Hyster-Yale(HY) - 2022 Q1 - Quarterly Report

Part I. Financial Information This section presents the unaudited condensed consolidated financial statements and management's analysis for Q1 2022 Item 1. Financial Statements The financial statements for Q1 2022 reveal a shift from net income to a net loss, driven by lower gross profit, increased operating expenses, and higher interest costs, while liquidity remains stable despite decreased total equity Unaudited Condensed Consolidated Balance Sheets Balance sheets show increased assets and liabilities, decreased equity, and changes in current assets and deferred revenue Unaudited Condensed Consolidated Balance Sheets (In millions) | Metric | March 31, 2022 | December 31, 2021 | Change | | :-------------------------------- | :------------- | :---------------- | :----- | | Total Current Assets | $1,446.0 | $1,350.0 | +$96.0 | | Total Assets | $2,057.3 | $1,970.1 | +$87.2 | | Total Current Liabilities | $1,232.6 | $1,104.6 | +$128.0 | | Total Liabilities | $1,705.8 | $1,587.2 | +$118.6 | | Total Stockholders' Equity | $324.9 | $357.1 | -$32.2 | | Total Equity | $351.5 | $382.9 | -$31.4 | - Deferred revenue significantly increased from $49.7 million at December 31, 2021, to $130.1 million at March 31, 2022, indicating higher customer prepayments[5] Unaudited Condensed Consolidated Statements of Operations Statements of operations show a shift from net income to net loss in Q1 2022 due to reduced gross profit and higher operating expenses Unaudited Condensed Consolidated Statements of Operations (Three Months Ended March 31, In millions, except per share data) | Metric | 2022 | 2021 | Change | | :------------------------------------ | :----- | :----- | :----- | | Revenues | $827.6 | $732.2 | +$95.4 | | Gross Profit | $101.2 | $118.4 | -$17.2 | | Operating Profit (Loss) | $(18.3) | $3.1 | -$21.4 | | Net Income (Loss) Attributable to Stockholders | $(25.0) | $5.6 | -$30.6 | | Basic Earnings (Loss) per Share | $(1.48) | $0.33 | -$1.81 | | Dividends per Share | $0.3225 | $0.3175 | +$0.005 | - The company experienced a significant decline in profitability, moving from an operating profit of $3.1 million in Q1 2021 to an operating loss of $18.3 million in Q1 2022, and a net loss attributable to stockholders of $25.0 million compared to a net income of $5.6 million in the prior year[6] Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) Comprehensive loss improved in Q1 2022 due to smaller negative impacts from foreign currency and cash flow hedging, despite a larger net loss Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended March 31, In millions) | Metric | 2022 | 2021 | Change | | :---------------------------------------------------- | :----- | :----- | :----- | | Net Income (Loss) | $(24.2) | $6.1 | -$30.3 | | Foreign currency translation adjustment | $(4.6) | $(24.8) | +$20.2 | | Current period cash flow hedging activity | $(1.8) | $(14.3) | +$12.5 | | Comprehensive Loss | $(27.7) | $(32.5) | +$4.8 | | Comprehensive Loss Attributable to Stockholders | $(28.5) | $(32.0) | +$3.5 | - The comprehensive loss improved slightly from $(32.5) million in Q1 2021 to $(27.7) million in Q1 2022, primarily due to a smaller negative impact from foreign currency translation adjustments and cash flow hedging activities, despite a larger net loss[8] Unaudited Condensed Consolidated Statements of Cash Flows Operating activities generated significant cash in Q1 2022, improving from prior year, while financing activities increased cash usage Unaudited Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, In millions) | Activity | 2022 | 2021 | Change | | :------------------------------------------ | :----- | :----- | :----- | | Net cash provided by (used for) operating activities | $59.1 | $(47.1) | +$106.2 | | Net cash provided by (used for) investing activities | $(9.3) | $9.5 | -$18.8 | | Net cash used for financing activities | $(50.9) | $(8.0) | -$42.9 | | Balance at the end of the period | $65.1 | $103.0 | -$37.9 | - Operating activities generated $59.1 million in cash in Q1 2022, a significant improvement from a cash usage of $47.1 million in Q1 2021, mainly due to favorable working capital changes, particularly lower inventory purchases and increased other liabilities[10] - Cash used for financing activities