10-Q

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, 2018

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from  to

Commission file number 1-9172

	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, SUITE 220, CLEVELAND, OHIO		44124-4069
(Address of principal executive offices)		(Zip code)
	(440) 229-5151
	(Registrant's telephone number, including area code)
	N/A
	(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES þ NO o

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

Large accelerated filer o	Accelerated filerþ	Non-accelerated filer o	Smaller reporting company o	Emerging growth company o
		(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES oNO þ

Number of shares of Class A Common Stock outstanding at April 27, 2018: 5,367,858

Number of shares of Class B Common Stock outstanding at April 27, 2018: 1,569,546

NACCO INDUSTRIES, INC.

TABLE OF CONTENTS

			Page Number
Part I.	FINANCIAL INFORMATION
	Item 1	Financial Statements
		Unaudited Condensed Consolidated Balance Sheets at March 31, 2018 and December 31, 2017	2
		Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2018 and 2017	3
		Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2018 and 2017	4
		Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2018 and 2017	5
		Unaudited Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2018 and 2017	6
		Notes to Unaudited Condensed Consolidated Financial Statements	7
	Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	23
	Item 4	Controls and Procedures	23
Part II.	OTHER INFORMATION
	Item 1	Legal Proceedings	24
	Item 1A	Risk Factors	24
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	24
	Item 3	Defaults Upon Senior Securities	24
	Item 4	Mine Safety Disclosures	24
	Item 5	Other Information	24
	Item 6	Exhibits	24
	Exhibit Index		24
	Signatures		25

1

Part I

FINANCIAL INFORMATION

Item 1. Financial Statements

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	MARCH 31 2018			DECEMBER 31 2017
	(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	83,403		$	101,600
Accounts receivable, net	14,004			14,611
Accounts receivable from affiliates	21,693			19,919
Inventories, net	30,115			30,015
Prepaid expenses and other	13,074			10,843
Total current assets	162,289			176,988
Property, plant and equipment, net	119,811			120,068
Intangibles, net	42,870			43,554
Deferred income taxes	4,465			5,962
Investments in unconsolidated subsidiaries	18,679			16,335
Deferred costs	3,555			3,582
Other non-current assets	22,507			23,063
Total assets	$	374,176		$	389,552
LIABILITIES AND EQUITY
Accounts payable	$	8,174		$	7,575
Accounts payable to affiliates	237			1,925
Revolving credit agreements	15,000			15,000
Current maturities of long-term debt	1,081			1,125
Accrued payroll	6,010			17,204
Asset retirement obligations	3,092			3,092
Other current liabilities	7,245			8,055
Total current liabilities	40,839			53,976
Long-term debt	34,687			42,021
Asset retirement obligations	35,907			37,005
Pension and other postretirement obligations	11,293			11,827
Deferred compensation	12,939			12,939
Other long-term liabilities	13,629			12,336
Total liabilities	149,294			170,104
Stockholders' equity
Common stock:
Class A, par value $1 per share, 5,369,326 shares outstanding (December 31, 2017 - 5,282,106 shares outstanding)	5,369			5,282
Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,569,746 shares outstanding (December 31, 2017 - 1,570,146 shares outstanding)	1,570			1,570
Capital in excess of par value	4,537			4,447
Retained earnings	226,513			216,490
Accumulated other comprehensive loss	(13,107		)	(8,341		)
Total stockholders' equity	224,882			219,448
Total liabilities and equity	$	374,176		$	389,552

See notes to Unaudited Condensed Consolidated Financial Statements.

2

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	THREE MONTHS ENDED
	MARCH 31
	2018			2017
	(In thousands, except per share data)
Revenues	$	31,200		$	28,300
Cost of sales	25,776			23,742
Gross profit	5,424			4,558
Earnings of unconsolidated operations	15,555			14,955
Operating expenses
Selling, general and administrative expenses	10,627			9,520
Amortization of intangible assets	684			587
Gain on sale of assets	(53		)	(400		)
	11,258			9,707
Operating profit	9,721			9,806
Other expense (income)
Interest expense	646			932
Income from other unconsolidated affiliates	(315		)	(308		)
Closed mine obligations	379			383
Other, net, including interest income	31			(20		)
	741			987
Income from continuing operations before income tax provision	8,980			8,819
Income tax provision from continuing operations	804			599
Income from continuing operations	8,176			8,220
Discontinued operations, net of tax expense of $1,071 in the three months ended March 31, 2017	—			(3,242		)
Net income	$	8,176		$	4,978
Basic earnings (loss) per share:
Continuing operations	$	1.19		$	1.21
Discontinued operations	—			(0.48		)
Basic earnings per share	$	1.19		$	0.73
Diluted earnings (loss) per share:
Continuing operations	$	1.18		$	1.20
Discontinued operations	—			(0.47		)
Diluted earnings per share	$	1.18		$	0.73
Dividends per share	$	0.1650		$	0.2675
Basic weighted average shares outstanding	6,894			6,806
Diluted weighted average shares outstanding	6,939			6,843

See notes to Unaudited Condensed Consolidated Financial Statements.

3

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	THREE MONTHS ENDED
	MARCH 31
	2018		2017
	(In thousands)
Net income	$	8,176	$	4,978
Foreign currency translation adjustment	—		1,071
Deferred gain on equity securities	—		226
Current period cash flow hedging activity, net of $86 tax benefit in the three months ended March 31, 2017	—		(239		)
Reclassification of hedging activities into earnings, net of $12 tax benefit in the three months ended March 31, 2017	—		6
Reclassification of pension and postretirement adjustments into earnings, net of $35 and $50 tax benefit in the three months ended March 31, 2018 and March 31, 2017, respectively	140		176
Total other comprehensive income	140		1,240
Comprehensive income	$	8,316	$	6,218

See notes to Unaudited Condensed Consolidated Financial Statements.

4

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	THREE MONTHS ENDED
	MARCH 31
	2018			2017
	(In thousands)
Operating activities
Net income	$	8,176		$	4,978
Loss from discontinued operations	—			(3,242		)
Income from continuing operations	8,176			8,220
Adjustments to reconcile income from continuing operations to net cash used for operating activities:
Depreciation, depletion and amortization	3,397			3,180
Amortization of deferred financing fees	84			93
Deferred income taxes	1,497			987
Other	(3,426		)	(6,577		)
Working capital changes:
Affiliates receivable/payable	(96		)	2,679
Accounts receivable	(321		)	(12,852		)
Inventories	(100		)	(339		)
Other current assets	(2,119		)	(2,561		)
Accounts payable	(1,135		)	614
Income taxes receivable/payable	(1,124		)	232
Other current liabilities	(12,862		)	(13,719		)
Net cash used for operating activities of continuing operations	(8,029		)	(20,043		)
Net cash used for operating activities of discontinued operations	—			(22,161		)
Net cash used for operating activities	(8,029		)	(42,204		)
Investing activities
Expenditures for property, plant and equipment	(2,452		)	(3,425		)
Proceeds from the sale of property, plant and equipment	55			611
Other	309			198
Net cash used for investing activities of continuing operations	(2,088		)	(2,616		)
Net cash used for investing activities of discontinued operations	—			(1,220		)
Net cash used for investing activities	(2,088		)	(3,836		)
Financing activities
Additions to long-term debt	1,269			3,461
Reductions of long-term debt	(8,205		)	(432		)
Cash dividends paid	(1,144		)	(1,827		)
Cash dividends received from Hamilton Beach Brands Holding Co. (See Note 10)	—			3,000
Net cash (used for) provided by financing activities of continuing operations	(8,080		)	4,202
Net cash provided by financing activities of discontinued operations	—			17,263
Net cash (used for) provided by financing activities	(8,080		)	21,465
Effect of exchange rate changes on cash of discontinued operations	—			353
Cash and cash equivalents
Total decrease for the period	(18,197		)	(24,222		)
Net change related to discontinued operations	—			5,765
Balance at the beginning of the period	101,600			69,308
Balance at the end of the period	$	83,403		$	50,851

See notes to Unaudited Condensed Consolidated Financial Statements.

5

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

										Accumulated Other Comprehensive Income (Loss)
	Class A Common Stock		Class B Common Stock		Capital in Excess of Par Value		Retained Earnings			Deferred Gain (Loss) on Equity Securities				Pension and Postretirement Plan Adjustment				Total Stockholders' Equity
	(In thousands, except per share data)
Balance, January 1, 2018	$	5,282	$	1,570	$	4,447	$	216,490			$	2,727			$	(11,068	)	$	219,448
ASC 606 adoption (See Note 2)	—		—		—		(2,075		)		—				—			(2,075		)
ASU 2016-01 reclassification (See Note 2)	—		—		—		2,727				(2,727		)		—			—
ASU 2018-02 reclassification (See Note 2)	—		—		—		2,339				—				(2,179		)	160
Stock-based compensation	87		—		90		—				—				—			177
Net income	—		—		—		8,176				—				—			8,176
Cash dividends on Class A and Class B common stock: $0.1650 per share	—		—		—		(1,144		)		—				—			(1,144		)
Reclassification adjustment to net income	—		—		—		—				—				140			140
Balance, March 31, 2018	$	5,369	$	1,570	$	4,537	$	226,513			$	—			$	(13,107	)	$	224,882

See notes to Unaudited Condensed Consolidated Financial Statements.

6

NACCO INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2018

(In thousands, except as noted and per share amounts)

NOTE 1—Nature of Operations and Basis of Presentation

Nature of Operations: 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 in consolidation. NACCO is the public holding company for The North American Coal Corporation.  The North American Coal Corporation and its affiliated companies (collectively, “NACoal”) operate surface mines that supply coal primarily to power generation companies under long-term contracts, and provide other value-added services to natural resource companies.  In addition, its North American Mining ("NAM") business operates and maintains draglines and other equipment under contracts with sellers of aggregates. 

On September 29, 2017, the Company spun-off Hamilton Beach Brands Holding Company ("HBBHC"), a former wholly owned subsidiary. The financial position, results of operations and cash flows of HBBHC are reflected as discontinued operations for all periods presented through the date of the spin-off. See Note 10 to the Unaudited Condensed Consolidated Financial Statements for further details regarding the spin-off.

NACoal has the following operating coal mining subsidiaries: Bisti Fuels Company, LLC ("Bisti"), Caddo Creek Resources Company, LLC (“Caddo Creek”), Camino Real Fuels, LLC (“Camino Real”), The Coteau Properties Company (“Coteau”), Coyote Creek Mining Company, LLC (“Coyote Creek”), Demery Resources Company, LLC (“Demery”), The Falkirk Mining Company (“Falkirk”), Mississippi Lignite Mining Company (“MLMC”) and The Sabine Mining Company (“Sabine”). Liberty Fuels Company, LLC ("Liberty") ceased all mining and delivery of lignite in 2017 and commenced mine reclamation in 2018.

All of the operating coal mining subsidiaries other than MLMC are unconsolidated (collectively, the "Unconsolidated Operations"). The unconsolidated coal mining subsidiaries were formed to develop, construct and/or operate surface coal mines under long-term contracts and are capitalized primarily with debt financing provided by or supported by their respective customers, and without recourse to NACCO and NACoal. Although NACoal owns 100% of the equity and manages the daily operations of the Unconsolidated Operations, the Company has determined that the equity capital provided by NACoal is not sufficient to adequately finance the ongoing activities or absorb any expected losses without additional support from the customers. The customers have a controlling financial interest and have the power to direct the activities that most significantly affect the economic performance of the entities. As a result, NACoal is not the primary beneficiary and therefore does not consolidate these entities' financial positions or results of operations. The income taxes resulting from operations of the Unconsolidated Operations are solely the responsibility of the Company. The pre-tax income from the Unconsolidated Operations is reported on the line “Earnings of unconsolidated operations” in the Consolidated Statements of Operations, with related taxes included in the provision for income taxes. The Company has included the pre-tax earnings of the Unconsolidated Operations above operating profit as they are an integral component of the Company's business and operating results.

The contracts with the customers of the unconsolidated subsidiaries eliminate exposure to spot coal market price fluctuations and are based on a "management fee" approach, whereby compensation includes reimbursement of all operating costs, plus a fee based on the amount of coal or limestone delivered. The fees earned adjust over time in line with various indices which reflect general U.S. inflation rates. 

MLMC is a consolidated entity because NACoal pays all operating costs and provides the capital for the mine. MLMC sells coal to its customer at a contractually agreed upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates.  Centennial Natural Resources, LLC ("Centennial"), which ceased coal production at the end of 2015, is also a consolidated entity.

NAM provides value-added services for independently owned limestone quarries and is reimbursed by its customers based on actual costs plus a management fee per unit of limestone delivered. The financial results for NAM are included in the consolidated operations or Unconsolidated Operations based on each entity's structure.

NACoal also provides coal handling, processing and drying services for a number of customers. For example, NoDak Energy Services, LLC ("NoDak") operates and maintains a coal processing facility for a customer's power plant. The pre-tax income from NoDak is reported on the line "Income from other unconsolidated affiliates" in the "Other expense (income)" section of the Consolidated Statements of Operations, with the related income taxes included in the provision for income taxes. North

7

American Coal Royalty Company, a consolidated entity, provides surface and mineral acquisition and lease maintenance services related to the Company's operations.

