Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes appearing in Part II, Item 8 of this Annual Report on Form 10-K.
Overview: The Manitowoc Company, Inc. (“Manitowoc” or the “Company”) was founded in 1902, and is headquartered in Milwaukee, Wisconsin, United States. Manitowoc, through its wholly-owned subsidiaries, provides high quality, customer-focused lifting products and services world-wide through its Grove, Manitowoc, National Crane, Potain, Shuttlelift, and Upfits by Aspen Equipment brands and its support-focused subsidiary MGX Equipment Services. For more information, visit www.manitowoc.com. The information on our website is not part of this or any other report we file with or furnish to the SEC and is not incorporated herein by reference.
All dollar amounts are in millions throughout the tables included in Management’s Discussion and Analysis of Financial Condition and Results of Operations unless otherwise indicated.
Orders and Backlog
Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America (“GAAP”) and our methodology for determining orders and backlog may vary from the methodology used by other companies. Management uses orders and backlog for capacity and resource planning. The Company believes this information is useful to investors to provide an indication of future revenues. Backlog represents the dollar value of orders which are expected to be recognized in net sales in the future. Orders are included in backlog when an executed binding contract with a price that has a floor has been received but has not been recognized in net sales.
Orders for the year ended December 31, 2025 increased 22.7% to $2,359.0 million from $1,922.8 million for the same period in 2024. The increase in orders was primarily due to higher demand in the Americas and EURAF segments. This was partially offset by lower demand in the MEAP segment. Orders were favorably impacted by $34.3 million from changes in foreign currency exchange rates.
The Company’s backlog as of December 31, 2025 was $793.5 million, a 22.0% increase from the December 31, 2024 backlog of $650.2 million. The increase in backlog from December 31, 2024 was primarily attributable to the higher orders as discussed above. Backlog was favorably impacted by $32.4 million from changes in foreign currency exchange rates.
Results of Operations
A detailed discussion of the year-over-year changes for the years ended December 31, 2024 and 2023 can be found in the Management's Discussion and Analysis section of the Company's 2024 Annual Report on Form 10-K filed on February 21, 2025, and is available on the SEC's website at www.sec.gov as well as in the "Investors" section of our website at www.manitowoc.com.
Results of Operations for the Years Ended December 31, 2025 and 2024
Percentage Change
Net sales
Gross profit
Gross profit %
Engineering, selling and
administrative expenses
Interest expense
Other expense - net
Provision (benefit) for income taxes
*Measure not meaningful
Net Sales
Consolidated net sales for the year ended December 31, 2025 increased 2.9% to $2,240.9 million from $2,178.0 million for the year ended December 31, 2024. The increase was primarily attributable to $50.6 million of higher new tower crane shipments in the EURAF segment, $51.0 million of higher non-new machine sales, and $15.5 million of higher revenue due to price
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realization and favorable product mix in the Americas segment. This was partially offset by lower new crane shipments in the Americas segment and European mobiles business. Net sales were favorably impacted by $35.3 million from changes in foreign currency exchange rates.
Gross Profit
Gross profit for the year ended December 31, 2025 increased 7.9% to $404.7 million compared to $375.0 million for the year ended December 31, 2024. The increase was primarily attributable to the higher net sales and favorable product mix. This was partially offset by lower absorbed costs due to lower manufacturing volume in the Americas segment and $6.1 million of net tariff costs.
Engineering, Selling, and Administrative Expenses
Engineering, selling, and administrative expenses for the year ended December 31, 2025 increased 8.6% to $342.9 million compared to $315.7 million for the year ended December 31, 2024. The increase is primarily due to higher costs for the triennial bauma trade show and $11.6 million of higher employee-related costs when compared to the prior year. This was partially offset by $8.9 million of higher costs associated with a legal matter with the U.S. Environmental Protection Agency (“U.S. EPA”) in the prior year. Engineering, selling, and administrative expenses were unfavorably impacted by $5.6 million from changes in foreign currency exchange rates.
Interest Expense
Interest expense for the year ended December 31, 2025 decreased 1.6% to $37.7 million compared to $38.3 million for the year ended December 31, 2024. The decrease was primarily due to lower interest rates on borrowings under the Company's ABL Revolving Credit Facility, partially offset by higher outstanding borrowings on the Company's other credit facilities. See further detail at Note 11, “Debt,” to the Consolidated Financial Statements.
Other Expense – Net
Other expense – net for the year ended December 31, 2025 was $2.2 million and was primarily composed of $0.8 million of net foreign currency transaction losses and $1.9 million of pension benefit and postretirement health costs, partially offset by $0.8 million of interest income net of bank fees.
Other expense - net for the year ended December 31, 2024 was $0.4 million and was primarily composed of $2.9 million of pension benefit and postretirement health costs and $1.1 million of non-cash losses associated with the refinancing of the Company’s former senior secured second lien notes. This was partially offset by $2.6 million of net foreign currency transaction gains and $0.7 million of interest income.
Provision (benefit) for Income Taxes
During the year ended December 31, 2025 and 2024, the Company recorded a provision for income taxes of $5.2 million and a benefit for income taxes of $44.1 million, respectively.
The 2025 effective tax rate was favorably impacted by a $5.4 million net reduction of the valuation allowance. This benefit was offset by domestic and foreign non-deductible expenses.
The 2024 effective tax rate was favorably impacted by a $57.5 million net reduction of the valuation allowance. The rate was unfavorably impacted by $5.6 million of additional unrecognized tax benefit reserves recorded during the year and non-deductible expenses related to a legal matter.
Refer to Note 13, “Income Taxes,” to the Consolidated Financial Statements.
Segment Operating Performance
The Company has three reportable segments, the Americas segment, the Europe and Africa (“EURAF”) segment and the Middle East and Asia Pacific (“MEAP”) segment. The segments were identified using the “management approach,” which designates the internal organization that is used by the CEO, who is also the Company’s Chief Operating Decision Maker
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(“CODM”), for making decisions about the allocation of resources and assessing performance. Further information regarding the Company’s reportable segments can be found in Note 17, “Segments,” to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Year Ended
December 31, 2025
Year Ended
December 31, 2024
Percentage Change
Net Sales
Americas
EURAF
MEAP
Segment Operating Income (Loss)
Americas
EURAF
MEAP
*Measure not meaningful
Americas
Americas segment net sales increased 5.2% in 2025 to $1,259.9 million from $1,197.6 million in 2024. The increase was primarily attributable to higher non-new machine sales and price realization, partially offset by lower new crane shipments.
Americas segment operating income of $95.7 million decreased $8.0 million in 2025 from $103.7 million in 2024. The decrease was primarily attributable to lower absorbed costs due to lower manufacturing volume, $7.4 million of higher engineering, selling, and administrative costs, and $6.1 million of net tariff costs. This was partially offset by the higher revenue.
EURAF
EURAF segment net sales increased 8.3% in 2025 to $667.2 million from $616.0 million in 2024. The increase was primarily attributable to a higher number of new tower crane shipments, partially offset by lower mobile crane shipments. EURAF net sales were favorably impacted by $31.5 million from changes in foreign currency exchange rates.
EURAF segment operating loss of $42.9 million decreased $3.7 million in 2025 from $46.6 million in 2024. The decrease in operating loss was primarily attributable to higher new sales, partially offset by $19.4 million of higher engineering, selling, and administrative expenses due to the triennial bauma trade show and higher new product development costs. EURAF segment operating loss was unfavorably impacted by $1.7 million from changes in foreign currency exchange rates.
MEAP
MEAP segment net sales decreased 13.9% in 2025 to $313.8 million from $364.4 million in 2024. The decrease was primarily attributable to product mix, as we sold more lower revenue units. MEAP net sales were favorably impacted by $3.9 million from changes in foreign currency exchange rates.
MEAP segment operating income of $44.6 million increased $5.2 million from $39.4 million in 2024. The increase was primarily attributable to higher absorbed costs due to higher manufacturing volume and favorable product mix, partially offset by lower net sales.
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Financial Condition
Cash Flows
The table below shows a summary of cash flows for the years ended December 31, 2025 and 2024:
Year Ended
December 31,
Net cash provided by operating activities
Net cash used for investing activities
Net cash provided by financing activities
Cash and cash equivalents
Cash Flows from Operating Activities
Net cash provided by operating activities of $22.2 million in 2025 decreased $27.0 million from $49.2 million in 2024 . The decrease in net cash provided by operating activities w as primarily driven by a $45.6 million payment to settle a legal matter with the U.S. EPA and associated environmental mitigation project. This was partially offset by $18.3 million of lower cash used for operating assets and liabilities.
Cash Flows from Investing Activities
Net cash used for investing activities of $49.5 million in 2025 increased $9.1 million from $40.4 million in 2024. The increase in net cash used for investing activities was primarily due to $12.9 million of cash outflows related to the purchase of certain assets and territory from Ring Power Corporation and $3.9 million of lower proceeds from the sale of property, plant, and equipment. This was partially offset by $8.2 million of lower capital expenditures.
Cash Flows from Financing Activities
Net cash provided by financing activities of $54.8 million in 2025 increased $48.1 million from $6.7 million in 2024. The increase in net cash provided by financing activities was primarily due to $39.0 of additional net borrowings under the ABL Revolving Credit Facility, $7.4 million of cash outflows related to debt issuance costs in 2024 which did not occur in 2025, and $5.7 million of cash outflows related to common stock repurchases in 2024 which did not occur in 2025. This was partially offset by $5.7 million of lower net proceeds from other debt.
Liquidity and Capital Resources
Liquidity
The Company’s liquidity position as of December 31, 2025 and 2024 is summarized as follows:
December 31, 2025
December 31, 2024
Cash and cash equivalents
Revolver borrowing capacity
Other debt availability
Less: Borrowings on revolver
Less: Borrowings on other debt
Less: Outstanding letters of credit
Total liquidity
The Company’s revolving credit facility, or other future facilities, may be used for working capital requirements, capital expenditures, funding future acquisitions (within the Company’s debt limitations), and other operating, investing, and financing needs. The Company believes its liquidity and expected cash flows from operations are sufficient to meet expected working capital, capital expenditures, contractual obligations, and other ongoing operational needs in the subsequent twelve months.
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Cash Sources
The Company has historically relied primarily on cash flows from operations, borrowings under revolving credit facilities, issuances of notes, and other forms of debt financing as its sources of cash.
The maximum availability under the Company’s current ABL Revolving Credit Facility is $325.0 million, of which $100.0 million is available to our German subsidiary. The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, accounts receivable, and certain 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 2031 Notes and the related guarantees. The ABL Revolving Credit Facility has a maturity date of September 18, 2029, 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 this facility.
In addition to the ABL Revolving Credit Facility, the Company has access to committed and non-committed lines of credit to fund working capital in Europe and China. There are six facilities, of which five facilities are denominated in Euros totaling €37.0 million and one facility denominated in Chinese Yuan totaling ¥30.0 million. Total U.S. dollar availability as of December 31, 2025 for the six overdraft facilities is $47.7 million, with $4.3 million outstanding.
Debt
Outstanding debt as of December 31, 2025 and 2024 is summarized as follows:
Borrowings under senior secured asset based revolving
credit facility
Senior secured second lien notes due 2031
Other debt
Deferred financing costs
Total debt
Short-term borrowings and current portion of long-term
debt
Long-term debt
Both the ABL Revolving Credit Facility and 2031 Notes include customary covenants and events of default. Refer to Note 11, “Debt,” to the Consolidated Financial Statements for additional discussions of covenants for the ABL Revolving Credit Facility and 2031 Notes. As of December 31, 2025, 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 2031 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. From time to time, the Company may seek to opportunistically raise capital in the debt capital markets and bank credit markets.
Other Financing Arrangements
The Company has two non-U.S. accounts receivable financing programs with a maximum availability of €25.0 million and €40.0 million. Transactions under the non-U.S. programs were accounted for as sales in accordance with Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing.” Under these financing programs, the Company has the ability to sell eligible receivables up to the customer's maximum limit. Refer to Note 12, “Accounts Receivable Factoring,” to the Consolidated Financial Statements.
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Off-Balance Sheet Arrangements
As of December 31, 2025, the Company had buyback commitments outstanding of $39.8 million. This amount is not reduced for amounts the Company would recover from the repossession and subsequent resale of collateral. Refer to Note 19, “Guarantees,” to the Consolidated Financial Statements for further information.
Contractual Obligations and Commercial Commitments
The Company's material cash requirements, contractual obligations, and commercial commitments include the following:
Debt
As of December 31, 2025, the Company had outstanding debt of $460.8 million with $13.7 million payable within one year. The Company is committed to pay 9.25% of annual interest on the $300.0 million 2031 Notes that mature on October 1, 2031. Additionally, the Company's debt outstanding under the ABL Revolving Credit Facility is subject to variable interest using either the Alternate Base Rate or Term Benchmark, Applicable Overnight Rate, Central Bank Rate (“CBR”) or RFR rate (each as defined in the ABL Credit Agreement) plus the applicable spread. For the year ended December 31, 2025 the Company incurred $7.3 million and $2.7 million of interest on borrowings from the ABL Revolving Credit Facility and other debts, respectively. Refer to Note 11, “Debt,” to the Consolidated Financial Statements for further information.
Purchase Obligations
As of December 31, 2025, the Company has purchase obligations of $984.6 million with $604.6 million due within one year. Purchase obligations consist primarily of open purchase orders for raw materials and various components used in the manufacturing process and purchase obligations from agreements with various suppliers that include a right of cancellation.
Leases
As of December 31, 2025, the Company had contractual fixed costs related to operating lease commitments of $82.2 million with $18.2 million due within one year. Refer to Note 21, “Leases,” to the Consolidated Financial Statements for further information.
