What changed in this filing

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Item 1. Financial Statements

2021-08-03 compared with 2021-05-04 · 210 added, 91 removed, 545 unchanged (36% of the section changed)

50 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

(In millions, except per share data)

9 unchanged sentences

Other, net 5.8 4.5 ( 0.4 ) 2.3

Income Before Income Taxes 8.5 19.7

Income tax provision 2.4 4.1

6.0 7.0 0.6 7.5

Income (Loss) Before Income Taxes ( 0.1 ) 1.7 8.4 21.4

Income tax provision (benefit) ( 2.4 ) ( 2.3 ) — 1.8

Net Income 2.3 4.0 8.4 19.6

10 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

(In millions)

14 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED

SIX MONTHS ENDED

(In millions)

27 unchanged sentences

Cash dividends paid ( 10.7 ) ( 10.6 )

Cash dividends paid to noncontrolling interest ( 0.2 ) ( 0.3 )

Financing fees paid ( 7.6 ) —

Purchase of treasury stock — ( 0.1 )

Net cash provided by (used for) financing activities ( 8.0 ) 53.1

Net cash provided by financing activities 37.5 34.4

Effect of exchange rate changes on cash ( 1.5 ) ( 3.2 )

10 unchanged sentences

(In millions)

Balance, March 31, 2020 $ 0.1 $ 0.1 $ ( 7.6 ) $ 313.2 $ 437.4 $ ( 118.4 ) $ ( 38.0 ) $ ( 76.4 ) $ 510.4 $ 32.3 $ 542.7

Stock-based compensation — — — 0.3 — — — — 0.3 — 0.3

Stock issued under stock compensation plans — — 0.4 ( 0.4 ) — — — — — — —

Net income — — — — 3.6 — — — 3.6 0.4 4.0

Cash dividends — — — — ( 5.3 ) — — — ( 5.3 ) ( 0.3 ) ( 5.6 )

Current period other comprehensive income — — — — — 8.3 7.9 — 16.2 — 16.2

Reclassification adjustment to net income — — — — — — 5.4 0.9 6.3 — 6.3

Foreign currency translation on noncontrolling interest — — — — — — — — — ( 0.2 ) ( 0.2 )

Balance, June 30, 2020 $ 0.1 $ 0.1 $ ( 7.2 ) $ 313.1 $ 435.7 $ ( 110.1 ) $ ( 24.7 ) $ ( 75.5 ) $ 531.5 $ 32.2 $ 563.7

Balance, March 31, 2021 $ 0.1 $ 0.1 $ ( 5.5 ) $ 315.6 $ 443.5 $ ( 82.4 ) $ ( 2.4 ) $ ( 86.9 ) $ 582.1 $ 33.7 $ 615.8

Stock-based compensation — — — 0.2 — — — — 0.2 — 0.2

Stock issued under stock compensation plans — — 0.3 ( 0.3 ) — — — — — — —

Net income — — — — 1.9 — — — 1.9 0.4 2.3

Cash dividends — — — — ( 5.4 ) — — — ( 5.4 ) ( 0.2 ) ( 5.6 )

Current period other comprehensive income — — — — — 12.0 5.0 — 17.0 — 17.0

Reclassification adjustment to net income — — — — — — ( 1.7 ) 1.1 ( 0.6 ) — ( 0.6 )

Foreign currency translation on noncontrolling interest — — — — — — — — — 0.9 0.9

Balance, June 30, 2021 $ 0.1 $ 0.1 $ ( 5.2 ) $ 315.5 $ 440.0 $ ( 70.4 ) $ 0.9 $ ( 85.8 ) $ 595.2 $ 34.8 $ 630.0

See notes to unaudited condensed consolidated financial statements.

HYSTER-YALE MATERIALS HANDLING, INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Accumulated Other Comprehensive Income (Loss)

Class A Common Stock Class B Common Stock Treasury Stock Capital in Excess of Par Value Retained Earnings Foreign Currency Translation Adjustment Deferred Gain (Loss) on Cash Flow Hedging Pension Adjustment Total Stockholders' Equity Noncontrolling Interests Total Equity

(In millions)

Balance, December 31, 2019 $ 0.1 $ 0.1 $ ( 15.9 ) $ 321.3 $ 427.4 $ ( 92.9 ) $ ( 18.5 ) $ ( 77.3 ) $ 544.3 $ 32.7 $ 577.0

4 unchanged sentences

Cash dividends — — — — ( 10.6 ) — — — ( 10.6 ) ( 0.3 ) ( 10.9 )

Current period other comprehensive income (loss) — — — — — ( 25.5 ) ( 22.5 ) — ( 48.0 ) — ( 48.0 )

Current period other comprehensive loss — — — — — ( 17.2 ) ( 14.6 ) — ( 31.8 ) — ( 31.8 )

Reclassification adjustment to net income — — — — — — 8.4 1.8 10.2 — 10.2

Foreign currency translation on noncontrolling interest — — — — — — — — — ( 0.9 ) ( 0.9 )

