What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-27 compared with 2022-02-28 · 178 added, 238 removed, 322 unchanged (56% of the section changed)

8 unchanged sentences

The Company, through HYG, designs, engineers, manufactures, sells and services a comprehensive line of lift trucks, attachments and aftermarket parts marketed globally, primarily under the Hyster ® and Yale ® brand names, mainly to independent Hyster ® and Yale ® retail dealerships.

The materials handling business historically has been cyclical because the rate of orders for lift trucks fluctuates depending on the general level of economic activity in the various industries and countries its customers serve.

The materials handling business historically has been cyclical because the order rate for lift trucks fluctuates depending on the economic activity level in the various industries and countries its customers serve.

Lift trucks and component parts are manufactured in the United States, China, Northern Ireland, Mexico, the Netherlands, Brazil, the Philippines, Italy, Japan and Vietnam.

The Company owns a 75% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

("Hyster-Yale Maximal").

Hyster-Yale Maximal is a Chinese manufacturer of low-intensity and standard lift trucks and specialized material handling equipment.

As of December 31, 2022, the Company owned a 90% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

("Hyster-Yale Maximal"), a Chinese manufacturer of low-intensity and standard lift trucks and specialized material handling equipment.

Hyster-Yale Maximal also designs and produces specialized products in the port equipment and rough terrain forklift markets.

During 2021, the Company signed an Equity Transfer Agreement with Y-C Hongkong Holding Co., Limited (“HK Holding Co”), pursuant to which the Company expects to purchase 15% of the equity interest of Hyster-Yale Maximal from HK Holding Co for an aggregate purchase price of $25.2 million in June 2022, which will be paid in annual installments of $8.4 million beginning in June 2022 through June 2024.

Subsequently, 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.

During 2021, the Company signed an Equity Transfer Agreement with Y-C Hongkong Holding Co., Limited (“HK Holding Co”).

In June 2022, the Company purchased 15% of the equity interest of Hyster-Yale Maximal from HK Holding Co for an aggregate purchase price of $25.2 million, which will be paid in annual installments of $8.4 million beginning June 2022 through June 2024.

The Company has an option to purchase HK Holding Co's 10% 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.

1 unchanged sentence

Bolzoni is a leading worldwide producer and distributor of attachments, forks and lift tables marketed under the Bolzoni ® , Auramo ® and Meyer ® brand names.

Bolzoni also produces components for lift truck manufacturers.

Bolzoni products are manufactured in the United States, Italy, China, Germany and Finland.

9 unchanged sentences

The Company’s objective is to provide a wide-range of solutions to its customers to generate profitable growth through increasing volumes, which in turn are expected to generate market share gains and drive improved margins.

The Company plans to accomplish these objectives by implementing its core strategic initiatives to:

The Company plans to accomplish this by implementing its core strategic initiatives to:

provide the lowest cost of ownership, while enhancing productivity for customers;

3 unchanged sentences

be the leader in the attachments business and be a leader in fuel cells and their applications.

During 2020, broad measures taken by governments, businesses and others across the globe to limit the spread of novel coronavirus ("COVID-19") adversely affected the Company.

The resulting significant decline in economic activity also reduced the demand for the Company's products and limited the availability of components from certain suppliers.

Production was significantly reduced or suspended at the Company's Chinese and European facilities for certain periods during the first and second quarters of 2020.

The Company also initiated several cost reduction measures designed to ease liquidity pressure.

These cost containment actions included spending and travel restrictions, significant reductions in temporary personnel, furloughs, suspension of incentive compensation and profit sharing, benefit reductions and salary reductions.

Effective January 1, 2021, the Company reinstated pre-pandemic salaries, benefits and incentive compensation programs.

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.

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 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.

See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2021 Annual Report on Form 10-K for discussion of financial condition and results of operations for 2021 compared with 2020.

14 unchanged sentences

Goodwill is tested for impairment annually as of May 1, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

The Company completed the annual testing of impairment of goodwill as of May 1, 2021 and an interim impairment test as of December 31, 2021 at the reporting unit level for the related goodwill.

The Company completed the annual testing of impairment of goodwill as of May 1, 2022 at the reporting unit level for the related goodwill.

The Company uses either a qualitative or quantitative analysis to determine whether fair value exceeds carrying value.

An estimate of the fair value of the reporting unit is determined through a combination of comparable market values for similar businesses and discounted cash flows.

These estimates can change significantly based on such factors as the reporting unit's financial performance, economic conditions, interest rates, growth rates, pricing, changes in business strategies

and competition.

Based on the annual testing, the fair value of each reporting unit was in excess of its carrying value and no impairment existed.

As of December 31, 2022, Bolzoni had $48.6 million of goodwill.

Based on the most recent interim impairment test, Bolzoni's fair value of equity exceeded the carrying value by $79.9 million or approximately 47%.

During 2021, the Company continued to experience 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.

4 unchanged sentences

No impairment of goodwill for the Bolzoni reporting unit was identified.

As of December 31, 2021, Bolzoni had $53.8 million of goodwill.

Based on the most recent interim impairment test, Bolzoni's fair value of equity exceeded the carrying value by $37.9 million or approximately 21%.

The Company has intangible assets, including customer and contractual relationships, patents and technology, and trademarks.

4 unchanged sentences

An impairment loss generally would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset.

In addition to the Company's annual testing of impairment, the Company completed an interim impairment test as of December 31, 2021.

Of the $42.7 million of net intangible assets, $16.0 million relates to indefinite-lived trademarks, related to the acquisition of Bolzoni.

3 unchanged sentences

If the resulting discounted cash flows are less than book value of the indefinite-lived intangible asset, an impairment exists and the asset would be adjusted to fair value.

Based on impairment testing as of May 1, 2021 and December 31, 2021, no impairment was identified.

Based on impairment testing as of May 1, 2022, no impairment was identified.

The Company periodically evaluates long-lived assets, including intangible assets with finite lives, for impairment when changes in circumstances or the occurrence of certain events indicate the carrying amount of an asset may not be recoverable.

4 unchanged sentences

The determination of asset groups and the underlying cash flows requires the use of significant judgment.

The continued high level of disruption to the Company’s manufacturing and logistics operations for 2021 and into 2022 and the effects of the COVID-19 pandemic, including border closures, halted Nuvera's progress on certain research and development agreements that were entered into prior to the start of the pandemic.

The continued high level of disruption to the Company’s manufacturing and logistics operations for 2021 and the effects of the COVID-19 pandemic, including border closures, halted Nuvera's progress on certain research and development agreements that were entered into prior to the start of the pandemic.

In anticipation of fulfilling these agreements, Nuvera made significant investments in manufacturing and equipment expansion, as well as increased inventory levels.