Capital Expenditures
The Company funds capital expenditures that are intended to improve the cost structure of the Company’s business; invest in new processes, products and technology; maintain high-quality production standards; and maintain and expand the Company's rental fleet.
The Company paid a total of $37.5 million during 2025 for capital expenditures, of which $18.8 million is for rental fleet assets. For the year ended December 31, 2025, depreciation was $59.9 million. The Company anticipates that capital expenditures for 2026 will be approximately $45 million to $50 million, of which approximately $25 million is for rental fleet assets.
Other Cash Requirements
The Company has unrecognized tax benefits totaling $15.7 million as of December 31, 2025, excluding related interest and penalties. It is reasonably possible that the unrecognized tax benefits could significantly change over the next 12 months. However, due to the highly uncertain nature of resolution and closure on audits, we are unable to estimate the range of impact at this time. Refer to Note 13, “Income Taxes,” to the Consolidated Financial Statements for disclosures surrounding uncertain income tax positions under ASC Topic 740 “Income Taxes.”
The Company maintains defined benefit pension plans for some of the Company’s employees and retirees. The Board of Directors has established the Retirement Plan Committee to manage the operations and administration of all benefit plans and related trusts. Refer to Note 20, “Employee Benefit Plans,” to the Consolidated Financial Statements.
In 2025, cash contributions by the Company to defined benefit pension, postretirement medical, and other defined benefit plans were $6.3 million, and the Company estimates that its contributions in 2026 will be approximately $5.4 million. Cash
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contributions to the Company’s 401(k) plan were $10.5 million in 2025. Cash contributions to the 401(k) plan earned in 2025 and expected to be paid in 2026 are $0.3 million.
The Company maintains a non-qualified supplemental deferred compensation plan for highly compensated and key management employees and for non-employee directors of the Company. The Company contributes a matching contribution for eligible wages above IRS employee compensation limits for 401(k) retirement plans and/or an additional contribution from the Company for each individual participant, which may or may not be made, at the full discretion of the Company based on its performance. In 2025, cash contributions by the Company to the non-qualified supplemental deferred compensation plan were $0.5 million. Cash contributions to the non-qualified supplemental deferred compensation plan earned in 2025 and expected to be paid in 2026 are $0.1 million.
Non-GAAP Measures
The Company uses adjusted ROIC, adjusted net income, adjusted diluted net income per share (“Adjusted DEPS”), EBITDA, adjusted EBITDA, and free cash flows, which are financial measures that are not prepared in accordance with GAAP, as additional metrics to evaluate the Company’s performance. The Company believes these non-GAAP measures provide important supplemental information to readers regarding business trends that can be used in evaluating its results because these financial measures provide a consistent method of comparing financial performance and are commonly used by investors to assess performance. These non-GAAP financial measures should be considered together with, and are not substitutes for, the GAAP financial information provided herein.
Adjusted ROIC
Adjusted ROIC measures how efficiently the Company uses invested capital in its operations. Adjusted ROIC is not a measure defined by GAAP and the Company’s methodology for determining adjusted ROIC may vary from the methodology used by other companies. Management and the Board use adjusted ROIC as a measure to assess operational performance and capital allocation. The Company believes this information is useful to investors as it provides a measure of value creation as a percentage of capital invested.
Adjusted ROIC is determined by dividing adjusted net operating profit after tax (“Adjusted NOPAT”) for the years ended December 31, 2025 and 2024, by the five-quarter average of invested capital. Adjusted NOPAT is calculated by taking operating income plus the addback of amortization of intangible assets and the addback or subtraction of restructuring expenses, other non-recurring items - net, and provision for income taxes, which is determined using a 15% tax rate. Invested capital is defined as net total assets less cash and cash equivalents and income tax assets - net plus short-term and long-term
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debt. Income taxes are defined as income tax payables/receivables, net deferred tax assets/liabilities, and uncertain tax positions.
The Company’s adjusted ROIC for the year ended December 31, 2025 was 5.3%. Below is the calculation of adjusted ROIC for the years ended December 31, 2025 and 2024.
Year Ended December 31, 2025
Year Ended December 31, 2024
Operating income
Amortization of intangible assets
Restructuring expense
Other non-recurring items - net
Adjusted operating income
Provision for income taxes
Adjusted NOPAT
5-Quarter Average
Total assets
Total liabilities
Net total assets
Cash and cash equivalents
Short-term borrowings and current portion of long-term debt
Long-term debt
Income tax assets - net
Invested capital
Adjusted ROIC
Adjusted Net Income and Adjusted DEPS
The Company defines adjusted net income as net income plus the addback or subtraction of restructuring and other non-recurring items. Adjusted DEPS is defined as adjusted net income divided by diluted weighted average shares outstanding. Diluted weighted average common shares outstanding are adjusted for the effect of dilutive stock awards when there is net income on an adjusted basis, as applicable. The reconciliation of net income and diluted net income per share to adjusted net
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income and Adjusted DEPS for the year ended December 31, 2025 and 2024 are summarized as follows. All dollar amounts are in millions, except per share data and share amounts.
Year Ended
December 31,
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
Engineering, selling and administrative
expenses (1)
Amortization of intangible assets
Restructuring expense (2)
Operating income
Interest expense
Amortization of deferred financing fees
Other (expense) income - net (3)
Income before income taxes
(Provision) benefit for income taxes (4)
Net income
Diluted weighted average common shares outstanding
Diluted net income per share
The adjustment in 2024 represents $8.9 million of costs associated with a legal matter with the U.S. EPA and $0.2 million of one-time costs.
The adjustment in 2025 and 2024 represents the addback of restructuring expense.
The adjustment in 2025 represents $0.6 million of interest related to settlement of a legal matter with the U.S. EPA. The adjustment in 2024 represents $1.1 million of non-cash losses associated with the refinancing of the Company’s 2026 Notes.
The adjustment in 2025 represents the net income tax impact of item (2). The adjustment in 2024 represents the net income tax impacts of items (1), (2), and (3) and the removal of a $55.1 million benefit from the release of a valuation allowance.
EBITDA and Adjusted EBITDA
The Company defines EBITDA as net income before interest, taxes, depreciation, and amortization. The Company defines adjusted EBITDA as EBITDA plus the addback or subtraction of restructuring expense, other expense – net, and certain other non-recurring items.
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The reconciliation of net income to EBITDA, and further to adjusted EBITDA for the years ended December 31, 2025 and 2024 is summarized as follows:
Year Ended December 31,
Net income
Interest expense and amortization of deferred financing
fees
Provision (benefit) for income taxes
Depreciation expense
Amortization of intangible assets
EBITDA
Restructuring expense
Other non-recurring items - net (1)
Other expense - net (2)
Other non-recurring items - net for the year ended December 31, 2024 relate to $8.9 million of costs associated with a legal matter with the U.S. EPA and $0.2 million of one-time costs.
Other expense - net includes net foreign currency gains (losses), other components of net periodic pension costs, and other items in the years ended December 31, 2025 and 2024.
Free Cash Flows
Free cash flows is defined as net cash provided by operating activities less capital expenditures. The reconciliation of net cash provided by operating activities to f ree cash flows for the years ended December 31, 2025 and 2024 is summarized as follows:
Year Ended
December 31,
Net cash provided by operating activities
Capital expenditures
Free cash flows
Financial Risk Management
The Company is exposed to market risks from changes in interest rates, commodities, and foreign currency exchange rates. To reduce these risks, the Company selectively makes use of derivative financial instruments and other proactive management techniques. The Company has written policies and procedures that place financial instruments under the direction of corporate finance and restrict all derivative transactions to those intended for hedging purposes. The use of financial instruments for trading purposes or speculation is strictly prohibited.
For a more detailed discussion of the Company's accounting policies and the financial instruments that it uses, refer to Note 2, “Summary of Significant Accounting Policies,” Note 5, “Fair Value of Financial Instruments,” and Note 11, “Debt,” to the Consolidated Financial Statements.
Interest Rate Risk
The Company's long-term debt primarily consists of $300.0 million on the 2031 Notes and borrowings under its ABL Revolving Credit Facility. Borrowings under the ABL Revolving Credit Facility are subject to variable interest using either the Alternate Base Rate or Term Benchmark, Applicable Overnight Rate, CBR, or RFR rate (each as defined in the ABL Credit Agreement) plus the applicable spread. The variable interest rate is based upon the average availability as of the most recent determination date. As of December 31, 2025, the Company had borrowings on the ABL Revolving Credit Facility of $144.6 million. At any time, the Company could be party to various interest rate swaps in connection with its fixed or floating rate debt. No interest rate swaps were entered into or outstanding during 2025 or 2024. A hypothetical 100 basis point increase/decrease in the average interest rate of the Company's annual average borrowings under its ABL Revolving Credit Facility would have resulted in a $1.5 million increase/decrease to interest expense for the year ended December 31, 2025.
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Commodity Prices
The Company is exposed to fluctuating market prices for commodities, including steel, copper, aluminum, and petroleum-based products. From time to time the Company may use commodity financial instruments to hedge commodity prices. No commodity financial instruments were entered into or outstanding during 2025 and 2024. For more information on commodities risk, see Part I, Item 1A. – “Risk Factors.”
Currency Risk
The Company has manufacturing, sales, and distribution facilities around the world, and therefore, makes investments and enters into transactions denominated in various currencies, which introduces transactional currency exchange risk.
To mitigate transactional currency exchange risk, the Company, from time-to-time, enters into foreign exchange contracts to 1) reduce the earnings and cash flows impact on non-functional currency denominated receivables and payables and 2) reduce the impact of changes in foreign currency rates between a budgeted rate and the rate realized at the time it recognizes a particular purchase or sale transaction. Gains and losses resulting from hedging instruments either impact the Company’s Consolidated Statements of Operations in the period of the underlying purchase or sale transaction, or offset the foreign exchange gains and losses on the underlying receivables and payables being hedged. The maturities of these foreign exchange contracts coincide with the expected underlying settlement date of the related cash inflow or outflow. The hedges of anticipated transactions are designated as cash flow hedges as required under ASC Topic 815 “Derivatives and Hedging.” As of December 31, 2025, the Company was party to foreign currency forward contracts with a notional value of $108.7 million all of which are carried on the Company’s balance sheet at fair value. As of December 31, 2025, a hypothetical 10% increase or decrease in the exchange rate in the Company’s portfolio of foreign currency contracts would result in a $11.5 million unrealized gain and a $14.1 million unrealized , respectively. Consistent with the use of these contracts to neutralize the effect of exchange rate fluctuations, such unrealized or would be offset by corresponding or , respectively, in the remeasurement of the underlying transactions being hedged.
Amounts invested in non-U.S. based subsidiaries are translated into U.S. dollars at the exchange rate in effect at year-end. Results of operations are translated into U.S. dollars at an average exchange rate for the period. The resulting translation adjustments are recorded in stockholders’ equity as other comprehensive income (loss). The cumulative translation adjustment recorded in other comprehensive income (loss) for the year ended December 31, 2025 was income of $36.3 million.
Environmental, Health, Safety, Contingencies, and Other Matters
Refer to Part II, Item 8, Note 18, “Commitments and Contingencies,” where the Company has disclosed environmental, health, safety, contingencies, and other matters.
Critical Accounting Policies and Estimates
The Consolidated Financial Statements include the accounts of the Company and all its subsidiaries. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and related footnotes. In preparing these Consolidated Financial Statements, the Company has made its best estimates and judgments of certain amounts included in the Consolidated Financial Statements giving due consideration to materiality. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. Although the Company has listed a number of accounting policies and estimates below which the Company believes to be most critical, the Company also believes that all of the Company’s accounting policies are important to the reader. Refer to Part II, Item 8, Note 2, “Summary of Significant Accounting Policies,” for a detailed description of these and other accounting policies of the Company.
Revenue Recognition – The Company records revenue in accordance with ASC Topic 606 – “Revenue from Contracts with Customers.” Below are the Company's revenue recognition policies by performance obligation.
Crane Sales
Crane sales are 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. Revenue is recognized 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.
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From time to time, the Company enters into agreements where the customer has the right to exercise a put option requiring the Company to buy back a crane 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.” 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.
Given the nature of the Company’s products, the customer may request that the product be held until a delivery location is identified. Under these “bill and hold” arrangements, sales are 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.
Crane Attachment Sales
Crane attachment sales are generated through the sale of new or used crane attachments such as luffing jibs, ecomats, and counterweights. Crane attachment sales are recognized when control of the product is transferred to the customer. Control transfers to the customer generally upon delivery to the carrier.
Aftermarket Part Sales
Aftermarket part sales are generated through the sale of new and used parts to end customers and distributors. Aftermarket part sales are 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 net sales.
Other Sales
The Company’s other sales consist primarily of sales from:
Repair and field service work;
Remanufacturing; and
Rental of cranes.
As it relates to the Company’s other sales, the Company’s performance obligations generally relate to performing specific agreed upon services. Depending on the nature of the contract, sales are recognized based on completion of those services or over the service period based on a measure of progress.
Inventories and Related Reserve for Obsolete and Excess Inventory – 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. Inventories are reduced by a reserve for excess and obsolete inventories. The estimated reserve is based upon specific identification of excess or obsolete inventories based on historical usage and estimated future usage.