Balance, March 31, 2020 $ 0.1 $ 0.1 $ ( 7.6 ) $ 313.2 $ 437.4 $ ( 118.4 ) $ ( 38.0 ) $ ( 76.4 ) $ 510.4 $ 32.3 $ 542.7

Balance, June 30, 2020 $ 0.1 $ 0.1 $ ( 7.2 ) $ 313.1 $ 435.7 $ ( 110.1 ) $ ( 24.7 ) $ ( 75.5 ) $ 531.5 $ 32.2 $ 563.7

Balance, December 31, 2020 $ 0.1 $ 0.1 $ ( 6.0 ) $ 312.6 $ 443.2 $ ( 57.6 ) $ 12.5 $ ( 88.0 ) $ 616.9 $ 34.2 $ 651.1

6 unchanged sentences

Foreign currency translation on noncontrolling interest — — — — — — — — — ( 0.1 ) ( 0.1 )

Balance, March 31, 2021 $ 0.1 $ 0.1 $ ( 5.5 ) $ 315.6 $ 443.5 $ ( 82.4 ) $ ( 2.4 ) $ ( 86.9 ) $ 582.1 $ 33.7 $ 615.8

Balance, June 30, 2021 $ 0.1 $ 0.1 $ ( 5.2 ) $ 315.5 $ 440.0 $ ( 70.4 ) $ 0.9 $ ( 85.8 ) $ 595.2 $ 34.8 $ 630.0

See notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

(Tabular Amounts in Millions, Except Per Share and Percentage Data)

30 unchanged sentences

The cost containment actions associated with hiring, use of contract and temporary workers, travel and meetings, as well as other discretionary spending are continuing.

These measures are expected to remain in place until market and economic uncertainty dissipates and results improve further, which the Company expects to occur over the course of 2021.

These measures are expected to remain in place until market and economic uncertainty dissipates and results improve.

In addition, the Company adjusted production levels in 2020 at its manufacturing plants to align more closely with the reduced levels of demand, and worked closely with suppliers to help ensure current needs were met while also promoting continuity as the market improved.

However, despite these efforts, during the first quarter of 2021, the Company experienced further pandemic-related and other global supply chain constraints, component shortages, shipping container availability constraints and higher freight costs, as well as significant material cost inflation resulting from the accelerated pace of the market recovery, all of which have negatively impacted the Company.

However, despite these efforts, during the second quarter and first six months of 2021, the Company experienced further pandemic-related and other global supply chain constraints, component shortages, shipping container availability constraints and higher freight costs, as well as significant material cost inflation resulting from the accelerated pace of the market recovery, all of which have negatively impacted the Company.

These financial statements have been prepared in accordance with U.S.

generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all

of the information and footnotes required by U.S.

generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company as of March 31, 2021 and the results of its operations and changes in equity for the three months ended March 31, 2021 and 2020, and the results of its cash flows for the three months ended March 31, 2021 and 2020 have been included.

generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of

management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company as of June 30, 2021 and the results of its operations and changes in equity for the three and six months ended June 30, 2021 and 2020, and the results of its cash flows for the six months ended June 30, 2021 and 2020 have been included.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

The accompanying unaudited condensed consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information or notes required by U.S.

generally accepted accounting principles for complete financial statements.

Note 2— Recently Issued Accounting Standards

8 unchanged sentences

Standard Description Required Date of Adoption Effect on the financial statements or other significant matters

ASU 2020-04, Reference Rate Reform (Topic 848) The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

ASU 2020-04, Reference Rate Reform (Topic 848) The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

From the date of issuance through December 31, 2022 The Company is currently evaluating the guidance and the effect on its financial position, results of operations, cash flows and related disclosures.

14 unchanged sentences

The estimated discount amount is based upon historical experience and trend analysis for each lift truck model.

In addition to standard discounts, dealers can also request additional discounts that allow

them to offer price concessions to customers.

In addition to standard discounts, dealers can also request additional discounts that allow them to offer price concessions to customers.

From time to time, the Company offers special incentives to increase market share or dealer stock and offers certain customers volume rebates if a specified cumulative level of purchases is obtained.

2 unchanged sentences

Standalone selling prices are generally determined based on the prices charged to customers or using expected cost plus margin.

Impairment losses recognized on receivables or contract assets were not significant for the three months ended March 31, 2021 and 2020, respectively.

Impairment losses recognized on receivables or contract assets were not significant for the three and six months ended June 30, 2021 and 2020, respectively.

The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less.

