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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K ANNUAL REPORT
Pursuant to Section 13 of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994 Commission File No. 1-9172
NACCO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1505819
----------------------------------- ---------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5875 Landerbrook Drive
Mayfield Heights, Ohio 44124-4017
----------------------------------- ---------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (216) 449-9600
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH
EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
----------------------------------- ---------------------------------
Class A Common Stock, New York Stock Exchange
Par Value $1.00 Per Share
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Class B Common Stock, Par Value $1.00 Per Share
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 and (2) has been subject to such filing
requirement for the past 90 days.
YES X NO
----- -----
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Aggregate market value of Class A Common Stock and Class B Common Stock held by
non-affiliates as of February 28, 1995:
$306,939,372
Number of shares of Class A Common Stock outstanding at February 28, 1995:
7,244,500
Number of shares of Class B Common Stock outstanding at February 28, 1995:
1,719,694
DOCUMENTS INCORPORATED BY REFERENCE
(a) The Company's Proxy Statement for its 1995 annual meeting of
stockholders, incorporated herein by reference in Part III.
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PART I
------
ITEM 1. BUSINESS
-----------------
General
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NACCO Industries, Inc. ("NACCO" or the "Company") is a holding company
which owns four principal operating subsidiaries:
(a) NACCO MATERIALS HANDLING GROUP. The Company owns approximately 97%
of the outstanding capital stock of Hyster-Yale Materials Handling, Inc.
("Hyster-Yale"), which is the parent company of NACCO Materials Handling Group,
Inc. (For convenience of reference NACCO Materials Handling Group, Inc. and
Hyster-Yale hereinafter referred to as "NMHG"). NMHG markets two full lines of
forklift trucks and related service parts under the Hyster(R) and Yale(R) brand
names. NMHG accounted for 63% and 49% of NACCO's revenues and operating
profits, respectively, in 1994.
(b) HAMILTON BEACH/PROCTOR-SILEX. The Company owns 80% of Hamilton
Beach/Proctor-Silex, Inc. ("Hamilton Beach/Proctor-Silex"), one of the nation's
leading manufacturers and marketers of small electric appliances. Hamilton
Beach/Proctor-Silex accounted for 20% and 19% of NACCO's revenues and operating
profits, respectively, in 1994.
(c) NORTH AMERICAN COAL. The Company's wholly owned subsidiary, The
North American Coal Corporation, and its affiliated coal companies
(collectively, "North American Coal"), mine and market lignite for use
primarily as fuel for power generation by electric utilities. North American
Coal accounted for 13% and 36% of NACCO's revenues and operating profits,
respectively, in 1994.
(d) KITCHEN COLLECTION. The Company's wholly owned subsidiary, The
Kitchen Collection, Inc. ("Kitchen Collection"), is a national specialty
retailer of kitchenware, small electric appliances and related accessories.
Kitchen Collection accounted for 3% and 4% of NACCO's revenues and operating
profits, respectively, in 1994.
Additional information relating to financial and operating data on a
segment basis (including NACCO, which reduced operating profits by 8% in 1994)
is set forth in Management's Discussion and Analysis of Results of Operations
and Financial Condition on pages 24 through 53 contained in Part II hereof and
in Note P to the Consolidated Financial Statements on pages F-24 through F-27
contained in Part IV hereof.
NACCO was incorporated as a Delaware corporation in 1986 in connection
with the formation of a holding company structure for a predecessor corporation
organized in 1913.
Significant Events
------------------
In August 1994, NACCO and NMHG's two minority stockholders made pro
rata cash capital contributions to NMHG aggregating $25.0 million. This cash
contribution, along with internally generated funds and borrowings, enabled
NMHG to call approximately $48.0 million face value of subordinated debentures
at a price of 105.
In December 1994, NMHG called an additional $24.0 million face value
of subordinated debentures at a price of 105 using internally generated funds
and borrowings. At December 31, 1994, there remained outstanding subordinated
debentures having a face value of approximately $78.5 million.
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On February 28, 1995, NMHG entered into a new long-term credit
agreement to replace its existing bank agreement and to refinance the majority
of its existing long-term debt. The new agreement provided the company with an
unsecured $350.0 million revolving credit facility to replace its current
senior credit facility. The new credit facility has a five-year maturity with
extension options and performance-based pricing comparable to its current
senior credit facility which provides the company with reduced interest rates
upon achievement of certain financial performance targets. With the new credit
facility in place, the company has the ability to call the remaining $78.5
million outstanding subordinated debentures in 1995. In anticipation of the
call, an extraordinary charge of $3.4 million will be recorded by NMHG in the
first quarter of 1995 to write-off unamortized debt issuance costs and
anticipated premiums.
Effective February 28, 1995, George C. Nebel resigned as President and
Chief Executive Officer of Hamilton Beach/Proctor-Silex. While the search for
Mr. Nebel's replacement is underway, Hamilton Beach/Proctor-Silex will be
managed by Alfred M. Rankin, Jr., Chairman, President and CEO of the Company, as
nonexecutive chairman of the Hamilton Beach/Proctor-Silex Board of Directors,
with daily operations being overseen by an executive committee comprised of key
Hamilton Beach/Proctor-Silex executives from various disciplines.
Business Segment Information
----------------------------
A. NACCO Materials Handling Group
------------------------------
NMHG is one of the leading worldwide designers, manufacturers and
marketers of forklift trucks which comprise the largest segment of the
materials handling equipment industry. NMHG accounted for 53% and 42% of
NACCO's assets and liabilities, respectively, as of December 31, 1994, while
its operations accounted for 63% and 49% of NACCO's revenues and operating
profits, respectively, in 1994.
The Industry
------------
Forklift trucks are used in both manufacturing and warehousing
environments. The materials handling industry, especially in industrialized
nations, is generally a mature industry, which has historically been cyclical.
Fluctuations in the rate of orders for forklift trucks reflect the capital
investment decisions of the customers, which in turn depend upon the general
level of economic activity in the various industries served by such customers.
In the most recent business cycle the North American market for forklift
trucks reached its lowest level in 1991 and has increased each year since then
to a record level in 1994. The European and Japanese markets generally had
been in decline since 1990; they both showed some recovery in 1994. During
this business cycle, however, the total worldwide lift-truck market was
relatively stable.
Company Operations
------------------
NMHG maintains product differentiation between Hyster(R) and Yale(R)
brands of forklift trucks and distributes its products through separate
worldwide dealer networks. Nevertheless, opportunities have been identified
and addressed to improve the company's results by integrating overlapping
operations and taking advantage of economies of scale in design, manufacturing
and purchasing. NMHG provides all design, manufacturing and administrative
functions. Products are marketed and sold through two separate dealer networks
which retain the Hyster and Yale identities. In Japan, NMHG has a 50% owned
joint venture with Sumitomo Heavy Industries Ltd. named Sumitomo-Yale Company
Limited ("S-Y"). S-Y performs certain design activities and produces lift
trucks and components which it markets in Japan and which are exported for sale
by NMHG and its affiliates in the U.S. and Europe.
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Product Lines
-------------
NMHG manufactures a wide range of forklift trucks under both the
Hyster(R) and Yale(R) brand names. The principal categories of forklift trucks
include electric rider, electric narrow-aisle and electric motorized hand
forklift trucks primarily for indoor use, and internal combustion engine
("ICE") forklift trucks for indoor or outdoor use. Forklift truck sales
accounted for approximately 82%, 80%, and 79% of NMHG's net sales in 1994,
1993, and 1992, respectively.
NMHG also derives significant revenues from the sale of service parts
for its products. Profit margins on service parts are greater than those on
forklift trucks. The large population of Hyster(R) and Yale(R) forklift trucks
now in service provides a market for service parts. In addition to parts for
its own forklift trucks, NMHG has a program (termed UNISOURCE(TM) in North
America and MULTIQUIP(TM) in Europe) designed to supply Hyster dealers with
replacement parts for most competing brands of forklift trucks. NMHG has a
similar program (termed PREMIER(TM)) for its Yale dealers in the Americas and
Europe. Accordingly, NMHG dealers can offer their mixed fleet customers a "one
stop" supply source. Certain of these parts are manufactured by and purchased
from third party component makers. NMHG also manufactures some of these parts
through reverse-engineering of its competitors' parts. Service parts accounted
for approximately 18%, 20%, and 21% of NMHG net sales in 1994, 1993, and 1992,
respectively.
Competition
-----------
The forklift truck industry is highly competitive. The worldwide
competitive structure of the industry is fragmented by product line and
country. The principal methods of competition among forklift truck
manufacturers are product performance, price, service and distribution
networks. The forklift truck industry competes with alternative methods of
materials handling, including conveyor systems, automated guided vehicle
systems and hand labor. Global competition is also affected by a number of
other factors, including currency fluctuations, variations in labor costs and
effective tax rates, and the costs related to compliance with applicable
regulations, including export restraints, antidumping provisions and
environmental regulations.
Although there is no official source for information on the subject,
NACCO believes that NMHG is one of the top three manufacturers of forklift
trucks in the world.
NMHG's position is strongest in North America, where it believes it is
the leader in unit sales of electric rider and ICE forklift trucks and has a
significant share of unit sales of electric narrow-aisle and electric motorized
hand forklift trucks. Although the European market is fragmented and
competitive positions vary from country to country, NMHG believes that it has a
significant share of unit sales of electric rider and ICE forklift trucks in
Western Europe. Although NMHG's current market share in Asia-Pacific,
including Japan, is lower than in other geographic areas it has been targeted
for additional market share growth.
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Trade Restrictions
------------------
A. United States
-------------
Since June 1988, Japanese-built ICE forklift trucks imported into the
U.S., with lifting capacities between 2,000 and 15,000 pounds, including
finished and unfinished forklift trucks, chassis, frames, and frames assembled
with one or more component parts, have been subject to an antidumping duty
order. Antidumping duty rates in effect through 1994 range from 4.48% to
56.81% depending on manufacturer or importer. The antidumping duty rate
applicable to imports from S-Y is 51.33%, and is likely to continue unchanged
for the foreseeable future, unless S-Y and NMHG decide to participate in
proceedings to have it reduced. NMHG does not currently import for sale in the
United States any forklift trucks or components subject to the antidumping duty
order. This antidumping duty order will remain in effect until the Japanese
manufacturers and importers satisfy the U.S. Department of Commerce
("Commerce") that they have not individually sold merchandise subject to the
order in the United States below foreign market value for at least three
consecutive years, or unless Commerce or the U.S. International Trade
Commission finds that changed circumstances exist sufficient to warrant the
revocation of the order. The legislation implementing the Uruguay round of
GATT negotiations passed in 1994 provides that the anti-dumping order will be
reviewed for possible revocation in 2000. All of NMHG's major Japanese
competitors have either built or acquired manufacturing or assembly facilities
in the United States. The company cannot predict with any certainty if there
will be any negative effects to the company resulting from the Japanese
sourcing of their forklift products in the United States.
B. Europe
------
From 1986 through 1994, Japanese forklift truck manufacturers were
subject to informal export restraints on Japanese-manufactured electric rider,
electric narrow-aisle and ICE forklift trucks shipped to Europe. These informal
restraints are not expected to continue in 1995. Several Japanese manufacturers
have announced either that they have established, or intend to establish,
manufacturing or assembly facilities within the European Community. The
company also cannot predict with any certainty if there will be any negative
effects to NMHG resulting from the Japanese sourcing of their forklift products
in Europe.
Product Design and Development
------------------------------
NMHG spent $23.2 million, $20.7 million, and $21.9 million on product
design and development activities in 1994, 1993, and 1992, respectively. The
Hyster(R) and Yale(R) products are differentiated for the specific needs of
their respective customer bases. NMHG continues to pursue opportunities to
improve product costs by engineering new Hyster(R) and Yale(R) brand products
with component commonality.
Certain product design and development activities with respect to ICE
forklift trucks and some components are performed in Japan by S-Y. S-Y spent
approximately $4.5 million, $4.0 million, and $3.7 million on product design
and development in 1994, 1993, and 1992, respectively.
Backlog
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As of December 31, 1994, NMHG's backlog of unfilled orders for
forklift trucks was approximately 24,600 units, or $433 million. This compares
to the backlog as of December 31, 1993 of approximately 12,100 units, or $206
million. Management believes NMHG's backlog level is consistent with overall
increases in industry backlog levels. Backlog represents unit orders to NMHG's
manufacturing plants from independent dealerships, retail customers and
contracts with the U.S. Government. Although these
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orders are believed to be firm, such orders may be subject to cancellation or
modification.
Sources
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NMHG has adopted a strategy of obtaining its raw materials and
principal components on a global basis from competitively priced sources. NMHG
is dependent on a limited number of suppliers for certain of its critical
components, including diesel and gasoline engines and cast-iron counterweights
used on certain forklift trucks. There would be a material adverse effect on
NMHG if it were unable to obtain all or a significant part of such components,
or if the cost of such components was to increase significantly under
circumstances which prevented NMHG from passing on such increases to its
customers.
Distribution
------------
The Hyster(R) and Yale(R) brand products are distributed through
separate highly developed worldwide dealer networks. Each also sells directly
to certain major accounts.
In Japan, forklift truck products are distributed by S-Y. In 1991,
Yale reached a ten-year agreement with Jungheinrich Aktiengesellschaft AG
("Jungheinrich"), a German manufacturer of forklift trucks, to continue
distribution of Yale brand products in Germany and Austria and to provide to
Jungheinrich certain ICE and electric-powered products for sale in other major
European countries under the Jungheinrich brand name.
Financing of Sales
------------------
Hyster U.S. dealer and direct sales are supported by leasing and
financing services provided by Hyster Credit Company, a division of AT&T
Commercial Finance Corporation, pursuant to an operating agreement which
expires in 2000.
NMHG is a minority stockholder of Yale Financial Services, Inc., a
subsidiary of General Electric Capital Corporation, which offers Yale U.S.
dealers wholesale and retail financing and leasing services for its forklift
trucks. Such retail financing and leasing services are also available to Yale
national account customers.
Employees
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As of February 28, 1995, NMHG had approximately 6,000 employees.
Employees in the Danville, Illinois manufacturing and parts depot operations
are unionized, as are tool room employees located in Portland, Oregon. A new
three-year contract for the Danville union employees was signed in 1994, which
will expire in June, 1997. A new three-year contract was signed in 1994 with
the Portland tool room union which will expire in October 1997. Employees at
the facilities in Berea, Kentucky; Sulligent, Alabama; and Greenville and
Lenoir, North Carolina are not represented by unions.
In Europe, shop employees in the Craigavon, Northern Ireland facility
are unionized. Employees in the Irvine, Scotland and Nijmegen, The Netherlands
facilities are not represented by unions. The employees in Nijmegen have
organized a works council, as required by Dutch law, which performs a
consultative role on employment matters.
NMHG's management believes its current labor relations with both
union and non-union employees are generally satisfactory.
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Government Regulation
---------------------
NMHG's manufacturing facilities, in common with others in industry,
are subject to numerous laws and regulations designed to protect the
environment, particularly with respect to disposal of plant waste. NMHG's
products are also subject to various industry and governmental standards.
NMHG's management believes that such requirements have not had a material
adverse effect on its operations.
Patents, Trademarks and Licenses
--------------------------------
NMHG is not materially dependent upon patents or patent protection.
NMHG is the owner of the Hyster(R) trademark, which is currently registered in
approximately 51 countries. The Yale(R) trademark, which is used on a
perpetual royalty-free basis by NMHG in connection with the manufacture and
sale of forklift trucks and related components, is currently registered in
approximately 100 countries. NMHG's management believes that its business is
not dependent upon any individual trademark registration or license, but that
the Hyster(R) and Yale(R) trademarks are material to its business.
B. Hamilton Beach/Proctor-Silex
----------------------------
General
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The Company believes that Hamilton Beach/Proctor-Silex is one of the
largest broad line manufacturers and marketers of small electric appliances in
North America. Hamilton Beach/Proctor-Silex's products are marketed primarily
to retail merchants and wholesale distributors. Hamilton Beach/Proctor-Silex
accounted for 17% and 12% of NACCO's assets and liabilities, respectively, as
of December 31, 1994, while its operations accounted for 20% and 19% of NACCO's
revenues and operating profits, respectively, in 1994.
Sales and Marketing
-------------------
Hamilton Beach/Proctor-Silex manufactures and markets a wide range of
small electric appliances, including motor driven appliances such as blenders,
food processors, mixers and electric knives which are primarily marketed under
the Hamilton Beach(R) brand name, and heat generating appliances such as
toasters, irons, coffeemakers and toaster ovens which are primarily marketed
under the Proctor-Silex(R) brand name. The company markets its products
primarily in North America, but also sells in, South America, Latin America and
Europe. Sales are generated by a network of sales employees and outside sales
representatives to mass merchandisers, catalog showrooms, warehouse membership
clubs, variety store chains, department stores and other retail outlets. Sales
are also made through independent dealers and distributors. Principal
customers include Wal-Mart, Target, K-Mart, Service Merchandise, Montgomery
Ward, Caldor's, Sears, Canadian Tire and Zellers. The company also
manufactures and sells certain private label brand products to third parties
for resale. Sales promotional activities are primarily focused on cooperative
advertising.