Goodwill, Intangible Assets and Other Long-Lived Assets – The Company accounts for goodwill and intangible assets under the guidance of ASC Topic 350-10, “Intangibles – Goodwill and Other.” Under ASC Topic 350-10, goodwill is not amortized; instead, the Company performs an annual impairment test. The Company has two reporting units with goodwill: Americas – Distribution and MEAP. The date for the annual impairment test is October 31, or more frequently if events or changes in circumstances indicate that the assets might be impaired. To perform its goodwill impairment test, the Company uses a combination of the income approach and market approach with a weighting of 70/30, respectively, to determine the fair value of the MEAP reporting unit. The Company determined a 70% weighting toward the income approach was appropriate as cash flows for the reporting unit are better aligned to the cyclical nature of the crane business and its unique market dynamics. The Company determined a 30% weighting toward the market approach was appropriate as the valuation is indicative of the fair value of the Company and its reporting unit but there is a lack of comparable peer companies. The Company uses only the income approach to determine the fair value of the Americas – Distribution reporting unit due to the of comparable peer companies to determine fair value under the market approach. is determined based on the amount in which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill at the reporting unit.
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The Company has two indefinite-lived intangible assets subject to an annual impairment test: the Potain trademark, tradename, and distribution network assets (“Potain Tradename”) and the Grove trademark, tradename, and distribution network assets (“Grove Tradename”). To perform its indefinite-lived intangible assets impairment test, the Company uses a fair-value method, based on a relief of royalty valuation approach. Management’s judgments and assumptions about the amounts of those cash flows and the discount rates are inputs to the annual impairment test. Impairment is determined based on the amount in which the carrying value of the indefinite-lived intangible asset exceeds its fair value, not to exceed the carrying amount of the indefinite-lived intangible asset.
As of October 31, 2025, the Company performed its annual goodwill impairment test. The fair values of the Americas - Distribution and MEAP reporting units were 28% and 109%, respectively, in excess of their carrying values as of the date of the annual impairment test and, therefore, were not impaired as of December 31, 2025.
As of October 31, 2025 the Company performed its annual indefinite-lived intangible assets impairment test. The fair value of the Potain and Grove Tradenames were in excess of their carrying values by 83% and 69%, respectively, as of the date of the annual impairment test and, therefore, were not impaired as of December 31, 2025.
A considerable amount of management judgment and assumptions are required in performing the goodwill and indefinite-lived asset impairment tests as it relates to the forecast of future revenues and margins and the discount rate, as applicable. While the Company believes the judgments and assumptions are reasonable, different assumptions could change the estimated fair value and, therefore, additional impairments could be required. Weakening industry or economic trends, disruptions to the Company's business, unexpected significant changes or planned changes in the use of the assets or in entity structure are all factors which may adversely impact the assumptions used in the valuations.
Intangible assets with definite lives continue to be amortized over their estimated useful lives. Definite-lived intangible assets are also subject to impairment testing whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. The Company determined there was not a triggering event during the year ended December 31, 2025, with the exception of one asset group located in Europe. Based on the results of the recoverability test, it was determined that the undiscounted cash flows were in excess of the carrying value of the long-lived assets.
The Company also reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC Topic 360-10-5, “Property, Plant, and Equipment.” ASC Topic 360-10-5 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.
The Company monitors events and market conditions to determine if any interim impairment tests of goodwill, other intangibles, or long-lived assets are warranted. Deterioration in macroeconomic conditions, a decline in actual results as compared with the Company’s projections, or a low equity market capitalization for a prolonged period, are factors which could indicate an interim triggering event has occurred. 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 Sheet and Results of Operations.
Employee Benefit Plans – The Company provides a range of benefits to its employees and retired employees, including pensions and postretirement health care coverage. Plan assets and obligations are recorded annually based on the Company’s measurement date utilizing various actuarial assumptions such as discount rates, expected return on plan assets, compensation increases, retirement and mortality rates and health care cost trend rates as of that date. The approach the Company uses to determine the annual assumptions are as follows:
Discount Rate – The Company’s discount rate assumptions are based on the interest rate of noncallable high-quality corporate bonds, with appropriate consideration of pension plan participant demographics and benefit payment terms. The Company’s discount rate is provided by an independent third party calculated based on an appropriate mix of high-quality bonds.
Expected Return on Plan Assets – The Company’s expected return on plan assets assumptions are based on the Company’s expectation of the long-term average rate of return on assets in the pension funds, which is reflective of the current and projected asset mix of the funds and considers the historical returns earned on the funds, net of estimated fees.
Compensation increase – The Company’s compensation increase assumptions reflect its long-term actual experience, the near-term outlook and assumed inflation.
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Retirement and Mortality Rates – The Company’s retirement and mortality rate assumptions are based primarily on actual plan experience and mortality tables.
Health Care Cost Trend Rates – The Company’s health care cost trend rate assumptions are developed based on historical cost data, near-term outlook and an assessment of likely long-term trends.
The following table summarizes the sensitivity of the Company's December 31, 2025 retirement obligations and 2025 retirement benefit costs to changes in the key assumptions used to determine those results:
Change in assumption:
Estimated
increase
(decrease) in
2026 pension
net periodic
benefit costs
Estimated
increase
(decrease) in
projected
benefit
obligation
for the
year ended
December
Estimated increase
(decrease) in
2026 other
postretirement
net periodic
benefit
costs
Estimated
increase
(decrease) in
other
postretirement
benefit
obligation for
the year ended
December 31,
0.50% increase in discount rate
0.50% decrease in discount rate
0.50% increase in long-term return on assets
0.50% decrease in long-term return on assets
1.0% increase in health care cost trend rates
1.0% decrease in health care cost trend rates
It is reasonably possible that the estimate for future retirement and medical costs may change in the near future due to changes in interest rates. Presently, there is no reliable means to estimate the amount of any such potential changes.
Measurements of net periodic benefit cost are based on the assumptions used for the previous year-end measurements of assets and obligations. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions when appropriate. As required by GAAP, the effects of the modifications are recorded currently or amortized over future periods. The Company has developed the assumptions with the assistance of its independent actuaries and other relevant sources, and believes the assumptions used are reasonable; however, changes in these assumptions could impact the Company’s financial position, results of operations, or cash flows.
Income Taxes – The Company accounts for income taxes under the guidance of ASC Topic 740-10, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities, and the valuation allowance recorded against the net deferred tax assets. The Company does not currently provide for additional U.S. and foreign income taxes which would become payable upon repatriation of undistributed earnings of foreign subsidiaries.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes deferred tax assets to the extent they are believed to be more likely than not to be realized by considering all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.
The Company measures and records income tax contingency accruals under the guidance of ASC Topic 740-10. The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the Company must determine the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis or when new information becomes available to management. These reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit, expirations due to statutes, and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an increase to the tax accrual.
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Warranties – In the normal course of business, the Company provides its customers warranties covering workmanship, and in some cases materials, on products manufactured. Such warranties generally provide that products will be free from defects for periods ranging from 12 months to 60 months. If a product fails to comply with the Company’s warranties, it may be obligated, at its expense, to correct any defect by repairing or replacing such defective product. The Company provides for an estimate of costs that may be incurred under its warranties at the time product revenue is recognized based on historical warranty experience for the related product or estimates of projected losses due to specific warranty issues on new products. These costs primarily include labor and materials, as necessary, associated with repair or replacement. The primary factors that affect the Company’s warranty liabilities include the number of shipped units and historical and anticipated rates or 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.
Item 7A. QUANTITATIVE AND QUALITA TIVE DISCLOSURES ABOUT MARKET RISK
Refer to Liquidity and Capital Resources, and Financial Risk Management in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a description of the quantitative and qualitative disclosures about market risk.
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Item 8. FINANCIAL STATEME NTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements:
Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID: 34 )
Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024, and 2023
Consolidated Balance Sheets for the years ended December 31, 2025 and 2024
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023
Consolidated Statements of Equity for the years ended December 31, 2025, 2024, and 2023
Notes to Consolidated Financial Statements
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of The Manitowoc Company, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of The Manitowoc Company, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 18, 2026 , expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill – Americas – Distribution Reporting Unit – Refer to Notes 2 and 9 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company performed its annual goodwill impairment test on October 31, 2025. The goodwill balance was $79.6 million as of December 31, 2025, of which $14.4 million related to the Americas – Distribution reporting unit. The Company used only the income approach to determine the fair value of the Americas – Distribution reporting unit. A considerable amount of management judgment and assumptions are required in performing the goodwill impairment test as it relates to forecasts of future revenues and margins and the selection of the discount rate. The Company determined that the fair
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value of the Americas - Distribution reporting unit exceeded its carrying value by 28% as of the measurement date and, therefore, no impairment was recognized.
We identified the impairment evaluation of goodwill for the Americas – Distribution reporting unit as a critical audit matter because of the inherent subjectivity involved in management’s estimates and the assumptions related to forecasts of future revenues and margins, and the selection of the discount rate. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the discount rate and forecasts of future revenues and margins used by management to estimate the fair value of the Americas - Distribution reporting unit included the following, among others:
We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those related to management’s forecasts of future revenues and margins and selection of the discount rate.
We evaluated management’s ability to accurately forecast future revenues and margins by comparing actual results to management’s previous forecasts.
We evaluated the reasonableness of management’s revenue and margin forecasts by comparing the forecasts to (1) historical revenues and margins and (2) forecasted information for certain companies in the reporting unit’s industry.
We reviewed industry reports for industry-specific and economic factors for the reporting unit and evaluated the reasonableness of management's revenue forecasts by comparing the forecasts to forecasted information from the industry reports.
With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the discount rate by (1) testing the source information underlying the determination of the discount rate; (2) testing the mathematical accuracy of the calculation; and (3) developing a range of independent estimates and comparing those to the discount rate selected by management.
/s/ DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 18, 2026
We have served as the Company’s auditor since 2023.
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The Manitowoc Company, Inc.
Consolidated Statem ents of Operations
For the years ended December 31, 2025, 2024, and 2023
Millions of dollars, except per share data
Net sales
Cost of sales
Gross profit
Operating costs and expenses:
Engineering, selling and administrative expenses
Amortization of intangible assets
Restructuring expense
Total operating costs and expenses
Operating income
Other expense:
Interest expense
Amortization of deferred financing fees
Other expense - net
Total other expense
Income before income taxes
Provision (benefit) for income taxes
Net income
Per Share Data
Basic net income per common share
Diluted net income per common share
The accompanying notes are an integral part of these consolidated financial statements.
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The Manitowoc Company, Inc.
Consolidated Statements of C omprehensive Income
For the years ended December 31, 2025, 2024, and 2023
Millions of dollars
Net income
Other comprehensive income (loss),
net of income tax
Unrealized gain (loss) on derivatives, net of
income tax (provision) benefit of $( 0.8 ), $ 1.0
and $ 0.0 , respectively
Employee pension and postretirement benefit income, net of income tax
(provision) benefit of $( 1.1 ), $( 1.3 ), and $ 0.7 , respectively
Foreign currency translation adjustments, net of
income tax (provision) benefit of $( 6.6 ), $ 2.1 , and $ 0.1 , respectively
Total other comprehensive income (loss), net of income tax
Comprehensive income
The accompanying notes are an integral part of these consolidated financial statements.
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The Manitowoc Company, Inc.
Consolidated B alance Sheets
As of December 31, 2025 and 2024
Dollars in millions, except par value and share amounts
Assets
Current Assets:
Cash and cash equivalents
Accounts receivable, less allowances of $ 5.8 and $ 5.9 , respectively
Inventories - net
Other current assets
Total current assets
Property, plant and equipment — net
Operating lease right-of-use assets
Goodwill
Intangible assets — net
Other non-current assets
Total assets
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses
Customer advances
Short-term borrowings and current portion of long-term debt
Product warranties
Other liabilities
Total current liabilities
Non-Current Liabilities:
Long-term debt
Operating lease liabilities
Deferred income taxes
Pension obligations
Postretirement health and other benefit obligations
Long-term deferred revenue
Other non-current liabilities
Total non-current liabilities
Commitments and contingencies (Note 18)
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,
35,473,418 and 35,134,245 shares outstanding, respectively)
Additional paid-in capital
Accumulated other comprehensive loss
Retained earnings
Treasury stock, at cost ( 5,320,565 and 5,659,738 shares, respectively)
Total stockholders' equity
Total liabilities and stockholders' equity
The accompanying notes are an integral part of these consolidated financial statements.
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The Manitowoc Company, Inc.
Consolidated Statem ents of Cash Flows
For the years ended December 31, 2025, 2024, and 2023
Millions of dollars
Cash Flows from Operating Activities:
Net income
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation expense
Amortization of intangible assets
Stock-based compensation expense
Amortization of deferred financing fees
Loss on debt extinguishment
Gain on sale of property, plant and equipment
Deferred income tax benefit - net
Other
Changes in operating assets and liabilities
Accounts receivable
Inventories
Other assets
Accounts payable
Accrued expenses and other liabilities
Net cash provided by operating activities
Cash Flows from Investing Activities:
Capital expenditures
Proceeds from sale of fixed assets
Purchase of assets
Other
Net cash used for investing activities
Cash Flows from Financing Activities:
Payments on revolving credit facility
Proceeds from revolving credit facility
Payments on long-term debt
Proceeds from long-term debt
Payments on other debt
Proceeds from other debt
Debt issuance costs and other debt related costs
Exercise of stock options
Common stock repurchases
Other financing activities
Net cash provided by (used for) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental Cash Flow Information
Interest paid
The accompanying notes are an integral part of these consolidated financial statements.
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The Manitowoc Company, Inc.
Consolidated Stat ements of Equity
For the years ended December 31, 2025, 2024, and 2023
Millions of dollars
Common Stock - Par Value
Balance at beginning of period
Balance at end of period
Additional Paid-in Capital
Balance at beginning of period
Stock compensation plans
Balance at end of period
Accumulated Other Comprehensive Loss
Balance at beginning of period
Other comprehensive income (loss)
Balance at end of period
Retained Earnings
Balance at beginning of period
Net income
Balance at end of period
Treasury Stock
Balance at beginning of period
Stock compensation plans
Common stock repurchases
Balance at end of period
Total stockholders' equity
The accompanying notes are an integral part of these consolidated financial statements.
