EX-99.1 2 mtw-form10xexhibit991xa8.htm EXHIBIT 99.1 Exhibit
Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
SUBJECT TO COMPLETION, DATED FEBRUARY 10, 2016
INFORMATION STATEMENT
MANITOWOC FOODSERVICE, INC.
2227 Welbilt Blvd., New Port Richey, FL 34655
COMMON STOCK
(par value $0.01 per share)
We are sending you this Information Statement in connection with The Manitowoc Company, Inc.’s spin-off of its wholly owned subsidiary, Manitowoc Foodservice, Inc., or “Manitowoc Foodservice.” To effect the spin-off, The Manitowoc Company, Inc., or “Manitowoc ParentCo,” will contribute the Foodservice Business (defined below) to Manitowoc Foodservice (the "Contribution") and then distribute all of the shares of Manitowoc Foodservice common stock on a pro rata basis to the holders of Manitowoc ParentCo common stock (the “Distribution”). We expect that for the United States ("U.S.") federal income tax purposes the Distribution will be tax-free to Manitowoc ParentCo’s U.S. shareholders, except for cash that shareholders receive in lieu of fractional shares.
If you are a record holder of Manitowoc ParentCo common stock as of the close of business on February 22, 2016, which is the record date for the Distribution, you will be entitled to receive one share of Manitowoc Foodservice common stock for every one share of Manitowoc ParentCo common stock you hold on that date. Manitowoc ParentCo will distribute the shares of Manitowoc Foodservice common stock in book-entry form, which means that we will not issue physical stock certificates. The distribution agent will not distribute any fractional shares of Manitowoc Foodservice common stock. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to each holder (net of any required withholding for taxes applicable to each holder) who would otherwise have been entitled to receive a fractional share in the Distribution.
The Distribution will be effective as of March 4, 2016. Immediately after the Distribution becomes effective, we will be an independent, publicly traded company.
Manitowoc ParentCo’s shareholders are not required to vote on or take any other action in connection with the spin-off. We are not asking you for a proxy, and you are requested not to send us a proxy. Manitowoc ParentCo’s shareholders will not be required to pay any consideration for the shares of Manitowoc Foodservice common stock they receive in the spin-off, surrender or exchange their shares of Manitowoc ParentCo common stock, or take any other action in connection with the spin-off.
Manitowoc ParentCo currently owns all of the outstanding shares of Manitowoc Foodservice common stock. Accordingly, no trading market for Manitowoc Foodservice common stock currently exists. We expect, however, that a limited trading market for Manitowoc Foodservice common stock, commonly known as a “when-issued” trading market, will develop as early as two trading days prior to the record date for the Distribution, and we expect “regular-way” trading of Manitowoc Foodservice common stock will begin on the first trading day after the distribution date. We intend to list Manitowoc Foodservice common stock on the New York Stock Exchange under the symbol “MFS.”
In reviewing this Information Statement, you should carefully consider the matters described in the section entitled “Risk Factors” beginning on page 14 of this Information Statement.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this Information Statement is truthful or complete. Any representation to the contrary is a criminal offense.
This Information Statement is not an offer to sell, or a solicitation of an offer to buy, any securities.
The date of this Information Statement is [●], 2016.
A notice of this Information Statement’s availability was first sent to holders of record of Manitowoc ParentCo on or about [●], 2016.



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TABLE OF CONTENTS
 
Page
 
 
INFORMATION STATEMENT SUMMARY
 
 
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
 
 
 
 
 
 
 
 
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BOARD OF DIRECTORS
 
 
COMPENSATION DISCUSSION AND ANALYSIS
 
 
 
 
 
 
 
 
DESCRIPTION OF MATERIAL INDEBTEDNESS
 
 
 
 
 
 


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QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF
The following provides only a summary of the terms of the Spin-Off. You should read the section entitled “The Spin-Off” in this Information Statement for a more detailed description of the matters described below.
In this Information Statement, unless the context otherwise requires:
“Manitowoc Foodservice,” “we,” “our” and “us” refer to Manitowoc Foodservice, Inc. and its combined subsidiaries, after giving effect to the Internal Reorganization and the Distribution;
“Manitowoc ParentCo” refers to The Manitowoc Company, Inc. and its consolidated subsidiaries, other than, for all periods following the Spin-Off, Manitowoc Foodservice; and
"Foodservice Business” refers to (1) the businesses and operations conducted by the Foodservice segment of Manitowoc ParentCo and its affiliates (including, for purposes of this definition, Manitowoc Foodservice and its affiliates) prior to the consummation of the Spin-Off, and (2) except as otherwise expressly provided in the Separation and Distribution Agreement (as defined herein), any terminated, divested or discontinued businesses or operations that are at the time of such termination, divestiture or discontinuation related to the Foodservice Business (as described in the foregoing clause (1)) as then conducted.

Coincident with the Spin-Off, Manitowoc ParentCo will change its name to Manitowoc Cranes, Inc.
Prior to the Distribution, Manitowoc ParentCo will undertake a series of internal transactions (the “Internal Reorganization”), following which Manitowoc ParentCo will hold, in addition to the shares of our common stock, its current crane business and we will hold the Foodservice Business. Throughout this Information Statement, “Spin-Off” refers to both the Internal Reorganization and the Distribution, collectively.

Q:    What is the Spin-Off?
A:
The Spin-Off is the method by which we will separate from Manitowoc ParentCo. In the Spin-Off, Manitowoc ParentCo will distribute to its shareholders all of the shares of our common stock. To the extent fractional shares exist, they will be converted to cash and the cash distributed to shareholders; Manitowoc ParentCo will not retain any Manitowoc Foodservice shares. Following the Spin-Off, we will be a separate company from Manitowoc ParentCo, and Manitowoc ParentCo will not retain any ownership interest in us.
Q:    Will the number of Manitowoc ParentCo shares I own change as a result of the Distribution?
A:
No, the number of shares of Manitowoc ParentCo common stock you own will not change as a result of the Distribution.
Q:    What are the reasons for the Spin-Off?
A:
The Manitowoc ParentCo Board of Directors believes that creating two public companies will present a number of opportunities, including the following:
The Spin-Off will allow each company to focus on its distinct growth profile, product categories, distribution systems and strategic priorities, with customized cultures, organizational structures, operating models and financial targets that best fit its own business, markets and unique opportunities.
The Spin-Off will allow each company to raise capital more efficiently using a capital structure that aligns with its distinct business profile, allocate resources and deploy capital in a manner consistent with its distinct operational focus and strategic priorities in order to optimize total returns to shareholders.
The Spin-Off will allow each company to issue stock-based compensation to its employees that more closely aligns the employee’s efforts with his or her compensation, thereby enhancing the ability of each company to attract and retain key talent.
The Spin-Off will allow investors to value Manitowoc ParentCo and Manitowoc Foodservice based on their particular operational and financial characteristics, and thus invest accordingly.
The Spin-Off will allow each company to attract a long-term investor base appropriate for the particular operational and financial characteristics of that company.
Q:    Why is the separation of Manitowoc Foodservice structured as a distribution of the Manitowoc Foodservice shares?
A:
Manitowoc ParentCo believes that a distribution of our shares is the most efficient way to separate our business from Manitowoc ParentCo in a manner that will achieve the above objectives.
Q:    What will I receive in the Spin-Off?

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A:
As a holder of Manitowoc ParentCo common stock, you will receive one share of our common stock for every one share of Manitowoc ParentCo common stock you hold on the Record Date (as defined below). The distribution agent will distribute only whole shares of our common stock in the Spin-Off. See “How will fractional shares be treated in the Distribution?” for more information on the treatment of the fractional shares you are entitled to receive in the Distribution. Your proportionate interest in Manitowoc ParentCo will not change as a result of the Spin-Off. For a more detailed description, see “The Spin-Off.”
Q:    What is being distributed in the Spin-Off?
A:
Manitowoc ParentCo will distribute approximately 136,920,805 shares of our common stock in the Spin-Off, based on the approximately 136,617,161 shares of Manitowoc ParentCo common stock outstanding as of December 31, 2015. The difference is due to the number of restricted stock units that will vest between December 31, 2015 and the Record Date and the estimated number of shares to be issued prior to the Record Date under the performance share awards made in February 2013 under the 2013 Omnibus Incentive Plan.  The actual number of shares of our common stock that Manitowoc ParentCo will distribute will depend on the number of shares of Manitowoc ParentCo common stock outstanding on the Record Date. The shares of our common stock that Manitowoc ParentCo distributes will constitute all of the issued and outstanding shares of our common stock immediately prior to the Distribution. For more information on the shares being distributed in the Spin-Off, see “Description of Our Capital Stock-Common Stock.”
Q:    What is the record date for the Distribution?
A:
Manitowoc ParentCo will determine record ownership as of the close of business on February 22, 2016, which we refer to as the “Record Date.”
Q:    When will the Distribution occur?
A:
The Distribution will be effective as of March 4, 2016, which we refer to as the “Distribution Date.” On or shortly after the Distribution Date, the whole shares of our common stock will be credited in book-entry accounts for shareholders entitled to receive the shares in the Distribution. We expect the distribution agent, acting on behalf of Manitowoc ParentCo, within ten business days after the Distribution Date to fully distribute to Manitowoc ParentCo shareholders any cash in lieu of the fractional shares they are entitled to receive. See “How will Manitowoc ParentCo distribute shares of our common stock?” for more information on how to access your book-entry account or your bank, brokerage or other account holding the Manitowoc Foodservice common stock you receive in the Distribution.
Q:    What do I have to do to participate in the Distribution?
A:
You are not required to take any action, but we urge you to read this document carefully. Shareholders of Manitowoc ParentCo common stock on the Record Date will not need to pay any cash or deliver any other consideration, including any shares of Manitowoc ParentCo common stock, in order to receive shares of our common stock in the Distribution.
Q:    Is shareholder approval required for the Spin-Off?
A:
No. Manitowoc ParentCo is a Wisconsin corporation governed by the Wisconsin Business Corporation Law, or the “WBCL.” Under the WBCL, the Manitowoc ParentCo Board, acting in accordance with the directors’ legal duties, has the authority to approve Manitowoc ParentCo’s transactions, except for certain types of transactions that expressly require shareholder approval. The Spin-Off is not one of the types of transactions that require shareholder approval under the WBCL. Further, Manitowoc ParentCo will effect the Spin-Off by distributing all shares of our common stock pro rata to Manitowoc ParentCo’s shareholders. Under the WBCL and Manitowoc ParentCo’s amended and restated articles of incorporation and restated by-laws, the Manitowoc ParentCo Board has the express authority to declare distributions to shareholders without shareholder approval. Accordingly, no shareholder approval of the Spin-Off is required under applicable law, and Manitowoc ParentCo is not seeking shareholder approval. Neither Manitowoc ParentCo nor we are asking you for a vote or requesting that you send us a proxy card.
Q:
If I sell my shares of Manitowoc ParentCo common stock on or before the Distribution Date, will I still be entitled to receive shares of Manitowoc Foodservice common stock in the Distribution?
A:
If you hold shares of Manitowoc ParentCo common stock on the Record Date and decide to sell them on or before the Distribution Date, you may choose to sell your Manitowoc ParentCo common stock with or without your entitlement to our common stock. You should discuss these alternatives with your bank, broker or other nominee. See “The Spin-Off-Trading Prior to the Distribution Date” for more information.
Q:    How will Manitowoc ParentCo distribute shares of our common stock?
A:
Registered shareholders: If you are a registered shareholder (meaning you hold physical Manitowoc ParentCo stock certificates or you own your shares of Manitowoc ParentCo common stock directly through an account with Manitowoc ParentCo’s transfer agent, Computershare), the distribution agent will credit the whole shares of our common stock you receive in the Distribution to your Computershare book-entry account on or shortly after the Distribution Date. Within ten business days after the Distribution Date, the distribution agent will mail you a Computershare book-entry account statement that reflects the number of whole shares of our common stock you own, along with a check for any cash in lieu of fractional shares you are entitled to receive. You will be able to access information regarding your book-entry account holding the Manitowoc Foodservice shares at

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www.computershare.com/investor or via our transfer agent’s interactive voice response system at (877) 498-8861, in each case using the same credentials that you use to access your Manitowoc ParentCo account.
“Street name” or beneficial shareholders: If you own your shares of Manitowoc ParentCo common stock beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of our common stock you receive in the Distribution on or shortly after the Distribution Date. Please contact your bank, broker or other nominee for further information about your account.
We will not issue any physical stock certificates to any shareholders, even if requested. See “The Spin-Off-When and How You Will Receive Manitowoc Foodservice Shares” for a more detailed explanation.
Q:    How will fractional shares be treated in the Distribution?
A:
The distribution agent will not distribute any fractional shares of our common stock in connection with the Spin-Off. Instead, the distribution agent will aggregate all fractional shares into whole shares and sell the whole shares in the open market at prevailing market prices on behalf of Manitowoc ParentCo shareholders entitled to receive a fractional share. The distribution agent will then distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to these holders (net of any required withholding for taxes applicable to each holder). We anticipate that the distribution agent will make these sales in the “when-issued” market, and when-issued trades will generally settle within four trading days following the Distribution Date. See “How will Manitowoc Foodservice common stock trade?” for additional information regarding when-issued trading and “Treatment of Fractional Shares” for a more detailed explanation of the treatment of fractional shares.
Q:    What are the U.S. federal income tax consequences of the Distribution to me?
A:
Assuming that the Spin-Off qualifies as a tax-free transaction under Sections 355, 368 and related provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Manitowoc ParentCo shareholders are not expected to recognize any gain or loss for U.S. federal income tax purposes solely as a result of the Spin-Off except to the extent of any cash received in lieu of fractional shares. With respect to such cash received in lieu of a fractional share, however, you will recognize gain or loss for U.S. federal income tax purposes. For more information regarding the potential U.S. federal income tax consequences to Manitowoc ParentCo and to you of the Distribution, see the section entitled "Material U.S. Federal Income Tax Consequences.”
Q:    How will I determine my tax basis in the shares of Manitowoc Foodservice common stock I receive in the Distribution?
A:
For U.S. federal income tax purposes, your aggregate basis in the common stock that you hold in Manitowoc ParentCo and the new Manitowoc Foodservice common stock received in the Distribution (including any fractional share interest in Manitowoc Foodservice common stock for which cash is received) will equal the aggregate basis in the shares of Manitowoc ParentCo common stock held by you immediately before the Distribution, allocated between your shares of Manitowoc ParentCo common stock and the Manitowoc Foodservice common stock (including any fractional share interest in Manitowoc Foodservice common stock for which cash is received) you receive in the Distribution in proportion to the relative fair market value of each on the Distribution Date.
You should consult your tax advisor about the particular consequences of the Distribution to you, including the application of the tax basis allocation rules and the application of state, local and foreign tax laws.
Q:    Does Manitowoc Foodservice intend to pay cash dividends?
A:
The timing, declaration, amount of, and payment of any dividends following the Spin-Off by Manitowoc Foodservice is within the discretion of our Board of Directors, which we refer to as our “Board,” and will depend upon many factors as deemed relevant by our Board. Currently, our Board does not plan to pay a dividend in 2016, as our focus in 2016 will be on the reduction of outstanding debt. See “Risk Factors-Risks Relating to Our Common Stock and the Securities Markets-We cannot assure you that we will pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock” and “Dividend Policy” for more information.
Q:
Will Manitowoc Foodservice incur any indebtedness prior to or at the time of the Distribution?
A:
Yes. Manitowoc Foodservice anticipates having approximately $1,400 million of indebtedness upon completion of the Spin-Off. On the Distribution Date, Manitowoc Foodservice anticipates that the debt will consist of a $975 million senior secured term loan B facility, which will bear interest at a floating rate and will mature in 2023, and $425 million of senior notes due 2024, which will bear interest at 9.5% per annum. Additionally, we expect to have a senior secured revolving credit facility that will permit borrowings of up to $225 million, which will bear interest at a floating rate and will mature in 2021. Based on historical performance and current expectations, we believe that the cash generated from our operations and available cash and cash equivalents will be sufficient to service this debt. See “Description of Material Indebtedness” and “Risk Factors-Risks Related to Our Business.”
Q:    How will Manitowoc Foodservice common stock trade?
A:
Currently, there is no public market for our common stock. We intend to list our common stock on the New York Stock Exchange, or “NYSE,” under the symbol “MFS.”

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We anticipate that trading in our common stock will begin on a “when-issued” basis as early as two trading days prior to the Record Date for the Distribution and will continue up to and including the Distribution Date. When-issued trading in the context of a spin-off refers to a sale or purchase made conditionally on or before the Distribution Date because the securities of the spun-off entity have not yet been distributed. When-issued trades generally settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, any when-issued trading of our common stock will end and “regular-way” trading will begin. Regular-way trading refers to trading after the security has been distributed and typically involves a trade that settles on the third full trading day following the date of the trade. See “The Spin-Off-Trading Prior to the Distribution Date” for more information. We cannot predict the trading prices for our common stock before, on or after the Distribution Date.
Q:    Will the Spin-Off affect the trading price of my Manitowoc ParentCo common stock?
A:
We expect the trading price of shares of Manitowoc ParentCo common stock immediately following the Distribution to be lower than immediately prior to the Distribution because the trading price will no longer reflect the value of the Foodservice Business. Furthermore, until the market has fully analyzed the value of Manitowoc ParentCo without the Foodservice Business, the trading price of shares of Manitowoc ParentCo common stock may fluctuate. There can be no assurance that, following the Distribution, the combined trading prices of the Manitowoc ParentCo common stock and the Manitowoc Foodservice common stock will equal or exceed what the trading price of Manitowoc ParentCo common stock would have been in the absence of the Spin-Off.
It is possible that after the Spin-Off, the combined market capitalization based on share price of Manitowoc ParentCo and Manitowoc Foodservice will be less than Manitowoc ParentCo’s market capitalization before the Spin-Off.
Q:    Will my shares of Manitowoc ParentCo common stock continue to trade following the Distribution?
A:
Yes. Manitowoc ParentCo common stock will continue to trade on the NYSE under the symbol “MTW.”
Q:    Do I have appraisal rights in connection with the Spin-Off?
A:
No. Holders of Manitowoc ParentCo common stock are not entitled to appraisal rights in connection with the Spin-Off.
Q:    Who is the transfer agent and registrar for Manitowoc Foodservice common stock?
A:
Following the Spin-Off, Computershare will serve as transfer agent and registrar for our common stock.
Computershare has two additional roles in the Distribution:
Computershare currently serves and will continue to serve as Manitowoc ParentCo’s transfer agent and registrar; and
Computershare will serve as the distribution agent in the Distribution and will assist Manitowoc ParentCo in the distribution of our common stock to Manitowoc ParentCo’s shareholders.
Q:    Are there risks associated with owning shares of Manitowoc Foodservice common stock?
A:
Yes. Our business faces both general and specific risks and uncertainties. Our business also faces risks relating to the Spin-Off. Following the Spin-Off, we will also face risks associated with being an independent, publicly traded company. Accordingly, you should read carefully the information set forth in the section entitled “Risk Factors” in this Information Statement.
Q:    Where can I get more information?
A:
If you have any questions relating to the mechanics of the Distribution, you should contact the distribution agent at:
Computershare Trust Company, N.A.
211 Quality Circle, Suite 210
College Station, TX 77842
(877) 498-8861

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INFORMATION STATEMENT SUMMARY
This summary highlights selected information from this Information Statement and provides an overview of our company, our separation from Manitowoc ParentCo and Manitowoc ParentCo’s distribution of our common stock to Manitowoc ParentCo’s shareholders. For a more complete understanding of our business and the Spin-Off, you should read the entire Information Statement carefully, particularly the discussion of "Risk Factors" within the Information Statement, and our audited and unaudited condensed historical combined financial statements and unaudited pro forma combined financial statements and the notes to those statements appearing elsewhere in this Information Statement.
Our Company
Manitowoc Foodservice is one of the world’s leading commercial foodservice equipment companies. We design, manufacture and service an integrated portfolio of hot and cold category products, and have a long track record of innovation. We have one of the industry’s broadest portfolios of products and are recognized by our customers and channel partners for the quality, reliability, and durability of our products. Our capabilities span refrigeration, ice-making, cooking, holding, food-preparation, and beverage-dispensing technologies, which allows us to equip entire commercial kitchens and serve the world’s growing demand for food prepared away from home. We supply foodservice equipment to commercial and institutional foodservice operators such as full-service restaurants, quick-service restaurant chains, hotels, caterers, supermarkets, convenience stores, business and industry, hospitals, schools and other institutions.
We differentiate ourselves by uniquely integrating food, equipment, digital technologies, and people to increase efficiency throughout the food preparation cycle, and create winning customer and consumer experiences. Our customers and channel partners trust the company and its food-inspiring technologies to serve their diverse needs on a global basis.
We operate in over 100 countries globally across the Americas, Europe Middle-East and Africa ("EMEA"), and Asia-Pacific and China ("APAC"). Our products, services and solutions are marketed through a worldwide network of over three thousand dealers and distributors under well-established and recognized brands, including Cleveland, Convotherm, Dean, Delfield, Fabristeel, Frymaster, Garland, Inducs, Kolpak, Koolaire, Lincoln, Manitowoc Beverage Systems, Manitowoc Ice, Merco, Merrychef, Moorwood Vulcan, Multiplex, RDI Systems, Servend, TRUpour, U.S. Range, and Welbilt. All of our products are supported by KitchenCare, our aftermarket repair and parts service. Manitowoc Foodservice’s scale and expertise enable it to serve a global customer base in continually evolving foodservice markets.
We believe that our product and brand portfolios, unique strategy of integrating foodservice-technologies and long-standing customer relationships globally position Manitowoc Foodservice to achieve sustainable, profitable growth globally, and consistent cash flow generation.
Our Strengths
Our competitive advantages include:
The breadth and complementarity of our product portfolio, with hot and cold product categories integrated under one operating company and supported by aftermarket service and support. This enables Manitowoc Foodservice to design, outfit and service commercial kitchens in a harmonized, efficient way and maintain a disciplined focus on targeting our fast-growing customer base with the right products for each need, at the right price;
The ability to integrate food, equipment, digital technologies and people seamlessly through collaborative innovation that enhances our customers' ability to compete in the marketplace. Manitowoc Foodservice helps customers differentiate their food and adapt to evolving and local tastes, different cooking styles and aesthetic preferences, both regionally and globally;
The scale and breadth of our dealer and distributor network to accompany our customers on their global journey, especially in fast-growing emerging markets;
Long-standing brands and innovative engineering customers can trust for superior quality and reliability. We regularly partner with our customers to further develop the equipment, systems and technologies they use to serve their specific culinary needs, and enable their success by delivering tailored solutions; and
Dedication to putting customer experience first. We offer a broad portfolio of products coupled with a unified face to the customer and growing service and parts support. Throughout the life cycle of each product, Manitowoc Foodservice provides customers with a consistent, seamless experience.

Our Strategies
We intend to achieve sustainable, profitable growth globally and sustainable cash flows by leveraging our position as a leading commercial foodservice equipment provider and by focusing on the following strategies:
Driving increased profitability by implementing operating strategies and cost saving initiatives;
Growing our customer base and deepening customer penetration by leveraging our position as a trusted foodservice equipment provider to the largest companies in the industry and expanding our reach to serve high potential mid-size customers;
Driving our international expansion by capitalizing on our global footprint to support growth in developed and emerging markets;
Selectively pursuing strategic acquisitions and partnerships to expand product offering, geographical footprint and customer base;

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Expanding the frontier of foodservice innovation by continuously developing new products and refreshing existing products with new, locally-relevant, food-inspired technologies, while simultaneously finding new ways to integrate those products and create cohesive kitchen systems; and
Continuing to attract and foster industry-leading talent by making our company a great place to have a long-term career.