As a result, it was determined in connection with the preparation of the financial statements that the carrying value of the Nuvera fixed assets exceeded the undiscounted cash flows from the assets and the fair value of Nuvera's fixed assets exceeded the carrying value by $10.0 million.

Based on the Company’s analysis, all other remaining long-lived assets with finite lives were not impaired as of December 31, 2021.

As a result, it was determined in connection with the preparation of the financial statements for 2021 that the carrying value of the Nuvera fixed assets exceeded the undiscounted cash flows from the assets and the carrying value of Nuvera's fixed assets exceeded the fair value by $10.0 million.

Factors which could result in future impairment charges include, but are not limited to, changes in worldwide economic conditions, changes in competitive conditions and customer preferences.

5 unchanged sentences

The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which it expects the temporary differences to be recovered or paid.

generally accepted accounting principles for income taxes requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not (defined as a

likelihood of more than 50%) such assets will not be realized.

The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company's financial statements or tax returns and future profitability.

16 unchanged sentences

If actual product failure rates, labor costs or replacement component costs differ from the Company's estimates, which are based on historical failure rates and consideration of known trends, revisions to the estimate of the cost to correct product failures would be required.

If the estimate of the cost to correct product failures were to increase by one percent over 2021 levels, the reserves for product warranties would increase and additional expense of $3.2 million would be incurred.

The Company's past results of operations have not been materially affected by a change in the estimate of product warranties and although there can be no assurances, the Company is not aware of any circumstances that would be reasonably likely to materially change the estimates in the future.

If the estimate of the cost to correct product failures were to increase by one percent over 2022 levels, the product warranties reserves would increase and reduce operating profit by approximately $3.1 million.

The Company's past results of operations have not been materially affected by a change in

the estimate of product warranties and although there can be no assurances, the Company is not aware of any circumstances that would be reasonably likely to materially change the estimates in the future.

Retirement benefit plans :

13 unchanged sentences

The following illustrates the sensitivity of the net periodic benefit cost and projected benefit obligation to a 1% change in the discount rate or return on plan assets (in millions):

Assumption Change Increase (decrease)

2022 net pension expense Increase (decrease)

Assumption Change Increase (decrease) 2023 net pension expense Increase (decrease)

2022 projected benefit obligation

7 unchanged sentences

The following table identifies the components of change for 2022 compared with 2021 by segment:

Revenues Gross Profit Operating Profit Net Income Attributable to Stockholders

Revenues Gross Profit Operating Profit (Loss) Net Income (Loss) Attributable to Stockholders

2021 $ 3,075.7 $ 363.4 $ (152.3) $ (173.0)

22 unchanged sentences

Bolzoni 355.7 347.8 2.3 %

Nuvera 0.7 3.9 n.m.

Nuvera 3.4 0.7 385.7 %

Eliminations (170.4) (170.2) n.m.

$ 3,548.3 $ 3,075.7 15.4 %

Favorable / (Unfavorable) % Change

2021 2020 2021 vs.

Gross profit (loss)

17 unchanged sentences

Americas $ 46.8 $ (19.7) 337.6 %

EMEA 0.3 3.1 (90.3) %

EMEA (46.6) 0.3 n.m.

JAPIC (10.6) (67.5) 84.3 %

4 unchanged sentences

$ (39.1) $ (152.3) 74.3 %

Favorable / (Unfavorable) % Change

2022 2021 2022 vs.

Interest expense 28.4 15.5 (83.2) %

Other income (5.1) (12.9) (60.5) %

Income before income taxes $ (154.9) $ 42.2 (467.1) %

Income (loss) before income taxes (62.4) (154.9) 59.7 %

Net income (loss) attributable to stockholders $ (74.1) $ (173.0) 57.2 %

Americas $ (57.6) $ 71.6 (180.4) %

EMEA 1.0 5.6 (82.1) %

JAPIC (55.3) (14.3) (286.7) %

Lift truck business (111.9) 62.9 (277.9) %

Bolzoni (0.2) 0.2 (200.0) %

Nuvera (59.4) (25.6) (132.0) %

Eliminations (1.5) (0.4) n.m.

$ (173.0) $ 37.1 (566.3) %

Diluted earnings per share $ (10.29) $ 2.21 (565.6) %

Diluted earnings (loss) per share $ (4.38) $ (10.29) 57.4 %

Reported income tax rate (14.7) % (18.3) %

1 unchanged sentence

Following is the detail of the Company's unit shipments, bookings and backlog of unfilled orders placed with its manufacturing and assembly operations for new lift trucks, reflected in thousands of units.

Unit backlog as of December 31, 2022 and September 30, 2022, excludes 2,600 suspended orders, for which the Company has no plans to fulfill.

As of December 31, 2022, substantially all of the Company's backlog is expected to be sold within the next twelve months.

7 unchanged sentences

The dollar value of bookings and backlog is calculated using the current unit bookings and backlog and the forecasted average sales price per unit.

Sales value of the Company's backlog as of December 31, 2022 and September 30, 2022, excludes the sales value of 2,600 suspended orders, for which the Company has no plans to fulfill.

YEAR ENDED NINE MONTHS ENDED YEAR ENDED

4 unchanged sentences

The following table identifies the components of change in revenues for 2022 compared with 2021:

Total Americas EMEA JAPIC

2021 $ 3,075.7 $ 1,984.6 $ 678.9 $ 233.9

Increase (decrease) in 2022 from:

Bolzoni revenues 64.1

Unit price 300.3 234.0 56.4 9.9

Unit volume and product mix 132.5 70.4 51.6 10.5

Parts 74.7 66.2 9.0 (0.5)

Other 51.4 45.7 1.5 4.2

Foreign currency (96.7) 4.5 (93.2) (8.0)

Unit price 27.7

Eliminations (0.2) — — —

Bolzoni revenues 7.9 — — —

Nuvera revenues 2.7 — — —

2022 $ 3,548.3 $ 2,405.4 $ 704.2 $ 250.0

Revenues increased 9.4% to $3,075.7 million in 2021 from $2,812.1 million in 2020.

The increase was primarily due to higher unit and parts volume in the lift truck business and Bolzoni.

In addition, revenues increased from favorable currency movements from the translation of sales into U.S.

dollars, mainly in EMEA, as well as improved fleet service revenue and pricing in the Americas.

Revenues in 2020 were significantly impacted by the COVID-19 pandemic and the resulting significant decline in economic activity.

America's revenues increased in 2021 compared with 2020, primarily from favorable aftermarket sales, including parts sales, driven by an increase in customer demand, as well as the favorable impact of price increases and higher fleet service revenue.