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Notes to Consolidated Financial Statements
1. Company and Basis of Presentation
The Manitowoc Company, Inc. (“Manitowoc” or the “Company”) was founded in 1902, and is headquartered in Milwaukee, Wisconsin, United States. Manitowoc, through its wholly-owned subsidiaries, provides high quality, customer-focused lifting products and services world-wide through its Grove, Manitowoc, National Crane, Potain, Shuttlelift, and Upfits by Aspen Equipment brands and its support-focused subsidiary MGX Equipment Services. For more information, visit www.manitowoc.com. The information on our website is not part of this or any other report we file with or furnish to the SEC and is not incorporated herein by reference.
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. Due to the ongoing and predictable maintenance needed by cranes, as well as the high cost of crane downtime, Manitowoc’s aftermarket support operations provide the Company with a consistent stream of recurring revenue. Manitowoc's 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 Company 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.
All amounts, except per share data and share amounts, are in millions throughout the tables in these notes unless otherwise indicated.
2. Summary of Significant Accounting Policies
Cash and Cash Equivalents The Company considers all cash, bankers acceptance, and short-term investments purchased with an original maturity of three months or less as cash and cash equivalents.
Allowance for Credit Losses Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. The Company's allowance for credit losses is based on an estimate of the losses inherent in amounts billed, pools of receivables with similar risk characteristics, existing and future economic conditions, reasonable and supportable forecasts that affect the collectability of the related receivable, and any specific customer collection issues the Company has identified.
The following table is a rollforward of the allowance for credit losses for the years ended December 31, 2025, 2024, and 2023.
Balance at beginning of period
Bad debt expenses
Use of reserve
Currency translation
Balance at end of period
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 and average cost methodologies.
Business Combinations The Company accounts for business combinations under the acquisition method in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“Topic 805”). The acquisition method requires identifiable assets acquired and liabilities assumed and any non-controlling interest in the business acquired be recognized and measured at fair value on the acquisition date, which is the date that the Company obtains control of the acquired business. The amount by which the fair value of consideration transferred as the purchase price exceeds the net fair
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value of assets acquired and liabilities assumed is recorded as goodwill. The Company expenses transaction costs in a business combination.
Goodwill and Intangible Asset s The Company accounts for goodwill and intangible assets under the guidance of ASC Topic 350-10, “Intangibles — Goodwill and Other” (“Topic 350”). Under Topic 350, goodwill is not amortized; instead, the Company performs an annual impairment test. The date for the annual impairment test is October 31 or more frequently if events or changes in circumstances indicate that the assets might be impaired. To perform its goodwill impairment test, the Company uses a combination of the income approach and market approach with a weighting of 70/30, respectively, to determine the fair value of the Middle East and Asia Pacific (“MEAP”) reporting unit. The Company uses only the income approach to determine the fair value of the Americas - Distribution reporting unit due to a lack of comparable peer companies to determine fair value under the market approach. Impairment is determined based on the amount in which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill at the reporting unit. 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 indefinite-lived intangible assets are not amortized but are subject to an annual impairment test. To perform its indefinite-lived intangible assets impairment test, the Company uses a fair-value method based on a relief of royalty valuation approach to determine the fair value of its indefinite-lived intangible assets. Management’s judgments and assumptions about the amounts of those cash flows and the discount rates are inputs to the annual impairment test. Impairment is determined based on the amount in which the carrying value of the indefinite-lived intangible asset exceeds its fair value, not to exceed the carrying amount of the indefinite-lived intangible asset. Refer to Note 9, “Goodwill and Intangible Assets,” for further details on the Company's impairment assessments. The Company’s definite-lived intangible assets subject to amortization are subject to impairment testing whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If an indicator of impairment is identified, the Company would use the undiscounted cash flow model.
The Company’s intangible assets subject to amortization are amortized straight-line over the following minimum and maximum estimated useful lives according to the Company's policy:
Years
Patents
Customer relationships
Trademarks and tradenames
Noncompetition agreements
Property, Plant, and Equipment Property, plant, and equipment are stated at cost. Expenditures for maintenance and repairs 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 depreciated over the remaining estimated useful life. 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 asset’s estimated useful life using the straight-line depreciation method for financial reporting and accelerated methods for income tax purposes. The Company also has certain leasehold improvements which are depreciated over the lesser of the asset's useful life or lease term using the straight-line depreciation method.
Property, plant, and equipment are generally depreciated over the following estimated useful lives according to the Company's policy:
Years
Building and improvements
Machinery, equipment, and tooling
Furniture and fixtures
Computer hardware and software
Rental cranes
Property, plant, and equipment also includes cranes accounted for as operating leases which are included in rental cranes as described below. 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 at the time of the order had a significant economic incentive to exercise. 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
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buyback amount at the end of the lease period. The amount of rental cranes included in property, plant, and equipment - net amou nted to $ 127.7 million a nd $ 142.1 million, net of accumulated depreciation, as of December 31, 2025 and 2024, 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 the undiscounted cash flows are less than the net book value of the assets, any related impairment loss is calculated based upon comparison of the fair value to the net book value of the assets.
Warranties Estimated 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 during the extended warranty period are expensed as incurred. Costs associated with other warranty activity not related to a manufacturer's standard or extended warranty are recorded in the period a loss is probable and can be reasonably estimated in accordance with ASC Topic 450-20 “Loss Contingencies.”
Product Liabilities The Company records product liability reserves for its self-insured portion of any outstanding product liability cases when losses are probable and reasonably estimable. The reserve is based upon two estimates. First, the Company tracks the population of all outstanding 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. Insurance recoveries related to a product liability case are recorded as an asset in the period it is determined that the gain has been realized or realizable. Refer to Note 18, “Commitments and Contingencies,” for further information.
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 Topic 815 “Derivatives 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 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 net of estimated future forfeitures for non-performance stock-based awards on a straight-line basis over the vesting period of the entire award. The Company recognizes expense net of estimated future forfeitures for stock-based awards with performance goals based on actual or estimated achievement of those goals on a straight-line basis over the vesting period of the entire award. Estimated future forfeiture rates are based on the Company's historical experience. Refer to Note 16, “Stock-Based Compensation,” for more information on stock-based compensation plans.
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Research and Development Research and development costs are charged to expense as incurred and amounted t o $ 55.8 million, $ 41.1 million and $ 35.3 million for the years ended December 31, 2025, 2024, and 2023, respectively. Research and development costs include salaries, materials, contractor fees, and other administrative costs. These costs are recorde d within engineering, selling, and administrative expenses in the Consolidated Statement of Operations.
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.
Ne t Income Per Share Net income per share is computed by dividing net income by the weighted average number of common shares outstanding during each year or period. The calculation of diluted net income per share reflects the effect of all potential dilutive shares that were outstanding during the respective periods, unless the effect of doing so would be antidilutive. The Company uses the treasury stock method to calculate the effect of outstanding stock-based compensation awards.
Comprehensive Income Comprehensive income in cludes, in addition to net income, 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.
Net Sales Sales are 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 attachments or aftermarket parts or completion of performance of services. Sales are measured as the amount of consideration the Company expects to be entitled to receive in exchange for transferring goods or providing services. The Company recognizes sales for extended 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 sales.
Performance Obligations
The following is a description of principal activities from which the Company generates sales. Disaggregation of the Company’s revenue sources are disclosed in Note 17, “Segments.”
Crane Sales
Crane sales are 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 variable consideration is not material to the overall contract with the customer. Sales are recognized 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.
From time to time, the Company enters into agreements where the customer has the right to exercise a put option requiring the Company to buyback a crane 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.
Given the nature of the Company’s products, the customer may request that the product be held until a delivery location is identified. Under these “bill and hold” arrangements, sales are 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.
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Crane Attachment Sales
Crane attachment sales are generated through the sale of new or used crane attachments such as luffing jibs, ecomats, and counterweights. Crane attachment sales are recognized when control of the product is transferred to the customer. Control transfers to the customer generally upon delivery to the carrier.
Aftermarket Part Sales
Aftermarket part sales are generated through the sale of new and used parts to end customers and distributors. Aftermarket part sales are 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 net sales.
Other Sales
The Company’s other sales consist primarily of sales from:
Repair and field service work;
Remanufacturing; and
Rental of cranes.
The Company’s performance obligations for other sales generally relates to performing specific agreed upon services. Depending on the nature of the contract, sales are recognized upon the completion of those services or over the service period based on a measure of progress.
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 accounts for shipping and handling activities performed after control of a product has been transferred to the customer as a fulfillment cost. As such, we have applied the practical expedient and we accrue for the costs of shipping and handling activities if revenue is recognized before contractually agreed shipping and handling activities occur.
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.
Rece nt Accounting Changes and Pronouncements
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The amendments in this ASU enhance the transparency and decision usefulness of income tax disclosures. The standard is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted this ASU as of December 31, 2025, refer to Note 13, “Income Taxes” for the additional disclosures required by the adoption of this ASU.
In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 224-40): Disaggregation of Income Statement Expense." The amendments in this ASU require public companies to disclose more information about their expenses in their financial statements. The ASU is effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the adoption of this ASU will have on its consolidated financial statements.
3. Acquisition of Assets
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Effective February 4, 2025, the Company acquired certain assets and distribution rights in Georgia, North Carolina, and South Carolina from Ring Power Corporation for total cash consideration of $ 12.9 million. The acquisition did not meet the definition of a business under ASC 805, "Business Combinations," and has therefore been accounted for as an asset acquisition.
The purchase price was allocated to the underlying assets acquired based upon their estimated fair value at the date of the acquisition as follows:
Inventory
Intangible assets
Property, plant, and equipment
Total Consideration
4. Net Sales
The Company defers revenue when cash payments are received in advance of satisfying the performance obligation. These amounts are recorded as customer advances in the Consolidated Balance Sheets. The table below shows the change in the customer advances balance for the years ended December 31, 2025 and 2024.
Balance at beginning of period
Cash received in advance of satisfying
performance obligations
Revenue recognized
Currency translation
Balance at end of period
The long-term portion of customer advances is recorded in other non-current liabilities in the Consolidated Balance Sheets.
The Company recognizes a contract asset for certain remanufacturing, repair, and field service work when the service is completed but unbilled as of the end of the period. Contract assets are recorded in other current assets in the Consolidated Balance Sheets. Contract assets were $ 11.7 million an d $ 8.8 million as of December 3 1, 2025 and 2024 .
5. Fair Value of Financial Instruments
ASC Topic 820-10 ("ASC 820") 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 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
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The following tables set forth the Company’s financial assets and liabilities related to foreign currency exchange contracts ("FX Forward Contracts") and The Manitowoc Company, Inc. Deferred Compensation Plan (the "Deferred Compensation Plan") that were accounted for at fair value as of December 31, 2025 and 2024.
Fair Value as of December 31, 2025
Level 1
Level 2
Level 3
Total
Recognized Location
Assets:
FX Forward Contracts
Other current assets
Deferred Compensation Plan - Program B
Other non-current assets
Total assets at fair value
Current Liabilities:
FX Forward Contracts
Accounts payable and
accrued expenses
Fair Value as of December 31, 2024
Level 1
Level 2
Level 3
Total
Recognized Location
Assets:
FX Forward Contracts
Other current assets
Deferred Compensation Plan - Program B
Other non-current assets
Total assets at fair value
Current Liabilities:
FX Forward Contracts
Accounts payable and
accrued expenses
The fair value of the $ 300.0 million se nior secured second lien notes due on October 1, 2031 , with an annual coupon rate of 9.25 % (the “2031 Notes”), was approximately $ 323.8 million as of December 31, 2025. Refer to Note 11, “Debt,” for a description of the 2031 Notes and the related carrying value.
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 the fair value of its 2031 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, and short-term variable debt, including any amounts outstanding under the Company's revolving credit facility, approximate fair value, without being discounted as of December 31, 2025 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. Refer to Note 6, “Derivative Financial Instruments,” for additional information.
T he Deferred Compensation Plan utilizes a rabbi trust to hold assets intended to satisfy the Company's corresponding future benefit obligations. The plan assets and corresponding obligations for Program B under the Deferred Compensation Plan are classified within Level 1. Refer to Note 20, "Employee Benefit Plans," for additional information on the Deferred Compensation Plan.
6. 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
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flows, changes in the derivatives’ fair value are not included in current earnings but are included in AOCI. 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. During the year-ended December 31, 2025, $ 1.6 million of forecasted transactions were no longer probable of occurring, resulting in a net gain of $ 0.1 million being recorded to other expense - net in the Consolidated Statement of Operations. No amounts w ere recorded related to forecasted transactions no longer being probable during the years ended December 31, 2024 or 2023.
The Company had FX Forward Contracts with an aggregate notional amount of $ 108.7 million and $ 129.7 million outstanding as of December 31, 2025 and 2024, respectively. The aggregate notional amount outstanding as of December 31, 2025 is scheduled to mature within 13 months . The FX Forward Contracts purchased are denominated in various foreign currencies. As of December 31, 2025 and 2024, the net fair value of these contracts was a net short-term asset of $ 0.1 million and a net short-term liability of $ 3.3 million, respectively. Net unrealized gains (losses), net of income tax, recorded in AOCI were $ 0.7 million as of December 31, 2025 and $( 1.7 ) million as of December 31, 2024.