4 unchanged sentences

THREE MONTHS ENDED

MARCH 31, 2021

JUNE 30, 2021

Lift truck business

6 unchanged sentences

THREE MONTHS ENDED

MARCH 31, 2020

JUNE 30, 2020

Lift truck business

5 unchanged sentences

Total Revenues $ 454.8 $ 120.1 $ 48.0 $ 64.2 $ 0.7 $ ( 33.4 ) $ 654.4

SIX MONTHS ENDED

JUNE 30, 2021

Lift truck business

Americas EMEA JAPIC Bolzoni Nuvera Elims Total

Dealer sales $ 438.7 $ 277.2 $ 109.2 $ — $ — $ — $ 825.1

Direct customer sales 218.2 3.4 — — — — 221.6

Aftermarket sales 223.1 53.7 15.9 — — — 292.7

Other 58.8 11.5 0.4 164.3 0.3 ( 76.9 ) 158.4

Total Revenues $ 938.8 $ 345.8 $ 125.5 $ 164.3 $ 0.3 $ ( 76.9 ) $ 1,497.8

SIX MONTHS ENDED

JUNE 30, 2020

Lift truck business

Americas EMEA JAPIC Bolzoni Nuvera Elims Total

Dealer sales $ 497.7 $ 217.1 $ 77.2 $ — $ — $ — $ 792.0

Direct customer sales 255.7 6.0 — — — — 261.7

Aftermarket sales 198.4 41.0 14.4 — — — 253.8

Other 53.7 8.1 1.0 152.1 2.1 ( 84.4 ) 132.6

Total Revenues $ 1,005.5 $ 272.2 $ 92.6 $ 152.1 $ 2.1 $ ( 84.4 ) $ 1,440.1

Dealer sales are recognized when the Company transfers control based on the shipping terms of the contract, which is generally when the truck is shipped from the manufacturing facility to the dealer.

8 unchanged sentences

In these transactions, the Company transfers control and recognizes revenue according to the shipping terms of the contract.

In the United States, Bolzoni also has revenue for sales of lift truck components to HYG plants.

Nuvera's revenues include development funding from third-party development agreements and the sale of fuel cell stacks and engines to third parties and to HYG.

In all revenue transactions, the Company receives cash equal to the invoice price and amount of consideration received

and the revenue recognized may vary with changes in marketing incentives.

In the United States, Bolzoni also has revenue for sales of lift truck components to Lift Truck plants.

Nuvera's revenues include development funding from third-party development agreements and the sale of fuel cell stacks and engines to third parties and to Lift Truck.

In all revenue transactions, the Company receives cash equal to the invoice price and amount of consideration received and the revenue recognized may vary with changes in marketing incentives.

Intercompany revenues between Bolzoni, Nuvera and the lift truck business have been eliminated.

7 unchanged sentences

Foreign currency effect ( 0.1 )

Balance, March 31, 2021 $ 69.9

Balance, June 30, 2021 $ 71.1

Note 4— Business Segments

11 unchanged sentences

Financial information for each reportable segment is presented in the following table:

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

Revenues from external customers

4 unchanged sentences

Bolzoni 84.8 64.2 164.3 152.1

Nuvera 0.3 0.7 0.3 2.1

Eliminations ( 38.7 ) ( 33.4 ) ( 76.9 ) ( 84.4 )

9 unchanged sentences

Total $ 116.4 $ 103.6 $ 234.8 $ 240.3

THREE MONTHS ENDED

Operating profit (loss)

19 unchanged sentences

federal, state and local, and foreign income taxes and is generally based on the application of a forecasted annual income tax rate applied to the current quarter's year-to-date pre-tax income or loss.

In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company's annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the Company's ability to use tax credits and net operating loss carryforwards and capital loss carryforwards, and available tax planning alternatives.

tax planning alternatives.

Discrete items, including the effect of changes in tax laws, tax rates and certain circumstances with respect to valuation allowances or the tax effect of other unusual or nonrecurring transactions or adjustments are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated annual effective income tax rate.

Additionally, the Company's interim effective income tax rate is computed and applied without regard to pre-tax losses where such losses are not expected to generate a current-year tax benefit.

The Company's reported income tax rate for the first quarter of 2021 is recorded under this interim guidance.

However, in limited situations in which an estimated annual effective income tax rate cannot be reliably forecasted, the actual effective tax rate computed from year-to-date earnings should be reported instead.

As a result of market conditions and uncertainty generated by the impacts of COVID-19 in the first quarter of 2020, the Company’s ability to reliably forecast earnings was limited.

Accordingly, the Company’s reported income tax rate for the first quarter of 2020 is the actual effective tax rate.

The Tax Cuts and Jobs Act ("Tax Reform Act") includes anti-deferral and anti-base erosion provisions, the global intangible low-taxed income (“GILTI”) provisions and the base-erosion and anti-abuse tax (“BEAT”) provisions.

10 unchanged sentences

A reconciliation of the consolidated federal statutory rate to the reported income tax rate is as follows:

THREE MONTHS ENDED

Income before income taxes $ 8.5 $ 19.7

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

Income (loss) before income taxes $ ( 0.1 ) $ 1.7 $ 8.4 $ 21.4

Statutory taxes (21%) $ — $ 0.4 $ 1.8 $ 4.5

1 unchanged sentence

Permanent adjustments:

Federal income tax credits ( 0.3 ) ( 3.5 ) ( 0.6 ) ( 4.1 )

rate differences ( 0.8 ) 0.4 ( 0.7 ) 0.1

Equity interest earnings ( 0.2 ) ( 1.0 ) ( 0.3 ) ( 1.3 )

State income taxes ( 0.3 ) ( 0.6 ) ( 0.3 ) —

Valuation allowance 0.4 2.9 0.5 3.8

Global intangible low-taxed income 0.5 2.6 0.9 2.7

Base-erosion and anti-abuse tax 0.2 4.7 0.2 5.3

Other — ( 1.3 ) 0.2 ( 1.2 )

Discrete items ( 2.1 ) ( 4.3 ) ( 2.2 ) ( 5.4 )

Income tax provision $ 2.4 $ 4.1

Reported income tax rate 28.2 % 20.8 %

Income tax provision (benefit) $ ( 2.4 ) $ ( 2.3 ) $ — $ 1.8

Reported income tax rate n.m.