increased to $50.9 million in Q1 2022 from $8.0 million in Q1 2021, primarily due to higher repayments on revolving credit facilities[10] Unaudited Condensed Consolidated Statements of Changes in Equity Total stockholders' equity decreased in Q1 2022, primarily due to the net loss for the period and cash dividends paid Unaudited Condensed Consolidated Statements of Changes in Equity (In millions) | Metric | Balance, Dec 31, 2021 | Stock-based compensation | Net income (loss) | Cash dividends | Current period other comprehensive loss | Reclassification adjustment to net income (loss) | Balance, Mar 31, 2022 | | :---------------------- | :-------------------- | :----------------------- | :---------------- | :------------- | :-------------------------------------- | :--------------------------------------------- | :-------------------- | | Total Stockholders' Equity | $357.1 | $1.7 | $(25.0) | $(5.4) | $(6.4) | $2.9 | $324.9 | - Total Stockholders' Equity decreased by $32.2 million from $357.1 million at December 31, 2021, to $324.9 million at March 31, 2022, primarily due to the net loss for the period and cash dividends paid[12] Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed disclosures on accounting policies, financial instruments, and other significant financial information Note 1. Basis of Presentation This note outlines the company's business operations, including its core products and equity method investments - Hyster-Yale Materials Handling, Inc. (the "Company") designs, engineers, manufactures, sells, and services lift trucks, attachments (Bolzoni), and hydrogen fuel cell stacks/engines (Nuvera) globally[15] - The Company accounts for investments in Sumitomo NACCO Forklift Co., Ltd. (50%-owned) and HYG Financial Services, Inc. (20%-owned) using the equity method[16] Note 2. Recently Issued Accounting Standards This note discusses the adoption status of recent accounting standard updates and ongoing evaluations - As of January 1, 2022, the Company did not adopt any recent accounting standard updates that had a material effect on its financial position, results of operations, cash flows, or related disclosures[18] - The Company is currently evaluating ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform[19] Note 3. Revenue Recognition This note details the company's revenue recognition policies, disaggregated revenue by category, and deferred revenue balances - Revenue is recognized when control of goods (trucks, parts) or services is transferred to the customer, typically at a point in time for sales and over time for service contracts[20][21] Disaggregated Revenue by Category (Three Months Ended March 31, 2022, In millions) | Category | Americas | EMEA | JAPIC | Bolzoni | Nuvera | Eliminations | Total | | :--------------- | :------- | :----- | :---- | :------ | :----- | :----------- | :---- | | Dealer sales | $289.9 | $130.6 | $46.7 | $— | $— | $— | $467.2 | | Direct customer sales | $99.5 | $6.1 | $— | $— | $— | $— | $105.6 | | Aftermarket sales | $145.1 | $27.6 | $4.9 | $— | $— | $— | $177.6 | | Other | $23.2 | $5.4 | $0.1 | $95.1 | $0.6 | $(47.2) | $77.2 | | Total Revenues | $557.7 | $169.7 | $51.7 | $95.1 | $0.6 | $(47.2) | $827.6 | Deferred Revenue (In millions) | Metric | Amount | | :------------------------ | :----- | | Balance, December 31, 2021 | $76.2 | | Customer deposits and billings | $88.8 | | Revenue recognized | $(11.4) | | Foreign currency effect | $1.0 | | Balance, March 31, 2022 | $154.6 | Note 4. Business Segments This note outlines the company's reportable business segments and their respective operating profit or loss contributions - The Company's reportable segments include three lift truck business units (Americas, EMEA, JAPIC) and two separate businesses (Bolzoni and Nuvera)[29][30] Segment Operating Profit (Loss) (Three Months Ended March 31, In millions) | Segment | 2022 | 2021 | Change | | :---------------- | :----- | :----- | :----- | | Americas | $4.4 | $14.6 | -$10.2 | | EMEA | $(11.4) | $0.1 | -$11.5 | | JAPIC | $(3.7) | $(2.5) | -$1.2 | | Lift truck business | $(10.7) | $12.2 | -$22.9 | | Bolzoni | $2.1 | $0.8 | +$1.3 | | Nuvera | $(8.1) | $(9.8) | +$1.7 | | Eliminations | $(1.6) | $(0.1) | -$1.5 | | Total | $(18.3) | $3.1 | -$21.4 | Note 5. Income Taxes This note explains the company's