The gains (losses) recorded in the Consolidated Statement of Operations for FX Forward Contracts for the years ended December 31, 2025, 2024, and 2023 are summarized as follows:
Recognized Location
Designated
Cost of sales
Non-Designated
Other expense - net
7. Inventories
The components of inventories as of December 31, 2025 and 2024 are summarized as follows:
Raw materials
Work-in-process
Finished goods
Inventories - net
8. Property, Plant, and Equipment
The components of property, plant, and equipment as of December 31, 2025 and 2024 are summarized as follows:
Land
Building and improvements
Machinery, equipment, and tooling
Furniture and fixtures
Computer hardware and software
Rental cranes
Construction in progress
Total cost
Less accumulated depreciation
Property, plant, and equipment — net
Property, plant, and equipment is depreciated over the estimated useful life using the straight-line depreciation method for financial reporting and accelerated methods for income tax purposes.
Additions to property, plant, and equipment included in accounts payable and accrued expenses in the Consolidated Balance Sheets as of December 31, 2025 and 2024 were $ 1.8 million and $ 5.3 million, respectively.
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9. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 are summarized as follows:
Americas
MEAP
Consolidated
Balance as of January 1, 2024
Foreign currency impact
Balance as of December 31, 2024
Foreign currency impact
Balance as of December 31, 2025
The gross carrying amount, accumulated impairment, and net book value of the Company's goodwill balances by reportable segment are summarized as follows:
December 31, 2025
December 31, 2024
Gross Carrying Amount
Accumulated Impairment Amount
Net Book Value
Gross Carrying Amount
Accumulated Impairment Amount
Net Book Value
Americas
EURAF
MEAP
Total
The Company performs its annual goodwill impairment test during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company will continue to monitor changes in circumstances and test more frequently if those changes indicate that assets might be impaired. As of October 31, 2025 , the Company performed its annual goodwill impairment test. The fair values of the Americas - Distribution and MEAP reporting units were in excess of their carrying values by 28 % and 109 %, respectively, as of the date of the annual impairment test and, therefore, were no t impaired as of December 31, 2025.
T he gross carrying amount, accumulated amortization and net book value of the Company’s intangible assets other than goodwill as of December 31, 2025 and 2024 are summarized as follows:
December 31, 2025
December 31, 2024
Gross
Carrying
Amount
Accumulated
Amortization
Amount
Net
Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Amount
Net
Book
Value
Definite lived intangible assets:
Customer relationships
Patents
Noncompetition agreements
Trademarks and tradenames
Total
Indefinite-lived intangible assets:
Trademarks and tradenames
Distribution network
Total
Total other intangible assets
Definite lived intangible assets are amortized over their estimated useful lives.
Amortization expense of intangible assets for the years ended December 31, 2025, 2024, and 2023 was $ 3.1 million, $ 2.9 million, and $ 3.2 million, respectively.
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Excluding the impact of any future acquisitions, divestitures or impairments, the Company's anticipated future amortization of intangible assets as of December 31 , 2025 is summarized as follows:
Year
Amortization
Thereafter
Total
Long-lived assets, which are primarily made up of property, plant, and equipment and definite lived intangible assets, are subject to impairment testing whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. The Company determined there was not a triggering event during the year ended December 31, 2025, with the exception of one asset group located in Europe. Based on the results of the recoverability test, it was determined that the undiscounted cash flows were in excess of the carrying value of that asset group.
The Company performs its annual indefinite-lived intangible assets impairment testing during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company will continue to monitor changes in circumstances and test more frequently if those changes indicate that assets might be impaired. The Company has two indefinite-lived intangible assets subject to an annual impairment test: the Potain trademark, tradename, and distribution network assets (“Potain Tradename”) and the Grove trademark, tradename, and distribution network assets (“Grove Tradename”). As of October 31, 2025 , the Company performed its annual indefinite-lived intangible assets impairment test. The fair value of the Potain and Grove Tradenames were in excess of their carrying values by 83 % and 69 %, respectively, as of the date of the annual impairment test and, therefore, were not impaired as of December 31, 2025.
A considerable amount of management judgment and assumptions are required in performing the goodwill and indefinite-lived asset impairment tests as it relates to the forecast of future revenues and margins and the discount rate, as applicable. While the Company believes the judgments and assumptions are reasonable, different assumptions could change the estimated fair value and, therefore, additional impairments could be required. Weakening industry or economic trends, disruptions to the Company's business, unexpected significant changes or planned changes in the use of the assets or in entity structure are all factors which may adversely impact the assumptions used in the valuations.
The Company continually monitors market conditions and determines if any additional interim reviews of 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.
10. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of December 31, 2025 and 2024 are summarized as follows:
Trade accounts payable
Employee-related expenses
Accrued vacation
Miscellaneous accrued expenses
Total accounts payable and accrued expenses
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11. Debt
Outstanding debt as of December 31, 2025 and 2024 is summarized as follows:
Borrowings under senior secured asset based revolving
credit facility
Senior secured second lien notes due 2031
Other debt
Deferred financing costs
Total debt
Short-term borrowings and current portion of long-term
debt
Long-term debt
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 certain 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 2031 Notes and the related guarantees. The ABL Revolving Credit Facility 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 (the “German Borrower”).
On June 17, 2021, the Company amended the ABL Credit Agreement to adjust certain negative covenants which reduced restrictions on the Company’s ability to expand its rental business. On May 19, 2022, the Company further amended the ABL Credit Agreement to (i) extend the maturity date to May 19, 2027 (subject to a springing maturity date of December 30, 2025 if our senior secured lien notes due April 1, 2026 had not been repaid in full or refinanced prior to December 30, 2025), (ii) permit the inclusion, subject to certain limitations, of the crane rental assets of certain subsidiaries in the borrowing base used to calculate availability under the ABL Credit Agreement, (iii) permit separate financing of crane rental assets not included in the borrowing base and (iv) replace U.S. dollar London Inter-bank Offered Rate with interest rates based on the secured overnight financing rate plus a credit spread adjustment (“SOFR”).
On September 18, 2024, the Company further amended the ABL Credit Agreement to (i) increase the aggregate commitment by $ 50.0 million to a total aggregate commitment of up to $ 325.0 million, of which $ 100.0 million is available to the German Borrower, (ii) increase the swingline sublimit by $ 20.0 million to an aggregate $ 50.0 million, of which $ 20.0 million is available to the German Borrower, and (iii) extend the maturity date to September 18, 2029.
Borrowings under the ABL Revolving Credit Facility bear interest at a variable rate using either the Alternate Base Rate or Term Benchmark, Applicable Overnight Rate, Central Bank Rate ("CBR") or RFR rate (each as defined in the ABL Credit Agreement) plus the applicable spread set forth below. The variable interest rate is based upon the average availability as of the most recent determination date as follows:
Average quarterly availability
Alternative Base Rate spread
Term Benchmark, Applicable Overnight Rate, CBR and RFR spread
Category 1
≥ 66% of Aggregate Commitment
Category 2
< 66% but ≥ 33% of Aggregate Commitment
Category 3
< 33% of Aggregate Commitment
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As of December 31, 2025 and 2024 , the Company had $ 144.6 million and $ 79.0 million, respectively, of borrowings outstanding under the ABL Revolving Credit Facility. T he spreads for Term Benchmark, Applicable Overnight Rate, CBR and RFR spread and Alternative Base Rate borrowings were deemed to be in Category 2 for the period from January 1, 2025 to March 31, 2025, Category 1 for the period from April 1, 2025 to June 30, 2025, and Category 2 for the period from July 1, 2025 to December 31, 2025. Excess availability as of December 31, 2025 was $ 177.0 million, which represents revolver borrowing capacity of $ 325.0 milli on less $ 144.6 million in borrowings outstanding and U.S. letters of credit outstanding of $ 3.4 million.
During the year ended December 31, 2025 , the highest daily borrowing under the ABL Revolving Credit Facility was $ 217.8 million and the average borrowing was $ 151.5 million, while the weighted-average annual interest rate was 4.83 %. During the year ended December 31, 2024 , the highest daily borrowing under the ABL Revolving Credit Facility was $ 173.0 million and the average borrowing was $ 120.5 million, while the weighted-average annual interest rate was 6.47 %.
As of December 31, 2025 , the Company had outstanding $ 20.6 million of other indebtedness that had a weighted-average interest rate of approximately 5.3 %. This debt includes balances on local credit lines, overdraft facilities, and other financing arrangements. The overdraft facilities were composed of five Euro facilities totaling € 37.0 million and one Chinese Yuan facility totaling ¥ 30.0 million. Total U.S. dollar availability as of December 31, 2025 for the six overdraft facilities was $ 47.7 million, with $ 4.3 million outstanding.
On September 19, 2024, the Company and certain of its subsidiaries entered into an indenture with U.S. Bank Trust Company, National Association as trustee and notes collateral agent, pursuant to which the Company issued $ 300.0 million aggregate principal amount of the 2031 Notes with an annual coupon rate of 9.25 %. Interest on the 2031 Notes is payable in cash semi-annually in arrears on April 1 and October 1 of each year. The 2031 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 or that guarantees certain other debt of the Company or a guarantor. The 2031 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 Company used the net proceeds from this offering, together with cash on hand, to redeem all of its outstanding 9.00 % senior secured second lien notes due 2026.
For the year ended December 31, 2024, the Company recorded a $ 1.1 million non-cash charge in other expense – net in the Consolidated Statement of Operations associated with the Company’s refinancing of the ABL Revolving Credit Facility and 2031 Notes. The charge is related to unamortized debt issuance costs on the prior $ 300.0 million senior secured second lien notes due April 1, 2026.
Both the ABL Revolving Credit Facility and the 2031 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 2031 Notes also include customary events of default. The ABL Revolving Credit Facility has customary representations and warranties including, as a condition to borrowing, that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no material adverse change in the Company’s business or financial condition since December 31, 2021.
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.
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The aggregate scheduled future maturities of outstanding debt obligations as of December 31, 2025 is summarized as follows:
Year
Maturities
Thereafter
Total
The table of scheduled maturities above does not agree to the Company’s total debt as of December 31, 2025 as shown on the Consolidated Balance Sheet due to $ 4.4 million of deferred financing costs associated with the 2031 Notes.
As of December 31, 2025 , 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 the 2031 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 .
12. Accounts Receivable Factoring
The Company has two non-U.S. accounts receivable financing programs with a maximum availability of € 25.0 million and € 40.0 million. Transactions under the non-U.S. programs were accounted for as sales in accordance with ASC 860, “Transfers and Servicing.” Under these financing programs, the Company has the ability to sell eligible receivables up to the customer's maximum limit and the Company's maximum availability.
For the years ended December 31, 2025 and 2024 , cash proceeds from the factoring of accounts receivable qualifying as sales were $ 269.1 million and $ 169.8 million, respectively.
Financing charges incurred from the factoring of accounts receivable qualifying as sales for the year ended December 31, 2025, 2024, and 2023 were immaterial.
13. Income Taxes
Income (loss) before income taxes for the years ended December 31, 2025, 2024, and 2023 is summarized as follows:
Income (loss) before income taxes:
United States
Foreign
Total
Provision (benefit) for income taxes for the years ended December 31, 2025, 2024, and 2023 is summarized as follows:
Current:
United States federal
State
Foreign
Total current
Deferred:
United States federal
State
Foreign
Total deferred
Provision (benefit) for income taxes
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The items accounting for the difference between income taxes computed at the United States federal statutory rate and the Company's effective rate for the years ended December 31, 2025, 2024, and 2023 is summarized as follows:
Total
Percent
Total
Percent
Total
Percent
Earnings from continuing operations, before income tax expense
U.S. Federal Statutory Tax Rate
United States
State and Local Income Taxes (a)
Federal
Effect of Cross-Border Tax Laws
GILTI
Other cross-border
Tax Credits
Research and development credit
Changes in Valuation Allowances
Nontaxable or Nondeductible Items
Non-deductible compensation
Non-deductible expenses
Share-based compensation
Other Adjustments
Brazil
Changes in Valuation Allowances
Foreign permanent items
Other
China
Foreign rate difference
Other
France
Foreign rate difference
Foreign permanent items
Foreign other taxes
Other
Germany
Changes in Valuation Allowances
Foreign rate difference
Foreign rate change
Other
Netherlands
Foreign rate difference
Foreign permanent items
Other
Other Foreign Jurisdictions
Changes in Unrecognized Tax Benefits
Income Tax Expense
The following states make up the majority of the tax effect in this category: California, Illinois, Minnesota, Pennsylvania, and Texas
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For the year ended December 31, 2025, the provision for income taxes was favorably impacted by a $ 5.4 million net reduction of the valuation allowance. This benefit was offset by domestic and foreign non-deductible expenses. For the year ended December 31, 2024, the benefit for income taxes was primarily driven by a $ 57.5 million net reduction of the valuation allowance. The benefit was partially offset by an increase of $ 5.6 million in the reserve for unrecognized tax benefits. For the year ended December 31, 2023, the provision for income taxes was favorably impacted by the release of a $ 19.0 million valuation allowance and a $ 3.2 million tax benefit for the favorable resolution of a previously reserved foreign income tax matter. These benefits were partially offset by the tax effect of $ 8.2 million related to non-deductible expenses.
For the years ended December 31, 2025, 2024, and 2023, the Company recorded a net income tax inclusion for global intangible low-taxed income (“GILTI”) in the amount of $ 7.7 million, $ 2.1 million, and $ 48.0 million, respectively. The GILTI inclusion for each respective year is reflective of the final regulations issued in 2020 relating to Internal Revenue Code Section 951A and the treatment of foreign income subject to a high tax rate.
As of each reporting date, the Company considers new evidence, both positive and negative, that could impact its assessment related to future realization of deferred tax assets. The income tax provision for the year ended December 31, 2025 includes a $ 6.7 million benefit from the reduction of a valuation allowance. The benefit for income taxes for the year ended December 31, 2024 includes a $ 57.5 million income tax benefit from the reduction of a valuation allowance. The provision for income taxes for the year ended December 31, 2023 includes a $ 19.0 million income tax benefit for the release of a valuation allowance. As of December 31, 2025, the Company has recorded valuation allowances on deferred tax assets for certain legal entities in Brazil, Chile, Russia, the U.K. and the United States as it is more likely than not that the assets will not be realized.
Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are summarized as follows:
Deferred income tax assets:
Inventories
Deferred employee benefits
Product warranty reserves
Product liability reserves
Tax credits
Loss and other tax attribute carryforwards
Deferred revenue
Capitalized research costs
Other
Total deferred income tax assets
Less valuation allowance
Net deferred income tax assets
Deferred income tax liabilities
Property, plant, and equipment
Intangible assets
Total deferred income tax liabilities
Net deferred income tax assets
The net deferred tax assets reflected in the Consolidated Balance Sheets for the years ended December 31, 2025 and 2024 are summarized as follows:
Long-term income tax assets, included in
other non-current assets
Long-term deferred income tax liability
Net deferred income tax asset
The Company believes that certain offshore cash can be accessed in a tax efficient manner and therefore, as of December 31, 2025, deferred taxes were not provided on approximately $ 216.4 million of unremitted earnings of foreign subsidiaries that may be remitted to the United States without material tax cost. The Company had approximately $ 470.5 million and $ 403.1 million of cumulative foreign earnings as of December 31, 2025 and December 31, 2024, respectively, which are asserted to be
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permanently reinvested. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.
As of December 31, 2025 and 2024, the Company had approximately $ 39.7 million and $ 72.1 million of federal net operating loss carryforwards, which are available to reduce future federal tax liabilities. The full amount is not subject to any time restrictions for future use. However, utilization of the indefinite lived loss carryforwards is limited annually to 80 % of adjusted taxable income.
As of December 31, 2025 and 2024, the Company had approximately $ 10.2 million and $ 40.7 million, respectively, of federal interest expense carryforward that is not subject to any time restrictions for future use. The utilization of the interest expense carryforward is limited annually to 30 % of adjusted taxable income.
As of December 31, 2025 and 2024, the Company had approximately $ 687.4 million and $ 682.7 million, respectively, of state net operating loss carryforwards, which are available to reduce future state tax liabilities. As of December 31, 2025, these state net operating loss carryforwards expire at various times through 2045 , respectively. As of December 31, 2025 and 2024, $ 666.7 million and $ 669.2 million, respectively, of the carryforward is offset by a partial valuation allowance.
As of December 31, 2025 and 2024, the Company had approximately $ 207.5 million and $ 208.5 million, respectively, of foreign loss carryforwards, which are available to reduce future foreign tax liabilities. Substantially all the foreign loss carryforwards have an indefinite carryforward period of which $ 63.8 million is offset by a valuation allowance as of December 31, 2025 and $ 55.5 million is offset by a valuation allowance as of December 31, 2024.
The total cash taxes reflected in the Consolidated Statement of Cash Flows for the years ended December 31, 2025 and 2024 are summarized as follows:
Federal
State
Foreign
Total
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
France
Germany
Portugal
Italy
Australia
Singapore
China
India
Mexico
Brazil
* Jurisdiction below the threshold for the period presented
The Company or one of its subsidiaries files income tax returns in the United States and certain foreign jurisdictions. The following table provides the open tax years for which the Company could be subject to income tax examination by the tax authorities in its major jurisdictions:
Jurisdiction
Open Years
U.S. federal
China
France
Germany
The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. As of December 31, 2025, the Company believes that it is more likely than not that the tax positions taken will be sustained upon the resolution of audits resulting in no material impact on its consolidated financial position and the results of operations and cashflows. However, the final determination with respect to any tax audits, including any related
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litigation costs, settlements, penalties and/or interest assessments, could be materially different from the Company’s accruals and could have a material effect on its financial position, results of operations, and/or cash flows in the periods for which that determination is made.
During the years ended December 31, 2025, 2024, and 2023, the Company recorded an increase to the gross unrecognized tax benefits including interest and penalties of $ 2.2 million, $ 5.4 million, and $ 0.2 million, respectively, of which $ 0.4 million, $ 0.6 million, and $ 0.2 million, respectively, are a result of adjustments to interest and penalties. Interest and penalties are recognized as a component of income tax expense.
A reconciliation of the beginning and ending amount of unrecognized tax benefits excluding interest and penalties as of Decem ber 31, 2025, 2024, and 2023 is summarized as follows:
Balance at beginning of year
Additions for tax positions of current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Reductions for lapse of statute of limitations
Balance at end of year
As of December 31, 2025, 2024, and 2023, the Company recorded interest and penalties of $ 2.4 million, $ 2.0 million, and $ 1.4 million, respectively.
The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was approximately $ 13.7 million as of December 31, 2025.
It is reasonably possible that the unrecognized tax benefits could significantly change over the next 12 months. However, due to the highly uncertain nature of resolution and closure on audits, we are unable to estimate the range of impact at this time.
14. Net Income Per Common Share
The following is a reconciliation of the weighted average common shares outstanding used to compute basic and diluted net income per common share:
Basic weighted average common
shares outstanding
Effect of dilutive securities - equity
compensation awards
Diluted weighted average common
shares outstanding
Equity compensation awards for which total employee proceeds from exercise exceed the average fair value of the same equity incentive instrument over the period have an anti-dilutive effect on earnings per share during periods with net income, and accordingly, are excluded from diluted weighted average common shares outstanding. Anti-dilutive equity instruments of 804,104 ; 1,037,975 ; and 431,392 common shares were excluded from the computation of diluted net income per share for the years ended December 31, 2025, 2024, and 2023, respectively.
No cash dividends were declared or paid as of December 31, 2025, 2024, and 2023 .
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15. Equity
Authorized capitalization consists of 75.0 million shares of $ 0.01 par value common stock and 3.5 million shares of $ 0.01 par value preferred stock. None of the preferred shares have been issued.
As of December 31, 2025 , the Company has authorization from the Board of Directors to purchase up to $ 35.0 million of the Company's common stock at management's discretion. As of December 31, 2025 , the Company has $ 29.3 million remaining under this authorization.
The components of accumulated other comprehensive loss as of December 31, 2025 and 2024 are summarized as follows:
Foreign currency translation, net of income tax
(expense) benefit of $( 4.3 ) and $ 2.3
Derivative instrument fair market value, net of income
tax benefit of $ 0.2 and $ 1.0
Employee pension and postretirement benefit adjustments,
net of income tax benefit of $ 11.2 and $ 12.3
Total accumulated other comprehensive loss
A reconciliation of the changes in accumulated other comprehensive loss, net of income tax, by component as of December 31, 2025 and 2024 are summarized as follows:
Gains (Losses) on Cash Flow Hedges
Pension &
Postretirement
Foreign Currency
Translation
Total
Balance as of December 31, 2023
Other comprehensive income (loss) before
reclassifications
Amounts reclassified from accumulated
other comprehensive loss
Net other comprehensive income (loss)
Balance as of December 31, 2024
Other comprehensive income before
reclassifications
Amounts reclassified from accumulated other
comprehensive loss
Net other comprehensive income
Balance as of December 31, 2025
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A reconciliation of the reclassifications out of accumulated other comprehensive loss, net of income taxes, for the years ended December 31, 2025, 2024, and 2023 are summarized as follows:
Amount Reclassified from Accumulated Other Comprehensive Income
Recognized
Location
Gains (losses) on cash flow hedges
FX Forward Contracts
Cost of sales
Total before income taxes
Provision for income taxes
Total, net of income taxes
Amortization of pension and
postretirement items
Actuarial gains (losses)
Other expense - net
Amortization of prior service cost
Other expense - net
Pension settlement charge
Other expense - net
Total before income taxes
Benefit for income taxes
Total, net of income taxes
Foreign currency translation
Losses on foreign currency translation
Total before income taxes
Provision for income taxes
Total, net of income taxes
Total reclassifications for the period,
net of income taxes
These accumulated other comprehensive loss components are components of net periodic pension cost (refer to Note 20, “Employee Benefit Plans,” for further details).
16. Stock-Based Compensation
The Company's 2025 Omnibus Incentive Plan (the "2025 Omnibus Plan") was approved by shareholders on May 6, 2025 at the Company's 2025 annual meeting. The 2025 Omnibus Plan provides for both short-term and long-term incentive awards for employees and non-employee directors. Stock-based awards may take the form of stock options, restricted stock units, and performance share awards. The total number of shares of the Company's common stock originally available for awards under the 2025 Omnibus Plan is 1.8 million shares a nd is subject to adjustments for stock splits, stock dividends, recycling provisions (described below), and certain other transactions or events in the future. The 2025 Omnibus Plan includes a recycling provision under which, after May 6, 2025, if any shares subject to awards granted under the 2013 Omnibus Plan (as defined below) would again have become available for new grants under the terms of the 2013 Omnibus Plan if the 2013 Omnibus Plan were still in effect, then those shares become available for the purpose of granting awards under the 2025 Omnibus Plan in the same number as the related awards depleted the reserve under the 2013 Omnibus Plan.
The Company’s 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”) was approved by shareholders on May 7, 2013. The 2013 Omnibus Plan provided for both short-term and long-term incentive awards for employees and non-employee directors. Stock-based awards previously granted under the 2013 Omnibus Plan may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, and performance share or performance unit awards.
The Company grants certain share-based payment awards that are classified as liabilities in accordance with ASC 718, "Compensation—Stock Compensation". These awards include cash-settled restricted stock units which vest in three annual increments over a three-year period and cash-settled performance share units which vest after three years and are earned based on the extent to which performance goals are met over the applicable performance period.
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Liability-classified awards are measured at fair value at each reporting date until settlement. The fair value of these awards is determined using the closing stock price at the end of the reporting period, and is remeasured at each balance sheet date. Changes in fair value are recognized as compensation expense in engineering, selling, and administrative expenses in the Consolidated Statements of Operations over the requisite service period.
As of December 31, 2025, the Company had a liability of $ 1.6 million recorded in accounts payable and accrued expenses in the Consolidated Balance Sheets related to awards that are expected to be settled in cash.
The Company recognizes expense net of estimated future forfeitures for all stock-based compensation on a straight-line basis over the vesting period of the entire award. Estimated future forfeitures are based on the Company’s historical experience.
During the years ended December 31, 2025, 2024, and 2023 , the Company recorded stock-based compensation expense, including cash-settled liability awards, of $ 9.7 million, $ 10.9 million, and $ 11.5 million, respectively, in engineering, selling, and administrative expense in the Consolidated Statement of Operations. The Company recognizes stock-based compensation expense over the award’s vesting period, subject to the retirement, death, or disability provisions of the 2025 Omnibus Plan or the 2013 Omnibus Plan (as applicable).
Shares are issued out of treasury stock upon exercise for stock options and vesting of restricted stock units and performance share units.
Stock Options
Stock option grants to employees are exercisable in three annual increments over a three-year period beginning on the first anniversary of the grant date and expire 10 years subsequent to the grant date.
The Company did no t grant employees stock options in 2025, 2024, or 2023. Stock-based compensation expense is calculated by estimating the fair value of non-qualified stock options at the time of grant and is amortized over the stock options’ vesting period. The Company recognized no expense before income taxes associated with stock options during the years ended December 31, 2025, 2024 and, 2023.
The activity for stock options is summarized as follows:
Shares
Weighted
Average
Exercise Price Per Share
Aggregate
Intrinsic
Value
Options outstanding as of December 31, 2024
Granted
Exercised
Forfeited
Cancelled
Options outstanding as of December 31, 2025
Options exercisable as of December 31, 2025
Restricted Stock Units
The Company grant ed 550,354 ; 461,632 ; and 520,132 restricted stock units inclusive of director awards in 2025, 2024, and 2023 , respectively. A total of 130,207 ; 78,894 ; and 77,576 equity compensation awards were granted to directors in 2025, 2024, and 2023, respectively, which vested immediately upon the grant date, with the exception of the 2025 awards that vest one year from the grant date. The Company recognize d $ 5.5 million, $ 6.4 million, and $ 6.3 million of compensation expense associated with restricted stock units during the years ended December 31, 2025, 2024, and 2023, respectively.
With the exception of director grants, the restricted stock units are earned based on service over the vesting period. Restricted stock units granted to employees vest in three annual increments over a three-year period beginning on the first anniversary of the grant date. The expense is based on the fair value of the Company's shares as of the grant date which is the grant date closing stock price.
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The activity for restricted stock units is summarized as follows:
Shares
Weighted
Average
Grant Date
Fair Value Per Share
Unvested as of December 31, 2024
Granted
Vested
Forfeited
Unvested as of December 31, 2025
During the year ended December 31, 2025, the Company modified certain 2023 and 2024 restricted stock units to settle them in cash in lieu of stock. The modification of these awards is shown as a forfeiture of the original award in the table above. The vesting schedule remains unchanged for these awards.
As of December 31, 2025 , the Company had $ 4.1 million of unrecognized compensation expense before income tax and net of estimated forfeitures related to restricted stock units which will be recognized over a weighted average period of 1.6 years.
Performance Share Units
The Company gran ted 374,798 ; 365,174 ; and 316,022 performance share units in 2025, 2024, and 2023 , respectively. The performance share units are earned based on service over the vesting period and only to the extent to which performance goals are met over the applicable three-year performance period. The performance goals vary for performance share units each grant year. The Company recognize d $ 3.0 million, $ 4.5 million, an d $ 5.2 million of c ompensation expense associated with performance share units during the years ended December 31, 2025, 2024, and 2023, respectively.
