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(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2017
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
(State or other jurisdiction of incorporation or organization)
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31-1637659
(I.R.S. Employer Identification No.)
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5875 Landerbrook Drive, Suite 300, Cleveland, Ohio
(Address of principal executive offices)
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44124-4069
(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Class A Common Stock, Par Value $0.01 Per Share
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New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(Do not check if a smaller reporting company)
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PAGE
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December 31, 2017
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September 30, 2017
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December 31, 2016
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||||||
Units (in thousands)
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33.8
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35.1
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30.7
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Backlog, approximate sales value (in millions)
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$
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860
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$
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860
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$
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740
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•
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potential political, economic and social instability in the non-U.S. countries in which the Company operates;
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•
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currency risks, including those risks set forth under, “The pricing and costs of the Company's products have been and may continue to be impacted by currency fluctuations, which could materially increase costs and result in material exchange losses and reduce operating margins”;
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•
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imposition of or increases in currency exchange controls;
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•
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potential inflation in the applicable non-U.S. economies;
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•
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imposition of or increases in import duties and other tariffs on products;
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•
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imposition of or increases in non-U.S. taxation of earnings and withholding on payments received;
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regulatory changes affecting non-U.S. operations; and
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•
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stringent labor regulations.
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Segment
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Facility Location
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Owned/Leased
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Function(s)
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Lift Truck
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Americas
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Berea, Kentucky
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Owned
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Assembly of lift trucks and manufacture of component parts
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Charlotte, North Carolina
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Leased
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Customer experience and training center
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Cleveland, Ohio
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Leased
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Global headquarters
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Danville, Illinois
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Owned
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Americas parts distribution center
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Fairview, Oregon
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Owned
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Global executive administrative center; counterbalanced development center for design and testing of lift trucks, prototype equipment and component parts
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Greenville,
North Carolina
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Owned
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Divisional headquarters and marketing and sales operations for Hyster
®
and Yale
®
in Americas; Americas warehouse development center; assembly of lift trucks and manufacture of component parts
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Itu, Brazil
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Owned
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Assembly of lift trucks and parts distribution center
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Ramos Arizpe,
Mexico
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Owned
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Manufacture of component parts for lift trucks
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Sulligent, Alabama
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Owned
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Manufacture of component parts for lift trucks
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EMEA
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Craigavon,
Northern Ireland
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Owned
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Manufacture of lift trucks and cylinders; frame and mast fabrication for EMEA
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Frimley, Surrey, United Kingdom
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Leased
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Divisional headquarters and marketing and sales operations for Hyster
®
and Yale
®
in EMEA
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Irvine, Scotland
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Leased
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European administrative center
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Masate, Italy
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Leased
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Assembly of lift trucks; European warehouse development center
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Nijmegen,
The Netherlands
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Owned
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Big trucks development center; manufacture and assembly of big trucks and component parts; European parts distribution center
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JAPIC
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Shanghai, China
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Owned
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Assembly of lift trucks by Shanghai Hyster joint venture, sale of parts and marketing operations of China
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Sydney, Australia
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Leased
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Divisional headquarters and sales and marketing for JAPIC; JAPIC parts distribution center
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Pune, India
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Leased
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Engineering design services
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Bolzoni
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Helsinki, Finland
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Leased
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Manufacture and distribution of Bolzoni products
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Heibei, China
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Owned
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Manufacture and distribution of Bolzoni products
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Homewood, Illinois
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Owned
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Manufacture and distribution of Bolzoni products
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Piacenza, Italy
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Owned
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Bolzoni headquarters; manufacture and distribution of Bolzoni products
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Prato, Italy
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Owned
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Manufacture and distribution of Bolzoni products
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Salzgitter, Germany
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Owned
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Manufacture and distribution of Bolzoni products
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Wuxi, China
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Owned
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Manufacture and distribution of Bolzoni products
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Nuvera
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Billerica, Massachusetts
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Leased
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Nuvera research and development laboratory
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San Donato, Italy
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Leased
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Nuvera integration and testing
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Name
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Age
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Current Position
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Other Positions
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Alfred M. Rankin, Jr.
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76
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Chairman, President and Chief Executive Officer of Hyster-Yale (from prior to 2013), Chairman of HYG (from prior to 2013).
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Colin Wilson
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63
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President and Chief Executive Officer, HYG of Hyster-Yale (from September 2014), President and Chief Executive Officer of HYG (from September 2014).
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President and Chief Operating Officer of HYG (from November 2013 to September 2014), President, Americas of HYG (from prior to 2013 to September 2014), Vice President and Chief Operating Officer of HYG (from prior to 2013 to November 2013).
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Gregory J. Breier
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52
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Vice President, Tax of Hyster-Yale (from May 2014), Vice President, Tax of HYG (from prior to 2013).
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Brian K. Frentzko
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57
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Vice President, Treasurer of Hyster-Yale (from prior to 2013), Vice President, Treasurer of HYG (from prior to 2013).
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Amy E. Gerbick
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46
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Associate General Counsel, Director of Corporate Compliance and Assistant Secretary of Hyster-Yale (from May 2014), Associate General Counsel, Director of Corporate Compliance and Assistant Secretary of HYG (from May 2014).
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Associate, Jones Day (a law firm) (from prior to 2013 to May 2014).
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Jennifer M. Langer
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44
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Vice President, Controller of Hyster-Yale (from February 2013), Vice President, Controller of HYG (from February 2013).
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Controller of Hyster-Yale (from prior to 2013 to February 2013), Controller of HYG (from prior to 2013 to February 2013).
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Lauren E. Miller
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63
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Senior Vice President, Chief Marketing Officer of Hyster-Yale (from January 2015), Senior Vice President, Chief Marketing Officer of HYG (from January 2015).
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Senior Vice President, Marketing and Consulting of Hyster-Yale (from prior to 2013 to January 2015), Senior Vice President, Marketing and Consulting of HYG (from prior to 2013 to January 2015).
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Charles F. Pascarelli
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58
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Senior Vice President, President, Americas of HYG (from January 2015)
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President, Sales and Marketing, Americas of HYG (from March 2013 to January 2015), President, Sales and Marketing, The Raymond Corporation (an electrical materials handling company) (from prior to 2013 to March 2013).
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Rajiv K. Prasad
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54
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Chief Product and Operations Officer of HYG (from February 2018).
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Senior Vice President, Global Product Development, Manufacturing and Supply Chain Strategy of HYG (from September 2014 to February 2018). Vice President, Global Product Development and Manufacturing of HYG (from prior to 2013 to September 2014).
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Anthony J. Salgado
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47
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Senior Vice President, JAPIC of HYG (from January 2016).
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Vice President, Corporate Officer, UniCarriers Corporation (an industrial company) (from April 2014 to January 2016), President, UniCarriers Americas Corporation (from October 2013 to January 2016), Vice President, Manufacturing Operations, UniCarriers Americas Corporation (from prior to 2013 to October 2013).
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Harry Sands
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66
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Senior Vice President, Managing Director, Europe, Middle East and Africa of HYG (from June 2015).
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Vice President, Manufacturing EMEA of HYG (from prior to 2013 to June 2015).
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Kenneth C. Schilling
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58
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Senior Vice President and Chief Financial Officer of Hyster-Yale (from September 2014), Senior Vice President and Chief Financial Officer of HYG (from September 2014).
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Vice President and Chief Financial Officer of Hyster-Yale (from prior to 2013 to September 2014), Vice President and Chief Financial Officer of HYG (from prior to 2013 to September 2014).
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Gopichand Somayajula
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61
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Vice President, Global Product Development of HYG (from May 2013)
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Vice President, Counterbalanced Engineering of HYG (from prior to 2013 to May 2013).
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Suzanne S. Taylor
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55
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Senior Vice President, General Counsel and Secretary of Hyster-Yale (from May 2016), Senior Vice President, General Counsel and Secretary of HYG (from May 2016).
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Vice President, Deputy General Counsel and Assistant Secretary of Hyster-Yale (from February 2013 to May 2016), Vice President, Deputy General Counsel and Assistant Secretary of HYG (from February 2013 to May 2016), Deputy General Counsel and Assistant Secretary of Hyster-Yale (from prior to 2013 to February 2013), Deputy General Counsel and Assistant Secretary of HYG (from prior to 2013 to February 2013).
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Mark H. Trivett
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48
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Vice President Finance, Europe, Middle East and Africa of HYG (from prior to 2013).
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Raymond C. Ulmer
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54
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Vice President Finance, Americas of HYG (from prior to 2013).
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Year Ended December 31
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||||||||||||||||||
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2017
(1)
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2016
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2015
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2014
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2013
|
||||||||||
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(In millions, except per share data)
|
||||||||||||||||||
Operating Statement Data:
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|
||||||||||
Revenues
|
$
|
2,885.2
|
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$
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2,569.7
|
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$
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2,578.1
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$
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2,767.2
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$
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2,666.3
|
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Operating profit
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$
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76.0
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$
|
34.9
|
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$
|
103.5
|
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$
|
148.8
|
|
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$
|
134.3
|
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Net income
|
$
|
48.9
|
|
|
$
|
42.3
|
|
|
$
|
75.1
|
|
|
$
|
110.2
|
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$
|
110.2
|
|
Net (income) loss attributable to noncontrolling interest
|
(0.3
|
)
|
|
0.5
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|||||
Net income attributable to stockholders
|
$
|
48.6
|
|
|
$
|
42.8
|
|
|
$
|
74.7
|
|
|
$
|
109.8
|
|
|
$
|
110.0
|
|
Basic earnings per share attributable to stockholders:
|
$
|
2.95
|
|
|
$
|
2.61
|
|
|
$
|
4.58
|
|
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$
|
6.61
|
|
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$
|
6.58
|
|
Diluted earnings per share attributable to stockholders:
|
$
|
2.94
|
|
|
$
|
2.61
|
|
|
$
|
4.57
|
|
|
$
|
6.58
|
|
|
$
|
6.54
|
|
Balance Sheet Data at December 31:
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|||||
Total assets
|
$
|
1,647.9
|
|
|
$
|
1,287.1
|
|
|
$
|
1,095.9
|
|
|
$
|
1,120.8
|
|
|
$
|
1,161.3
|
|
Long-term debt
|
$
|
216.2
|
|
|
$
|
82.2
|
|
|
$
|
19.6
|
|
|
$
|
12.0
|
|
|
$
|
6.7
|
|
Stockholders' equity
|
$
|
565.5
|
|
|
$
|
463.8
|
|
|
$
|
460.8
|
|
|
$
|
454.5
|
|
|
$
|
449.8
|
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Provided by (used for) operating activities
|
$
|
164.7
|
|
|
$
|
(48.9
|
)
|
|
$
|
89.4
|
|
|
$
|
100.0
|
|
|
$
|
152.9
|
|
Used for investing activities
|
$
|
(47.3
|
)
|
|
$
|
(145.1
|
)
|
|
$
|
(31.3
|
)
|
|
$
|
(44.4
|
)
|
|
$
|
(26.1
|
)
|
Provided by (used for) financing activities
|
$
|
53.1
|
|
|
$
|
77.9
|
|
|
$
|
(7.1
|
)
|
|
$
|
(110.5
|
)
|
|
$
|
(104.4
|
)
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash dividends
|
$
|
1.2025
|
|
|
$
|
1.1700
|
|
|
$
|
1.1300
|
|
|
$
|
1.0750
|
|
|
$
|
1.0000
|
|
Market value at December 31
|
$
|
85.16
|
|
|
$
|
63.77
|
|
|
$
|
52.45
|
|
|
$
|
73.20
|
|
|
$
|
93.16
|
|
Stockholders' equity at December 31
|
$
|
34.35
|
|
|
$
|
28.30
|
|
|
$
|
28.23
|
|
|
$
|
27.98
|
|
|
$
|
26.91
|
|
Actual shares outstanding at December 31
|
16.462
|
|
|
16.391
|
|
|
16.324
|
|
|
16.241
|
|
|
16.714
|
|
|||||
Basic weighted average shares outstanding
|
16.447
|
|
|
16.376
|
|
|
16.307
|
|
|
16.607
|
|
|
16.725
|
|
|||||
Diluted weighted average shares outstanding
|
16.514
|
|
|
16.427
|
|
|
16.355
|
|
|
16.675
|
|
|
16.808
|
|
|||||
Total employees at December 31
(2)
|
6,800
|
|
|
6,500
|
|
|
5,400
|
|
|
5,400
|
|
|
5,100
|
|
(1)
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During 2017, the Company recognized $19.8 million of equity income from HYGFS and $38.2 million of income tax expense as a result of the Tax Cuts and Jobs Act (the “Tax Reform Act”), which was signed into law on December 22, 2017. Further information on the impacts of the Tax Reform Act is discussed in Note 6 to the consolidated financial statements.
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(2)
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Excludes temporary employees.
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Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Assumption
|
|
Change
|
|
Increase (decrease)
2018 net pension expense
|
|
Increase (decrease)
2017 projected benefit obligation
|
Discount rate
|
|
1% increase
|
|
$0.1
|
|
$(6.1)
|
|
|
1% decrease
|
|
(0.3)
|
|
6.7
|
Return on plan assets
|
|
1% increase
|
|
(1.0)
|
|
N/A
|
|
|
1% decrease
|
|
1.0
|
|
N/A
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Revenues
|
|
Gross Profit
|
|
Operating Profit
|
|
Net Income Attributable to Stockholders
|
||||||||
2016
|
|
$
|
2,569.7
|
|
|
$
|
427.5
|
|
|
$
|
34.9
|
|
|
$
|
42.8
|
|
Increase (decrease) in 2017
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
158.4
|
|
|
46.7
|
|
|
35.6
|
|
|
8.8
|
|
||||
EMEA
|
|
100.1
|
|
|
6.2
|
|
|
1.4
|
|
|
(4.1
|
)
|
||||
JAPIC
|
|
4.4
|
|
|
3.1
|
|
|
0.6
|
|
|
0.2
|
|
||||
Lift truck business
|
|
262.9
|
|
|
56.0
|
|
|
37.6
|
|
|
4.9
|
|
||||
Bolzoni
|
|
61.6
|
|
|
19.1
|
|
|
6.5
|
|
|
4.2
|
|
||||
Nuvera
|
|
1.2
|
|
|
0.6
|
|
|
(2.4
|
)
|
|
(2.9
|
)
|
||||
Eliminations
|
|
(10.2
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(0.4
|
)
|
||||
2017
|
|
$
|
2,885.2
|
|
|
$
|
502.6
|
|
|
$
|
76.0
|
|
|
$
|
48.6
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) % Change
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
Lift truck unit shipments (in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
58.4
|
|
|
54.4
|
|
|
56.8
|
|
|
7.4
|
%
|
|
(4.2
|
)%
|
|||
EMEA
|
28.9
|
|
|
24.6
|
|
|
23.8
|
|
|
17.5
|
%
|
|
3.4
|
%
|
|||
JAPIC
|
6.1
|
|
|
5.8
|
|
|
6.3
|
|
|
5.2
|
%
|
|
(7.9
|
)%
|
|||
|
93.4
|
|
|
84.8
|
|
|
86.9
|
|
|
10.1
|
%
|
|
(2.4
|
)%
|
|||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
1,834.1
|
|
|
$
|
1,675.7
|
|
|
$
|
1,775.5
|
|
|
9.5
|
%
|
|
(5.6
|
)%
|
EMEA
|
715.8
|
|
|
615.7
|
|
|
606.4
|
|
|
16.3
|
%
|
|
1.5
|
%
|
|||
JAPIC
|
173.9
|
|
|
169.5
|
|
|
193.7
|
|
|
2.6
|
%
|
|
(12.5
|
)%
|
|||
Lift truck business
|
2,723.8
|
|
|
2,460.9
|
|
|
2,575.6
|
|
|
10.7
|
%
|
|
(4.5
|
)%
|
|||
Bolzoni
(1)
|
177.2
|
|
|
115.6
|
|
|
—
|
|
|
53.3
|
%
|
|
n.m.
|
|
|||
Nuvera
|
3.7
|
|
|
2.5
|
|
|
2.5
|
|
|
48.0
|
%
|
|
n.m.
|
|
|||
Eliminations
|
(19.5
|
)
|
|
(9.3
|
)
|
|
—
|
|
|
n.m.
|
|
|
n.m.
|
|
|||
|
$
|
2,885.2
|
|
|
$
|
2,569.7
|
|
|
$
|
2,578.1
|
|
|
12.3
|
%
|
|
(0.3
|
)%
|
Gross profit (loss)
|
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
334.6
|
|
|
$
|
287.9
|
|
|
$
|
308.1
|
|
|
16.2
|
%
|
|
(6.6
|
)%
|
EMEA
|
95.7
|
|
|
89.5
|
|
|
101.3
|
|
|
6.9
|
%
|
|
(11.6
|
)%
|
|||
JAPIC
|
20.2
|
|
|
17.1
|
|
|
23.2
|
|
|
18.1
|
%
|
|
(26.3
|
)%
|
|||
Lift truck business
|
450.5
|
|
|
394.5
|
|
|
432.6
|
|
|
14.2
|
%
|
|
(8.8
|
)%
|
|||
Bolzoni
(1)
|
54.8
|
|
|
35.7
|
|
|
—
|
|
|
53.5
|
%
|
|
n.m.
|
|
|||
Nuvera
|
(2.1
|
)
|
|
(2.7
|
)
|
|
(1.8
|
)
|
|
(22.2
|
)%
|
|
n.m.
|
|
|||
Eliminations
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
n.m.
|
|
|
n.m.
|
|
|||
|
$
|
502.6
|
|
|
$
|
427.5
|
|
|
$
|
430.8
|
|
|
17.6
|
%
|
|
(0.8
|
)%
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
225.3
|
|
|
$
|
214.2
|
|
|
$
|
191.2
|
|
|
(5.2
|
)%
|
|
(12.0
|
)%
|
EMEA
|
86.7
|
|
|
81.9
|
|
|
88.3
|
|
|
(5.9
|
)%
|
|
7.2
|
%
|
|||
JAPIC
|
26.3
|
|
|
23.8
|
|
|
25.0
|
|
|
(10.5
|
)%
|
|
4.8
|
%
|
|||
Lift truck business
|
338.3
|
|
|
319.9
|
|
|
304.5
|
|
|
(5.8
|
)%
|
|
(5.1
|
)%
|
|||
Bolzoni
(1)
|
48.4
|
|
|
35.8
|
|
|
—
|
|
|
(35.2
|
)%
|
|
n.m.
|
|
|||
Nuvera
|
39.9
|
|
|
36.9
|
|
|
22.8
|
|
|
(8.1
|
)%
|
|
n.m.
|
|
|||
|
$
|
426.6
|
|
|
$
|
392.6
|
|
|
$
|
327.3
|
|
|
(8.7
|
)%
|
|
(20.0
|
)%
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) % Change
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||
Operating profit (loss)
|
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
109.3
|
|
|
$
|
73.7
|
|
|
$
|
116.9
|
|
|
48.3
|
%
|
|
(37.0
|
)%
|
EMEA
|
9.0
|
|
|
7.6
|
|
|
13.0
|
|
|
18.4
|
%
|
|
(41.5
|
)%
|
|||
JAPIC
|
(6.1
|
)
|
|
(6.7
|
)
|
|
(1.8
|
)
|
|
9.0
|
%
|
|
n.m.
|
|
|||
Lift truck business
|
112.2
|
|
|
74.6
|
|
|
128.1
|
|
|
50.4
|
%
|
|
(41.8
|
)%
|
|||
Bolzoni
(1)
|
6.4
|
|
|
(0.1
|
)
|
|
—
|
|
|
n.m.
|
|
|
n.m.
|
|
|||
Nuvera
|
(42.0
|
)
|
|
(39.6
|
)
|
|
(24.6
|
)
|
|
(6.1
|
)%
|
|
n.m.
|
|
|||
Eliminations
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
n.m.
|
|
|
n.m.
|
|
|||
|
$
|
76.0
|
|
|
$
|
34.9
|
|
|
$
|
103.5
|
|
|
117.8
|
%
|
|
(66.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
14.6
|
|
|
$
|
6.7
|
|
|
$
|
4.7
|
|
|
(117.9
|
)%
|
|
(42.6
|
)%
|
Other income
|
$
|
(32.4
|
)
|
|
$
|
(10.1
|
)
|
|
$
|
(5.7
|
)
|
|
220.8
|
%
|
|
77.2
|
%
|
Income before income taxes
|
$
|
93.8
|
|
|
$
|
38.3
|
|
|
$
|
104.5
|
|
|
144.9
|
%
|
|
(63.3
|
)%
|
Net income (loss) attributable to stockholders
|
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
68.4
|
|
|
$
|
59.6
|
|
|
$
|
76.3
|
|
|
14.8
|
%
|
|
(21.9
|
)%
|
EMEA
|
5.3
|
|
|
9.4
|
|
|
10.6
|
|
|
(43.6
|
)%
|
|
(11.3
|
)%
|
|||
JAPIC
|
(1.9
|
)
|
|
(2.1
|
)
|
|
2.4
|
|
|
9.5
|
%
|
|
(187.5
|
)%
|
|||
Lift truck business
|
71.8
|
|
|
66.9
|
|
|
89.3
|
|
|
7.3
|
%
|
|
(25.1
|
)%
|
|||
Bolzoni
(1)
|
3.9
|
|
|
(0.3
|
)
|
|
—
|
|
|
n.m.
|
|
|
n.m.
|
|
|||
Nuvera
|
(26.7
|
)
|
|
(23.8
|
)
|
|
(14.6
|
)
|
|
(12.2
|
)%
|
|
n.m.
|
|
|||
Eliminations
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
n.m.
|
|
|
n.m.
|
|
|||
|
$
|
48.6
|
|
|
$
|
42.8
|
|
|
$
|
74.7
|
|
|
13.6
|
%
|
|
(42.7
|
)%
|
Diluted earnings per share
|
$
|
2.94
|
|
|
$
|
2.61
|
|
|
$
|
4.57
|
|
|
12.6
|
%
|
|
(42.9
|
)%
|
Reported income tax rate
|
47.9
|
%
|
|
n.m.
|
|
|
28.1
|
%
|
|
|
|
|
|||||
(1)
Bolzoni was acquired on April 1, 2016 and results of operations have been included since the acquisition date.
|
|||||||||||||||||
n.m. - not meaningful
|
|
|
YEAR ENDED
|
|
NINE MONTHS ENDED
|
|
YEAR ENDED
|
|||
|
|
December 31, 2017
|
|
September 30, 2017
|
|
December 31, 2016
|
|||
Unit backlog, beginning of period
|
|
30.7
|
|
|
30.7
|
|
|
26.9
|
|
Unit shipments
|
|
(93.4
|
)
|
|
(67.5
|
)
|
|
(84.8
|
)
|
Unit bookings
|
|
96.5
|
|
|
71.9
|
|
|
88.6
|
|
Unit backlog, end of period
|
|
33.8
|
|
|
35.1
|
|
|
30.7
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
YEAR ENDED
|
|
NINE MONTHS ENDED
|
|
YEAR ENDED
|
||||||
|
|
December 31, 2017
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||
Bookings, approximate sales value
|
|
$
|
2,260
|
|
|
$
|
1,645
|
|
|
$
|
2,000
|
|
Backlog, approximate sales value
|
|
$
|
860
|
|
|
$
|
860
|
|
|
$
|
740
|
|
|
|
Revenues
|
||||
2016
|
|
$
|
2,569.7
|
|
||
Increase (decrease) in 2017 from:
|
|
|
||||
Unit volume and product mix
|
|
206.5
|
|
|||
Bolzoni revenues
|
|
|
||||
First quarter 2017
|
$
|
41.6
|
|
|
||
Increase in comparable periods
|
20.0
|
|
61.6
|
|
||
Parts
|
|
25.7
|
|
|||
Unit price
|
|
23.1
|
|
|||
Foreign currency
|
|
12.4
|
|
|||
Nuvera revenues
|
|
1.2
|
|
|||
Other
|
|
(15.0
|
)
|
|||
2017
|
|
$
|
2,885.2
|
|
|
Operating Profit
|
||
2016
|
$
|
34.9
|
|
Increase (decrease) in 2017 from:
|
|
||
Lift truck gross profit
|
55.4
|
|
|
Bolzoni operations
|
6.5
|
|
|
Nuvera operations
|
(2.4
|
)
|
|
Lift truck selling, general and administrative expenses
|
(18.4
|
)
|
|
2017
|
$
|
76.0
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Revenues
|
||
2015
|
$
|
2,578.1
|
|
Increase (decrease) in 2016 from:
|
|
||
Unit volume and product mix
|
(84.1
|
)
|
|
Unit price
|
(27.3
|
)
|
|
Foreign currency
|
(20.1
|
)
|
|
Bolzoni revenues
|
115.6
|
|
|
Other
|
5.6
|
|
|
Parts
|
1.9
|
|
|
2016
|
$
|
2,569.7
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Operating Profit
|
||
2015
|
$
|
103.5
|
|
Decrease in 2016 from:
|
|
||
Lift truck gross profit
|
(38.1
|
)
|
|
Lift truck selling, general and administrative expenses
|
(15.4
|
)
|
|
Nuvera operations
|
(15.0
|
)
|
|
Bolzoni operations
|
(0.1
|
)
|
|
2016
|
$
|
34.9
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes
|
|
$
|
93.8
|
|
|
$
|
38.3
|
|
|
$
|
104.5
|
|
Statutory taxes at 35%
|
|
$
|
32.8
|
|
|
$
|
13.4
|
|
|
$
|
36.6
|
|
Permanent adjustments:
|
|
|
|
|
|
|
||||||
Equity interest earnings
|
|
(8.1
|
)
|
|
(2.2
|
)
|
|
(1.9
|
)
|
|||
Non-U.S. rate differences
|
|
(7.8
|
)
|
|
(9.0
|
)
|
|
(13.3
|
)
|
|||
Federal income tax credits
|
|
(1.6
|
)
|
|
(1.7
|
)
|
|
—
|
|
|||
State income taxes
|
|
1.1
|
|
|
0.1
|
|
|
3.4
|
|
|||
Valuation allowance
|
|
3.4
|
|
|
2.4
|
|
|
9.3
|
|
|||
Other
|
|
(0.2
|
)
|
|
0.6
|
|
|
1.0
|
|
|||
|
|
$
|
(13.2
|
)
|
|
$
|
(9.8
|
)
|
|
$
|
(1.5
|
)
|
Discrete items:
|
|
|
|
|
|
|
||||||
Tax Reform Act
|
|
38.2
|
|
|
—
|
|
|
—
|
|
|||
Provision to return adjustments
|
|
0.6
|
|
|
(1.9
|
)
|
|
(0.2
|
)
|
|||
Valuation allowance
|
|
(3.3
|
)
|
|
(2.6
|
)
|
|
(3.4
|
)
|
|||
Sale of non-U.S. investment
|
|
(9.1
|
)
|
|
(1.9
|
)
|
|
(3.7
|
)
|
|||
Other
|
|
(1.1
|
)
|
|
(1.2
|
)
|
|
1.6
|
|
|||
|
|
$
|
25.3
|
|
|
$
|
(7.6
|
)
|
|
$
|
(5.7
|
)
|
Income tax provision (benefit)
|
|
$
|
44.9
|
|
|
$
|
(4.0
|
)
|
|
$
|
29.4
|
|
Reported income tax rate
|
|
47.9
|
%
|
|
n.m.
