UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

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

For the quarterly period ended June 30, 2007

OR

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		(I.R.S. Employer Identification No.)
incorporation or organization)
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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ      Accelerated filer o      Non-accelerated filer o

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 July 31, 2007 6,658,150
Number of shares of Class B Common Stock outstanding at July 31, 2007 1,608,821

 

 

NACCO INDUSTRIES, INC.

TABLE OF CONTENTS

						Page Number
Part I.		FINANCIAL INFORMATION
		Item 1		Financial Statements
				Unaudited Condensed Consolidated Balance Sheets at June 30, 2007 and December 31, 2006			2
				Unaudited Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2007 and 2006			3
				Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006			4
				Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2007 and 2006			5
				Notes to Unaudited Condensed Consolidated Financial Statements			6-21
		Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations			22-52
		Item 3		Quantitative and Qualitative Disclosures About Market Risk			53
		Item 4		Controls and Procedures			53
Part II.		OTHER INFORMATION
		Item 1		Legal Proceedings			54
		Item 1A		Risk Factors			54-55
		Item 2		Unregistered Sales of Equity Securities and Use of Proceeds			55
		Item 3		Defaults Upon Senior Securities			55
		Item 4		Submission of Matters to a Vote of Security Holders			55-56
		Item 5		Other Information			56
		Item 6		Exhibits			56
		Signatures					57
		Exhibit Index					58
EX-10.5
EX-31.1
EX-31.2
EX-32

Part I
FINANCIAL INFORMATION

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

		JUNE 30				DECEMBER 31
		2007				2006
		(In millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents		$	253.8			$	196.7
Accounts receivable, net			390.5				401.5
Inventories			510.6				484.9
Prepaid expenses and other			77.2				70.7
Total Current Assets			1,232.1				1,153.8
Property, Plant and Equipment, Net			371.5				371.4
Goodwill			439.7				437.8
Coal Supply Agreements and Other Intangibles, Net			72.6				74.2
Other Non-current Assets			116.2				119.1
Total Assets		$	2,232.1			$	2,156.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	390.9			$	432.1
Revolving credit agreements — not guaranteed by the parent company			59.6				28.3
Current maturities of long-term debt — not guaranteed by the parent company			30.9				28.3
Accrued payroll			36.3				45.1
Other current liabilities			177.7				217.2
Total Current Liabilities			695.4				751.0
Long-term Debt — not guaranteed by the parent company			456.8				359.9
Self-insurance and Other Liabilities			272.0				252.3
Stockholders’ Equity
Common stock:
Class A, par value $1 per share, 6,658,150 shares outstanding (2006 — 6,628,483 shares outstanding)			6.7				6.7
Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,608,821 shares outstanding (2006 — 1,609,513 shares outstanding)			1.6				1.6
Capital in excess of par value			13.5				12.5
Retained earnings			791.1				792.5
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment			49.8				38.4
Deferred gain (loss) on cash flow hedging			0.7				(0.4	)
Pension and post-retirement plan adjustment			(55.5	)			(58.2	)
			807.9				793.1
Total Liabilities and Stockholders’ Equity		$	2,232.1			$	2,156.3

See notes to unaudited condensed consolidated financial statements.

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

		THREE MONTHS ENDED								SIX MONTHS ENDED
		JUNE 30								JUNE 30
		2007				2006				2007				2006
		(In millions, except per share data)
Revenues		$	830.9			$	796.9			$	1,634.8			$	1,567.3
Cost of sales			701.5				666.8				1,374.4				1,315.8
Gross Profit			129.4				130.1				260.4				251.5
Earnings of unconsolidated project mining subsidiaries			8.6				9.1				17.9				18.0
Operating Expenses
Selling, general and administrative expenses			119.8				105.4				242.7				214.5
Gain on sale of businesses			—				—				—				(3.7	)
Restructuring charge (reversal)			1.0				—				3.4				(0.2	)
			120.8				105.4				246.1				210.6
Operating Profit			17.2				33.8				32.2				58.9
Other income (expense)
Interest expense			(9.8	)			(10.8	)			(17.8	)			(24.3	)
Income from other unconsolidated affiliates			2.0				1.4				3.5				2.3
Loss on extinguishment of debt			—				(17.6	)			—				(17.6	)
Other			2.2				0.2				2.4				2.9
			(5.6	)			(26.8	)			(11.9	)			(36.7	)
Income Before Income Taxes and Minority Interest			11.6				7.0				20.3				22.2
Income tax provision			1.7				2.4				3.9				5.4
Income Before Minority Interest			9.9				4.6				16.4				16.8
Minority interest income			—				0.1				0.1				0.6
Net Income		$	9.9			$	4.7			$	16.5			$	17.4
Comprehensive Income		$	20.1			$	15.8			$	31.7			$	35.2
Basic and Diluted Earnings per Share		$	1.20			$	0.57			$	2.00			$	2.11
Dividends per Share		$	0.5000			$	0.4800			$	0.9800			$	0.9450
Basic Weighted Average Shares Outstanding			8.267				8.236				8.258				8.232
Diluted Weighted Average Shares Outstanding			8.270				8.240				8.268				8.236

