MANITOWOC CO INC, 10-K filed on 2/14/2020
Annual Report
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Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Jan. 31, 2020
Jun. 28, 2019
Cover [Abstract]      
Entity Registrant Name The Manitowoc Company, Inc.    
Entity Central Index Key 0000061986    
Trading Symbol MTW    
Document Type 10-K    
Document Period End Date Dec. 31, 2019    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 621.3
Entity Shares Outstanding   35,376,787  
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Entity File Number 1-11978    
Entity Tax Identification Number 39-0448110    
Entity Address, Address Line One 11270 West Park Place    
Entity Address, Address Line Two Suite 1000    
Entity Address, City or Town Milwaukee    
Entity Address, State or Province WI    
Entity Address, Postal Zip Code 53224    
City Area Code 414    
Local Phone Number 760-4600    
Entity Incorporation, State or Country Code WI    
Title of 12(b) Security Common Stock, $.01 Par Value    
Security Exchange Name NYSE    
Entity Interactive Data Current Yes    
Document Annual Report true    
Document Transition Report false    
Documents Incorporated by Reference

Portions of the registrant’s Proxy Statement for the 2020 Annual Meeting of Shareholders, are incorporated by reference in Part III of this Annual Report on Form 10-K.

 

 

   
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Consolidated Statements of Operations - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Statement [Abstract]      
Net sales $ 1,834.1 $ 1,846.8 $ 1,581.3
Cost of sales 1,490.0 1,518.7 1,299.4
Gross profit 344.1 328.1 281.9
Operating costs and expenses:      
Engineering, selling and administrative expenses 225.6 251.6 245.3
Asset impairment expense 0.0 82.6 0.1
Amortization of intangible assets 0.3 0.3 0.8
Restructuring expense 9.8 12.9 27.2
Other operating expenses 0.0 0.0 0.1
Total operating costs and expenses 235.7 347.4 273.5
Operating income (loss) 108.4 (19.3) 8.4
Other income (expense):      
Interest expense (32.7) (39.1) (39.2)
Amortization of deferred financing fees (1.5) (1.8) (1.9)
Loss on debt extinguishment (25.0) 0.0 0.0
Other income (expense) — net 9.8 (11.5) (6.8)
Total other expense (49.4) (52.4) (47.9)
Income (loss) from continuing operations before income taxes 59.0 (71.7) (39.5)
Provision (benefit) for income taxes 12.4 (4.8) (49.5)
Net income (loss) from continuing operations 46.6 (66.9) 10.0
Discontinued operations:      
Loss from discontinued operations, net of income taxes of $0.0, $0.0 and $0.0, respectively 0.0 (0.2) (0.6)
Net income (loss) $ 46.6 $ (67.1) $ 9.4
Basic net income (loss) per common share:      
Net income (loss) from continuing operations $ 1.31 $ (1.88) $ 0.28
Loss from discontinued operations 0 (0.01) (0.02)
Basic net income (loss) per share 1.31 (1.89) 0.26
Diluted net income (loss) per common share:      
Net income (loss) from continuing operations 1.31 (1.88) 0.28
Loss from discontinued operations 0 (0.01) (0.02)
Diluted net income (loss) per share $ 1.31 $ (1.89) $ 0.26
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Consolidated Statements of Operations (Parenthetical) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Statement [Abstract]      
Loss from discontinued operations, income taxes $ 0.0 $ 0.0 $ 0.0
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Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]      
Net income (loss) $ 46.6 $ (67.1) $ 9.4
Other comprehensive income (loss), net of income tax:      
Net unrealized gains (losses) on derivatives, net of income tax provision of $0.0, $0.0 and $0.0, respectively 0.3 (0.4) 0.4
Employee pension and postretirement benefit income (loss), net of income tax benefit of $0.2, $1.4 and $4.2, respectively (3.7) 8.9 6.7
Foreign currency translation adjustments (1.0) (27.7) 58.4
Total other comprehensive income (loss), net of income tax (4.4) (19.2) 65.5
Comprehensive income (loss) $ 42.2 $ (86.3) $ 74.9
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Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]      
Unrealized income (loss) on derivatives, net of income tax provision $ 0.0 $ 0.0 $ 0.0
Employee pension and post retirement benefit income (loss), net of income tax benefit $ 0.2 $ 1.4 $ 4.2
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Consolidated Balance Sheets - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Current Assets:    
Cash and cash equivalents $ 199.3 $ 140.3
Accounts receivable, less allowances of $7.9 and $10.3, respectively 168.3 171.8
Inventories — net 461.4 453.1
Notes receivable — net 17.4 19.4
Other current assets 26.0 58.3
Total current assets 872.4 842.9
Property, plant and equipment — net 289.9 288.9
Operating lease right-of-use assets 47.6  
Goodwill 232.5 232.8
Other intangible assets — net 116.3 118.1
Other non-current assets 59.0 59.2
Total assets 1,617.7 1,541.9
Current Liabilities:    
Accounts payable and accrued expenses 340.8 425.2
Short-term borrowings and current portion of long-term debt 3.8 6.4
Product warranties 47.2 39.1
Customer advances 25.8 9.6
Other liabilities 23.3 16.3
Total current liabilities 440.9 496.6
Non-Current Liabilities:    
Long-term debt 308.4 266.7
Operating lease liabilities 37.6  
Deferred income taxes 5.5 5.7
Pension obligations 86.4 85.7
Postretirement health and other benefit obligations 16.4 18.3
Long-term deferred revenue 30.3 25.2
Other non-current liabilities 46.3 42.4
Total non-current liabilities 530.9 444.0
Commitments and contingencies (Note 18)
Total stockholders' equity:    
Preferred stock (3,500,000 shares authorized of $.01 par value; none outstanding)
Common stock (75,000,000 shares authorized, 40,793,983 shares issued, 35,374,537 and 35,588,833 shares outstanding, respectively) 0.4 0.4
Additional paid-in capital 592.2 584.8
Accumulated other comprehensive loss (121.0) (116.6)
