What changed in this filing

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Item 1. Financial Statements

2023-08-01 compared with 2023-05-02 · 142 added, 59 removed, 505 unchanged (28% of the section changed)

52 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2023 2022 2023 2022

(In millions, except per share data)

9 unchanged sentences

Other, net 2.7 4.1 1.0 4.9

8.0 6.1 14.7 9.1

Income (Loss) Before Income Taxes 50.8 ( 21.8 ) 86.7 ( 43.1 )

Income tax expense 8.7 2.9

Income tax expense (benefit) 12.0 ( 3.1 ) 20.7 ( 0.2 )

Net Income (Loss) 38.8 ( 18.7 ) 66.0 ( 42.9 )

12 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2023 2022 2023 2022

(In millions)

15 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED

SIX MONTHS ENDED

(In millions)

27 unchanged sentences

Cash dividends paid ( 11.1 ) ( 10.9 )

Cash dividends paid to noncontrolling interest ( 1.3 ) ( 0.2 )

Financing fees paid ( 0.6 ) —

Purchase of treasury stock ( 0.1 ) —

Net cash used for financing activities ( 2.5 ) ( 50.9 )

Net cash provided by (used for) financing activities ( 28.9 ) 33.5

Effect of exchange rate changes on cash 2.7 ( 0.7 )

Cash and Cash Equivalents

Increase (decrease) for the period 5.6 ( 0.4 )

Increase for the period 6.7 10.1

Balance at the beginning of the period 59.0 65.5

8 unchanged sentences

(In millions)

Balance, December 31, 2021 $ — $ 0.1 $ 0.1 $ ( 4.5 ) $ 315.1 $ 248.6 $ ( 97.7 ) $ ( 32.0 ) $ ( 72.6 ) $ 357.1 $ 25.8 $ 382.9

Balance, March 31, 2022 $ — $ 0.1 $ 0.1 $ — $ 312.3 $ 218.2 $ ( 102.3 ) $ ( 32.1 ) $ ( 71.4 ) $ 324.9 $ 26.6 $ 351.5

Stock-based compensation — — — — 0.9 — — — — 0.9 — 0.9

Stock issued under stock compensation plans — — — — 0.1 — — — — 0.1 — 0.1

Net loss — — — — — ( 25.0 ) — — — ( 25.0 ) 0.8 ( 24.2 )

Net income (loss) — — — — — ( 19.4 ) — — — ( 19.4 ) 0.7 ( 18.7 )

Cash dividends — — — — — ( 5.5 ) — — — ( 5.5 ) ( 0.2 ) ( 5.7 )

Current period other comprehensive loss — — — — — — ( 40.3 ) ( 45.9 ) — ( 86.2 ) — ( 86.2 )

Reclassification adjustment to net loss — — — — — — — 1.7 1.2 2.9 — 2.9

Reclassification adjustment to net income (loss) — — — — — — — 5.7 1.2 6.9 — 6.9

Purchase of noncontrolling interest — — — — ( 12.8 ) — — — — ( 12.8 ) ( 11.1 ) ( 23.9 )

Reclassification from permanent equity to temporary equity 15.9 — — — ( 9.3 ) — — — — ( 9.3 ) ( 6.6 ) ( 15.9 )

Foreign currency translation on noncontrolling interest — — — — — — — — — — ( 1.5 ) ( 1.5 )

Balance, June 30, 2022 $ 15.9 $ 0.1 $ 0.1 $ — $ 291.2 $ 193.3 $ ( 142.6 ) $ ( 72.3 ) $ ( 70.2 ) $ 199.6 $ 7.9 $ 207.5

Balance, March 31, 2023 $ 14.7 $ 0.1 $ 0.1 $ ( 0.1 ) $ 303.4 $ 173.7 $ ( 125.4 ) $ ( 25.4 ) $ ( 70.9 ) $ 255.5 $ 2.1 $ 257.6

Stock-based compensation — — — — 5.9 — — — — 5.9 — 5.9

Net income 0.2 — — — — 38.3 — — — 38.3 — 38.3

Cash dividends ( 0.9 ) — — — — ( 5.5 ) — — — ( 5.5 ) ( 0.4 ) ( 5.9 )

Accrued dividends 0.3 — — — — — — — — — — —

Current period other comprehensive income — — — — — — ( 6.0 ) ( 2.9 ) — ( 8.9 ) — ( 8.9 )

Reclassification adjustment to net income — — — — — — — 4.4 0.8 5.2 — 5.2

Foreign currency translation on noncontrolling interest ( 0.4 ) — — — — — — — — — 0.1 0.1

Balance, June 30, 2023 $ 13.9 $ 0.1 $ 0.1 $ ( 0.1 ) $ 309.3 $ 206.5 $ ( 131.4 ) $ ( 23.9 ) $ ( 70.1 ) $ 290.5 $ 1.8 $ 292.3

See notes to unaudited condensed consolidated financial statements.