EMEA's revenues increased mainly due to favorable foreign currency movements of $34.0 million from the translation of sales into U.S.

dollars and higher unit and parts volumes resulting from increased customer demand.

JAPIC's revenues increased primarily as a result of improved unit volumes and favorable foreign currency movements of $10.8 million, partially offset by a shift in sales to lower-priced lift trucks.

Bolzoni's revenues increased mainly due to higher unit volume resulting from increased customer demand.

Nuvera's revenues decreased primarily due to lower shipments of fuel cells and reduced third-party fuel cell development services in 2021 compared with 2020.

Revenues increased 15.4% to $3,548.3 in 2022 from $3,075.7 million in 2021.

The increase was primarily due to improved pricing, higher unit and parts volume, a shift in sales to higher-priced lift trucks and favorable aftermarket sales in the Lift Truck business, partially offset by unfavorable currency movements from the translation of sales into U.S.

The following table identifies the components of change in operating profit (loss) for 2022 compared with 2021:

Operating Profit (Loss)

Total Americas EMEA JAPIC

2021 $ (152.3) $ (19.7) $ 0.3 $ (67.5)

Increase (decrease) in 2022 from:

Goodwill impairment charge 55.6 — — 55.6

(96.7) (19.7) 0.3 (11.9)

Lift truck gross profit and eliminations 41.8 81.6 (41.9) 1.4

2 unchanged sentences

Bolzoni operations 8.0 — — —

Goodwill impairment charge (55.6)

2022 $ (39.1) $ 46.8 $ (46.6) $ (10.6)

The Company recognized an operating loss of $152.3 million in 2021 compared with operating profit of $49.9 million in 2020.

The change in operating profit (loss) was mainly due to lower gross profit, a non-cash impairment charge for goodwill of $55.6 million in JAPIC, unfavorable selling, general and administrative expenses in the lift truck business and a larger operating loss at Nuvera mainly from $26.1 million of non-cash inventory and property, plant and equipment adjustments.

The decrease in gross profit was primarily due to significant material and freight cost inflation due to supply chain and logistics constraints of $125.1 million, mainly in the Americas.

The increase in selling, general and administrative expenses in the lift truck business was primarily due to the reinstatement of pre-pandemic employee-related salaries and benefits.

See Notes 10 and 11 for further discussion of Nuvera's adjustments.

Americas recognized an operating loss of $19.7 million in 2021 compared with an operating profit of $102.1 million in 2020 due to a decrease in gross profit and an increase in selling, general and administrative expenses.

Gross profit declined primarily due to material cost inflation and increased freight costs of $107.5 million, net of price increases of $22.1 million, a shift in sales mix to lower-margin lift trucks and higher manufacturing costs resulting from inefficiencies associated with component shortages.

The decrease in gross profit was partly offset by the realization of higher margins on parts sales and a $8.5 million favorable adjustment for social contribution taxes previously imposed on material purchases in Brazil.

See Note 16 for further discussion of the adjustment in Brazil.

Selling, general and administrative expenses increased mainly as result of the reinstatement of pre-pandemic salaries and benefits that were suspended in 2020.

EMEA's operating profit declined from $3.1 million in 2020 to $0.3 million in 2021.

The decrease in operating profit was primarily the result of higher selling, general and administrative expenses partially offset by improved gross profit.

Selling, general and administrative expenses increased primarily as pre-pandemic salaries and benefits were reinstated, including $1.7 million of incentive compensation.

Gross profit increased from favorable foreign currency movements of $6.9 million, improved parts and unit volume and improved pricing, partially offset by material cost inflation and higher manufacturing costs resulting from inefficiencies associated with component shortages and the absence of $7.8 million of government subsidies received in 2020.

JAPIC's operating loss increased to $67.5 million in 2021 from $19.6 million in 2020 primarily due to a non-cash impairment charge for goodwill of $55.6 million.

The goodwill impairment was partially offset by lower selling, general and administrative expenses as a result of cost cutting-initiatives and the absence of prior year restructuring costs.

Bolzoni recognized an operating loss of $1.8 million is 2021 compared with operating profit of $1.0 million in 2020.

Volume improvements from higher customer demand were completely offset by higher material and freight costs as well as the reinstatement of pre-pandemic salaries and benefits that were suspended in 2020, including the absence of $5.2 million of government subsidies received in 2020.

Nuvera's operating loss increased to $62.3 million in 2021 compared with $36.1 million in 2020 as a result of non-cash charges of $26.1 million recorded in 2021 for Nuvera's inventory and property, plant and equipment.

See Note 10 and 11 for further discussion of these charges at Nuvera.

The Company recognized a net loss attributable to stockholders of $173.0 million in 2021 compared with net income attributable to stockholders of $37.1 million in 2020.

The decrease was primarily the result of lower operating profit and a valuation allowance of $58.6 million provided against deferred tax assets.

These items were partially offset by the non-controlling interest share of the goodwill impairment charge at JAPIC of $11.7 million, a $4.6 million gain related to the sale of the Company's preferred shares of OneH2 in 2021 and higher equity earnings in unconsolidated subsidiaries.

See "Financial

Review - Income Taxes" and Note 6 to the consolidated financial statements in this Annual Report on Form 10-K for further discussion of income taxes.

The income tax provision includes U.S.

federal, state and local, and non-U.S.

income taxes.

In determining the effective income tax rate, the Company analyzes various factors, including annual earnings or losses, the laws of taxing jurisdictions in which the earnings or losses were generated, the impact of state and local income taxes, the ability to use tax credits, net operating loss carryforwards and carrybacks, capital loss carryforwards, and available tax planning alternatives.

Discrete items, including the effect of changes in tax laws, tax rates, and certain items with respect to valuation allowances or other unusual or non-recurring tax adjustments are reflected in the interim period in which they occur.

Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards on a taxing jurisdiction basis.

The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which it expects the temporary differences to be recovered or paid.

The authoritative guidance for income taxes requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not (defined as a likelihood of more than 50%) such assets will not be realized.

The Company's accounting for deferred tax consequences represents its best estimate of those future events.

Changes in the Company's estimates, due to unanticipated events or otherwise, could have a material effect on its financial condition and results of operations.

The Company continually evaluates its deferred tax assets to determine if a valuation allowance is required or no longer needed.

During 2021, the Company recognized a tax charge of $24.8 million, for the establishment of a valuation allowance against the beginning of the year balance of the Company’s U.S.

and United Kingdom deferred tax assets, excluding the portion of assets available to be carried back to the prior tax year.

Based upon a review of the Company’s recent operations, including cumulative U.S.

pretax losses, lack of available tax planning strategies and declining forecasts due to supply and logistics constraints, the evidence available no longer supported a more likely than not standard for realization of these deferred tax assets.