Overview of the Spin-Off
On January 29, 2015, Manitowoc ParentCo announced plans to create two independent public companies: the Crane Business and the Foodservice Business. To effect the separation, first, Manitowoc ParentCo will undertake the Internal Reorganization described under “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo-Separation and Distribution Agreement.” Following the Internal Reorganization, Manitowoc ParentCo will hold the Crane Business, and Manitowoc Foodservice, Manitowoc ParentCo’s wholly owned subsidiary, will hold the Foodservice Business. Then, Manitowoc ParentCo will distribute all of Manitowoc Foodservice’s common stock to Manitowoc ParentCo’s shareholders, and Manitowoc Foodservice, holding the Foodservice Business, will become an independent, publicly traded company.
Before the Spin-Off, we intend to enter into a Separation and Distribution Agreement and several other agreements with Manitowoc ParentCo related to the Spin-Off. These agreements will govern the relationship between Manitowoc ParentCo and us up to and after completion of the Spin-Off and allocate between Manitowoc ParentCo and us various assets, liabilities and obligations, including employee benefits, intellectual property and tax-related assets and liabilities. See “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo” for more detail.
The Spin-Off described in this Information Statement is subject to the satisfaction or waiver of a number of conditions. In addition, Manitowoc ParentCo has the right not to complete the Spin-Off if, at any time, Manitowoc ParentCo’s Board of Directors, or the “Manitowoc ParentCo Board,” determines, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Manitowoc ParentCo or its shareholders or is otherwise not advisable. See “The Spin-Off-Conditions to the Spin-Off” for more detail.
Distributing Company
The Manitowoc Company, Inc., a Wisconsin corporation that holds all of our common stock issued and outstanding prior to the Distribution. After the Distribution, Manitowoc ParentCo will not own any shares of our common stock.
Distributed Company
Manitowoc Foodservice, Inc., a Delaware corporation and a wholly owned subsidiary of Manitowoc ParentCo. At the time of the Distribution, we will hold, directly or through our subsidiaries, the assets and liabilities of the Foodservice Business. See “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo” for more detail. After the Spin-Off, we will be an independent, publicly traded company.
Distributed Securities
All of the shares of our common stock owned by Manitowoc ParentCo, which will be 100% of our common stock issued and outstanding immediately prior to the Distribution. Based on the approximately 136,617,161 shares of Manitowoc ParentCo common stock outstanding on December 31, 2015, and applying the distribution ratio of one share of Manitowoc Foodservice common stock for every one share of Manitowoc ParentCo common stock, approximately 136,920,805 shares of Manitowoc Foodservice common stock will be distributed. The difference is due to the number of restricted stock units that will vest between December 31, 2015 and the Record Date and the estimated number of shares to be issued prior to the Record Date under the performance share awards made in February 2013 under the 2013 Omnibus Incentive Plan.
Record Date
The Record Date is the close of business on February 22, 2016.
Distribution Date
The Distribution Date is March 4, 2016.
Internal Reorganization
The Manitowoc Company, Inc. currently, directly or through its wholly owned subsidiaries, holds both the Foodservice Business and the Crane Business. In connection with the Spin-Off, we will undertake the Internal Reorganization so that Manitowoc Foodservice, Inc. holds only the Foodservice Business and certain other specified net liabilities. See “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo-Separation and Distribution Agreement” for a description of the Internal Reorganization.

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Distribution Ratio
Each holder of Manitowoc ParentCo common stock will receive one shares of our common stock for every one share of Manitowoc ParentCo common stock it holds on the Record Date. The distribution agent will distribute only whole shares of our common stock in the Spin-Off. See “The Spin-Off-Treatment of Fractional Shares” for more detail. Please note that if you sell your shares of Manitowoc ParentCo common stock on or before the Distribution Date, the buyer of those shares may in some circumstances be entitled to receive the shares of our common stock issuable in respect of the Manitowoc ParentCo shares that you sold. See “The Spin-Off-Trading Prior to the Distribution Date” for more detail.
The Distribution
On the Distribution Date, Manitowoc ParentCo will release the shares of our common stock to the distribution agent to distribute to Manitowoc ParentCo shareholders. The distribution agent will distribute our shares in book-entry form. We will not issue any physical stock certificates. The distribution agent, or your bank, broker or other nominee, will credit your shares of our common stock to your book-entry account, or your bank, brokerage or other account, on or shortly after the Distribution Date. You will not be required to make any payment, surrender or exchange your shares of Manitowoc ParentCo common stock or take any other action to receive your shares of our common stock.
Fractional Shares
The distribution agent will not distribute any fractional shares of our common stock to Manitowoc ParentCo shareholders. Instead, the distribution agent will first aggregate fractional shares into whole shares, then sell the whole shares in the open market at prevailing market prices on behalf of Manitowoc ParentCo shareholders entitled to receive a fractional share, and finally distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to these holders (net of any required withholding for taxes applicable to each holder). If you receive cash in lieu of fractional shares, you will not be entitled to any interest on the payments.
Conditions to the Spin-Off
The Spin-Off is subject to the satisfaction of the following conditions or the Manitowoc ParentCo Board’s waiver of the following conditions:
 
•    The Manitowoc ParentCo Board will, in its sole and absolute discretion, have authorized and approved (i) the Internal Reorganization (as described under “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo-Separation and Distribution Agreement”); (ii) any other transfers of assets and assumptions of liabilities contemplated by the Separation and Distribution Agreement and any related agreements; and (iii) the Distribution, and will not have withdrawn that authorization and approval;
 
•    The Manitowoc ParentCo Board will have declared the Distribution of all outstanding shares of our common stock to Manitowoc ParentCo’s shareholders;
 
•    The U.S. Securities and Exchange Commission, or the “SEC,” will have declared our Registration Statement on Form 10, of which this Information Statement is a part, effective under the Securities Exchange Act of 1934, as amended, or the “Exchange Act,” no stop order suspending the effectiveness of the Registration Statement will be in effect, no proceedings for that purpose will be pending before or threatened by the SEC, and notice of Internet availability of this Information Statement or this Information Statement will have been mailed to Manitowoc ParentCo’s shareholders;
 
•    The NYSE or another national securities exchange approved by the Manitowoc ParentCo Board will have accepted our common stock for listing, subject to official notice of issuance;
 
•    The Internal Reorganization will have been completed;
 
•    The receipt of an opinion from tax counsel or another third-party advisor to Manitowoc ParentCo that the Distribution and certain related transactions will qualify as tax-free to Manitowoc ParentCo and its shareholders under Sections 355, 368 and related provisions of the Code;

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•    No order, injunction or decree that would prevent the consummation of the Distribution will be threatened, pending or issued (and still in effect) by any governmental entity of competent jurisdiction, no other legal restraint or prohibition preventing the consummation of the Distribution will be in effect and no other event outside the control of Manitowoc ParentCo will have occurred or failed to occur that prevents the consummation of the Distribution;
 
•    No other events or developments will have occurred prior to the Distribution that, in the judgment of the Manitowoc ParentCo Board, would result in the Distribution having a material adverse effect on Manitowoc ParentCo or its shareholders;
 
•    Manitowoc ParentCo and Manitowoc Foodservice will have executed and delivered the Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement, Intellectual Property Matters Agreement and all other ancillary agreements related to the Spin-Off; and
 
•    Immediately prior to the Distribution, our certificate of incorporation, or our “Certificate of Incorporation,” and bylaws, or our “Bylaws,” each in substantially the form filed as an exhibit to the Registration Statement on Form 10 of which this Information Statement is a part, will be in effect.
 
The fulfillment of the above conditions will not create any obligation on Manitowoc ParentCo’s part to effect the Spin-Off. We are not aware of any material federal, foreign or state regulatory requirements with which we must comply, other than SEC rules and regulations, or any material approvals that we must obtain, other than the NYSE’s approval for listing of our common stock and the SEC’s declaration of the effectiveness of the Registration Statement, in connection with the Distribution. Manitowoc ParentCo has the right not to complete the Spin-Off if, at any time, the Manitowoc ParentCo Board determines, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Manitowoc ParentCo or its shareholders or is otherwise not advisable.
Trading Market and Symbol
We intend to file an application to list our common stock on the NYSE under the symbol “MFS.” We anticipate that, as early as two trading days prior to the Record Date, trading of shares of our common stock will begin on a “when-issued” basis and will continue up to and including the Distribution Date, and we expect that “regular-way” trading of our common stock will begin the first trading day after the Distribution Date. See “The Spin-Off-Trading Prior to the Distribution Date.”
U.S. Federal Income Tax Consequences of the Spin-Off
Assuming that the Spin-Off qualifies as a tax-free transaction under Section 355, 368, and related provisions of the Code, Manitowoc ParentCo shareholders are not expected to recognize any gain or loss for U.S. federal income tax purposes solely as a result of the Spin-Off except to the extent of any cash received in lieu of fractional shares. With respect to such cash received in lieu of a fractional share, however, you will recognize gain or loss for U.S federal income tax purposes. For more information regarding the U.S. federal income tax consequences to Manitowoc ParentCo and to you of the Spin-Off, see the section entitled “Material U.S. Federal Income Tax Consequences.”
Relationship with Manitowoc ParentCo after the Spin-Off
We intend to enter into several agreements with Manitowoc ParentCo related to the Internal Reorganization and Distribution, which will govern the relationship between Manitowoc ParentCo and us up to and after completion of the Spin-Off and allocate between Manitowoc ParentCo and us various assets, liabilities, rights and obligations. These agreements include:
 
•    A Separation and Distribution Agreement that will set forth Manitowoc ParentCo’s and our agreements regarding the principal actions that we will take in connection with the Spin-Off and aspects of our relationship following the Spin-Off;
 
•    A Transition Services Agreement, pursuant to which Manitowoc ParentCo and we will provide each other specified services on a transitional basis to help ensure an orderly transition following the Spin-Off;

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•    An Employee Matters Agreement that will address employee compensation and benefit matters;
 
•    A Tax Matters Agreement that will allocate responsibility for taxes incurred before and after the Spin-Off and include indemnification rights with respect to tax matters and restrictions to preserve the tax-free status of the Spin-Off; and
 
•    An Intellectual Property Matters Agreement that will provide for ownership, licensing, consent to use and other arrangements to facilitate Manitowoc ParentCo’s and our ongoing use of intellectual property.
 
We describe these arrangements in greater detail under “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo,” and describe some of the risks of these arrangements under “Risk Factors-Risks Relating to the Spin-Off.”
Dividend Policy
Our Board of Directors does not currently plan on paying a dividend in 2016 as our focus in 2016 will be on the reduction of outstanding debt. The timing, declaration, amount and payment of any future dividend will fall within the discretion of our Board. See “Risk Factors-Risks Relating to Our Common Stock and the Securities Markets-We cannot assure you that we will pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock” and “Dividend Policy.”
Transfer Agent
Computershare will serve as transfer agent for our common stock.
Risk Factors
Our business faces both general and specific risks and uncertainties. Our business also faces risks relating to the Spin-Off. Following the Spin-Off, we will also face risks associated with being an independent, publicly traded company. Accordingly, you should read carefully the information set forth under “Risk Factors.”

Other Information
Manitowoc Foodservice was incorporated in Delaware on July 20, 2015. Our principal executive offices are located at 2227 Welbilt Boulevard, New Port Richey, FL 34655. Our telephone number is (727) 375-7010.

Before the Spin-Off, if you have any questions relating to the Spin-Off, you should contact Manitowoc ParentCo at:
Investor Relations
The Manitowoc Company, Inc.
2400 South 44th Street
Manitowoc, WI 54221-0066
Phone: (920) 864-4410
Email: info@manitowoc.com
After the Spin-Off, if you have any questions relating to Manitowoc Foodservice, you should contact us at:
Investor Relations
Manitowoc Foodservice, Inc.
2227 Welbilt Boulevard
New Port Richey, FL 34655
Phone: (727) 853-3079
Email: investors@mtwfs.com

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After the Spin-Off, if you have any questions relating to Manitowoc ParentCo, you should contact them at:
Investor Relations
The Manitowoc Company, Inc.
2400 South 44th Street
Manitowoc, WI 54221-0066
Phone: (920) 864-4410
Email: info@manitowoc.com


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SUMMARY HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following summary financial data reflects the combined operations of Manitowoc Foodservice for the periods indicated below. The summary combined income statement data for the years ended December 31, 2014, 2013 and 2012, and summary combined balance sheet data as of December 31, 2014 and 2013, as set forth below, have been derived from our audited combined financial statements, which are included in the “Index to Financial Statements” section of this Information Statement. The summary combined balance sheet data as of December 31, 2012, has been derived from our audited combined financial statements, which are not included elsewhere in this Information Statement. The summary condensed combined income statement data for the nine months ended September 30, 2015 and 2014 are derived from our unaudited condensed combined interim financial statements which are included elsewhere in this Information Statement. The unaudited condensed combined financial data have been prepared on a basis consistent with the basis on which our audited combined financial statements have been prepared, except for income taxes for the nine months ended September 30, 2015, which are based on the estimated effective tax rate for the full year. In the opinion of Manitowoc Foodservice’s management, the unaudited condensed combined financial data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such data. The historical results do not necessarily indicate the results expected for any future period. To ensure a full understanding of this summary financial data, you should read the summary combined financial data presented below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the combined financial statements and accompanying notes included elsewhere in this Information Statement.
The summary unaudited pro forma combined financial data as of and for the nine months ended September 30, 2015, and year ended December 31, 2014, has been prepared to reflect the Spin-Off, including the incurrence of indebtedness of approximately $1,400 million. The $1,400 million of indebtedness is expected to consist of a $975 million senior secured term loan B facility, which will bear interest at a floating rate and will mature in 2023, and $425 million of senior notes due 2024, which will bear interest at 9.5% per annum. Additionally, we expect to have a senior secured revolving credit facility that will permit borrowings of up to $225 million, which will bear interest at a floating rate and will mature in 2021. See “Description of Material Indebtedness” for more information regarding this new debt. The summary unaudited pro forma combined income statement data presented for the periods ended September 30, 2015, and December 31, 2014, assumes the Spin-Off occurred on January 1, 2014, the first day of fiscal year 2014. The summary unaudited pro forma condensed combined balance sheet data assumes the Spin-Off occurred on September 30, 2015. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information, and we believe such assumptions are reasonable under the circumstances.
The unaudited pro forma combined financial statements are not necessarily indicative of our results of operations or financial condition had the Spin-Off and our anticipated post-Spin-Off capital structure been completed on the dates assumed. They may not reflect the results of operations or financial condition that would have resulted had we been operating as an independent, publicly traded company during such periods. In addition, they are not necessarily indicative of our future results of operations or financial condition.
You should read this summary financial data together with “Unaudited Pro Forma Combined Financial Statements,” “Capitalization,” “Selected Historical Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the combined financial statements and accompanying notes included elsewhere in this Information Statement.
 
 
As of and for the nine months ended
September 30,
 
As of and for the year ended
December 31,

(in millions)

 
Pro forma 2015
 
2015
 
2014
 
Pro forma 2014
 
2014
 
2013
 
2012
Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
1,178.4

 
$
1,178.4

 
$
1,207.1

 
$
1,581.3

 
$
1,581.3

 
$
1,541.8

 
$
1,486.2

Depreciation and amortization
 
38.5

 
38.5

 
39.9

 
53.0

 
53.0

 
51.4

 
53.6

Earnings from continuing operations before taxes on earnings
 
44.5

 
133.5

 
149.5

 
67.9

 
187.2

 
204.6

 
179.5

Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Working capital (1)
 
135.6

 
135.6

 
108.5

 
n/a
 
72.7

 
74.0

 
75.6

Total assets
 
1,978.0

 
1,924.7

 
1,926.2

 
n/a
 
1,898.3

 
1,918.2

 
1,969.0

Long-term obligations (2)
 
1,392.7

 
2.5

 
2.1

 
n/a
 
3.6

 
1.7

 
1.8

Capital expenditures
 
9.6

 
9.6

 
17.7

 
n/a
 
25.3

 
33.6

 
17.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Working capital is defined as net receivables and inventory less third-party accounts payable.

(2) Long-term obligations include long-term capital lease obligations.




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RECENT DEVELOPMENTS
Financial Update - The preliminary financial data in this financial update were prepared on a standalone basis and reflect the historical results of operations and financial position of Manitowoc Foodservice in accordance with U.S. GAAP. The financial results are presented as if Manitowoc Foodservice had been carved out of Manitowoc ParentCo for all periods presented. All significant transactions within Manitowoc Foodservice have been eliminated.
Fourth quarter 2015 net sales for Manitowoc Foodservice were up 4.7 percent, to $391.7 million from $374.2 million in the fourth quarter of 2014. Continued strength in cold-side products and KitchenCare were the primary growth drivers, while hot-side sales are recovering and large-chain spending is firming.
Manitowoc Foodservice operating earnings for the fourth quarter of 2015 were $65.7 million versus $43.4 million for the fourth quarter of 2014. This produced an operating margin of 16.8 percent for Manitowoc Foodservice for the fourth quarter of 2015, compared to 11.6 percent for the fourth quarter of 2014. This was a 520 basis point year-over-year improvement and a 170 basis point sequential improvement over third quarter 2015 results. The improvement was driven largely by the impact of cost-saving initiatives, product line simplification, and stronger KitchenCare results.
Manitowoc Foodservice depreciation and amortization expense for the fourth quarter of 2015 was $5 million and $8 million, respectively, versus $5 million and $8 million for the fourth quarter of 2014, respectively. Capital expenditures were $4 million for the fourth quarter of 2015 versus $7 million for the fourth quarter of 2014.
The preliminary financial results and other financial data presented above are subject to the completion of our financial closing procedures. Those procedures have not been completed. These preliminary financial data are not a comprehensive statement of our financial results for the three-month period ended December 31, 2015 or the year ended December 31, 2015, and our actual results for such periods may differ materially from these preliminary financial data due to the completion of our year-end financial closing procedures, final adjustments and completion of the audit of our financial statements. In connection with the completion of these activities, we may identify items that would require us to make adjustments to these preliminary financial data, which may be material. There can be no assurance that these preliminary financial data will be realized, and these preliminary financial data are subject to risks and uncertainties, many of which are not within our control. Accordingly, you should not place undue reliance on such preliminary financial data. We do not undertake any obligation to update these preliminary financial data. See “Cautionary Statement Regarding Forward-Looking Statements.”
The above preliminary financial data has been prepared by and is the responsibility of our management. PricewaterhouseCoopers LLP has not audited, reviewed, compiled or performed any procedures with respect to the accompanying preliminary financial data. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto.
Divestiture of Kysor Panel Systems
On December 7, 2015, Manitowoc ParentCo announced the completion of the sale of Kysor Panel Systems, a manufacturer of wood frame and high-density rail panel systems for walk-in freezers and coolers for the retail and convenience-store markets and part of the Foodservice Business, to an affiliate of D Cubed Group LLC. The purchase price for the transaction was approximately $85 million, with cash proceeds received of approximately $78 million. In December 2015, Manitowoc ParentCo used the proceeds of the sale to reduce outstanding debt under its existing revolving credit facility. Manitowoc ParentCo anticipates recording a gain of approximately $10 million in connection with the divestiture.

RISK FACTORS
You should carefully consider all of the information in this Information Statement and each of the risks described below, which we believe are the principal risks that we face. Some of the risks relate to our business, others to the Spin-Off. Some risks relate principally to the securities markets and ownership of our common stock.
Any of the following risks could materially and adversely affect our business, financial condition and results of operations and the actual outcome of matters as to which forward-looking statements are made in this Information Statement.
Risks Relating to Our Business
We face the following risks in connection with our business and the general conditions and trends of the foodservice industry in which we operate:
Our operational results are dependent on how well we can scale our manufacturing capacity and resources to the level of our customers’ demand.
We operate in an industry that requires manufacturers to make highly efficient use of manufacturing capacity. Insufficient or excess capacity threatens our ability to generate competitive profit margins and may expose us to liabilities related to contract commitments. Adapting or modifying our capacity is difficult, as modifications take substantial time to execute and, in some cases, may require regulatory approval. Additionally, delivering product during process or facility modifications requires special coordination. The cost and resources required to adapt our capacity, such as through facility acquisitions, facility closings, or process moves between facilities, may negate any planned cost

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reductions or may result in costly delays, product quality issues or material shortages, all of which could adversely affect our operational results and our reputation with our customers.
Our success depends on our ability to attract and retain key personnel.
Our success depends to a large extent upon our ability to attract and retain key executives, managers and skilled personnel. The loss of the services of one or more of these key employees could have an adverse effect, at least in the short to medium term, on significant aspects of our business, including strategic planning and product development. Generally, our key employees are not bound by employment or non-competition agreements, and we cannot be sure that we will be able to retain our key officers and employees. The Spin-Off may also heighten risks related to our organizational structure as a newly independent company. If certain subject-matter experts or employees with specialized skills remain with Manitowoc ParentCo or move to employment elsewhere, we will incur significant costs in hiring, training, developing and retaining their replacements.
If we are unable to successfully implement certain cost-reduction initiatives, we may not achieve our earnings targets.
We have developed initiatives to realize cost savings by reducing the complexity of our product offerings, including an “80/20” initiative that will focus the majority of our resources on our most important products and our best customers, but the success of this and other profit-enhancement and cost-reduction initiatives is not guaranteed, and we may not achieve the cost savings we expect. The 80/20 initiative in particular involves significant cultural shifts, both internally and for our customers, that may inhibit or impair its successful implementation. Additionally, if we devote a disproportionate amount of time, personnel and resources to initiatives that yield slower or less than anticipated results or they are ultimately unsuccessful, we may be distracted from other initiatives and priorities that might have yielded more rapid or better results, and our results of operations may suffer accordingly.
Price increases or our inability to execute successful pricing strategies for some materials and sources of supply, as well as disruptions of supplies of some materials, could affect our profitability.
We use large amounts of steel, stainless steel, aluminum, copper and electronic controls, among other items, in the manufacture of our products. Occasionally, market prices of some of our key raw materials increase significantly, which could adversely affect our margins. Furthermore, although we are implementing a strategic sourcing initiative, we may not be able to achieve the expected cost savings from that initiative. In addition, because we maintain limited raw material and component inventories, even brief unanticipated delays in delivery by suppliers-including those due to capacity constraints, labor disputes, impaired financial condition of suppliers, weather emergencies or other natural disasters-may impair our ability to satisfy our customers and could adversely affect our financial performance.
To better manage our exposures to certain commodity price fluctuations, we regularly hedge our commodity exposures through financial markets. Through this hedging program we fix the future price for a portion of these commodities used in the production of our products. To the extent that our hedging is not successful in fixing commodity prices that are favorable in comparison to market prices at the time of purchase, we would experience a negative impact on our profit margins compared to the margins we would have realized if these price commitments were not in place, which may adversely affect our results of operations, financial condition and cash flows in future periods.
Because we participate in an industry that is highly competitive, our net sales and profits could decline as we respond to competition.
We sell our products in a highly competitive industry. We compete based on product design, quality of products, quality and responsiveness of product support services, product performance and reliability, maintenance costs and price. Some of our competitors may have greater financial, marketing, manufacturing and distribution resources than we do. Competition could cause our sales to decrease or cause us to cut prices or incur additional costs to remain competitive, any of which could adversely affect our financial condition, results of operations and cash flows.
Additionally, a substantial portion of our dealer revenue comes from a small number of buying groups, which gives those buying groups a large degree of leverage and purchasing power with us and other suppliers. In recent years those buying groups have used their leverage to extract increasingly larger rebates, discounts and other price reductions. We must try to balance the added revenue from reducing prices to those buying groups against the reduced margins from reducing prices to those buying groups, which could adversely affect our results of operations.
If we do not develop new and innovative products or if customers in our markets do not accept them, our results would be negatively affected.
Our products must be kept current to meet our customers’ needs, overcome competitive products and meet evolving regulatory requirements. To remain competitive, we therefore must develop new and innovative products on an on-going basis, and we invest significantly in the research and development of new products. If we do not successfully develop innovative products, it may be difficult to differentiate our products from our competitors' products and satisfy regulatory requirements, and our sales and results would suffer.
If we do not meet customers’ product quality and reliability standards/expectations, we may experience increased or unexpected product warranty claims and other adverse consequences to our business.
Product quality and reliability are significant factors influencing customers’ decisions to purchase our products. Inability to maintain the high quality of our products relative to the perceived or actual quality of similar products offered by competitors could result in the loss of market share, loss of revenue, reduced profitability, an increase in warranty costs, and/or damage to our reputation. Similarly, if we fail to provide the

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same level of quality through our Manitowoc KitchenCare aftermarket parts and repair service as we provide in original equipment manufacturing, it could likewise negatively affect our revenue and our reputation with our customers.
Product quality and reliability are determined in part by factors that are not entirely within our control. We depend on our suppliers for parts and components that meet our standards. If our suppliers fail to meet those standards, we may not be able to deliver the quality products that our customers expect, which may impair revenue and our reputation and lead to higher warranty costs.
We provide our customers a warranty covering workmanship, and in some cases materials, on products we manufacture. Our warranty generally provides that products will be free from defects for periods ranging from 12 months to 60 months with certain equipment having longer term warranties. If a product fails to comply with the warranty, we may be obligated, at our expense, to correct any defect by repairing or replacing the defective product. Although we maintain warranty reserves in an amount based primarily on the number of units shipped and on historical and anticipated warranty claims, there can be no assurance that future warranty claims will follow historical patterns or that we can accurately anticipate the level of future warranty claims. An increase in the rate of warranty claims or the occurrence of unexpected warranty claims could adversely affect our financial condition, results of operations and cash flows.
Changing consumer tastes and government regulations affecting the quick-service restaurant industry could affect sales to our largest customers.
A number of our largest customers operate in the quick-service restaurant industry. The quick-service restaurant industry is frequently affected by changes in consumer tastes and eating habits, often as a result of new information or attitudes regarding diet and health or as a result of government regulations requiring quick-service restaurants to disclose the nutritional content of their food. If consumers’ eating habits change significantly, our customers may choose or be required to modify their menu offerings. Such modifications, or the failure to make the modifications to the extent consumers desire, could have an adverse effect on our customers’ business, financial conditions or results, which in turn could adversely affect the customers' demand for our products.
We have significant manufacturing and sales of our products outside of the United States, which may present additional risks to our business.
For the nine months ended September 30, 2015 and the years ended December 31, 2014, 2013 and 2012, approximately 31.4%, 37.1%, 38.4% and 37.4%, respectively, of our net sales were attributable to products sold outside of the United States. Expanding our international sales is part of our growth strategy. International operations generally are subject to various risks, including political, military, religious and economic instability, local labor market conditions, the imposition of foreign tariffs, the impact of foreign government regulations, the effects of income and withholding tax, governmental expropriation, and differences in business practices. We may incur increased costs and experience delays or disruptions in product deliveries and payments in connection with our international sales, manufacturing and the integration of new facilities that could cause loss of revenue or increased cost. Unfavorable changes in the political, regulatory and business climate and currency devaluations of various foreign jurisdictions could adversely affect our financial condition, results of operations and cash flows.

