Good day, everyone and welcome to today’s Manitowoc Company, Incorporated Fourth Quarter 2014 Earnings Call. Today’s call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Khail. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining Manitowoc’s fourth quarter and full year earnings conference call. Participating in today’s call will be Glen Tellock, our Chairman and Chief Executive Officer; and Carl Laurino, Senior Vice President and Chief Financial Officer. Glen will open today’s call by providing comments related to the plans separation of our Cranes and Foodservice businesses, our quarterly results and business outlook. Carl will then discuss our financial results for the fourth quarter in greater detail. Please note a supplemental presentation for today's remarks is available on our website and viewable via webcast. Following our prepared remarks, we will be joined by Eric Etchart, Senior Vice President, Business Development; Larry Weyers, President of Manitowoc Cranes; and Bob Hund, President of Manitowoc Foodservice for a question-and-answer session. For anyone who is not able to listen to today’s entire call an archived version of this call will be available later this evening. Please visit the Investor Relations section of our corporate website at www.manitowoc.com to access the replay. Before Glen begins his commentary, I would like to review our Safe Harbor statement. This call is taking place on January 29, 2015. During the course of today’s call forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995 will be made during each speaker’s remarks and during our question-and-answer session. Such statements are based on the company’s current assessment of its markets and other factors that affect its business. However, actual results could differ materially from any implied projections due to one or more of the factors explained in Manitowoc’s filings with the Securities and Exchange Commission, which are also available on our website. The Manitowoc Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or other circumstances. With that, I’ll now turn the call over to Glen.

Thanks, Steve, and good morning, everyone. This afternoon we announced our intent separate our industry-leading businesses into two publicly traded companies, as well as our fourth quarter and full year results for 2014. I will begin by providing some context concerning the expected separation, as well as the strategic rationale for our decision before we review our financial results. Turning to slide 3, Manitowoc has a rich history and over the last 14 years we have transformed the company into a global industrial manufacturing with two market-leading businesses Cranes and Foodservice. To understand how we arrived at today's announcement, it is important to note how the business has developed since the last trough and the legacy of leadership we have built over the years. Our recent history was marked by several transformational transactions from 2001 to 2008 setting the stage for Manitowoc today. The acquisitions of Potain, Grove and Enodis expanded our product portfolio, while the divestiture of other businesses that no longer fit with our long-term goals such as our legacy marine business tightened our focus around two platforms. Having the businesses together at this time gave us the scale and cash flow to make these transformative moves, while allowing us to grow them into industry-leading companies they are today. On Slide 4, you can see us as we move through the last few cycles and that the most recent recovery has yet started to materialize, we focused on integration and operational efficiencies. In addition, we implemented strategic investments that further strengthened our competitive position and laid the foundation for sustainable growth, as we will discuss in a moment. 2014 was negatively impacted by growing uncertainty among our customers due to macroeconomic conditions. However, as you can see on the slide, we had seen significant improvements over the last…

Thanks Glen and good morning everyone. We reported net sales for the fourth quarter of $1 billion, which is a decrease of 6.1% from a year ago. GAAP net earnings for the fourth quarter were $33.6 million, or $0.25 per diluted share versus earnings of $20.9 million, or $0.15 per diluted share, in the fourth quarter of 2013. Unfavorable currency exchange rate had a $0.04 negative on EPS in the quarter. Excluding special items, fourth quarter 2014 adjusted earnings from continuing operations was $37.5 million, $0.27 per diluted share versus adjusted earnings of $63.9 million or $0.47 per diluted share last year. During the fourth quarter of 2014 adjustments included $3.9 million of costs associated with restructuring activities. During the fourth quarter of 2013, the company incurred $35.6 million in losses related to the Dong Yue disposal, $3.2 million in losses related to discontinued operations. $2.5 million of cost associated with the restructuring activities and cost associated with early extinguishment of debt totaling $1.7 million. During the fourth quarter of 2014, cash provided by continuing operations was $237.6 million driven by cash from profitability and improvements in working capital, particularly inventory levels within Cranes. More importantly, we continue to progress in terms of our cost saving initiatives, which resulted in over $20 million of reorganization and product cost benefits, as well as a combined $8.5 million of lower corporate and interest expense. Turning to the results for our two businesses, Foodservice sales in the fourth quarter of 2014 totaled $374.2 million from $399.5 million in the prior year period. Fourth quarter 2014 operating earnings in Foodservice were $48.3 million producing operating margins of 12.9% compared to 17.2% for the quarter of 2013. As mentioned by Glen, the fourth quarter Foodservice decline in operating margin was driven by customer timing effecting…