Although the Company projects earnings over the longer term for these operations, due to the cumulative losses such longer-term forecasts are not sufficient evidence to support the future utilization of deferred tax assets.

Additionally, $32.5 million of valuation allowance expense, related to these operations, was provided against deferred tax assets generated in the current year.

A reconciliation of the consolidated U.S.

federal statutory rate and reported income tax rate is as follows for the years ended December 31:

Income (loss) before income taxes $ (154.9) $ 42.2

Statutory taxes at 21% $ (32.5) $ 8.9

Permanent adjustments:

Valuation allowance 33.6 2.1

rate differences 8.8 (0.1)

Global intangible low-taxed income 5.2 1.9

Other 1.5 0.4

Tax controversy resolution 0.4 —

State income taxes (5.6) 0.3

Federal income tax credits (1.9) (2.2)

Equity interest earnings (1.8) (1.0)

Base-erosion and anti-abuse tax — 0.8

Discrete items:

Valuation allowance 25.0 0.8

Other 2.4 (1.5)

Tax controversy resolution (4.9) (5.8)

Provision to return adjustments (1.9) (0.9)

$ 20.6 $ (7.4)

Income tax provision $ 28.3 $ 3.7

Reported income tax rate (18.3) % 8.8 %

The Company's reported income tax rate differs from the U.S.

federal statutory tax rate primarily as a result of changes in valuation allowances, income taxed in non-U.S.

jurisdictions, global intangible low-taxed income, state income taxes, federal research and energy credits and equity interest earnings.

Other permanent adjustments include non-deductible compensation and anticipated withholding tax on unremitted non-U.S.

The effect of discrete items on the reported income tax rate include the establishment of a valuation allowance on deferred tax assets and the change in tax reserves for controversy resolution primarily driven by the expiration of the applicable statutes of limitation.

The tax controversy benefits recognized relate to prior business acquisitions that were offset with the pretax reduction of the related indemnity receivable in the amounts of $3.2 million and $4.3 million in 2021 and 2020, respectively.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (the "Tax Reform Act") eliminates the option to deduct research and development expenditures immediately in the year incurred and requires U.S.

taxpayers to amortize such expenditures over five to fifteen years depending upon whether the activities were incurred in the U.S.

or outside of the U.S.

Without the option to deduct these expenses in the year incurred, the Company expects this change to have a material impact upon our future cash payments for taxes.

Under the assumption that this legislation is not modified or repealed, the impact will continue over the fifteen year maximum amortization period, but will decrease each year until the end of the fifteen year deferral period.

The Company recognized an operating loss of $39.1 million in 2022 compared with $152.3 million in 2021.

The reduction in operating loss was mainly due to the absence of a non-cash impairment charge for goodwill of $55.6 million in JAPIC in 2021, increased gross profit in the lift truck business and a lower operating loss at Nuvera mainly from $26.1 million of charges related to the impairment of Nuvera's property, plant and equipment and inventory losses recorded in 2021.

The increase in gross profit in 2022 compared to 2021 was primarily due to favorable pricing of $300.5 million and improved unit and parts volume in the lift truck business.

The increase in gross profit was partially offset by $257.3 million of material cost inflation and higher manufacturing costs resulting from inefficiencies associated with component shortages as well as unfavorable foreign currency movements, including derivative contracts, of $43.3 million.

Americas recognized an operating profit of $46.8 million in 2022 compared with an operating loss of $19.7 million in 2021 primarily due to an increase in gross profit.

Gross profit improved primarily as result of favorable pricing of $234.0 million and improved unit and parts volume.

The increase in gross profit was partially offset as result of material and freight cost inflation and higher manufacturing costs resulting from inefficiencies associated with component shortages of $189.9 million and unfavorable foreign currency movements, including derivative contracts, of $23.4 million.

Higher selling, general and administrative expenses primarily due to increase employee-related costs partially offset the improvement in gross profit.

EMEA recognized an operating loss of $46.6 million in 2022 compared with operating profit of $0.3 million in 2021 mainly as result of lower gross profit.

Gross profit decreased primarily due to material cost inflation and higher manufacturing costs resulting from inefficiencies associated with component shortages of $95.5 million and unfavorable foreign currency movements of $18.4 million.

The decrease in gross profit was partially offset by improved pricing of $56.4 million and higher unit and parts volumes.

JAPIC's operating loss improved to $10.6 million in 2022 from $67.5 million in 2021 primarily due to the absence of a non-cash impairment charge for goodwill of $55.6 million recognized in 2021.

In addition, higher gross profit from improved pricing was partially offset by higher manufacturing costs resulting from inefficiencies associated with component shortages and unfavorable foreign currency movements.

Bolzoni recognized operating profit of $6.2 million in 2022 compared with an operating loss of $1.8 million in 2021 primarily due to higher gross profit from improved pricing and a shift in mix to higher-margin products, partially offset by material cost inflation and unfavorable foreign currency exchange rates.

Nuvera's operating loss improved to $34.3 million in 2022 compared with $62.3 million in 2021 mainly as a result of the absence of non-cash charges of $26.1 million recorded in 2021 for Nuvera's inventory and property, plant and equipment.

See Notes 10 and 11 for further discussion of these charges at Nuvera.

The Company recognized a net loss attributable to stockholders of $74.1 million in 2022 compared with $173.0 million in 2021.

The improvement was primarily the result of higher operating profit and the absence of a valuation allowance of $58.6 million provided against deferred tax assets in 2021.

These items were partially offset by higher interest expense, the absence of the

non-controlling interest share of the goodwill impairment charge at JAPIC of $11.7 million in 2021, higher pension expense and a $4.6 million gain related to the sale of the Company's preferred shares of OneH2, Inc.

("OneH2") recognized in 2021.

See Note 6 to the consolidated financial statements in this Annual Report on Form 10-K for further discussion of income taxes.

5 unchanged sentences

Depreciation and amortization 43.4 46.2 (2.8)

Impairment charges 65.6 — 65.6

Stock-based compensation 4.0 1.3 2.7

Dividends from unconsolidated affiliates 15.6 5.5 10.1

Impairment charges — 65.6 (65.6)

Working capital changes:

5 unchanged sentences

Net cash provided by (used for) operating activities 40.6 (253.5) 294.1

2021 2020 Change

Investing activities:

Expenditures for property, plant and equipment (28.8) (44.3) 15.5

Proceeds from the sale of assets and investment 19.8 8.0 11.8

Proceeds from the sale of assets and investments 1.8 19.8 (18.0)

Purchase of noncontrolling interest (8.4) — (8.4)

Net cash used for investing activities (35.4) (24.5) (10.9)

Cash flow before financing activities $ 5.2 $ (278.0) $ 283.2

Net cash provided by (used for) operating activities decreased $420.4 million in 2021 compared with 2020, primarily as a result of the change in working capital items and net income (loss).