Retained earnings 236.2 189.6
Treasury stock, at cost (5,419,446 and 5,205,150 shares, respectively) (61.9) (56.9)
Total stockholders’ equity 645.9 601.3
Total liabilities and stockholders' equity $ 1,617.7 $ 1,541.9
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Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Statement Of Financial Position [Abstract]    
Accounts Receivable, allowances (in dollars) $ 7.9 $ 10.3
Preferred stock authorized (in shares) 3,500,000 3,500,000
Par value of preferred stock per share (in dollars per share) $ 0.01 $ 0.01
Preferred stock outstanding (in shares) 0 0
Common stock, shares authorized (in shares) 75,000,000 75,000,000
Common stock, shares issued (in shares) 40,793,983 40,793,983
Common stock, shares outstanding (in shares) 35,374,537 35,588,833
Treasury stock (in shares) 5,419,446 5,205,150
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Consolidated Statements of Cash Flows - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash Flows From Operating Activities      
Net income (loss) $ 46.6 $ (67.1) $ 9.4
Adjustments to reconcile net income (loss) to cash (used for) provided by operating activities of continuing operations:      
Asset impairment expense 0.0 82.6 0.1
Loss from discontinued operations, net of income taxes   0.2 0.6
Depreciation expense 35.0 36.1 38.1
Amortization of intangible assets 0.3 0.3 0.8
Amortization of deferred financing fees 1.5 1.8 1.9
Deferred income tax (benefit) - net 1.5 (11.1) (44.1)
Loss on early extinguishment of debt 25.0 0.0 0.0
Loss (gain) on sale of property, plant and equipment (3.5) 0.9 0.1
Stock-based compensation expense and other 10.1 7.4 8.5
Changes in operating assets and liabilities, excluding the effects of business divestitures:      
Accounts receivable (124.2) (553.4) (435.5)
Inventories (18.3) (72.7) 51.1
Notes receivable 2.9 18.6 18.8
Other assets 23.9 2.7 4.0
Accounts payable (59.7) 56.5 27.1
Accrued expenses and other liabilities 5.6 (15.6) (5.2)
Net cash used for operating activities of continuing operations (53.3) (512.8) (324.3)
Net cash used for operating activities of discontinued operations   (0.2) (0.6)
Net cash used for operating activities (53.3) (513.0) (324.9)
Cash Flows From Investing Activities      
Capital expenditures (35.1) (31.7) (28.9)
Proceeds from sale of property, plant and equipment 17.2 13.0 7.0
Cash receipts on sold accounts receivable 126.3 553.1 402.8
Other     0.4
Net cash provided by investing activities 108.4 534.4 381.3
Cash Flows From Financing Activities      
Proceeds from revolving credit facility 139.7    
Payments on revolving credit facility (139.7)    
Payments on long-term debt (276.6) (3.8) (10.9)
Proceeds from long-term debt 300.0   0.2
Other debt - net (4.4)   (4.7)
Debt issuance costs (8.3)    
Exercises of stock options including windfall tax benefits 0.4 2.5 5.7
Common stock repurchases (7.4)    
Net cash provided by (used for) financing activities 3.7 (1.3) (9.7)
Effect of exchange rate changes on cash 0.2 (2.8) 2.4
Net increase (decrease) in cash, cash equivalents and restricted cash 59.0 17.3 49.1
Cash and cash equivalents at beginning of period 140.3 123.0 73.9
Cash and cash equivalents at end of period 199.3 140.3 123.0
Supplemental Cash Flow Information      
Interest paid 36.0 36.8 37.0
Income taxes (refunded) paid $ 10.5 $ 2.6 $ (7.6)
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Consolidated Statements of Equity - USD ($)
$ in Millions
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Loss
Retained Earnings
Treasury Stock
Balance at beginning of year at Dec. 31, 2016   $ 1.4 $ 567.6 $ (162.9) $ 247.3 $ (62.9)
Balance (in shares) at Dec. 31, 2016   34,960,303        
Increase (Decrease) in Stockholders' Equity            
Adjustment due to reverse stock split   $ (1.0) 1.0      
Stock options exercised and issuance of other stock awards     2.0     3.1
Stock options exercised (in shares)   262,118        
Restricted stock, net (in shares)   23,566        
Performance shares issued (in shares)   27,877        
Stock-based compensation     7.0      
Other comprehensive income (loss)       65.5    
Net income (loss) $ 9.4       9.4  
Balance at end of year at Dec. 31, 2017 677.5 $ 0.4 577.6 (97.4) 256.7 (59.8)
Balance (in shares) at Dec. 31, 2017   35,273,864        
Increase (Decrease) in Stockholders' Equity            
Stock options exercised and issuance of other stock awards     (1.0)     2.9
Stock options exercised (in shares)   95,019        
Restricted stock, net (in shares)   165,404        
Performance shares issued (in shares)   54,546        
Stock-based compensation     8.2      
Other comprehensive income (loss)       (19.2)    
Net income (loss) (67.1)       (67.1)  
Balance at end of year at Dec. 31, 2018 601.3 $ 0.4 584.8 (116.6) 189.6 (56.9)
Balance (in shares) at Dec. 31, 2018   35,588,833        
Increase (Decrease) in Stockholders' Equity            
Stock options exercised and issuance of other stock awards     (2.1)     2.4
Stock options exercised (in shares)   58,404        
Restricted stock, net (in shares)   145,482        
Performance shares issued (in shares)   54,860        
Common stock repurchases (in shares)   (473,042)        
Common stock repurchases   $ 7.4       (7.4)
Stock-based compensation     9.5      
Other comprehensive income (loss)       (4.4)    
Net income (loss) 46.6       46.6  
Balance at end of year at Dec. 31, 2019 $ 645.9 $ 0.4 $ 592.2 $ (121.0) $ 236.2 $ (61.9)
Balance (in shares) at Dec. 31, 2019   35,374,537        
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Consolidated Statements of Equity (Parenthetical)
12 Months Ended
Dec. 31, 2017
Statement Of Stockholders Equity [Abstract]  
Reverse stock split 4
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Company and Basis of Presentation
12 Months Ended
Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Company and Basis of Presentation

