Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

22. Employee Benefit Plans

The Company provides defined benefit pension plans, defined contribution plans and/or other postretirement benefit plans to employees in many of the Company’s locations throughout the world. The Company’s defined benefit plans provide a benefit based on years of service and/or the employee’s average earnings near retirement. The Company’s defined contribution plans allow employees to contribute a portion of their salary to help save for retirement, and in most cases, the Company provides a matching contribution. The benefit obligation related to the Company’s non-U.S. defined benefit pension plans are for employees located primarily in Europe. For postretirement medical and other benefit plans, all of the Company’s benefit obligation is for employees located in the United States.

Defined contribution plans

The Company maintains two defined contribution retirement plans for its employees in the United States: (1) The Manitowoc Company, Inc. 401(k) Retirement Plan (the “Manitowoc 401(k) Plan”) and (2) The Manitowoc Company, Inc. Deferred Compensation Plan (the “Manitowoc Deferred Compensation Plan”). Each plan results in individual participant balances that reflect a combination of amounts contributed by the Company or deferred by the participant, amounts invested at the direction of either the Company or the participant, and the continuing reinvestment of returns until the accounts are distributed.

The Company also has various other non-U.S. defined contribution plans that allow eligible employees to contribute a portion of their salary to the plans. In most cases, the Company provides a matching contribution to the funds. Company contributions to the plans are generally based upon formulas contained in the plans. Total costs incurred under the Non-U.S. defined contribution plans, and reported within the Consolidated Statement of Operations, were $1.7 million, $1.6 million and $1.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Manitowoc 401(k) Plan

The Manitowoc 401(k) Plan is a tax-qualified retirement plan that is available to substantially all U.S. employees of Manitowoc, its subsidiaries and related entities.

The Manitowoc 401(k) Plan allows employees to make both pre and after-tax elective deferrals, subject to certain limitations under the Internal Revenue Code of 1986, as amended (the “Tax Code”). The Company also has the right to make the following additional contributions: (1) a safe harbor matching contribution and (2) an additional contribution, which may or may not be made, at the full discretion of the Company and for which the value will be fully determined by the Company based on its performance. Each participant in the Manitowoc 401(k) Plan is allowed to direct the investment of that participant’s account among a diverse mix of investment funds, including a Company stock alternative. To the extent that any funds are invested in

the Company’s stock, that portion of the Manitowoc 401(k) Plan is an employee stock ownership plan, as defined under the Tax Code (an “ESOP”).

The terms governing the retirement benefits under the Manitowoc 401(k) Plan are the same for the Company’s executive officers as they are for other eligible employees in the U.S.

Total costs incurred under this plan, and reported within the Consolidated Statement of Operations, were $11.9 million, $5.8 million and $5.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Manitowoc Deferred Compensation Plan

The Manitowoc Deferred Compensation Plan is a non-qualified supplemental deferred compensation plan for highly compensated and key management employees and for non-employee directors of the Company. The Company maintains the Manitowoc Deferred Compensation Plan to allow eligible individuals to save for retirement in a tax-efficient manner despite Tax Code restrictions that would otherwise impair their ability to do so under the Manitowoc 401(k) Plan. The Manitowoc Deferred Compensation Plan also assists the Company in retaining those key employees and directors.

The Manitowoc Deferred Compensation Plan accounts are credited with: (1) elective deferrals made at the request of the individual participant; (2) a matching contribution for eligible wages above IRS employee compensation limits for 401(k) retirement plans and/or (3) an additional contribution from the Company for each individual participant, which may or may not be made, at the full discretion of the Company based on its performance. Although unfunded within the meaning of the Tax Code, the Manitowoc Deferred Compensation Plan utilizes a rabbi trust to hold assets intended to satisfy the Company’s corresponding future benefit obligations. Each participant in the Manitowoc Deferred Compensation Plan is credited with earnings based upon individual elections from a diverse mix of investment funds that are intended to reflect investment funds similar to those offered under the Manitowoc 401(k) Plan, including the Company’s stock. Participants do not receive preferential or above-market rates of return under the Manitowoc Deferred Compensation Plan.