The changes were mainly due to the global supply chain constraints, component shortages, shipping container availability constraints and higher freight costs.

In addition, the Company recorded non-cash charges of $55.6 million and $10.0 million in goodwill and long-lived asset impairments, respectively, in the year ended December 31, 2021.

The change in net cash used for investing activities during 2021 compared with 2020 is due to the proceeds from the sale of preferred shares of OneH2 for $15.7 million and lower capital expenditures in 2021.

The change in net cash provided by (used for) operating activities of $294.1 million in 2022 compared with 2021 was primarily a result of changes in working capital items and net income (loss), partially offset by the absence of non-cash charges of $55.6 million and $10.0 million for goodwill and long-lived asset impairments, respectively, recorded in 2021.

The changes in working capital were mainly due to a smaller increase in inventory in 2022 compared 2021.

The change in net cash used for investing activities during 2022 compared with 2021 is due to the absence of the proceeds from the sale of preferred shares of OneH2 in 2021 and the current year's installment purchase of Hyster-Yale Maximal's noncontrolling interest in 2022, partially offset by lower capital expenditures in 2022.

2022 2021 Change

Financing Activities:

Net increase (decrease) in long-term debt and revolving credit agreements $ 223.0 $ (18.9) $ 241.9

Net increase in long-term debt and revolving credit agreements $ 11.1 $ 223.0 $ (211.9)

Cash dividends paid (21.8) (21.6) (0.2)

Financing fees paid (7.6) — (7.6)

Other (0.2) (0.2) —

Financing fees paid — (7.6) 7.6

Net cash provided by (used for) financing activities $ (10.9) $ 193.6 $ (204.5)

Net cash provided by (used for) financing activities increased $234.2 million in 2021 compared with 2020.

The increase was primarily related to additional borrowings from refinancing the Term Loan (as defined below) and on the Facility (as defined below) in 2021.

The borrowings were primarily used to fund working capital needs.

The increase was partially offset by financing fees paid in connection with the amendments of the Facility and Term Loan.

The change in net cash provided by (used for) financing activities in 2022 compared with 2021 was primarily due to a smaller increase in borrowings during 2022 versus 2021, partially offset by the absence of financing fees paid in 2021.

Financing Activities

The Company has a $300.0 million secured, floating-rate revolving credit facility (the "Facility") that expires in June 2026.

There were $155.0 million borrowings outstanding under the Facility at December 31, 2021.

The availability under the Facility at December 31, 2021 was $140.1 million, which reflects reductions of $4.9 million for letters of credit and other restrictions.

As of December 31, 2021, the Facility consisted of a U.S.

revolving credit facility of $210.0 million and a non-U.S.

revolving credit facility of $90.0 million.

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

The Company has a $300.0 million secured, floating-rate revolving credit facility (the "Facility") that expires in June 2026 and a $225.0 million term loan (the "Term Loan"), which matures in May 2028.

The Facility can be increased 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 borrowers in the Facility, 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.

The obligations under the Facility are generally secured by a first priority lien on working capital assets of the borrowers and guarantors in the Facility, 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.

The approximate book value of assets held as collateral under the Facility was $1.1 billion as of December 31, 2022.

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 non-U.S.

base rate loans.

The applicable margins, as of December 31, 2021, for U.S.

base rate loans and LIBOR loans were 0.50% and 1.25%, respectively.

The applicable margin, as of December 31, 2021, for non-U.S.

base rate loans and LIBOR loans was 1.25%.

applicable interest rates for borrowings outstanding under the Facility on December 31, 2021 was 3.75%, 1.60% and 1.50% for the U.S.

base rate, LIBOR and foreign EURIBOR loans, respectively.

The Facility also required the payment of a fee of 0.25% per annum on the unused commitments as of December 31, 2021.

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

The Facility limits the payment of dividends and other restricted payments the Company 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 to achieve a minimum fixed

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

At December 31, 2022, the Company was in compliance with the covenants in the Facility.

The Company also has a $225.0 million term loan (the "Term Loan"), which matures in May 2028.

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

Key terms of the Facility as of December 31, 2022 were as follows:

borrowing capacity $ 210.0

borrowing capacity 90.0

Outstanding 134.6

Availability restrictions 7.7

Availability $ 157.7

Applicable margins, as defined in agreement

base rate loans 0.25%-0.75%

LIBOR, EURIBOR and foreign base rate loans 1.25%-1.75%

Applicable margins, for amounts outstanding

base rate and LIBOR loans 0.50%;

base rate and LIBOR loans 1.50 %

Applicable interest rate, for amounts outstanding

base rate 8.00 %

EURIBOR 3.88 %

Facility fee, per annum on unused commitment 0.25 %

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

At December 31, 2021, there was $223.9 million of principal outstanding under the Term Loan which has been reduced in the consolidated balance sheet by $5.3 million of discounts and unamortized deferred financing fees.

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 borrowers of the Facility, which includes, but is not limited to cash and cash equivalents, accounts receivable and inventory.

The approximate book value of assets held as collateral under the Term Loan was $750 million as of December 31, 2022.

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, as provided in the Term Loan, is 2.50% for U.S.

base rate loans and 3.50% for Eurodollar loans.

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

The interest rate on the amount outstanding under the Term Loan at December 31, 2021 was 4.00%.

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.

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At December 31, 2022, the Company was in compliance with the covenants in the Term Loan.

The Company incurred fees of $7.6 million and $0.4 million in 2021 and 2019, respectively.

No fees were incurred in 2020.

Key terms of the Term Loan as of December 31, 2022 were as follows:

Outstanding $ 221.6

Discounts and unamortized deferred financing fees 4.1

Net amount outstanding $ 217.5

Applicable margins, as defined in agreement

base rate loans 2.50 %

Eurodollar 3.50 %

Eurodollar floor 0.50 %

Applicable interest rate, for amounts outstanding 7.88 %

The Company incurred fees of $7.6 million in 2021.

These fees related to amending the Facility and the Term Loan.

These fees were deferred and are being amortized as interest expense over the term of the applicable debt agreements.

No fees were incurred in 2022 or 2020.

Fees related to the Term Loan are presented as a direct deduction of the corresponding debt.

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$ 65.2 $ 28.8 $ 44.3

Planned expenditures in 2022 are primarily for product development and tooling, improvements at manufacturing locations and manufacturing equipment and improvements to information technology infrastructure.