1. Company and Basis of Presentation

The Manitowoc Company, Inc. (“Manitowoc” and the “Company”) was founded in 1902 and has over a 117-year tradition of providing high-quality, customer-focused products and support services to its markets. Manitowoc is one of the world’s leading providers of engineered lifting solutions. Manitowoc, through its wholly-owned subsidiaries, designs, manufactures, markets, and supports comprehensive product lines of mobile telescopic cranes, tower cranes, lattice-boom crawler cranes, and boom trucks under the Grove, Manitowoc, National Crane, Potain, Shuttlelift and Manitowoc Crane Care brand names. The Company serves a wide variety of customers, including dealers, rental companies, contractors, and government entities, across the petrochemical, industrial, commercial construction, power and utilities, infrastructure and residential construction end markets. Additionally, its Manitowoc Crane Care offering leverages Manitowoc's installed base of approximately 149,000 cranes to provide aftermarket parts and services to enable its customers to manage their fleets more effectively and improve their return on investment. Due to the ongoing and predictable maintenance needed by cranes, as well as the high cost of crane downtime, Manitowoc Crane Care provides the Company with a consistent stream of recurring revenue. Manitowoc is a Wisconsin corporation and its principal executive offices are located at 11270 West Park Place Suite 1000, Milwaukee, Wisconsin 53224.

Basis of Presentation The consolidated financial statements include the accounts of The Manitowoc Company, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Certain prior period amounts have been reclassified to conform to the current period presentation. All amounts, except per share and share amounts, are in millions of dollars throughout the tables in these notes unless otherwise indicated.

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Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents The Company considers all cash and short-term investments purchased with an original maturity of three months or less as cash and cash equivalents.

Allowance for Doubtful Accounts Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. Our estimate for the allowance for doubtful accounts related to trade receivables includes evaluation of specific accounts where we have information that the customer may have an inability to meet its financial obligations together with a general provision for unknown but existing doubtful accounts based on historical experience, which are subject to change if experience improves or deteriorates.

Inventories Inventories are valued at the lower of cost or net realizable value. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. The Company determines inventory value using the first-in, first-out method.

Goodwill and Other Intangible Assets The Company accounts for goodwill and other intangible assets under the guidance of Accounting Standards Codification (“ASC”) Topic 350-10, “Intangibles — Goodwill and Other.” Under ASC Topic 350-10, goodwill is not amortized; instead, the Company performs an annual impairment review. The date for the annual impairment review is October 31, or more frequently if events or changes in circumstances indicate that the assets might be impaired. To test goodwill, the Company estimates the fair values of its reporting units using the income approach based on the present value of expected future cash flows, subject to a comparison for reasonableness to its market capitalization at the date of valuation. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In addition, goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value.

The Company’s other intangible assets with indefinite lives, including trademarks and tradenames and distribution networks, are not amortized but are tested for impairment annually, or more frequently, as events dictate. For other indefinite lived intangible assets, the impairment test consists of a comparison of the fair value of the intangible assets to their carrying amount. See Note 9, “Goodwill and Other Intangible Assets,” for further details on our impairment assessments. The Company’s intangible assets subject to amortization are tested for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. 

The Company’s other intangible assets subject to amortization are amortized straight-line over the following estimated useful lives:

 

 

 

Useful lives

Patents

 

20 years

Customer relationships

 

20 years

 

Property, Plant and Equipment Property, plant and equipment are stated at cost. Expenditures for maintenance, repairs and minor renewals are charged against earnings as incurred. Expenditures for major renewals and improvements that substantially extend the capacity or useful life of an asset are capitalized and are then depreciated. The cost and accumulated depreciation for property, plant and equipment sold, retired or otherwise disposed of are relieved from the accounts, and resulting gains or losses are reflected in earnings. Property, plant and equipment are depreciated over the estimated useful lives of the assets using the straight-line depreciation method for financial reporting and accelerated depreciation methods for income tax purposes.

Property, plant and equipment are depreciated over the following estimated useful lives:

 

 

 

Years

Building and improvements

 

2 - 43

Machinery, equipment and tooling

 

3 - 18

Furniture and fixtures

 

3 - 10

Computer hardware and software

 

2 - 10

Rental cranes

 

5 - 15

 

Property, plant and equipment also includes cranes accounted for as operating leases. Equipment accounted for as operating leases includes rental cranes leased directly to the customer and cranes for which the Company has assisted in the financing arrangement, whereby the Company has made a buyback commitment in which the customer has a significant economic incentive of exercising. Equipment that is leased directly to the customer is accounted for as an operating lease with the related assets capitalized and depreciated over their estimated economic life. Equipment involved in a financing arrangement is depreciated over the life of the underlying arrangement to the buyback amount at the end of the lease period. The amount of buyback and rental equipment included in property, plant and equipment amounted to $51.2 million and $49.4 million, net of accumulated depreciation, at December 31, 2019 and 2018, respectively.

The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the assets’ carrying amount may not be recoverable. The Company conducts its impairment analyses in accordance with ASC Topic 360-10-5 “Property, Plant and Equipment” (“Topic 360”). Topic 360 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and to evaluate the asset group against the sum of the undiscounted future cash flows. If an impairment is determined to exist, any related impairment loss is calculated based upon comparison of the expected undiscounted future cash flows to the net book value of the assets.

Warranties Estimated standard manufacturing warranty costs are recorded in cost of sales at the time of sale of the warranted products based on historical warranty experience for the related product or estimates of projected costs due to specific warranty issues on new products. These estimates are reviewed periodically and are adjusted based on changes in facts, circumstances or actual experience. When a customer purchases an extended warranty, revenue associated with the extended warranty is deferred and recognized over the life of the extended warranty period. Costs related to the extended warranty are expensed as incurred.

Product Liabilities The Company records product liability reserves for its self-insured portion of any pending or threatened product liability actions when losses are probable and reasonably estimable. The reserve is based upon two estimates. First, the Company tracks the population of all outstanding pending and threatened product liability cases to determine an appropriate case reserve for each based upon the Company’s best judgment with the advice of legal counsel. These estimates are continually evaluated and adjusted based upon changes to facts and circumstances surrounding the case. Second, the Company determines the amount of additional reserve required to cover incurred, but not reported, product liability obligations and to account for possible adverse development of the established case reserves utilizing actuarially developed estimates.