|
|
|
28.1
|
%
|
|||
n.m. - not meaningful
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
2017
|
|
2016
|
|
Change
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
48.9
|
|
|
$
|
42.3
|
|
|
$
|
6.6
|
|
Depreciation and amortization
|
42.8
|
|
|
39.1
|
|
|
3.7
|
|
|||
Stock-based compensation
|
8.8
|
|
|
4.9
|
|
|
3.9
|
|
|||
Impairment of long-lived assets
|
4.9
|
|
|
—
|
|
|
4.9
|
|
|||
Dividends from unconsolidated affiliates
|
2.8
|
|
|
5.1
|
|
|
(2.3
|
)
|
|||
Other
|
0.7
|
|
|
(27.7
|
)
|
|
28.4
|
|
|||
Working capital changes, excluding the effect of business acquisitions
|
55.8
|
|
|
(112.6
|
)
|
|
168.4
|
|
|||
Net cash provided by (used for) operating activities
|
164.7
|
|
|
(48.9
|
)
|
|
213.6
|
|
|||
|
|
|
|
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
2017
|
|
2016
|
|
Change
|
||||||
Investing activities:
|
|
|
|
|
|
||||||
Expenditures for property, plant and equipment
|
(41.0
|
)
|
|
(42.7
|
)
|
|
1.7
|
|
|||
Proceeds from the sale of property, plant and equipment
|
1.3
|
|
|
13.7
|
|
|
(12.4
|
)
|
|||
Investments in equity securities
|
(5.6
|
)
|
|
—
|
|
|
(5.6
|
)
|
|||
Business acquisitions, net of cash acquired
|
(1.0
|
)
|
|
(116.1
|
)
|
|
115.1
|
|
|||
Purchase of noncontrolling interest
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|||
Net cash used for investing activities
|
(47.3
|
)
|
|
(145.1
|
)
|
|
97.8
|
|
|||
|
|
|
|
|
|
||||||
Cash flow before financing activities
|
$
|
117.4
|
|
|
$
|
(194.0
|
)
|
|
$
|
311.4
|
|
|
2017
|
|
2016
|
|
Change
|
||||||
Financing Activities:
|
|
|
|
|
|
||||||
Net addition of long-term debt and revolving credit agreements
|
$
|
78.0
|
|
|
$
|
99.0
|
|
|
$
|
(21.0
|
)
|
Cash dividends paid
|
(19.8
|
)
|
|
(19.2
|
)
|
|
(0.6
|
)
|
|||
Financing fees paid
|
(4.7
|
)
|
|
(1.7
|
)
|
|
(3.0
|
)
|
|||
Other
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Net cash provided by financing activities
|
$
|
53.1
|
|
|
$
|
77.9
|
|
|
$
|
(24.8
|
)
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
Contractual Obligations
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||||
Term Loan
|
$
|
195.0
|
|
|
$
|
10.0
|
|
|
$
|
10.0
|
|
|
$
|
10.0
|
|
|
$
|
10.0
|
|
|
$
|
10.0
|
|
|
$
|
145.0
|
|
Variable interest payments on Term Loan
|
50.1
|
|
|
10.6
|
|
|
10.0
|
|
|
9.5
|
|
|
8.9
|
|
|
8.4
|
|
|
2.7
|
|
|||||||
Revolving credit agreements
|
6.1
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Variable interest payments on revolving credit agreements
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other debt
|
73.9
|
|
|
52.4
|
|
|
21.3
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|||||||
Variable interest payments on other debt
|
2.7
|
|
|
1.8
|
|
|
0.6
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|||||||
Capital lease obligations including principal and interest
|
20.3
|
|
|
7.1
|
|
|
5.9
|
|
|
4.9
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|||||||
Operating leases
|
74.9
|
|
|
20.2
|
|
|
13.9
|
|
|
10.3
|
|
|
7.4
|
|
|
6.1
|
|
|
17.0
|
|
|||||||
Tax Reform Act transition tax liability
|
22.5
|
|
|
2.1
|
|
|
1.8
|
|
|
1.8
|
|
|
1.8
|
|
|
1.8
|
|
|
13.2
|
|
|||||||
Purchase and other obligations
|
564.3
|
|
|
557.8
|
|
|
1.0
|
|
|
1.0
|
|
|
2.0
|
|
|
—
|
|
|
2.5
|
|
|||||||
Total contractual cash obligations
|
$
|
1,009.9
|
|
|
$
|
668.2
|
|
|
$
|
64.5
|
|
|
$
|
37.8
|
|
|
$
|
32.7
|
|
|
$
|
26.3
|
|
|
$
|
180.4
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Planned 2018
|
|
Actual 2017
|
|
Actual 2016
|
||||||
Lift truck business
|
|
$
|
42.4
|
|
|
$
|
35.3
|
|
|
$
|
36.5
|
|
Bolzoni
|
|
6.6
|
|
|
4.7
|
|
|
4.0
|
|
|||
Nuvera
|
|
6.0
|
|
|
1.0
|
|
|
2.2
|
|
|||
|
|
$
|
55.0
|
|
|
$
|
41.0
|
|
|
$
|
42.7
|
|
|
December 31
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Cash and cash equivalents
|
$
|
220.1
|
|
|
$
|
43.2
|
|
|
$
|
176.9
|
|
Other net tangible assets
|
527.8
|
|
|
531.5
|
|
|
(3.7
|
)
|
|||
Intangible assets
|
56.1
|
|
|
56.2
|
|
|
(0.1
|
)
|
|||
Goodwill
|
59.1
|
|
|
50.7
|
|
|
8.4
|
|
|||
Net assets
|
863.1
|
|
|
681.6
|
|
|
181.5
|
|
|||
Total debt
|
(290.7
|
)
|
|
(211.2
|
)
|
|
(79.5
|
)
|
|||
Total equity
|
$
|
572.4
|
|
|
$
|
470.4
|
|
|
$
|
102.0
|
|
Debt to total capitalization
|
34
|
%
|
|
31
|
%
|
|
3
|
%
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
HYGFS
|
|
Total
|
||||
Total recourse or repurchase obligations
|
|
$
|
174.2
|
|
|
$
|
203.5
|
|
Less: exposure limited for certain dealers
|
|
54.3
|
|
|
54.3
|
|
||
Plus: 7.5% of original loan balance
|
|
12.0
|
|
|
12.0
|
|
||
|
|
131.9
|
|
|
161.2
|
|
||
Incremental obligation related to guarantee to WF
|
|
179.6
|
|
|
179.6
|
|
||
Total exposure related to guarantees
|
|
$
|
311.5
|
|
|
$
|
340.8
|
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Plan Category
|
|
Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))
|
||
Class A Shares:
|
|
(a)
|
|
(b)
|
|
(c)
|
||
Equity compensation plans approved by security holders
|
|
—
|
|
|
N/A
|
|
527,910
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
N/A
|
|
—
|
|
Total
|
|
—
|
|
|
N/A
|
|
527,910
|
|
Class B Shares:
|
|
|
|
|
|
|
||
Equity compensation plans approved by security holders
|
|
—
|
|
|
N/A
|
|
—
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
N/A
|
|
—
|
|
Total
|
|
—
|
|
|
N/A
|
|
—
|
|
2.1
|
|
|
2.2
|
|
|
2.3
|
|
4.1
|
|
|
4.2
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14*
|
|
|
10.15*
|
|
|
10.16*
|
|
|
10.17*
|
|
|
10.18*
|
|
|
10.19*
|
|
|
10.20*
|
|
|
10.21*
|
|
|
10.22*
|
|
10.23*
|
|
|
10.24*
|
|
|
10.25*
|
|
|
10.26*
|
|
|
10.27*
|
|
|
10.28
|
|
|
10.29
|
|
|
10.30
|
|
|
10.31
|
|
|
10.32
|
|
|
10.33
|
|
|
10.34
|
|
|
10.35
|
|
|
10.36
|
|
|
10.37
|
|
|
10.38
|
|
|
10.39
|
|
|
10.40
|
|
10.41
|
|
|
10.42
|
|
|
10.43
|
|
|
10.44
|
|
|
10.45
|
|
|
10.46
|
|
|
10.47
|
|
|
10.48
|
|
|
10.49
|
|
|
10.50
|
|
|
10.51
|
|
|
10.52
|
|
|
10.53
|
|
|
10.54
|
|
10.55
|
|
|
10.56
|
|
|
10.57
|
|
24.1
|
|
|
24.2
|
|
|
24.3
|
|
|
24.4
|
|
|
24.5
|
|
|
24.6
|
|
|
24.7
|
|
|
24.8
|
|
|
24.9
|
|
|
Hyster-Yale Materials Handling, Inc.
|
|
||
|
By:
|
/s/ Kenneth C. Schilling
|
|
|
|
|
Kenneth C. Schilling
|
|
|
|
|
Senior Vice President and Chief Financial Officer (principal financial and accounting officer)
|
|
/s/ Alfred M. Rankin, Jr.
|
|
Chairman, President and Chief Executive Officer (principal executive officer), Director
|
February 27, 2018
|
Alfred M. Rankin, Jr.
|
|
|
|
|
|
|
|
/s/ Kenneth C. Schilling
|
|
Senior Vice President and Chief Financial Officer (principal financial and accounting officer)
|
February 27, 2018
|
Kenneth C. Schilling
|
|
|
|
|
|
|
|
* J.C. Butler, Jr.
|
|
Director
|
February 27, 2018
|
J.C. Butler, Jr.
|
|
|
|
|
|
|
|
* Carolyn Corvi
|
|
Director
|
February 27, 2018
|
Carolyn Corvi
|
|
|
|
|
|
|
|
* John P. Jumper
|
|
Director
|
February 27, 2018
|
John P. Jumper
|
|
|
|
|
|
|
|
* Dennis W. LaBarre
|
|
Director
|
February 27, 2018
|
Dennis W. LaBarre
|
|
|
|
|
|
|
|
* H. Vincent Poor
|
|
Director
|
February 27, 2018
|
H. Vincent Poor
|
|
|
|
|
|
|
|
* Claiborne R. Rankin
|
|
Director
|
February 27, 2018
|
Claiborne R. Rankin
|
|
|
|
|
|
|
|
* John M. Stropki
|
|
Director
|
February 27, 2018
|
John M. Stropki
|
|
|
|
|
|
|
|
* Britton T. Taplin
|
|
Director
|
February 27, 2018
|
Britton T. Taplin
|
|
|
|
|
|
|
|
* Eugene Wong
|
|
Director
|
February 27, 2018
|
Eugene Wong
|
|
|
|
/s/ Kenneth C. Schilling
|
|
February 27, 2018
|
Kenneth C. Schilling, Attorney-in-Fact
|
|
|
/s/ Ernst & Young LLP
|
|
|
|
We have served as the Company’s auditor since 2002.
|
|
|
|
|
|
|
|
Cleveland, Ohio
|
|
|
|
February 27, 2018
|
|
|
|
/s/ Ernst & Young LLP
|
|
|
|
|
|
|
|
Cleveland, Ohio
|
|
|
|
February 27, 2018
|
|
|
|
Year Ended December 31
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions, except per share data)
|
||||||||||
Revenues
|
$
|
2,885.2
|
|
|
$
|
2,569.7
|
|
|
$
|
2,578.1
|
|
Cost of sales
|
2,382.6
|
|
|
2,142.2
|
|
|
2,147.3
|
|
|||
Gross Profit
|
502.6
|
|
|
427.5
|
|
|
430.8
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
426.6
|
|
|
392.6
|
|
|
327.3
|
|
|||
Operating Profit
|
76.0
|
|
|
34.9
|
|
|
103.5
|
|
|||
Other (income) expense
|
|
|
|
|
|
||||||
Interest expense
|
14.6
|
|
|
6.7
|
|
|
4.7
|
|
|||
Income from unconsolidated affiliates
|
(28.0
|
)
|
|
(7.1
|
)
|
|
(6.1
|
)
|
|||
Other, net
|
(4.4
|
)
|
|
(3.0
|
)
|
|
0.4
|
|
|||
|
(17.8
|
)
|
|
(3.4
|
)
|
|
(1.0
|
)
|
|||
Income Before Income Taxes
|
93.8
|
|
|
38.3
|
|
|
104.5
|
|
|||
Income tax provision (benefit)
|
44.9
|
|
|
(4.0
|
)
|
|
29.4
|
|
|||
Net Income
|
48.9
|
|
|
42.3
|
|
|
75.1
|
|
|||
Net (income) loss attributable to noncontrolling interest
|
(0.3
|
)
|
|
0.5
|
|
|
(0.4
|
)
|
|||
Net Income Attributable to Stockholders
|
$
|
48.6
|
|
|
$
|
42.8
|
|
|
$
|
74.7
|
|
|
|
|
|
|
|
||||||
Basic Earnings per Share Attributable to Stockholders
|
$
|
2.95
|
|
|
$
|
2.61
|
|
|
$
|
4.58
|
|
Diluted Earnings per Share Attributable to Stockholders
|
$
|
2.94
|
|
|
$
|
2.61
|
|
|
$
|
4.57
|
|
|
Year Ended December 31
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Net Income
|
$
|
48.9
|
|
|
$
|
42.3
|
|
|
$
|
75.1
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
33.5
|
|
|
(1.9
|
)
|
|
(49.7
|
)
|
|||
Unrealized gain on available-for-sale securities, net of $0.5 tax expense in 2017
|
2.8
|
|
|
—
|
|
|
—
|
|
|||
Current period cash flow hedging activity, net of $8.0 tax expense in 2017, net of $6.5 tax benefit in 2016 and net of $6.4 tax benefit in 2015
|
6.6
|
|
|
(9.0
|
)
|
|
(4.7
|
)
|
|||
Reclassification of hedging activities into earnings, net of $1.6 tax expense in 2017, net of $2.2 tax expense in 2016 and net of $6.0 tax expense in 2015
|
4.1
|
|
|
0.8
|
|
|
2.7
|
|
|||
Current period pension adjustment, net of $3.7 tax expense in 2017, net of $3.8 tax benefit in 2016 and net of $1.5 tax benefit in 2015
|
13.1
|
|
|
(17.4
|
)
|
|
(3.4
|
)
|
|||
Reclassification of pension into earnings, net of $1.0 tax expense in 2017, net of $0.7 tax expense in 2016 and net of $0.9 tax expense in 2015
|
3.2
|
|
|
2.0
|
|
|
2.3
|
|
|||
Comprehensive Income
|
$
|
112.2
|
|
|
$
|
16.8
|
|
|
$
|
22.3
|
|
Other comprehensive income (loss) attributable to noncontrolling interests
|
|
|
|
|
|
||||||
Net (income) loss attributable to noncontrolling interests
|
(0.3
|
)
|
|
0.5
|
|
|
(0.4
|
)
|
|||
Foreign currency translation adjustment attributable to noncontrolling interests
|
(0.9
|
)
|
|
2.2
|
|
|
—
|
|
|||
Comprehensive Income Attributable to Stockholders
|
$
|
111.0
|
|
|
$
|
19.5
|
|
|
$
|
21.9
|
|
|
December 31
|
||||||
|
2017
|
|
2016
|
||||
|
(In millions, except share data)
|
||||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
220.1
|
|
|
$
|
43.2
|
|
Accounts receivable, net of allowances of $3.7 in 2017 and $10.3 in 2016
|
453.0
|
|
|
375.3
|
|
||
Inventories, net
|
411.9
|
|
|
352.2
|
|
||
Prepaid expenses and other
|
46.4
|
|
|
39.3
|
|
||
Total Current Assets
|
1,131.4
|
|
|
810.0
|
|
||
Property, Plant and Equipment, Net
|
265.4
|
|
|
255.1
|
|
||
Intangible Assets
|
56.1
|
|
|
56.2
|
|
||
Goodwill
|
59.1
|
|
|
50.7
|
|
||
Deferred Income Taxes
|
16.6
|
|
|
43.9
|
|
||
Investment in Unconsolidated Affiliates
|
81.9
|
|
|
45.9
|
|
||
Other Non-current Assets
|
37.4
|
|
|
25.3
|
|
||
Total Assets
|
$
|
1,647.9
|
|
|
$
|
1,287.1
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
385.8
|
|
|
$
|
242.4
|
|
Accounts payable, affiliates
|
18.1
|
|
|
16.5
|
|
||
Revolving credit facilities
|
6.1
|
|
|
79.0
|
|
||
Current maturities of long-term debt
|
68.4
|
|
|
50.0
|
|
||
Accrued payroll
|
51.7
|
|
|
43.7
|
|
||
Other current liabilities
|
162.3
|
|
|
144.9
|
|
||
Total Current Liabilities
|
692.4
|
|
|
576.5
|
|
||
Long-term Debt
|
216.2
|
|
|
82.2
|
|
||
Self-insurance Liabilities
|
33.5
|
|
|
19.7
|
|
||
Pension Obligations
|
11.1
|
|
|
37.2
|
|
||
Deferred Income Taxes
|
13.0
|
|
|
11.4
|
|
||
Other Long-term Liabilities
|
109.3
|
|
|
89.7
|
|
||
Total Liabilities
|
1,075.5
|
|
|
816.7
|
|
||
Stockholders’ Equity
|
|
|
|
||||
Common stock:
|
|
|
|
||||
Class A, par value $0.01 per share, 12,562,817 shares outstanding (2016 - 12,466,463 shares outstanding)
|
0.1
|
|
|
0.1
|
|
||
Class B, par value $0.01 per share, convertible into Class A on a one-for-one basis, 3,899,503 shares outstanding (2016 - 3,924,291 shares outstanding)
|
0.1
|
|
|
0.1
|
|
||
Capital in excess of par value
|
323.8
|
|
|
319.6
|
|
||
Treasury stock
|
(31.5
|
)
|
|
(36.9
|
)
|
||
Retained earnings
|
389.1
|
|
|
360.3
|
|
||
Accumulated other comprehensive loss
|
(116.1
|
)
|
|
(179.4
|
)
|
||
Total Stockholders’ Equity
|
565.5
|
|
|
463.8
|
|
||
Noncontrolling Interest
|
6.9
|
|
|
6.6
|
|
||
Total Equity
|
572.4
|
|
|
470.4
|
|
||
Total Liabilities and Equity
|
$
|
1,647.9
|
|
|
$
|
1,287.1
|
|
|
Year Ended December 31
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
48.9
|
|
|
$
|
42.3
|
|
|
$
|
75.1
|
|
Adjustments to reconcile net income to net cash provided (used for) by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
42.8
|
|
|
39.1
|
|
|
28.9
|
|
|||
Amortization of deferred financing fees
|
1.4
|
|
|
1.1
|
|
|
1.2
|
|
|||
Deferred income taxes
|
8.1
|
|
|
(7.4
|
)
|
|
(1.4
|
)
|
|||
Gain on sale of assets
|
(0.3
|
)
|
|
(0.3
|
)
|
|
—
|
|
|||
Stock-based compensation
|
8.8
|
|
|
4.9
|
|
|
2.9
|
|
|||
Long-lived and intangible assets impairment charge
|
4.9
|
|
|
—
|
|
|
—
|
|
|||
Dividends from unconsolidated affiliates
|
2.8
|
|
|
5.1
|
|
|
2.5
|
|
|||
Other non-current liabilities
|
4.8
|
|
|
(6.0
|
)
|
|
3.8
|
|
|||
Other
|
(13.3
|
)
|
|
(15.1
|
)
|
|
1.0
|
|
|||
Working capital changes, excluding the effect of business acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(44.0
|
)
|
|
(27.5
|
)
|
|
6.2
|
|
|||
Inventories
|
(43.6
|
)
|
|
(14.9
|
)
|
|
6.2
|
|
|||
Other current assets
|
(1.0
|
)
|
|
(3.2
|
)
|
|
(0.6
|
)
|
|||
Accounts payable
|
125.1
|
|
|
(53.8
|
)
|
|
(39.3
|
)
|
|||
Other liabilities
|
19.3
|
|
|
(13.2
|
)
|
|
2.9
|
|
|||
Net cash provided by (used for) operating activities
|
164.7
|
|
|
(48.9
|
)
|
|
89.4
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Expenditures for property, plant and equipment
|
(41.0
|
)
|
|
(42.7
|
)
|
|
(46.6
|
)
|
|||
Proceeds from the sale of assets
|
1.3
|
|
|
13.7
|
|
|
14.4
|
|
|||
Investments in equity securities
|
(5.6
|
)
|
|
—
|
|
|
—
|
|
|||
Business acquisition, net of cash acquired
|
(1.0
|
)
|
|
(116.1
|
)
|
|
0.9
|
|
|||
Purchase of noncontrolling interest
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used for investing activities
|
(47.3
|
)
|
|
(145.1
|
)
|
|
(31.3
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Additions to long-term debt
|
265.6
|
|
|
40.1
|
|
|
46.4
|
|
|||
Reductions of long-term debt
|
(75.9
|
)
|
|
(56.5
|
)
|
|
(35.0
|
)
|
|||
Net additions (reductions) to revolving credit agreements
|
(111.7
|
)
|
|
115.4
|
|
|
—
|
|
|||
Cash dividends paid
|
(19.8
|
)
|
|
(19.2
|
)
|
|
(18.4
|
)
|
|||
Cash dividends paid to noncontrolling interest
|
(0.3
|
)
|
|
(0.2
|
)
|
|
—
|
|
|||
Financing fees paid
|
(4.7
|
)
|
|
(1.7
|
)
|
|
—
|
|
|||
Other
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Net cash provided by (used for) financing activities
|
53.1
|
|
|
77.9
|
|
|
(7.1
|
)
|
|||
Effect of exchange rate changes on cash
|
6.4
|
|
|
4.2
|
|
|
(7.3
|
)
|
|||
Cash and Cash Equivalents
|
|
|
|
|
|
||||||
Increase (decrease) for the year
|
176.9
|
|
|
(111.9
|
)
|
|
43.7
|
|
|||
Balance at the beginning of the year
|
43.2
|
|
|
155.1
|
|
|
111.4
|
|
|||
Balance at the end of the year
|
$
|
220.1
|
|
|
$
|
43.2
|
|
|
$
|
155.1
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Class A Common Stock
|
Class B Common Stock
|
Treasury Stock
|
Capital in Excess of Par Value
|
Retained Earnings
|
Foreign Currency Translation Adjustment
|
|
Deferred Gain on AFS Securities
|
Deferred Gain (Loss) on Cash Flow Hedging
|
Pension Adjustment
|
Total Stockholders' Equity
|
Noncontrolling Interest
|
Total Equity
|
|||||||||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2015
|
$
|
0.1
|
|
$
|
0.1
|
|
$
|
(49.1
|
)
|
$
|
324.1
|
|
$
|
280.4
|
|
$
|
(40.4
|
)
|
|
$
|
—
|
|
|
$
|
(2.0
|
)
|
|
$
|
(58.7
|
)
|
|
$
|
454.5
|
|
|
$
|
1.5
|
|
|
$
|
456.0
|
|
Stock-based compensation
|
—
|
|
—
|
|
—
|
|
2.9
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
|
2.9
|
|
||||||||||||
Stock issued under stock compensation plans
|
—
|
|
—
|
|
6.7
|
|
(6.7
|
)
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Purchase of treasury stock
|
—
|
|
—
|
|
(0.1
|
)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
74.7
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74.7
|
|
|
0.4
|
|
|
75.1
|
|
||||||||||||
Cash dividends on common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
(18.4
|
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.4
|
)
|
|
—
|
|
|
(18.4
|
)
|
||||||||||||
Current period other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(49.7
|
)
|
|
—
|
|
|
(4.7
|
)
|
|
(3.4
|
)
|
|
(57.8
|
)
|
|
—
|
|
|
(57.8
|
)
|
||||||||||||
Reclassification adjustment to net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.3
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
||||||||||||
Balance, December 31, 2015
|
$
|
0.1
|
|
$
|
0.1
|
|
$
|
(42.5
|
)
|
$
|
320.3
|
|
$
|
336.7
|
|
$
|
(90.1
|
)
|
|
$
|
—
|
|
|
$
|
(4.0
|
)
|
|
$
|
(59.8
|
)
|
|
$
|
460.8
|
|
|
$
|
1.9
|
|
|
$
|
462.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Stock-based compensation
|
—
|
|
—
|
|
—
|
|
4.9
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
|
4.9
|
|
||||||||||||
Stock issued under stock compensation plans
|
—
|
|
—
|
|
5.6
|
|
(5.6
|
)
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
42.8
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42.8
|
|
|
(0.5
|
)
|
|
42.3
|
|
||||||||||||
Cash dividends
|
—
|
|
—
|
|
—
|
|
—
|
|
(19.2
|
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.2
|
)
|
|
(0.2
|
)
|
|
(19.4
|
)
|
||||||||||||
Current period other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.9
|
)
|
|
—
|
|
|
(9.0
|
)
|
|
(17.4
|
)
|
|
(28.3
|
)
|
|
—
|
|
|
(28.3
|
)
|
||||||||||||
Reclassification adjustment to net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
2.0
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||||||||||
Acquisition of Bolzoni
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69.8
|
|
|
69.8
|
|
||||||||||||
Purchase of noncontrolling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62.2
|
)
|
|
(62.2
|
)
|
||||||||||||
Foreign currency translation on noncontrolling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
(2.2
|
)
|
||||||||||||
Balance, December 31, 2016
|
$
|
0.1
|
|
$
|
0.1
|
|
$
|
(36.9
|
)
|
$
|
319.6
|
|
$
|
360.3
|
|
$
|
(92.0
|
)
|
|
$
|
—
|
|
|
$
|
(12.2
|
)
|
|
$
|
(75.2
|
)
|
|
$
|
463.8
|
|
|
$
|
6.6
|
|
|
$
|
470.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Stock-based compensation
|
—
|
|
—
|
|
—
|
|
8.8
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.8
|
|
|
—
|
|
|
8.8
|
|
||||||||||||
Stock issued under stock compensation plans
|
—
|
|
—
|
|
5.4
|
|
(5.4
|
)
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
48.6
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48.6
|
|
|
0.3
|
|
|
48.9
|
|
||||||||||||
Cash dividends
|
—
|
|
—
|
|
—
|
|
—
|
|
(19.8
|
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.8
|
)
|
|
(0.3
|
)
|
|
(20.1
|
)
|
||||||||||||
Current period other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
33.5
|
|
|
2.8
|
|
|
6.6
|
|
|
13.1
|
|
|
56.0
|
|
|
—
|
|
|
56.0
|
|
||||||||||||
Reclassification adjustment to net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
4.1
|
|
|
3.2
|
|
|
7.3
|
|
|
—
|
|
|
7.3
|
|
||||||||||||
Acquisition of business
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||||||||
Purchase of noncontrolling interest
|
—
|
|
—
|
|
—
|
|
0.8
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(0.9
|
)
|
|
(0.1
|
)
|
||||||||||||
Foreign currency translation on noncontrolling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
0.9
|
|
||||||||||||
Balance, December 31, 2017
|
$
|
0.1
|
|
$
|
0.1
|
|
$
|
(31.5
|
)
|
$
|
323.8
|
|
$
|
389.1
|
|
$
|
(58.5
|
)
|
|
$
|
2.8
|
|
|
$
|
(1.5
|
)
|
|
$
|
(58.9
|
)
|
|
$
|
565.5
|
|
|
$
|
6.9
|
|
|
$
|
572.4
|
|
Significant Accounting Policy
|
|
Note
|
Reportable segments
|
|
Business Segments (Note 3)
|
Stock-based compensation
|
|
Common Stock and Earnings per Share (Note 5)
|
Income taxes
|
|
Income Taxes (Note 6)
|
Derivatives and hedging activities
|
|
Financial Instruments and Derivative Financial Instruments (Note 8)
|
Fair value of financial instruments
|
|
Financial Instruments and Derivative Financial Instruments (Note 8)
and Retirement Benefit Plans (Note 9)
|
Pension
|
|
Retirement Benefit Plans (Note 9)
|
Inventories
|
|
Inventories (Note 10)
|
Property, plant and equipment
|
|
Property, Plant and Equipment, Net (Note 11)
|
Impairment or disposal of long-lived assets
|
|
Property, Plant and Equipment, Net (Note 11)
|
Goodwill and intangible assets
|
|
Goodwill and Intangible Assets (Note 12)
|
Contingencies
|
|
Contingencies (Note 16)
|
Standard
|
|
Description
|
ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory
|
|
The guidance requires inventory to be measured at the lower of cost or net realizable value. The guidance defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
|
ASU No. 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships
|
|
The guidance clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require dedesignation of that hedging relationship, provided that all other hedge accounting criteria continue to be met.