All of the unconsolidated subsidiaries are accounted for under the equity method. See Note 6 for further discussion.

Basis of Presentation: These financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") 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. GAAP 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 at March 31, 2018 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the three months endedMarch 31, 2018 and 2017 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, 2017.

The balance sheet at December 31, 2017 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. GAAP for complete financial statements.

Reclassifications: As a result of the reclassification of HBBHC to discontinued operations and the adoption of new accounting standards, certain amounts in the prior period Unaudited Condensed Consolidated Financial Statements have been reclassified to conform to the current period's presentation.

NOTE 2—Recently Issued Accounting Standards

Revenue Recognition: The Company accounts for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers", which NACCO adopted on January 1, 2018, using the modified retrospective method. The adoption of ASC 606 resulted in the establishment of a $2.6 million contract liability and a $2.1 million cumulative effect adjustment to beginning retained earnings (net of tax of $0.5 million) as of January 1, 2018 to reflect the impact of changing the accounting for lease bonus payments received under certain royalty contracts. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period results are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605.

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Nature of Performance Obligations

At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service that is distinct. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

Each mine or mine area has a contract with its respective customer that represents a contract under ASC 606. For its consolidated entities, NACoal’s performance obligations vary by contract and consist of the following:

At MLMC, each MMBtu delivered during the production period is considered a separate performance obligation. Revenue is recognized at the point in time that control of each MMBtu of lignite transfers to the customer. Fluctuations in revenue from period to period generally result from changes in customer demand.

At NAM entities, the management service to oversee the operation of the equipment and delivery of limestone is the performance obligation accounted for as a series. Performance momentarily creates an asset that the customer simultaneously receives and consumes; therefore, control is transferred to the customer over time. Consistent with the conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate. As each month of service is completed, revenue is recognized for the amount of actual costs incurred, plus the management fee and the general and administrative fee (as applicable). Fluctuations in revenue from period to period result from changes in customer demand and variances in reimbursable costs primarily due to increases and decreases in activity levels on individual contracts.

NACoal enters into royalty contracts which grant the right to its customers to explore, develop, produce and sell minerals controlled by the Company. These arrangements result in the transfer of mineral rights to a customer for a period of time;

8

however, no rights to the actual land are granted other than access for purposes of exploration, development, and production. The mineral rights revert back to NACoal at the expiration of the contract.

Under these royalty contracts, granting exclusive right, title, and interest in and to minerals, if any, is the performance obligation. The performance obligation under these contracts represents a series of distinct goods or services whereby each day of access that is provided is distinct. The transaction price consists of a variable sales based royalty and in certain arrangements a fixed component in the form of an up-front lease bonus payment.As the amount of consideration the Company will ultimately be entitled to is entirely susceptible to factors outside its control, the entire amount of variable consideration is constrained at contract inception. The fixed portion of the transaction price will be recognized over the primary term of the contract which is generally five years.

Significant Judgments

The Company’s contracts contain different types of variable consideration including, but not limited to, management fees that adjust based on limestone yards or coal volumes or MMBtu delivered, however, the terms of these variable payments relate specifically to our efforts to satisfy one or more, but not all of, the performance obligations (or to a specific outcome from satisfying the performance obligations), in the contract. Therefore, the Company allocates each variable payment (and subsequent changes to that payment) entirely to the specific performance obligation to which it relates. Management fees as well as general and administrative charges are also adjusted based on changes in specified indices (e.g. CPI) to compensate for general inflation changes. Index adjustments, if applicable, are effective prospectively. Certain contracts include reimbursement of actual costs incurred.

Disaggregation of Revenue

In accordance with ASC 606-10-50, the Company disaggregates revenue from contracts with customers into major goods and service lines and timing of transfer of goods and services. The Company determined that disaggregating revenue into these categories achieves the disclosure objective of depicting how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in the segment information footnote, the Company’s business consists of one operating segment, NACoal.

The following table disaggregates revenue by major sources (in thousands):

	THREE MONTHS ENDED
	MARCH 31
Major Goods/Service Lines	2018		2017 (1)
Consolidated operations - long-term contracts	$	28,023	$	25,201
Royalty	3,177		3,099
Total revenues	$	31,200	$	28,300
Timing of Revenue Recognition
Goods transferred at a point in time	$	17,021	$	16,915
Services transferred over time	14,179		11,385
Total revenues	$	31,200	$	28,300

⁽¹⁾ As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Balances

The opening and closing balances of the Company’s current and long-term contract liability, and receivables are as follows:

	Contract balances
	Accounts Receivable			Contract liability (current)		Contract liability (long-term)
Beginning balance January 1, 2018	$	14,611		$	860	$	1,766
Ending balance March 31, 2018	14,004			860		1,458
Increase (decrease)	$	(607	)	$	—	$	(308	)

9

As described above, NACoal enters into royalty contracts that grant exclusive right, title, and interest in and to minerals. The transaction price consists of a variable sales-based royalty and, in certain arrangements, a fixed component in the form of an up-front lease bonus payment. The timing of the payment of the fixed portion of the transaction price is upfront, however, the performance obligation is satisfied over the primary term of the contract, which is generally five years. Therefore, at the time any such up-front payment is received, a contract liability is recorded which represents deferred revenue. The difference between the opening and closing balance of this contract liability, which is shown above, primarily results from the difference between new lease bonus payments received and amortization of up-front lease bonus payments received in previous periods.

The amount of revenue recognized in the period that was included in the opening contract liability was $0.3 million. This revenue consists of up-front lease bonus payments received under royalty contracts that are recognized over the primary term of the royalty agreement, which is generally five years. The difference between the opening and closing balances of the Company’s accounts receivable and contract liabilities results from the timing difference between the Company’s performance and the customer’s payment. Contracts with payments in arrears are recognized as receivables. The Company expects to recognize an additional $0.7 million in the remainder of 2018, $0.5 million in 2019, $0.4 million in both 2020 and 2021 and $0.3 million in 2022.

The Company has no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

Practical Expedients & Accounting Policy Elections

Remaining performance obligations - The Company has not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or more as the Company recognized revenue at the amount to which it has the right to invoice for goods delivered or services performed.

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement, including when variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a series.

As discussed above, the Company allocates the variable consideration in its contract entirely to each specific performance obligation to which it relates. Therefore, any remaining variable consideration in the transaction price is allocated entirely to wholly unsatisfied performance obligations. As such, the Company has not disclosed the value of unsatisfied performance obligations pursuant to the practical expedient.

Other Accounting Standards Adopted in 2018: In January 2016, the FASB issued Accounting Standard Update ("ASU") No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which NACCO adopted on January 1, 2018. The adoption of this guidance resulted in a $2.7 million reclassification within the Unaudited Condensed Consolidated Statements of Changes in Equity and did not have a material effect on the Company’s financial position, results of operations, cash flows and related disclosures. See Note 5 for further discussion.

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which NACCO adopted on January 1, 2018. The adoption of this guidance resulted in a $2.3 million reclassification within the Unaudited Condensed Consolidated Statements of Changes in Equity and did not have a material effect on the Company’s financial position, results of operations, cash flows and related disclosures.

Accounting Standards Not Yet Adopted: In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, or as of January 1, 2019 for NACCO. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company is currently in the process of evaluating its existing lease portfolio, including accumulating all of the information required to properly account for the leases under the new standard. Additionally, the Company is evaluating the need for a lease management system to assist in the accounting and additional changes to processes and internal controls to meet the standard’s reporting and disclosure requirements. While the Company is currently evaluating how and to what extent ASU 2016-02 will affect the Company's financial position, results of operations and related disclosures, it is not expected to have a material impact on liquidity or debt-covenant compliance. 

10

NOTE 3—Inventories

Inventories are summarized as follows:

	MARCH 31 2018		DECEMBER 31 2017
Coal	$	12,371	$	13,416
Mining supplies	17,744		16,599
Total inventories	$	30,115	$	30,015

NOTE 4—Stockholders' Equity

Stock Repurchase Program: On February 14, 2018, the Company's Board of Directors approved a stock repurchase program ("2018 Stock Repurchase Program") providing for the purchase of up to $25 million of the Company's outstanding Class A Common Stock through December 31, 2019. The timing and amount of any repurchases under the 2018 Stock Repurchase Program are determined at the discretion of the Company's management based on a number of factors, including the availability of capital, other capital allocation alternatives, market conditions for the Company's Class A Common Stock and other legal and contractual restrictions. The 2018 Stock Repurchase Program does not require the Company to acquire any specific number of shares. It may be modified, suspended, extended or terminated by the Company at any time without prior notice and may be executed through open market purchases, privately negotiated transactions or otherwise. All or part of the repurchases under the 2018 Stock Repurchase Program may be implemented under a Rule 10b5-1 trading plan, which would allow repurchases under pre-set terms at times when the Company might otherwise be prevented from doing so.

During the three months ended March 31, 2018, the Company did not repurchase any shares of Class A Common Stock under the 2018 Stock Repurchase Program.

NOTE 5—Fair Value Disclosure

Recurring Fair Value Measurements: The following table presents the Company's assets and liabilities accounted for at fair value on a recurring basis:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	Date		(Level 1)		(Level 2)		(Level 3)
	March 31, 2018
Assets:
Equity securities	$	9,086	$	9,086	$	—	$	—
Interest rate swap agreements	41		—		41		—
	$	9,127	$	9,086	$	41	$	—
	December 31, 2017
Assets:
Equity securities	$	9,166	$	9,166	$	—	$	—
Interest rate swap agreements	42		—		42		—
	$	9,208	$	9,166	$	42	$	—

Bellaire Corporation (“Bellaire”) is a non-operating subsidiary of the Company with legacy liabilities relating to closed mining operations, primarily former Eastern U.S. underground coal mining operations. In connection with Bellaire's normal permit renewal with the Pennsylvania Department of Environmental Protection ("DEP"), Bellaire established a $5.0 million mine water treatment trust (the "Mine Water Treatment Trust") to provide a financial assurance mechanism to assure the long-term treatment of post-mining discharges. Bellaire's Mine Water Treatment Trust invests in equity securities that are reported at fair

11

value based upon quoted market prices in active markets for identical assets; therefore, they are classified as Level 1 within the fair value hierarchy. The Mine Water Treatment Trust has an unrealized pre-tax gain of $4.1 million as of March 31, 2018.

The Company uses significant other observable inputs to value derivative instruments used to hedge interest rate risk; therefore, they are classified within Level 2 of the valuation hierarchy. The fair value for these contracts is determined based on current interest rates.

There were no transfers into or out of Levels 1, 2 or 3 during the three months endedMarch 31, 2018 and 2017.

NOTE 6—Unconsolidated Subsidiaries

NACoal's wholly owned unconsolidated subsidiaries each meet the definition of a variable interest entity. See Note 1 for a discussion of these entities.

The investment in the unconsolidated subsidiaries and related tax positions totaled $18.7 million and $16.3 million at March 31, 2018 and December 31, 2017, respectively. The Company's maximum risk of loss relating to these entities is limited to its invested capital, which was $5.9 million and $5.2 million at March 31, 2018 and December 31, 2017, respectively.

NACoal is a party to certain guarantees related to Coyote Creek. Under certain circumstances of default or termination of Coyote Creek’s Lignite Sales Agreement (“LSA”), NACoal would be obligated for payment of a "make-whole" amount to Coyote Creek’s third-party lenders. The “make-whole” amount is based on the excess, if any, of the discounted value of the remaining scheduled debt payments over the principal amount. In addition, in the event Coyote Creek’s LSA is terminated on or after January 1, 2024 by Coyote Creek’s customers, NACoal is obligated to purchase Coyote Creek’s dragline and rolling stock for the then net book value of those assets. To date, no payments have been required from NACoal since the inception of these guarantees. The Company believes that the likelihood NACoal would be required to perform under the guarantees is remote, and no amounts related to these guarantees have been recorded.

Summarized financial information for the unconsolidated subsidiaries is as follows:

	THREE MONTHS ENDED
	MARCH 31
	2018		2017
Revenues	$	183,046	$	194,174
Gross profit	$	21,144	$	21,997
Income before income taxes	$	16,122	$	15,710

NOTE 7—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 asbestos-related claims 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.  If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of the contingency and, in some circumstances, an estimate of the possible loss. 

These matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of an adverse impact on the Company’s financial position, results of operations and cash flows of the period in which the ruling occurs, or in future periods.

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NOTE 8—Business Segments

Two of the Company’s former segments, Hamilton Beach Brands and Kitchen Collection, were spun-off on September 29, 2017. See Note 1 for a discussion of the Company's industry and the spin-off. There were no changes to the composition of the remaining segments, NACoal and NACCO and Other. NACCO's non-operating segment, NACCO and Other, includes the accounts of the parent company and Bellaire.