income tax provision, its reconciliation, and the factors influencing the reported income tax rate - The income tax provision is based on a forecasted annual income tax rate, with discrete items reflected in the period they occur[32][33] Income Tax Provision Reconciliation (Three Months Ended March 31, In millions) | Metric | 2022 | 2021 | | :-------------------------- | :----- | :----- | | Income (loss) before income taxes | $(21.3) | $8.5 | | Statutory taxes (21%) | $(4.5) | $1.8 | | Valuation allowance | $10.9 | $0.4 | | Income tax provision | $2.9 | $2.4 | | Reported income tax rate | (13.6)% | 28.2% | - The reported income tax rate for Q1 2022 was (13.6)%, differing from the U.S. federal statutory rate primarily due to additional valuation allowances and an interim adjustment from pretax losses for which no tax benefit was recognized[34] Note 6. Reclassifications from OCI This note details reclassifications from other comprehensive income to net income, primarily driven by cash flow hedges Reclassifications from OCI to Net Income (Loss) (Three Months Ended March 31, In millions) | OCI Component | Affected Line Item | 2022 (Net of tax) | 2021 (Net of tax) | | :------------------------------------ | :----------------- | :---------------- | :---------------- | | Gain (loss) on cash flow hedges | Net income (loss) | $(1.7) | $0.6 | | Amortization of defined benefit pension items | Net income (loss) | $(1.2) | $(1.1) | | Total reclassifications for the period | | $(2.9) | $(0.5) | - Total reclassifications from OCI to net income (loss) resulted in a $(2.9) million impact in Q1 2022, compared to $(0.5) million in Q1 2021, primarily driven by losses on cash flow hedges[35] Note 7. Financial Instruments and Derivative Financial Instruments This note describes the company's use of derivative financial instruments to manage foreign currency and interest rate risks and their fair values - The Company uses forward foreign currency exchange contracts and interest rate swap agreements to manage risks related to foreign currency transactions and floating rate debt[38][41] - At March 31, 2022, the fair value of revolving credit agreements and long-term debt was $449.8 million, approximating its carrying value of $450.9 million[37] Fair Value of Derivative Instruments (In millions) | Derivative Type | March 31, 2022 (Net Liability) | December 31, 2021 (Net Liability) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | Foreign currency exchange contracts | $39.6 | $26.7 | | Interest rate swap agreements | $(6.2) (Net Asset) | $3.2 | Note 8. Retirement Benefit Plans This note details the company's defined benefit pension plans and the components of pension income or expense - The Company maintains defined benefit pension plans, with benefits frozen for U.S. and U.K. plans, and only certain Netherlands employees still earning benefits[51][52] Components of Pension (Income) Expense (Three Months Ended March 31, In millions) | Component | 2022 | 2021 | | :-------------------------- | :----- | :----- | | U.S. Pension Total | $(0.1) | $(0.3) | | Non-U.S. Pension Total | $(0.3) | $(1.1) | | Total Pension (Income) Expense | $(0.4) | $(1.4) | Note 9. Inventories This note describes the valuation methods for inventories and provides a breakdown of inventory categories - Inventories are valued at the lower of cost or market for LIFO (48% of total inventories at March 31, 2022) and lower of cost or net realizable value for FIFO (all other inventories)[55] Inventories (In millions) | Category | March 31, 2022 | December 31, 2021 | | :------------------------ | :------------- | :---------------- | | Finished goods and service parts | $362.5 | $321.6 | | Work in process | $37.4 | $32.9 | | Raw materials | $520.8 | $509.9 | | Total manufactured inventories | $920.7 | $864.4 | | LIFO reserve | $(94.3) | $(83.4) | | Total inventory | $826.4 | $781.0 | Note 10. Product Warranties This note explains the company's product warranty policies and the changes in warranty obligations - The Company provides standard and separately priced extended warranties for its lift trucks, with liabilities accrued at the time of revenue recognition[56][57] Changes in Warranty Obligations (In millions) | Metric | 2022 | | :------------------------------------ | :----- | | Balance at December 31, 