefit pension mately $77.2 million to $455.1 million compared to plan. The $15.1 million contribution funded the defined ben- $377.8 million for the year ended December 31, 2007. This efit plan as well as paid an incentive to certain pensioners to increase was driven by higher expenses in the Crane and transfer from the defined benefit plan to a defined contribu- Foodservice segments and for general corporate expenses. tion plan. As a result of this payment, the company recorded Crane segment ES&A expense increased due to higher sell- a charge during the second quarter of 2007 of approximately ing expenses, increased costs related to the 2008 and 2007 $3.8 million to reflect the incentive given to the pensioners acquisitions, expenses related to the ERP implementation and expenses incurred. This charge is recorded in pension project and the negative impact of the stronger Euro resulting settlements in the Consolidated Statement of Operations for in an additional $10.4 million in expenses. The increase in the year ended December 31, 2007. Subsequent to the fund- Foodservice segment ES&A expenses are due to approxi- ing of the defined benefit pension plan, approximately mately two months of additional expenses incurred within $39.2 million of assets and related liabilities were transferred the Enodis business. from the defined benefit pension plan to a defined contribution pension plan.

20 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 21 CHKSUM Content: 19381 Layout: 29962 Graphics: No Graphics CLEAN

During the second quarter of 2007, we recorded a charge amount plus accrued and unpaid interest up to the redemp- of $1.4 million related to a withdraw liability from a multiem- tion date. The total cash payment for the redemption was ployer pension plan at our former River Falls, Wisconsin $129.6 million. As a result of this redemption, we incurred a facility. During the third quarter of 2005, we closed our charge of $12.5 million ($8.1 million net of income taxes) Kolpak operation located in River Falls, Wisconsin and con- related to the call premium, the write-off of unamortized solidated it with our operation in Tennessee. This charge is debt issuance costs and other expenses. The charge was recorded in pension settlements in the Consolidated State- recorded in loss on debt extinguishment in the Consolidated ment of Operations for the year ended December 31, 2007. Statement of Operations. Interest expense for the year ended December 31, 2008 The effective tax rate for the year ended December 31, was $54.1 million versus $36.2 million for the year ended 2008 was 1.9% compared to 28.0% for the year ended December 31, 2007. The increase is the result of approxi- December 31, 2007. The lower effective tax rate in 2008 was mately two months of additional interest expense related to the result of a significant decrease in U.S. pre-tax income, our New Credit Agreement of $2,925.0 million which primarily as a result of the loss on currency hedges. The became effective on August 25, 2008 and was drawn upon effective tax rate in 2007 was lower than the statutory rate on November 6, 2008, in order to fund our purchase of as a result of a foreign tax credit carryforward which was Enodis. See further detail on the New Credit Agreement at recognized during the second quarter of 2007 and an IRS Note 10, “Debt.” audit settlement during the third quarter of 2007. In addition, On December 31, 2008, the company made a cash pay- all periods were favorably affected, as compared to the ment of $118.5 million to partially pay down the balance of statutory rate, to varying degrees by certain global tax plan- the Term Loan X. As of December 31, 2008, the balance of ning initiatives. Term Loan X was $181.5 million. As a result of this payment, For the year ended December 31, 2008, a minority interest the company incurred a charge of $4.1 million related to the loss of $1.9 million was recorded in relation to our 50% joint partial write-off of debt issuance costs of $3.3 million and the venture with the shareholders of Tai’An Dongyue in 2008. write off of other deferred financing fees totaling $0.8 million. See further detail related to the joint venture at Note 3, The charge was recorded in loss on debt extinguishment in “Acquisitions.” the Consolidated Statements of Operations. The results from discontinued operations were a loss of During July 2008, the company entered into various hedg- $143.4 million and earnings of $21.9 million, net of income ing transactions (the “hedges”) to comply with the terms of taxes, for the years ended December 31, 2008 and 2007, its New Credit Agreement (see further detail related to the respectively. The 2008 earnings relate to the results of opera- New Credit Agreement at Note 10, “Debt”) issued to fund tions of the former Marine segment sold on December 31, the purchase of Enodis. The hedges were required to limit 2008 and the Enodis ice businesses classified as held-for-sale the company’s exposure to fluctuations in the underlying at year-end which included a non-cash impairment charge of Great British Pound (GBP) purchase price of the Enodis $175.0 million. The 2007 earnings from discontinued opera- shares which could have ultimately required additional fund- tions relate to the results of operations from the Marine seg- ing capacity under the New Credit Agreement. Subsequent ment and to the favorable product liability experience related to entering into the hedging transactions, the U.S. Dollar to our discontinued Manlift business which was sold in 2004. strengthened against the GBP which resulted in a significant We also realized an after tax gain on the sale of our former change to the fair value of the underlying hedges. Financial Marine segment of $53.1 million during 2008. Accounting Standards Board Statement (FAS) No. 133, “Accounting for Derivative Instruments and Hedging Activi- Year Ended December 31, 2007 Compared to 2006 ties” states that hedges of a firm commitment to acquire a Consolidated net sales increased 39.0% in 2007 to business do not qualify for hedge accounting (or balance $3.7 billion from $2.7 billion in 2006. This increase was the sheet) treatment. Therefore, the periodic market value result of higher year-over-year sales in both of our business changes in these hedges are required to be recognized in segments. Sales in our Crane and Foodservice segments the income statement. The final disposition of these hedge increased 45.2% and 5.5%, respectively, for the year positions was determined based upon the market exchange ended December 31, 2007 compared to 2006. Changes in rate on November 6, 2008, the date the funding transaction currency exchange rates resulted in an increase in sales of was completed. For the year ended December 31, 2008, the $122.8 million or 3.1% for the year ended December 31, 2007 loss on currency hedges related to the purchase of Enodis compared to the year ended December 31, 2006. Further was $379.4 million. analysis of the increases in sales by segment is presented in Other income, net for the year ended December 31, 2008 the Sales and Operating Earnings by Segment section below. was a loss of $3.0 million versus a gain of $9.8 million for Gross profit increased significantly for the year ended the prior year. The loss in 2008 is the result of other foreign December 31, 2007 to $861.5 million compared to currency losses of $14.0 million, offset by interest income of $611.3 million for the year ended December 31, 2006 — an $11.0 million which was higher than the 2007 interest increase of 40.9%. Gross margin increased in 2007 to 23.4% income of $8.4 million due to higher cash balances through- from 23.1% in 2006. The increase in consolidated gross out 2008 versus 2007. profit and margin was driven by both segments as a result 1 On August 1, 2007, we redeemed our 10 ⁄2% senior sub- of higher sales volumes and increased productivity. Crane ordinated notes due 2012. Pursuant to the terms of the segment gross profit increased in 2007 to $729.8 million indenture, we paid the note holders 105.25% of the principal from $488.7 million in 2006, while gross margin increased

The Manitowoc Company, Inc. — 2008 Form 10-K 21

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 22 CHKSUM Content: 13953 Layout: 45590 Graphics: No Graphics CLEAN

to 22.5% from 21.9% over the same period. The Foodser- Cranes and Related Products Segment vice segment’s gross profit and gross margin increased from $122.7 million and 29.5% in 2006 to $131.6 million and 2008 2007 2006 30.0% in 2007, respectively. Net sales $3,882.9 $3,245.7 $2,235.4 Engineering, selling and administrative (ES&A) expenses Operating earnings $ 555.6 $ 470.5 $ 280.6 for the year ended December 31, 2007 increased approximately $61.0 million to $377.9 million compared to Operating margin 14.3% 14.5% 12.6% $316.9 million for the year ended December 31, 2006. This increase was primarily driven by the Crane and Foodservice Year Ended December 31, 2008 Compared to 2007 segments and corporate expenses. Crane segment ES&A Crane segment net sales for the year ended December 31, expense increased due to higher engineering and selling 2008 increased 19.6% to $3.9 billion versus $3.2 billion for expenses, increased employee related costs and expenses the year ended December 31, 2007. Net sales for the year related to the initiation of an ERP implementation project. ended December 31, 2008 increased over the prior year in Foodservice segment ES&A expenses increased due to all of our major geographic regions. The Crane segment ben- higher employee and commission costs. Corporate efited from a strong crane end-market demand during the expenses increased primarily due to increased employee first nine months of 2008 as compared to the same period related costs. of 2007. Due to the slowing world economy, the lower Interest expense for the year ended December 31, 2007 demand for cranes, especially for tower cranes, during the was $36.2 million versus $46.3 million for the year ended last 3 months of 2008 were lower than the same period in December 31, 2006. The decrease resulted from the com- 2007. From a product line standpoint, the sales increase was 1 driven by increased volumes of crawler, tower and mobile pany’s redemption of the 10 ⁄2% senior subordinated notes due 2012. This decrease was partially offset by an increase hydraulic cranes worldwide, and increases in our aftermar- in the average borrowings outstanding under our revolving ket sales and service business, slightly offset by decreased credit facility and higher accounts receivable securitization sales of our boom truck cranes in North America due to the interest costs. continued soft residential housing construction market. As 1 of December 31, 2008, total Crane segment backlog was We redeemed our 10 ⁄2% senior subordinated notes due 2012 in August 2007. Pursuant to the terms of the indenture, $1.9 billion, a 32.3% decrease as compared to the Decem- we paid the note holders 105.25 percent of the principal ber 31, 2007 backlog of $2.9 billion and a 41.5% decrease amount plus accrued and unpaid interest up to the redemp- versus the September 30, 2008 backlog of $3.3 billion. tion date. As a result of this redemption, we incurred a For the year ended December 31, 2008, the Crane seg- charge of $12.5 million ($8.1 million net of income taxes) ment reported operating earnings of $555.6 million com- related to the call premium, the write-off of unamortized pared to $470.5 million for the year ended December 31, debt issuance costs and other expenses. The charge was 2007. Operating earnings of the Crane segment were favor- recorded in loss on debt extinguishment in the Consolidated ably affected by increased volume across all regions and all Statements of Operations. product lines except for boom trucks, appropriate product The effective tax rate for the year ended December 31, price increases, and product cost takeout initiatives. These 2007 was 28.0% compared to 32.0% for the year ended results were partially offset by product cost increases and December 31, 2006. The lower effective tax rate in 2007 was higher administrative costs due in part to the unfavorable a result of a foreign tax credit carryforward which was rec- impact of a stronger Euro currency as compared to the U.S. ognized during the second quarter and an IRS audit settle- Dollar for the majority of 2008. Operating margin for the year ment during the third quarter. In addition, all periods were ended December 31, 2008 was 14.3% versus 14.5% for the favorably affected, as compared to the statutory rate, to year ended December 31, 2007. Higher material costs and varying degrees by certain global tax planning initiatives. softening sales of our higher margin product lines in the The earnings from discontinued operations, net of income fourth quarter contributed to the decline in operating margin. taxes, for the year ended December 31, 2007 primarily To better align the company’s resources with the current reflects the divested Marine business and the favorable demand in Europe the company committed to a restructuring product liability experience related to our discontinued plan in the fourth quarter of 2008 to reduce the cost struc- Manlift business which was sold in 2004. tures of its French and Portuguese facilities. The plan includes workforce reductions of approximately 350 employees in Sales and Operating Earnings by Segment France and 120 employees in Portugal. During, 2008, the Operating earnings reported below by segment include the company has recorded $21.7 million in expense associated impact of reductions due to restructurings and plant consoli- with involuntary employee terminations and related costs. dation costs, whereas these expenses were separately identified in the Results of Consolidated Operations table above. Year Ended December 31, 2007 Compared to 2006 Crane segment net sales for the year ended December 31, 2007 increased 45.2% to $3.2 billion versus $2.2 billion for

22 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 23 CHKSUM Content: 2043 Layout: 38485 Graphics: No Graphics CLEAN

the year ended December 31, 2006. Net sales for the year 2007 were lower by $0.8 million. This decrease was due to ended December 31, 2007 increased over the prior year in higher material costs and lower volume of higher margin ice all of our major geographic regions. The Crane segment ben- products mainly offset by appropriate pricing initiatives and efited from strong crane end-market demand. From a prod- product cost takeouts. uct line standpoint, the sales increase was driven by increased volumes of crawler, tower and mobile hydraulic Year Ended December 31, 2007 Compared to 2006 cranes worldwide, and increases in our aftermarket sales Foodservice segment net sales increased 5.5% to and service business, slightly offset by decreased sales of $438.3 million for the year ended December 31, 2007 versus our boom truck cranes in North America due to the soften- $415.4 million for the year ended December 31, 2006. The ing residential housing construction market. As of sales increase during 2007 was driven by all divisions and December 31, 2007, total Crane segment backlog was $2.9 the full year results of McCann’s which was acquired on billion, an 87.5% increase over the December 31, 2006 back- May 26, 2006. The increases were a result of both volume log of $1.5 billion and an 8.4% increase over the and pricing increases versus the prior year. In addition, our September 30, 2007 backlog of $2.7 billion. beverage division benefited from the acquisition of McCann’s, For the year ended December 31, 2007, the Crane seg- which added approximately $20.8 million of sales for the full ment reported operating earnings of $470.5 million com- year ended December 31, 2007 as compared to approximately pared to $280.6 million for the year ended December 31, $11.4 million of sales for the last half of the year ended 2006. Operating earnings of the Crane segment were favor- December 31, 2006. ably affected by increased volume across all regions and all For the year ended December 31, 2007, the Foodservice but one product line, manufacturing productivity gains, prod- segment reported operating earnings of $61.3 million com- uct cost takeout initiatives, and price increases where appro- pared to $56.2 million for the year ended December 31, priate. Operating margin for the year ended December 31, 2006. Operating results for 2007 were improved as a result 2007 was 14.5% as compared to 12.6% for the year ended of increased volumes, appropriate pricing initiatives, and December 31, 2006. Strong factory performance, leveraging product cost takeouts. These benefits were somewhat off- of fixed costs, and appropriate pricing initiatives in all our set by material cost increases and higher employee and regions contributed to the gains in profit and margin, some- commission costs. The McCann’s acquisition benefited 2007 what offset by higher costs of materials. operating earnings by $3.7 million compared to 2006 operating earnings of $1.4 million. Foodservice Equipment Segment General Corporate Expenses 2008 2007 2006 Net sales $620.1 $438.3 $415.4 2008 2007 2006 Operating earnings $ 56.8 $ 61.3 $ 56.2 Net sales $4,503.0 $3,684.0 $2,650.8 Operating margin 9.2% 14.0% 13.5% Corporate expenses $ 51.7 $ 48.2 $ 42.4 % of Net sales 1.1% 1.3% 1.6% Year Ended December 31, 2008 Compared to 2007 Foodservice segment net sales increased 41.5% or Year Ended December 31, 2008 Compared to 2007 $181.8 million to $620.1 million for the year ended Corporate expenses increased $3.5 million to $51.7 million December 31, 2008 as compared to $438.3 million for the in 2008 compared to $48.2 million in 2007. The increase was year ended December 31, 2007. The sales increase during primarily due to higher employee related costs, health care 2008 was driven by the $179.1 million in net sales from the costs, and other professional expenses. Enodis business since its acquisition on October 27, 2008. Excluding the sales from Enodis, sales would have only Year Ended December 31, 2007 Compared to 2006 increased by $2.7 million for the year ended December 31, Corporate expenses increased $5.8 million to $48.2 million 2008 compared to the same period last year. This increase in 2007 compared to $42.4 million in 2006. The increase was was the result of price increases and a favorable currency primarily due to higher employee related costs and other exchange rate impact. By region, strong sales in the Asia professional expenses. markets and slightly higher sales in Europe more than offset weaker sales in North America. Market Conditions and Outlook For the year ended December 31, 2008, the Foodservice During 2009, we will strive to successfully execute our long- segment reported operating earnings of $56.8 million com- term strategy of building market-leadership positions in our pared to $61.3 million for the year ended December 31, two core markets: Cranes and related products and Food- 2007. The operating earnings decrease was mainly due to service equipment. In addition, since we have divested our the operating earnings loss of $3.7 million from the Enodis Marine segment we are now focusing all resources and business as a result of a $9.5 million inventory step-up pur- management efforts on expanding our competitive position chase accounting adjustment recorded in the opening bal- within our two remaining segments. As a result of the global ance sheet and subsequently recognized as a charge to economic slowdown, we have taken actions and will make earnings for the quarter. Operating earnings in 2008 for the additional changes to our businesses as market dynamics legacy Maintowoc Foodservice businesses, as compared to

The Manitowoc Company, Inc. — 2008 Form 10-K 23

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 24 CHKSUM Content: 14403 Layout: 37392 Graphics: No Graphics CLEAN

continue to unfold in 2009. We intend to build on our leader- Foodservice Equipment — The biggest negative economic ship positions during this slowdown and emerge as an even factors in 2008 were the decline into recession for most stronger competitor. economies, the spike in commodity costs, and the rise to Looking ahead to 2009, we have forecasted consolidated record levels of oil prices that reduced disposable income revenue of approximately $4.9 billion. This is based on esti- and changed dining out patterns. On the positive side, it mated revenue of $3.2 billion in the Crane segment and was the continual effect of changing consumer demand on $1.7 billion in the Foodservice segment. We have forecasted operators that translated into the need for innovative food- operating margins in the low double digit range for both service equipment that answered the call for new menu segments. Based on these assumptions, we expect earn- items, more efficient equipment, and new beverage offerings per share in the range of $1.35 to $1.60 per share, ings to try to increase same store sales. Regionally, Asia excluding special items, such as further restructuring costs. continued its strong growth, in particular China driven by Other financial expectations for 2009 include capital expen- QSR expansion and project business driven by the Olympic ditures not to exceed $120 million, depreciation and amorti- Games in Beijing. zation of $135 million, and an effective tax rate in the The global economy continues to be our greatest concern mid-20% range. Finally, we have set a year-end debt reduc- in 2009. We believe the segments that performed well in tion target of $1 billion since funding the Enodis acquisition 2008 could continue to benefit in the coming months: quick in November of 2008. Due to continuing weak market condi- service restaurants (QSRs), which benefitted from con- tions and continued global economic uncertainty, we cannot sumers trading down from higher priced alternatives, institu- be assurred of meeting these forecasts and actual results tional customers and large project business. From a product may differ materially from these estimates. standpoint we expect the demand for accelerated cooking products, custom refrigeration, and energy efficient prod- Cranes and Related Products — For the industry data cur- ucts to outperform other products families. We also believe rently available through the first three quarters of 2008, Man- end user chains will continue to seek new menu items to itowoc grew market share slightly in tower cranes, lattice drive sales. We expect all developed regions to experience boom crawler cranes, and truck cranes. Truck cranes continued economic weakness and for the emerging mar- increased due in part to the addition of the new Tai’An kets, primarily Asia, to exhibit much slower growth. Dongyue joint venture in China market and stronger sales in With the Enodis acquisition, we will continue with our his- the U.S. Rough terrain market share was unchanged com- tory of bringing innovative products and services to the pared with 2007 with a slight decline in the U.S. which was foodservice market, only now that market is much wider and compensated by share growth in Europe and the Middle diverse. We will continue to develop customer driven solu- East. All Terrain crane market share remained level from tions through more energy efficient equipment, integrated 2007 to 2008 with gains in the Americas compensating for kitchen systems and products that do more while taking up declines in Asia. less physical space. The softer global economy will also Looking ahead, we expect sales volumes to decrease in focus our efforts to realize synergies more quickly and 2009 as construction spend is expected to decline an improve our overall development, manufacturing, and mar- additional 2% versus 2008 worldwide in real terms keting processes. according to Global Insight, and specifically non-residential construction will remain flat versus 2008. Similarly, the U.S. Liquidity and Capital Resources construction market is expected to decline 14% in 2009. The Cash flow from operations during 2008 was $309.0 million non-residential construction decline in the U.S. will be a compared to $244.0 million in 2007. We applied a portion of significant contributor to this decline as it is expected to this cash flow in 2008 to capital spending, dividends and drop an additional 11% for the year. The impacts of any payment of outstanding debt. We had $173.0 million in cash economic stimulus packages and especially those targeted and cash equivalents on-hand at December 31, 2008 versus to stimulate infrastructure and energy projects which are $366.9 million on-hand at December 31, 2007. heavy crane markets, are unknown. Cash flow from operating activities during 2008 was Manitowoc will continue to improve our product lines and affected by stronger earnings from continuing operations of we have a variety of new product programs in queue for the $519.8 million as compared to $475.8 million in 2007. An next three years for all our product families as we continue increase in accounts payable of $35.1 million also favorably to grow worldwide, especially in emerging markets through impacted cash flow from operations. The increase in our new facilities in China, India and Slovakia and we target accounts payable is related to higher levels of inventory as other long term growth markets in Russia and Brazil. Along compared to the prior year. These favorable impacts were with product offerings tailored for growing markets, we will offset by increases of accounts receivable and inventories of also expand and strengthen our renowned Crane CARE $25.4 million and $179.9 million, respectively, and a global product support network to be well positioned for the decrease in accrued income taxes of $105.9 million. The long term in all major markets worldwide. As the market receivable increase related to higher sales of our Crane declines, we will also use the opportunity to improve our products while the increase in inventory levels was also due design and manufacturing processes to ensure we maintain to the higher sales in our Crane segment negatively our reputation for high quality products for the long term impacted by the downturn in Crane demand we saw in the into the recovery. fourth quarter of 2008. The decrease in accrued income taxes relates to payments of accrued income taxes and

24 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 25 CHKSUM Content: 32812 Layout: 29962 Graphics: No Graphics CLEAN

overpayments of estimated income taxes which are now lender, up to an aggregate amount of $300.0 million. The classified as a receivable as of December 31, 2008. company is obligated to prepay the three term loan facilities Net earnings from discontinued operations, before the non- from the net proceeds of asset sales, casualty losses, equity cash impairment charge of $175.0 million, was $31.6 million offerings, and new indebtedness for borrowed money, and which also contributed to total cash from operations. from a portion of its excess cash flow, subject to certain Cash flows from investing activities consist primarily of exceptions. cash used for acquisitions and capital expenditures and cash Borrowings made under the revolving facility Term Loan A, provided from the sale of the Marine segment. Net cash and Term Loan X will initially bear interest at 3.25 percent in used in investing activities during 2008 was $2.4 billion as excess of an adjusted London Interbank Offered (LIBO) rate compared to $186.6 million during 2007. Cash was primarily as defined in the New Credit Agreement, or 1.50 percent in used to fund our acquisition of Enodis for $2,060.8 million excess of an alternate base rate, at the company’s option. and the related $379.4 million settlement of hedges imple- Borrowings made under the Term Loan B will initially bear mented to reduce the currency risk of the GBP purchase interest at 3.50 percent in excess of an adjusted LIBO rate price. Capital spending, excluding equipment held for rental, as defined in the New Credit Agreement, or 1.50 percent in of $150.3 million in 2008 was higher than the 2007 total of excess of an alternate base rate, at the company’s option. $112.8 million primarily due to the upgrade and replacement The company cannot borrow under the alternate base rate of manufacturing equipment, support of new product devel- option if that rate is lower than the adjusted LIBO rate. A opment, improvement of information technology systems commitment fee applies to the unused portion revolving and completion of capacity expansion projects. Additionally, facility and is currently 0.50 percent per year. on December 31, 2008, the company received $118.5 mil- The New Credit Agreement contains financial covenants lion from the sale of its Marine segment. whereby the ratio of (a) consolidated earnings before inter- Cash flows from financing activities consist primarily of est, taxes, depreciation and amortization, and other adjust- proceeds from the issuance of long-term debt to effect the ments, as defined in the New Credit Agreement (EBITDA) to Enodis acquisition and cash used by financing activities con- (b) consolidated interest expense, each for the most recent sist primarily of repayments of indebtedness and payments four fiscal quarters (Consolidated Interest Coverage Ratio) of dividends to shareholders. Financing activities resulted in and the ratio of (c) consolidated indebtedness to (d) consoli- a net source of cash of $1.9 billion during 2008 compared to dated EBITDA for the most recent four fiscal quarters (Con- cash provided from financing operations of $123.9 million solidated Total Leverage Ratio) at all time, must each meet during 2007. certain defined limits. The minimum Consolidated Interest On October 27, 2008, we completed our acquisition of Coverage Ratio is required to be greater than 2.50:1.00 for Enodis, a global leader in the design and manufacture of inno- fiscal quarters through March 31, 2009, 2.75:1.00 for fiscal vative equipment for the commercial foodservice industry. quarters after March 31, 2009 through March 31, 2010 and The $2.7 billion acquisition, inclusive of the purchase of out- greater than 3.00:1.00 thereafter. The Consolidated Total standing shares and rights to shares, acquired debt, the set- Leverage Ratio is required to be less than 4.00:1.00 through tlement of hedges related to the acquisition and transaction December 30, 2009, less than 3.75:1.00 from December 31, fees, the largest and most recent acquisition for the company, 2009 through December 30, 2010 and less than 3.50:1.00 has established Manitowoc among the world’s top manufac- thereafter. The New Credit agreement also contains custom- turers of commercial foodservice equipment. With this acqui- ary representations and warranties and events of default. sition, our Foodservice capabilities now span refrigeration, As of December 31, 2008, we complied with all affirma- ice-making, cooking, food-prep, and beverage-dispensing tive and negative covenants inclusive of the financial technologies, and allow Manitowoc to be able to equip entire covenants pertaining to our New Credit Agreement. Based commercial kitchens and serve the world’s growing demand on our forecasted operating results and related debt reduc- for food prepared away from home. See further detail related tions, we have projected compliance will all covenants to the acquisitions at Note 3, “Acquisitions.” through March of 2010. Our ability to comply with the finan- In order to fund the Enodis acquisition, in April 2008, the cial covenants in the future depends on further debt reduc- company entered into a $2,400.0 million credit agreement tion and achieving our forecasted operating results. Given which was amended and restated as of August 25, 2008 the uncertain global economies, continued constraints in the to ultimately increase the size of the total facility to credit markets, and other market uncertainties, there are var- $2,925.0 million (New Credit Agreement). The New Credit ious scenarios, including a reduction from forecasted oper- Agreement became effective November 6, 2008. Prior to ating results, under which we could violate our financial November 6, 2008, the company borrowed from its $300.0 covenants in the second half of 2009. Our failure to comply million Amended and Restated Credit Agreement, dated as with such covenants or an assessment that we are likely to of December 14, 2006. fail to comply with such covenants, could also lead us to The New Credit Agreement includes four loan facilities — seek an amendment to or a waiver of the financial a revolving facility of $400.0 million with a five-year term, a covenants contained in our New Credit Agreement. Despite Term Loan A of $1,025.0 million with a five-year term, a Term our present belief that we could obtain an amendment if Loan B of $1,200.0 million with a six-year term, and a Term necessary, we cannot provide assurance that we would be Loan X of $300.0 million with an eighteen-month term. The able to obtain any amendments to or waivers of the company has the option to increase the borrowing capacity covenants contained in our New Credit Agreement that we of the revolving facility or Term Loan A, if agreed upon by the may request. Any such amendment to or waiver of the

The Manitowoc Company, Inc. — 2008 Form 10-K 25

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 26 CHKSUM Content: 3044 Layout: 63358 Graphics: No Graphics CLEAN

covenants would likely involve upfront fees, higher annual $103.0 million, and is included in accounts receivable in the interest costs and other terms less favorable to us than accompanying Consolidated Balance Sheets. those currently in our New Credit Agreement. In the event The securitization program’s capacity was increased from our current lenders won’t amend or waive the covenants, $90 million in 2006 to $105 million in the third quarter of the debt would be due and we would need to seek alterna- 2007. The program includes certain domestic trade accounts tive financing. We cannot provide assurance that we would receivable from our U.S. Crane and Foodservice businesses. be able to obtain alternative financing. If we were not able to Trade accounts receivables sold to the Purchaser and being secure alternative financing, this would have a material serviced by the company totaled $105.0 million at adverse impact on the company. December 31, 2008, an increase of $5.0 million from the bal- As of December 31, 2008, in connection with its New ance sold to the Purchaser at December 31, 2007. Credit Agreement the company incurred $118.3 million in We spent a total of $150.3 million during 2008 for capital debt issuance costs. The cash flow impact of these fees, expenditures. We continued to fund capital expenditures to which totaled $90.8 million, is included in cash flow used for improve the cost structure of our business, invest in new financing activities in the Consolidated Statement of Cash processes, products and technology, to maintain high-qual- Flows for the year ending December 31, 2008. The remain- ity production standards and to complete certain production ing balance of $27.5 million which represents an original capacity expansion. The following table summarizes 2008 issue discount is required to be paid upon extinguishment of capital expenditures and depreciation by segment. Term Loan B. On December 31, 2008, the company completed the sale Capital of its Marine segment to Fincantieri Marine Group Holdings, Expenditures Depreciation Inc., a subsidiary of Fincantieri — Cantieri Navali Italiani SpA. Cranes and Related Products $129.4 $66.3 The sale price in the all-cash transaction was approximately Foodservice Equipment 10.9 12.4 $120 million. The company used the cash proceeds, net of a Corporate 10.0 1.5 preliminary working capital adjustment, to partially pay down the balance on the Term Loan X of approximately Total $150.3 $80.2 $118.5 million. As of December 31, 2008 the balance of Term Loan X was $181.5 million. As a result of this payment, On July 19, 2007, the company acquired Shirke Construc- the company incurred a charge of $4.1 million related to the tion Equipments Pvt. Ltd (Shirke). Headquartered in Pune, partial write-off of debt issuance costs of $3.3 million and India, Shirke is a market leader in the Indian tower crane the write off of other deferred financing fees totaling industry and has been Potain’s Indian manufacturing partner $0.8 million. The charge was recorded in loss on debt extin- and distributor since 1982. The cash flow impact of this guishment in the Consolidated Statements of Operations. acquisition is included in business acquisition, net of cash On March 6, 2008, the company formed a 50% joint ven- acquired within the cash flow from investing section of the ture with the shareholders of Tai’An Dongyue for the produc- Consolidated Statements of Cash Flows. tion of mobile and truck-mounted hydraulic cranes. The cash On January 3, 2007, the company acquired the Carrydeck flow impact of this acquisition is included in business acqui- line of mobile industrial cranes from Marine Travelift, Inc. of sitions, net of cash acquired, within the cash flow from Sturgeon Bay, Wisconsin. The acquisition of the Carrydeck investing section of the Consolidated Statement of Cash line adds six new models to the company’s product offering Flows. See further detail related to the joint venture at of mobile industrial cranes. The cash flow impact of this Note 3, “Acquisitions.” acquisition is included in business acquisitions, net of cash The company is party to an accounts receivable securitiza- acquired within the cash flow from investing section of the tion program whereby it sells certain of its domestic trade Consolidated Statements of Cash Flows. accounts receivable to a wholly owned, bankruptcy-remote, On April 3, 2007, we sold all of our aftermarket replace- special purpose subsidiary which, in turn, sells participating ment parts and rights to manufacture, sell and service after- interests in its pool of receivables to a third-party financial market replacement parts, for all the models of the Grove institution (Purchaser). The Purchaser receives an ownership Manlift aerial work platform product line around the world, and security interest in the pool of receivables. New receiv- to MinnPar LLC (MinnPar) for $4.9 million. The cash flow ables are purchased by the special purpose subsidiary and impact of this divestiture is recorded in gain on sale of parts participation interests are resold to the Purchaser as collec- line and in proceeds from sale of business or parts in the tions reduce previously sold participation interests. The Consolidated Statements of Cash Flows. company has retained collection and administrative respon- Restricted cash represents cash in escrow funds related sibilities on the participation interests sold. The Purchaser to the security for an indemnity agreement for our casualty has no recourse against the company for uncollectible insurance provider. 1 receivables; however, the company’s retained interest in the On August 1, 2007, the company redeemed its 10 ⁄2% receivable pool is subordinate to the Purchaser’s interest senior subordinated notes due 2012. Pursuant to the terms and is recorded at fair value. Due to a short average collec- of the indenture, the company paid the note holders 105.25 tion cycle of less than 60 days for such accounts receivable percent of the principal amount plus accrued and unpaid and the company’s collection history, the fair value of the interest up to the redemption date. As a result of this company’s retained interest approximates book value. The redemption, the company incurred a charge of $12.5 million retained interest recorded at December 31, 2008 was related to the call premium, the write-off of unamortized

