UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

NACCO INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		34-1505819
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)
5875 LANDERBROOK DRIVE, CLEVELAND, OHIO		44124-4017
(Address of principal executive offices)		(Zip code)

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ   NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

      Large accelerated filer þ               Accelerated filer o                         Non-accelerated filer o                         Smaller reporting company o

                                        (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o   NO þ

Number of shares of Class A Common Stock outstanding at April 25, 2008 6,674,275
Number of shares of Class B Common Stock outstanding at April 25, 2008 1,607,342

 

 

NACCO INDUSTRIES, INC.

TABLE OF CONTENTS

		Page Number
Part I. FINANCIAL INFORMATION
Item 1 Financial Statements
Unaudited Condensed Consolidated Balance Sheets at March 31, 2008 and December 31, 2007		2
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2008 and 2007		3
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007		4
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2008 and 2007		5
Notes to Unaudited Condensed Consolidated Financial Statements		6-18
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		19-42
Item 3 Quantitative and Qualitative Disclosures About Market Risk		43
Item 4 Controls and Procedures		43
Part II. OTHER INFORMATION
Item 1 Legal Proceedings		44
Item 1A Risk Factors		44
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		44
Item 3 Defaults Upon Senior Securities		44
Item 4 Submission of Matters to a Vote of Security Holders		44
Item 5 Other Information		44
Item 6 Exhibits		44
Signatures		45
Exhibit Index		46
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-31(I)(1)
EX-31(I)(2)
EX-32

Part I
FINANCIAL INFORMATION

NACCO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

		MARCH 31				DECEMBER 31
		2008				2007
		(In millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents		$	222.3			$	281.4
Accounts receivable, net			476.0				512.5
Inventories			613.4				551.5
Deferred income taxes			48.4				51.1
Prepaid expenses and other			68.6				38.3
Total Current Assets			1,428.7				1,434.8
Property, Plant and Equipment, Net			378.3				374.2
Goodwill			444.2				441.9
Coal Supply Agreements and Other Intangibles, Net			70.3				71.0
Long-term Deferred Income Taxes			17.5				17.6
Other Non-current Assets			88.5				88.7
Total Assets		$	2,427.5			$	2,428.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	498.9			$	505.2
Revolving credit agreements — not guaranteed by the parent company			96.8				31.9
Current maturities of long-term debt — not guaranteed by the parent company			39.4				35.2
Accrued payroll			33.0				63.8
Deferred revenue			16.7				18.4
Other current liabilities			189.3				202.0
Total Current Liabilities			874.1				856.5
Long-term Debt — not guaranteed by the parent company			419.1				439.5
Pension and Other Post-retirement Obligations			72.0				74.2
Long-term Deferred Income Taxes			7.3				—
Other Long-term Liabilities			157.4				165.9
Total Liabilities			1,529.9				1,536.1
Stockholders’ Equity
Common stock:
Class A, par value $1 per share, 6,674,275 shares outstanding (2007 - 6,661,102 shares outstanding)			6.7				6.7
Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,607,342 shares outstanding (2007 - 1,607,442 shares outstanding)			1.6				1.6
Capital in excess of par value			14.6				14.1
Retained earnings			853.1				855.6
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment			78.1				66.8
Deferred loss on cash flow hedging			(11.5	)			(5.7	)
Pension and post-retirement plan adjustment			(45.0	)			(47.0	)
			897.6				892.1
Total Liabilities and Stockholders’ Equity		$	2,427.5			$	2,428.2

See notes to unaudited condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
		(In millions, except per share data)
Revenues		$	865.0			$	803.9
Cost of sales			737.4				672.9
Gross Profit			127.6				131.0
Earnings of unconsolidated project mining subsidiaries			8.6				9.3
Operating Expenses
Selling, general and administrative expenses			124.0				122.9
Restructuring charge			0.6				2.4
			124.6				125.3
Operating Profit			11.6				15.0
Other income (expense)
Interest expense			(11.0	)			(8.0	)
Interest income			3.1				2.1
Income from other unconsolidated affiliates			1.8				1.5
Other			(2.1	)			(1.9	)
			(8.2	)			(6.3	)
Income Before Income Taxes and Minority Interest			3.4				8.7
Income tax provision			0.7				2.2
Income Before Minority Interest			2.7				6.5
Minority interest income			—				0.1
Net Income		$	2.7			$	6.6
Comprehensive Income		$	10.2			$	11.6
Basic and Diluted Earnings per Share		$	0.33			$	0.80
Dividends per Share		$	0.5000			$	0.4800
Basic Weighted Average Shares Outstanding			8.275				8.252
Diluted Weighted Average Shares Outstanding			8.282				8.267

See notes to unaudited condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
		(In millions)
Operating Activities
Net income		$	2.7			$	6.6
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation, depletion and amortization			15.4				15.0
Amortization of deferred financing fees			0.5				0.5
Deferred income taxes			14.2				3.5
Restructuring charges			0.6				2.4
Minority interest income			—				(0.1	)
Other			1.7				3.5
Working capital changes:
Accounts receivable			35.6				11.4
Inventories			(50.2	)			(5.8	)
Other current assets			(27.1	)			(10.4	)
Accounts payable			(15.2	)			(42.1	)
Other liabilities			(63.4	)			(53.4	)
Net cash used for operating activities			(85.2	)			(68.9	)
Investing Activities
Expenditures for property, plant and equipment			(18.0	)			(18.2	)
Proceeds from the sale of assets			1.8				1.0
Net cash used for investing activities			(16.2	)			(17.2	)
Financing Activities
Additions to long-term debt			8.3				7.3
Reductions of long-term debt			(25.8	)			(19.0	)
Net additions to revolving credit agreements			62.2				22.8
Cash dividends paid			(4.1	)			(4.0	)
Net cash provided by financing activities			40.6				7.1
Effect of exchange rate changes on cash			1.7				(0.5	)
Cash and Cash Equivalents
Decrease for the period			(59.1	)			(79.5	)
Balance at the beginning of the period			281.4				196.7
Balance at the end of the period		$	222.3			$	117.2