Our results of operations may be negatively impacted by product liability lawsuits.
Our business exposes us to potential product liability risks that are inherent in the design, manufacture, sale and use of our products. Neither we nor our affiliates have to date incurred material costs related to these product liability claims. We vigorously defend ourselves against current claims and intend to do so against future claims. However, a substantial increase in the number of claims that are made against us or the amounts of any judgments or settlements could adversely affect our reputation and our financial condition, results of operations and cash flows.
If we fail to protect our intellectual property rights or maintain our rights to use licensed intellectual property, our business could be adversely affected.
Our patents, trademarks and licenses are important in the operation of our businesses. Although we intend to protect our intellectual property rights vigorously, we cannot be certain that we will be successful in doing so. Third parties may assert or prosecute infringement or validity claims against us in connection with the services and products that we offer, and we may or may not be able to successfully defend these claims. Litigation, either to enforce our intellectual property rights or to defend against claimed infringement of the rights of others, could result in substantial costs and diversion of our resources. In addition, if a third party would prevail in an infringement claim against us, then we would likely need to obtain a license from the third party on commercial terms, which would likely increase our costs. Our failure to maintain or obtain necessary licenses or an adverse outcome in any litigation relating to patent infringement or other intellectual property matters could have a material adverse effect on our financial condition, results of operations and cash flows.
Sales of our products are sensitive to volatile or variable factors. A downturn or weakness in overall economic activity or fluctuations in weather or other factors adversely affect us.
Historically, sales of products that we manufacture and sell have been subject to variations caused by changes in general economic conditions and other factors. In particular, the strength of the economy generally may affect the rates of expansion, consolidation, renovation and equipment replacement within the restaurant, lodging, convenience store and healthcare industries, which may affect our sales. Furthermore, any future economic recession may impact leveraged companies like us more than competing companies with less leverage and may adversely affect our financial condition, results of operations and cash flows.

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Weather conditions can substantially affect our business, as relatively cool summer weather and cooler-than-normal weather in hot climates tend to decrease sales of ice and beverage dispensers. Our sales depend in part upon our customers’ replacement or repair cycles. Adverse economic conditions may cause customers to forego or postpone new purchases in favor of repairing existing machinery.
If we are unable to sufficiently adjust to market conditions, among other potential adverse effects on our financial condition, results of operations and cash flows, we could fail to deliver on planned results, fall short of analyst and investor expectations, incur high fixed costs, and/or fail to benefit from higher than expected customer demand resulting in loss of market share.
Our operations and profitability could suffer if we experience labor relations problems.
As of September 30, 2015, we employed approximately 5,500 people and had labor agreements with five local unions in North America. We have two trade unions in Europe and two trade unions in China. During 2015, three of our union contracts expired. Each contract that expired in 2015 was successfully renegotiated without incident. In 2016, we have two union contracts that will expire. Any significant labor relations issues could adversely affect our operations, reputation, results of operations and financial condition.
We are exposed to the risk of changes in interest rates or foreign currency fluctuations.
We expect to incur in the future indebtedness that accrues interest at a variable rate. Increases in interest rates will reduce our operating cash flows and could hinder our ability to fund our operations, capital expenditures, acquisitions or dividends. In such cases we may seek to reduce our exposure to fluctuations in interest rates, but hedging our exposure carries the risk that we may forego the benefits we would otherwise experience if interest rates were to change in our favor. Developing an effective strategy for dealing with movements in interest rates is complex, and no strategy is guaranteed to completely insulate us from the risks associated with such fluctuations.
Additionally, some of our operations are or may be conducted by subsidiaries in foreign countries. The results of the operations and the financial position of these subsidiaries will be reported in the relevant foreign currencies and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements, which are stated in U.S. dollars. The exchange rates between many of these currencies and the U.S. dollar have fluctuated significantly in recent years and may continue to fluctuate significantly in the future. Such fluctuations may have a material effect on our results of operations and financial position and may significantly affect the comparability of our results between financial periods.
We also incur currency transaction risk whenever one of our operating subsidiaries enters into a transaction using a different currency than its functional currency. We attempt to reduce currency transaction risk whenever one of our operating subsidiaries enters into a material transaction using a different currency than its functional currency by:
matching cash flows and payments in the same currency;
direct foreign currency borrowing; and
entering into foreign exchange contracts for hedging purposes.

However, we may not be able to hedge this risk completely or at an acceptable cost, which may adversely affect our results of operations, financial condition and cash flows in future periods.
Changes to tax laws or exposure to additional tax liabilities may have a negative impact on our operating results.

Tax policy reform continues to be a topic of discussion in the U.S. A significant change to the tax system in the U.S., including changes to the taxation of international income, could have a material adverse effect upon our results of operations. We regularly undergo tax audits in various jurisdictions in which we operate. Although we believe that our tax estimates are reasonable and that we prepare our tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be materially different from our estimates or from our historical income tax provisions and accruals. The results of an audit or litigation could materially affect our operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, and/or interest assessments.

Our business and/or reputation could be negatively affected as a result of actions of activist shareholders, and such activism could impact the trading value of our securities.
Certain of our stockholders may in the future publicly or privately express views with respect to the operation of our business, our business strategy, corporate governance considerations or other matters that may not be fully aligned with our own. Responding to actions by activist shareholders can be costly and time-consuming, disrupt our operations and divert the attention of management and our employees. Perceived uncertainties as to our future direction may result in the loss of potential business opportunities, damage to our reputation, and may make it more difficult to attract and retain qualified directors, personnel and business partners. These actions could also cause our stock price to experience periods of volatility.
Activist shareholders may in the future make strategic proposals, suggestions, or requests for changes concerning the operation of our business, our business strategy, corporate governance considerations, or other matters. We cannot predict, and no assurances can be given, as to the outcome or timing of any consequences arising from these actions, and any such consequences may impact the value of our securities.

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Environmental liabilities that may arise in the future could be material to us.
Our operations, facilities and properties are subject to extensive and evolving laws and regulations pertaining to air emissions, wastewater discharges, the handling and disposal of solid and hazardous materials and wastes, the remediation of contamination, and otherwise relating to health, safety and the protection of the environment. As a result, we are involved from time to time in administrative or legal proceedings relating to environmental and health and safety matters, and have in the past and will continue to incur capital and other expenditures relating to such matters. We also cannot be certain that identification of presently unidentified environmental conditions, more vigorous enforcement by regulatory authorities, or other unanticipated events will not arise in the future and give rise to additional environmental liabilities, compliance costs and/or penalties that could be material. Further, environmental laws and regulations are constantly evolving and it is impossible to predict accurately the effect any changes may have upon our financial condition, results of operations or cash flows.
Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
In the ordinary course of our business, we collect and store sensitive data, including our proprietary business information and that of our customers, suppliers and business partners, as well as personally identifiable information of our customers and employees, in our internal and external data centers, cloud services, and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure, and that of our partners, may be vulnerable to malicious attacks or breached due to employee error, malfeasance or other disruptions, including as a result of rollouts of new systems. Any such breach or operational failure would compromise our networks and/or that of our partners and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings and/or regulatory penalties, disrupt our operations, damage our reputation, and/or cause a loss of confidence in our products and services, which could adversely affect our business.
Our inability to recover from natural or man-made disasters could adversely affect our business.
Our business and financial results may be affected by certain events that we cannot anticipate or that are beyond our control, such as natural or man-made disasters, national emergencies, significant labor strikes, work stoppages, political unrest, war or terrorist activities that could curtail production at our facilities and cause delayed deliveries and canceled orders. In addition, we purchase components and raw materials and information technology and other services from numerous suppliers, and, even if our facilities were not directly affected by such events, we could be affected by interruptions at such suppliers. Such suppliers may be less likely than our own facilities to be able to quickly recover from such events and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. We cannot assure you that we will have insurance to adequately compensate us for any of these events.
Our international sales and operations are subject to applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect our operations.
We must comply with all applicable international trade, customs, export controls and economic sanctions laws and regulations of the U.S. and other countries. We are also subject to the Foreign Corrupt Practices Act and other anti-bribery laws that generally bar bribes or unreasonable gifts to foreign governments or officials. Changes in trade sanctions laws may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities, and may result in modifications to compliance programs. Violation of these laws or regulations could result in sanctions or fines and could have a material adverse effect on our financial condition, results of operations and cash flows.
Compliance with regulations related to conflict minerals may force us to incur additional expenses and affect the manufacturing and sale of our products.
In recent years, governments in both the U.S. and Europe have implemented or proposed regulations governing the use of certain minerals, including tin, tantalum, tungsten and gold (“conflict minerals”). In the U.S., SEC rules require disclosures related to conflict minerals that are necessary to the functionality or production of a product manufactured, or contracted to be manufactured, by an SEC-reporting company, that are sourced from the Democratic Republic of Congo and other countries in central Africa. In the European Union, proposed regulations would require similar disclosures, and may encompass other geographic regions outside of central Africa.
These disclosure requirements could affect the sourcing and availability of some of the minerals used in the manufacture of our products. Our supply chain is complex, and if we are not able to conclusively verify the origins for all conflict minerals used in our products or that our products are “conflict free,” we may face reputational challenges with our customers or investors. Furthermore, we may also encounter challenges to satisfy customers who require that our products be certified as “conflict free,” which could place us at a competitive disadvantage if we are unable to do so. Additionally, as there may be only a limited number of suppliers offering “conflict free” metals, we cannot be sure that we will be able to obtain necessary metals from such suppliers in sufficient quantities or at competitive prices. Finally, because European regulations have not yet been finalized, it is difficult for us to determine whether and how we will establish a compliance program. For all of these reasons, we could incur significant costs related to the conflict minerals compliance process, and face equally significant costs in satisfying the disclosure requirements.

Risks Relating to the Spin-Off
We face the following risks in connection with the Spin-Off:

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There could be significant liability if the Spin-Off is determined to be a taxable transaction.

A condition to the Spin-Off is Manitowoc ParentCo’s receipt of an opinion from its legal counsel substantially to the effect that the Spin-Off and certain related transactions will qualify as tax-free to Manitowoc ParentCo and its shareholders under Sections 355, 368 and related provisions of the Code, except to the extent of any cash received in lieu of fractional shares of Manitowoc Foodservice’s common stock. Any such opinion is not binding on the U.S. Internal Revenue Service (the “IRS”). Accordingly, the IRS may reach conclusions with respect to the Spin-Off that are different from the conclusions reached in the opinion. The opinion will rely on certain facts, assumptions, representations and undertakings from Manitowoc ParentCo and us regarding the past and future conduct of the companies’ respective businesses and other matters, which, if incomplete, incorrect or not satisfied, could alter the conclusions of the party giving such opinion.
If the Spin-Off ultimately is determined to be taxable, the Spin-Off could be treated as a taxable dividend to Manitowoc ParentCo’s shareholders for U.S. federal income tax purposes, and Manitowoc ParentCo’s shareholders could incur significant federal income tax liabilities. In addition, Manitowoc ParentCo would recognize a taxable gain to the extent that the fair market value of Manitowoc’s Foodservice’s common stock exceeds Manitowoc’s ParentCo’s tax basis in such stock on the date of the Spin-Off. Under the Tax Matters Agreement, we could be required, under certain circumstances, to indemnify Manitowoc ParentCo and its affiliates against all tax-related liabilities caused by those failures, to the extent those liabilities result from an action we or our affiliates take from any breach of our or our affiliates’ representations, covenants or obligations under the Tax Matters Agreement or any other agreement we enter into in connection with the Spin-Off. Events triggering an indemnification obligation under the agreement include events occurring after the Distribution that cause Manitowoc ParentCo to recognize a gain under Section 355(e) of the Code. See “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo-Tax Matters Agreement.” Moreover, though valid as between Manitowoc Foodservice and Manitowoc ParentCo, the Tax Matters Agreement is not binding on the IRS and, as a legal matter, we are jointly and severally liable for any U.S. federal consolidated income taxes (and certain state and local income taxes) imposed on Manitowoc ParentCo for the taxable year of the Spin-Off and for prior taxable years.
Manitowoc Foodservice may not be able to engage in certain transactions after the Spin-Off.
To preserve the tax-free treatment of the Spin-Off, Manitowoc Foodservice and Manitowoc ParentCo will enter into a Tax Matters Agreement that will restrict Manitowoc Foodservice from taking any action that prevents the Distribution and related transactions from being tax-free for U.S. federal income tax purposes. Under the tax matters agreement, for an agreed upon period following the Distribution, we expect to be prohibited, except in certain circumstances, from:
entering into any transaction resulting in the acquisition of above a certain percentage of our stock or substantially all of our assets, whether by merger or otherwise;
merging, consolidating or liquidating;
issuing equity securities beyond certain thresholds;
repurchasing our capital stock; and
ceasing to actively conduct our business.
These restrictions may limit our ability to pursue certain strategic transactions or other transactions that we may believe to be in the best interests of its shareholders or that might increase the value of our business. In addition, under the Tax Matters Agreement, we will be required to indemnify Manitowoc ParentCo against any such tax liabilities as a result of the acquisition of our stock or assets, even if Manitowoc ParentCo consented to the acquisition.
We could have an indemnification obligation to Manitowoc ParentCo if the transactions we undertake in the Spin-Off do not qualify for non-recognition treatment, which could materially adversely affect our financial condition.
Generally, taxes resulting from the failure of the Spin-Off to qualify for non-recognition treatment for U.S. federal income tax purposes would be imposed on Manitowoc ParentCo and Manitowoc ParentCo’s shareholders and, under the Tax Matters Agreement, Manitowoc ParentCo is generally obligated to indemnify us against such taxes. However, under the Tax Matters Agreement, we could be required, under certain circumstances, to indemnify Manitowoc ParentCo and its affiliates against all tax-related liabilities caused by those failures, to the extent those liabilities result from an action we or our affiliates take or from any breach of our or our affiliates’ representations, covenants or obligations under the Tax Matters Agreement or any other agreement we enter into in connection with the Spin-Off. Events triggering an indemnification obligation under the agreement include events occurring after the Distribution that cause Manitowoc ParentCo to recognize a gain under Section 355(e) of the Code. See “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo-Tax Matters Agreement.” Moreover, though valid as between Manitowoc Foodservice and Manitowoc ParentCo, the Tax Matters Agreement is not binding on the IRS and, as a legal matter, we are jointly and severally liable for any U.S. federal consolidated income taxes (and certain state and local income taxes) imposed on Manitowoc ParentCo for the taxable year of the Spin-Off and for prior taxable years.
We may be unable to achieve some or all of the benefits that we expect to achieve from the Spin-Off.
We believe that, as an independent, publicly traded company, we will be able, among other matters, to better focus our financial and operational resources on our specific business, growth profile and strategic priorities, design and implement corporate strategies and policies targeted to our operational focus and strategic priorities, streamline our processes and infrastructure to focus on our core strengths, implement and maintain a capital structure designed to meet our specific needs and more effectively respond to industry dynamics. However, we may be

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unable to achieve some or all of these benefits. In addition, completion of the proposed Spin-Off will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing our businesses. If we fail to achieve some or all of the benefits that we expect to achieve as an independent company, or do not achieve them in the time we expect, our business, financial condition and results of operations could be materially and adversely affected.
We may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent company.
We have historically operated as part of Manitowoc ParentCo’s corporate organization, and Manitowoc ParentCo has assisted us by providing various corporate functions. Following the Spin-Off, Manitowoc ParentCo will have no obligation to provide us with assistance other than the transition services described under “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo Transition Services Agreement.” These services do not include every service we have received from Manitowoc ParentCo in the past, and Manitowoc ParentCo is only obligated to provide these services for limited periods from the date of the Spin-Off. Accordingly, following the Spin-Off, we will need to provide internally or obtain from unaffiliated third parties the services we currently receive from Manitowoc ParentCo. These services include information technology, research and development, finance, legal, insurance, compliance and human resources activities, the effective and appropriate performance of which is critical to our operations. We may be unable to replace these services in a timely manner or on terms and conditions as favorable as those we receive from Manitowoc ParentCo. In particular, Manitowoc ParentCo’s information technology networks and systems are complex, and duplicating these networks and systems will be challenging. Because our business previously operated as part of the wider Manitowoc ParentCo organization, we may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently, or we may incur additional costs that could adversely affect our business. If we fail to obtain the quality of administrative services necessary to operate effectively or incur greater costs in obtaining these services, our profitability, financial condition and results of operations may be materially and adversely affected.
We have no operating history as an independent, publicly traded company, and our historical and pro forma financial information is not necessarily representative of the results we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.
We derived the historical and pro forma financial information included in this Information Statement from Manitowoc ParentCo’s consolidated financial statements and this information does not necessarily reflect the results of operations, financial position and cash flows we would have achieved as an independent, publicly traded company during the periods presented, or those that we will achieve in the future. This is primarily because of the following factors:
Prior to the Spin-Off, we operated as part of Manitowoc ParentCo’s broader corporate organization, rather than as an independent company. Manitowoc ParentCo performed various corporate functions for us, including information technology, research and development, finance, legal, insurance, compliance and human resources activities. Our historical and pro forma financial information reflects allocations of corporate expenses from Manitowoc ParentCo for these and similar functions. These allocations may not reflect the costs we will incur for similar services in the future as an independent company.
We will enter into transactions with Manitowoc ParentCo that did not exist prior to the Spin-Off. See “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo” for information regarding these transactions.
Our historical financial information does not reflect changes that we expect to experience in the future as a result of the Spin-Off, including changes in our cost structure, personnel needs, tax structure, financing and business operations. As part of Manitowoc ParentCo, we enjoyed certain benefits from Manitowoc ParentCo’s operating diversity, size, purchasing power and available capital for investments, and we will lose these benefits after the Spin-Off. After the Spin-Off, as an independent entity, we may be unable to purchase goods, services and technologies, such as insurance and health care benefits and computer software licenses, on terms as favorable to us as those we obtained as part of Manitowoc ParentCo prior to the Spin-Off.
Following the Spin-Off, we will also be responsible for the additional costs associated with being an independent, publicly traded company, including costs related to corporate governance, investor and public relations and public reporting. Therefore, our financial statements may not be indicative of our future performance as an independent company. While we have been profitable as part of Manitowoc ParentCo, we cannot assure you that our profits will continue at a similar level when we are a stand-alone company. For additional information about our past financial performance and the basis of presentation of our financial statements, see “Selected Historical Combined Financial Data,” “Unaudited Pro Forma Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical combined financial statements and accompanying notes included elsewhere in this Information Statement.
The unaudited pro forma combined financial statements are subject to the assumptions and adjustments described in the accompanying notes. While we believe that these assumptions and adjustments are reasonable under the circumstances and given the information available at this time, these assumptions and adjustments are subject to change as Manitowoc ParentCo and we finalize the terms of the Spin-Off and our agreements related to the Spin-Off.
We will incur substantial indebtedness in connection with the Spin-Off, and the degree to which we will be leveraged following completion of the Spin-Off may materially and adversely affect our business, financial condition and results of operations.

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We are incurring substantial indebtedness in connection with the Spin-Off. We have historically been part of a larger enterprise under the Manitowoc ParentCo umbrella, which has assisted with working capital requirements on a short-term basis and provided other financial support functions. After the Spin-Off, we will not be able to rely on Manitowoc ParentCo’s consolidated earnings, assets or cash flows, and we will be responsible for servicing our own debt, obtaining and maintaining sufficient working capital and paying dividends.
Our ability to make payments on and to refinance our indebtedness, including the debt retained or incurred pursuant to the Spin-Off as well as any future debt that we may incur, will depend on our ability to generate cash in the future from operations, financings or asset sales. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We may not generate sufficient funds to service our debt and meet our business needs, such as funding working capital or the expansion of our operations. If we are not able to repay or refinance our debt as it becomes due, we may be forced to take disadvantageous actions, including reducing spending on marketing, advertising and new product innovation, reducing future financing for working capital, capital expenditures and general corporate purposes, selling assets or dedicating an unsustainable level of our cash flow from operations to the payment of principal and interest on our indebtedness. In addition, our ability to withstand competitive pressures and to react to changes in the food and beverage industry could be impaired. The lenders who hold our debt could also accelerate amounts due in the event that we default, which could potentially trigger a default or acceleration of the maturity of our other debt.
In addition, our substantial leverage could put us at a competitive disadvantage compared to our competitors that are less leveraged. These competitors could have greater financial flexibility to pursue strategic acquisitions and secure additional financing for their operations. Our substantial leverage could also impede our ability to withstand downturns in our industry or the economy in general.
We may increase our debt or raise additional capital in the future, including to meet working capital needs or fund acquisitions, which could affect our financial health and decrease our profitability.
We may increase our debt or raise additional capital in the future, subject to restrictions in our debt agreements. In addition, our Board may issue shares of preferred stock without further action by holders of our common stock. If our cash flow from operations is less than we anticipate, or if our cash requirements are more than we expect, we may require more financing. However, debt or equity financing may not be available to us on terms we find acceptable, if at all. If we incur additional debt or raise equity through the issuance of our preferred stock, the terms of the debt or our preferred stock issued may give the holders rights, preferences and privileges senior to those of holders of our common stock, particularly in the event of liquidation. If we raise funds through the issuance of additional equity, our then-existing stockholders' ownership in us would be diluted. Also, regardless of the terms of our debt or equity financing, our agreements and obligations under the Tax Matters Agreement may limit our ability to issue stock. For a more detailed discussion, see “Manitowoc Foodservice may not be able to engage in certain transactions after the Spin-Off.” If we are unable to raise additional capital when needed, our financial condition, and thus your investment in us, could be materially and adversely affected.
Potential liabilities may arise under fraudulent conveyance and transfer laws and legal capital requirements, which could have an adverse effect on our financial condition and our results of operations.
In the event that any entity involved in the Spin-Off (including the Internal Reorganization and financing transactions contemplated to be consummated in connection with the Spin-Off) subsequently fails to pay its creditors or enters insolvency proceedings, these transactions may be challenged under U.S. federal, U.S. state and foreign fraudulent conveyance and transfer laws, as well as legal capital requirements governing distributions and similar transactions. If a court were to determine under these laws that, (a) at the time of the Spin-Off, the entity in question: (1) was insolvent; (2) was rendered insolvent by reason of the Spin-Off; (3) had remaining assets constituting unreasonably small capital; (4) intended to incur, or believed it would incur, debts beyond its ability to pay these debts as they matured; or (b) the transaction in question failed to satisfy applicable legal capital requirements, the court could determine that the Spin-Off was voidable, in whole or in part. Subject to various defenses, the court could then require Manitowoc ParentCo or us, or other recipients of value in connection with the Spin-Off (potentially including our stockholders as recipients of shares of our common stock in connection with the Spin-Off), as the case may be, to turn over value to other entities involved in the Spin-Off and contemplated transactions for the benefit of unpaid creditors. The measure of insolvency and applicable legal capital requirements will vary depending upon the jurisdiction whose law is being applied.
After the Spin-Off, certain of our directors and officers may have actual or potential conflicts of interest because of their Manitowoc ParentCo equity ownership or their former Manitowoc ParentCo positions.
Certain of the persons we expect to become our executive officers and directors have been, and will be until the Spin-Off, Manitowoc ParentCo officers, directors or employees and thus have professional relationships with Manitowoc ParentCo’s executive officers, directors or employees. In addition, because of their former Manitowoc ParentCo positions, following the Spin-Off, certain of our directors and executive officers may own Manitowoc ParentCo common stock or options to acquire shares of Manitowoc ParentCo common stock, and the individual holdings may be significant for some of these individuals compared to their total assets. These relationships and financial interests may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for Manitowoc ParentCo and us. For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between Manitowoc ParentCo and us regarding the terms of the agreements governing the Spin-Off and the relationship thereafter between the companies.
Risks Relating to Our Common Stock and the Securities Markets
You face the following risks in connection with ownership of our common stock:

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No market for our common stock currently exists and an active trading market may not develop or be sustained after the Spin-Off. Following the Spin-Off, our stock price may fluctuate significantly.
There is currently no public market for our common stock. We intend to apply to list our common stock on the NYSE. We anticipate that before the Distribution Date for the Spin-Off, trading of shares of our common stock will begin on a “when-issued” basis and this trading will continue up to and including the Distribution Date. However, an active trading market for our common stock may not develop as a result of the Spin-Off or may not be sustained in the future. The lack of an active market may make it more difficult for you to sell our shares and could lead to our share price being depressed or volatile.
We cannot predict the prices at which our common stock may trade after the Spin-Off. The market price of our common stock may fluctuate widely, depending on many factors, some of which may be beyond our control, including the factors listed in “Cautionary Statement Concerning Forward-Looking Statements” and the following:
our quarterly or annual earnings, or those of other companies in our industry;
announcements by us or our competitors of significant new business awards;
announcements of significant acquisitions, divestitures, strategic alliances, joint ventures or dispositions by us or our competitors;
the failure of securities analysts to cover our common stock after the Spin-Off;
changes in earnings estimates by securities analysts;
the operating and stock price performance of other comparable companies;
investor perception of our company and the foodservice industry;
overall market fluctuations;
changes in capital gains taxes and taxes on dividends affecting stockholders; and
general economic conditions and other external factors.