26 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 27 CHKSUM Content: 22354 Layout: 29962 Graphics: No Graphics CLEAN

debt issuance costs and other expenses. We utilized cash Our Senior Notes due 2013 contain customary affirmative on hand and availability under our revolving credit facility to and negative covenants. Among other restrictions, these fund this redemption. covenants require us to meet specified financial tests, which During May 2006, we redeemed our 175 million include the following: consolidated interest coverage ratio Euro ($216.9 million based on May 15, 2006 exchange and consolidated total leverage ratio. These covenants also 3 rates) 10 ⁄8% senior subordinated notes due 2011. Pursuant limit, among other things, our ability to redeem or repurchase to the terms of the indenture, we paid the note holders our debt, incur additional debt, make acquisitions, merge 105.188 percent of the principal amount of the notes, which with other entities, pay dividends or distributions, repurchase included a call premium of $11.2 million plus accrued and capital stock, and create or become subject to liens. We unpaid interest up to the redemption date. We utilized cash were in compliance with all covenants as of December 31, on hand and availability under our revolving credit facility to 2008, and based upon our current plans and outlook, we fund this redemption. The borrowings drawn on the revolving believe we will be able to comply with these covenants during credit facility to complete this transaction were fully paid off the subsequent 12 months. during 2006. Our debt position at various times increases our vulnerability During the years ended December 31, 2008, 2007 and to general adverse industry and economic conditions and 2006, we sold $3.7 million, $14.2 million and $14.8 million, results in a meaningful portion of our cash flow from opera- respectively, of our long term notes receivable to third party tions being used for payment of interest on our debt. This financing companies. We guarantee varying percentages, up could potentially limit our ability to respond to market condi- to 100%, of collection of the notes to the financing compa- tions or take advantage of future business opportunities. nies. We have accounted for the sales of the notes as a Our ability to service our debt is dependent upon many fac- financing of receivables. The receivables remain on our Con- tors, some of which are not subject to our control, such as solidated Balance Sheets, net of payments made, in other general economic, financial, competitive, legislative, and current and non-current assets, and we have recognized an regulatory factors. In addition, our ability to borrow additional obligation equal to the net outstanding balance of the notes funds under the revolving credit facility in the future will in other current and non-current liabilities in the Consolidated depend on our meeting the financial covenants contained in Balance Sheets. The cash flow benefit of these transactions the credit agreement, even after taking into account such is reflected as a financing activity in the Consolidated State- new borrowings. ments of Cash Flows. During the years ended December 31, The revolving credit facility or other future facilities may be 2008, 2007 and 2006, the customers paid $7.5 million, used for working capital requirements, capital expenditures, $18.5 million and $30.2 million, respectively, of the notes to funding future acquisitions, and other investing and financ- the third party financing companies. As of December 31, 2008, ing needs. We believe that our available cash, revolving 2007 and 2006, the outstanding balance of the notes receiv- credit facility, cash generated from future operations, and ables guaranteed by us was $14.5 million, $18.2 million and access to public debt and equity markets will be adequate to $22.3 million, respectively. fund our capital and debt financing requirements for the Our outstanding debt at December 31, 2008 consists of foreseeable future. $2.4 billion from our New Credit Agreement, $150.0 million Management also considers the following regarding liquidity 1 of 7 ⁄8% senior notes due 2013 (Senior Notes due 2013), as and capital resources to identify trends, demands, commit- well as outstanding amounts under our revolving credit facil- ments, events and uncertainties that require disclosure: ity, working capital lines of credit in non-U.S. locations and A. Our New Credit Agreement requires us to comply with capital leases. As of December 31, 2008, we also had out- certain financial ratios and tests to comply with the terms standing $81.8 million of other indebtedness. Our total debt of the agreement. We were in compliance with these has a weighted — average interest rate of 5.9%. As of covenants as of December 31, 2008, the latest measure- December 31, 2008, the company had $614.7 million of ment date. The occurrence of any default of these unused availability under the terms of the revolving facility covenants could result in acceleration of any outstanding (less the balance of outstanding letters of credit and including balances under the New Credit Agreement. Further, such the $300.0 million option to increase the borrowing capacity acceleration would constitute an event of default under of the New Credit Agreement). See further detail related to the indentures governing our Senior Notes due 2013 and our Debt at Note 10, “Debt.” could trigger cross default provisions in other agreements. In the fourth quarter of 2008, we cancelled our two fixed- B. Circumstances that could impair our ability to continue to-floating rate swap contracts which effectively converted to engage in transactions that have been integral to his- $50.0 million of our fixed rate Senior Notes due 2013 to vari- torical operations or are financially or operationally able rate debt. These contracts were considered to be essential, or that could render that activity commercially hedges against changes in the fair value of the fixed rate impracticable, such as the inability to maintain a speci- debt obligation. In January 2009, the company entered into fied credit rating, level of earnings, earnings per share, new interest rate hedging transactions related to its Term financial ratios, or collateral. We do not believe that the Loan A and Term Loan B facilities. These hedge transactions risk factors applicable to our business are reasonably fixed the interest rate paid for 50 percent of each of these likely to impair our ability to continue to engage in our facilities for a weighted average life of at least three years as planned activities at this time. required by the terms of the New Credit Agreement. See C. Factors specific to us and our markets that we expect to additional discussion at Note 24, “Subsequent Events.” be given significant weight in the determination of our

The Manitowoc Company, Inc. — 2008 Form 10-K 27

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 28 CHKSUM Content: 1118 Layout: 32817 Graphics: No Graphics CLEAN

credit rating or will otherwise affect our ability to raise the availability of or requirements for capital resources are short-term and long-term financing. We do not presently as follows: believe that events covered by the risk factors applicable • We have disclosed in Note 17 to the Consolidated to our business could materially affect our credit ratings Financial Statements our buyback and residual value or could adversely affect our ability to raise short-term or guaranty commitments. long-term financing. • We lease various assets under operating leases. The D. We have disclosed information related to certain guaran- future estimated payments under these arrangements tees in Note 17 to our Consolidated Financial Statements. are disclosed in Note 20 to the Consolidated Financial E. Written options on non-financial assets (for example, Statements and in the table below. real estate puts). We do not have any written options on • We have disclosed our accounts receivable securitiza- non-financial assets. tion arrangement in Note 11 to the Consolidated Finan- cial Statements. OFF-BALANCE SHEET ARRANGEMENTS Our disclosures concerning transactions, arrangements and CONTRACTUAL OBLIGATIONS AND COMMERCIAL other relationships with unconsolidated entities or other per- COMMITMENTS sons that are reasonably likely to materially affect liquidity or A summary of our significant contractual obligations as of December 31, 2008 is as follows:

Total Committed 2009 2010 2011 2012 2013 Thereafter Debt $2,649.4 $181.2 $296.0 $165.7 $165.7 $691.5 $1,149.3 Capital leases 5.9 1.1 0.9 0.8 0.7 0.3 2.1 Operating leases 164.6 40.1 31.3 22.9 16.6 12.9 40.8 Total committed $2,819.9 $222.4 $328.2 $189.4 $183.0 $704.7 $1,192.2

* There were no significant purchase obligation commitments at December 31, 2008. * Table above does not include interest payments. * FIN 48 tax liabilities totaling $66.2 million, excluding related interests and penalties, are not included in the table because the timing of their resolution cannot be estimated. See Note 12 to the Consolidated Financial Statements for disclosures surrounding uncertain income tax positions under FIN 48.

At December 31, 2008, we had outstanding letters of policies and procedures that place financial instruments under credit that totaled $68.3 million. We also had buyback com- the direction of corporate finance and restrict all derivative mitments and residual value guarantees outstanding, that if transactions to those intended for hedging purposes. The use all were satisfied in full at December 31, 2008, the total cash of financial instruments for trading purposes or speculation is cost to us would be $105.1 million. This amount is not strictly prohibited. reduced for amounts the company would recover from For a more detailed discussion of our accounting policies repossessing and subsequent resale of collateral. and the financial instruments that we use, please refer to We maintain defined benefit pension plans for some of Note 2, “Summary of Significant Accounting Policies,” and our operations in the United States, Europe and Asia. The Note 10, “Debt,” to the Consolidated Financial Statements. company has established the Retirement Plan Committee (the Committee) to manage the operations and administra- Interest Rate Risk tion of all benefit plans and related trusts. In conjunction In the fourth quarter of 2008, we cancelled our two with the Enodis acquisition (see Note 3), and effective as fixed-to-floating rate swap contracts which effectively con- of December 31, 2008, the company merged all but one of verted $50.0 million of our fixed rate Senior Notes due 2013 the former Enodis U.S. pension plans into the Manitowoc to variable rate debt. These contracts were considered to be U.S. pension plan. The unmerged plan continues to accrue hedges against changes in the fair value of the fixed rate benefits for the enrolled participants, while the remaining debt obligation. At December 31, 2008, we did not use interest merged plans had benefit accruals frozen prior to the rate swaps or other types of derivative financial instruments merger of the plans. to mitigate the risks related to fluctuations in interest rates In 2008, cash contributions to all pension plans by us which could negatively impact the fair value of our fixed-rate were $3.2 million, and we estimate that our pension plan debt or increase our interest cost related to our floating rate contributions will be approximately $7.3 million in 2009. debt. However, in January 2009 the company entered into new interest rate hedging transactions related to its Term Financial Risk Management Loan A and Term Loan B facilities. These hedge transactions We are exposed to market risks from changes in interest rates, fixed the interest rate paid for 50 percent of each of these commodities, and changes in foreign currency exchange rates. facilities for a weighted average life of at least three years as To reduce these risks, we selectively use financial instruments required by the terms of the New Credit Agreement. See and other proactive management techniques. We have written additional discussion at Note 24, “Subsequent Events.”

28 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 29 CHKSUM Content: 30691 Layout: 29962 Graphics: No Graphics CLEAN

Commodity Prices hedges would not have a significant impact on the date of We are exposed to fluctuating market prices for commodi- settlement due to the insignificant amounts of such hedges. ties, including steel, copper, aluminum, and petroleum-based Amounts invested in non-U.S. based subsidiaries are products. Each of our business segments is subject to the translated into U.S. dollars at the exchange rate in effect at effect of changing raw material costs caused by movements year-end. Results of operations are translated into U.S. dollars in underlying commodity prices. We have established pro- at an average exchange rate for the period. The resulting grams to manage the negotiations of commodity prices. translation adjustments are recorded in stockholders’ equity Some of these programs are centralized across business as cumulative translation adjustments. The translation segments, and others are specific to a business segment or adjustment recorded in accumulated other comprehensive business unit. In addition to the regular negotiations of income at December 31, 2008 is $87.1 million. material prices with certain vendors, during 2008 we entered into certain commodity hedges that fix the price of certain of Environmental, Health, Safety, and Other Matters our key commodities utilized in the production of our Food- Please refer to Item 8, Financial Statements and Supplemen- service product offerings. At December 31, 2008, $2.1 million tary Data, Note 16 to the Consolidated Financial Statements (net of tax of $1.1 million) of unrealized losses due to com- where we have disclosed our Environmental, Health, Safety, modity hedging positions remain deferred in accumulated Contingencies and other Matters. other comprehensive income and will be realized as a component of cost of sales over the next 12 months. Critical Accounting Policies The Consolidated Financial Statements include accounts of Currency Risk the company and all its subsidiaries. The preparation of We have manufacturing, sales and distribution facilities financial statements in conformity with accounting principles around the world and thus make investments and enter into generally accepted in the United States of America requires transactions denominated in various foreign currencies. us to make estimates and assumptions in certain circum- International sales, including those sales that originated out- stances that affect amounts reported in the accompanying side of the United States, were approximately 58% of our Consolidated Financial Statements and related footnotes. In total sales for 2008, with the largest percentage (30%) being preparing these Consolidated Financial Statements, we have sales into various European countries. made our best estimates and judgments of certain amounts Regarding transactional foreign exchange risk, we enter included in the Consolidated Financial Statements giving into limited forward exchange contracts to 1) reduce the due consideration to materiality. We do not believe there is a impact of changes in foreign currency rates between a bud- great likelihood that materially different amounts would be geted rate and the rate realized at the time we recognize a reported related to the accounting policies described below. particular purchase or sale transaction and 2) reduce earn- However, application of these accounting policies involve ings and cash flow impact on nonfunctional currency the exercise of judgment and use of assumptions as to future denominated receivables and payables. Gains and losses uncertainties and, as a result, actual results could differ from resulting from hedging instruments either impact our Con- these estimates. Although we have listed a number of solidated Statements of Operations in the period of the accounting policies below which we believe to be most criti- underlying purchase or sale transaction, or offset the foreign cal, we also believe that all of our accounting policies are exchange gains and losses on the underlying receivables important to the reader. Therefore, please refer also to the and payables being hedged. The maturities of these forward Notes to the Consolidated Financial Statements for more exchange contracts coincide with either the underlying detailed description of these and other accounting policies transaction date or the settlement date of the related cash of the company. inflow or outflow. The hedges of anticipated transactions are designated as cash flow hedges and the hedges of Revenue Recognition — Revenue is generally recognized accounts receivable and accounts payable are designated as and earned when all the following criteria are satisfied with fair value hedges in accordance with SFAS No. 133, regard to a specific transaction: persuasive evidence of an “Accounting for Derivative Instruments and Hedging Activi- arrangement exists, the price is fixed and determinable, col- ties.” At December 31, 2008, we had outstanding forward lectability of cash is reasonably assured, and delivery has exchange contracts hedging anticipated transactions and occurred or services have been rendered. We periodically future settlements of outstanding accounts receivable and enter into transactions with customers that provide for residual accounts payable with an aggregate fair market value of a value guarantees and buyback commitments. These transac- liability of $5.2 million. A 10% appreciation or depreciation tions are recorded as operating leases for all significant of the underlying functional currency at December 31, 2008 residual value guarantees and for all buyback commitments. for fair value hedges would not have a significant impact on These initial transactions are recorded as deferred revenue our Consolidated Statements of Operations as any gains or and are amortized to income on a straight-line basis over a losses under the foreign exchange contracts hedging period equal to that of the customer’s third-party financing accounts receivable or payable balances would be offset by agreement. In addition, we lease cranes to customers under equal gains or losses on the underlying receivables or operating lease terms. Revenue from operating leases is payables. A 10% appreciation or depreciation of the underlying recognized ratably over the term of the lease, and leased functional currency at December 31, 2008 for cash flow cranes are depreciated over their estimated useful lives.

The Manitowoc Company, Inc. — 2008 Form 10-K 29

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 30 CHKSUM Content: 43511 Layout: 37392 Graphics: No Graphics CLEAN

Revenue Recognition under Percentage-of-completion Goodwill and Other Intangible Assets — We account for Accounting — Revenue under long-term contracts, primarily goodwill and other intangible assets under the guidance of within the former Marine segment, are recognized using the SFAS No. 142, “Goodwill and Other Intangible Assets.” percentage-of-completion (POC) method of accounting. Under SFAS No. 142, goodwill is no longer amortized; how- Under this method, sales and gross profit are recognized as ever, it is tested for impairment annually or more frequently work is performed based on the relationship between actual if events or changes in circumstances indicate that the asset costs incurred and total estimated costs at the completion might be impaired. The Company performs impairment of the contract. Recognized revenues that will not be billed reviews for its reporting units, which have been determined under the terms of the contract until a later date are recorded to be: Cranes Americas; Cranes Europe, Middle East, and as “recoverable costs and accrued profit on progress com- Africa; Cranes Asia; Crane CARE; Foodservice Americas; pleted not billed,” which are included in other current assets Foodservice Europe, Middle East, and Africa; Foodservice in the Consolidated Balance Sheets. Likewise, contracts Asia; and Foodservice Retail, using a fair-value method where billings to date have exceeded recognized revenues based on the present value of future cash flows, which are recorded as “amounts billed in excess of sales,” which involves management’s judgments and assumptions. The are included in accounts payable and accrued expenses in estimated fair value is then compared with the carrying the Consolidated Balance Sheets. Changes to the original amount of the reporting unit, including recorded goodwill. estimates may be required during the life of the contract and The Company is subject to financial statement risk to the such estimates are reviewed when customer change orders extent that the carrying amount exceeds the estimated fair are placed and on a regular periodic basis. Sales and gross value. The impairment testing performed by the Company at profit are adjusted when known for revisions in estimated June 30, 2008, indicated that the estimated fair value of total contract costs and contract values. Claims against cus- each reporting unit exceeded its corresponding carrying tomers are recognized as revenue when it is probable that amount, including recorded goodwill and, as such, no the claim will result in additional contract revenue and the impairment existed at that time. amount can be reliably estimated. Estimated losses are During the fourth quarter of 2008, our stock price declined recorded when identified. The use of the POC method of significantly and we began to see signs of a slow down in accounting involves considerable use of estimates in deter- our Crane segment, highlighted by a decrease in our backlog. mining revenues, costs and profits and in assigning the Additionally, access to the credit markets, which are critical amounts to accounting periods. The company continually to the ability of some of our customers to finance crane pur- evaluates all of the issues related to the assumptions, risks chases, has been restricted. We believed these circumstances and uncertainties inherent with the application of the POC to be indicators of potential impairment under the guidance method of accounting. of SFAS No. 142, “Goodwill and Other Intangible Assets” and we performed an impairment test for each of the report- Allowance for Doubtful Accounts — Accounts receivable ing units within our Crane segment as of December 31, 2008. are reduced by an allowance for amounts that may become We re-performed our established method of present valuing uncollectible in the future. Our estimate for the allowance future cash flows, which considered updated projections, for doubtful accounts related to trade receivables includes and determined that goodwill was not impaired. The deter- evaluation of specific accounts where we have information mination of fair value of the reporting units requires us to that the customer may have an inability to meet its financial make significant estimates and assumptions. These estimates obligations together with a general provision for unknown and assumptions primarily include, but are not limited to, rev- but existing doubtful accounts based on pre-established per- enue growth and operating earnings projections, discount centages to specific aging categories which are subject to rates, terminal growth rates, and required capital projections change if experience improves or deteriorates. Despite over- for each reporting unit. Due to the inherent uncertainty involved all market conditions and deterioration in the credit markets, in making these estimates, actual results could differ materially we have not experienced a significant change in collection from those estimates. We evaluated the significant assump- patterns or defaults on customer payments. tions used to determine the fair values of each reporting unit, both individually and in the aggregate and concluded Inventories and Related Reserve for Obsolete and Excess they are reasonable. Inventory — Inventories are valued at the lower of cost or We also considered a market approach in evaluating the market using both the first-in, first-out (FIFO) method and potential for impairment by calculating fair value using the last-in, first-out (LIFO) method and are reduced by a recent like transaction multiples of earnings before interest, reserve for excess and obsolete inventories. The estimated taxes, depreciation and amortization (EBITDA). This analysis reserve is based upon specific identification of excess or also did not indicate impairment. obsolete inventories together with a general provision based During the latter part of the fourth quarter of fiscal 2008 on pre-established percentages applied to specific aging and as of December 31, 2008, our market capitalization was categories of inventory. These categories are evaluated below book value. While we considered the market capital- based upon historical usage, estimated future usage, and ization decline in our evaluation of fair value of our reporting sales requiring the inventory. These percentages were estab- units, that market metric is only one indicator of fair value. lished based upon historical write-off experience. This is particularly true when a company’s share price appears to be significantly influenced by recent transactions or market uncertainty regarding leverage. We believe the Enodis

30 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 31 CHKSUM Content: 19075 Layout: 63465 Graphics: No Graphics CLEAN

acquisition and the related increase in debt levels have the carrying value of the assets may not be recoverable. A unduly influenced our share price as evidenced by an exces- considerable amount of management judgment and sive decline in share price in comparison with our peers. assumptions are required in performing the impairment When taking these factors into consideration, the control tests, principally in determining the fair value of the assets. premium used by the company was within widely accepted While the company believes its judgments and assumptions control premium ranges. A control premium is the amount were reasonable, different assumptions could change the that a buyer is willing to pay over the current market price of estimated fair values and, therefore, impairment charges a company in order to acquire a controlling interest. We could be required. therefore concluded there was no indication of impairment under this metric. Employee Benefit Plans — We provide a range of benefits We will continue to monitor market conditions and deter- to our employees and retired employees, including pensions mine if any additional interim review of goodwill is warranted. and postretirement health care coverage. Plan assets and Further deterioration in the market or actual results as obligations are recorded annually based on the company’s compared with our projections may ultimately result in a measurement date utilizing various actuarial assumptions future impairment. In the event we determine that goodwill such as discount rates, expected return on plan assets, is impaired in the future, we would need to recognize a compensation increases, retirement and mortality rates, and non-cash impairment charge, which could have a material health care cost trend rates as of that date. The approach adverse effect on our consolidated balance sheet and we use to determine the annual assumptions are as follows: results of operations. • Discount Rate — Our discount rate assumptions are In addition, we completed the acquisition of Enodis during based on the interest rate of noncallable high-quality the fourth quarter. As a result of this acquisition, we have corporate bonds, with appropriate consideration of our recorded an additional $1.4 billion of goodwill within our pension plans’ participants’ demographics and benefit Foodservice segment. The purchase price we paid for payment terms. Enodis was based on our projections of future operating • Expected Return on Plan Assets — Our expected return profits and the expected synergies we believe we can derive on plan assets assumptions are based on our expecta- from cost savings and revenue enhancements. However, we tion of the long-term average rate of return on assets in cannot be assured that the intended beneficial effect from the pension funds, which is reflective of the current and this acquisition will be realized, particularly given the current projected asset mix of the funds and considers the his- difficult market conditions. Consequently, an impairment torical returns earned on the funds. charge may be required in a future period if operating results • Compensation increase — Our compensation increase are below our projections. assumptions reflect our long-term actual experience, In order to comply with the agreements with the European the near-term outlook and assumed inflation. Commission and the United States Department of Justice • Retirement and Mortality Rates — Our retirement and we initiated a multiple step process to divest of the required mortality rate assumptions are based primarily on actual businesses during the fourth quarter of 2008. As part of our plan experience and mortality tables. requirement to divest of these businesses, we obtained pre- • Health Care Cost Trend Rates — Our health care cost liminary purchase offers from several potential buyers. As trend rate assumptions are developed based on histori- we continued with the sales process throughout January cal cost data, near-term outlook and an assessment of and February of 2009 and preliminary purchase offers were likely long-term trends. rescinded or significantly reduced, it became apparent that the carrying value of the businesses at December 31, 2008 Measurements of net periodic benefit cost are based on the exceeded their fair value. We therefore considered the guid- assumptions used for the previous year-end measurements ance in SFAS No.144 “Accounting for the Impairment or Dis- of assets and obligations. The company reviews its actuarial posal of Long-Lived Assets,” and have recognized a non-cash assumptions on an annual basis and makes modifications to charge of $175.0 million to adjust the carrying amount of the the assumptions when appropriate. As required by U.S. GAAP, businesses to be divested in the Consolidated Statements of the effects of the modifications are recorded currently or Operations in earnings from discontinued operations at amortized over future periods. Management has developed December 31, 2008. This charge reduces the carrying amount the assumptions with the assistance of its independent of the businesses to be divested to our revised estimated fair actuaries and other relevant sources and we believe that our value, less costs to sell. If the final sales price is less than our assumptions used are reasonable; however, changes in estimated fair value an additional impairment charge, which these assumptions could impact the company’s financial could have a material affect on our consolidated financial position, results of operations or cash flows. statements, would be recognized in future periods. Product Liability — We are subject in the normal course of Other intangible assets with definite lives continue to be business to product liability lawsuits. To the extent permitted amortized over their estimated useful lives. Indefinite and under applicable laws, our exposure to losses from these definite lived intangible assets are also subject to impairment lawsuits is mitigated by insurance with self-insurance retention testing. Indefinite lived assets are tested annually, or more limits. We record product liability reserves for our self-insured frequently if events or changes in circumstances indicate that portion of any pending or threatened product liability actions. the assets might be impaired. Definite lived intangible assets Our reserve is based upon two estimates. First, we track the are tested whenever events or circumstances indicate that

The Manitowoc Company, Inc. — 2008 Form 10-K 31

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 32 CHKSUM Content: 54416 Layout: 37392 Graphics: No Graphics CLEAN

population of all outstanding pending and threatened product Stock Options — The computation of the expense associated liability cases to determine an appropriate case reserve for with stock-based compensation requires the use of a valuation each based upon our best judgment and the advice of legal model. We currently use a Black-Scholes option pricing model counsel. These estimates are continually evaluated and to calculate the fair value of our stock options and stock appre- adjusted based upon changes to the facts and circumstances ciation rights. The Black-Scholes model requires assumptions surrounding the case. Second, the company determines the regarding the volatility of the company’s stock, the expected amount of additional reserve required to cover incurred but life of the stock award and the company’s dividend ratio. We not reported product liability issues and to account for possi- primarily use historical data to determine the assumptions to ble adverse development of the established case reserves be used in the Black-Scholes model and have no reason to (collectively referred to as IBNR). This analysis is performed believe that future data is likely to differ materially from his- at least twice annually. We have established a position torical data. However, changes in the assumptions to reflect within the actuarially determined range, which we believe is future stock price volatility, future dividend payments and the best estimate of the IBNR liability. future stock award exercise experience could result in a change in the assumptions used to value awards in the Income Taxes — We account for income taxes in accordance future and may result in a material change to the fair value with SFAS No. 109, “Accounting for Income Taxes.” Deferred calculation of stock-based awards. tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial Warranties — In the normal course of business we provide statement carrying amounts of existing assets and liabilities our customers warranties covering workmanship, and in and their respective tax bases and operating loss and tax some cases materials, on products manufactured by us. Such credit carryforwards. Deferred tax assets and liabilities are warranties generally provide that products will be free from measured using enacted tax rates expected to apply to taxable defects for periods ranging from 12 months to 60 months income in the years in which those temporary differences with certain equipment having longer-term warranties. If a are expected to be recovered or settled. We record a valuation product fails to comply with our warranty, we may be obli- allowance that represents a reserve on deferred tax assets gated, at our expense, to correct any defect by repairing or for which utilization is uncertain. Management judgment is replacing such defective product. We provide for an estimate required in determining our provision for income taxes, of costs that may be incurred under our warranty at the time deferred tax assets and liabilities, and the valuation allowance product revenue is recognized based on historical warranty recorded against our net deferred tax assets. The valuation experience for the related product or estimates of projected allowance would need to be adjusted in the event future tax- losses due to specific warranty issues on new products. These able income is materially different than amounts estimated. costs primarily include labor and materials, as necessary asso- Our policy is to remit earnings from foreign subsidiaries only ciated with repair or replacement. The primary factors that to the extent any resultant foreign taxes are creditable in the affect our warranty liability include the number of shipped United States. Accordingly, we do not currently provide for units and historical and anticipated rates or warranty claims. additional United States and foreign income taxes which As these factors are impacted by actual experience and would become payable upon repatriation of undistributed future expectations, we assess the adequacy of our recorded earnings of foreign subsidiaries. warranty liability and adjust the amounts as necessary. We measure and record income tax contingency accruals in accordance with Financial Accounting Standards Board Restructuring Charges — Restructuring charges for exit and Interpretation No. 48, “Accounting for Uncertainty in Income disposal activities are recognized when the liability is incurred. Taxes” (“FIN 48”). We recognize liabilities for uncertain income We use the definition of liability found in FASB Concept State- tax positions based on a two-step process. The first step is ment No. 6, “Elements of Financial Statements.” In addition, to evaluate the tax position for recognition by determining if the liability for the restructuring charge associated with an exit the weight of available evidence indicates that it is more or disposal activity is measured initially at its fair value. likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, Recent Accounting Changes and Pronouncements if any. The second step requires us to estimate and measure In December 2008, the FASB issued FSP No. FAS 132(R)-1, the tax benefit as the largest amount that is more than 50% “Employers’ Disclosures about Postretirement Benefit Plan likely to be realized upon ultimate settlement. It is inherently Assets”. FSP FAS 132(R)-1 amends SFAS No. 132(R), difficult and subjective to estimate such amounts, as we “Employers’ Disclosures about Pensions and Other Postre- must determine the probability of various possible outcomes. tirement Benefits”, to provide guidance on an employer’s We reevaluate these uncertain tax positions on a quarterly disclosures about the types of plan assets held in a defined basis or when new information becomes available to manage- benefit pension or other postretirement plan. This statement ment. These reevaluations are based on factors including, but is effective for financial statements issued for fiscal years not limited to, changes in facts or circumstances, changes ending after December 15, 2009. The company is currently in tax law, successfully settled issues under audit, expirations evaluating the impact this statement will have on its financial due to statutes, and new audit activity. Such a change in position and results of operations. recognition or measurement could result in the recognition In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of a tax benefit or an increase to the tax accrual. of Generally Accepted Accounting Principles”, which identifies the sources of accounting principles and the framework for