Because of the seasonal nature of the markets for small electric
appliances, Hamilton Beach/Proctor-Silex's management believes that backlog is
not a meaningful indicator of performance nor is it a significant indicator of
annual sales. Backlog of orders as of December 31, 1994 was approximately $8.2
million. This compares with the aggregate backlog as of December 31, 1993 of
approximately $13.1 million. This backlog represents customer orders; customer
orders may be cancelled at any time prior to shipment.
Hamilton Beach/Proctor-Silex's warranty program to the consumer
consists generally of a limited warranty lasting one or two years, depending on
the product,
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for domestic electric appliances, and two years for all Canadian electric
appliances. Under these warranty programs, the company may repair or replace,
at its option, those products found to contain manufacturing defects.
Revenues and operating profit for Hamilton Beach/Proctor-Silex are
traditionally greater in the second half of the year as sales of small electric
appliances increase significantly with the fall holiday selling season.
Because of the seasonality of purchases of its products, Hamilton
Beach/Proctor-Silex incurs substantial short-term debt to finance inventories
and accounts receivable.
Product Design and Development
------------------------------
Hamilton Beach/Proctor-Silex spent $2.7 million in 1994 and 1993 and
$2.5 million in 1992 on product design and development activities.
Sources
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The principal raw materials used to manufacture and distribute
Hamilton Beach/Proctor-Silex's products are steel, aluminum, plastics and
packaging materials. The company's management believes that adequate quantities
of raw materials are available from various suppliers.
On November 28, 1994, the parent company of one of Hamilton
Beach/Proctor Silex's principal suppliers of molded plastic, Southern Tech
Plastics Products, Inc., entered into Chapter 11 bankruptcy proceedings.
On March 3, 1995, Hamilton Beach/Proctor-Silex entered into a
nonbinding letter of intent to purchase the stock of Southern Tech Plastics
Products, Inc. Subject to final agreement of the parties and the approval of
the United States Bankruptcy Court, it is the company's intention to close this
transaction in April and continue molding operations on its own, although there
can be no assurance that this transaction will be consummated.
Competition
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The small electric appliance industry is highly competitive.
Based on publicly available information about the industry,
Hamilton Beach/Proctor-Silex's management believes it is one of the
largest producers of such appliances in North America.
As retailers generally purchase a limited selection of small electric
appliances, Hamilton Beach/Proctor-Silex competes with other suppliers for
retail shelf space and focuses its marketing efforts on retailers rather than
consumers. The company's management believes that the principal areas of
competition with respect to its products are quality, price, product design,
product features, merchandising, promotion and warranty. Hamilton
Beach/Proctor-Silex's management believes that it is competitive in all of
these areas.
Government Regulation
---------------------
Hamilton Beach/Proctor-Silex, in common with other manufacturers, is
subject to numerous Federal and state health, safety and environmental
regulations. The company's management believes that the impact of expenditures
to comply with such laws will not have a material adverse effect on Hamilton
Beach/Proctor-Silex. The company's products are subject to testing or
regulation by Underwriters' Laboratories, the Canadian Standards Association,
and various entities in foreign countries which review product design.
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Patents, Trademarks, Copyrights, and Licenses
---------------------------------------------
Hamilton Beach/Proctor-Silex holds patents and trademarks registered
in the United States and foreign countries for various products. The company's
management believes that its business is not dependent upon any individual
patent, trademark, copyright or license, but that the Hamilton Beach(R) and
Proctor-Silex(R) trademarks are material to its business.
Employees
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As of February 28, 1995, Hamilton Beach/Proctor-Silex's work force
consisted of approximately 3,900 employees, none of which are represented by
unions except for approximately 30 hourly employees at the Picton, Ontario
facility. The Picton, Ontario employees are represented by an employee
association which performs a consultative role.
C. North American Coal
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General
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North American Coal is engaged in the mining and marketing of lignite
for use primarily as fuel for power generation by electric utilities.
Substantially all of the sales by North American Coal are made through wholly
owned project mining subsidiaries pursuant to long-term, cost plus a profit per
ton contracts. The utility customers have arranged and guaranteed the
financing of the development and operation of the project mining subsidiaries.
There is no recourse to NACCO or North American Coal for the financing of these
subsidiary mines. At December 31, 1994 North American Coal's operating mines
consisted of mines where the reserves were acquired and developed by North
American Coal, except for the South Hallsville No. 1 Mine whose reserves are
owned by the customer. North American Coal also earns royalty income from the
lease of various coal and gas properties. For further information as to the
financing of the project mining subsidiaries, see Note H to the Consolidated
Financial Statements on pages F-15 through F-16 contained in Part IV hereof.
Project mining subsidiaries accounted for 24% and 29% of NACCO's assets and
liabilities, respectively, as of December 31, 1994, while their operations
accounted for 12% and 30% of the Company's revenues and operating profits,
respectively, in 1994.
Sales and Markets
-----------------
The principal customers of North American Coal are electric utilities
and a synfuels plant. In 1994, sales to one customer, which supplies coal to
four facilities, accounted for 45% of North American Coal's revenues compared
with 46% and 44% in 1993 and 1992, respectively. The distribution of sales in
the last five years has been as follows:
DISTRIBUTION
-----------------------------
Total
Tons Sold Electric Synfuels
(Millions) Utilities Plant
---------- --------- -------
1994 27.2 76% 24%
1993 26.5 75% 25%
1992 24.5 74% 26%
1991 21.7 73% 27%
1990 20.8 71% 29%
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The contracts under which the project mining subsidiaries were
organized provide that under certain conditions of default the customer(s)
involved may elect to acquire the assets (subject to the liabilities) or the
capital stock of the subsidiary, for an amount effectively equal to book value.
In one case, the customer may elect to acquire the stock of the subsidiary
after a specified period of time without reference to default, in exchange for
certain payments on coal thereafter mined.
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The location, customer, sales tonnage and contract expiration date for the
mines operated by North American Coal in 1994 were as follows:
1994 Sales
Mine and Customer Tonnage Contract
Mining Operation Location (Plant) (Millions) Expires
---------------- -------- -------- ---------- -------
Project Mining
Subsidiaries
------------
The Coteau Freedom (1) Dakota Coal 6.5 2007(2)
Properties Mine; Company
Company Beulah, (Great Plains
North Synfuels
Dakota Plant)
(surface)
Dakota Coal 5.1 2007
Company
(Antelope
Valley
Station)
Dakota Coal 3.1 2007
Company
(Leland Olds
Station)
Dakota Coal 1.0 1997
Company
(Stanton Station
of United Power
Association)
The Falkirk Falkirk (1) United Power 7.3 2013
Mining Mine; Association/
Company Under- Cooperative
wood, Power
North Association
Dakota (Coal Creek
(surface) Station)
The Sabine South (1) Southwestern 3.4 2007
Mining Hallsville, Electric
Company No. 1 Power Company
Mine; (Henry W. Pirkey
Halls- Power Plant)
ville,
Texas
(surface)
Other
-----
Red River Oxbow Mine; Central .8 (3) 2001
Mining Coushatta, Louisiana
Company Louisiana Electric
(Joint Venture (surface) Company (Dolet
with Phillips Hills Power Plant)
Coal Company)
<FN>
- see following page for explanation of note references.
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Notes to preceding table:
-------------------------
(1) The contracts for these mines require the customer to cover
the cost of the ongoing replacement and upkeep of the plant
and equipment of the mine.
(2) Although the term of the existing coal sales agreement
terminates in 2007, the term may be extended for six (6)
additional periods of five years, or until 2037, at the option
of The Coteau Properties Company.
(3) The amount represents the total (100%) of the 1994 joint
venture tonnage.
Under terms of a lignite mining agreement entered into in 1985
with Utility Fuels, Inc. ("UFI"), a subsidiary of Houston Industries
Incorporated, North American Coal has been retained to design,
develop, construct and operate the proposed Trinity Mine in the
Malakoff-Cayuga reserves near Malakoff, Texas. The Trinity Mine was
expected to produce from 4.5 to 6.5 million tons of lignite annually.
After several delays, however, the proposed Malakoff Generating
Station was cancelled in July, 1994. North American Coal and its
wholly-owned subsidiary, North American Coal Royalty Company ("Royalty
Company"), have received certain management fees, minimum royalties
and other payments in connection with the future development of the
Trinity Mine project. In December 1992 the Lignite Lease and Sublease
Agreement under which the minimum royalties were received was amended.
The parties agreed that, in light of the delayed development of this
mining project, effective January 1, 1993 UFI was no longer obligated
to pay minimum royalties to Royalty Company. Termination of this
obligation reduces North American Coal's annual net income
approximately $2.4 million, after tax. Under the original agreement,
these minimum royalty payments would have terminated at the end of the
year 2005.
Government Regulation
---------------------
North American Coal, in common with other coal producers,
continues to be subject to Federal and state health, safety and
environmental regulations. The 1995 expenditures which will be
required for compliance with the provisions of governmental
regulations, including mined land reclamation and other air and water
pollution abatement requirements, are estimated at $1.2 million for
certain closed mines and are included in Self-Insurance Reserves and
Other in NACCO's Consolidated Financial Statements in this Annual
Report on Form 10-K. The active operations are required to make
certain additional capital expenditures to comply with such
governmental regulations, which expenditures will be recovered under
the terms of the coal sales agreements with the utility customers.
North American Coal's management believes that the Clean Air
Act Amendments, which became effective in 1990, will not have a
material adverse effect on its current operations, because
substantially all of the power generating facilities operated or
supplied by North American Coal's customers meet or exceed the
requirements of the Clean Air Act.
The Federal Energy Regulatory Commission ("FERC") issued Order
636, effective in May 1992, which requires gas pipeline companies to
separate their gas sales and gas transportation functions. As a
result of this Order, the nation's natural gas pipeline companies,
including the four which purchase gas produced by the Great Plains
Synfuels Plant (the
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"Synfuels Plant"), which is supplied by the company's Coteau
mining subsidiary, have much less need for gas supply under contract
and are actively seeking to restructure or terminate many supply
contracts. The four (4) pipeline companies which purchase gas from
the Synfuels Plant have reached a tentative settlement agreement with
the plant's operator, Dakota Gasification Company ("DGC"), over the
dispute regarding their gas purchase contracts. Under the settlement
agreement, the pipeline companies will pay DGC market-based prices,
plus a fixed monthly demand payment for seven years, for the gas.
FERC must approve the settlement with each of the four (4) pipeline
companies. In December 1994, FERC approved the settlement with one of
the pipeline companies. The affected customers of the four pipelines
have been unsuccessful to date in court challenges to the arrangements
although several challenges are presently pending on rehearing. Based
on regulatory and judicial consideration to date, it does not appear
that continued operation of the Synfuels Plant and Coteau's supply of
coal to the Plant will be adversely affected in the near future.
Coteau sold approximately 6.5 million tons of lignite to the Synfuels
Plant in 1994.
Competition
-----------
The coal industry competes with other sources of energy,
particularly oil, gas, hydro-electric power and nuclear power. Among
the factors that affect competition are the price and availability of
oil and natural gas, environmental considerations, the time and
expenditures required to develop new energy sources, the cost of
transportation, the cost of compliance with governmental regulation of
operations, and the impact of federal energy policies. The ability
of North American Coal to market and develop its reserves will depend
upon the interaction of these factors.
There is no official source of information on the subject, but
company management believes that North American Coal is the seventh
largest commercial coal producer in the United States.
Employees
---------
As of February 28, 1995, North American Coal had approximately
880 employees.
D. Kitchen Collection
------------------
Kitchen Collection(R) is a national specialty retailer of
kitchenware, small electric appliances and related accessories which
operated 119 retail stores as of February 28, 1995. Stores are
located primarily in factory outlet complexes that feature merchandise
of highly recognizable name-brand manufacturers. Kitchen Collection's
product mix includes a broad line of appliances from leading
manufacturers, including Hamilton Beach/Proctor-Silex appliances.
Kitchen Collection introduced a new store format in 1994,
named Hearthstone(TM). These stores carry a distinctive mix of
merchandise for the entire home, with particular emphasis on gift
items and home decor. The product mix and store design at Hearthstone
are distinctively different from the traditional Kitchen Collection
store. This market differentiation will allow the two store formats
to coexist within the same market.
13
14
Kitchen Collection accounted for 1% of NACCO's assets and
liabilities as of December 31, 1994, while its operations accounted
for 3% and 4% of NACCO's revenues and operating profits, respectively,
in 1994.
Item 2. Properties
-------------------
A. NMHG
----
The following table summarizes certain information with
respect to the principal manufacturing, distribution and office
facilities owned or leased by NMHG.
Location Owned Leased Function/Principal Products
-------- ----- ----- ---------------------------
Basingstoke, England X Hyster forklift truck marketing
and sales operations for Europe,
the Middle East and Africa
Berea, Kentucky X Manufacture of forklift trucks
Craigavon, Northern X Manufacture of forklift trucks
Ireland
Danville, Illinois X Manufacture of forklift trucks,
components and service parts
Danville, Illinois X Distribution of service parts
for both Hyster and Yale
forklift trucks
Danville, Illinois X Hyster forklift truck marketing
and sales operations for the
Americas
Flemington, X Yale forklift truck marketing
New Jersey and sales operations for the
Americas and certain NMHG
engineering operations
Greenville, North X Manufacture of forklift trucks;
Carolina NMHG manufacturing and other
staff operations for the
Americas
Irvine, Scotland X Manufacture of forklift trucks
and other staff operations for
the Europe
Lenoir, North X Manufacture of component
Carolina parts for forklift trucks
14
15
Nijmegen, The X Manufacture of forklift
Netherlands trucks and component parts;
distribution of service parts
for forklift trucks
Portland, Oregon X Technical center for testing
of prototype equipment and
component parts
Portland, Oregon X NMHG corporate headquarters
Portland, Oregon X Manufacture of production tooling
and prototype units
Sao Paulo, Brazil X Manufacture of forklift
trucks; distribution of service
parts for forklift trucks
Sulligent, Alabama X Manufacture of component parts
for forklift trucks
Sydney, Australia X Assembly of forklift trucks;
distribution of service parts for
forklift trucks and
staff operations for Asia-
Pacific
Wolverhampton, X Yale forklift truck
England marketing and sales operations
for Europe
In 1994, NMHG sold one of its facilities located in Danville, Illinois and is
currently leasing back a portion of the facility for its Hyster marketing and
sales operations.
15
16
B. Hamilton Beach/Proctor-Silex
----------------------------
The following table summarizes certain information with respect to the
principal manufacturing, distribution and office facilities owned or leased by
Hamilton Beach/Proctor-Silex.
Location Owned Leased Function/Principal Products
-------- ----- ------ ---------------------------
Collierville, X Distribution center
Tennessee
El Paso, Texas X Distribution center
Glen Allen, Virginia X Corporate headquarters
Juarez, Chihuahua, X Two assembly plants
Mexico for coffeemakers,irons and
popcorn pumpers
Miami, Florida X Distribution center
Mt. Airy, North X Manufacture of toasters and
Carolina toaster ovens
Mt. Airy, North X Distribution center
Carolina
Picton, Ontario, X Distribution center
Canada
Southern Pines, X Manufacture of iron
North Carolina components; service center for
customer returns; catalog sales
center; parts distribution center
Toronto, Ontario, X Proctor-Silex, Canada sales
Canada and administration
headquarters
Washington, North X Distribution and
Carolina warranty center; manufacture of
products; plastics molding
facility
Sales offices are also leased in several cities in the United States
and Canada.
C. North American Coal
-------------------
North American Coal's proven and probable coal reserves and deposits
(owned in fee or held under leases which generally remain in effect until
exhaustion of the reserves if mining is in progress) are estimated at
approximately 2.2 billion tons, approximately 81% of which are lignite deposits
in North Dakota.
Reserves are estimates of quantities of coal, made by the company's
geological and engineering staff, that are considered mineable in the future
using existing operating methods. Developed reserves are those which have been
allocated to mines which are in operation; all other reserves are classified as
16
17
undeveloped. The table which follows gives detailed information as to North
American Coal's in-place reserves as of December 31, 1994 for the mines listed
under Item 1 "North American Coal" on page 11. The reserves of the South
Hallsville No. 1 Mine, which are listed on page 11, are owned and controlled by
the customer and, therefore, have not been listed in the following table.
Additional information concerning North American Coal is set forth in Item 1
"North American Coal".
Reserves (Millions of Tons)
---------------------------
Average
Sulfur
Committed Average Content
Under BTUs Per Unit
Contract Uncommitted per lb. of Weight
-------- ----------- ------- ---------
Developed
---------
Freedom Mine,
North Dakota 507.5 6,767 0.8%
Falkirk Mine,
North Dakota 674.2 6,200 0.6%
Oxbow Mine,
Louisiana (1) 2.8 6.4 6,722 0.7%
------- ------
Total Developed 1,184.5 6.4
Undeveloped
-----------
North Dakota 571.2 6,428 0.7%
Texas 125.8 125.2 6,208 0.9%
Eastern 64.5 79.7 12,070 3.3%
------- -----
Total Undeveloped 190.3 776.1
------- -----
1,374.8 782.5
======= =====
<FN>
(1) These amounts represent the total (100%) of the joint venture reserves.