2021 | $64.7 | | Current year warranty expense | $8.3 | | Change in estimate related to pre-existing warranties | $(0.8) | | Payments made | $(10.0) | | Balance at March 31, 2022 | $62.2 | Note 11. Contingencies This note addresses the company's exposure to legal and regulatory proceedings and management's assessment of potential material costs - The Company is subject to various legal and regulatory proceedings, but management believes the likelihood of incurring material costs in excess of recognized accruals is remote[60] Note 12. Guarantees This note details the company's recourse and repurchase obligations for customer financing and guarantees related to affiliate debt - The Company provides recourse or repurchase obligations for customer financing, totaling $120.2 million at March 31, 2022, with collateral valued at approximately $184.4 million[61] - A significant portion ($100.0 million) of these obligations relates to transactions with HYGFS, and the Company also guarantees 20% of HYGFS' debt with Wells Fargo, amounting to an incremental obligation of $199.8 million[62] Total Exposure Related to Guarantees (March 31, 2022, In millions) | Category | HYGFS | Total | | :------------------------------------ | :---- | :---- | | Total recourse or repurchase obligations | $100.0 | $120.2 | | Incremental obligation related to guarantee to WF | $199.8 | $199.8 | | Total exposure related to guarantees | $290.2 | $310.4 | Note 13. Equity and Debt Investments This note provides information on the company's equity investments in unconsolidated affiliates and a debt investment - The Company holds equity investments in HYGFS (20%) and SN (50%), accounted for using the equity method, and a debt investment in OneH2, Inc. ($0.8 million)[65][67] Equity Investments in Unconsolidated Affiliates (In millions) | Affiliate | March 31, 2022 | December 31, 2021 | | :-------- | :------------- | :---------------- | | HYGFS | $17.6 | $25.2 | | SN | $40.8 | $43.7 | | Bolzoni | $0.3 | $0.3 | Dividends Received from Unconsolidated Affiliates (Three Months Ended March 31, In millions) | Affiliate | 2022 | 2021 | | :-------- | :--- | :--- | | HYGFS | $10.3 | $5.1 | | SN | $0.7 | $0.4 | | Total | $11.0 | $5.5 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company faced a challenging Q1 2022 with increased revenues but a significant operating loss due to cost inflation and supply chain issues, yet anticipates gradual profitability improvement and a return to substantial profit by Q4 through strategic initiatives Company Overview This section provides an overview of Hyster-Yale Materials Handling, Inc.'s global operations and business scope - Hyster-Yale Materials Handling, Inc. is a leading global lift truck manufacturer, offering a comprehensive line of lift trucks, attachments (Bolzoni), and hydrogen fuel cell power products (Nuvera)[69][70] - The materials handling business is cyclical, influenced by general economic activity, and the Company expects to increase its ownership in Hyster-Yale Maximal to 100% by exercising an option prior to June 8, 2056[69] Critical Accounting Policies and Estimates This section confirms no material changes to the company's critical accounting policies and estimates since the last annual report - There have been no material changes to the Company's Critical Accounting Policies and Estimates since December 31, 2021, as disclosed in its Annual Report on Form 10-K[71] Financial Review This section provides a detailed analysis of the company's revenues, operating profit, and net income for Q1 2022 compared to the prior year Revenues Analysis (Q1 2022 vs Q1 2021) This analysis details the drivers behind the company's revenue changes across segments in Q1 2022 compared to Q1 2021 Revenues (Three Months Ended March 31, In millions) | Segment | 2022 | 2021 | % Change | | :---------------- | :----- | :----- | :------- | | Americas | $557.7 | $459.7 | 21.3% | | EMEA | $169.7 | $170.7 | (0.6)% | | JAPIC | $51.7 | $60.5 | (14.5)% | | Lift truck business | $779.1 | $690.9 | 12.8% | | Bolzoni | $95.1 | $79.5 | 19.6% | | Nuvera | $0.6 | $— | n.m. | | Total | $827.6 | $732.2 | 13.0% | - Total revenues increased by 13.0% to $827.6 million in Q1 2022, driven by improved pricing ($43.9 million) and higher unit and parts volume ($24.1 million for unit