Other Events and Transactions

HBBHC Spin-Off: On September 29, 2017, the Company spun-off HBBHC, a former wholly owned subsidiary. To complete the spin-off, the Company distributed one share of HBBHC Class A common stock and one share of HBBHC Class B common stock to NACCO stockholders for each share of NACCO Class A common stock or Class B common stock owned. The Company accounted for the spin-off based on the historical carrying value of HBBHC.

On September 28, 2017, prior to the spin-off, HBBHC paid NACCO a one-time $35.0 million cash dividend. This payment was in addition to $3.0 million in dividends HBBHC paid to NACCO in the first six months of 2017.

In connection with the spin-off of HBBHC, the Company and HBBHC entered into a Transition Services Agreement ("TSA"). Under the terms of the TSA, the Company provides various services to HBBHC on a transitional basis, as needed, for varying periods after the spin-off date. None of the transition services are expected to exceed one year. NACCO expects to receive net aggregate fees of approximately $1.0 million over the term of the TSA from HBBHC.

As a result of the spin-off, the financial position, results of operations and cash flows of HBBHC are reflected as discontinued operations through the date of the spin-off in the Consolidated Financial Statements. In connection with the spin-off of HBBHC, NACCO and Other recognized non-deductible expenses directly attributable to the spin-off of $2.8 million during 2017, which are reflected as discontinued operations in the Consolidated Statement of Operations.

Discontinued operations includes the following results of HBBHC for the three years ended December 31:



	2017			2016			2015
HBBHC Operating Statement Data:
Revenues	$	474,971		$	745,357		$	767,862
Cost of goods sold	353,436			551,586			577,134
Gross profit	121,535			193,771			190,728
Operating expenses ^(a)	114,379			150,397			155,174
Operating profit	7,156			43,374			35,554
Interest expense	1,300			1,374			1,962
Other expense, net	(939		)	837			1,556
Income before income taxes	6,795			41,163			32,036
Income tax expense	2,655			14,984			12,325
HBBHC net income	$	4,140		$	26,179		$	19,711

NACCO expenses related to the spin-off	2,759			—			—
NACCO discontinued operations income tax expense (benefit) adjustments	(493		)	(472		)	—
NACCO discontinued operations, net of tax	$	1,874		$	26,651		$	19,711

(a) HBBHC's operating profit includes the recognition of $2.5 million of expenses related to the spin-off in 2017.

Centennial: Centennial ceased coal production in the fourth quarter of 2015 and the Company began actively marketing Centennial's mine machinery and equipment. The Company classified these assets as held for sale during the fourth quarter of 2015 when management approved and committed to a formal plan of sale. The coal land and real estate did not meet the held-for-sale criteria and remained within property, plant and equipment as a long-lived asset. As a result of various unfavorable conditions, including but not limited to weakness in the U.S. and global coal markets and certain asset-specific factors, the Company determined the carrying value of Centennial's coal land and real estate were not recoverable. The Company also conducted a review of the carrying value of Centennial's mine machinery and equipment classified as assets held for sale. The Company recognized aggregate impairment charges of $17.4 million and $1.0 million during 2016 and 2017, respectively. The carrying value of coal land and real estate and the assets held for sale were zero as of December 31, 2017. The asset impairment charges were recorded as "Centennial asset impairment charge" in the Consolidated Statements of Operations. See Note 9 for further discussion of the Company's asset impairment charges.

During 2017, 2016 and 2015, revisions were made to Centennial's asset retirement obligations due to revised estimated cash flows and the timing of those cash flows, resulting in (income)/expense of $(2.8) million, $(0.3) million and $7.5 million, respectively. See Note 7 for further discussion of the Company's asset retirement obligations.

Other: During the fourth quarter of 2016, NACoal recorded a $3.3 million charge related to the resolution of a legal matter. This charge is recorded on the line "Selling, general and administrative expenses" in the Consolidated Statements of Operations.