Financial information for each of NACCO's reportable segments is presented in the following table:

	THREE MONTHS ENDED
	MARCH 31
	2018			2017
Revenues
NACoal	$	31,200		$	28,300
Total	$	31,200		$	28,300
Operating profit (loss)
NACoal	$	11,282		$	11,326
NACCO and Other	(1,561		)	(1,520		)
Total	$	9,721		$	9,806

NOTE 9—Income Taxes

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (“TCJA”), which significantly revised U.S. tax law. Subsequent to the enactment of the TCJA, the SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides a measurement period of up to one year after the enactment date for companies to finalize the recognition of the income tax effects of the TCJA. As a result of the TCJA and pursuant to SAB 118, the Company provisionally recorded a discrete net tax benefit of $3.1 million during the year ended December 31, 2017 and no adjustments were recorded to that provisional amount during the three months ended March 31, 2018. The ultimate impact of the TCJA may differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions, additional regulatory guidance that may be issued, and the computation of state income taxes as there is uncertainty on conformity to the U.S. federal tax system following the TCJA.

NOTE 10—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.

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 continue beyond September 29, 2018. NACCO received fees of $0.2 million in the first three months of 2018, recorded as a reduction to selling, general and administrative expenses, and expects to receive net aggregate fees of approximately $1.0 million over the term of the TSA from HBBHC.

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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 Unaudited Condensed Consolidated Financial Statements. Discontinued operations includes the following results of HBBHC for the three months ended March 31, 2017:

	THREE MONTHS ENDED
	MARCH 31, 2017
HBBHC Operating Statement Data:
Revenues	$	140,282
Cost of goods sold	105,705
Gross profit	34,577
Operating expenses	37,015
Operating loss	(2,438		)
Interest expense	415
Other income, net	(682		)
Loss before income taxes	(2,171		)
Income tax benefit	(814		)
HBBHC net loss	$	(1,357	)
NACCO discontinued operations income tax expense adjustment	1,885
NACCO discontinued operations	$	(3,242	)

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Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations

(Dollars in thousands, except as noted and per share data)

Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations and are subject to various uncertainties and changes in circumstances. Important factors that could cause actual results to differ materially from those described in these forward-looking statements are set forth below under the heading “Forward-Looking Statements."

Management's Discussion and Analysis of Financial Condition and Results of Operations includes NACCO Industries, Inc. (the “parent company” or “NACCO”) and its wholly owned subsidiaries (collectively, the “Company”). NACCO is the public holding company for The North American Coal Corporation.  The North American Coal Corporation and its affiliated companies (collectively, “NACoal”) operate surface mines that supply coal primarily to power generation companies under long-term contracts, and provide other value-added services to natural resource companies.  In addition, its North American Mining ("NAM") business operates and maintains draglines and other equipment under contracts with sellers of aggregates.  NACoal’s service-based business model aligns its operating goals with customers’ objectives. 

Coal is surface mined from NACoal's mines in North Dakota, Texas, Mississippi, Louisiana and on the Navajo Nation in New Mexico. NACoal has the following operating coal mining subsidiaries: Bisti, Caddo Creek Resources Company, LLC (“Caddo Creek”), Camino Real Fuels, LLC (“Camino Real”), The Coteau Properties Company (“Coteau”), Coyote Creek Mining Company, LLC (“Coyote Creek”), Demery Resources Company, LLC (“Demery”), The Falkirk Mining Company (“Falkirk”), Mississippi Lignite Mining Company (“MLMC”) and The Sabine Mining Company (“Sabine”). Liberty Fuels Company, LLC ("Liberty") ceased all mining and delivery of lignite in 2017 and commenced mine reclamation in 2018.

NAM provides value-added services for independently owned limestone quarries and is reimbursed by its customers based on actual costs plus a management fee per unit of limestone delivered. The financial results for NAM are included in the consolidated mining operations or unconsolidated mining operations based on each entity's structure.

NACoal also provides coal handling, processing and drying services for a number of customers. For example, NoDak Energy Services, LLC ("NoDak") operates and maintains a coal processing facility for a customer's power plant. North American Coal Royalty Company provides surface and mineral acquisition and lease maintenance services related to the Company's operations.

NACCO and Other includes the parent company operations and Bellaire Corporation ("Bellaire"), a non-operating subsidiary of NACCO. Although Bellaire’s operations are immaterial, it has long-term liabilities related to closed mines, primarily from former Eastern U.S. underground coal mining activities.

On September 29, 2017, the Company spun-off Hamilton Beach Brands Holding Company ("HBBHC"), a former wholly owned subsidiary. As a result of the spin-off, NACCO stockholders received one share of HBBHC Class A common stock and one share of HBBHC Class B common stock for each share of NACCO Class A or Class B common stock owned on the record date for the spin-off. The financial position, results of operations and cash flows of HBBHC are reflected as discontinued operations for all periods presented through the date of the spin-off.   

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company has updated its revenue recognition policy in connection with the adoption of ASC 606 as further described in Note 2 to the accompanying Unaudited Condensed Consolidated Financial Statements.  Please also refer to the discussion of the Company's Critical Accounting Policies and Estimates as disclosed on pages 28 through 31 in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The Company's remaining Critical Accounting Policies and Estimates have not materially changed since December 31, 2017.

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CONSOLIDATED FINANCIAL SUMMARY

The results of operations for NACCO were as follows for the three months endedMarch 31:

	THREE MONTHS
	2018			2017
NACoal operating profit (a)	$	11,282		$	11,326
NACCO and Other operating loss (a)	(1,561		)	(1,520		)
Operating profit (a)	9,721			9,806
Interest expense	646			932
Income from other unconsolidated affiliates	(315		)	(308		)
Closed mine obligations	379			383
Other, net, including interest income	31			(20		)
Other expense, net	741			987
Income before income tax provision	8,980			8,819
Income tax provision	804			599
Income from continuing operations, net of tax	$	8,176		$	8,220
Discontinued operations, net of tax	—			(3,242		)
Net income	$	8,176		$	4,978
Effective income tax rate from continuing operations	9.0		%	6.8		%

^(a) All of NACCO's Revenues are attributable to NACoal. As a result, the Company's results of operations, including Revenues, Operating profit and Other expense, net, for NACoal and NACCO and Other are discussed below in "Segment Results." Amounts below income before income tax provision are analyzed on a consolidated basis.

Income Taxes

The Company evaluates and updates its estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of actual earnings compared to projections of earnings between entities that benefit from percentage depletion and those that do not, the effective tax rate may vary quarterly. The quarterly income tax provision is generally comprised of tax expense on income or benefit on loss at the most recent estimated annual effective income tax rate, adjusted for the effect of discrete items. See Note 9 to the Unaudited Condensed Consolidated Financial Statements for further discussion of the Company's income taxes.

Liquidity and Capital Resources of NACCO

Financing arrangements are obtained and maintained at the subsidiary level. NACCO has not guaranteed any borrowings of its subsidiaries. The credit agreement at NACoal allows for the payment to NACCO of dividends and advances under certain circumstances as described below under "The North American Coal Corporation - Liquidity and Capital Resources - Financing Activities". Dividends (to the extent permitted by NACoal's credit agreement) and management fees are the primary sources of cash for NACCO and enable the Company to pay dividends to stockholders.

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Capital Structure

NACCO's consolidated capital structure is presented below:

	MARCH 31 2018			DECEMBER 31 2017			Change
Cash and cash equivalents	$	83,403		$	101,600		$	(18,197	)
Other net tangible assets	170,264			153,791			16,473
Intangible assets, net	42,870			43,554			(684		)
Net assets	296,537			298,945			(2,408		)
Total debt	(50,768		)	(58,146		)	7,378
Bellaire closed mine obligations	(20,887		)	(21,351		)	464
Total equity	$	224,882		$	219,448		$	5,434
Debt to total capitalization	18%			21%			(3)%

The components of change are discussed below in "Segment Results."

NACCO Industries, Inc. Consolidated Outlook

In 2018, NACCO expects consolidated income before income tax from continuing operations to decrease modestly compared with 2017 and expects an effective income tax rate in the range of 9% - 12%. The effective income tax rate is affected by items such as percentage depletion and the mix of earnings, including losses at entities with higher effective income tax rates.

Income before income tax in 2017 included $5.1 million of gains on sales of assets, mostly realized at Centennial. Excluding these gains, NACCO expects 2018 income before income tax to increase compared with the prior year primarily as a result of lower operating expenses, improved income at the unconsolidated operations and reduced interest expense. These improvements are expected to be partially offset by an anticipated substantial decrease in royalty and other income and a decrease in income at MLMC. Royalties on oil, gas and coal extracted by third parties are subject to changes in market forces and the activities of third parties, making it difficult to forecast whether recent high levels of income will continue.

Income from the unconsolidated operations is expected to be modestly higher in 2018 due in part to higher compensation at Liberty and increases at NAM's unconsolidated limestone operations as a result of new contracts signed in 2017 and increased customer demand.

Bisti, one of NACoal's unconsolidated operations, operates the Navajo Mine, which supplies coal to the Four Corners Generating Station.  The owners of the Four Corners Generating Station are in the process of installing additional environmental controls at the plant. This installation limited the plant’s ability to take coal deliveries in the first quarter of 2018 and is expected to continue to limit deliveries in the second quarter, resulting in a reduction in coal deliveries and income in the first half of 2018 compared with 2017. Despite the anticipated lower deliveries and earnings in the first half of the year, principally in the first quarter, Bisti's full-year 2018 income is expected to be comparable to 2017, as an anticipated increase in Bisti's income in the second half of 2018 is expected to offset the decrease in the first half of the year. Once installation of this equipment is complete, this plant should enjoy the benefits of an improved environmental profile. Production at Bisti is anticipated to be 5 million to 6 million tons of coal per year when the plant is operating at expected levels, which is currently anticipated to occur in 2019.     

On June 28, 2017, Southern Company and its subsidiary, Mississippi Power, suspended operations involving the coal gasifier portion of the Kemper County energy facility. Liberty, an unconsolidated operation, was the sole supplier of coal to fuel the gasifier under its contract with Mississippi Power. On February 8, 2018, Mississippi Power instructed Liberty to permanently cease all mining and delivery of lignite and to commence mine reclamation. The terms of the contract specify that Mississippi Power is responsible for all mine closure costs. Under the contract, Liberty is specified as the contractor to complete final mine closure and receives compensation for these services. The customer’s decision to close the mine does not negatively impact the 2018 earnings outlook for Liberty, but it does unfavorably affect NACoal’s long-term earnings potential from this mine.

At the consolidated operations, MLMC's pre-tax income in the first half of 2018 is expected to decrease substantially from the first half of 2017, primarily as a result of an increase in the cost per ton delivered. In general, cost per ton delivered is lowest when the power plant requires a consistently high level of coal deliveries, primarily because costs are spread over more tons. Historically, periods of reduced or fluctuating deliveries, such as during planned or unplanned power plant outages or periods of fluctuating demand for electricity generated by the plant, have adversely affected MLMC's tons delivered, resulting in an

17

increase in cost per ton delivered and reduced profitability. Pre-tax income in the second half of 2018 is expected to increase compared with the second half of 2017, but is not expected to fully offset the decrease from the first half of 2018. As a result, MLMC's full-year income is expected to decrease in 2018 compared with 2017. Customer demand in the second half of 2018 is expected to return to higher levels due to reduced plant outage days. If customer demand remains low at MLMC, it could continue to unfavorably affect NACoal's 2018 and future earnings significantly.

Centennial's pre-tax loss in 2018 is expected to be comparable to its 2017 pre-tax loss excluding gains on sales of assets of $3.1 million. Centennial will continue to evaluate strategies to optimize cash flow, including the continued assessment of a range of strategies for its remaining Alabama mineral reserves, including holding reserves with substantial unmined coal tons for sale or contract mining when conditions permit. Cash expenditures related to mine reclamation will continue until reclamation is complete, or ownership of, or responsibility for, the remaining mines is transferred.

Cash flow before financing activities is expected to decrease substantially in 2018 compared with 2017. Capital expenditures are expected to be up to $32 million in 2018, of which $2.4 million was expended in the first quarter. Planned expenditures at MLMC and NAM include expenditures for new and replacement equipment and land required for future mining. However, the timing of spending for some items could shift to later periods as capital expenditures can vary significantly in any given year based on the type of asset needed and its relative cost.

While the current regulatory environment for development of new coal projects has improved, continued low natural gas prices and growth in renewable energy sources, such as solar and wind, could unfavorably affect the amount of electricity generation attributable to coal-fired power plants over the longer term. NACoal continues to seek opportunities for new coal mining projects, although future opportunities are likely to be very limited. In addition, NACoal continues to pursue additional non-coal mining opportunities, principally related to its NAM business and elsewhere where it might provide value-added services.