The Company has two separate investment programs: Program A and B, which allows participants to direct deferrals and Company contributions and restricts the Company’s use and access to the funds but are subject to the claims of the Company’s general creditors in rabbi trusts. Program A invests solely in the Company’s stock; dividends paid, if any, on the Company’s stock are automatically reinvested; and all distributions must be made in Company stock. Program B offers a variety of investment options but does not include Company stock as an investment option. All distributions from Program B must be made in cash. Participants cannot transfer assets between programs.

Program A is accounted for as a plan that does not permit diversification. As a result, the Company stock held by Program A is classified in equity in a manner similar to accounting for treasury stock. The deferred compensation obligation is classified as an equity instrument. Changes in the fair value of the Company’s stock and the compensation obligation are not recognized. The asset and obligation for Program A were $0.6 million and $0.2 million as of December 31, 2022 and 2021, respectively.

Program B is accounted for as a plan that permits diversification. As a result, the assets held by Program B are classified as an asset in the Consolidated Balance Sheets and changes in the fair value of the assets are recognized in earnings. The deferred compensation obligation is classified as a liability in the Consolidated Balance Sheets and adjusted, with a charge or credit to compensation cost, to reflect changes in the fair value of the obligation. The assets, which are included in other non-current assets, and obligations, which are included in other non-current liabilities, were $7.1 million and $8.9 million as of December 31, 2022 and 2021, respectively. Total costs incurred under this plan, and reported within the Consolidated Statement of Operations, for the years ended December 31, 2022, 2021 and 2020 were $0.4 million, $0.1 million and $0.4 million, respectively.

Pension, Postretirement Medical and Other Benefit Plans

The Company provides certain pension, postretirement medical and other benefits (death benefits) for eligible retirees and their dependents in the U.S. under various frozen plans. Pension benefits are provided under the Manitowoc U.S. Pension Plan (“U.S. Pension Plan”). Certain pension benefits are funded, the postretirement medical benefits are not funded but are paid as incurred, and the death benefits are fully insured. Eligibility for coverage is based on meeting certain years of service and retirement qualifications. The healthcare benefits may be subject to deductibles, co-payment provisions, and other limitations. The Company has reserved the right to modify these benefits which have been frozen.

In addition to the U.S. Pension Plan, the Company also maintains defined benefit pension plans for various Non-US subsidiaries which are sponsored directly by the Company or its subsidiaries and offered only to employees or retirees of those

subsidiaries (“Non-U.S. Pension Plans”). Certain Non-U.S. Pension Plans have frozen benefit accruals. During 2021, the unvested portion of Portugal's pension plan was transferred to a defined contribution plan. As a result, the Company recognized a settlement gain of $0.9 million.

The components of periodic benefit costs for the years ended December 31, 2022, 2021 and 2020 are summarized as follows:

	U.S. Pension Plan									Non-U.S. Pension Plans									Postretirement Medical and Other
	2022			2021			2020			2022			2021			2020			2022			2021			2020
Service cost - benefits earned    during the year	$	—		$	—		$	—		$	1.6		$	2.3		$	2.1		$	0.1		$	0.1		$	0.2
Interest cost of projected benefit obligation		3.2			2.8			4.0			1.7			1.5			1.8			0.2			0.2			0.4
Expected return on assets		(5.2	)		(4.9	)		(5.2	)		(1.2	)		(1.0	)		(1.1	)		—			—			—
Amortization of prior service cost		—			—			—			0.1			0.1			0.1			(1.4	)		(2.7	)		(2.7	)
Amortization of actuarial net loss (gain)		1.9			3.2			2.8			1.5			1.8			1.7			(0.5	)		(0.3	)		—
Pension settlement gain		—			—			—			(0.1	)		(0.9	)		—			—			—			—
Net periodic benefit cost	$	(0.1	)	$	1.1		$	1.6		$	3.6		$	3.8		$	4.6		$	(1.6	)	$	(2.7	)	$	(2.1	)
Weighted average    assumptions:
Effective discount rate for    benefit obligations		2.8	%		2.4	%		3.3	%		1.4	%		1.2	%		1.6	%		2.5	%		2.0	%		2.9	%
Effective interest rate on    benefit obligation		1.0	%		2.0	%		2.9	%		1.6	%		1.2	%		1.6	%		1.9	%		1.3	%		2.6	%
Expected return on    plan assets		4.7	%		4.3	%		5.2	%		2.9	%		1.6	%		2.3	%	N/A			N/A			N/A
Rate of compensation    increase	N/A			N/A			N/A				4.1	%		4.1	%		3.1	%	N/A			N/A			N/A

The prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants.

