Restructuring and Asset Impairments

The Company initiated restructuring plans in 2015 to focus on its cranes business and Spin-Off of MFS. The Spin-Off was completed in the first quarter of 2016. Refer to Notes 1 and 3 for further information regarding the Spin-Off. The Company is continuing its restructuring activities to right-size the business by balancing capacity with demand. During the twelve months ended December 31, 2016, 2015 and 2014, the Company incurred $23.4 million, $9.4 million and $6.6 million of restructuring expense, respectively. These costs related primarily to employee termination benefits associated with workforce reductions. The workforce reductions are part of ongoing manufacturing and operations rationalization programs, including the planned closure of the Company's manufacturing facility in Manitowoc, WI, which was announced during the third quarter of 2016. The restructuring expense in the twelve months ended December 31, 2016, and December 31, 2015 included $2.3 million and $3.5 million, respectively, of expense related to executive severance.

During the third quarter of 2016, the Company announced its intent to relocate its crawler crane manufacturing operations located in Manitowoc, Wisconsin to Shady Grove, Pennsylvania, with completion anticipated by the middle of 2017. This initiative is intended to increase operational efficiency, and thereby increase future operating results and liquidity, allowing the Company to reallocate resources to invest in future growth.

Including amounts already incurred, the Company expects to incur cash charges related to severance costs and other employment-related benefits in the range of $10 to $15 million, capital expenditures in the range of $10 to $15 million and other costs in the range of $15 to $20 million related to the plant consolidation into Shady Grove, Pennsylvania. The Company anticipates that the majority of the cash charges will be settled by the end of 2017. Non-cash charges, primarily related to fixed assets and inventory related charges are expected to be in the range of $20 to $25 million and are anticipated to be recognized by the end of 2017.

The following is a roll-forward of the Company's restructuring activities for the twelve months ended December 31, 2016 (in millions):



	Restructuring Reserve Balance as of December 31, 2015		Restructuring Expenses		Use of Reserve		Reserve Reclassifications		Restructuring Reserve Balance as of December 31, 2016
Total	$	6.5	$	23.4	$	20.8	$	0.9	$	8.2

In the twelve months ended December 31, 2016, the Company recorded $96.9 million in asset impairment expense. This included a $13.8 million write-down to fair value related to the fixed assets of the Manitowoc, WI manufacturing facility. Further, during 2016, the Company, in conjunction with the decision to close the manufacturing location in Manitowoc, WI, made the decision to permanently stop any further work on implementing its SAP enterprise resource planning (“ERP”) platform, and recorded a write-off of $58.6 million related to SAP construction-in-progress and $18.6 million related to SAP and other IT assets. The remainder of the impairment expense for the year was related to other restructuring actions.

Asset impairment expense for the year ended December 31, 2015 was $15.3 million. The impairment recorded in 2015 resulted from the write-down of manufacturing facilities in Brazil and Slovakia.

Asset valuations are estimates and require assumptions and judgment by management. While the Company believes the estimates and assumptions are reasonable, a change in assumptions, including market conditions, could change the estimated fair value and, therefore, further impairment charges could be required.