|
ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323)
|
|
The guidance eliminates the requirement that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increase in the level of ownership or degree of influence. In addition, the guidance requires that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting.
|
ASU No. 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
|
|
The guidance simplifies several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.
|
Standard
|
|
Description
|
|
Required Date of Adoption
|
|
Effect on the financial statements or other significant matters
|
ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (Subsequent ASUs have been issued in 2015, 2016 and 2017 to update or clarify this guidance)
|
|
The new guidance is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.
|
|
January 1, 2018
|
|
The Company's evaluation process of the new standard included, but was not limited to, identifying contracts and revenue streams within the scope of the guidance, reviewing and documenting the accounting and identifying and determining the accounting for any related contract costs and variable consideration. The Company has documented this evaluation and has implemented processes and controls for certain revenue streams as warranted by the guidance. The Company adopted the standard on January 1, 2018 using the modified retrospective approach and recorded a cumulative adjustment to retained earnings for open contracts as of January 1, 2018. The adoption of the standard did not have a material impact on the Company's consolidated financial statements. The Company will provide the new disclosures required by the standard in the Company's March 31, 2018 Quarterly Report on Form 10-Q.
|
ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
The guidance requires equity investments previously accounted for under the cost method of accounting to be measured at fair value and recognized in net income. In addition, the guidance defines measurement and presentation of financial instruments.
|
|
January 1, 2018
|
|
The Company anticipates the adoption will increase the volatility of other (income) expense as a result of applying the guidance. The Company recorded a cumulative adjustment to retained earnings for deferred gains related to equity investments in third-parties as of January 1, 2018 of $3.6 million. Subsequent changes in the fair value of these investments will be recognized directly in earnings.
|
ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
|
|
The guidance clarifies the classification of certain types of cash receipts and cash payments. In addition, the guidance provides for the application of the predominance principle when certain cash receipts and payments have aspects of more than one class of cash flows.
|
|
January 1, 2018
|
|
The adoption of the guidance did not have a material effect on the Company's financial position, results of operations, cash flows or related disclosures.
|
ASU No. 2016-16, Income Taxes (Topic 740)
|
|
The guidance allows for recognition of current and deferred income taxes for an intra-entity transfer of an asset other than inventory. The guidance allows for more accurate representation of the economics of an intra-entity asset transfer which will require income tax consequences of the transfer, including income taxes payable or paid.
|
|
January 1, 2018
|
|
The adoption of the guidance did not have a material effect on the Company's financial position, results of operations, cash flows or related disclosures.
|
ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash
|
|
The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.
|
|
January 1, 2018
|
|
The adoption of the guidance did not have a material effect on the Company's financial position, results of operations, cash flows or related disclosures.
|
ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business
|
|
The guidance clarifies the definition of a business to assist entities in evaluating whether transactions should be accounted for as acquisitions or disposals of businesses.
|
|
January 1, 2018
|
|
The adoption of the guidance did not have a material effect on the Company's financial position, results of operations, cash flows or related disclosures.
|
Standard
|
|
Description
|
|
Required Date of Adoption
|
|
Effect on the financial statements or other significant matters
|
ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition
|
|
The guidance clarifies the scope and accounting of a financial asset that meets the definition of an "in-substance nonfinancial asset" and defines the term, "in-substance nonfinancial asset," in addition to partial sales of nonfinancial assets.
|
|
January 1, 2018
|
|
The adoption of the guidance did not have a material effect on the Company's financial position, results of operations, cash flows or related disclosures.
|
ASU 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement
|
|
The guidance requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations.
|
|
January 1, 2018
|
|
The Company will present the components of net benefit cost, other than service cost, in other (income) expense for its pension plans starting on January 1, 2018. Service cost for the Company's pension plans will continue to be reported in operating profit.
|
ASU No. 2016-02, Leases (Topic 842)(Subsequent ASUs have been issued in 2017 to update or clarify this guidance)
|
|
The guidance requires lessees (with the exception of short-term leases) to recognize, at the commencement date, a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
|
|
January 1, 2019
|
|
The Company's evaluation process of the new standard includes, but is not limited to, evaluating its current lease portfolio, identifying relevant contracts and attributes affected by the standard and determining the required accounting upon adoption. In addition, the Company expects to implement new processes and controls regarding asset financing transactions and financial reporting. The Company continues to evaluate its global leasing portfolio and train relevant personnel. In addition, the Company has started abstraction of key attributes within lease contracts and began to evaluate systems-related requirements for the new standard. This evaluation will continue throughout 2018. While the Company's evaluation of the alternative methods of adoption, practical expedients and the effect on its financial position, results of operations, cash flows and related disclosures is ongoing; the Company anticipates the adoption will materially affect the consolidated balance sheets and will require changes to the Company's systems and processes.
|
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
|
|
The guidance makes targeted changes to the hedge accounting model intended to facilitate financial reporting that more closely reflects an entity’s risk management activities and to simplify the application of hedge accounting. Changes include expanding the types of risk management strategies eligible for hedge accounting, easing the documentation and effectiveness assessment requirements, changing how ineffectiveness is measured and changing the presentation and disclosure requirements for hedge accounting activities.
|
|
January 1, 2019
|
|
The Company is currently evaluating the guidance and the effect on its financial position, results of operations, cash flows and related disclosures.
|
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
|
The guidance provides an election to reclassify the stranded tax effects resulting from the Tax Reform Act from OCI to retained earnings. In addition, the guidance requires new disclosures regarding the election to adopt and the manner in which tax effects remaining in OCI are released.
|
|
January 1, 2019
|
|
The Company is currently evaluating the guidance and the effect on its financial position, results of operations, cash flows and related disclosures.
|
Standard
|
|
Description
|
|
Required Date of Adoption
|
|
Effect on the financial statements or other significant matters
|
ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326)
|
|
The guidance eliminates the probable initial recognition threshold and requires an entity to reflect its current estimate of all expected credit losses. The guidance also requires additional disclosures in certain circumstances.
|
|
January 1, 2020
|
|
The Company is currently evaluating the alternative methods of adoption and the effect on its financial position, results of operations, cash flows and related disclosures.
|
ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
|
The guidance removes the second step of the two-step test for the measurement of goodwill impairment. The guidance allows for early adoption for impairment testing dates after January 1, 2017.
|
|
January 1, 2020
|
|
The Company is currently evaluating the timing of adoption and the effect on its current impairment testing process.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues from external customers
|
|
|
|
|
|
||||||
Americas
|
$
|
1,834.1
|
|
|
$
|
1,675.7
|
|
|
$
|
1,775.5
|
|
EMEA
|
715.8
|
|
|
615.7
|
|
|
606.4
|
|
|||
JAPIC
|
173.9
|
|
|
169.5
|
|
|
193.7
|
|
|||
Lift truck business
|
2,723.8
|
|
|
2,460.9
|
|
|
2,575.6
|
|
|||
Bolzoni
|
177.2
|
|
|
115.6
|
|
|
—
|
|
|||
Nuvera
|
3.7
|
|
|
2.5
|
|
|
2.5
|
|
|||
Eliminations
|
(19.5
|
)
|
|
(9.3
|
)
|
|
—
|
|
|||
Total
|
$
|
2,885.2
|
|
|
$
|
2,569.7
|
|
|
$
|
2,578.1
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Gross profit (loss)
|
|
|
|
|
|
||||||
Americas
|
$
|
334.6
|
|
|
$
|
287.9
|
|
|
$
|
308.1
|
|
EMEA
|
95.7
|
|
|
89.5
|
|
|
101.3
|
|
|||
JAPIC
|
20.2
|
|
|
17.1
|
|
|
23.2
|
|
|||
Lift truck business
|
450.5
|
|
|
394.5
|
|
|
432.6
|
|
|||
Bolzoni
|
54.8
|
|
|
35.7
|
|
|
—
|
|
|||
Nuvera
|
(2.1
|
)
|
|
(2.7
|
)
|
|
(1.8
|
)
|
|||
Eliminations
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
502.6
|
|
|
$
|
427.5
|
|
|
$
|
430.8
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
||||||
Americas
|
$
|
225.3
|
|
|
$
|
214.2
|
|
|
$
|
191.2
|
|
EMEA
|
86.7
|
|
|
81.9
|
|
|
88.3
|
|
|||
JAPIC
|
26.3
|
|
|
23.8
|
|
|
25.0
|
|
|||
Lift truck business
|
338.3
|
|
|
319.9
|
|
|
304.5
|
|
|||
Bolzoni
|
48.4
|
|
|
35.8
|
|
|
—
|
|
|||
Nuvera
|
39.9
|
|
|
36.9
|
|
|
22.8
|
|
|||
Total
|
$
|
426.6
|
|
|
$
|
392.6
|
|
|
$
|
327.3
|
|
Operating profit (loss)
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
109.3
|
|
|
$
|
73.7
|
|
|
$
|
116.9
|
|
EMEA
|
9.0
|
|
|
7.6
|
|
|
13.0
|
|
|||
JAPIC
|
(6.1
|
)
|
|
(6.7
|
)
|
|
(1.8
|
)
|
|||
Lift truck business
|
112.2
|
|
|
74.6
|
|
|
128.1
|
|
|||
Bolzoni
|
6.4
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Nuvera
|
(42.0
|
)
|
|
(39.6
|
)
|
|
(24.6
|
)
|
|||
Eliminations
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
76.0
|
|
|
$
|
34.9
|
|
|
$
|
103.5
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
12.3
|
|
|
$
|
5.4
|
|
|
$
|
4.4
|
|
EMEA
|
1.6
|
|
|
0.4
|
|
|
0.1
|
|
|||
JAPIC
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|||
Lift truck business
|
13.9
|
|
|
5.9
|
|
|
4.7
|
|
|||
Bolzoni
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|||
Nuvera
|
—
|
|
|
—
|
|
|
—
|
|
|||
Eliminations
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
14.6
|
|
|
$
|
6.7
|
|
|
$
|
4.7
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest income
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
(3.3
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(1.0
|
)
|
EMEA
|
—
|
|
|
(0.5
|
)
|
|
(0.3
|
)
|
|||
JAPIC
|
(0.4
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|||
Lift truck business
|
(3.7
|
)
|
|
(2.0
|
)
|
|
(1.5
|
)
|
|||
Bolzoni
|
—
|
|
|
—
|
|
|
—
|
|
|||
Nuvera
|
—
|
|
|
—
|
|
|
—
|
|
|||
Eliminations
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
(3.6
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(1.5
|
)
|
Other (income) expense
|
|
|
|
|
|
||||||
Americas
|
$
|
(25.4
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(2.7
|
)
|
EMEA
|
1.1
|
|
|
1.0
|
|
|
1.0
|
|
|||
JAPIC
|
(4.5
|
)
|
|
(3.2
|
)
|
|
(2.5
|
)
|
|||
Lift truck business
|
(28.8
|
)
|
|
(7.9
|
)
|
|
(4.2
|
)
|
|||
Bolzoni
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|||
Nuvera
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
(28.8
|
)
|
|
$
|
(8.1
|
)
|
|
$
|
(4.2
|
)
|
Income tax provision (benefit)
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
57.3
|
|
|
$
|
15.4
|
|
|
$
|
39.9
|
|
EMEA
|
0.9
|
|
|
(2.7
|
)
|
|
1.6
|
|
|||
JAPIC
|
1.2
|
|
|
(0.5
|
)
|
|
(2.1
|
)
|
|||
Lift truck business
|
59.4
|
|
|
12.2
|
|
|
39.4
|
|
|||
Bolzoni
|
1.0
|
|
|
(0.4
|
)
|
|
—
|
|
|||
Nuvera
|
(15.3
|
)
|
|
(15.8
|
)
|
|
(10.0
|
)
|
|||
Eliminations
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
44.9
|
|
|
$
|
(4.0
|
)
|
|
$
|
29.4
|
|
Net income (loss) attributable to stockholders
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
68.4
|
|
|
$
|
59.6
|
|
|
$
|
76.3
|
|
EMEA
|
5.3
|
|
|
9.4
|
|
|
10.6
|
|
|||
JAPIC
|
(1.9
|
)
|
|
(2.1
|
)
|
|
2.4
|
|
|||
Lift truck business
|
71.8
|
|
|
66.9
|
|
|
89.3
|
|
|||
Bolzoni
|
3.9
|
|
|
(0.3
|
)
|
|
—
|
|
|||
Nuvera
|
(26.7
|
)
|
|
(23.8
|
)
|
|
(14.6
|
)
|
|||
Eliminations
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
48.6
|
|
|
$
|
42.8
|
|
|
$
|
74.7
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total assets
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
1,146.0
|
|
|
$
|
831.9
|
|
|
$
|
680.7
|
|
EMEA
|
615.5
|
|
|
462.3
|
|
|
412.0
|
|
|||
JAPIC
|
138.6
|
|
|
127.0
|
|
|
140.6
|
|
|||
Eliminations
|
(304.6
|
)
|
|
(185.3
|
)
|
|
(130.9
|
)
|
|||
Lift truck business
|
1,595.5
|
|
|
1,235.9
|
|
|
1,102.4
|
|
|||
Bolzoni
|
239.8
|
|
|
206.9
|
|
|
—
|
|
|||
Nuvera
|
26.4
|
|
|
36.9
|
|
|
17.4
|
|
|||
Eliminations
|
(213.8
|
)
|
|
(192.6
|
)
|
|
(23.9
|
)
|
|||
Total
|
$
|
1,647.9
|
|
|
$
|
1,287.1
|
|
|
$
|
1,095.9
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
19.9
|
|
|
$
|
18.5
|
|
|
$
|
16.2
|
|
EMEA
|
7.1
|
|
|
6.5
|
|
|
5.9
|
|
|||
JAPIC
|
2.6
|
|
|
3.1
|
|
|
5.2
|
|
|||
Lift truck business
|
29.6
|
|
|
28.1
|
|
|
27.3
|
|
|||
Bolzoni
|
11.2
|
|
|
9.5
|
|
|
—
|
|
|||
Nuvera
|
2.0
|
|
|
1.5
|
|
|
1.6
|
|
|||
Total
|
$
|
42.8
|
|
|
$
|
39.1
|
|
|
$
|
28.9
|
|
Capital expenditures
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
25.5
|
|
|
$
|
27.6
|
|
|
$
|
33.5
|
|
EMEA
|
8.6
|
|
|
7.3
|
|
|
8.7
|
|
|||
JAPIC
|
1.2
|
|
|
1.6
|
|
|
1.7
|
|
|||
Lift truck business
|
35.3
|
|
|
36.5
|
|
|
43.9
|
|
|||
Bolzoni
|
4.7
|
|
|
4.0
|
|
|
—
|
|
|||
Nuvera
|
1.0
|
|
|
2.2
|
|
|
2.7
|
|
|||
Total
|
$
|
41.0
|
|
|
$
|
42.7
|
|
|
$
|
46.6
|
|
Cash and cash equivalents
|
|
|
|
|
|
||||||
Americas
|
$
|
191.2
|
|
|
$
|
10.4
|
|
|
$
|
54.2
|
|
EMEA
|
11.6
|
|
|
14.4
|
|
|
82.2
|
|
|||
JAPIC
|
6.6
|
|
|
8.2
|
|
|
18.5
|
|
|||
Lift truck business
|
209.4
|
|
|
33.0
|
|
|
154.9
|
|
|||
Bolzoni
|
10.7
|
|
|
10.2
|
|
|
—
|
|
|||
Nuvera
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Total
|
$
|
220.1
|
|
|
$
|
43.2
|
|
|
$
|
155.1
|
|
|
United
States
|
|
Europe, Africa and Middle East
|
|
Other
|
|
Consolidated
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenues from unaffiliated customers, based on the customers’ location
|
$
|
1,588.8
|
|
|
$
|
825.8
|
|
|
$
|
470.6
|
|
|
$
|
2,885.2
|
|
Long-lived tangible assets
|
$
|
181.6
|
|
|
$
|
82.3
|
|
|
$
|
83.4
|
|
|
$
|
347.3
|
|
2016
|
|
|
|
|
|
|
|
||||||||
Revenues from unaffiliated customers, based on the customers’ location
|
$
|
1,437.6
|
|
|
$
|
701.9
|
|
|
$
|
430.2
|
|
|
$
|
2,569.7
|
|
Long-lived tangible assets
|
$
|
159.1
|
|
|
$
|
59.8
|
|
|
$
|
82.1
|
|
|
$
|
301.0
|
|
2015
|
|
|
|
|
|
|
|
||||||||
Revenues from unaffiliated customers, based on the customers’ location
|
$
|
1,575.2
|
|
|
$
|
606.5
|
|
|
$
|
396.4
|
|
|
$
|
2,578.1
|
|
Long-lived tangible assets
|
$
|
126.2
|
|
|
$
|
39.4
|
|
|
$
|
61.8
|
|
|
$
|
227.4
|
|
|
2017
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Revenues
|
$
|
713.1
|
|
|
$
|
685.5
|
|
|
$
|
691.1
|
|
|
$
|
795.5
|
|
Gross profit
|
$
|
126.1
|
|
|
$
|
121.7
|
|
|
$
|
121.4
|
|
|
$
|
133.4
|
|
Operating profit
|
$
|
23.4
|
|
|
$
|
18.3
|
|
|
$
|
17.9
|
|
|
$
|
16.4
|
|
Net income (loss)
|
$
|
18.1
|
|
|
$
|
16.4
|
|
|
$
|
16.7
|
|
|
$
|
(2.3
|
)
|
Net income (loss) attributable to stockholders
|
$
|
18.1
|
|
|
$
|
16.4
|
|
|
$
|
16.5
|
|
|
$
|
(2.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
$
|
1.10
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
(0.15
|
)
|
Diluted earnings (loss) per share
|
$
|
1.10
|
|
|
$
|
0.99
|
|
|
$
|
1.00
|
|
|
$
|
(0.15
|
)
|
|
2016
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Revenues
|
$
|
604.2
|
|
|
$
|
645.6
|
|
|
$
|
629.3
|
|
|
$
|
690.6
|
|
Gross profit
|
$
|
97.9
|
|
|
$
|
114.0
|
|
|
$
|
104.6
|
|
|
$
|
111.0
|
|
Operating profit
|
$
|
9.7
|
|
|
$
|
11.4
|
|
|
$
|
5.4
|
|
|
$
|
8.4
|
|
Net income
|
$
|
9.9
|
|
|
$
|
8.3
|
|
|
$
|
12.0
|
|
|
$
|
12.1
|
|
Net income attributable to stockholders
|
$
|
10.0
|
|
|
$
|
8.3
|
|
|
$
|
12.3
|
|
|
$
|
12.2
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.61
|
|
|
$
|
0.51
|
|
|
$
|
0.75
|
|
|
$
|
0.74
|
|
Diluted earnings per share
|
$
|
0.61
|
|
|
$
|
0.51
|
|
|
$
|
0.75
|
|
|
$
|
0.74
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Basic weighted average shares outstanding
|
16.447
|
|
|
16.376
|
|
|
16.307
|
|
|||
Dilutive effect of restricted stock awards
|
0.067
|
|
|
0.051
|
|
|
0.048
|
|
|||
Diluted weighted average shares outstanding
|
16.514
|
|
|
16.427
|
|
|
16.355
|
|
|||
Basic earnings per share
|
$
|
2.95
|
|
|
$
|
2.61
|
|
|
$
|
4.58
|
|
Diluted earnings per share
|
$
|
2.94
|
|
|
$
|
2.61
|
|
|
$
|
4.57
|
|
Cash dividends per share
|
$
|
1.2025
|
|
|
$
|
1.1700
|
|
|
$
|
1.1300
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes
|
|
|
|
|
|
||||||
U.S.
|
$
|
48.3
|
|
|
$
|
(1.2
|
)
|
|
$
|
71.2
|
|
Non-U.S.
|
45.5
|
|
|
39.5
|
|
|
33.3
|
|
|||
|
$
|
93.8
|
|
|
$
|
38.3
|
|
|
$
|
104.5
|
|
Income tax provision (benefit)
|
|
|
|
|
|
||||||
Current tax provision:
|
|
|
|
|
|
||||||
Federal
|
$
|
28.3
|
|
|
$
|
(1.3
|
)
|
|
$
|
22.1
|
|
State
|
1.4
|
|
|
(0.3
|
)
|
|
3.4
|
|
|||
Non-U.S.
|
7.1
|
|
|
5.0
|
|
|
5.3
|
|
|||
Total current
|
$
|
36.8
|
|
|
$
|
3.4
|
|
|
$
|
30.8
|
|
Deferred tax provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
10.7
|
|
|
$
|
(5.8
|
)
|
|
$
|
(0.4
|
)
|
State
|
(0.7
|
)
|
|
0.8
|
|
|
1.2
|
|
|||
Non-U.S.
|
(1.9
|
)
|
|
(2.4
|
)
|
|
(2.2
|
)
|
|||
Total deferred
|
$
|
8.1
|
|
|
$
|
(7.4
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
44.9
|
|
|
$
|
(4.0
|
)
|
|
$
|
29.4
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes
|
$
|
93.8
|
|
|
$
|
38.3
|
|
|
$
|
104.5
|
|
Statutory taxes at 35.0%
|
$
|
32.8
|
|
|
$
|
13.4
|
|
|
$
|
36.6
|
|
Tax Reform Act
|
38.2
|
|
|
—
|
|
|
—
|
|
|||
State income taxes
|
0.2
|
|
|
(0.6
|
)
|
|
4.1
|
|
|||
Valuation allowance
|
0.1
|
|
|
(0.2
|
)
|
|
5.9
|
|
|||
Sale of non-U.S. investment
|
(9.1
|
)
|
|
(1.9
|
)
|
|
(3.7
|
)
|
|||
Equity interest earnings
|
(8.1
|
)
|
|
(2.2
|
)
|
|
(1.9
|
)
|
|||
Non-U.S. rate differences
|
(7.2
|
)
|
|
(9.6
|
)
|
|
(10.5
|
)
|
|||
R&D and other federal credits
|
(1.8
|
)
|
|
(1.8
|
)
|
|
(1.7
|
)
|
|||
Unremitted non-U.S. earnings
|
(0.4
|
)
|
|
(3.9
|
)
|
|
0.1
|
|
|||
Tax controversy resolution
|
—
|
|
|
2.1
|
|
|
(0.2
|
)
|
|||
Other
|
0.2
|
|
|
0.7
|
|
|
0.7
|
|
|||
Income tax provision (benefit)
|
$
|
44.9
|
|
|
$
|
(4.0
|
)
|
|
$
|
29.4
|
|
Reported income tax rate
|
47.9
|
%
|
|
n.m.