To develop the expected long-term rate of return on assets assumptions, the Company considered the historical returns and future expectations for returns in each asset class net of fees, as well as targeted asset allocation percentages within the pension portfolio.

The following is a reconciliation of the changes in benefit obligation, plan assets, and funded status as of December 31, 2022 and 2021:

	U.S. Pension Plan						Non-U.S. Pension Plans						Postretirement Medical and Other
	2022			2021			2022			2021			2022			2021
Change in Benefit Obligation
Benefit obligation, beginning of year	$	141.2		$	151.9		$	94.5		$	104.9		$	13.7		$	15.8
Service cost		—			—			1.6			2.3			0.1			0.1
Interest cost		3.2			2.8			1.7			1.5			0.2			0.2
Participant contributions		—			—			—			—			0.1			0.3
Plan curtailment		—			—			—			(0.3	)		—			—
Actuarial (gain) loss		(30.1	)		(5.4	)		(27.1	)		(3.7	)		(3.4	)		(1.0	)
Currency translation adjustment		—			—			(8.0	)		(4.2	)		—			—
Pension settlement		—			—			(0.3	)		(1.9	)		—			—
Benefits paid		(7.9	)		(8.1	)		(3.4	)		(4.1	)		(1.2	)		(1.7	)
Benefit obligation, end of year	$	106.4		$	141.2		$	59.0		$	94.5		$	9.5		$	13.7
Change in Plan Assets
Fair value of plan assets, beginning of year	$	114.6		$	113.7		$	50.2		$	52.3		$	—		$	—
Actual return on plan assets		(24.9	)		8.5			(15.0	)		0.6			—			—
Employer contributions		0.5			0.5			3.4			3.9			1.1			1.4
Participant contributions		—			—			—			—			0.1			0.3
Currency translation adjustment		—			—			(5.2	)		(0.6	)		—			—
Pension settlement		—			—			(0.3	)		(1.9	)		—			—
Benefits paid		(7.9	)		(8.1	)		(3.4	)		(4.1	)		(1.2	)		(1.7	)
Fair value of plan assets, end of year		82.3			114.6			29.7			50.2			—			—
Funded status	$	(24.1	)	$	(26.6	)	$	(29.3	)	$	(44.3	)	$	(9.5	)	$	(13.7	)
Amounts recognized in the Consolidated    Balance Sheets as of December 31
Short-term pension obligation	$	(0.5	)	$	(0.5	)	$	(1.2	)	$	(1.0	)	$	—		$	—
Long-term pension obligation		(23.6	)		(26.1	)		(28.1	)		(43.3	)		—			—
Short-term postretirement medical and other    benefit obligations		—			—			—			—			(1.3	)		(1.6	)
Long-term postretirement medical and other    benefit obligations		—			—			—			—			(8.2	)		(12.1	)
Net amount recognized	$	(24.1	)	$	(26.6	)	$	(29.3	)	$	(44.3	)	$	(9.5	)	$	(13.7	)
Weighted-Average Assumptions
Discount rate		2.8	%		2.8	%		4.2	%		1.4	%		5.4	%		2.5	%
Rate of compensation increase	N/A			N/A				2.7	%		4.1	%	N/A			N/A

The Company prepares its discount rates with advice from an independent third party. The Company uses different discount rates for each plan depending on the plan jurisdiction, the demographics of participants and the expected timing of benefit payments. For the qualified U.S. pension plan and postretirement medical plans, the Company uses a discount rate calculated based on an appropriate mix of high-quality corporate bonds. For the non-U.S. pension and postretirement plans, the Company consistently uses the relevant country specific benchmark indices for determining the various discount rates.