Derivative Financial Instruments and Hedging Activities The Company has policies and procedures that place all financial instruments under the direction of corporate treasury and restrict all derivative transactions to those intended for hedging purposes. The use of financial instruments for trading purposes is strictly prohibited. The Company uses financial instruments

to manage the market risk from changes in foreign exchange rates, commodities and interest rates. The Company follows the guidance in accordance with ASC No. 815Derivatives and Hedging (“Topic 815”). The fair values of all outstanding derivatives are recorded in the Consolidated Balance Sheets. The change in a derivative’s fair value is recorded each period in current earnings or accumulated other comprehensive income (loss) (“AOCI”) depending on whether the derivative is designated and qualifies as a cash flow hedge.

The Company selectively hedges anticipated transactions that are subject to foreign exchange exposure, commodity price exposure or variable interest rate exposure, primarily using foreign currency exchange contracts (“FX Forward Contracts”), commodity contracts and interest rate contracts, respectively. These instruments are designated as cash flow hedges in accordance with Topic 815 and are recorded in the Consolidated Balance Sheets at fair value. The effective portion of the contracts’ gains or losses due to changes in fair value are initially recorded as a component of AOCI and are subsequently reclassified into earnings when the hedged transactions, typically sales and costs related to sales and interest expense, occur and affect earnings. These contracts are highly effective in hedging the variability in future cash attributable to changes in currency exchange rates, commodity prices or interest rates.

The amount reported as derivative instrument fair market value adjustment in the AOCI account within the Consolidated Statements of Comprehensive Income (Loss) represents the net gain (loss) on foreign currency exchange contracts designated as cash flow hedges, net of income taxes.

Stock-Based Compensation The Company recognizes expense for all stock-based compensation with graded vesting on a straight-line basis over the vesting period of the entire award. Stock-based compensation plans are described more fully in Note 16, “Stock-Based Compensation.”

Research and Development Research and development costs are charged to expense as incurred and amounted to $31.1 million, $35.2 million and $37.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. Research and development costs include salaries, materials, contractor fees and other administrative costs. 

Income Taxes The Company utilizes the liability method to recognize deferred tax assets and liabilities for the expected future income tax consequences of events that have been recognized in the Company’s financial statements. Under this method, deferred tax assets and liabilities are determined based on the temporary difference between financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. Valuation allowances are provided for deferred tax assets where it is considered more likely than not that the Company will not realize the benefit of such assets. The Company evaluates its uncertain tax positions as new information becomes available. Tax benefits are recognized to the extent a position is more likely than not to be sustained upon examination by the taxing authority.

Earnings Per Share Basic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during each year or period. The calculation of diluted earnings (loss) per share reflects the effect of all dilutive potential shares that were outstanding during the respective periods, unless the effect of doing so is antidilutive. The Company uses the treasury stock method to calculate the effect of outstanding stock-based compensation awards.

Comprehensive Income (Loss) Comprehensive income (loss) includes, in addition to net earnings, other items that are reported as direct adjustments to Manitowoc stockholders’ equity. These items are foreign currency translation adjustments, employee postretirement benefit adjustments and the change in fair value of certain derivative instruments.

Recent Accounting Changes and Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12 “Income Taxes (Topic 740).” The amendments in this ASU simplify accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The standard is effective for annual periods beginning after December 15, 2020. The Company is currently evaluating the impact the adoption of the ASU will have on the Company’s consolidated financial statements.


In August 2018, the FASB issued ASU No. 2018-15 “Intangibles – Goodwill and Other – Internal-use Software (Subtopic 250-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract.” The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for annual periods beginning after December 15, 2019. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02 “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This new standard permits an entity to reclassify to retained earnings the tax effects stranded in accumulated other comprehensive income (loss) as a result of U.S. tax reform. The Company adopted this ASU as of January 1, 2019 and chose not to reclassify the stranded tax effects related to the U.S. tax reform change in the federal corporate tax rate from accumulated other comprehensive income (loss) to retained earnings. The Company has elected the portfolio approach to release stranded income tax effects in accumulated other comprehensive income (loss).

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses,” which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. The new guidance is applicable to financial assets measured at amortized cost, net investments in leases and certain off-balance sheet credit exposures. The standard is effective for annual periods beginning after December 15, 2019. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 - “Leases,” which is intended to improve financial reporting on leasing transactions. This was further clarified with technical corrections issued within ASU 2018-10 and ASU 2018-11. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. The Company adopted this ASU as of January 1, 2019. The adoption of this ASU did not have a material impact on the Company’s Consolidated Statement of Operations and Consolidated Statement of Cash Flows. The updated disclosures are included in Note 22, “Leases.”

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Revenues
12 Months Ended
Dec. 31, 2019
Revenue From Contract With Customer [Abstract]  
Revenues

3. Revenues

Significant Accounting Policy

Revenue is recognized when obligations under the terms of a contract with the Company’s customer are satisfied; generally this occurs with the transfer of control of the Company’s cranes or aftermarket parts or completion of performance of services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company recognizes revenue for extended warranties beyond the base warranties over the life of the extended warranty period.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are categorized as a fulfillment cost and are included in cost of sales on the Consolidated Statement of Operations.

Performance Obligations

The following is a description of principle activities from which the Company generates revenue. Disaggregation of the Company’s revenue sources are disclosed in Note 17, “Segments.”

Crane Revenue

Crane revenue is primarily generated through the sale of new and used cranes. Contracts with customers are generally in the form of a purchase order. Based on the nature of the Company’s contracts, the Company does not have any significant financing terms. Contracts may have variable consideration in the form of early pay discounts or rebates, however the variable consideration is not material to the overall contract with the customer. Revenue is earned under these contracts when control of the product is transferred to the customer. Control transfers to the customer generally upon delivery to the carrier or acceptance through an independent inspection company that acts as an agent of the customer.