See notes to unaudited condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
		(In millions, except per share data)
Class A Common Stock		$	6.7			$	6.7
Class B Common Stock			1.6				1.6
Capital in Excess of Par Value
Beginning balance			14.1				12.5
Shares issued under stock compensation plans			0.5				0.5
			14.6				13.0
Retained Earnings
Balance as of December 31:
2007			855.6				—
2006			—				792.5
Cumulative effect of accounting change for SFAS No. 158, net of $0.5 tax benefit			(1.1	)			—
Cumulative effect of accounting change for FIN No. 48			—				(9.8	)
Beginning balance			854.5				782.7
Net income			2.7				6.6
Cash dividends on Class A and Class B common stock:
2008 $0.5000 per share			(4.1	)			—
2007 $0.4800 per share			—				(4.0	)
			853.1				785.3
Accumulated Other Comprehensive Income (Loss)
Beginning balance			14.1				(20.2	)
Foreign currency translation adjustment			11.3				4.2
Reclassification of hedging activity into earnings			0.3				(0.3	)
Current period cash flow hedging activity			(6.1	)			(0.3	)
Cumulative effect of accounting change for SFAS No. 158			1.0				—
Reclassification of pension and post-retirement activities into earnings			1.0				1.4
			21.6				(15.2	)
Total Stockholders’ Equity		$	897.6			$	791.4

See notes to unaudited condensed consolidated financial statements.

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

Note 1 — Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of NACCO Industries, Inc. (the “parent company” or “NACCO”) and its wholly owned subsidiaries (collectively, “NACCO Industries, Inc. and Subsidiaries” or the “Company”). Intercompany accounts and transactions are eliminated upon consolidation. The Company’s subsidiaries operate in three principal industries: lift trucks, housewares and mining. The Company manages its subsidiaries primarily by industry; however, the Company manages its lift truck operations as two reportable segments: wholesale manufacturing and retail distribution. NACCO Housewares Group (“Housewares”) also consists of two reportable segments: Hamilton Beach Brands, Inc. (“HBB”) and The Kitchen Collection, Inc. (“KC”).

NMHG Holding Co. (“NMHG”) designs, engineers, manufactures, sells, services and leases a comprehensive line of lift trucks and aftermarket parts marketed globally under the Hyster^® and Yale^® brand names. NMHG manages its operations as two reportable segments: wholesale manufacturing (“NMHG Wholesale”) and retail distribution (“NMHG Retail”). NMHG Wholesale includes the manufacture, sale and leasing of lift trucks and related service parts, primarily to independent and wholly owned Hyster^® and Yale^® retail dealerships. Lift trucks and component parts are manufactured in the United States, Northern Ireland, Scotland, The Netherlands, China, Italy, Japan, Mexico, the Philippines and Brazil. NMHG Retail includes the sale, leasing and service of Hyster^® and Yale^® lift trucks and related service parts by wholly owned retail dealerships. Housewares consists of two reportable segments: HBB, a leading designer, marketer and distributor of small electric household appliances, as well as commercial products for restaurants, bars and hotels, and KC, a national specialty retailer of kitchenware and gourmet foods operating under the Kitchen Collection^® and Le Gourmet Chef^® store names in outlet and traditional malls throughout the United States. The North American Coal Corporation and its affiliated coal companies (collectively, “NACoal”) mine and market lignite coal primarily as fuel for power generation and provide selected value-added mining services for other natural resources companies.

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company as of March 31, 2008 and the results of its operations for the three months ended March 31, 2008 and 2007 and the results of its cash flows and changes in stockholders’ equity for the three months ended March 31, 2008 and 2007 have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

The balance sheet at December 31, 2007 has been derived from the audited financial statements at that date but does not include all of the information or notes required by U.S. generally accepted accounting principles for complete financial statements.

Operating results for the three months ended March 31, 2008 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2008. Because the housewares business is seasonal, a majority of revenues and operating profit typically occurs in the second half of the calendar year when sales of small electric household appliances to retailers and consumers increase significantly for the fall holiday selling season. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Note 2 — Recently Issued Accounting Standards

SFAS No. 158: In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R).” SFAS No. 158 requires an entity to recognize the funded status of a defined benefit postretirement plan in its statement of financial position measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation would be the projected benefit obligation; for any other postretirement benefit plan, the benefit obligation would be the accumulated postretirement benefit obligation. The pronouncement also requires entities to recognize the actuarial gains and losses and the prior service costs and credits that arise during the period but are not recognized as components of net periodic benefit cost as a component of accumulated other comprehensive income (loss) (“OCI”) and measure defined benefit plan assets and obligations as of the date of the employer’s statement of financial position. The pronouncement also requires disclosure of additional information in the notes to financial statements about certain effects of net periodic benefit cost in the subsequent fiscal year that arise from delayed recognition of the actuarial gains and losses and the prior service costs and credits. As of December 31, 2006, the Company adopted the recognition and disclosure provisions of SFAS No. 158. The Company will change the measurement date of its postretirement benefit plans from September 30 to the date of its

statement of financial position as of December 31, 2008. As a result, an adjustment of three-fifteenths of the net periodic benefit cost determined for the period from September 30, 2007 to December 31, 2008 was recorded to opening retained earnings on January 1, 2008. The remaining twelve-fifteenths will be recognized as net periodic benefit cost during 2008. See Note 8 for further discussion of the effect of adopting the measurement date provisions of SFAS No. 158 on the Company’s Unaudited Condensed Consolidated Financial Statements.