D. Kitchen Collection
------------------
Kitchen Collection owns the building housing its corporate
headquarters, a warehouse/distribution facility and a retail store in
Chillicothe, Ohio. It leases warehouse/distribution facilities in Chillicothe,
Ohio and the remainder of its retail stores. A typical store is approximately
3,300 square feet.
17
18
Item 3. Legal Proceedings
--------------------------
Neither the Company nor any of its subsidiaries is a party to any
material pending legal proceeding other than ordinary routine litigation
incidental to its respective business.
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders of the Company.
Item 4A. Executive Officers of the Registrant
----------------------------------------------
The information under this Item is furnished pursuant to Instruction 3
to Items 401(b) and 401(c) of Regulation S-K.
The table on the following pages sets forth the name, age, current
position and principal occupation and employment during the past five years of
the Company's executive officers.
18
19
Officers of the Company
Name Age Current Position Other Positions
---- --- ---------------- ---------------
Alfred M. Rankin, Jr. 53 Chairman, President, and Chief Executive Officer From May 1991 to May 1994,
of NACCO (since May 1994) President and Chief Executive
Officer of NACCO. From
prior to 1990 to May 1991,
President and Chief Operating
Officer of NACCO.
Frank B. O'Brien 48 Senior Vice President - Corporate From January 1993 to
Development and Chief Financial Officer of December 1993,
NACCO (since January 1994) Senior Vice President -
Corporate Development of NACCO.
From prior to 1990 to
December 1992, see
Vice President - Corporate
Development of NACCO.
Steven M. Billick 38 Vice President and Controller From prior to 1990 to July 1991,
of NACCO (since July 1991) Partner, Deloitte & Touche
(accounting firm).
Charles A. Bittenbender 45 Vice President, General Counsel and From prior to 1990 to June 1990,
Secretary of NACCO (since July 1990) Deputy General Counsel, G.D.
Searle & Co. (research-based
manufacturer and marketer of
pharmaceutical products).
19
20
Principal Officers of the Company's Subsidiaries
A. NMHG
----
Name Age Current Position Other Positions
---- --- ---------------- ---------------
Reginald R. Eklund 54 President and Chief Executive From August 1993 to September
Officer of NMHG (since 1993, Vice President of Hyster and
September 1992) Yale. From September 1992 to
August 1993, President and Chief
Executive Officer of Hyster. From
prior to 1990 to September 1992,
President and Chief Operating
Officer of NMHG. From prior to
1990 to August 1993, President and
Chief Executive Officer of Yale.
Bergen I. Bull 55 Vice President, General Counsel From November 1990 to December
and Secretary of NMHG 1993, Vice President and Assistant
(since December 1993) Secretary of Yale. From prior to
1990 to December 1993, Vice
President, Corporate
Administration, General Counsel and
Secretary of Hyster.
G. Michael Decker 53 Vice President, Finance and Chief From February 1993 to December
Financial Officer of NMHG 1993, Vice President, Finance
(since February 1993) and Chief Financial Officer of
Hyster and Yale. From 1991 to
February 1993, Vice President,
Finance, Secretary and Chief
Financial Officer for Doehler
Jarvis Ltd. Partnership (casting
manufacturer). From prior to
1990 to 1991, Senior Vice
President Finance Treasurer and
Chief Financial Officer for The
Manitowoc Company, Inc.
(manufacturer serving heavy
construction, food service and
shipbuilding industries).
Julie C. Hui 38 Controller of NMHG (since From 1992 to January 1995,
January 1995) Controller, Bun Brown Corporation
(manufacturer of micro electronics
and systems products). In 1991,
Director of Accounting and Tax
of Bun Brown. From prior to 1990
to December 1990, Tax Manager
of Bun Brown.
Jeffrey C. Mattern 42 Treasurer of NMHG (since From August 1992, Treasurer of
August 1992) Hyster and Yale. From prior to 1990
to July 1992, Assistant Treasurer
for Harnischfeger Industries, Inc.
(manufacturer of papermaking
machinery, mining and materials
handling equipment).
Frank G. Muller 53 Vice President, President Americas From February 1993 to December
for NMHG (since May 1993) 1993, Vice President of Hyster and
Yale. From May 1992 to May 1993,
Vice President, Manufacturing,
Americas for NMHG. From prior to
1990 to May 1992, Vice President,
Manufacturing, Yale.
Victoria L. Rickey 42 Vice President, Managing Director, From 1993 to January 1995,
NMHG Europe (since January 1995) Senior Vice President
International Business Group, J.I.
Case (manufacturer of agricultural
and construction equipment). From
prior to 1990 to 1993, Vice
President, Agricultural Equipment
of J.I. Case.
Graham D. Tribe 52 Vice President, Managing Director, From prior to 1990 to May 1994,
NMHG Asia-Pacific Managing Director, Hyster
(since May 1994) Australia Pty. Ltd.
20
21
Principal Officers of the Company's Subsidiaries
------------------------------------------------
B. HAMILTON BEACH/PROCTOR-SILEX
--------------------------------
Name Age Current Position Other Positions
---- --- ---------------- ---------------
Judith B. McBee 47 Executive Vice President - From October 1990 to September
Marketing of Hamilton Beach/ 1994, Executive Vice President -
Proctor-Silex (since October 1994) Marketing/Sales of Hamilton
Beach/Proctor Silex. From January
1990 to October 1990, Executive
Vice President - Marketing/Sales
of Proctor-Silex. From prior to
1990 to January 1990, Executive
Vice President - Marketing of
Proctor-Silex.
Paul C. Smith 48 Senior Vice President - Sales of From prior to 1990 to September
Hamilton Beach/Proctor-Silex 1994, Vice President and General
(since October 1994) Manager, Consumer Markets
Division, Fuji Photo Film U.S.A.
(manufacturer of photographic
film).
Charles B. Hoyt 47 Vice President - Finance and From August 1990 to October 1990,
Chief Financial Officer of Vice President and Chief Financial
Hamilton Beach/Proctor-Silex Officer of Proctor-Silex. From
(since October 1990) prior to 1990 to August 1990,
Vice President - Finance and
Treasurer of Yale.
Ronald C. Eksten 51 Vice President, General Counsel From prior to 1990 to December
and Secretary of Hamilton Beach/ 1991, Associate General Counsel,
Proctor-Silex (since December 1991) Continental Can Company, Inc. (an
international manufacturer of
packaging products).
Michael J. Morecroft 52 Vice President, Engineering/Product From prior to 1990 to October
Development of Hamilton Beach/ 1990, Vice President, Engineering
Proctor-Silex (since October 1990) of Hamilton Beach Inc.
Jack J. Pountney 66 Vice President of Hamilton Beach/ From prior to 1990, President,
Proctor-Silex - President, Proctor-Silex Proctor-Silex Canada.
Canada (since June 1993)
James H. Taylor 37 Vice President and Treasurer of From prior to 1990 to October
Hamilton Beach/Proctor-Silex 1990, Vice President and Treasurer
(since October 1990) of Proctor-Silex.
21
22
Principal Officers of the Company's Subsidiaries
------------------------------------------------
C. North American Coal
-----------------------
Name Age Current Position Other Positions
---- --- ---------------- ---------------
Clifford R. Miercort 55 President of North American Coal
(since prior to 1990) and Chief
Executive Officer of North American
Coal (since April 1990)
H. Dean Jacot 52 Executive Vice President and
Chief Operating Officer of
North American Coal (since
prior to 1990)
Herschell A. Cashion 52 Senior Vice President - Business From prior to 1990 to August 1994,
Development of North American Coal Vice President - Business
(since August 1994) Development of North American Coal
Charles B. Friley 53 Vice President and Chief Financial From April 1992 to October 1994,
Officer (since February 1995) Senior Vice President of Phillips
Alaska Natural Gas Company. From
prior to 1990 to April 1992,
Vice President of Phillips 66
Natural Gas Company.
Thomas A. Koza 48 Vice President - Law and From prior to 1990 to July 1990,
Administration of North Vice President, General Counsel
American Coal; Secretary of and Secretary of NACCO.
North American Coal
(since prior to 1990)
K. Donald Grischow 47 Controller of North American
Coal and Treasurer of North
American Coal (since prior to 1990)
22
23
Principal Officers of the Company's Subsidiaries
------------------------------------------------
D. Kitchen Collection
------------------
Name Age Current Position Other Positions
---- --- ---------------- ---------------
Randall D. Lynch 48 President and Chief Executive Officer of Kitchen From prior to 1990 to June 1991,
Collection (since June 1991) President of Kitchen Collection.
Randolph J. Gawelek 47 Executive Vice President and Secretary of Kitchen
Collection (since prior to 1990)
23
24
PART II
-------
Item 5. Market for Registrant's Common Equity and Related
-------------------------------------------------------------
Stockholder Matters
-------------------
NACCO Industries, Inc. Class A common stock is traded on the
New York Stock Exchange. The ticker symbol is NC. Because of
transfer restrictions, no trading market has developed, or is
expected to develop, for the Company's Class B common stock. The
Class B common stock is convertible into Class A common stock on a
one-for-one basis. The high and low market prices for the Class A
common stock and dividends per share for both classes of stock for
the past two years are presented in the table below:
1994
-----------------------------
Sales Price Cash
-----------------------------
High Low Dividend
------ -------- --------
First quarter $58.13 - $48.38 16.5 cents
Second quarter $60.75 - $45.75 17.0 cents
Third quarter $63.00 - $52.88 17.0 cents
Fourth quarter $64.00 - $46.63 17.0 cents
1993
-----------------------------
Sales Price Cash
-----------------------------
High Low Dividend
------ -------- --------
First quarter $55.00 - $44.00 16.0 cents
Second quarter $58.25 - $50.00 16.5 cents
Third quarter $52.13 - $43.63 16.5 cents
Fourth quarter $52.00 - $42.00 16.5 cents
At December 31, 1994, there were approximately 900 Class
A common stockholders of record and 600 Class B common
stockholders of record.
24
25
Item 6. Selected Financial Data
--------------------------------
NACCO Industries, Inc. and Subsidiaries
Year Ended December 31
--------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ----------
(In thousands, except per share and employee data)
Total revenues $1,864,887 $1,549,371 $1,483,779 $1,369,195 $1,384,993 $1,187,570
Operating profit $ 135,096 $ 93,384 $ 101,280 $ 94,532 $ 106,484 $ 125,363
Income before
extraordinary $ 45,272 $ 11,593 $ 22,868 $ 20,038 $ 28,189 $ 55,820
charge
Extraordinary
charge, net-
of-tax (3,218) (3,292) (110,000)
---------- ---------- ---------- ---------- ---------- ----------
Net income $ 42,054 $ 8,301 $ (87,132) $ 20,038 $ 28,189 $ 55,820
(loss)
Total assets $1,694,322 $1,642,493 $1,684,889 $1,629,663 $1,767,098 $1,724,767
Notes payable $ 286,717 $ 357,788 $ 459,906 $ 442,279 $ 533,692 $ 605,874
Stockholders $ 279,391 $ 235,626 $ 238,316 $ 350,188 $ 353,293 $ 303,986
equity
Total employees 11,086 10,879 10,497 9,858 11,111 10,725
Per share of
stock:
Income before
extraordinary $ 5.06 $ 1.30 $ 2.57 $ 2.26 $ 3.18 $ 6.29
charge
Extraordinary
charge, net-
of-tax (0.36) (0.37) (12.37)
---------- ---------- ---------- ---------- ---------- ----------
Net income $ 4.70 $ 0.93 $ (9.80) $ 2.26 $ 3.18 $ 6.29
(loss)
Cash dividends $ .675 $ .655 $ .635 $ .615 $ .595 $ .575
Market value $ 48.38 $ 51.50 $ 51.75 $ 47.50 $ 30.25 $ 55.50
Stockholders
equity $ 31.21 $ 26.35 $ 26.67 $ 39.43 $ 39.79 $ 34.25
Average shares
outstanding 8,948 8,938 8,891 8,878 8,877 8,874
25
26
Item 7. Management's Discussion and Analysis of Financial
------------------------------------------------------------
Condition and Results of Operations
-----------------------------------
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
FINANCIAL SUMMARY
Income before extraordinary charge for 1994 was $45.3 million,
or $5.06 per share, compared with income before extraordinary
charge of $11.6 million, or $1.30 per share, in 1993.
Extraordinary charges of $3.2 million and $3.3 million, net-of-tax,
or $0.36 per share and $0.37 per share, were recognized in 1994 and
1993, respectively, resulting in net income of $42.1 million, or
$4.70 per share in 1994 and $8.3 million or $0.93 per share in
1993. These extraordinary charges relate to the retirement of
portions of NACCO Materials Handling Group's Hyster-Yale 12 3/8%
subordinated debentures and are discussed in more detail in Note B
to the consolidated financial statements on page F-10 and in this
discussion and analysis on page 38.
Income before extraordinary charge for 1992 was $22.9
million, or $2.57 per share. In 1992, an extraordinary charge of
$110.0 million, or $12.37 per share, was recognized as a result of
the Coal Industry Retiree Health Benefit Act of 1992. The 1992
extraordinary charge is discussed in more detail in Note B to
the consolidated financial statements on page F-10 and in this
discussion and analysis on page 53.
SEGMENT INFORMATION
NACCO Industries, Inc. ("NACCO," the parent company) has four
operating subsidiaries, The North American Coal Corporation ("North
American Coal"), NACCO Materials Handling Group, Inc. ("NMHG"),
Hamilton Beach/Proctor-Silex, Inc. ("Hamilton Beach/
Proctor-Silex"), and The Kitchen Collection, Inc. ("Kitchen
Collection"). These four subsidiaries function in distinct
business environments, and the results of operations and financial
condition are best discussed at the subsidiary level. Results by
segment as reported in the financial statements are summarized in
Note P to the consolidated financial statements on page F-24 of
this annual report.
26
27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NORTH AMERICAN COAL
North American Coal mines and markets lignite for use
primarily as fuel for power generation by electric utilities. The
lignite is surface mined in North Dakota, Texas and Louisiana.
Total coal reserves approximate 2.2 billion tons, with 1.4 billion
tons committed to electric utility customers pursuant to long-term
contracts.
FINANCIAL REVIEW
North American Coal's three project mining subsidiaries
(Coteau, Falkirk and Sabine) mine lignite for utility customers
pursuant to long-term contracts at a price based on actual cost
plus an agreed pretax profit per ton. Due to the cost-plus
nature of these contracts, revenues and operating profits are
impacted by increases and decreases in operating costs as well as
sales tons. Net income of these project mines, however, is not
significantly affected by changes in such operating costs.
These operating costs include costs of operations, interest
expense and certain other income and expense items. Because
of the nature of the contracts at these mines, their results are
best analyzed in terms of income before taxes and net income.
North American Coal s results have been adjusted to include
certain royalty and other payments previously classified with
Bellaire, a non- operating subsidiary of NACCO, that are more
appropriately classified with North American Coal.
Tons sold by North American Coal's four operating mines were
as follows for the year ended December 31:
1994 1993 1992
---- ---- ----
Coteau Properties 15.7 14.9 13.7
Falkirk Mining 7.3 7.6 7.4
Sabine Mining 3.4 3.5 2.8
Red River Mining .8 .5 .6
-- -- --
27.2 26.5 24.5
==== ==== ====
Revenues, income before taxes, provision for taxes and net
income were as follows for the year ended December 31:
1994 1993 1992
---- ---- ----
Revenues
Coteau $113.5 $106.5 $93.1
Falkirk 61.3 59.5 54.8
Sabine 51.8 50.4 43.4
Red River 13.9 10.0 10.6
---- ---- ----
240.5 226.4 201.9
Royalties and other 9.7 6.9 10.0
--- --- ----
$250.2 $233.3 $211.9
====== ====== ======
27
28
Income before taxes
Coteau $10.5 $11.1 $10.2
Falkirk 9.8 9.8 9.1
Sabine 3.3 3.3 2.6
Red River 2.3 1.1 1.4
--- --- ---
Total from operating mines 25.9 25.3 23.3
Royalty and other income, net 10.5 7.7 9.6
Headquarters expense (6.0) (5.2) (4.9)
---- ---- ----
30.4 27.8 28.0
Provision for taxes 9.4 10.4 7.9
--- ---- ---
Net income $21.0 $17.4 $ 20.1
===== ===== =====
28
29
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
FINANCIAL REVIEW - Continued
NORTH AMERICAN COAL
1994 Compared with 1993
The following schedule details the components of the
changes in revenues, income before taxes and net income for 1994
compared with 1993:
Income Net
Revenues Before Taxes Income
-------- ------------ ------
1993 $233.3 $27.8 $17.4
Coteau
Tonnage volume 4.9 .6 .4
Mix of tons sold (.5) (.5) (.3)
Agreed profit per ton (.9) (.9) (.6)
Pass-through costs 3.4
Falkirk
Tonnage volume (2.4) (.4) (.3)
Agreed profit per ton .3 .3 .2
Pass-through costs 3.7
Sabine
Tonnage volume (1.4) (.1) (.1)
Agreed profit per ton .1 .1
Pass-through costs 2.8
Red River
Tonnage volume 6.6 1.6 1.0
Mix of tons sold (1.6) (1.6) (1.0)
Average selling price (1.1) (1.1) (.7)
Operating costs 3.4 2.2
Other income (expense) (1.2) (.8)
------ ------ ------
Variances from operating mines 13.9 .2 --
Royalties and other income, net 3.0 3.2 2.1
Headquarters expense (.8) (.5)
Differences between effective and
statutory tax rates 2.0
------ ------ ------
1994 $250.2 $30.4 $21.0
====== ===== =====
29
30
Increases in customer demand due to higher customer fuel
requirements resulted in increased tonnage volume at Coteau and Red
River. In 1993, Falkirk's customer purchased additional tonnage for
purposes of increasing the stockpile at the generating station
which resulted in unfavorable tonnage volume in 1994 compared with
1993. At Red River, tons sold in excess of amounts specified in
the contract yield a lower price, resulting in an unfavorable sales
mix in 1994.