Thanks Carl. To conclude the macro challenges that we are seeing are likely to persist throughout 2015. We do have a strong record of navigating uncertain market conditions while maintaining an eye on the opportunities ahead. We believe that the plan and timing we’ve laid out for the separation of the two businesses to prepare each for ongoing success enables us to allow each business to pursue individual strategies, equip each business with the appropriate resources to achieve continued growth and profitability. Enable each business to attract a long-term investor base appropriate for the particular operational and financial characteristics of each business and enhance the flexibility of each business to pursue distinct capital structures and capital allocation strategies. As we execute the separation of Cranes and Foodservice, we will remain steadfast in the execution of our key initiatives over the next 12 months. This concludes our prepared remarks for today. Vicky, we will now open the call up to our question and answer session.

[Operator Instructions] We will go first to Jamie Cook with Credit Suisse.

Hi, good evening.

Hi Jamie.

Thanks for keeping it interesting. I guess, two obvious questions. One, separating – splitting up Manitowoc has been out there forever and a day, and your view it always had been it didn't make sense. Food and Crane, there were diversification benefits, et cetera. What changed your tune all of a sudden to make you comfortable that Food and Crane should be separate? And, I guess it's also interesting in just given the recent reduction in crude prices and what that means for the Crane business, obviously, it means the Crane business is pushed out. Why would it be a good time for Cranes to be a standalone company?

Hey, Jamie. It’s Glen, I mean, obviously a logical question. When you look at what change – I mean it’s really the – I think, as I said in my remark for logical evolution of the businesses. I mean, we – if you look at this over a long period of time and we have – ever since the acquisition of a notice and a divestiture of Marine, and our strategic planning process. So, as you walk through those and we look at some of the initiatives that we laid out last year in the cost optimization structure that we talked about. We believe that many of those initiatives that we started at the enterprise level are in place or will be fully in place by the middle of this year. And it gives us the opportunity then as you move forward, at the time that the separation occurs. They can pursue their own strategies. They will take advantage of the markets that they're in and they may have different market dynamics. So that's why we look at where we were, where we're going to be in this year based on our guidance and that have made sense at the first quarter of next year.

Okay. I guess just -- can -- obviously the Crane -- I'll let someone else ask, let them ask a question on the splitter. Just on the Crane side, on the orders, the orders were a little stronger than probably most had anticipated. I would probably order -- argue that the orders were probably backwards-looking because things really started to collapse the end of December. Can you talk about what you've seen sort of in the month of January? If things deteriorated? Conversations with customer, have you seen cancellations, just any update there?

Well, we typically wouldn't give a lot of inter quarter comments.

Except you are splitting up the company, and so it's probably more relevant.

Well, I think -- but I when you look at it, Jamie, the conversations are still pretty good I mean despite what you see throughout the world. But I will say that, from a product line perspective, the conversations around the Crawler Cranes are very solid because of the new products. Conversations around Tower Cranes are pretty good. I think the two product lines that are -- we already talked about them are the RTs and some of the mobile hydraulics but the RTs and the boom trucks. Those are the two that give us that kind of guidance that takes us down that we have for 2015. But the conversations in January are still pretty good. I don't think people -- while there are actions being taken by a lot of the energy companies to slow things down, I don't think it is like 2009 and 2010 when they stopped things completely.

We’ll go next to Andrew Kaplowitz with Barclays.

Hi, good evening guys.

