NACCO Industries (NC) 10-Q 2 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 28, 2017
Entity Information [Line Items]
Entity Registrant Name	NACCO INDUSTRIES INC
Entity Central Index Key	789,933
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Shares Outstanding Class A
Entity Information [Line Items]
Shares Outstanding (in shares)		5,263,374
Shares Outstanding Class B
Entity Information [Line Items]
Shares Outstanding (in shares)		1,570,448

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
ASSETS
Cash and cash equivalents	$ 56,426	$ 80,648	$ 35,718
Accounts receivable, net	79,718	117,463	73,851
Accounts receivable from unconsolidated subsidiaries	13,469	7,404	4,590
Inventories, net	158,982	157,342	164,334
Assets held for sale	1,824	2,016	17,593
Prepaid expenses and other	20,476	16,859	19,680
Total current assets	330,895	381,732	315,766
Property, plant and equipment, net	132,158	131,049	132,345
Goodwill	6,253	6,253	6,253
Other Intangibles, net	52,026	52,959	55,858
Deferred income taxes	26,333	28,380	33,588
Investments in unconsolidated subsidiaries	35,906	31,054	29,532
Deferred costs	10,311	10,037	7,338
Other non-current assets	26,409	26,557	25,834
Total assets	620,291	668,021	606,514
LIABILITIES AND EQUITY
Accounts payable	87,119	128,248	90,247
Revolving credit agreements of subsidiaries - not guaranteed by the parent company	30,978	12,714	4,170
Current maturities of long-term debt of subsidiaries - not guaranteed by the parent company	1,757	1,744	1,513
Accrued payroll	14,033	32,925	13,057
Accrued cooperative advertising	6,683	15,056	6,437
Other current liabilities	26,634	31,141	25,373
Total current liabilities	167,204	221,828	140,797
Long-term debt of subsidiaries - not guaranteed by the parent company	125,313	120,295	157,468
Asset retirement obligations	38,823	38,262	41,286
Pension and other postretirement obligations	13,783	14,271	13,088
Other long-term liabilities	50,642	53,072	51,856
Total liabilities	395,765	447,728	404,495
Common stock:
Capital in excess of par value	0	0	712
Retained earnings	242,379	239,441	218,743
Accumulated other comprehensive loss	(24,687)	(25,927)	(24,315)
Total stockholders' equity	224,526	220,293	202,019
Total liabilities and equity	620,291	668,021	606,514
Shares Outstanding Class A
Common stock:
Common stock	5,263	5,208	5,308
Shares Outstanding Class B
Common stock:
Common stock	$ 1,571	$ 1,571	$ 1,571

Unaudited Condensed Consolidat3

Unaudited Condensed Consolidated Balance Sheets (Parenthetical)	Mar. 31, 2017$ / sharesshares	Dec. 31, 2016$ / sharesshares	Mar. 31, 2016$ / sharesshares
Shares Outstanding Class A
Common stock, par value (in dollars per share) | $ / shares	$ 1	$ 1	$ 1
Common stock, shares outstanding (in shares) | shares	5,263,307	5,207,955	5,307,743
Shares Outstanding Class B
Common stock, par value (in dollars per share) | $ / shares	$ 1	$ 1	$ 1
Common stock, convertible conversion ratio	1	1	1
Common stock, shares outstanding (in shares) | shares	1,570,515	1,570,915	1,571,528

Unaudited Condensed Consolidat4

Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Revenues	$ 168,582	$ 173,421
Cost of sales	129,447	133,416
Gross profit	39,135	40,005
Earnings of unconsolidated mines	14,955	12,648
Operating expenses
Selling, general and administrative expenses	45,790	46,259
Amortization of intangible assets	932	982
Operating expenses	46,722	47,241
Operating profit	7,368	5,412
Other expense (income)
Interest expense	1,347	1,505
Income from other unconsolidated affiliates	(308)	(303)
Closed mine obligations	383	376
Other, net, including interest income	(702)	53
Other (income) expense	720	1,631
Income before income tax provision	6,648	3,781
Income tax provision	1,670	979
Net income	$ 4,978	$ 2,802
Earnings Per Share [Abstract]
Basic earnings per share (in dollars per share)	$ 0.73	$ 0.41
Diluted earnings per share (in dollars per share)	0.73	0.41
Dividends per share (in dollars per share)	$ 0.2675	$ 0.2625
Basic weighted average shares outstanding (in shares)	6,806	6,857
Diluted weighted average shares outstanding (in shares)	6,843	6,885