|
|
|
28.1
|
%
|
|||
n.m. - not meaningful
|
|
December 31
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets
|
|
|
|
||||
Tax attribute carryforwards
|
$
|
28.3
|
|
|
$
|
31.6
|
|
Product warranties
|
9.1
|
|
|
13.7
|
|
||
Accrued expenses and reserves
|
8.3
|
|
|
23.2
|
|
||
Accrued product liability
|
6.5
|
|
|
9.3
|
|
||
Other employee benefits
|
3.2
|
|
|
5.2
|
|
||
Accrued pension benefits
|
2.2
|
|
|
8.2
|
|
||
Other
|
—
|
|
|
2.2
|
|
||
Total deferred tax assets
|
57.6
|
|
|
93.4
|
|
||
Less: Valuation allowance
|
31.0
|
|
|
29.3
|
|
||
|
26.6
|
|
|
64.1
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Depreciation and amortization
|
22.2
|
|
|
25.4
|
|
||
Inventories
|
0.5
|
|
|
5.8
|
|
||
Unremitted earnings
|
—
|
|
|
0.4
|
|
||
Other
|
0.3
|
|
|
—
|
|
||
Total deferred tax liabilities
|
23.0
|
|
|
31.6
|
|
||
Net deferred tax asset
|
$
|
3.6
|
|
|
$
|
32.5
|
|
|
December 31, 2017
|
||||||||
|
Net deferred tax
asset
|
|
Valuation
allowance
|
|
Carryforwards
expire during:
|
||||
Non-U.S. net operating loss
|
$
|
21.9
|
|
|
$
|
13.9
|
|
|
2018 - Indefinite
|
Non-U.S. capital losses
|
6.5
|
|
|
6.5
|
|
|
2018 - Indefinite
|
||
State net operating losses and credits
|
3.8
|
|
|
2.4
|
|
|
2018 - 2036
|
||
Less: Unrecognized tax benefits
|
(3.9
|
)
|
|
—
|
|
|
|
||
Total
|
$
|
28.3
|
|
|
$
|
22.8
|
|
|
|
|
December 31, 2016
|
||||||||
|
Net deferred tax
asset
|
|
Valuation
allowance
|
|
Carryforwards
expire during:
|
||||
Non-U.S. net operating loss
|
$
|
25.2
|
|
|
$
|
15.7
|
|
|
2017 - Indefinite
|
Non-U.S. capital losses
|
5.9
|
|
|
5.9
|
|
|
2017 - Indefinite
|
||
State net operating losses and credits
|
2.8
|
|
|
2.0
|
|
|
2017 - 2031
|
||
U.S. foreign tax credit
|
2.5
|
|
|
—
|
|
|
2017 - 2026
|
||
U.S. net operating loss
|
0.8
|
|
|
—
|
|
|
2017 - 2036
|
||
Less: Unrecognized tax benefits
|
(5.6
|
)
|
|
—
|
|
|
|
||
Total
|
$
|
31.6
|
|
|
$
|
23.6
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at January 1
|
$
|
11.2
|
|
|
$
|
3.8
|
|
|
$
|
4.3
|
|
Additions (reductions) for business acquisitions
|
(1.0
|
)
|
|
6.3
|
|
|
—
|
|
|||
Additions based on tax positions related to the current year
|
2.7
|
|
|
2.8
|
|
|
0.7
|
|
|||
Additions (reductions) for tax positions of prior years
|
(1.5
|
)
|
|
0.1
|
|
|
0.1
|
|
|||
Reductions due to settlements with taxing authorities and the lapse of the applicable statute of limitations
|
(1.2
|
)
|
|
(0.9
|
)
|
|
(1.1
|
)
|
|||
Other changes in unrecognized tax benefits including foreign currency translation adjustments
|
0.7
|
|
|
(0.9
|
)
|
|
(0.2
|
)
|
|||
Balance at December 31
|
$
|
10.9
|
|
|
$
|
11.2
|
|
|
$
|
3.8
|
|
Details about OCI Components
|
|
Amount Reclassified from OCI
|
|
Affected Line Item in the Statement Where Net Income Is Presented
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
||||||
Gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
$
|
(5.7
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(8.7
|
)
|
|
Cost of sales
|
Total before tax
|
|
(5.7
|
)
|
|
(3.0
|
)
|
|
(8.7
|
)
|
|
Income before income taxes
|
|||
Tax expense
|
|
1.6
|
|
|
2.2
|
|
|
6.0
|
|
|
Income tax provision (benefit)
|
|||
Net of tax
|
|
$
|
(4.1
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(2.7
|
)
|
|
Net income
|
Amortization of defined benefit pension items:
|
|
|
|
|
|
|
|
|
||||||
Actuarial loss
|
|
$
|
(4.5
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(3.5
|
)
|
|
(a)
|
Prior service (cost) credit
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
(a)
|
|||
Total before tax
|
|
(4.2
|
)
|
|
(2.7
|
)
|
|
(3.2
|
)
|
|
Income before income taxes
|
|||
Tax expense
|
|
1.0
|
|
|
0.7
|
|
|
0.9
|
|
|
Income tax provision (benefit)
|
|||
Net of tax
|
|
$
|
(3.2
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(2.3
|
)
|
|
Net income
|
Total reclassifications for the period
|
|
$
|
(7.3
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
(5.0
|
)
|
|
|
Notional Amount
|
|
Average Fixed Rate
|
|
|
||||||||||
December 31
|
|
December 31
|
|
December 31
|
|
December 31
|
|
|
||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Term at December 31, 2017
|
||||||
$
|
100.0
|
|
|
$
|
100.0
|
|
|
1.47
|
%
|
|
1.47
|
%
|
|
Extending to December 2018
|
56.5
|
|
|
—
|
|
|
1.94
|
%
|
|
—
|
%
|
|
November 2017 to November 2022
|
||
83.5
|
|
|
—
|
|
|
2.20
|
%
|
|
—
|
%
|
|
December 2018 to May 2023
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
Balance sheet location
|
|
2017
|
|
2016
|
|
Balance sheet location
|
|
2017
|
|
2016
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current
|
Prepaid expenses and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Prepaid expenses and other
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Long-term
|
Other non-current assets
|
|
0.7
|
|
|
—
|
|
|
Other non-current assets
|
|
—
|
|
|
—
|
|
||||
|
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
Other long-term liabilities
|
|
0.1
|
|
|
—
|
|
||||
Foreign currency exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current
|
Prepaid expenses and other
|
|
8.3
|
|
|
—
|
|
|
Prepaid expenses and other
|
|
4.0
|
|
|
—
|
|
||||
|
Other current liabilities
|
|
2.8
|
|
|
3.7
|
|
|
Other current liabilities
|
|
4.3
|
|
|
14.0
|
|
||||
Long-Term
|
Other non-current assets
|
|
3.9
|
|
|
—
|
|
|
Other non-current assets
|
|
1.3
|
|
|
—
|
|
||||
|
Other long-term liabilities
|
|
0.5
|
|
|
—
|
|
|
Other long-term liabilities
|
|
7.7
|
|
|
10.1
|
|
||||
Total derivatives designated as hedging instruments
|
|
$
|
16.2
|
|
|
$
|
3.7
|
|
|
|
|
$
|
17.5
|
|
|
$
|
24.1
|
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current
|
Prepaid expenses and other
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
Prepaid expenses and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other current liabilities
|
|
—
|
|
|
—
|
|
|
Other current liabilities
|
|
—
|
|
|
0.3
|
|
||||
Long-term
|
Other non-current assets
|
|
—
|
|
|
0.2
|
|
|
Other non-current assets
|
|
—
|
|
|
—
|
|
||||
|
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
Other long-term liabilities
|
|
0.1
|
|
|
0.2
|
|
||||
Foreign currency exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current
|
Prepaid expenses and other
|
|
0.8
|
|
|
—
|
|
|
Prepaid expenses and other
|
|
0.4
|
|
|
—
|
|
||||
|
Other current liabilities
|
|
0.1
|
|
|
1.6
|
|
|
Other current liabilities
|
|
0.8
|
|
|
3.9
|
|
||||
Total derivatives not designated as hedging instruments
|
|
$
|
1.3
|
|
|
$
|
1.8
|
|
|
|
|
$
|
1.3
|
|
|
$
|
4.4
|
|
|
Total derivatives
|
|
$
|
17.5
|
|
|
$
|
5.5
|
|
|
|
|
$
|
18.8
|
|
|
$
|
28.5
|
|
|
|
Derivative Assets as of December 31, 2017
|
|
Derivative Liabilities as of December 31, 2017
|
||||||||||||||||||||||||||||
|
|
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
|
||||||||||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swap agreements
|
|
$
|
1.0
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency exchange contracts
|
|
7.3
|
|
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|
(7.3
|
)
|
|
2.1
|
|
|
2.1
|
|
||||||||
Total derivatives
|
|
$
|
8.3
|
|
|
$
|
(7.5
|
)
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
$
|
9.6
|
|
|
$
|
(7.5
|
)
|
|
$
|
2.1
|
|
|
$
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
Derivative Assets as of December 31, 2016
|
|
Derivative Liabilities as of December 31, 2016
|
||||||||||||||||||||||||||||
|
|
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
|
||||||||||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swap agreements
|
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Foreign currency exchange contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.7
|
|
|
—
|
|
|
22.7
|
|
|
22.7
|
|
||||||||
Total derivatives
|
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
23.0
|
|
|
$
|
23.0
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
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)
|
|
Location of Gain or
(Loss) Recognized
in Income on
Derivative
(Ineffective
Portion and Amount
Excluded from
Effectiveness
Testing)
|
|
Amount of Gain or (Loss) Recognized
in Income on Derivative (Ineffective
Portion and Amount Excluded from
Effectiveness Testing)
|
||||||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest rate swap agreements
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency exchange contracts
|
|
14.1
|
|
|
(15.5
|
)
|
|
(11.1
|
)
|
|
Cost of sales
|
|
(5.7
|
)
|
|
(3.0
|
)
|
|
(8.7
|
)
|
|
Cost of sales
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
0.1
|
|
|||||||||
|
|
$
|
14.6
|
|
|
$
|
(15.5
|
)
|
|
$
|
(11.1
|
)
|
|
|
|
$
|
(5.7
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(8.7
|
)
|
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Derivatives Not Designated as Hedging Instruments
|
|
Location of Gain or (Loss) Recognized in Income on Derivative
|
|
Amount of Gain or (Loss)
Recognized in Income on Derivative
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||||
Cash flow hedges
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
Interest rate swap agreements
|
|
Other
|
|
$
|
0.2
|
|
|
$
|
(0.6
|
)
|
|
$
|
(0.5
|
)
|
||||||||||||||||||||||||||
Foreign currency exchange contracts
|
|
Cost of sales
|
|
2.0
|
|
|
(2.8
|
)
|
|
0.3
|
|
|||||||||||||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2.2
|
|
|
$
|
(3.4
|
)
|
|
$
|
(0.2
|
)
|
|
2017
|
|
2016
|
|
2015
|
United States Plans
|
|
|
|
|
|
Weighted average discount rates
|
3.40%
|
|
3.75%
|
|
4.00%
|
Expected long-term rate of return on assets
|
7.50%
|
|
7.50%
|
|
7.50%
|
Non-U.S. Plans
|
|
|
|
|
|
Weighted average discount rates
|
0.88% - 2.40%
|
|
0.86% - 2.50%
|
|
2.10% - 3.70%
|
Rate of increase in compensation levels
|
1.50% - 2.50%
|
|
1.50% - 2.50%
|
|
2.00% - 2.50%
|
Expected long-term rate of return on assets
|
1.70% - 7.00%
|
|
3.00% - 7.00%
|
|
3.00% - 7.00%
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States Plans
|
|
|
|
|
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
2.7
|
|
|
3.0
|
|
|
2.9
|
|
|||
Expected return on plan assets
|
(4.9
|
)
|
|
(5.0
|
)
|
|
(5.5
|
)
|
|||
Amortization of actuarial loss
|
1.8
|
|
|
1.6
|
|
|
1.5
|
|
|||
Amortization of prior service credit
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|||
Settlements
|
1.0
|
|
|
0.9
|
|
|
1.3
|
|
|||
Net periodic pension expense (benefit)
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
(0.1
|
)
|
Non-U.S. Plans
|
|
|
|
|
|
||||||
Service cost
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Interest cost
|
4.1
|
|
|
5.0
|
|
|
5.6
|
|
|||
Expected return on plan assets
|
(9.2
|
)
|
|
(8.8
|
)
|
|
(9.6
|
)
|
|||
Amortization of actuarial loss
|
2.7
|
|
|
1.4
|
|
|
2.0
|
|
|||
Net periodic pension expense (benefit)
|
$
|
(2.2
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(1.8
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States Plans
|
|
|
|
|
|
||||||
Current year actuarial (gain) loss
|
$
|
(2.0
|
)
|
|
$
|
1.6
|
|
|
$
|
4.3
|
|
Amortization of actuarial loss
|
(1.8
|
)
|
|
(1.6
|
)
|
|
(1.5
|
)
|
|||
Amortization of prior service credit
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|||
Settlements
|
(1.0
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|||
Total recognized in other comprehensive income (loss)
|
$
|
(4.5
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
1.8
|
|
Non-U.S. Plans
|
|
|
|
|
|
||||||
Current year actuarial (gain) loss
|
$
|
(13.8
|
)
|
|
$
|
20.5
|
|
|
$
|
2.0
|
|
Amortization of actuarial loss
|
(2.7
|
)
|
|
(1.4
|
)
|
|
(2.0
|
)
|
|||
Current year prior service credit
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Total recognized in other comprehensive income (loss)
|
$
|
(16.5
|
)
|
|
$
|
19.1
|
|
|
$
|
(0.1
|
)
|
|
2017
|
|
2016
|
||||||||||||
|
U.S. Plans
|
|
Non-U.S.
Plans
|
|
U.S. Plans
|
|
Non-U.S.
Plans
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation at beginning of year
|
$
|
75.7
|
|
|
$
|
165.2
|
|
|
$
|
77.3
|
|
|
$
|
156.1
|
|
Service cost
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Interest cost
|
2.7
|
|
|
4.1
|
|
|
3.0
|
|
|
5.0
|
|
||||
Actuarial (gain) loss
|
2.9
|
|
|
(1.9
|
)
|
|
1.2
|
|
|
34.6
|
|
||||
Benefits paid
|
(4.5
|
)
|
|
(5.8
|
)
|
|
(4.2
|
)
|
|
(5.4
|
)
|
||||
Employee contributions
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Lump sum payments
|
(2.0
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
||||
Business acquisition benefit obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
17.1
|
|
|
—
|
|
|
(27.9
|
)
|
||||
Projected benefit obligation at end of year
|
$
|
74.8
|
|
|
$
|
179.0
|
|
|
$
|
75.7
|
|
|
$
|
165.2
|
|
Accumulated benefit obligation at end of year
|
$
|
74.8
|
|
|
$
|
178.4
|
|
|
$
|
75.7
|
|
|
$
|
164.7
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
67.2
|
|
|
$
|
138.9
|
|
|
$
|
68.4
|
|
|
$
|
144.7
|
|
Actual return on plan assets
|
9.8
|
|
|
20.6
|
|
|
4.6
|
|
|
21.1
|
|
||||
Employer contributions
|
0.5
|
|
|
9.2
|
|
|
—
|
|
|
3.2
|
|
||||
Employee contributions
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Benefits paid
|
(4.5
|
)
|
|
(5.8
|
)
|
|
(4.2
|
)
|
|
(5.4
|
)
|
||||
Settlements
|
(2.0
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
15.3
|
|
|
—
|
|
|
(24.8
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
71.0
|
|
|
$
|
178.3
|
|
|
$
|
67.2
|
|
|
$
|
138.9
|
|
Funded status at end of year
|
$
|
(3.8
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(8.5
|
)
|
|
$
|
(26.3
|
)
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
||||||||||||
|
U.S. Plans
|
|
Non-U.S.
Plans
|
|
U.S. Plans
|
|
Non-U.S.
Plans
|
||||||||
Amounts recognized in the consolidated balance sheets consist of:
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
0.1
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Noncurrent liabilities
|
(3.9
|
)
|
|
(4.5
|
)
|
|
(8.5
|
)
|
|
(26.3
|
)
|
||||
|
$
|
(3.8
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(8.5
|
)
|
|
$
|
(26.3
|
)
|
Components of accumulated other comprehensive income (loss) consist of:
|
|
|
|
|
|
|
|
||||||||
Actuarial loss
|
$
|
37.9
|
|
|
$
|
40.1
|
|
|
$
|
42.7
|
|
|
$
|
53.3
|
|
Prior service credit
|
(0.3
|
)
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(0.1
|
)
|
||||
Deferred taxes
|
(7.8
|
)
|
|
(5.2
|
)
|
|
(14.4
|
)
|
|
(9.0
|
)
|
||||
Change in statutory tax rate
|
(6.0
|
)
|
|
(2.0
|
)
|
|
(1.2
|
)
|
|
(1.6
|
)
|
||||
Foreign currency translation adjustment
|
—
|
|
|
2.3
|
|
|
—
|
|
|
6.1
|
|
||||
|
$
|
23.8
|
|
|
$
|
35.1
|
|
|
$
|
26.5
|
|
|
$
|
48.7
|
|
|
|
Amount
|
|
Net of tax
|
||||
Actuarial loss
|
|
$
|
3.8
|
|
|
$
|
3.0
|
|
Prior service credit
|
|
$
|
(0.2
|
)
|
|
$
|
(0.2
|
)
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
2018
|
$
|
6.1
|
|
|
$
|
5.7
|
|
2019
|
6.0
|
|
|
6.6
|
|
||
2020
|
5.7
|
|
|
6.6
|
|
||
2021
|
5.6
|
|
|
6.6
|
|
||
2022
|
5.5
|
|
|
6.7
|
|
||
2023 - 2027
|
23.9
|
|
|
39.4
|
|
||
|
$
|
52.8
|
|
|
$
|
71.6
|
|
|
2017
Actual Allocation |
|
2016
Actual Allocation |
|
Target Allocation
Range
|
U.S. equity securities
|
44.8%
|
|
45.4%
|
|
36.0% - 54.0%
|
Non-U.S. equity securities
|
20.0%
|
|
19.7%
|
|
16.0% - 24.0%
|
Fixed income securities
|
33.9%
|
|
33.9%
|
|
30.0% - 40.0%
|
Money market
|
1.3%
|
|
1.0%
|
|
0.0% - 10.0%
|
|
2017
Actual Allocation |
|
2016
Actual Allocation |
|
Target Allocation
|
U.K. equity securities
|
20.2%
|
|
21.2%
|
|
21.0%
|
Non-U.K. equity securities
|
49.3%
|
|
48.8%
|
|
49.0%
|
Fixed income securities
|
27.7%
|
|
30.0%
|
|
30.0%
|
Money market
|
2.8%
|
|
—%
|
|
—%
|
|
Level 1
|
|
Level 2
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
U.S. equity securities
|
$
|
31.8
|
|
|
$
|
30.5
|
|
|
$
|
26.1
|
|
|
$
|
20.4
|
|
U.K. equity securities
|
—
|
|
|
—
|
|
|
32.8
|
|
|
26.7
|
|
||||
Non-U.S., non-U.K. equity securities
|
14.2
|
|
|
13.3
|
|
|
54.0
|
|
|
42.0
|
|
||||
Fixed income securities
|
24.1
|
|
|
22.7
|
|
|
60.9
|
|
|
49.8
|
|
||||
Money market
|
0.9
|
|
|
0.7
|
|
|
4.5
|
|
|
—
|
|
||||
Total
|
$
|
71.0
|
|
|
$
|
67.2
|
|
|
$
|
178.3
|
|
|
$
|
138.9
|
|
|
December 31
|
||||||
|
2017
|
|
2016
|
||||
Finished goods and service parts
|
$
|
193.7
|
|
|
$
|
171.9
|
|
Work in process
|
19.9
|
|
|
26.1
|
|
||
Raw materials
|
239.0
|
|
|
191.4
|
|
||
Total manufactured inventories
|
452.6
|
|
|
389.4
|
|
||
LIFO reserve
|
(40.7
|
)
|
|
(37.2
|
)
|
||
Total inventory
|
$
|
411.9
|
|
|
$
|
352.2
|
|
|
December 31
|
||||||
|
2017
|
|
2016
|
||||
Land and land improvements
|
$
|
27.4
|
|
|
$
|
26.3
|
|
Plant and equipment
|
700.4
|
|
|
645.1
|
|
||
Property, plant and equipment, at cost
|
727.8
|
|
|
671.4
|
|
||
Allowances for depreciation and amortization
|
(462.4
|
)
|
|
(416.3
|
)
|
||
|
$
|
265.4
|
|
|
$
|
255.1
|
|
December 31, 2017
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||
Intangible assets not subject to amortization
|
|
|
|
|
|
|
||||||
Trademarks
|
|
$
|
18.0
|
|
|
$
|
—
|
|
|
$
|
18.0
|
|
Intangible assets subject to amortization
|
|
|
|
|
|
|
||||||
Customer and contractual relationships
|
|
30.5
|
|
|
(6.4
|
)
|
|
24.1
|
|
|||
Patents and technology
|
|
16.5
|
|
|
(3.1
|
)
|
|
13.4
|
|
|||
Trademarks
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||
Total
|
|
$
|
65.6
|
|
|
$
|
(9.5
|
)
|
|
$
|
56.1
|
|
December 31, 2016
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||
Intangible assets not subject to amortization
|
|
|
|
|
|
|
||||||
Trademarks
|
|
$
|
15.8
|
|
|
$
|
—
|
|
|
$
|
15.8
|
|
Intangible assets subject to amortization
|
|
|
|
|
|
|
||||||
Customer and contractual relationships
|
|
$
|
27.9
|
|
|
$
|
(2.9
|
)
|
|
$
|
25.0
|
|
Patents and technology
|
|
16.3
|
|
|
(2.0
|
)
|
|
14.3
|
|
|||
Trademarks
|
|
1.2
|
|
|
(0.1
|
)
|
|
1.1
|
|
|||
Total
|
|
$
|
61.2
|
|
|
$
|
(5.0
|
)
|
|
$
|
56.2
|
|
Intangible assets subject to amortization
|
|
Weighted-Average Useful Lives (Years)
|
Customer relationships
|
|
10
|
Engineering drawings
|
|
9
|
Non-compete agreement
|
|
2
|
Patents
|
|
7
|
Trademarks
|
|
10
|
|
|
Carrying Amount of Goodwill
|
||||||||||||||
|
|
Americas
|
|
EMEA
|
|
Bolzoni
|
|
Total
|
||||||||
Balance at January 1, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions
|
|
1.7
|
|
|
—
|
|
|
54.2
|
|
|
55.9
|
|
||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
|
(5.2
|
)
|
||||
Balance at December 31, 2016
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
49.0
|
|
|
$
|
50.7
|
|
Additions
|
|
—
|
|
|
0.8
|
|
|
1.0
|
|
|
1.8
|
|
||||
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
6.6
|
|
|
6.6
|
|
||||
Balance at December 31, 2017
|
|
$
|
1.7
|
|
|
$
|
0.8
|
|
|
$
|
56.6
|
|
|
$
|
59.1
|
|
|
December 31
|
||||||
|
2017
|
|
2016
|
||||
Total outstanding borrowings:
|
|
|
|
||||
Revolving credit agreements
|
$
|
6.1
|
|
|
$
|
116.0
|
|
Term loan, net
|
190.9
|
|
|
—
|
|
||
Other debt
|
73.9
|
|
|
68.5
|
|
||
Capital lease obligations
|
19.8
|
|
|
26.7
|
|
||
Total debt outstanding
|
$
|
290.7
|
|
|
$
|
211.2
|
|
Plus: discount on term loan and unamortized deferred financing fees
|
4.1
|
|
|
—
|
|
||
Total debt outstanding, gross
|
$
|
294.8
|
|
|
$
|
211.2
|
|
Current portion of borrowings outstanding
|
$
|
74.5
|
|
|
$
|
129.0
|
|
Long-term portion of borrowings outstanding
|
$
|
216.2
|
|
|
$
|
82.2
|
|
Total available borrowings, net of limitations, under revolving credit agreements
|
$
|
218.8
|
|
|
$
|
291.2
|
|
Unused revolving credit agreements
|
$
|
212.7
|
|
|
$
|
175.2
|
|
Weighted average stated interest rate on total borrowings
|
5.2
|
%
|
|
4.4
|
%
|
||
Weighted average effective interest rate on total borrowings (including interest rate swap agreements)
|
3.9
|
%
|
|
4.4
|
%
|
2018
|
$
|
68.5
|
|
2019
|
31.3
|
|
|
2020
|
10.1
|
|
|
2021
|
10.1
|
|
|
2022
|
10.0
|
|
|
Thereafter
|
145.0
|
|
|
|
$
|
275.0
|
|
|
Capital
Leases
|
|
Operating
Leases
|
||||
2018
|
$
|
7.1
|
|
|
$
|
20.2
|
|
2019
|
5.9
|
|
|
13.9
|
|
||
2020
|
4.9
|
|
|
10.3
|
|
||
2021
|
2.4
|
|
|
7.4
|
|
||
2022
|
—
|
|
|
6.1
|
|
||
Subsequent to 2022
|
—
|
|
|
17.0
|
|
||
Total minimum lease payments
|
20.3
|
|
|
$
|
74.9
|
|
|
Amounts representing interest
|
0.5
|
|
|
|
|||
Present value of net minimum lease payments
|
19.8
|
|
|
|
|||
Current maturities
|
6.8
|
|
|
|
|||
Long-term capital lease obligation
|
$
|
13.0
|
|
|
|
|
December 31
|
||||||
|
2017
|
|
2016
|
||||
Plant and equipment
|
$
|
35.9
|
|
|
$
|
37.5
|
|
Less accumulated amortization
|
(10.4
|
)
|
|
(8.1
|
)
|
||
|
$
|
25.5
|
|
|
$
|
29.4
|
|
|
2017
|
|
2016
|
||||
Balance at January 1
|
$
|
52.3
|
|
|
$
|
55.5
|
|
Current year warranty expense
|
32.2
|
|
|
35.4
|
|
||
Change in estimate related to pre-existing warranties
|
(8.9
|
)
|
|
(10.1
|
)
|
||
Payments made
|
(26.5
|
)
|
|
(27.9
|
)
|
||
Foreign currency effect
|
1.9
|
|
|
(0.6
|
)
|
||
Balance at December 31
|
$
|
51.0
|
|
|
$
|
52.3
|
|
|
|
HYGFS
|
|
Total
|
||||
Total recourse or repurchase obligations
|
|
$
|
174.2
|
|
|
$
|
203.5
|
|
Less: exposure limited for certain dealers
|
|
54.3
|
|
|
54.3
|
|
||
Plus: 7.5% of original loan balance
|
|
12.0
|
|
|
12.0
|
|
||
|
|
131.9
|
|
|
161.2
|
|
||
Incremental obligation related to guarantee to WF
|
|
179.6
|
|
|
179.6
|
|
||
Total exposure related to guarantees
|
|
$
|
311.5
|
|
|
$
|
340.8
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Statement of Operations
|
|
|
|
|
|
||||||
Revenues
|
$
|
350.3
|
|
|
$
|
326.7
|
|
|
$
|
315.0
|
|
Gross profit
|
$
|
111.9
|
|
|
$
|
103.4
|
|
|
$
|
98.7
|
|
Income from continuing operations
|
$
|
127.2
|
|
|
$
|
25.5
|
|
|
$
|
23.1
|
|
Net income
|
$
|
127.2
|
|
|
$
|
25.5
|
|
|
$
|
23.1
|
|
Balance Sheet
|
|
|
|
|
|
||||||
Current assets
|
$
|
125.3
|
|
|
$
|
115.5
|
|
|
|
||
Non-current assets
|
$
|
1,484.0
|
|
|
$
|
1,272.2
|
|
|
|
||
Current liabilities
|
$
|
120.7
|
|
|
$
|
117.2
|
|
|
|
||
Non-current liabilities
|
$
|
1,241.6
|
|
|
$
|
1,138.0
|
|
|
|
Acquired Assets and Liabilities
|
|
Fair Value
|
||
Cash
|
|
$
|
8.0
|
|
Accounts receivable
|
|
34.0
|
|
|
Inventories
|
|
31.5
|
|
|
Property, plant and equipment
|
|
43.3
|
|
|
Intangible Assets
|
|
54.8
|
|
|
Other assets
|
|
0.5
|
|
|
Total assets acquired
|
|
$
|
172.1
|
|
Accounts payable
|
|
32.7
|
|
|
Total debt
|
|
44.3
|
|
|
Long-term deferred tax liabilities
|
|
12.5
|
|
|
Other liabilities
|
|
8.0
|
|
|
Total liabilities assumed
|
|
$
|
97.5
|
|
Noncontrolling interest
|
|
5.7
|
|
|
Net assets acquired
|
|
$
|
68.9
|
|
Initial purchase price
|
|
$
|
60.9
|
|
Interest acquired in mandatory tender offer
|
|
$
|
63.2
|
|
Goodwill
|
|
$
|
55.2
|
|
Acquired Intangible Assets
|
|
Fair Value
|
|
Weighted-Average Useful Lives (Years)
|
|
Valuation Method
|
||
Customer relationships
|
|
$
|
22.1
|
|
|
13
|
|
Excess Earnings
|
Trademarks
|
|
17.1
|
|
|
Indefinite
|
|
Relief from Royalty
|
|
Engineering drawings
|
|
12.5
|
|
|
10
|
|
Reproduction Cost
|
|
Patents
|
|
2.1
|
|
|
10
|
|
Relief from Royalty
|
|
Non-compete agreement
|
|
1.0
|
|
|
3
|
|
Lost Profit
|
|
Total
|
|
$
|
54.8
|
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
||||||||||||
Description
|
|
Balance at Beginning of Period
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other Accounts
— Describe (A)
|
|
Deductions
— Describe
|
|
Balance at
End of
Period
|
||||||||||||
|
(In millions)
|
|||||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reserves deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts (B)
|
|
$
|
14.9
|
|
|
$
|
0.2
|
|
|
$
|
1.1
|
|
|
$
|
7.5
|
|
|
(C)
|
|
$
|
8.7
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reserves deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts (B)
|
|
$
|
12.8
|
|
|
$
|
6.3
|
|
|
$
|
(2.7
|
)
|
|
$
|
1.5
|
|
|
(C)
|
|
$
|
14.9
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reserves deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts (B)
|
|
$
|
16.3
|
|
|
$
|
4.9
|
|
|
$
|
(2.1
|
)
|
|
$
|
6.3
|
|
|
(C)
|
|
$
|
12.8
|
|
(A)
|
Foreign currency translation adjustments and other.
|
(B)
|
Includes allowance of receivables classified as long-term of
$5.0 million
,
$4.6 million
and
$4.5 million
in
2017
,
2016
and
2015
, respectively.
|
(C)
|
Write-offs, net of recoveries.
|
1.
|
Purpose of the Plan
|
2.
|
Definitions
|
(a)
|
“Average Award Share Price.” Except as otherwise provided in the Guidelines for the 2012 and 2013 Performance Periods, Average Award Share Price means the lesser of (i) the average of the closing price per share of Class A Common Stock on the New York Stock Exchange on the Friday (or if Friday is not a trading day, the last trading day before such Friday) for each week during the calendar year preceding the commencement of the Performance Period (or such other previous calendar year as determined by the Committee and specified in the Guidelines; provided, however, that with respect to any Qualified Performance-Based Award, such determination shall be made not later than 90 days after the commencement of the applicable Performance Period) or (ii) the average of the closing price per share of Class A Common Stock on the New York Stock Exchange on the Friday (or if Friday is not a trading day, the last trading day before such Friday) for each week of the applicable Performance Period.
|
(b)
|
“Award” means an award paid to a Participant under this Plan for a Performance Period (or portion thereof) in an amount determined pursuant to a formula based upon the achievement of Performance Objectives which is established by the Committee; provided, however, that with respect to any Qualified Performance-Based Award, such formula shall be established not later than 90 days after the commencement of the Performance Period on which the Award is based and prior to the completion of 25% of such Performance Period. The Committee shall allocate the amount of an Award between the cash component, to be paid in cash, and the equity component, to be paid in Award Shares, pursuant to a formula which is established by the Committee; provided, however, that with respect to any Qualified Performance-Based Award, such formula shall be established not later than 90 days after the commencement of the Performance Period on which the Award is based and prior to the completion of 25% of such Performance Period.