32 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 33 CHKSUM Content: 18021 Layout: 51136 Graphics: No Graphics CLEAN

selecting the principles used in the preparation of financial earnings until settled. SFAS 141(R) also requires acquisition- statements. SFAS No. 162 is effective 60 days following the related transaction and restructuring costs to be expensed SEC’s approval of the Public Company Accounting Oversight rather than treated as part of the cost of the acquisition. Board amendments to AU Section 411, “The Meaning of SFAS 141(R) applies prospectively to business combinations Present Fairly in Conformity with Generally Accepted for which the acquisition date is on or after the beginning of Accounting Principles”. SFAS No. 162 is now effective for the first annual reporting period beginning on or after the company. The adoption of this statement did not have a December 15, 2008. The company is currently evaluating the material impact on the company’s financial position or impact this statement will have on its financial position and results of operations. results of operations. In March 2008, the FASB issued SFAS No. 161, “Disclosures In February 2007, the FASB issued SFAS No. 159, “The Fair about Derivative Instruments and Hedging Activities, an Value Option for Financial Assets and Financial Liabilities — amendment of FASB Statement No. 133”. SFAS No. 161 Including an Amendment of FASB Statement No. 115”. amends and expands the disclosure requirements of SFAS 159 permits entities to choose to measure many finan- SFAS No. 133 with the intent to provide users of financial cial instruments and certain other items at fair value that are statements with an enhanced understanding of: 1) how and not currently required to be measured at fair value. SFAS 159 why an entity uses derivative instruments; 2) how derivative permits all entities to choose, at specified election dates, to instruments and related hedged items are accounted for under measure eligible items at fair value (the “fair value option”). SFAS No. 133 and its related interpretations; and 3) how deriv- A business entity shall report unrealized gains and losses on ative instruments and related hedged items affect an entity’s items for which the fair value option has been elected in financial position, financial performance and cash flows. This earnings at each subsequent reporting date. Upfront costs statement is effective for financial statements issued for fiscal and fees related to items for which the fair value option is years and interim periods beginning after November 15, 2008, elected are recognized in earnings as incurred and not with early application encouraged. The company is currently deferred. SFAS 159 also establishes presentation and disclo- evaluating the impact on disclosures of the adoption of sure requirements designed to facilitate comparisons between SFAS No. 161 on its consolidated financial statements. entities that choose different measurement attributes for simi- In December 2007, the FASB issued SFAS No. 160, “Non- lar types of assets and liabilities. SFAS No. 159 was effective controlling Interests in Consolidated Financial Statements an for us on January 1, 2008. The adoption of SFAS No. 159 did Amendment of ARB No. 51”, which establishes accounting not have an impact on our consolidated financial statements and reporting standards for the noncontrolling interest in a as the company did not elect the fair value option for any of subsidiary and for the deconsolidation of a subsidiary. such eligible financial assets or financial liabilities. SFAS 160 clarifies that a noncontrolling interest in a subsidiary In September 2006, the FASB issued SFAS No. 157, “Fair is an ownership interest in the consolidated entity that should Value Measurements.” SFAS 157 defines fair value, establishes be reported as equity in the consolidated financial statements. a framework for measuring fair value in generally accepted SFAS 160 also requires consolidated net income to be accounting principles and establishes a hierarchy that cate- reported at amounts that include the amounts attributable to gorizes and prioritizes the sources to be used to estimate both the parent and the noncontrolling interest. It also requires fair value. SFAS 157 also expands financial statement disclo- disclosure, on the face of the consolidated statement of sures about fair value measurements. On February 12, 2008, income, of the amounts of consolidated net income attributa- the FASB issued FASB Staff Position (FSP) 157-2 which ble to the parent and to the noncontrolling interest. SFAS 160 delays the effective date of SFAS 157 for one year, for all also provides guidance when a subsidiary is deconsolidated nonfinancial assets and nonfinancial liabilities, except those and requires expanded disclosures in the consolidated finan- that are recognized or disclosed at fair value in the financial cial statements that clearly identify and distinguish between statements on a recurring basis (at least annually). FAS 157 the interests of the parent’s owners and the interests of the and FSP 157-2 are effective for financial statements issued noncontrolling owners of a subsidiary. SFAS 160 is effective for fiscal years beginning after November 15, 2007. We have for fiscal years, and interim periods within those fiscal years, elected a partial deferral of SFAS 157 under the provisions of beginning on or after December 15, 2008. The company is FSP 157-2 related to the measurement of fair value used when currently evaluating the impact this statement will have on its evaluating goodwill, other intangible assets and other long- financial position and results of operations. lived assets for impairment and valuing asset retirement In December 2007, the FASB issued SFAS No. 141(R), obligations and liabilities for exit or disposal activities. The “Business Combinations”, which establishes principles and impact of partially adopting SFAS 157 effective January 1, 2008 requirements for how the acquirer: (a) recognizes and meas- was not material to our consolidated financial statements. ures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the Cautionary Statements about Forward-Looking acquiree; (b) recognizes and measures the goodwill acquired Information in the business combination or a gain from a bargain pur- Statements in this report and in other company communica- chase; and (c) determines what information to disclose to tions that are not historical facts are forward-looking state- enable users of the financial statements to evaluate the ments, which are based upon our current expectations. nature and financial effects of the business combination. These statements involve risks and uncertainties that could SFAS 141(R) requires contingent consideration to be recog- cause actual results to differ materially from what appears nized at its fair value on the acquisition date and, for certain within this annual report. arrangements, changes in fair value to be recognized in

The Manitowoc Company, Inc. — 2008 Form 10-K 33

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ba | Sequence: 34 CHKSUM Content: 11678 Layout: 39019 Graphics: No Graphics CLEAN

Forward-looking statements include descriptions of plans costs to be incurred in achieving synergies, potential divesti- and objectives for future operations, and the assumptions tures and other strategic options. behind those plans. The words “anticipates,” “believes,” “intends,” “estimates,” and “expects,” or similar expressions, Corporate (including factors that may affect both of our usually identify forward-looking statements. Any and all projec- segments) — changes in laws and regulations throughout tions of future performance are forward-looking statements. the world; the ability to finance, complete and/or successfully In addition to the assumptions, uncertainties, and other integrate, restructure and consolidate acquisitions, divesti- information referred to specifically in the forward-looking tures, strategic alliances and joint ventures; issues related to statements, a number of factors relating to each business new facilities and expansions or consolidation of existing segment could cause actual results to be significantly differ- facilities; efficiencies and capacity utilization of facilities; ent from what is presented in this annual report. Those factors competitive pricing; availability of certain raw materials; include, without limitation, the following: changes in raw materials and commodity prices; issues associated with new product introductions; matters impact- Crane — market acceptance of new and innovative products; ing the successful and timely implementation of ERP systems; cyclicality of the construction industry; the effects of govern- changes in domestic and international economic and industry ment spending on construction-related projects throughout conditions, including steel industry conditions; changes in the world; changes in world demand for our crane product the markets served by the company (including Enodis); unex- offering; the replacement cycle of technologically obsolete pected issues associated with the availability of local suppliers cranes; demand for used equipment; actions of competitors; and skilled labor; changes in the interest rate environment; successful and timely implementation of our ERP system; risks associated with growth; foreign currency fluctuations and foreign exchange rate risk. and their impact on hedges in place with Manitowoc; world-wide political risk; geographic factors and economic Foodservice — market acceptance of new and innovative risks; health epidemics; pressure of additional financing products; weather; consolidations within the restaurant and leverage resulting from acquisitions; success in increasing foodservice equipment industries; global expansion of cus- manufacturing efficiencies and capacities; unanticipated tomers; the commercial ice-cube machine replacement changes in revenue, margins, costs and capital expenditures; cycle in the United States; unanticipated issues associated work stoppages, labor negotiations and rates; actions of with refresh/renovation plans by national restaurant accounts; competitors; unanticipated changes in consumer spending; specialty foodservice market growth; the demand for quick- the ability of our customers to obtain financing; the state of service restaurant and kiosks; future strength of the beverage financial and credit markets; and unanticipated changes in industry; and in connection with the acquisition of Enodis customer demand. plc, compliance with the terms and conditions of regulatory approvals obtained in connection with the acquisition of ITEM 7A. QUANTITATIVE AND QUALITATIVE Enodis, the ability to appropriately and timely integrate the DISCLOSURES ABOUT MARKET RISK acquisition of Enodis, the timing, price, and other terms of the divestiture of Enodis’ global ice business required by See Liquidity and Capital Resources, and Risk Management in regulatory authorities, anticipated earnings enhancements, Management’s Discussion and Analysis of Financial Condition estimated cost savings and other synergies and the antici- and Results of Operations for a description of the quantitative pated timing to realize those savings and synergies, estimated and qualitative disclosure about market risk.

34 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ca | Sequence: 1 CHKSUM Content: 21330 Layout: 45106 Graphics: No Graphics CLEAN

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements and Financial Statement Schedule:

Financial Statements:

Report of Independent Registered Public Accounting Firm 36

Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006 37

Consolidated Balance Sheets as of December 31, 2008 and 2007 38

Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006 39

Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the years ended December 31, 2008, 2007 and 2006 40

Notes to Consolidated Financial Statements 41

Financial Statement Schedule:

Schedule II — Valuation and Qualifying Accounts for the three years ended December 31, 2008, 2007 and 2006 79

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

The Manitowoc Company, Inc. — 2008 Form 10-K 35

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ca | Sequence: 2 CHKSUM Content: 25059 Layout: 37392 Graphics: No Graphics CLEAN

Report of Independent Registered Public financial statements for external purposes in accordance Accounting Firm with generally accepted accounting principles. A company’s internal control over financial reporting includes those poli- To the Stockholders and Board of Directors of cies and procedures that (i) pertain to the maintenance of The Manitowoc Company, Inc.: records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the In our opinion, the consolidated financial statements listed company; (ii) provide reasonable assurance that transactions in the accompanying index present fairly, in all material are recorded as necessary to permit preparation of financial respects, the financial position of The Manitowoc Company, statements in accordance with generally accepted account- Inc. and its subsidiaries (the “Company”) at December 31, ing principles, and that receipts and expenditures of the 2008 and 2007, and the results of their operations and their company are being made only in accordance with authoriza- cash flows for each of the three years in the period ended tions of management and directors of the company; and December 31, 2008 in conformity with accounting principles (iii) provide reasonable assurance regarding prevention or generally accepted in the United States of America. In addi- timely detection of unauthorized acquisition, use, or disposition, in our opinion, the financial statement schedule listed tion of the company’s assets that could have a material in the accompanying index presents fairly, in all material effect on the financial statements. respects, the information set forth therein when read in con- Because of its inherent limitations, internal control over junction with the related consolidated financial statements. financial reporting may not prevent or detect misstatements. Also in our opinion, the Company maintained, in all material Also, projections of any evaluation of effectiveness to future respects, effective internal control over financial reporting as periods are subject to the risk that controls may become of December 31, 2008, based on criteria established in Inter- inadequate because of changes in conditions, or that the nal Control — Integrated Framework issued by the Commit- degree of compliance with the policies or procedures may tee of Sponsoring Organizations of the Treadway deteriorate. Commission (COSO). The Company’s management is As described in Management’s Report on Internal Control responsible for these financial statements and financial Over Financial Reporting, management has excluded certain statement schedule, for maintaining effective internal con- elements of the internal control over financial reporting of trol over financial reporting and for its assessment of the Enodis from its assessment of internal control over financial effectiveness of internal control over financial reporting, reporting as of December 31, 2008 because it was acquired included in Management’s Report on Internal Control over by the Company in a purchase business combination during Financial Reporting under Item 9A. Our responsibility is to 2008. Subsequent to the acquisition, certain elements of express opinions on these financial statements, on the Enodis’ internal control over financial reporting and related financial statement schedule, and on the Company’s internal processes were integrated into the Company’s existing control over financial reporting based on our integrated systems and internal control over financial reporting. Those audits. We conducted our audits in accordance with the controls that were not integrated have been excluded from standards of the Public Company Accounting Oversight management’s assessment of the effectiveness of internal Board (United States). Those standards require that we plan control over financial reporting as of December 31, 2008. and perform the audits to obtain reasonable assurance We have also excluded these elements of the internal con- about whether the financial statements are free of material trol over financial reporting of Enodis from our audit of the misstatement and whether effective internal control over Company’s internal control over financial reporting. The financial reporting was maintained in all material respects. excluded elements represent controls over accounts that are Our audits of the financial statements included examining, 14% of consolidated total assets and 4% of consolidated on a test basis, evidence supporting the amounts and net sales as of and for the year ended December 31, 2008. disclosures in the financial statements, assessing the accounting principles used and significant estimates made /s/ PricewaterhouseCoopers by management, and evaluating the overall financial Milwaukee, Wisconsin statement presentation. Our audit of internal control over March 2, 2009 financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. As discussed in Notes 2 and 12 to the consolidated financial statements, the Company changed its method of accounting for uncertain tax benefits in 2007. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of

36 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ca | Sequence: 3 CHKSUM Content: 2733 Layout: 45106 Graphics: No Graphics CLEAN

The Manitowoc Company, Inc. Consolidated Statements of Operations For the years ended December 31, 2008, 2007 and 2006

Millions of dollars, except per share data 2008 2007 2006 Operations Net sales $4,503.0 $3,684.0 $2,650.8 Costs and expenses: Cost of sales 3,487.2 2,822.5 2,039.5 Engineering, selling and administrative expenses 455.1 377.9 316.9 Amortization expense 11.6 5.8 3.3 Gain on sale of parts line — (3.3) — Pension settlements — 5.3 — Integration expense 7.6 — Restructuring expense 21.7 — — Total costs and expenses 3,983.2 3,208.2 2,359.7 Operating earnings from continuing operations 519.8 475.8 291.1 Other income (expenses): Interest expense (54.1) (36.2) (46.3) Loss on debt extinguishment (4.1) (12.5) (14.4) Loss on purchase price hedges (379.4) — — Other income (expense) — net (3.0) 9.8 3.4 Total other income (expenses) (440.6) (38.9) (57.3) Earnings from continuing operations before taxes on earnings and minority interest 79.2 436.9 233.8 Provision for taxes on earnings 1.5 122.1 74.8 Earnings from continuing operations before minority interests 77.7 314.8 159.0 Minority interest, net of income taxes (1.9) — — Earnings from continuing operations 79.6 314.8 159.0 Discontinued operations: Earnings (loss) from discontinued operations, net of income taxes of $(16.1), $(9.1) and $(3.2), respectively (143.4) 21.9 7.2 Gain on sale of discontinued operations, net of income taxes of $(17.4) 53.1 — — Net earnings (loss) $ (10.7) $ 336.7 $ 166.2 Per Share Data Basic earnings (loss) per share: Earnings from continuing operations $ 0.61 $ 2.53 $ 1.30 Earnings (loss) from discontinued operations, net of income taxes (1.10) 0.18 0.06 Gain on sale of discontinued operations, net of income taxes 0.41 — — Net earnings (loss) $ (0.08) $ 2.70 $ 1.36 Diluted earnings per share: Earnings from continuing operations $ 0.61 $ 2.47 $ 1.27 Earnings (loss) from discontinued operations, net of income taxes (1.10) 0.17 0.06 Gain on sale of discontinued operations, net of income taxes 0.41 — — Net earnings (loss) $ (0.08) $ 2.64 $ 1.32

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

The Manitowoc Company, Inc. — 2008 Form 10-K 37

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ca | Sequence: 4 CHKSUM Content: 63785 Layout: 37857 Graphics: No Graphics CLEAN

The Manitowoc Company, Inc. Consolidated Balance Sheets As of December 31, 2008 and 2007

Millions of dollars, except share data 2008 2007 Assets Current Assets: Cash and cash equivalents $ 173.0 $ 366.9 Marketable securities 2.6 2.5 Restricted cash 5.1 16.7 Accounts receivable, less allowances of $36.3 and $27.5, respectively 608.2 416.7 Inventories — net 925.3 591.0 Deferred income taxes 138.1 66.1 Other current assets 157.2 61.1 Current assets of discontinued operation 124.8 54.6 Total current assets 2,134.3 1,575.6 Property, plant and equipment — net 728.8 468.9 Goodwill 1,890.5 471.6 Other intangible assets — net 1,009.0 200.6 Deferred income taxes — 27.6 Other non-current assets 179.7 55.8 Long-term assets of discontinued operation 123.1 71.3 Total assets $6,065.4 $2,871.4 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable and accrued expenses $1,206.3 $ 845.7 Short-term borrowings and current portion of long-term debt 182.3 13.1 Customer advances 48.5 — Product warranties 102.0 80.4 Product liabilities 34.4 34.7 Current liabilities of discontinued operation 44.6 100.7 Total current liabilities 1,618.1 1,074.6 Non-Current Liabilities: Long-term debt, less current portion 2,473.0 217.5 Deferred income taxes 283.7 — Pension obligations 48.0 25.0 Postretirement health and other benefit obligations 55.9 51.3 Long-term deferred revenue 56.3 60.6 Other non-current liabilities 230.6 92.5 Total non-current liabilities 3,147.5 446.9 Commitments and contingencies (Note 16) Stockholders’ Equity: Common stock (300,000,000 shares authorized, 163,175,928 shares issued, 130,359,554 and 129,880,734 shares outstanding, respectively) 1.4 1.4 Additional paid-in capital 436.1 419.8 Accumulated other comprehensive income 68.5 114.5 Retained earnings 882.7 903.8 Treasury stock, at cost (32,816,374 and 33,295,194 shares, respectively) (88.9) (89.6) Total stockholders’ equity 1,299.8 1,349.9 Total liabilities and stockholders’ equity $6,065.4 $2,871.4

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

38 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ca | Sequence: 5 CHKSUM Content: 36967 Layout: 37924 Graphics: No Graphics CLEAN

The Manitowoc Company, Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2008, 2007 and 2006

Millions of dollars 2008 2007 2006 Cash Flows From Operations Net earnings (loss) $ (10.7) $ 336.7 $ 166.2 Adjustments to reconcile net earnings to cash provided by operating activities of continuing operations: Discontinued operations, net of income taxes 143.4 (21.9) (7.2) Pension settlements — (5.3) — Gain on sales of parts line — (3.3) — Depreciation 80.2 80.2 67.4 Amortization of intangible assets 11.6 5.8 3.3 Amortization of deferred financing fees 5.7 1.1 1.4 Deferred income taxes 6.9 17.7 14.8 Loss on purchase price hedges 379.4 — — Restructuring expense 21.7 — — Gain on sale of segment (53.1) — — Loss on early extinguishment of debt 4.1 2.3 3.1 Gain on sale of property, plant and equipment (3.6) (4.3) (2.1) Other 4.7 6.2 5.7 Changes in operating assets and liabilities, excluding the effects of business acquisitions or dispositions: Accounts receivable (25.4) (126.4) (13.2) Inventories (179.9) (75.1) (157.6) Other assets (29.1) (23.7) 13.8 Accounts payable and accrued expenses (70.8) 20.8 140.2 Other liabilities 1.4 4.8 (0.1) Net cash provided by operating activities of continuing operations 286.5 215.6 235.7 Net cash provided by (used for) operating activities of discontinued operations 22.5 28.4 57.3 Net cash provided by operating activities 309.0 244.0 293.0 Cash Flows From Investing Capital expenditures (150.3) (112.8) (64.4) Proceeds from sale of property, plant and equipment 10.0 9.8 10.3 Restricted cash 11.6 (1.6) (15.1) Business acquisitions, net of cash acquired (2,030.6) (79.9) (48.4) Settlement of hedges related to acquisitions (379.4) — — Proceeds from sale of business or parts 118.5 4.8 — Purchase of marketable securities (0.1) (0.1) (0.1) Net cash used for investing activities of continuing operations (2,420.3) (179.8) (117.7) Net cash used for investing activities of discontinued operations (4.9) (6.8) (3.1) Net cash used for investing activities (2,425.2) (186.6) (120.8) Cash Flows From Financing Net proceeds from issuance of common stock — 157.1 — Payments on long-term debt (693.8) (123.5) (256.7) Proceeds from long-term debt 2,769.3 19.8 20.1 Proceeds from (payments on) revolving credit facility — net (54.6) 56.7 (4.3) Payments on notes financing — net (3.8) (4.3) (15.4) Debt issuance costs (90.8) — (0.2) Dividends paid (10.4) (9.5) (8.6) Exercises of stock options including windfall tax benefits 8.5 27.6 32.2 Net cash provided by (used for) financing activities of continuing operations 1,924.4 123.9 (232.9) Net cash provided by financing activities of discontinued operations 2.5 — — Net cash provided by (used for) financing activities 1,926.9 123.9 (232.9) Effect of exchange rate changes on cash (4.6) 10.7 6.1 Net increase (decrease) in cash and cash equivalents (193.9) 192.0 (54.6) Balance at beginning of year 366.9 174.9 229.5 Balance at end of year $ 173.0 $ 366.9 $ 174.9 Supplemental Cash Flow Information Interest paid $ 23.7 $ 41.5 $ 48.3 Income taxes paid $ 142.7 $ 141.8 $ 23.7

The accompanying notes are an integral part of these financial statements. The Manitowoc Company, Inc. — 2008 Form 10-K 39

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.ca | Sequence: 6 CHKSUM Content: 38251 Layout: 1410 Graphics: No Graphics CLEAN

The Manitowoc Company, Inc. Consolidated Statements of Stockholders’ Equity and Comprehensive Income For the years ended December 31, 2008, 2007 and 2006

Millions of dollars, except shares data 2008 2007 2006 Common Stock — Shares Outstanding Balance at beginning of year 129,880,734 62,121,862 30,362,501 Stock options exercised 485,168 936,105 1,065,668 Two-for-one stock split — 62,799,852 30,605,986 Stock swap for stock options exercised (15,048) (6,385) (10,593) Restricted stock 8,700 29,300 98,300 Issuance of common stock — 4,000,000 — Balance at end of year 130,359,554 129,880,734 62,121,862 Common Stock — Par Value Balance at beginning of year $ 1.4 $ 0.7 $ 0.4 Issuance of common stock — 0.1 — Two-for-one stock split — 0.6 0.3 Balance at end of year $ 1.4 $ 1.4 $ 0.7 Additional Paid-in Capital Balance at beginning of year $ 419.8 $ 231.8 $ 195.9 Issuance of common stock — 156.8 — Two-for-one stock split — (0.6) (0.3) Stock options exercised 3.1 7.1 9.1 Restricted stock expense 1.9 2.0 1.2 Windfall tax benefit on stock options exercised 4.8 16.5 20.2 Stock option expense 6.5 6.2 5.7 Balance at end of year $ 436.1 $ 419.8 $ 231.8 Accumulated Other Comprehensive Income Balance at beginning of year $ 114.5 $ 48.0 $ 16.6 Foreign currency translation adjustments (29.6) 47.4 35.2 Derivative instrument fair market adjustment, net of income taxes of $(4.0), $(0.4) and $0.9 (7.3) (0.7) 1.6 Adoption of FAS 158, net of income taxes of $(3.9) — — (7.3) Additional minimum pension liability, net of income taxes of $0.9 — — 1.9 Employee pension and postretirement benefits, net of income taxes of $(4.9), $10.7 and $0.0 (9.1) 19.8 — Balance at end of year $ 68.5 $ 114.5 $ 48.0 Retained Earnings Balance at beginning of year $ 903.8 $ 587.4 $ 429.8 Adoption of FIN 48 — (10.8) — Net earnings (loss) (10.7) 336.7 166.2 Cash dividends (10.4) (9.5) (8.6) Balance at end of year $ 882.7 $ 903.8 $ 587.4 Treasury Stock Balance at beginning of year $ (89.6) $ (93.4) $ (99.4) Stock options exercised 0.7 3.8 6.0 Balance at end of year $ (88.9) $ (89.6) $ (93.4) Comprehensive Income Net earnings (loss) $ (10.7) $ 336.7 $ 166.2 Other comprehensive income (loss): Foreign currency translation adjustments (29.6) 47.4 35.2 Derivative instrument fair market adjustment, net of income taxes (7.3) (0.7) 1.6 Additional minimum pension liability, net of income taxes — — 1.9 Employee pension and postretirement benefits, net of income taxes (9.1) 19.8 — Comprehensive income (loss) $ (56.7) $ 403.2 $ 204.9

The accompanying notes are an integral part of these financial statements. 40 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 1 CHKSUM Content: 20146 Layout: 9948 Graphics: No Graphics CLEAN

Notes to Consolidated Financial Statements December 31, 2008, and for all prior periods presented in accordance with SFAS No. 144, “Accounting for the Impair- 1. Company and Basis of Presentation ment or Disposal of Long-Lived Assets”. After reclassifying the Marine segment to discontinued operations, the com- Company Founded in 1902, the Manitowoc Company, Inc. pany has two remaining reportable segments, the Crane and and its subsidiaries (collectively referred to as the “com- Foodservice segments. pany”) is a multi-industry, capital goods manufacturer in two principal markets: Cranes and Related Products (Crane) and Basis of Presentation The consolidated financial statements Foodservice Equipment (Foodservice). include the accounts of The Manitowoc Company, Inc. and The Crane business is a global provider of engineered lift its wholly and majority-owned subsidiaries. All significant solutions which designs, manufactures and markets a com- intercompany balances and transactions have been elimi- prehensive line of lattice-boom crawler cranes, mobile tele- nated. The preparation of financial statements in conformity scopic cranes, tower cranes, and boom trucks. The Crane with accounting principles generally accepted in the United products are primarily marketed under the Manitowoc, Grove, States of America requires management to make estimates Potain, and National brand names and are used in a wide vari- and assumptions that affect the reported amounts of assets ety of applications, including energy, petrochemical and and liabilities, disclosure of contingent assets and liabilities industrial projects, infrastructure development such as road, at the date of the financial statements, and the reported bridge and airport construction and commercial and high-rise amounts of revenues and expenses during the reporting residential construction. Our crane-related product support period. Actual results could differ from these estimates. Cer- services are marketed under the Crane CARE brand name and tain prior period amounts have been reclassified to conform include maintenance and repair services and parts supply. to the current period presentation as a result of the sale of On October 27, 2008, we completed our acquisition of the Marine segment on December 31, 2008. Enodis plc (Enodis), a global leader in the design and manufacture of innovative equipment for the commercial foodser- 2. Summary of Significant Accounting Policies vice industry. The $2.1 billion acquisition price of the transaction, exclusive of the cost to settle the related Cash Equivalents, Restricted Cash and Marketable Securi- hedges of the GBP purchase price and assumed debt, the ties All short-term investments purchased with an original largest and most recent acquisition for the company, has maturity of three months or less are considered cash equiva- established Manitowoc among the world’s top manufactur- lents. Marketable securities at December 31, 2008 and 2007, ers of commercial foodservice equipment. With this acquisi- include securities which are considered “available for sale.” tion, our Foodservice capabilities now span refrigeration, The difference between fair market value and cost of these ice-making, cooking, food-prep, and beverage-dispensing investments was not significant for either year. Restricted technologies. Manitowoc is now able to equip entire com- cash represents cash in escrow funds related to the security mercial kitchens and serve the world’s growing demand for for an indemnity agreement for our casualty insurance food prepared away from home. provider. In order to secure clearance for the acquisition of Enodis Inventories Inventories are valued at the lower of cost or from the European Commission and United States Depart- market value. Approximately 88% of the company’s invento- ment of Justice, Manitowoc agreed to sell substantially all of ries at December 31, 2008 and 2007, respectively, were Enodis’ global ice machine operations following completion valued using the first-in, first-out (FIFO) method. The remain- of the transaction. The businesses that will be sold are oper- ing inventories were valued using the last-in, first-out (LIFO) ated under the Scotsman, Ice-O-Matic, Simag, Barline, Ice- method. If the FIFO inventory valuation method had been matic, and Oref brand names. The company has also agreed used exclusively, inventories would have increased by to sell certain non-ice businesses of Enodis located in Italy $35.8 million and $23.7 million at December 31, 2008 and that are operated under the Tecnomac and Icematic brand 2007, respectively. Finished goods and work-in-process names. Prior to disposal, the antitrust clearances require inventories include material, labor and manufacturing that the ice businesses are treated as standalone opera- overhead costs. tions, in competition with Manitowoc. The divestiture of the businesses is expected to be completed during the second Goodwill and Other Intangible Assets The company quarter of 2009. The results of these operations have been accounts for its goodwill and other intangible assets under classified as discontinued operations. Statement of Financial Accounting Standards (SFAS) On December 31, 2008, the company completed the sale No. 142, “Goodwill and Other Intangible Assets.” Under of its Marine segment to Fincantieri Marine Group Holdings SFAS No. 142, goodwill is not amortized, but it is tested for Inc., a subsidiary of Fincantieri — Cantieri Navali Italiani impairment annually, or more frequently, as events dictate. SpA. The sale price in the all-cash deal was approximately See additional discussion of impairment testing under $120 million. This transaction will allow the company to “Impairment of Long-Lived Assets,” below. The company’s focus its financial assets and managerial resources on the other intangible assets with indefinite lives, including trade- growth of its increasingly global crane and foodservice busi- marks and tradenames and in-place distributor networks, are nesses. The company is reporting the Marine segment as a not amortized, but are also tested for impairment annually, discontinued operation for financial reporting purposes as of or more frequently, as events dictate. The company’s other