See notes to unaudited condensed consolidated financial statements.

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

		SIX MONTHS ENDED
		JUNE 30
		2007				2006
		(In millions)
Operating Activities
Net income		$	16.5			$	17.4
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation, depletion and amortization			29.8				29.9
Amortization of deferred financing fees			0.9				1.3
Loss on extinguishment of debt			—				17.6
Deferred income taxes			7.1				8.6
Restructuring charge (reversal)			3.4				(0.2	)
Minority interest income			(0.1	)			(0.6	)
Loss (gain) on sale of assets			(0.3	)			0.3
Gain on sale of businesses			—				(3.7	)
Other			9.2				0.1
Working capital changes, excluding the effect of business dispositions:
Accounts receivable			20.5				14.1
Inventories			(10.0	)			(1.4	)
Other current assets			(12.4	)			(10.1	)
Accounts payable			(48.6	)			(23.7	)
Other liabilities			(43.0	)			(32.3	)
Net cash provided by (used for) operating activities			(27.0	)			17.3
Investing Activities
Expenditures for property, plant and equipment			(31.0	)			(31.9	)
Proceeds from the sale of assets			1.7				14.3
Proceeds from the sale of businesses			—				4.5
Other			0.3				0.2
Net cash used for investing activities			(29.0	)			(12.9	)
Financing Activities
Additions to long-term debt			120.0				243.6
Reductions of long-term debt			(29.4	)			(284.6	)
Net additions to revolving credit agreements			33.3				9.5
Cash dividends paid			(8.1	)			(7.8	)
Premium on extinguishment of debt			—				(12.5	)
Financing fees paid			(2.6	)			(4.9	)
Other			—				0.8
Net cash provided by (used for) financing activities			113.2				(55.9	)
Effect of exchange rate changes on cash			(0.1	)			(3.0	)
Cash and Cash Equivalents
Increase (decrease) for the period			57.1				(54.5	)
Balance at the beginning of the period			196.7				166.5
Balance at the end of the period		$	253.8			$	112.0

See notes to unaudited condensed consolidated financial statements.

NACCO INDUSTRIES, INC. AND SUBSIDIAIRIES

		SIX MONTHS ENDED
		JUNE 30
		2007				2006
		(In millions, except per share data)
Class A Common Stock		$	6.7			$	6.6
Class B Common Stock			1.6				1.6
Capital in Excess of Par Value
Beginning balance			12.5				7.2
Shares issued under stock compensation plans			1.0				2.4
			13.5				9.6
Retained Earnings
Balance as of December 31:
2006			792.5				—
2005			—				729.6
Cumulative effect of accounting change for EITF No. 04-6, net of $14.9 tax benefit			—				(27.6	)
Cumulative effect of accounting change for FIN No. 48			(9.8	)			—
Beginning balance			782.7				702.0
Net income			16.5				17.4
Cash dividends on Class A and Class B common stock:
2007 $0.9800 per share			(8.1	)			—
2006 $0.9450 per share			—				(7.8	)
			791.1				711.6
Accumulated Other Comprehensive Income (Loss)
Beginning balance			(20.2	)			(41.7	)
Foreign currency translation adjustment			11.4				8.7
Reclassification of hedging activity into earnings			0.3				1.4
Current period cash flow hedging activity			0.8				8.3
Pension and post-retirement plan adjustment			0.4				(0.6	)
Reclassification of pension and post-retirement activities into earnings			2.3				—
			(5.0	)			(23.9	)
Total Stockholders’ Equity		$	807.9			$	705.5

See notes to unaudited condensed consolidated financial statements.