Unaudited Condensed Consolidat5

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 4,978	$ 2,802
Foreign currency translation adjustment	1,071	207
Deferred gain on available for sale securities	226	65
Current period cash flow hedging activity, net of $86 and $680 tax benefit in the three months ended March 31, 2017 and March 31, 2016, respectively.	(239)	(1,367)
Reclassification of hedging activities into earnings, net of $12 and $61 tax benefit in the three months ended March 31, 2017 and March 31, 2016, respectively.	6	75
Reclassification of pension and postretirement adjustments into earnings, net of $50 and $99 tax benefit in the three months ended March 31, 2017 and March 31, 2016, respectively.	176	149
Total other comprehensive income (loss)	1,240	(871)
Comprehensive income	$ 6,218	$ 1,931

Unaudited Condensed Consolidat6

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Current period cash flow hedging activity, tax expense (benefit)	$ (86)	$ (680)
Reclassification of hedging activities into earnings, tax benefit (expense)	(12)	(61)
Reclassification of pension and postretirement adjustments into earnings, tax benefit (expense)	$ (50)	$ (99)

Unaudited Condensed Consolidat7

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net income	$ 4,978	$ 2,802
Adjustments to reconcile from net income to net cash used for operating activities:
Depreciation, depletion and amortization	4,488	4,192
Amortization of deferred financing fees	148	157
Deferred income taxes	2,047	8,425
Other	(7,592)	(1,973)
Working capital changes:
Accounts receivable	29,974	35,095
Inventories	(1,651)	632
Other current assets	(2,722)	(2,207)
Accounts payable	(41,454)	(12,580)
Other current liabilities	(30,420)	(38,362)
Net cash used for operating activities	(42,204)	(3,819)
Investing activities
Expenditures for property, plant and equipment	(4,650)	(4,359)
Other	814	18
Net cash used for investing activities	(3,836)	(4,341)
Financing activities
Additions to long-term debt	5,461	137
Reductions of long-term debt	(432)	(2,772)
Net additions (reductions) to revolving credit agreements	18,263	(4,195)
Cash dividends paid	(1,827)	(1,804)
Net cash provided by (used for) financing activities	21,465	(8,634)
Effect of exchange rate changes on cash	353	13
Cash and cash equivalents
Decrease for the period	(24,222)	(16,781)
Balance at the beginning of the period	80,648	52,499
Balance at the end of the period	$ 56,426	$ 35,718

Unaudited Condensed Consolidat8

Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Total Stockholders' Equity	Common StockShares Outstanding Class A	Common StockShares Outstanding Class B	Capital in Excess of Par Value	Retained Earnings	Foreign Currency Translation Adjustment	Deferred Gain (Loss) on Available for Sale Securities	Deferred Gain (Loss) on Cash Flow Hedging	Pension and Postretirement Plan Adjustment
Balance, beginning of period at Dec. 31, 2015		$ 201,138	$ 5,265	$ 1,572	$ 0	$ 217,745	$ (5,455)	$ 1,480	$ (112)	$ (19,357)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		754	42		712
Conversion of Class B to Class A shares			1	(1)
Net income	$ 2,802	2,802				2,802
Cash dividends on Class A and Class B common stock		(1,804)				(1,804)
Current period other comprehensive income (loss)		(1,095)					207	65	(1,367)
Reclassification adjustment to net income		224							75	149
Balance, end of period at Mar. 31, 2016		202,019	5,308	1,571	712	218,743	(5,248)	1,545	(1,404)	(19,208)
Balance, beginning of period at Dec. 31, 2016		220,293	5,208	1,571	0	239,441	(7,533)	1,893	393	(20,680)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		(158)	55		0	(213)
Net income	$ 4,978	4,978				4,978
Cash dividends on Class A and Class B common stock		(1,827)				(1,827)
Current period other comprehensive income (loss)		1,058					1,071	226	(239)
Reclassification adjustment to net income		182							6	176
Balance, end of period at Mar. 31, 2017		$ 224,526	$ 5,263	$ 1,571	$ 0	$ 242,379	$ (6,462)	$ 2,119	$ 160	$ (20,504)

Unaudited Condensed Consolidat9

Unaudited Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Stockholders' Equity [Abstract]
Cash dividends on common stock (in dollars per share)	$ 0.2675	$ 0.2625