|
(c)
|
“Award Shares” means fully-paid, non-assessable shares of Class A Common Stock that are issued pursuant to, and with such restrictions as are imposed by, the terms of this Plan and the Guidelines. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing and, in the discretion of the Company, may be issued as certificated or uncertificated shares.
|
(d)
|
“Change in Control” means the occurrence of an event described in Appendix 1 hereto.
|
(e)
|
“Class A Common Stock” means the Company's Class A Common Stock, par value $1.00 per share.
|
(f)
|
“Committee” means the Compensation Committee of the Company's Board of Directors or any other committee appointed by the Company's Board of Directors to administer this Plan in accordance with Section 3, so long as any such committee consists of not less than two directors of the Company and so long
|
(g)
|
“Covered Employee” means any Participant who is a “covered employee” for purposes of Section 162(m) or any Participant who the Committee determines in its sole discretion could become a “covered employee.”
|
(h)
|
“Guidelines” means the guidelines that are approved by the Committee for the administration of the Awards granted under this Plan. To the extent that there is any inconsistency between the Guidelines and this Plan, the Guidelines will control.
|
(i)
|
“Participant” means any person who is classified as a salaried employee of the Employers (including directors of the Employers who are also salaried employees of the Employers) who, in the judgment of the Committee, occupies a position in which his efforts may significantly contribute to the profits or growth of the Company and who is designated by the Compensation Committee as a Participant in the Plan. A “Non-U.S. Participant” shall mean a Participant who resides outside of the U.S. and a “U.S. Participant” shall mean any Participant who is not a Non-U.S. Participant. Notwithstanding the foregoing, (A) leased employees (as defined in Code Section 414) and (B) persons who are participants in the NACCO Materials Handling Group, Inc. Long-Term Incentive Compensation Plan for a particular Performance Period shall not be eligible to participate in this Plan for the same Performance Period.
|
(j)
|
“Payment Period” means, with respect to any Performance Period, the period from January 1 to March 15 of the calendar year immediately following the calendar year in which such Performance Period ends.
|
(k)
|
“Performance Period” means any period of one or more years (or portion thereof) on which an Award is based, as established by the Committee. Any Performance Period(s) applicable to a Qualified Performance-Based Award shall be established by the Committee not later than 90 days after the commencement of the Performance Period on which such Qualified Performance-Based Award will be based and prior to completion of 25% of such Performance Period.
|
(l)
|
“Performance Objectives” shall mean the performance objectives established pursuant to this Plan for Participants. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or any subsidiary, division, business unit, department or function of the Company. Performance Objectives may be measured on an absolute or relative basis. Different groups of Participants may be subject to different Performance Objectives for the same Performance Period. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance-Based Award shall be based on one or more, or a combination, of the following criteria, or the attainment of specified levels of growth or improvement in one or more, or a combination, of the following criteria: return on equity, return on total capital employed, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, return on sales, earnings before interest and taxes, revenue, revenue growth, gross margin, net or standard margin, return on investment, increase in the fair market value of shares, share price (including, but not limited to, growth measures and total stockholder return), operating profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), inventory turns, financial return ratios, market share, earnings measures/ratios, economic value added, balance sheet measurements (such as receivable turnover), internal rate of return, customer satisfaction surveys or productivity, net income, operating profit or increase in operating profit, market share, increase in market share, sales value increase over time, economic value added, economic value increase over time, new project development or net sales.
|
(m)
|
“Qualified Performance-Based Award” shall mean any Award or portion of an Award granted to a Covered Employee that is intended to satisfy the requirements for “qualified performance-based compensation” under Section 162(m).
|
(n)
|
“Retire” or “Retirement” means a termination of employment after reaching age 60 with at least 15 years of service.
|
(o)
|
“Rule 16b-3” means Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (or any successor rule to the same effect), as in effect from time to time.
|
(p)
|
“Salary Points” means the salary points assigned to a Participant by the Committee for the applicable Performance Period pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee.
|
(q)
|
“Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any successor provision.
|
(r)
|
“Spin-Off Date” means the “Spin-Off Date,” as such term is defined in the 2012 Separation Agreement between NACCO Industries, Inc. and Hyster-Yale Materials Handling, Inc.
|
(s)
|
“Target Award” means a dollar amount calculated by multiplying (i) the designated salary midpoint that corresponds to a Participant's Salary Points by (ii) the long-term incentive compensation target percent for those Salary Points for the applicable Performance Period, as determined by the Committee. The Target Award is the award that would be paid to a Participant under this Plan if each Performance Objective was met.
|
3.
|
Administration
|
4.
|
Eligibility
|
5.
|
Awards
|
(a)
|
The Committee shall approve (i) a Target Award to be granted to each Participant and (ii) a formula for determining the amount of each Award, which formula is based upon the Company's achievement of Performance Objectives; provided, however, that with respect to any Award that is designated by the Committee as a Qualified Performance-Based Award, the Committee shall approve the foregoing not later than the 90th day of the applicable Performance Period and prior to the completion of 25% of such Performance Period. Each grant shall specify an initial allocation between the cash portion of the Award and the equity portion of the Award.
|
(b)
|
Prior to the end of the Payment Period, the Committee shall approve (i) a preliminary calculation of the amount of each Award based upon the application of the formula and actual performance relative to the Target Awards previously determined in accordance with Section 5(a); and (ii) a final calculation of the amount of each Award to be paid to each Participant for the Performance Period. Such approval shall be certified by the Committee before any amount is paid under any Award with respect to that Performance Period. Notwithstanding the foregoing, the Committee shall have the power to (1) decrease the amount of any Award below the amount determined in accordance with the foregoing provisions; (2) increase the amount of any Award above the initial amount determined in accordance with the foregoing provisions or adjust the amount thereof in any other manner determined by the Committee in its sole and absolute discretion; and/or (3) adjust the allocation between the cash portion of the Award and the equity portion of the Award; provided, however, that (A) no such decrease may occur following a Change in Control and (B) no such increase, change or adjustment may be made that would cause any Qualified Performance-Based Award to be includable as “applicable employee remuneration” of such Participant, as such term is defined in Section 162(m) (
i.e.
, to no longer qualify for the exception for “qualified performance-based compensation” under Section 162(m)). No Award, including any Award equal to the Target Award, shall be payable under this Plan to any Participant except as determined by the Committee.
|
(c)
|
Calculations of Target Awards for a Performance Period shall initially be based on the Participant's Salary Points as of January 1
st
of the first year of the Performance Period. However, such Target Awards shall be changed during or after the Performance Period under the following circumstances: (i) if a Participant receives a change in Salary Points, salary midpoint and/or long-term incentive compensation target percentage during a Performance Period, such change shall be reflected in a pro-rata Target Award, (ii) employees hired into or promoted into a position eligible to participate in the Plan during a Performance Period will be assigned a pro-rated Target Award based on their length of service during the Performance Period; provided that the employees have been employed by the Employers for at least 90 days during the Performance Period and (iii) the Committee may increase or decrease the amount of the Target Award at any time, in its sole and absolute discretion; provided, however, that (X) no such decrease may occur following a Change in Control and (Y) no such increase, adjustment or any other change may be made that would cause any Qualified Performance-Based Award to be includable as “applicable employee remuneration” of such Participant, as such term is defined in Code Section 162(m) (
i.e.
, to no longer qualify for the exception for “qualified performance-based compensation” under Code Section 162(m)). Unless otherwise determined by the Committee (in its sole and absolute discretion), in order to be eligible to receive an Award for a Performance Period, the Participant must be employed by an Employer and must be a Participant on December 31
st
of the last year of the Performance Period. Notwithstanding the foregoing, if a Participant dies, becomes disabled or Retires during the Performance Period, the Participant shall be entitled to a pro-rata portion of the Award for such Performance Period, calculated based on actual performance for the entire Performance Period and the number of days the Participant was actually employed by the Employers during the Performance Period.
|
(d)
|
Each Award shall be fully paid during the Payment Period and shall be paid partly in cash and partly in Award Shares. Notwithstanding the foregoing, the Committee, in its sole and absolute discretion, may require that an Award that is payable to a Non U.S. Participant may be paid fully in cash. The number of Award Shares to
|
(e)
|
At such time as the Committee approves a Target Award and formula for determining the amount of each Award, the Committee shall designate whether all or any portion of the Award is a Qualified Performance-Based Award.
|
6.
|
Withholding Taxes/Offsets
|
(a)
|
To the extent that an Employer is required to withhold federal, state or local taxes in connection with any Award paid to a Participant under this Plan, and the amounts available to the Employer for such withholding are insufficient, it shall be a condition to the receipt of such Award that the Participant make arrangements satisfactory to the Company for the payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such Award. The Company and a Participant may also make similar arrangements with respect to the payment of any other taxes derived from or related to the Award with respect to which withholding is not required.
|
(b)
|
If, prior to the payment of any Award, it is determined by an Employer, in its sole and absolute discretion that any amount of money is owed by the Participant to the Employer, the Award otherwise payable to the Participant may be reduced in satisfaction of the Participant's debt to such Employer. Such amount(s) owed by the Participant to the Employer may include, but is not limited to, the unused balance of any cash advances previously obtained by the Participant, or any outstanding credit card debt incurred by the Participant.
|
7.
|
Change
in Control
|
(a)
|
The following provisions shall apply notwithstanding any other provision of this Plan to the contrary.
|
(b)
|
Amount of Award for Year of Change In Control
. In the event of a Change in Control during a Performance Period, the amount of the Award payable to a Participant who is employed by an Employer on the date of the Change in Control (or who died, become permanently disabled or Retired during such Performance Period and prior to the Change in Control) for such Performance Period shall be equal to the Participant's Target Award for such Performance Period, multiplied by a fraction, the numerator of which is the number of days during the Performance Period during which the Participant was employed by the Employers prior to the Change in Control and the denominator of which is the number of days in the Performance Period.
|
(c)
|
Time of Payment
. In the event of a Change in Control, the payment date of all outstanding Awards (including, without limitation, the pro-rata Target Award for the Performance Period during which the Change in Control occurred) shall be the date that is between two days prior to, or within 30 days after, the date of the Change in Control, as determined by the Committee in its sole and absolute discretion.
|
8.
|
Award Shares Terms and Restrictions
|
(a)
|
Award Shares granted to a Participant shall entitle such Participant to voting, dividend and other ownership rights. Each payment of Award Shares shall be evidenced by an agreement executed on behalf of the Company by an authorized officer and delivered to and accepted by such Participant. Each such agreement
|
(b)
|
Except as otherwise set forth in this Section, Award Shares shall not be assigned, transferred, exchanged, pledged, hypothecated or encumbered (a "Transfer") by a Participant or any other person, voluntarily or involuntarily, other than a Transfer of Award Shares (i) by will or the laws of descent and distribution, (ii) pursuant to a domestic relations order meeting the definition of a qualified domestic relations order under Section 206(d)(3)(B) of the Employee Retirement Income Security Act of 1974, as amended (“QDRO”), (iii) to a trust for the benefit of a Participant or his spouse, children or grandchildren (provided that Award Shares transferred to such trust shall continue to be Award Shares subject to the terms of this Plan) or (iv) with the consent of the Committee, after the substitution by a Participant of a number of shares of Class A or Class B Common Stock of the Company (the "New Shares") for an equal number of Award Shares, whereupon the New Shares shall become and be deemed for all purposes to be Award Shares, subject to all of the terms and conditions imposed by this Plan and the Guidelines on the shares for which they are substituted, including the restrictions on Transfer, and the restrictions hereby imposed on the shares for which the New Shares are substituted shall lapse and such shares shall no longer be subject to this Plan or the Guidelines. The Company shall not honor, and shall instruct the transfer agent not to honor, any attempted Transfer and any attempted Transfer shall be invalid, other than Transfers described in clauses (i) through (iv) above.
|
(c)
|
Each Award shall provide that a Transfer of the Award Shares shall be prohibited or restricted for a period of ten years from the last day of the Performance Period, or such other shorter or longer period as may be determined by the Committee (in its sole and absolute discretion) from time to time. Notwithstanding the foregoing, such restrictions shall automatically lapse on the earliest of (i) the date the Participant dies or becomes permanently disabled, (ii) five years (or earlier with the approval of the Committee) after the Participant Retires, (iii) an extraordinary release of restrictions pursuant to Subsection (d) below, or (iv) a release of restrictions as determined by the Committee in its sole and absolute discretion (including, without limitation, a release caused by a termination of this Plan). Following the lapse of restrictions pursuant to this Subsection or Subsection (d) below, the shares shall no longer be “Award Shares” and, at the Participant's request, the Company shall take all such action as may be necessary to remove such restrictions from the stock certificates, or other applicable records with respect to uncertificated shares, representing the Award Shares, such that the resulting shares shall be fully paid, nonassessable and unrestricted by the terms of this Plan.
|
(d)
|
Extraordinary Release of Restrictions
.
|
(i)
|
A Participant may request in writing that a Committee member authorize the lapse of restrictions on a Transfer of such Award Shares if the Participant desires to dispose of such Award Shares for (A) the purchase of a principal residence for the Participant, (B) payment of medical expenses for the Participant, his spouse or his dependents, (C) payment of expenses for the education of the Participant, his spouse or his dependents for the next 18 months or (iv) any other extraordinary reason which the Committee has previously approved in writing The Committee shall have the sole power to grant or deny any such request. Upon the granting of any such request, the Company shall cause the release of restrictions in the manner described in Subsection (c) on such number of Award Shares as the Committee shall authorize.
|
(ii)
|
A Participant who is employed by the Employers may request such a release at any time following the third anniversary of the date the Award Shares were issued; provided that the restrictions on no more than 20% of such Award Shares may be released pursuant to this Subsection (d). A Participant who is no longer employed by the Employers may request such a release at any time following the
|
(e)
|
Legend
. The Company shall cause an appropriate legend to be placed on each certificate, or other applicable records with respect to uncertificated shares, for the Award Shares, reflecting the foregoing restrictions.
|
9.
|
Amendment, Termination and Adjustments
|
(a)
|
The Committee, subject to approval by the Board of Directors of the Company, may alter or amend this Plan from time to time or terminate it in its entirety; provided, however, that no such action shall, without the consent of a Participant, affect the rights in (i) an outstanding Award of a Participant that was previously approved by the Committee for a Performance Period but has not yet been paid or (ii) any Award Shares that were previously issued to a Participant under this Plan. Unless otherwise specified by the Committee, all Award Shares that were issued prior to the termination of this Plan shall continue to be subject to the terms of this Plan following such termination; provided that the Transfer restrictions on such Shares shall lapse as otherwise provided in Section 8.
|
(b)
|
The Committee may make or provide for an adjustment in (A) the total number of Award Shares to be issued under this Plan specified in Section 10 or (B) the definition of Average Award Share Price as the Committee in its sole discretion, exercised in good faith, may determine is equitably required to reflect (i) any stock dividend, stock split, combination of shares, recapitalization or any other change in the capital structure of the Company, (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (iii) any other corporate transaction or event having an effect similar to any of the foregoing (collectively, the “Extraordinary Events”). Any securities that are distributed in respect to Award Shares in connection with any of the Extraordinary Events shall be deemed to be Award Shares and shall be subject to the Transfer restrictions set forth herein to the same extent and for the same period as if such securities were the original Award Shares with respect to which they were issued, unless such restrictions are waived or otherwise altered by the Committee.
|
(c)
|
Notwithstanding the provisions of Subsection (a) or Subsection (b), without further approval by the stockholders of the Company, no such action shall (i) increase the maximum number of Award Shares to be issued under this Plan specified in Section 10 (except that adjustments and additions expressly authorized by this Section shall not be limited by this clause (i)), (ii) cause Rule 16b-3 to become inapplicable to this Plan or (iii) cause any amount of any Qualified Performance-Based Award to be includable as “applicable employee remuneration” of such Participant, as such term is defined in Section 162(m) (
i.e.
, to no longer qualify for the exception for “qualified performance-based compensation” under Section 162(m)).
|
10.
|
Award Shares Subject to Plan
|
11.
|
Approval by Stockholders
|
12.
|
General Provisions
|
(a)
|
No Right of Employment
. Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Employers, or shall in any way affect the right and power of the Employers to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Employers might have done if this Plan had not been adopted.
|
(b)
|
Governing Law
. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of Delaware.
|
(c)
|
Miscellaneous
. Headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this Plan or any provisions thereof. The use of the masculine gender shall also include within its meaning the feminine. The use of the singular shall also include within its meaning the plural, and vice versa.
|
(d)
|
Limitation on Rights of Employees. No Trust
. No trust has been created by the Employers for the payment of Awards under this Plan; nor have the employees been granted any lien on any assets of the Employers to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Company and a participant hereunder is a mere unsecured creditor of the Company.
|
(e)
|
Non-transferability of Awards.
Awards shall not be transferable by a Participant. Award Shares paid pursuant to an Award shall be transferable, subject to the restrictions described in Section 8.
|
(f)
|
Section 409A of the Internal Revenue Code
. This Plan is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations issued thereunder, and shall be administered in a manner that is consistent with such intent.
|
13.
|
Effective Date
|
ii.
|
a majority of the Board of Directors of HY ceases to be comprised of Incumbent Directors; or
|
iii.
|
the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of HY or the acquisition of assets of another corporation, or other transaction involving HY (“HY Business Combination”) excluding, however, such a Business Combination pursuant to which both of the following apply (such a Business Combination, an “Excluded HY Business Combination”):
|
VIII POST-CLOSING UNDERTAKINGS
|
39
|
E XI APPLICABLE LAW AND DISPUTE RESOLUTION
|
48
|
(1)
|
KNSN PIPE & PILE COMPANY LIMITED
, a limited liability company incorporated and existing under the laws of the PRC with its legal address at Jiang Jia Village, Lu Shan Street, Fuyang District, Hangzhou City, Zhejiang Province, China (“
Seller
”); and
|
(2)
|
HYSTER-YALE ACQUISITION HOLDING LTD
, a corporation incorporated and existing under the laws of England and Wales, with its registered address at Centennial House, Building 4.5, Frimley Business Park, Frimley, Surrey GU16 7SG, UK (“
Buyer
”).
|
Address:
|
Jiang Jia Village, Lu Shan Street, Fuyang District, Hangzhou City, Zhejiang Province, China
|
Address:
|
Centennial House, Building 4.5, Frimley Business Park, Frimley, Surrey GU16 7SG, UK
|
(a)
|
Seller agrees to sell, assign and transfer to Buyer, and Buyer agrees to purchase, accept and acquire from Seller, seventy-five percent (75%) equity interest in the Target Company (the “
Equity Interest
”), including all right, title and interest of Seller in the Equity Interest in accordance with the terms and conditions stipulated under this Agreement (the “
Equity Transfer
”).
|
(b)
|
As of the Closing Date, unless otherwise agreed to by the Parties, the transfer of the Equity Interest shall include, among other things, the assignment of all of the voting and economic rights associated with the Equity Interest, any undistributed dividends and any undistributed retained earnings of the Target Company proportionate to the Equity Interest accumulated as of the Closing Date.
|
(a)
|
On the Closing Date, provided that Buyer has issued the Closing Confirmation pursuant to Section 7.2(a) and the New Business License has been issued to the Target Company, Buyer shall pay ninety percent (90%) of Purchase Price (“
First Installment
”), i.e., USD81,000,000, to a “Special Foreign Currency Bank Account for Asset Realization” of Seller opened with a PRC bank as provided in Section 4.6(a) (“
Seller’s Designated Account
”). Seller’s Designated Account shall be opened as a jointly-controlled escrow account whereby no amount in such account can be released to anyone without the instruction signed by both Parties. The First Installment may only be released for the use of repaying KNSN Receivables pursuant to Section 6.5 and removing Related and Third Party Guarantees pursuant to Section 6.6. Provided that (i) the KNSN Receivables are fully repaid, (ii) the Related and Third Party Guarantees are partially removed pursuant to the timeline set forth in
Schedule 6.6
so that the total amount of such Guarantees is lowered to or under RMB147,950,000, and (iii) there is no remaining or additional liabilities to the Target Company or Buyer associated with the removed Guarantees, any balance amount in Seller’s Designated Account may be released and wired to another designated account of Seller within ten (10) Business Days after the satisfaction of (i), (ii) and (iii) above.
|
(b)
|
On the Closing Date, provided that Buyer has issued the Closing Confirmation pursuant to Section 7.2(a) and the New Business License has been issued to the Target Company, Buyer shall wire ten percent (10%) of the Purchase Price, i.e., USD9,000,000 (the “
Escrow Amount
”), to an escrow account (“
Escrow Account
”) opened in Hong Kong pursuant to a three-party escrow agreement (the “
Escrow Agreement
”) among Buyer, Seller and an escrow agent or bank located in Hong Kong. The Escrow Amount will be released to Seller in two installments in accordance with the terms and conditions of this Agreement: (i) USD 2,700,000 (“
The First Escrow Payment
”), which is retained in the Escrow Account to secure the performance of those obligations and undertakings set forth under Section 8.4(a) for the first two (2) years after Closing; and (ii) USD 6,300,000 (“
The Second Escrow Payment
”), which is retained in the Escrow Account to secure the performance of those obligations and undertakings set forth under Section 8.4(b) for the entire three-year period after Closing. The First Escrow Payment shall remain in the Escrow Account for two (2) years after Closing in accordance with Section 8.4(a). The Second Escrow Payment shall remain in the Escrow Account for three (3) years after Closing in accordance with Section 8.4(b). The Escrow Agreement shall specify that none of the Escrow Amount may be released to Seller until and unless both Buyer and Seller have signed a written release instruction to authorize the release in accordance with the Escrow Agreement. Any amount deposited in the Escrow Account will not accrue interest. The Parties agree that any Escrow Amount or the balance after deduction (if applicable) in the Escrow Account will be paid to Seller pursuant to Section 8.4 within one (1) month upon the expiration of the relevant period to determine the payment of Escrow Amount pursuant to Section 8.4.
|
(a)
|
As soon as practical after the Execution Date and no later than the Closing Date, Seller shall,
|
(i)
|
cause unanimous board resolutions to be adopted and signed by all directors of the Target Company, and if so required for purpose of filing with MOFCOM and SAIC, cause shareholder resolution to be adopted and signed by all shareholders of the Target Company, to approve, among other matters,
|
(A)
|
the Equity Transfer by Seller to Buyer pursuant to this Agreement; and
|
(B)
|
the adoption of the Amended AOA;
|
(ii)
|
cause the current owner of the remaining twenty-five percent (25%) equity interest in the Target Company to confirm in writing his waiver of the right of first refusal with regard to, and consent to, Seller’s entering into the Equity Transfer pursuant to this Agreement.
|
(a)
|
On or before the Closing Date, Seller shall issue a letter of removal effective as of the Closing Date to remove and/or replace such number of the current directors of the Target Company pursuant to the Amended AOA, and Buyer shall appoint such number of directors to the Target Company on the Closing Date to cause that the board composition of the Target Company comply with the Amended AOA as approved.
|
(b)
|
As soon as practical after the Closing Date and no later than the fifteenth (15th) day after the Closing, each of Seller and Buyer shall provide all assistance and support as may be necessary for the Target Company to complete all filings with the appropriate registration authorities (including but not limited to SAIC) and obtain any approvals and certificates required to effectuate the establishment of the new Board of Directors with the respective number of appointees from Seller and Buyer.
|
(a)
|
As soon as practicable following the Execution Date and no later than the Closing Date, subject to Buyer’s issuance of the Closing Confirmation pursuant to Section 7.2(a), Seller shall, and shall cause the Target Company to, with necessary assistance of Buyer as may be required, timely prepare and submit to SAIC all required documents to register the Equity Transfer and the other relevant changes in the corporate records of the Target Company, reflecting, among other things, the Equity Transfer, the change in the company name of the Target Company and the Amended AOA. The completion of such registration with SAIC shall be evidenced by a new business license (the “
New Business License
”; the date on which the New Business License is issued is herein referred to as the “
Business License Date
”) and relevant registration records issued by SAIC reflecting, among other things, that (i) Buyer is the seventy-five percent (75%) shareholder of the Target Company, and (ii) the Target Company’s name has been changed to “Hyster-Yale Maximal Materials Handling Co., Ltd.” or another similar name as the Parties agreed to (collectively, the “
Corporate Changes
”).
|
(b)
|
Upon the Closing Date, Buyer shall own legal and beneficial ownership of the Equity Interest. Starting from the Closing Date, Buyer shall be entitled to all the relevant rights and interests, and be bound by all the relevant obligations, as associated with the Equity Interest under applicable Laws and regulations as well as the Amended AOA.
|
(c)
|
In order to facilitate the Parties’ control of the progress of Closing, Seller shall timely communicate with Buyer and obtain a prior written consent from Buyer before Seller and/or the Target Company applies for the New Business License.
|
(a)
|
As soon as practical after the
Execution Date and no later than the Business License Date, Seller shall, with the necessary assistance from Buyer and the Target Company, apply to the competent level of SAFE and/or a bank designated by SAFE for all the approvals and permits (“
SAFE Approval
”) required for opening Seller’s Designated Accounts in the form of bank accounts permissible for receiving and settling foreign currency payment, pursuant to which Seller would be allowed to receive and settle the Purchase Price as paid in foreign currency into Seller’s Designated Account. Only after the issuance of SAFE Approval and satisfaction of other relevant conditions agreed herein shall Buyer be obligated to pay the First Installment into Seller’s Designated Account pursuant to Section 3.3(a) hereinabove.
|
(b)
|
Within five (5) Business Days after the Business License Date, Seller shall, and shall cause the Target Company to, apply to SAFE or its designated bank for registration of
|
(c)
|
Within three (3) Business Days after Buyer pays the First Installment to Seller’ Designated Accounts pursuant to Section 3.3(a) herein, to the extent applicable, the Parities shall, and shall cause the Target Company to, apply to SAFE for issuance of the relevant “Certificate of Receipt and Settlement of Foreign Exchange Payment for Equity Transfer” evidencing the full payment of the First Installment.
|
(a)
|
It is duly organized and validly existing under the Laws of England and Wales and has the requisite legal capacity and authority to enter into this Agreement and perform its obligations hereunder;
|
(b)
|
It has obtained all appropriate board and/or shareholder level approvals for entering into and undertaking the transactions contemplated in this Agreement and its execution and performance of this Agreement does not violate any applicable Laws, order, judgment or decree;
|
(c)
|
It is not insolvent and no receiver or administrator has been appointed to it or over any part of its assets and no such appointment has been threatened, it is not in liquidation and no proceeding has been brought or threatened for the purpose of winding up Buyer, and there are no facts, matters or circumstances which give any person the right to apply to liquidate or wind up Buyer; and
|
(d)
|
It has not entered into an arrangement, compromise or composition with or assignment for the benefit of its creditors or a class of them, and it is able to pay its debts, other than debts or claims the subject of a good faith dispute, and has not stopped or suspended the payment of all or a class of its debts.
|
(a)
|
Information Provided
|
(b)
|
Capacity and Authorization
|
(i)
|
Seller is a limited liability company duly incorporated and validly existing under the Laws of PRC, and has the requisite legal capacity and authority to enter into this Agreement and perform its obligations hereunder.
|
(ii)
|
The execution and performance by Seller of this Agreement and each of the other Transaction Documents to which Seller is a Party shall not:
|
(A)
|
cause any violation of the provisions of the existing Articles of Association of the Target Company or any other similar regulations and documents with respect to the formation and operation of the Target Company; or
|
(B)
|
cause any violation of any Laws or any order, ruling or instruction that is imposed on or binding on either Seller or the Target Company by any court or Governmental Authority of the PRC.
|
(c)
|
The Equity Interest
|
(i)
|
Seller is the sole legal and beneficial owner of the Equity Interest of the Target Company and has full power and capacity to transfer the Equity Interest to Buyer.
|
(ii)
|
The Equity Interest is free and clear of all Encumbrances and there is no outstanding claim with regard to such Equity Interest or any agreements to transfer the Equity Interest to any third parties.
|
(iii)
|
The total registered capital amount of the Target Company is RMB78,700,000, which has been fully paid in. The Equity Interest constitutes 75% of the registered capital of the Target Company.
|
(d)
|
Financial Statements
|
(e)
|
Changes
|
(i)
|
any waiver by Seller or the Target Company of a valuable right or of a material debt in excess of RMB125,000 owed to it with respect to the Target Company or its assets;
|
(ii)
|
any incurrence of or commitment to incur any Indebtedness with respect to the Target Company for money borrowed other than in the ordinary course of business;
|
(iii)
|
the creation of any Encumbrance with respect to the Target Company or the Assets of the Target Company;
|
(iv)
|
any satisfaction or discharge of any Encumbrance or payment of any obligation of the Target Company, except in the ordinary course of business and that is not material to the Assets, financial condition or operation of the Target Company;
|
(v)
|
any material change, amendment to or termination of a Material Contract (as defined under Section 5.2(i)(i));
|
(vi)
|
any sale, assignment, exclusive license, or transfer of any Intellectual Property used in or necessary to the operation of the Target Company to any third party;
|
(vii)
|
any loan or advance to, guarantee for the benefit of, or investment in, any Person (including but not limited to any of the employees, officers or directors, or any members of their immediate families, of Seller or the Target Company), corporation, partnership, joint venture or other entity that would create a liability for the Target Company other than in the ordinary course of business;
|
(viii)
|
any damage, destruction or loss, whether or not covered by insurance, adversely affecting the assets, financial condition or operation of the Target Company resulting in more than RMB125,000;
|
(ix)
|
receipt of any notice that there has been a termination of business relationship with, or cancellation of an order with a value of more than RMB125,000 by, any customer of the Target Company;
|
(x)
|
any capital expenditures or commitments therefor involving the Target Company that individually or in the aggregate exceeds RMB125,000; or
|
(xi)
|
any other event or condition of any character which individually or in the aggregate would incur Material Adverse Change on the assets, financial condition or operation of the Target Company.
|
(f)
|
Intellectual Property
|
(i)
|
The Target Company owns or otherwise has the right or license to use all Intellectual Property necessary for its operation without any violation or infringement of the rights of others, free and clear of all Encumbrances.