The increased tonnage at Red River resulted in volume
efficiencies that favorably impacted operating costs. The increase
in royalties and other income in 1994 is from royalties received
relating to former coal properties, which royalties were not
received in 1993.
30
31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NORTH AMERICAN COAL - Continued
FINANCIAL REVIEW - Continued
1993 Compared with 1992
The following schedule details the components of the changes
in revenues, income before taxes and net income for 1993 compared
with 1992:
Income Net
Revenues Before Taxes Income
-------- ------------ ------
1992 $ 211.9 $28.0 $20.1
Coteau
Tonnage volume 8.2 .9 .6
Mix of tons sold (.3) (.3) (.2)
Agreed profit per ton .2 .2 .1
Pass-through costs 5.4
Falkirk
Tonnage volume 1.3 .2 .1
Agreed profit per ton .4 .4 .3
Pass-through costs 3.0
Sabine
Tonnage volume 9.3 .6 .4
Agreed profit per ton .1 .1 .1
Pass-through costs (2.5)
Red River
Tonnage volume (1.8) (.5) (.3)
Mix of tons sold .1 .1 .1
Average selling price 1.1 1.1 .7
Operating costs (1.2) (.8)
Other income (expense) .3 .1
------- ---- -----
Variances from operating mines 24.5 1.9 1.2
Royalties and other income, net (3.1) (1.8) (1.1)
Headquarters expense (.3) (.2)
Differences between effective and
statutory tax rates (2.6)
-------- ----- -----
1993 $ 233.3 $27.8 $17.4
======== ===== =====
31
32
The increase in revenues due to pass-through costs at Coteau
primarily related to increased interest expense of $5.8 million.
The loss of the minimum royalty payments (see "Other" which
follows) related to Royalty Company reduced revenues and operating
profit by approximately $3.6 million.
OTHER INCOME AND EXPENSE
Below is a detail of other income (expense) for the year
ended December 31:
1994 1993 1992
------ ------ ------
Interest income
Project mining subsidiaries $ .8 $ .5 $ .5
Other mining operations 2.2 1.6 1.6
--- --- ---
$ 3.0 $ 2.1 $ 2.1
====== ===== =====
Interest expense
Project mining subsidiaries $(18.6) (18.5) (13.2)
Other mining operations (1.3) (.8) (1.0)
---- --- ----
$(19.9) $(19.3) $(14.2)
====== ====== ======
Other-net
Project mining subsidiaries $ .4 $ .2 $ 1.1
Other mining operations (1.5) (.2) (2.5)
---- --- ----
$ (1.1) $ --- $ (1.4)
====== ====== =======
PROVISION FOR INCOME TAXES
North American Coal's effective tax rate for 1994, 1993
and 1992 was 31.1 percent, 37.9 percent and 28.7 percent,
respectively. In the third quarter of 1993, North American
Coal recognized additional tax expense to reflect the impact on
their deferred tax balances of the one percent increase in the
statutory tax rate. This adjustment increased North American
Coal's effective tax rate in 1993 relative to 1994 and 1992.
OTHER
In December 1992, North American Coal Royalty Company
("Royalty Company"), a wholly owned subsidiary of North American
Coal, and a public utility company agreed to amend an existing
Lignite Lease and Sublease Agreement. The parties agreed, in light
of the delayed development of the mining project to which such
leases were assigned, the utility was no longer obligated to pay
Royalty Company minimum royalties beginning January 1, 1993. These
royalties amounted to approximately $3.6 million per year and
termination of these payments reduced North American Coal's annual
net income approximately $2.4 million, after tax, beginning in
1993.
32
33
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NORTH AMERICAN COAL - Continued
FINANCIAL REVIEW - Continued
1995 OUTLOOK
North American Coal's existing mines are expected to produce
about the same number of total tons in 1995 as in 1994, as customer
requirements appear level with the previous year. Several events
have, however, occurred during 1994 which will provide for future
growth at North American Coal. In the company's first venture
outside of coal, a mining services contract was signed in December
1994 with White Rock Quarries near Miami, Florida, which produces
limestone. North American Coal has contracted to provide mining
services on the limestone reserves owned by White Rock. The
project will begin generating revenues in 1996. In June 1994,
Coteau amended the coal sales agreement with its customer, which
gives Coteau the option to extend its contract for up to an
additional 30 years, through 2037. This contract amendment was
signed in exchange for reduced profits of approximately $1.0
million per year for ten years beginning in 1994. North American
Coal is continuing its contract negotiations relating to a contract
mining agreement for the Salt River Project in western New Mexico,
and is continuing to look for other growth opportunities.
LIQUIDITY AND CAPITAL RESOURCES
North American Coal has in place a $50.0 million revolving
credit facility. The expiration date of this facility (which
currently is September 1997) can be extended one additional year,
on an annual basis, upon the mutual consent of North American Coal
and the bank group. North American Coal had $35.0 million of its
revolving credit facility available at December 31, 1994.
The financing of the project mining subsidiaries, which is
guaranteed by the utility customers, comprises long-term equipment
leases, notes payable and non-interest-bearing advances from
customers. The obligations of the project mining subsidiaries do
not impact the short- or long-term liquidity of the company and are
without recourse to NACCO or North American Coal. These
arrangements allow the project mining subsidiaries to pay dividends
in amounts equal to their retained earnings.
Expenditures for property, plant and equipment by the project
mining subsidiaries were $11.7 million in 1994 and $23.0 million
in 1993, and are anticipated to be approximately $15.0 million in
1995. These expenditures relate to the development and improvement
of the project mining subsidiaries' mines and are financed by the
utility customers.
33
34
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO MATERIALS HANDLING GROUP
NACCO Materials Handling Group, 97 percent-owned by NACCO,
designs, manufactures and markets forklift trucks and related
service parts under the Hyster(R) and Yale(R) brand names.
FINANCIAL REVIEW
The results of operations for NMHG were as follows for the year
ended December 31:
1994 1993 1992
---- ---- ----
Revenues
Americas $ 828.1 $645.4 $ 579.0
Europe, Africa and Middle East 289.7 220.5 251.5
Asia - Pacific 61.1 42.3 35.4
---- ---- ----
$1,178.9 $ 908.2 $ 865.9
======== ======= ========
Operating profit
Americas $ 45.5 $ 40.3 $14.9
Europe, Africa and Middle East 15.1 (2.4) 28.7
Asia - Pacific 5.2 1.7 .7
--- --- --
$ 65.8 $ 39.6 $44.3
======== ====== =====
Operating profit excluding
goodwill amortization
Americas $ 53.4 $ 48.2 $22.8
Europe, Africa and Middle East 17.9 .4 31.5
Asia - Pacific 5.3 1.8 .8
--- --- --
$ 76.6 $ 50.4 $55.1
======== ====== =====
Net income (loss) before
extraordinary charge $ 18.7 $ (5.1) $ 1.3
Extraordinary charge (3.2) (3.3)
---- ---- ----
Net income (loss) $ 15.5 $ (8.4) $ 1.3
======== ====== =====
34
35
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO MATERIALS HANDLING GROUP--Continued
FINANCIAL REVIEW--Continued
1994 Compared With 1993
The following schedule details the components of the changes
in revenues, operating profit and net income (loss) for 1994
compared with 1993:
Net
Operating Income
Revenues Profit (Loss)
-------- ------------- -------
1993 $ 908.2 $39.6 $(8.4)
Increase (decrease) in 1994 from:
Unit volume 211.7 40.8 26.5
Sales mix 8.1 (.8) (.5)
Average sales price 14.7 14.7 9.6
Service parts 27.2 11.1 7.2
Foreign currency 9.0 (4.2) (2.7)
Manufacturing cost 3.5 2.3
Other operating expense (38.9) (25.2)
Other income and expense 7.1
Differences between effective and
statutory tax rates (.5)
Extraordinary item .1
-------- ----- -----
1994 $1,178.9 $65.8 $15.5
======== ===== =====
Record market size in North America and higher market shares
in both the Americas and Europe resulted in record lift truck unit
volume of 55,751 units at NMHG in 1994. Unit shipments were up
approximately 25 percent and 30 percent in the Americas and in
Europe, respectively. NMHG initiated modest price increases during
the middle of 1994 which were accepted in the marketplace,
favorably affecting operating results. The strong economy in North
America and new marketing programs and new dealers in Europe
improved the worldwide service parts business. During 1994, a
weaker U.S. dollar caused translated revenues to be higher compared
with 1993, while operating profit was adversely affected by the
strong Japanese yen which increased the cost of products sourced
from Japan.
The improvement in manufacturing cost is due to the favorable
effect of increased manufacturing throughput partially offset by
plant ramp-ups and vendor parts shortages which caused labor
inefficiencies. Other operating expense increased in 1994 compared
with 1993 due to higher costs associated with strategic marketing
and product development programs, increased incentive-based payroll
costs and additional warranty expenditures related to new products
and increased volumes. The investments in strategic programs are
expected to plateau in the next two years.
35
36
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO MATERIALS HANDLING GROUP--Continued
FINANCIAL REVIEW--Continued
1993 COMPARED WITH 1992
The following schedule details the components of the changes
in revenues, operating profit and net income (loss) for 1993
compared with 1992:
Net
Operating Income
Revenues Profit (Loss)
-------- ------------- -------
1992 $865.9 $44.3 $1.3
Increase (decrease) in 1993 from:
Unit volume 49.8 7.1 4.7
Sales mix 15.1 1.2 .8
Average sales price 8.2 8.2 5.4
Service parts 6.4 6.6 4.4
Foreign currency (37.2) (16.3) (10.8)
Manufacturing cost (10.8) (7.1)
Other operating expense (.7) (.5)
Other income and expense (1.0)
Differences between effective and
statutory tax rates (1.8)
Change in statutory tax rate (.5)
Extraordinary item (3.3)
------ ----- -----
1993 $908.2 $39.6 $(8.4)
====== ===== =====
Improved economic conditions in North America, partially
offset by continued weakness in most of Europe and Japan, resulted
in increased unit volume in 1993. While continued discounting
prevented significant price improvements in 1993 in the forklift
industry, pricing in North America and Europe was favorable when
compared with 1992. Although sales mix changes to higher-priced
products in both North America and Europe during 1993 had a
favorable impact on revenues, the impact on operating profit was
not proportionate because mix shifted to lower-margin products.
NMHG also realized improved global market share in 1993.
Service parts business continued to recover in North America
with higher volumes and sales of higher-margin service parts
resulting in a favorable impact on revenues and operating profit
during 1993. Higher revenues from the North American service parts
business were partially offset by weak European markets. Favorable
mix, however, reduced the impact of lower European volume on
operating profit from the service parts business in 1993.
36
37
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO MATERIALS HANDLING GROUP--Continued
FINANCIAL REVIEW--Continued
1993 Compared With 1992--Continued
Manufacturing costs were higher in 1993 compared with 1992
primarily as a result of start-up costs associated with new product
introductions and unfavorable fixed manufacturing cost variances
due to the lower level of production volume in Europe. A weaker
British pound sterling in 1993 compared with 1992 resulted in lower
translated sales and profits in Europe. In addition, a stronger
Japanese yen in 1993 adversely affected operating profit because it
increased the cost of products and parts sourced from Japan.
OTHER INCOME AND EXPENSE
Below is a detail of other income (expense) for the year
ended December 31:
1994 1993 1992
------ ----- -------
Interest income $ .8 $ .8 $ 1.5
Interest expense (33.7) (40.4) (44.2)
Other-net 2.9 (1.7) 2.9
--- ---- ---
$(30.0) $(41.3) $ (39.8)
======= ====== =====
The decrease in interest income in 1993 compared with 1992 is
due primarily to lower levels of excess cash available for
investment.
The debt restructurings and equity infusions in 1994 and 1993
reduced outstanding debt and lowered overall effective interest
rates resulting in reduced interest expense in 1994 compared with
1993, and in 1993 compared with 1992 (see the "Extraordinary
Charge" discussion which follows).
Other-net consists primarily of equity in the earnings of the
Sumitomo-Yale 50 percent-owned joint venture ("S-Y"), gains and
losses on the sale of assets and grant income. In 1994, other-net
included income of $0.5 million from S-Y compared with a loss of
$3.9 million in 1993. The improved results at S-Y in 1994 are due
to elevated sales volumes to NMHG and manufacturing cost
reductions. The significant loss at S-Y in 1993 was caused by the
increase in the value of the Japanese yen compared with other
global currencies and the depressed European and Japanese markets.
During, 1994 NMHG received $3.2 million of employment grant income
related to additional hiring at the Craigavon, Northern Ireland,
facility. During the second quarter of 1993, NMHG sold its former
manufacturing site in Wednesfield, England, for $3.3 million,
resulting in a net pretax gain of $2.1 million. During 1992, NMHG
experienced sizable foreign currency exchange gains due to the
decrease in the value of the British pound sterling compared with
other currencies which have not been repeated.
37
38
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO MATERIALS HANDLING GROUP--Continued
FINANCIAL REVIEW--Continued
PROVISION FOR INCOME TAXES
NMHG's effective tax rate for 1994 was 47.7 percent. For
1993, the effective tax rate was not meaningful because expenses
not deductible for tax purposes, primarily amortization of
goodwill, resulted in a tax provision in 1993 despite a loss before
income taxes. The higher level of pretax income in 1994 reduced
the effect of these non-deductible expenses and resulted in an
effective tax rate that is closer to the statutory tax rate. Also
in 1993, NMHG began providing for U.S. taxes on foreign earnings
taxed at overall lower rates in anticipation of future
repatriations.
In 1992 the effective tax rate was 70.7 percent. The high
effective tax rate in 1992 was due to the low level of pretax
income in that year relative to the expenses not deductible for tax
purposes.
EXTRAORDINARY CHARGE
The extraordinary charges of $3.2 million and $3.3 million,
net of $2.0 million in tax benefits, were recognized in the second
quarters of 1994 and 1993, respectively. These charges represent
the write-off of premiums and unamortized debt issuance costs
associated with the retirement of approximately $70.0 million and
$50.0 million face value of NACCO Materials Handling Group s
Hyster-Yale 12 3/8% subordinated debentures. These retirements
were achieved using internally generated funds of NMHG and equity
infusions from existing stockholders. Refer to Note G, Revolving
Credit Agreements and Notes Payable, for additional information.
BACKLOG
NMHG's backlog of orders at December 31, 1994, was
approximately 24,600 forklift truck units, compared with 12,100
units at December 31, 1993 and 1992. The increased order demand in
1994 and, to a lesser degree, vendor part shortages have extended
delivery lead times and resulted in expanded backlog in 1994.
Management believes that the NMHG backlog level is consistent with
overall increases in industry backlog levels.
38
39
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO MATERIALS HANDLING GROUP--Continued
1995 OUTLOOK
The forklift truck industry has historically been cyclical.
The economic conditions in the various markets in which the
industry customers operate affect demand. Based on external
economic forecasts and recent factory order levels, management
expects economic activity in North America to continue to be strong
in 1995. Europe has begun to recover from its recent recession and
an expanded European market is anticipated in 1995. Many markets in
the Asia-Pacific will continue to grow. The Japanese market is
expected to show signs of improvement in 1995. Overall, NMHG
anticipates increased shipments in 1995 compared with 1994.
NMHG will introduce several new products in 1995 and will
continue its efforts to increase worldwide market shares.
Management is focused on alleviating manufacturing bottlenecks to
improve the output of its plants and reduce delivery lead times.
While NMHG does source certain product from Japan, management does
not expect the recent earthquake, which did not damage S-Y's
manufacturing facility, to have a material adverse affect on the
company's supply of manufacturing materials. In addition, the
recent floods in The Netherlands did not damage NMHG's facility in
Nijmegen or seriously interrupt the plant s supply lines.