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

(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/Proctor-Silex, Inc. (“HB/PS”) and The Kitchen Collection, Inc. (“KCI”).

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 and sale 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 and rental companies. Housewares consists of two reportable segments: HB/PS, a leading designer, marketer and distributor of small electric household appliances, as well as commercial products for restaurants, bars and hotels, and KCI, 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 June 30, 2007 and the results of its operations for the three and six months ended June 30, 2007 and 2006 and the results of its cash flows and changes in stockholders’ equity for the six months ended June 30, 2007 and 2006 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, 2006.

The balance sheet at December 31, 2006 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 and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2007. 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, 2006.

Note 2 – Recently Issued Accounting Standards

SFAS No. 155: In February 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 155, “Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140.” SFAS No. 155 resolves issues addressed in SFAS No. 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets,” and permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives and amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 is effective for all financial instruments acquired or issued after the beginning of the first fiscal year that begins after September 15, 2006. SFAS No. 155 did not have a material impact on the Company’s financial position or results of operations upon adoption.

SFAS No. 156: In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140.” SFAS No. 156 requires an entity to recognize a servicing asset or liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract under a transfer of the servicer’s financial assets that meets the requirements for sale accounting, a transfer of the servicer’s financial assets to a qualified special-purpose entity in a guaranteed mortgage securitization in which the transferor retains all of the resulting securities and classifies them as either available-for-sale or trading securities in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” and an acquisition or assumption of an obligation to service a financial asset that does not relate to financial assets of the servicer or its consolidated affiliates. Additionally, SFAS No. 156 requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, permits an entity to choose either the use of an amortization or fair value method for subsequent measurements, permits at initial adoption a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights and requires separate presentation of servicing assets and liabilities subsequently measured at fair value and additional disclosures for all separately recognized servicing assets and liabilities. SFAS No. 156 is effective for transactions entered into after the beginning of the first fiscal year that begins after September 15, 2006. SFAS No. 156 did not have a material impact on the Company’s financial position or results of operations upon adoption.

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. The Company is currently evaluating the effect the adoption of SFAS No. 157 will have on its financial position, results of operations and related disclosures.

SFAS No. 158: In September 2006, the FASB issued 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 other comprehensive income 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 expects to 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.

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 is currently evaluating the effect the adoption of SFAS No. 159 will have on its financial position, results of operations and related disclosures.

FIN No. 48: In June 2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes – an Interpretation of SFAS No. 109.” FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” The pronouncement prescribes a recognition threshold and measurement attributable to financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The pronouncement also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition of uncertain taxes. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. As a result of the adoption of FIN No. 48 on January 1, 2007, the Company recognized a cumulative effect of accounting change of $9.8 million, which decreased beginning retained earnings in the accompanying Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2007 and increased “Self-insurance and Other Liabilities” in the accompanying Unaudited Condensed Consolidated Balance Sheet as of June 30, 2007. See Note 8 for further discussion of the effect of adopting FIN No. 48 on the Company’s Unaudited Condensed Consolidated Financial Statements.

Note 3 – Restructuring

Restructuring plans initiated prior to or on December 31, 2002 are accounted for according to Emerging Issues Task Force (“EITF”) No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring),” while all restructuring actions initiated after December 31, 2002 are accounted for according to SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS No. 146 requires that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. EITF No. 94-3 had previously required that a liability for such costs be recognized at the date of the Company’s commitment to an exit or disposal plan. SFAS No. 146 may affect the periods in which costs are recognized although the total amount of costs recognized will be the same as previous accounting guidance.