Hi, Andy

Hey, Andy

So Glen, the noise level in Foodservice has ratcheted up a bit over the last year. Foodservice looked like it was well on track, as you know, in the second half of 2013; has been pretty off-track in 2014. So can you talk a low bit more about why these issues have cropped up this year versus last year and what kind of confidence can we get that you really got your arms around the execution here in 2015?

Well, I think when you look at 2014, we had some initiatives, whether it was on operational issues that we talked about at Cleveland. We had some new product introduction things that were differed and delayed. And again, we are accountable for that, so I think when you get pass some of those –the backlogs that we have in certain product lines and coming late in the year and not be able to get some things out as you were optimizing some of the other areas, Monterrey comes to mind. I think we had probably a slower start at Monterrey than we anticipated. Those things as we mentioned in my remarks, Cleveland is behind us towards the end of the year performing well and I think so the once that get behind you in the Monterrey and the one that we see currently that we still have some work to do, but I think it’s well on its way is the KitchenCare. And I think once we get that, I think it’s an normal process for us and you saw Carl’s guidance for the margins to get that back.

Got it, okay.

The confidence is there only because we’ve done it before. These are things we’ve done it before.

You’ve had good performance, and 2014 was a setback, but you have had good performance. Let me shift gears actually and ask you one other Crane question. You're talking about high single digit margin for Cranes in 2015, but there too, there does seem to be quite a few moving variables. You've got the VPC Cranes that you're going to deliver. You've got cost take-out initiative and you also mentioned price competition. So, can you update us on the progress of your cost-cutting initiative in Cranes in 2015 and if I'm thinking in terms of how much it could be worth to margin, is it sort of a 100 basis points or something like that and – or should we be concerned that it could be absorbed by price discounting or under absorption during the year?

I’m going to touch that last one a little bit and then I’ll let Larry maybe talk about some of the manufacturing initiatives and his confidence in those. But, what I would say is in the latter half of the year in 2014 the benefits of our manufacturing and sourcing initiatives were eaten up by pricing and I think there is a less of that impact built into the 2015, than you would have seen in 2014. So, I would agree it was probably up in the back half, but I think was – absorptions is the other one that Carl’s mentioned and I think we with the rightsizings and the way the plan is laid out this year, I think that’s inherent in the guidance. So you really get some confidence on what you’re doing.

Yeah. Andy, this is Larry Weyers. I think over that the biggest thing we’ve been working on over the last eight to nine months is clearly with our SDI and our supplier development initiatives, which is – it’s driven a lot of the purchasing savings in the material cost going forward. But I think the other one is we spend a lot time with what we refer to as establishing a balanced attack in the factories. And by doing so it’s really allowed us to save on our material costs and our handling and it really enabled us to leverage our direct, indirect ratio in the factories and control our inventory and I think in Glen's early comments, we saw a lot of the benefits of that really come to light in the fourth quarter with our raw and [Indiscernible] in inventory control.

I think the key there, Andy, it’s really becoming more agile in that business where you don't –are not bringing different levels of direct support every time there is an increase or a decrease in the product build.

We will go next to Rob Wertheimer with Vertical Research Partners.

Hi, good evening, guys.

Hey, Rob.

If I may ask you a question on the transaction. Is it – could you just discuss the timing and year-long process? Does it need to be that long legalistically or did you think it was better just from a – coming out of market standpoint to see what happens with oil and so forth? And have you authorize your advisors to offer division for sale in the meantime?

Well, on your first question Rob, the length of the process, I mean when we looked at it, we looked at some of the things, I think to Jamie's point earlier, there are things that we've done since the acquisition of Enodis that our enterprise led and there is a lot of the synergy that you have between the two businesses. It is going to unwind those and it's almost turning the ball backwards and going the other way. So those are going to take time and we didn't want to commit to something we don't know how long it’s going to take. We certainly had our advisors give us precedent transactions and we can see all of those. We just felt, from some of the things that we are going into 2015 that the first quarter was about timing from a shareholder perspective to get the best value. With respect to your other question, we're not going to speculate as to what happened during this process, but I can assure you the board and everybody else looked at a lot of different alternatives and decided that the separation of business was the best alternative.