Planned expenditures in 2023 are primarily for product development, improvements to information technology infrastructure and improvements at manufacturing locations and manufacturing equipment.

The primary sources of financing for these capital expenditures are expected to be internally generated funds and bank financing.

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Total debt (552.9) (518.5) (34.4)

Total equity $ 382.9 $ 651.1 $ (268.2)

Total temporary and permanent equity $ 225.1 $ 382.9 $ (157.8)

Debt to total capitalization 71 % 58 % 13 %

1 unchanged sentence

See Note 18 to the consolidated financial statements in this Annual Report on Form 10-K for further discussion of related party transactions.

OUTLOOK AND STRATEGIC PERSPECTIVE

PERSPECTIVE AND OUTLOOK

Market Commentary

The global economic outlook remains constrained and economic activity appears to be decelerating in many parts of the world.

This global downturn is due to several factors, including tight monetary policies in various countries designed to contain inflation, as well as uncertainties around China's economic reopening and the ongoing Russia/Ukraine conflict.

The conflict has already negatively impacted economic activity, particularly in Europe, for a sustained period.

The latest publicly available global lift truck market data shows a definitive decrease in third-quarter 2022 market activity compared with peak third-quarter levels seen in 2021 as all major geographic regions experienced double digit percentage market declines.

Internal company estimates suggest that the global lift truck market will have declined in the fourth-quarter 2022 across all geographic regions compared with the prior year quarter.

However, a modest volume increase versus third-quarter 2022 is predicted, primarily due to an anticipated improvement in EMEA.

Looking ahead, the global lift truck market is expected to decline for the full-year 2023 compared with 2022 in all regions except JAPIC, which is anticipated to increase modestly year-over-year.

However, 2023's global market unit volumes are expected to remain relatively strong and above pre-pandemic levels in all regions except EMEA.

Several years of extraordinary lift truck market growth stretched supplier capacity to, and in some cases beyond, its limits.

A moderate market slowdown could allow the lift truck component supply base to meet their supply requirements more effectively and allow the Company to work down its extended backlog.

Operational Perspectives - Lift Truck Business

As a result of several factors, including the large but declining market, a focus on booking orders with solid margins and the Company's extended lead times, fourth-quarter 2022 lift truck bookings decreased significantly from robust prior-year levels.

However, fourth-quarter 2022 bookings increased modestly from third-quarter 2022 largely due to a seasonal rebound in EMEA and better-than-expected fourth-quarter market conditions in the Americas.

Looking forward to 2023, bookings' levels are expected to decrease year-over-year due to the moderating market outlook and the Company’s continued focus on higher-margin units while also balancing the need to maintain a full production pipeline across its facilities.

These anticipated bookings' decreases, combined with planned production increases, should help the Company reduce its backlog, which has begun trending down, to more competitive levels over the course of 2023.

Full-year 2023 production and shipment volumes are expected to increase versus 2022 helping to alleviate the substantial backlog level and reduce lead times as anticipated continued supply chain improvements are achieved.

Despite these expected improvements, lengthy lead times are expected to remain.

However, they should help mitigate the impact of a recessionary economic environment on the business.

Order selectivity has resulted in higher average prices and margins for both unit bookings and backlog.

As the Company works through its backlog in 2023, lower-margin units are expected to ship during the 2023 first quarter and the majority of 2023 shipments are anticipated to be produced from the currently existing higher-margin backlog.

As a result, average unit margins are expected to continue to improve, including into 2024 when new bookings with anticipated higher margins are expected to be produced.

The Company continues to experience material and labor cost increases, but the rate of increase has slowed.

Forward economic indicators suggest inflationary pressures have begun to abate and cost inflation is expected to gradually moderate throughout 2023, absent any unanticipated effects from geopolitical events and public health crises.

Due to the substantial inflationary pressure over the past two years, the Lift Truck business implemented several price increases.

In 2023, the Company expects a positive price-to-current cost ratio, in part to address ongoing cost increases in certain areas.

The Company will continue to monitor material and labor costs closely, as well as the impact of tariffs, and adjust pricing accordingly.

As a result of abating cost increases and the current significant backlog level with its expected built-in margin increases over time, the Company believes unit margins should increase significantly in 2023 in aggregate versus 2022 and will lead to significant improvements in operating profit in 2023.

Lift Truck operating profit in each of the 2023 quarters is expected to exceed 2022 fourth quarter results, with improvements following normal business seasonality patterns.

The above factors, as well as the benefits from the Company's ongoing strategic initiatives as they mature, are expected to lead to a significant increase in revenues and a substantial operating profit in 2023 at the Lift Truck business.

These assumptions, however, are highly sensitive to the effect of various market forces, particularly those that impact global supply chains.

Strategic Perspectives - Lift Truck

From a broader perspective, the Lift Truck Business has three core strategies that are expected to transform the Company’s competitiveness, market position and economic performance over time:

• To provide the lowest cost of ownership while enhancing customer productivity.

This is expected to be achieved by further expanding a wide variety of vehicle innovations including:

new modular and scalable product families, truck electrification projects and technology advancements in product automation, power options, telemetry and operator assist systems;

• Be the leader in the delivery of industry- and customer-focused solutions, by transforming the Company's sales approach to meet a wide variety of customer needs across a broad set of end markets;

• Be the leader in independent distribution, by focusing on effectively coordinating dealer and major accounts coverage, dealer excellence and ensuring outstanding dealer ownership globally.

The Company continues to make progress on its high priority projects.

Notably, in fourth-quarter 2022, the Company announced that its first hydrogen fuel cell-powered container handler, powered by Nuvera ® fuel cell engines, began its testing pilot at the Port of Los Angeles (CA).

After successfully performing in lighter applications, the truck has advanced to more difficult applications.

Additionally, the Lift Truck business launched its first modular, scalable lift trucks in 2022, first to the EMEA market in May followed by the Americas market late in the year.

Given the current extended backlog, the production ramp-up for this new product line is occurring gradually.

Early customer reports indicate that this new 2- to 3-ton standard internal combustion engine lift truck is being well-received in both markets.

The Company expects to launch this product in the JAPIC market in mid-2023.

Operational and Strategic Perspectives - Bolzoni

Over the course of 2023, Bolzoni expects component shortages to continue moderating, while further increasing prices to offset higher input costs.

Combined, these are expected to result in increased margins over time and higher 2023 full-year operating profit compared with 2022.

Bolzoni's core strategy is to be the leader in the Attachments business.

In this context, Bolzoni continues to concentrate on driving its "One Company - 3 Brands" approach and increasing its Americas business, while focusing on strengthening its ability to serve key attachment industries and customers in all global markets.