Furthermore, our business profile and market capitalization may not fit the investment objectives of some Manitowoc ParentCo shareholders and, as a result, these Manitowoc ParentCo shareholders may sell our shares after the Distribution. See “Substantial sales of our common stock may occur in connection with the Spin-Off, which could cause our stock price to decline.” Low trading volume for our stock, which may occur if an active trading market does not develop, among other reasons, would amplify the effect of the above factors on our stock price volatility.
Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could also adversely affect the trading price of our common stock.
Substantial sales of our common stock may occur in connection with the Spin-Off, which could cause our stock price to decline.
Manitowoc ParentCo shareholders receiving shares of our common stock in the Distribution generally may sell those shares immediately in the public market. Although we have no actual knowledge of any plan or intention of any significant shareholder to sell our common stock following the Spin-Off, it is possible that some Manitowoc ParentCo shareholders, including some of our larger stockholders, will sell our common stock received in the Distribution if, for reasons such as our business profile or market capitalization as an independent company, we do not fit their investment objectives, or - in the case of index funds - we are not a participant in the index in which they are investing. The sales of significant amounts of our common stock relating to the above events or the perception in the market that such sales will occur may decrease the market price of our common stock.
We cannot assure you that we will pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.
Following the Spin-Off, the timing, declaration, amount and payment of any future dividends to stockholders will fall within the discretion of our Board. Our Board currently does not plan on paying a dividend in 2016, as Manitowoc Foodservice's focus in 2016 will be on the reduction of outstanding debt. Our Board’s decisions regarding the payment of future dividends including subsequent to 2016 will depend on many factors, including our financial condition, earnings, capital requirements and debt service obligations, as well as legal requirements, regulatory constraints, industry practice and other factors that our Board deems relevant. In addition, the terms of the agreements governing our new debt or debt that we may incur in the future may limit or prohibit the payment of dividends. For more information, see “Dividend Policy.” There can be no assurance that we will pay a dividend in the future or that we will continue to pay any dividend if we do commence paying dividends. There can also be no assurance that, in the future, the combined annual dividends on Manitowoc ParentCo common stock, if any, and our common stock, if any, after the Spin-Off will equal the annual dividends on Manitowoc ParentCo common stock prior to the Spin-Off.
Your percentage ownership in Manitowoc Foodservice may be diluted in the future.
Your percentage ownership in Manitowoc Foodservice may be diluted in the future because of equity awards that we expect to grant to our directors, officers and employees. Prior to the Spin-Off, we expect to approve equity incentive plans that will provide for the grant of common stock-based equity awards to our directors, officers and other employees. In addition, we may issue equity as all or part of the consideration paid for acquisitions and strategic investments we may make in the future.

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Provisions of Delaware law and our Certificate of Incorporation and Bylaws may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock.
Several provisions of Delaware law and our Certificate of Incorporation and Bylaws may discourage, delay or prevent a merger or acquisition that a stockholder or investor may consider favorable. These include provisions that:
allow our Board to adopt a stockholder rights plan;
authorize our Board to establish one or more series of undesignated preferred stock without stockholder approval, and to determine the terms of such preferred stock at the time of issuance;
do not provide for cumulative voting in the election of directors;
limit the stockholders’ ability to call special meetings of stockholders to remove directors;
establish advance notice requirements for stockholder nominations and proposals; and
limit our ability to enter into business combination transactions with certain stockholders.

These and other provisions of Delaware law and our Certificate of Incorporation and Bylaws may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of Manitowoc Foodservice, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their shares of our common stock at a price above the prevailing market price. See “Description of Our Capital Stock” for more information.
Our Bylaws include an exclusive forum provision that could limit our stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or other employees.
Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if that court does not have jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of Manitowoc Foodservice; (ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer or other employee of Manitowoc Foodservice to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our Certificate of Incorporation or our Bylaws (as any of the foregoing may be amended from time to time); or (iv) any action asserting a claim governed by the internal affairs doctrine. This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers, which may discourage lawsuits against us or our directors or officers. Alternatively, if a court outside of Delaware were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.


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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Statements in this Information Statement that are not historical facts are forward-looking statements, which are based upon our current expectations.
These statements involve risks and uncertainties that could cause actual results to differ materially from what appears within this Information Statement.
Forward-looking statements include descriptions of plans and objectives for future operations, and the assumptions behind those plans. The words “anticipates,” “believes,” “intends,” “estimates,” “targets” and “expects,” or similar expressions, usually identify forward-looking statements. Any and all projections of future performance are forward-looking statements.
In addition to the assumptions, uncertainties and other information referred to specifically in the forward-looking statements, a number of factors relating to our business could cause actual results to be significantly different from the current expectations presented in this Information Statement. Those factors include, without limitation, the following:
the impact of our separation from Manitowoc ParentCo and risks relating to our ability to operate effectively as an independent, publicly traded company;
efficiencies and capacity utilization of facilities;
issues relating to the ability to timely and efficiently execute on manufacturing strategies, including issues relating to new plant start-ups, plant closings, workforce reductions or ramp-ups, and/or consolidations of existing facilities and operations;
our failure to retain our executive management team and to attract qualified new personnel;
realization of anticipated earnings enhancements, cost savings, strategic options and other synergies, and the anticipated timing to realize those enhancements, savings, synergies, and options;
availability of certain raw materials;
changes in raw materials and commodity prices;
actions of competitors, including competitive pricing;
the successful development of innovative products and market acceptance of new and innovative products;
the ability to focus and capitalize on product quality and reliability;
unexpected issues associated with the quality of materials and components sourced from third parties and resolution of those issues;
unanticipated issues associated with refresh/renovation plans by national restaurant accounts and global chains;
consumer demand for quick-service restaurant chains and kiosks;
growth in demand for foodservice equipment by customers in emerging markets;
global expansion of customers;
changes in the markets we serve;
unfavorable outcomes in product liability lawsuits, or an increase in the volume of product liability lawsuits;
unexpected costs incurred in protecting our intellectual property;
weather;
changes in domestic and international economic and industry conditions;
work stoppages, labor negotiations, rates and temporary labor;
the availability of local suppliers and skilled labor;
unanticipated changes in capital and financial markets;
changes in the interest rate environment;
foreign currency fluctuations and their impact on reported results and hedges in place;
unexpected issues affecting our effective tax rate, including, but not limited to, global tax policies, tax reform, and tax legislation;
unanticipated issues associated with the resolution or settlement of uncertain tax positions or unfavorable resolution of tax audits;
the tax treatment of the Distribution and the restrictions on post-Distribution activities imposed on Manitowoc Foodservice under the Tax Matters Agreement in order to preserve the tax-free treatment of the Spin-Off;
actions of activist shareholders;
costs associated with unanticipated environmental liabilities;
risks associated with data security and technological systems and protections;
world-wide political risk;
natural disasters disrupting commerce in one or more regions of the world;
acts of terrorism;
geographic factors and economic risks;
changes in laws and regulations, as well as their enforcement, throughout the world;
changes in the costs of compliance with laws regarding trade, export controls and foreign corrupt practices;
foodservice equipment replacement cycles in the U.S. and other mature markets;
the ability to compete and appropriately integrate, and/or transition, restructure and consolidate acquisitions, divestures, strategic alliances, joint ventures and other strategic alternatives and otherwise capitalize on key strategic opportunities;

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in connection with acquisitions, divestitures, strategic alliances and joint ventures, the finalization of the price and other terms, the realization of contingencies consistent with any established reserves, and unanticipated issues associated with transitional services;
pressure of financing leverage;
unanticipated changes in consumer spending;
compliance with debt covenants and maintenance of credit ratings as well as the impact of interest and principal repayment of our future debt obligations;
growth of general and administrative expenses, including health care and postretirement costs; and
other events outside our control.


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THE SPIN-OFF
Background
On January 29, 2015, Manitowoc ParentCo announced plans to create two independent public companies: the Foodservice Business and the Crane Business. To effect the Spin-Off, Manitowoc ParentCo will undertake the Internal Reorganization described under “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo-Separation and Distribution Agreement,” following which Manitowoc ParentCo will hold the Crane Business and Manitowoc Foodservice, Manitowoc ParentCo’s wholly owned subsidiary, will hold the Foodservice Business.
Following the Internal Reorganization, Manitowoc ParentCo will distribute all of its equity interest in us, consisting of all of the outstanding shares of our common stock, to Manitowoc ParentCo’s shareholders on a pro rata basis. Following the Spin-Off, Manitowoc ParentCo will not own any equity interest in us, and we will operate independently from Manitowoc ParentCo. No approval of Manitowoc ParentCo’s shareholders is required in connection with the Spin-Off, and Manitowoc ParentCo’s shareholders will not have any appraisal rights in connection with the Spin-Off.
The Spin-Off described in this Information Statement is subject to the satisfaction, or Manitowoc ParentCo’s waiver, of a number of conditions. In addition, Manitowoc ParentCo has the right not to complete the Spin-Off if, at any time, the Manitowoc ParentCo Board determines, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Manitowoc ParentCo or its shareholders or is otherwise not advisable. For a more detailed description, see “Conditions to the Spin-Off.”
Reasons for the Spin-Off
The Manitowoc ParentCo Board believes that creating two public companies will present a number of opportunities, including the following:
The Spin-Off will allow each company to focus on its distinct growth profile, product categories, distribution systems and strategic priorities, with customized cultures, organizational structures, operating models and financial targets that best fit its own business, markets and unique opportunities.
The Spin-Off will allow each company to raise capital more efficiently using a capital structure that aligns with its distinct business profile, allocate resources and deploy capital in a manner consistent with its distinct operational focus and strategic priorities in order to optimize total returns to shareholders.
The Spin-Off will allow each company to issue stock-based compensation to its employees that more closely aligns the employee’s efforts with his or her compensation, thereby enhancing the ability of each company to attract and retain key talent.
The Spin-Off will allow investors to value Manitowoc ParentCo and Manitowoc Foodservice based on their particular operational and financial characteristics and thus invest accordingly.
The Spin-Off will allow each company to attract a long-term investor base appropriate for the particular operational and financial characteristics of that company.
The Manitowoc ParentCo Board also considered certain risks and negative factors associated with the Spin-Off, including: the fact that the Spin-Off will be contingent upon the satisfaction of a number of conditions and will require significant time and attention of management; the risk that the Spin-Off may not achieve some or all of its intended benefits; the fact that the trading price of Manitowoc ParentCo’s common stock will likely decrease immediately following the Spin-Off; the risk that the combined trading price of Manitowoc ParentCo common stock and our common stock may be less than the price at which Manitowoc ParentCo’s common stock would otherwise have traded; and the risk that the Spin-Off could result in substantial tax liability.
Separation of Manitowoc Foodservice from Manitowoc ParentCo
With the objective of creating two separate and strong businesses and with input and advice from Manitowoc ParentCo’s management, the Manitowoc ParentCo Board defined principles to implement the separation of Manitowoc Foodservice from Manitowoc ParentCo. These separation principles include ensuring that both Manitowoc ParentCo and Manitowoc Foodservice will each hold the assets needed to operate our respective businesses and have total liabilities immediately following the Spin-Off that support each of us achieving capital structures appropriate for our business profiles.
The Manitowoc ParentCo Board charged a steering committee comprising members of Manitowoc ParentCo’s senior management, or the “Steering Committee,” with overseeing the separation of the businesses in accordance with these separation principles. Guided by the separation principles and input from business units and strategy, tax and legal teams, as well as outside advisors, the Steering Committee considered, among other factors, each business’s historic ownership and usage of assets, incurrence of liabilities, relationships with other entities and accounting treatment, as well as administrative costs and efficiencies, to determine the terms of the separation of Manitowoc Foodservice from Manitowoc ParentCo.
When and How You Will Receive Manitowoc Foodservice Shares

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Manitowoc ParentCo will distribute to its shareholders, pro rata, one share of our common stock for every one share of Manitowoc ParentCo common stock outstanding as of December 31, 2015, the Record Date of the Distribution.
Prior to the Spin-Off, Manitowoc ParentCo will deliver all of the issued and outstanding shares of our common stock to the distribution agent. Computershare will serve as distribution agent in connection with the distribution of our common stock and as transfer agent and registrar for our common stock.
If you own Manitowoc ParentCo common stock as of the close of business on February 22, 2016, the shares of our common stock that you are entitled to receive in the Distribution will be issued to your account as follows:
Registered shareholders. If you own your shares of Manitowoc ParentCo common stock directly, either through an account with Manitowoc ParentCo’s transfer agent or if you hold physical stock certificates, you are a registered shareholder. In this case, the distribution agent will credit the whole shares of our common stock you receive in the Distribution by way of direct registration in book-entry form to your Computershare account on or shortly after the Distribution Date. Registration in book-entry form refers to a method of recording share ownership where no physical stock certificates are issued to shareholders, as is the case in the Distribution. You will be able to access information regarding your book-entry account holding the Manitowoc Foodservice shares at www.computershare.com/investor or via our transfer agent’s interactive voice response system at (877) 498‑8861, in each case using the same credentials that you use to access your Manitowoc ParentCo account.
Within ten business days after the Distribution Date, the distribution agent will mail to you a Computershare account statement and a check for any cash in lieu of fractional shares you are entitled to receive. See “Treatment of Fractional Shares.” The Computershare account statement will indicate the number of whole shares of our common stock that have been registered in book-entry form in your name.
“Street name” or beneficial shareholders. Most Manitowoc ParentCo shareholders own their shares of Manitowoc ParentCo common stock beneficially through a bank, broker or other nominee. In these cases, the bank, broker or other nominee holds the shares in “street name” and records your ownership on its books. If you own your shares of Manitowoc ParentCo common stock through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of our common stock that you receive in the Distribution on or shortly after the Distribution Date. We encourage you to contact your bank, broker or other nominee if you have any questions concerning the mechanics of having shares held in street name.
If you sell any of your shares of Manitowoc ParentCo common stock on or before the Distribution Date, the buyer of those shares, and not you, may in some circumstances be entitled to receive the shares of our common stock issuable in respect of the shares sold. If you sell any of your shares of Manitowoc ParentCo common stock after the Record Date but before the Distribution Date, you may choose to sell the shares with or without the right to receive Manitowoc Foodservice shares. See “Trading Prior to the Distribution Date” for more information.
We are not asking Manitowoc ParentCo shareholders to take any action in connection with the Spin-Off. No shareholder approval of the Spin-Off is required. We are not asking you for a proxy and request that you not send us a proxy. We are also not asking you to surrender any of your shares of Manitowoc ParentCo common stock for shares of our common stock. The number of outstanding shares of Manitowoc ParentCo common stock will not change as a result of the Spin-Off.
Number of Shares You Will Receive
On the Distribution Date, you will receive one share of our common stock for every one share of Manitowoc ParentCo common stock you owned as of the Record Date.
Treatment of Equity-Based Compensation
With respect to Manitowoc ParentCo’s equity-based incentive awards that are outstanding on the Distribution Date, we expect that each outstanding Manitowoc ParentCo stock option, restricted share, restricted stock unit and performance share will be treated in a manner similar to that experienced by Manitowoc ParentCo shareholders with respect to their Manitowoc ParentCo common stock. More specifically, each of these awards will be deemed bifurcated into two separate awards: (1) a modified award covering Manitowoc ParentCo common stock; and (2) a new award of the same type covering Manitowoc Foodservice common stock. Each of these two awards will be subject to the same terms and conditions after the spin-off as the terms and conditions applicable to the original Manitowoc ParentCo award prior to the spin-off, except:

with respect to each modified stock option award covering Manitowoc ParentCo common stock and new stock option award covering Manitowoc Foodservice common stock, the per-share exercise price for such award will be adjusted or established, as applicable, so that the two awards, together, will retain, in the aggregate, the same intrinsic value that the original Manitowoc ParentCo stock option award had immediately prior to the spin-off (subject to rounding);
with respect to performance shares subject to performance goals relating to performance periods that are incomplete at the time of the spin-off, the performance goals will be deemed met at the target level and the number of performance shares will be calculated with no proration, but the performance shares will remain subject to continued time-based vesting until the end of the applicable performance period.

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with respect to each new award covering Manitowoc Foodservice common stock, the number of underlying shares subject to such new award will be determined based on application of the distribution ratio to the number of shares of Manitowoc ParentCo common stock subject to the original Manitowoc ParentCo award prior to bifurcation;
with respect to any continuous employment requirement associated with any equity-based incentive awards, such requirement will be satisfied after the spin-off (a) by a Manitowoc Foodservice employee based on his or her continuous employment with Manitowoc Foodservice (for equity-based incentive awards of either Manitowoc Foodservice or Manitowoc ParentCo) and (b) by a Manitowoc ParentCo employee based on his or her continuous employment with Manitowoc ParentCo (for equity-based incentive awards of either Manitowoc ParentCo or Manitowoc Foodservice); and
to the extent any original Manitowoc ParentCo equity-based incentive award is subject to potential accelerated vesting or exercisability in the event of a “change of control” or similar event, the corresponding post-spinoff Manitowoc ParentCo and Manitowoc Foodservice equity-based incentive awards will generally accelerate in the same manner in the event of (a) a change of control or similar event of the issuer of the shares underlying such awards, or (b) a change of control or similar event of the employer of the grantee.
To the extent that an affected employee is employed in a non-U.S. jurisdiction, and the adjustments or grants contemplated above could result in adverse tax consequences or other adverse regulatory consequences, Manitowoc ParentCo may determine that a different equitable adjustment or grant will apply in order to avoid any such adverse consequences.
We expect that the Compensation Committee of our board of directors will maintain a program to deliver long-term incentive awards to our executives and other employees that is appropriate for our business needs. However, the types of awards provided, the allocation of grant date values among the mix of awards and the performance measures to be used may differ from Manitowoc ParentCo’s past practice.
Treatment of Fractional Shares
The distribution agent will not distribute any fractional shares of our common stock in connection with the Spin-Off. Instead, the distribution agent will aggregate all fractional shares into whole shares and sell the whole shares in the open market at prevailing market prices on behalf of Manitowoc ParentCo shareholders entitled to receive a fractional share. The distribution agent will then distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to these holders (net of any required withholding for taxes applicable to each holder). We anticipate that the distribution agent will make these sales in the “when-issued” market, and when-issued trades will generally settle within four trading days following the Distribution Date. See “Trading Prior to the Distribution Date” for additional information regarding when-issued trading. The distribution agent will, in its sole discretion, without any influence by Manitowoc ParentCo or us, determine when, how, through which broker-dealer and at what price to sell the whole shares. The distribution agent is not, and any broker-dealer used by the distribution agent will not be, an affiliate of either Manitowoc ParentCo or us.
The distribution agent will send to each registered holder of Manitowoc ParentCo common stock entitled to a fractional share a check in the cash amount deliverable in lieu of that holder’s fractional share as soon as practicable following the Distribution Date. We expect the distribution agent to complete the distribution of cash in lieu of fractional shares to Manitowoc ParentCo shareholders within ten business days after the Distribution Date. If you hold your shares through a bank, broker or other nominee, your bank, broker or nominee will receive, on your behalf, your pro rata share of the aggregate net cash proceeds of the sales. No interest will be paid on any cash you receive in lieu of fractional shares. The cash you receive in lieu of fractional shares will generally be taxable to you. See “Material U.S. Federal Income Tax Consequences” below for more information.
Results of the Spin-Off
After the Spin-Off, we will be an independent, publicly traded company. Immediately following the Distribution, we expect to have approximately 1,975 registered holders of shares of our common stock and approximately 136,617,161 shares of our common stock outstanding, based on the number of Manitowoc ParentCo registered shareholders and shares of Manitowoc ParentCo common stock outstanding on December 31, 2015. The actual number of shares of our common stock Manitowoc ParentCo will distribute in the Spin-Off will depend on the actual number of shares of Manitowoc ParentCo common stock outstanding on the Record Date, and will reflect any issuance of new shares or exercises of outstanding options pursuant to Manitowoc ParentCo’s equity plans on or prior to the Record Date. The Spin-Off will not affect the number of outstanding shares of Manitowoc ParentCo common stock or any rights of Manitowoc ParentCo shareholders, although we expect the trading price of shares of Manitowoc ParentCo common stock immediately following the Distribution to be lower than immediately prior to the Distribution because Manitowoc ParentCo’s trading price will no longer reflect the value of the Foodservice Business. Furthermore, until the market has fully analyzed the value of Manitowoc ParentCo without the Foodservice Business, the price of shares of Manitowoc ParentCo common stock may fluctuate.
Before the Spin-Off, we intend to enter into a Separation and Distribution Agreement and several other agreements with Manitowoc ParentCo related to the Spin-Off. These agreements will govern the relationship between Manitowoc ParentCo and us up to and after completion of the Spin-Off and allocate between Manitowoc ParentCo and us various assets, liabilities, rights and obligations, including employee benefits, intellectual property and tax-related assets and liabilities. We describe these arrangements in greater detail under “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo.”