Thank you. One quick question, just to clean up on Cranes. Is the order number clean or was it impaired by any currency that adjusted the backlog and/or flowed through the orders?

It's clean. It may have been better if we wouldn't have seen some of the currency pressure.

We will go next to Mig Dobre with Robert Baird.

Good evening, guys. Glen, I remember you arguing in the past that the Crane business cannot really be a standalone entity and really belongs within a larger organization. And, you put out a slide deck call it, six months ago, that was looking at some of your peers and making that point. What changed? Can this business be a standalone business?

Yeah, absolutely. And I think you’re referencing the investor deck that was – that we put out in mid-year. And I don’t know that it was in reference to Cranes not being able to standalone. But I think when you look at where they are today, and that’s the thing is – as we’ve evolved down this process with the initiatives we have in place. And I’ll tell you that it’s a constant evaluation of both Foodservice and Cranes. When you look out and say to yourself, what are the things you are doing in the business that are going to impact this business in two and three years. And we’re talking about the rightsizing of the organization. We’re talking about the operational improvements. We’re talking about taking fixed costs out of business. We’re talking about the balance that affects that Larry just gave you. The change to a product line organization in both Foodservice and Cranes. As you sit here today you focus forward, you say to yourself, are these businesses able to stand by themselves and make that happen and throughout the year, the determination looking at it and say, yeah, they can do that based on the initiatives we have in place. And I think when you fast forward and look at what we’ve given for guidance in 2015 and where you think maybe the markets can go for Foodservice and Cranes in 2016 and 2017, it gives us that comfort that they could pursue those strategies on their own.

Okay. If I may ask a question on Foodservice here and you talked a little bit about margin, but I recall you saying that the Cleveland execution issues have hampered margin by at least 100 basis points in 2014. And that price cost was also, if I recall, about 50 basis points worth of headwind. Is it fair to say that we should be expecting at least 150 basis points if these things are no longer an issue in 2015 in terms of market potential, margin expansion, or is that too optimistic?

Yeah Mig, I think the number you threw out from – concerning Cleveland certainly is a fully loaded number from a perspective of the absorption that went along with that. We stand by those numbers. I would say that there were some other things relative to the business that we talked about a little bit on this call that also are relevant when you look at the 2014 performance. Some of those things have a little bit of uncertainty that surround them like your mix of the business, which was headwind for us. But as we look at, despite the fact that we're not making any significant pie in this guidance assumptions about the market, when we look at the things that we can control relative to the cost and fixing some of the headwinds that plagued us in 2014. We feel good about the guidance that we can improve margins pretty significantly.

We’ll go next to Nicole DeBlase with Morgan Stanley.

Yeah, thanks guys good evening.

Hi, Nicole.

Hi, Nicole.

Okay, so just a question on debt and I don't know how much you guys have thought about this yet, but you said that you kind of expect the same amount of debt on the Crane and Foodservice business, those advantage you have for overall manufacturing, but I'm curious why you wouldn't think about levering up the Crane business less given it’s extreme cyclicality and then putting more debt on the Foodservice business. So, is that something you've given thought to?

Well, I'll let Carl answer that specifically, but we did say on the call is, is that we would probably look at similar credit statistics for each one of them. And I think it's probably a little pre-mature to say how much of debt we would put on each one, but we certainly would have the same credit statistics and profile. Carl, if you can add.

I think that's spot on. It's recognized that obviously the Foodservice business does have more stability through the cycle than the Cranes does, very obvious statement there. And by virtue with that, I think the objective – the logical objective would be to try to make the credit profile consistent. Obviously, we are going to delever as an enterprise between now and then as well. So the overall debt should be lower when we get to the first quarter of 2016. But the objective would be to keep the two separate credit profiles at or better than the current Manitowoc credit profile and that, I think it's logical to assume that there would be more debt placed on Foodservice and Cranes in that instance.

Okay, got it, understood. That's helpful. And then I don't want to be the dead horse, because this question has come up in a couple of different ways on the call, but I mean let's say that the barricades does play out within the Crane business and you have more of like a double digit, I think if it can decline in Crane sales in 2015, would you still go ahead with those transaction or would that be a risk to completing the split?