A summary of the Company’s restructuring plans accounted for according to SFAS No. 146 are as follows:

Housewares 2006 Restructuring Program

During 2006, HB/PS’ 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 will be sourced from third-party suppliers. As such, HB/PS recognized a charge of approximately $1.5 million in 2006. Of this amount, $1.1 million related to severance and $0.3 million related to lease termination costs for machinery and equipment no longer in use. Also included in the restructuring charge is 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. During the first six months of 2007, HB/PS recognized an additional charge of approximately $0.9 million related to the lease impairment of the building and equipment no longer in use and $0.1 for other costs related to the restructuring. Severance payments of $0.8 million were made to 120 employees during the first six months of 2007. Lease payments of $0.7 million and payments of $0.1 million for other costs were made during the first six months of 2007. Payments related to this restructuring plan are expected to continue through 2007.

Housewares 2005 Restructuring Program

During 2005, HB/PS’ 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 will be sourced from third-party Chinese manufacturers. As such, HB/PS recognized a charge of approximately $3.8 million in 2005. Of this amount, $2.3 million related to severance, $1.0 million related to lease termination costs for machinery and equipment no longer in use, $0.2 million related to the write-down of excess inventory and $0.1 million related to other costs. 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. During the first six months of 2006, HB/PS recognized an additional charge of approximately $0.2 million for other costs related to the restructuring. In addition, severance payments of $1.2 million were made to 317 employees, lease payments of $0.3 million and payments of $0.2 million for other costs were made during the first six months of 2006. Severance payments of $0.4 million were made to 85 employees during the first six months of 2007. Also, $0.1 million of the accrual related to lease termination costs for machinery and equipment no longer in use was reversed due to receiving higher than estimated proceeds for the sale of machinery and equipment. No further payments related to this restructuring plan are expected.

Housewares 2004 Restructuring Program

During 2004, the Board of Directors approved management’s plan to restructure HB/PS’ manufacturing activities by closing the Sotec manufacturing facility located near Juarez, Mexico and consolidating all remaining activities into its Saltillo, Mexico facility. In addition, it closed its El Paso, Texas distribution center and consolidated these activities into its Memphis, Tennessee distribution center. HB/PS reduced activities at its North American manufacturing plants through the end of 2005 as a result of increased sourcing of products from China. These actions were designed to reduce HB/PS’ manufacturing inefficiencies attributable to excess capacity to minimal levels in 2005. As such, HB/PS recognized a charge of approximately $9.4 million in 2004. Of this amount, $3.6 million related to lease termination costs for closed facilities and machinery and equipment no longer in use, $2.3 million related to severance, $0.4 million related to the write-down of excess inventory and $0.1 million related to post-employment medical 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. Severance payments of $0.2 million were made to 27 employees during the first six months of 2007. In addition, $0.1 million of the accrual for the write-down of excess inventory was reversed during the first six months of 2007 and included in “Cost of sales” due to the inventory being sold for an amount higher than previously estimated. Payments related to this restructuring plan are expected to continue through 2007.

Following is the detail of the cash and non-cash charges related to the HB/PS restructuring programs. The Company does not expect any additional charges related to these programs.

		Total charges				Total charges				Charges incurred in
		expected to be				incurred through				the six months
		incurred, net				December 31, 2006				ended June 30, 2007
Cash charges
Severance		$	5.6			$	5.6			$	—
Lease impairment			6.0				5.2				0.8
Other			0.5				0.4				0.1
			12.1				11.2				0.9
Non-cash charges
Asset impairment			3.3				3.3				—
Excess inventory			0.6				0.6				—
			3.9				3.9				—
Total charges		$	16.0			$	15.1			$	0.9

Following is a rollforward of the restructuring liability:

						Lease
		Severance				Impairment				Other				Total
Balance at January 1, 2007		$	2.2			$	0.4			$	—			$	2.6
Provision			—				0.9				0.1				1.0
Reversal			—				(0.1	)			—				(0.1	)
Payments			(1.4	)			(0.7	)			(0.1	)			(2.2	)
Balance at June 30, 2007		$	0.8			$	0.5			$	—			$	1.3

NMHG 2007 Restructuring Program

During the first quarter of 2007, NMHG Wholesale’s management approved a plan for The Netherlands manufacturing facility to outsource its welding and painting operations to 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 $0.6 million were made to 22 employees during the first six months of 2007. Payments related to this restructuring plan are expected to continue through 2008.