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SEGMENT RESULTS

THE NORTH AMERICAN COAL CORPORATION

FINANCIAL REVIEW

Tons of coal delivered by NACoal's operating mines were as follows for the three months endedMarch 31 (in millions):

	THREE MONTHS
	2018	2017
Coteau	3.8	3.8
Falkirk	2.1	1.7
Sabine	1.1	1.0
Bisti	0.3	1.3
Camino Real	0.5	0.5
Coyote Creek	0.6	0.5
Other	0.1	0.4
Unconsolidated operations	8.5	9.2
MLMC	0.7	0.7
Total tons delivered	9.2	9.9

Cubic yards of limestone delivered by NAM were as follows for the three months endedMarch 31 (in millions):

	THREE MONTHS
	2018	2017
Unconsolidated operations	1.5	0.2
Consolidated operations	7.8	7.6
Total yards delivered	9.3	7.8

The results of operations for NACoal were as follows for the three months endedMarch 31:

	THREE MONTHS
	2018			2017
Revenue - consolidated operations	$	28,023		$	25,201
Revenue - royalty	3,177			3,099
Total revenues	31,200			28,300
Cost of sales - consolidated operations	25,360			23,184
Cost of sales - royalty	363			524
Total cost of sales	25,723			23,708
Gross profit	5,477			4,592
Earnings of unconsolidated operations(a)	15,555			14,955
Selling, general and administrative expenses	9,118			8,034
Amortization of intangible assets	684			587
(Gain) loss on sale of assets	(52		)	(400		)
Operating profit	11,282			11,326
Interest expense	646			932
Other (income) expense, including income from other unconsolidated affiliates	(282		)	(243		)
Income before income tax provision	$	10,918		$	10,637

^(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of the Company's unconsolidated subsidiaries, including summarized financial information.

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First Quarter of 2018 Compared with First Quarter of 2017

The following table identifies the components of change in revenues for the first quarter of 2018 compared with the first quarter of 2017:

	Revenues
2017	$	28,300
Increase (decrease) from:
Consolidated operations	2,787
Royalty	113
2018	$	31,200

Revenues increased $2.9 million in the first quarter of 2018 compared with the first quarter of 2017 primarily due to higher reimbursed costs at NAM's consolidated operations.

The following table identifies the components of change in operating profit for the first quarter of 2018 compared with the first quarter of 2017:

	Operating Profit
2017	$	11,326
Centennial, excluding the net gain on sales of assets	1,379
Earnings of unconsolidated operations	600
Royalty	234
Selling, general and administrative expenses	(1,084		)
Consolidated operations, excluding Centennial	(826		)
Net gain on sale of assets, primarily Centennial	(347		)
2018	$	11,282

NACoal's operating profit in the first quarter of 2018 was comparable to the first quarter of 2017 as improved results at Centennial were offset by increased selling, general and administrative expenses. Centennial's operating profit increased primarily due to a $1.0 million revision of estimated cash flows for Centennial's asset retirement obligation. The increase in selling, general and administrative expenses was due to higher employee-related expenses, additional business development costs and increased professional fees.

Other changes in operating profit include a decrease in earnings at the consolidated operations, principally MLMC due to an increase in cost per ton delivered. This decrease was partially offset by an increase in earnings of unconsolidated operations mainly due to an increase in limestone deliveries at NAM’s unconsolidated operations, higher compensation at Liberty during the mine reclamation period despite the customer's decision to cease deliveries in the second half of 2017 and moderately increased earnings at other unconsolidated operations.  These improved earnings were partly offset by a decrease in results at Bisti due to fewer tons delivered. 

Income before income tax provision increased primarily due to a $0.3 million decrease in interest expense attributable to lower average borrowings under NACoal's revolving credit facility in the first quarter of 2018 compared with 2017.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

The following tables detail NACoal's changes in cash flow for the three months endedMarch 31:

	2018			2017			Change
Operating activities:
Net cash provided by (used for) operating activities	2,468			(11,361		)	13,829
Investing activities:
Expenditures for property, plant and equipment	(2,410		)	(3,421		)	1,011
Other	343			789			(446		)
Net cash used for investing activities	(2,067		)	(2,632		)	565
Cash flow before financing activities	$	401		$	(13,993	)	$	14,394

The change in net cash provided by (used for) operating activities was primarily the result of a favorable working capital change during the first three months of 2018 compared with the first three months of 2017. The change in working capital was mainly the result of a significant increase in accounts receivable due to timing during the first three months of 2017 compared with the first three months of 2018.

The change in net cash used for investing activities was primarily attributable to the decrease in expenditures for property, plant and equipment at MLMC.

	2018			2017		Change
Financing activities:
Net reductions to long-term debt and revolving credit agreements	$	(6,936	)	$	3,029	$	(9,965	)
Net cash (used for) provided by financing activities	$	(6,936	)	$	3,029	$	(9,965	)

The change in net cash (used for) provided by financing activities was primarily from a reduction in borrowings on NACoal's revolving credit facility during the first three months of 2018 when compared with the first three months of 2017.

Financing Activities

NACoal has an unsecured revolving line of credit of up to $150.0 million (the “NACoal Facility”) that expires in August 2022. Borrowings outstanding under the NACoal Facility were $42.0 million at March 31, 2018. At March 31, 2018, the excess availability under the NACoal Facility was $106.6 million, which reflects a reduction for outstanding letters of credit of $1.4 million.

The NACoal Facility has performance-based pricing, which sets interest rates based upon achieving various levels of debt to EBITDA ratios, as defined in the NACoal Facility. Borrowings bear interest at a floating rate plus a margin based on the level of debt to EBITDA ratio achieved. The applicable margins, effective March 31, 2018, for base rate and LIBOR loans were 1.00% and 2.00%, respectively. The NACoal Facility has a commitment fee which is based upon achieving various levels of debt to EBITDA ratios. The commitment fee was 0.35% on the unused commitment at March 31, 2018. The floating rate of interest applicable to the NACoal Facility at March 31, 2018 was 3.39% including the floating rate margin and the effect of an interest rate swap agreement.

The NACoal Facility contains restrictive covenants, which require, among other things, NACoal to maintain a maximum debt to EBITDA ratio of 3.00 to 1.00 and an interest coverage ratio of not less than 4.00 to 1.00. The NACoal Facility provides the ability to make loans, dividends and advances to NACCO, with some restrictions based on maintaining a maximum debt to EBITDA ratio of 2.00 to 1.00, or if greater than 2.00 to 1.00, a Fixed Charge Coverage Ratio of 1.10 to 1.00, in conjunction with maintaining unused availability thresholds of borrowing capacity, as defined in the NACoal Facility, of $15.0 million. At March 31, 2018, NACoal was in compliance with all financial covenants in the NACoal Facility.

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NACoal believes funds available from cash on hand at the Company, the NACoal Facility and operating cash flows will provide sufficient liquidity to meet its operating needs and commitments arising during the next twelve months and until the expiration of the NACoal Facility.

Contractual Obligations, Contingent Liabilities and Commitments

Since December 31, 2017, there have been no significant changes in the total amount of NACoal's contractual obligations, contingent liabilities or commercial commitments, or the timing of cash flows in accordance with those obligations as reported on page 39 in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of certain guarantees related to Coyote Creek.

Capital Expenditures

Expenditures for property, plant and equipment were $2.4 million during the first three months of 2018. NACoal estimates that its capital expenditures for the remainder of 2018 could be up to $29.6 million for new and replacement equipment and land required for future mining. These expenditures are expected to be funded from internally generated funds and bank borrowings.

Capital Structure

NACoal's capital structure is presented below:

	MARCH 31 2018			DECEMBER 31 2017			Change
Cash and cash equivalents	$	146		$	6,681		$	(6,535	)
Other net tangible assets	156,706			149,085			7,621
Coal supply agreements, net	42,870			43,554			(684		)
Net assets	199,722			199,320			402
Total debt	(50,768		)	(58,146		)	7,378
Total equity	$	148,954		$	141,174		$	7,780
Debt to total capitalization	25%			29%			(4)%

The increase in net assets was due to the change in other net tangible assets, which was primarily the result of a decrease in accrued payroll, partially offset by the change in cash and cash equivalents from a reduction in borrowings on NACoal's revolving credit facility during the first three months of 2018.

NACCO AND OTHER

FINANCIAL REVIEW

Operating Results

The results of operations at NACCO and Other were as follows for the three months endedMarch 31:

	THREE MONTHS
	2018			2017
Revenues	$	—		$	—
Operating loss	$	(1,561	)	$	(1,520	)
Other expense	$	377		$	298
Loss before income tax provision (benefit)	$	(1,938	)	$	(1,818	)

21

First Quarter of 2018 Compared with First Quarter of 2017

NACCO and Other's operating loss in the first quarter of 2018 was comparable to the first quarter of 2017 as a reduction in management fees charged to the subsidiaries was partially offset by lower employee-related expenses. The management fees charged to NACoal represent an allocation of corporate overhead of the parent company. The first quarter of 2017 includes $1.0 million of management fees related to HBBHC.

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 will provide 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 continue beyond September 29, 2018. NACCO received fees of $0.2 million in the first three months of 2018, recorded as a reduction to selling, general and administrative expenses, and expects to receive net aggregate fees of approximately $1.0 million over the term of the TSA from HBBHC. Upon expiration of the TSA, NACCO will no longer receive fees or incur expenses related to providing services to HBBHC.

Contractual Obligations, Contingent Liabilities and Commitments

Since December 31, 2017, there have been no significant changes in the total amount of NACCO and Other contractual obligations, contingent liabilities or commercial commitments, or the timing of cash flows in accordance with those obligations as reported on page 43 in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.

FORWARD-LOOKING STATEMENTS

The statements contained in this Form 10-Q that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) changes in tax laws or regulatory requirements, including changes in mining or power plant emission regulations and health, safety or environmental legislation, (2) changes in costs related to geological conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (3) regulatory actions, changes in mining permit requirements or delays in obtaining mining permits that could affect deliveries to customers, (4) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or limestone requirements, (5) weather or equipment problems that could affect deliveries to customers, (6) changes in the power industry that would affect demand for NACoal's reserves, (7) changes in the costs to reclaim NACoal mining areas, (8) costs to pursue and develop new mining and value-added service opportunities, (9) changes to or termination of a long-term mining contract, or a customer default under a contract, (10) delays or reductions in coal deliveries at NACoal's mines, (11) increased competition, including consolidation within the industry, and (12) the possibility that the impact of the U.S. Tax Cuts and Jobs Act could be less favorable than current estimates.

22

Item 3. Quantitative and Qualitative Disclosures About Market Risk

INTEREST RATE RISK

The Company entered into certain financing arrangements that require interest payments based on floating interest rates. As such, the Company's financial results are subject to changes in the market rate of interest. There is an inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and business financing requirements. To reduce the exposure to changes in the market rate of interest, NACoal has entered into interest rate swap agreements for its floating rate financing arrangements. The Company does not enter into interest rate swap agreements for trading purposes. Terms of the interest rate swap agreements provide for the subsidiaries to receive a variable interest rate and pay a fixed interest rate.

The fair value of the Company's interest rate swap agreements was a net asset of less than $0.1 million at March 31, 2018. A hypothetical 10% change in interest rates would not cause a material change in the fair value of the interest rate swap agreements at March 31, 2018 and, assuming no changes in the Company's financial structure as it stands, would not have a material effect on annual interest expense.

COMMODITY PRICE RISK

The Company uses certain commodities, including steel and diesel fuel, in the normal course of its operations. As such, the cost of operations is subject to variability as the market for these commodities changes. The Company monitors this risk and utilizes forward purchase contracts to manage a portion of NACoal's exposure related to diesel fuel volatility. There were no material changes in the Company's commodity price risk during the first quarter of 2018.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures:  An evaluation was carried out under the supervision and with the participation of the Company's management, including the principal executive officer and the principal financial officer, of the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, these officers have concluded that the Company's disclosure controls and procedures are effective.

Changes in internal control over financial reporting: During the first quarter of 2018, there have been no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

23

PART II

OTHER INFORMATION

Item 1Legal Proceedings

None.

Item 1ARisk Factors

No material changes to the risk factors from the Company's Annual Report on Form 10-K for the year ended December 31, 2017. 

Item 2Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3Defaults Upon Senior Securities

None.

Item 4Mine Safety Disclosures

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 filed with this Quarterly Report on Form 10-Q for the period ended March 31, 2018.

Item 5Other Information

None.

Item 6Exhibits

Exhibit
Number*	Description of Exhibits
31(i)(1)	Certification of J.C. Butler, Jr. pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act
31(i)(2)	Certification of Elizabeth I. Loveman pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act
32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by J.C. Butler, Jr. and Elizabeth I. Loveman
95	Mine Safety Disclosure Exhibit
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*    Numbered in accordance with Item 601 of Regulation S-K.