SFAS No. 157: In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. The provisions of SFAS No. 157 apply under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years for financial assets and liabilities, and for fiscal years beginning after November 15, 2008 for nonfinancial assets and liabilities. The adoption of SFAS No. 157 for financial assets and liabilities did not have a material effect on the Company’s financial position or results of operations.

The Company measures its derivatives at fair value on a recurring basis using significant observable inputs, which is Level 2 as defined in the SFAS No. 157 fair value hierarchy. The Company uses a present value technique which incorporates the LIBOR swap curve, foreign currency spot rates and foreign currency forward rates to value its derivatives, including its interest rate swap agreements and foreign currency exchange contracts, and also incorporates the effect of its subsidiary and counterparty credit risk into the valuation. The fair value of derivative assets was $2.3 million and the fair value of derivative liabilities was $20.3 million at March 31, 2008.

SFAS No. 159: In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The pronouncement also establishes presentation and disclosure requirements to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company did not elect to measure its financial instruments or any other items at fair value as permitted by SFAS No. 159. Therefore, the adoption of SFAS No. 159 did not have a material effect on the Company’s financial position or results of operations.

SFAS No. 141R: In December 2007, the FASB issued SFAS No. 141R, “Business Combinations.” SFAS No. 141R modifies the accounting for business combinations by requiring that acquired assets and assumed liabilities be recorded at fair value, contingent consideration arrangements be recorded at fair value on the date of the acquisition and preacquisition contingencies will generally be accounted for in purchase accounting at fair value. The pronouncement also requires that transaction costs be expensed as incurred, acquired research and development be capitalized as an indefinite-lived intangible asset and the requirements of SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” be met at the acquisition date in order to accrue for a restructuring plan in purchase accounting. SFAS No. 141R is required to be adopted prospectively effective for fiscal years beginning after December 15, 2008.

SFAS No. 160: In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51.” SFAS No. 160 modifies the reporting for noncontrolling interests in the balance sheet and minority interest income (expense) in the income statement. The pronouncement also requires that increases and decreases in the noncontrolling ownership interest amount be accounted for as equity transactions. SFAS No. 160 is required to be adopted prospectively, with limited exceptions, effective for fiscal years beginning on or after December 15, 2008. The Company is currently evaluating the effect the adoption of SFAS No. 160 will have on its financial position, results of operations and related disclosures.

SFAS No. 161: In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133.” SFAS No. 161 modifies existing requirements to include qualitative disclosures regarding the objectives and strategies for using derivatives, fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. The pronouncement also requires the cross-referencing of derivative disclosures within the financial statements and notes thereto. The requirements of SFAS No. 161 are effective for interim and annual periods beginning after November 15, 2008. The Company will include the additional disclosures required in its financial statements upon adoption of SFAS No. 161.

Reclassifications: Certain amounts in the prior periods’ Consolidated Financial Statements have been reclassified to conform to the current period’s presentation.

Note 3 — Restructuring

NMHG 2007 Restructuring Programs

During 2007, NMHG’s Board of Directors approved a plan to phase out production of current product at its facility in Irvine, Scotland by early 2009, change the product mix at its Craigavon, Northern Ireland facility and increase production at its Berea, Kentucky and Sulligent, Alabama plants in the United States and at its Ramos Arizpe facility in Mexico. As a result, NMHG Wholesale recognized a charge of approximately $5.5 million in 2007. Of this amount, $5.2 million related to severance and $0.3 million related to other costs of the restructuring. During

the first three months of 2008, NMHG recognized an additional charge of $0.6 million, which is classified in the Unaudited Condensed Consolidated Statement of Operations on the line “Restructuring charge.” Of this amount, $0.2 million related to severance and $0.4 million related to other costs of the restructuring. Payments of $0.4 million were made for other costs related to the restructuring during the first three months of 2008. Payments related to this restructuring plan are expected to be made through early 2009.

In addition, the Company anticipates that it will incur subsequent charges, which were not eligible for accrual at March 31, 2008, totaling approximately $1.9 million for additional severance and other costs related to the restructuring, which includes approximately $1.8 million during the remainder of 2008 and $0.1 million during 2009.

During 2007, NMHG Wholesale’s management approved a plan for The Netherlands manufacturing facility to outsource its welding and painting operations to a third party in a lower cost country. As a result, NMHG Wholesale recognized a charge of approximately $2.5 million in the first quarter of 2007, which is classified in the Unaudited Condensed Consolidated Statement of Operations on the line “Restructuring charge.” Of this amount, a cash charge of $1.1 million related to severance and $1.4 million related to a non-cash asset impairment charge for equipment, which was determined based on current estimated market values for similar assets compared with the net book value of these assets. The Company does not expect to incur any additional charges related to this restructuring plan. Severance payments of $0.1 million were made to three employees during the first three months of 2008. No further payments related to this restructuring plan are expected.