Given the nature of the Company’s products, from time to time, the customer may request that the product be held until a delivery location is identified. Under these “bill and hold” arrangements, revenue is recognized when all of the following criteria are met: 1) the reason for the bill-and-hold arrangement is substantive, 2) the product is separately identified as belonging to the customer, 3) the product is ready for transfer to the customer, and 4) the Company does not have the ability to use the product or direct it to another customer.

From time to time, the Company enters into agreements where the customer has the right to exercise a buyback option for the repurchase of a crane by the Company at an agreed upon price. The Company evaluates each agreement at inception to determine if the customer has a significant economic incentive to exercise that right. If it is determined that the customer has a significant economic incentive to exercise that right, the agreement is accounted for as a lease in accordance with ASC Topic 842 “Leases” (“Topic 842”). If it is determined that the customer does not have a significant economic incentive to exercise that right, then revenue is recognized when control of the asset is transferred to the customer. Refer to Note 19, “Guarantees” for additional information.

Aftermarket Part Sales

Aftermarket part sales are generated through the sale of new and used parts to end customers and distributors. Aftermarket parts revenue is recognized when control of the product is transferred to the customer. Control transfers to the customer generally upon delivery to the carrier. Customers generally have a right of return which the Company estimates using historical information. The amount of estimated returns is deducted from revenue.

Other Revenues

The Company’s other revenues consist primarily of revenues from:

 

Repair and field service work; and

 

Training and technical publications.

As it relates to the Company’s other revenues, the Company’s performance obligations generally relate to performing specific agreed upon services. Revenue is earned upon the completion of those services.

Customer Advances

The Company records deferred revenue when cash payments are received or due in advance of performance, including amounts which are refundable. The table below shows the change in the customer advances balance for the year ended December 31, 2019 and 2018 which are included in current liabilities in the Consolidated Balance Sheet.

 

 

 

2019

 

 

2018

 

Balance at beginning of period

 

$

9.6

 

 

$

12.7

 

Cash received in advance of satisfying

   performance obligation

 

 

112.2

 

 

 

96.5

 

Revenue recognized

 

 

(96.3

)

 

 

(98.5

)

Currency translation

 

 

0.3

 

 

 

(1.1

)

Balance at end of period

 

$

25.8

 

 

$

9.6

 

 

Practical Expedients and Exemptions

The Company expenses sales commissions when incurred because the amortization period would be one year or less. These costs are recorded within engineering, selling and administrative expenses in the Consolidated Statement of Operations.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.

v3.19.3.a.u2
Fair Value of Financial Instruments
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

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

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2

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

           

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

           

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

Level 3

Unobservable inputs for the asset or liability

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2019 and 2018 by level within the fair value hierarchy.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

 

 

Fair Value as of December 31, 2019

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FX Forward Contracts

 

$

 

 

$

0.1

 

 

$

 

 

$

0.1

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FX Forward Contracts

 

$

 

 

$

0.1

 

 

$

 

 

$

0.1

 

 

 

 

Fair Value as of December 31, 2018

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FX Forward Contracts

 

$

 

 

$

0.1

 

 

$

 

 

$

0.1

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FX Forward Contracts

 

$

 

 

$

1.8

 

 

$

 

 

$

1.8

 

The fair value of the senior secured second lien notes due on April 1, 2026, with an annual coupon rate of 9.000% (the “2026 Notes”), was approximately $316.1 million as of December 31, 2019.

The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company estimates fair value of its 2026 Notes based on quoted market prices of the instruments; because these markets are typically actively traded, the liabilities are classified as Level 1 within the valuation hierarchy. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, deferred purchase price notes on receivables sold (see Note 12, “Accounts Receivable Securitization and Other Factoring Arrangements”) and short-term variable debt, including any amounts outstanding under our revolving credit facility, approximate fair value, without being discounted as of December 31, 2019 due to the short-term nature of these instruments.

FX Forward Contracts are valued through an independent valuation source which uses an industry standard data provider, with resulting valuations periodically validated through third-party or counterparty quotes. As such, these derivative instruments are classified within Level 2. See Note 5, “Derivative Financial Instruments” for additional information.

v3.19.3.a.u2
Derivative Financial Instruments
12 Months Ended
Dec. 31, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

 


5. Derivative Financial Instruments

The Company’s risk management objective is to ensure that business exposures to risks are minimized using the most effective and efficient methods to eliminate, reduce, or transfer such exposures. Operating decisions consider these associated risks and, whenever possible, transactions are structured to avoid or mitigate these risks.

From time to time, the Company enters into FX Forward Contracts to manage the exposure on forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities in currencies other than the functional currency of certain subsidiaries. Certain of these FX Forward Contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income (loss). These changes in fair value are reclassified into earnings as a component of cost of sales, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives’ fair value is recorded as a component of other income (expense) – net in the period in which the transaction is no longer considered probable of occurring. No amounts were recorded related to these types of transactions during the years ended December 31, 2019, 2018 and 2017.

The Company had FX Forward Contracts with an aggregate notional amount of $32.6 million and $76.8 million outstanding as of December 31, 2019 and 2018, respectively. The aggregate notional amount outstanding as of December 31, 2019 is scheduled to mature within one year. The FX Forward Contracts purchased are denominated in Euros. As of December 31, 2019 and 2018, the fair value of these contracts was a net zero balance and a net current liability of $1.7 million, respectively. Net unrealized gains (losses), net of income tax, recorded in accumulated other comprehensive income (loss) were zero and $(0.3) million as of December 31, 2019 and 2018, respectively.

The following table provides the amount of gains or losses recorded in the Consolidated Statement of Operations for FX Forward Contracts for the years ended December 31, 2019 and 2018.