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Listing and Trading of our Common Stock
As of the date of this Information Statement, we are a wholly owned subsidiary of Manitowoc ParentCo. Accordingly, no public market for our common stock currently exists, although a “when-issued” market in our common stock may develop prior to the Distribution. See “Trading Prior to the Distribution Date” below for an explanation of a “when-issued” market. We intend to list our shares of common stock on the NYSE under the symbol “MFS.” Following the Spin-Off, Manitowoc ParentCo common stock will continue to trade on the NYSE under the symbol “MTW.”
Neither Manitowoc ParentCo nor we can assure you as to the trading price of Manitowoc ParentCo common stock or our common stock after the Spin-Off, or as to whether the combined trading prices of Manitowoc ParentCo common stock and our common stock after the Spin-Off will be less than, equal to or greater than the trading prices of Manitowoc ParentCo common stock prior to the Spin-Off. The trading price of our common stock may fluctuate significantly following the Spin-Off. See “Risk Factors-Risks Relating to our Common Stock and the Securities Markets” for more detail.
The shares of our common stock distributed to Manitowoc ParentCo shareholders will be freely transferable, except for shares received by individuals who are our affiliates. Individuals who may be considered our affiliates after the Spin-Off include individuals who control, are controlled by or are under common control with us, as those terms generally are interpreted for federal securities law purposes. These individuals may include some or all of our directors and executive officers. Individuals who are our affiliates will be permitted to sell their shares of our common stock only pursuant to an effective registration statement under the Securities Act of 1933, or the “Securities Act,” or an exemption from the registration requirements of the Securities Act, such as those afforded by Section 4(1) of the Securities Act or Rule 144 thereunder.
We expect that Manitowoc ParentCo’s current directors and executive officers following the Spin-Off will voluntarily commit to hold 100% of the after-tax net shares of our common stock they receive in the Spin-Off and 100% of the after-tax net shares of Manitowoc ParentCo common stock they hold on the Distribution Date for at least one year following the Distribution Date. In addition, we expect that the other individuals who will serve as our executive officers following the Spin-Off will voluntarily commit to hold 100% of the after-tax net shares of our common stock they receive in the Spin-Off and at least 50% of the after-tax net shares of Manitowoc ParentCo common stock they hold on the Distribution Date for at least one year following the Distribution Date.
Trading Prior to the Distribution Date
We expect a “when-issued” market in our common stock to develop as early as two trading days prior to the Record Date for the Distribution and continue up to and including the Distribution Date. When-issued trading refers to a sale or purchase made conditionally on or before the Distribution Date because the securities of the spun-off entity have not yet been distributed. If you own shares of Manitowoc ParentCo common stock on the Record Date, you will be entitled to receive shares of our common stock in the Distribution. You may trade this entitlement to receive shares of our common stock, without the shares of Manitowoc ParentCo common stock you own, on the when-issued market. We expect when-issued trades of our common stock to settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, we expect that when-issued trading of our common stock will end and “regular-way” trading will begin.
Following the Distribution Date, we expect shares of our common stock to be listed on the NYSE under the trading symbol “MFS.” If when-issued trading occurs, the listing for our common stock is expected to be under a trading symbol different from our regular-way trading symbol. We will announce our when-issued trading symbol when and if it becomes available. If the Spin-Off does not occur, all when-issued trading will be null and void.
Conditions to the Spin-Off
We expect that the Spin-Off will be effective on the Distribution Date, provided that the following conditions have been satisfied or the Manitowoc ParentCo Board has waived the conditions:
the Manitowoc ParentCo Board will, in its sole and absolute discretion, have authorized and approved:
(i)    the Internal Reorganization,
(ii)
any other transfers of assets and assumptions of liabilities contemplated by the Separation and Distribution Agreement and any related agreements; and
(iii)    the Distribution,
and will not have withdrawn that authorization and approval;
the Manitowoc ParentCo Board will have declared the Distribution of all outstanding shares of our common stock to Manitowoc ParentCo’s shareholders;
the SEC will have declared our Registration Statement on Form 10, of which this Information Statement is a part, effective under the Exchange Act, no stop order suspending the effectiveness of the Registration Statement will be in effect, no proceedings for that purpose will be pending before or threatened by the SEC and notice of Internet availability of this Information Statement or this Information Statement will have been mailed to Manitowoc ParentCo’s shareholders;

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the NYSE or another national securities exchange approved by the Manitowoc ParentCo Board will have accepted our common stock for listing, subject to official notice of issuance;
the Internal Reorganization will have been completed;
the receipt of an opinion from tax counsel or another third party advisor to Manitowoc ParentCo that the Distribution and certain related transactions will qualify as tax-free to Manitowoc ParentCo and its shareholders under Sections 355, 368 and related provisions of the Code;
no order, injunction or decree that would prevent the consummation of the Distribution will be threatened, pending or issued (and still in effect) by any governmental entity of competent jurisdiction, no other legal restraint or prohibition preventing the consummation of the Distribution will be in effect, and no other event outside the control of Manitowoc ParentCo will have occurred or failed to occur that prevents the consummation of the Distribution;
no other events or developments will have occurred prior to the Distribution that, in the judgment of the Manitowoc ParentCo Board, would result in the Distribution having a material adverse effect on Manitowoc ParentCo or its shareholders;
Manitowoc ParentCo and we will have executed and delivered the Separation and Distribution Agreement, Tax Matters Agreement, Transition Services Agreement, Employee Matters Agreement, Intellectual Property Matters Agreement and all other ancillary agreements related to the Spin-Off; and
 
immediately prior to the Distribution, our Certificate of Incorporation and Bylaws, each in substantially the form filed as an exhibit to the Registration Statement on Form 10 of which this Information Statement is a part, will be in effect.
The fulfillment of the above conditions will not create any obligation on Manitowoc ParentCo’s part to effect the Spin-Off. We are not aware of any material federal, foreign or state regulatory requirements with which we must comply, other than SEC rules and regulations, or any material approvals that we must obtain, other than the NYSE’s approval for listing of our common stock and the SEC’s declaration of the effectiveness of the Registration Statement, in connection with the Distribution. Manitowoc ParentCo has the right not to complete the Spin-Off if, at any time, the Manitowoc ParentCo Board determines, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Manitowoc ParentCo or its shareholders or is otherwise not advisable.
Reasons for Furnishing this Information Statement
We and Manitowoc ParentCo are furnishing this Information Statement solely to provide information to Manitowoc ParentCo’s shareholders who will receive shares of our common stock in the Distribution. You should not construe this Information Statement as an inducement or encouragement to buy, hold or sell any of our securities or any securities of Manitowoc ParentCo. We believe that the information contained in this Information Statement is accurate as of the date set forth on the cover. Changes to the information contained in this Information Statement may occur after that date, and neither Manitowoc ParentCo nor we undertake any obligation to update the information except in the normal course of Manitowoc ParentCo’s and our public disclosure obligations and practices.


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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material U.S. federal income tax consequences to Manitowoc ParentCo and to the holders of Manitowoc ParentCo common stock in connection with the Spin-Off. This summary is based on the Code, the Treasury Regulations promulgated thereunder and judicial and administrative interpretations thereof, in each case as in effect and available as of the date of this Information Statement, all of which are subject to change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below.
This summary is limited to holders of Manitowoc ParentCo common stock that are U.S. Holders, as defined immediately below. A “U.S. Holder” is a beneficial owner of Manitowoc ParentCo common stock that is, for U.S. federal income tax purposes:
an individual who is a citizen or a resident of the United States;
an entity that is classified for U.S. federal income tax purposes as a corporation and that is organized under the laws of the United States, any state thereof, or the District of Columbia, or is otherwise treated for U.S. federal income tax purposes as a domestic corporation;
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United States persons as described in Section 7701(a)(30) of the Code (“United States persons”) have the authority to control all of its substantial decisions; or (ii) it was treated as a domestic trust under the law in effect before 1997 and a valid election is in place under applicable U.S. Treasury Regulations.

This summary does not address all tax considerations that may be relevant to U.S. Holders in light of their particular circumstances, and does not address the consequences to U.S. Holders subject to special treatment under the U.S. federal income tax laws, including but not limited to the following:
dealers or traders in securities or currencies;
tax-exempt entities;
banks, financial institutions or insurance companies;
real estate investment trusts or regulated investment companies;
persons who acquired Manitowoc ParentCo common stock pursuant to the exercise of employee stock options or otherwise as compensation;
holders who own, or are deemed to own, at least 10% or more, by voting power or value, of the equity interests in Manitowoc ParentCo;
holders who own Manitowoc ParentCo common stock as part of a position in a straddle or as part of a hedging, conversion or other risk reduction transaction for U.S. federal income tax purposes; or
persons who own Manitowoc ParentCo common stock through partnerships or other pass-through entities.

This summary does not address the U.S. federal income tax consequences to Manitowoc ParentCo’s shareholders who do not hold Manitowoc ParentCo common stock as a capital asset. Moreover, this summary does not discuss any alternative minimum tax consequences and does not address any state, local or non-U.S. tax consequences or any estate, gift or other non-income tax consequences.
If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds Manitowoc ParentCo common stock, the tax treatment of a partner in that partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to its tax consequences.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE SPIN-OFF. THIS SUMMARY IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR INVESTOR.
In connection with the Spin-Off, Manitowoc ParentCo expects to receive an opinion from Baker & McKenzie LLP to the effect that (i) the Contribution will qualify for non-recognition of gain or loss to Manitowoc ParentCo and us pursuant to Section 368 and related provisions of the Code, and (ii) the Distribution will qualify for non-recognition of gain or loss to Manitowoc ParentCo and Manitowoc ParentCo’s shareholders pursuant to Section 355 and related provisions of the Code, except to the extent of cash received in lieu of fractional shares. The opinion will be based on, among other things, current tax law and assumptions and representations made by Manitowoc Foodservice and Manitowoc ParentCo, which if incorrect in any material respect, could jeopardize the conclusions reached by Baker & McKenzie LLP in its opinion. The opinion received by Manitowoc ParentCo will not be binding on the IRS or the courts. Although the receipt of the opinion is a condition to the Spin-Off, that condition as well as all other conditions to the Spin-Off may be waived by Manitowoc ParentCo in its sole discretion. The tax opinion of Baker & McKenzie LLP will rely on certain facts, assumptions, representations and undertakings from Manitowoc ParentCo and Manitowoc Foodservice regarding the past and future conduct of Manitowoc ParentCo’s and Manitowoc Foodservice’s businesses and other matters. If any of these facts, assumptions, representations or undertakings is incorrect or not otherwise satisfied, Manitowoc ParentCo may not be able to rely on the tax opinion. Accordingly, notwithstanding the receipt of the tax opinion, there can be no assurance that the IRS will not assert, or that a court would not sustain, a position contrary to one or more of the conclusions set forth below. In that event, the consequences described immediately below would not apply and holders of Manitowoc ParentCo common stock who receive shares of Manitowoc Foodservice common stock in the Spin-Off could be subject to significant U.S. federal income tax liability.

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Assuming the Spin-Off satisfies the requirements necessary for tax-free treatment under Sections 355, 368 and related provisions of the Code, the following will describe the material U.S. federal income tax consequences to Manitowoc ParentCo, Manitowoc Foodservice and Manitowoc ParentCo’s shareholders of the Spin-Off:
no gain or loss will be recognized by, or be includible in the income of, a holder of Manitowoc ParentCo common stock, solely as a result of the receipt of Manitowoc Foodservice common stock, except with respect to any cash received in lieu of a fractional share;
subject to the discussion below regarding Section 355(e), no gain or loss will be recognized by, and no amount will be includable in the income of, Manitowoc ParentCo as a result of the Spin-Off, other than with respect to any “excess loss account” or “intercompany transaction” required to be taken into account under U.S. Treasury Regulations relating to consolidated returns and Manitowoc ParentCo should not be required to recapture its overall foreign loss account as a result of the Contribution and Distribution;
the aggregate tax basis of Manitowoc ParentCo common stock and Manitowoc Foodservice common stock (including any fractional shares for which cash is received) in the hands of a U.S. Holder immediately after the Distribution will be the same as the aggregate tax basis of Manitowoc ParentCo common stock held by the U.S. Holder immediately before the Distribution, allocated between the common stock of Manitowoc ParentCo and Manitowoc Foodservice common stock, including any fractional share interest for which cash is received, in proportion to their relative fair market values on the Distribution Date;
the holding period of shares of the Manitowoc Foodservice common stock received by a U.S. Holder in the Distribution will include the holding period of such U.S Holder’s shares of Manitowoc ParentCo common stock, provided that such shares of Manitowoc ParentCo common stock are held as capital assets on the Distribution Date; and
a U.S. Holder who receives cash in lieu of a fractional share of Manitowoc Foodservice common stock in the Distribution will be treated as having sold such fractional share for the amount of cash it actually received and, provided the fractional share is considered to be held as a capital asset, generally will recognize capital gain or loss in an amount equal to the difference between the amount of such cash received and such U.S. Holder’s adjusted tax basis in the fractional share. That gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for its Manitowoc ParentCo common stock exceeds one year on the Distribution Date.

U.S. Holders that have acquired different blocks of shares of Manitowoc ParentCo common stock at different times or at different prices should consult their tax advisors regarding the allocation of their aggregate adjusted basis among, and their holding period of, Manitowoc Foodservice common stock distributed with respect to such blocks of shares of Manitowoc ParentCo common stock.
U.S. Treasury Regulations require certain shareholders that receive stock in a spin-off to attach to their respective U.S. federal income tax returns, for the year in which the spin-off occurs, a detailed statement setting forth certain information relating to the spin-off. Within a reasonable period of time after the Distribution, Manitowoc ParentCo expects to make available to its shareholders on its website IRS Form 8937 ("Reports of Organizational Actions Affecting Basis of Securities") containing information pertaining to compliance with this requirement.
If the Distribution fails to qualify as tax-free for U.S. federal income tax purposes, each U.S. Holder that receives shares of Manitowoc Foodservice common stock in the Distribution would be treated as receiving a distribution in an amount equal to the fair market value of such shares, and the distribution of shares of Manitowoc Foodservice common stock received with respect to a share of Manitowoc ParentCo common stock generally would be treated in the following manner:
first, as a taxable dividend to the extent of such shareholder’s pro rata share of Manitowoc ParentCo’s current and accumulated earnings and profits, if any, that is allocable to the share of Manitowoc ParentCo common stock (with such earnings and profits being increased to reflect any gain recognized by Manitowoc ParentCo on the Distribution);
second, as a non-taxable return of capital to the extent of such U.S. Holder’s tax basis in the share of Manitowoc ParentCo common stock; and
thereafter as capital gain with respect to any remaining value.

Additionally, each U.S. Holder’s basis in the Manitowoc Foodservice common stock would be equal to the fair market value of such stock on the Distribution Date and its holding period in the Manitowoc Foodservice common stock would begin on the Distribution Date.
Furthermore, Manitowoc ParentCo would recognize a taxable gain on the Manitowoc Foodservice common stock to the extent the fair market value of the shares of Manitowoc Foodservice common stock owned by Manitowoc ParentCo immediately prior to the Distribution exceeds Manitowoc ParentCo’s tax basis in such shares. Any such gain would be substantial.
Even if the Distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, it may be taxable to Manitowoc ParentCo (but not Manitowoc ParentCo’s shareholders) under Section 355(e) if 50% or more, by vote or value, of the shares of Manitowoc Foodservice common stock or shares of Manitowoc ParentCo common stock are acquired or issued as part of a plan or series of related transactions that includes the Distribution. For this purpose, any acquisitions or issuances of Manitowoc ParentCo common stock within two years before the Distribution, and any acquisitions or issuances of Manitowoc Foodservice common stock or Manitowoc ParentCo common stock within two years after the Distribution, generally are presumed to be part of such a plan, although Manitowoc Foodservice or Manitowoc ParentCo may be able to rebut that presumption. Even if Section 355(e) were to apply to cause the Distribution to be taxable to Manitowoc ParentCo, the receipt of the shares of Manitowoc Foodservice common stock in the Distribution would remain tax-free to the Manitowoc ParentCo shareholders.

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In connection with the Spin-Off, Manitowoc Foodservice and Manitowoc ParentCo will enter into the Tax Matters Agreement whereby Manitowoc Foodservice will agree to be subject to certain restrictions to preserve the tax-free nature of the Spin-Off. For a description of the Tax Matters Agreement, see “Certain Relationships and Related Person Transactions-Agreements with Manitowoc ParentCo-Tax Matters Agreement.”

The preceding summary of the anticipated U.S. federal tax consequences of the spin-off is not specific to any shareholder's individual circumstances. Manitowoc ParentCo’s shareholders should consult their own tax advisors as to the specific tax consequences of the spin-off to them, including the application and effect of state, local or non-U.S. tax laws and changes in applicable tax laws.


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DIVIDEND POLICY
The Manitowoc Foodservice Board of Directors does not currently plan on paying a dividend in 2016 as Manitowoc Foodservice’s focus in 2016 will be on the reduction of outstanding debt. The timing, declaration, amount of, and payment of any dividends following the Spin-Off including subsequent to 2016 is within the discretion of the Manitowoc Foodservice Board of Directors and will depend upon many factors, including Manitowoc Foodservice’s financial condition, earnings, corporate strategy, capital requirements of its operating subsidiaries, covenants associated with certain debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets, and other factors deemed relevant by Manitowoc Foodservice’s Board of Directors.


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CAPITALIZATION
The following table sets forth the unaudited cash and cash equivalents and capitalization of Manitowoc Foodservice as of September 30, 2015, on an historical basis and on a pro forma basis to give effect to the pro forma adjustments included in our unaudited pro forma financial information. The information below is not necessarily indicative of what our capitalization would have been had the Spin-Off and related financing transactions been completed as of September 30, 2015. In addition, it is not indicative of Manitowoc Foodservice’s future capitalization. This table should be read in conjunction with “Unaudited Pro Forma Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical combined financial statements and accompanying notes included elsewhere in this Information Statement.
 
 
As of September 30, 2015
(in millions)
 
Historical
 
Pro Forma
Cash and cash equivalents
 
$
47.3

 
$
21.9

Capitalization:
 
 
 
 
Indebtedness
 
 
 
 
Short-term debt
 

 
9.8

Long-term debt
 

 
1,390.2

Total indebtedness (1)
 

 
1,400.0

Equity
 
 
 
 
Common stock, par value $0.01 per share (2)
 

 
1.4

Additional paid-in capital
 

 
(34.5
)
Net parent company investment
 
1,355.9

 

Accumulated other comprehensive loss
 
(40.5
)
 
(50.4
)
Total equity
 
1,315.4

 
(83.5
)
Total capitalization
 
$
1,315.4

 
$
1,316.5

 
 
 
 
 
(1) Total indebtedness excludes capital lease obligations.
 
 
 
 
(2) For pro forma purposes, we assumed the distribution of approximately 137 million shares of Manitowoc Foodservice common stock to holders of Manitowoc ParentCo common stock based on the number of shares of Manitowoc ParentCo common stock outstanding as of September 30, 2015.






-35-


SELECTED HISTORICAL COMBINED FINANCIAL DATA
The following table presents our selected historical combined financial data as of and for the nine months ended September 30, 2015 and 2014, and as of and for each of the fiscal years in the five-year period ended December 31, 2014. We derived the selected historical combined financial data as of September 30, 2015, and for the nine months ended September 30, 2015 and 2014, and as of December 31, 2014 and 2013, and for each of the fiscal years in the three-year period ended December 31, 2014, from our unaudited and audited combined financial statements included elsewhere in this Information Statement. We derived the selected historical combined financial data as of September 30, 2014, and December 31, 2012, and as of and for the fiscal years ended December 31, 2011 and 2010, from our unaudited combined financial statements that are not included in this Information Statement. In management’s opinion, the unaudited combined financial statements have been prepared on the same basis as the audited combined financial statements and include all adjustments, consisting only of ordinary recurring adjustments, necessary for a fair presentation of the information for the periods presented.
Our historical combined financial statements include expenses of Manitowoc ParentCo that were allocated to us for certain functions, including general corporate expenses related to finance, treasury, tax, audit, legal, information technology, human resources, and investor relations. These costs may not be representative of the future costs we will incur as an independent public company. In addition, our historical financial information does not reflect changes that we expect to experience in the future as a result of our Spin-Off from Manitowoc ParentCo, including changes in our cost structure, personnel needs, tax structure, financing and business operations. Consequently, the financial information included here may not necessarily reflect our financial position, results of operations and cash flows in the future or what our financial position, results of operations and cash flows would have been had we been an independent, publicly traded company during the periods presented.
You should read the selected historical combined financial data presented below in conjunction with our audited and unaudited condensed combined financial statements and accompanying notes, “Unaudited Pro Forma Combined Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Information Statement.
 
 
As of and for the nine months ended September 30,
 
As of and for the year ended December 31,
(in millions)
 
2015
 
2014
 
2014
 
2013
 
2012
 
2011
 
2010
Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
1,178.4

 
$
1,207.1

 
$
1,581.3

 
$
1,541.8

 
$
1,486.2

 
$
1,454.6

 
$
1,363.0

Depreciation and amortization
 
38.5

 
39.9

 
53.0

 
51.4

 
53.6

 
56.5

 
62.7

Earnings from continuing operations before taxes on earnings
 
133.5

 
149.5

 
187.2

 
204.6

 
179.5

 
140.9

 
133.0

Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Working capital (1)
 
135.6

 
108.5

 
72.7

 
74.0

 
75.6

 
89.4

 
74.4

Total assets
 
1,924.7

 
1,926.2

 
1,898.3

 
1,918.2

 
1,969.0

 
2,012.6

 
2,231.0

Long-term obligations (2)
 
2.5

 
2.1

 
3.6

 
1.7

 
1.8

 
1.9

 
2.0

Capital expenditures
 
9.6

 
17.7

 
25.3

 
33.6

 
17.5

 
11.9

 
12.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Working capital is defined as net receivables and inventory less third-party accounts payable.
(2) Long-term obligations includes long-term capital lease obligations.



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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The unaudited pro forma combined financial statements of Manitowoc Foodservice consist of an unaudited pro forma combined statement of income for the nine months ended September 30, 2015 and for the year ended December 31, 2014 and an unaudited pro forma combined balance sheet as of September 30, 2015 derived from the historical combined financial statements included in this Information Statement. The unaudited pro forma combined financial statements reported below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Selected Historical Combined Financial Data” and the audited and unaudited combined financial statements and corresponding notes.
The following unaudited pro forma combined financial statements are subject to assumptions and adjustments described in the accompanying notes. Manitowoc Foodservice’s management believes these assumptions and adjustments are reasonable under the circumstances and given the information available at this time. However, these adjustments are subject to change as Manitowoc ParentCo and Manitowoc Foodservice finalize the terms of the Spin-Off, including the Separation and Distribution Agreement and related transaction agreements. The unaudited pro forma combined financial statements do not purport to represent what Manitowoc Foodservice’s financial position and results of operations actually would have been had the Spin-Off occurred on the dates indicated, or to project Manitowoc Foodservice’s financial performance for any future period following the Spin-Off.
The unaudited pro forma combined statements of earnings for the nine months ended September 30, 2015 and the year ended December 31, 2014 give effect to the Spin-Off as if it had occurred on January 1, 2014, the first day of fiscal 2014. The unaudited pro forma combined balance sheet as of September 30, 2015, gives effect to the Spin-Off as if it had occurred on that date. The unaudited pro forma combined financial statements include adjustments to reflect the following:
the issuance of 100% of our issued and outstanding common stock by Manitowoc ParentCo in connection with the Spin-Off;
our anticipated capital structure, including debt anticipated to be incurred;
the resulting elimination of Manitowoc ParentCo’s net investment in Manitowoc Foodservice; and
the cash dividend to Manitowoc ParentCo.

Manitowoc Foodservice’s annual and interim combined financial statements include allocations for certain expenses and support functions historically provided by Manitowoc ParentCo, such as business shared services and corporate costs that benefit Manitowoc Foodservice. Management believes the assumptions associated with allocating these costs are reasonable. Nevertheless, the combined financial statements may not include all of the actual expense that would have been incurred and may not represent Manitowoc Foodservice’s results of operations, financial position, or cash flows had it been a stand-alone company during the periods presented. General corporate expenses allocated to Manitowoc Foodservice for the nine months ended September 30, 2015, and year ended December 31, 2014, were $19.0 million and $22.1 million, respectively.  After the Spin-Off, Manitowoc Foodservice will incur incremental costs as an independent public company, including costs to replace services previously provided by Manitowoc ParentCo as well as other similar expenses associated with operating as a standalone company. We expect that a significant portion of these incremental dis-synergy costs will be offset by specific actions taken as part of the separation process, including but not limited to the right sizing of functions and activities already existing in business.  Due to the scope and complexity of these activities, the amount and timing of these incremental costs could vary depending on the finalization of specific initiatives and actions undertaken as part of the spin process and, therefore, these costs are not included within the unaudited pro forma combined financial statements.
Manitowoc ParentCo expects to incur approximately $130-140 million before-tax of one-time chargeable separation costs in connection with the Spin-Off, including consulting, legal, auditing, information technology, financing, debt breakage and other similar costs. Only immaterial separation costs are reflected in Manitowoc Foodservice’s historical financial statements as the costs are non-recurring in nature and expected to be borne by Manitowoc ParentCo.