- not meaningful

During the second quarter of 2021 and 2020, the Company recognized a discrete tax benefit of $ 3.3 million and $ 4.3 million, respectively, related to the expiration of the statute of limitations for uncertain tax positions related to acquisitions for which an offsetting pre-tax indemnity receivable was also recorded.

The expense for the release of the indemnity receivable was recorded in pre-tax earnings on the line “Other, net” in the unaudited condensed consolidated statements of operations.

During the second quarter of 2021, the Company recognized a discrete tax charge of $ 1.4 million for the tax impact of the favorable adjustment for social contribution taxes previously imposed on material purchases in Brazil.

See Note 12 for additional information.

Note 6— Reclassifications from OCI

1 unchanged sentence

Details about OCI Components Amount Reclassified from OCI Affected Line Item in the Statement Where Net Income Is Presented

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

Gain (loss) on cash flow hedges:

10 unchanged sentences

Total reclassifications for the period $ 0.6 $ ( 6.3 ) $ 0.1 $ ( 10.2 )

Note 7— Current and Long-Term Financing

On May 28, 2021, the Company entered into an agreement for a $ 225.0 million term loan (the “Term Loan”) which expires on May 28, 2028 (the "Maturity Date").

The Term Loan replaced the Company’s previous term loan facility, which was set to mature on May 30, 2023.

The Term Loan requires quarterly principal payments on the last day of each March, June, September and December commencing September 30, 2021 in an amount equal to $562,500 and the final principal repayment is due in May 2028.

The Term Loan Borrower may also be required to make mandatory prepayments, in certain circumstances, as provided in the Term Loan.

The obligations under the Term Loan are generally secured by a first priority lien on the present and future shares of capital stock, material real property, fixtures and general intangibles consisting of intellectual property and a second priority lien on working capital assets of the Company, which includes, but is not limited to cash and cash equivalents, accounts receivable and inventory.

Borrowings under the Term Loan bear interest at a floating rate, which can be a base rate or Eurodollar rate, as defined in the Term Loan, plus an applicable margin.

The applicable margin is 2.50 % for base rate loans and 3.50 % for Eurodollar loans.

In addition, the Term Loan includes a Eurodollar rate floor of 0.50 %.

In addition, the Term Loan includes restrictive covenants, which, among other things, limit additional borrowings and investments of the Company subject to certain thresholds, as provided in the Term Loan.

The Term Loan limits the payment of dividends and other restricted payments the Company, including its subsidiaries may make up to $50.0 million in any fiscal year.

Additional dividends may be paid if the consolidated total net leverage ratio, as defined in the Term Loan, does not exceed 2.50 to 1.00 at the time of the payment.

The Term Loan also contains a provision requiring a premium to be paid in the event of a repricing of the borrowings under the Term Loan, whether by amendment or entry into new loans, within the six-month period following entry into the Term Loan.

At the time of execution of the Term Loan, approximately $ 1.5 million of deferred financing fees relating to the old term loan were expensed, which was recorded on the line "Other, net" in the unaudited condensed consolidated statements of operations.

In addition, approximately $ 5.8 million of additional deferred financing fees were incurred in connection with the Term Loan.

On June 24, 2021, the Company entered into an amended and restated agreement for a $ 300.0 million secured floating-rate revolving credit facility (as amended, the "Facility").

The Facility consists of a domestic revolving credit facility in the initial amount of $210.0 million and a foreign revolving credit facility in the initial amount of $90.0 million.

The facility expires June 24, 2026.

The Facility replaced the Company's previous revolving credit facility, which was to expire April 28, 2022.

The Facility can be increased to up to $400.0 million over the term of the Facility in minimum increments of $10.0 million, subject to approval by the lenders.

The obligations under the Facility are generally secured by a first priority lien on working capital assets of the Company, which includes but is not limited to cash and cash equivalents, accounts receivable and inventory, and a second priority lien on the present and future shares of capital stock, fixtures and general intangibles consisting of intellectual property.

Borrowings under the Facility bear interest at a floating rate, which can be a base rate, LIBOR or EURIBOR, as defined in the Facility, plus an applicable margin.

The applicable margins are based on the total excess availability, as defined in the Facility, and range from 0.25 % to 0.75 % for U.S.

base rate loans and 1.25 % to 1.75 % for LIBOR, EURIBOR and foreign base rate loans.

For the period prior to June 30, 2021, the applicable margins under the Facility are 0.25 % for U.S.

base rate loans and 1.25 % for LIBOR, EURIBOR and foreign base rate loans.

In addition, the Facility requires the payment of a fee of 0.25 % per annum on the unused commitment based on the average daily outstanding balance during the preceding month.