The Manitowoc Company, Inc. — 2008 Form 10-K 41

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 2 CHKSUM Content: 60809 Layout: 37392 Graphics: No Graphics CLEAN

intangible assets subject to amortization are tested for reporting units using the present value of future cash flows impairment whenever events or changes in circumstances approach, subject to a comparison for reasonableness to its indicate that their carrying values may not be recoverable. market capitalization at the date of valuation. If the carrying Other intangible assets are amortized over the following amount exceeds the fair value, the second step of the estimated useful lives: goodwill impairment test is performed to measure the amount of the impairment loss, if any. In the second step Useful lives the implied fair value of the goodwill is estimated as the fair Patents 10-20 years value of the reporting unit used in the first step less the fair values of all other net tangible and intangible assets of the Engineering drawings 15 years reporting unit. If the carrying amount of the goodwill Customer relationships 10-20 years exceeds its implied fair market value, an impairment loss is Property, Plant and Equipment Property, plant and recognized in an amount equal to that excess, not to exceed equipment are stated at cost. Expenditures for maintenance, the carrying amount of the goodwill. In addition, goodwill of repairs and minor renewals are charged against earnings as a reporting unit is tested for impairment between annual incurred. Expenditures for major renewals and improvements tests if an event occurs or circumstances change that would that substantially extend the capacity or useful life of an more likely than not reduce the fair value of a reporting unit asset are capitalized and are then depreciated. The cost and below its carrying value. For other indefinite lived intangible accumulated depreciation for property, plant and equipment assets, the impairment test consists of a comparison of the sold, retired, or otherwise disposed of are relieved from the fair value of the intangible assets to their carrying amount. accounts, and resulting gains or losses are reflected in earn- During the fourth quarter of 2008, our stock price declined ings. Property, plant and equipment are depreciated over the significantly and we began to see signs of a slow down in estimated useful lives of the assets using the straight-line our Crane segment, highlighted by a decrease in our depreciation method for financial reporting and on acceler- backlog. Additionally, access to the credit markets, which ated methods for income tax purposes. are critical to the ability of some of our customers to finance Property, plant and equipment are depreciated over the crane purchases, has been restricted. We believed these following estimated useful lives: circumstances to be indicators of potential impairment under the guidance of SFAS No. 142, “Goodwill and Other Intangible Assets” and we performed an impairment test for Years each of the reporting units within our Crane segment as of Building and improvements 2-40 December 31, 2008. We re-performed our established Machinery, equipment and tooling 2-20 method of present valuing future cash flows, which consid- Furniture and fixtures 5-20 ered updated projections, and determined that goodwill was Computer hardware and software 2-5 not impaired. The determination of fair value of the reporting units requires us to make significant estimates and assump- Property, plant and equipment also include cranes tions. These estimates and assumptions primarily include, accounted for as operating leases. Equipment accounted for but are not limited to, revenue growth and operating earn- as operating leases includes equipment leased directly to ings projections, discount rates, terminal growth rates, and the customer and equipment for which the company has required capital projections for each reporting unit. Due to assisted in the financing arrangement whereby it has guar- the inherent uncertainty involved in making these estimates, anteed more than insignificant residual value or made a actual results could differ materially from those estimates. buyback commitment. Equipment that is leased directly to We evaluated the significant assumptions used to determine the customer is accounted for as an operating lease with the the fair values of each reporting unit, both individually and in related assets capitalized and depreciated over their esti- the aggregate and concluded they are reasonable. mated economic life. Equipment involved in a financing We also considered a market approach in evaluating the arrangement is depreciated over the life of the underlying potential for impairment by calculating fair value using arrangement so that the net book value at the end of the recent like transaction multiples of earnings before interest, period equals the buyback amount or the residual value taxes, depreciation and amortization (EBITDA). This analysis amount. The amount of rental equipment included in prop- also did not indicate impairment. erty, plant and equipment amounted to $100.3 million and During the latter part of the fourth quarter of fiscal 2008 $115.3 million, net of accumulated depreciation, at and as of December 31, 2008, our market capitalization was December 31, 2008 and 2007, respectively. below book value. While we considered the market capitalization decline in our evaluation of fair value of our reporting Impairment of Long-Lived Assets The company reviews units, that market metric is only one indicator of fair value. long-lived assets, including goodwill and other intangible This is particularly true when a company’s share price assets, for impairment whenever events or changes in busi- appears to be significantly influenced by recent transactions ness circumstances indicate that the carrying amount of the or market uncertainty regarding leverage. We believe the assets may not be fully recoverable. Enodis acquisition and the related increase in debt levels Each year, in its second quarter, the company tests for have unduly influenced our share price as evidenced by an impairment of goodwill according to a two-step approach. In excessive decline in share price in comparison with our the first step, the company estimates the fair values of its peers. When taking these factors into consideration, the

42 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 3 CHKSUM Content: 6597 Layout: 29962 Graphics: No Graphics CLEAN

control premium used by the company was within widely impairment tests, principally in determining the fair value of accepted control premium ranges. A control premium is the the assets. While the company believes its judgments and amount that a buyer is willing to pay over the current market assumptions were reasonable, different assumptions could price of a company in order to acquire a controlling interest. change the estimated fair values and, therefore, impairment We therefore concluded there was no indication of impair- charges could be required. ment under this metric. For property, plant and equipment and other long-lived We will continue to monitor market conditions and deter- assets, other than goodwill and other indefinite lived intangi- mine if any additional interim review of goodwill is war- ble assets, the company performs undiscounted operating ranted. Further deterioration in the market or actual results cash flow analyses to determine impairments. If an impair- as compared with our projections may ultimately result in a ment is determined to exist, any related impairment loss is future impairment. In the event we determine that goodwill calculated based upon comparison of the fair value to the is impaired in the future, we would need to recognize a non- net book value of the assets. Impairment losses on assets cash impairment charge, which could have a material held for sale are based on the estimated proceeds to be adverse effect on our consolidated balance sheet and received, less costs to sell. results of operations. In addition, we completed the acquisition of Enodis during Financial Instruments The carrying amounts reported in the the fourth quarter. As a result of this acquisition, we have Consolidated Balance Sheets for cash and cash equivalents, recorded an additional $1.4 billion of goodwill within our accounts receivable, accounts payable, and short-term Foodservice segment. The purchase price we paid for variable rate debt approximated fair value at December 31, Enodis was based on our projections of future operating 2008 and 2007. The fair value of the company’s 7 1/8% profits and the expected synergies we believe we can derive Senior Notes due 2013 was approximately $108.4 million from cost savings and revenue enhancements. However, we and $149.3 million at December 31, 2008 and 2007, respec- cannot be assured that the intended beneficial effect from tively. The fair values of the company’s term loans under the this acquisition will be realized, particularly given the current New Credit Agreement which became effective November 6, difficult market conditions. Consequently, an impairment 2008, are as follows: Term Loan A is approximately $768.8, charge may be required in a future period if operating results Term Loan B is approximately $890.4 million, and Term Loan are below our projections. X is approximately $158.6 million. The fair value of the out- In order to comply with the agreements with the standing amount of our revolving credit facility was esti- European Commission and the United States Department of mated to approximate its carrying amount (see Note 10, Justice, we initiated a multiple step process to divest of the “Debt” for the related book values of these debt instru- required businesses during the fourth quarter of 2008. As ments). The aggregate fair values of commodity contracts part of our requirement to divest of these businesses, we and foreign currency exchange contracts at December 31, obtained preliminary purchase offers from several potential 2008 and 2007 were $(11.6) million and $2.4 million, respec- buyers. As we continued with the sales process throughout tively. The 2007 fair value amount also includes the fair value January and February of 2009 and preliminary purchase of interest rate swaps. These fair values are the amounts at offers were rescinded or significantly reduced, it became which they could be settled, based on estimates obtained apparent that the carrying value of the businesses at from financial institutions. December 31, 2008 exceeded their fair value. We therefore considered the guidance in SFAS No.144 “Accounting for the Warranties Estimated warranty costs are recorded in cost Impairment or Disposal of Long-Lived Assets,” and have of sales at the time of sale of the warranted products based recognized a non-cash charge of $175.0 million to adjust the on historical warranty experience for the related product or carrying amount of the businesses to be divested in the estimates of projected costs due to specific warranty issues Consolidated Statements of Operations in earnings from dis- on new products. These estimates are reviewed periodically continued operations at December 31, 2008. This charge and are adjusted based on changes in facts, circumstances reduces the carrying amount of the businesses to be or actual experience. divested to our revised estimated fair value, less costs to Environmental Liabilities The company accrues for losses sell. If the final sales price is less than our estimated fair associated with environmental remediation obligations value an additional impairment charge, which could have a when such losses are probable and reasonably estimable. material affect on our consolidated financial statements, Such accruals are adjusted as information develops or cir- would be recognized in future periods. cumstances change. Costs of long-term expenditures for Other intangible assets with definite lives continue to be environmental remediation obligations are discounted to amortized over their estimated useful lives. Indefinite and their present value when the timing of cash flows are definite lived intangible assets are also subject to impair- estimable. ment testing. Indefinite lived assets are tested annually, or more frequently if events or changes in circumstances Product Liabilities The company records product liability indicate that the assets might be impaired. Definite lived reserves for its self-insured portion of any pending or threat- intangible assets are tested whenever events or circum- ened product liability actions. The reserve is based upon two stances indicate that the carrying value of the assets may estimates. First, the company tracks the population of all not be recoverable. A considerable amount of management outstanding pending and threatened product liability cases judgment and assumptions are required in performing the

The Manitowoc Company, Inc. — 2008 Form 10-K 43

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 4 CHKSUM Content: 19400 Layout: 41597 Graphics: No Graphics CLEAN

to determine an appropriate case reserve for each based in the Consolidated Balance Sheets at fair value. The upon the company’s best judgment and the advice of legal effective portion of the contracts’ gains or losses due to counsel. These estimates are continually evaluated and changes in fair value are initially recorded as a component of adjusted based upon changes to facts and circumstances OCI and are subsequently reclassified into earnings when surrounding the case. Second, the company determines the the hedge transactions, typically sales and costs related to amount of additional reserve required to cover incurred but sales, occur and affect earnings. These contracts are highly not reported product liability issues and to account for possi- effective in hedging the variability in future cash flows ble adverse development of the established case reserves attributable to changes in currency exchange rates or (collectively referred to as IBNR). This analysis is performed commodity prices. at least twice annually. Fair Value Hedges The company periodically enters into Foreign Currency Translation The financial statements of interest rate swaps designated as a hedge of the fair value of the company’s non-U.S. subsidiaries are translated using the a portion of its fixed rate debt. These hedges effectively current exchange rate for assets and liabilities and the aver- result in changing a portion of its fixed rate debt to variable age exchange rate for the year for income and expense interest rate debt. Both the swaps and the hedged portion of items. Resulting translation adjustments are recorded to the debt are recorded in the Consolidated Balance Sheets at Accumulated Other Comprehensive Income (AOCI) as a fair value. The change in fair value of the swaps exactly off- component of stockholders’ equity. sets the change in fair value of the hedged debt, with no net impact to earnings. Interest expense of the hedged debt is Derivative Financial Instruments and Hedging Activities recorded at the variable rate in earnings. As of December 31, The company has written policies and procedures that place 2008, the company had no interest rate swaps outstanding. all financial instruments under the direction of corporate See Note 10, “Debt” for additional information related to treasury and restrict all derivative transactions to those these hedges. intended for hedging purposes. The use of financial instru- The company selectively hedges cash inflows and out- ments for trading purposes is strictly prohibited. The flows that are subject to foreign currency exposure from the company uses financial instruments to manage the market date of transaction to the related payment date. The hedges risk from changes in foreign exchange rates, commodities for these foreign currency accounts receivable and accounts and interest rates. The company follows the guidance of payable are classified as fair value hedges in accordance Statement of Financial Accounting Standards (SFAS) with SFAS No. 133 and are recorded in the Consolidated No. 133, “Accounting for Derivative Instruments and Hedg- Balance Sheets at fair value. Gains or losses due to changes ing Activities,” as amended by SFAS No. 137, No. 138, and in fair value are recorded as an adjustment to earnings in the No. 149. The fair values of all derivatives are recorded in the Consolidated Statements of Operations. Consolidated Balance Sheets. The change in a derivative’s fair value is recorded each period in current earnings or Stock-Based Compensation At December 31, 2008, the Other Comprehensive Income (OCI) depending on whether company has five stock-based compensation plans, which the derivative is designated and qualifies as part of a hedge are described more fully in Note 15, “Stock Based Compen- transaction and if so, the type of hedge transaction. sation.” Effective January 1, 2006, the company adopted For the year ended December 31, 2008, a $379.4 million SFAS No. 123 (R), “Share-Based Payment: An Amendment loss was recognized in operating earnings. SFAS No. 133, of Financial Accounting Standards Board Statements “Accounting for Derivative Instruments and Hedging Activi- No. 123” (SFAS No. 123(R)), which revised SFAS No. 123, ties” states that hedges of a firm commitment to acquire a “Accounting for Stock-Based Compensation” and super- business do not qualify for hedge accounting (or balance sedes APB Opinion No. 25, “Accounting for Stock Issued to sheet) treatment. Therefore, the periodic market value Employees.” SFAS No. 123(R) requires all share-based pay- changes in these hedges are required to go through the ments to employees, including grants of employee stock income statement. During 2008, minimal amounts were rec- options, to be measured at fair value and expensed in the ognized in earnings due to ineffectiveness of certain com- Consolidated Statements of Operations over the service modity hedges. For the years ended December 31, 2007 and period (generally the vesting period) of the grant. Upon 2006, no amount was recognized in earnings due to ineffec- adoption, the company transitioned to SFAS No. 123(R) tiveness of a hedge transaction. The amount reported as using the modified prospective application, under which derivative instrument fair market value adjustment in the compensation expense is only recognized in the Consoli- accumulated OCI account within stockholders’ equity repre- dated Statements of Operations beginning with the first sents the net gain (loss) on foreign exchange currency period that SFAS No. 123(R) is effective and continuing to be exchange contracts and commodity contracts designated as expensed thereafter. The company recognizes expense for cash flow hedges, net of income taxes. all stock-based compensation with graded vesting on a straight-line basis over the vesting period of the entire Cash Flow Hedge The company selectively hedges antici- award. In addition to the compensation expense related to pated transactions that are subject to foreign exchange stock options, the company recognized $1.9 million, $2.0 exposure or commodity price exposure, primarily using for- million and $1.2 million of compensation expense related to eign currency exchange contracts and commodity contracts, restricted stock during the years ended December 31, 2008, respectively. These instruments are designated as cash flow 2007 and 2006, respectively. hedges in accordance with SFAS No. 133 and are recorded

44 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 5 CHKSUM Content: 64327 Layout: 44409 Graphics: No Graphics CLEAN

Revenue Recognition and Long-Term Contracts Revenue is for financial statement disclosure of tax positions taken or generally recognized and earned when all the following crite- expected to be taken on a tax return. FIN No. 48 was effec- ria are satisfied with regard to a specific transaction: persua- tive for the company on January 1, 2007. Upon the adoption sive evidence of a sales arrangement exists; the price is of FIN No. 48, the company recognized an additional tax fixed or determinable; collectability of cash is reasonably liability of $10.8 million and a corresponding reduction in assured; and delivery has occurred or services have been retained earnings recorded as a cumulative effect of an rendered. Shipping and handling fees are reflected in net accounting change in the first quarter of 2007. sales and shipping and handling costs are reflected in cost of sales in the Consolidated Statements of Operations. Earnings Per Share Basic earnings per share is computed Revenue under these fixed-price long-term contracts are by dividing net earnings by the weighted average number of recorded based on the ratio of costs incurred to estimated common shares outstanding during each year or period. total costs at completion, and costs are expensed as Diluted earnings per share is computed similar to basic incurred. Amounts representing contract change orders, earnings per share except that the weighted average shares claims or other items are included in revenue only when outstanding is increased to include shares of restricted they can be reliably estimated and realization is probable. stock and the number of additional shares that would have When adjustments in contract value or estimated costs are been outstanding if stock options were exercised and the determined, any changes from prior estimates are reflected proceeds from such exercise were used to acquire shares of in earnings in the current period. Anticipated losses on con- common stock at the average market price during the year tracts or programs in progress are charged to earnings or period. when identified. As discussed above, the company enters into transactions Comprehensive Income Comprehensive income includes, with customers that provide for residual value guarantees in addition to net earnings, other items that are reported as and buyback commitments on certain crane transactions. direct adjustments to stockholders’ equity. Currently, these The company records transactions which it provides signifi- items are foreign currency translation adjustments, cant residual value guarantees and any buyback commit- employee postretirement benefit adjustments and the ments as operating leases. Net revenues in connection with change in fair value of certain derivative instruments. the initial transactions are recorded as deferred revenue and Concentration of Credit Risk Credit extended to customers are amortized to income on a straight-line basis over a through trade accounts receivable potentially subjects the period equal to that of the customer’s third party financing company to risk. This risk is limited due to the large number agreement. See Note 17, “Guarantees.” of customers and their dispersion across various industries The company also leases cranes to customers under and many geographical areas. However, a significant operating lease terms. Revenue from operating leases is amount of the company’s receivables are with distributors recognized ratably over the term of the lease, and leased and contractors in the construction industry, large compa- cranes are depreciated over their estimated useful lives. nies in the foodservice and beverage industry, customers Research and Development Research and development servicing the U.S. steel industry, and government agencies. costs are charged to expense as incurred and amount to The company currently does not foresee a significant credit $40.0 million, $36.1 million and $31.2 million for the years risk associated with these individual groups of receivables, ended December 31, 2008, 2007 and 2006, respectively. but continues to monitor the exposure due to the current Research and development costs include salaries, materials, global economic conditions. contractor fees and other administrative costs. Recent Accounting Changes and Pronouncements In Income Taxes The company utilizes the liability method to December 2008, the FASB issued FSP No. FAS 132(R)-1, recognize deferred tax assets and liabilities for the expected “Employers’ Disclosures about Postretirement Benefit Plan future income tax consequences of events that have been Assets”. FSP FAS 132(R)-1 amends SFAS No. 132(R), recognized in the company’s financial statements. Under “Employers’ Disclosures about Pensions and Other Postre- this method, deferred tax assets and liabilities are deter- tirement Benefits”, to provide guidance on an employer’s mined based on the temporary difference between financial disclosures about the type of plan assets held in a defined statement carrying amounts and the tax basis of assets and benefit pension or other postretirement plan. This statement liabilities using enacted tax rates in effect in the years in is effective for financial statements issued for fiscal years which the temporary differences are expected to reverse. ending after December 15, 2009. The company is currently Valuation allowances are provided for deferred tax assets evaluating the impact this statement will have on its finan- where it is considered more likely than not that the company cial position and results of operations. will not realize the benefit of such assets. In May 2008, the FASB issued SFAS No. 162, “The Hierar- In June 2006, the FASB issued FASB Interpretation (FIN) chy of Generally Accepted Accounting Principles”, which No. 48, “Accounting for Uncertainty in Income Taxes — an identifies the sources of accounting principles and the interpretation of FASB Statement No. 109.” This interpreta- framework for selecting the principles used in the preparation clarifies the accounting for uncertainty in income taxes tion of financial statements. SFAS No. 162 is effective recognized in an entity’s financial statements in accordance 60 days following the SEC’s approval of the Public Company with SFAS No. 109, “Accounting for Income Taxes.” It pre- Accounting Oversight Board amendments to AU Section 411, scribes a recognition threshold and measurement attribute “The Meaning of Present Fairly in Conformity with Generally

The Manitowoc Company, Inc. — 2008 Form 10-K 45

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 6 CHKSUM Content: 24972 Layout: 37392 Graphics: No Graphics CLEAN

Accepted Accounting Principles”. SFAS No. 162 is now expensed rather than treated as part of the cost of the effective for the company. The adoption of this statement acquisition. SFAS 141(R) applies prospectively to business did not have a material impact on the company’s financial combinations for which the acquisition date is on or after position or results of operations. the beginning of the first annual reporting period beginning In March 2008, the FASB issued SFAS No. 161, “Disclo- on or after December 15, 2008. The company is currently sures about Derivative Instruments and Hedging Activities, evaluating the impact this statement will have on its finan- an amendment of FASB Statement No. 133”. SFAS No. 161 cial position and results of operations. amends and expands the disclosure requirements of In February 2007, the FASB issued SFAS No. 159, “The Fair SFAS No. 133 with the intent to provide users of financial Value Option for Financial Assets and Financial Liabilities — statements with an enhanced understanding of: 1) how and Including an Amendment of FASB Statement No. 115”. why an entity uses derivative instruments; 2) how deriva- SFAS 159 permits entities to choose to measure many finan- tive instruments and related hedged items are accounted cial instruments and certain other items at fair value that are for under SFAS No. 133 and its related interpretations; and not currently required to be measured at fair value. 3) how derivative instruments and related hedged items SFAS 159 permits all entities to choose, at specified election affect an entity’s financial position, financial performance dates, to measure eligible items at fair value (the “fair value and cash flows. This statement is effective for financial option”). A business entity shall report unrealized gains and statements issued for fiscal years and interim periods begin- losses on items for which the fair value option has been ning after November 15, 2008, with early application encour- elected in earnings at each subsequent reporting date. aged. The company is currently evaluating the impact on Upfront costs and fees related to items for which the fair disclosures of the adoption of SFAS No. 161 on its consoli- value option is elected are recognized in earnings as dated financial statements. incurred and not deferred. SFAS 159 also establishes pres- In December 2007, the FASB issued SFAS No. 160, “Non- entation and disclosure requirements designed to facilitate controlling Interests in Consolidated Financial Statements an comparisons between entities that choose different meas- Amendment of ARB No. 51”, which establishes accounting urement attributes for similar types of assets and liabilities. and reporting standards for the noncontrolling interest in a SFAS No. 159 was effective for us on January 1, 2008. The subsidiary and for the deconsolidation of a subsidiary. adoption of SFAS No. 159 did not have an impact on our SFAS 160 clarifies that a noncontrolling interest in a sub- consolidated financial statements as the company did not sidiary is an ownership interest in the consolidated entity elect the fair value option for any of such eligible financial that should be reported as equity in the consolidated assets or financial liabilities. financial statements. SFAS 160 also requires consolidated In September 2006, the FASB issued SFAS No. 157, “Fair net income to be reported at amounts that include the Value Measurements.” SFAS 157 defines fair value, estab- amounts attributable to both the parent and the noncontrol- lishes a framework for measuring fair value in generally ling interest. It also requires disclosure, on the face of the accepted accounting principles and establishes a hierarchy consolidated statement of income, of the amounts of con- that categorizes and prioritizes the sources to be used to solidated net income attributable to the parent and to the estimate fair value. SFAS 157 also expands financial state- noncontrolling interest. SFAS 160 also provides guidance ment disclosures about fair value measurements. On when a subsidiary is deconsolidated and requires expanded February 12, 2008, the FASB issued FASB Staff Position disclosures in the consolidated financial statements that (FSP) 157-2 which delays the effective date of SFAS 157 for clearly identify and distinguish between the interests of the one year, for all nonfinancial assets and nonfinancial liabili- parent’s owners and the interests of the noncontrolling own- ties, except those that are recognized or disclosed at fair ers of a subsidiary. SFAS 160 is effective for fiscal years, and value in the financial statements on a recurring basis (at interim periods within those fiscal years, beginning on or least annually). FAS 157 and FSP 157-2 are effective for after December 15, 2008. The company is currently evaluat- financial statements issued for fiscal years beginning after ing the impact this statement will have on its financial posi- November 15, 2007. We have elected a partial deferral of tion and results of operations. SFAS 157 under the provisions of FSP 157-2 related to the In December 2007, the FASB issued SFAS No. 141(R), measurement of fair value used when evaluating goodwill, “Business Combinations”, which establishes principles and other intangible assets and other long-lived assets for requirements for how the acquirer: (a) recognizes and meas- impairment and valuing asset retirement obligations and ures in its financial statements the identifiable assets liabilities for exit or disposal activities. The impact of partially acquired, the liabilities assumed, and any noncontrolling adopting SFAS 157 effective January 1, 2008 was not mate- interest in the acquiree; (b) recognizes and measures the rial to our Consolidated Financial Statements. goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what informa- 3. Acquisitions tion to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business On October 27, 2008, the company acquired 100% of the combination. SFAS 141(R) requires contingent consideration issued and to be issued shares of Enodis plc (Enodis). The to be recognized at its fair value on the acquisition date and, results of Enodis’ operations have been included in the con- for certain arrangements, changes in fair value to be recog- solidated financial statements since that date. Enodis is a nized in earnings until settled. SFAS 141(R) also requires global leader in the design and manufacture of innovative acquisition-related transaction and restructuring costs to be equipment for the commercial foodservice industry. The

46 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 7 CHKSUM Content: 27653 Layout: 12897 Graphics: No Graphics CLEAN

$2.1 billion acquisition price of the transaction, exclusive of to illustrate the incremental impact on earnings of interest the cost to settle the related hedges of the GBP purchase costs on the borrowings to acquire Enodis, amortization price and assumed debt, the largest and most recent acqui- expense related to acquired intangible assets of Enodis, sition for the company, has established Manitowoc among depreciation expense related to the fair value of the acquired the world’s top manufacturers of commercial foodservice depreciable tangible assets and the tax benefit associated equipment. With this acquisition, our Foodservice capabili- with the incremental interest costs and amortization and ties now span refrigeration, ice-making, cooking, food-prep, depreciation expense. The following unaudited pro forma and beverage-dispensing technologies, and allow Mani- information includes $14.6 million of additional expense towoc to be able to equip entire commercial kitchens and related to the fair value adjustment of inventories and serve the world’s growing demand for food prepared away excludes certain cost savings or operating synergies (or from home. costs associated with realizing such savings or synergies) The aggregate purchase price was $2.1 billion, exclusive that may result from the acquisition. of the settlement of related hedges, in cash and there are no future contingent payments or options. The following table Millions of dollars, except per share data 2008 2007 summarizes the estimated fair values of the assets acquired Revenue and liabilities assumed at the date of acquisition. The com- Pro forma $5,962.2 $5,664.0 pany is in the process of finalizing third-party valuations of As reported 4,503.0 4,005.0 certain intangible assets; thus, the allocation of the pur- Net Earnings chase price is subject to future refinement. Pro forma $ (133.6) $ 294.8 At October 27, 2008: As reported (10.7) 336.7 Net Earnings per share Cash $ 56.9 Pro forma $ (1.03) $ 2.37 Accounts receivable, net 157.9 As reported (0.08) 2.70 Inventory, net 150.7 Other current assets 54.8 The unaudited pro forma information is provided for illus- Current assets of discontinued operation 118.7 trative purposes only and does not purport to represent Total current assets 539.0 what our consolidated results of operations would have Property, plant and equipment 182.5 been had the transaction actually occurred as of January 1, Intangible assets 819.0 2008, or January 1, 2007, and does not purport to project Goodwill 1,393.8 our future consolidated results of operations. Other non-current assets 40.9 In conjunction with the acquisition of Enodis, certain Non-current assets of discontinued operation 337.0 restructuring activities have been undertaken to recognize Total assets acquired 3,312.2 cost synergies and rationalize the new cost structure of the Foodservice segment. Amounts included in the acquisition Accounts payable 287.6 cost allocation for these activities are summarized in the Other current liabilities 33.4 following table and recorded in accounts payable and Current liabilities of discontinued operation 58.1 accrued expenses in the Consolidated Balance Sheets: Total current liabilities 379.1 Long-term debt, less current portion 382.4 At October 27, 2008: Other non-current liabilities 463.6 Employee involuntary termination benefits $ 9.3 Non-current liabilities of discontinued operation 26.5 Facility closure costs 29.2 Total liabilities assumed 1,251.6 Other 5.0 Net assets acquired $2,060.6 Total $43.5

Of the $819.0 million of acquired intangible assets, The finalization of the purchase price allocation during $339.0 million was assigned to registered trademarks and 2009 could have a material impact on the above restructuring tradenames that are not subject to amortization, $165.0 million amounts. was assigned to developed technology with a weighted aver- The company has not presented pro-forma financial infor- age useful life of 15 years, and the remaining $315.0 million mation for the following acquisitions due to the immaterial was assigned to customer relationships with a weighted dollar amount of the transactions and the immaterial impact average useful life of 20 years. All of the $1,393.8 million of on our results of operations: goodwill was assigned to the Foodservice segment, none of On March 6, 2008, the company formed a 50% joint ven- which is expected to be deductible for tax purposes. ture with the shareholders of Tai’An Dongyue Heavy Machin- The following information reflects the results of Mani- ery Co., Ltd. (Tai’An Dongyue) for the production of mobile towoc’s operations for the years ended December 31, 2008 and truck-mounted hydraulic cranes. The joint venture is and 2007 on a pro forma basis as if the acquisition of Enodis located in Tai’An City, Shandong Province, China. The com- had been completed on January 1, 2008 and January 1, pany controls 60% of the voting rights and has other rights 2007, respectively. Pro forma adjustments have been made