Nature of Operations and Basis

Nature of Operations and Basis of Presentation	3 Months Ended
	Mar. 31, 2017
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. The Company's subsidiaries operate in the following principal industries: mining, small appliances and specialty retail. The Company manages its subsidiaries primarily by industry. The North American Coal Corporation and its affiliated companies (collectively, “NACoal”) mine coal primarily for use in power generation and provide value-added services for natural resource companies. Hamilton Beach Brands, Inc. (“HBB”) is a leading designer, marketer and distributor of small electric household and specialty housewares appliances, as well as commercial products for restaurants, bars and hotels. The Kitchen Collection, LLC (“KC”) is a national specialty retailer of kitchenware operating under the Kitchen Collection® store name in outlet and traditional malls throughout the United States. 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”), Liberty Fuels Company, LLC (“Liberty”), Mississippi Lignite Mining Company (“MLMC”) and The Sabine Mining Company (“Sabine”). All of the operating coal mining subsidiaries other than MLMC are unconsolidated (collectively the "Unconsolidated Mines"). The Unconsolidated Mines 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. The contracts with the customers of the Unconsolidated Mines provide for reimbursement to the company at a price based on actual costs plus an agreed upon pre-tax profit per ton of coal sold or actual costs plus an agreed upon fee per btu of heating value delivered. The fees earned at each mine adjust over time in line with various indices which reflect general U.S. inflation rates. Although NACoal owns 100% of the equity and manages the daily operations of the Unconsolidated Mines, 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 position or results of operations. The income taxes resulting from operations of the Unconsolidated Mines are solely the responsibility of the Company. The pre-tax income from the Unconsolidated Mines is reported on the line “Earnings of unconsolidated mines” 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 Mines above operating profit as they are an integral component of the Company's business and operating results. 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 in the fourth quarter of 2015, is also a consolidated entity. NACoal provides value-added mining services for independently owned limerock quarries through its North American Mining ("NAM") division. NAM is reimbursed by its customers based on actual costs plus a management fee. The financial results for NAM are included in 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. The pre-tax income from NoDak is reported on the line "Income from other unconsolidated affiliates" in the "Other (income) expense" 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, 2017 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the three months ended March 31, 2017 and 2016 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, 2016 . The balance sheet at December 31, 2016 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. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2017 . The HBB and KC businesses are seasonal and a majority of revenues and operating profit typically occurs in the second half of the calendar year when sales of small electric household appliances to retailers and consumers increase significantly for the fall holiday selling season. For further information regarding seasonality of these businesses, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 . Certain amounts in the prior periods' Unaudited Condensed Consolidated Financial Statements have been reclassified to conform to the current period's presentation.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	3 Months Ended
	Mar. 31, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recently Issued Accounting Standards	Recently Issued Accounting Standards Accounting Standards Not Yet Adopted In May 2014, the FASB codified in ASC 606, "Revenue Recognition - Revenue from Contracts with Customers," which supersedes most current revenue recognition guidance, including industry-specific guidance, and requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers and provide additional disclosures. As amended, the effective date for public entities is annual reporting periods beginning after December 15, 2017 and interim periods therein. The Company anticipates adopting the new revenue guidance effective January 1, 2018 using the modified retrospective method with the cumulative effect of initially applying the standard recognized as an adjustment to equity. The Company has developed a project plan with respect to its implementation of this standard, including identification of revenue streams and review of contracts and procedures currently in place, and is evaluating the impact on the Company's financial position, results of operations and cash flows. The adoption of this guidance will result in increased disclosures to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts. The Company is in the process of identifying and implementing changes to processes and controls to meet the standard's updated reporting and disclosure requirements and continues to update its assessment of the impact of the standard. The Company expects to further its assessment of the financial impact of the new guidance on its consolidated financial statements by mid-2017.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories are summarized as follows: MARCH 31 DECEMBER 31 MARCH 31 Coal - NACoal $ 13,155 $ 13,137 $ 16,305 Mining supplies - NACoal 16,100 15,790 20,810 Total inventories at weighted average cost 29,255 28,927 37,115 Sourced inventories - HBB 98,688 95,008 94,482 Retail inventories - KC 31,039 33,407 32,737 Total inventories $ 158,982 $ 157,342 $ 164,334

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity Stock Repurchase Program: On May 10, 2016, the Company's Board of Directors approved a stock repurchase program (the "2016 Stock Repurchase Program") providing for the purchase of up to $50 million of the Company's Class A Common Stock outstanding through December 31, 2017. The Company’s previous $60 million stock repurchase program, announced in December 2013, was completed in October 2015. The timing and amount of any repurchases under the 2016 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 and market conditions for the Company's Class A Common Stock. The 2016 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 2016 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, 2017 , the Company did not repurchase any shares of Class A Common Stock under the 2016 Stock Repurchase Program.