Schedule 5.2(f)
contains a complete and accurate list of all Intellectual Property owned, licensed to or used by the Target Company, whether registered or not, as well as a complete and accurate list of all licenses granted by the Target Company to any third party with respect to any Intellectual Property.
|
(ii)
|
There is no pending or threatened claim or litigation contesting the right to use the Intellectual Property related to the Target Company, asserting the misuse thereof, or asserting the infringement or other violation of any Intellectual Property of any third party. All rights, title, and interest to any material inventions and material know-how conceived by the Target Company as related to the operation of the Target Company, including any applications therefore, have been transferred and assigned to, and are currently owned by, the Target Company. All rights, title, and interest to any inventions and know-how of the employees of the Target Company that (i) resulted from the use of the working time, Company’s materials, information or facilities; or (ii) are relevant to or arising out of the work, assignments or duties entrusted to the Target Company’s employees during the employees’ employment with the Target Company (including inventions and know-how made during the term of employment or within one year of termination or expiry of the employment), including any applications therefore, have been transferred and assigned to, and are currently owned by, the Target Company.
|
(iii)
|
No proceedings or claims in which Seller or the Target Company alleges that any person is infringing upon, or otherwise violating, any Intellectual Property rights related to the Target Company are pending, and none has been served, instituted or asserted by Seller or the Target Company.
|
(g)
|
Litigation
|
(i)
|
There is no action, suit, hearing, arbitration, third-party claim, government enforcement action or investigation, administrative proceeding, or other court or regulatory proceeding in progress, pending, outstanding or threatened in the PRC or any applicable foreign jurisdiction against or affecting Seller, the Target Company or any of their officers, directors or employees with respect to the Target Company, its assets or operation, or the Equity Interest, nor is there a legal basis for any of the foregoing.
|
(ii)
|
There is no judgment, decree or order of any court or Governmental Authority, (including Governmental Authorities of any foreign countries with jurisdiction over Seller or the Target Company) in effect and binding on Seller or the Target Company with respect to the Target Company’s operation, assets or personnel.
|
(iii)
|
There is no court action, suit, proceeding or investigation with respect to the Target Company, its assets or operation, or the Equity Interest which Seller or the Target Company intends to initiate against any third party.
|
(h)
|
Liabilities
|
(i)
|
Contracts
|
(i)
|
For purpose of this Agreement, a “
Material Contract
” means any of the following Contracts, to which the Target Company is a party:
|
(A)
|
any Contract entered into in connection with the transfer or subscription of the Target Company’s equity interest;
|
(B)
|
any Contract that obligates the Target Company to pay, after the Reference Balance Sheet Date, an amount in excess of RMB125,000;
|
(C)
|
any Contract that has a contract value in excess of RMB125,000 each and a remaining term in excess of one (1) year;
|
(D)
|
any Contract on which the Target Company and its operation is substantially dependent or which is otherwise material to the Target Company’s operation (“
substantially dependent
” or “
material
” meaning having a potential economic impact of at least RMB125,000) ;
|
(E)
|
any loan agreement, indenture, letter of credit, security agreement, mortgage pledge agreement, deed of trust, bond, note, or other agreement relating to the borrowing of money or to the mortgaging, pledging, transferring of a security interest, or otherwise placing an Encumbrance on any part or all of the Assets;
|
(F)
|
any Contract involving a guarantee of performance by any Person or involving any agreement to act as guarantor for any Person, or any other Contract to be contingently or secondarily liable for the obligations of any Person;
|
(G)
|
any Contract that limits or restricts the ability of the Target Company to compete or otherwise to conduct its operation in any manner or place;
|
(H)
|
any joint venture, partnership, alliance or similar Contracts involving a sharing of profits or expenses
|
(I)
|
any asset purchase agreement, share/equity purchase agreement or other Contract for acquisition or divestiture of any assets (including, without limitation, any Intellectual Property) by the Target Company for consideration in excess of RMB 125,000 per annum, as listed under
Schedule 5.2(i)
;
|
(J)
|
any Contract that grants a power of attorney, agency or similar authority to another Person or entity other than power delegated to an officer of the Target Company for the performance of his/her duties in the ordinary course of business;
|
(K)
|
any Contract entered into with or related to any director, senior management or key employee of the Target Company, or any other personnel who assumes a confidentiality obligation towards the Target Company;
|
(L)
|
any Contract that contains a right of first refusal; and
|
(M)
|
any Contract containing a “change of control” clause which obliges the Target Company or Seller to notify the relevant party or obtain consent from the relevant party in case of a change of control or shareholding in the Target Company, as listed under
Schedule 5.2(i)
.
|
(ii)
|
The Material Contracts (as described under (A) through (M) in Section 5.2(i)(i) above) are all valid, in full force and effect, and binding upon the Target Company and the other parties thereto. None of the Material Contracts are oral contracts.
|
(iii)
|
The Target Company has satisfied or provided for all of its liabilities and obligations under the Material Contracts requiring performance prior to the date hereof and is not in default under any Material Contract. No condition exists that with notice would constitute a material default. None of Mr. Lu, the Target Company or Seller is aware of any default thereunder by any other party to any Material Contract or any condition existing that with notice would constitute such a default, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, a Material Contract. None of Mr. Lu, the Target Company or Seller has given to or received from any Person any notice or other communication (whether oral or written) regarding any actual, alleged, possible, or potential violation or breach of, or default under, any Material Contract.
|
(iv)
|
None of the Material Contracts has resulted in or will result in (a) a violation or breach of any provision of the current articles of association of the Target Company, (b) a breach of, or constitute a default under, or result in the creation or imposition of, any Encumbrance pursuant to any Contract to which the Target Company is a party or by which the Target Company or any of their properties is bound, or (c) a breach of any Laws applicable to the Target Company or any of its assets.
|
(v)
|
Except as otherwise disclosed under
Schedule 5.2(i)
, none of the Material Contracts as currently in effect contains a “change of control” clause described in Section 5.2(i)(i)(M) above.
|
(j)
|
Compliance with Laws
|
(i)
|
The Target Company has complied with and is in compliance with all national and local laws, statutes, executive orders, licensing requirements, rules, regulations and judicial and/or administrative decisions and/or ordinances of the
|
(ii)
|
The Target Company is and has been: (a) duly licensed, and possesses the franchises, permits, licenses, approvals and other authorizations (collectively, “
Licenses
”) from all persons and entities, including all Governmental Authorities under all applicable national, provincial, regional and municipal Laws, that are necessary for the Target Company to engage in its business pursuant to its articles of association and operate its assets in all applicable jurisdictions; and (b) in compliance with all Licenses. All Licenses are valid, in full force and effect and not subject to challenge. Such Licenses include but not limited to the High-and-New-Technology-Enterprise Qualifications (“
HNTE Qualifications
”) that would entitle the Target Company to relevant tax benefits. In particular, Seller represents and warrants that all HNTE Qualifications of the Target Company obtained before the Closing Date have been, and will be, applied, obtained and used in compliance with all applicable Laws. No condition or fact existed or exists that would cause the previous or current HNTE Qualifications of the Target Company to be canceled, revoked, or penalized by any Governmental Authority, or would cause the Target Company to be required to disgorge benefits it has enjoyed as a result of its previous and existing HNTE Qualifications.
|
(iii)
|
All reports, informational returns and updates which the Target Company is required to file under any national, provincial, regional, and municipal law, rule, regulation or order have been filed in a timely manner and all fees relating to the same have been paid. The Target Company has not engaged in any activity that would cause a material change to, revocation of or suspension of any Licenses. No action, proceeding or investigation contemplating the revocation or suspension of any License is pending or threatened, and neither the Target Company nor Seller has Knowledge of any reason why any License would not be renewed. The Equity Transfer as contemplated herein will not affect the validity or enforceability of any Licenses, contracts or other rights and entitlements.
|
(k)
|
Compliance with Anti-Corruption Laws and Regulations
|
(i)
|
With respect to the operation and management of the Target Company, except as otherwise disclosed by Seller or Mr. Lu to Buyer or its representatives for purpose of this Equity Transfer, the Target Company, and all of its shareholders (including but not limited to Seller), officers, directors, employees, consultants, representatives, agents, distributors, resellers or Affiliates (and any person or entity acting on behalf of any of the foregoing) have complied with Anti-Corruption Laws with respect to (i) the holding of shares in the Target Company
|
(ii)
|
Specifically, without limiting the foregoing representation, with respect to the operation and management of the Target Company, the Target Company, and all of its shareholders (including but not limited to Seller), officers, directors, employees, consultants, representatives, agents, distributors, resellers or Affiliates (and any person or entity acting on behalf of any of the foregoing) have not, directly, or indirectly:
|
(A)
|
made any unlawful payment to foreign or domestic Government Officials or to foreign or domestic political parties or campaigns;
|
(B)
|
provided any contribution, gift, donation, grant, bribe, rebate, payoff, influence payment, kickback, travel, lodging, meal, entertainment or other payment, or provided any other benefit or thing of value to any Person, private or public, regardless of whether in tangible or intangible form, and whether in money, property, favors or services:
|
(1)
|
to obtain favorable treatment or advantages for the Target Company, or to secure contracts or business,
|
(2)
|
to obtain special concessions or pay for special concessions already obtained, or
|
(3)
|
in violation of the Anti-Corruption Laws.
|
(C)
|
established or maintained any fund or asset used in relation to or for the benefit of the Target Company, that has not been properly recorded in the books or records of the Target Company;
|
(D)
|
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to relationships with a Governmental Authority or a Government Official’s political activity; or
|
(E)
|
authorized or tolerated any of the above.
|
(iii)
|
For purpose of this Section 5.2(k),
“Government Official”
means any officeholder, employee or other official (including any immediate family member thereof) of a Governmental Authority, any person acting in an official capacity for a Governmental Authority or any candidate for political office. “
Governmental Authority
” means in any jurisdiction, any government, any other supranational, national, state, federal, regional, municipal, city, town or local government, any subdivision, court, arbitral tribunal, central bank or administrative agency or commission or other authority thereof, any state enterprise or state corporation or other entity owned or controlled by a government, any quasi-governmental body exercising any regulatory, administrative, taxing, excise, customs importing or other governmental or quasi-governmental authority or any stock exchange or other regulatory or supervisory body or authority, a political party or a public international organization.
|
(iv)
|
None of the Target Company or any of its shareholders (including but not limited to Seller), officers, directors, or employees is a Government Official or a Governmental Authority and none of the proceeds of the transaction under this Agreement shall be directed to any Government Official or Governmental Authority.
|
(v)
|
Seller and the Target Company have made all payments to third parties, including sales agents, consultants, commission agents, distributors, resellers, dealers or other intermediaries engaged to sell, market or otherwise secure or retain business for the Target Company, in compliance with Anti-Corruption Laws.
|
(vi)
|
To the best Knowledge of Seller and the Target Company, all distributors, resellers and agents of the Target Company are in compliance with Anti-Corruption Laws.
|
(vii)
|
Mr. Lu, Seller and the Target Company have never received any reports, complaints or allegations from any source whatsoever that the Target Company or its officers, directors, employees, or third parties acting on the Target Company’s behalf have violated the Anti-Corruption Laws.
|
(l)
|
Overall Compliance History
|
(m)
|
Environmental, Health and Safety Issues
|
(i)
|
With respect to the operation of the Target Company since its establishment, except as disclosed under Schedule 5.2(m), neither Seller (when acting on behalf of the Target Company) nor the Target Company was or is in violation of any Environmental Laws, and no material expenditures exceeding RMB125,000 are or are threatened to be required in order to comply with any such Environmental Laws.
|
(ii)
|
In relation to the Target Company and its operation, except as disclosed under Schedule 5.2(m), neither Seller (when acting on behalf of the Target Company) or the Target Company (1) owns, leases or operates any real property contaminated with or has been exposed to any Hazardous Substance that is subject to any Environmental Laws of PRC, (2) is liable for any off-site disposal or contamination pursuant to any Environmental Laws of PRC, or (3) is subject to any claim relating to any Environmental Laws of PRC, and there is no pending or threatened lawsuit, proceeding or investigation against either of them which might lead to such a claim.
|
(iii)
|
The Target Company has obtained and currently maintains all environmental, health and safety permits (“
EHS Permits
”) required for all its previous and current operation under applicable environmental laws of the PRC, and is in full compliance with all such EHS Permits.
Such EHS Permits include, without limitation, the environmental impact assessment (“
EIA
”) approval, relevant instruction or opinions from the Environmental Authorities related to environmental completion acceptance inspection (“
CAI
”) approval, Pollutant Discharge Registration (“
PDR
”), Pollutant Discharge Permit (“
PDP
”), Occupational Disease Hazards (“
ODH
”) Pre-assessment and Acceptance, ODH Control effectiveness assessment and Occupational Healthy Completion Acceptance Inspection Approval, and other applicable ODH registration and fire-fighting inspection qualification certificates.
|
(n)
|
Title; Encumbrances
|
(i)
|
Except as otherwise disclosed under
Schedule 5.2(n)
, as of the Execution Date, the Target Company has good and marketable title to all the Assets (as listed under
Schedule 5.2(n)
). All Assets of the Target Company are free and clear of any Encumbrances. With respect to the Assets leased by the Target Company, the Target Company is in full compliance with such leases and holds a valid leasehold interest free of any Encumbrances.
|
(ii)
|
Except for the bad debt provision already made by the Target Company as of the Execution Date, the accounts receivable included in the Assets are collectible. All of the inventory included in the Assets consists of a quantity and quality usable and saleable in the ordinary course of business, and is fit for its intended use, in compliance with all applicable Laws and certifications, supported by fair consideration and valid invoices, and in conformity with all applicable product registrations and specifications. The Target Company does not hold any materials on consignment or have title to any materials in the possession of others.
|
(iii)
|
All Taxes and government charges payable related to the import and/or procurement of the equipment and machinery of the Target Company have been fully and timely paid. The Target Company owns or otherwise occupies no other equipment or machinery that is subject to any “lock-in” period and/or supervision by any Governmental Authority. The Target Company is not subject to any legal or administrative requirement to pay or refund any Taxes or fees in connection with any of its Assets (including but not limited to any equipment or machinery) due to the Equity Transfer.
|
(o)
|
Related-Party Transactions
|
(i)
|
Except as otherwise disclosed under
Schedule 5.2(o)
, no Related Party has any agreement, understanding, or proposed transaction that is currently performed, ongoing or still in its effective term relating to the Target Company with, or is currently indebted to Seller, the Target Company or their respective Affiliates.
|
(ii)
|
Except as disclosed in
Schedule 5.2(o)
, neither Seller nor the Target Company is currently indebted (or committed to make loans or extend or guarantee credit)
|
(iii)
|
Except as disclosed in
Schedule 5.2(o)
, no Related Party currently has any direct or indirect ownership interest in any firm or corporation with which Mr. Lu, Seller, the Target Company or any of their respective Affiliates is affiliated or with which Mr. Lu, Seller, the Target Company or any of their respective Affiliates has a business relationship, or any firm or corporation that competes with Seller, the Target Company or their respective Affiliates (except that Related Parties may own less than one percent (1%) of the stock of a publicly traded company that engages in the foregoing).
|
(iv)
|
No Related Party currently has any interest, either directly or indirectly, in: (1) any Person which purchases from or sells, licenses or furnishes to Seller, the Target Company or their respective Affiliates any goods, property, intellectual or other property rights or services; (2) any third party Person which sells, markets or promotes the Products or business of the Target Company or earns any form of commission, compensation or margin for the same; or (3) any Contract to which Seller, the Target Company or any of their respective Affiliates is a party or by which it may be bound or affected.
|
(p)
|
Entire Business
|
(q)
|
Real Estate
|
(i)
|
The Target Company holds valid, complete and fully paid-up title to all the land use rights and buildings listed in
Schedule 5.2(q)
(collectively, the “
Owned Real Properties
”), and there is no outstanding consideration or Tax to be paid to perfect or secure the Target Company’s full title (including land use rights) to such Owned Real Property.
|
(ii)
|
All buildings owned, occupied or used by the Target Company are qualified for their respective use and have been constructed with sufficient and valid planning and construction permits as legally required.
|
(iii)
|
Schedule 5.2(q)
contains a full and accurate list of all real properties owned, leased, occupied or used by the Target Company (collectively, “
Real Properties
”). The Target Company’s occupation, use, ownership, lease and construction of any and all Real Properties complies with applicable Laws, regulations, rules, decrees, agreements and contracts, and does not impose any requirement, obligation or risks on the Target Company or Buyer to pay any fees, fines, damages, costs, or other amounts (excluding rents payable under valid lease agreements) arising from such ownership, leasehold, occupation or usage.
|
(iv)
|
All leases related to the Real Properties are in full force and effect and the Target Company is not in default under any provision of such leases.
|
(v)
|
There are no circumstances, including any notice of condemnation or eminent domain, which would restrict or terminate the continued ownership, lease, occupation, use or enjoyment of any Real Property.
|
(r)
|
Labor
|
(i)
|
Schedule 5.2(r)
contains an accurate and complete list of the employees of the Target Company and its branches and subsidiaries.
|
(ii)
|
The Target Company has duly entered into valid labor contracts and established effective employment relationships with each of its employees in full compliance with applicable Laws. All statutory requirements regarding any of such labor contracts have been fulfilled. Neither the Target Company nor Seller has any liability prior to the Closing Date for breach or indemnification to any employee of the Target Company with respect to the performance of or other matters relating to the labor contracts or any other commitment or contractual arrangement with any such employee.
|
(iii)
|
The Target Company has made timely payment of all labor-related remuneration, benefits, liabilities, costs, fees and expenses (collectively, “
Employee Liabilities
”) pursuant to applicable Laws and its contractual obligations with regard to each of its employees, including but not limited to (i) full and timely payment and contribution of social security (including pension, unemployment, medical, birth control and work-related injury insurance) and housing fund for any and all employees, and (ii) full payment and contribution of all salaries, bonuses, benefits, allowance or insurance benefits (such as any bonus plan or insurance benefits as committed to any employee) payable to employees. There has been no overdue payment penalties, fines or other sanctions with respect to any Employee Liabilities.
|
(iv)
|
The Target Company has complied with all applicable Laws and regulations in relation to any of its employees, including without limitation, Laws with respect to labor contracts, labor safety, working conditions, working hours, holidays, payment of salaries and withholding income taxes, contribution to employee social insurance funds and housing funds, overtime work compensation, termination and severance payments, overdue interest, penalties, sanctions, and labor unions.
|
(v)
|
The Target Company has complied with all registration procedures and requirements related to its employees under applicable Laws, obtained valid and updated registration certificates for applicable labor matters (including but not limited to, registration of labor contracts and social insurance registration certificates), and duly passed all annual inspection conducted by the relevant Governmental Authorities in charge of employment matters.
|
(vi)
|
There is no pending, unresolved or threatened litigation, arbitration, claim or disputes by or relating to any existing or former employee of the Target Company
|
(vii)
|
All employees of the Target Company are employees performing actual work responsibilities related to the operation or management of the Target Company who have not reached their respective retirement ages, and there is no internal retirees or legal retirees working for the Target Company or otherwise on the payroll of the Target Company. The Target Company has not assumed and will not assume any Employee Liabilities in relation to any ex-employees who are still on the payroll but are retired or have been made redundant prior to the retirement age.
|
(s)
|
Taxation
|
(i)
|
Full provision or reservation has been made in the Reference Balance Sheet for all Taxes to be assessed against the Target Company
when they fall due in accordance with Laws
, including, without limitation, Taxes accrued on or before the Reference Balance Sheet Date. By the Closing Date, full provision or reservation shall have been made for all Taxes to be assessed against the Target Company as accrued for the period between the Reference Balance Sheet Date and the Closing Date.
|
(ii)
|
The Target Company has (1) timely, completely and accurately prepared and filed in accordance with Laws all tax returns,
reports and relevant supporting documents
, and (2) timely and fully paid all Taxes payable by the Target Company since its formation, and timely and fully withheld and remitted to the appropriate Governmental Authority all Taxes which it is obligated to withhold and remit from amounts owing to any employee, creditor, customer or third party.
|
(iii)
|
Since its formation, the Target Company has not been subject to any penalty from any tax authority, and has not been subject to any disputes, audits, investigations or claims concerning any Tax, whether such disputes, audits, investigations or claims are resolved, pending, threatened or potential, and neither Seller nor the Target Company has any Knowledge of any circumstances that may give rise to such disputes, audits, investigations or claims.
|
(iv)
|
The Target Company has been operated in such a manner that fully complies with all the terms, conditions, obligations and requirements under any applicable Laws, contracts, arrangement or waiver related to any Tax incentives or benefits (including without limitations, benefits related to HNTE Qualifications) available to the Target Company, and has validly and legally obtained all necessary approvals from relevant Governmental Authority for such Tax incentives.
|
(v)
|
All prices paid and charged by the Target Company to any Related Party for goods or services have been at arm’s length, compliant with applicable Laws, and supported by comprehensive documentation required under applicable Laws, including through the completion and retention of any statutory records, invoices
|
(t)
|
Operation of the Business
|
(u)
|
Sales and Trading
|
(i)
|
Any and all of the transactions, sales, purchases, distributions and other dealings conducted by or relating to the Target Company and any Affiliates or related individuals of the Target Company have been supported by fair consideration, negotiated and contracted at arms’ length, and conducted in compliance with applicable Laws and regulations of the PRC.
|
(ii)
|
As of the date of this Agreement, except for those contracts disclosed under
Schedule 5.2(u)
, there is no ongoing or unfinished agreements or commitments in any form or nature that obliges the Target Company to supply any products to, provide any services to or facilitate any form of cooperation with PRC military (including but not limited to, military agencies, departments, companies, organizations, or associations, affiliates of military agencies, entities or individuals in which PRC military has ownership or control, and military-related schools and institutions, collectively “
Military
”) or otherwise engage in business, operation or projects related to Military.
|
(v)
|
Products
|
(i)
|
The Products sold by the Target Company conform to, meet or exceed the standards required by all applicable Laws, ordinances and regulations now in effect. To Seller’s Knowledge, there is no pending legislation, ordinance or regulation which if adopted or enacted would have a Material Adverse Change on the manufacture of such Products or the Target Company' businesses.
|
(ii)
|
Schedule 5.2(v)
contains a written statement accurately describing the Target Company' warranties and customer service policies and any recurring warranty problems. The Target Company has no outstanding contracts or proposals that depart from the warranty and customer service policy and practice described in such Schedule.
|
(iii)
|
No claims of customers or others based on an alleged or admitted defect of material, workmanship or design or otherwise in or in respect of any of the products of the Target Company are presently pending or threatened.
|
(w)
|
Affiliates
|
(a)
|
Seller shall, and shall cause the Target Company to, undertake the following matters during the Interim Period:
|
(i)
|
Seller shall have full and actual control of the Target Company during the Interim Period and shall cause the Target Company to carry on business in compliance with all applicable Laws, including Anti-Corruption Laws, and in the ordinary and usual course of business, and in the same lawful manner and scope as of the Execution Date, including maintenance of all corporate and financial records and files;
|
(ii)
|
The Target Company shall not allow or procure any event, conduct or act that would cause any Material Adverse Change to the Target Company, the Assets, the equity interest of the Target Company, Buyer or the transactions contemplated herein;
|
(iii)
|
The Target Company shall maintain the Assets in good condition and make such repairs as are necessary to permit the continued operation of the Target Company, and shall take all reasonable actions to preserve the full value of the Assets as reflected in
Schedule 5.2(n)
;
|
(iv)
|
The Target Company shall manage the working capital level in the ordinary and usual course of business as it was managed before the Reference Balance Sheet Date, and shall take all reasonable actions to maintain the working capital at a normal level up to the Closing Date. For purpose of this Agreement, “normal level” of working capital means at least RMB 50,000,000 and is calculated by subtracting those current liability items from those current asset items shown and defined under
Schedule 6.1
;
|
(v)
|
Seller shall, and shall cause the Target Company to, ensure that the Target Company’s payment of salaries and bonuses for all its employees and consultants are current and paid in compliance with applicable Laws of the PRC up to the Closing Date, and the Target Company’s payment of the social insurance contributions and housing fund contributions is consistent with the applicable Laws.