The Manitowoc Company, Inc. — 2008 Form 10-K 47

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 8 CHKSUM Content: 62512 Layout: 42450 Graphics: No Graphics CLEAN

that give it significant control over the operations of Tai’An related to the goodwill of the ExacTech, Inc. acquisition at Dongyue, and accordingly, the results of this joint venture Note 8, “Goodwill and Other Intangible Assets.” are consolidated by the company. The aggregate consideration for the joint venture interest in Tai’An Dongyue was 4. Discontinued Operations $32.5 million and resulted in $23.5 million of goodwill and $8.5 million of other intangible assets being recognized by On December 31, 2008, the company completed the sale the company’s Crane segment. See further detail related to of its Marine segment to Fincantieri Marine Group Holdings the goodwill and other intangible assets of the Tai’An Dongyue Inc., a subsidiary of Fincantieri — Cantieri Navali Italiani SpA. acquisition at Note 8, “Goodwill and Other Intangible Assets.” The sale price in the all-cash deal was approximately On July 19, 2007, the company acquired Shirke Construc- $120 million. This transaction will allow the company to tion Equipments Pvt. Ltd (Shirke) for an aggregate consider- focus its financial assets and managerial resources on the ation of $64.5 million including approximately $1.3 million of growth of its increasingly global Crane and Foodservice busi- acquisition costs. Headquartered in Pune, India, Shirke is a nesses. The company is reporting the Marine segment as a market leader in the Indian tower crane industry and has discontinued operation for financial reporting purposes as of been Potain’s Indian manufacturing partner and distributor December 31, 2008, and for all prior periods presented in since 1982. The aggregate consideration paid for Shirke accordance with SFAS No. 144, “Accounting for the Impair- resulted in $33.8 million of goodwill and $30.2 million of ment or Disposal of Long-Lived Assets”. After reclassifying other intangible assets being recognized by the company’s the Marine segment to discontinued operations, the com- Crane segment. See further detail related to the goodwill pany has two remaining reportable segments, the Crane and and other intangible assets of the Shirke acquisition at Foodservice segments. Note 8, “Goodwill and Other Intangible Assets.” The following selected financial data of the Marine seg- On January 3, 2007, the company acquired the Carrydeck ment for the years ended December 31, 2008, 2007 and line of mobile industrial cranes from Marine Travelift, Inc. of 2006 is presented for informational purposes only and does Sturgeon Bay, Wisconsin. The acquisition of the Carrydeck not necessarily reflect what the results of operations would line adds six new models to the company’s product offering have been had the business operated as a stand-alone of mobile industrial cranes. The aggregate consideration entity. There was no general corporate expense or interest paid for the Carrydeck line resulted in $9.2 million of good- expense allocated to discontinued operations for this busi- will and $6.5 million of other intangible assets being recog- ness during the periods presented. nized by the company’s Crane segment. See further detail related to the goodwill and other intangible assets of the 2008 2007 2006 Carrydeck acquisition at Note 8, “Goodwill and Other Intan- Net sales $381.3 $321.0 $282.5 gible Assets.” On May 26, 2006, the company acquired substantially all Pretax earnings from discontinued of the assets and business operated by McCann’s Engineer- operation $ 53.2 $ 26.1 $ 11.1 ing & Mfg. Co. and McCann’s de Mexico S.A. de C.V. Gain on sale, net of income taxes (McCann’s). Headquartered in Los Angeles, California, and of $(17.4) 53.1 — — with operations in Tijuana, Mexico, McCann’s is engaged in Provision for taxes on earnings (18.1) (7.3) (3.5) the design, manufacture and sale of beverage dispensing Net earnings (loss) from discontinued equipment primarily used in fast food restaurants, stadiums, operation $ 88.2 $ 18.8 $ 7.6 cafeterias and convenience stores. McCann’s primary products are backroom beverage equipment such as carbona- tors, water boosters and racks. McCann’s also produces The following table illustrates the amounts of assets and accessory components for beverage dispensers including liabilities reported in discontinued operations for the Marine specialty valves, stands and other stainless steel compo- segment in the accompanying 2007 consolidated balance nents. The aggregate consideration paid for the McCann’s sheets: acquisition was $37.1 million, including acquisition costs of approximately $0.7 million. The acquisition resulted in 2007 approximately $14.4 million of goodwill and $14.3 million of Accounts receivable, net $ 10.4 other intangible assets being recognized by the company’s Inventory, net 6.8 Foodservice segment. See further detail related to the good- Sales in excess of billing 38.0 will and other intangible assets of the McCann’s acquisition Other assets 2.8 at Note 8, “Goodwill and Other Intangible Assets.” Property, plant and equipment, net 20.7 On January 3, 2006, the company acquired certain assets, rights and properties of ExacTech, Inc., a supplier of fabrica- Goodwill 47.2 tion, machining, welding, and other services to various par- Total assets $125.9 ties. Located in Port Washington, Wisconsin, ExacTech, Inc. Accounts payable and other accrued expenses $ 21.2 now provides these services to the company’s U.S. based Billings in excess of sales 65.6 crane manufacturing facilities. The aggregate consideration Other current liabilities 13.9 paid for the acquisition resulted in approximately $6.5 million Total current liabilities $100.7 of goodwill being recognized by the company’s Crane segment in the first quarter of 2006. See further detail

48 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 9 CHKSUM Content: 62460 Layout: 5073 Graphics: No Graphics CLEAN

In addition to the former Marine segment, the company divested to our revised estimated fair value, less costs to has classified the Enodis ice and related businesses as sell. If the final sales price is less than our estimated fair discontinued in compliance with SFAS No. 144. value an additional impairment charge, which could have a In order to secure clearance for the acquisition of Enodis material affect on our consolidated financial statements, from the European Commission and United States Depart- would be recognized in future periods. ment of Justice, Manitowoc agreed to sell substantially all of The earnings from discontinued operations, net of income Enodis’ global ice machine operations following completion taxes, for the year ended December 31, 2007 also reflects of the transaction. The businesses that will be sold are oper- favorable product liability experience related to our discon- ated under the Scotsman, Ice-O-Matic, Simag, Barline, tinued Manlift business which was sold in 2004. During the Icematic, and Oref brand names. The company has also second quarter of 2004, the company completed the sale of agreed to sell certain non-ice businesses of Enodis located its wholly-owned subsidiary, Delta Manlift SAS (Delta), to in Italy that are operated under the Tecnomac and Icematic JLG Industries, Inc. Headquartered in Tonneins, France, brand names. Prior to disposal, the antitrust clearances Delta manufactured the Toucan brand of vertical mast lifts, a require that the ice businesses are treated as standalone line of aerial work platforms distributed throughout Europe operations, in competition with Manitowoc. The divestiture for use principally in industrial and maintenance operations. of the businesses is expected to be completed during the The sale of Delta represents a discontinued operation under second quarter of 2009. The results of these operations SFAS No. 144. Results of Delta in prior periods have been have been classified as discontinued operations. classified as discontinued in the Consolidated Financial In order to comply with the agreements with the Statements to exclude the results from continuing European Commission and the United States Department of operations. Justice we initiated a multiple step process to divest of the During the third quarter of 2005, the company decided to required businesses during the fourth quarter of 2008. As close Toledo Ship Repair Company (Toledo Ship Repair), a part of our requirement to divest of these businesses, we division of the company’s wholly-owned subsidiary, Mani- obtained preliminary purchase offers from several potential towoc Marine Group, LLC. Located in Toledo, Ohio, Toledo buyers. As we continued with the sales process throughout Ship Repair performed ship repair and industrial repair serv- January and February of 2009 and preliminary purchase ices. The final disposition charge of $0.3 million in 2006 is offers were rescinded or significantly reduced, it became recorded in gain on sale or closure of discontinued opera- apparent that the carrying value of the businesses at tions, net of income taxes in the Consolidated Statements of December 31, 2008 exceeded their fair value. We therefore Operations. The closure of Toledo Ship Repair represents a considered the guidance in SFAS No.144 “Accounting for the discontinued operation under SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets,” and have rec- the Impairment or Disposal of Long-Lived Assets.” Results ognized a non-cash charge of $175.0 million to adjust the of Toledo Ship Repair in 2006 have been classified as dis- carrying amount of the businesses to be divested in the continued in the Consolidated Financial Statements to Consolidated Statements of Operations in earnings from dis- exclude the results from continuing operations. There were continued operations at December 31, 2008. This charge no operating results from Toledo Ship Repair for the years reduces the carrying amount of the businesses to be ended December 31, 2007 and 2008.

5. Financial Instruments

As discussed in Note 2, the company adopted SFAS No. 157, “Fair Value Measurements” effective January 1, 2008. The following table sets forth the company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2008 by level within the fair value hierarchy. As required by SFAS No. 157, 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 December 31, 2008 Level 1 Level 2 Level 3 Total Current Assets: Foreign currency exchange contracts $ 5.5 $ — $— $ 5.5 Total Current assets at fair value $ 5.5 $ — $— $ 5.5 Current Liabilities: Foreign currency exchange contracts $10.7 $ — $— $10.7 Forward commodity contracts — 6.4 — 6.4 Total Current liabilities at fair value $10.7 $6.4 $— $17.1

The carrying value of the company’s other financial assets and liabilities, including cash, accounts receivable, accounts payable, retained interest in receivables sold and short-term loans payable approximate fair value, without being discounted, due to the short periods during which these amounts are outstanding.

The Manitowoc Company, Inc. — 2008 Form 10-K 49

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 10 CHKSUM Content: 34515 Layout: 65512 Graphics: No Graphics CLEAN

SFAS No. 157 defines fair value as the price that would be Hedging Activities” states that hedges of a firm commitment received to sell an asset or paid to transfer a liability in an to acquire a business do not qualify for hedge accounting (or orderly transaction between market participants at the meas- balance sheet) treatment. Therefore, the periodic market urement date (exit price). SFAS No. 157 classifies the inputs value changes in these hedges were required to go through used to measure fair value into the following hierarchy: the income statement. The final disposition of these hedge positions was determined based upon the market exchange Level 1 Unadjusted quoted prices in active markets for rate on November 6, 2008, the date the funding transaction identical assets or liabilities was completed. For the year ended December 31, 2008, the Level 2 Unadjusted quoted prices in active markets for sim- loss on currency hedges related to the purchase of Enodis ilar assets or liabilities, or was $379.4 million. Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or 6. Inventories Inputs other than quoted prices that are observable for the asset or liability The components of inventories at December 31 are sum- Level 3 Unobservable inputs for the asset or liability marized as follows:

The company endeavors to utilize the best available informa- 2008 2007 tion in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of Inventories — gross: input that is significant to the fair value measurement. The Raw materials $ 416.0 $252.3 company has determined that our financial assets and liabili- Work-in-process 262.9 216.4 ties are level 1 and level 2 in the fair value hierarchy. Finished goods 352.3 188.5 As a result of our global operating and financing activities, Total 1,031.2 657.2 the company is exposed to market risks from changes in Less excess and obsolete inventory reserve (70.1) (42.6) interest and foreign currency exchange rates and commod- Net inventories at FIFO cost 961.1 614.6 ity prices, which may adversely affect our operating results and financial position. When deemed appropriate, we mini- Less excess of FIFO costs over LIFO value (35.8) (23.6) mize our risks from interest and foreign currency exchange Inventories — net $ 925.3 $591.0 rate and commodity price fluctuations through the use of derivative financial instruments. Derivative financial instru- 7. Property, Plant and Equipment ments are used to manage risk and are not used for trading or other speculative purposes and we do not use leveraged The components of property, plant and equipment at derivative financial instruments. The forward foreign cur- December 31 are summarized as follows: rency exchange contracts and forward commodity purchase agreements are valued using broker quotations, or market 2008 2007 transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Land $ 69.2 $ 48.1 level 1 and level 2. Building and improvements 303.6 215.9 During July 2008, the company entered into various hedg- Machinery, equipment and tooling 408.1 266.9 ing transactions (the “hedges”) to comply with the terms of Furniture and fixtures 32.7 28.8 its New Credit Agreement (see further detail related to the Computer hardware and software 64.2 43.5 New Credit Agreement at Note 10, “Debt”) issued to fund Rental cranes 165.2 186.4 the purchase of Enodis. The hedges were required by the Construction in progress 96.9 64.5 company’s lenders to limit the company’s exposure to fluc- Total cost 1,139.9 854.1 tuations in the underlying GBP purchase price of the Enodis Less accumulated depreciation (411.1) (385.2) shares which could have ultimately required additional funding capacity under the New Credit Agreement. Subsequent Property, plant and equipment — net $ 728.8 $ 468.9 to entering into the hedging transactions, the U.S. Dollar strengthened against the GBP which resulted in a significant * Accumulated depreciation for Rental cranes for the years ended change to the fair value of the underlying hedges. December 31, 2008 and 2007 was $64.9 million and $71.1 million, SFAS No. 133, “Accounting for Derivative Instruments and respectively.

50 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 11 CHKSUM Content: 38182 Layout: 25331 Graphics: No Graphics CLEAN

8. Goodwill and Other Intangible Assets

The changes in carrying amount of goodwill by reportable segment for the years ended December 31, 2008 and 2007, were as follows: Crane Foodservice Total Balance as of January 1, 2007 $214.8 $ 200.1 $ 414.9 Carrydeck acquisition 9.2 — 9.2 Shirke acquisition 33.8 — 33.8 Foreign currency impact 13.7 — 13.7 Balance as of December 31, 2007 271.5 200.1 471.6 Tai’An Dongyue acquisition 23.5 — 23.5 Enodis acquisition — 1,393.8 1,393.8 Foreign currency impact (9.5) 11.1 1.6 Balance as of December 31, 2008 $285.5 $1,605.0 $1,890.5

As discussed in Note 3, “Acquisitions,” on October 27, As discussed in Note 3, “Acquisitions,” during 2007, the com- 2008, the company acquired 100% of the issued and to be pany completed the acquisitions of the Carrydeck line of mobile issued shares of Enodis plc. Enodis is a global leader in the industrial cranes and Shirke. The acquisition of the Carrydeck design and manufacture of innovative equipment for the line resulted in an increase of $9.2 million of goodwill and commercial foodservice industry. The aggregate purchase $6.5 million of other intangible assets being recognized by the price of $2,060.6 million resulted in $819.0 million of identifi- company’s Crane segment. The other intangible assets consist able intangible assets and $1,393.8 million of goodwill. Of of trademarks totaling $1.2 million, which have an indefinite life, the $819.0 million of acquired intangible assets, $339.0 mil- customer relationships of $4.2 million, which have been lion was assigned to registered trademarks and tradenames assigned a 20-year life, and non-patented technologies of that are not subject to amortization, $165.0 million was $1.1 million which have been assigned a 20-year life. The acqui- assigned to developed technology with a weighted average sition of Shirke resulted in an increase of $33.8 million of good- useful life of 15 years, and the remaining $315.0 million was will and $30.2 million of other intangible assets being assigned to customer relationships with a weighted average recognized by the company’s Crane segment. The other intan- useful life of 20 years. All of the $1,393.8 million of goodwill gible assets consist of customer relationships of $10.5 million, was assigned to the Foodservice segment. which have been assigned a 10-year life, trademarks totaling Also discussed in Note 3, “Acquisitions,” during 2008, the $9.1 million, which have an indefinite life, and other intangibles company formed a 50% joint venture with the shareholders of $10.6 million, which include various intangible assets that are of Tai’An Dongyue for the production of mobile and truck- amortized over 6 months to 6 years, which approximates their mounted hydraulic cranes. The joint venture is located in estimated useful lives. Tai’An City, Shandong Province, China. The aggregate con- As discussed in Note 3, “Acquisitions,” during 2006, the sideration for the joint venture interest in Tai’An Dongyue company completed the acquisitions of McCann’s and was $32.5 million and resulted in $23.5 million of goodwill ExacTech, Inc. The acquisition of ExacTech, Inc. resulted in and $8.5 million of other intangible assets being recognized an increase of $6.5 million of goodwill and no other intangi- by the company’s Crane segment. The other intangible ble assets. The acquisition of McCann’s resulted in an assets consist of trademarks of $1.0 million, which have an increase of $14.4 million of goodwill and $14.3 million of indefinite life, customer relationships of $0.9 million, which other intangible assets. The other intangible assets consist have been assigned a 10-year life, and other intangibles of of trademarks totaling $7.0 million, which have an indefinite $6.6 million, which consist primarily of crane manufacturing life, customer relationships of $5.8 million, which have been licenses and have been assigned a 10-year life. assigned a 13 year life, and patents of $1.5 million which have been assigned a 10 year life. The gross carrying amount and accumulated amortization of the company’s intangible assets other than goodwill were as follows as of December 31, 2008 and 2007. December 31, 2008 December 31, 2007 Gross Net Gross Net Carrying Accumulated Book Carrying Accumulated Book Amount Amortization Value Amount Amortization Value Trademarks and tradenames $ 458.3 $ — $ 458.3 $120.9 $ — $120.9 Customer relationships 334.6 (5.5) 329.1 20.4 (1.4) 19.0 Patents 34.5 (16.5) 18.0 35.2 (12.2) 23.0 Engineering drawings 11.6 (5.4) 6.2 12.0 (5.4) 6.6 Distribution network 21.4 — 21.4 21.8 — 21.8 Other intangibles 184.9 (8.9) 176.0 10.6 (1.3) 9.3 $1,045.3 $(36.3) $1,009.0 $220.9 $(20.3) $200.6

Amortization expense recorded for the other intangible respectively. Estimated amortization expense for the five assets for the years ended December 31, 2008, 2007 and years beginning in 2009 is estimated to be approximately 2006 was $11.6 million, $5.8 million and $3.3 million, $32.1 million per year. The Manitowoc Company, Inc. — 2008 Form 10-K 51

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 12 CHKSUM Content: 49112 Layout: 28932 Graphics: No Graphics CLEAN

9. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at December 31 are summarized as follows:

2008 2007 Trade accounts and interest payable $ 649.2 $522.1 Employee related expenses 120.2 88.9 Litigation reserves 72.0 — Restructuring expenses 41.1 — Profit sharing and incentives 67.2 58.1 Accrued rebates 45.7 — Deferred revenue — current 49.5 55.9 Derivative liabilities 17.1 0.8 Miscellaneous accrued expenses 144.3 119.9 $1,206.3 $845.7

10. Debt

Debt at December 31 is summarized as follows:

2008 2007 Revolving credit facility $ 17.0 $ 56.7 Term loan A 1,025.0 — Term loan B 1,200.0 — Term loan X 181.5 — Fair value of interest rate swaps — 0.1 Senior notes due 2013 150.0 150.0 Other 81.8 23.8 Total debt 2,655.3 230.6 Less current portion and short-term borrowings (182.3) (13.1) Long-term debt $2,473.0 $217.5

In April 2008, the company entered into a $2,400.0 million Credit Agreement, or 1.50 percent in excess of an alternate credit agreement which was amended and restated as of base rate, at the company’s option. The company cannot August 25, 2008 to ultimately increase the size of the total borrow under the alternate base rate option if that rate is facility to $2,925.0 million (New Credit Agreement). The New lower than the adjusted LIBO rate. A commitment fee Credit Agreement became effective November 6, 2008. applies to the unused portion of the revolving facility and is The New Credit Agreement includes four loan facilities — 0.50 percent per year. a revolving facility of $400.0 million with a five-year term, a The New Credit Agreement contains financial covenants Term Loan A of $1,025.0 million with a five-year term, a Term whereby the ratio of (a) consolidated earnings before inter- Loan B of $1,200.0 million with a six-year term, and a Term est, taxes, depreciation and amortization, and other adjust- Loan X of $300.0 million with an eighteen-month term. The ments, as defined in the New Credit Agreement (EBITDA) to company has the option to increase the borrowing capacity (b) consolidated interest expense, each for the most recent of the revolving facility or Term Loan A, if agreed upon by the four fiscal quarters (Consolidated Interest Coverage Ratio) lender, up to an aggregate amount of $300.0 million. The and the ratio of (c) consolidated indebtedness to (d) consoli- company is obligated to prepay the three term loan facilities dated EBITDA for the most recent four fiscal quarters (Con- from the net proceeds of asset sales, casualty losses, equity solidated Total Leverage Ratio) at all time, must each meet offerings, and new indebtedness for borrowed money, and certain defined limits. The minimum Consolidated Interest from a portion of its excess cash flow, subject to certain Coverage Ratio is required to be greater than 2.50:1.00 for exceptions. fiscal quarters through March 31, 2009, 2.75:1.00 for fiscal Borrowings made under the revolving facility, Term Loan A, quarters after March 31, 2009 through March 31, 2010 and and Term Loan X will initially bear interest at 3.25 percent in greater than 3.00:1.00 thereafter. The Consolidated Total excess of an adjusted LIBO rate as defined in the New Leverage Ratio is required to be less than 4.00:1.00 through Credit Agreement, or 1.50 percent in excess of an alternate December 30, 2009, less than 3.75:1.00 from December 31, base rate, at the company’s option. Borrowings made under 2009 through December 30, 2010 and less than 3.50:1.00 the Term Loan B will initially bear interest at 3.50 percent in thereafter. The New Credit agreement also contains custom- excess of an adjusted LIBO rate as defined in the New ary representations and warranties and events of default.

52 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 13 CHKSUM Content: 15224 Layout: 45697 Graphics: No Graphics CLEAN

As of December 31, we complied with all affirmative and write-off of unamortized debt issuance costs and other negative covenants inclusive of the financial covenants per- expenses. The charge was recorded in loss on debt extin- taining to our New Credit Agreement. Based on our fore- guishment in the Consolidated Statements of Operations. casted operating results and related debt reductions, we On May 15, 2006, the company redeemed its 175 million 3 have projected compliance with all covenants through Euro, 10 ⁄8% senior subordinated notes due 2011 for March of 2010. Our ability to comply with the financial $216.9 million (based on May 15, 2006 exchange rates). covenants in the future depends on further debt reduction Pursuant to the terms of the indenture, the company paid and achieving our forecasted operating results. Given the the note holders 105.188 percent of the principal amount of uncertain global economies, continued constraints in the the notes plus accrued and unpaid interest up to the credit markets, and other market uncertainties, there are var- redemption date. As a result of this redemption, the com- ious scenarios, including a reduction from forecasted oper- pany incurred a charge of $14.4 million ($9.4 million net of ating results, under which we could violate our financial income taxes) related to the call premium ($11.2 million), covenants in the second half of 2009. Our failure to comply write-off of unamortized debt issuance costs ($3.1 million) with such covenants or an assessment that we are likely to and other expenses ($0.1 million). The charge was recorded fail to comply with such covenants, could also lead us to in loss on debt extinguishment in the Consolidated seek an amendment to or a waiver of the financial Statements of Operations. covenants contained in our New Credit Agreement. Despite On November 6, 2003, the company completed the sale of 1 our present belief that we could obtain an amendment if $150.0 million of 7 ⁄8% Senior Notes due 2013 (Senior Notes necessary, we cannot provide assurance that we would be due 2013). The Senior Notes due 2013 are unsecured senior able to obtain any amendments to or waivers of the obligations. Our Revolving Credit Facility ranks equally with covenants contained in our New Credit Agreement that we the Senior Notes due 2013, except that it is secured by sub- may request. Any such amendment to or waiver of the stantially all domestic tangible and intangible assets of the covenants would likely involve upfront fees, higher annual company and its subsidiaries. The Senior Notes due 2013 are interest costs and other terms less favorable to us than fully and unconditionally jointly and severally guaranteed by those currently in our New Credit Agreement. In the event substantially all of the company’s domestic subsidiaries (see our current lenders won’t amend or waive the covenants, Note 22, “Subsidiary Guarantors of Senior Notes due 2013”). the debt would be due and we would need to seek alterna- Interest on the Senior Notes due 2013 is payable semiannu- tive financing. We cannot provide assurance that we would ally in May and November each year. The Senior Notes due be able to obtain alternative financing. If we were not able to 2013 can be redeemed by the company in whole or in part for secure alternative financing, this would have a material a premium on or after November 1, 2008. The following is the adverse impact on the company. premium paid by the company, expressed as a percentage of During 2008, the company incurred $118.3 million in debt the principal amount, if it redeems the Senior Notes due 2013 issuance costs. The cash flow impact of these fees, which during the 12-month period commencing on November 1 of totaled $90.8 million, is included in cash flow used for the year set forth below: financing activities in the Consolidated Statement of Cash Flows for the year ending December 31, 2008. The remain- Year Percentage ing balance of $27.5 million which represents on original 2009 102.375% issue discount is required to be paid upon extinguishment of 2010 101.188% Term Loan B. 2011 and thereafter 100.000% Prior to November 6, 2008, the company borrowed from its $300.0 million Amended and Restated Credit Agree- Our Senior Notes due 2013 contain customary affirmative ment, dated as of December 14, 2006. Borrowings under and negative covenants. Among other restrictions, these this five year, $300 million, Revolving Credit Facility bore covenants require us to meet specified financial tests, which interest at a rate equal to the sum of a base rate or a include the following: consolidated interest coverage ratio Eurodollar rate plus an applicable margin, which is based on and consolidated total leverage ratio. These covenants also the company’s consolidated total leverage ratio as defined limit, among other things, our ability to redeem or repur- by the credit agreement. The annual commitment fee in chase our debt, incur additional debt, make acquisitions, effect at December 31, 2007 on the unused portion of the merge with other entities, pay dividends or distributions, Revolving Credit Facility was 0.15%. As of December 31, repurchase capital stock, and create or become subject to 2007, there was $56.7 million outstanding under the Revolv- liens. We were in compliance with all covenants as of ing Credit Facility. As of December 31, 2007, the company December 31, 2008, and based upon our current plans and had $1.9 million of outstanding letters of credit outstanding outlook, we believe we will be able to comply with these secured by the Revolving Credit Facility. covenants during the subsequent 12 months. On August 1, 2007, the company redeemed its $175 million 1 As of December 31, 2008, the company had outstanding 10 ⁄2% senior subordinated notes due 2012. Pursuant to the $17.0 million of borrowings under our revolving facility with an terms of the indenture, the company paid the note holders interest rate of 5.0%. We also had outstanding $81.8 million 105.25 percent of the principal amount plus accrued and of other indebtedness. Our total debt has a weighted-average unpaid interest up to the redemption date. As a result of this interest rate of 5.9%. This debt includes outstanding bank redemption, the company incurred a charge of $12.5 million overdrafts in the Americas, Asia and Europe and various ($8.1 million net of income taxes) related to the call premium, capital leases.

The Manitowoc Company, Inc. — 2008 Form 10-K 53

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 14 CHKSUM Content: 15288 Layout: 41757 Graphics: No Graphics CLEAN

In the fourth quarter of 2008, the company cancelled its as collections reduce previously sold participation interests. two fixed-to-floating rate swap contracts which effectively The company has retained collection and administrative converted $50.0 million of its fixed rate Senior Notes due responsibilities on the participation interests sold. The Pur- 2013 to variable rate debt. These contracts were considered chaser has no recourse against the company for uncol- to be hedges against changes in the fair value of the fixed lectible receivables; however, the company’s retained rate debt obligation. In January 2009, the company entered interest in the receivable pool is subordinate to the Pur- into new interest rate hedging transactions related to its chaser and is recorded at fair value. Due to a short average Term Loan A and Term Loan B facilities. These hedge trans- collection cycle of less than 60 days for such accounts actions fixed the interest rate paid for 50 percent of each of receivable and due to the company’s collection history, the these facilities for a weighted average life of at least three fair value of the company’s retained interest approximates years as required by the terms of the New Credit Agree- book value. The retained interest recorded at December 31, ment. See additional discussion at Note 24, “Subsequent 2008 is $103.0 million and is included in accounts receivable Events.” in the accompanying Consolidated Balance Sheets. The aggregate scheduled maturities of outstanding debt The securitization program includes certain of the com- obligations in subsequent years are as follows: pany’s domestic U.S. Foodservice and Crane segment’s businesses and the program was amended in the third quar- 2009 $ 182.3 ter of 2007 to increase the capacity of the program from 2010 296.9 $90.0 million to $105.0 million. Trade accounts receivables 2011 166.5 sold to the Purchaser and being serviced by the company totaled $105.0 million at December 31, 2008. 2012 166.4 Incremental sales of trade receivables from the special 2013 691.8 purpose subsidiary to the Purchaser totaled $308.0 million Thereafter 1,151.4 for the year ended December 31, 2008. Cash collections of $2,655.3 trade accounts receivable balances in the total receivable pool totaled $1.2 billion for the year ended December 31, 11. Accounts Receivable Securitization 2008. The accounts receivables securitization program is The company has entered into an accounts receivable secu- accounted for as a sale in accordance with FASB Statement ritization program whereby it sells certain of its domestic No. 140 “Accounting for Transfers and Servicing of Financial trade accounts receivable to a wholly owned, bankruptcy- Assets and Extinguishment of Liabilities — a Replacement remote special purpose subsidiary which, in turn, sells par- of FASB Statement No. 125.” Sales of trade receivables to ticipating interests in its pool of receivables to a third-party the Purchaser are reflected as a reduction of accounts financial institution (Purchaser). The Purchaser receives an receivable in the accompanying Consolidated Balance ownership and security interest in the pool of receivables. Sheets and the proceeds received are included in cash flows New receivables are purchased by the special purpose sub- from operating activities in the accompanying Consolidated sidiary and participation interests are resold to the Purchaser Statements of Cash Flows.

The table below provides additional information about delinquencies and net credit losses for trade accounts receivable subject to the accounts receivable securitization program.