The Facility includes restrictive covenants, which, among other things, limit additional borrowings and investments of the Company and its subsidiaries subject to certain thresholds, as provided in the Facility.

The Facility limits the payment of dividends and other restricted payments the Company, including its subsidiaries, may make unless certain total excess availability and/or fixed charge coverage ratio thresholds, each as set forth in the Facility, are satisfied.

The Facility also requires the Company, including its subsidiaries to achieve a minimum fixed charge coverage ratio in which total excess availability is less than the greater of 10% of the total borrowing base, as defined in the Facility, and $20.0 million.

The Company incurred approximately $ 1.8 million of additional deferred financing fees in connection with the Facility.

Note 8— Financial Instruments and Derivative Financial Instruments

3 unchanged sentences

This valuation methodology is Level 2 as defined in the fair value hierarchy.

At March 31, 2021, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 256.8 million and $ 258.0 million, respectively.

At June 30, 2021, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 318.5 million and $ 319.6 million, respectively.

At December 31, 2020, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 257.2 million and $ 260.5 million, respectively.

22 unchanged sentences

Foreign Currency Derivatives:

The Company held forward foreign currency exchange contracts with total notional amounts of $ 878.1 million at March 31, 2021, primarily denominated in euros, Japanese yen, U.S.

dollars, British pounds, Mexican pesos, Chinese renminbi, Swedish kroner and Australian dollars.

The Company held forward foreign currency exchange contracts with total notional amounts of $ 1.0 billion at June 30, 2021, primarily denominated in euros, Japanese yen, U.S.

dollars, Chinese renminbi, Mexican pesos, Swedish kroner, British pounds and Australian dollars.

The Company held forward foreign currency exchange contracts with total notional amounts of $ 840.5 million at December 31, 2020, primarily denominated in euros, U.S.

dollars, Japanese yen, British pounds, Chinese renminbi, Mexican pesos, Swedish kroner and Australian dollars.

The fair value of these contracts approximated a net liability of $ 3.0 million and a net asset of $ 23.5 million at March 31, 2021 and December 31, 2020, respectively.

The fair value of these contracts approximated a net asset of $ 2.3 million and $ 23.5 million at June 30, 2021 and December 31, 2020, respectively.

Forward foreign currency exchange contracts that qualify for hedge accounting are generally used to hedge transactions expected to occur within the next 36 months.

The mark-to-market effect of forward foreign currency exchange contracts that are considered effective as hedges has been included in OCI.

Based on market valuations at March 31, 2021, $ 0.9 million of the amount of net deferred loss included in OCI at March 31, 2021 is expected to be reclassified as income into the unaudited condensed consolidated statement of operations over the next twelve months, as the transactions occur.

Based on market valuations at June 30, 2021, $ 3.7 million of the amount of net deferred gain included in OCI at June 30, 2021 is expected to be reclassified as income into the unaudited condensed consolidated statements of operations over the next twelve months, as the transactions occur.

Interest Rate Derivatives:

The Company holds certain contracts that hedge interest payments on its $ 200.0 million term loan (the "Term Loan") borrowings.

The following table summarizes the notional amounts, related rates, excluding spreads, and remaining terms of interest rate swap agreements at March 31, 2021 and December 31, 2020:

The Company holds certain contracts that hedge interest payments on its $ 225.0 million Term Loan borrowings.

In the second quarter of 2021, the Company entered into new interest rate swaps with a six-year term and $ 180.0 million notional amount.

The previous interest rate swaps were amended and included in the new interest rate swaps.

The fair value of the previous interest rate swaps will be amortized over the remaining original term.

In addition, the Company holds certain contracts that hedge interest payments on Bolzoni's debt.

The following table summarizes the notional amounts, related rates, excluding spreads, and remaining terms of interest rate swap agreements at June 30, 2021 and December 31, 2020:

Notional Amount Average Fixed Rate

MARCH 31 DECEMBER 31 MARCH 31 DECEMBER 31

2021 2020 2021 2020 Term at March 31, 2021

$ 56.5 $ 56.5 1.94 % 1.94 % Extending to November 2022

JUNE 30 DECEMBER 31 JUNE 30 DECEMBER 31

2021 2020 2021 2020 Term at June 30, 2021

$ 180.0 $ — 1.68 % — % Extending to May 2027

The fair value of all interest rate swap agreements was a net liability of $ 4.2 million and $ 4.9 million at March 31, 2021 and December 31, 2020, respectively.

$ 16.0 $ 19.0 ( 0.14 ) % ( 0.10 ) % Extending to September 2025

$ — $ 56.5 — % 1.94 % Terminated May 2021

$ — $ 65.7 — % 2.20 % Terminated May 2021

The fair value of all interest rate swap agreements was a net liability of $ 5.5 million and $ 4.9 million at June 30, 2021 and December 31, 2020, respectively.

The mark-to-market effect of interest rate swap agreements that are considered effective as hedges has been included in OCI.

Based on market valuations at March 31, 2021, $ 1.7 million of the amount included in OCI as net deferred loss is expected to be reclassified as expense in the unaudited condensed consolidated statement of operations over the next twelve months, as cash flow payments are made in accordance with the interest rate swap agreements.