Following is the detail of the cash and non-cash charges related to the NMHG restructuring programs:

		Total charges				Total charges				Charges incurred in				Additional charges
		expected to be				incurred through				the three months				expected to be
		incurred				December 31, 2007				ended March 31, 2008				incurred
Cash charges
Severance		$	7.2			$	6.3			$	0.2			$	0.7
Other			1.9				0.3				0.4				1.2
			9.1				6.6				0.6				1.9
Non-cash charges
Asset impairment			1.4				1.4				—				—
Total charges		$	10.5			$	8.0			$	0.6			$	1.9

Following is an analysis of the activity related to the NMHG restructuring liability:

		Severance				Other				Total
Balance at January 1, 2008		$	5.3			$	—			$	5.3
Provision			0.2				0.4				0.6
Payments			(0.1	)			(0.4	)			(0.5	)
Foreign currency effect			(0.1	)			—				(0.1	)
Balance at March 31, 2008		$	5.3			$	—			$	5.3

HBB 2006 Restructuring Program

During 2006, HBB’s management approved a plan for the Saltillo, Mexico facility to phase out production of blenders and coffeemakers for the Mexican and Latin American markets. Blenders and coffeemakers for the Mexican and Latin American markets are now sourced from third-party suppliers. As a result, HBB has recognized total charges of approximately $2.5 million through December 31, 2007. Of this amount, $1.2 million related to lease termination costs for machinery and equipment no longer in use, $1.1 million related to severance and $0.1 million was for other costs related to the restructuring. Also included in the restructuring charge was a $0.1 million non-cash asset impairment charge for equipment and tooling, which was determined based on current estimated market values for similar assets compared with the net book value of these assets. There were no additional charges recognized in the first quarter of 2008. Lease payments of $0.1 million and $0.3 million were made during the first quarter of 2008 and 2007, respectively. No further charges or payments related to this restructuring plan are expected.

HBB 2005 Restructuring Program

During 2005, HBB’s management approved a plan for the Saltillo, Mexico facility to phase out production of blenders for the U.S. and Canadian markets and only produce blenders for the Mexican and Latin American markets. Blenders for the U.S. and Canadian markets are now sourced from third-party Chinese manufacturers. As such, HBB has recognized total charges of approximately $3.9 million through December 31, 2007. Of this amount, $2.3 million related to severance, $0.9 million related to lease termination costs for machinery and equipment no longer in use, $0.3 million related to other costs and $0.2 million related to the non-cash write-down of excess inventory. Also included in the restructuring charge was a $0.2 million non-cash asset impairment charge for equipment and tooling, which was determined based on current estimated market values for similar assets compared with the net book value of these assets. There were no additional charges recognized in the first quarter of 2008. Severance payments of $0.2 million were made to 31 employees during the first quarter of 2007. No further charges or payments related to this restructuring plan are expected.

HBB 2004 Restructuring Program

During 2004, the HBB Board of Directors approved management’s plan to restructure HBB’s manufacturing activities by closing the Sotec manufacturing facility located near Juarez, Mexico and consolidating all remaining activities into its Saltillo, Mexico facility. In addition, HBB closed its El Paso, Texas distribution center and consolidated these activities into its Memphis, Tennessee distribution center. As such, HBB has recognized total charges of approximately $9.2 million through December 31, 2007. Of this amount, $3.9 million related to lease termination costs for closed facilities and machinery and equipment no longer in use, $1.9 million related to severance, $0.3 million related to the non-cash write-down of excess inventory and $0.1 million related to other expenses. Also included in the restructuring charge was a $3.0 million non-cash asset impairment charge for equipment and tooling, which was determined based on current estimated market values for similar assets compared with the net book value of these assets. There were no additional charges recognized in the first quarter of 2008. Severance payments of $0.2 million were made to 17 employees during the first quarter of 2007. No further charges or payments related to this restructuring plan are expected.

Following is an analysis of the activity related to the restructuring liability:

		Lease
		Impairment
Balance at January 1, 2008		$	0.1
Payments			(0.1	)
Balance at March 31, 2008		$	—

Note 4 — Inventories

Inventories are summarized as follows:

		MARCH 31				DECEMBER 31
		2008				2007
Manufactured inventories:
Finished goods and service parts -
NMHG Wholesale		$	230.5			$	180.8
HBB			87.5				79.0
			318.0				259.8
Raw materials and work in process -
NMHG Wholesale			257.0				246.5
HBB			2.1				2.3
			259.1				248.8
Total manufactured inventories			577.1				508.6
Retail inventories:
NMHG Retail			26.9				25.5
KC			46.5				48.3
Total retail inventories			73.4				73.8
Total inventories at FIFO			650.5				582.4
Coal — NACoal			12.8				12.3
Mining supplies — NACoal			11.2				11.9
Total inventories at weighted average			24.0				24.2
LIFO reserve:
NMHG			(57.5	)			(56.4	)
HBB			(3.6	)			1.3
			(61.1	)			(55.1	)
		$	613.4			$	551.5

The cost of certain manufactured and retail inventories, including service parts, has been determined using the last-in, first-out (“LIFO”) method of inventory valuation. At March 31, 2008 and December 31, 2007, 50% and 51%, respectively, of total inventories were determined using the LIFO method. An actual valuation of inventory under the LIFO method can be made only at the end of the year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because these estimates are subject to change and may be different than the actual inventory levels and costs at year-end, interim results are subject to the final year-end LIFO inventory valuation.

HBB’s LIFO inventory value at December 31, 2007 exceeded its first-in, first-out (“FIFO”) inventory value primarily due to prior years’ price deflation.