The performance goals for the performance share units granted in 2025 are weighted 60 % on the 3-year average of the Company’s adjusted return on invested capital ("Adjusted ROIC") percentage from 2025 to 2027 and 40 % on cumulative non-new machine sales from January 1, 2025 through December 31, 2027. The Company defines non-new machine sales as parts sales, used crane sales, rental revenue, service revenue and other revenue. The 2025 performance share units, other than those units that are to be settled in cash, include a +/- 20 % modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200 % of target shares granted.
The performance goals for the performance share units granted in 2024 are weighted 60 % on the 3-year average of the Company's Adjusted ROIC percentage from 2024 to 2026 and 40 % on cumulative non-new machine sales from January 1, 2024 through December 31, 2026.The 2024 performance share units include a +/- 20 % modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200 % of target shares granted.
The performance goals for the performance share units granted in 2023 are weighted 60 % on the 3-year average of the Company’s adjusted EBITDA percentage from 2023 to 2025 and 40 % on cumulative non-new machine sales from January 1, 2023 through December 31, 2025. The 2023 performance share units include a +/- 20 % modifier weighted on total shareholder return relative to a defined peer group of companies during the three-year performance period, not to exceed 200 % of target shares granted.
The activity for performance share units is summarized as follows:
Shares
Weighted
Average
Grant Date Fair Value
Per Share
Unvested as of December 31, 2024
Granted (1)
Adjustment for performance results achieved (2)
Vested
Forfeited
Unvested as of December 31, 2025
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Performance shares granted assuming achievement of performance goals at target.
Adjustment due to performance share units granted in 2022 and vested in 2025 where the number of shares achieved based on the three-year performance period ended December 31, 2024 were higher than target.
During the year ended December 31, 2025, the Company modified certain 2023 and 2024 performance share units to settle them in cash in lieu of stock. The modification of these awards is shown as a forfeiture of the original award in the table above. The performance conditions and vesting schedules remain unchanged for these awards.
As of December 31, 2025 , the Company had $ 3.1 million of unrecognized compensation expense before income tax and net of estimated forfeitures related to performance share units expected to be recognized over a weighted average period of 1.9 years.
The Company uses the Monte Carlo valuation model to determine fair value of the performance share unit grants. The Company used an average of historical stock prices of selected peers for its volatility assumption. The assumed risk-free rates were based on three-year U.S. Treasury rates in effect at the time of grant. The fair value of each performance share unit was estimated at the date of grant using the following assumptions:
Correlation
Risk-free interest rate
Expected volatility
Expected dividend yield
17. Segments
The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by the President and CEO , who is also the Company’s Chief Operating Decision Maker (“CODM”), for making decisions about the allocation of resources and assessing performance as the source of the Company’s reportable operating segments.
The Company has three reportable segments: Americas, Europe and Africa ( “ EURAF ” ) and MEAP. The Americas reporting segment includes the North America and South America continents. The EURAF reporting segment includes the Europe and Africa continents, excluding the Middle East region. The MEAP reporting segment includes the Asia and Australia continents and the Middle East region.
The CODM evaluates the performance of its reportable segments based on net sales and operating income. Segment net sales are recognized in the geographic region the product is sold. Each reportable segment has new and non-new machine sales. Operating income for each segment includes net sales to third parties, cost of sales directly attributable to the segment, selling and administrative costs directly attributable to the segment, and engineering costs directly attributable to the segment. Manufacturing variances generated by the manufacturing locations within each operating segment are maintained in each segment’s operating income. Operating income for each segment excludes other income and expense and certain expenses managed outside the operating segments. Costs excluded from segment operating income include various corporate expenses such as stock-based compensation expenses, income taxes and other separately managed general and administrative costs. The Company does not include intercompany sales between segments for management reporting purposes. The CODM does not evaluate performance of the reportable segments based on total assets.
The following table shows information by reportable segment for the years ended December 31, 2025, 2024, and 2023:
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Year Ended December 31, 2025
Year Ended December 31, 2024
Year Ended December 31, 2023
Americas
EURAF
MEAP
Total
Americas
EURAF
MEAP
Total
Americas
EURAF
MEAP
Total
Revenues from external customers
Less: (a)
Cost of sales
Engineering, selling, and administration costs
Other segment items (b)
Segment operating income (loss)
Reconciliation of segment operating income (loss)
Interest expense
Amortization of deferred financing fees
Other expense - net
Unallocated amounts:
Other corporate expenses
Restructuring (income) expense
Income before income taxes
Other Segment Disclosures
Depreciation and amortization (c)
Capital expenditures
The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Other segment items for each reportable segment include:
Americas — amortization expense and restructuring expense.
EURAF — restructuring expense.
MEAP — restructuring expense.
The amount of depreciation and amortization disclosed by reportable segment are included within cost of sales or engineering, selling, and administration costs, as applicable.
Net sales by geographic area for the years ended December 31, 2025, 2024, and 2023 and property, plant, and equipment as of December 31, 2025 and 2024 are summarized as follows:
Net Sales
Property, Plant, and Equipment
United States
Europe
Other
Total net sales
New machine and non-new machine sales for the years ended December 31, 2025, 2024, and 2023 are summarized as follows:
New machine sales
Non-new machine sales
Total net sales
18. Commitments and Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business which have not been fully resolved. The outcome of any litigation is inherently uncertain. When a loss related to a legal proceeding or claim is probable and reasonably estimable, the Company accrues its best estimate for the ultimate resolution of the matter.
As of December 31, 2025, various product-related lawsuits were pending. To the extent permitted under applicable law, all of these are insured with self-insurance retention levels. The Company’s self-insurance retention levels vary by business and have fluctuated over the last 10 years . As of December 31, 2025, the largest self-insured retention level for new occurrences
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currently maintained by the Company is $ 3.0 mill ion per occurrence and applies to product liability claims arising in North America.
As of December 31, 2025, current and long-term product liability reserves were $ 2.0 million and $ 6.8 million, respectively. As of December 31, 2024, current and long-term product liabilities reserves were $ 1.4 million and $ 5.0 million, respectively. Current product liability reserves are included within other liabilities and long-term product liability reserves are included within other non-current liabilities in the Consolidated Balance Sheets. These amounts are not reduced for insurance recoveries for claims above the Company's self-insured retention level. As of December 31, 2025 and 2024, the Company had zero estimated insurance recoveries included in the other current assets in the Consolidated Balance Sheets.
Reserves for product-related lawsuits were estimated using a combination of actual case reserves and actuarial methods. Based on the Company’s experience in defending product liability claims, management believes the reserves are adequate for estimated case resolutions on aggregate self-insured claims and insured claims. Any recoveries from insurance carriers are dependent upon the legal sufficiency of claims and solvency of insurance carriers.
It is reasonably possible that the estimates for warranty and other related claims, product liability, asbestos-related claims and other various legal matters may change based upon new information that may 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. The ultimate resolution of these matters, individually and in the aggregate, is not expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
On March 28, 2025, the federal district court for the Eastern District of Wisconsin entered a Consent Decree between the Company and the United States regarding alleged violations of the Transition Program for Equipment Manufacturers (“TPEM program”) relating to the sales of cranes manufactured between January 1, 2014 and July 31, 2017. Pursuant to the Consent Decree, the Company has paid a civil penalty of $ 42.6 million (plus interest of $ 0.6 million), and is implementing an emissions mitigation project upgrading a short-line locomotive engine in Maryland for $2.6 million. Completion of the terms in the Consent Decree will settle this matter and release the Company from civil claims under the Clean Air Act related to the Company’s participation in the TPEM program. As of December 31, 2025, the Company has accrued $ 0.2 million r elated to the emissions mitigation project within accounts payable and accrued expenses on the Consolidated Balance Sheets.
19. Guarantees
The Company periodically enters into transactions with customers that provide for buyback commitments. The Company evaluates each agreement at inception to determine if the customer has a significant economic incentive to exercise the buyback option. If it is determined that the customer has a significant economic incentive to exercise that right, the revenue is deferred and the agreement is accounted for as a lease in accordance with 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 product is transferred to the customer. The revenue deferred related to buyback obligations accounted for under Topic 842 included in other current and non-current liabilities as of December 31, 2025 and 2024 was $ 18.7 million and $ 14.9 million, respectively. The total amount of buyback commitments given by the Company and outstanding as of December 31, 2025 and 2024 w as $ 39.8 million and $ 29.9 million, respectively. These amounts are not reduced for amounts the Company would recover from repossession and subsequent resale of the units. The buyback commitments expire at various times through 2032. The Company also has various loss guarantees with maximum liabilities of $ 24.0 million and $ 14.3 million as of December 31, 2025 and 2024, respectively. These amounts are not reduced for amounts the Company would recover from repossession and subsequent resale of the cranes securing the related guarantees.
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. Such warranties generally provide that products will be free from defects for periods ranging from 12 months to 60 months . In addition, the Company may incur other warranty related costs outside of its standard warranty period. Costs for other warranty related work are recorded in the period a loss is probable and can be reasonably estimated.
As of December 31, 2025 and 2024, the Company had reserves of $ 45.0 million and $ 45.3 million, respectively, for warranty and other related claims included in product warranties and other non-current liabilities in the Consolidated Balance Sheets. Certain of these warranty and other related claims involve matters in dispute that may ultimately be resolved by negotiation, arbitration, or litigation.
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Below is a table summarizing the warranty and other warranty related work for the years ended December 31, 2025, 2024, and 2023:
Balance at beginning of period
Adjustments for warranties issued in current period
Adjustments to pre-existing warranties
Settlement made (in cash or in kind) during the period
Currency translation
Balance at end of period
The long-term portion of the warranty liability is recorded in other non-current liabilities in the Consolidated Balance Sheets.
The Company sells extended warranty contracts, which it accounts for as a service type warranty under ASC Topic 606 – “Revenue from Contracts with Customers.” Revenue associated with extended warranty contracts is deferred and amortized on a straight-line basis over the duration of the extended warranty period. As of December 31, 2025 and 2024 , there was $ 9.6 million and $ 8.6 million, respectively , of deferred revenue included in other current and non-current liabilities in the Consolidated Balance Sheets.
20. Employee Benefit Plans
The Company provides defined benefit pension plans, defined contribution plans, and/or other postretirement benefit plans to employees in many of the Company’s locations throughout the world. The Company’s defined benefit plans provide a benefit based on years of service and/or the employee’s average earnings near retirement. The Company’s defined contribution plans allow employees to contribute a portion of their salary to help save for retirement, and in most cases, the Company provides a matching contribution. The benefit obligation related to the Company’s non-U.S. defined benefit pension plans are for employees located primarily in Europe. For postretirement medical and other benefit plans, all of the Company’s benefit obligation is for employees located in the United States.
Defined contribution plans
The Company maintains two defined contribution retirement plans for its employees in the United States: (1) The Manitowoc Company, Inc. 401(k) Retirement Plan (the “Manitowoc 401(k) Plan”) and (2) The Manitowoc Deferred Compensation Plan. Each plan results in individual participant balances that reflect a combination of amounts contributed by the Company or deferred by the participant, amounts invested at the direction of either the Company or the participant, and the continuing reinvestment of returns until the accounts are distributed.
The Company also has various other non-U.S. defined contribution plans that allow eligible employees to contribute a portion of their salary to the plans. In most cases, the Company provides a matching contribution to the funds contributed by the employees. Company contributions to the plans are generally based upon formulas contained in the plans. Total costs incurred under the non-U.S. defined contribution plans, and reported within the Consolidated Statement of Operations were $ 2.4 million, $ 2.0 million, and $ 1.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Manitowoc 401(k) Plan
The Manitowoc 401(k) Plan is a tax-qualified retirement plan that is available to substantially all U.S. employees of Manitowoc, its subsidiaries, and related entities.
The Manitowoc 401(k) Plan allows employees to make both pre and after-tax elective deferrals, subject to certain limitations under the Internal Revenue Code of 1986, as amended (the “Tax Code”). The Company also has the right to make the following additional contributions: (1) a safe harbor matching contribution and (2) an additional contribution, which may or may not be made, at the full discretion of the Company and for which the value will be fully determined by the Company based on its performance. Each participant in the Manitowoc 401(k) Plan is allowed to direct the investment of that participant’s account among a diverse mix of investment funds, including a Company stock alternative. To the extent that any funds are invested in the Company’s stock, that portion of the Manitowoc 401(k) Plan is an employee stock ownership plan, as defined under the Tax Code (an “ESOP”).
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The terms governing the retirement benefits under the Manitowoc 401(k) Plan are the same for the Company’s executive officers as they are for other eligible employees in the U.S.
Total costs incurred under this plan, and reported within the Consolidated Statement of Operations, were $ 6.2 million, $ 9.3 million and $ 8.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Manitowoc Deferred Compensation Plan
The Manitowoc Deferred Compensation Plan is a non-qualified supplemental deferred compensation plan for highly compensated and key management employees and for non-employee directors of the Company. The Company maintains the Manitowoc Deferred Compensation Plan to allow eligible individuals to save for retirement in a tax-efficient manner despite Tax Code restrictions that would otherwise impair their ability to do so under the Manitowoc 401(k) Plan. The Manitowoc Deferred Compensation Plan also assists the Company in retaining those key employees and directors.
The Manitowoc Deferred Compensation Plan accounts are credited with: (1) elective deferrals made at the request of the individual participant; (2) a matching contribution for eligible wages above IRS employee compensation limits for 401(k) retirement plans; and/or (3) an additional contribution from the Company for each individual participant, which may or may not be made, at the full discretion of the Company based on its performance. Although unfunded within the meaning of the Tax Code, the Manitowoc Deferred Compensation Plan utilizes a rabbi trust to hold assets intended to satisfy the Company’s corresponding future benefit obligations. Each participant in the Manitowoc Deferred Compensation Plan is credited with earnings based upon individual elections from a diverse mix of investment funds that are intended to reflect investment funds similar to those offered under the Manitowoc 401(k) Plan, including the Company’s stock. Participants do not receive preferential or above-market rates of return under the Manitowoc Deferred Compensation Plan.