Well, our intentions are certainly to complete the split. So, that's really where it is. I mean, you are going to look at the macroeconomic environment, but I would go back Nicole, to look at the history of the Crane segment. You go back to 2002 is the first time we were ever profitable in a downturn. I forget may be 2010, the margins were even better in a more significant downturn. And that’s what we’ve been trying to do is make this situated that every downturn we’d be more profitable. And I think the other beauty is, in both Foodservice and Cranes, we have good people. They’ve been through it before it’s a lot of the same people, so the organization is well managed with those types of business. So I feel pretty comfortable with the timing and the way they could handle the pluses the minuses in any cycle.

We’ll go next to Ted Grace with Susquehanna.

Hey, guys, I wanted to start following up on Andy's line of questioning on Foodservices and I think we all understand the industrial logic of breaking the Company in half and I don't think anybody would dispute that. I guess what I'm hoping to understand a little better, either from Glen, or maybe Bob is, on a standalone basis, where do you see Foodservices in 2016? I know there's 12 months or so we start really knowing what 2016 looks like, but if we were to look at the public appears and obviously whatever it points to, the Company has put up meaningfully different growth trajectory. It's been structurally more profitably narrowed the gap but just as we think about kind of the standalone business, could you maybe just frame out where you see that business going in the future and how does it benefit on a standalone basis? How does that improve your organic growth, your new product introduction and maybe we can just start there?

Well, Ted, I think, what you have to do is you have to go back to the rationale of why we did this. I mean, they are going to have that opportunity to pursue their own yield, their plans, their strategies, I mean they will have probably a capital allocation policy that will be determined. But I think one thing you have to do is you have to look at and it’s too early for us to determine. There are costs of this separation, as we go between now and the first quarter of next year. And there are just synergies of things that we have that are done at a corporate office. We haven’t determined what that number might be. So again, we will keep you informed as we go on with that, but we certainly recognized the opportunities that are ahead of us, and that’s why we feel the timing of the separation is good right now.

Okay, but just – I mean I think this is obvious and intuitive but I'd rather just ask it point blank. You do expect that you'd see an acceleration and underlying growth rates on a standalone basis as Foodservices pursues its own strategy and presumably margin expansion trajectory after you get through these synergies?

Well, I certainly – I certainly feel comfortable with the guidance that we’ve given for 2015 and I don’t want to comment on where I think the 2016 markets are but I think there – it’s safe to say that they have a very healthy pipeline of new product introductions and so you have the macroeconomics that fit into it, and you also have within the new product development pipeline. So again, go back to the rationale of why we’ve done this is because we see it as an opportune time to make this separation in 2016.

We’ll go next to Jerry Revich with Goldman Sachs.

Hi, good evening.

Hi, Jerry.

I'm wondering if you could just talk about what public company corporate cost would look like or what's your best assessment as you break up the businesses versus consolidated basis? Glen, you mentioned it would be a headwind. Can you just help us understand the magnitude of it?

Well, I think it’s a little bit too early to tell exactly what those are, I mean obviously we’ve look at the corporate cost and we look at the office here and what needs to go on to a single entity from a corporate side. It really is too early to tell on that but that’s probably couple of quarters away before we really know that.

And then for the Crane business, I'm wondering if you could talk a little bit more about the guidance, what it assumes by region, presumably North America, up significantly, Latin American and Asia down, and currency a drag. But I'm wondering if you could flush that out and maybe comment on any changes in manufacturing footprint that you might consider longer term if the recent currency moves continues so-called towards parity in the Euro?

Well. I’ll address the capacity footprint on first, and then I’ll let Larry just give kind of an overall general view of where he sees the markets, the pluses and the minuses but there's always the opportunity Jerry. When you look at your footprint from a manufacturing side, the – for instance, we moved the assembly in manufacturing of our 999 Crawler Crane to Shady Grove because there is an opportunity there with a downswing in our key market to and the upswing in the Crawlers we have in Manitowoc to make those and utilize the assets and the resources that you have. Looking out what we’re going to be in three or four years, yeah, I think, when you do or don't meet some of the expectations that you have and you implement many of the lean initiatives we have, it does create excess capacity. And so really that's, I mean, we're looking at that on a regular basis. So, people – if the markets don't spike substantially, we should see additional areas where we can take advantage of capacity footprints. Larry, do you want to mention some of the markets resume?