Fair Value Disclosure

Fair Value Disclosure	3 Months Ended
	Mar. 31, 2017
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, 2017 Assets: Available for sale securities $ 8,229 $ 8,229 $ — $ — Interest rate swap agreements 802 — 802 — Foreign currency exchange contracts 27 — 27 — $ 9,058 $ 8,229 $ 829 $ — Liabilities: Interest rate swap agreements $ 103 $ — $ 103 $ — Foreign currency exchange contracts 489 — 489 — $ 592 $ — $ 592 $ — December 31, 2016 Assets: Available for sale securities $ 7,882 $ 7,882 $ — $ — Interest rate swap agreements 774 — 774 — Foreign currency exchange contracts 147 — 147 — $ 8,803 $ 7,882 $ 921 $ — Liabilities: Interest rate swap agreements $ 339 $ — $ 339 $ — $ 339 $ — $ 339 $ — March 31, 2016 Assets: Available for sale securities $ 7,347 $ 7,347 $ — $ — $ 7,347 $ 7,347 $ — $ — Liabilities: Interest rate swap agreements $ 1,850 $ — $ 1,850 $ — Foreign currency exchange contracts 491 — 491 — $ 2,341 $ — $ 2,341 $ — 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 available for sale 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 Company uses significant other observable inputs to value derivative instruments used to hedge foreign currency and interest rate risk; therefore, they are classified within Level 2 of the valuation hierarchy. The fair value for these contracts is determined based on exchange rates and interest rates, respectively. There were no transfers into or out of Levels 1, 2 or 3 during the three months ended March 31, 2017 and 2016 .

Unconsolidated Subsidiaries

Unconsolidated Subsidiaries	3 Months Ended
	Mar. 31, 2017
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 $35.9 million , $31.1 million and $29.5 million at March 31, 2017 , December 31, 2016 and March 31, 2016 , respectively. The Company's maximum risk of loss relating to these entities is limited to its invested capital, which was $6.2 million , $4.6 million and $3.9 million at March 31, 2017 , December 31, 2016 , and March 31, 2016 , 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 of NACoal’s future performance 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 2017 2016 Revenues $ 194,174 $ 145,070 Gross profit $ 21,997 $ 18,748 Income before income taxes $ 15,710 $ 13,121 Net income $ 11,681 $ 10,010

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2017
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 product liability, patent infringement, asbestos-related claims, environmental and other claims. These proceedings and claims are incidental to the ordinary course of business of the Company. Management believes that it has meritorious defenses and will vigorously defend the Company in these actions. Any costs that management estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount can be reasonably estimated. 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. Environmental matters HBB is investigating or remediating historical environmental contamination at some current and former sites operated by HBB or by businesses it acquired. Based on the current stage of the investigation or remediation at each known site, HBB estimates the total investigation and remediation costs and the period of assessment and remediation activity required for each site. The estimate of future investigation and remediation costs is primarily based on variables associated with site clean-up, including, but not limited to, physical characteristics of the site, the nature and extent of the contamination and applicable regulatory programs and remediation standards. No assessment can fully characterize all subsurface conditions at a site. There is no assurance that additional assessment and remediation efforts will not result in adjustments to estimated remediation costs or the time frame for remediation at these sites. HBB's estimates of investigation and remediation costs may change if it discovers contamination at additional sites or additional contamination at known sites, if the effectiveness of its current remediation efforts change, if applicable federal or state regulations change or if HBB's estimate of the time required to remediate the sites changes. HBB's revised estimates may differ materially from original estimates. At March 31, 2017 , December 31, 2016 and March 31, 2016 , HBB had accrued undiscounted obligations of $9.0 million , $8.7 million and $9.3 million , respectively, for environmental investigation and remediation activities. In addition, HBB estimates that it is reasonably possible that it may incur additional expenses in the range of zero to $5.0 million related to the environmental investigation and remediation at these sites.