HYSTER-YALE MATERIALS HANDLING, INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY AND PERMANENT EQUITY

Temporary Equity Permanent Equity

Accumulated Other Comprehensive Income (Loss)

Redeemable Noncontrolling Interest 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 Permanent Equity

(In millions)

Balance, December 31, 2021 $ — $ 0.1 $ 0.1 $ ( 4.5 ) $ 315.1 $ 248.6 $ ( 97.7 ) $ ( 32.0 ) $ ( 72.6 ) $ 357.1 $ 25.8 $ 382.9

Stock-based compensation — — — — 2.6 — — — — 2.6 — 2.6

Stock issued under stock compensation plans — — — 4.5 ( 4.4 ) — — — — 0.1 — 0.1

Net income (loss) — — — — — ( 44.4 ) — — — ( 44.4 ) 1.5 ( 42.9 )

Cash dividends — — — — — ( 10.9 ) — — — ( 10.9 ) ( 0.2 ) ( 11.1 )

Current period other comprehensive loss — — — — — — ( 44.9 ) ( 47.7 ) — ( 92.6 ) — ( 92.6 )

Reclassification adjustment to net income (loss) — — — — — — — 7.4 2.4 9.8 — 9.8

Purchase of noncontrolling interest — — — — ( 12.8 ) — — — — ( 12.8 ) ( 11.1 ) ( 23.9 )

Reclassification from permanent equity to temporary equity 15.9 — — — ( 9.3 ) — — — — ( 9.3 ) ( 6.6 ) ( 15.9 )

Foreign currency translation on noncontrolling interest — — — — — — — — — — ( 1.5 ) ( 1.5 )

Balance, June 30, 2022 $ 15.9 $ 0.1 $ 0.1 $ — $ 291.2 $ 193.3 $ ( 142.6 ) $ ( 72.3 ) $ ( 70.2 ) $ 199.6 $ 7.9 $ 207.5

Balance, December 31, 2022 $ 14.2 $ 0.1 $ 0.1 $ — $ 297.7 $ 152.7 $ ( 137.0 ) $ ( 37.7 ) $ ( 71.5 ) $ 204.4 $ 6.5 $ 210.9

Stock-based compensation — — — — 10.8 — — — — 10.8 — 10.8

Purchase of treasury stock — — — ( 0.1 ) — — — — — ( 0.1 ) — ( 0.1 )

7 unchanged sentences

Foreign currency translation on noncontrolling interest ( 0.3 ) — — — — — — — — — 0.2 0.2

Balance, March 31, 2023 $ 14.7 $ 0.1 $ 0.1 $ ( 0.1 ) $ 303.4 $ 173.7 $ ( 125.4 ) $ ( 25.4 ) $ ( 70.9 ) $ 255.5 $ 2.1 $ 257.6

Balance, June 30, 2023 $ 13.9 $ 0.1 $ 0.1 $ ( 0.1 ) $ 309.3 $ 206.5 $ ( 131.4 ) $ ( 23.9 ) $ ( 70.1 ) $ 290.5 $ 1.8 $ 292.3

See notes to unaudited condensed consolidated financial statements.

31 unchanged sentences

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 March 31, 2023 and the results of its operations and changes in equity for the three months ended March 31, 2023 and 2022, and the results of its cash flows for the three months ended March 31, 2023 and 2022 have been included.

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, 2023 and the results of its operations and changes in equity for the three and six months ended June 30, 2023 and 2022, and the results of its cash flows for the six months ended June 30, 2023 and 2022 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, 2022.

26 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, 2023 and 2022.

Impairment losses recognized on receivables or contract assets were not significant for the six months ended June 30, 2023 and 2022.