Note 5 — Unconsolidated Subsidiaries and Equity Investments

Three of NACoal’s wholly owned subsidiaries, The Coteau Properties Company, The Falkirk Mining Company and The Sabine Mining Company (collectively, the “project mining subsidiaries”), meet the definition of a variable interest entity pursuant to FASB Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities.” The project mining subsidiaries were developed between 1974 and 1981 and operate lignite coal mines under long-term contracts with various utility customers. The contracts with the project mining subsidiaries’ utility customers allow each mine to sell lignite coal at a price based on actual cost plus an agreed pre-tax profit per ton. The taxes resulting from earnings of the project mining subsidiaries are solely the responsibility of the Company. These entities are capitalized primarily with debt financing, which the utility customers have arranged and guaranteed. The obligations of the project mining subsidiaries are without recourse to NACCO and NACoal. Although NACoal owns 100% of the stock and manages the daily operations of these entities, the Company has determined that the equity capital provided by NACoal is not sufficient to adequately finance the ongoing activities of the project mining

subsidiaries or absorb any expected losses without additional support from the utility customers. As a result, NACoal is not the primary beneficiary and does not consolidate these entities’ financial position or results of operations. The pre-tax income from the project mining subsidiaries is reported on the line “Earnings of unconsolidated project mining subsidiaries” in the Unaudited Condensed Consolidated Statements of Operations with related taxes included in the provision for income taxes. The Company has included the pre-tax earnings of the project mining subsidiaries above operating profit as they are an integral component of the Company’s business and operating results. The investment in the project mining subsidiaries and related tax assets and liabilities are included on the line “Other Non-current Assets” in the Unaudited Condensed Consolidated Balance Sheets. The Company’s risk of loss relating to these entities is limited to its invested capital and accumulated undistributed earnings, which were $4.7 million at March 31, 2008 and $5.1 million at December 31, 2007.

Summarized financial information for the project mining subsidiaries is as follows:

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
Revenues		$	80.9			$	76.8
Gross profit		$	12.7			$	13.8
Income before income taxes		$	8.6			$	9.3
Income from continuing operations		$	6.6			$	7.5
Net income		$	6.6			$	7.5

NMHG has a 20% ownership interest in NMHG Financial Services, Inc. (“NFS”), a joint venture with GE Capital Corporation (“GECC”), formed primarily for the purpose of providing financial services to independent Hyster^® and Yale^® lift truck dealers and National Account customers in the United States. NMHG’s ownership in NFS is accounted for using the equity method of accounting.

NMHG has a 50% ownership interest in Sumitomo NACCO Materials Handling Company, Ltd. (“SN”), a limited liability company which was formed primarily for the manufacture and distribution of Sumitomo-Yale and Shinko- branded lift trucks in Japan and the export of Hyster^® and Yale^®-branded lift trucks and related components and service parts outside of Japan. NMHG purchases products from SN under normal trade terms based on current market prices. NMHG’s ownership in SN is also accounted for using the equity method of accounting.

The Company’s percentage share of the net income or loss from its equity investments in NFS and SN are reported on the line “Income from other unconsolidated affiliates” in the “Other income (expense)” section of the Unaudited Condensed Consolidated Statements of Operations. The Company’s equity investments are included on the line “Other Non-current Assets” in the Unaudited Condensed Consolidated Balance Sheets. At March 31, 2008 and December 31, 2007, NMHG’s investment in NFS was $12.8 million and $15.0 million, respectively, and NMHG’s investment in SN was $23.5 million and $22.7 million, respectively.

Summarized financial information for these equity investments is as follows:

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
Revenues		$	101.9			$	84.1
Gross profit		$	29.2			$	24.4
Income from continuing operations		$	6.3			$	5.6
Net income		$	6.3			$	5.6

Note 6 — Guarantees and Contingencies

Various legal and regulatory proceedings and claims have been or may be asserted against NACCO and certain subsidiaries relating to the conduct of their businesses, including product liability, environmental and other claims. These proceedings and claims are incidental to the ordinary course of business of the Company. Management believes that it has meritorious defenses and will vigorously defend the Company in these actions. Any costs that management estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount can be reasonably estimated. Although the ultimate disposition of these proceedings is not presently determinable, management believes, after consultation with its legal counsel, that the likelihood is remote that material costs will be incurred in excess of accruals already recognized.

Under various financing arrangements for certain customers, including independently owned retail dealerships, NMHG provides guarantees of the residual values of lift trucks or recourse or repurchase obligations such that NMHG would be obligated in the event of default by the customer. Terms of the third-party financing arrangements for which NMHG is providing a guarantee generally range from one to five years. Total guarantees and amounts

subject to recourse or repurchase obligations at March 31, 2008 and December 31, 2007 were $241.5 million and $251.7 million, respectively. Losses anticipated under the terms of the guarantees, recourse or repurchase obligations are not significant and reserves have been provided for such losses in the accompanying Unaudited Condensed Consolidated Financial Statements. Generally, NMHG retains a security interest in the related assets financed such that, in the event NMHG would become obligated under the terms of the recourse or repurchase obligations, NMHG would take title to the financed assets. The fair value of collateral held at March 31, 2008 was approximately $272.6 million based on Company estimates. The Company estimates the fair value of the collateral using information regarding the original sales price, the current age of the equipment and general market conditions that influence the value of both new and used lift trucks.