Bolzoni also intends to increase its sales, marketing and product support capabilities in North America and Europe to support its industry-specific sales strategy.

Operational and Strategic Perspectives - Nuvera

Nuvera's core strategy is to be a leader in the fuel cell business.

Nuvera continues to focus on placing 45kW and 60kW fuel cell engines in niche, heavy-duty vehicle applications with expected significant fuel cell adoption potential.

Nuvera announced several projects in 2022 with various third parties to test Nuvera ® engines in heavy-duty applications, including the Port of Los Angeles, which began testing in late 2022, and in multiple European ports which are expected to begin testing in 2023.

Nuvera is also developing a new 125kW fuel cell engine for heavier-duty applications.

In 2023, Nuvera expects continued focus on ramping up customer product demonstrations and customer bookings, which are expected to result in higher sales and moderately higher costs.

Combined, this is expected to generate a loss comparable to 2022 but significantly enhance the foundation for future technology adoption and improved financial returns.

Consolidated Outlook

Given the continued extensive component shortages due to supply chain constraints, significant material and freight cost inflation, as well as continued losses at Nuvera, the Company, on a consolidated basis, expects a large net loss in the first quarter, a substantially reduced, but still large, net loss in the second quarter, approximately breakeven results in the third quarter and substantial net income in the fourth quarter of 2022.

These expectations are based on the expected reasonable resolution of component shortages and relative stabilization of material and freight costs.

However, the fourth-quarter net income is not expected to fully offset the losses generated in the first nine months.

The Company is managing 2022 capital expenditures, operating expenses and its production plan in a manner designed to protect liquidity.

Capital expenditures are expected to be approximately $31.5 million in 2022.

The Company has implemented a program of strict controls over operating expenses to reduce cash outflow, including delays in the timing of certain strategic program investments.

While the Company expects in time to make these capital expenditures and investments in the business, maintaining liquidity will continue to be a priority.

The Company's ability to build and ship trucks was significantly constrained by parts shortages of certain critical components while the remaining components needed to build trucks were received and added to inventory, causing inventory levels to increase substantially.

In this context, the Company expects to reduce inventory significantly by using current inventory to build trucks for which production has been significantly delayed due to critical parts shortages.

At December 31, 2021, the Company's cash on hand was $65.5 million and debt was $518.5 million compared with cash on hand of $61.4 million and debt of $428.0 million at September 30, 2021, and cash on hand of $151.4 million and debt of $289.2 million at December 31, 2020.

As of December 31, 2021, the Company had unused borrowing capacity of approximately $165.0 million under the Company's revolving credit facilities compared with $245.9 million at September 30, 2021 and $266.4 million at December 31, 2020.

Lift Truck Strategic Perspective

In 2022, the global lift truck market is expected to recede from the historical highs of 2021, but still be higher than pre-pandemic levels.

As a result of this market outlook, Lift Truck is anticipating a substantial decrease in bookings in 2022 compared with 2021, with the rate of decrease expected to moderate in the fourth quarter.

In 2021, the Company experienced production and shipment levels which were far lower than its objectives due to continued supply chain logistics constraints and component shortages.

These constraints are anticipated to continue into the beginning of the third quarter of 2022 but begin to moderate during the first half of the year.

Full-year shipments are expected to increase significantly in 2022 over 2021 given the Company's robust backlog and actions put in place to mitigate the impact of the supply chain constraints and shortages.

The significant material cost inflation and higher freight costs and the non-renewal of tariff exclusions are expected to continue to keep the cost of components and freight high in 2022 compared with 2021.

Inflation continued to rise in the fourth quarter of 2021, but at a slightly lower rate of change.

However, while more moderate cost increases are expected to continue in 2022, there are some signs that suggest material costs have peaked.

In light of this cost inflation, the Lift Truck business has implemented price increases several times over the course of 2021 and at the beginning of 2022, but many of the orders in the backlog slotted for production in the first nine months of 2022 do not reflect the full effect of all these price increases.

other hand, new bookings are being made at close to target margins based on expected future costs at the time of production.

As a result, the Company expects to continue to experience very low margins in the first quarter of 2022 due to the lag between when unit price increases went into effect and when revenue is realized as the units are shipped.

Margins are then expected to increase over the successive 2022 quarters with much stronger margins in the fourth quarter when the higher-margin, already-booked trucks, and trucks anticipated to be booked, are expected to be produced and shipped.

The Company will continue to work aggressively to try to manage supply chain and logistics costs, component availability and tariff exclusions, and will continue to adjust prices accordingly.

As a result of these factors, the Lift Truck business expects significant operating and net losses in the first quarter of 2022, moderated losses in the second quarter, profitability in the third quarter and substantial profit in the fourth quarter.

From a strategic perspective, the Lift Truck business has three core strategies that are expected to have a transformational impact on the Company’s competitiveness, market position and economic performance as it emerges from the current period of mismatch of costs and pricing.

The first is to provide the lowest cost of ownership while enhancing customer productivity.

The primary focus of this strategic initiative is the new modular and scalable product projects, which are expected to lay the groundwork for enhanced market position by providing lower cost of ownership and enhanced productivity for the Company’s customers, including low-intensity applications.

Additional to this are key projects geared toward electrification of trucks for applications now dominated by internal combustion engine trucks, automation product options and providing telemetry and operator assist systems.

The second core strategy is to be the leader in the delivery of industry- and customer-focused solutions.

The primary focus for this strategic initiative is transforming the Company's sales approach by using an industry-focused approach to meet its customers' needs.

The third core strategy is to be the leader in independent distribution.

The main focus of this strategic initiative is on dealer and major account coverage, dealer excellence and ensuring outstanding dealer ownership globally.

As a result of these core strategies, the increased shipment volume potential of the current backlog and expected bookings in 2022, and enhanced prices, the Lift Truck business expects to move from significant operating losses in the first quarter of 2022 to substantial operating profit and net income in the fourth quarter, with the improvements in the second half of the year expected to more than offset the losses in the first half.

Over this period, the Company is projecting the stabilization of product and transportation costs and the continued expectation of improved component and logistics availability.

The Company is also anticipating the continued introduction of additional modular and scalable product families and the continued implementation of cost savings initiatives over this period and the longer term.

As the Company brings costs, price and production volumes in line over 2022, the Lift Truck business is expected to have a strong operating profit and net income in 2023.

Bolzoni Strategic Perspective

Over the course of 2022, Bolzoni expects component shortages to moderate and the timing of pricing actions to permit improved returns beginning with moderate operating profit in the first quarter and continuing with improving operating profit in the remaining quarters of 2022.