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, 2023

JUNE 30, 2023

Lift truck business

6 unchanged sentences

THREE MONTHS ENDED

MARCH 31, 2022

JUNE 30, 2022

Lift truck business

5 unchanged sentences

Total Revenues $ 596.6 $ 184.8 $ 64.9 $ 86.4 $ 0.3 $ ( 37.6 ) $ 895.4

SIX MONTHS ENDED

JUNE 30, 2023

Lift truck business

Americas EMEA JAPIC Bolzoni Nuvera Elims Total

Dealer sales $ 776.9 $ 342.6 $ 82.0 $ — $ — $ — $ 1,201.5

Direct customer sales 298.6 4.5 — — — — 303.1

Aftermarket sales 365.9 57.1 15.0 — — — 438.0

Other 33.0 11.3 0.5 195.2 2.6 ( 95.3 ) 147.3

Total Revenues $ 1,474.4 $ 415.5 $ 97.5 $ 195.2 $ 2.6 $ ( 95.3 ) $ 2,089.9

SIX MONTHS ENDED

JUNE 30, 2022

Lift truck business

Americas EMEA JAPIC Bolzoni Nuvera Elims Total

Dealer sales $ 591.5 $ 281.2 $ 102.8 $ — $ — $ — $ 975.5

Direct customer sales 219.4 9.4 — — — — 228.8

Aftermarket sales 292.3 52.8 13.6 — — — 358.7

Other 51.1 11.1 0.2 181.5 0.9 ( 84.8 ) 160.0

Total Revenues $ 1,154.3 $ 354.5 $ 116.6 $ 181.5 $ 0.9 $ ( 84.8 ) $ 1,723.0

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.

20 unchanged sentences

Foreign currency effect 0.2

Balance, March 31, 2023 $ 140.5

Balance, June 30, 2023 $ 131.4

Note 4— Business Segments

12 unchanged sentences

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

THREE MONTHS ENDED

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JUNE 30 JUNE 30

2023 2022 2023 2022

Revenues from external customers

24 unchanged sentences

federal statutory rate to the reported income tax rate is as follows:

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2023 2022 2023 2022

Income (loss) before income taxes $ 50.8 $ ( 21.8 ) $ 86.7 $ ( 43.1 )

5 unchanged sentences

Discrete items ( 2.3 ) ( 4.5 ) ( 2.1 ) ( 5.3 )

Income tax expense $ 8.7 $ 2.9

Income tax expense (benefit) $ 12.0 $ ( 3.1 ) $ 20.7 $ ( 0.2 )

Reported income tax rate 23.6 % 14.2 % 23.9 % 0.5 %

The Company's estimated annual effective income tax rate assumes that a significant portion of its net operating loss carryforwards will be utilized in 2023 and the release of the valuation allowance associated with the asset.

This will be more

than offset by the capitalization of research and development expenses under current U.S.

The Company's estimated annual effective income tax rate assumes that a significant portion of its net operating loss carryforwards will be utilized in 2023 along with the release of the associated valuation allowances.

This release will be more than offset by the capitalization of research and development expenses under current U.S.

tax rules for which a valuation allowance will be provided.

The net of these items is included in the valuation allowance line in the table above.

The Company's reported income tax rate in the prior year differed from the U.S.

federal statutory tax rate primarily as a result of recording additional valuation allowances and an interim adjustment resulting from pretax losses for which no tax benefit was recognized.

During the first and second quarters of 2023, the Company recorded other permanent adjustments primarily relating to state income taxes and non-deductible compensation.

During the second quarter of 2023 and 2022, the Company recognized discrete tax benefits of $ 2.3 million and $ 4.5 million, respectively, mainly resulting from the expiration of the statute of limitations for uncertain tax positions related to acquisitions.

Of those amounts, an offsetting pre-tax indemnity receivable was recorded for $ 2.1 million and $ 3.8 million in the second quarter of 2023 and 2022, respectively.

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.

Note 6— Reclassifications from OCI

1 unchanged sentence

OCI Components Amount Reclassified from OCI Affected Line Item

THREE MONTHS ENDED

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2023 2022 2023 2022

Gain (loss) on cash flow hedges:

2 unchanged sentences

Total before tax ( 4.4 ) ( 5.6 ) ( 15.3 ) ( 7.2 ) Income (loss) before income taxes

Tax (expense) benefit — ( 0.1 ) Income tax expense

Tax (expense) benefit — ( 0.1 ) — ( 0.2 ) Income tax expense (benefit)

Net of tax $ ( 4.4 ) $ ( 5.7 ) $ ( 15.3 ) $ ( 7.4 ) Net income (loss)

2 unchanged sentences

Total before tax ( 0.7 ) ( 1.2 ) ( 1.4 ) ( 2.4 ) Income (loss) before income taxes

Tax (expense) benefit 0.1 — Income tax expense

Tax (expense) benefit ( 0.1 ) — — — Income tax expense (benefit)

Net of tax $ ( 0.8 ) $ ( 1.2 ) $ ( 1.4 ) $ ( 2.4 ) Net income (loss)

5 unchanged sentences

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

At March 31, 2023, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 517.1 million and $ 532.6 million, respectively.