The Company has two separate investment programs: Program A and B, which allows participants to direct deferrals and Company contributions and restricts the Company’s use and access to the funds but are subject to the claims of the Company’s general creditors in rabbi trusts. Program A invests solely in the Company’s stock; dividends paid, if any, on the Company’s stock are automatically reinvested; and all distributions must be made in Company stock. Program B offers a variety of investment options but does not include Company stock as an investment option. All distributions from Program B must be made in cash. Participants cannot transfer assets between programs.
Program A is accounted for as a plan that does not permit diversification. As a result, the Company stock held by Program A is classified in equity in a manner similar to accounting for treasury stock. The deferred compensation obligation is classified as an equity instrument. Changes in the fair value of the Company’s stock and the compensation obligation are not recognized. The fair market value of the asset and corresponding obligation for Program A were $ 0.8 million and $ 0.7 million as of December 31, 2025 and 2024, respectively.
Program B is accounted for as a plan that permits diversification. As a result, the assets held by Program B are classified as an asset in the Consolidated Balance Sheets and changes in the fair value of the assets are recognized in earnings. The deferred compensation obligation is classified as a liability in the Consolidated Balance Sheets and adjusted to reflect changes in the fair value of the obligation. The assets, which are included in other non-current assets, and obligations, which are included in other non-current liabilities, were $ 9.5 million and $ 8.8 million as of December 31, 2025 and 2024, respectively.
Total costs incurred under this plan, and reported within the Consolidated Statement of Operations, for the years ended December 31, 2025, 2024, and 2023 were $ 0.1 million , $ 0.4 million and $ 0.2 million, respectively.
Pension, Postretirement Medical and Other Benefit Plans
The Company provides certain pension, postretirement medical, and other benefits (death benefits) for eligible retirees and their dependents in the U.S. under various frozen plans. Pension benefits are provided under the Manitowoc U.S. Pension Plan (“U.S. Pension Plan”). Certain pension benefits are funded, the postretirement medical benefits are not funded but are paid as incurred, and the death benefits are fully insured. Eligibility for coverage is based on meeting certain years of service and retirement qualifications. The healthcare benefits may be subject to deductibles, co-payment provisions, and other limitations. The Company has reserved the right to modify these benefits which have been frozen.
In addition to the U.S. Pension Plan, the Company also maintains defined benefit pension plans for various Non-US subsidiaries which are sponsored directly by the Company or its subsidiaries and offered only to employees or retirees of those subsidiaries (“Non-U.S. Pension Plans”). Certain Non-U.S. Pension Plans have frozen benefit accruals.
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The components of periodic benefit costs for the years ended December 31, 2025, 2024, and 2023 are summarized as follows:
U.S. Pension Plan
Non-U.S. Pension Plans
Postretirement Medical
and Other
Service cost - benefits earned
during the year
Interest cost of projected
benefit obligation
Expected return on assets
Amortization of prior service
cost
Amortization of actuarial net
loss (gain)
Pension settlement gain
Net periodic benefit cost
Weighted average
assumptions:
Effective discount rate for
benefit obligations
Expected return on
plan assets
Rate of compensation
increase
The prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10 % of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants.
To develop the expected long-term rate of return on assets assumptions, the Company considered the historical returns and future expectations for returns in each asset class net of fees, as well as targeted asset allocation percentages within the pension portfolio.
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The following is a reconciliation of the changes in benefit obligation, plan assets, and funded status as of December 31, 2025 and 2024:
U.S. Pension Plan
Non-U.S. Pension Plans
Postretirement
Medical and Other
Change in Benefit Obligation
Benefit obligation, beginning of year
Service cost
Interest cost
Participant contributions
Actuarial (gain) loss
Currency translation adjustment
Pension settlement
Benefits paid
Benefit obligation, end of year
Change in Plan Assets
Fair value of plan assets, beginning of year
Actual return on plan assets
Employer contributions
Currency translation adjustment
Pension settlement
Benefits paid
Fair value of plan assets, end of year
Funded status
Amounts recognized in the Consolidated
Balance Sheets as of December 31
Pension asset
Short-term pension obligation
Long-term pension obligation
Short-term postretirement medical and other
benefit obligations
Long-term postretirement medical and other
benefit obligations
Net amount recognized
Weighted-Average Assumptions
Discount rate
Rate of compensation increase
The Company determines its discount rates with advice from an independent third party. The Company uses different discount rates for each plan depending on the plan jurisdiction, the demographics of participants and the expected timing of benefit payments. For the qualified U.S. pension plan and postretirement medical plans, the Company uses a discount rate calculated based on an appropriate mix of high-quality corporate bonds. For the non-U.S. pension and postretirement plans, the Company consistently uses the relevant country specific benchmark indices for determining the various discount rates.
Amounts recognized in accumulated other comprehensive loss as of December 31, 2025 and 2024, are summarized as follows:
Pensions
Postretirement
Medical and Other
Net actuarial gain (loss)
Prior service cost
Total amount recognized
For measurement purpos es, a 7.30 % an nual rate of increase in the per capita cost of covered health care benefits was assumed for the postretirement medical and other plan for 2025. The rate was assumed to decrease gradually to 4.00 % in 2048 and remain at that level thereafter.
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The weighted-average asset allocation of the U.S. Pension Plan as of December 31, 2025 and 2024, by asset category are summarized as follows:
Equity
Fixed income
Other
Total
The weighted-average asset allocation of the Non-U.S. Pension Plans as of December 31, 2025 and 2024, by asset category are summarized as follows:
Equity
Fixed income
Other (1)
Total
Includes diversified investments that have equity and fixed income holdings.
The Board of Directors has established the Retirement Plan Committee (the “Committee”) to manage the operations and administration of all benefit plans and related trusts. On a quarterly basis, the Committee reviews progress toward achieving the pension plans’ and individual investment managers’ performance objectives.
Investment Strategy The overall objective of the Company's pension assets is to earn a rate of return over time to satisfy the benefit obligations of the pension plans and to maintain sufficient liquidity to pay benefits and address other cash requirements of the pension funds. Specific investment objectives for the Company’s long-term investment strategy include reducing the volatility of pension assets relative to pension liabilities, achieving a competitive, total investment return, achieving diversification between and within asset classes and managing other risks. Investment objectives for each asset class are determined based on specific risks and investment opportunities identified.
The Company reviews its long-term, strategic asset allocations annually. The Company uses various analytics to determine the optimal asset mix and considers plan liability characteristics, liquidity characteristics, funding requirements, expected rates of return, and the distribution of returns. The Company identifies investment benchmarks for the asset classes in the strategic asset allocation that are market-based.
Actual allocations to each asset class vary from target allocations due to periodic investment strategy changes, market value fluctuations, the length of time it takes to fully implement investment allocation positions and the timing of benefit payments and contributions. The asset allocation is monitored and rebalanced monthly.
The actual and target allocations for the pension assets as of December 31, 2025, by asset class, are summarized as follows:
Target Allocations
Weighted Average Asset
Allocations
U.S. Plans
Non-U.S. Plans
U.S. Plans
Non-U.S. Plans
Equity Securities
Debt Securities
Other
Risk Management In managing the plan assets, the Company reviews and manages risk associated with funded status risk, interest rate risk, market risk, counterparty risk, liquidity risk, and operational risk. Liability management and asset class diversification are central to the Company’s risk management approach and are integral to the overall investment strategy. Further, asset classes are constructed to achieve diversification by investment strategy, by industry or sector and by holding. Asset performance is monitored against the relative benchmarked indices.
Fair Value Measurements The following tables present the Company’s plan assets using the fair value hierarchy as of December 31, 2025 and 2024. The fair value hierarchy has three levels based on the reliability of the inputs used to determine
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fair value. Refer to Note 5, “Fair Value of Financial Instruments,” for definitions of each fair value level. The plan assets may consist of a combination of investments and are allocated based on the predominant asset class.
December 31, 2025
Assets
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)
Net Asset Value ("NAV")*
Total
Equity:
U.S. equity
International equity
Fixed income:
Corporate bonds and notes
Government and agency bonds
Commingled funds
International fixed income
Other:
Cash and cash equivalents
Annuity contracts
Other
Total
* Certain assets that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy.
December 31, 2024
Assets
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Unobservable
Inputs
(Level 3)
Net Asset Value ("NAV")*
Total
Equity:
U.S. equity
International equity
Fixed income:
Corporate bonds and notes
Government and agency bonds
Commingled funds
International fixed income
Other:
Cash and cash equivalents
Annuity contracts
Other
Total
*Certain assets that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy.
Cash and cash equivalents, which are used to pay benefits, are primarily held in registered money market funds which are valued using a market approach based on the quoted market prices of identical instruments. Other cash and cash equivalents are valued daily by the fund using a market approach with inputs that include quoted market prices for similar instruments.
Insurance group annuity contracts are valued at the present value of the future benefit payments owed by the insurance Company to the Non-U.S. Pension Plan's participants.
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The valuation methodologies described above may generate a fair value calculation that may not be indicative of net realizable value or future fair values. While the Company believes the valuation methodologies used are appropriate, the use of different methodologies or assumptions in calculating fair value could result in different amounts.
A reconciliation of the fair value measurements of plan assets using significant unobservable inputs (Level 3) from the beginning of the year to the end of the year is as follows:
Annuity Contracts
Year Ended December 31,
Beginning Balance
Additions
Actual return on assets
Benefit payments
Foreign currency impact
Ending Balance
The expected 2026 minimum contributions for the U.S. Pension Plan are $ 3.1 million and there are no planned discretionary or non-cash contributions. The expected 2026 minimum contributions for the Non-U.S. Pension Plans are $ 1.7 million an d there are no planned discretionary or non-cash contributions. Expected Company paid claims for the postretirement medical and other plans are $ 0.6 million f or 2026. Projected future benefit payments from the plans as of December 31, 2025 are estimated as follows:
U.S. Pension
Plan
Non-U.S.
Pension
Plans
Postretirement
Medical and
Other
Thereafter
Total
The fair value of plan assets for which the accumulated benefit obligation is in excess of the plan assets as of December 31, 2025 and 2024 is summarized as follows:
U.S. Pension Plan
Non U.S. Pension Plans
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
The measurement date for all plans is December 31, 2025 .
21. Leases
The Company has operating leases for offices, warehouses, land for storage of cranes, vehicles, information technology equipment, and manufacturing equipment. The remaining lease terms are up t o 18 years, some of which include multiple renewal options which would extend the lease term for up to an additional 10 years , and some of which include options to terminate the lease within one year. Certain leases include one or more options to renew; the exercise of lease renewal options is at the Company’s discretion. The Company includes renewal option periods in the lease term when it is determined that the
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options are reasonably certain to be exercised. The Company’s financing leases have an immaterial impact on the consolidated financial statements.
The components of lease expense for the years ended December 31, 2025, 2024, and 2023 are summarized as follows:
Operating lease cost
Variable lease cost*
Total lease cost
*Includes short-term leases, which are immaterial.
Supplemental Consolidated Balance Sheet information related to leases as of December 31, 2025 and 2024 are summarized as follows:
Operating lease right-of-use assets
Other liabilities
Operating lease liabilities
Total operating lease liabilities
Cash paid for operating leases included in operating cash flows w as $ 33.8 milli on, $ 30.6 million, and $ 29.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Operating lease right-of-use assets obtained in exchange for lease obligations were $ 17.2 million for the year ended December 31, 2025 and $ 14.9 million for the year ended December 31, 2024.
As of December 31, 2025, the Company’s operating leases have a weighted-average remaining lease term of 6.1 y ears and a weighted average discount rate of 6.0 % . As of December 31, 2024 , the Company's leases had a weighted-average remaining lease term of 6.3 years and a weighted average discount rate of 6.1 %. Topic 842 requires a lessee to discount its unpaid lease obligations using the interest rate implicit in the lease, or if not readily determinable, the incremental borrowing rate at the time of lease commencement. Generally, the Company uses its incremental borrowing rate as the implicit rate cannot be determined. The Company’s incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms in a similar region.
Maturities of operating lease liabilities as of December 31, 2025 are summarized as follows:
Year
Lease Payments
Thereafter
Total lease payments
Less: imputed interest
Present value of lease liabilities
As of December 31, 2025, we have no additional operating leases for facilities that have not yet commenced.
Lessor Accounting
The Company rents cranes to its customers and actively manages the size, quality, age and composition of its rental fleet to meet customer demands and trends. The rental fleet is serviced through the Company’s parts and service team. The rental activities create cross-selling opportunities in crane sales including rent-to-own purchase options whereby customers are given a period of time to exercise an option to purchase the related equipment at an established price with any rental payments paid applied to reduce the purchase price.
Substantially all of the Company's leasing arrangements are classified as operating leases. Rental revenue is recognized on a straight-line basis over the rental period.
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In most cases, the Company's rental arrangements include non-lease components, including delivery and pick-up services. The Company accounts for these non-lease components separate from the rental arrangement and recognizes the revenue associated with these components when the service is performed. The Company has elected to exclude from rental revenue all taxes collected from customers related to rental activities. The Company manages the residual value risk of its rented assets by (i) monitoring the quality, aging and anticipated retail market value of the rental fleet assets to determine the optimal period to remove an asset from the rental fleet, (ii) maintaining the quality of assets through parts and service support and (iii) requiring physical damage insurance of customers. The Company primarily disposes of the rental assets through its rent to own program or sale of the asset.
Refer to Note 8, “Property, Plant, and Equipment,” for the balance of rental cranes included in property, plant, and equipment in the Consolidated Balance Sheets.
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