Accounting Policies and Basis of Presentation

During the first quarter of fiscal 2016, the Board of Directors of The Manitowoc Company, Inc. (“Manitowoc,” “MTW,” and the “Company”) approved the tax-free spin-off of the Company’s foodservice business (“MFS”) into an independent, public company (the “Spin-Off”). To consummate the Spin-Off, the Board declared a pro rata dividend of MFS common stock to MTW’s stockholders of record as of the close of business on February 22, 2016 (the "Record Date"), payable on March 4, 2016. Each MTW stockholder received one share of MFS common stock for every share of MTW common stock held as of the close of business on the Record Date.

In these Condensed Consolidated Financial Statements, unless otherwise indicated, references to Manitowoc, MTW and the Company, refer to The Manitowoc Company, Inc. and its consolidated subsidiaries after giving effect to the Spin-Off, or, in the case of information as of dates or for periods prior to the Spin-Off, the consolidated entities of the Crane business and certain other assets and liabilities that were historically held at the MTW corporate level but were specifically identifiable and attributable to the Crane business. The Company is a leading providers of engineered lifting equipment for the global construction industry, including lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks.

As a result of the Spin-Off, the Condensed Consolidated Financial Statements and related financial information reflect MFS operations, assets and liabilities, and cash flows as discontinued operations for all periods presented. Refer to Note 2, "Discontinued Operations," for additional information regarding the Spin-Off.

Subsequent to the Spin-Off, the management team determined that Manitowoc has one reportable segment, the Crane business. The Company identified its segment using the “management approach,” which designates the internal organization that is used by management for making operating decisions and assessing performance.

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive income for the three and six months ended June 30, 2016 and 2015, the cash flows for the same six-month periods, and the financial position at June 30, 2016 and December 31, 2015, and except as otherwise discussed, such adjustments consist of only those of a normal recurring nature. The interim results are not necessarily indicative of results for a full year and do not contain information included in the Company’s annual consolidated financial statements and notes for the year ended December 31, 2015. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to SEC rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report on Form 10-K.

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

During the first quarter of 2016, in conjunction with the Spin-Off, the Company identified an out-of-period adjustment related to deferred tax assets which originated prior to 2010, whereby the Company had understated the deferred tax assets by $6.2 million at each balance sheet date prior to March 31, 2016. In the first quarter of 2016, the Company recorded an adjustment to the deferred tax assets and the income tax provision on continuing operations to record the out-of-period adjustment. Additionally, the Company identified an out-of-period adjustment in MFS’ deferred tax assets, which also originated prior to 2010, whereby the Company had understated the deferred tax assets by $2.9 million at each balance sheet date prior to March 31, 2016. In the first quarter of 2016, prior to the Spin-Off, the Company recorded an adjustment to the deferred tax assets and the income tax provision on discontinued operations to correct the out-of-period adjustment. The Company does not believe that these adjustments were material to its Condensed Consolidated Financial Statements.

During the second quarter of 2016, the Company identified two adjustments to the previously issued financial statements for the three months ended March 31, 2016. In evaluating whether the Company’s previously issued consolidated financial statements were materially misstated, the Company considered the guidance in ASC Topic 250, Accounting Changes and Error Corrections and ASC Topic 250-10-S99-1, Assessing Materiality. The Company determined that these errors were not material to the Company's prior interim period consolidated financial statements and therefore, amendment of the previously filed report was not required. However, the Company determined that the impact of the corrections would be too significant to record within the second quarter of 2016. As such, the revision for the corrections is reflected in the financial information of the applicable prior periods in this Form 10-Q filing.

The adjustments identified during the second quarter of 2016 are as follows:

•

Adjustment related to accumulated other comprehensive loss ("AOCL"), whereby the Company had understated loss on debt extinguishment by $4.3 million, overstated income tax expense by $0.8 million, and understated loss from continuing operations by $3.5 million in the first quarter of 2016. The adjustment also resulted in an overstatement of AOCL and understatement of retained earnings by $2.6 million as of March 31, 2016.


•	Adjustment related to the classification of income tax expense between continuing operations and discontinued operations in the three months ended March 31, 2015, whereby the Company had understated the benefit for taxes on continuing operations, and understated the income tax provision on discontinued operations by $2.1 million.

A summary of the adjustments on the impacted financial statement line items in the Condensed Consolidated Statements of Operations as revised and as previously presented in the March 31, 2016, Form 10-Q is as follows:



	Three Months Ended March 31, 2016						Three Months Ended March 31, 2015
	As revised			As previously presented			As revised			As previously presented
Loss on debt extinguishment	$	(76.3	)	$	(72.0	)	$	—		$	—
Loss from continuing operations before taxes on income	(82.8		)	(78.5		)	(32.9		)	(32.9		)
Provision (benefit) for taxes on income	121.5			122.3			(9.5		)	(7.4		)
Loss from continuing operations	(204.3		)	(200.8		)	(23.4		)	(25.5		)
Discontinued operations:
(Loss) income from discontinued operations, net of income taxes	(3.2		)	(3.2		)	15.0			17.1
Net loss	$	(207.5	)	$	(204.0	)	$	(8.4	)	$	(8.4	)

Loss per common share - basic and diluted
Loss from continuing operations	$	(1.50	)	$	(1.47	)	$	(0.17	)	$	(0.19	)
(Loss) income from discontinued operations	(0.02		)	(0.02		)	0.11			0.13
Loss per common share	$	(1.52	)	$	(1.49	)	$	(0.06	)	$	(0.06	)