Balance Outstanding Balance 60 Days or More Net Credit Losses Outstanding Past Due Year Ended December 31, 2008 December 31, 2008 December 31, 2008 Trade accounts receivable subject to securitization program $208.0 $5.9 $ — Trade accounts receivable balance sold 105.0 Retained interest $103.0

12. Income Taxes

Income tax expense for continuing operations is summarized below: 2008 2007 2006 Earnings (loss) from continuing operations before income taxes: Domestic $ (38.5) $188.8 $ 89.1 Foreign 117.7 248.1 144.7 Total $ 79.2 $436.9 $233.8

54 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 15 CHKSUM Content: 18653 Layout: 32852 Graphics: No Graphics CLEAN

The provision for taxes on earnings (loss) from continuing operations for the years ended December 31, 2008, 2007 and 2006 are as follows: 2008 2007 2006 Current: Federal $(37.5) $ 64.8 $42.8 State 0.3 10.3 3.7 Foreign 40.2 42.8 31.8 Total current 3.0 117.9 78.3 Deferred: Federal and state 7.2 (0.1) (5.2) Foreign (8.7) 4.3 1.7 Total deferred (1.5) 4.2 (3.5) Provision for taxes on earnings $ 1.5 $122.1 $74.8

The federal statutory income tax rate is reconciled to the company’s effective income tax rate for continuing operations for the years ended December 31, 2008, 2007 and 2006 as follows: 2008 2007 2006 Federal income tax at statutory rate 35.0% 35.0% 35.0% State income provision (benefit) (2.1) 1.6 1.7 Non-deductible book intangible asset amortization 0.5 0.1 0.2 Tax exempt export income — — (0.5) Federal manufacturing income benefit — (0.7) — Federal tax credits (8.9) (1.4) — Taxes on foreign income which differ from the U.S. statutory rate (27.9) (6.1) (5.5) Adjustments for unrecognized tax benefits 3.5 (0.9) — Other items 1.8 0.4 1.1 Provision for taxes on earnings 1.9% 28.0% 32.0%

The effective tax rate for the year ended December 31, was lower than the statutory rate as a result of a foreign tax 2008 was 1.9% compared to 28.0% for the year ended credit carryforward which was recognized during the December 31, 2007. The effective tax rate in 2008 was second quarter of 2007 and an IRS audit settlement during favorably affected by the significant decrease in U.S. pre-tax the third quarter of 2007. In addition, the effective tax rate income resulting from the loss on currency hedges and in 2008, 2007 and 2006 were favorably affected, as com- certain global tax planning initiatives that are not impacted pared to the statutory rate, to varying degrees by certain by pre-tax income volatility. The effective tax rate in 2007 global tax planning initiatives.

The deferred income tax accounts reflect the impact of temporary differences between the basis of assets and liabilities for financial reporting purposes and their related basis as measured by income tax regulations. A summary of the deferred income tax accounts at December 31 is as follows:

2008 2007 Current deferred assets: Inventories $ 28.0 $13.9 Accounts receivable 7.2 12.1 Product warranty reserves 32.3 17.3 Product liability reserves 9.2 12.1 Other employee-related benefits and allowances 18.5 5.3 Net operating losses carryforwards, current portion — 3.0 Deferred revenue, current portion 1.9 — Other reserves and allowances 41.0 2.4 Net future income tax benefits, current $138.1 $66.1

The Manitowoc Company, Inc. — 2008 Form 10-K 55

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 16 CHKSUM Content: 32592 Layout: 8046 Graphics: No Graphics CLEAN

2008 2007 Non-current deferred assets (liabilities): Property, plant and equipment $ (47.8) $(34.3) Intangible assets (305.8) (3.4) Post retirement benefits other than pensions 18.2 20.4 Deferred employee benefits 14.7 8.6 Severance benefits — 0.2 Product warranty reserves 1.2 1.3 Tax credits 2.9 4.5 Net operating loss carryforwards 64.1 22.5 Deferred revenue 6.3 14.8 Other 2.5 2.8 Total non-current deferred asset (liability) (243.7) 37.4 Less valuation allowance (40.0) (9.8) Net future tax benefits, non-current $(283.7) $ 27.6

As a result of the Enodis acquisition, the company years for which the company could be subject to income tax recorded through purchase accounting current deferred tax examination by the tax authorities in its major jurisdictions: assets of $59.6 million and non-current deferred tax liabilities of $318.5 million, including a valuation allowance of Jurisdiction Open Years $30.5 million. U.S. Federal 2006 — 2008 The company’s policy is to remit earnings from foreign Wisconsin 1997 — 2008 subsidiaries only to the extent any underlying foreign taxes Pennsylvania 2004 — 2008 are creditable in the United States. Accordingly, the com- France 2003 — 2008 pany does not currently provide for additional United States Germany 2001 — 2008 and foreign income taxes which would become payable Italy 2003 — 2008 upon repatriation of undistributed earnings of foreign sub- Portugal 2004 — 2008 sidiaries. Undistributable earnings from continuing United Kingdom 2005 — 2008 operations on which additional income taxes have not been Singapore 2002 — 2008 provided amounted to approximately $434.3 million at December 31, 2008. If all such undistributed earnings were The Internal Revenue Service (IRS) commenced an exami- remitted, an additional provision for income taxes of nation of the company’s U.S. income tax returns for the approximately $152.0 million would have been necessary as 2006 and 2007 tax years in the fourth quarter of 2008. Thus of December 31, 2008. far there have been no significant developments with As of December 31, 2008, the company has approxi- regards to this IRS examination. In 2006, the Wisconsin mately $432.2 million of state net operating loss carryfor- Department of Revenue (WDOR) began an examination of wards, which are available to reduce future state tax the company’s Wisconsin income tax returns for 1997 liabilities. These state net operating loss carryforwards through 2005. The company expects to settle this examina- expire beginning 2009 through 2028. The company also has tion in 2009 and does not expect a material impact to the approximately $176.6 million of foreign loss carryforwards, financial statements. In August 2007, the German tax author- which are available to reduce future foreign tax liabilities. ities began an examination of the company’s German These foreign loss carryforwards generally have no expira- entity’s income and trade tax returns for 2001 through 2005. tion under current foreign law with the exception of China, Thus far, there have been no significant developments with which is limited to a five year carry forward. The valuation regard to this German examination. allowance represents a reserve for certain foreign loss carry- The company adopted the provisions of FASB Interpretation forwards for which realization is not “more likely than not.” (FIN) No. 48, “Accounting for Uncertainty in Income Taxes — an The company or one of its subsidiaries files income tax interpretation of FASB Statement No. 109,” on January 1, 2007. returns in the U.S. federal jurisdiction, and various state and During 2008, the company recorded additional unrecognized foreign jurisdictions. The following table provides the open tax tax benefits of $59.7 million of which $57.0 million resulted from the Enodis acquisition and was recorded through

56 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 17 CHKSUM Content: 52963 Layout: 942 Graphics: No Graphics CLEAN

purchase accounting. Included in the recorded unrecognized Substantially all of the company’s unrecognized tax bene- tax benefit is an increase of $24.0 million for accrued interest fits as of December 31, 2008 and 2007, if recognized, would and penalties of which $22.5 million resulted from the Enodis affect the effective tax rate. acquisition and was recorded through purchase accounting. The company recognizes accrued interest and penalties A reconciliation of the beginning and ending amount of related to unrecognized tax benefits as part of income tax unrecognized tax benefits excluding interest and penalties for expense. During the years ended December 31, 2008, 2007, the years ended December 31, 2008 and 2007 is as follows: and 2006, the company accrued $24.0 million, ($1.9) million, and $0.5 million, respectively, for the payment of interest 2008 2007 and penalties related to uncertain tax liabilities. For the year ended December 31, 2008, $22.5 million of the total Balance at beginning of year $30.5 $27.5 amount resulted from the Enodis acquisition and was Additions based on tax positions related recorded through purchase accounting. As of the year to the current year 2.0 18.7 ended December 31, 2008, the company has accrued inter- Additions for tax positions of prior years est and penalties of $30.1 million. resulting from the Enodis acquisition 34.5 — During the next 12 months, the company does not expect Reductions for tax positions of prior years — (4.9) any material changes in its unrecognized tax benefits. Reductions based on settlements with taxing authorities — (9.5) Reductions for lapse of statute (0.8) (1.3) Balance at end of year $66.2 $30.5

13. Earnings Per Share

The following is a reconciliation of the weighted average shares outstanding used to compute basic and diluted earnings per share. 2008 2007 2006 Basic weighted average common shares outstanding 129,930,749 124,667,931 122,449,148 Effect of dilutive securities — stock options and restricted stock — 2,821,485 3,122,384 Diluted weighted average common shares outstanding 129,930,749 127,489,416 125,571,532

For the year ended December 31, 2008, the total number September 10, 2007 stock split), subject to adjustment as of potential dilutive options was 1.7 million. However, these set forth in the Rights Agreement (the “Purchase Price” or options were not included in the computation of diluted net “Exercise Price”). loss per common share for the year since to do so would As explained in the Rights Agreement, the Rights become decrease the loss per share. For the years ended exercisable on the “Distribution Date”, which is that date December 31, 2007 and 2006, 0.0 million, and 0.3 million, that any of the following occurs: (1) 10 days following a pub- respectively, common shares issuable upon the exercise of lic announcement that a person or group of affiliated per- stock options, were anti-dilutive and were excluded from the sons (an “Acquiring Person”) has acquired, or obtained the calculation of diluted earnings per share. right to acquire, beneficial ownership of 20% or more of the outstanding shares of Common Stock of the company; or 14. Stockholders’ Equity (2) 10 business days following the commencement of a ten- der offer or exchange offer that would result in a person or Authorized capitalization consists of 300 million shares of group beneficially owning 20% or more of such outstanding $0.01 par value common stock and 3.5 million shares of shares of Common Stock. The Rights will expire at the close $0.01 par value preferred stock. None of the preferred of business on March 29, 2017, unless earlier redeemed or shares have been issued. exchanged by the company as described in the Rights On March 21, 2007, the Board of Directors of the company Agreement. approved the Rights Agreement between the company and On July 26, 2007, the board of directors authorized a Computershare Trust Company, N.A., as Rights Agent and two-for-one split of the company’s common stock. Record declared a dividend distribution of one right (a “Right”) for holders of Manitowoc’s common stock at the close of each outstanding share of Common Stock, par value $0.01 business on August 31, 2007 received on September 10, per share, of the company (the “Common Stock”), to share- 2007 one additional share of common stock for every holders of record at the close of business on March 30, 2007 share of Manitowoc common stock they owned as of (the “Record Date”). In addition to the Rights issued as a divi- August 31, 2007. Manitowoc shares outstanding at the dend on the record date, the Board of Directors has also close of business on August 31, 2007 totaled 62,787,642. determined that one Right will be issued together with each The company’s common stock began trading at its post- share of Common Stock issued by the company after the split price at the beginning of trading on September 11, Record Date. Generally, each Right, when it becomes exer- 2007. Per share, share and stock option amounts within cisable, entitles the registered holder to purchase from the this Annual Report on Form 10-K for all periods presented company one share of Common Stock at a purchase price, in have been adjusted to reflect the stock split. cash, of $110.00 per share ($220.00 per share prior to the

The Manitowoc Company, Inc. — 2008 Form 10-K 57

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 18 CHKSUM Content: 29813 Layout: 28208 Graphics: No Graphics CLEAN

The amount and timing of the quarterly dividend is deter- ($3.9 million after taxes) of pre-tax compensation expense mined by the board of directors at its regular meetings each associated with stock options for the years ended year. In the year ended December 31, 2008, the Company paid December 31, 2008, 2007 and 2006, respectively. a quarterly dividend of $0.02 in cash for each quarter for a The company maintains the following stock plans: cumulative dividend in 2008 of $0.08 per share. In the year The Manitowoc Company, Inc. 1995 Stock Plan provides for ended December 31, 2007, the company paid a quarterly the granting of stock options, restricted stock and limited dividend of $.0175 (adjusted for the stock split in September of stock appreciation rights as an incentive to certain employees. 2007) in cash the first two quarters and paid a quarterly divi- Under this plan, stock options to acquire up to 10.1 million dend of $0.02 in cash in each of the last two quarters for a shares of common stock, in the aggregate, may be granted cumulative dividend in 2007 of $0.075 per share. under the time-vesting formula at an exercise price equal to Currently, the company has authorization to purchase up the market price of the common stock at the close of business to 10 million shares (adjusted for the 2006 and 2007 2-for-1 or the business day immediately preceding the date of grant. stock splits) of common stock at management’s discretion. The options become exercisable in 25% increments beginning As of December 31, 2008, the company had purchased on the second anniversary of the grant date over a four-year approximately 7.6 million shares (adjusted for the 2006 and period and expire ten years subsequent to the grant date. The 2007 2-for-1 stock splits) at a cost of $49.8 million pursuant restrictions on any restricted shares granted under the plan to this authorization. The company did not purchase any lapse in one-third increments on each anniversary of the grant shares of its common stock during 2008, 2007 or 2006. date. Awards are no longer granted under this plan. Awards In November 2007, we sold, pursuant to an underwritten surrendered under this plan become available for granting public offering, approximately 4.0 million shares of our com- under the 2003 Incentive Stock and Awards Plan. mon stock at a price of $39.48 per share to the public. The The Manitowoc Company, Inc. 2003 Incentive Stock and offering was undertaken to meet anticipated investor Awards Plan (2003 Stock Plan) provides for both short-term demand for the company’s common stock in connection and long-term incentive awards for employees. Stock-based with Standard & Poor’s decision to add the company to the awards may take the form of stock options, stock appreciation S&P 500 Index as of the close of trading on November 15. Net cash proceeds from this offering, after deducting under- rights, restricted stock, and performance share or performance writing discounts and commissions, were $156.9 million. unit awards. The total number of shares of the company’s We used the proceeds for general corporate purposes. common stock originally available for awards under the 2003 The components of accumulated other comprehensive Stock Plan was 12.0 million shares (adjusted for all stock splits income as of December 31, 2008 and 2007 are as follows: since the plan’s inception) and is subject to further adjustments for stock splits, stock dividends and certain other trans- 2008 2007 actions or events in the future. Options under this plan are exercisable at such times and subject to such conditions as Foreign currency translation $ 87.1 $116.6 the compensation committee should determine. Options Derivative instrument fair market value, granted under the plan to date become exercisable in 25% net of income taxes of $(3.2) and $0.8 (5.9) 1.4 increments beginning on the second anniversary of the grant Employee pension and postretirement benefit date over a four-year period and expire ten years subsequent adjustments, net of income taxes of to the grant date. Restrictions on restricted stock awarded $(6.8) and $(1.9) (12.7) (3.5) under this plan lapse 100% on the third anniversary of the $ 68.5 $114.5 grant date. There have been no awards of stock appreciation rights, performance shares or performance units. 15. Stock Based Compensation The Manitowoc Company, Inc. 1999 Non-Employee Director Stock Option Plan (1999 Stock Plan) provides for the Effective January 1, 2006, the company adopted granting of stock options to non-employee members of the SFAS No. 123 (R), “Share-Based Payment: An Amendment board of directors. Under this plan, stock options to acquire of Financial Accounting Standards Board Statements up to 0.7 million shares (adjusted for all stock splits since the No. 123” (SFAS No. 123(R)), which revised SFAS No. 123, plan’s inception and is subject to further adjustments for “Accounting for Stock-Based Compensation” and super- stock splits, stock dividends and certain other transactions or sedes APB Opinion No. 25, “Accounting for Stock Issued to events in the future) of common stock, in the aggregate, may Employees.” SFAS No. 123(R) requires all share-based pay- be granted under a time-vesting formula and at an exercise ments to employees, including grants of employee stock price equal to the market price of the common stock at the options, to be measured at fair value and expensed in the date of grant. For the 1999 Stock Plan, the options are exer- Consolidated Statements of Operations over the service cisable in 25% increments beginning on the first anniversary period (generally the vesting period) of the grant. of the grant date over a four-year period and expire ten years As a result of the adoption of SFAS No. 123(R), the com- subsequent to the grant date. During 2004, this plan was pany recognized $6.5 million ($6.4 million after taxes), frozen and replaced with the 2004 Director Stock Plan. $6.2 million ($4.5 million after taxes) and $5.7 million

58 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 19 CHKSUM Content: 27550 Layout: 47373 Graphics: No Graphics CLEAN

The 2004 Non-Employee Director Stock and Awards Plan With the acquisition of Grove, the company inherited the (2004 Director Stock Plan) was approved by the shareholders Grove Investors, Inc. 2001 Stock Incentive Plan. Outstanding of the company during the 2004 annual meeting and it Grove stock options under the Grove Investors, Inc. 2001 replaces 1999 Stock Plan. Stock-based awards may take the Stock Incentive Plan were converted into options to acquire form of stock options, restricted stock, or restricted stock the company’s common stock at the date of acquisition. units. The total number of shares of the company’s common Under this plan, after the conversion of Grove stock options to stock originally available for awards under the 2004 Stock Manitowoc stock options, stock options to acquire 0.1 million Plan was 0.9 million (adjusted for all stock splits since the shares (adjusted for all stock splits since the plan’s inception plan’s inception and is subject to further adjustments for and is subject to further adjustments for stock splits, stock stock splits, stock dividends and certain other transactions dividends and certain other transactions or events in the or events in the future). Stock options awarded under the future) of common stock of the company were outstanding. plan vest immediately and expire ten years subsequent to These options are fully vested and expire on September 25, the grant date. Restrictions on restricted stock awarded to 2011. No additional options may be granted under the Grove date under the plan lapse on the third anniversary of the Investors, Inc. 2001 Stock Incentive Plan. award date.

A summary of the company’s stock option activity is as follows (in millions, except weighted average exercise price):

Weighted Average Aggregate Shares Exercise Price Intrinsic Value Options outstanding as of January 1, 2007 5.5 $11.04 Granted 0.8 30.78 Exercised (1.6) 7.26 Cancelled (0.2) 17.16 Options outstanding as of December 31, 2007 4.5 $15.43 Granted 0.5 39.27 Exercised (0.5) 8.97 Cancelled (0.2) 24.47 Options outstanding as of December 31, 2008 4.3 $18.21 $1.9 Options exerciseable as of: January 1, 2007 1.7 $ 6.71 December 31, 2007 1.6 $ 8.85 December 31, 2008 1.9 $11.05 $1.9

The outstanding stock options at December 31, 2008 have a by range of exercise prices at December 31, 2008 (in millions, range of exercise prices of $4.23 to $47.84 per option. The except weight average remaining contractual life and following table shows the options outstanding and exercisable weighted average exercise price).

Weighted Average Remaining Outstanding Contractual Weighted Average Exercisable Weighted Average Range of Exercise Price Options Life (Years) Exercise Price Options Exercise Price $4.23–$6.00 0.2 3.7 $ 4.77 0.2 $ 4.77 $6.01–$7.00 0.5 3.5 6.31 0.5 6.31 $7.01–$9.00 0.5 4.5 7.90 0.4 7.96 $9.01–$10.20 0.6 6.3 10.13 0.3 10.13 $10.21–$18.00 0.4 6.3 10.62 0.2 10.45 $18.01–$25.00 0.5 7.2 18.89 0.1 18.90 $25.01–$27.50 0.5 7.3 26.11 0.2 26.10 $27.51–$29.52 0.6 8.2 29.51 — 29.52 $35.97–$47.84 0.5 9.0 38.98 — 39.79 4.3 6.4 $18.21 1.9 $11.05

The Manitowoc Company, Inc. — 2008 Form 10-K 59

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 20 CHKSUM Content: 20745 Layout: 35667 Graphics: No Graphics CLEAN

The company continues to use the Black-Scholes valuation As of December 31, 2008, the company also held reserves model to value stock options. The company used its historical for environmental matters related to Enodis locations of stock prices as the basis for its volatility assumption. The approximately $2.0 million and at another location of approx- assumed risk-free rates were based on ten-year U.S. Treasury imately $0.6 million. At certain of the company’s other facili- rates in effect at the time of grant. The expected option life ties, the company has identified potential contaminants in represents the period of time that the options granted are soil and groundwater. The ultimate cost of any remediation expected to be outstanding and are based on historical required will depend upon the results of future investigation. experience. Based upon available information, the company does not As of December 31, 2008, the company has $15.3 million expect the ultimate costs at any of these locations will have of unrecognized compensation expense which will be recog- a material adverse effect on its financial condition, results of nized over the next five years. operations, or cash flows. The weighted average fair value of options granted per share The company believes that it has obtained and is in substan- during the years ended December 31, 2008, 2007 and 2006 tial compliance with those material environmental permits was $15.34, $12.56 and $9.60, respectively. The fair value and approvals necessary to conduct its various businesses. of each option grant was estimated at the date of grant Based on the facts presently known, the company does not using the Black-Scholes option-pricing method with the expect environmental compliance costs to have a material following assumptions: adverse effect on its financial condition, results of operations, or cash flows. 2008 2007 2006 As of December 31, 2008, various product-related lawsuits Expected life (years) 6.0 6.0 7.0 were pending. To the extent permitted under applicable law, all of these are insured with self-insurance retention levels. Risk-free interest rate 4.4% 4.4% 4.8% The company’s self-insurance retention levels vary by busi- Expected volatility 35.0% 35.0% 34.0% ness, and have fluctuated over the last five years. The range Expected dividend yield 0.3% 0.3% 0.6% of the company’s self-insured retention levels is $0.1 million to $3.0 million per occurrence. The high-end of the com- For the years ended December 31, 2008, 2007 and 2006 pany’s self-insurance retention level is a legacy product lia- the total intrinsic value of stock options exercised was $13.8 bility insurance program inherited in the Grove acquisition million, $45.9 million and $46.5 million, respectively. for cranes manufactured in the United States for occur- rences from January 2000 through October 2002. As of 16. Contingencies and Significant Estimates December 31, 2008, the largest self-insured retention level currently maintained by the company is $2.0 million per The company has been identified as a potentially responsible occurrence and applies to product liability claims for cranes party under the Comprehensive Environmental Response, manufactured in the United States. Compensation, and Liability Act (CERLA) in connection with Product liability reserves in the Consolidated Balance Sheets the Lemberger Landfill Superfund Site near Manitowoc, at December 31, 2008, were $34.4 million; $9.8 million was Wisconsin. Approximately 150 potentially responsible parties reserved specifically for actual cases and $24.6 million for have been identified as having shipped hazardous materials claims incurred but not reported which were estimated to this site. Eleven of those, including the company, have using actuarial methods. For the year ended December 31, formed the Lemberger Site Remediation Group and have 2007, product liability reserves in the Consolidated Balance successfully negotiated with the United States Environmental Sheets were $34.7 million; $14.5 million was reserved Protection Agency and the Wisconsin Department of Natural specifically for actual cases and $20.2 million for claims Resources to fund the cleanup and settle their potential lia- incurred but not reported. Based on the company’s experi- bility at this site. The estimated remaining cost to complete ence in defending product liability claims, management the clean up of this site is approximately $8.1 million. believes the current reserves are adequate for estimated Although liability is joint and several, the company’s share of case resolutions on aggregate self-insured claims and the liability is estimated to be 11% of the remaining cost. insured claims. Any recoveries from insurance carriers are Remediation work at the site has been substantially com- dependent upon the legal sufficiency of claims and solvency pleted, with only long-term pumping and treating of ground- of insurance carriers. water and site maintenance remaining. The company’s At December 31, 2008 and 2007, the company had remaining estimated liability for this matter, included in reserved $123.5 million and $92.1 million, respectively, for accounts payable and accrued expenses in the Consolidated warranty claims included in product warranties and other Balance Sheets at December 31, 2008 and 2007 is $0.8 and non-current liabilities in the Consolidated Balance Sheets. $0.9 million, respectively. Based on the size of the company’s Certain of these warranty and other related claims involve current allocation of liabilities at this site, the existence of matters in dispute that ultimately are resolved by negotia- other viable potential responsible parties and current tions, arbitration, or litigation. reserve, the company does not believe that any liability It is reasonably possible that the estimates for environmental imposed in connection with this site will have a material remediation, product liability and warranty costs may change adverse effect on its financial condition, results of operations, in the near future based upon new information that may or cash flows. 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.

60 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 21 CHKSUM Content: 61014 Layout: 63813 Graphics: No Graphics CLEAN

The company is involved in numerous lawsuits involving third party financing agreement. The deferred revenue included asbestos-related claims in which the company is one of in other current and non-current liabilities at December 31, numerous defendants. After taking into consideration legal 2008 and 2007 was $105.8 million and $102.4 million, counsel’s evaluation of such actions, the current political respectively. The total amount of residual value guarantees environment with respect to asbestos related claims, and and buyback commitments given by the company and out- the liabilities accrued with respect to such matters, in the standing at December 31, 2008 and 2007 was $105.1 million opinion of management, ultimate resolution is not expected and $128.4 million, respectively. These amounts are not to have a material adverse effect on the financial condition, reduced for amounts the company would recover from results of operations, or cash flows of the company. repossessing and subsequent resale of the units. The resid- In conjunction with the Enodis acquisition, the company ual value guarantees and buyback commitments expire at assumed the responsibility to address outstanding and various times through 2013. future legal actions. As of December 31, 2008, the only During the years ended December 31, 2008 and 2007, the significant unresolved claimed legal matter involves a former company sold $3.7 million and $14.2 million, respectively, of subsidiary of Enodis, Consolidated Industries Corporation its long term notes receivable to third party financing com- (Consolidated). Enodis sold Consolidated to an unrelated panies. The company guarantees some percentage, up to party in 1998. Shortly after the sale, Consolidated commenced 100%, of collection of the notes to the financing companies. bankruptcy proceedings. Subsequently, the appointed bank- The company has accounted for the sales of the notes as a ruptcy trustee asserted a variety of bankruptcy and equitable financing of receivables. The receivables remain on the com- claims seeking recovery in the United States Bankruptcy pany’s Consolidated Balance Sheets, net of payments Court for the Northern District of Indiana. On January 7, 2003, made, in other current and non-current assets and the com- the United States District Court entered a partial summary pany has recognized an obligation equal to the net outstand- judgment against Enodis and on July 28, 2004, the Bankruptcy ing balance of the notes in other current and non-current Court also issued an opinion against Enodis. On October 31, liabilities in the Consolidated Balance Sheets. The cash flow 2006, the District Court upheld the rulings of the Bankruptcy benefit of these transactions are reflected as financing activ- Court and the certain judgments against Enodis. Both ities in the Consolidated Statements of Cash Flows. During Enodis and the trustee appealed the court’s judgments to the years ended December 31, 2008 and 2007 customers have the United States Court of Appeals for the Seventh Circuit. paid $7.5 million and $18.5 million, respectively, of the notes On September 2, 2008, the Seventh Circuit Court of Appeals to the third party financing companies. As of December 31, entered an order affirming in part, reversing in part, and 2008 and 2007, the outstanding balance of the notes receiv- remanding in part the judgments previously entered by the ables guaranteed by the company was $14.5 million and Bankruptcy Court and the District Court. $18.2 million, respectively. As a result of the ruling by the Seventh Circuit Court of In the normal course of business, the company provides its Appeals, the District Court assigned the case to a Magis- customers a warranty covering workmanship, and in some trate Judge in the Northern District of Indiana to conduct a cases materials, on products manufactured by the company. settlement conference which began on December 10, 2008. Such warranty generally provides that products will be free Subsequent to December 31, 2008, an agreement was from defects for periods ranging from 12 months to 60 months reached and the Settlement Agreement was submitted to with certain equipment having longer-term warranties. If a prod- the Bankruptcy Court for approval. Any objections to the Set- uct fails to comply with the company’s warranty, the company tlement Agreement must be filed no later than March 5, may be obligated, at its expense, to correct any defect by 2009. We do not anticipate objections to made to the Settle- repairing or replacing such defective products. The company ment Agreement, and we will pay the agreed amount of provides for an estimate of costs that may be incurred under its $69.5 million plus interest from February 1, 2009 when the warranty at the time product revenue is recognized. These Settlement Agreement is approved by the Bankruptcy Court. costs primarily include labor and materials, as necessary, asso- As of December 31, 2008, the company has accrued ciated with repair or replacement. The primary factors that $72.0 million related to this matter in accounts payable and affect the company’s warranty liability include the number of other accrued expenses in the Consolidated Balance Sheet. units shipped and historical and anticipated warranty claims. As The company is also involved in various legal actions arising these factors are impacted by actual experience and future out of the normal course of business, which, taking into expectations, the company assesses the adequacy of its account the liabilities accrued and legal counsel’s evaluation recorded warranty liability and adjusts the amounts as neces- of such actions, in the opinion of management, the ultimate sary. Below is a table summarizing the warranty activity for the resolution is not expected to have a material adverse effect years ended December 31, 2008 and 2007. on the company’s financial condition, results of operations, or cash flows. 2008 2007 Balance at beginning of period $ 91.2 $ 69.1 17. Guarantees Accruals for warranties issued during the period 61.0 64.9 The company periodically enters into transactions with cus- Acquisitions 33.4 — tomers that provide for residual value guarantees and buy- Settlements made (in cash or in kind) back commitments. These initial transactions are recorded during the period (61.1) (45.8) as deferred revenue and are amortized to income on a Currency translation (1.0) 3.0 straight-line basis over a period equal to that of the customer’s Balance at end of period $123.5 $ 91.2

The Manitowoc Company, Inc. — 2008 Form 10-K 61

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 22 CHKSUM Content: 52177 Layout: 53878 Graphics: No Graphics CLEAN

18. Restructuring Europe the company committed to a restructuring plan in the fourth quarter of 2008 to reduce the cost structure of its Restructuring expense for the year ended December 31, French and Portuguese facilities. 2008 was $21.7 million as compared to no restructuring The plan includes workforce reductions of approximately expense in 2007 or 2006. The restructuring expense is pri- 350 employees in France and 120 employees in Portugal. As marily in response to the accelerated decline in demand in of December 31, 2008, no significant benefit payments have Western and Southern Europe where market conditions been made with respect to the workforce reductions, but all have negatively impacted our tower crane product sales. restructuring activities are expected to be completed by The tower crane backlog in Europe has declined by almost December 31, 2009. The following table summarizes the initial 80% in 2008 compared to the same period in 2007. To better amounts recorded for the activities, all of which are related align the company’s resources with the current demand in to the Crane segment:

Total Costs Incurred Costs Incurred As of December 31, 2008 ($000,000’s) Expected Costs During the Period To Date Involuntary employee terminations and related costs $21.1 $— $—

19. Employee Benefit Plans Total costs incurred under these plans were $28.4 million, $36.1 million and $30.0 million for the years ended Savings and Investment Plans The company sponsors a December 31, 2008, 2007 and 2006, respectively. defined contribution savings plan that allows substantially all domestic employees to contribute a portion of their pre-tax Pension, Postretirement Health and Other Benefit Plans The and/or after-tax income in accordance with plan-specific company provides certain pension, health care and death guidelines. In conjunction with the Enodis acquisition (see benefits for eligible retirees and their dependents. The Note 3), the company currently sponsors two distinct pension benefits are funded, while the health care and death defined contribution savings plans. The acquired plan allows benefits are not funded but are paid as incurred. Eligibility the company to make a matching contribution on pre-tax for coverage is based on meeting certain years of service contributions to the plan in an amount equal to 100% of the and retirement qualifications. These benefits may be subject first 3% of compensation and 50% of the next 2% of com- to deductibles, co-payment provisions, and other limitations. pensation contributed to the plan. Effective January 1, 2007 The company has reserved the right to modify these benefits. the former Manitowoc plan was revised to increase the In September 2006, the FASB issued SFAS No. 158, company match to 100% of the participants’ contributions “Employers’ Accounting for Defined Benefit Pension and up to 4% from 3% previously, and match an additional 50% Other Postretirement Plans, an amendment of FASB State- of the participants’ contributions between 4% to a maximum ments No. 87, 88, 106, and 132(R)”. The company adopted of 8% from 3% to a maximum of 6% previously, of the par- SFAS No. 158 as of December 31, 2006 which resulted in ticipants’ compensation. It is anticipated that the underlying adjustments to total assets, total liabilities, and accumulated plan guidelines will be conformed during the integration other comprehensive income, net of tax of $(11.2) million, process. The company also provides retirement benefits $3.9 million, and $7.3 million, respectively. through noncontributory deferred profit sharing plans covering substantially all employees. Company contributions to The components of period benefit costs for the years the plans are based upon formulas contained in the plans. ended December 31, 2008, 2007 and 2006 are as follows:

US Pension Plans Non-U.S. Pension Plans Postretirement Health and Other 2008 2007 2006 2008 2007 2006 2008 2007 2006 Service cost — benefits earned during the year $ 0.1 $ — $ — $ 1.9 $ 2.1 $ 2.1 $0.8 $0.7 $0.9 Interest cost of projected benefit obligation 7.8 7.0 6.4 5.0 3.6 4.4 3.2 3.3 3.2 Expected return on assets (7.2) (7.0) (6.4) (4.1) (3.1) (3.5) — — — Amortization of actuarial net (gain) loss — 0.7 0.8 — — 0.1 — 0.3 0.1 Settlement gain recognized — — — 0.1 0.8 — — Special termination benefit — — — — 5.3 — — — — Net periodic benefit cost $ 0.7 $ 0.7 $ 0.8 $ 2.9 $ 8.7 $ 3.1 $4.0 $4.3 $4.2 Weighted average assumptions:- Discount rate 6.61% 5.75% 5.50% 6.14% 4.81% 4.53% 6.5% 5.75% 5.50% Expected return on plan assets 5.92% 8.25% 8.25% 5.95% 6.03% 6.37% N/A N/A N/A Rate of compensation increase N/A N/A N/A 4.18% 3.88% 3.53% N/A N/A N/A

The prior service costs are amortized on a straight-line greater of the benefit obligation and the market-related value basis over the average remaining service period of active of assets are amortized over the average remaining service participants. Gains and losses in excess of 10% of the period of active participants.