At June 30, 2023, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 504.1 million and $ 514.8 million, respectively.

At December 31, 2022, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 486.4 million and $ 490.3 million, respectively.

13 unchanged sentences

Terms of the interest rate swap agreements require the Company to receive a variable interest rate and pay a fixed interest rate.

The Company's interest rate swap agreements and the associated variable rate financings are predominately based upon the one-month LIBOR.

The Company's interest rate swap agreements and the associated variable rate financings are predominately based upon the one-month Secured Overnight Financing Rate ("SOFR").

Changes in the fair value of interest rate swap agreements that are effective as hedges are recorded in OCI.

6 unchanged sentences

Foreign Currency Derivatives:

The Company held forward foreign currency exchange contracts with total notional amounts of $ 0.7 billion at March 31, 2023, primarily denominated in euros, Japanese yen, U.S.

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

The Company held forward foreign currency exchange contracts with total notional amounts of $ 0.9 billion at June 30, 2023, 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 $ 0.8 billion at December 31, 2022, primarily denominated in euros, Japanese yen, U.S.

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

The fair value of these contracts approximated a net liability of $ 31.2 million and $ 43.5 million at March 31, 2023 and December 31, 2022, respectively.

The fair value of these contracts approximated a net liability of $ 35.3 million and $ 43.5 million at June 30, 2023 and December 31, 2022, respectively.

Forward foreign currency exchange contracts that qualify for hedge accounting are generally used to hedge transactions expected to occur within the next 24 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, 2023, $ 26.3 million of the amount of net deferred loss included in OCI at March 31, 2023 is expected to be reclassified as expense into the unaudited condensed consolidated statements of operations over the next twelve months, as the transactions occur.

Based on market valuations at June 30, 2023, $ 30.0 million of the amount of net deferred loss included in OCI at June 30, 2023 is expected to be reclassified as expense into the unaudited condensed consolidated statements of operations over the next twelve months, as the transactions occur.

Interest Rate Derivatives:

1 unchanged sentence

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 March 31, 2023 and December 31, 2022:

The following table summarizes the notional amounts, related rates, excluding spreads, and remaining terms of interest rate swap agreements at June 30, 2023 and December 31, 2022:

Notional Amount Average Fixed Rate

MARCH 31 DECEMBER 31 MARCH 31 DECEMBER 31

2023 2022 2023 2022 Term at March 31, 2023

JUNE 30 DECEMBER 31 JUNE 30 DECEMBER 31

2023 2022 2023 2022 Term at June 30, 2023

$ 180.0 $ 180.0 1.65 % 1.68 % Extending to May 2027

$ 21.2 $ 22.4 0.20 % 0.18 % Extending to May 2027

The fair value of all interest rate swap agreements was a net asset of $ 13.4 million and $ 16.1 million at March 31, 2023 and December 31, 2022, respectively.

The fair value of all interest rate swap agreements was a net asset of $ 16.5 million and $ 16.1 million at June 30, 2023 and December 31, 2022, 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, 2023, $ 5.9 million of the amount included in OCI as net deferred gain is expected to be reclassified as income 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.

Based on market valuations at June 30, 2023, $ 7.0 million of the amount included in OCI as net deferred gain is expected to be reclassified as income 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

2023 DECEMBER 31

2022 Balance Sheet Location MARCH 31

2022 Balance Sheet Location JUNE 30

2023 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, 2023 Derivative Liabilities as of March 31, 2023

Derivative Assets as of June 30, 2023 Derivative Liabilities as of June 30, 2023

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 2023 2022 2023 2022 2023 2022 2023 2022

18 unchanged sentences

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

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2023 2022 2023 2022

Interest cost $ 0.7 $ 0.4 $ 1.3 $ 0.8

17 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, 2023 and December 31, 2022, 51 % and 52%, 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, 2023 and December 31, 2022, 50 % and 52 %, 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.

2 unchanged sentences

Because these estimates are subject to change and may be different than the actual inventory levels and costs at the end of the year, interim results are subject to the final year-end LIFO inventory valuation.