 

 

Recognized Location

 

2019

 

 

2018

 

 

2017

 

Designated

 

Cost of sales

 

$

3.1

 

 

$

5.0

 

 

$

0.6

 

Non-Designated

 

Other income (expense) - net

 

 

3.9

 

 

 

(1.9

)

 

 

(0.8

)

 

v3.19.3.a.u2
Inventories
12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Inventories

6. Inventories

The components of inventories as of December 31, 2019 and 2018 are summarized as follows: 

 

 

2019

 

 

2018

 

Raw materials

 

$

156.3

 

 

$

159.2

 

Work-in-process

 

 

116.3

 

 

 

112.0

 

Finished goods

 

 

239.4

 

 

 

238.0

 

Total inventories

 

 

512.0

 

 

 

509.2

 

Excess and obsolete inventory reserve

 

 

(50.6

)

 

 

(56.1

)

Inventories — net

 

$

461.4

 

 

$

453.1

 

 

v3.19.3.a.u2
Notes Receivable
12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Notes Receivable

7. Notes Receivable

The Company has notes receivable balances that are classified as current or long-term based on the timing of the amounts due. Long-term notes receivable are included within other non-current assets on the Consolidated Balance Sheet. Current and long-term notes receivable balances primarily relate to the Company's captive finance entity in China. The Company also has a long-term note receivable balance related to the 2014 sale of Manitowoc Dong Yue. During 2019 and 2018, the Company recorded $2.8 million and $3.6 million, respectively, related to the write down of the note with Manitowoc Dong Yue to the anticipated collection amount based on current expectations. As of December 31, 2019, the Company had current and long-term notes receivable in the amounts of $17.4 million and $16.3 million, respectively. As of December 31, 2018, the Company had current and long-term notes receivable in the amounts of $19.4 million and $17.0 million, respectively.

v3.19.3.a.u2
Property, Plant and Equipment
12 Months Ended
Dec. 31, 2019
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

8. Property, Plant and Equipment

The components of property, plant and equipment as of December 31, 2019 and 2018 are summarized as follows: 

 

 

2019

 

 

2018

 

Land

 

$

24.0

 

 

$

24.1

 

Building and improvements

 

 

197.3

 

 

 

195.3

 

Machinery, equipment and tooling

 

 

274.2

 

 

 

269.4

 

Furniture and fixtures

 

 

18.5

 

 

 

16.4

 

Computer hardware and software

 

 

119.3

 

 

 

117.1

 

Rental cranes

 

 

77.7

 

 

 

84.0

 

Construction in progress

 

 

11.2

 

 

 

9.6

 

Total cost

 

 

722.2

 

 

 

715.9

 

Less accumulated depreciation

 

 

(432.3

)

 

 

(427.0

)

Property, plant and equipment — net

 

$

289.9

 

 

$

288.9

 

The Company recorded no asset impairment charges for the year ended December 31, 2019. For the year ended December 31, 2018, the Company recorded $0.4 million in asset impairment charges.

 

Assets Held for Sale

As of December 31, 2018, the Company had classified $12.9 million as assets held for sale within other current assets on the Consolidated Balance Sheets related to the Manitowoc, Wisconsin manufacturing buildings and land. During 2019, the Company sold the Manitowoc, Wisconsin manufacturing buildings and land previously classified as assets held for sale, which resulted in a $3.5 million gain recorded within other income (expense) – net on the Consolidated Statements of Operations.

v3.19.3.a.u2
Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2019
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets

9. Goodwill and Other Intangible Assets

The Company performs its annual goodwill and indefinite lived assets impairment testing during the fourth quarter. Based on the results of that test, no impairment was indicated in 2019. The Company will continue to monitor changes in circumstances and test more frequently if those changes indicate that assets might be impaired.

During the year ended December 31, 2018, the Company recorded a non-cash goodwill impairment charge of $82.2 million in the EURAF reporting unit. The goodwill impairment charge resulted from a reduction in the estimated fair value of the reporting unit based on the continued decline in the Company’s equity market capitalization and lower forecasted results in the region.

A considerable amount of management judgment and assumptions are required in performing the impairment tests as it relates to revenue growth rates and projected operating income. While the Company believes the judgments and assumptions are reasonable, different assumptions could change the estimated fair value and, therefore, additional impairment charges could be required. Weakening industry or economic trends, disruptions to our business, unexpected significant changes or planned changes in the use of the assets or in entity structure may adversely impact the assumptions used in the valuations. The Company continually monitors market conditions and determines if any additional interim reviews of goodwill, other intangibles or long-lived assets are warranted. In the event the Company determines that assets are impaired in the future, the Company would recognize a non-cash impairment charge, which could have a material adverse effect on the Company’s Consolidated Balance Sheets and Results of Operations.

The changes in carrying amount of goodwill for the years ended December 31, 2019 and 2018 are as follows: 

 

 

Americas

 

 

EURAF

 

 

MEAP

 

 

Consolidated

 

Balance as of January 1, 2018

 

$

166.5

 

 

$

85.9

 

 

$

68.9

 

 

$

321.3

 

Foreign currency impact

 

 

 

 

 

(3.7

)

 

 

(2.6

)

 

 

(6.3

)

Goodwill impairment

 

 

 

 

 

(82.2

)

 

 

 

 

 

(82.2

)

Net balance as of December 31, 2018

 

 

166.5

 

 

 

 

 

 

66.3

 

 

 

232.8

 

Foreign currency impact

 

 

 

 

 

 

 

 

(0.3

)

 

 

(0.3

)

Net balance as of December 31, 2019

 

$

166.5

 

 

$

 

 

$

66.0

 

 

$

232.5

 

The gross carrying amount and accumulated amortization of the Company’s intangible assets other than goodwill are as follows as of December 31, 2019 and 2018. 