24

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NACCO Industries, Inc. (Registrant)
Date:	May 2, 2018	/s/ Elizabeth I. Loveman
		Elizabeth I. Loveman
		Vice President and Controller (principal financial and accounting officer)

25

EX-31.1

Exhibit 31(i)(1)

Certifications

I, J.C. Butler, Jr., certify that:

1. I have reviewed this quarterlyreport on Form 10-Q of NACCO Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 2, 2018	/s/ J.C. Butler, Jr.
		J.C. Butler, Jr.
		President and Chief Executive Officer (principal executive officer)

EX-31.2

Exhibit 31(i)(2)

Certifications

I, Elizabeth I. Loveman, certify that:

1. I have reviewed this quarterlyreport on Form 10-Q of NACCO Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 2, 2018	/s/ Elizabeth I. Loveman
		Elizabeth I. Loveman
		Vice President and Controller (principal financial officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of NACCO Industries, Inc. (the "Company") on Form 10-Q for the quarter ended March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date:	May 2, 2018	/s/ J.C. Butler, Jr.
		J.C. Butler, Jr.
		President and Chief Executive Officer (principal executive officer)

Date:	May 2, 2018	/s/ Elizabeth I. Loveman
		Elizabeth I. Loveman
		Vice President and Controller (principal financial officer)

EX-95

Exhibit 95

MINE SAFETY DISCLOSURES

NACCO Industries, Inc. and its wholly owned subsidiaries (the “Company”) believes that The North American Coal Corporation and its affiliated coal companies (collectively, “NACoal”) is an industry leader in safety. NACoal has health and safety programs in place that include extensive employee training, accident prevention, workplace inspection, emergency response, accident investigation, regulatory compliance and program auditing. The objectives for NACoal's programs are to eliminate workplace incidents, comply with all mining-related regulations and provide support for both regulators and the industry to improve mine safety.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, each operator of a coal or other mine is required to include certain mine safety results in its periodic reports filed with the Securities and Exchange Commission. The operation of NACoal's mines is subject to regulation by the Federal Mine Safety and Health Administration ("MSHA") under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"). MSHA inspects NACoal's mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. The Company has presented information below regarding certain mining safety and health matters for NACoal's mining operations for the quarter ended March 31, 2018. In evaluating this information, consideration should be given to factors such as: (i) the number of citations and orders will vary depending on the size of the mine, (ii) the number of citations issued will vary from inspector to inspector and from mine to mine, and (iii) citations and orders can be contested and appealed, and in that process, are often reduced in severity and amount, and are sometimes vacated.

During the quarter ended March 31, 2018, neither NACoal's current mining operations nor Bellaire's closed mines: (i) were assessed any Mine Act section 104(b) orders for alleged failure to totally abate the subject matter of a Mine Act section 104(a) citation within the period specified in the citation; (ii) were assessed any Mine Act section 104(d) citations or orders for an alleged unwarrantable failure (i.e., aggravated conduct constituting more than ordinary negligence) to comply with a mining safety standard or regulation; (iii) were assessed any Mine Act section 110(b)(2) penalties for failure to correct the subject matter of a Mine Act section 104(a) citation within the specified time period, which failure was deemed flagrant (i.e., reckless or repeated failure to make reasonable efforts to eliminate a known violation that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury); (iv) received any Mine Act section 107(a) imminent danger orders to immediately remove miners; or (v) received any MSHA written notices under Mine Act section 104(e) of a pattern of violation of mandatory health or safety standards or of the potential to have such a pattern. In addition, there were no mining-related fatalities at NACoal's mining operations or Bellaire's closed mines during the quarter ended March 31, 2018.

The following table sets forth the total number of specific citations and orders, the total dollar value of the proposed civil penalty assessments that were issued by MSHA, the total number of legal actions initiated and resolved before the Federal Mine Safety and Health Review Commission ("FMSHRC") during the quarter ended March 31, 2018, and the total number of legal actions pending before the FMSHRC at March 31, 2018, pursuant to the Mine Act, by individual mine at NACoal:

Name of Mine or Quarry (1)	Mine Act Section 104 Significant & Substantial Citations (2)	Total Dollar Value of Proposed MSHA Assessment		Number of Legal Actions Initiated before the FMSHRC for the quarter ended at March 31, 2018	Number of Legal Actions Resolved before the FMSHRC for the quarter ended at March 31, 2018	Number of Legal Actions Pending before the FMSHRC at March 31, 2018 (3)
Coteau (Freedom Mine)	—	$	364	—	—	—
Falkirk (Falkirk Mine)	—	—		—	—	—
Sabine (South Hallsville No. 1 Mine)	—	—		1	—	—
Demery (Five Forks Mine)	—	—		—	—	—
Caddo Creek (Marshall Mine)	—	—		—	—	—
Camino Real (Eagle Pass Mine)	—	—		—	—	—
Liberty (Liberty Mine)	—	—		—	—	—
Coyote Creek (Coyote Creek Mine)	—	—		—	—	—
Bisti Fuels (Navajo Mine)	—	128		2	—	2
MLMC (Red Hills Mine)	—	—		—	—	—
North American Mining Operations:	—	—		—	—	—
Card Sound Quarry	—	—		—	—	—
White Rock Quarry - North	—	118		—	—	—
White Rock Quarry - South	—	—		—	—	—
Krome Quarry	—	—		—	—	—
Alico Quarry	—	—		—	—	—
FEC Quarry	—	—		—	—	—
SCL Quarry	—	—		—	—	—
Central State Aggregates Quarry	—	—		—	—	—
Mid Coast Aggregates Quarry	—	336		—	—	—
West Florida Aggregates Quarry	—	—		—	—	—
St. Catherine Quarry	—	—		—	—	—
Center Hill Quarry	—	—		—	—	—
Inglis Quarry	—	—		—	—	—
Corkscrew Quarry	—	—		—	—	—
Palm Beach Aggregates Quarry
Total	—	$	946	3	—	2

(1) Bellaire's closed mines are not included in the table above and did not receive any of the indicated citations.

(2) Mine Act section 104(a) significant and substantial citations are for alleged violations of a mining safety standard or regulation where there exists a reasonable likelihood that the hazard contributed to or will result in an injury or illness of a reasonably serious nature.

(3) The pending legal actions at Bisti Fuels are contests of citations received.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 27, 2018
Entity Information [Line Items]
Entity Registrant Name	NACCO INDUSTRIES INC
Entity Central Index Key	0000789933
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Amendment Flag	false
Shares Outstanding Class A
Entity Information [Line Items]
Shares Outstanding (in shares)		5,367,858
Shares Outstanding Class B
Entity Information [Line Items]
Shares Outstanding (in shares)		1,569,546

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 83,403	$ 101,600
Accounts receivable, net	14,004	14,611
Accounts receivable from affiliates	21,693	19,919
Inventories, net	30,115	30,015
Prepaid expenses and other	13,074	10,843
Total current assets	162,289	176,988
Property, plant and equipment, net	119,811	120,068
Intangibles, net	42,870	43,554
Deferred income taxes	4,465	5,962
Investments in unconsolidated subsidiaries	18,679	16,335
Deferred costs	3,555	3,582
Other non-current assets	22,507	23,063
Total assets	374,176	389,552
LIABILITIES AND EQUITY
Accounts payable	8,174	7,575
Accounts payable to affiliates	237	1,925
Revolving credit agreements	15,000	15,000
Current maturities of long-term debt	1,081	1,125
Accrued payroll	6,010	17,204
Asset retirement obligations	3,092	3,092
Other current liabilities	7,245	8,055
Total current liabilities	40,839	53,976
Long-term debt	34,687	42,021
Asset retirement obligations	35,907	37,005
Pension and other postretirement obligations	11,293	11,827
Deferred compensation	12,939	12,939
Other long-term liabilities	13,629	12,336
Total liabilities	149,294	170,104
Common stock:
Capital in excess of par value	4,537	4,447
Retained earnings	226,513	216,490
Accumulated other comprehensive loss	(13,107)	(8,341)
Total stockholders' equity	224,882	219,448
Total liabilities and equity	374,176	389,552
Shares Outstanding Class A
Common stock:
Common stock	5,369	5,282
Shares Outstanding Class B
Common stock:
Common stock	$ 1,570	$ 1,570

XML

Unaudited Condensed Consolidated Balance Sheets (Parenthetical)	Mar. 31, 2018 $ / shares shares	Dec. 31, 2017 $ / shares shares
Shares Outstanding Class A
Common stock, par value (in dollars per share) | $ / shares	$ 1	$ 1
Common stock, shares outstanding (in shares) | shares	5,369,326	5,282,106
Shares Outstanding Class B
Common stock, par value (in dollars per share) | $ / shares	$ 1	$ 1
Common stock, convertible conversion ratio	1	1
Common stock, shares outstanding (in shares) | shares	1,569,746	1,570,146

XML

Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenues	$ 31,200	$ 28,300
Cost of sales	25,776	23,742
Gross profit	5,424	4,558
Earnings of unconsolidated operations	15,555	14,955
Operating expenses
Selling, general and administrative expenses	10,627	9,520
Amortization of intangible assets	684	587
Gain on sale of assets	(53)	(400)
Operating expenses	11,258	9,707
Operating profit	9,721	9,806
Other expense (income)
Interest expense	646	932
Income from other unconsolidated affiliates	(315)	(308)
Closed mine obligations	379	383
Other, net, including interest income	31	(20)
Other (income) expense	741	987
Income from continuing operations before income tax provision	8,980	8,819
Income tax provision from continuing operations	804	599
Income from continuing operations	8,176	8,220
Discontinued operations, net of tax expense of $1,071 in the three months ended March 31, 2017	0	(3,242)
Net income	$ 8,176	$ 4,978
Basic earnings (loss) per share:
Continuing operations (in dollars per share)	$ 1.19	$ 1.21
Discontinued operations (in dollars per share)	0.00	(0.48)
Basic earnings per share (in dollars per share)	1.19	0.73
Diluted earnings (loss) per share:
Continuing operations (in dollars per share)	1.18	1.20
Discontinued operations (in dollars per share)	0.00	(0.47)
Diluted earnings per share (in dollars per share)	1.18	0.73
Dividends per share (in dollars per share)	$ 0.1650	$ 0.2675
Basic weighted average shares outstanding (in shares)	6,894	6,806
Diluted weighted average shares outstanding (in shares)	6,939	6,843

XML

Unaudited Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Tax effect of discontinued operations	$ 0	$ 1,071

XML

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 8,176	$ 4,978
Foreign currency translation adjustment	0	1,071
Deferred gain on equity securities	0	226
Current period cash flow hedging activity, net of $86 tax benefit in the three months ended March 31, 2017	0	(239)
Reclassification of hedging activities into earnings, net of $12 tax benefit in the three months ended March 31, 2017	0	6
Reclassification of pension and postretirement adjustments into earnings, net of $35 and $50 tax benefit in the three months ended March 31, 2018 and March 31, 2017, respectively	140	176
Total other comprehensive income	140	1,240
Comprehensive income	$ 8,316	$ 6,218

XML

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Current period cash flow hedging activity, tax expense (benefit)	$ 0	$ (86)
Reclassification of hedging activities into earnings, tax expense (benefit)	0	(12)
Reclassification of pension and postretirement adjustments into earnings, tax expense (benefit)	$ (35)	$ (50)

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net income	$ 8,176	$ 4,978
Loss from discontinued operations	0	(3,242)
Income from continuing operations	8,176	8,220
Adjustments to reconcile income from continuing operations to net cash used for operating activities:
Depreciation, depletion and amortization	3,397	3,180
Amortization of deferred financing fees	84	93
Deferred income taxes	1,497	987
Other	(3,426)	(6,577)
Working capital changes:
Affiliates receivable/payable	(96)	2,679
Accounts receivable	(321)	(12,852)
Inventories	(100)	(339)
Other current assets	(2,119)	(2,561)
Accounts payable	(1,135)	614
Income taxes receivable/payable	(1,124)	232
Other current liabilities	(12,862)	(13,719)
Net cash used for operating activities of continuing operations	(8,029)	(20,043)
Net cash used for operating activities of discontinued operations	0	(22,161)
Net cash used for operating activities	(8,029)	(42,204)
Investing activities
Expenditures for property, plant and equipment	(2,452)	(3,425)
Proceeds from the sale of property, plant and equipment	55	611
Other	309	198
Net cash used for investing activities of continuing operations	(2,088)	(2,616)
Net cash used for investing activities of discontinued operations	0	(1,220)
Net cash used for investing activities	(2,088)	(3,836)
Financing activities
Additions to long-term debt	1,269	3,461
Reductions of long-term debt	(8,205)	(432)
Cash dividends paid	(1,144)	(1,827)
Cash dividends received from Hamilton Beach Brands Holding Co. (See Note 10)	0	3,000
Net cash (used for) provided by financing activities of continuing operations	(8,080)	4,202
Net cash provided by financing activities of discontinued operations	0	17,263
Net cash (used for) provided by financing activities	(8,080)	21,465
Effect of exchange rate changes on cash of discontinued operations	0	353
Cash and cash equivalents
Total decrease for the period	(18,197)	(24,222)
Net change related to discontinued operations	0	5,765
Balance at the beginning of the period	101,600	69,308
Balance at the end of the period	$ 83,403	$ 50,851

XML

Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Total Stockholders' Equity	Common Stock Shares Outstanding Class A	Common Stock Shares Outstanding Class B	Capital in Excess of Par Value	Retained Earnings	Deferred Gain (Loss) on Equity Securities	Pension and Postretirement Plan Adjustment
Balance, beginning of period at Dec. 31, 2017		$ 219,448	$ 5,282	$ 1,570	$ 4,447	$ 216,490	$ 2,727	$ (11,068)
Balance, beginning of period at Dec. 31, 2017		219,448	5,282	1,570	4,447	216,490	2,727	(11,068)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
ASU 2018-02 reclassification		160				2,339		(2,179)
Stock-based compensation		177	87		90
Net income	$ 8,176	8,176				8,176
Cash dividends on Class A and Class B common stock		(1,144)				(1,144)
Reclassification adjustment to net income		140						(140)
Balance, end of period at Mar. 31, 2018		224,882	$ 5,369	$ 1,570	$ 4,537	226,513	0	$ (13,107)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of new accounting principles on retained earnings | Accounting Standards Update 2014-09		(2,075)				(2,075)
Cumulative effect of new accounting principles on retained earnings | Accounting Standards Update 2016-01		$ 0				$ 2,727	$ (2,727)

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Unaudited Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Stockholders' Equity [Abstract]
Cash dividends on common stock (in dollars per share)	$ 0.1650	$ 0.2675

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Nature of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

Nature of Operations: 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 in consolidation. NACCO is the public holding company for The North American Coal Corporation.  The North American Coal Corporation and its affiliated companies (collectively, “NACoal”) operate surface mines that supply coal primarily to power generation companies under long-term contracts, and provide other value-added services to natural resource companies.  In addition, its North American Mining ("NAM") business operates and maintains draglines and other equipment under contracts with sellers of aggregates. 