NMHG has a 20% ownership interest in NFS, a joint venture with GECC formed primarily for the purpose of providing financial services to independent Hyster^® and Yale^® lift truck dealers and National Account customers in the United States. NMHG’s ownership in NFS is accounted for using the equity method of accounting. Generally, NMHG sells lift trucks through its independent dealer network or directly to customers. These dealers and customers may enter into a financing transaction with NFS or other unrelated third parties. NFS provides debt financing to dealers and lease financing to both dealers and customers. On occasion, the credit quality of a customer or concentration issues within GECC may necessitate providing standby recourse or repurchase obligations or a guarantee of the residual value of the lift trucks purchased by customers and financed through NFS. At March 31, 2008, approximately $171.7 million of the Company’s total guarantees, recourse or repurchase obligations related to transactions with NFS. In addition, in connection with the joint venture agreement, NMHG also provides a guarantee to GECC for 20% of NFS’ debt with GECC, such that NMHG would become liable under the terms of NFS’ debt agreements with GECC in the case of default by NFS. At March 31, 2008 the amount of NFS’ debt guaranteed by NMHG was $221.1 million. NFS has not defaulted under the terms of this debt financing in the past and although there can be no assurances, NMHG is not aware of any circumstances that would cause NFS to default in future periods.

NMHG provides a standard warranty on its lift trucks, generally for six to twelve months or 1,000 to 2,000 hours. For certain series of lift trucks, NMHG provides an extended powertrain warranty of two years as part of the standard warranty. HBB provides a standard warranty to consumers for all of its products. The specific terms and conditions of those warranties vary depending upon the product brand. In general, if a product is returned under warranty, a refund is provided to the consumer by HBB’s customer, the retailer. Generally, the retailer returns those products to HBB for a credit. The Company estimates the costs which may be incurred under its standard warranty programs and records a liability for such costs at the time product revenue is recognized.

In addition, NMHG sells extended warranty agreements, which provide a warranty for an additional two to five years or up to 2,400 to 10,000 hours. The specific terms and conditions of those warranties vary depending upon the product sold and the country in which NMHG does business. Revenue received for the sale of extended warranty contracts is deferred and recognized in the same manner as the costs incurred to perform under the warranty contracts, in accordance with FASB Technical Bulletin 90-1, “Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts.”

NMHG also maintains a quality enhancement program under which it provides for specifically identified field product improvements in its warranty obligation. Accruals under this program are determined based on estimates of the potential number of claims to be processed and the cost of processing those claims based on historical costs.

The Company periodically assesses the adequacy of its recorded warranty liabilities at NMHG and HBB and adjusts the amounts as necessary. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims and the cost per claim. Changes in the Company’s current and long-term warranty obligations, including deferred revenue on extended warranty contracts, are as follows:

		2008
Balance at January 1		$	52.8
Warranties issued			18.7
Settlements made			(18.0	)
Balance at March 31		$	53.5

Note 7 — Income Taxes

The income tax provision includes U.S. federal, state and local, and foreign income taxes and is based on the application of a forecasted annual income tax rate applied to the current quarter’s year-to-date pre-tax income. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the Company’s ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates, certain circumstances with respect to valuation allowances or other unusual or non-recurring tax adjustments are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated effective annual income tax rate.

A reconciliation of the Company’s consolidated federal statutory and effective income tax is as follows:

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
Income before income taxes and minority interest:		$	3.4			$	8.7
Statutory taxes at 35%		$	1.2			$	3.0
Other permanent items:
NMHG Wholesale equity interest earnings			(0.1	)			—
NACoal percentage depletion			(0.2	)			(0.5	)
Foreign tax rate differential			(0.3	)			(0.5	)
Other			0.1				0.2
			(0.5	)			(0.8	)
Income tax provision		$	0.7			$	2.2
Effective income tax rate			20.6	%			25.3	%

The effective income tax rate for the three months ended March 31, 2008 decreased compared with the prior year due to a larger percentage benefit from foreign tax rate differential at NMHG Wholesale and percentage depletion at NACoal on lower consolidated pre-tax income. The Company’s consolidated effective income tax rate is lower than the statutory income tax rate primarily due to permanently invested income subject to lower tax rates in foreign taxing jurisdictions at NMHG Wholesale and the benefit of percentage depletion at NACoal.

Note 8 — Retirement Benefit Plans

The Company maintains various defined benefit pension plans that provide benefits based on years of service and average compensation during certain periods. The Company’s policy is to make contributions to fund these plans within the range allowed by applicable regulations. Plan assets consist primarily of publicly traded stocks, investment contracts and government and corporate bonds.

In 2007, the Company announced that pension benefits for certain HBB employees in Canada will be frozen effective January 1, 2009. In 2004, pension benefits for certain NACoal employees were frozen. In 1996, pension benefits were frozen for employees covered under NMHG’s and HBB’s U.S. plans, except for those NMHG employees participating in collective bargaining agreements. As a result, in the United States only certain NMHG employees covered under collective bargaining agreements will earn retirement benefits under defined benefit pension plans. Other employees, including those whose pension benefits were frozen, receive retirement benefits under defined contribution retirement plans.

The Company also maintains health care and life insurance plans which provide benefits to eligible retired employees. These plans have no assets. Under the Company’s current policy, benefits under these plans are funded at the time they are due to participants or beneficiaries.

SFAS No. 158: The Company will change the measurement date of its postretirement benefit plans from September 30 to December 31, 2008, the date of its statement of financial position. As a result, an adjustment of opening retained earnings for three-fifteenths of the net periodic benefit cost determined for the period from September 30, 2007 to December 31, 2008 was recorded on January 1, 2008 and is reflected in the Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity as of March 31, 2008. The remaining twelve-fifteenths will be recognized as net periodic benefit cost during 2008.