LIQUIDITY AND CAPITAL RESOURCES
In connection with the 1994 retirement of subordinated
debentures, NMHG further amended its existing senior bank credit
agreement during the second quarter of 1994 to permit the
accelerated use of $25.0 million to retire additional debentures.
These funds were used to call additional debentures in December
1994.
NMHG had available $67.0 million of its $100.0 million
revolving credit facility at December 31, 1994. On February
28,1995, the company entered into a new long-term credit agreement
to replace its existing bank agreement and to refinance the
majority of its existing long-term debt. The new agreement
provides the company with an unsecured $350.0 million revolving
credit facility to replace its current senior credit facility. The
new credit facility has a five-year maturity with extension options
and performance-based pricing comparable to its current senior
credit facility which provides the company with reduced interest
rates upon achievement of certain financial performance targets.
With the new credit agreement in place, the company has the ability
to call the remaining $78.5 million outstanding Hyster-Yale 12 3/8%
subordinated debentures in 1995. In anticipation of the call, an
extraordinary charge of $3.4 million will be recorded in the first
quarter of 1995 to write-off unamortized debt issuance costs and
anticipated premiums. The company believes it can adequately meet
all of its current and long-term commitments and operating needs
from operating cash flow and funds available under credit
agreements.
39
40
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO MATERIALS HANDLING GROUP--Continued
LIQUIDITY AND CAPITAL RESOURCES--Continued
Expenditures for property, plant and equipment were $25.9
million in 1994 and $20.2 million in 1993, and are anticipated to
be approximately $40.0 million in 1995. These expenditures relate
to investments in productive capacity because of the increased unit
volumes, and new product development. NMHG is investing to improve
production volumes at all of its plants and has undertaken
expansion of its Craigavon, Northern Ireland, and Irvine, Scotland,
production facilities. Capital for these expenditures has been and
is expected to be provided primarily by internally generated funds
and government assistance grants.
During 1993, NMHG repatriated $18.3 million of earnings from
certain foreign subsidiaries, which were used in operations. Taxes
associated with these earnings were previously provided for
financial reporting purposes. Future repatriations of foreign
earnings may be affected by changes in currency exchange rates and
foreign and U.S. tax rates.
NMHG s capital expenditures in 1994, 1993 and 1992 of $25.9
million, $20.2 million and $24.3 million, respectively, are
outpacing depreciation expense of $19.8 million in 1994, $18.9
million in 1993 and $19.1 million in 1992.
NMHG s capital structure has improved with substantially less
debt and is as follows for the year ended December 31:
1994 1993 1992
------- ------- -------
Debt $ 260.1 $ 326.6 $ 406.6
Stockholders equity 305.9 257.1 215.4
------- ------- -------
Total capitalization $ 566.0 $ 583.7 $ 622.0
======= ======= ========
Debt to total capitalization 46% 56% 65%
======= ======= ========
40
41
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
HAMILTON BEACH PROCTOR-SILEX
Hamilton Beach/Proctor-Silex, 80 percent-owned by NACCO, is a
leading manufacturer of small electric appliances. The housewares
business is seasonal. A majority of revenues and operating profit
occurs in the second half of the year when sales of small electric
appliances increase significantly for the fall holiday selling
season.
FINANCIAL REVIEW
The results of operations for Hamilton Beach/Proctor-Silex
were as follows for the year ended December 31:
1994 1993 1992
------- ------- ------
Revenues $377.5 $356.3 $358.6
Operating profit $ 25.3 $ 11.8 $ 19.3
Operating profit excluding
goodwill amortization $ 28.1 $ 14.7 $ 22.3
Net income (loss) $ 10.2 $ (1.0) $ 5.4
1994 COMPARED WITH 1993
The following schedule details the components of the changes
in revenues, operating profit and net income (loss) for 1994
compared with 1993:
Net
Operating Income
Revenues Profit (Loss)
-------- ---------- --------
1993 $356.3 $ 11.8 $ (1.0)
Increase (decrease) in 1994 from:
Unit volume 17.1 4.2 2.8
Sales mix 1.9 .5 .3
Average sales price 4.2 4.2 2.8
Foreign currency translation (2.0) (2.0) (1.3)
Manufacturing cost 8.5 5.6
Other operating expense (1.9) (1.3)
Other income and expense 2.7
Differences between effective and
statutory tax rates (.4)
------ ------ ------
1994 $377.5 $ 25.3 $ 10.2
====== ====== ======
41
42
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
HAMILTON BEACH/PROCTOR-SILEX--Continued
FINANCIAL REVIEW--Continued
1994 COMPARED WITH 1993--CONTINUED
During 1994, Hamilton Beach/Proctor-Silex experienced
increased volumes in blenders, mixers, coffeemakers and food
processors sold domestically and in most products sold in Canada.
The increased volumes in these product lines were tempered somewhat
by decreased steam grill and toaster sales domestically and lower
toaster oven sales both domestically and in Canada. Contributing
to the positive sales mix were increased sales of high-end
toasters, irons and toaster ovens offset by a shift to lower-priced
blender models. Hamilton Beach/Proctor-Silex's improvements in
pricing occurred in both the domestic and Canadian markets across
most core heat and motor-driven product lines.
The successful completion of its manufacturing consolidation
programs, level loading of its factories and reduced transportation
costs favorably affected operating results at Hamilton Beach/
Proctor-Silex by reducing manufacturing costs. Level loading
maintains consistent production and staffing levels throughout the
year, contributing favorably to manufacturing efficiencies by
maintaining a more highly trained and experienced work force.
Other operating expenses were unfavorable in 1994 compared with
1993 primarily due to higher selling and incentive compensation
costs.
1993 COMPARED WITH 1992
The following schedule details the components of the changes
in revenues, operating profit and net income (loss) for 1993
compared with 1992:
Net
Operating Income
Revenues Profit (Loss)
-------- --------- --------
1992 358.6 19.3 $ 5.4
Increase (decrease) in 1993 from:
Unit volume 14.3 3.8 2.4
Sales mix (10.2) (2.6) (1.7)
Average sales price (3.5) (3.5) (2.3)
Foreign currency translation (2.9) (2.9) (1.9)
Manufacturing cost (1.1) (.7)
Other operating expense (1.2) (.8)
Other income and expense (2.1)
Differences between effective and
statutory tax rates .5
Change in statutory tax rate .2
-------- ------- -------
1993 $ 356.3 $ 11.8 $ (1.0)
======== ======= =======
42
43
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
HAMILTON BEACH/PROCTOR-SILEX--Continued
FINANCIAL REVIEW--Continued
1993 COMPARED WITH 1992--Continued
The higher volume in 1993 was primarily the result of
increased unit sales of coffeemakers, blenders, steam grills, food
processors, toaster ovens and commercial roasters. A significant
decrease in unit sales of juice extractors offset the increases in
other product lines. The adverse sales mix in 1993 was the result
of reduced juice extractor sales, which yielded improved margins in
1992, and a shift away from sales of full-size irons. In addition,
the increased volume in blenders, food processors, toaster ovens
and coffeemakers was primarily in opening price-point models.
Foreign currency translation negatively influenced operating
results in 1993 due to the drop in the value of the Canadian dollar
in relation to the U.S. dollar. The increase in other operating
expense in 1993 was primarily the result of higher marketing and
selling costs.
43
44
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
HAMILTON BEACH/PROCTOR-SILEX--Continued
FINANCIAL REVIEW--Continued
Other Income and Expense
Below is a detail of other income (expense) for the year
ended December 31:
1994 1993 1992
------ ------ -------
Interest expense $(7.5) $ (7.7) $ (8.6)
Other-net (.3) (4.1)
------ ------ -------
$(7.8) $(11.8) $ (8.6)
======= ====== =======
The reduced interest expense in 1994 compared with 1993 is
due to lower average interest rates partially offset by higher
average borrowings. The reduction in interest expense in 1993
compared with 1992 was due to lower levels of borrowings.
The decrease in other-net in 1994 compared with 1993 resulted
primarily from the settlement of certain litigation during 1993.
PROVISION FOR INCOME TAXES
Hamilton Beach/Proctor-Silex's effective tax rate for 1994
was 41.7 percent. The effective tax rate was not meaningful in
1993 and was 50.0 percent in 1992.
Expenses not deductible for tax purposes, which include
amortization of goodwill and other purchase price adjustments
associated with the Hamilton Beach and Proctor-Silex acquisitions,
were approximately level in 1994, 1993 and 1992. These
non-deductible expenses resulted in a tax provision in 1993 despite
break-even pretax earnings. Due to higher levels of pretax income
in 1994 and 1992, relative to 1993, these non-deductible expenses
had a smaller impact on the effective tax rate in 1994 and 1992.
44
45
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
HAMILTON BEACH/PROCTOR-SILEX--Continued
FINANCIAL REVIEW--Continued
1995 OUTLOOK
Hamilton Beach/Proctor-Silex expects total industry unit
shipments to be slightly higher in 1995 compared with 1994 in most
core product lines. Management of Hamilton Beach<>Proctor-Silex
expects increases in market share in its core products during 1995
as a result of new and redesigned products introduced during 1994
that should better meet consumer demand and increase product
placements.
LIQUIDITY AND CAPITAL RESOURCES
Hamilton Beach/Proctor-Silex's credit agreement, as modified
in May 1994, provides for a revolving credit facility ("Facility")
that permits advances up to $135.0 million. At December 31, 1994,
Hamilton Beach/Proctor-Silex had $57.0 million available under
this Facility. The expiration date of this Facility (which
currently is May 1997) may be extended, on an annual basis,
beginning in 1995 for one additional year upon the mutual consent
of Hamilton Beach/Proctor-Silex and the bank group. In conjunction
with this modification, Hamilton Beach/Proctor-Silex repaid the
outstanding balance of its term note of $28.1 million in May 1994.
At December 31, 1994, Hamilton Beach/Proctor-Silex also had $0.4
million available under a separate facility.
The Facility, which is secured by substantially all assets of
Hamilton Beach/Proctor-Silex, allows borrowings to be made at
either LIBOR or lender's prime rate plus a margin. At the date of
modification the stated interest rate became LIBOR plus 1.00
percent compared with a stated interest rate at March 31 of LIBOR
plus 1.75 percent. In addition, this modification allows Hamilton
Beach/Proctor-Silex to pay dividends, under certain conditions, to
its stockholders. The borrowing rates can be reduced to as low as
LIBOR plus 0.50 percent based upon achievement of predetermined
interest coverage ratios. On July 15, 1994, Hamilton Beach/
Proctor-Silex paid a $15.0 million dividend to its stockholders.
Expenditures for property, plant and equipment were $13.4
million in 1994 and $12.2 million in 1993, and are anticipated to
be approximately $12.8 million in 1995. The primary focus of these
expenditures is to increase manufacturing efficiency and to acquire
tooling for new and existing products. Capital for these
expenditures has been and is expected to be provided primarily by
internally generated funds and short-term borrowings.
Hamilton Beach/Proctor-Silex's capital expenditures in 1994,
1993 and 1992 of $13.4 million, $12.2 million and $10.8 million,
respectively, are outpacing depreciation expense of $11.5 million
in 1994, $10.9 million in 1993 and $9.8 million in 1992.
Hamilton Beach/Proctor-Silex's capital structure continues to
be near its 35 percent target and is as follows for the year ended
December 31:
1994 1993 1992
------- ------- --------
Debt $ 82.6 $ 86.5 $ 83.0
Stockholders equity 130.4 138.6 141.8
------- ------- --------
Total capitalization $ 213.0 $ 225.1 $ 224.8
======= ======= ========
Debt to total capitalization 39% 38% 37%
======= ======= ========
45
46
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
KITCHEN COLLECTION
Kitchen Collection is a national specialty retailer of
kitchenware, tableware, small electric appliances and related
accessories. The specialty retail business is seasonal with the
majority of its revenues and operating profit generated in the
fourth quarter during the fall holiday selling season.
FINANCIAL REVIEW
The results of operations for Kitchen Collection were
as follows for the year ended December 31:
1994 1993 1992
-------- -------- ---------
Number of stores 119 104 86
Revenues $63.9 $53.7 $45.5
Operating profit $ 5.4 $ 4.8 $ 4.4
Net income $ 3.1 $ 2.7 $ 2.4
1994 COMPARED WITH 1993
The following schedule details the components of the changes
in revenues, operating profit and net income for 1994 compared with
1993:
Operating Net
Revenues Profit Income
-------- --------- ------
1993 $53.7 $4.8 $2.7
Increase (decrease) in 1994 from:
Stores opened in 1994 5.5 .6 .4
Stores opened in 1993 4.4 .4 .3
Comparable stores .3 (.2) (.1)
Other (.2) (.2)
-------- --------- ------
1994 $63.9 $5.4 $3.1
===== ==== ====
The opening of 37 new stores in 1994 and 1993 contributed
favorably to current year results. While gross profit showed a
slight improvement in 1994 compared with 1993, operating profit as
a percent of sales declined somewhat due primarily to store rent
escalations and increased costs for renovations at comparable
stores.
46
47
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
THE KITCHEN COLLECTION--Continued
FINANCIAL REVIEW--Continued
1993 Compared With 1992
The following schedule details the components of the changes
in revenues, operating profit and net income for 1993 compared with
1992:
Operating Net
Revenues Profit Income
-------- --------- ------
1992 $ 45.5 $ 4.4 $ 2.4
Increase (decrease) in 1993 from:
Stores opened in 1993 4.8 .5 .3
Stores opened in 1992 4.4 .6 .4
Comparable stores (1.0) (.4) (.3)
Other (.3) (.1)
-------- ------- ------
1993 $ 53.7 $ 4.8 $ 2.7
======= ======= ======
Kitchen Collection experienced mixed results during 1993.
The net addition of 18 new stores during 1993 and a full year's
operations of stores opened during 1992 resulted in increases to
revenues and operating profits. Results at comparable stores were
lower in 1993 compared with 1992 as the economic recovery did not
impact specialty retailers. The use of markdowns on selected
products to increase customer traffic and competitive pricing
pressures on specific product lines negatively affected operating
profit in 1993.
OTHER INCOME AND EXPENSE
Interest expense was $0.3 million, $0.1 million and $0.2
million in 1994, 1993 and 1992, respectively.
47
48
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
THE KITCHEN COLLECTION--Continued
FINANCIAL REVIEW--Continued
PROVISION FOR INCOME TAXES
Kitchen Collection's effective tax rate was 40.0 percent,
40.6 percent and 41.6 percent in 1994, 1993 and 1992, respectively.
LIQUIDITY AND CAPITAL RESOURCES
In May, 1994, Kitchen Collection modified its credit
arrangement to allow for an increase in the outstanding balance on
its term loan to $5.0 million. At December 31, 1994, the
outstanding balance was $5.0 million. In addition, the scheduled
repayments, which previously were in annual installments through
1997, are now payable in two equal installments due January 15,
1999, and January 15, 2000. This modification also reduced Kitchen
Collection's stated interest rate to LIBOR plus 0.75 percent from
LIBOR plus 1.50 percent and allows for increased levels of
dividends. During 1994, Kitchen Collection paid dividends of $5.6
million to NACCO.
Expenditures for property, plant and equipment were $1.0
million in 1994 and $1.1 million in 1993, and are anticipated to be
approximately $1.9 million in 1995. These expenditures are
primarily for new store openings and improvements to existing
facilities and are funded internally. At December 31, 1994,
Kitchen Collection had available all of its $2.5 million line of
credit. This credit line is renewable annually in May and has
currently been extended through May 1995.
Kitchen Collection's capital structure approaches its 35
percent target and is as follows for the year ended December 31:
1994 1993 1992
Debt $ 5.0 $ 2.4 $ 2.9
Stockholder's equity 10.1 12.6 11.6
---- ---- ----
Total capitalization $ 15.1 $ 15.0 $ 14.5
==== ==== ====
Debt to total capitalization 33% 16% 20%
==== ==== ====
48
49
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO AND OTHER
FINANCIAL REVIEW
1994 COMPARED WITH 1993
The following schedule details the components of the changes
in operating loss and net loss for 1994 compared with 1993:
Operating Net
Loss Loss
---- ----
1993 $(7.9) $(5.4)
Administrative and general expenses
Payroll-related (2.3) (1.6)
Outside service and other .3 .2
Interest income (.5)
Interest expense (.8)
Other-net (.4)
Consolidating tax adjustments 2.4
----- ----
1994 $(9.9) $(6.1)
===== =====
While the level of parent company personnel remained steady
in 1994 compared with 1993, payroll-related expenses increased in
1994 due to higher incentive-based compensation, profit sharing and
medical expenses.