On September 29, 2017, the Company spun-off Hamilton Beach Brands Holding Company ("HBBHC"), a former wholly owned subsidiary. The financial position, results of operations and cash flows of HBBHC are reflected as discontinued operations for all periods presented through the date of the spin-off. See Note 10 to the Unaudited Condensed Consolidated Financial Statements for further details regarding the spin-off.

NACoal has the following operating coal mining subsidiaries: Bisti Fuels Company, LLC ("Bisti"), Caddo Creek Resources Company, LLC (“Caddo Creek”), Camino Real Fuels, LLC (“Camino Real”), The Coteau Properties Company (“Coteau”), Coyote Creek Mining Company, LLC (“Coyote Creek”), Demery Resources Company, LLC (“Demery”), The Falkirk Mining Company (“Falkirk”), Mississippi Lignite Mining Company (“MLMC”) and The Sabine Mining Company (“Sabine”). Liberty Fuels Company, LLC ("Liberty") ceased all mining and delivery of lignite in 2017 and commenced mine reclamation in 2018.

All of the operating coal mining subsidiaries other than MLMC are unconsolidated (collectively, the "Unconsolidated Operations"). The unconsolidated coal mining subsidiaries were formed to develop, construct and/or operate surface coal mines under long-term contracts and are capitalized primarily with debt financing provided by or supported by their respective customers, and without recourse to NACCO and NACoal. Although NACoal owns 100% of the equity and manages the daily operations of the Unconsolidated Operations, the Company has determined that the equity capital provided by NACoal is not sufficient to adequately finance the ongoing activities or absorb any expected losses without additional support from the customers. The customers have a controlling financial interest and have the power to direct the activities that most significantly affect the economic performance of the entities. As a result, NACoal is not the primary beneficiary and therefore does not consolidate these entities' financial positions or results of operations. The income taxes resulting from operations of the Unconsolidated Operations are solely the responsibility of the Company. The pre-tax income from the Unconsolidated Operations is reported on the line “Earnings of unconsolidated operations” in the Consolidated Statements of Operations, with related taxes included in the provision for income taxes. The Company has included the pre-tax earnings of the Unconsolidated Operations above operating profit as they are an integral component of the Company's business and operating results.

The contracts with the customers of the unconsolidated subsidiaries eliminate exposure to spot coal market price fluctuations and are based on a "management fee" approach, whereby compensation includes reimbursement of all operating costs, plus a fee based on the amount of coal or limestone delivered. The fees earned adjust over time in line with various indices which reflect general U.S. inflation rates. 

MLMC is a consolidated entity because NACoal pays all operating costs and provides the capital for the mine. MLMC sells coal to its customer at a contractually agreed upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates.  Centennial Natural Resources, LLC ("Centennial"), which ceased coal production at the end of 2015, is also a consolidated entity.

NAM provides value-added services for independently owned limestone quarries and is reimbursed by its customers based on actual costs plus a management fee per unit of limestone delivered. The financial results for NAM are included in the consolidated operations or Unconsolidated Operations based on each entity's structure.

NACoal also provides coal handling, processing and drying services for a number of customers. For example, NoDak Energy Services, LLC ("NoDak") operates and maintains a coal processing facility for a customer's power plant. The pre-tax income from NoDak is reported on the line "Income from other unconsolidated affiliates" in the "Other expense (income)" section of the Consolidated Statements of Operations, with the related income taxes included in the provision for income taxes. North American Coal Royalty Company, a consolidated entity, provides surface and mineral acquisition and lease maintenance services related to the Company's operations.

All of the unconsolidated subsidiaries are accounted for under the equity method. See Note 6 for further discussion.

Basis of Presentation: These financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") 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. GAAP 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 at March 31, 2018 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the three months endedMarch 31, 2018 and 2017 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, 2017.

The balance sheet at December 31, 2017 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. GAAP for complete financial statements.

Reclassifications: As a result of the reclassification of HBBHC to discontinued operations and the adoption of new accounting standards, certain amounts in the prior period Unaudited Condensed Consolidated Financial Statements have been reclassified to conform to the current period's presentation.

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Recently Issued Accounting Standards

3 Months Ended

Mar. 31, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Revenue Recognition: The Company accounts for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers", which NACCO adopted on January 1, 2018, using the modified retrospective method. The adoption of ASC 606 resulted in the establishment of a $2.6 million contract liability and a $2.1 million cumulative effect adjustment to beginning retained earnings (net of tax of $0.5 million) as of January 1, 2018 to reflect the impact of changing the accounting for lease bonus payments received under certain royalty contracts. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period results are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605.

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Nature of Performance Obligations

At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service that is distinct. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

Each mine or mine area has a contract with its respective customer that represents a contract under ASC 606. For its consolidated entities, NACoal’s performance obligations vary by contract and consist of the following:

At MLMC, each MMBtu delivered during the production period is considered a separate performance obligation. Revenue is recognized at the point in time that control of each MMBtu of lignite transfers to the customer. Fluctuations in revenue from period to period generally result from changes in customer demand.

At NAM entities, the management service to oversee the operation of the equipment and delivery of limestone is the performance obligation accounted for as a series. Performance momentarily creates an asset that the customer simultaneously receives and consumes; therefore, control is transferred to the customer over time. Consistent with the conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate. As each month of service is completed, revenue is recognized for the amount of actual costs incurred, plus the management fee and the general and administrative fee (as applicable). Fluctuations in revenue from period to period result from changes in customer demand and variances in reimbursable costs primarily due to increases and decreases in activity levels on individual contracts.

NACoal enters into royalty contracts which grant the right to its customers to explore, develop, produce and sell minerals controlled by the Company. These arrangements result in the transfer of mineral rights to a customer for a period of time; however, no rights to the actual land are granted other than access for purposes of exploration, development, and production. The mineral rights revert back to NACoal at the expiration of the contract.

Under these royalty contracts, granting exclusive right, title, and interest in and to minerals, if any, is the performance obligation. The performance obligation under these contracts represents a series of distinct goods or services whereby each day of access that is provided is distinct. The transaction price consists of a variable sales based royalty and in certain arrangements a fixed component in the form of an up-front lease bonus payment.As the amount of consideration the Company will ultimately be entitled to is entirely susceptible to factors outside its control, the entire amount of variable consideration is constrained at contract inception. The fixed portion of the transaction price will be recognized over the primary term of the contract which is generally five years.

Significant Judgments

The Company’s contracts contain different types of variable consideration including, but not limited to, management fees that adjust based on limestone yards or coal volumes or MMBtu delivered, however, the terms of these variable payments relate specifically to our efforts to satisfy one or more, but not all of, the performance obligations (or to a specific outcome from satisfying the performance obligations), in the contract. Therefore, the Company allocates each variable payment (and subsequent changes to that payment) entirely to the specific performance obligation to which it relates. Management fees as well as general and administrative charges are also adjusted based on changes in specified indices (e.g. CPI) to compensate for general inflation changes. Index adjustments, if applicable, are effective prospectively. Certain contracts include reimbursement of actual costs incurred.

Disaggregation of Revenue

In accordance with ASC 606-10-50, the Company disaggregates revenue from contracts with customers into major goods and service lines and timing of transfer of goods and services. The Company determined that disaggregating revenue into these categories achieves the disclosure objective of depicting how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in the segment information footnote, the Company’s business consists of one operating segment, NACoal.

The following table disaggregates revenue by major sources (in thousands):

	THREE MONTHS ENDED
	MARCH 31
Major Goods/Service Lines	2018		2017 (1)
Consolidated operations - long-term contracts	$	28,023	$	25,201
Royalty	3,177		3,099
Total revenues	$	31,200	$	28,300
Timing of Revenue Recognition
Goods transferred at a point in time	$	17,021	$	16,915
Services transferred over time	14,179		11,385
Total revenues	$	31,200	$	28,300

⁽¹⁾ As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Balances

The opening and closing balances of the Company’s current and long-term contract liability, and receivables are as follows:

	Contract balances
	Accounts Receivable			Contract liability (current)		Contract liability (long-term)
Beginning balance January 1, 2018	$	14,611		$	860	$	1,766
Ending balance March 31, 2018	14,004			860		1,458
Increase (decrease)	$	(607	)	$	—	$	(308	)

As described above, NACoal enters into royalty contracts that grant exclusive right, title, and interest in and to minerals. The transaction price consists of a variable sales-based royalty and, in certain arrangements, a fixed component in the form of an up-front lease bonus payment. The timing of the payment of the fixed portion of the transaction price is upfront, however, the performance obligation is satisfied over the primary term of the contract, which is generally five years. Therefore, at the time any such up-front payment is received, a contract liability is recorded which represents deferred revenue. The difference between the opening and closing balance of this contract liability, which is shown above, primarily results from the difference between new lease bonus payments received and amortization of up-front lease bonus payments received in previous periods.

The amount of revenue recognized in the period that was included in the opening contract liability was $0.3 million. This revenue consists of up-front lease bonus payments received under royalty contracts that are recognized over the primary term of the royalty agreement, which is generally five years. The difference between the opening and closing balances of the Company’s accounts receivable and contract liabilities results from the timing difference between the Company’s performance and the customer’s payment. Contracts with payments in arrears are recognized as receivables. The Company expects to recognize an additional $0.7 million in the remainder of 2018, $0.5 million in 2019, $0.4 million in both 2020 and 2021 and $0.3 million in 2022.

The Company has no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

Practical Expedients & Accounting Policy Elections

Remaining performance obligations - The Company has not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or more as the Company recognized revenue at the amount to which it has the right to invoice for goods delivered or services performed.

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement, including when variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a series.

As discussed above, the Company allocates the variable consideration in its contract entirely to each specific performance obligation to which it relates. Therefore, any remaining variable consideration in the transaction price is allocated entirely to wholly unsatisfied performance obligations. As such, the Company has not disclosed the value of unsatisfied performance obligations pursuant to the practical expedient.

Other Accounting Standards Adopted in 2018: In January 2016, the FASB issued Accounting Standard Update ("ASU") No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which NACCO adopted on January 1, 2018. The adoption of this guidance resulted in a $2.7 million reclassification within the Unaudited Condensed Consolidated Statements of Changes in Equity and did not have a material effect on the Company’s financial position, results of operations, cash flows and related disclosures. See Note 5 for further discussion.

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which NACCO adopted on January 1, 2018. The adoption of this guidance resulted in a $2.3 million reclassification within the Unaudited Condensed Consolidated Statements of Changes in Equity and did not have a material effect on the Company’s financial position, results of operations, cash flows and related disclosures.

Accounting Standards Not Yet Adopted: In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, or as of January 1, 2019 for NACCO. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company is currently in the process of evaluating its existing lease portfolio, including accumulating all of the information required to properly account for the leases under the new standard. Additionally, the Company is evaluating the need for a lease management system to assist in the accounting and additional changes to processes and internal controls to meet the standard’s reporting and disclosure requirements. While the Company is currently evaluating how and to what extent ASU 2016-02 will affect the Company's financial position, results of operations and related disclosures, it is not expected to have a material impact on liquidity or debt-covenant compliance.

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Inventories

3 Months Ended

Mar. 31, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are summarized as follows:

	MARCH 31 2018		DECEMBER 31 2017
Coal	$	12,371	$	13,416
Mining supplies	17,744		16,599
Total inventories	$	30,115	$	30,015

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Stockholders' Equity

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Stock Repurchase Program: On February 14, 2018, the Company's Board of Directors approved a stock repurchase program ("2018 Stock Repurchase Program") providing for the purchase of up to $25 million of the Company's outstanding Class A Common Stock through December 31, 2019. The timing and amount of any repurchases under the 2018 Stock Repurchase Program are determined at the discretion of the Company's management based on a number of factors, including the availability of capital, other capital allocation alternatives, market conditions for the Company's Class A Common Stock and other legal and contractual restrictions. The 2018 Stock Repurchase Program does not require the Company to acquire any specific number of shares. It may be modified, suspended, extended or terminated by the Company at any time without prior notice and may be executed through open market purchases, privately negotiated transactions or otherwise. All or part of the repurchases under the 2018 Stock Repurchase Program may be implemented under a Rule 10b5-1 trading plan, which would allow repurchases under pre-set terms at times when the Company might otherwise be prevented from doing so.