volume and product mix, $21.9 million for parts), partially offset by unfavorable foreign currency movements ($14.0 million)[77] - Americas revenues increased by 21.3% due to higher pricing and unit/parts volume, while JAPIC revenues decreased by 14.5% due to lower unit and parts volumes[78][79] Operating Profit (Loss) Analysis (Q1 2022 vs Q1 2021) This analysis examines the factors contributing to the company's shift from operating profit to a significant operating loss in Q1 2022 Operating Profit (Loss) (Three Months Ended March 31, In millions) | Segment | 2022 | 2021 | % Change | | :---------------- | :----- | :----- | :------- | | Americas | $4.4 | $14.6 | (69.9)% | | EMEA | $(11.4) | $0.1 | n.m. | | JAPIC | $(3.7) | $(2.5) | (48.0)% | | Lift truck business | $(10.7) | $12.2 | (187.7)% | | Bolzoni | $2.1 | $0.8 | 162.5% | | Nuvera | $(8.1) | $(9.8) | 17.3% | | Total | $(18.3) | $3.1 | n.m. | - The Company reported an operating loss of $18.3 million in Q1 2022, a significant decline from an operating profit of $3.1 million in Q1 2021, primarily due to lower gross profit in the lift truck business[80] - Gross profit decreased mainly due to $68.6 million in material and freight cost inflation and manufacturing inefficiencies from supply chain constraints, which more than offset the $43.9 million benefit from improved pricing[80] - EMEA recognized an operating loss of $11.4 million, including $2.5 million in charges related to Russian orders, while Bolzoni's operating profit increased by 162.5% due to higher unit volume and pricing[82][84] Net Income (Loss) Attributable to Stockholders Analysis (Q1 2022 vs Q1 2021) This analysis details the reasons for the company's shift from net income to a net loss attributable to stockholders in Q1 2022 Net Income (Loss) Attributable to Stockholders (Three Months Ended March 31, In millions) | Segment | 2022 | 2021 | % Change | | :---------------- | :----- | :----- | :------- | | Americas | $1.1 | $9.5 | (88.4)% | | EMEA | $(7.0) | $0.9 | n.m. | | JAPIC | $(4.0) | $(2.2) | (81.8)% | | Lift truck business | $(9.9) | $8.2 | n.m. | | Bolzoni | $1.3 | $0.6 | 116.7% | | Nuvera | $(8.1) | $(3.8) | (113.2)% | | Total | $(25.0) | $5.6 | n.m. | - Net loss attributable to stockholders was $25.0 million in Q1 2022, compared to net income of $5.6 million in Q1 2021, primarily due to lower lift truck operating profit, absence of a $4.6 million gain on sale of investment, higher interest expense, and unfavorable mark-to-market adjustments[86] Liquidity and Capital Resources This section reviews the company's cash flow activities, financing, capital expenditures, and overall capital structure Cash Flows Analysis This analysis highlights the significant improvement in operating cash flow and the shift in investing activities during Q1 2022 Net Cash Flow Activities (Three Months Ended March 31, In millions) | Activity | 2022 | 2021 | Change | | :------------------------------------------ | :----- | :----- | :----- | | Net cash provided by (used for) operating activities | $59.1 | $(47.1) | +$106.2 | | Net cash provided by (used for) investing activities | $(9.3) | $9.5 | -$18.8 | | Net cash used for financing activities | $(50.9) | $(8.0) | -$42.9 | | Cash flow before financing activities | $49.8 | $(37.6) | +$87.4 | - Operating cash flow improved significantly by $106.2 million, primarily due to an increase in other liabilities from customer down payments and lower inventory purchases[88] - Investing activities shifted from providing $9.5 million in cash in Q1 2021 to using $9.3 million in Q1 2022, mainly due to the absence of proceeds from the sale of OneH2 preferred shares ($15.7 million) in the current period[89] Financing Activities This section details the company's financing activities, including credit facilities and debt outstanding, and its compliance with covenants - Net cash used for financing activities increased to $50.9 million in Q1 2022 from $8.0 million in Q1 2021, primarily due to repayments on the $300.0 million secured revolving credit facility (the "Facility")[90][91] - At March 31, 2022, the Company had $101.0 million outstanding under the Facility, with $194.5 million of unused borrowing capacity, and was in compliance with all restrictive covenants[91][93] - The Company also has a $225.0 million