Business Segments

Business Segments	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Business Segments	Business Segments NACCO is a holding company with the following principal subsidiaries: NACoal, HBB and KC. See Note 1 for a discussion of the Company's industries and product lines. 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. The line “Eliminations” in the Revenues section eliminates revenues from HBB sales to KC. The amounts of these revenues are based on current market prices of similar third-party transactions. No other sales transactions occur among reportable segments. THREE MONTHS ENDED MARCH 31 2017 2016 Revenues NACoal $ 28,300 $ 30,287 HBB 114,154 115,740 KC 26,665 28,383 Eliminations (537 ) (989 ) Total $ 168,582 $ 173,421 Operating profit (loss) NACoal $ 11,326 $ 9,742 HBB 782 67 KC (3,279 ) (2,890 ) NACCO and Other (1,520 ) (1,441 ) Eliminations 59 (66 ) Total $ 7,368 $ 5,412 Net income (loss) NACoal $ 9,289 $ 8,253 HBB 689 (261 ) KC (2,143 ) (1,868 ) NACCO and Other (1,338 ) (1,067 ) Eliminations (1,519 ) (2,255 ) Total $ 4,978 $ 2,802

Nature of Operations and Basi18

Nature of Operations and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consolidation	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. The Company's subsidiaries operate in the following principal industries: mining, small appliances and specialty retail. The Company manages its subsidiaries primarily by industry. The North American Coal Corporation and its affiliated companies (collectively, “NACoal”) mine coal primarily for use in power generation and provide value-added services for natural resource companies. Hamilton Beach Brands, Inc. (“HBB”) is a leading designer, marketer and distributor of small electric household and specialty housewares appliances, as well as commercial products for restaurants, bars and hotels. The Kitchen Collection, LLC (“KC”) is a national specialty retailer of kitchenware operating under the Kitchen Collection® store name in outlet and traditional malls throughout the United States. 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”), Liberty Fuels Company, LLC (“Liberty”), Mississippi Lignite Mining Company (“MLMC”) and The Sabine Mining Company (“Sabine”). All of the operating coal mining subsidiaries other than MLMC are unconsolidated (collectively the "Unconsolidated Mines"). The Unconsolidated Mines 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. The contracts with the customers of the Unconsolidated Mines provide for reimbursement to the company at a price based on actual costs plus an agreed upon pre-tax profit per ton of coal sold or actual costs plus an agreed upon fee per btu of heating value delivered. The fees earned at each mine adjust over time in line with various indices which reflect general U.S. inflation rates. Although NACoal owns 100% of the equity and manages the daily operations of the Unconsolidated Mines, 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 position or results of operations. The income taxes resulting from operations of the Unconsolidated Mines are solely the responsibility of the Company. The pre-tax income from the Unconsolidated Mines is reported on the line “Earnings of unconsolidated mines” 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 Mines above operating profit as they are an integral component of the Company's business and operating results. 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 in the fourth quarter of 2015, is also a consolidated entity. NACoal provides value-added mining services for independently owned limerock quarries through its North American Mining ("NAM") division. NAM is reimbursed by its customers based on actual costs plus a management fee. The financial results for NAM are included in 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. The pre-tax income from NoDak is reported on the line "Income from other unconsolidated affiliates" in the "Other (income) expense" 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	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, 2017 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the three months ended March 31, 2017 and 2016 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, 2016 . The balance sheet at December 31, 2016 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.
Accounting Standards Not Yet Adopted	Accounting Standards Not Yet Adopted In May 2014, the FASB codified in ASC 606, "Revenue Recognition - Revenue from Contracts with Customers," which supersedes most current revenue recognition guidance, including industry-specific guidance, and requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers and provide additional disclosures. As amended, the effective date for public entities is annual reporting periods beginning after December 15, 2017 and interim periods therein. The Company anticipates adopting the new revenue guidance effective January 1, 2018 using the modified retrospective method with the cumulative effect of initially applying the standard recognized as an adjustment to equity. The Company has developed a project plan with respect to its implementation of this standard, including identification of revenue streams and review of contracts and procedures currently in place, and is evaluating the impact on the Company's financial position, results of operations and cash flows. The adoption of this guidance will result in increased disclosures to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts. The Company is in the process of identifying and implementing changes to processes and controls to meet the standard's updated reporting and disclosure requirements and continues to update its assessment of the impact of the standard. The Company expects to further its assessment of the financial impact of the new guidance on its consolidated financial statements by mid-2017.

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories are summarized as follows: MARCH 31 DECEMBER 31 MARCH 31 Coal - NACoal $ 13,155 $ 13,137 $ 16,305 Mining supplies - NACoal 16,100 15,790 20,810 Total inventories at weighted average cost 29,255 28,927 37,115 Sourced inventories - HBB 98,688 95,008 94,482 Retail inventories - KC 31,039 33,407 32,737 Total inventories $ 158,982 $ 157,342 $ 164,334

Fair Value Disclosure (Tables)

Fair Value Disclosure (Tables)	3 Months Ended
	Mar. 31, 2017
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, 2017 Assets: Available for sale securities $ 8,229 $ 8,229 $ — $ — Interest rate swap agreements 802 — 802 — Foreign currency exchange contracts 27 — 27 — $ 9,058 $ 8,229 $ 829 $ — Liabilities: Interest rate swap agreements $ 103 $ — $ 103 $ — Foreign currency exchange contracts 489 — 489 — $ 592 $ — $ 592 $ — December 31, 2016 Assets: Available for sale securities $ 7,882 $ 7,882 $ — $ — Interest rate swap agreements 774 — 774 — Foreign currency exchange contracts 147 — 147 — $ 8,803 $ 7,882 $ 921 $ — Liabilities: Interest rate swap agreements $ 339 $ — $ 339 $ — $ 339 $ — $ 339 $ — March 31, 2016 Assets: Available for sale securities $ 7,347 $ 7,347 $ — $ — $ 7,347 $ 7,347 $ — $ — Liabilities: Interest rate swap agreements $ 1,850 $ — $ 1,850 $ — Foreign currency exchange contracts 491 — 491 — $ 2,341 $ — $ 2,341 $ —

Unconsolidated Subsidiaries (Ta

Unconsolidated Subsidiaries (Tables)	3 Months Ended
	Mar. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]
Schedule of Variable Interest Entities	Summarized financial information for the unconsolidated subsidiaries is as follows: THREE MONTHS ENDED MARCH 31 2017 2016 Revenues $ 194,174 $ 145,070 Gross profit $ 21,997 $ 18,748 Income before income taxes $ 15,710 $ 13,121 Net income $ 11,681 $ 10,010

Business Segments (Tables)

Business Segments (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Segment Reporting Information	Financial information for each of NACCO's reportable segments is presented in the following table. The line “Eliminations” in the Revenues section eliminates revenues from HBB sales to KC. The amounts of these revenues are based on current market prices of similar third-party transactions. No other sales transactions occur among reportable segments. THREE MONTHS ENDED MARCH 31 2017 2016 Revenues NACoal $ 28,300 $ 30,287 HBB 114,154 115,740 KC 26,665 28,383 Eliminations (537 ) (989 ) Total $ 168,582 $ 173,421 Operating profit (loss) NACoal $ 11,326 $ 9,742 HBB 782 67 KC (3,279 ) (2,890 ) NACCO and Other (1,520 ) (1,441 ) Eliminations 59 (66 ) Total $ 7,368 $ 5,412 Net income (loss) NACoal $ 9,289 $ 8,253 HBB 689 (261 ) KC (2,143 ) (1,868 ) NACCO and Other (1,338 ) (1,067 ) Eliminations (1,519 ) (2,255 ) Total $ 4,978 $ 2,802

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Inventory Disclosure [Abstract]
Coal - NACoal	$ 13,155	$ 13,137	$ 16,305
Mining supplies - NACoal	16,100	15,790	20,810
Total inventories at weighted average cost	29,255	28,927	37,115
Sourced inventories - HBB	98,688	95,008	94,482
Retail inventories - KC	31,039	33,407	32,737
Total inventories	$ 158,982	$ 157,342	$ 164,334

Stockholders' Equity Narrative

Stockholders' Equity Narrative (Details) - USD ($)	May 10, 2016	Oct. 31, 2015
2016 Stock Repurchase Program
Class of Stock [Line Items]
Stock repurchase program, authorized amount	$ 50,000,000
2013 Stock Repurchase Program
Class of Stock [Line Items]
Stock repurchase program, authorized amount		$ 60,000,000

Fair Value Disclosure (On a Rec

Fair Value Disclosure (On a Recurring Basis) (Details) - Fair value measurements, recurring - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Level 1
Assets:
Available for sale securities	$ 8,229	$ 7,882	$ 7,347
Interest rate swap agreements	0	0
Foreign currency exchange contracts	0	0
Assets at fair value	8,229	7,882	7,347
Liabilities:
Interest rate swap agreements	0	0	0
Foreign currency exchange contracts	0		0
Liabilities at fair value	0	0	0
Level 2
Assets:
Available for sale securities	0	0	0
Interest rate swap agreements	802	774
Foreign currency exchange contracts	27	147
Assets at fair value	829	921	0
Liabilities:
Interest rate swap agreements	103	339	1,850
Foreign currency exchange contracts	489		491
Liabilities at fair value	592	339	2,341
Level 3
Assets:
Available for sale securities	0	0	0
Interest rate swap agreements	0	0
Foreign currency exchange contracts	0	0
Assets at fair value	0	0	0
Liabilities:
Interest rate swap agreements	0	0	0
Foreign currency exchange contracts	0		0
Liabilities at fair value	0	0	0
Total
Assets:
Available for sale securities	8,229	7,882	7,347
Interest rate swap agreements	802	774
Foreign currency exchange contracts	27	147
Assets at fair value	9,058	8,803	7,347
Liabilities:
Interest rate swap agreements	103	339	1,850
Foreign currency exchange contracts	489		491
Liabilities at fair value	$ 592	$ 339	$ 2,341

Fair Value Disclosure (Narrativ

Fair Value Disclosure (Narrative) (Details) - Level 1 - Fair value measurements, recurring - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mine Water Treatment Trust	$ 8,229	$ 7,882	$ 7,347
Bellaire Corporation
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mine Water Treatment Trust	$ 5,000

Unconsolidated Subsidiaries (Na

Unconsolidated Subsidiaries (Narrative) (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Variable Interest Entity [Line Items]
Investments in unconsolidated subsidiaries	$ 35,906,000	$ 31,054,000	$ 29,532,000
Variable interest entity, reporting entity involvement, maximum risk of loss	6,200,000	4,600,000	3,900,000
Other noncurrent assets
Variable Interest Entity [Line Items]
Investments in unconsolidated subsidiaries	$ 35,900,000	$ 31,100,000	$ 29,500,000

Unconsolidated Subsidiaries (Sc

Unconsolidated Subsidiaries (Schedule) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Variable Interest Entity [Line Items]
Revenues	$ 168,582	$ 173,421
Gross profit	39,135	40,005
Net income	4,978	2,802
Variable interest entity, not primary beneficiary
Variable Interest Entity [Line Items]
Revenues	194,174	145,070
Gross profit	21,997	18,748
Income before income taxes	15,710	13,121
Net income	$ 11,681	$ 10,010

Contingencies (Narrative) (Deta

Contingencies (Narrative) (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Loss Contingencies [Line Items]
Accrual for environmental investigation and remediation activities	$ 9,000,000	$ 8,700,000	$ 9,300,000
Minimum
Loss Contingencies [Line Items]
Estimate of possible loss	0
Maximum
Loss Contingencies [Line Items]
Estimate of possible loss	$ 5,000,000

Business Segments (Details)

Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Revenues	$ 168,582	$ 173,421
Operating profit (loss)	7,368	5,412
Net income (loss)	4,978	2,802
Operating segments | NACoal
Segment Reporting Information [Line Items]
Revenues	28,300	30,287
Operating profit (loss)	11,326	9,742
Net income (loss)	9,289	8,253
Operating segments | HBB
Segment Reporting Information [Line Items]
Revenues	114,154	115,740
Operating profit (loss)	782	67
Net income (loss)	689	(261)
Operating segments | KC
Segment Reporting Information [Line Items]
Revenues	26,665	28,383
Operating profit (loss)	(3,279)	(2,890)
Net income (loss)	(2,143)	(1,868)
Operating segments | NACCO and Other
Segment Reporting Information [Line Items]
Operating profit (loss)	(1,520)	(1,441)
Net income (loss)	(1,338)	(1,067)
Eliminations
Segment Reporting Information [Line Items]
Revenues	(537)	(989)
Operating profit (loss)	59	(66)
Net income (loss)	$ (1,519)	$ (2,255)