49
50
1993 COMPARED WITH 1992
The following schedule details the components of the changes
in operating loss and net loss for 1993 compared with 1992:
Operating Net
Loss Loss
------- ------
1992 $ (8.2) $ (6.1)
Administrative and general expenses
Payroll-related .2 .2
Outside service and other .1 .1
Interest income .4
Interest expense (.3)
Other-net .5
Differences between effective and
statutory tax rates (.2)
------- ------
1993 $ (7.9) $ (5.4)
======= ======
INTEREST RATE PROTECTION
NMHG, Hamilton Beach/Proctor-Silex, North American Coal and
Kitchen Collection have entered into interest rate swap agreements
and/or purchased interest rate caps for portions of their floating
rate debt. These interest rate swaps and caps provide protection
against significant increases in interest rates. The Company
evaluates its exposure to floating rate debt on an ongoing basis.
50
51
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO AND OTHER--Continued
ENVIRONMENTAL MATTERS
The Company's manufacturing operations, like those of other
companies engaged in similar businesses, involve the use, disposal
and cleanup of substances regulated under environmental protection
laws. The Company's North American Coal subsidiary is affected by
the regulations of agencies under which it operates, particularly
the federal Office of Surface Mining, the United States
Environmental Protection Agency and associated state regulatory
authorities. In addition, North American Coal is attentive to any
changes which may arise due to proposed legislation concerning the
Clean Air Act Amendments of 1990, reauthorization of the Resource
Conservation and Recovery Act, the Clean Water Act, the Endangered
Species Act and other regulatory actions.
Compliance with these increasingly stringent standards
results in higher expenditures for both capital improvements and
operating costs. The Company's policies stress environmental
responsibility and compliance with these regulations. Based on
current information, management does not expect compliance with
these regulations to have a material adverse effect on its
financial condition or results of operations.
LIQUIDITY AND CAPITAL RESOURCES
Although the subsidiaries have entered into substantial debt
agreements, NACCO has not guaranteed the long-term debt or any
borrowings of its subsidiaries.
The NMHG debt agreement includes loan covenants which
prohibit the payment of dividends to NACCO. The debt agreements
at Hamilton Beach/Proctor-Silex and Kitchen Collection allow for
the payment of dividends under certain circumstances. The revised
credit agreement entered into on February 28, 1995 at NMHG will
allow the transfer of up to $25.0 million to NACCO. There are no
restrictions for North American Coal, and its dividends and
advances are the primary source of cash for NACCO.
The Company believes it can adequately meet all of its
current and long-term commitments and operating needs. This
outlook stems from amounts available under revolving credit
facilities, the substantial prepayment of scheduled debt payments
and the utility customers' funding of the project mining
subsidiaries.
51
52
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
(Tabular Amounts in Millions, Except Per Share, Store and
Percentage Data)
NACCO AND OTHER--Continued
BELLAIRE CORPORATION
Bellaire Corporation ("Bellaire") is a non-operating
subsidiary of NACCO. Bellaire's results primarily include mine
closing activities related to the Indian Head Mine which ceased
mining operations in April 1992 when its sales contract expired due
to the exhaustion of its economically recoverable coal reserves.
Bellaire's results have been adjusted to remove certain royalty and
other payments that are now more appropriately classified with
North American Coal's results.
The results of operations were as follows for the year ended
December 31:
1994 1993 1992
---- ---- ----
Revenues $ .6 $ 3.0 $ 6.0
Operating loss $ (.1) $ (.1) $ (.1)
Other income, net $ 1.5 $ 1.1 $ 1.6
Income before extraordinary charge $ .8 $ 2.6 $ .9
Extraordinary charge, net-of-tax (110.0)
------ ------ -------
Net income (loss) $ .8 $ 2.6 $(109.1)
====== ====== =======
During the third quarter of 1993, Bellaire recognized a
non-recurring tax benefit of $2.3 million to reflect the impact of
the one percent increase in the statutory tax rate on its deferred
tax asset. This tax benefit increased Bellaire s income in 1993
relative to 1994 and 1992.
52
53
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO AND OTHER--Continued
BELLAIRE CORPORATION--Continued
The Coal Industry Retiree Health Benefit Act of 1992
requires Bellaire to incur additional costs for retiree medical
expenses of certain United Mine Worker retirees. A charge of
$110.0 million (net of $56.7 million of tax benefits) was
recognized in 1992 to reflect the estimated future payments related
to this legislation. Annual cash payments required by this
legislation are expected to be in the range of $2.0 million to $4.0
million per year after tax. These payments could continue as long
as 40 to 50 years, or as long as there are eligible participants.
Payments in 1994 amounted to $4.6 million before-tax and included
payments for 1994 and 1993. Management expects taxable earnings to
continue to be sufficient to realize the full amount of the related
deferred tax asset.
The condensed balance sheets for Bellaire were as
follows at December 31:
1994 1993
----- -----
Net current assets $ 13.1 $ 10.9
Property, plant and equipment, net .5 .5
Deferred taxes and other assets 64.1 67.0
Obligation to United Mine Workers
of America Combined Benefit Fund (155.0) (159.3)
Other liabilities (24.0) (21.2)
------- -------
Deficit $(101.3) $(102.1)
======= =======
The assets and liabilities of Bellaire represent the
net assets of former mining operations, including Indian Head. The
Obligation to United Mine Workers of America Combined Benefit Fund
relates to the previously discussed extraordinary charge. The
deferred taxes relate to the Obligation to United Mine Workers of
America Combined Benefit Fund. The other liabilities are
obligations related to other former mining operations.
The annual cash payments related to Bellaire's
obligations, net of internally generated funds, are funded by NACCO
and amounted to $4.7 million before-tax during 1994 and are
anticipated to be approximately $3.9 million before-tax in 1995.
EFFECTS OF INFLATION
The Company believes that inflation has not materially
affected its results of operations in 1994 and does not expect
inflation to be a significant item in 1995.
53
54
Item 8. Financial Statements and Supplementary Data
--------------------------------------------------------
The information required by this Item 8 is set forth at pages F-2
through F-42 of the Financial Statements and Supplementary Data
contained in Part IV hereof.
Item 9. Changes in and Disagreements with Accountants on
--------------------------------------------------------
Accounting and Financial Disclosure
-----------------------------------
Not Applicable.
54
55
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
------------------------------------------------------------
Information with respect to Directors of the Company is set
forth in the 1995 Proxy Statement under the heading "Business to be
Transacted -- 1. Election of Directors," which information is
incorporated herein by reference. Information regarding the
executive officers of the Company is included as Item 4A of Part I
as permitted by Instruction 3 to Item 401(b) of Regulation S-K.
Item 11. Executive Compensation
--------------------------------
Information with respect to executive compensation is set
forth in the 1995 Proxy Statement under the headings "Business to
be Transacted -- 1. Election of Directors -- Compensation of
Directors," and "Compensation of Executive Officers," which
information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
-------------------------------------------------------------
Management
----------
Information with respect to security ownership of certain
beneficial owners and management is set forth in the 1995 Proxy
Statement under the heading "Business to be Transacted -- 1.
Election of Directors -- Beneficial Ownership of Class A Common and
Class B Common," which information is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions
--------------------------------------------------------
Information with respect to certain relationships and related
transactions is set forth in the 1995 Proxy Statement under the
heading "Business to be Transacted -- 1. Election of Directors --
Compensation Committee Interlocks and Insider Participation," which
information is incorporated herein by reference.
55
56
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports
--------------------------------------------------------------
on Form 8-K
-----------
(a) (1) and (2) The response to Item 14(a)(1) and (2) is
set forth beginning at page F-1 of this Annual Report on Form 10-K.
(a) (3) Listing of Exhibits -- See the exhibit index
beginning at page X-1 of this Annual Report on Form 10-K.
(b) The Company has not filed any current reports on Form
8-K during the fourth quarter of 1994.
(c) The response to Item 14(c) is set forth beginning at
page X-1 of this Annual Report on Form 10-K.
(d) Financial Statement Schedules -- The response to Item
14(d) is set forth beginning at page F-32 of this Annual Report on
Form 10-K.
56
57
SIGNATURES
----------
Pursuant to the requirements of Section 13 of the
Securities Exchange Act of 1934, the Company has duly caused this
Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
NACCO Industries, Inc.
By: Frank B. O'Brien
-----------------------------------
Frank B. O'Brien
Senior Vice President - Corporate
Development and Chief Financial
Officer
(Principal Financial Officer)
Date: March 31, 1995
57
58
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities
and on the dates indicated.
* Alfred M. Rankin, Jr. Chairman, President and March 31, 1995
----------------------- Chief Executive Officer
Alfred M. Rankin, Jr. (Principal Executive
Officer), Director
Frank B. O'Brien Senior Vice President - March 31, 1995
----------------------- Corporate Development
Frank B. O'Brien and Chief Financial
Officer (Principal
Financial Officer)
Steven M. Billick Vice President and March 31, 1995
----------------------- Controller (Principal
Steven M. Billick Accounting Officer)
* Owsley Brown II Director March 31, 1995
----------------------
Owsley Brown II
* John J. Dwyer Director March 31, 1995
----------------------
John J. Dwyer
* Robert M. Gates Director March 31, 1995
----------------------
Robert M. Gates
* E. Bradley Jones Director March 31, 1995
----------------------
E. Bradley Jones
* Dennis W. LaBarre Director March 31, 1995
----------------------
Dennis W. LaBarre
* John C. Sawhill Director March 31, 1995
----------------------
John C. Sawhill
* Britton T. Taplin Director March 31, 1995
----------------------
Britton T. Taplin
* Frank E. Taplin, Jr. Director March 31, 1995
----------------------
Frank E. Taplin, Jr.
58
59
*Frank B. O'Brien, by signing his name hereto, does hereby sign
this Annual Report on Form 10-K on behalf of each of the above
named and designated officers and directors of the Company pursuant
to a Power of Attorney executed by such persons and filed with the
Securities and Exchange Commission.
Frank B. O'Brien March 31, 1995
-------------------------------------
Frank B. O'Brien, Attorney-in-Fact
59
60
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14(a)(1) AND (2), AND ITEM 14(d)
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENTS
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1994
NACCO INDUSTRIES, INC.
MAYFIELD HEIGHTS, OHIO
F-1
61
Form 10-K
ITEM 14(a)(1) AND (2)
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of NACCO
Industries, Inc. and Subsidiaries are included in Item 8:
Report of Independent Public Accountants-Year ended December
31, 1994, 1993 and 1992
Consolidated statements of income-Year ended December 31,
1994, 1993 and 1992.
Consolidated balance sheets-December 31, 1994 and December
31, 1993.
Consolidated statements of cash flows-Year ended December 31,
1994, 1993 and 1992.
Consolidated statements of stockholders' equity-Year ended
December 31, 1994, 1993 and 1992.
Notes to consolidated financial statements.
NACCO Industries, Inc. Report of Management.
The following consolidated financial statement schedules of NACCO
Industries, Inc. and Subsidiaries are included in Item 14(d):
Schedule I Condensed Financial Information of the
Parent
Schedule II Valuation and qualifying accounts
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable,
and therefore have been omitted.
F-2
62
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of NACCO Industries, Inc.:
We have audited the accompanying consolidated balance sheets of
NACCO Industries, Inc. and Subsidiaries as of December 31, 1994 and
1993, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years
in the period ended December 31, 1994. These financial
statements and the schedules referred to below are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedules
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of NACCO Industries, Inc. and Subsidiaries as of December 31, 1994
and 1993, and the results of their operations and their cash flows
for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed
in Item 14(a)(1) and (2) and Item 14(d) of Form 10-K are the
responsibility of the Company's management and are presented
for purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial
statements. These schedules have been subjected to the auditing
procedures applied in the audit of the basic financial
statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Cleveland, Ohio
February 28, 1995
F-3
63
CONSOLIDATED STATEMENTS OF INCOME
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31
-------------------------------------
1994 1993 1992
-------------------------------------
(In thousands, except per share data)
Net sales $1,853,479 $1,538,805 $1,470,005
Other operating income 11,408 10,566 13,774
---------- ---------- ----------
TOTAL REVENUES 1,864,887 1,549,371 1,483,779
Cost of sales 1,487,447 1,244,051 1,171,231
---------- ---------- ----------
GROSS PROFIT 377,440 305,320 312,548
Selling, administrative and
general expenses 228,619 198,149 197,393
Amortization of goodwill 13,725 13,787 13,875
---------- ---------- ----------
OPERATING PROFIT 135,096 93,384 101,280
Other income (expense)
Interest income 1,615 1,880 3,294
Interest expense (60,400) (65,930) (66,032)
Other - net 2,185 (4,670) 1,787
---------- ---------- ----------
(56,600) (68,720) (60,951)
---------- ---------- ----------
Income Before Income Taxes, Minority Interest and
Extraordinary Charge 78,496 24,664 40,329
Provision for income taxes 30,730 13,511 16,346
---------- ---------- ----------
Income Before Minority Interest
and Extraordinary Charge 47,766 11,153 23,983
Minority interest (2,494) 440 (1,115)
---------- ---------- ----------
Income Before Extraordinary Charge 45,272 11,593 22,868
Extraordinary charge, net-of-tax (3,218) (3,292) (110,000)
---------- ---------- ----------
Net Income (Loss) $ 42,054 $ 8,301 $ (87,132)
========== ========== ==========
Per Share:
Income Before Extraordinary Charge $ 5.06 $ 1.30 $ 2.57
Extraordinary charge, net-of-tax (.36) (.37) (12.37)
---------- ---------- ----------
Net Income (Loss) $ 4.70 $ .93 $ (9.80)
========= ========= ==========
<FN>
See notes to consolidated financial statements.
F-4
64
CONSOLIDATED BALANCE SHEETS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31
-----------------------------
1994 1993
-----------------------------
(In thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 19,541 $ 29,149
Accounts receivable, net 236,215 200,112
Inventories 298,987 238,168
Prepaid expenses and other 31,893 37,373
-------- ---------
586,636 504,802
OTHER ASSETS 41,341 45,438
PROPERTY, PLANT AND EQUIPMENT, NET 485,314 496,213
DEFERRED CHARGES
Goodwill, net 471,574 487,963
Deferred costs and other 69,257 64,663
Deferred income taxes 40,200 43,414
-------- ---------
581,031 596,040
-------- ---------
TOTAL ASSETS $ 1,694,322 $ 1,642,493
========= =========
F-5
65
CONSOLIDATED BALANCE SHEETS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31
-----------------------------
1994 1993
-----------------------------
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 226,892 $ 148,397
Revolving credit agreements 30,760 35,178
Current maturities of long-term obligations 63,509 55,016
Income taxes 18,662 27,198
Accrued payroll 28,018 19,750
Other current liabilities 113,597 111,916
----------- -----------
481,438 397,455
NOTES PAYABLE - not guaranteed by
the parent company 286,717 357,788
OBLIGATIONS OF PROJECT MINING SUBSIDIARIES
not guaranteed by the parent company or
its North American Coal subsidiary 331,876 338,504
OBLIGATION TO UNITED MINE WORKERS
OF AMERICA COMBINED BENEFIT FUND 154,959 159,276
SELF-INSURANCE RESERVES AND OTHER 119,399 112,589
MINORITY INTEREST 40,542 41,255
STOCKHOLDERS' EQUITY
Common stock:
Class A, par value $1 per share, 7,228,739
shares outstanding (1993 - 7,177,075
shares outstanding) 7,229 7,177
Class B, par value $1 per share, convertible
into Class A on a one-for-one basis,
1,722,981 shares outstanding
(1993 - 1,763,503 shares outstanding) 1,723 1,764
Capital in excess of par value 2,788 2,548
Retained income 262,226 226,212
Foreign currency translation adjustment
and other 5,425 (2,075)
----------- -----------
279,391 235,626
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $ 1,694,322 $ 1,642,493
=========== ===========
<FN>
See notes to consolidated financial statements.
F-6
66
CONSOLIDATED STATEMENTS OF CASH FLOWS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31
------------------------------------
1994 1993 1992
------------------------------------
(In thousands)
OPERATING ACTIVITIES
Net income (loss) $ 42,054 $ 8,301 $ (87,132)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Extraordinary charge, net-of-tax 1,022 2,007 110,000
Depreciation, depletion and amortization 80,154 78,063 72,509
Deferred income taxes 3,985 5,176 6,159
Currency exchange (gain) loss 103 (5,691)
Other non-cash items (6,165) (8,047) (15,185)
Working capital changes:
Accounts receivable (31,180) (22,926) 943
Inventories (54,791) 8,505 (19,214)
Other current assets (5,353) (2,213) 2,902
Accounts payable and other liabilities 68,054 3,341 (18,323)
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 97,780 72,310 46,968
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (52,564) (57,661) (74,354)
Proceeds from the sale of businesses 21,229
Proceeds from the sale of other assets 11,144 27,600 1,707
Notes receivable 1,412 4,664 1,431
-------- -------- --------
NET CASH USED BY INVESTING ACTIVITIES (40,008) (25,397) (49,987)
FINANCING ACTIVITIES
Additions to long-term obligations
and revolving credit 122,055 31,373 93,106
Reductions of long-term obligations
and revolving credit (192,679) (84,533) (114,294)
Additions to obligations of project mining 53,768 51,517 45,535
subsidiaries
Reductions of obligations of project mining (67,658) (60,083) (54,809)
subsidiaries
Additions to (reductions of) advances
from customers 2,626 (7,208) 26,107
Financing of other short-term obligations 11,884 16,172
Cash dividends paid (6,040) (5,854) (5,645)
Capital grants 1,622 3,741 2,020
Other - net 3,596 4,746 (3,825)
-------- -------- --------
NET CASH USED BY FINANCING ACTIVITIES (70,826) (50,129) (11,805)
Effect of exchange rate changes on cash 3,446 (1,482) (3,615)
-------- -------- --------
CASH AND CASH EQUIVALENTS
Decrease for the year (9,608) (4,698) (18,439)
Balance at the beginning of the year 29,149 33,847 52,286
-------- -------- --------
BALANCE AT THE END OF THE YEAR $ 19,541 $ 29,149 $ 33,847
======== ======== ========
<FN>
See notes to consolidated financial statements.