During the three months ended March 31, 2018, the Company did not repurchase any shares of Class A Common Stock under the 2018 Stock Repurchase Program.

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Fair Value Disclosure

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Disclosure

Fair Value Disclosure

Recurring Fair Value Measurements: The following table presents the Company's assets and liabilities accounted for at fair value on a recurring basis:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	Date		(Level 1)		(Level 2)		(Level 3)
	March 31, 2018
Assets:
Equity securities	$	9,086	$	9,086	$	—	$	—
Interest rate swap agreements	41		—		41		—
	$	9,127	$	9,086	$	41	$	—
	December 31, 2017
Assets:
Equity securities	$	9,166	$	9,166	$	—	$	—
Interest rate swap agreements	42		—		42		—
	$	9,208	$	9,166	$	42	$	—

Bellaire Corporation (“Bellaire”) is a non-operating subsidiary of the Company with legacy liabilities relating to closed mining operations, primarily former Eastern U.S. underground coal mining operations. In connection with Bellaire's normal permit renewal with the Pennsylvania Department of Environmental Protection ("DEP"), Bellaire established a $5.0 million mine water treatment trust (the "Mine Water Treatment Trust") to provide a financial assurance mechanism to assure the long-term treatment of post-mining discharges. Bellaire's Mine Water Treatment Trust invests in equity securities that are reported at fair value based upon quoted market prices in active markets for identical assets; therefore, they are classified as Level 1 within the fair value hierarchy. The Mine Water Treatment Trust has an unrealized pre-tax gain of $4.1 million as of March 31, 2018.

The Company uses significant other observable inputs to value derivative instruments used to hedge interest rate risk; therefore, they are classified within Level 2 of the valuation hierarchy. The fair value for these contracts is determined based on current interest rates.

There were no transfers into or out of Levels 1, 2 or 3 during the three months endedMarch 31, 2018 and 2017.

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Unconsolidated Subsidiaries

3 Months Ended

Mar. 31, 2018

Equity Method Investments and Joint Ventures [Abstract]

Unconsolidated Subsidiaries

Unconsolidated Subsidiaries

NACoal's wholly owned unconsolidated subsidiaries each meet the definition of a variable interest entity. See Note 1 for a discussion of these entities.

The investment in the unconsolidated subsidiaries and related tax positions totaled $18.7 million and $16.3 million at March 31, 2018 and December 31, 2017, respectively. The Company's maximum risk of loss relating to these entities is limited to its invested capital, which was $5.9 million and $5.2 million at March 31, 2018 and December 31, 2017, respectively.

NACoal is a party to certain guarantees related to Coyote Creek. Under certain circumstances of default or termination of Coyote Creek’s Lignite Sales Agreement (“LSA”), NACoal would be obligated for payment of a "make-whole" amount to Coyote Creek’s third-party lenders. The “make-whole” amount is based on the excess, if any, of the discounted value of the remaining scheduled debt payments over the principal amount. In addition, in the event Coyote Creek’s LSA is terminated on or after January 1, 2024 by Coyote Creek’s customers, NACoal is obligated to purchase Coyote Creek’s dragline and rolling stock for the then net book value of those assets. To date, no payments have been required from NACoal since the inception of these guarantees. The Company believes that the likelihood NACoal would be required to perform under the guarantees is remote, and no amounts related to these guarantees have been recorded.

Summarized financial information for the unconsolidated subsidiaries is as follows:

	THREE MONTHS ENDED
	MARCH 31
	2018		2017
Revenues	$	183,046	$	194,174
Gross profit	$	21,144	$	21,997
Income before income taxes	$	16,122	$	15,710

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Contingencies

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Contingencies

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 asbestos-related claims 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.  If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of the contingency and, in some circumstances, an estimate of the possible loss. 

These matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of an adverse impact on the Company’s financial position, results of operations and cash flows of the period in which the ruling occurs, or in future periods.

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Business Segments

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Business Segments

Business Segments

Two of the Company’s former segments, Hamilton Beach Brands and Kitchen Collection, were spun-off on September 29, 2017. See Note 1 for a discussion of the Company's industry and the spin-off. There were no changes to the composition of the remaining segments, NACoal and NACCO and Other. NACCO's non-operating segment, NACCO and Other, includes the accounts of the parent company and Bellaire.

Financial information for each of NACCO's reportable segments is presented in the following table:

	THREE MONTHS ENDED
	MARCH 31
	2018			2017
Revenues
NACoal	$	31,200		$	28,300
Total	$	31,200		$	28,300
Operating profit (loss)
NACoal	$	11,282		$	11,326
NACCO and Other	(1,561		)	(1,520		)
Total	$	9,721		$	9,806

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Income Taxes

3 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (“TCJA”), which significantly revised U.S. tax law. Subsequent to the enactment of the TCJA, the SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides a measurement period of up to one year after the enactment date for companies to finalize the recognition of the income tax effects of the TCJA. As a result of the TCJA and pursuant to SAB 118, the Company provisionally recorded a discrete net tax benefit of $3.1 million during the year ended December 31, 2017 and no adjustments were recorded to that provisional amount during the three months ended March 31, 2018. The ultimate impact of the TCJA may differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions, additional regulatory guidance that may be issued, and the computation of state income taxes as there is uncertainty on conformity to the U.S. federal tax system following the TCJA.

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Other Events and Transactions

3 Months Ended

Mar. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Other Events and Transactions

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.

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 continue beyond September 29, 2018. NACCO received fees of $0.2 million in the first three months of 2018, recorded as a reduction to selling, general and administrative expenses, and 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 Unaudited Condensed Consolidated Financial Statements. Discontinued operations includes the following results of HBBHC for the three months ended March 31, 2017:

	THREE MONTHS ENDED
	MARCH 31, 2017
HBBHC Operating Statement Data:
Revenues	$	140,282
Cost of goods sold	105,705
Gross profit	34,577
Operating expenses	37,015
Operating loss	(2,438		)
Interest expense	415
Other income, net	(682		)
Loss before income taxes	(2,171		)
Income tax benefit	(814		)
HBBHC net loss	$	(1,357	)
NACCO discontinued operations income tax expense adjustment	1,885
NACCO discontinued operations	$	(3,242	)

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Nature of Operations and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations: 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 in consolidation. NACCO is the public holding company for The North American Coal Corporation.  The North American Coal Corporation and its affiliated companies (collectively, “NACoal”) operate surface mines that supply coal primarily to power generation companies under long-term contracts, and provide other value-added services to natural resource companies.  In addition, its North American Mining ("NAM") business operates and maintains draglines and other equipment under contracts with sellers of aggregates. 

On September 29, 2017, the Company spun-off Hamilton Beach Brands Holding Company ("HBBHC"), a former wholly owned subsidiary. The financial position, results of operations and cash flows of HBBHC are reflected as discontinued operations for all periods presented through the date of the spin-off. See Note 10 to the Unaudited Condensed Consolidated Financial Statements for further details regarding the spin-off.

NACoal has the following operating coal mining subsidiaries: Bisti Fuels Company, LLC ("Bisti"), Caddo Creek Resources Company, LLC (“Caddo Creek”), Camino Real Fuels, LLC (“Camino Real”), The Coteau Properties Company (“Coteau”), Coyote Creek Mining Company, LLC (“Coyote Creek”), Demery Resources Company, LLC (“Demery”), The Falkirk Mining Company (“Falkirk”), Mississippi Lignite Mining Company (“MLMC”) and The Sabine Mining Company (“Sabine”). Liberty Fuels Company, LLC ("Liberty") ceased all mining and delivery of lignite in 2017 and commenced mine reclamation in 2018.

All of the operating coal mining subsidiaries other than MLMC are unconsolidated (collectively, the "Unconsolidated Operations"). The unconsolidated coal mining subsidiaries were formed to develop, construct and/or operate surface coal mines under long-term contracts and are capitalized primarily with debt financing provided by or supported by their respective customers, and without recourse to NACCO and NACoal. Although NACoal owns 100% of the equity and manages the daily operations of the Unconsolidated Operations, the Company has determined that the equity capital provided by NACoal is not sufficient to adequately finance the ongoing activities or absorb any expected losses without additional support from the customers. The customers have a controlling financial interest and have the power to direct the activities that most significantly affect the economic performance of the entities. As a result, NACoal is not the primary beneficiary and therefore does not consolidate these entities' financial positions or results of operations. The income taxes resulting from operations of the Unconsolidated Operations are solely the responsibility of the Company. The pre-tax income from the Unconsolidated Operations is reported on the line “Earnings of unconsolidated operations” in the Consolidated Statements of Operations, with related taxes included in the provision for income taxes. The Company has included the pre-tax earnings of the Unconsolidated Operations above operating profit as they are an integral component of the Company's business and operating results.

The contracts with the customers of the unconsolidated subsidiaries eliminate exposure to spot coal market price fluctuations and are based on a "management fee" approach, whereby compensation includes reimbursement of all operating costs, plus a fee based on the amount of coal or limestone delivered. The fees earned adjust over time in line with various indices which reflect general U.S. inflation rates. 

MLMC is a consolidated entity because NACoal pays all operating costs and provides the capital for the mine. MLMC sells coal to its customer at a contractually agreed upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates.  Centennial Natural Resources, LLC ("Centennial"), which ceased coal production at the end of 2015, is also a consolidated entity.

NAM provides value-added services for independently owned limestone quarries and is reimbursed by its customers based on actual costs plus a management fee per unit of limestone delivered. The financial results for NAM are included in the consolidated operations or Unconsolidated Operations based on each entity's structure.

NACoal also provides coal handling, processing and drying services for a number of customers. For example, NoDak Energy Services, LLC ("NoDak") operates and maintains a coal processing facility for a customer's power plant. The pre-tax income from NoDak is reported on the line "Income from other unconsolidated affiliates" in the "Other expense (income)" section of the Consolidated Statements of Operations, with the related income taxes included in the provision for income taxes. North American Coal Royalty Company, a consolidated entity, provides surface and mineral acquisition and lease maintenance services related to the Company's operations.

All of the unconsolidated subsidiaries are accounted for under the equity method.

Basis of Presentation

Basis of Presentation: These financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") 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. GAAP 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 at March 31, 2018 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the three months endedMarch 31, 2018 and 2017 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, 2017.

The balance sheet at December 31, 2017 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. GAAP for complete financial statements.

Reclassifications

Reclassifications: As a result of the reclassification of HBBHC to discontinued operations and the adoption of new accounting standards, certain amounts in the prior period Unaudited Condensed Consolidated Financial Statements have been reclassified to conform to the current period's presentation.

Accounting Standards Adopted in 2018 and Not Yet Adopted

Revenue Recognition: The Company accounts for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers", which NACCO adopted on January 1, 2018, using the modified retrospective method. The adoption of ASC 606 resulted in the establishment of a $2.6 million contract liability and a $2.1 million cumulative effect adjustment to beginning retained earnings (net of tax of $0.5 million) as of January 1, 2018 to reflect the impact of changing the accounting for lease bonus payments received under certain royalty contracts. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period results are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605.

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Nature of Performance Obligations

At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service that is distinct. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

Each mine or mine area has a contract with its respective customer that represents a contract under ASC 606. For its consolidated entities, NACoal’s performance obligations vary by contract and consist of the following:

At MLMC, each MMBtu delivered during the production period is considered a separate performance obligation. Revenue is recognized at the point in time that control of each MMBtu of lignite transfers to the customer. Fluctuations in revenue from period to period generally result from changes in customer demand.

At NAM entities, the management service to oversee the operation of the equipment and delivery of limestone is the performance obligation accounted for as a series. Performance momentarily creates an asset that the customer simultaneously receives and consumes; therefore, control is transferred to the customer over time. Consistent with the conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate. As each month of service is completed, revenue is recognized for the amount of actual costs incurred, plus the management fee and the general and administrative fee (as applicable). Fluctuations in revenue from period to period result from changes in customer demand and variances in reimbursable costs primarily due to increases and decreases in activity levels on individual contracts.

NACoal enters into royalty contracts which grant the right to its customers to explore, develop, produce and sell minerals controlled by the Company. These arrangements result in the transfer of mineral rights to a customer for a period of time; however, no rights to the actual land are granted other than access for purposes of exploration, development, and production. The mineral rights revert back to NACoal at the expiration of the contract.

Under these royalty contracts, granting exclusive right, title, and interest in and to minerals, if any, is the performance obligation. The performance obligation under these contracts represents a series of distinct goods or services whereby each day of access that is provided is distinct. The transaction price consists of a variable sales based royalty and in certain arrangements a fixed component in the form of an up-front lease bonus payment.As the amount of consideration the Company will ultimately be entitled to is entirely susceptible to factors outside its control, the entire amount of variable consideration is constrained at contract inception. The fixed portion of the transaction price will be recognized over the primary term of the contract which is generally five years.