The components of pension and post-retirement (income) expense are set forth below:

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
U.S. Pension
Service cost		$	0.1			$	0.1
Interest cost			2.2				2.0
Expected return on plan assets			(2.7	)			(2.3	)
Amortization of actuarial loss			0.6				0.8
Amortization of prior service cost			0.1				—
Total		$	0.3			$	0.6
Non-U.S. Pension
Service cost		$	0.8			$	0.8
Interest cost			2.2				1.9
Expected return on plan assets			(2.4	)			(2.2	)
Employee contributions			(0.3	)			(0.3	)
Amortization of actuarial loss			0.9				1.1
Total		$	1.2			$	1.3
Post-retirement
Service cost		$	0.1			$	0.1
Interest cost			0.2				0.2
Amortization of prior service credit			(0.1	)			(0.1	)
Total		$	0.2			$	0.2

Note 9 — Business Segments

Financial information for each of NACCO’s reportable segments, as defined by SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” is presented in the following table. See Note 1 for a discussion of the Company’s operating segments and product lines. NACCO’s non-operating segment, NACCO and Other, includes the accounts of the parent company and Bellaire Corporation (“Bellaire”).

NMHG Wholesale derives a portion of its revenues from transactions with NMHG Retail. The amount of these revenues, which are based on current market prices on similar third-party transactions, are indicated in the following table on the line “NMHG Eliminations” in the revenues section. HBB derives a portion of its revenues from transactions with KC. The amounts of these revenues, which are based on current market prices on similar third-party transactions, are indicated in the following table on the line “Housewares Eliminations” in the revenues section. No other sales transactions occur among reportable segments. Other transactions among reportable segments are recognized based on similar third-party transactions; that is, at current market prices.

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
Revenues from external customers
NMHG
NMHG Wholesale		$	677.9			$	590.7
NMHG Retail			46.9				62.2
NMHG Eliminations			(25.9	)			(19.7	)
			698.9				633.2
Housewares
HBB			95.2				96.8
KC			39.2				39.7
Housewares Eliminations			(0.6	)			(0.4	)
			133.8				136.1
NACoal			32.3				34.6
NACCO and Other			—				—
Total		$	865.0			$	803.9
Gross profit
NMHG
NMHG Wholesale		$	84.3			$	81.7
NMHG Retail			8.4				9.2
NMHG Eliminations			0.1				0.2
			92.8				91.1
Housewares
HBB			15.2				17.3
KC			16.1				17.1
Housewares Eliminations			0.1				—
			31.4				34.4
NACoal			3.1				5.5
NACCO and Other			0.3				—
Total		$	127.6			$	131.0
Selling, general and administrative expenses
NMHG
NMHG Wholesale		$	70.3			$	65.2
NMHG Retail			8.7				13.2
			79.0				78.4
Housewares
HBB			17.2				16.7
KC			21.6				22.0
			38.8				38.7
NACoal			5.2				5.3
NACCO and Other			1.0				0.5
Total		$	124.0			$	122.9

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
Operating profit (loss)
NMHG
NMHG Wholesale		$	13.4			$	14.0
NMHG Retail			(0.3	)			(4.0	)
NMHG Eliminations			0.1				0.2
			13.2				10.2
Housewares
HBB			(2.0	)			0.7
KC			(5.5	)			(4.9	)
Housewares Eliminations			0.1				—
			(7.4	)			(4.2	)
NACoal			6.5				9.5
NACCO and Other			(0.7	)			(0.5	)
Total		$	11.6			$	15.0
Interest expense
NMHG
NMHG Wholesale		$	(6.5	)		$	(4.9	)
NMHG Retail			(0.3	)			(0.8	)
NMHG Eliminations			(0.1	)			(0.2	)
			(6.9	)			(5.9	)
Housewares
HBB			(2.9	)			(0.8	)
KC			(0.2	)			(0.3	)
			(3.1	)			(1.1	)
NACoal			(1.6	)			(1.7	)
NACCO and Other			—				(0.1	)
Eliminations			0.6				0.8
Total		$	(11.0	)		$	(8.0	)
Interest income
NMHG
NMHG Wholesale		$	1.3			$	1.2
NMHG Retail			—				—
			1.3				1.2
Housewares
HBB			—				—
KC			—				—
			—				—
NACoal			—				0.1
NACCO and Other			2.4				1.6
Eliminations			(0.6	)			(0.8	)
Total		$	3.1			$	2.1

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
Other income (expense) (excluding interest income)
NMHG
NMHG Wholesale		$	1.4			$	1.2
NMHG Retail			(0.1	)			—
			1.3				1.2
Housewares
HBB			—				(0.1	)
KC			(0.1	)			—
			(0.1	)			(0.1	)
NACoal			(0.9	)			—
NACCO and Other			(0.6	)			(1.5	)
Total		$	(0.3	)		$	(0.4	)
Income tax provision (benefit)
NMHG
NMHG Wholesale		$	1.7			$	2.6
NMHG Retail			(0.4	)			(1.2	)
NMHG Eliminations			0.3				0.1
			1.6				1.5
Housewares
HBB			(2.1	)			(0.1	)
KC			(2.6	)			(2.1	)
Housewares Eliminations			0.4				0.1
			(4.3	)			(2.1	)
NACoal			0.2				1.1
NACCO and Other			3.2				1.7
Total		$	0.7			$	2.2
Net income (loss)
NMHG
NMHG Wholesale		$	7.9			$	9.0
NMHG Retail			(0.3	)			(3.6	)
NMHG Eliminations			(0.3	)			(0.1	)
			7.3				5.3
Housewares
HBB			(2.8	)			(0.1	)
KC			(3.2	)			(3.1	)
Housewares Eliminations			(0.3	)			(0.1	)
			(6.3	)			(3.3	)
NACoal			3.8				6.8
NACCO and Other			(2.1	)			(2.2	)
Total		$	2.7			$	6.6