F-7
67
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31
------------------------------------
1994 1993 1992
---------- --------- ----------
(In thousands)
CLASS A COMMON STOCK
Beginning balance $ 7,177 $ 7,113 $ 7,040
Conversion of Class B shares to
Class A shares 43 60 26
Sale of treasury shares under
stock option and
compensation plans 11 4 56
Purchase of treasury shares (2) (9)
--------- -------- --------
7,229 7,177 7,113
CLASS B COMMON STOCK
Beginning balance 1,764 1,823 1,842
Conversion of Class B shares to
Class A shares (43) (60) (26)
Sale of shares under stock
option plans 2 1 7
--------- -------- --------
1,723 1,764 1,823
CAPITAL IN EXCESS OF PAR VALUE
Beginning balance 2,548 2,342 774
Sale of shares under stock
option and compensation plans 348 206 1,912
Purchase of treasury shares (108) (344)
--------- -------- --------
2,788 2,548 2,342
RETAINED INCOME
Beginning balance 226,212 223,765 316,542
Net income (loss) 42,054 8,301 (87,132)
Cash dividends on Class A and Class B
common stock:
1994 $.675 per share (6,040)
1993 $.655 per share (5,854)
1992 $.635 per share (5,645)
--------- -------- --------
262,226 226,212 223,765
FOREIGN CURRENCY TRANSLATION
ADJUSTMENT AND OTHER
Beginning balance (2,075) 3,273 23,990
Foreign currency translation adjustment and other 7,500 (5,348) (20,717)
--------- -------- --------
5,425 (2,075) 3,273
--------- -------- --------
TOTAL STOCKHOLDERS' EQUITY $ 279,391 $ 235,626 $ 238,316
========= ========= =========
<FN>
See notes to consolidated financial statements.
F-8
68
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
(Tabular Dollars in Millions, Except Per Share and Percentage Data)
NOTE A--ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include the accounts of NACCO Industries, Inc.
("NACCO," the parent company) and its majority owned subsidiaries
(NACCO Industries, Inc. and Subsidiaries - the "Company").
Intercompany accounts and transactions are eliminated.
CASH AND CASH EQUIVALENTS: Cash and cash equivalents include
cash in banks and highly liquid investments with original
maturities of three months or less.
INVENTORIES: Inventories are stated at the lower of cost or
market. Cost is determined under the last-in, first-out (LIFO)
method for manufacturing inventories in the United States and
under the first-in, first-out (FIFO) method with respect to all
other inventories.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are
recorded at cost. Depreciation, depletion and amortization are
provided in amounts sufficient to amortize the cost of the assets
(including assets recorded under capital leases) over their
estimated useful lives using the straight- line method. The
units-of-production method is used to amortize certain
coal-related assets based on estimated recoverable tonnages.
GOODWILL: Goodwill represents the excess purchase price paid
over the fair value of the net assets acquired. The amortization
of goodwill is determined on a straight-line basis over a 40-year
period. Management regularly evaluates its accounting for
goodwill considering such factors as historical and future
profitability and believes that the asset is realizable and the
amortization period remains appropriate.
DEFERRED FINANCING COSTS: Amortization of the costs related to
manufacturing assets is calculated utilizing the interest method
over the term of the related indebtedness. The costs incurred
related to the coal assets are amortized utilizing the
units-of-production method. Amortization of these costs is
included in interest expense on the Company's consolidated
statements of income.
PRODUCT DEVELOPMENT COSTS: Expenses associated with the
development of new products and changes to existing products are
charged to expense as incurred. These costs amounted to $25.9
million, $23.4 million and $24.4 million in 1994, 1993 and 1992,
respectively.
COMMON STOCK: The Class A common stock has one vote per share
and the Class B common stock has 10 votes per share. The total
number of authorized shares of Class A common stock and Class B
common stock at December 31, 1994, was 25,000,000 shares and
6,756,176 shares, respectively. Treasury shares of Class A stock
totalling 832,122 and 840,564 at December 31, 1994 and 1993,
respectively, have been deducted from shares outstanding.
FOREIGN CURRENCY: The financial statements of the Company's
foreign operations are translated into U.S. dollars at year-end
exchange rates for assets and liabilities, and at weighted
average exchange rates during the year for revenues and expenses.
The effect of changes in foreign exchange rates applied to these
foreign financial statements is included as a separate component
of stockholders' equity.
F-9
69
NOTE A--ACCOUNTING POLICIES--Continued
FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS:
The fair values of financial instruments have been determined
through information obtained from quoted market sources and
management estimates. The Company does not hold or issue
financial instruments or derivative financial instruments for
trading purposes.
The Company enters into forward foreign exchange contracts
with terms of one-to-twelve months. These contracts hedge
certain foreign currency denominated receivables and payables and
foreign currency commitments. Gains and losses on these
contracts are deferred and recognized as part of the cost of the
underlying transaction being hedged.
The Company also enters into interest rate swap agreements
with terms ranging from six months to five years. The
differential between the floating interest rate and fixed
interest rate which is to be paid or received is recognized in
interest expense as the floating interest rate changes over the
life of the agreement.
EARNINGS PER SHARE: The calculation of net income per share is
based on the weighted average number of shares outstanding during
each period.
RECLASSIFICATIONS: Certain amounts in the prior periods'
consolidated financial statements have been reclassified to
conform to the current period's presentation.
NOTE B--EXTRAORDINARY CHARGE
1994 AND 1993
The extraordinary charges of $3.2 million and $3.3 million,
net of $2.0 million in tax benefits, were recognized in the
second quarters of 1994 and 1993, respectively. These charges
represent the write-off of premiums and unamortized debt issuance
costs associated with the retirement of approximately $70.0
million and $50.0 million face value of NACCO Materials Handling
Group s Hyster-Yale 12 3/8% subordinated debentures. These
retirements were achieved using internally generated funds of
NMHG and equity infusions from existing stockholders.
1992
The Coal Industry Retiree Health Benefit Act of 1992 requires
Bellaire, a wholly-owned non-operating subsidiary of NACCO, to
incur additional costs for retiree medical expenses of certain
United Mine Worker retirees. A charge of $110.0 million (net of
$56.7 million of tax benefits) was recognized in 1992 to reflect
the estimated future payments related to this legislation.
Annual cash payments required by this legislation are expected to
be in the range of $2.0 million to $4.0 million per year after
tax. These payments could continue as long as 40 to 50 years, or
as long as there are eligible participants. Payments in 1994
amounted to $4.6 million and included payments for 1994 and 1993.
Management expects taxable earnings to continue to be sufficient
to realize the full amount of the related deferred tax asset.
NOTE C--ACCOUNTS RECEIVABLE
Allowances for doubtful accounts, returns, discounts and
adjustments of $10.6 million and $11.1 million at December 31,
1994 and 1993, respectively, were deducted from accounts
receivable.
F-10
70
NOTE D--INVENTORIES
Inventories are summarized as follows:
December 31
----------------------
1994 1993
----------------------
Manufacturing inventories:
Finished goods and service parts
NACCO Materials Handling Group $ 82.3 $ 81.6
Hamilton Beach<>Proctor-Silex 32.8 36.0
------- -------
115.1 117.6
------- -------
Raw materials and work in process
NACCO Materials Handling Group 137.9 80.3
Hamilton Beach<>Proctor-Silex 15.9 15.3
------- -------
153.8 95.6
------- -------
LIFO reserve
NACCO Materials Handling Group (11.4) (10.6)
Hamilton Beach<>Proctor-Silex (.1) .4
------- -------
(11.5) (10.2)
------- -------
Total manufacturing inventories 257.4 203.0
North American Coal:
Coal 8.4 7.6
Mining supplies 18.8 16.2
Retail inventories-Kitchen Collection 14.4 11.4
------ ------
$299.0 $238.2
====== ======
The cost of manufacturing inventories has been determined by
the LIFO method for 69% of such inventories at December 31, 1994
and 1993.
F-11
71
NOTE E--PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment includes the following:
December 31
---------------------
1994 1993
---------------------
Coal lands and real estate
NACCO Materials Handling Group $ 6.0 $ 5.4
Hamilton Beach<>Proctor-Silex .8 .7
North American Coal 14.8 15.2
Project mining subsidiaries (Note H) 54.0 52.7
Kitchen Collection .1 .1
NACCO and Bellaire .9 .9
------ -------
76.6 75.0
Plant and equipment
NACCO Materials Handling Group 208.4 185.5
Hamilton Beach<>Proctor-Silex 105.5 94.2
North American Coal 15.2 15.2
Project mining subsidiaries (Note H) 409.3 403.0
Kitchen Collection 6.0 5.1
NACCO and Bellaire 4.1 4.2
------ -------
748.5 707.2
------ -------
825.1 782.2
Less allowances for depreciation, depletion
and amortization 339.8 286.0
------ -------
$ 485.3 $ 496.2
======== ========
Total depreciation, depletion and amortization expense on
property, plant and equipment was $63.2 million, $60.1 million
and $53.6 million during 1994, 1993 and 1992, respectively.
Proven and probable coal reserves approximated 2.2 billion
tons at December 31, 1994 and 1993.
NOTE F--DEFERRED CHARGES
Accumulated amortization of goodwill, patents and trademarks
was $80.5 million and $66.4 million at December 31, 1994 and 1993,
respectively. Total amortization expense of these items was
$14.1 million, $14.3 million and $14.4 million during 1994, 1993
and 1992, respectively.
Total amortization expense of deferred financing costs was
$3.0 million, $3.7 million and $4.0 million during 1994, 1993
and 1992, respectively.
F-12
72
NOTE G--REVOLVING CREDIT AGREEMENTS AND NOTES PAYABLE
NACCO has not guaranteed the long-term debt or any borrowings
of its subsidiaries.
REVOLVING CREDIT AGREEMENTS
NACCO Materials Handling Group
NMHG's credit agreement, as amended, provides for a term note
and a revolving credit facility. The revolving credit facility
permits advances and secured letters of credit to NMHG from time
to time, up to an aggregate principal amount of $100.0 million.
The following summarizes the revolving credit facility:
Amount of revolver $100.0
Amount available at December 31, 1994 $ 67.0
Interest rate at December 31, 1994 8.5%
Average interest rate during 1994 7.5%
Commitment fee at December 31, 1994 0.3%
Expiration date 1997
In connection with the 1994 retirement of subordinated
debentures, NMHG further amended its existing senior bank credit
agreement during the second quarter of 1994 to permit the
accelerated use of $25.0 million to retire additional debentures.
These funds were used to call additional debentures in December
1994.
On February 28, 1995, the company entered into a new
long-term credit agreement to replace its existing bank agreement
and to refinance the majority of its existing long-term debt.
The new agreement provides the company with an unsecured $350.0
million revolving credit facility to replace its current senior
credit facility. The new credit facility has a five year
maturity with extension options and performance based pricing
comparable to its current senior credit facility, which provides
the company with reduced interest rates upon achievement of
certain financial performance targets. With the new credit
agreement in place, the company has the ability to call the
remaining $78.5 million outstanding Hyster-Yale 12 3/8%
subordinated debentures in 1995. In anticipation of the call, an
extraordinary charge of $3.4 million will be recorded in the
first quarter of 1995 to write-off unamortized debt issuance
costs and anticipated premiums.
HAMILTON BEACH PROCTOR-SILEX
Hamilton Beach Proctor-Silex's credit agreement, as modified
in May 1994, provides for a revolving credit facility (Facility)
that permits advances up to $135.0 million. The following
summarizes this Facility:
Amount of revolver $135.0
Amount available at December 31, 1994 $ 57.0
Interest rate at December 31, 1994 6.9%
Average interest rate during 1994 6.4%
Facility fee 0.4%
Current expiration date 1997
At December 31, 1994, Hamilton Beach Proctor-Silex had $78.0
million outstanding under this Facility, $70.0 million of which
is classified as long- term because it is not expected to be
repaid during 1995. The expiration date of this Facility (which
currently is May 1997) may be extended, on an annual basis,
beginning in 1995 for one additional year upon the mutual consent
of Hamilton Beach Proctor-Silex and the bank group. In
conjunction with this modification, Hamilton Beach Proctor-Silex
repaid the outstanding balance of its term note of $28.1 million
in May 1994. At December 31, 1994, Hamilton Beach Proctor-Silex
also had $0.4 million available under a separate facility.
F-13
73
NOTE G--REVOLVING CREDIT AGREEMENTS AND NOTES PAYABLE--Continued
REVOLVING CREDIT AGREEMENTS--Continued
The Facility, which is secured by substantially all assets of
Hamilton Beach Proctor-Silex, allows borrowings to be made at
either LIBOR, or lender's prime rate plus a margin. At the date
of modification, the stated interest rate became LIBOR plus
1.00%, compared with a stated interest rate at March 31 of LIBOR
plus 1.75%. In addition, this modification allows Hamilton Beach
Proctor-Silex to pay dividends, under certain conditions, to its
stockholders. The borrowing rates can be reduced to as low as
LIBOR plus 0.50% based upon achievement of predetermined interest
coverage ratios. On July 15, 1994, Hamilton Beach Proctor-Silex
paid a $15.0 million dividend to its stockholders.
NORTH AMERICAN COAL
North American Coal has in place a revolving credit facility
summarized as follows:
Amount of revolver $50.0
Amount available at December 31, 1994 $35.0
Interest rate at December 31, 1994 6.6%
Average interest rate during 1994 5.7%
Total commitment and facility fee 0.3%
Current expiration date 1997
The expiration date of this facility may be extended one
additional year, on an annual basis, upon the mutual consent of
North American Coal and the bank group.
NOTES PAYABLE
Subsidiary notes payable, less current maturities, consist of
the following:
December 31
-----------------------
1994 1993
-----------------------
NACCO MATERIALS HANDLING GROUP
Term note with an interest rate of
6.0% at year-end (average interest rate of
6.3% during 1994) payable
1995 to 1997 and secured by all assets $ 95.3 $ 139.3
12.375% senior subordinated
debentures payable in 1999
with a mandatory sinking fund
payment on August 1, 1998
of $78.5 million 78.5 149.8
Long-term portion of revolving credit facility 33.0
Other 4.6 1.3
------- -------
Total NMHG 211.4 290.4
HAMILTON BEACH PROCTOR-SILEX
Long-term portion of revolving credit facility 70.0 37.0
Term note 28.1
------- -------
Total Hamilton Beach<>Proctor-Silex 70.0 65.1
KITCHEN COLLECTION
Term note with an interest rate of 7.6%
at year-end (average interest
rate of 7.2% during 1994)
payable 1999 to 2000 5.0 1.9
NORTH AMERICAN COAL .3 .4
------- -------
$ 286.7 $ 357.8
======= =======
F-14
74
NOTE G--REVOLVING CREDIT AGREEMENTS AND NOTES PAYABLE--Continued
NOTES PAYABLE--Continued
The senior subordinated debentures are callable by NMHG prior
to maturity at redemption prices (expressed as percentages of the
principal amount) as follows: during the 12-month period
beginning August 1, 1994; - 105.0 %; 1995 - 102.5%.
The maturities of the subsidiary notes payable for the next
five years, including current maturities, are as follows:
1995 $ 47.4
1996 46.5
1997 85.0
1998 80.1
1999 2.6
Thereafter 2.5
------
$264.1
======
Interest paid was $44.0 million, $48.4 million and $54.4
million during 1994, 1993 and 1992, respectively.
The credit agreements for NMHG, Hamilton Beach Proctor-Silex,
North American Coal and Kitchen Collection contain certain
covenants and restrictions. Covenants require, among other
things, maintenance of certain minimum amounts of net worth and
certain specified ratios of working capital, debt to equity,
interest coverage and fixed charge coverage. These ratios are
calculated at the subsidiary level. Restrictions include limits
on capital expenditures and dividends. At December 31, 1994, the
subsidiaries were in compliance with all the covenants in their
debt agreements.
NOTE H--OBLIGATIONS OF PROJECT MINING SUBSIDIARIES
North American Coal's project mining subsidiaries have entered
into long-term contracts with various utility customers to
provide lignite at a sales price based on cost plus a profit per
ton. The utility customers have arranged and guaranteed the
financing for the development and operation of these subsidiary
mines. The obligations of these project mining subsidiaries
included in the Company's consolidated balance sheets do not
affect the short- or long-term liquidity of the company and are
without recourse to NACCO or its North American Coal subsidiary.