Significant Judgments

The Company’s contracts contain different types of variable consideration including, but not limited to, management fees that adjust based on limestone yards or coal volumes or MMBtu delivered, however, the terms of these variable payments relate specifically to our efforts to satisfy one or more, but not all of, the performance obligations (or to a specific outcome from satisfying the performance obligations), in the contract. Therefore, the Company allocates each variable payment (and subsequent changes to that payment) entirely to the specific performance obligation to which it relates. Management fees as well as general and administrative charges are also adjusted based on changes in specified indices (e.g. CPI) to compensate for general inflation changes. Index adjustments, if applicable, are effective prospectively. Certain contracts include reimbursement of actual costs incurred.

Disaggregation of Revenue

In accordance with ASC 606-10-50, the Company disaggregates revenue from contracts with customers into major goods and service lines and timing of transfer of goods and services. The Company determined that disaggregating revenue into these categories achieves the disclosure objective of depicting how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in the segment information footnote, the Company’s business consists of one operating segment, NACoal.

The following table disaggregates revenue by major sources (in thousands):

	THREE MONTHS ENDED
	MARCH 31
Major Goods/Service Lines	2018		2017 (1)
Consolidated operations - long-term contracts	$	28,023	$	25,201
Royalty	3,177		3,099
Total revenues	$	31,200	$	28,300
Timing of Revenue Recognition
Goods transferred at a point in time	$	17,021	$	16,915
Services transferred over time	14,179		11,385
Total revenues	$	31,200	$	28,300

⁽¹⁾ As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Balances

The opening and closing balances of the Company’s current and long-term contract liability, and receivables are as follows:

	Contract balances
	Accounts Receivable			Contract liability (current)		Contract liability (long-term)
Beginning balance January 1, 2018	$	14,611		$	860	$	1,766
Ending balance March 31, 2018	14,004			860		1,458
Increase (decrease)	$	(607	)	$	—	$	(308	)

As described above, NACoal enters into royalty contracts that grant exclusive right, title, and interest in and to minerals. The transaction price consists of a variable sales-based royalty and, in certain arrangements, a fixed component in the form of an up-front lease bonus payment. The timing of the payment of the fixed portion of the transaction price is upfront, however, the performance obligation is satisfied over the primary term of the contract, which is generally five years. Therefore, at the time any such up-front payment is received, a contract liability is recorded which represents deferred revenue. The difference between the opening and closing balance of this contract liability, which is shown above, primarily results from the difference between new lease bonus payments received and amortization of up-front lease bonus payments received in previous periods.

The amount of revenue recognized in the period that was included in the opening contract liability was $0.3 million. This revenue consists of up-front lease bonus payments received under royalty contracts that are recognized over the primary term of the royalty agreement, which is generally five years. The difference between the opening and closing balances of the Company’s accounts receivable and contract liabilities results from the timing difference between the Company’s performance and the customer’s payment. Contracts with payments in arrears are recognized as receivables. The Company expects to recognize an additional $0.7 million in the remainder of 2018, $0.5 million in 2019, $0.4 million in both 2020 and 2021 and $0.3 million in 2022.

The Company has no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

Practical Expedients & Accounting Policy Elections

Remaining performance obligations - The Company has not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or more as the Company recognized revenue at the amount to which it has the right to invoice for goods delivered or services performed.

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement, including when variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a series.

As discussed above, the Company allocates the variable consideration in its contract entirely to each specific performance obligation to which it relates. Therefore, any remaining variable consideration in the transaction price is allocated entirely to wholly unsatisfied performance obligations. As such, the Company has not disclosed the value of unsatisfied performance obligations pursuant to the practical expedient.

Other Accounting Standards Adopted in 2018: In January 2016, the FASB issued Accounting Standard Update ("ASU") No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which NACCO adopted on January 1, 2018. The adoption of this guidance resulted in a $2.7 million reclassification within the Unaudited Condensed Consolidated Statements of Changes in Equity and did not have a material effect on the Company’s financial position, results of operations, cash flows and related disclosures. See Note 5 for further discussion.

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which NACCO adopted on January 1, 2018. The adoption of this guidance resulted in a $2.3 million reclassification within the Unaudited Condensed Consolidated Statements of Changes in Equity and did not have a material effect on the Company’s financial position, results of operations, cash flows and related disclosures.

Accounting Standards Not Yet Adopted: In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, or as of January 1, 2019 for NACCO. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company is currently in the process of evaluating its existing lease portfolio, including accumulating all of the information required to properly account for the leases under the new standard. Additionally, the Company is evaluating the need for a lease management system to assist in the accounting and additional changes to processes and internal controls to meet the standard’s reporting and disclosure requirements. While the Company is currently evaluating how and to what extent ASU 2016-02 will affect the Company's financial position, results of operations and related disclosures, it is not expected to have a material impact on liquidity or debt-covenant compliance. 

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Recently Issued Accounting Standards (Tables)

3 Months Ended

Mar. 31, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Disaggregation of Revenue

The following table disaggregates revenue by major sources (in thousands):

	THREE MONTHS ENDED
	MARCH 31
Major Goods/Service Lines	2018		2017 (1)
Consolidated operations - long-term contracts	$	28,023	$	25,201
Royalty	3,177		3,099
Total revenues	$	31,200	$	28,300
Timing of Revenue Recognition
Goods transferred at a point in time	$	17,021	$	16,915
Services transferred over time	14,179		11,385
Total revenues	$	31,200	$	28,300

⁽¹⁾ As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Balances

The opening and closing balances of the Company’s current and long-term contract liability, and receivables are as follows:

	Contract balances
	Accounts Receivable			Contract liability (current)		Contract liability (long-term)
Beginning balance January 1, 2018	$	14,611		$	860	$	1,766
Ending balance March 31, 2018	14,004			860		1,458
Increase (decrease)	$	(607	)	$	—	$	(308	)

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Inventories (Tables)

3 Months Ended

Mar. 31, 2018

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories are summarized as follows:

	MARCH 31 2018		DECEMBER 31 2017
Coal	$	12,371	$	13,416
Mining supplies	17,744		16,599
Total inventories	$	30,115	$	30,015

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Fair Value Disclosure (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents the Company's assets and liabilities accounted for at fair value on a recurring basis:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	Date		(Level 1)		(Level 2)		(Level 3)
	March 31, 2018
Assets:
Equity securities	$	9,086	$	9,086	$	—	$	—
Interest rate swap agreements	41		—		41		—
	$	9,127	$	9,086	$	41	$	—
	December 31, 2017
Assets:
Equity securities	$	9,166	$	9,166	$	—	$	—
Interest rate swap agreements	42		—		42		—
	$	9,208	$	9,166	$	42	$	—

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Unconsolidated Subsidiaries (Tables)

3 Months Ended

Mar. 31, 2018

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Financial Information for Unconsolidated Subsidiaries

Summarized financial information for the unconsolidated subsidiaries is as follows:

	THREE MONTHS ENDED
	MARCH 31
	2018		2017
Revenues	$	183,046	$	194,174
Gross profit	$	21,144	$	21,997
Income before income taxes	$	16,122	$	15,710

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Segment Reporting Information

Financial information for each of NACCO's reportable segments is presented in the following table:

	THREE MONTHS ENDED
	MARCH 31
	2018			2017
Revenues
NACoal	$	31,200		$	28,300
Total	$	31,200		$	28,300
Operating profit (loss)
NACoal	$	11,282		$	11,326
NACCO and Other	(1,561		)	(1,520		)
Total	$	9,721		$	9,806

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Other Events and Transactions (Tables)

3 Months Ended

Mar. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operation Results

Discontinued operations includes the following results of HBBHC for the three months ended March 31, 2017:

	THREE MONTHS ENDED
	MARCH 31, 2017
HBBHC Operating Statement Data:
Revenues	$	140,282
Cost of goods sold	105,705
Gross profit	34,577
Operating expenses	37,015
Operating loss	(2,438		)
Interest expense	415
Other income, net	(682		)
Loss before income taxes	(2,171		)
Income tax benefit	(814		)
HBBHC net loss	$	(1,357	)
NACCO discontinued operations income tax expense adjustment	1,885
NACCO discontinued operations	$	(3,242	)

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Recently Issued Accounting Standards - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 01, 2018	Mar. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue recognized in contract liability	$ 300
Accounting Standards Update 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract liability	2,600
Accounting Standards Update 2018-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification from AOCI to retained earnings	2,300
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification from AOCI to retained earnings		$ 2,339
Retained Earnings | Accounting Standards Update 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of new accounting principle	(2,075)
Cumulative effect of new accounting principle, net of tax	500
Retained Earnings | Accounting Standards Update 2016-01
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of new accounting principle	$ 2,727

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Recently Issued Accounting Standards - Disaggregation of Revenue (Details) - NACoal - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disaggregation of Revenue [Line Items]
Revenues	$ 31,200	$ 28,300
Consolidated operations - long-term contracts
Disaggregation of Revenue [Line Items]
Revenues	28,023	25,201
Royalty
Disaggregation of Revenue [Line Items]
Revenues	3,177	3,099
Goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	17,021	16,915
Services transferred over time
Disaggregation of Revenue [Line Items]
Revenues	$ 14,179	$ 11,385

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Recently Issued Accounting Standards - Contract Balances (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
Contract Assets [Roll Forward]
Beginning balance January 1, 2018	$ 14,611
Ending balance March 31, 2018	14,004
Increase (decrease) in accounts receivable	(607)
Contract Liabilities, Current [Roll Forward]
Beginning balance January 1, 2018	860
Ending balance March 31, 2018	860
Increase (decrease) in contract liability (current)	0
Contract Liabilities, Noncurrent [Roll Forward]
Beginning balance January 1, 2018	1,766
Ending balance March 31, 2018	1,458
Increase (decrease) in contract liability (long-term)	$ (308)

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Recently Issued Accounting Standards - Expected Revenue Recognition (Details) $ in Millions	Mar. 31, 2018 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 0.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	0.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	0.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	0.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 0.3

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Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Coal	$ 12,371	$ 13,416
Mining supplies	17,744	16,599
Total inventories	$ 30,115	$ 30,015

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Stockholders' Equity Stockholders' Equity (Narrative) (Details)	Feb. 14, 2018 USD ($)
2018 Stock Repurchase Program
Class of Stock [Line Items]
Stock repurchase program, authorized amount	$ 25,000,000

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Fair Value Disclosure (On a Recurring Basis) (Details) - Fair value measurements, recurring - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Level 1
Assets:
Equity securities	$ 9,086	$ 9,166
Interest rate swap agreements	0	0
Assets at fair value	9,086	9,166
Level 2
Assets:
Equity securities	0	0
Interest rate swap agreements	41	42
Assets at fair value	41	42
Level 3
Assets:
Equity securities	0	0
Interest rate swap agreements	0	0
Assets at fair value	0	0
Total
Assets:
Equity securities	9,086	9,166
Interest rate swap agreements	41	42
Assets at fair value	$ 9,127	$ 9,208

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Fair Value Disclosure (Narrative) (Details) - Bellaire Corporation - Level 1 - Fair value measurements, recurring $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mine Water Treatment Trust	$ 5.0
Unrealized gain on the Mine Water Treatment Trust	$ 4.1

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Unconsolidated Subsidiaries (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
Investments in unconsolidated subsidiaries and related tax positions	$ 18,679	$ 16,335
Variable interest entity, reporting entity involvement, maximum risk of loss	5,900	5,200
Other noncurrent assets
Variable Interest Entity [Line Items]
Investments in unconsolidated subsidiaries and related tax positions	$ 18,700	$ 16,300

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Unconsolidated Subsidiaries (Schedule) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Variable Interest Entity [Line Items]
Revenues	$ 31,200	$ 28,300
Gross profit	5,424	4,558
Variable interest entity, not primary beneficiary
Variable Interest Entity [Line Items]
Revenues	183,046	194,174
Gross profit	21,144	21,997
Income before income taxes	$ 16,122	$ 15,710

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Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information [Line Items]
Revenues	$ 31,200	$ 28,300
Operating profit (loss)	9,721	9,806
NACoal
Segment Reporting Information [Line Items]
Revenues	31,200	28,300
Operating segments | NACoal
Segment Reporting Information [Line Items]
Operating profit (loss)	11,282	11,326
NACCO and Other
Segment Reporting Information [Line Items]
Operating profit (loss)	$ (1,561)	$ (1,520)

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Income Taxes Income Taxes (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2017 USD ($)
Income Tax Disclosure [Abstract]
Discrete income tax expense	$ 3.1

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Other Events and Transactions (Narrative) (Details) - HBBHC $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Fee income	$ 0.2
Expected net aggregate fees over term of TSA	$ 1.0

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Other Events and Transactions (Discontinued Operation Results) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income tax benefit	$ 0	$ 1,071
Loss from discontinued operations	$ 0	(3,242)
Spinoff
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations		(3,242)
Spinoff | HBBHC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues		140,282
Cost of goods sold		105,705
Gross profit		34,577
Operating expenses		37,015
Operating loss		(2,438)
Interest expense		415
Other income, net		(682)
Loss before income taxes		(2,171)
Income tax benefit		(814)
HBBHC net loss		(1,357)
NACCO discontinued operations income tax expense adjustment		$ 1,885