|
(vi)
|
Except as required by applicable Laws or otherwise agreed to by the Parties, the Target Company shall not, during the Interim Period, (1) make any material amendment to the terms and conditions of employment (including, without limitation, remuneration, pension entitlements or other benefits) of any of its
|
(vii)
|
Without prejudice to the general principles set forth in other clauses under this Section 6.1, and unless otherwise expressly provided for in this Agreement or agreed by Buyer in writing in advance, the Target Company shall not, and Seller shall ensure that the Target Company shall not, during the Interim Period:
|
(A)
|
increase or decrease the registered capital of the Target Company;
|
(B)
|
change its business scope and nature, abandon or change any qualification, permit or license already obtained and/or to be obtained by it, or cause such qualification, permit or license to lapse;
|
(C)
|
invest in any other entities;
|
(D)
|
incur or enter into any agreement or commitment involving any capital expenditure in excess of RMB125,000 per item or RMB600,000 in the aggregate;
|
(E)
|
other than the normal operation of business in respect of sales of inventory, acquire, sell, assign, lease, grant of dispose of, or agree to acquire, sell, assign, lease, grant or dispose of, any significant Assets, including inventory, or enter into or amend any significant Contract or arrangement regarding any Assets;
|
(F)
|
borrow or raise any money or enter into any loan facility or otherwise incur any Indebtedness other than bona fide working capital borrowings in the ordinary and usual course of business and to the extent required to fund the working capital requirements of the Target Company;
|
(G)
|
purchase, lease or sublease, or amend or terminate any existing lease or sublease related to, any real property used in the business or operations of the Target Company;
|
(H)
|
engage, either orally or in writing, any new distributor, sales representative or sales consultant, or make a material change in any existing distributor, sales representative or sales consultant agreement or arrangement, except in the ordinary course consistent with the previous 12 months activities prior to the Execution Date and upon prior notice to Buyer;
|
(I)
|
create, incur or assume any Encumbrance on any part or all of the equity interest in the Target Company or the Assets or agree to do so, or enter into
|
(J)
|
renew, extend, roll over, incur, provide or create any new guarantee for the benefit of any third party, whether related to unrelated;
|
(K)
|
renew, extend, or roll over any existent guarantee for the benefit of any third party (whether related to unrelated) for over one (1) year or on less favorable terms or conditions to the Target Company;
|
(L)
|
fail to comply with a material obligation under any Contract to which the Target Company is a party that would have a Material Adverse Change on the Target Company; or
|
(M)
|
enter into, terminate or amend any Contract, lease, license or commitment: (1) which is not capable of being terminated without compensation at any time with three months’ notice or less; (2) which is not in the ordinary and usual course of business; (3) other than on arms’ length terms; or (4) which involves or may involve annual expense or aggregate expenditure in excess of RMB125,000.
|
(a)
|
the current 25% shareholder of the Target Company as of the date when the Closing Confirmation is issued will be a holding company (the “
Holding Co
”) incorporated in Hong Kong, and such Holding Co will be owned by or in the actual control of current management personnel of the Target Company as consented by HY. In case Holding Co is not directly owned by such management personnel, Seller shall fully disclose to Buyer or its designated representatives all direct and indirect shareholding and ownership information of the Holding Co up to the ultimate controlling person;
|
(b)
|
Holding Co will enter into a Shareholders Agreement with Buyer (“
Shareholders Agreement
”) substantially in the form as the attached
Appendix B
before the Closing Date; and
|
(c)
|
On or prior to Closing, all shareholder(s) of Holding Co will enter into a deed of share charge (“
Share Charge Deed
”) with Buyer pursuant to which, all shareholders of Holding Co are obliged to pledge and charge all of their shares in Holding Co to Buyer (“
Share Charge
”) to guarantee that:
|
(i)
|
all the Related and Third Party Guarantees (as listed under
Schedule 6.6
) will be fully removed as soon as practical before the deadlines set forth in the timetable under
Schedule 6.6
without incurring any costs, losses or additional liabilities to the Target Company;
|
(ii)
|
the Target Company, Holding Co, Mr. Lu and all other Affiliates of Mr. Lu have been in full compliance with applicable Anti-Corruption Laws prior to Closing; and
|
(iii)
|
the Target Company, Holding Co, Mr. Lu and all other Affiliates of Mr. Lu will continue to fully comply with the Anti-Corruption Laws after Closing.
|
(a)
|
As soon as practical after the Execution Date and prior to the Closing Date, (i) Seller shall cause Mr. Lu to carve out and sell his direct or indirect ownership, equity and interest in Shanghai Maximal Forklift Sales Co. (“
Shanghai Maximal
”) to an unrelated third party, and (ii) Seller shall, and shall cause the Target Company to, carve out and sell the Target Company’s ownership, equity and interest in Shenzhen Maximal Forklift Sales Co., Ltd. (“
Shenzhen Maximal
”) to an unrelated third party (the foregoing transactions under (i) and (ii) are collectively referred to as the “
Carve-Out
”). Seller shall indemnify and hold the Target Company and/or Buyer harmless from any Taxes, fees or duties (other than the purchase price) levied on the Target Company, Buyer or their respective Affiliates arising from or in connection with the Carve-Out.
|
(b)
|
Upon completion of the Carve-Out, both Shenzhen Maximal and Shanghai Maximal shall be separated from the Target Company and become independent dealers of the Target Company. The dealer agreement between the Target Company and each of Shenzhen Maximal and Shanghai Maximal shall include standard exclusivity provisions in template group dealer contracts of Buyer, the form of which is subject to the review and consent of Buyer.
|
(a)
|
As soon as practical after the Execution Date and prior to the Closing Date, Seller shall, and shall cause the Target Company to, amend and re-sign the intercompany loan agreement between the Target Company and Seller, in a form reasonably satisfactory to Buyer.
|
(b)
|
Seller shall ensure that any and all Indebtedness (including but not limited to loans) owed by Seller to the Target Company (“
KNSN Receivable
”, including without limitations, those listed under
Schedule 6.5
) shall be fully repaid and/or settled as soon as possible within one (1) month after the Closing Date. The Parties agree that any KNSN Receivable shall continue to accrue interest until it is repaid in full.
|
(a)
|
Seller and Buyer have agreed on the timeline and action plan for the removal and elimination of the Related and Third Party Guarantees provided by the Target Company, which is attached hereto as
Schedule 6.6
, subject to written amendments from time to time based on mutual consensus of the Parties. Seller shall, and shall cause its Affiliates and Related Parties (including without limitations, Mr. Lu) to, cause all the Related and Third Party Guarantees to be timely removed before the deadlines set forth in
Schedule 6.6
, without incurring any costs, losses or additional liabilities to the Target Company. Provided that the value of the Related and Third Party Guarantees is reduced to or under the annual cap amounts stipulated in
Schedule 6.6
, the Parties may agree in writing to adjust the repayment timeline of certain Related and Third Party Guarantees.
|
(b)
|
Seller shall ensure that starting from the Execution Date, except for those guarantees as permitted to be renewed pursuant to
Schedule 6.6
or except as otherwise agreed to by the Parties, the Target Company will not enter into, provide, extend, grant or renew any guarantee for any third party, whether related or unrelated to the Target Company or its
|
(c)
|
As soon as practical after the Execution Date and prior to the Closing Date, Seller shall cause the Related and Third Party Guarantees to be partially removed so that the total amount of the Related and Third Party Guarantees would be lowered to or under RMB 321,800,000 on or before the Closing Date with no remaining or additional liabilities to the Target Company or Buyer arising from such removed Guarantees.
|
(d)
|
Within three (3) months after the Closing Date, Seller shall ensure that the Related and Third Party Guarantees will be partially removed as soon as possible pursuant to
Schedule 6.6
with no remaining or additional liabilities to the Target Company or Buyer arising from such removed Guarantees, so that the total amount of the Related and Third Party Guarantees will be lowered to or under RMB 147,950,000. In order to facilitate the performance of this Section 6.6(d), the Parties shall cooperate with each other to sign and issue instructions to release the First Installment from Seller’s Designated Account to the bank account(s) of the Target Company as repayment of the KNSN Receivable pursuant to Section 6.5 and to the relevant bank accounts of creditors, lenders and guaranteed parties to remove the Related and Third Party Guarantees pursuant to
Schedule 6.6
. Provided that (i) the KNSN Receivable is fully repaid pursuant to Section 6.5 and (ii) the portion of Related and Third Party Guarantees has been timely removed pursuant to
Schedule 6.6
with no remaining or additional liabilities to the Target Company or Buyer arising from such removed Guarantees, so that its total amount is lowered to or under RMB 147,950,000 by the end of three (3) months after Closing, the Parties shall each sign and issue written instruction to release any and all balance amount of First Installment from Seller’s Designated Account to another account designated by Seller.
|
(e)
|
Seller shall further ensure that any and all Related and Third Party Guarantees will be fully removed as soon as possible within four (4) years after the Closing in accordance with the agreed timeline and action plan under
Schedule 6.6
; provided that however, if by the third (3
rd
) anniversary of the Closing Date, any Related and Third Party Guarantees have not been fully removed, an amount equivalent to the value of the unremoved Guarantee shall be kept in the Escrow Account and cannot be released to Seller under Section 8.4 until all the Related and Third Party Guarantees are fully removed.
|
(a)
|
As soon as practical after the Execution Date and no later than the Closing Date, Seller shall, and shall cause the Target Company to, take and fulfill all the measures set forth in
Schedule 6.7
(“
Compliance Measures
”) to improve the anti-bribery compliance and internal controls of the Target Company to an extent satisfactory to Buyer, as determined in Buyer’s reasonable discretion.
|
(b)
|
Provided that Buyer honors its confidentiality obligations, Seller shall grant Buyer full access to the Target Company, the Target Company’s records and systems, and the Target Company’s management and employees to enable Buyer to conduct an audit (“
Compliance Audit
”) by Buyer’s designated employees, representatives and/or agents, so as to verify that the Target Company has implemented the Compliance Measures to an extent satisfactory to Buyer.
|
(a)
|
Straddle Period Taxes.
In the case of any taxable period that includes (but does not end on) the Closing Date (a “
Straddle Period
”), Seller shall be responsible for any and all Tax liabilities of the Target Company for the Straddle Period up to and including the Closing Date. Pursuant to Section 8.1, Buyer will compute the Tax liabilities of the Target Company as if a taxable period had ended on the Closing Date (including the corporate income tax liability of the Target Company for Straddle Period up to and including the Closing Date as estimated and accrued pursuant to PRC GAAP) and specify the amount of such tax liability in the Post-Closing Statement (the term is defined below in Section 8.1(b)). Such Tax liability of the Target Company for the Straddle Period up to and including the Closing Date shall be included in the calculation of the Closing Debt Amounts (as the term is defined below in Section 8.1(a)).
|
(b)
|
Cooperation on Tax Matters/Audits
|
(i)
|
Buyer shall have full control and take charge of the filing of tax returns pursuant to this Section 6.8 and any Tax-related audit, litigation or other proceeding related to the Equity Transfer and/or the Target Company, while Seller shall, and shall cause Holding Co and the Target Company (to the extent applicable) to, provide full cooperation and support to the preparation and filing of tax returns and any Tax-related audit, litigation or other proceeding. Such cooperation shall include the retention and (at the other Party’s request) the provision of records and information reasonably relevant to any such audit, litigation or other proceeding, as well as ensuring that relevant employees of the Target Company are available to provide additional information and explanation for such records and information.
|
(ii)
|
Buyer shall promptly notify Seller in writing upon receipt by Buyer, any Affiliate of Buyer or the Target Company of notice of any pending or threatened Tax audits or assessments relating to the income, properties or operations of the Target Company for any Tax period ending on or before the Closing Date. Seller shall promptly notify Buyer in writing upon receipt by Seller of notice of any pending or threatened Tax audits or assessments relating to the income, properties or operations of the Target Company for any such period.
|
(c)
|
Entity Classification Election
|
(i)
|
Seller and Buyer shall promptly, and shall promptly cause any of their applicable Affiliates (including the Target Company) to, make or cause to be made a timely entity classification election pursuant to U.S. Treasury Regulation Section 301.7701-3(c) having an effective date as of the Closing Date and electing
|
(ii)
|
Except to the extent otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Internal Revenue Code (or any similar provision of applicable national, local or non-US Law), Buyer and Seller shall, and shall cause their respective Affiliates to, (i) file all tax returns in a manner consistent with the Entity Classification Election and (ii) take no position contrary thereto in connection with any Tax proceeding or otherwise. In case Seller or the Target Company incurs any actual losses due to regulators’ penalties or orders as a result of their cooperation under this Section 6.8(c), Buyer shall compensate the actual losses of Seller or the Target Company.
|
(a)
|
Each Party agrees to use all reasonable efforts to take, or cause to be taken, all appropriate actions, do or cause to be done all things necessary, proper or advisable under applicable PRC Laws, provide the other Party and its respective representatives with all necessary documents, information and assistance, and to execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and complete the items detailed herein to complete the Closing, including without limitations, to
use best efforts to procure that all the conditions set forth in Section 7.1 below are satisfied and fulfilled as promptly as possible after the Execution Date.
|
(b)
|
In particular, during the Interim Period, if Buyer finds out (by itself or through a third party auditor) that any CP provided in Section 7.1 (except for obtaining the New Business License) fails to be satisfied, Buyer shall promptly inform Seller of such failure and Seller shall take timely and proactive actions to satisfy the relevant CP and endeavor to cause all CPs to be satisfied prior to the Outside Date (as defined in Section 12.1(b)(iv)).
|
(a)
|
Prior to the Closing Date, Seller shall, and shall cause the Target Company and the relevant Affiliates or Related Parties of Seller to, execute the Escrow Agreement, the Shareholders Agreement, the Amended AOA, the Share Charge Deed, and the Employment Contract (in addition to this Agreement) in the corresponding forms
|
(b)
|
Prior to the Closing Date, Seller shall, and shall cause the Target Company and the relevant Affiliates of Seller to, agree with Buyer on the form and substance of the OEM and Licensing Agreement, the Technology License Agreement, the Maximal Product Supply Agreement, the HY Component Supply Agreement, the Maximal Component Supply Agreement, the Technical Service Agreement, and any other Transaction Documents related to the Equity Transfer the form of which are required to be agreed to by the Parties pursuant to this Agreement.
|
(a)
|
As soon as practical after the Execution Date, Seller shall use its best efforts to, and shall cause the Target Company to, obtain required, proper and valid approvals and permits that would allow the Target Company to legally use, occupy and lease the land parcel of approximately 4,000.02 square meters located at its operation Site to the west of the factory buildings (which was leased by the Target Company from the Fuyang local government with a lease term expiring by July 14, 2020). Upon and after the Closing, Seller shall continue to use its best efforts to ensure that the Target Company will be allowed to continue to use such land for a long term after the Closing (including after the lease expiration in 2020), without any impact on the continued ordinary operation of the Target Company, and shall use its best efforts to cause the Target Company to legally obtain granted land use right to state-owned land with respect to such land as soon as practical which will allow the Target Company to construct buildings and facilities on such land.
|
(b)
|
In addition, Seller shall use its best efforts to cause the Target Company to obtain consents and support from the relevant government authorities to ensure that the Target Company is allowed to legally use, occupy and lease the land parcel of approximately 14,333 square meters located at its operation Site (which is also leased by the Target Company from the Fuyang local government with a lease term expiring by July 14, 2020; such land parcel together with the other land parcel of 4,000.02 square meters described under Section 6.12(a) above are collectively referred to as the “
Leased Land
”) for a long term after the Execution Date and after the Closing (including after the lease expiration in 2020), and ensure that the status of continued use and occupation of such land will not impact the continued ordinary operation of the Target Company in any way.
|
(a)
|
As soon as practical after the Execution Date, Seller shall use its best efforts to, and shall cause the Target Company to, obtain any and all missing or inadequate EHS Permits required for the operation of the Target Company, including but not limited to the following:
|
(i)
|
completing EIA process, preparing EIA report, and obtaining approvals from the competent level of environmental authorities on the EIA report for the heavy equipment assembly process performed in the No.5 workshop of the Target Company, the recent changes to the facilities at the No. 4 factory building of the
|
(ii)
|
fulfilling PDR process for all the relevant operations of the Target Company, evidenced by an approval or filing voucher issued by competent level of environmental authorities; and
|
(iii)
|
obtaining PDP for all the relevant operations of the Target Company, or if PDP is not legally required, obtaining a written confirmation from the level of environmental authorities to confirm PDP is not legally required.
|
(b)
|
Upon and after the Closing, Seller shall continue to use its best efforts to cause the Target Company to obtain the EHS Permits and fulfill all such actions listed in Section 6.13(a) as soon as practical after the Closing.
|
(c)
|
As soon as practical after the Execution Date and no later than the Closing Date, Seller shall ensure, and shall cause the Target Company to ensure, that the Target Company shall complete all the required and reasonable rectification measures with regard to its VOC substance (as described under
Schedule 5.2(m)
) in accordance with the applicable Laws and environmental authorities’ requirements. In case such VOC rectification measures have not been completed pursusant to the applicable Laws and environmental authorities’ requirements by the date the Closing Confirmation is issued, (i) Seller shall continue to cause and ensure that the Target Company would complete such VOC rectification measures in accordance with the applicable Laws and environmental authorities’ requirements as soon as practical after the Closing, and (ii) Seller shall be responsible for any and all costs, fees and penalties (if any) arising from the VOC rectification measures and process, and shall indemnify Buyer and hold Buyer harmless from and against any losses or costs associated with the VOC rectification, and such indemnity shall not be subject to or prejudiced by any other indemnity threshold or cap provisions in this Agreement (including but not limited to the bucket clause under Section 10.1(b)).
|
(a)
|
All the representations and warranties of Seller set forth hereunder are true, complete and not misleading in any material aspects when made, throughout the Interim Period, and on and as of the Closing Date with the same effect as if such representations and warranties were made on and as of the Closing Date, and Seller has signed and issued a Closing Memorandum to Buyer certifying that all such representations and warranties of Seller are all true, complete and not misleading in any material aspects as of the Closing Date;
|
(b)
|
Seller has, and has caused Mr. Lu, the Target Company or Seller’s other Affiliates and Related Parties to have, performed and complied with all agreements, obligations and covenants contained in the Transaction Documents that are required to be performed or complied with by Seller or any of the aforementioned parties on or before the Closing Date;
|
(c)
|
The Target Company has received all the third party consents and has issued all the notices to relevant third parties as required for the consummation of the transactions contemplated hereunder, including without limitation, consents from the banks, guarantees, mortgagees and other relevant counter parties under those Material Contracts that contain “change of control” clauses set forth on
Schedule 7.1(c)
;
|
(d)
|
The Target Company and Seller have received and delivered to Buyer all regulatory approvals and filing certificates legally required for the consummation of the Equity Transfer, including (1) the Registration Voucher issued by competent level of MOFCOM indicating Buyer’s legal title to the Equity Interest and the approval or registration of the Amended AOA; (2) the New Business License issued by competent level of SAIC and applicable SAIC registration records reflecting Buyer as a 75% shareholder of the Target Company; (3) other registration records issued by SAIC evidencing the Amended AOA has been approved and effective, and (4) the SAFE Approval issued by competent level of SAFE with regard to the receipt and settlement of foreign exchange payment for equity transfer pursuant to Section 4.6;
|
(e)
|
The Parties have executed, and have caused the Target Company or other relevant Affiliates and Related Parties to execute, this Agreement, the Escrow Agreement, the Shareholders Agreement, the Amended AOA, the Share Charge Deed, the Employment Contract and any other Transaction Documents related to the Equity Transfer as required to be executed pursuant to this Agreement, and have delivered to the other Party executed originals of such documents;
|
(f)
|
The Parties have agreed on the substance and form of the OEM and Licensing Agreement, the Technology License Agreement, the Maximal Product Supply Agreement, the HY Component Supply Agreement, the Maximal Component Supply Agreement, the Technical Service Agreement, and any other Transaction Documents related to the Equity Transfer the form of which are required to be agreed to by the Parties pursuant to this Agreement;
|
(g)
|
Prior to the Closing Date, there has been no Material Adverse Change to the Target Company, or the Assets or operation of the Target Company, including but not limited to the financial condition, operating results, business prospects, customer relations, supplier relations and employees of the Target Company;
|
(h)
|
25% equity interest of the Target Company is owned by a shareholder consented by Buyer, as duly registered with SAIC and other applicable authorities, and all shareholders of such 25% shareholder have entered into a Share Charge Deed with Buyer and have set up, effectuated and registered (if so required) the Share Charge for the benefit of Buyer according to the Parties’ agreement;
|
(i)
|
The key assets of Samuk listed in
Schedule 6.3
have been transferred to the Target Company or the Sub pursuant to Section 6.3;
|
(j)
|
Shenzhen Maximal and Shanghai Maximal have been carved out from the Target Company and become independent dealers separate from the Target Company pursuant to Section 6.4;
|
(k)
|
Seller and the Target Company have signed and delivered amended intercompany loan agreements in a form reasonably satisfactory to Buyer pursuant to Section 6.5;
|
(l)
|
Seller has partially removed the Related and Third Party Guarantees and lowered the total amount of the Related and Third Party Guarantees to or under RMB321,800,000 pursuant to Section 6.6, without incurring any costs, losses or remaining or additional liability to the Target Company or Buyer;
|
(m)
|
The Target Company has implemented the Compliance Measures in a manner and to an extent satisfactory to Buyer, as determined in Buyer’s reasonable discretion after an audit, pursuant to Section 6.7;
|
(n)
|
Buyer has obtained approval from its bank(s) or other financing partners to support its payment of the total amount of Purchase Price;
|
(o)
|
The Target Company’s working capital has been adjusted and maintained at the normal level as defined in Section 6.1(a)(iv);
|
(p)
|
All obligations and covenants in respect of the Entity Classification Elections pursuant to Section 6.8(c) have been satisfied;
|
(q)
|
Seller has signed and delivered to Buyer Seller’s Guarantee Letter pursuant to Section 6.14; and
|
(r)
|
Any other undertakings of Seller or Mr. Lu made in relation to the Equity Transfer that are required to be performed prior to Closing (including without limitatiosn, those pre-Closing undertakings in the Undertaking Letter) have been fully performed and satisfied.
|
(a)
|
Closing Confirmation
|
(b)
|
Application for New Business License
|
(c)
|
Date of Closing
|
(d)
|
Actions on the Closing Date
|
(i)
|
On the Closing Date, provided that Buyer has issued the Closing Confirmation pursuant to Section 7.2(a) and the New Business License has been issued to the Target Company pursuant to Section 4.5(a), Buyer shall pay the First Installment to Seller’s Designated Account and the Escrow Amount to the Escrow Account pursuant to Section 3.3.
|
(ii)
|
On the Closing Date, unless otherwise waived in writing by Buyer, Seller shall, and shall cause the Target Company to, deliver to Buyer the following items: (i) evidences indicating that all the CPs under Section 7.1 have been properly satisfied, (ii) where applicable, original(s) of the certificates, approvals, licenses, registrations documents, executed agreements, and other documents as required under Section 7.1, including without limitations, originals of the MOFCOM Registration Voucher and New Business License; and (iii) all Books and Records of the Target Company, as well as all the company chop, financial chop, contract chop, invoice chop and any other chops of the Target Company.
|
(iii)
|
On the Closing Date, the Parties shall jointly conduct a stock take and fixed assets check on the Target Company. The result of such inventory and asset check will be used to calculate the Closing Working Capital (defined in Section 8.1(a) below) and other amounts needed to complete the Post-Closing Statement (defined in Section 8.1(b) below).
|
(a)
|
Schedule 8.1
sets forth a calculation of the working capital, the cash amounts and the debt amounts of the Target Company as of the Reference Balance Sheet Date (the “
Sample Closing Statement
”), including the classification of asset and liability line items and general ledger accounts. The Sample Closing Statement shall be prepared in accordance with PRC GAAP. In addition, for purposes of this Agreement, the following terms shall have the following meanings respectively:
|
•
|
“
Working Capital Adjustment Amount
” means an amount (which may be a positive or negative amount or zero) equal to (a) if the Closing Working Capital is greater than RMB 50 million, 75% of the balance of the Closing Working Capital
minus
RMB 50 million, (b) if the Closing Working Capital is less than RMB 50 million, the Closing Working Capital
minus
RMB 50 million, or (c) zero if the Closing Working Capital is equal to RMB 50 million.
|
•
|
“
Closing Cash Amounts
” means all cash (as recorded in normal ledger) and cash equivalents, bank and other depositary accounts and safe deposit boxes, certificates of deposit, government bills or bonds owned by the Target Company as of Closing. For the avoidance of doubt, the Parties agree that the Closing Cash Amounts shall be calculated based on only those “cash and cash like items” listed in the Sample Closing Statement in Schedule 8.1 attached hereto.
|
•
|
“
Closing Debt Amounts
” means the aggregate amount of the following owed by the Target Company as of Closing, without duplication: (a) the outstanding principal amount of any indebtedness for borrowed money, including all accrued but unpaid interest thereon; (b) all other obligations evidenced by bonds, debentures, notes or similar instruments of indebtedness, including all accrued but unpaid interest thereon; and (c) all direct obligations under letters of credit and guarantees, in each case solely to the extent drawn. For the avoidance of doubt, the Parties agree that: (i) the Closing Debt Amounts shall be calculated based on only those “debt and debt like items” listed in the Sample Closing Statement in
Schedule 8.1
attached hereto; and (ii) the “tax payable” item listed in the Sample Statement will include the tax liability of the Target Company for the Straddle Period up to and including the Closing Date calculated pursuant to Section 6.8(a).
|
•
|
“
Closing Working Capital
” means the net working capital of the Target Company as of Closing, calculated by subtracting (a) the sum of the amounts as of such time for the current liability line items and the general ledger accounts shown on the Sample Closing Statement for the Target Company, from (b) the sum of the amounts as of such time for the current asset line items and general ledger accounts shown on the Sample Closing Statement for the Target Company, in each case determined in accordance with the PRC GAAP;
provided
,
however
, that in no event shall “Closing Working Capital” include any amount included within the definition of Closing Cash Amounts or Closing Debt Amounts. For the avoidance of doubt, the Parties agree that the Closing Working Capital shall be calculated based on only those “Working Capital” items listed in the Sample Closing Statement in Schedule 8.1 attached hereto.
|
(b)
|
As promptly as reasonably possible and in any event within ninety (90) days after the Closing Date, Buyer shall prepare or cause to be prepared, and will provide to Seller, a written statement (the “
Post-Closing Statement
”), setting forth the Working Capital Adjustment Amount, the Closing Cash Amounts and the Closing Debt Amounts. The Post-Closing Statement shall set forth in reasonable detail the Buyer’s calculations of such amounts in a manner consistent with the Sample Closing Statement and shall be prepared in accordance with the PRC GAAP.
|
(c)
|
Within 30 days following receipt by Seller of the Post-Closing Statement, Seller shall deliver written notice to Buyer of any dispute Seller has with respect to the calculation, preparation or content of the Post-Closing Statement (the “
Dispute Notice
”); provided, that if Seller does not deliver any Dispute Notice to Buyer within such 30 day period, the Post-Closing Statement will be final, conclusive and binding on the Parties. The Dispute Notice shall set forth in reasonable detail (i) any item on the Post-Closing Statement that Seller disputes and (ii) the proposed amount of such item. Upon receipt by Buyer of a Dispute Notice, Buyer and Seller shall negotiate in good faith to resolve any dispute set forth therein. If Buyer and Seller fail to resolve any such dispute within thirty (30) days after delivery of the Dispute Notice (the “
Dispute Resolution Period
”), within ten (10) Business Days following the expiration of the Dispute Resolution Period, the Parties shall jointly select and engage one of the internationally recognized Big Four accounting firms (who shall not be the then public accountant of HYG, the “
Independent Accounting Firm
”) to resolve any such dispute.
|
(d)
|
The “
Final Purchase Price
” shall mean the Purchase Price,
plus
(i) the Working Capital Adjustment Amount,
plus
(ii)
75% of the Closing Cash Amounts,
minus
(iii) 75% of the Closing Debt Amounts, in each of cases, (i), (ii) and (iii), as finally determined pursuant to Sections 8.1(b) and (c).
|
(e)
|
If the Purchase Price shall exceed the Final Purchase Price, then Seller shall pay or cause to be paid an amount in cash equal to such excess to Buyer by wire transfer of immediately available funds to an account or accounts designated in writing by Buyer to Seller; or if the Final Purchase Price shall exceed the Purchase Price, then Buyer shall pay or cause to be paid an amount in cash equal to such excess to Seller by wire transfer of immediately available funds to an account or accounts designated in writing by Seller to Buyer. Any such payment is to be made within five (5) Business Days of the date on which the Final Purchase Price is finally determined pursuant to this Section 8.1, except as expressly otherwise agreed by the Parties in writing. To the extent any such adjustment payment under Section 8.1 cannot be made due to Chinese foreign exchange restrictions or other Chinese regulatory restrictions, the Parties shall take all necessary actions to ensure that the adjustment payment can be made or otherwise settled within thirty (30) days after the Final Purchase Price is finally determined pursuant to this Section 8.1 (including without limitation taking all necessary actions to obtain government approvals for amending this Agreement or to adjust or offset any amounts owed under any other Transaction Documents to effectively make the adjustment payment as described in this Section 8.1).