Following is a rollforward of the restructuring liability:

		Severance
Balance at January 1, 2007		$	—
Provision			1.1
Payments			(0.6	)
Balance at June 30, 2007		$	0.5

The changes to the Company’s restructuring plans accounted for according to EITF No. 94-3 are as follows:

NMHG 2002 Restructuring Program

As announced in December 2002, NMHG Wholesale phased out its Lenoir, North Carolina lift truck component facility and restructured other manufacturing and administrative operations, primarily its Irvine, Scotland lift truck assembly and component facility. As such, NMHG Wholesale recognized a restructuring charge of approximately $12.5 million during 2002. Of this amount, $3.8 million related to a non-cash asset impairment charge for a building, machinery and tooling, which was determined based on current market values for similar assets and broker quotes compared with the net book value of these assets, and $8.7 million related to severance and other employee benefits to be paid to approximately 615

manufacturing and administrative employees. In addition, $0.4 million of the amount accrued at December 31, 2002 was reversed during the first six months of 2006 as a result of a reduction in the estimate of employees eligible to receive severance payments as well as a reduction in the average amount to be paid to each employee. Severance payments of $0.1 million were made to six employees during the first six months of 2006. Final payments under this program were made during 2006.

Additional restructuring related costs, primarily related to manufacturing inefficiencies, which were not eligible for accrual as of December 31, 2002, were $2.1 million in the first six months of 2006, of which $2.0 million was classified as “Cost of sales” and $0.1 million was classified as “Selling, general and administrative expenses” in the Unaudited Condensed Consolidated Statements of Operations.

Note 4 – Inventories

Inventories are summarized as follows:

		JUNE 30				DECEMBER 31
		2007				2006
Manufactured inventories:
Finished goods and service parts —
NMHG Wholesale		$	172.4			$	148.2
HB/PS			81.7				77.3
			254.1				225.5
Raw materials and work in process —
NMHG Wholesale			202.4				207.3
HB/PS			1.8				3.6
			204.2				210.9
Total manufactured inventories			458.3				436.4
Retail inventories:
NMHG Retail			35.9				32.2
KCI			44.9				42.8
Total retail inventories			80.8				75.0
Total inventories at FIFO			539.1				511.4
Coal — NACoal			8.7				8.7
Mining supplies — NACoal			10.8				9.1
Total inventories at weighted average			19.5				17.8
LIFO reserve:
NMHG			(49.4	)			(47.8	)
HB/PS			1.4				3.5
			(48.0	)			(44.3	)
		$	510.6			$	484.9

The cost of certain manufactured and retail inventories, including service parts, has been determined using the last-in, first-out (“LIFO”) method of inventory. At June 30, 2007 and December 31, 2006, 52% and 55%, 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.

HB/PS’ LIFO inventory value exceeds 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 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 of the project mining subsidiaries. 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 assets and liabilities of the project mining subsidiaries are not included in the Unaudited Condensed Consolidated Balance Sheets but the investment in the project mining subsidiaries and related tax assets and liabilities are included. The Company’s risk of loss relating to these entities is limited to its invested capital and accumulated undistributed earnings, which was $4.9 million at June 30, 2007 and $5.1 million at December 31, 2006.

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

		THREE MONTHS ENDED								SIX MONTHS ENDED
		JUNE 30								JUNE 30
		2007				2006				2007				2006
Revenues		$	85.0			$	85.8			$	161.8			$	153.0
Gross profit		$	13.2			$	12.6			$	27.0			$	25.1
Income before income taxes		$	8.6			$	9.1			$	17.9			$	18.0
Income from continuing operations		$	6.8			$	7.1			$	14.3			$	14.3
Net income		$	6.8			$	7.1			$	14.3			$	14.3

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 and wholly owned 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. 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.