Based on market valuations at June 30, 2021, $ 2.7 million of the amount included in OCI as net deferred loss is expected to be reclassified as expense in the unaudited condensed consolidated statements of operations over the next twelve months, as cash flow payments are made in accordance with the interest rate swap agreements.

The following table summarizes the fair value of derivative instruments reflected on a gross basis by contract as recorded in the unaudited condensed consolidated balance sheets:

Asset Derivatives Liability Derivatives

Balance Sheet Location MARCH 31

Balance Sheet Location JUNE 30

2021 DECEMBER 31

2020 Balance Sheet Location MARCH 31

2020 Balance Sheet Location JUNE 30

2021 DECEMBER 31

18 unchanged sentences

The following table summarizes the offsetting of the fair value of derivative instruments on a gross basis by counterparty as recorded in the unaudited condensed consolidated balance sheets:

Derivative Assets as of March 31, 2021 Derivative Liabilities as of March 31, 2021

Derivative Assets as of June 30, 2021 Derivative Liabilities as of June 30, 2021

Gross Amounts of Recognized Assets Gross Amounts Offset Net Amounts Presented Net Amount Gross Amounts of Recognized Liabilities Gross Amounts Offset Net Amounts Presented Net Amount

11 unchanged sentences

Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion)

THREE MONTHS ENDED THREE MONTHS ENDED

MARCH 31 MARCH 31

THREE MONTHS ENDED SIX MONTHS ENDED THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

Derivatives Designated as Hedging Instruments 2021 2020 2021 2020 2021 2020 2021 2020

18 unchanged sentences

The components of pension (income) expense are set forth below:

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THREE MONTHS ENDED SIX MONTHS ENDED

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2021 2020 2021 2020

Interest cost $ 0.3 $ 0.5 $ 0.7 $ 1.0

2 unchanged sentences

Total $ ( 0.3 ) $ ( 0.1 ) $ ( 0.6 ) $ ( 0.3 )

Service cost $ 0.1 $ — $ 0.1 $ —

Interest cost 0.7 0.7 1.3 1.5

12 unchanged sentences

Inventories are stated at the lower of cost or market for last-in, first-out (“LIFO”) inventory or lower of cost or net realizable value for first-in, first-out (“FIFO”) inventory.

At March 31, 2021 and December 31, 2020, 47 % and 42 %, respectively, of total inventories were determined using the LIFO method, which consists primarily of manufactured inventories, including service parts, for the lift truck business in the United States.

At June 30, 2021 and December 31, 2020, 48 % and 42 %, respectively, of total inventories were determined using the LIFO method, which consists primarily of manufactured inventories, including service parts, for the lift truck business in the United States.

The FIFO method is used with respect to all other inventories.

20 unchanged sentences

Foreign currency effect ( 0.5 )

Balance at March 31, 2021 $ 60.9

Balance at June 30, 2021 $ 68.7

Note 12— Contingencies

4 unchanged sentences

Although the ultimate disposition of these proceedings is not presently determinable, management believes, after consultation with its legal counsel, that the likelihood is remote that costs will be incurred materially in excess of accruals already recognized.

The Company previously filed legal actions in Brazil to recover certain social integration and social contribution taxes paid over gross sales, including ICMS receipts, which is a form of state value added tax.

During 2019, the Company’s Brazil legal advisors notified the Company that they received judicial notification that the Superior Judicial Court rendered a favorable decision on the case granting the Company the right to recover, through offset of federal tax liabilities, amounts of overpayments collected by the government from 1999 to date.

The Company previously filed lawsuits in Brazil to recover certain social integration and social contribution taxes paid on gross sales, including the ICMS, which is a form of state value added tax.

During the course of the lawsuit, many other taxpayers filed lawsuits with the same objective.

Due to the increasing number of lawsuits filed, the Federal Supreme Court ("STF") declared that all ongoing legal cases should have their decision suspended until the STF decides on the matter, a decision that was expected to apply to all cases on this topic.

In 2019, the Company's legal advisors in Brazil notified the Company that they received judicial notification that the STF had issued a favorable decision in the case granting the Company the right to recover, by offsetting federal tax liabilities, amounts of overpayments collected by the government from 1999 to the present date.

The judicial court decision is final and not subject to appeals.

The current estimate of the refund calculated on a gross basis is approximately 100 million Brazilian reais, or approximately $17 million as of March 31, 2021.

The current estimate of the refund calculated on a gross basis is approximately 110 million Brazilian reais, or approximately $22 million as of June 30, 2021.

Despite the favorable decision of the STF, the Brazilian tax authorities sought clarification in the same main lawsuit on certain issues, including the value of these credits (i.e., the gross rate or the net credit value), and certain other issues that could affect the Brazilian taxpayers' rights with respect to these credits, all of which could materially impact the realization of the credits.

During the second quarter of 2021, the STF ruled in favor of taxpayers that the refund should be calculated on a gross basis.

The amount and ultimate timing of realization of these recoveries is dependent upon administrative approvals, generation of federal tax liabilities in Brazil eligible for offset and potential impacts of future legislative actions within Brazil, all of which are uncertain.