62 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 23 CHKSUM Content: 38572 Layout: 18794 Graphics: No Graphics CLEAN

The following is a reconciliation of the changes in benefit obligation, the changes in plan assets, and the funded status as of December 31, 2008 and 2007.

Non-U.S. Pension Postretirement Health US Pension Plans Plans and Other 2008 2007 2008 2007 2008 2007 Change in Benefit Obligation Benefit obligation, beginning of year $113.9 $124.1 $ 63.7 $100.7 $ 50.2 $ 59.9 Service cost 0.1 — 1.9 2.1 0.8 0.7 Interest cost 7.8 7.0 5.0 3.6 3.2 3.3 Participant contributions — — 0.1 0.1 1.9 2.0 Plan settlements — — — (37.7) — — Special termination benefits — — — 5.3 — — Net transfer in/(out) 42.6 — 123.3 — 4.0 — Actuarial loss (gain) 13.7 (12.5) 13.5 (5.1) 6.4 (9.4) Currency translation adjustment — — (17.3) 3.6 0.1 — Benefits paid (5.3) (4.7) (5.0) (8.9) (5.8) (6.3) Benefit obligation, end of year 172.8 113.9 185.2 63.7 60.8 50.2 Change in Plan Assets Fair value of plan assets, beginning of year 119.2 88.0 51.4 72.4 — — Actual return on plan assets 22.1 8.0 5.6 4.4 — — Employer contributions 0.7 28.0 4.1 19.2 3.9 4.3 Participant contributions — — 0.1 0.1 1.9 2.0 Plan settlements — — — (37.7) — — Currency translation adjustment — — (18.8) 1.9 — — Net transfer in/(out) 28.9 — 122.5 — — — Benefits paid (5.3) (4.7) (5.0) (8.9) (5.8) (6.3) Fair value of plan assets, end of year 165.6 119.2 159.9 51.4 — — Funded status $ (7.2) $ 5.3 $ (25.3) $ (12.3) $(60.8) $(50.2) Amounts recognized in the Consolidated Balance sheet at December 31 Pension asset $ 11.0 $ 11.9 $ 6.8 $ 3.4 $ — $ — Pension obligation (18.2) (6.6) (32.1) (15.7) — — Postretirement health and other benefit obligations — — — — (60.8) (50.2) Net amount recognized $ (7.2) $ 5.3 $ (25.3) $ (12.3) $(60.8) $(50.2) Weighted-Average Assumptions Discount rate 6.20% 6.50% 6.25% 5.68% 6.23% 6.50% Expected return on plan assets 5.92% 6.50% 5.95% 6.03% N/A N/A

Amounts recognized in accumulated other comprehensive income as of December 31, 2008 and 2007, consist of the following:

Postretirement Pensions health and other 2008 2007 2008 2007 Net actuarial gain (loss) $(15.2) $(4.8) $(6.0) $0.5 Prior service credit 0.3 0.3 — — Total amount recognized $(14.9) $(4.5) $(6.0) $0.5

The amounts in accumulated other comprehensive not significant for the pension and the postretirement health income that are expected to be recognized as components and other plans. of net periodic benefit cost during the next fiscal year are

The Manitowoc Company, Inc. — 2008 Form 10-K 63

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 24 CHKSUM Content: 57599 Layout: 46660 Graphics: No Graphics CLEAN

For measurement purposes, a 7.0% annual rate of significant effect on the amounts reported for the health increase in the per capita cost of covered health care bene- care plans. The following table summarizes the sensitivity of fits was assumed for 2008. The rate was assumed to our December 31, 2008 retirement obligations and 2009 decrease gradually to 5.0% for 2014 and remain at that level retirement benefit costs of our plans to changes in the key thereafter. Assumed health care cost trend rates have a assumptions used to determine those results:

Estimated Estimated increase Estimated increase increase (decrease) in Projected Estimated increase (decrease) in Other (decrease) Benefit Obligation for (decrease) in Other Postretirement Benefit in 2009 the year ended Postretirement Obligation for the year ended Change in assumption: pension cost December 31, 2008 Benefit costs December 31, 2008 0.50% increase in discount rate — (21.1) (0.1) (2.5) 0.50% decrease in discount rate 0.1 22.8 0.1 2.6 0.50% increase in long-term return on assets (1.6) — — — 0.50% decrease in long-term return on assets 1.6 — — — 1% increase in medical trend rates — — 0.4 5.6 1% decrease in medical trend rates — — (0.4) 4.9

It is reasonably possible that the estimate for future retire- while the remaining merged plans had benefit accruals ment and health costs may change in the near future due to frozen prior to the merger of the plans. Effective January 1, changes in the health care environment or changes in inter- 2007, the company merged all Manitowoc U.S. pension est rates that may arise. Presently, there is no reliable means plans together and made a contribution of $27.2 million that to estimate the amount of any such potential changes. is expected to fully fund the ongoing pension liability. The The weighted-average asset allocations of the U.S. pen- company also changed its investment policy to more closely sion plans at December 31, 2008 and 2007, by asset cate- align the interest rate sensitivity of its pension assets with gory are as follows: the corresponding liabilities. The resulting asset allocation is approximately 10% equities and 90% fixed income. This 2008 2007 funding and change in allocation removed a significant por- Equity 16.6% 10.0% tion of the U.S. pension’s volatility arising from unpredictable changes in interest rates and the equity markets. This deci- Fixed income 83.4 90.0 sion will protect the company’s balance sheet as well as Real estate —— support its goal of minimizing unexpected future pension Other —— cash contributions based upon the new provisions of the 100.0% 100.0% Pension Protection Act and protect our employees’ benefits. It is anticipated that the underlying plan asset allocations will The weighted-average asset allocations of the Non U.S. be conformed during the integration process. pension plans at December 31, 2008 and 2007, by asset cat- During the second quarter of 2007, the company made a egory are as follows: $15.1 million pension contribution to its U.K. defined benefit pension plan. The $15.1 million contribution funded the 2008 2007 defined benefit plan as well as paid an incentive to certain pensioners to transfer from the defined benefit plan to a Equity 26.9% 33.5% defined contribution plan. As a result of this payment, the Fixed income 72.5 63.5 company recorded a charge during the second quarter of Real estate 0.3 1.0 2007 of approximately $3.8 million to reflect the incentive Other 0.3 2.0 given to the pensioners and expenses incurred. During the 100.0% 100.0% second quarter of 2007, the company recorded a charge of $1.4 million related to a withdraw liability from a multiem- The board of directors has established the Retirement ployer pension plan at its former River Falls, Wisconsin facil- Plan Committee (the Committee) to manage the operations ity. During the third quarter of 2005, the company closed its and administration of all benefit plans and related trusts. The Kolpak operation located in River Falls, Wisconsin and con- Committee is committed to diversification to reduce the risk solidated it with its operation in Tennessee. The $1.4 million of large losses. On a quarterly basis, the Committee reviews represents the estimated payment the company will make to progress towards achieving the pension plans’ and individ- the multiemployer pension plan for its former union employ- ual managers’ performance objectives. ees at the closed facility. In conjunction with the Enodis acquisition (see Note 3), To develop the expected long-term rate of return on and effective as of December 31, 2008, the company assets assumptions, the company considered the historical merged all but one of the Enodis U.S. pension plans into the returns and future expectations for returns in each asset Manitowoc U.S. merged pension plan. The unmerged plan class, as well as targeted asset allocation percentages continues to accrue benefits for the enrolled participants, within the pension portfolio.

64 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 25 CHKSUM Content: 9372 Layout: 9747 Graphics: No Graphics CLEAN

The expected 2009 contributions for the U.S. pension plans are as follows: the minimum contribution for 2009 is $2.5 million; the discretionary contribution is $0 million; and the non-cash contribution is $0. The expected 2009 contributions for the non-U.S. pension plans are as follows: the minimum contribution for 2009 is $4.8 million; the discretionary contribution is $0; and the non-cash contribution is $0. Expected company paid claims for the postretirement health and life insurance plans are $4.8 million for 2009. Projected benefit payments from the plans as of December 31, 2008 are estimated as follows:

Postretirement U.S Pension Non-U.S. Health and Plans Pension Plans Other 2009 $ 8.8 $ 9.9 $ 4.8 2010 9.2 10.0 4.9 2011 9.5 10.3 4.9 2012 9.9 11.0 4.9 2013 10.3 10.8 5.0 2014 — 2018 57.5 63.8 27.0

The fair value of plan assets for which the accumulated benefit obligation is in excess of the plan assets as of December 31, 2008 and 2007 is as follows: U.S Pension Plans Non U.S. Pension Plans 2008 2007 2008 2007 Projected benefit obligation 30.3 6.6 38.4 13.9 Accumulated benefit obligation 30.3 6.6 35.6 13.4 Fair value of plan assets 12.1 — 6.2 —

The accumulated benefit obligation for all U.S. pension Program A is accounted for as a plan which does not permit plans as of December 31, 2008 and 2007 was $172.8 million diversification. As a result, the company stock held by Pro- and $113.9 million, respectively. The accumulated benefit obli- gram A is classified in equity in a manner similar to account- gation for all non-U.S. pension plans as of December 31, 2008 ing for treasury stock. The deferred compensation obligation and 2007 was $179.6 million and $22.3 million, respectively. is classified as an equity instrument. Changes in the fair The measurement date for all plans is December 31, 2008. value of the company’s stock and the compensation obliga- The company maintains a target benefit plan for certain tion are not recognized. The asset and obligation for Pro- executive officers of the company that is unfunded. gram A were both $2.3 million at December 31, 2008 and Expenses related to the plan in the amount of $4.1 million, $0.2 million at December 31, 2007. These amounts are off- $3.0 million and $1.9 million were recorded in 2008, 2007 set in the Consolidated Statements of Stockholders’ Equity and 2006, respectively. Amounts accrued as of December 31, and Comprehensive Income. 2008 and 2007 related to this plan were $16.5 million and Program B is accounted for as a plan which permits diver- $13.4 million, respectively. sification. As a result, the assets held by Program B are clas- The company has two general deferred compensation sified as an asset in the Consolidated Balance Sheets and plans that enable certain key employees and non-employee changes in the fair value of the assets are recognized in directors to defer a portion of their compensation or fees on earnings. The deferred compensation obligation is classified a pre-tax basis. Under the historical Manitowoc plan, the as a liability in the Consolidated Balance Sheets and company matches contributions at a rate equal to an adjusted, with a charge or credit to compensation cost, to employee’s profit sharing percentage plus one percent. reflect changes in the fair value of the obligation. The assets, Effective January 1, 2002, the company amended its included in other non-current assets, and obligation, included deferred compensation plan to provide plan participants the in other non-current liabilities, were both $9.6 million at ability to direct deferrals and company matching contribu- December 31, 2008 and $13.1 million at December 31, 2007. tions into two separate investment programs, Program A The net impact on the Consolidated Statements of Opera- and Program B. tions was $0 for the years ended December 31, 2008, 2007 The investment assets in Program A and B are held in two and 2006. separate Deferred Compensation Plans, which restrict the Under the former Enodis plan, the company may provide company’s use and access to the funds but which are also any of the following types of contributions: (i) matching con- subject to the claims of the company’s general creditors in tributions may be credited to the participant’s account in an rabbi trusts. Program A invests solely in the company’s amount up to 6% of the amount, if any, of the base salary stock; dividends paid on the company’s stock are automati- and bonus deferrals during the calendar year; (ii) non-elective cally reinvested; and all distributions must be made in com- contributions may be contributed to the account in an pany stock. Program B offers a variety of investment options amount equal to 6% of the portion of the compensation that but does not include company stock as an investment exceeds the applicable annual Internal Revenue Code Section; option. All distributions from Program B must be made in (iii) profit sharing contributions equal to 2% of the compen- cash. Participants cannot transfer assets between programs. sation that exceeds the applicable annual Internal Revenue

The Manitowoc Company, Inc. — 2008 Form 10-K 65

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 26 CHKSUM Content: 58125 Layout: 4363 Graphics: No Graphics CLEAN

Code Section limit (subject to satisfaction of company per- The company identifies its segments using the “manage- formance criteria); and (iv) additional discretionary contribu- ment approach,” which designates the internal organization tions may be made for some or all participants at the discretion that is used by management for making operating decisions of the company. It is anticipated that the underlying plan and assessing performance as the source of the company’s guidelines will be conformed during the integration process. reportable segments. The company has not aggregated individual operating segments within these reportable segments. 20. Leases The Crane business is a global provider of engineered lift solutions which designs, manufactures and markets a com- The company leases various property, plant and equipment. prehensive line of lattice-boom crawler cranes, mobile tele- Terms of the leases vary, but generally require the company scopic cranes, tower cranes, and boom trucks. The Crane to pay property taxes, insurance premiums, and mainte- products are marketed under the Manitowoc, Grove, Potain, nance costs associated with the leased property. Rental and National brand names and are used in a wide variety of expense attributed to operating leases was $33.9 million, applications, including energy, petrochemical and industrial $28.0 million and $23.6 million in 2008, 2007 and 2006, projects, infrastructure development such as road, bridge respectively. Future minimum rental obligations under non- and airport construction, commercial and high-rise residen- cancelable operating leases, as of December 31, 2008, are tial construction, mining and dredging. Our crane-related payable as follows: product support services are marketed under the Crane CARE brand name and include maintenance and repair serv- 2009 $ 40.1 ices and parts supply. 2010 31.3 Our Foodservice Equipment business designs, manufac- 2011 22.9 tures and sells primary cooking and warming equipment; ice-cube machines, ice flaker machines and storage bins; 2012 16.6 refrigerator and freezer equipment; ware washing equip- 2013 12.9 ment; beverage dispensers and related products; serving Thereafter 40.8 and storage equipment; and food preparation equipment, Total minimum rental obligations 164.6 cookware, kitchen utensils and tools. Our suite of products is used by commercial and institutional foodservice opera- 21. Business Segments tors such as full service restaurants, quick-service restaurant (QSR) chains, hotels, industrial caterers, supermarkets, con- On December 31, 2008, the company completed the sale of venience stores, hospitals, schools and other institutions. its Marine segment to Fincantieri Marine Group Holdings, The accounting policies of the segments are the same as Inc., a subsidiary of Fincantieri — Cantieri Navali Italiani SpA. those described in the summary of significant accounting The sale price in the all-cash deal was approximately policies except that certain expenses are not allocated to the $120 million. The company is reporting the Marine segment segments. These unallocated expenses are corporate over- as a discontinued operation for financial reporting purposes head, amortization expense of intangible assets with definite as of December 31, 2008, and for all prior periods presented lives, interest expense and income tax expense. The com- in accordance with SFAS No. 144, “Accounting for the pany evaluates segment performance based upon profit and Impairment or Disposal of Long-Lived Assets”. After reclassi- loss before the aforementioned expenses. Financial informa- fying the Marine segment to discontinued operations, the tion relating to the company’s reportable segments for the company has two remaining reportable segments, the Crane years ended December 31, 2008, 2007 and 2006 is as follows. and Foodservice segments. Restructuring costs separately identified in the Consolidated Statements of Operations are included as reductions to the respective segments operating earnings for each year below.

66 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 27 CHKSUM Content: 36425 Layout: 28592 Graphics: No Graphics CLEAN

Net sales from continuing operations and long-lived asset information by geographic area as of and for the years ended December 31 are as follows: Net Sales Long-Lived Assets 2008 2007 2006 2008 2007 United States $1,896.6 $1,627.4 $1,252.6 $1,607.1 $ 609.0 Other North America 127.7 114.1 80.5 28.5 — Europe 1,444.2 1,215.0 817.0 2,105.5 483.5 Asia 395.0 299.5 170.4 177.2 118.7 Middle East 314.0 183.0 167.8 1.8 1.7 Central and South America 117.4 61.9 54.0 0.6 0.4 Africa 82.8 64.2 50.6 — — South Pacific and Caribbean 13.5 16.0 5.0 5.4 5.6 Australia 111.8 102.9 52.9 5.0 6.3 Total $4,503.0 $3,684.0 $2,650.8 $3,931.1 $1,225.2

Net sales from continuing operations and long-lived asset information for Europe primarily relates to France, Germany and the United Kingdom.

22. Subsidiary Guarantors of Senior Notes due 2013

The following tables present condensed consolidating financial information for (a) the parent company, The Manitowoc Com- pany, Inc. (Parent); (b) the guarantors of the Senior Notes due 2013, which include substantially all of the domestic wholly owned subsidiaries of the company (Subsidiary Guarantors); and (c) the wholly and partially owned foreign subsidiaries of the company, which do not guarantee the Senior Notes due 2013 (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 guaran- 1 tees, and 100% owned by the company. On August 1, 2007, the company redeemed its 10 ⁄2% senior subordinated notes due 2012, the guarantors of which are substantially the same as the guarantors of the Senior Notes due 2013. The Manitowoc Company, Inc. — 2008 Form 10-K 67

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, PANTONE Process Blue U, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 28 CHKSUM Content: 53392 Layout: 37857 Graphics: No Graphics CLEAN

Condensed Consolidating Statement of Operations For the year ended December 31, 2008

Non- Guarantor Guarantor Millions of dollars, except per share data Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $2,400.0 $2,776.4 $(673.4) $4,503.0 Costs and expenses: Cost of sales — 1,940.2 2,220.4 (673.4) 3,487.2 Engineering, selling and administrative expenses 53.9 165.6 235.6 — 455.1 Restructuring expense — 0.1 21.6 — 21.7 Amortization expense — 2.0 9.6 — 11.6 Integration expense — 7.6 —— 7.6 Equity in (earnings) loss of subsidiaries (161.4) (8.5) — 169.9 — Total costs and expenses (107.5) 2,107.0 2,487.2 (503.5) 3,983.2 Operating earnings (loss) from continuing operations 107.5 293.0 289.2 (169.9) 519.8 Other income (expenses): Interest expense (35.3) (3.7) (15.1) — (54.1) Loss on purchase price hedges (379.4) — — — (379.4) Loss on early extinguishment of debt (4.1) — —— (4.1) Management fee income (expense) 52.5 (46.8) (5.7) — — Other income (expense) — net 101.4 (10.9) (93.5) — (3.0) Total other expenses (264.9) (61.4) (114.3) — (440.6) Earnings (loss) from continuing operations before taxes on earnings and minority interest (157.4) 231.6 174.9 (169.9) 79.2 Provision (benefit) for taxes on earnings (146.7) 102.7 45.5 — 1.5 Earnings (loss) from continuing operations before minority interest (10.7) 128.9 129.4 (169.9) 77.7 Minority interest, net of income taxes — — (1.9) — (1.9) Net earnings (loss) from continuing operations $ (10.7) $ 128.9 $ 131.3 $(169.9) $ 79.6 Discontinued operations: Earnings from discontinued operations, net of income taxes — 35.1 (178.5) — (143.4) Gain on sale of discontinued operations, net of income taxes — 53.1 — — 53.1 Net earnings (loss) $ (10.7) $ 217.1 $ (47.2) $(169.9) $ (10.7)

68 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 29 CHKSUM Content: 23025 Layout: 45106 Graphics: No Graphics CLEAN

Condensed Consolidating Statement of Operations For the year ended December 31, 2007

Non- Guarantor Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $2,097.4 $2,091.2 $(504.6) $3,684.0 Costs and expenses: Cost of sales — 1,658.5 1,668.6 (504.6) 2,822.5 Engineering, selling and administrative expenses 47.1 163.2 167.6 — 377.9 Amortization expense — 1.9 3.9 — 5.8 Gain on sale of parts line — (3.3) —— (3.3) Pension settlements 1.3 — 4.0 — 5.3 Equity in (earnings) loss of subsidiaries (303.2) (5.2) — 308.4 — Total costs and expenses (254.8) 1,815.1 1,844.1 (196.2) 3,208.2 Operating earnings (loss) from continuing operations 254.8 282.3 247.1 (308.4) 475.8 Other income (expenses): Interest expense (22.6) (4.8) (8.8) — (36.2) Loss on debt extinguishment (12.5) — — — (12.5) Management fee income (expense) 59.5 (60.3) 0.8 — — Other income (expense) — net 70.6 (18.7) (42.1) — 9.8 Total other income (expenses) 95.0 (83.8) (50.1) — (38.9) Earnings (loss) from continuing operations before taxes on earnings (loss) 349.8 198.5 197.0 (308.4) 436.9 Provision for taxes on earnings 13.1 54.5 54.5 — 122.1 Earnings (loss) from continuing operations 336.7 144.0 142.5 (308.4) 314.8 Discontinued operations: Earnings from discontinued operations, net of income taxes — 20.7 1.2 — 21.9 Net earnings (loss) $ 336.7 $ 164.7 $ 143.7 $(308.4) $ 336.7

The Manitowoc Company, Inc. — 2008 Form 10-K 69

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 30 CHKSUM Content: 37289 Layout: 37857 Graphics: No Graphics CLEAN

Condensed Consolidating Statement of Operations For the year ended December 31, 2006

Non- Guarantor Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $1,596.9 $1,366.3 $(312.4) $2,650.8 Costs and expenses: Cost of sales — 1,267.9 1,084.0 (312.4) 2,039.5 Engineering, selling and administrative expenses 41.4 141.4 134.1 — 316.9 Amortization expense — 1.5 1.8 — 3.3 Equity in (earnings) loss of subsidiaries (176.9) 1.5 — 175.4 — Total costs and expenses (135.5) 1,412.3 1,219.9 (137.0) 2,359.7 Operating earnings (loss) from continuing operations 135.5 184.6 146.4 (175.4) 291.1 Other income (expenses): Interest expense (34.0) (1.3) (11.0) — (46.3) Management fee income (expense) 39.8 (39.8) —— — Loss on debt extinguishment (14.4) — — — (14.4) Other income (expense) — net 33.4 (20.7) (9.3) — 3.4 Total other income (expenses) 24.8 (61.8) (20.3) — (57.3) Earnings (loss) from continuing operations before taxes on earnings (loss) 160.3 122.8 126.1 (175.4) 233.8 Provision (benefit) for taxes on earnings (5.9) 44.1 36.6 — 74.8 Earnings (loss) from continuing operations 166.2 78.7 89.5 (175.4) 159.0 Discontinued operations: Earnings from discontinued operations, net of income taxes — 7.2 —— 7.2 Net earnings (loss) $ 166.2 $ 85.9 $ 89.5 $(175.4) $ 166.2

70 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 31 CHKSUM Content: 41467 Layout: 45106 Graphics: No Graphics CLEAN

Condensed Consolidating Balance Sheet As of December 31, 2008 Non- Guarantor Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ 2.1 $ 60.6 $ 110.3 $ — $ 173.0 Marketable securities 2.6 — — — 2.6 Restricted cash 5.1 — — — 5.1 Accounts receivable — net 0.3 127.6 480.3 — 608.2 Inventories — net — 286.5 638.8 — 925.3 Deferred income taxes 53.5 — 84.6 — 138.1 Other current assets 95.9 12.4 48.9 — 157.2 Current assets of discontinued operations — — 124.8 — 124.8 Total current assets 159.5 487.1 1,487.7 — 2,134.3 Property, plant and equipment — net 11.5 226.9 490.4 — 728.8 Goodwill — 278.7 1,611.8 — 1,890.5 Other intangible assets — net — 69.6 939.4 — 1,009.0 Deferred income taxes 25.0 — (25.0) — — Other non-current assets 143.1 12.8 23.8 — 179.7 Long-term assets of discontinued operations — — 123.1 — 123.1 Investment in affiliates 2,460.0 23.6 — (2,483.6) — Total assets $ 2,799.1 $1,098.7 $4,651.2 $(2,483.6) $6,065.4 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable and accrued expenses $ 66.6 $ 319.5 $ 820.2 $ — $1,206.3 Short-term borrowings and current portion of long-term debt 114.6 — 67.7 — 182.3 Customer advances — 23.6 24.9 — 48.5 Product warranties — 40.2 61.8 — 102.0 Product liabilities — 23.3 11.1 — 34.4 Current liabilities of discontinued operations — — 44.6 — 44.6 Total current liabilities 181.2 406.6 1,030.3 — 1,618.1 Non-Current Liabilities: Long-term debt, less current portion 2,458.8 — 14.2 — 2,473.0 Deferred income taxes — — 283.7 — 283.7 Pension obligations 9.6 3.2 35.2 — 48.0 Postretirement health and other benefit obligations 51.6 — 4.3 — 55.9 Intercompany (1,248.7) (1,156.2) 2,404.9 — — Long-term deferred revenue — 9.5 46.8 — 56.3 Other non-current liabilities 46.8 16.3 167.5 — 230.6 Total non-current liabilities 1,318.1 (1,127.2) 2,956.6 — 3,147.5 Stockholders’ equity 1,299.8 1,819.3 664.3 (2,483.6) 1,299.8 Total liabilities and stockholders’ equity $ 2,799.1 $ 1,098.7 $4,651.2 $(2,483.6) $6,065.4

The Manitowoc Company, Inc. — 2008 Form 10-K 71

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 32 CHKSUM Content: 45282 Layout: 37857 Graphics: No Graphics CLEAN

Condensed Consolidating Balance Sheet As of December 31, 2007 Non- Guarantor Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ 195.0 $ 25.2 $ 146.7 $ — $ 366.9 Marketable securities 2.5 — — — 2.5 Restricted cash 15.5 — 1.2 — 16.7 Accounts receivable — net 0.5 107.0 309.2 — 416.7 Inventories — net — 201.5 389.5 — 591.0 Deferred income taxes 46.6 — 19.5 — 66.1 Other current assets 0.7 12.9 47.5 — 61.1 Current assets of discontinued operation — 54.6 — — 54.6 Total current assets 260.8 401.2 913.6 — 1,575.6 Property, plant and equipment — net 9.5 178.7 280.7 — 468.9 Goodwill — 278.7 192.9 — 471.6 Other intangible assets — net — 71.6 129.0 — 200.6 Deferred income taxes 25.0 — 2.6 — 27.6 Other non-current assets 37.9 9.1 8.8 — 55.8 Long-term assets of discontinued operation — 71.3 — — 71.3 Investment in affiliates 932.4 8.4 — (940.8) — Total assets $1,265.6 $1,019.0 $1,527.6 $(940.8) $2,871.4 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable and accrued expenses $ 32.0 $ 262.0 $ 551.7 $ — $ 845.7 Short-term borrowings and current portion of long-term debt — — 13.1 — 13.1 Product warranties — 38.5 41.9 — 80.4 Product liabilities — 30.1 4.6 — 34.7 Current liabilities of discontinued operation — 100.7 — — 100.7 Total current liabilities 32.0 431.3 611.3 — 1,074.6 Non-Current Liabilities: Long-term debt, less current portion 150.1 — 67.4 — 217.5 Pension obligations 6.4 3.3 15.3 — 25.0 Postretirement health and other benefit obligations 50.2 — 1.1 — 51.3 Intercompany (370.3) (231.5) 601.8 — — Long-term deferred revenue — 16.6 44.0 — 60.6 Other non-current liabilities 47.3 16.0 29.2 — 92.5 Total non-current liabilities (116.3) (195.6) 758.8 — 446.9 Stockholders’ equity 1,349.9 783.3 157.5 (940.8) 1,349.9 Total liabilities and stockholders’ equity $1,265.6 $1,019.0 $1,527.6 $(940.8) $2,871.4

