Other Events and Transactions

HBBHC Spin-Off: On September 29, 2017, the Company spun-off HBBHC, a former wholly owned subsidiary. To complete the spin-off, the Company distributed one share of HBBHC Class A common stock and one share of HBBHC Class B common stock to NACCO stockholders for each share of NACCO Class A common stock or Class B common stock owned. The Company accounted for the spin-off based on the historical carrying value of HBBHC. On September 28, 2017, prior to the spin-off, HBBHC paid NACCO a one-time $35.0 million cash dividend. This payment was in addition to $3.0 million in dividends HBBHC paid to NACCO in the first six months of 2017.

In connection with the spin-off of HBBHC, the Company and HBBHC entered into a Transition Services Agreement ("TSA"). Under the terms of the TSA, the Company provides various services to HBBHC on a transitional basis, as needed, for varying periods after the spin-off date. As of December 31, 2018 the transition services are materially complete. NACCO received fees of $0.5 million and $0.2 million for the years ended December 31, 2018 and December 31, 2017, respectively, recorded as a reduction to selling, general and administrative expenses related to the transitional services.

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

Discontinued operations includes the following results of HBBHC for the year ended December 31, 2017:



HBBHC Operating Statement Data:
Revenues	$	474,971
Cost of goods sold	353,436
Gross profit	121,535
Operating expenses ^(a)	114,379
Operating profit	7,156
Interest expense	1,300
Other expense, net	(939		)
Income before income taxes	6,795
Income tax expense	2,655
HBBHC net income	$	4,140

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

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