Based upon a probability weighted analysis, including a review of historical earnings and trends, forecasted earnings, the relevant expiration of carryforwards and the potential of selling the credits at a significant discount, the Company determined the net realizable value of the credits is approximately 8 million Brazilian reais, or $ 1.4 million as of March 31, 2021.

Future legislative changes in Brazil, changes in the Company’s forecasted earnings or resolution of other uncertainties could impact the estimate of the amount realizable for these tax credits.

The Brazilian tax authorities have sought clarification before the Brazilian Supreme Court of certain matters, including the amount of these credits (i.e., the gross rate or net credit amount), and certain other matters that could affect the rights of Brazilian taxpayers regarding these credits, all of which could materially impact the realization of the credits.

Based on the opinions of tax and legal advisors, the Company has not accrued any amounts related to potential future litigation regarding these credits.

The Company is in the process of negotiating the sale of these credits at a discount and has revised the net realizable value of the credits to approximately 29 million Brazilian reais, or $ 5.8 million as of June 30, 2021.

In addition, the Company has generated additional tax credits since the favorable decision in 2019 of approximately 12 million Brazilian reais, or approximately $ 2.4 million.

The Company recorded approximately $ 6.3 million of income related to the revised estimate of net realizable value of these credits in the second quarter of 2021 in “Cost of Sales” in the unaudited condensed consolidated statements of operations.

Note 13— Guarantees

1 unchanged sentence

Terms of the third-party financing arrangements for which the Company is providing recourse or repurchase obligations generally range from one to five years .

Total amounts subject to recourse or repurchase obligations at March 31, 2021 and December 31, 2020 were $ 120.6 million and $ 119.7 million, respectively.

As of March 31, 2021, losses anticipated under the terms of the recourse or

repurchase obligations were not significant and reserves have been provided for such losses based on historical experience in the accompanying unaudited condensed consolidated financial statements.

Total amounts subject to recourse or repurchase obligations at June 30, 2021 and December 31, 2020 were $ 121.7 million and $ 119.7 million, respectively.

As of June 30, 2021, losses anticipated under the terms of the recourse or repurchase obligations were not significant and reserves have been provided for such losses based on historical experience in the accompanying unaudited condensed consolidated financial statements.

The Company generally retains a security interest in the related assets financed such that, in the event the Company would become obligated under the terms of the recourse or repurchase obligations, the Company would take title to the assets financed.

The fair value of collateral held at March 31, 2021 was approximately $ 184.2 million based on Company estimates.

The fair value of collateral held at June 30, 2021 was approximately $ 185.4 million based on Company estimates.

The Company estimates the fair value of the collateral using information regarding the original sales price, the current age of the equipment and general market conditions that influence the value of both new and used lift trucks.

The Company also regularly monitors the external credit ratings of the entities for which it has provided recourse or repurchase obligations.

As of March 31, 2021, the Company did not believe there was a significant risk of non-payment or non-performance of the obligations by these entities;

As of June 30, 2021, the Company did not believe there was a significant risk of non-payment or non-performance of the obligations by these entities;

however, there can be no assurance that the risk may not increase in the future.

In addition, the Company has an agreement with WF to limit its exposure to losses at certain eligible dealers.

Under this agreement, losses related to $ 22.3 million of recourse or repurchase obligations for these certain eligible dealers are limited to 7.5 % of their original loan balance, or $ 12.5 million as of March 31, 2021.

The $ 22.3 million is included in the $ 120.6 million of total amounts subject to recourse or repurchase obligations at March 31, 2021.

The $ 22.3 million is included in the $ 121.7 million of total amounts subject to recourse or repurchase obligations at June 30, 2021.

Generally, the Company sells lift trucks through its independent dealer network or directly to customers.

1 unchanged sentence

HYGFS provides debt and lease financing to both dealers and customers.

On occasion, the credit quality of a customer or credit concentration issues within WF may require the Company to provide recourse or repurchase obligations of the lift trucks purchased by customers and financed through HYGFS.

At March 31, 2021, approximately $ 97.5 million of the Company's total recourse or repurchase obligations of $ 120.6 million related to transactions with HYGFS.

On occasion, the credit quality of a customer or credit concentration issues within WF

may require the Company to provide recourse or repurchase obligations of the lift trucks purchased by customers and financed through HYGFS.

At June 30, 2021, approximately $ 95.7 million of the Company's total recourse or repurchase obligations of $ 121.7 million related to transactions with HYGFS.

In connection with the joint venture agreement, the Company also provides a guarantee to WF for 20 % of HYGFS’ debt with WF, such that the Company would become liable under the terms of HYGFS’ debt agreements with WF in the case of default by HYGFS.

At March 31, 2021, loans from WF to HYGFS totaled $ 1.1 billion.

At June 30, 2021, loans from WF to HYGFS totaled $ 1.1 billion.

Although the Company’s contractual guarantee was $ 225.6 million, the loans by WF to HYGFS are secured by HYGFS’ customer receivables, of which the Company guarantees $ 95.7 million.

1 unchanged sentence

HYGFS has not defaulted under the terms of this debt financing in the past, and although there can be no assurances, the Company is not aware of any circumstances that would cause HYGFS to default in future periods.