-37-


MANITOWOC FOODSERVICE
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

(in millions of dollars, except share and per share data)
 
Historical
 
Pro Forma Adjustments
 
 
Pro Forma
Operations
 
 
 
 
 
 
 
Net sales
 
$
1,178.4

 
$

 
 
$
1,178.4

Costs and expenses:
 
 
 


 
 
 
Cost of sales
 
809.6

 

 
 
809.6

Engineering, selling and administrative expenses
 
223.3

 

 
 
223.3

Amortization expense
 
23.6

 

 
 
23.6

Restructuring expense
 
1.3

 

 
 
1.3

Separation expense
 
1.1

 
(1.1
)
 
(1)

Other expense (income)
 
0.4

 

 
 
0.4

Total costs and expenses
 
1,059.3

 
(1.1
)
 
 
1,058.2

Operating earnings from continuing operations
 
119.1

 
1.1

 
 
120.2

Other (expenses) income:
 
 

 
 
 
 
 

Interest expense
 
(1.0
)
 
(72.6
)
 
(2)
(73.6
)
Amortization of deferred financing fees
 

 
(4.0
)
 
(3)
(4.0
)
Interest income on notes with Manitowoc ParentCo - net
 
13.5

 
(13.5
)
 
(8)

Other income - net
 
1.9

 

 
 
1.9

Total other income
 
14.4

 
(90.1
)
 
 
(75.7
)
Earnings from continuing operations before taxes on earnings
 
133.5

 
(89.0
)
 
 
44.5

Provision for taxes on earnings
 
41.8

 
(30.8
)
 
(1) (4) (8)
11.0

Earnings from continuing operations
 
91.7

 
(58.2
)
 
 
33.5

Discontinued operations:
 
 
 
 
 
 
 
Earnings from discontinued operations, net of income taxes of $0.0
 
0.3

 

 
 
0.3

Net earnings
 
$
92.0

 
$
(58.2
)
 
 
$
33.8

 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
  Basic
 
n/a

 
 
 
(9)
$
0.25

  Diluted
 
n/a

 
 
 
(10)
$
0.25

 
 
 
 
 
 
 
 
Common shares outstanding
 
 
 
 
 
 
 
  Basic
 
n/a

 
 
 
(9)
136.0

  Diluted
 
n/a

 
 
 
(10)
137.3


See Notes to Unaudited Pro Forma Combined Financial Statements.









-38-


MANITOWOC FOODSERVICE
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014

(in millions of dollars, except share and per share data)
 
Historical
 
Pro Forma Adjustments
 
 
Pro Forma
Operations
 
 
 
 
 
 
 
Net sales
 
$
1,581.3

 
$

 
 
$
1,581.3

Costs and expenses:
 
 
 
 
 
 
 
Cost of sales
 
1,073.3

 

 
 
1,073.3

Engineering, selling and administrative expenses
 
299.6

 

 
 
299.6

Amortization expense
 
31.8

 

 
 
31.8

Asset impairment expense
 
1.1

 

 
 
1.1

Restructuring expense
 
2.6

 

 
 
2.6

Other expense
 
0.4

 

 
 
0.4

Total costs and expenses
 
1,408.8

 

 
 
1,408.8

Operating earnings from continuing operations
 
172.5

 

 
 
172.5

Other (expenses) income:
 
 
 
 
 
 

Interest expense
 
(1.3
)
 
(97.4
)
 
(2)
(98.7
)
Amortization of deferred financing fees
 

 
(5.3
)
 
(3)
(5.3
)
Interest income on notes with Manitowoc ParentCo - net
 
16.6

 
(16.6
)
 
(8)

Other expense - net
 
(0.6
)
 

 
 
(0.6
)
Total other income
 
14.7

 
(119.3
)
 
 
(104.6
)
Earnings from continuing operations before taxes on earnings
 
187.2

 
(119.3
)
 
 
67.9

Provision for taxes on earnings
 
25.9

 
(42.7
)
 
(4) (8)
(16.8
)
Earnings from continuing operations
 
161.3

 
(76.6
)
 
 
84.7

Discontinued operations:
 
 
 
 
 
 

Loss from discontinued operations, net of income taxes of $(0.3)
 
(0.4
)
 

 
 
(0.4
)
Loss on sale of discontinued operations, net of income taxes of $(0.6)
 
(1.1
)
 

 
 
(1.1
)
Net earnings
 
$
159.8

 
$
(76.6
)
 
 
$
83.2

 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
  Basic
 
n/a

 
 
 
(9)
$
0.62

  Diluted
 
n/a

 
 
 
(10)
$
0.61

 
 
 
 
 
 
 
 
Common shares outstanding
 
 
 
 
 
 
 
  Basic
 
n/a

 
 
 
(9)
134.9

  Diluted
 
n/a

 
 
 
(10)
137.4

See Notes to Unaudited Pro Forma Combined Financial Statements.

-39-


MANITOWOC FOODSERVICE
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2015
(in millions of dollars)
 
Historical
 
Pro Forma Adjustments
 
 
Pro Forma
Assets
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
47.3

 
$
(25.4
)
 
(6)
$
21.9

Restricted cash
 
0.6

 

 
 
0.6

Accounts receivable, less allowances of $3.6
 
97.3

 

 
 
97.3

Inventories — net
 
159.1

 

 
 
159.1

Deferred income taxes
 
23.7

 
0.1

 
(5)
23.8

Other current assets
 
11.7

 

 
 
11.7

Current assets held for sale
 
8.1

 

 
 
8.1

Total current assets
 
347.8

 
(25.3
)
 
 
322.5

Property, plant and equipment — net
 
127.0

 

 
 
127.0

Goodwill
 
844.6

 

 
 
844.6

Other intangible assets — net
 
524.6

 

 
 
524.6

Other non-current assets
 
16.7

 
78.6

 
(5) (6) (7)
95.3

Long-term assets held for sale
 
64.0

 

 
 
64.0

Total assets
 
$
1,924.7

 
$
53.3

 
 
$
1,978.0

Liabilities and Equity
 

 


 
 

Current Liabilities:
 

 


 
 

Accounts payable and accrued expenses
 
$
277.6

 

 
 
$
277.6

Current portion of long-term debt and capital leases
 
0.4

 
9.8

 
(6)
10.2

Product warranties
 
34.2

 

 
 
34.2

Current liabilities held for sale

 
20.2

 

 
 
20.2

Total current liabilities
 
332.4

 
9.8

 
 
342.2

Non-Current Liabilities:
 

 


 
 

Long-term capital leases and debt
 
2.5

 
1,390.2

 
(6)
1,392.7

Deferred income taxes
 
217.1

 
(6.4
)
 
(5)
210.7

Pension and postretirement health obligations
 
37.8

 
52.7

 
(5)
90.5

Other non-current liabilities
 
18.8

 
5.9

 
(7)
24.7

Long-term liabilities held for sale
 
0.7

 

 
 
0.7

Total non-current liabilities
 
276.9

 
1,442.4

 
 
1,719.3

Total Equity:
 

 


 
 

Common stock
 

 
1.4

 
(11)
1.4

Additional paid-in capital
 

 
(34.5
)
 
(12)
(34.5
)
Net parent company investment
 
1,355.9

 
(1,355.9
)
 
(5) (6) (12)

Accumulated other comprehensive loss
 
(40.5
)
 
(9.9
)
 
(5)
(50.4
)
Total equity
 
1,315.4

 
(1,398.9
)
 
 
(83.5
)
Total liabilities and equity
 
$
1,924.7

 
$
53.3

 
 
$
1,978.0

See Notes to Unaudited Pro Forma Combined Financial Statements.

-40-


MANITOWOC FOODSERVICE
Notes to Unaudited Pro Forma Combined Financial Statements

1. Separation Costs
This adjustment reflects the removal of separation costs of $1.1 million recorded as separation expense, for the nine months ended September 30, 2015, directly related to the Spin-Off that were incurred during the historical period. These costs were primarily for legal, tax, accounting and other professional fees. This pro forma adjustment results in an increase to the income tax provision of $0.4 million.

2. Interest Expense
This adjustment reflects the pro forma interest expense of $72.6 million and $97.4 million for the nine months ended September 30, 2015 and the year ended December 31, 2014, respectively, based on Manitowoc Foodservice's new debt position of $1,400.0 million described in Note 6 and the weighted average interest rate of 7.0%. Interest expense on the new debt was computed based on Manitowoc Foodservice’s new debt position effective upon separation from Manitowoc ParentCo. The actual interest expense may differ from the pro forma interest expense of Manitowoc Foodservice following the Spin-Off as the interest expense will be contingent on Manitowoc Foodservice's future cash needs and debt position. A 0.125% increase or decrease in the blended weighted average interest rate attributable to our long term debt that is expected to be outstanding after giving pro forma effect to the Spin-Off would cause our interest expense to change by approximately $2.0 million on an annual basis. See “Description of Material Indebtedness.”

3. Amortization of Deferred Financing Fees
This adjustment reflects the pro forma amortization of deferred financing fees of $4.0 million and $5.3 million for the nine months ended September 30, 2015 and the year ended December 31, 2014, respectively, that would be incurred on the debt issuance as described in Note 6. Amortization of deferred financing fees is reflective of the straight-line amortization of total debt issuance costs over the terms of the underlying debt instruments, which range between 5 and 8 years.

4. Provision for Taxes on Earnings
The provision for income taxes reflected in our historical combined financial statements was determined as if we filed separate, standalone income tax returns in each relevant jurisdiction. In determining the tax rate to apply to our pro forma adjustments, we used the applicable statutory rate based on the jurisdiction in which the adjustment relates, consistent with Instruction 7 to Rule 11-02(b) of Regulation S-X. If the adjustment relates to an item that would never be taxed in that particular jurisdiction, we did not provide for any tax. The effective tax rates on the pro forma adjustments were 34.6% and 35.7% for the nine-month period ended September 30, 2015 and twelve-month period ended December 31, 2014, respectively.

The proforma effective tax rate is 24.8% and (24.7)% for the nine month period ended September 30, 2015 and the twelve month period ended December 31, 2014, respectively. The differences between the U.S. federal statutory income tax rate and Manitowoc Foodservice's effective tax rate were as follows:

 
 
Nine months ended
 
Year ended
 
 
September 30,
 
December 31,
 
 
2015
 
2014
Federal income tax at statutory rate
 
35.0
 %
 
35.0
 %
State income provision (benefit)
 
(0.4
)
 
(0.7
)
Manufacturing & research incentives
 
(1.1
)
 
(2.0
)
Taxes on foreign income which differ from the U.S. statutory rate
 
(9.5
)
 
(6.3
)
Adjustments for unrecognized tax benefits
 
(0.7
)
 
(4.1
)
Adjustments for valuation allowances
 
2.5

 
(1.1
)
Capital loss generation
 

 
(37.7
)
Other items
 
(1.0
)
 
(7.8
)
Effective tax rate
 
24.8
 %
 
(24.7
)%

The 2015 and 2014 effective tax rates were favorably impacted by income earned in jurisdictions where the statutory rate was less than 35%.

In the third quarter of 2014, Manitowoc Foodservice made an election with the IRS to treat Enodis Holdings, Ltd, Manitowoc Foodservice’s UK Holding Company, as a partnership for U.S. income tax purposes. As a result of this status change, Manitowoc Foodservice realized a net $25.6 million capital loss tax benefit. This transaction resulted in an effective tax rate benefit of 37.7% unique to 2014.

In 2014, we recognized a 6.0% effective tax rate benefit on the release of a valuation allowance on deferred tax assets of our Manitowoc Foodservice operations in Spain.

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None of the items in the 'Other' line of the effective tax rate reconciliation above, which total $(0.3) million and $(5.3) million for the nine-month period ended September 30, 2015, and twelve-month period ended December 31, 2014, respectively, are significant individually or when appropriately aggregated.

Our effective tax rate for the year ended December 31, 2014 decreased from 13.8% on a historical basis, to (24.7)% on a pro forma basis.  See Note 12, “Income Taxes,” to the Audited Combined Financial Statements for more information about the historical effective tax rate.  The primary reason for this change is the income tax benefit associated with the interest expense on our $975.0 million Term Loan B Facility and $425 million of notes described in Note 6 to the Unaudited Pro Forma Combined Financial Statements, which interest expense will be deductible at U.S. income tax rates.  The pro forma effective tax rate is further impacted by the reduced pretax book income denominator after pro forma adjustments.

5. Defined Benefit Plan Assets and Obligations
Certain employees participate in defined benefit pension plans sponsored by Manitowoc ParentCo. When we become a standalone independent company, we will assume these obligations and provide the benefits directly. Manitowoc ParentCo will transfer to us the plan liabilities in the amount of $52.7 million and assets in the amount of $35.3 million associated with participant employees of Manitowoc Foodservice. The unrecognized actuarial loss on these plans is $9.9 million. These pro forma adjustments result in a reduction in deferred income tax liabilities of $6.4 million and a $0.1 million increase in deferred income tax assets. The remaining net impact is reflected within net parent company investment. The benefit plan expenses associated with this pension obligation were previously allocated to Manitowoc Foodservice and are included in the historical combined statements of operations. The actual assumed net benefit plan obligations could change significantly from our estimates included in these pro forma adjustments.

6. New Debt Financing
This adjustment reflects $1,400.0 million of new debt, comprised of our $975.0 million Term Loan B Facility and $425.0 million of notes, to establish our new debt structure and the related debt issuance costs of $37.4 million as if the Spin-Off had taken place on September 30, 2015. The $9.8 million short-term portion of our new total debt reflects the minimum payment obligations of 1% of Term Loan B Facility value within the first 12 months from the Term Loan B Facility issue date. Proceeds from the debt issuance will be distributed to Manitowoc ParentCo in the form of a dividend in the amount of $1,388.0 million with the excess of the amount of the net proceeds over the dividend amount being retained by us for general corporate purposes. The cash impact of $25.4 million associated with the new debt financing is comprised of $1,400.0 million related to the proceeds from the new debt, offset by cash outflows of the $1,388.0 million cash dividend from Manitowoc Foodservice to Manitowoc ParentCo and $37.4 million of debt issuance costs.

7. Deferred Compensation Plan Assets and Obligations
Certain highly compensated and key management employees and directors participate in deferred compensation plans sponsored by Manitowoc ParentCo. When we become a standalone independent company, we will assume these obligations and provide the benefits directly. Manitowoc ParentCo will transfer to us the plan liabilities in the amount of $5.9 million and assets in the amount of $5.9 million associated with participant employees of Manitowoc Foodservice. These pro forma adjustments do not have a material tax impact.

8. Interest Income from Notes with Manitowoc ParentCo
This adjustment reflects the removal of net intercompany interest income on intercompany notes between Manitowoc Foodservice and Manitowoc ParentCo of $13.5 million and $16.6 million and the corresponding impact to the provision for taxes on earnings of $4.7 million and $5.6 million, for the nine months ended September 30, 2015 and the fiscal year ended December 31, 2014, respectively.

9. Basic Earnings Per Share
The number of Manitowoc Foodservice shares used to compute basic earnings per share for the nine-month period ended September 30, 2015 and twelve-month period ended December 31, 2014 is based on the number of shares of Manitowoc Foodservice common stock assumed to be outstanding on the record date, which for the pro forma purposes is assumed to be a number of shares outstanding as of September 30, 2015 and December 31, 2014. Pro forma earnings per share reflect a distribution ratio of one share of Manitowoc Foodservice common stock for one Manitowoc ParentCo common shares outstanding.

10. Diluted Earnings Per Share
The number of shares used to compute diluted earnings per share is based on the number of basic shares of Manitowoc Foodservice common stock as described in Note 9, plus the effective dilutive shares related to stock awards.

11. Shares of Common Stock
This adjustment reflects 137 million shares of Manitowoc Foodservice common stock at a par value of $0.01 per share. The number of shares of Manitowoc Foodservice common stock is based on the number of shares of Manitowoc ParentCo common stock outstanding on September

-42-


30, 2015 and an expected distribution ratio of one share of Manitowoc Foodservice common stock for every share of Manitowoc ParentCo common stock.

12. Recapitalization of Equity
This adjustment reflects the pro forma recapitalization of our equity. On the Distribution Date, Manitowoc ParentCo’s net investment in Manitowoc Foodservice will be re-designated as Manitowoc Foodservice’s stockholders’ equity and will be allocated between common stock (see Note 11) and additional paid-in capital based on the number of shares of Manitowoc Foodservice common stock outstanding at the Distribution Date.

-43-


BUSINESS
Overview
Manitowoc Foodservice is one of the world’s leading commercial foodservice equipment companies. We design, manufacture and service an integrated portfolio of hot and cold category products, and have a long track record of innovation. We have one of the industry’s broadest portfolios of products and are recognized by our customers and channel partners for the quality, reliability, and durability of our products. Our capabilities span refrigeration, ice-making, cooking, holding, food-preparation, and beverage-dispensing technologies, which allow us to equip entire commercial kitchens and serve the world’s growing demand for food prepared away from home. We supply foodservice equipment to commercial and institutional foodservice operators such as full-service restaurants, quick-service restaurant chains, hotels, caterers, supermarkets, convenience stores, business and industry, hospitals, schools and other institutions.
We differentiate ourselves by uniquely integrating food, equipment, digital technologies, and people to increase efficiency throughout the food preparation cycle, and create winning customer and consumer experiences. Our customers and channel partners trust the company and its food-inspiring technologies to serve their diverse needs on a global basis.
We sell in more than 100 countries globally, across the Americas, EMEA and APAC. Our products, services and solutions are marketed through a worldwide network of over three thousand dealers and distributors under well-established and recognized brands, including Cleveland, Convotherm, Dean, Delfield, Fabristeel, Frymaster, Garland, Inducs, Kolpak, Koolaire, Lincoln, Manitowoc Beverage Systems, Manitowoc Ice, Merco, Merrychef, Moorwood Vulcan, Multiplex, RDI Systems, Servend, TRUpour, U.S. Range, and Welbilt. All of our products are supported by KitchenCare, our aftermarket repair and parts service business. Manitowoc Foodservice’s scale and expertise enable it to serve a global customer base in continually evolving foodservice markets.
Manitowoc Foodservice Brands
 

We believe our ability to deliver a wide range of hot and cold category products and services that can be configured to meet end-users’ food service needs is a key driver of our success. Our customers come to us for innovations that may enable profitable growth by improving their menus, enhancing operations, and reducing costs. We accomplish this with:
Complementary industry leading brands: A complementary portfolio of strong hot and cold category products integrated under one operating company and supported by growing aftermarket service and support. This enables Manitowoc Foodservice to design and

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outfit commercial kitchens in a harmonized, efficient manner and maintain a disciplined focus on targeting our fast-growing customer base with the right products for each need, at the right price;
Integration of food, equipment, digital technologies and people: The ability to integrate food, equipment, digital technologies and people seamlessly through collaborative innovation that enhances our customers’ ability to compete in the marketplace. Manitowoc Foodservice helps customers differentiate their food and adapt to evolving and local tastes, different cooking styles and aesthetic preferences, both regionally and globally;
Global scale through our network: The scale and breadth of our dealer and distributor network to accompany our customers on their global journey, especially in fast-growing emerging markets;
Trusted innovation and service: Long-standing brands and innovative engineering customers can trust for superior quality and reliability. We regularly partner with our customers to further develop the equipment, systems and technologies they use to serve their specific culinary needs, and enable their success by delivering tailored solutions; and
Seamless customer experience: Dedication to putting customer experience first. We offer a broad portfolio of products coupled with a unified face to the customer and growing service and parts support. Throughout the life cycle of each product, Manitowoc Foodservice provides customers with a consistent, seamless experience.

Our broad portfolio of foodservice equipment and services provides us with a balanced, diverse revenue base across geographies and foodservice product categories. Approximately 50% of our revenues are for cold category products and services, with the remaining being approximately 35% attributed to hot category products and 15% to aftermarket services.
For the twelve-month period ended December 31, 2014, Manitowoc Foodservice generated revenue of $1,581.3 million and operating earnings from continuing operations of $172.5 million. Based on sales by destination in the fiscal year ended December 31, 2014, the majority of our revenue was derived from customers in the Americas (71%), with 18% from EMEA customers and 11% from APAC customers.
History and Developments
Manitowoc ParentCo, a predecessor entity to Manitowoc Foodservice, was founded in 1902 and began building commercial ice machines in 1966. Manitowoc ParentCo publicly listed on the NASDAQ stock exchange in 1971 and publicly listed on the NYSE in 1993. Through a focus on research and development, innovation and superior customer service, as well as strategic and transformational acquisitions, Manitowoc Foodservice over time became an industry-leading source for foodservice equipment. Our key milestones include:
1995: Acquisition of Shannon Group solidified our strong position in food-cooling products and positioned Manitowoc Foodservice as a leading manufacturer of commercial ice-cube machines and walk-in refrigerators; opened an ice machine manufacturing facility in China.
1997: Acquisition of SerVend International, a manufacturer of ice/beverage dispensers; gave us a leading position in the convenience-store segment and in beverage-dispensing equipment.
1999: Acquisition of Kyees Aluminum Inc., a manufacturer of cooling components for suppliers of fountain soft drink dispensers; enabled us to build and distribute complete drink systems through the bottler channel.
2000: Acquisition of Multiplex Company provided us with an enhanced line of beverage dispensing equipment and services and accelerated our progress towards becoming a full-service provider of ice and beverage equipment.
2006: Acquisition of McCann’s Engineering & Manufacturing Co., a provider of beverage dispensing equipment primarily used in fast-food restaurants, stadiums, cafeterias and convenience stores.
2008: Acquisition of Enodis; substantially enlarged the size of our product portfolio, positioned us as one of the global leaders in commercial foodservice equipment and allowed us to expand our offerings in the hot-service and food retail equipment markets.
2009: Sale of Scotsman, Ice-O-Matic, Simag, Barline, and other ice machine and related businesses operated by subsidiaries of Enodis; Manitowoc was required to divest Enodis Ice Group as a condition of the U.S. Department of Justice’s and the European Commission’s clearance of the Enodis acquisition.
2010: Acquisition of Appliance Scientific provided us with innovative accelerated cooking technologies and solidified our offerings for quick-service restaurants and convenience stores.
2011: Divestiture of Kysor/Warren and Kysor/Warren de Mexico to Lennox International.
2013: Divestiture of the Jackson warewashing business to Hoshizaki USA Holdings, Inc.
2013: Acquisition of Inducs provided us with an extensive line of advanced technology induction cooking products.
2015: Acquisition of the remaining 50% interest in the Welbilt joint venture manufacturing cold category foodservice equipment in Thailand (pending local government approval).
2015: Divestiture of Kysor Panel Systems to D Cubed Group, LLC.