Summarized financial information for these equity investments is as follows:

		THREE MONTHS ENDED								SIX MONTHS ENDED
		JUNE 30								JUNE 30
		2007				2006				2007				2006
Revenues		$	103.2			$	86.7			$	187.3			$	165.2
Gross profit		$	30.1			$	25.1			$	54.5			$	47.1
Income from continuing operations		$	7.3			$	5.1			$	12.9			$	8.9
Net income		$	7.3			$	5.1			$	12.9			$	8.9

Note 6 – Current and Long-Term Financing

HB/PS has a $115.0 million senior secured floating-rate revolving credit facility (the “HB/PS Facility”). The HB/PS Facility was amended on May 31, 2007 to extend the maturity date to July 31, 2012, change the interest rate on outstanding borrowings, revise certain definitions, allow HB/PS to pay a special cash dividend of $110.0 million and allow HB/PS to enter into a term loan agreement (the “HB/PS Term Loan Agreement”). The obligations under the HB/PS Facility are secured by a first lien on the accounts receivable and inventory of HB/PS and a second lien on all of the other assets of HB/PS.

On May 31, 2007, HB/PS entered into the HB/PS Term Loan Agreement that provides for term loans up to an aggregate principal amount of $125.0 million. A portion of the proceeds of the term loans under the HB/PS Term Loan Agreement were used to finance the payment of a $110.0 million special cash dividend. The term loans require quarterly principal payments in an amount equal to 1% of the original principal amount per year for the term of the loan, with the remaining balance to be paid at the maturity date on May 31, 2013. Prior to the final maturity date, the term loans are subject to mandatory prepayments from the proceeds of the issuance of certain indebtedness, certain asset sales and 50% of excess cash flow as defined in the HB/PS Term Loan Agreement, which reduce the quarterly principal payments required. The obligations of HB/PS under the HB/PS Term Loan Agreement are secured by a second lien on accounts receivable and inventory and a first lien on all of the other assets of HB/PS.

The term loans bear interest at a floating rate which, at HB/PS’ option, can be either a base rate or the Adjusted Eurodollar Rate, as defined in the HB/PS Term Loan Agreement, plus an applicable margin. The applicable margins, effective June 30, 2007, for base rate loans and Adjusted Eurodollar Rate loans were 1.25% and 2.25%, respectively. The applicable margins are subject to quarterly adjustment based on a leverage ratio. The interest rate on the amount outstanding under the HB/PS Term Loan Agreement was 7.76% at June 30, 2007.

The HB/PS Term Loan Agreement contains restrictive covenants substantially similar to those in the HB/PS Facility which, among other things, limit the amount of dividends HB/PS may declare and pay and the incurrence of indebtedness (other than indebtedness under the HB/PS Facility). The HB/PS Term Loan Agreement also requires HB/PS to meet certain financial tests, including, but not limited to, maximum total leverage ratio and minimum fixed charge coverage ratio tests.

Note 7 – 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 June 30, 2007 and December 31, 2006 were $232.7 million and $231.9 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 June 30, 2007 was approximately $255.8 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 and wholly owned 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 June 30, 2007, approximately $178.6 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 June 30, 2007 the amount of NFS’ debt guaranteed by NMHG was $175.8 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 the new 1 to 8 ton series of lift trucks, NMHG provides an extended powertrain warranty of two years as part of the standard warranty. HB/PS 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 HB/PS’ customer, the retailer. Generally, the retailer returns those products to HB/PS 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 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:

		2007
Balance at January 1		$	44.6
Warranties issued			23.7
Settlements made			(23.9	)
Foreign currency effect			0.2
Balance at June 30		$	44.6

Note 8 – 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								SIX MONTHS ENDED
		JUNE 30								JUNE 30
		2007				2006				2007				2006
Income before income taxes and minority interest:		$	11.6			$	7.0			$	20.3			$	22.2
Statutory taxes at 35%		$	4.1			$	2.5			$	7.1			$	7.8
Discrete items:
NMHG Wholesale Settlements			(0.7	)			—				(0.7	)			—
NMHG Retail sale of European dealership			—				—				—				(1.3	)
NACCO and Other Settlements			(0.6	)			—				(0.6	)			—
Other			0.4				—				0.4				—
			(0.9	)			—				(0.9	)			(1.3	)
Other permanent items:
NACoal percentage depletion			(0.7	)			(0.3	)			(1.2	)			(1.0	)
Foreign tax rate differential			(0.8	)			(0.3	)			(1.3	)			(1.0	)
Other			—				0.5				0.2				0.9
			(1.5	)			(0.1	)			(2.3	)			(1.1	)
Income tax provision		$	1.7			$	2.4			$	3.9			$	5.4
Effective income tax rate			14.7	%			34.3	%			19.2	%			24.3	%
Effective income tax rate excluding discrete items			22.4	%			34.3	%			23.6	%			30.2	%

NMHG Wholesale: During the three and six months ended June 30, 2007, NMHG Wholesale’s effective income tax rate was affected by the settlement of income tax audits with taxing authorities.