term loan, with $223.3 million principal outstanding at March 31, 2022, and believes current liquidity sources are sufficient for its operating needs[94][99] Contractual Obligations, Contingent Liabilities and Commitments This section confirms no significant changes in the company's contractual obligations or commercial commitments since the last fiscal year-end - There have been no significant changes in the total amount or timing of the Company's contractual obligations or commercial commitments since December 31, 2021[100] Capital Expenditures This section outlines the company's planned capital expenditures for 2022 and their financing sources Capital Expenditures (In millions) | Segment | Three Months Ended March 31, 2022 | Planned for Remainder of 2022 | Planned 2022 Total | Actual 2021 | | :---------------- | :-------------------------------- | :---------------------------- | :----------------- | :---------- | | Lift truck business | $7.5 | $12.3 | $19.8 | $30.6 | | Bolzoni | $1.8 | $3.4 | $5.2 | $10.4 | | Nuvera | $0.4 | $3.5 | $3.9 | $3.3 | | Total | $9.7 | $19.2 | $28.9 | $44.3 | - Planned capital expenditures for 2022 are approximately $28.9 million, primarily for product development, IT infrastructure, and manufacturing improvements, to be financed by internally generated funds and bank financing[101] Capital Structure This section presents the company's cash, debt, and equity balances, along with its debt to total capitalization ratio Capital Structure (In millions) | Metric | March 31, 2022 | December 31, 2021 | Change | | :-------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $65.1 | $65.5 | $(0.4) | | Total debt | $(479.0) | $(518.5) | +$39.5 | | Total equity | $351.5 | $382.9 | $(31.4) | | Debt to total capitalization | 58% | 58% | —% | - Total debt decreased by $39.5 million to $479.0 million at March 31, 2022, while total equity decreased by $31.4 million, maintaining a stable debt to total capitalization ratio of 58%[102] Outlook and Strategic Perspective This section provides the company's forward-looking statements on expected financial performance and strategic initiatives across its business segments Consolidated Outlook This outlook details expected net losses in Q2 and Q3 2022, followed by substantial net income in Q4, influenced by ongoing market challenges - The Company expects a larger net loss in Q2 2022, a lower but substantial net loss in Q3, and substantial net income in Q4, but Q4 profit is not expected to offset losses from the first nine months[103] - This outlook is influenced by continued component shortages, significant material and freight cost inflation, the Russia/Ukraine conflict, and ongoing losses at Nuvera[103] - Liquidity protection is a priority, with expected 2022 capital expenditures of $29 million and strict controls over operating expenses, including delays in strategic program investments[104] Lift Truck Strategic Perspective This perspective outlines expectations for the global lift truck market, shipment forecasts, margin improvements, and core strategic initiatives - The global lift truck market is expected to decline from 2021 highs but remain above pre-pandemic levels, leading to an anticipated substantial decrease in bookings for the remainder of 2022[106] - Full-year shipments are expected to increase significantly in 2022 due to a robust backlog and mitigation efforts for supply chain constraints, despite ongoing component shortages and the Russia/Ukraine conflict[107] - The Lift Truck business expects lower margins in Q2 2022 due to a lag between price increases and revenue realization, with margins improving in the second half and substantial profit in Q4 as higher-margin orders are shipped[108] - Core strategies include providing the lowest cost of ownership (modular products, electrification, automation), leading in industry- and customer-focused solutions, and being a leader in independent distribution[111] Bolzoni Strategic Perspective This perspective details Bolzoni's expected operating profit and net income trends, along with its strategic focus areas for market growth - Bolzoni expects lower operating profit and net income in Q2 2022 compared to Q1, but significantly higher than the prior-year loss, with improving profits in Q3 and Q4 as component shortages moderate and