The following table includes the exposure amounts related to the Company's guarantees at March 31, 2021:

The following table includes the exposure amounts related to the Company's guarantees at June 30, 2021:

Total recourse or repurchase obligations $ 95.7 $ 121.7

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The Company's equity investments in unconsolidated affiliates recorded on the unaudited condensed consolidated balance sheets are as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

HYGFS $ 20.0 $ 21.4

1 unchanged sentence

Dividends received from unconsolidated affiliates are summarized below:

THREE MONTHS ENDED

SIX MONTHS ENDED

HYGFS $ 5.1 $ 6.4

Summarized financial information for HYGFS and SN is as follows:

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

Revenues $ 106.7 $ 95.2 $ 209.9 $ 197.0

3 unchanged sentences

The Company has an equity investment in a third party valued using a quoted market price in an active market, or Level 1 in the fair value hierarchy.

The Company's investment as of March 31, 2021 and December 31, 2020 was $ 3.0 million and $ 2.1 million, respectively.

The Company's investment as of June 30, 2021 and December 31, 2020 was $ 2.0 million and $ 2.1 million, respectively.

Any gain or loss on the investment is included on the line "Other" in the "Other (income) expense" section of the unaudited condensed consolidated statements of operations as follows:

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2021 2020 2021 2020

Gain (loss) on equity investment $ 1.1 $ ( 0.1 ) $ — $ ( 1.2 )

2 unchanged sentences

The gain on the sale of the investment is included on the line "Other, net" in the "Other (income) expense" section of the unaudited condensed consolidated statements of operations.

The Company's investment was $ 0.8 million and $ 11.9 million as of March 31, 2021 and December 31, 2020, respectively.

The Company's investment was $ 0.8 million and $ 11.9 million as of June 30, 2021 and December 31, 2020, respectively.

Note 15— Restructuring

3 unchanged sentences

These charges primarily related to severance, which was recorded on the line "Selling, general and administrative expenses" in the unaudited condensed consolidated statements of operations.

During the three months ended March 31, 2021, the Company recorded a benefit of $0.4 million as a result of changes in estimates of severance accruals.

In addition, approximately $0.6 million of severance payments were paid in the three months ended March 31, 2021.

During the second quarter of 2021, the Company recorded a provision of $ 0.1 million for additional severance.

During the first six months of 2021, the Company recorded a benefit of $ 0.3 million as a result of changes in estimates of severance accruals.

In addition, approximately $ 0.7 million and $ 1.3 million of severance payments were paid in the three and six-months ended June 30, 2021, respectively.

The remaining severance payments are expected to be paid in 2021.

In addition to the restructuring charge recorded during 2020, the Company anticipates it will incur subsequent charges, which were not eligible for accrual at March 31, 2021, of approximately $ 1.1 million for additional costs related to the restructuring, which the Company expects to incur during 2021.

In addition to the restructuring charge recorded during 2020, the Company anticipates it will incur subsequent charges, which were not eligible for accrual at June 30, 2021, of approximately $ 0.8 million for additional costs related to the restructuring, which the Company expects to incur during 2021.

Following is the detail of the cash charges incurred by reporting segment:

Total charges incurred Total charges incurred through December 31, 2020 Total benefits recorded in the three months ended March 31, 2021

Total charges incurred Total charges incurred through December 31, 2020 Total benefits recorded in the six months ended June 30, 2021

Americas $ 0.8 $ 1.0 $ ( 0.2 )

5 unchanged sentences

Balance at January 1, 2021 $ 1.0 $ 2.0 $ 1.4 $ 4.4

Provision 0.1 — — 0.1

Changes in estimate ( 0.3 ) — ( 0.1 ) ( 0.4 )

Payments ( 0.7 ) ( 0.5 ) ( 0.1 ) ( 1.3 )

Balance at March 31, 2021 $ 0.1 $ 2.0 $ 1.3 $ 3.4

Balance at June 30, 2021 $ 0.1 $ 1.5 $ 1.2 $ 2.8

Note 16— Other

On May 26, 2021, the Company signed an Equity Transfer Agreement (the “ETA”) with Y-C Hongkong Holding Co., Limited (“HK Holding Co”), pursuant to which the Company will purchase 15% of the equity interest of Hyster-Yale Maximal from HK Holding Co for an aggregate purchase price of $25.2 million.

After the closing under the ETA, which is anticipated to occur on June 1, 2022 (the “Closing Date"), 10% and 90% of the equity interest of Hyster-Yale Maximal will be owned by HK Holding Co and the Company, respectively.

Under the terms of the ETA, on the Closing Date and prior to each of June 1, 2023 and June 1, 2024, the Company will pay $8.4 million to HK Holding Co.

The closing of the transaction is subject to customary closing conditions and required regulatory approvals.

There is no guarantee the closing will occur either as provided in the ETA or at all.

After the closing, the Company will have an option to purchase HK Holding Co's remaining interest in Hyster-Yale Maximal at any time prior to June 8, 2056 for $16.8 million.

If this option is exercised, the Company will own 100% of the equity interest of Hyster-Yale Maximal.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements