XML 177 R20.htm IDEA: XBRL DOCUMENT

Leases

12 Months Ended

Dec. 31, 2023

The Company recognizes right-of-use assets (“ROU assets”) and lease liabilities for operating leases of real estate, mining and other equipment that expire at various dates through 2033. The majority of the Company's leases are operating leases. NACCO does not recognize leases with a term of 12 months or less on the balance sheet. Instead, the Company recognizes the related lease expense on a straight-line basis over the lease term. The Company accounts for lease and non-lease components as a single lease component. The Company's lease agreements do not contain lease payments that depend on an index or a rate, as such, minimum lease payments do not include variable lease payments.

Leased assets and liabilities include the following at December 31:


Description	Location	2023		2022
Assets
Operating	Operating lease right-of-use assets	$	8,667	$	6,419
Finance	Property, plant and equipment, net (a)	107		843


Liabilities
Current
Operating	Other current liabilities	$	1,485	$	1,039
Finance	Current maturities of long-term debt	28		776
Non-current
Operating	Operating lease liabilities	$	8,782	$	7,528
Finance	Long-term debt	84		19

(a) Finance leased assets are recorded net of accumulated amortization of less than $0.1 million and $0.2 million as of December 31, 2023 and December 31, 2022, respectively.

The components of lease expense for the years ended December 31 are as follows:


Description	Location	2023		2022
Lease expense
Operating lease cost	Selling, general and administrative expenses	$	1,712	$	1,881
Finance lease cost:
Amortization of leased assets	Cost of sales	61		128
Interest on lease liabilities	Interest expense	7		13
Variable lease expense	Selling, general and administrative expenses	572		534
Short-term lease expense	Selling, general and administrative expenses	3,214		3,434
Total lease expense		$	5,566	$	5,990

Future minimum finance and operating lease payments were as follows at December 31, 2023:


	Finance Leases		Operating Leases		Total
2024	$	36	$	2,238	$	2,274
2025	33		2,014		2,047
2026	33		2,003		2,036
2027	21		1,593		1,614
2028	9		1,607		1,616
Subsequent to 2028	—		3,935		3,935
Total minimum lease payments	132		13,390		$	13,522
Amounts representing interest	20		3,123
Present value of net minimum lease payments	$	112	$	10,267

As most of the Company's leases do not provide an implicit rate, the Company determines the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The Company considers its credit rating and the current economic environment in determining this collateralized rate. The assumptions used in accounting for ASC 842 for the years ended December 31 are as follows:


	2023		2022
Weighted average remaining lease term (years)
Operating	6.81		7.66
Finance	3.97		1.41

Weighted average discount rate
Operating	8.13	%	7.13	%
Finance	8.69	%	3.11	%

The following table details cash paid for amounts included in the measurement of lease liabilities for the years ended December 31:


	2023		2022
Operating cash flows from operating leases	$	1,823	$	2,097
Operating cash flows from finance leases	7		13
Financing cash flows from finance leases	786		183

Leases

Leased assets and liabilities include the following at December 31:


Description	Location	2023		2022
Assets
Operating	Operating lease right-of-use assets	$	8,667	$	6,419
Finance	Property, plant and equipment, net (a)	107		843


Liabilities
Current
Operating	Other current liabilities	$	1,485	$	1,039
Finance	Current maturities of long-term debt	28		776
Non-current
Operating	Operating lease liabilities	$	8,782	$	7,528
Finance	Long-term debt	84		19

(a) Finance leased assets are recorded net of accumulated amortization of less than $0.1 million and $0.2 million as of December 31, 2023 and December 31, 2022, respectively.

The components of lease expense for the years ended December 31 are as follows:


Description	Location	2023		2022
Lease expense
Operating lease cost	Selling, general and administrative expenses	$	1,712	$	1,881
Finance lease cost:
Amortization of leased assets	Cost of sales	61		128
Interest on lease liabilities	Interest expense	7		13
Variable lease expense	Selling, general and administrative expenses	572		534
Short-term lease expense	Selling, general and administrative expenses	3,214		3,434
Total lease expense		$	5,566	$	5,990

Future minimum finance and operating lease payments were as follows at December 31, 2023:


	Finance Leases		Operating Leases		Total
2024	$	36	$	2,238	$	2,274
2025	33		2,014		2,047
2026	33		2,003		2,036
2027	21		1,593		1,614
2028	9		1,607		1,616
Subsequent to 2028	—		3,935		3,935
Total minimum lease payments	132		13,390		$	13,522
Amounts representing interest	20		3,123
Present value of net minimum lease payments	$	112	$	10,267


	2023		2022
Weighted average remaining lease term (years)
Operating	6.81		7.66
Finance	3.97		1.41

Weighted average discount rate
Operating	8.13	%	7.13	%
Finance	8.69	%	3.11	%

The following table details cash paid for amounts included in the measurement of lease liabilities for the years ended December 31:


	2023		2022
Operating cash flows from operating leases	$	1,823	$	2,097
Operating cash flows from finance leases	7		13
Financing cash flows from finance leases	786		183