Amounts recognized in accumulated other comprehensive loss as of December 31, 2022 and 2021, are summarized as follows:

	Pensions						Postretirement Medical and Other
	2022			2021			2022		2021
Net actuarial gain (loss)	$	(35.0	)	$	(51.3	)	$	7.0	$	4.0
Prior service credit (cost)		(0.3	)		(0.4	)		—		1.4
Total amount recognized	$	(35.3	)	$	(51.7	)	$	7.0	$	5.4

For measurement purposes, a 5.59% annual rate of increase in the per capita cost of covered health care benefits was assumed for the postretirement medical and other plan for 2022. The rate was assumed to decrease gradually to 4.00% in 2046 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement medical and other plan.

The following table summarizes the sensitivity of our December 31, 2022 retirement obligations and 2023 retirement benefit costs of the Company's plans to changes in the key assumptions used to determine those results:

Change in assumption:	Estimated increase (decrease) in 2023 pension cost			Estimated increase (decrease) in Projected Benefit Obligation for the year ended December 31, 2022			Estimated increase (decrease) in 2023 Other Postretirement Benefit costs			Estimated increase (decrease) in Other Postretirement Benefit Obligation for the year ended December 31, 2022
0.50% increase in discount rate	$	(0.6	)	$	(7.6	)	N/A			$	(0.2	)
0.50% decrease in discount rate		0.6			8.2		N/A				0.3
0.50% increase in long-term return on assets		(0.5	)	N/A			N/A			N/A
0.50% decrease in long-term return on assets		0.5		N/A			N/A			N/A
1.0% increase in medical trend rates	N/A			N/A			0.1				0.2
1.0% decrease in medical trend rates	N/A			N/A				(0.1	)		(0.2	)

It is reasonably possible that the estimate for future retirement and medical costs may change in the near future due to changes in interest rates. Presently, there is no reliable means to estimate the amount of any such potential changes.

The weighted-average asset allocations of the U.S. pension plan as of December 31, 2022 and 2021, by asset category are summarized as follows:

	2022			2021
Equity		52.8	%		52.7	%
Fixed income		36.9	%		38.2	%
Other		10.3	%		9.1	%
Total		100.0	%		100.0	%

The weighted-average asset allocations of the Non-U.S. pension plans as of December 31, 2022 and 2021, by asset category are summarized as follows:

	2022			2021
Equity		—	%		—	%
Fixed income		45.2	%		41.3	%
Other(1)		54.8	%		58.7	%
Total		100.0	%		100.0	%

(1)Includes diversified investments that have equity and fixed income holdings.

The Board of Directors has established the Retirement Plan Committee (the “Committee”) to manage the operations and administration of all benefit plans and related trusts. On a quarterly basis, the Committee reviews progress toward achieving the pension plans’ and individual investment managers’ performance objectives.

Investment Strategy The overall objective of the Company's pension assets is to earn a rate of return over time to satisfy the benefit obligations of the pension plans and to maintain sufficient liquidity to pay benefits and address other cash requirements of the pension funds. Specific investment objectives for the Company’s long-term investment strategy include reducing the volatility of pension assets relative to pension liabilities, achieving a competitive, total investment return, achieving diversification between and within asset classes and managing other risks. Investment objectives for each asset class are determined based on specific risks and investment opportunities identified.

The Company reviews its long-term, strategic asset allocations annually. The Company uses various analytics to determine the optimal asset mix and considers plan liability characteristics, liquidity characteristics, funding requirements, expected rates of return and the distribution of returns. The Company identifies investment benchmarks for the asset classes in the strategic asset allocation that are market-based.

Actual allocations to each asset class vary from target allocations due to periodic investment strategy changes, market value fluctuations, the length of time it takes to fully implement investment allocation positions and the timing of benefit payments and contributions. The asset allocation is monitored and rebalanced monthly.

The actual and target allocations for the pension assets as of December 31, 2022, by asset class, are summarized as follows:

	Target Allocations						Weighted Average Asset Allocations
	U.S. Plan			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Equity Securities		50	%		—	%		52.8	%		—	%
Debt Securities		40	%		48	%		36.9	%		45.2	%
Other		10	%		52	%		10.3	%		54.8	%

Risk Management In managing the plan assets, the Company reviews and manages risk associated with funded status risk, interest rate risk, market risk, counterparty risk, liquidity risk and operational risk. Liability management and asset class diversification are central to the Company’s risk management approach and are integral to the overall investment strategy. Further, asset classes are constructed to achieve diversification by investment strategy, by industry or sector and by holding. Asset performance is monitored against benchmarked indices.