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Products and Services
We offer a leading product portfolio of hot and cold category foodservice equipment. Our suite of products is used by commercial and institutional foodservice operators including full-service restaurants, quick-service restaurant chains, hotels, caterers, supermarkets, convenience stores, business and industry, hospitals, schools and other institutions. We have a presence throughout the world’s most significant markets in the following product groups:
Primary cooking equipment. We design, manufacture and sell a broad array of ranges, griddles, grills, combi ovens, convection ovens, conveyor ovens, induction cookers, broilers, tilt fry pans/kettles/skillets, braising pans, cheese melters/salamanders, cook stations, table top and countertop cooking/frying systems, fryers, steam jacketed kettles, and steamers. We sell traditional ovens, combi ovens, convection ovens, conveyor ovens, rapid-cooking ovens, range and grill products under the Convotherm, Garland, Lincoln, Merrychef, U.S. Range, and other brand names. Fryers and frying systems are marketed under the Frymaster and Dean brand names, while steam equipment is manufactured and sold under the Cleveland brand.
Serving, warming and storage equipment. We design, manufacture and sell a range of cafeteria and buffet equipment stations, bins, boxes, warming cabinets, warmers, display and deli cases, and insulated and refrigerated salad and food bars. Our equipment stations, cases, food bars and food serving lines are marketed under the Delfield, Fabristeel, Frymaster, Merco and other brand names.
Beverage dispensers and related products. We produce beverage dispensers, blended ice machines, ice/beverage dispensers, beer coolers, post-mix dispensing valves, backroom equipment and support system components and related equipment for use by quick-service restaurant chains, convenience stores, bottling operations, movie theaters, and the soft-drink industry. Our beverage and related products are sold under the Servend, Multiplex, TRUpour, and Manitowoc Beverage Systems brand names.
Ice-cube machines, ice flaker machines, and storage bins. We design, manufacture and sell ice machines under the Manitowoc and Koolaire brand names. Our ice machines make ice in cube, nugget and flake form. The ice-cube machines are available either as self-contained units, which make and store ice, or as modular units, which make ice, but do not store it.
Walk-in refrigerator and freezer equipment. We design, manufacture and sell commercial upright and undercounter refrigerators and freezers, blast freezers, blast chillers and cook-chill systems under the Delfield brand name. We manufacture modular and fully assembled walk-in refrigerators, coolers and freezers, and prefabricated cooler and freezer panels for use in the construction of refrigerated storage rooms and environmental systems under the Kolpak brand name. We also design and manufacture customized refrigeration systems under the RDI Systems brand name.
Aftermarket parts and service solutions. We provide parts and aftermarket service as well as a wide variety of solutions under the KitchenCare brand name.

Product Innovation
Manitowoc Foodservice strives to deliver products beyond our customers’ imagination, enabling them to provide fresh, new food experiences to consumers outside the home globally. Customer demands are constantly changing, and a more health-conscious public is looking for fresh, natural alternatives to traditional out-of-home eating options, and increasingly cares about how food is sourced, handled and prepared. Manitowoc Foodservice is focused on providing our customers with the equipment they need to seize the opportunities from these dynamic changes in the market.
Through innovation, we strive to simplify restaurant operations, improve the quality of the food, improve speed and flexibility of the restaurant operation, and reduce the overall carbon foot print and life cycle operating cost of the equipment. We believe that these benefits will be delivered through our innovation portfolio consisting of mobile connectivity and monitoring, and step change improvements in operator productivity, speed and flexibility, energy efficiency, and health and sanitation.
Mobile Connectivity and Monitoring: Integration of mobile devices in kitchens is increasing rapidly, and will extend the user interface beyond the traditional boundaries of the equipment. The combination of wearables and beacons can provide notification of key tasks and equipment situations requiring immediate attention even if the crew is not looking at the appliance. Bluetooth allows for secure information exchange using cellular or network mobile devices to collect information on the equipment, view training or maintenance instructions, and update menus and equipment software. RFID tracking of food and holding trays helps ensure the right food in the right quantities is available when needed. Our KitchenConnect series also includes a system for equipment monitoring which collects data to reduce downtime, optimize energy use, and improve service response time.
Productivity, Speed and Flexibility: Kitchens that occupy less space, have higher output and are easier to operate are the key to growth in the foodservice industry, particularly in urban locations; greater speed and equipment flexibility also allow for higher productivity and a wider range of menu options. For example, restaurants increasingly require smaller zones that can be individually controlled, enabling variable temperature cooking across the surface with lower standby energy losses, and

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we are a leading provider of such surface cooking platforms. We are also expanding the use of impingement microwave ovens by adding steam and inverter control to the magnetron, which enables better control over moisture levels in the food and the microwave heating rate, and makes the oven much easier to clean with steam. Innovative control systems can improve information flow in the kitchen by letting operators know what and when to cook, and how to maintain and clean the equipment. Our fitkitchen initiative addresses all these procedures holistically, and provides us with unique insights on how to apply and improve our equipment.
Energy Efficiency: We are focused on increasing the efficiency of individual components and reducing standby energy losses. An example of reducing standby energy loss is the use of induction heating for holding pans so that energy is only used when a thermal load is present. We are also leading in the area of high efficiency combustion systems with metal matrix burner technology. This technology reduces gas consumption and allows for variable firing rate. For cooling, natural refrigerants such as R-290 offer improved thermodynamic performance, and variable speed compressors and fans further increase overall cycle performance under part load conditions.
Health and Sanitation: Manual sanitation of equipment in the restaurant has become a major challenge due to extended operating hours, the increasing number and complexity of equipment in kitchens, and competing demands from revenue producing tasks. For the cold product category, our HEPA filtration technology brings the clean room into the kitchen, controlling airborne contamination of ice machines. Electrically charged particles of water and UV light provide the basis for automated sterilization of food zones and contact surfaces in equipment. Compact steam generators are being embedded in our equipment, providing a proven technology for cleaning cooking cavities in our ovens.
We have a strong track record of working with customers to develop equipment platforms from a clean sheet of paper, taking into account freshness, flavor and speed of service, as well as constraints of building infrastructure, kitchen ventilation and HVAC systems. Developing products that give our customers a competitive advantage is at the core of our innovation strategy, and we believe that big opportunities to further advance the interaction of equipment, food and people in the kitchen still lie ahead in the foodservice industry. The following graphic depicts our fitkitchen concept:

Manitowoc Foodservice has launched the following major products and innovations over the past five years:
Blend-In-Cup Smoothie Machine (with or without Integrated Ice Machine) - Plug and play fully integrated blended beverage station, blending beverages directly in the serving cups. Storing eight ingredient bags in its refrigerated cabinet, it can adapt its blend/mix profile to suit any customer recipe. With its automated portioning and dispense, it reduces waste and labor, and ensures the consistency of the final beverage. Build for both restaurant and retail applications, it blends and dispenses up to three drinks at

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once, and up to 120 drinks an hour within only 26” of space. The version without ice machine needs to be manually filled with ice and stores up to 25 lbs. of ice. The integrated version includes a high capacity, integrated ice maker with automatic cleaning to ensure constant ice availability and sanitation.
Convotherm 4 - Combi oven designed around our customer needs, enabling them to achieve outstanding cooking and baking results. It is available in seven sizes and two different configurations, and includes an industry-leading flexible and safe cleaning system. Significantly lower operating cost and a very low service call rate are expected to lead to high customer satisfaction over the product life cycle.
Merrychef eikon - Recent additions to this series include the eikon e2, a compact oven with ventless technology allowing users to prepare food to order at up to 10x the speed of conventional ovens in a minimum of space, and the eikon e4s, which enables speeds of up to 15x that of conventional ovens. Both models are fitted with an EasyToUCH touchscreen allowing selection of profiles at the touch of an icon. The new eikon e6 (as well as the e2) uses the new patented planar plume technology, whereby heated air is directed into planes, which then wrap around the food product to deliver a higher quality, even cook in less time with fast, quiet operation.
Indigo Ice Machine - An awarding-winning state-of-the-art modular cuber platform, offered in various sizes from 300 to 2,100 lbs./day sold under the Manitowoc brand. This product line differentiates itself through unique technological features, convenience, and efficiency to deliver lower long term operating costs.
Koolaire - A new brand of basic-feature ice machines complementing our premium Manitowoc brand, offered in sizes ranging from 170 - 1,800 lbs./day. Koolaire machines are simple, highly reliable, and target an entry level price point.
Chick-fil-A Broiler - Our Garland brand has leveraged its global leadership in clamshell technology to develop the first-ever clamshell broiler in partnership with the largest chicken chain in the U.S. The clamshell broiler enabled our customer to create an entirely new menu, offering healthier grilled chicken sandwiches to complement its emblematic fried-chicken sandwiches. We are currently engaged in developing a next generation version of this technology.
Merco IntelliHold Series - Specifically developed for commercial kitchens, this warmer provides a holding environment for food between the kitchen and the front-of-house with improved energy efficiency and increased storage capacity within an unchanged footprint.
Frymaster FilterQuick - FilterQuick replaces the time-consuming manual filtration process with a simple push button automatic filtration process that allows the fryer to resume operation in less than four minutes. By combining automatic filtration with our oil conserving frypots, FilterQuick offers customer the most advanced oil-conserving fryer in the market. FilterQuick is also available with an integrated patented oil quality sensor that allows Frymaster customers to measure the exact oil quality with the push of a button, which helps them to maximize oil life without sacrificing food quality.

Market and Industry
Global foodservice sales, which account for the value of all food prepared away from home, is the most important driver of our industry. The global foodservice industry was estimated at approximately $2.7 trillion in 2014 according to Euromonitor International, and is expected to increase at a nominal compounded annual growth rate ("CAGR") of 7% to reach $3.5 trillion by 2018. According to Euromonitor International, the U.S. foodservice market accounted for approximately 19%, or $506 billion, of the total global foodservice market in 2014. We estimate the size of the global foodservice equipment markets we serve to be approximately $27 billion.
Demand in the restaurant segment, one of seven and our largest end market within the U.S. foodservice industry, is driven by consumer disposable income, employment, investment in new establishments, and the underlying trend for increased convenience.
Foodservice Equipment and Supplies, an industry publication, estimates that in 2016 for U.S. commercial businesses in need of foodservice equipment, 62% of equipment purchases will be to replace existing equipment, 20% for renovations, 11% for more environmentally friendly or sustainable equipment, and 7% for new construction.


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Source: National Restaurant Association
According to Technomic, the foodservice industry in the U.S. is expected to grow at a nominal CAGR of approximately 2% during the 2015-2020 period with some foodservice industry sectors, such as healthcare or fast casual dining growing at the nominal CAGR of 4-6% during the same time period. Management expects that foodservice industry growth within the U.S. will be supported by improving economic conditions, declining rate of unemployment and accelerating increases in real disposable income. Additionally, as a more health conscious public is forsaking convenience foods for fresh, natural alternatives and is focusing on how their food is made, sourced, handled, and prepared, demand for foodservice equipment is expected to rise as foodservice providers adapt to evolving tastes.
On a global level, the demand for affordable dining is expected to continue to increase. Consumers in every market are expected to continue gravitating towards more informal options, a trend seen among both high income consumers looking to save during a slow economic recovery, and lower income consumers new to foodservice looking for accessible entry points. For foodservice equipment operators in emerging markets, this offers enormous room for innovation, particularly in terms of format, as consumers new to eating out look to experiment with a variety of brands and experiences. Fast-food chains, in particular, have proved successful in these markets in serving occasions where they have historically been weak, such as dinner.
Per Euromonitor International, global growth is expected to be driven by solid performance in Asia, Latin America, Middle East and Africa as follows:
In APAC, foodservice industry sales are projected to grow at a CAGR of approximately 3%, or by $200 billion, during the 2014-2019 period. China is expected to be a major contributor to this region’s absolute dollar sales growth, despite somewhat challenging market conditions recently. The highest growth is APAC is projected in the juice/smoothie bars and pizza full-service restaurants segments with CAGRs of approximately 13% and 12%, respectively.
In Latin America, foodservice industry sales are expected to grow at an approximately 3% CAGR, or by $50 billion, during the 2014-2019 period. The most significant absolute sales dollar growth is expected in Brazil. The highest growth in Latin America overall is projected in the fast-food category with CAGR of approximately 4%, but the largest regional growth opportunities are projected in juice/smoothie bar category with estimated CAGR of approximately 12% during the 2014-2019 period. 

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In the Middle East and Africa region (“MEA”), foodservice industry sales are expected to grow at a CAGR of approximately 4% or by $25 billion during the 2014-2019 period. While Sub-Saharan Africa is likely to be one of the most important regions for growth in the long-term, over the next several years the majority of sales in the region will continue to come from the Middle East and the Gulf States in particular. The largest growth opportunities in MEA are expected in the burger fast-food category with a projected CAGR of approximately 10% during the 2014-2019 period.
In Western Europe, consumers have become much more value-conscious, and increasingly look to modern chains as the best way to spend on eating out. Foodservice sales in Western Europe are projected to grow at an approximately 1% CAGR during the 2014-2019 period according to Euromonitor International. In Eastern Europe, sales are expected to grow with an approximately 2% CAGR during the 2014-2019 period, with the strongest growth projected in convenience stores and fast-food.
Overall, we believe that continued growth in demand for foodservice equipment will result from the development of new restaurant concepts in the U.S., and the expansion of U.S. and foreign chains into international markets, the replacement and upgrade of existing equipment and new equipment requirements resulting from menu changes. We expect to benefit from these trends, and grow market penetration alongside our customers as they expand into new service categories and geographies. We believe we are well-positioned to take advantage of worldwide growth opportunities with global and regional new product introductions, improvement in operational excellence, and other strategic initiatives.

Strengths
Our competitive strengths derive from combining deep industry expertise and understanding of our markets, our history of investment in research and development, successful product innovation and long-standing customer relationships.
The breadth and complementarity of our product portfolio, with strong hot and cold category brands integrated under one operating company, supported by aftermarket service and support.
Manitowoc Foodservice offers 23 industry-leading brands, which provide the full spectrum of foodservice equipment across six hot and cold product and service categories, including primary cooking equipment, ice machines and storage bins, walk-in refrigerator and freezer equipment, beverage dispensers and related products, serving, warming and storage equipment, and aftermarket parts and service solutions (KitchenCare). Offering a full suite of integrated hot and cold kitchen equipment products and services provides us with significant cross-selling opportunities and allows us to keep ahead of evolving industry trends. Our aftermarket offering, KitchenCare, provides support services to our entire product spectrum. This enables Manitowoc Foodservice to design, outfit and service commercial kitchens in a harmonized, efficient way and maintain a disciplined focus on targeting our fast-growing customer base with the right products for each need, at the right price.
The ability to integrate food, equipment, digital technologies, and people seamlessly through collaborative innovation that enhances our customers’ ability to compete in the marketplace.
We combine our expertise in industrial engineering and culinary sciences to continuously optimize both the functionality and ease of operation of our foodservice equipment products. This effort leads to the creation of innovative kitchens with optimized work flow, energy and labor savings, and more comfortable work spaces, all of which result in high customer satisfaction. Our foodservice equipment and design capabilities help customers differentiate their food and adapt to evolving and local tastes, different cooking styles, and aesthetic preferences, regionally and globally. We continuously innovate by working closely with customers to develop products to meet their evolving needs. By closely tracking customer trends and employing a dedicated staff of chefs, we are able to maintain our position as an expert on every major cooking technique and emerging industry trend.
The scale and breadth of our dealer and distributor network to accompany customers on their global journey, especially in fast-growing emerging markets.
We have extensive manufacturing, sales, and customer service networks across all the regions we serve. We operate 38 locations in 12 countries, providing us with the scale to serve the largest global customers and the local market expertise to leverage international growth. Our footprint enables us to build our products as close as possible to intended end markets, and apply our developed markets expertise in emerging markets. Manitowoc Foodservices’ worldwide network of over three thousand dealers and distributors allows us to serve our customer base globally and grow alongside them as they enter new markets.
Long-standing brands and innovative engineering customers can trust for superior quality and reliability.
Manitowoc delivers high performance, efficient kitchens with innovative features that meet specific culinary needs and enhance our customers’ ability to compete in the marketplace. The Manitowoc Foodservice Education and Technology Centers (“ETC”) in New Port Richey, Florida and Hangzhou, China contain computer-assisted design platforms, a model shop for on-site development of prototypes, a laboratory for product testing, and various display areas for new products. Our test kitchens, flexible demonstration areas, and culinary teams enable us to demonstrate a wide range of equipment in realistic operating environments, and also support a wide range of menu ideation, food development and sensory testing with our customers and food partners. We also use the ETCs to provide training for our customers, marketing representatives, service providers, industry consultants, dealers and distributors.

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The superior quality of our foodservice equipment has long been recognized by third-parties. Recent industry awards received by Manitowoc Foodservice include:
2014 Best-in-Class Award, Foodservice Equipment & Supplies Magazine: Declared five Manitowoc brands (Cleveland, Delfield, Frymaster, Lincoln and Manitowoc Ice) as Best-in-Class. It was the 15th consecutive year in which Frymaster and Manitowoc Ice received the Best-in-Class distinction;
2015 National Restaurant Association Kitchen Innovation Awards: Frymaster and Merrychef won 2015 Kitchen Innovation awards. Reflecting a history of innovation, Manitowoc Foodservice has won 29 Kitchen Innovation Awards since 2005; and
2015 Energy Star Partner of the Year: Manitowoc Foodservice has been named an Energy Star Partner of the Year for six consecutive years. In 2015, we also received our fourth Sustained Excellence Award.
Dedication to putting customer experience first.
We are the only company in the market offering a broad portfolio coupled with a unified customer service interface. Throughout the life of each product, Manitowoc Foodservice teams are available to provide a consistent, seamless customer experience. We design custom kitchen environments based on the unique operational needs of each customer, provide reliable equipment that meet or exceeds customer expectations, and offer aftermarket service to resolve any issues.
Strategies

We intend to achieve sustainable, profitable growth globally by leveraging our position as a leading commercial foodservice equipment provider and by using the following strategies:
Driving increased profitability.
We believe we can significantly improve the profitability of our business and are implementing several cost saving initiatives and operating strategies to drive increased margins. We are committed to further improving our margins by focusing on fewer, higher-margin products and markets, value-based pricing, and effective sourcing, as well as by driving operational excellence in our existing plants. Additionally, we will continue to improve the quality of our selling, general and administrative functions.
Select currently ongoing projects supporting these goals include:
Operational improvements at select production facilities;
80/20 portfolio rationalization: focus the most resources and investments in developing the products that yield the greatest returns (“80% of the sales from 20% of the portfolio”), to benefit from latent scale advantages;
Facility rationalization: drive best-in-class operating metrics, standardization of operating processes and cost of poor quality (COPQ) reduction;
Global sourcing initiative: ensure that suppliers are able not only to provide parts at competitive cost positions and lead times, but also help identify component-level innovations that will create differentiating advantages for Manitowoc; our sourcing and procurement initiatives also aim to improve product cost take-out, streamline supplier agreements, and improve processes, tools and data analysis; and
New product initiatives: continue to increase our value proposition with customers through products that simplify restaurant operation, improve the quality of the food, improve speed and flexibility, and reduce the overall carbon footprint and life cycle operating cost.
Growing our customer base and deepening customer penetration.
We believe our broad product portfolio and leading brands position us to achieve profitable growth above the average industry rate by further growing the number of customers we serve and improving customer overall satisfaction. We continue to be a trusted provider to the largest companies in the foodservice industry and plan to further expand our reach to select, high potential mid-sized companies where we can offer strong customer satisfaction. We are working closely with our channel partners to identify emerging high value customers, and provide them with our high-quality products and support services.
Select currently ongoing projects supporting these goals include:
Strengthening channel partner relationships: working closely with dealers and distributors to identify and pursue opportunities with new and emerging customers including in high growth markets; and
Increased investment in new customer acquisition: identifying and prioritizing high value and high ROI opportunities in the marketplace, and disciplined execution against those priorities through strong project management.
Driving our international expansion.

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Our global footprint positions us to capitalize on growth in developed and emerging markets. Approximately 37% of sales were generated internationally during the twelve-month period ended December 31, 2014, and we have grown our international sales by 5% since 2012. We will work closely with channel partners to identify emerging global opportunities, particularly in high growth markets including markets including APAC, Latin America, and MEA.
We continue to invest heavily in the APAC region, as it is expected to remain the largest driver of aggregate global foodservice sales growth over the next few years. We currently have four manufacturing facilities in Asia and a technology center in China, demonstrating our commitment to building lasting relationships with a broad base of Asian foodservice providers. We also have three test kitchens across the region, and partner closely with Asian chefs and distributors to produce foodservice equipment specifically tailored to meet the unique demands of local customers.
In Latin America, Manitowoc Foodservice enjoys longstanding business relationships with end customers in the fast growing segments of the market such as convenience stores, local chains, global chains, and retail and institutional. We also have a well-established sales and aftermarket support networks in over 30 countries and territories. These networks are supported by a strong team of employees in the sales, technical support and culinary areas. Manitowoc Foodservice owns manufacturing facilities in Tijuana, Mexico and Monterrey, Mexico, a distribution hub in Mexico City, as well as a sales and service training center in Monterrey, Mexico.
Our engagement in MEA continues to grow as we invest in the expansion of our sales team to serve our customers in this region. We are working diligently on realigning and reinforcing our distribution channels in MEA. Our demonstration kitchen in Jebel Ali Free Zone in Dubai, United Arab Emirates is just one example of our commitment to and engagement in this region.
Selectively pursuing strategic acquisitions and partnerships.
Our industry is fragmented and we believe there is significant opportunity for continued consolidation through acquisitions and partnerships. We have a long track record of acquisitions and believe that we are well positioned to expand our product offerings, geographic footprint and customer base through acquisitions and related strategic alliance activities. Consistent with our strategy, we actively evaluate potential acquisition opportunities for Manitowoc Foodservice on an ongoing basis. We seek to manage liabilities, integration and other risks associated with acquisitions through due diligence, favorable acquisition contracts, and careful planning and execution of the integration of the acquired businesses.
Expanding the frontier of foodservice innovation.
To remain a leader in our industry and continue to grow our reputation as one of the most innovative companies in our industry, we continuously leverage suppliers to source innovation and refresh existing products with new, locally-relevant, food-inspiring technologies, while simultaneously finding new ways to integrate those products and create cohesive kitchen systems. Our innovation co-creation and customization capabilities uniquely position us to develop solutions that are truly adapted to different ways of cooking and preparing food, whether for new menus or new geographies.
Select currently ongoing projects supporting these goals include:
fitkitchen: “Food Inspiring Technology” designed and developed for integrated kitchens that meet each customer’s individual equipment requirements and size constraints, using our leading test kitchen facilities;
Discovery innovation process: collaboration with customers and suppliers to identify innovations that enhance our customers’ ability to compete in the marketplace;
Digital strategy: to better connect food, equipment and people in the kitchen, and to better connect us with our customers; and
New product initiative prioritization and process: prioritize investments needed to bring to market those new products with the greatest potential for high ROI.

Continuing to attract and foster industry-leading talent.
Manitowoc Foodservice’s people are key to our success. As of December 31, 2014, we had approximately 5,500 employees across all of our locations. Our employees embody and personify our iconic brands and strive to understand our customers. We are continuing to recruit talented professionals and strive to make our company a great place to have a long-term career.
Select currently ongoing projects supporting these goals include:
The LEAD (Leadership Evaluation and Accelerated Development) Program accelerates the development of key leaders for current and future roles to achieve aggressive organizational goals. It provides high potential key leaders for current and future roles by providing them with objective, third party feedback, developmental discussions, career planning, and ongoing support to meet their leadership potential;
The New Manager Assimilation process enables new managers (either new to the organization or new to a position) and their teams to begin working together effectively right from the start; and

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Our internal learning and development programs provide employees with opportunities to enhance their leadership and professional skills, while emphasizing the importance of teamwork and diversity. Our course offerings reflect the priorities of the business, from the full range of Six Sigma certifications, safety, and project management training to Rosetta Stone language courses, functional-specific courses, and general competency areas such as time management.

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Our Reportable Segments
We manufacture and sell foodservice equipment in more than 100 countries. We report our operating results through three reportable segments: Americas, EMEA and APAC. All three segments offer a broad range of hot and cold category foodservice products and solutions for customers in various end markets.
The following table presents the relative percentages of total revenue attributable to each reportable segment for each of the last three fiscal years.
 
For the Years Ended December 31,
 
2014
2013
2012
Americas
82.3
 %
83.2
 %
83.0
 %
EMEA
19.9
 %
20.3
 %
14.4
 %
APAC
12.5
 %
8.4
 %
9.2
 %
Elimination of inter-segment sales

(14.8
)%
(11.9
)%
(6.6
)%
In the Americas, we provide foodservice equipment in over 30 countries and territories throughout North America, Latin America and the Caribbean. Our Americas segment contributed total revenue including intercompany sales of $1,301.9 million during the twelve-month period ended December 31, 2014, representing 82.3% of total Manitowoc Foodservice revenue.
In EMEA, we provide foodservice equipment in over 50 countries throughout Europe, the Middle East and sub-Saharan Africa. Our EMEA segment contributed total revenue including intercompany sales of $315.1 million during the twelve-month period ended December 31, 2014, representing 19.9% of total Manitowoc Foodservice revenue.
In APAC, we provide foodservice equipment in over 20 countries throughout Asia, including China and India. Our APAC segment contributed total revenue including intercompany sales of $198.2 million during the twelve-month period ended December 31, 2014, representing 12.5% of total Manitowoc Foodservice revenue.
Customers
We sell primarily through distributors and dealers ("direct customers"), who ultimately sell to end customers. Our end-customer base is comprised of a wide variety of foodservice providers, including large multinational and regional chain restaurants, convenience stores and retail stores; chain and independent casual and family dining restaurants; independent restaurants and caterers; lodging, resort, leisure and convention facilities; healthcare facilities; schools and universities; large business and industrial customers; and many other foodservice outlets. We serve some of the largest and most widely recognized multinational and regional businesses in the foodservice and hospitality industries. The following table presents a representative selection of our dealers and end customers, including, but not limited to, our ten largest end customers. In aggregate, the customers presented below comprise approximately 50% of Manitowoc Foodservice's total revenue during the twelve-month period ended December 31, 2014.