The market’s overall?

Yeah, just…

Yeah, I think generally, the markets for 2015, when think of our dollar projection in revenues it's driven primarily by our caution to the price of oil. Obviously, whether it's the drilling work that slowed down, what's going to happen with the shale oil projects, but we have not seen any of the refinery maintenance work or turnaround work slow down or any indication of it which is good. LNG plants still look like they're going to be positive. And then I think when you look around the globe, it's obviously a mixed bag [ph], but we've seen good activity and projections for Saudi Arabia, UAE, Qatar, Kuwait, some of the activity in the UK. Germany is stable with its rental activity. We haven't seen it developed into a lot of Crane sales yet, but it's positive. So obviously, on the flip side, France is flat, but little activity as far as new Cranes. Russia is negative clearly, but we've got some other areas. Vietnam has been strong, it looks like it will be strong next year. And then – it's probably a little bit too early to tell on what's going on in India. I think, I'll be there next week. But I think that one – all the signs are positive, but it's probably still a little bit too early to tell.

We will go next to Seth Weber with RBC Capital Markets.

Hey, thanks. Good evening, everybody.

Hi, Seth.

So I wanted to – on the transaction, so you have this $140 million to $195 million program cost benefit program that you've talked about previously. So, my question is, how much of that leaks out in this transaction would you not be able to get if the Company split? And then kind of a related question, I think you had previously talked about that number being predicated on a stable end markets, which it sounds like maybe we're not seeing in the Crane business at this point. So, can you talk about how we should think about that $140 million to $195 million over the next couple of years? Is that number now become haircut by some level?

It’s probably – Seth, it's probably not to the higher end of the range but I don't know why it wouldn’t – you certainly wouldn't see it at the lower end of the range. And the reason I say that is because lot of it is process-driven. And we as I mentioned earlier today, this week a big event here in Manitowoc to kick off a lot of this from the purchasing and the sourcing initiatives from a process standpoint. And so, I think when you look at it, there are some synergies when it comes to the MROs, when it comes to the indirects, but that's not the majority of where you're going to see it. I think if you go back to the sheet that we had in our investor presentation, it was broke out specifically by Cranes and Foodservice. So I think you can certainly expect us to be at that lower end of the range at least. And then it's a matter of what's the high end of that and that's to be determined.

Okay, thanks. And then I guess on the Crane business, how much of the weakness that you're seeing in the RT business, specifically is end market driven? And how much do you think is just competitive, some of your competitors taking advantage of currency to be more aggressive or – and take your losing share to some of your foreign competitors?

Yeah, this is Larry again. I think when we started 2014, we ran into what everybody was calling the polar vortex. One of the markets in North America, we have really high market share. And I think we all kind of assumed that as we got through that, the market would pick up. But clearly, that the market overall, forget about share, the market was down significantly in just the number of units that were purchased by customers. And I think we saw a lot of things that didn't materialize that we thought we would, whether it's the lack of the highway bill, nonresidential construction was lackluster, and clearly, we didn't see anything in the residential construction. So, I think when you roll all of those together, the other factor that we saw as the lot of end users where looking more towards rental than purchase with a lack of quality that they were seeing in the markets. Their decision was, more or less, why don't I rent a RPO Crane rather than actually pull the trigger and buy one. So, I think as part of that we saw a use of capital from our dealers to expand some of their rental fleets and RPO offerings. And I think as they consume that capital, it limits maybe how many more cranes they want to stock. So, our real focus going forward is to Glen’s mention, we will improve our agility, reduce our frozen windows, increase our efforts on balanced attack. So, our key to success there is going to be our agility to handle these markets as they go up and down depending on where they are in the world.