As a result, Bolzoni expects sizeable operating profit and net income in 2022 compared with operating and net losses in 2021.

Bolzoni continues to focus on implementing its "One Company - 3 Brands" organizational approach to help streamline corporate operations and strengthen its North America and JAPIC commercial operations.

Bolzoni is working to increase its Americas business by strengthening its ability to serve key attachment industries and customers in the North America market through the introduction of a broader range of locally produced attachments with shorter lead times, while continuing to sell cylinders and various other components produced in its Sulligent, Alabama plant.

Bolzoni is also increasing its sales, marketing and product support capabilities both in North America and Europe based on an industry-specific approach, with an immediate focus on the paper, beverage, appliance, third-party logistics and automotive industries.

Nuvera Strategic Perspective

Nuvera continues to focus on applying its 45kW and 60kW engines, which were both released for sale late in 2020, in niche, heavy-duty vehicle applications with expected near-term significant fuel cell adoption potential.

As a result of these releases, Nuvera accelerated its 45kW and 60kW engine commercialization operations for the global market.

In 2022, Nuvera will continue to focus on ramping up demonstrations, quotes and bookings of these products.

In addition, Nuvera has initiated development of a new 125kW engine and continues to focus on applications in the forklift truck market.

Excluding the impact of the inventory valuation and fixed asset impairment charges taken in 2021, the Company expects moderately reduced losses at Nuvera in 2022 as a result of enhanced fuel cell shipments.

On a consolidated basis, the Company is nearing completion on its efforts to build out the lower-priced, lower-margin backlog units held over from prior periods.

As a result, continued margin expansion is expected to lead to substantial operating profit and net income for the 2023 full year.

These expectations are based on the Company's ability to effectively manage ongoing component shortages, modestly increase production levels and see a reasonable stabilization of material and freight costs.

The Company’s steps to improve profitability are producing tangible results.

Efforts to reduce inventory and generate cash are expected to show substantial progress in the second half of 2023.

The Company remains committed to enhancing its cash flows, with ongoing action plans to improve future results including continued discipline over capital expenditures and operating expenses.

Capital expenditures are expected to be approximately $65 million for full-year 2023, with spending more heavily weighted toward the second half of the year.

This full-year increase over significantly restrained 2022 levels is required to adequately maintain the Company’s facilities and includes a modest return to investing for long-term profitable growth.

Working capital continues to be an area of intense focus for the Company.

Inventory levels remain above historical pre-pandemic levels due to prior production delays because of parts and labor shortages.

In the first half of 2023, reducing

inventory levels will be a key focus area.

Efforts to maximize use of on-hand inventory, coupled with material purchases below expected production rates, should help to reduce excess inventory levels around the Company in both the first and second half of 2023.

Supply constraints continue to be an issue sporadically around the globe, but the Company expects continued improvements as 2023 progresses.

As a result of these actions, the Company expects a significant increase in cash flow before financing activities for the full-year 2023 compared with 2022.

RECENTLY ISSUED ACCOUNTING STANDARDS

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These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation:

(1) delays in delivery and other supply chain disruptions, or increases in costs as a result of inflation or otherwise, including materials and transportation costs and shortages, the imposition of tariffs, or the renewal of tariff exclusions, on raw materials or sourced products, and labor, or changes in or unavailability of quality suppliers or transporters, including the impacts of the foregoing risks on the Company's liquidity, (2) the duration and severity of the COVID-19 pandemic, any preventive or protective actions taken by governmental authorities, and any unfavorable effects of the COVID-19 pandemic on either the Company's or its suppliers plants' capabilities to produce and ship products, (3) delays in manufacturing and delivery schedules, (4) customer acceptance of pricing, (5) the ability of Hyster-Yale and its dealers, suppliers and end-users to access credit in the current economic environment, or obtain financing at reasonable rates, or at all, as a result of current economic and market conditions, (6) further impairment charges or charges due to valuation allowances, (7) reduction in demand for lift trucks, attachments and related aftermarket parts and service on a global basis, including any reduction in demand as a result of a COVID-19 triggered economic recession, (8) exchange rate fluctuations, interest rate volatility and monetary policies and other changes in the regulatory climate in the countries in which the Company operates and/or sells products, (9) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (10) the successful commercialization of Nuvera's technology, (11) the political and economic uncertainties in the countries where the Company does business, (12) bankruptcy of or loss of major dealers, retail customers or suppliers, (13) customer acceptance of, changes in the costs of, or delays in the development of new products, (14) introduction of new products by, or more favorable product pricing offered by, competitors, (15) product liability or other litigation, warranty claims or returns of products, (16) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, and (17) unfavorable effects of geopolitical and legislative developments on global operations, including without limitation the entry into new trade agreements and the imposition of tariffs and/or economic sanctions.

(1) delays in delivery and other supply chain disruptions, or increases in costs as a result of inflation or otherwise, including materials and transportation costs and shortages, the imposition of tariffs, or the renewal of tariff exclusions, on raw materials or sourced products, and labor, or changes in or unavailability of quality suppliers or transporters, including the impacts of the foregoing risks on the Company's liquidity, (2) delays in manufacturing and delivery schedules, (3) customer acceptance of pricing, (4) any preventive or protective actions taken by governmental authorities related to the COVID-19 pandemic, and any unfavorable effects of the COVID-19 pandemic on either the Company's or its suppliers plants' capabilities to produce and ship products, (5) unfavorable effects of geopolitical and legislative developments on global operations, including without limitation the entry into new trade agreements and the imposition of tariffs and/or economic sanctions, as well as armed conflicts, including the Russia/Ukraine conflict, and their regional effects, (6) the ability of the Company and its dealers, suppliers and end-users to access credit in the current economic environment, or obtain financing at reasonable rates, or at all, as a result of interest rate volatility and current economic and market conditions, including inflation, (7) reduction in demand for lift trucks, attachments and related aftermarket parts and service on a global basis, including any reduction in demand as a result of an economic recession, (8) exchange rate fluctuations, interest rate volatility and monetary policies and other changes in the regulatory climate in the countries in which the Company operates and/or sells products, (9) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives, (10) the successful commercialization of Nuvera's technology, (11) impairment charges, (12) the political and economic uncertainties in the countries where the Company does business, as well as the effects of any withdrawals from such countries, (13) bankruptcy of or loss of major dealers, retail customers or suppliers, (14) customer acceptance of, changes in the costs of, or delays in the development of new products, (15) introduction of new products by, more favorable product pricing offered by or shorter lead times available through competitors, (16) product liability or other litigation, warranty claims or returns of products, (17) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, and (18) the ability to attract, retain, and replace workforce and administrative employees.

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-K

Item 7. Management’s Discussion and Analysis