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Select Manitowoc Global Foodservice Customers
 
 
 
 
 
 
 

Additionally, we have a strong base of mid-sized customers and continuously focus on expanding it further. According to Euromonitor International, many mid-size chains exhibited growth above 20% in 2014, particularly in APAC and Latin America, reflecting the increasing power of local players and strong demand for chained versions of local favorites. Driven by a clear pattern of investment in locally-owned chains and concepts featuring local cuisine, these trends are expected to continue over the long term. We work with each of our mid-size customers to help them capitalize on these trends through our innovation process, which allows us to provide them with the following value propositions:
Simplification of their operations;
Improved speed and flexibility of the overall operation;
Improved quality of the food and service;

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Reduced energy consumption and carbon footprint;
Lower total cost over the life cycle of the appliance; and
Superior reliability of the overall equipment system.
We do not typically have long-term contracts with our customers; however, large chains frequently authorize specific foodservice equipment manufacturers as approved vendors for particular products, and thereafter, sales are made locally or regionally to end customers via kitchen equipment suppliers, dealers or distributors. Many large quick-service restaurant chains refurbish or open a large number of outlets, or implement menu changes requiring investment in new equipment, over a short period of time. When this occurs, these customers often choose a small number of manufacturers whose approved products may or must be purchased by restaurant operators. We work closely with our customers to develop the products they need and to become approved vendors for these products.
Our end-customers often need equipment upgrades that enable them to improve productivity and food safety, reduce labor costs, respond to enhanced hygiene, environmental and menu requirements or reduce energy consumption. These changes often require customized cooking and cooling and freezing equipment. In addition, many restaurants seek to differentiate their products by changing their menu and format. We believe that product development is important to our success because a supplier’s ability to provide customized or innovative foodservice equipment is a primary factor when customers are making their purchasing decisions. Our significant investment in new product research and development positions us to uniquely serve our global customer base.
Sales, Marketing and Distribution
We sell our products through a worldwide network of over three thousand dealers and distributors in over 100 countries. Our network is differentiated from competitors through serving as a single source for a broad portfolio of leading brands and product categories. This allows us to provide one face to our customers for multiple brands with relevant culinary and ingredients expertise and appropriate key account management for our larger global chain customers. We support our sales efforts with a variety of marketing efforts including trade-specific advertising, cooperative distributor merchandising, digital marketing, and marketing at a variety of industry trade shows.
In the Americas, Manitowoc Foodservice has a broad portfolio of channel partners, covering all major foodservice market segments, including quick-service restaurants, fast casual, education, health care, business and industry, as well as the convenience and retail space. Our direct sales team is supplemented by a network of industry-leading rep groups, providing national coverage. Direct sales team, sales reps and distributors jointly serve over 900 equipment dealers with our full portfolio of hot and cold product category brands. A dedicated strategic account team with culinary support is focused on the major U.S.-based restaurant chains, where we have significant global market share. Our teams work closely with our customers’ menu and equipment development teams to assure alignment with their strategic plans. We also have distribution hubs in Canada, Mexico and Latin America. KitchenCare provides a range of after-market services that manages a comprehensive factory-authorized service network, assuring proper installation, preventative maintenance, spare parts supply and maximum customer uptime on all Manitowoc Foodservice appliances.
In EMEA, our distribution includes three company-owned distribution hubs in Herborn, Germany serving Germany and Austria, in Guildford, UK serving the UK and Northern Ireland, and in Barcelona, Spain serving Spain and Portugal. Each of these distribution centers operates a network of third party dealers chosen to satisfy the requirements of both chain customers and independent caterers in their respective territories. Outside these countries, Manitowoc Foodservice products and services are sold through non-exclusive third party distributors and service companies. In addition, our beverage customers receive specialist support from our beverage systems facility in Halesowen, UK. In emerging markets, such as the Arabian Gulf and Russia, we provide specialist applications support via sales offices located in Dubai and Moscow.
In APAC, Manitowoc Foodservice has a presence since the mid-1980s. As our chain customers expanded into the region, we first established distribution and service support, followed by a growth-oriented sales force and the first manufacturing facility in China in 1992. Today, we are operating four manufacturing facilities and five sales and service offices throughout the region. We access the market in APAC through our dedicated distribution and dealer channel partners, most of which have been established in the market for decades and have been Manitowoc Foodservice partners for over 15 years. Our business in the region reflects a growing acceptance of the value our products deliver and is continually expending into a local customer base that has decided to champion western menus and desires the appliances that will consistently deliver the quality expected from a top brand with the reliability and support for which we are known.
Regulatory Environment
We actively work with standards organizations, industry associations, certification parties, and regulatory bodies to develop and promote effective and balanced standards, codes, and regulations that provide for the advancement of sustainable customer solutions with the highest possible levels of energy efficiency, sanitation, safety, and food quality. For example, we are active members of NAFEM, AHRI, UL task group, NSF Joint Committee, ASHRAE, the working groups responsible for EN safety standards in Europe, HKI, and other regional standards organizations. We are fully engaged with the Department of Energy on new energy standards, EPA on EnergySTAR programs and SNAP alternate refrigerant regulations, and EU ECO directive consultant organizations.
Competition
We sell all of our products in highly competitive markets and compete based on product design, quality of products and aftermarket support services, product performance, maintenance costs, energy and resource saving, other contributions to sustainability, and price. We believe that we benefit from the following competitive advantages:

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A complementary portfolio of industry-leading hot and cold category products, integrated under one operating company and supported by growing aftermarket service and support;
The ability to integrate food, equipment, digital technologies and people seamlessly through collaborative innovation that enhances our customers’ ability to compete in the marketplace;
The scale and breadth of our dealer and distributor network to accompany our customers on their global journey, especially in fast-growing emerging markets;
Long-standing brands and innovation engineering that customers can trust for superior quality and reliability; and
Dedication to putting customer experience first.
The following table sets forth our primary competitors in each of our product groups:
Products
 
Primary Competitors
 
 
 
Primary cooking equipment
 
Ali Group; Dover Industries; Duke; Electrolux; Henny Penny; ITW; Middleby; Rational; and Taylor
 
 
 
Serving, warming and storage equipment
 
Alto Shaam; Cambro; Duke; Hatco; ITW; Middleby; Standex; and Vollrath
 
 
 
Beverage dispensers and related products
 
Automatic Bar Controls; Celli; Cornelius; Hoshizaki/Lancer Corporation; Taylor; and Vin Service
 
 
 
Ice-cube, ice flaker machines and storage bins
 
Aucma; Brema; Follett; Hoshizaki; Ice-O-Matic; Scotsman; and Vogt
 
 
 
Walk-in Refrigerator and freezer equipment
 
American Panel; Arctic; Bally; Beverage Air; Hoshizaki; ICS; Master-Bilt; Nor-Lake; Thermo-Kool; Traulsen; True Foodservice; and TurboAir
 
 
 

Seasonality
Typically, the second and third quarters of our fiscal year represent the best periods for our financial results. Our customers are primarily in the northern hemisphere, and the warmer summer weather generally leads to an increase in construction and remodeling within the foodservice industry, as well as in the use and replacement of ice machines. As a result, distributors build inventories during the second quarter to prepare for increased demand.
Raw Materials
We support our region-of-use production strategy with corresponding region-of-use supplier partners. The primary raw materials that we use are structural and rolled steel, aluminum, and copper. We also purchase electrical equipment and other semi- and fully-processed materials. We maintain inventories of steel and other purchased material. We have been successful in our goal to maintain alternative sources of raw materials and supplies, and therefore are not dependent on a single source for any particular raw material or supply.
Engineering, Research and Development
We believe our extensive engineering, research and development capabilities are a key driver of our success. We engage in research and development activities at 15 dedicated locations in the Americas, EMEA and APAC. We have a staff of in-house engineers and technicians on three continents, supplemented with external engineering resources, who collectively are responsible for improving existing products and developing new products. We incurred total engineering costs of $52.6 million, $42.6 million, and $39.6 million during the twelve-month periods ended December 31, 2014, 2013 and 2012, respectively, which included research and development costs of $31.0 million, $28.7 million, and $35.6 million during the twelve-month periods ended December 31, 2014, 2013 and 2012, respectively.
Our team of engineers focuses on developing cost effective, innovative, high performance, low maintenance products that are intended to solve problems for our customers in differentiated ways and create significant brand loyalty among customers. Design engineers work closely with our culinary, manufacturing and marketing staff which enables us to identify changing end-user requirements, implement new technologies and effectively introduce product innovations. Close, carefully managed relationships with dealers, distributors and end users help us identify their needs, for not only products, but also for the service and support that are critical to their profitable operations. As part of our ongoing commitment to provide superior products, we intend to continue our efforts to design products that meet evolving customer demands and reduce the period from product conception to product introduction.
Key projects and initiatives that are the basis for maintaining a competitive advantage in our capabilities for engineering and product development include the following:
Flexing engineering resources among the 15 engineering centers through engineering leadership for hot and cold category products and supplementing the internal resource pool with a strategic relationship with a major services provider based in India;

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Regional technology centers that provide a continuous stream of application-focused new technologies and product concepts into the engineering centers and fully leverage supplier and university relationships;
Internal capability for electronic controls development and application to define our roadmap for controls, work hand-in-hand with strategic suppliers, and ensure continued industry leadership in this increasingly important product dimension; and
Focus areas around technologies to lead the industry in the delivery of healthy food, equipment sanitation, energy efficiency, menu flexibility, and mobile devices and web connectivity.

Intellectual Property
Intellectual property, inclusive of certain patents, trademarks, copyrights, know-how, trade secrets and other proprietary rights, is important to our business. We hold numerous patents pertaining to our products, and have presently pending applications for additional patents in the U.S. and foreign countries. In addition, we have various registered and unregistered trademarks and licenses that are of material importance to our business and we believe our ownership of this intellectual property is adequately protected in customary fashions under applicable laws. Although certain proprietary intellectual property rights are important to our success, we do not believe we are materially dependent on any particular patent or license, or any particular group of patents or licensees.
Our worldwide intellectual property portfolio provides:
Global protection of our R&D and product development investments;
Recognizable competitive distinctions and proprietary advantages;
Brand support and enhancement; and
Leverage for value creation opportunities such as licenses and other dispositions.

Our intellectual property portfolio is strategically aligned with our businesses and we continually calibrate it for both competitiveness and cost-effectiveness. Additionally, we monitor other companies’ intellectual property to ensure our freedom-to-operate. Similarly, we study our competitors’ products to identify unauthorized use of our protected inventions, and follow-up to resolve through appropriate enforcement programs in case of any violations.
Employees
As of December 31, 2014, we had approximately 5,500 employees. In North America, we have in place six labor agreements with five employee unions. We have two trade unions in Europe and two trade unions in China.
Production and Facilities
We manufacture our products in our geographic markets around the world. We operate manufacturing and warehouse facilities, offices and technology centers across the Americas, EMEA and APAC. Our corporate headquarters is located in New Port Richey, Florida. Our strategy is to produce in the region of use, wherever appropriate, to be closer to our end-user, increase efficiency, and provide timelier product delivery.
In managing our network of production facilities, we focus on achieving operating efficiencies, standardization of operating processes and cost of poor quality reduction. Additionally, our sourcing and procurement initiatives aim to improve product cost take-out, streamline supplier agreements, and improve processes, tools and data analysis.

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The following table outlines the principal facilities we own or lease as of December 31, 2014.
Facility Location
 
Type of Facility
 
Approximate
Square Footage
 
Owned/Leased
New Port Richey, Florida (2)
 
Corporate Headquarters
 
42,000
 
Owned
Americas
 
 
 
 
 
 
Manitowoc, Wisconsin (2)
 
Manufacturing/Office
 
376,000
 
Owned
Parsons, Tennessee (1)
 
Manufacturing
 
120,000
 
Owned
Sellersburg, Indiana (2)
 
Manufacturing/Office
 
146,000
 
Owned
Tijuana, Mexico (1)
 
Manufacturing
 
111,000
 
Leased
Goodyear, Arizona (3)
 
Manufacturing/Office
 
50,000
 
Leased
Shreveport, Louisiana (1), (2)
 
Manufacturing/Office
 
539,000
 
Owned
Mt. Pleasant, Michigan (2)
 
Manufacturing/Office
 
345,000
 
Owned
Baltimore, Maryland
 
Manufacturing/Office
 
16,000
 
Leased
Cleveland, Ohio (1), (2)
 
Manufacturing/Office/Warehouse
 
391,000
 
Owned/Leased
Covington, Tennessee (1)
 
Manufacturing/Office/Warehouse
 
386,000
 
Owned/Leased
Piney Flats, Tennessee (3)
 
Manufacturing/Office
 
110,000
 
Leased
Fort Worth, Texas (3)
 
Manufacturing/Office
 
182,000
 
Leased
Concord, Ontario, Canada
 
Manufacturing/Office
 
116,000
 
Leased
Mississauga, Ontario, Canada (1), (2)
 
Manufacturing/Office/Warehouse
 
186,000
 
Leased
Monterrey, Mexico
 
Manufacturing/Office
 
303,750
 
Leased
EMEA
 
 
 
 
 
 
Guildford, United Kingdom (2)
 
Office
 
35,000
 
Leased
Eglfing, Germany (2)
 
Manufacturing/Office/Warehouse
 
130,000
 
Leased
Herisau, Switzerland (2)
 
Manufacturing/Office
 
26,974
 
Leased
Halesowen, United Kingdom (2)
 
Manufacturing/Office
 
86,000
 
Leased
Sheffield, United Kingdom
 
Manufacturing/Office
 
100,000
 
Leased
Felsted, United Kingdom (4)
 
Land
 
292,000
 
Owned
APAC
 
 
 
 
 
 
Foshan, China (2)
 
Manufacturing/Office/Warehouse
 
125,000
 
Leased
Shanghai, China (2)
 
Office/Warehouse

 
29,000
 
Leased
Prachinburi, Thailand (Joint Venture) (2)
 
Manufacturing/Office/Warehouse
 
438,608
 
Owned
Singapore
 
Manufacturing/Office

 
93,300
 
Owned/Leased

Hangzhou, China (2)
 
Manufacturing/Office
 
260,000
 
Owned/Leased
Samutprakarn, Thailand (Joint Venture)
 
Office
 
4,305
 
Leased
(1)
There are multiple separate facilities within these locations.
(2)
Serves also as a research and development center.
(3)
These facilities were sold during the fourth quarter of 2015 as part of the sale of Kysor Panel Systems.
(4)
This property was sold during the fourth quarter of 2015.

In addition, we lease sales office and/or warehouse space in Manitowoc, Wisconsin; Irwindale, California; Odessa, Florida; Tampa, Florida; Fort Wayne, Indiana; Jeffersonville, Indiana; Herborn, Germany; Kuala Lumpur, Malaysia; Selangor, Malaysia; Barcelona, Spain; Naucalpan de Juarez, Mexico; Gurgaon, Mumbai and Bangalore, India; as well as Mexico City, Mexico.
Legal Proceedings
Our global operations are governed by laws addressing the protection of the environment and employee safety and health. Under various circumstances, these laws impose civil and criminal penalties and fines, as well as injunctive and remedial relief, for noncompliance. They also may require remediation at sites where company-related substances have been released into the environment.
We have expended substantial resources globally, both financial and managerial, to comply with the applicable laws and regulations, and to protect the environment and our workers. We believe we are in substantial compliance with such laws and regulations and we maintain procedures designed to foster and ensure compliance. However, we have been and may in the future be subject to formal or informal enforcement actions or proceedings regarding noncompliance with such laws or regulations, whether or not determined to be ultimately responsible in the normal course of business. Historically, these actions have been resolved in various ways with the regulatory authorities without material commitments or penalties to the company.

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For information concerning other contingencies and uncertainties, see Note 15, “Contingencies and Significant Estimates,” to the Audited Combined Financial Statements and Note 13, "Contingencies and Significant Estimates," to the Unaudited Condensed Combined Financial Statements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion together with the other sections of this Information Statement, including our audited and unaudited condensed historical combined financial statements and the related notes, “Business” and “Unaudited Pro Forma Combined Financial Statements” and related notes. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. The forward-looking statements are subject to a number of important factors, including those factors discussed under “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements,” that could cause our actual results to differ materially from those indicated in the forward-looking statements.
Introduction
Management’s discussion and analysis of financial condition and results of operations accompanies our combined financial statements and provides additional information about our business, financial condition, liquidity and capital resources, cash flows and results of operations. We have organized the information as follows:
Overview. This section provides a brief description of the Spin-Off, our business, reportable segments, accounting basis of presentation and a brief summary of our results of operations.
Results of operations and discussion and analysis. This section highlights items affecting the comparability of our financial results and provides an analysis of our combined and segment results of operations for the nine months ended September 30, 2015 and 2014 and for each of the three years ended December 31, 2014, 2013, and 2012.
Liquidity and capital resources. This section provides an overview of our historical and anticipated cash and financing activities in connection with the Spin-Off. We also review our historical sources and uses of cash in our operating, investing and financing activities. We summarize our current and planned debt and other long-term financial commitments.
Quantitative and qualitative disclosures about market risk. This section discusses how we monitor and manage market risk related to changing commodity prices, currency and interest rates. We also provide an analysis of how adverse changes in market conditions could impact our results based on certain assumptions we have provided. We discuss how we hedge certain of these risks to mitigate unplanned or adverse impacts to our operating results and financial condition.
Non-GAAP financial measures. This section discusses certain operational performance measures we use internally to evaluate our operating results and to make important decisions about our business. We also provide a reconciliation of these measures to the financial measures we have reported in our historical combined financial statements so you understand the adjustments we make to further evaluate our underlying operating performance.
Critical accounting policies and estimates. This section summarizes the accounting policies that we consider important to our financial condition and results of operations and that require significant judgment or estimates to be made in their application. We also discuss commodity cost trends impacting our historical results and that we expect will continue through the remainder of 2015.
Overview
Spin-Off
On January 29, 2015, Manitowoc ParentCo announced plans to create two independent public companies: the Foodservice Business and the Crane Business. To effect the separation, Manitowoc ParentCo will undertake the Internal Reorganization described under “Certain Relationships and Related Party Transactions-Agreements with Manitowoc ParentCo-Separation and Distribution Agreement,” following which Manitowoc ParentCo will hold the Crane Business and Manitowoc Foodservice, Manitowoc ParentCo’s wholly owned subsidiary, will hold the Foodservice Business.
Following the Internal Reorganization, Manitowoc ParentCo will distribute all of its equity interest in us, consisting of all of the outstanding shares of our common stock, to Manitowoc ParentCo’s shareholders on a pro rata basis.
The Spin-Off is subject to the satisfaction, or Manitowoc ParentCo’s waiver, of a number of conditions. In addition, Manitowoc ParentCo has the right not to complete the Spin-Off if, at any time, the Manitowoc ParentCo Board determines, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Manitowoc ParentCo or its shareholders or is otherwise not advisable. For a more detailed description, see “The Spin-Off-Conditions to the Spin-Off.”
Business
Manitowoc Foodservice is among the world’s leading designers and manufacturers of commercial foodservice equipment. Our capabilities span refrigeration, ice-making, cooking, holding, food-preparation, and beverage-dispensing technologies, and allow us to equip entire commercial kitchens and serve the world’s growing demand for food prepared away from home. We supply foodservice equipment to

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commercial and institutional foodservice operators such as full-service restaurants, quick-service restaurant chains, hotels, caterers, supermarkets, convenience stores, business and industry, hospitals, schools and other institutions.
We operate in over 100 countries globally, across the Americas, EMEA and APAC. Our products, services and solutions are marketed through a worldwide network of over three thousand dealers and distributors under industry-leading brands, including Cleveland, Convotherm, Dean, Delfield, Fabristeel, Frymaster, Garland, Inducs, Kolpak, Koolaire, Lincoln, Manitowoc Ice, Merco, Merrychef, Multiplex, Servend, and U.S. Range. All of our products are supported by KitchenCare, our aftermarket repair and parts service. Manitowoc Foodservice’s scale and expertise enable it to serve a global blue-chip customer base across the world in continually evolving foodservice markets. For the nine-month and twelve-month periods ended September 30, 2015 and December 30, 2014, we generated revenue of $1,178.4 million and $1,581.3 million respectively, and operating income of $119.1 million and $172.5 million, respectively.
Reportable Segments
We manage our business in three geographic reportable segments: Americas, EMEA, and APAC. These segments represent the level at which we review our financial performance and make operating decisions. Segment operating earnings, or earnings before amortization, corporate charges, taxes and other special gains or charges is the measure of profit and loss that our chief operating decision maker uses to evaluate the financial performance of our business and is the basis for resource allocation and performance reviews. For these reasons, we believe that segment operating earnings represent the most relevant measure of segment profit and loss. A reconciliation of segment operating earnings to earnings from continuing operations on a U.S. GAAP basis is presented in the “- Results of Operations and Discussion and Analysis - Sales and Operating Earnings by Segment.”
In contrast to many other companies in the fragmented foodservice equipment industry, Manitowoc Foodservice has the scale and experience to follow its customers globally, operating in the Americas, EMEA and APAC regions. The United States is by far the company’s biggest geographic segment in terms of sales, followed by Europe. While we plan to continue growing in these two regions, the company also recognizes that the bulk of overall growth in the foodservice industry is expected to occur in markets other than US/Canada and Western Europe. As such, Manitowoc Foodservice is also working closely with its channel partners to expand its footprint in other high-growth markets.
Americas
The Americas segment, including the U.S., Canada and Latin America, had net sales and operating earnings of approximately $1,301.9 million and $201.8 million, respectively, for the twelve-month period ended December 31, 2014. Sales generated by the U.S. operations represent a significant majority of sales in the Americas segment.
EMEA
The EMEA segment is made up of markets in Europe, Middle East and Africa, including the United Kingdom, the Nordic countries, Germany, France, Spain, Italy and Switzerland, as well as Egypt, South Africa, Dubai, and a number of other countries across the region. The EMEA segment had net sales and operating earnings of approximately $315.1 million and $20.7 million, respectively, for the twelve-month period ended December 31, 2014.

APAC
The APAC segment is comprised of markets in China, Singapore, Australia, India, Malaysia, Indonesia, Thailand and Philippines. The APAC segment had net sales and operating earnings of approximately $198.2 million and $20.8 million, respectively, for the twelve-month period ended December 31, 2014.

Accounting Basis of Presentation
Our historical combined financial statements include the accounts of Manitowoc Foodservice and its subsidiaries as well as entities which were not previously subsidiaries but will form part of Manitowoc Foodservice. Our historical combined financial statements include expenses of Manitowoc ParentCo that were allocated to us for certain functions, including general corporate expenses related to finance, treasury, tax, audit, legal, information technology, human resources, and investor relations.
The combined financial statements are prepared on a standalone basis and reflect the historical results of operations, financial position and cash flows of Manitowoc Foodservice in accordance with U.S. GAAP. The combined financial statements are presented as if Manitowoc Foodservice had been carved out of Manitowoc ParentCo for all periods presented. All significant transactions within Manitowoc Foodservice have been eliminated.
You should read the historical combined financial data presented below in conjunction with our audited and unaudited condensed combined financial statements and accompanying notes.
All dollar amounts are in millions of dollars throughout the tables included in this Management’s Discussion and Analysis of Financial Conditions and Results of Operations unless otherwise indicated.


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Results of Operations and Discussion and Analysis
Results of Operations
The following are our results of operations for the nine months ended September 30, 2015, compared to the nine months ended September 30, 2014:
 
 
Nine Months Ended September 30,
(Millions of dollars)
 
2015
 
2014
Operations
 
 

 
 

Net sales
 
$
1,178.4