72 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 33 CHKSUM Content: 32558 Layout: 45106 Graphics: No Graphics CLEAN

Condensed Consolidating Statement of Cash Flows For the year ended December 31, 2008

Non- Subsidiary Guarantor Parent Guarantors Subsidiaries Eliminations Consolidated Net cash provided by (used for) operating activities of continuing operations $ 235.9 $ 119.5 $ 101.0 $(169.9) $ 286.5 Cash provided by (used for) operating activities of discontinued operations — 26.0 (3.5) — 22.5 Net cash provided by (used for) operating activities 235.9 145.5 97.5 (169.9) 309.0 Cash Flows from Investing: Business acquisitions, net of cash acquired — — (2,030.6) — (2,030.6) Settlement of hedges related to acquisitions (379.4) — — — (379.4) Capital expenditures (3.6) (82.4) (64.3) — (150.3) Restricted cash 10.5 — 1.1 — 11.6 Proceeds from sale of property, plant and equipment — 0.7 9.3 — 10.0 Proceeds from sale of business — 118.5 — — 118.5 Purchase of marketable securities (0.1) — —— (0.1) Intercompany investments (2,357.1) (143.6) 2,330.8 169.9 — Net cash provided by (used for) investing activities of continuing operations (2,729.7) (106.8) 246.3 169.9 (2,420.3) Net cash used for investing activities of discontinued operations — (4.9) —— (4.9) Net cash provided by (used for) investing activities (2,729.7) (111.7) 246.3 169.9 (2,425.2) Cash Flows from Financing: Proceeds from long-term debt 2,695.0 — 74.3 — 2,769.3 Payments on long-term debt (301.4) — (392.4) — (693.8) Payments on revolving credit facility — net — — (54.6) — (54.6) Payments on notes financing — net — (0.9) (2.9) — (3.8) Debt issuance costs (90.8) — — — (90.8) Dividends paid (10.4) — — — (10.4) Exercises of stock options 8.5 — —— 8.5 Net cash provided by (used for) financing activities of continuing operations 2,300.9 (0.9) (375.6) — 1,924.4 Net cash provided by financing activities of discontinued operations — 2.5 —— 2.5 Net cash provided by (used for) financing activities 2,300.9 1.6 (375.6) — 1,926.9 Effect of exchange rate changes on cash — — (4.6) — (4.6) Net increase (decrease) in cash and cash equivalents (192.9) 35.4 (36.4) — (193.9) Balance at beginning of period 195.0 25.2 146.7 — 366.9 Balance at end of period $ 2.1 $ 60.6 $ 110.3 $ — $ 173.0

The Manitowoc Company, Inc. — 2008 Form 10-K 73

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 34 CHKSUM Content: 163 Layout: 37857 Graphics: No Graphics CLEAN

Condensed Consolidating Statement of Cash Flows For the year ended December 31, 2007

Non- Subsidiary Guarantor Parent Guarantors Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities of continuing operations $ 366.9 $ 146.4 $ 10.7 $(308.4) $ 215.6 Cash provided by operating activities of discontinued operations — 27.2 1.2 — 28.4 Net cash provided by (used in) operating activities 366.9 173.6 11.9 (308.4) 244.0 Cash Flows from Investing: Business acquisition — (15.9) (64.0) — (79.9) Capital expenditures (2.4) (47.9) (62.5) — (112.8) Restricted cash (0.5) — (1.1) — (1.6) Proceeds from sale of property, plant and equipment — 0.3 9.5 — 9.8 Proceeds from sale of parts product line — 4.8 — — 4.8 Purchase of marketable securities (0.1) — — — (0.1) Intercompany investments (250.8) (103.6) 46.0 308.4 — Net cash provided by (used for) investing activities of continuing operations (253.8) (162.3) (72.1) 308.4 (179.8) Net cash used for investing activities of discontinued operations — (6.8) — — (6.8) Net cash provided by (used for) investing activities (253.8) (169.1) (72.1) 308.4 (186.6) Cash Flows from Financing: Proceeds from long-term debt — — 19.8 — 19.8 Proceeds from (payments on revolving credit facility) — — 56.7 — 56.7 Payments on long-term debt (113.7) — (9.8) — (123.5) Payments on notes financing — (3.4) (0.9) — (4.3) Net proceeds of equity offering 157.1 — — — 157.1 Dividends paid (9.5) — — — (9.5) Exercises of stock options 27.6 — — — 27.6 Net cash used for financing activities 61.5 (3.4) 65.8 — 123.9 Effect of exchange rate changes on cash — — 10.7 — 10.7 Net increase (decrease) in cash and cash equivalents 174.6 1.1 16.3 — 192.0 Balance at beginning of period 20.4 24.1 130.4 — 174.9 Balance at end of period $ 195.0 $ 25.2 $146.7 $ — $ 366.9

74 The Manitowoc Company, Inc. — 2008 Form 10-K

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 35 CHKSUM Content: 38562 Layout: 45106 Graphics: No Graphics CLEAN

Condensed Consolidating Statement of Cash Flows For the year ended December 31, 2006 (In millions)

Non- Subsidiary Guarantor Parent Guarantors Subsidiaries Eliminations Consolidated Net cash provided by (used for) operating activities of continuing operations $ 201.9 $ 76.6 $132.6 $(175.4) $ 235.7 Cash provided by operating activities of discontinued operations — 57.3 — — 57.3 Net cash provided by (used for) operating activities 201.9 133.9 132.6 (175.4) 293.0 Cash Flows from Investing: Business acquisition — (48.4) — — (48.4) Capital expenditures (1.8) (24.1) (38.5) — (64.4) Restricted cash (15.1) — — — (15.1) Proceeds from sale of property, plant and equipment — 0.7 9.6 — 10.3 Purchase of marketable securities (0.1) — — — (0.1) Intercompany investments (106.5) (38.3) (30.6) 175.4 — Net cash provided by (used for) investing activities of continuing operations (123.5) (110.1) (59.5) 175.4 (117.7) Net cash used for investing activities of discontinued operations — (3.1) — — (3.1) Net cash provided by (used for) investing activities (123.5) (113.2) (59.5) 175.4 (120.8) Cash Flows from Financing: Proceeds from long-term debt — — 20.1 — 20.1 Payments on long-term debt (223.5) — (33.2) — (256.7) Payments on notes revolving credit facility (4.3) — — — (4.3) Payments on notes financing — (6.3) (9.1) — (15.4) Debt issuance costs (0.2) — — — (0.2) Dividends paid (8.6) — — — (8.6) Exercises of stock options 32.2 — — — 32.2 Net cash used for financing activities (204.4) (6.3) (22.2) — (232.9) Effect of exchange rate changes on cash — — 6.1 — 6.1 Net increase (decrease) in cash and cash equivalents (126.0) 14.4 57.0 — (54.6) Balance at beginning of period 146.4 9.7 73.4 — 229.5 Balance at end of period $ 20.4 $ 24.1 $130.4 $ — $ 174.9

The Manitowoc Company, Inc. — 2008 Form 10-K 75

JOB: 09-1275-2 CYCLE#;BL#: 6; 0 TRIM: 8.5" x 11" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: none V1.5 Merrill Corp - The Manitowoc Company_ Inc. 10-K FYE 12-31-2008 10-K ED Version ED | bjasper | 13-Mar-09 13:02 | 09-1275-2.da | Sequence: 36 CHKSUM Content: 49006 Layout: 56268 Graphics: No Graphics CLEAN

23. Quarterly Financial Data (Unaudited)

The following table presents quarterly financial data for 2008 and 2007. The 2007 quarterly financial data has been adjusted for the Marine segment sale completed on December 31, 2008.

2008 2007 First Second Third Fourth First Second Third Fourth Net sales $988.5 $1,191.1 $1,106.8 $1,216.6 $ 779.8 $ 933.1 $925.2 $1,045.9 Gross profit 242.8 287.1 243.7 242.2 183.9 226.3 211.8 239.5 Earnings from continuing operations 95.3 121.2 (37.8)* (99.1)* 60.2 91.2 71.1 92.3 Discontinued operations: Earnings (loss) from discontinued operations, net of income taxes 7.3 12.7 11.7 (175.1) 3.9 6.3 4.8 6.9 Gain on sale of discontinued operations, net of income taxes — — — 53.1 — — — — Net earnings (loss) $102.6 $ 133.9 $ (26.1) $ (221.1) $ 64.1 $ 97.5 $ 75.9 $ 99.2 Basic earnings per share: Earnings from continuing operations $ 0.73 $ 0.93 $ (0.29) $ (0.76) $ 0.49 $ 0.73 $ 0.57 $ 0.74 Discontinued operations: Earnings (loss) from discontinued operations, net of income taxes 0.06 0.10 0.09 (1.35) 0.03 0.05 0.04 0.06 Gain on sale of discontinued operations, net of income taxes — — — 0.41 — — — — Net earnings $ 0.79 $ 1.03 $ (0.20) $ (1.70) $ 0.52 $ 0.78 $ 0.61 $ 0.80 Diluted earnings per share: Earnings from continuing operations $ 0.72 $ 0.92 $ (0.29) $ (0.76) $ 0.47 $ 0.71 $ 0.56 $ 0.71 Discontinued operations: Earnings (loss) from discontinued operations, net of income taxes 0.06 0.10 0.09 (1.35) 0.03 0.05 0.04 0.05 Gain on sale of discontinued operations, net of income taxes — — — 0.41 — — — — Net earnings $ 0.78 $ 1.01 $ (0.20) $ (1.70) $ 0.50 $ 0.76 $ 0.59 $ 0.76 Dividends per common share $ 0.02 $ 0.02 $ 0.02 $ 0.02 $0.0175 $0.0175 $ 0.02 $ 0.02

* Includes expense, net of tax, of $112.3 million and $120.4 million recorded in the 3rd and 4th quarters, respectively, in relation to hedges on the purchase price of Enodis.

24. Subsequent Events In February of 2009 the company announced the lay-off of 450 production employees at its Crane Segment manufac- In January 2009 the company entered into new interest rate turing facility in Shady Grove, Pennsylvania. This action was hedging transactions related to its Term Loan A and Term taken in response to the continued economic weakness Loan B facilities. These hedge transactions fixed the interest affecting the demand for our crane products. rate paid for 50 percent of each of these facilities for a In February of 2009 a Settlement Agreement was reached weighted average life of at least three years as required by in the Consolidated Industries Corporation matter, related to the terms of the New Credit Agreement. A notional amount of a former subsidiary of Enodis, which was submitted to the Term Loan A borrowings equal to $512.5 million was fixed at a Bankruptcy Court. Any objections to the Settlement Agree- London Interbank Offered (LIBO) rate plus the 3.25 basis point ment must be filed no later than March 5, 2009. We do not spread at 5.39%. A notional amount of Term Loan B borrow- anticipate objections to made to the Settlement Agreement, ings equal to $600.0 million was fixed at a LIBO rate plus the and we will pay the agreed amount of $69.5 million plus 3.50 basis point spread at 7.13%. Both interest rate hedges interest from February 1, 2009 when the Settlement Agree- for the Term Loan A and Term Loan B are amortizing swaps ment is approved by the Bankruptcy Court. As of that have an aggregate weighted average life of three years. December 31, 2008, the company has accrued $72.0 million The remaining unhedged 50% portions of the Term Loans A related to this matter in accounts payable and other accrued and B as well as the revolving credit facility and Term Loan X expenses in the Consolidated Balance Sheet. See further continue to bear interest at a variable interest rate plus the discussion of the Consolidated Industries Corporation mat- applicable spread according to the New Credit Agreement. ter at Note 16, “Contingencies and Significant Estimates.”

76 The Manitowoc Company, Inc. — 2008 Form 10-K

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH Because of its inherent limitations, internal control over ACCOUNTANTS ON ACCOUNTING AND FINANCIAL financial reporting may not prevent or detect misstate- DISCLOSURE ments. Also, projections of any evaluation of effectiveness None. to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, ITEM 9A. CONTROLS AND PROCEDURES or that the degree of compliance with the policies or procedures may deteriorate. Conclusion Regarding the Effectiveness of Disclosure The effectiveness of the company’s internal control over Controls and Procedures financial reporting as of December 31, 2008, has been The company’s management, with the participation of the audited by PricewaterhouseCoopers LLP, an independent company’s Chief Executive Officer and Chief Financial Offi- registered public accounting firm, as stated in their report cer, have evaluated the effectiveness of the company’s dis- which appears herein. closure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Changes in Internal Control Over Financial Reporting Act of 1934, as amended (“the Exchange Act”)) as of the end There have been no changes in our internal control over of the period covered by this report. Based on such evalua- financial reporting during the last fiscal quarter of 2008 that tion, the company’s Chief Executive Officer and Chief Finan- have materially affected, or are reasonably likely to materially cial Officer have concluded that, as of the end of such affect, our internal control over financial reporting. period, the company’s disclosure controls and procedures are effective in recording, processing, summarizing, and ITEM 9B. OTHER INFORMATION reporting, on a timely basis, information required to be dis- None. closed by the company in the reports that it files or submits under the Exchange Act, and that such information is accu- ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE mulated and communicated to the Chief Executive Officer REGISTRANT and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. The information required by this item is incorporated by reference from the sections of the 2009 Proxy Statement cap- Management’s Report on Internal Control Over tioned “Section 16(a) Beneficial Ownership Reporting Financial Reporting Compliance,” “Audit Committee” and “Election of Directors.” The company’s management is responsible for establishing See also “Executive Officers of the Registrant” in Part I and maintaining adequate internal control over financial hereof, which is incorporated herein by reference. reporting, as such term is defined in Exchange Act The company has a Global Ethics Policy and other poli- Rule 13a-15(f). The company’s management, with the par- cies relating to business conduct, that pertain to all employ- ticipation of the company’s Chief Executive Officer and ees, which can be viewed at the company’s website Chief Financial Officer, has evaluated the effectiveness of www.manitowoc.com. The company has adopted a code of the company’s internal control over financial reporting ethics that applies to the company’s principal executive offi- based on the framework in Internal Control-Integrated cer, principal financial officer, and controller, which is part of Framework issued by the Committee of Sponsoring Organi- the company’s Global Ethics Policy and other policies zations of the Treadway Commission. Based on this evalua- related to business conduct. tion, the company’s management has concluded that, as of December 31, 2008, the company’s internal control over ITEM 11. EXECUTIVE COMPENSATION financial reporting was effective. Management has excluded certain elements of the internal The information required by this item is incorporated by refer- control over financial reporting of Enodis from its assessment ence from the sections of the 2009 Proxy Statement captioned of internal control over financial reporting as of December 31, “Compensation of Directors,” “Executive Compensation,” 2008, because it was acquired by the company in a purchase “Report of the Compensation and Benefits Committee on business combination during 2008. Subsequent to the acquisi- Executive Compensation,” and “Contingent Employment tion, certain elements of Enodis’ internal control over financial Agreements.” reporting and related processes were integrated into the company’s existing systems and internal control over financial ITEM 12. SECURITY OWNERSHIP OF CERTAIN reporting. Those controls that were not integrated have been BENEFICIAL OWNERS AND MANAGEMENT excluded from management’s assessment of the effectiveness of internal control over financial reporting as of The information required by this item is incorporated by ref- December 31, 2008. The excluded elements represent con- erence from the sections of the 2009 Proxy Statement cap- trols over accounts that are 14% of consolidated total assets tioned “Ownership of Securities” and the subsection and 4% of consolidated net sales as of and for the year ended captioned “Equity Compensation Plans.” December 31, 2008.

The Manitowoc Company, Inc. — 2008 Form 10-K 77

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated by refer- The information required by this item is incorporated by reference from the section of the 2009 Proxy Statement captioned ence from the section of the 2009 Proxy Statement captioned “Other Information — Independent Public Accountants.” “Governance of the Board and its Committees — Governance of the Company.”

78 The Manitowoc Company, Inc. — 2008 Form 10-K

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PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this Report. (1) Financial Statements: The following Consolidated Financial Statements are filed as part of this report under Item 8, “Financial Statements and Supplementary Date.”

Report of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006 Consolidated Balance Sheets as of December 31, 2008 and 2007 Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006 Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the years ended December 31, 2008, 2007 and 2006 Notes to Consolidated Financial Statements

(2) Financial Statement Schedules: Financial Statement Schedule for the years ended December 31, 2008, 2007, and 2006

Schedule Description Filed Herewith II Valuation and Qualifying Accounts X

All other financial statement schedules not listed have been omitted since the required information is included in the Consolidated Financial Statements or the Notes thereto, or is not applicable or required under rules of Regulation S-X. (b) Exhibits: See Index to Exhibits immediately following the signature page of this report, which is incorporated herein by reference.

THE MANITOWOC COMPANY, INC AND SUBSIDIARIES Schedule II: Valuation and Qualifying Accounts For The Years Ended December 31, 2006, 2007 and 2008 (dollars in millions)

Balance at Impact of Beginning Acquisition Charge to Foreign Balance at of of Costs and Utilization Exchange End of Year Business Expenses of Reserve Rates Year Year End December 31, 2006 Allowance for doubtful accounts $23.8 $ 0.2 $ 6.0 $ (4.0) $ 1.3 $27.3 Inventory obsolescence reserve $36.3 $ 0.6 $16.8 $(11.3) $ 2.0 $44.4 Deferred tax valuation allowance $ 7.4 $ — $ 2.5 $ (0.7) $ 0.5 $ 9.7 Year End December 31, 2007 Allowance for doubtful accounts $27.3 $ 0.1 $ 4.4 $ (7.3) $ 1.0 $25.5 Inventory obsolescence reserve $44.4 $ — $12.1 $(15.6) $ 1.7 $42.6 Deferred tax valuation allowance $ 9.7 $ — $ — $ (0.1) $ 0.2 $ 9.8 Year End December 31, 2008 Allowance for doubtful accounts $25.5 $12.6 $ 5.2 $ (6.1) $(0.8) $36.4 Inventory obsolescence reserve $42.6 $24.6 $22.9 $(18.8) $(1.2) $70.1 Deferred tax valuation allowance $ 9.8 $30.5 $ 1.3 $ (1.3) $(0.3) $40.0

The Manitowoc Company, Inc. — 2008 Form 10-K 79

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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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: March 2, 2009

The Manitowoc Company, Inc. (Registrant)

/S/ GLEN E. TELLOCK Glen E. Tellock Chairman, President and Chief Executive Officer

/S/ CARL J. LAURINO Carl J. Laurino Senior Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following per- sons constituting a majority of the Board of Directors on behalf of the registrant and in the capacities and on the dates indicated:

/s/ GLEN E. TELLOCK March 2, 2009 Glen E. Tellock, Chairman, President and Chief Executive Officer

/s/ CARL J. LAURINO March 2, 2009 Carl J. Laurino, Senior Vice President and Chief Financial Officer

/s/ KEITH D. NOSBUSCH March 2, 2009 Keith D. Nosbusch, Director

/s/ DEAN H. ANDERSON March 2, 2009 Dean H. Anderson, Director

/s/ ROBERT C. STIFT March 2, 2009 Robert C. Stift, Director

/s/ JAMES L. PACKARD March 2, 2009 James L. Packard, Director

/s/ DANIEL W. D UVAL March 2, 2009 Daniel W. Duval, Director

/s/ VIRGIS W. C OLBERT March 2, 2009 Virgis W. Colbert, Director

/s/ KENNETH W. K RUEGER March 2, 2009 Kenneth W. Krueger, Director

/s/ CYNTHIA M. EGNOTOVICH March 2, 2009 Cynthia M. Egnotovich, Director

80 The Manitowoc Company, Inc. — 2008 Form 10-K

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THE MANITOWOC COMPANY, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008 INDEX TO EXHIBITS

Filed/Furnished Exhibit No. Description Herewith 3.1 Amended and Restated Articles of Incorporation, as amended on November 5, 1984, May 5, 1998, and March 31, 2006 filed as Exhibit 3.1 to the company’s Annual Report on Form 10-K for the year ended December 31, 2006 3.2 Restated By-Laws (as amended through May 3, 2005) (filed as Exhibit 3. (ii) to the company’s current report on Form 8-K dated May 3, 2005 and incorporated herein by reference). 4.1 Rights Agreement dated March 21, 2007 between the Registrant and Computershare Trust Company, N.A. (filed as Exhibit 4.1 to the company’s Report on Form 8-K dated as of March 21, 2007 and incorporated herein by reference). 4.2(a)* Indenture, dated August 8, 2002, by and among The Manitowoc Company, Inc., the Guarantors named therein, and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.1 to the company’s current Report on Form 8-K dated as of August 8, 2002 and incorporated herein by reference). 4.2(b) Indenture, dated as of November 6, 2003, by and between The Manitowoc Company, Inc., the Guarantors named therein, and BNY Midwest Trust Company, as Trustee (filed as Exhibit 4.1 to the company’s current Report on Form 8-K dated as of November 6, 2003 and incorporated herein by reference). 4.4 Articles III, V, and VIII of the Amended and Restated Articles of Incorporation (see Exhibit 3.1 above) 4.5 Amended and Restated Credit Agreement dated as of December 14, 2006 by and among The Manitowoc Company, Inc., as Borrower, the lenders party thereto, and JP Morgan Chase Bank, N.A., as Agent (filed as Exhibit 4.5 to the company’s Annual Report on Form 10-K for the year ended December 31, 2006 and incorporated herein by reference) as amended on May 31, 2007, with such amendment filed as Exhibit 4.5 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and incorporated herein by reference.

4.6 Amended and Restated Credit Agreement dated as of August 25, 2008 by and among The Manitowoc Company, Inc., as X(1) Borrower, the lenders party thereto, and JP Morgan Chase Bank, N.A., as Agent (filed as Exhibit 4.1 to the company’s Quarterly Report on Form 10-Q for the period ended September 30, 2008 and incorporated herein by reference) as amended on December 19, 2008, with such amendment filed as Exhibit 4.6 to this Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

10.1** The Manitowoc Company, Inc. Deferred Compensation Plan effective August 20, 1993, as amended (filed as Exhibit 10.1 X(1) to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and incorporated herein by reference) as amended and restated through December 31, 2008, with such Amended and Restated plan filed as exhibit 10.1 to this Annual Report on Form 10-K for the fiscal year ended December 31, 2008. 10.2** The Manitowoc Company, Inc. Management Incentive Compensation Plan (Economic Value Added (EVA) Bonus Plan Effective July 4, 1993, as amended (filed as Exhibit 10.2 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and incorporated herein by reference).

10.2(a)** Short-Term Incentive Plan, Effective January 1, 2005, as amended on February 27, 2007, effective January 1, 2007 and X(1) as further amended on February 15, 2008, effective January 1, 2008 (filed as Exhibit 10.2(a) to this annual report on Form 10-K for the fiscal year ended December 31, 2007 and incorporated herein by reference). 10.3(a)** Form of Contingent Employment Agreement between the company and the following executive officers of the Company: Terry D. Growcock, Glen E. Tellock, Carl J. Laurino, Maurice D. Jones, Thomas G. Musial, and Dean J. Nolden (filed as Exhibit 10(a) to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference). 10.3(b)** Form of Contingent Employment Agreement between the company and the following executive officers of the company and certain other employees of the company: Eric P. Etchart, Robert P. Herre, and Michael Kachmer (filed as Exhibit 10(b) to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference). 10.4** Form of Indemnity Agreement between the company and each of the directors, executive officers and certain other employees of the company (filed as Exhibit 10(b) to the company’s Annual Report on Form 10-K for the fiscal year ended July 1, 1989 and incorporated herein by reference).

The Manitowoc Company, Inc. — 2008 Form 10-K 81

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Filed/Furnished Exhibit No. Description Herewith 10.5** Supplemental Retirement Agreement between Fred M. Butler and the company dated March 15, 1993 (filed as Exhibit 10(e) to the company’s Annual Report on Form 10-K for the fiscal year ended July 3, 1993 and incorporated herein by reference). 10.6(a)** Supplemental Retirement Agreement between Robert K. Silva and the company dated January 2, 1995 (filed as Exhibit 10 to the company’s Report on Form 10-Q for the transition period ended December 31. 1994 and incorporated herein by reference). 10.6(b)** Restatement to clarify Mr. Silva’s Supplemental Retirement Agreement dated March 31, 1997 (filed as Exhibit 10.6(b) to the company’s Report on Form 10-K for the fiscal year ended December 31, 1996 and incorporated herein by reference).

10.6(c)** Supplemental Retirement Plan dated May 2000, as amended and restated through December 31, 2008, with such X(1) Amended and Restated plan filed as Exhibit 10.6(c) to this Annual Report on Form 10-K for the fiscal year ended December 31, 2008. 10.7(a)** The Manitowoc Company, Inc. 1995 Stock Plan, as amended (filed as Exhibit 10.7(a) to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and incorporated herein by reference). 10.7(b)** The Manitowoc Company, Inc. 1999 Non-Employee Director Stock Option Plan, as amended (filed as Exhibit 10.7(b) to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and incorporated herein by reference).

10.7(c)** The Manitowoc Company, Inc. 2003 Incentive Stock and Awards Plan, as amended on December 17, 2208, effective X(1) January 1, 2005, with such amended plan filed as Exhibit 10.7(c) to this Annual Report on Form 10-K for the fiscal year ended December 31, 2008. 10.7(d)** Grove Investors, Inc. 2001 Stock Incentive Plan (filed as Exhibit 99.1 to the company’s Registration Statement on Form S-8, filed on September 13, 2002 (Registration No. 333-99513) and incorporated herein by reference).

10.7(e)** The Manitowoc Company, Inc. 2004 Non-Employee Director Stock and Award Plan, as amended on December 17, 2008, X(1) effective January 1, 2005, with such amended plan filed as Exhibit 10.7(e) to this Annual Report on Form 10-K for the fiscal year ended December 31, 2008. 10.8** The Manitowoc Company, Inc. Incentive Stock Option Agreement with Vesting Provisions (filed as Exhibit 10.1 to the company’s Report on Form 8-K dated as of February 25, 2005 and incorporated herein by reference). 10.9** The Manitowoc Company, Inc. Non-Qualified Stock Option Agreement with Vesting Provisions (filed as Exhibit 10.2 to the company’s Report on Form 8-K dated as of February 25, 2005 and incorporated herein by reference). 10.10** The Manitowoc Company, Inc. Award Agreement for Restricted Stock Awards under The Manitowoc Company, Inc. 2003 Incentive Stock and Awards Plan, amended February 27, 2007(filed as Exhibit 10.10 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and incorporated herein by reference). 10.11** The Manitowoc Company, Inc. Award Agreement for the 2004 Non-employee Director Stock and Awards Plan, as amended effective May 3, 2006 and February 27, 2007 (filed as Exhibit 10.11 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and incorporated herein by reference). 10.12 Amended and Restated Receivable Purchase Agreement among Manitowoc Funding , LLC, as Seller, The Manitowoc Company, Inc., as Servicer, Hannover Funding Company LLC, as Purchaser, and Norddeutsche Landesbank Girozentrale, as Agent, dated as of December 21, 2006 (filed as Exhibit 10.1 on the company’s Current Report on Form 8-K dated as of December 22, 2006 and incorporated herein by reference) as amended on August 15, 2007 with such amendment filed as Exhibit 10.12 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and incorporated herein by reference. 10.13 Purchase Agreement, dated as of August 1, 2008, by and among The Manitowoc Company, Inc., MMG Holding Co., LLC, Fincantieri-Cantieri Navali Italiani S.p.A. and Fincantieri Marine Group Holdings Inc. (filed as Exhibit 2.1 to the company’s Report on Form 8-K dated as of August 1, 2008 and incorporated herein by reference).

10.14 Amendment No. 1 to the Purchase Agreement , dated as of December 31, 2008, by and among The Manitowoc Company, X(1) Inc., MMG Holding Co., LLC, Fincantieri-Cantieri Navali Italiani S.p.A. and Fincantieri Marine Group Holdings Inc. 11 Statement regarding computation of basic and diluted earnings per share (see Note 13 to the 2007 Consolidated Financial Statements included herein).

12.1 Statement of Computation of Ratio of Earnings to Fixed Charges X(1)

82 The Manitowoc Company, Inc. — 2008 Form 10-K

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Filed/Furnished Exhibit No. Description Herewith 21 Subsidiaries of The Manitowoc Company, Inc. X(1)

23.1 Consent of PricewaterhouseCoopers LLP, the company’s Independent Registered Public Accounting Firm 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)

(1) Filed Herewith (2) Furnished Herewith * Pursuant to Item 601(b)(2) of Regulation S-K, the Registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any unfiled exhibits or schedules to such documents. ** Management contracts and executive compensation plans and arrangements required to be filed as exhibits pursuant to Item 15(c) of Form 10-K.

The Manitowoc Company, Inc. — 2008 Form 10-K 83

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1103637_Cover03637_Cover 2 33/19/09/19/09 77:58:37:58:37 PPMM Heavy Lifting The Manitowoc Company, Inc. The Manitowoc Company, Inc. 2008 Annual Report A mega-crane like the 31000 2400 South 44th Street The Manitowoc Company, Inc. 2008 Annual Report requires a mega-sized load P.O. Box 66 block. Designed and manufac- Manitowoc, WI 54221-0066 tured in the Netherlands, the Changing the Balance 31000’s load block is 12 feet wide, measures 30 feet tall, and weighs 110,000 pounds. It is equipped with 22 sheaves that are reeved with two-inch diameter wire rope to provide the 44 parts of line the 31000 requires for its 2,500-ton maximum capacity.