We will go next to Charley Brady with BMO Capital Markets.

Hi Charley.

Yeah, Sorry about that. On the Crane margin outlook in 2015, the guidance implies margins going up, we’ve got revenues dropping, again around kind of 5% to 6% of where that was going to be. You talked about some pricing pressures that you still are going to have, maybe not as much as you’re having them. And then, I would imagine you did solve some absorption issues, particularly since revenues in Crane are declining in ’15. So I’m trying to square that off with, how do margins go higher given all of those factors in ’15?

Charley, it’s really some of the things that we were talking about on some of these initiatives that probably were further along in Cranes purchasing cost savings, manufacturing cost savings that are substantial that will enable us to earn through some of the lost absorption that will come from the decline of the top line if we experience it.

Were you not recognizing a majority of that in Q4 or is there still more or are you going to pick it up more in ’15? And there’s more restructuring going to do that offsets all of that absorption and pricing?

Yes, that’s where you saw, Charley, some of the restructuring cost in the fourth quarter so you can get the benefit of that pretty much and the reason we did it, so we had the benefit for the full year. The other thing I would say is, I mentioned earlier, I think the pricing on some things in the back half of 2014, more so than what we had anticipated. And I think that’s because of it was probably more of a surprise in the end markets by all competitors and all Crane manufactures. And then lastly, I think you have a better for the margin standpoint. You have a better mix of products this year than what you had in 2014. As you look towards the Crawler Cranes and the Tower Cranes as opposed to the mobile hydraulics. So I think mixed as an issue also.

We’ll go next to Ann Duignan with JPMorgan.

Hi guys.

Hi, Ann.

Hi Ann.

My question, two questions. One quick one. Can you talk about the debt covenants? I believe that the word, debt covenants that did not allow a breakup. Have those been renegotiated or will they need to be renegotiated or have we already gotten through that problem?

Well, I don’t think it’s really a problem, Ann. Obviously, the debt package is to the Manitowoc company and there will an negotiation that’s kind of a market driven that we expect to be able to reflect as we go through this transaction in next year and you’ll essentially have two new credit packages for the two new companies, so it’s not as though have to transfer the debt that exist today.

Right. Okay, that's helpful. And then on cranes, can you talk about what you've embedded in your guidance for the potential for a slowdown in oil rich nations like the Middle East? I know you said that activity is still pretty strong today, but surely a year from now, if oil prices stay that where they are at, wouldn't you expect a slowdown at some point late 2015 or into 2016 in construction activity in places like the Middle East? That begs the question of why now, like others had asked?

Yeah, I’ll answer your first question. I think the inherent price of oil, where it is today is baked into the price. And as Larry said, okay and the Middle East is probably one of the – as you see it today, is a bright spot. But that’s if you can look at and see that the guidance we gave is actually down, until we set down mid-single digits. So I mean, maybe we’re confusing the terms of bright spots it’s only down 3% that will be a bright spot compared to 5%. So I mean. I think that’s where we’re looking at it Ann, because we – these are put together with inherent price of oil very low. And then the answer to your other question, you ask again, why now. I think when you again –we go through on a strategic planning process that is good as any companies that there is and this didn’t just start on last year. I mean, this has been done every since we started acquiring companies back in the late 90s. That's how we got the global footprint in Cranes; that's how we got to the global footprint in Foodservice. And, in talking with management, these are management recommendations, and where we believe, we can take these businesses and the Board, looking at our assumptions, the advisors, giving the Board direction and helping them with their decisions. Putting it all together and saying, where we think the markets are going to go long-term. Right now is the best time to do it for them to proceed with their own strategies.

And now, I turn the call back over to Mr. Khail for closing remarks.

Before we conclude today's call, I would like to remind everyone that a replay of our fourth quarter conference call will be available later this evening. You can access the replay by visiting the Investor Relations section of our corporate website at www.manitowoc.com. Thank you everyone for joining us today and for your continuing interest in the Manitowoc Company. We look forward to speaking with you again during our first quarter conference call in April. Have a good evening.

That does conclude today’s conference. We thank you for your participation.