 

 

December 31, 2019

 

 

December 31, 2018

 

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

Amount

 

 

Net

Book

Value

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

Amount

 

 

Net

Book

Value

 

Trademarks and tradenames

 

$

95.3

 

 

$

 

 

$

95.3

 

 

$

96.7

 

 

$

 

 

$

96.7

 

Customer relationships

 

 

10.0

 

 

 

(8.5

)

 

 

1.5

 

 

 

10.1

 

 

 

(8.4

)

 

 

1.7

 

Patents

 

 

29.5

 

 

 

(28.7

)

 

 

0.8

 

 

 

29.8

 

 

 

(29.0

)

 

 

0.8

 

Distribution network

 

 

18.7

 

 

 

 

 

 

18.7

 

 

 

18.9

 

 

 

 

 

 

18.9

 

Net balance

 

$

153.5

 

 

$

(37.2

)

 

$

116.3

 

 

$

155.5

 

 

$

(37.4

)

 

$

118.1

 

Amortization of intangible assets for the years ended December 31, 2019, 2018 and 2017 was $0.3 million, $0.3 million and $0.8 million, respectively. Excluding the impact of any future acquisitions, divestitures or impairments, the Company anticipates amortization will be approximately $0.3 million per year through 2022.

v3.19.3.a.u2
Accounts Payable and Accrued Expenses
12 Months Ended
Dec. 31, 2019
Payables And Accruals [Abstract]  
Accounts Payable and Accrued Expenses

10. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of December 31, 2019 and 2018 are summarized as follows: 

 

 

2019

 

 

2018

 

Trade accounts payable

 

$

187.1

 

 

$

249.2

 

Employee-related expenses

 

 

56.6

 

 

 

59.5

 

Accrued vacation

 

 

20.2

 

 

 

24.3

 

Miscellaneous accrued expenses

 

 

76.9

 

 

 

92.2

 

Total accounts payable and accrued expenses

 

$

340.8

 

 

$

425.2

 

 

v3.19.3.a.u2
Debt
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Debt

11. Debt

Outstanding debt as of December 31, 2019 and 2018 is summarized as follows:

 

 

2019

 

 

2018

 

Senior secured asset based revolving credit facility

 

$

 

 

$

 

Senior secured second lien notes due 2021

 

 

 

 

 

254.2

 

Senior secured second lien notes due 2026

 

 

300.0

 

 

 

 

Other

 

 

16.7

 

 

 

21.2

 

Deferred financing costs

 

 

(4.5

)

 

 

(2.3

)

Total debt

 

 

312.2

 

 

 

273.1

 

Short-term borrowings and current portion of

   long-term debt

 

 

(3.8

)

 

 

(6.4

)

Long-term debt

 

$

308.4

 

 

$

266.7

 

 

On March 25, 2019, the Company and certain of its subsidiaries entered into an indenture with U.S. Bank National Association as trustee and notes collateral agent, pursuant to which the Company issued $300.0 million aggregate principal amount of senior secured second lien notes due on April 1, 2026 with an annual coupon rate of 9.000%. Interest on the 2026 Notes is payable in cash semi-annual in arrears on April 1 and October 1 of each year. The 2026 Notes are fully and unconditionally guaranteed on a senior secured second lien basis, jointly and severally, by each of the Company’s existing and future domestic subsidiaries that is either a guarantor or a borrower under the ABL Revolving Credit Facility (as defined below) or that guarantees certain other debt of the Company or a guarantor. The 2026 Notes and the related guarantees are secured on a second-priority basis, subject to certain exceptions and permitted liens, by pledges of capital stock and other equity interests and other security interests in substantially all of the personal property and fee-owned real property of the Company and of the guarantors that secure obligations under the ABL Revolving Credit Facility. The 2026 Notes were sold pursuant to exemptions from registration under the Securities Act of 1933.

Additionally, on March 25, 2019, the Company and certain subsidiaries of the Company (the “Loan Parties”) entered into a credit agreement (the “ABL Credit Agreement”) with JP Morgan Chase Bank, N.A. as administrative and collateral agent, and

certain financial institutions party thereto as lenders, providing for a senior secured asset-based revolving credit facility (the “ABL Revolving Credit Facility”) of up to $275.0 million. The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, accounts receivable and fixed assets of the Loan Parties. The Loan Parties’ obligations under the ABL Revolving Credit Facility are secured on a first-priority basis, subject to certain exceptions and permitted liens, by substantially all of the personal property and fee-owned real property of the Loan Parties. The liens securing the ABL Revolving Credit Facility are senior in priority to the second-priority liens securing the obligations under the 2026 Notes and the related guarantees. The ABL Revolving Credit Facility has a term of 5 years and includes a $75.0 million letter of credit sub-facility, $10.0 million of which is available to the Company’s German subsidiary that is a borrower under the ABL Revolving Credit Facility.

Borrowings under the ABL Revolving Credit Facility bear interest at a variable rate using either the Alternative Base Rate or the Eurodollar and Overnight London Interbank Offer Rate (“LIBOR”). The variable interest rate is based upon the average quarterly availability as of the most recent determination date as follows:

Average quarterly availability

Alternative base rate spread

 

Eurodollar and overnight LIBOR spread

 

≥ 50% of Aggregate Commitment

0.25%

 

1.25%

 

< 50% of Aggregate Commitment

0.50%

 

1.50%

 

The Company used the initial extension credit under the ABL Revolving Credit Facility, together with the net proceeds from the offering of the 2026 Notes, to (i) redeem all of the Company’s $260.0 million in outstanding 12.750% Senior Secured Second Lien Notes due 2021 (the “Prior 2021 Notes”); (ii) repay all obligations outstanding, and terminate all commitments, under (x) the Company’s previous $225.0 million ABL Revolving Credit Facility (“Prior ABL Facility”) and (y) $75.0 million AR Securitization Facility; and (iii) pay related fees and expenses, including $16.6 million of call premium on the Prior 2021 Notes, $5.0 million of closing costs and $4.6 million of accrued interest.

During the year ended December 31, 2019, the Company recorded a $25.0 million charge in the Consolidated Statement of Operations associated with the Company’s refinancing of the ABL Revolving Credit Facility and 2026 Notes. The charge is composed of $16.6 million of call premium on the Prior 2021 Notes, $5.3 million of unamortized discount on the Prior 2021 Notes and $3.1 million of unamortized debt issuance costs.

As of December 31, 2019, the Company had outstanding $16.7 million of other indebtedness that has a weighted-average interest rate of approximately 5.1%. This debt includes balances on local credit lines and other financing arrangements obligations.