Note 10—Current and Long-Term Financing

On May 25, 2023, the Company entered into an amendment of its secured, floating-rate revolving credit facility (the "Facility").

As a result of the amendment, among other items, (i) a new tranche of revolving loans with aggregate commitments of $ 25.0 million (the “FILO Commitments”) was established under the Facility and (ii) the benchmark interest rate for U.S.

dollar-denominated borrowings under the Facility changed from LIBOR to Term SOFR, each as defined in the Facility.

The FILO Commitments will terminate on May 1, 2024 unless otherwise terminated prior to such date by the Company in accordance with the terms of the Facility.

Commencing December 1, 2023, the FILO Commitments will amortize on a monthly basis in the amount of $4.2 million per month.

Loans under the FILO Commitments ("FILO Loans") bear interest at a floating rate, which can be a base rate or Term SOFR, plus an applicable margin.

The applicable margins for FILO Loans are 2.25 % for base rate loans and 3.25 % for Term SOFR loans.

Subsequent to the amendment, existing U.S.

Loans (as defined in the Facility) were reallocated to the FILO Commitment.

As a result of such reallocation, the FILO Commitment was fully utilized as of the closing.

After giving effect to the amendment, the Facility consists of a domestic revolving credit facility in the amount of $ 210.0 million, a foreign revolving credit facility in the amount of $ 90.0 million and the FILO Commitments in the amount of $ 25.0 million.

The Company incurred approximately $ 0.6 million of additional deferred financing fees in connection with the amendment of the Facility.

Note 11— Product Warranties

16 unchanged sentences

Foreign currency effect 0.3

Balance at March 31, 2023 $ 57.3

Balance at June 30, 2023 $ 61.9

Note 12— Contingencies

7 unchanged sentences

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, 2023 and December 31, 2022 were $ 136.4 million and $ 133.2 million, respectively.

As of March 31, 2023, 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, 2023 and December 31, 2022 were $ 141.5 million and $ 133.2 million, respectively.

As of June 30, 2023, 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, 2023 was approximately $ 191.6 million based on Company estimates.

The fair value of collateral held at June 30, 2023 was approximately $ 195.4 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, 2023, 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, 2023, 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 $ 29.4 million of recourse or repurchase obligations for these certain eligible dealers are limited to 7.5 % of their original loan balance, or $ 12.8 million as of March 31, 2023.

The $ 29.4 million is included in the $ 136.4 million of total amounts subject to recourse or repurchase obligations at March 31, 2023.

Under this agreement, losses related to $ 25.5 million of recourse or repurchase obligations for these certain eligible dealers are limited to 7.5 % of their original loan balance, or $ 12.1 million as of June 30, 2023.

The $ 25.5 million is included in the $ 141.5 million of total amounts subject to recourse or repurchase obligations at June 30, 2023.

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

2 unchanged sentences

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, 2023, approximately $ 120.2 million of the Company's total recourse or repurchase obligations of $ 136.4 million related to transactions with HYGFS.

At June 30, 2023, approximately $ 129.8 million of the Company's total recourse or repurchase obligations of $ 141.5 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, 2023, loans from WF to HYGFS totaled $ 1.2 billion.

At June 30, 2023, loans from WF to HYGFS totaled $ 1.2 billion.

Although the Company’s contractual guarantee was $ 244.5 million, the loans by WF to HYGFS are secured by HYGFS’ customer receivables, of which the Company guarantees $ 129.8 million.

13 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

HYGFS $ 17.2 $ 21.8

1 unchanged sentence

Dividends received from unconsolidated affiliates are summarized below:

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HYGFS $ 10.5 $ 14.9

$ 10.5 $ 15.6

Summarized financial information for HYGFS and SN is as follows:

THREE MONTHS ENDED

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JUNE 30 JUNE 30

2023 2022 2023 2022

Revenues $ 121.3 $ 103.7 $ 229.3 $ 210.5

4 unchanged sentences

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, 2023 and December 31, 2022 was $ 0.7 million and $ 0.5 million, respectively.

The Company's investment as of June 30, 2023 and December 31, 2022 was $ 1.1 million and $ 0.5 million, respectively.

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

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2023 2022 2023 2022

Gain on equity investment $ 0.3 $ 0.6 $ 0.5 $ 0.6

The Company has a debt investment in a third party, OneH2, Inc.

The Company's investment was $ 0.8 million as of March 31, 2023 and December 31, 2022, respectively.

The Company's investment was $ 0.8 million as of each June 30, 2023 and December 31, 2022.

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