NMHG Retail: During the six months ended June 30, 2006, NMHG Retail sold a dealership in Europe for a pre-tax gain of $3.7 million. For tax purposes, a portion of the gain was exempt from local taxation and the remaining gain was fully offset by tax net operating loss carryforwards for which a full valuation allowance had been previously provided. Therefore, the Company recognized a tax benefit related to the sale of this dealership during the first six months of 2006.

NACCO and Other: During the three and six months ended June 30, 2007, NACCO and Other’s effective income tax rate was affected by the settlement of income tax audits with taxing authorities.

Excluding the impact of the discrete items discussed above, the effective income tax rate for the three and six months ended June 30, 2007 decreased compared with the prior year due to a larger benefit from foreign tax rate differential at NMHG Wholesale and an increased benefit of percentage depletion at NACoal. The Company’s consolidated effective income tax rate is lower than the statutory income tax rate primarily due to the benefit of percentage depletion at NACoal and permanently invested income subject to lower tax rates in foreign taxing jurisdictions at NMHG Wholesale.

FIN No. 48: The Company adopted FIN No. 48 on January 1, 2007 and recognized an additional liability of approximately $9.8 million for unrecognized tax benefits, which was accounted for as a reduction to the beginning balance of retained earnings. See Note 2 for further discussion of FIN No. 48.

The liability for unrecognized tax benefits for permanent and temporary book versus tax differences as of January 1, 2007 was $17.7 million, of which $15.6 million relates to permanent items, that if recognized, would impact the effective income tax rate.

The Company records interest and penalties on uncertain tax positions as a component of the income tax provision. The total amount of interest and penalties accrued as of the date of adoption of FIN No. 48 was $4.2 million.

The Company believes that due to various factors, including the settlement of on-going audits and the expiration or extension of underlying statutes of limitation, it is impractical to determine the positions for which it is reasonably possible that the total of uncertain tax positions will significantly increase or decrease within the next twelve months.

In general, the Company operates in taxing jurisdictions that provide a statute of limitations period ranging from three to six years for the taxing authorities to review the applicable tax filings. The Company extended the statute of limitations for its 2003 U.S. federal tax year to allow the U.S. taxing authorities to complete their examination and administrative review of the 2003 and 2004 tax years, which was completed in June 2007. The Company does not have any additional material taxing jurisdictions in which the statute of limitations has been extended beyond the applicable time frame allowed by law.

Note 9 – 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 HB/PS 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 HB/PS’ 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.

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

		THREE MONTHS ENDED								SIX MONTHS ENDED
		JUNE 30								JUNE 30
		2007				2006				2007				2006
U.S. Pension
Service cost		$	0.1			$	0.1			$	0.2			$	0.2
Interest cost			2.0				1.9				4.0				3.9
Expected return on plan assets			(2.4	)			(2.1	)			(4.7	)			(4.3	)
Amortization of prior service cost			0.1				—				0.1				—
Amortization of net loss			0.8				1.1				1.6				2.1
Total		$	0.6			$	1.0			$	1.2			$	1.9
Non-U.S. Pension
Service cost		$	0.8			$	0.8			$	1.6			$	1.5
Interest cost			1.9				1.6				3.8				3.2
Expected return on plan assets			(2.2	)			(1.8	)			(4.4	)			(3.5	)
Employee contributions			(0.2	)			(0.2	)			(0.5	)			(0.4	)
Amortization of transition obligation			0.1				(0.1	)			0.1				(0.1	)
Amortization of net loss			1.0				1.1				2.1				2.1
Total		$	1.4			$	1.4			$	2.7			$	2.8
Post-retirement
Service cost		$	—			$	0.1			$	0.1			$	0.1
Interest cost			0.2				0.2				0.4				0.4
Amortization of prior service cost			—				(0.1	)			(0.1	)			(0.1	)
Total		$	0.2			$	0.2			$	0.4			$	0.4