As of December 31, 2019, the Company did not have an outstanding balance on the ABL Revolving Credit Facility and no borrowings on the Prior ABL Facility as of December 31, 2018. During the year ended December 31, 2019, the highest daily borrowing under either ABL facility was $39.7 million and the average borrowing was $8.9 million, while the average annual interest rate was 4.15%. The interest rate of the ABL Revolving Credit Facility fluctuates based on excess availability. As of December 31, 2019, the spreads for Eurodollar and Overnight LIBOR and Alternative Base Rate borrowings were 1.25% and 0.25%, respectively, with excess availability of approximately $206.4 million, which represents revolver borrowing capacity of $210.4 million less U.S. letters of credit outstanding of $4.0 million.

Both the ABL Revolving Credit Facility and 2026 Notes include customary covenants which include, without limitation, restrictions on, the Company’s ability and the ability of the Company’s restricted subsidiaries to incur, assume or guarantee additional debt or issue certain preferred shares, pay dividends on or make other distributions in respect of the Company’s capital stock or make other restricted payments, make certain investments, sell or transfer certain assets, create liens on certain assets to secure debt, consolidate, merge, sell, or otherwise dispose of all or substantially all of the Company’s assets, enter into certain transactions with affiliates and designate the Company’s subsidiaries as unrestricted. Both the ABL Revolving Credit Facility and the 2026 Notes also include customary events of default.

Additionally, the ABL Revolving Credit Facility contains a covenant requiring the Company to maintain a minimum fixed charge coverage ratio under certain circumstances set forth in the ABL Credit Agreement.

The aggregate scheduled future maturities of outstanding debt obligations as of December 31, 2019 is as follows: 

Year

 

 

 

 

2020

 

$

3.8

 

2021

 

 

10.5

 

2022

 

 

1.7

 

2023

 

 

 

2024

 

 

 

Thereafter

 

 

300.7

 

Total

 

$

316.7

 

 

 

The table of scheduled maturities above does not agree to the Company’s total debt as of December 31, 2019 as shown on the Consolidated Balance Sheet due to $4.5 million of deferred financing costs.

As of December 31, 2019, the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and 2026 Notes. Based upon management’s current plans and outlook, the Company believes it will be able to comply with these covenants during the subsequent twelve months.

v3.19.3.a.u2
Accounts Receivable Securitization and Other Factoring Arrangements
12 Months Ended
Dec. 31, 2019
Transfers And Servicing [Abstract]  
Accounts Receivable Securitization and Other Factoring Arrangements

12. Accounts Receivable Securitization and Other Factoring Arrangements

The Company had maintained a Receivables Purchase Agreement (“RPA”) among Manitowoc Funding, LLC (“MTW Funding”), as Seller, The Manitowoc Company, Inc., as Servicer, and Wells Fargo Bank, N.A., as Purchaser and as Agent, with a commitment size of $75.0 million. Under the RPA (and the related Purchase and Sale Agreements referenced in the RPA), the Company’s domestic trade accounts receivable were sold to MTW Funding which, in turn, sold, conveyed, transferred and assigned to a third-party financial institution (“Purchaser”), all of MTW Funding’s rights, title and interest in a pool of receivables to the Purchaser. Transactions under the program are accounted for as sales in accordance with ASC Topic 860, “Transfers and Servicing” (“Topic 860”). This program was terminated on March 25, 2019.

Trade accounts receivables sold to the Purchaser and being serviced by the Company totaled $149.0 million and $863.5 million as of December 31, 2019 and 2018, respectively. Cash proceeds received from customers related to the receivables previously sold for the years ended December 31, 2019 and 2018 were $182.8 million and $781.6 million, respectively.

Sales of trade receivables under the program reflected as a reduction of accounts receivable in the accompanying Consolidated Balance Sheets were zero and $75.0 million as of December 31, 2019 and 2018, respectively. The proceeds received, including collections on the deferred purchase price notes, are included in cash flows from operating activities in the accompanying Consolidated Statements of Cash Flows. The Company deems the interest rate risk related to the deferred purchase price notes to be de minimis, primarily because the average collection cycle of the related receivables is less than 60 days; and as such, the fair value of the Company’s deferred purchase price notes approximates book value. The fair value of the deferred purchase price notes recorded as of December 31, 2019 and 2018 was zero and $71.5 million, respectively, and is included in accounts receivable in the accompanying Consolidated Balance Sheets. For the years ended December 31, 2019, 2018 and 2017 non-cash investing activities related to the increase in the deferred purchase price was zero, $594.2 million and $538.1 million, respectively.

The Company has two non-U.S. accounts receivable financing programs. During 2019, the Company increased the maximum availability under these programs from €45 million to €55 million. Under these financing programs, the Company has the ability to sell eligible receivables up to the maximum limit and can sell additional receivables as previously sold are collected. During the year ended December 31, 2019, the Company sold €193.6 million of receivables and received €193.6 million of cash on the sold receivables. The Company also has one U.S. accounts receivable financing program. Transactions under the U.S. and non-U.S. programs were accounted for as sales in accordance with Topic 860.

v3.19.3.a.u2
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes

13. Income Taxes

Income (loss) from continuing operations before income taxes for the years ended December 31, 2019, 2018 and 2017 is summarized as follows: 

 

 

2019

 

 

2018

 

 

2017

 

Income (loss) from continuing operations before

   income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

(10.0

)

 

$

(76.4

)

 

$

(98.5

)

Non-U.S.

 

 

69.0

 

 

 

4.7

 

 

 

59.0

 

Total

 

$

59.0

 

 

$

(71.7

)

 

$

(39.5

)

Income tax provision (benefit) for the years ended December 31, 2019, 2018 and 2017 is summarized as follows:

 

 

2019

 

 

2018

 

 

2017

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Federal and state

 

$

(0.7

)

 

$

(7.3

)

 

$

(12.8

)

Non-U.S.

 

 

11.6

 

 

 

13.6

 

 

 

7.4

 

Total current

 

$

10.9

 

 

$

6.3

 

 

$

(5.4

)

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Federal and state

 

$

0.2

 

 

$

(6.2

)

 

$

(7.0

)

Non-U.S.

 

 

1.3

 

 

 

(4.9

)

 

 

(37.1

)

Total deferred