Fair Value Measurements The following table presents the Company’s plan assets using the fair value hierarchy as of December 31, 2022 and 2021. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Refer to Note 5, “Fair Value of Financial Instruments,” for definitions of each fair value level.

	December 31, 2022
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Net Asset Value ("NAV")*		Total
Equity:
U.S. equity	$	—	$	—	$	—	$	16.9	$	16.9
International equity		—		—		—		27.8		27.8
Fixed income:
Corporate bonds and notes		—		—		—		18.5		18.5
Government and agency bonds		—		—		—		25.4		25.4
Commingled funds		—		—		—		8.6		8.6
International fixed income		—		—		—		1.9		1.9
Other:
Cash and cash equivalents		0.9		—		—		—		0.9
Money market funds		—		0.7		—		—		0.7
Annuity contracts		—		—		8.5		—		8.5
Other		—		—		—		2.8		2.8
Total	$	0.9	$	0.7	$	8.5	$	101.9	$	112.0

*Certain assets that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy.

	December 31, 2021
Assets	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Net Asset Value ("NAV")*		Total
Equity:
U.S. equity	$	—	$	—	$	—	$	32.7	$	32.7
International equity		—		—		—		31.9		31.9
Fixed income:
Corporate bonds and notes		—		—		—		27.1		27.1
Government and agency bonds		—		—		—		34.7		34.7
Commingled funds		—		—		—		18.9		18.9
International fixed income		—		—		—		2.2		2.2
Other:
Cash and cash equivalents		0.7		—		—		—		0.7
Money market funds		—		0.7		—		—		0.7
Annuity contracts		—		—		12.6		—		12.6
Other		—		—		—		3.3		3.3
Total	$	0.7	$	0.7	$	12.6	$	150.8	$	164.8

*Certain assets that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy.

Cash and cash equivalents, which are used to pay benefits, are primarily held in registered money market funds which are valued using a market approach based on the quoted market prices of identical instruments. Other cash and cash equivalents are valued daily by the fund using a market approach with inputs that include quoted market prices for similar instruments.

Insurance group annuity contracts are valued at the present value of the future benefit payments owed by the insurance Company to the Non-U.S. Pension Plan's participants.

The valuation methodologies described above may generate a fair value calculation that may not be indicative of net realizable value or future fair values. While the Company believes the valuation methodologies used are appropriate, the use of different methodologies or assumptions in calculating fair value could result in different amounts.

A reconciliation of the fair value measurements of plan assets using significant unobservable inputs (Level 3) from the beginning of the year to the end of the year is as follows:

	Insurance Contracts Year Ended December 31,
	2022			2021
Beginning Balance	$	12.6		$	12.9
Actual return on assets		(1.9	)		0.7
Benefit payments		(0.8	)		(0.9	)
Foreign currency impact		(1.4	)		(0.1	)
Ending Balance	$	8.5		$	12.6

The expected 2023 minimum contributions for the U.S. pension plan are $0.5 million and there are no planned discretionary or non-cash contributions. The expected 2023 minimum contributions for the non-U.S. pension plans are $3.2 million and there are no planned discretionary or non-cash contributions. Expected Company paid claims for the postretirement medical and

other plans are $1.3 million for 2023. Projected future benefit payments from the plans as of December 31, 2022 are estimated as follows:

	U.S. Pension Plan		Non-U.S. Pension Plans		Postretirement Medical and Other
2023	$	8.7	$	2.9	$	1.3
2024		8.8		2.8		1.3
2025		8.8		3.3		1.2
2026		8.7		3.5		1.1
2027		8.7		4.0		1.0
Thereafter		41.8		21.0		3.9
Total	$	85.5	$	37.5	$	9.8

The fair value of plan assets for which the accumulated benefit obligation is in excess of the plan assets as of December 31, 2022 and 2021 is summarized as follows:

	U.S. Pension Plan				Non U.S. Pension Plans
	2022		2021		2022		2021
Projected benefit obligation	$	106.4	$	141.2	$	59.0	$	93.5
Accumulated benefit obligation		106.4		141.2		56.1		89.1
Fair value of plan assets		82.3		114.6		29.7		50.2

The measurement date for all plans is December 31, 2022.