Note 10 – 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. HB/PS derives a portion of its revenues from transactions with KCI. 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								SIX MONTHS ENDED
		JUNE 30								JUNE 30
		2007				2006				2007				2006
Revenues from external customers
NMHG
NMHG Wholesale		$	608.8			$	581.4			$	1,199.5			$	1,154.2
NMHG Retail			63.2				63.9				125.4				125.3
NMHG Eliminations			(17.4	)			(23.3	)			(37.1	)			(38.7	)
			654.6				622.0				1,287.8				1,240.8
Housewares
HB/PS			103.3				113.6				200.1				209.1
KCI			38.9				23.2				78.6				46.7
Housewares Eliminations			(0.8	)			(1.1	)			(1.2	)			(2.2	)
			141.4				135.7				277.5				253.6
NACoal			34.9				39.2				69.5				72.9
NACCO and Other			—				—				—				—
		$	830.9			$	796.9			$	1,634.8			$	1,567.3
Gross profit
NMHG
NMHG Wholesale		$	80.3			$	77.5			$	162.0			$	156.1
NMHG Retail			7.0				9.1				16.2				19.2
NMHG Eliminations			(0.6	)			(0.4	)			(0.4	)			0.2
			86.7				86.2				177.8				175.5
Housewares
HB/PS			19.6				22.9				36.9				41.6
KCI			16.7				10.0				33.8				20.0
Housewares Eliminations			—				—				—				(0.1	)
			36.3				32.9				70.7				61.5
NACoal			6.4				11.0				11.9				14.5
NACCO and Other			—				—				—				—
		$	129.4			$	130.1			$	260.4			$	251.5

		THREE MONTHS ENDED								SIX MONTHS ENDED
		JUNE 30								JUNE 30
		2007				2006				2007				2006
Selling, general and administrative expenses
NMHG
NMHG Wholesale		$	65.4			$	57.9			$	130.6			$	118.2
NMHG Retail			13.1				12.8				26.3				25.4
NMHG Eliminations			—				—				—				—
			78.5				70.7				156.9				143.6
Housewares
HB/PS			16.7				16.4				33.4				33.7
KCI			20.9				11.6				42.9				23.0
			37.6				28.0				76.3				56.7
NACoal			2.0				6.2				7.3				12.3
NACCO and Other			1.7				0.5				2.2				1.9
		$	119.8			$	105.4			$	242.7			$	214.5
Operating profit (loss)
NMHG
NMHG Wholesale		$	14.9			$	19.6			$	28.9			$	38.3
NMHG Retail			(6.1	)			(3.7	)			(10.1	)			(2.5	)
NMHG Eliminations			(0.6	)			(0.4	)			(0.4	)			0.2
			8.2				15.5				18.4				36.0
Housewares
HB/PS			1.9				6.5				2.6				7.7
KCI			(4.2	)			(1.6	)			(9.1	)			(3.0	)
Housewares Eliminations			—				—				—				(0.1	)
			(2.3	)			4.9				(6.5	)			4.6
NACoal			13.0				13.9				22.5				20.2
NACCO and Other			(1.7	)			(0.5	)			(2.2	)			(1.9	)
		$	17.2			$	33.8			$	32.2			$	58.9
Interest expense
NMHG
NMHG Wholesale		$	(5.4	)		$	(7.3	)		$	(10.3	)		$	(16.1	)
NMHG Retail			(0.8	)			(0.8	)			(1.6	)			(1.6	)
NMHG Eliminations			(0.2	)			(0.3	)			(0.4	)			(0.4	)
			(6.4	)			(8.4	)			(12.3	)			(18.1	)
Housewares
HB/PS			(2.3	)			(1.0	)			(3.1	)			(2.1	)
KCI			(0.4	)			(0.1	)			(0.7	)			(0.2	)
			(2.7	)			(1.1	)			(3.8	)			(2.3	)
NACoal			(1.8	)			(1.9	)			(3.5	)			(3.9	)
NACCO and Other			0.1				—				—				—
Eliminations			1.0				0.6				1.8				—
		$	(9.8	)		$	(10.8	)		$	(17.8	)		$	(24.3	)