		THREE MONTHS ENDED
		MARCH 31
		2008				2007
Depreciation, depletion and amortization
NMHG
NMHG Wholesale		$	9.9			$	7.7
NMHG Retail			1.0				2.5
			10.9				10.2
Housewares
HBB			0.8				1.0
KC			0.7				0.6
			1.5				1.6
NACoal			3.0				3.2
NACCO and Other			—				—
Total		$	15.4			$	15.0
Capital Expenditures
NMHG
NMHG Wholesale		$	10.5			$	6.1
NMHG Retail			0.4				2.2
			10.9				8.3
Housewares
HBB			1.7				0.7
KC			0.6				0.6
			2.3				1.3
NACoal			4.8				8.5
NACCO and Other			—				0.1
Total		$	18.0			$	18.2

		MARCH 31				DECEMBER 31
Total assets		2008				2007
NMHG
NMHG Wholesale		$	1,667.6			$	1,647.5
NMHG Retail			77.3				93.5
NMHG Eliminations			(93.3	)			(137.4	)
			1,651.6				1,603.6
Housewares
HBB			278.8				308.2
KC			70.6				70.7
Housewares Eliminations			(0.3	)			(0.6	)
			349.1				378.3
NACoal			269.4				268.9
NACCO and Other			296.0				308.0
Eliminations			(138.6	)			(130.6	)
Total		$	2,427.5			$	2,428.2

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

NACCO Industries, Inc. (the “parent company” or “NACCO”) and its wholly owned subsidiaries (collectively, the “Company”) operate in three principal industries: lift trucks, housewares and mining. Results of operations and financial condition are discussed separately by segment, which corresponds with the industry groupings. The Company manages its lift truck operations as two reportable segments: wholesale manufacturing and retail distribution. NACCO Housewares Group (“Housewares”) also consists of two reportable segments: Hamilton Beach Brands, Inc. (“HBB”) and The Kitchen Collection, Inc. (“KC”). Results by segment are also summarized in Note 9 to the Unaudited Condensed Consolidated Financial Statements.

NMHG Holding Co. (“NMHG”) designs, engineers, manufactures, sells, services and leases a comprehensive line of lift trucks and aftermarket parts marketed globally under the Hyster^® and Yale^® brand names. NMHG manages its operations as two reportable segments: wholesale manufacturing (“NMHG Wholesale”) and retail distribution (“NMHG Retail”). NMHG Wholesale includes the manufacture, sale and leasing of lift trucks and related service parts, primarily to independent and wholly owned Hyster^® and Yale^® retail dealerships. Lift trucks and component parts are manufactured in the United States, Northern Ireland, Scotland, The Netherlands, China, Italy, Japan, Mexico, the Philippines and Brazil. NMHG Retail includes the sale, leasing and service of Hyster^® and Yale^® lift trucks and related service parts by wholly owned retail dealerships. Housewares consists of two reportable segments: HBB, a leading designer, marketer and distributor of small electric household appliances, as well as commercial products for restaurants, bars and hotels located throughout the United States, Canada and Mexico, and KC, a national specialty retailer of kitchenware and gourmet foods operating under the Kitchen Collection^® and Le Gourmet Chef^® store names in outlet and traditional malls throughout the United States. The North American Coal Corporation and its affiliated coal companies (collectively “NACoal”) mine and market lignite coal primarily as fuel for power generation and provide selected value-added mining services for other natural resources companies in the United States. Lignite coal is delivered from NACoal’s mines in Texas, North Dakota, Louisiana and Mississippi to adjacent or nearby power plants. Dragline mining services are provided for independently owned limerock quarries in Florida.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Please refer to the discussion of the Company’s Critical Accounting Policies and Estimates as disclosed on pages 34 through 37 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. The Company’s Critical Accounting Policies and Estimates have not materially changed from December 31, 2007.

NACCO MATERIALS HANDLING GROUP

NMHG designs, engineers, manufactures, sells, services and leases a comprehensive line of lift trucks and aftermarket parts marketed globally under the Hyster^® and Yale^® brand names.

FINANCIAL REVIEW

The segment and geographic results of operations for NMHG were as follows for the three months ended March 31:

		2008				2007
Revenues
Wholesale
Americas		$	394.1			$	371.2
Europe			222.7				181.2
Asia-Pacific			61.1				38.3
			677.9				590.7
Retail (net of eliminations)
Europe			5.5				13.7
Asia-Pacific			15.5				28.8
			21.0				42.5
NMHG Consolidated		$	698.9			$	633.2
Operating profit (loss)
Wholesale
Americas		$	1.9			$	6.1
Europe			11.4				6.3
Asia-Pacific			0.1				1.6
			13.4				14.0
Retail (net of eliminations)
Europe			(0.2	)			(0.5	)
Asia-Pacific			—				(3.3	)
			(0.2	)			(3.8	)
NMHG Consolidated		$	13.2			$	10.2
Interest expense
Wholesale		$	(6.5	)		$	(4.9	)
Retail (net of eliminations)			(0.4	)			(1.0	)
NMHG Consolidated		$	(6.9	)		$	(5.9	)
Other income (expense)
Wholesale		$	2.7			$	2.4
Retail (net of eliminations)			(0.1	)			—
NMHG Consolidated		$	2.6			$	2.4
Net income (loss)
Wholesale		$	7.9			$	9.0
Retail (net of eliminations)			(0.6	)			(3.7	)
NMHG Consolidated		$	7.3			$	5.3
Effective income tax rate
Wholesale			17.7	%			22.6	%
Retail (net of eliminations)			14.3	%			22.9	%
NMHG Consolidated			18.0	%			22.4	%