|
(a)
|
directly or indirectly employing, engaging or seeking to employ or engage, through solicitation, recruitment or otherwise, any individual employed by, or providing services related to the Target Company’s business to, the Target Company or Buyer, or otherwise soliciting such individual to terminate his or her employment with the Target Company or Buyer; or
|
(b)
|
directly or indirectly soliciting, enticing or causing any individual who is or has been a supplier or customer of the Target Company or Buyer to cease or substantially decrease its business with the Target Company or Buyer.
|
(a)
|
Seller hereby undertakes that it shall, and shall cause its Affiliates and Related Parties to, unless agreed otherwise by the Parties or with the prior consent of Buyer, refrain from engaging the following during the Interim Period and for a period of 5 years after the Closing Date:
|
(i)
|
engaging directly or indirectly in any competitive business activities involving or relating to the business of the Target Company; or
|
(ii)
|
establishing, or owning any equity interest in any entity that manufactures any or all of the Products of the Target Company as provided in Section 5.2(v) of this Agreement or products that could reasonably be contemplated to compete with the products of the Target Company as provided in Section 5.2(v) of this Agreement, or participating in the production, assembly, distribution and/or sale of such products, in any capacity, other than through the Target Company in their capacities as equity owners, employees or managers of the Target Company.
|
(b)
|
Seller further agrees to cause Mr. Lu, Barry Su, Liexin Zhu and other applicable personnel as agreed to between the Parties to comply with and be bound by those non-competition undertakings made under their Employment Contracts.
|
(a)
|
Release of The First Escrow Payment
. The First Escrow Payment may be released to Seller from the Escrow Account on the second anniversary of the Closing Date pursuant to Section 3.3(b), provided that each of the following conditions is satisfied, or otherwise explicitly waived by Buyer:
|
(i)
|
All the representations and warranties of Seller set forth hereunder and under Seller’s Guarantee Letter as well as all representations and warranties made under the Undertaking Letter are true, complete and not misleading in any material aspects when made, throughout the period from Execution Date to the second anniversary of the Closing Date, and on and as of the second anniversary of the Closing Date with the same effect as if such representations and warranties were made on and as of such date;
|
(ii)
|
Up to the second anniversary of the Closing Date, Seller, Mr. Lu, and the Target Company have performed and complied with all agreements, obligations and covenants contained in the Transaction Documents (including without limitations, this Agreement, Seller’s Guarantee Letter and the Undertaking Letter) that are required to be performed or complied with by them respectively;
|
(iii)
|
There has been no violation or breach of any applicable Laws, undertakings and covenants contained in this Agreement or any other documents signed by Seller, Mr. Lu or their respective Affiliates and Buyer for this Equity Transfer, including without limitations, the Anti-Corruption Laws by the Target Company, Seller, Holding Co, Mr. Lu or any other Affiliates of Seller prior to Closing, and no Loss (as defined below in Section 10.1(a)) related to the Anti-Corruption Laws has arisen out of or in connection with the operation of the Target Company prior to Closing;
|
(iv)
|
There has been no violation or breach of any applicable Laws, undertakings and covenants contained in this Agreement or any other documents signed by Seller, Mr. Lu or their respective Affiliates and Buyer for this Equity Transfer, including without limitations, the Anti-Corruption Laws by the Target Company, Seller, Holding Co, Mr. Lu or any other Affiliates of Seller throughout the two-year period following the Closing Date, and no Loss related to the Anti-Corruption Laws (excluding those losses attributable to Buyer) has arisen out of or in connection with the operation of the Target Company throughout such two-year period;
|
(v)
|
Buyer has received from Seller a copy of the tax clearance certificate (or similar documentation issued by the local tax authority) proving that Seller have paid in full its Chinese Taxes (including but not limited to Chinese capital gain taxes) payable for the Equity Transfer and the receipt of the Purchase Price according to applicable Laws; and
|
(vi)
|
All KNSN Receivables have been fully repaid and/or settled pursuant to Section 6.5 and the relevant portion of the Related and Third Party Guarantees have been removed pursuant to the timeline and action plan under
Schedule 6.6
, without incurring costs, losses or remaining or additional liabilities to the Target Company or Buyer.
|
(b)
|
Release of The Second Escrow Payment
. The Second Escrow Payment may be released to Seller from the Escrow Account on the third anniversary of the Closing Date pursuant to Section 3.3(b), provided that each of the following conditions is satisfied, or otherwise explicitly waived by Buyer:
|
(i)
|
All the representations and warranties of Seller set forth hereunder and under Seller’s Guarantee Letter as well as all representations and warranties made under the Undertaking Letter are true, complete and not misleading in any material aspects when made, throughout the period from Execution Date to the third anniversary of the Closing Date, and on and as of the third anniversary of the Closing Date with the same effect as if such representations and warranties were made on and as of such date;
|
(ii)
|
Up to the third anniversary of the Closing Date, Seller, Mr. Lu and the Target Company have performed and complied with all agreements, obligations and covenants contained in the Transaction Documents (including without limitations, this Agreement, Seller’s Guarantee Letter and the Undertaking Letter) that are required to be performed or complied with by Seller and the Target Company respectively;
|
(iii)
|
There has been no violation or breach of any applicable Laws, undertakings and covenants contained in this Agreement or any other documents signed by Seller, Mr. Lu or their respective Affiliates and Buyer for this Equity Transfer, including without limitations, the Anti-Corruption Laws by the Target Company, Seller, Holding Co, Mr. Lu or any other Affiliates of Seller prior to Closing, and no Loss related to the Anti-Corruption Laws and anti-bribery compliance has arisen out of or in connection with the operation of the Target Company prior to Closing;
|
(iv)
|
There has been no violation or breach of any applicable Laws, undertakings and covenants contained in this Agreement or any other documents signed by Seller, Mr. Lu or their respective Affiliates and Buyer for this Equity Transfer, including without limitations, the Anti-Corruption Laws, by the Target Company, Seller, Holding Co, Mr. Lu or any other Affiliates of Seller through the three-year period following the Closing Date, and no Loss related to the Anti-Corruption Laws (excluding those losses attributable to Buyer or Buyer) has arisen out of or in connection with the operation of the Target Company throughout such three-year period; and
|
(v)
|
The relevant portion of the Related and Third Party Guarantees have been removed pursuant to the timeline and action plan under
Schedule 6.6
, without incurring costs, losses or remaining or additional liabilities to the Target Company or Buyer; provided that however, if by the third anniversary of the Closing Date, any Related and Third Party Guarantees have not been removed, an amount equivalent to the value of the unremoved Guarantee shall be kept in the Escrow Account and cannot be released to Seller after all the Related and Third Party Guarantees are fully removed.
|
(c)
|
During the twenty-third (23
rd
) month after the Closing Date, Buyer shall give a written notice to Seller indicating whether Buyer believes that all conditions in Section 8.4(a) have been satisfied. Similarly, during the thirty-fifth (35
th
) month after the Closing Date, Buyer shall give a written notice to Seller indicating whether Buyer believes that all conditions in Section 8.4(b) have been satisfied. To the extent Buyer agrees that all conditions under Section 8.4(a) and/or 8.4(b) have been satisfied, as the case may be, the Parties shall cooperate with each other to sign and instruct the release of The First Escrow Payment and The Second Escrow Payment, as the case may be, to Seller in accordance with the Escrow Agreement.
|
(d)
|
Upon receipt of each of the written notices of Buyer under Section 8.4(c), Seller shall have thirty (30) days thereafter to review Buyer’s claims (if any). Buyer and Seller shall attempt to resolve in good faith any disputed items during each of such thirty-day period through negotiation or mediation. In the event there is any dispute between the Parties at the end of the thirty-day period regarding whether the conditions set forth in Section
|
(a)
|
Seller agrees to indemnify, defend and hold Buyer, its directors, officers, employees, subsidiaries, Affiliates and the successors and assigns of any of the foregoing (“
Buyer’s Indemnitees
”) harmless from and against any and all claims, liabilities, obligations, demands, damages, losses, costs, expenses (including reasonable attorneys’ fees), fines, penalties, judgments and amounts paid in settlement imposed on, asserted against or incurred by Buyer's Indemnitees with a value in excess of USD200,000 (collectively, “
Losses
”) arising from, in connection with, resulting from or incident to any matters or issues relating to the formation, activities, management or operation of the Target Company, provided that any indemnifiable Losses incurred by directors, officers or employees of Buyer shall be limited to such Losses arising from or in connection with the formation, activities, management or operation of the Target Company prior to the Closing Date. For purpose of this clause, the indemnifiable Losses include but are not limited to the following:
|
(i)
|
Any breach of any representation, warranty, covenant, obligation or agreement of Seller in this Agreement, any Schedule, or any document or agreement furnished or to be furnished by Seller or the Target Company under this Agreement, or any breach of any representation, warranty, covenant, obligation or agreement under Seller’s Guarantee Letter or the Undertaking Letter;
|
(ii)
|
Any claims, demands, lawsuits, investigations, proceedings or actions by any third party containing or relating to allegations that, if true, would constitute a breach of, or misstatement in, any one of the representations and warranties contained in Article V;
|
(iii)
|
Any liabilities, claims, penalties, investigations, prosecutions, proceedings or actions related to or arising from an alleged or actual violation of the Anti-Corruption Laws or export control Laws arising from or in connection with the formation, action, management or operation the Target Company prior to the Closing Date, regardless of whether any such violation has been disclosed by Seller or Mr. Lu to Buyer or its representatives;
|
(iv)
|
Any liabilities, claims, fees, costs, penalties, investigations, prosecutions, proceedings or actions related to or arising from the Target Company’s ownership, occupation, use, lease or construction on any Real Property, including but not limited to any liabilities, claims, fees, costs, penalties, investigations, prosecutions, proceedings or actions relating to the lack of proper approvals and certificates for the Leased Land;
|
(v)
|
Any compensation, wages, salaries, bonuses, overtime-work compensation, vacation pay, holiday pay, severance, profit sharing, supplemental unemployment, retirement and pension benefits, penalties or similar payments or costs relating to any employees of the Target Company or arising out of the Target Company's duties, commitments and/or obligations as an employer, on or prior to the Closing Date which arises from or is related to any claim, demand, order, action or penalty raised or imposed by a third party, including but not limited to any liabilities, claims, fees, costs, penalties, investigations,
|
(vi)
|
Any and all liabilities for Taxes (including but not limited to any clawed-back Tax benefits or any unpaid or underpaid Taxes) of the Target Company or Seller as required by competent tax authority which accrues, arises, or in any way results from or determined with respect to or in any way is relating to or referenced by any period prior to the Closing Date;
|
(vii)
|
Any liabilities, claims, penalties, losses, interest payments, fees, damages, investigations, prosecutions, proceedings or actions related to or arising from any Related and Third Party Guarantees;
|
(viii)
|
Any product defect and/or product liability, in whole or in part, asserted by the relevant parties entitled to make such claim within three (3) years after the Closing Date, regardless of when a claim therefor is asserted, for products manufactured, distributed and/or sold on or prior to the Closing Date including, but not limited to, claims for personal injuries, property damage and economic loss and/or liability arising out of or related to the manufacture, distribution and/or sale of products by the Target Company or the Target Company's agents or representatives on or prior to the Closing Date;
|
(ix)
|
Any claims by employees of the Target Company for injuries sustained and/or disease incurred when working for or related to the Target Company on or prior to the Closing Date, regardless of when a claim therefor is asserted,;
|
(x)
|
The generation, transportation, placement, storage, treatment, use and/or disposal by the Target Company or any predecessor(s) of the Target Company of any Hazardous Substances, pollution, emission or wastes, as defined by applicable Laws, or other materials prior to the Closing Date at any Site, facility and/or Real Property; and
|
(xi)
|
Any liabilities, claims, penalties, investigations, prosecutions, proceedings or actions related to or arising from an alleged or actual violation of environmental Laws (including but not limited to any failure in obtaining, maintaining, filing of or renewing any EHS Permit) arising from or in connection with the formation, activities, management or operation of the Target Company prior to the Closing Date, regardless of whether any such violation has been disclosed by Seller or Mr. Lu to Buyer or its representatives.
|
(b)
|
For purpose of this Section 10.1, to the extent the value of a Loss or a series of Losses is lower than USD200,000 (including USD200,000), Seller will not be obliged to indemnify any of Buyer’s Indemnitees pursuant to this Section 10.1; however, once the aggregate amount of any Loss or any series of Losses exceeds USD200,000, Seller shall be obliged and liable to indemnity Buyer’s Indemnitees from and against the entire amount of any and all Losses (i.e., from the first dollar).
|
(c)
|
All of the representations and warranties contained in this Agreement shall survive the Closing Date and continue in full force and effect for three (3) years after the Closing Date, except that, however, representations and warranties related to intellectual property, compliance with laws, anti-corruption, environmental, employment, and taxes (under Sections 5.2(f), (j), (k), (l), (m), (r), and (s) herein) shall survive their respectively statutes of limitation under Applicable Laws.
|
(d)
|
In case any indemnifiable Losses arises, Buyer shall first deduct the amount of such Losses from any balance of the Escrow Amount in the Escrow Account (as defined under Section 3.3(b)) at the time of the Losses occurrence; provided that, if the amount of the relevant Losses is unclear to Buyer, Buyer may suspend releasing the Escrow Amount until the amount of the Losses is confirmed. If the balance of the Escrow Amount available for deduction is insufficient to cover the entire value of the indemnifiable Losses, Buyer is entitled to claim its Losses against Seller and ask Seller to indemnify Buyer from and against such Losses pursuant to Section 10.1.
|
(a)
|
In case of any disputes arising from or in connection with the validity, interpretation, performance, implementation or termination of this Agreement, the Parties shall try to resolve such dispute through friendly consultations.
|
(b)
|
If a dispute cannot be resolved through friendly consultations within thirty (30) days from the date a Party gives the other Party written notice of such dispute, such dispute shall be resolved exclusively by arbitration under the auspices of Hong Kong International Arbitration Centre (“
HKIAC
”) in accordance with the arbitration rules of the HKIAC in force at the time of the request for arbitration.
|
(c)
|
Arbitration shall take place in Hong Kong at the HKIAC. The arbitration proceeding shall be conducted in English. The arbitral tribunal shall consist of three (3) arbitrators, with one arbitrator to be appointed by Seller, one arbitrator to be appointed by Buyer, and the third arbitrator to be appointed by the Chairman or Deputy Chairman of HKIAC. The third arbitrator cannot currently hold, or have previously held, U.S. citizenship or PRC citizenship.
|
(d)
|
The arbitration award shall be final and binding on the Parties and shall not be subject to any appeal, and the Parties shall be bound thereby and shall act accordingly. Judgment on the award of the arbitrators may be enforced by any court of competent jurisdiction. The losing Party, as determined by the arbitrators, shall pay all out-of-pocket expenses incurred by the prevailing Party (including legal fees), as determined by the arbitrators in connection with any such dispute.
|
(a)
|
This Agreement shall become effective upon execution by the authorized representatives of the Parties.
|
(b)
|
This Agreement may be terminated prior to the Closing Date under any of the following circumstances:
|
(i)
|
by unanimous consent of the Parties;
|
(ii)
|
by a non-breaching Party in case of a material breach of this Agreement, Seller’s Guarantee Letter or the Undertaking Letter that is not cured or duly remedied by a breaching Party within thirty (30) Business Days after written notice thereof from a non-breaching Party or within another period as agreed by the Parties;
|
(iii)
|
by Buyer if any part of the Seller Warranties were not true and accurate at and as of the Execution Date or become no longer true or accurate;
|
(iv)
|
by either Party on or after the expiration of nine (9) months after the Execution Date (the date when such 9 month period expires is hereinafter referred to as the “
Outside Date
”) if Buyer has not issued the Closing Confirmation to Seller pursuant to Section 7.2(a) prior to such Outside Date; provided, however, that if the Closing Confirmation has not been issued as a result of a breach of a representation, warranty, Transaction Document or covenant by any Party hereto, such breaching Party shall not be entitled to terminate this Agreement;
|
(v)
|
by either Party on or after the one and twentieth (120
th
) day after the issuance of Closing Confirmation if the New Business License has not been issued prior to such date; provided, however, that if the New Business License has not been issued as a result of a breach of a representation, warranty, Transaction Document or covenant by any Party hereto, such breaching Party shall not be entitled to terminate this Agreement; or
|
(vi)
|
by either Party, in case of a Force Majeure Event, as defined in Section 12.10 below, continues for one hundred and eighty (180) days and prevents the Parties from consummating the transactions contemplated herein.
|
(c)
|
In the event Buyer chooses to terminate this Agreement in accordance with paragraphs (ii) of Section 12.1(b), without limiting Buyer’s right to claim damages and unless otherwise agreed to by the Parties:
|
(i)
|
Seller shall be liable to indemnify and compensate Buyer, on demand, an amount equal to all actual Losses (including legal fees, professional advisors’ or consultants’ fees and other reasonable costs actually incurred) incurred by Buyer due to such termination;
|
(ii)
|
all relevant obligations of Buyer under this Agreement, including without limitations, the obligation to pay the Purchase Price, shall immediately cease and no longer be binding on Buyer; and
|
(iii)
|
any Purchase Price already paid by Buyer under this Agreement shall be immediately refunded to Buyer.
|
(d)
|
In the event Seller chooses to terminate this Agreement in accordance with paragraph (ii) of Section 12.1(b), without limiting Seller’s right to claim damages and unless otherwise agreed to by the Parties:
|
(i)
|
Buyer shall be liable to indemnify and compensate Seller, on demand, an amount equal to all actual Losses (including legal fees, professional advisors’ or consultants’ fees and other reasonable costs actually incurred) incurred by Seller due to such termination; and
|
(ii)
|
all relevant obligations of Seller under this Agreement shall immediately cease and no longer be binding on Seller.
|
(e)
|
The Parties agree that any Losses indemnifiable by either Party pursuant to Section 12.1(c) or 12.1(d) above shall not exceed USD2,000,000.
|
(f)
|
In the event this Agreement is terminated pursuant to Section 12.1(b), without prejudice to any rights and remedies available to the Parties under this Agreement or applicable Laws, the Parties shall take, or cause to be taken, all necessary actions, including but not limited to, obtaining all necessary approvals and consents from the relevant Governmental Authorities and complete all registrations with the relevant registration authorities (including but not limited to SAIC), to unwind the Equity Transfer or any other actions or transactions that have been completed pursuant to this Agreement.
|
(g)
|
Except as provide in Section 12.1(f), upon any termination of this Agreement pursuant to Section 12.1(b), no Party shall thereafter have any further liability or obligation hereunder except for liability arising for any breaches of this Agreement prior to such termination; provided, however, that Section 12.1(f) and the confidentiality obligations under Section 12.5 shall remain in full force and effect to bind the Parties.
|
(a)
|
Within five (5) years after the Closing Date, Seller shall keep confidential and shall not disclose to any person, corporation, firm or entity (excluding its legal and financial advisors) any information, documents and/or materials relating to the Target Company, except to the extent the disclosure of any such information is required by Law or a court, authorized by Buyer in writing in advance (which Buyer shall respond in writing whether it authorizes such disclosure within five (5) Business Days after receiving the notice by Seller regarding such disclosure) or reasonably occurs in connection with disputes over the terms of this Agreement, or if the relevant information has become public information prior to the disclosure pursuant to this Agreement or without Seller’s breach of this Section 12.5.
|
(b)
|
Within five (5) years after the Closing Date, Buyer shall keep confidential and shall not disclose to any third party any information relating to Seller’ prior practice of managing and operating the Target Company that was disclosed by Seller to Buyer in connection with this Equity Transfer, except to the extent disclosure of any such information (i) is required by Law or a court and is authorized by Seller in writing in advance (which Seller shall respond in writing whether it authorizes such disclosure within five (5)
|
(i)
|
If to Seller:
|
(ii)
|
If to Buyer:
|
Name
|
Incorporation
|
|
|
Auramo OY
|
Finland
|
Auramo ZA
|
South Africa (40%)
|
Bolzoni Auramo AB
|
Sweden
|
Bolzoni Auramo B.V.
|
Holland (51%)
|
Bolzoni Auramo Canada Ltd.
|
Canada
|
Bolzoni Auramo Inc.
|
South Carolina
|
Bolzoni Auramo Polska SP Zoo
|
Poland (60%)
|
Bolzoni Auramo Pty Ltd.
|
Australia
|
Bolzoni Auramo (Shanghai) Forklift Truck Attachment Co. Ltd.
|
China (60%)
|
Bolzoni Auramo SL Sociedad Unipersonal
|
Spain
|
Bolzoni Auramo (Wuxi) Forklift Truck Attachment Co. Ltd.
|
China
|
Bolzoni Capital Holding B.V.
|
Netherlands
|
Bolzoni Capital UK, Limited
|
United Kingdom
|
Bolzoni Italia Srl
|
Italy
|
Bolzoni (Hebei) Forks
|
China
|
Bolzoni Holdings LLC
|
Delaware
|
Bolzoni Holding Hong Kong
|
Hong Kong (PRC)(80%)
|
Bolzoni Holding SpA
|
Italy
|
Bolzoni Ltd.
|
United Kingdom
|
Bolzoni Portugal Lda.
|
Portugal (31%)
|
Bolzoni Sarl
|
France
|
Bolzoni SpA
|
Italy
|
G2A
|
France (75%)
|
Hiroshima Yale Co., Ltd.
|
Japan (20%)
|
HYG Financial Services, Inc.
|
Delaware (20%)
|
HYG Telematics Solutions Limited
|
United Kingdom
|
Hyster (H.K.) Limited
|
Hong Kong (PRC)
|
Hyster Overseas Capital Corporation, LLC
|
Delaware
|
Hyster Singapore Pte Ltd
|
Singapore
|
Hyster-Yale Acquisition Holding Limited
|
United Kingdom
|
Hyster-Yale Australia Holding Pty Ltd.
|
Australia
|
Hyster-Yale Asia-Pacific Pty, Ltd.
|
Australia
|
Hyster-Yale Brasil Empilhadeiras Ltda.
|
Brazil
|
Hyster-Yale Canada ULC
|
Canada
|
Hyster-Yale Deutschland GmbH
|
Germany
|
Hyster-Yale France S.A.R.L.
|
France
|
Hyster-Yale Group, Inc.
|
Delaware
|
Hyster-Yale Group Limited
|
United Kingdom
|
Hyster-Yale Holding B.V.
|
Netherlands
|
Hyster-Yale International B.V.
|
Netherlands
|
Hyster-Yale Italia SpA
|
Italy
|
Hyster-Yale Lift Trucks India Private Limited
|
India
|
Hyster-Yale Mauritius
|
Mauritius
|
Hyster-Yale Mexico S.A. de C.V.
|
Mexico
|
Hyster-Yale Nederland B.V.
|
Netherlands
|
Hyster-Yale UK Limited
|
United Kingdom
|
Hyster-Yale UK Pension Co. Limited
|
United Kingdom
|
Meyer GmbH
|
Germany
|
LLC Hans H. Meyer OOO
|
Russia (80%)
|
Name
|
Incorporation
|
|
|
NMHG Distribution Pty. Limited
|
Australia
|
Nuvera Fuel Cells, LLC.
|
Delaware
|
Onoda Industry Co. Ltd.
|
Japan (20%)
|
Shanghai Hyster Forklift, Ltd.
|
China
|
Shanghai Hyster International Trading Co. Ltd.
|
China
|
SNP Estate Corporation
|
Philippines (50%)
|
Suminac Philippines, Inc.
|
Philippines (50%)
|
Sumitomo NACCO Forklift Co., Ltd.
|
Japan (50%)
|
Sumitomo NACCO Forklift Sales Co., Ltd.
|
Japan (50%)
|
Sumitomo NACCO Forklift Vietnam Co., Ltd.
|
Vietnam (50%)
|
Tohoku Shinko Co., Ltd.
|
Japan (47%)
|
Tokai Shinko Co., Ltd.
|
Japan (15%)
|
Weil Corporation
|
Philippines (50%)
|
Yale Materials Handling UK Ltd.
|
United Kingdom
|
(1)
|
Registration Statement on Form S-8 pertaining to the Hyster-Yale Materials Handling, Inc. Supplemental Long-Term Equity Incentive Plan of Hyster-Yale Materials Handling, Inc. for the registration of 100,000 shares of Class A common stock;
|
(2)
|
Registration Statement on Form S-8 pertaining to the Hyster-Yale Materials Handling, Inc. Non-Employee Directors' Equity Compensation Plan of Hyster-Yale Materials Handling, Inc. for the registration of 100,000 shares of Class A common stock;
|
(3)
|
Registration Statement on Form S-8 pertaining to the Hyster-Yale Materials Handling, Inc. Long-Term Equity Incentive Plan of Hyster-Yale Materials Handling, Inc. for the registration of 750,000 shares of Class A common stock;
|
|
|
|
/s/ Ernst & Young LLP
|
Cleveland, Ohio
|
|
|
|
February 27, 2018
|
|
|
|
/s/ J.C. Butler, Jr.
|
|
February 6, 2018
|
|
John C. Butler, Jr.
|
|
Date
|
|
/s/ Carolyn Corvi
|
|
February 6, 2018
|
|
Carolyn Corvi
|
|
Date
|
|
/s/ John P. Jumper
|
|
February 6, 2018
|
|
John P. Jumper
|
|
Date
|
|
/s/ Dennis W. LaBarre
|
|
February 6, 2018
|
|
Dennis W. LaBarre
|
|
Date
|
|
/s/ H. Vincent Poor
|
|
February 6, 2018
|
|
H. Vincent Poor
|
|
Date
|
|
/s/ Claiborne R. Rankin
|
|
February 6, 2018
|
|
Claiborne R. Rankin
|
|
Date
|
|
/s/ John M. Stropki
|
|
February 6, 2018
|
|
John M. Stropki
|
|
Date
|
|
/s/ Britton T. Taplin
|
|
February 6, 2018
|
|
Britton T. Taplin
|
|
Date
|
|
/s/ Eugene Wong
|
|
February 6, 2018
|
|
Eugene Wong
|
|
Date
|
|
1.
|
I have reviewed this annual report on Form 10-K of Hyster-Yale Materials Handling, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)), for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 27, 2018
|
|
/s/ Alfred M. Rankin, Jr.
|
|
|
|
|
Alfred M. Rankin, Jr.
|
|
|
|
|
Chairman, President and Chief Executive Officer (principal executive officer)
|
|
1.
|
I have reviewed this annual report on Form 10-K of Hyster-Yale Materials Handling, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)), for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 27, 2018
|
|
/s/ Kenneth C. Schilling
|
|
|
|
|
Kenneth C. Schilling
|
|
|
|
|
Senior Vice President and Chief Financial Officer (principal financial and accounting officer)
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
Date:
|
February 27, 2018
|
|
/s/ Alfred M. Rankin, Jr.
|
|
|
|
|
Alfred M. Rankin, Jr.
|
|
|
|
|
Chairman, President and Chief Executive Officer (principal executive officer)
|
|
Date:
|
February 27, 2018
|
|
/s/ Kenneth C. Schilling
|
|
|
|
|
Kenneth C. Schilling
|
|
|
|
|
Senior Vice President and Chief Financial Officer (principal financial and accounting officer)
|
|