Guarantees

The company periodically enters into transactions with customers that provide for residual value guarantees and buyback commitments. These initial transactions are recorded as deferred revenue and are amortized to income on a straight-line basis over a period equal to that of the customer’s third party financing agreement. The deferred revenue included in other current and non-current liabilities as of March 31, 2014 and December 31, 2013 was $58.6 million and $62.6 million, respectively. The total amount of residual value guarantees and buyback commitments given by the company and outstanding as of March 31, 2014 and December 31, 2013 was $57.7 million and $66.8 million, respectively. These amounts are not reduced for amounts the company would recover from the repossession and subsequent resale of the units. The residual value guarantees and buyback commitments expire at various times through 2018.

During the three months ended March 31, 2014 and 2013 the company sold $20.7 million and $2.1 million, respectively, of additional long term notes receivable to third party financing companies. Related to notes sold, the company guarantees some percentage, up to 100%, of collection of the notes to the financing companies. The company has accounted for the sales of the notes as a financing of receivables. The receivables remain on the company’s Condensed Consolidated Balance Sheets, net of payments made, in other current and non-current assets, and the company has recognized an obligation equal to the net outstanding balance of the notes in other current and non-current liabilities in the Condensed Consolidated Balance Sheets. The cash flow benefit of these transactions is reflected as financing activities in the Condensed Consolidated Statements of Cash Flows. During the three months ended March 31, 2014 and 2013, the customers paid $27.9 million and $16.4 million, respectively, on the notes to the third party financing companies. As of March 31, 2014 and December 31, 2013, the outstanding balance of the notes receivable guaranteed by the company was $28.0 million and $34.3 million, respectively.

See Note 2, "Discontinued Operations," for further discussion of debt guaranteed by the company related to Manitowoc Dong Yue.

In the normal course of business, the company provides its customers a warranty covering workmanship, and in some cases materials, on products manufactured by the company. The warranty generally provides that products will be free from defects for periods ranging from 12 to 60 months with certain equipment having longer-term warranties. If a product fails to comply with the company’s warranty, the company may be obligated, at its expense, to correct any defect by repairing or replacing such defective products. The company provides for an estimate of costs that may be incurred under its warranty at the time product revenue is recognized. These costs primarily include labor and materials, as necessary, associated with repair or replacement. The primary factors that affect the company’s warranty liability include the number of units shipped and historical and anticipated warranty claims. As these factors are impacted by actual experience and future expectations, the company assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. Below is a table summarizing the warranty activity for the three months ended March 31, 2014 and the year ended December 31, 2013:



(in millions)	Three Months Ended March 31, 2014			Year Ended December 31, 2013
Balance at beginning of period	$	99.0		$	101.2
Accruals for warranties issued during the period	14.5			58.6
Acquisition of Inducs, AG	—			0.2
Settlements made (in cash or in kind) during the period	(17.4		)	(61.7		)
Currency translation	0.1			0.7
Balance at end of period	$	96.2		$	99.0