pricing actions take effect[113] - Strategic focus includes implementing the "One Company - 3 Brands" approach, strengthening North America and JAPIC commercial operations, and increasing sales in key attachment industries[114] Nuvera Strategic Perspective This perspective outlines Nuvera's continued focus on commercializing hydrogen fuel cell engines and expectations for reduced losses in 2022 - Nuvera continues to focus on commercializing its 45kW and 60kW hydrogen fuel cell engines for niche, heavy-duty vehicle applications and has initiated development of a new 125kW engine[115] - The Company expects moderately reduced losses at Nuvera in 2022 due to enhanced fuel cell shipments, excluding the impact of 2021 inventory valuation and fixed asset impairment charges[115] Effects of Foreign Currency This section acknowledges the company's exposure to foreign currency exchange rate variability and its impact on financial results - The Company operates internationally and is subject to foreign currency exchange rate variability, with the effects on revenues, operating profit, and net income discussed in the operating results[116] Forward-Looking Statements This section highlights inherent risks and uncertainties associated with forward-looking statements, including supply chain disruptions and geopolitical factors - The report contains forward-looking statements subject to risks and uncertainties, including supply chain disruptions, cost inflation, geopolitical developments (e.g., Russia/Ukraine conflict), and customer acceptance of pricing[117] - Other factors that could cause actual results to differ include the COVID-19 pandemic, manufacturing delays, credit access, impairment charges, demand reduction, exchange rate fluctuations, and the successful commercialization of Nuvera's technology[117] Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company's market risk exposures remain materially unchanged since December 31, 2021, consistent with disclosures in its Annual Report on Form 10-K - There have been no material changes in the Company's market risk exposures since December 31, 2021, as detailed in the Annual Report on Form 10-K[118] Item 4. Controls and Procedures Management concluded that the Company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal control over financial reporting during Q1 - The Company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2022[119] - No changes in internal control over financial reporting occurred during Q1 2022 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[120] Part II. Other Information This section covers legal proceedings, risk factors, sales of equity securities, defaults, mine safety disclosures, other information, and exhibits Item 1. Legal Proceedings The Company reported no legal proceedings for the period - No legal proceedings were reported for the period[122] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - No material changes from risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021[122] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company reported no unregistered sales of equity securities or use of proceeds for the period - No unregistered sales of equity securities or use of proceeds were reported for the period[122] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities for the period - No defaults upon senior securities were reported for the period[122] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the Company's operations - Mine Safety Disclosures are not applicable[122] Item 5. Other Information The Company reported no other information for the period - No other information was reported for the period[122] Item 6. Exhibits The report includes various exhibits, such as the Director Fee Policy, certifications from executive officers, and Inline XBRL documents - Exhibits filed include the Hyster-Yale Materials Handling, Inc. and Subsidiaries Director Fee Policy (Amended Effective as of January 1, 2022), certifications from Alfred M. Rankin, Jr. and Kenneth C. Schilling, and Inline XBRL documents[122] Signatures The report was duly signed on May 3, 2022, by Kenneth C. Schilling, Senior Vice President and Chief Financial Officer - The report was signed by Kenneth C. Schilling, Senior Vice President and Chief Financial Officer, on May 3, 2022[126]