Obligations of project mining subsidiaries, less current
maturities, consist of the following at December 31:
1994 1993
------------------------
Capitalized lease obligations $ 140.1 $ 145.1
Non-interest-bearing advances from customers 136.0 133.4
Promissory notes with interest rates ranging
from 4.4% to 10.9% during 1994 55.7 60.0
------- ---------
$ 331.8 $ 338.5
======= ==========
The annual maturities of the promissory notes are: 1995 -
$6.5 million; 1996 - $4.3 million; 1997 - $1.8 million; 1998 -
$3.1 million; 1999 - $3.1 million; thereafter - $43.4 million.
Advances from customers are used to develop, operate and provide
for the ongoing working capital needs of certain project mining
subsidiaries.
F-15
75
NOTE H--OBLIGATIONS OF PROJECT MINING SUBSIDIARIES Continued
Interest paid was $17.7 million, $17.5 million and $13.2
million during 1994, 1993 and 1992 respectively. Interest
expense is included as part of the cost of coal which is passed
through to the utility customers.
The project mining subsidiaries' lease obligations for mining
equipment have the following future minimum lease payments at
December 31, 1994:
Capital Operating
Leases Leases
-------- ---------
1995 $ 20.7 $ .4
1996 19.6 .3
1997 18.8 .3
1998 18.0 .2
1999 17.7
Subsequent to 1999 150.3
------ ------
Total minimum lease payments 245.1 $ 1.2
=======
Amounts representing interest (95.4)
------
Present value of net minimum
lease payments 149.7
Current maturities (9.6)
------
$140.1
======
Interest expense and amortization in excess of annual lease
payments are deferred and recognized in years when annual lease
payments exceed interest expense and amortization.
Project mining assets recorded under capital leases are
included with property, plant and equipment and consist of the
following at December 31:
1994 1993
----------------------
Plant and equipment $ 188.1 $ 187.0
Less accumulated amortization 71.6 63.7
--------- --------
$ 116.5 $ 123.3
========= ========
During 1994, 1993 and 1992, the project mining subsidiaries
incurred capital lease obligations of $5.2 million, $22.4
million and $12.0 million, respectively, in connection with lease
agreements to acquire plant and equipment.
Rental expense for all of the project mines' operating leases
amounted to $0.2 million during 1994,1993 and 1992.
The above obligations are secured by substantially all owned
assets of the respective project mining subsidiary and the
assignment of all rights under its coal sales agreement.
F-16
76
NOTE I--LEASE COMMITMENTS
Future minimum operating lease payments, excluding project
mining subsidiaries, at December 31, 1994, are as follows:
1995 $ 14.2
1996 12.8
1997 10.9
1998 9.0
1999 6.9
Thereafter 9.6
-----------
$ 63.4
===========
Rental expense for all operating leases, excluding project
mining subsidiaries, amounted to $16.9 million, $15.3 million and
$13.7 million during 1994, 1993 and 1992, respectively.
NOTE J--FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS
A financial instrument is cash or a contract that imposes an
obligation to deliver, or conveys a right to receive, cash or
another financial instrument. The fair value of financial
instruments, except for NMHG's Hyster-Yale 12 3/8% subordinated
debentures, approximated carrying values at December 31, 1994.
The fair value of the subordinated debentures was $82.5 million
at December 31,1994, compared with the carrying value of $78.5
million.
Interest Rate Derivatives
The Company's operating subsidiaries enter into interest rate
swap agreements. The use of these allows these subsidiaries to
enter into long-term credit agreements that have
performance-based, floating rates of interest and then swap them
into fixed rates, as opposed to entering into higher cost
fixed-rate credit arrangements. These agreements are with major
commercial banks; therefore, the risk of credit loss from
nonperformance by the banks is minimal. The following table
summarizes the notional amounts and related rates (including
applicable margins) on interest rate swap agreements outstanding
at December 31, 1994:
Notional Fixed Rate
Amount Paid
-------- ------------
NMHG $185.0 6.0%
Hamilton Beach<>Proctor-Silex $ 60.0 6.9%
North American Coal $ 14.0 6.6%
Kitchen Collection $ 5.0 7.6%
F-17
77
NOTE J--FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL
INSTRUMENTS--Continued
FOREIGN CURRENCY DERIVATIVES
NMHG and Hamilton Beach<>Proctor-Silex enter into forward
foreign exchange contracts for purposes of hedging their exposure
to foreign currency exchange rate fluctuations. These contracts
are with major financial institutions. Therefore, the risk of
credit loss from non-performance by these institutions is
minimal. These contracts hedge primarily firm commitments and,
to a lesser degree, forecasted commitments relating to cash flows
associated with sales and purchases denominated in foreign
currencies. The table below summarizes foreign exchange contracts
outstanding as of December 31, 1994:
Deferred
Contract Gain
Amount (Loss)
-------- --------
NMHG $ 190.9 $ (.5)
Hamilton Beach<>Proctor-Silex $ 1.0 --
NOTE K--CONTINGENCIES
Various legal proceedings and claims have been or may be
asserted against NACCO and certain subsidiaries relating to the
conduct of its business including product liability and
environmental claims. These proceedings are incidental to
their ordinary course of business. Management believes that it
has meritorious defenses and will vigorously defend itself in
these actions. Any costs that management estimates will be paid
in these claims are accrued when the liability is considered
probable and the amount can be reasonably estimated.
Although the ultimate disposition of these proceedings is not
presently determinable, management believes, after consultation
with its General Counsel, the likelihood that material costs
will be incurred in excess of accruals already recognized
is remote.
NMHG is subject to recourse or repurchase obligations under
various financing arrangements for certain independently owned
retail dealerships at December 31, 1994. Also, certain dealer
loans are guaranteed by NMHG. When NMHG is the guarantor of the
principal amount financed, a security interest is usually
maintained in certain assets of parties for whom NMHG is
guaranteeing debt. Total amounts subject to recourse or repurchase
obligation at December 31, 1994, were $91.0 million. Losses
anticipated under the terms of the recourse or repurchase
obligations are not significant and have been provided for
financial reporting purposes.
NOTE L--STOCK OPTIONS
The 1975 and 1981 stock option plans as amended provide for the
granting to officers and other key employees options to purchase
Class A and Class B common stock of the Company at a price not less
than the market value of such stock at the date of grant. Options
become exercisable over a four-year period and expire 10 years from
the date of the grant. At December 31, 1994, all stock options
outstanding were exercisable. There were options for 80,701 Class
A shares at December 31, 1994 and 1993, respectively, and 80,100
Class B shares at December 31, 1994 and 1993, respectively,
available for grant under these plans. The Company does not,
however, intend to issue any additional stock options. At December
31, 1994, there were options relating to Class A shares for 5,800
shares with an option price of $32.00 that were granted on January
12, 1989, and 25,000 shares at an option price of $35.56 granted on
March 1, 1989.
F-18
78
NOTE M--OTHER - NET
Items included in other-net for the year ended December 31 are
as follows:
1994 1993 1992
---------------------------------------
Equity in earnings (losses) of
unconsolidated subsidiaries $ 1.0 $ (3.9) $ (.6)
Litigation settlement (3.5)
Gain (loss) on sale of assets (.1) 2.3 .2
Currency transaction gains (losses) (.8) .1 5.6
Miscellaneous 2.1 .3 (3.4)
--------- --------- ---------
$ 2.2 $ (4.7) $ 1.8
========= ========== =========
NOTE N--INCOME TAXES
The components of income before income taxes on a legal entity
basis for the year ended December 31 are as follows:
1994 1993 1992
---------------------------------------
Domestic $ 57.1 $ 18.3 $ 4.9
Foreign 21.4 6.4 35.4
--------- --------- ---------
Income before income taxes
and extraordinary charge $ 78.5 $ 24.7 $ 40.3
========== ========== ==========
Domestic income before income taxes has been reduced by all of
the amortization of goodwill and deferred financing costs, and
substantially all interest expense.
Provision for income taxes consists of the following for the
year ended December 31:
1994 1993 1992
--------------------------------------
Current tax expense:
Federal $ 24.3 $ 8.4 $ 3.9
State 3.0 2.7 1.3
Foreign 7.8 4.4 6.8
-------- --------- ----------
Total current 35.1 15.5 12.0
-------- --------- ----------
Deferred tax expense (benefit):
Federal (1.1) 3.6 2.8
State (.1) (1.2) .6
Foreign (3.2) (4.4) .9
-------- --------- ----------
Total deferred (4.4) (2.0) 4.3
-------- --------- ----------
Provision for income taxes $ 30.7 $ 13.5 $ 16.3
======== ========= ==========
F-19
79
NOTE N--INCOME TAXES--Continued
The Company made income tax payments of $29.0 million, $16.3
million and $30.8 million during 1994, 1993 and 1992,
respectively. During the same period, income tax refunds totaled
$1.2 million, $5.1 million and $5.3 million, respectively.
At December 31, 1994, the Company had cumulative undistributed
earnings at its foreign subsidiaries of $93.1 million. It is the
Company's intention to reinvest $39.0 million of these
undistributed earnings of its foreign subsidiaries and thereby
indefinitely postpone their remittance. There has been no
provision made for taxes, nor is it practicable to estimate the
amount of taxes on the undistributed earnings which are
reinvested indefinitely. The remaining undistributed earnings of
$54.1 million can be remitted without a material charge to
earnings.
Upon remittance of earnings, certain foreign countries impose
withholding taxes that are then available, subject to certain
limitations, for use as credits against the Company's U.S. tax
liability. The amount of withholding tax that would be payable
upon remittance of the entire amount of undistributed earnings
would approximate $5.7 million.
A reconciliation of federal statutory and effective income tax
for the year ended December 31 follows:
1994 1993 1992
------------------------------------
Income before taxes $ 78.5 $ 24.7 $ 40.3
========= ========= =========
Statutory taxes at 35% in 1994 and 1993
and 34% in 1992 $ 27.5 $ 8.6 $ 13.7
Amortization of excess purchase price 5.1 4.8 4.7
State income taxes 1.8 1.0 1.8
Differences between foreign
and statutory tax rates .4 .1 (3.6)
Percentage depletion (1.6) (1.6) (2.4)
Export benefits (1.0) (.8) (.3)
Earnings reported net of taxes (.4) 1.1 (.1)
Other-net (1.1) .3 2.5
--------- --------- ---------
Provision for income taxes $ 30.7 $ 13.5 $ 16.3
========= ========= =========
Effective rate 39.15% 54.78% 40.53%
========= ========= =========
F-20
80
NOTE N--INCOME TAXES--Continued
A summary of the components of the net deferred tax asset
(liability) in the Company's consolidated balance sheets at
December 31 resulting from differences in the book and tax basis
of assets and liabilities follows:
Current Non-Current
-------------------------- ---------------------------
Domestic Foreign Domestic Foreign
-------- ------- -------- -------
1994
----
Inventories $ (20.0) $ 1.0
Accrued expenses and reserves 10.9 4.9 $ 24.0
Employee benefits 1.8 15.9 $ (2.6)
Net operating loss carryforwards 1.8 .8 3.3
Reserve for Obligation to
United Mine Workers of
America Combined Benefit Fund 56.2
Depreciation and depletion (40.3) (5.4)
Unrepatriated earnings (8.9)
Other (1.1) (10.0) .1
-------- -------- -------- -------
$ (5.5) $ 5.6 $ 40.2 $ (7.9)
======== ======== ======== ========
1993
----
Inventories $ (26.1) $ 1.4
Accrued expenses and reserves 13.8 .2 $ 24.6
Employee benefits 1.7 12.4 $ (2.3)
Net operating loss carryforwards 2.2 6.1 4.8
Reserve for Obligation to
United Mine Workers of
America Combined Benefit Fund 56.4
Depreciation and depletion (40.3) (5.4)
Unrepatriated earnings (4.9)
Other 2.0 (.4) (9.6) (.1)
-------- -------- -------- -------
$ (6.4) $ 7.3 $ 43.4 $ (7.8)
======== ======== ======== ========
The Company and certain of its subsidiaries are currently
under examination for federal and various state income tax
returns. The Company has not been informed of any material
assessment resulting from these examinations and will vigorously
contest any material assessment. Management believes that any
potential adjustment would not materially affect future earnings.
F-21
81
NOTE O--RETIREMENT BENEFIT PLANS
Defined Benefit Plans
The Company maintains various defined benefit pension plans
covering its employees. These plans provide benefits based on
years of service and average compensation during certain periods.
The Company's policy is to make contributions to fund these plans
within the range allowed by the applicable regulations.
Contributions to the various plans were $6.9 million in 1994 and
$5.2 million in 1993 and 1992. Plan assets consist primarily of
publicly traded stocks, investment contracts and government and
corporate bonds.
Set forth below is a detail of consolidated worldwide net
periodic pension expense and the assumptions used in accounting
for the United States defined benefit plans for the year ended
December 31. The United Kingdom plans used assumptions that are
consistent with, but not identical to, those used by the United
States plans.
1994 1993 1992
--------------------------------------------
Service cost $ 6.6 $ 6.3 $ 6.6
Interest cost on projected
benefit obligation 9.4 9.0 9.1
Actual loss (gain) on plan assets 1.1 (8.2) (2.1)
Curtailment gain (.4)
Net amortization and deferral
of actuarial (gains) losses (9.5) .1 (6.4)
------------- ----------- -----------
Net periodic pension expense $ 7.6 $ 6.8 $ 7.2
============ =========== ===========
Assumptions:
Weighted average discount rates 8.5% 7.5% 8.0-8.3%
Rate of increase in compensation
levels 5.0 -5.5% 4.0-6.0% 4.5-6.8%
Expected long-term rate of return
on assets 9.0% 9.0% 9.0%
F-22
82
NOTE O--RETIREMENT BENEFIT PLANS--Continued
The following sets forth the funded status of the defined
benefit plans and amounts recognized in the consolidated balance
sheets at December 31:
Partially Funded Fully Funded
Plans Plans
-------------------------------------
1994 1993 1994 1993
-------------------------------------
Actuarial present value of benefit obligation:
Vested accumulated benefit obligation $ 66.9 $ 69.1 $ 23.0 $ 21.9
Nonvested accumulated benefit obligation 4.6 5.2 .2 .2
-------- ------- ------- ------
Total accumulated benefit obligation 71.5 74.3 23.2 22.1
Value of future salary projections 19.9 22.8 2.4 2.2
-------- ------- ------- ------
Total projected benefit obligation 91.4 97.1 25.6 24.3
Fair value of plan assets 71.8 71.9 29.4 28.8
-------- ------- ------- ------
Plan assets in excess of (less than)
projected benefit obligation (19.6) (25.2) 3.8 4.5
Amounts available to (reduce) increase
future pension expense:
Unamortized balance of the initial
transition amount (2.5) (1.4) (.6) (.6)
Unamortized cumulative actuarial loss (gain) (2.0) 4.1 1.6 1.0
Unamortized prior service cost 3.8 3.6 1.3 1.3
Adjustment for minimum pension liability (7.8) (7.9)
--------- ------- ------- ------
Pension asset (liability) recognized in
consolidated balance sheet $ (28.1) $ (26.8) $ 6.1 $ 6.2
========= ======= ======= ======
F-23
83
NOTE O--RETIREMENT BENEFIT PLANS--Continued
DEFINED CONTRIBUTION PLANS
NACCO and its subsidiaries have defined contribution plans for
substantially all employees. For NACCO and certain subsidiaries,
employee contributions are matched by the Company based on plan
provisions. In addition, NACCO and certain other subsidiaries
have profit sharing plans whereby the subsidiary's contribution
is determined annually based on its operating results. Total
contributions to these plans were $5.9 million in 1994, $5.5
million in 1993 and $4.6 million in 1992.
RETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFIT PLANS
NACCO and certain of its subsidiaries have retirement health
care and life insurance benefit plans. These plans provide
benefits to pensioners and their survivors if they reach
certain age and service requirements while working for NACCO
or its subsidiaries. The amounts of expenses and liabilities
related to these plans are not material.
NOTE P--BUSINESS SEGMENTS
The Company has four operating subsidiaries. NMHG
designs, manufactures and markets forklift trucks and related
service parts under the Hyster(R) and Yale(R) brand names.
Hamilton Beach-Proctor-Silex is a leading manufacturer of small
electric appliances. North American Coal mines and markets
lignite for use primarily as fuel in power generation by electric
utilities. Kitchen Collection is a national specialty retailer of
kitchenware and small electric appliances.
Sales between subsidiaries, which are minimal, are eliminated
in consolidation. Information relating to the Company's
operations at the subsidiary level is presented below. The
results for North American Coal and Bellaire have been adjusted
to reflect the reclassification of certain royalty and other
payments previously classified with Bellaire that are more
appropriately classified with North American Coal.
F-24
84
NOTE P--BUSINESS SEGMENTS--Continued
1994 1993 1992
----------------------------------------
REVENUES
NACCO Materials Handling Group $ 1,178.9 $ 908.2 $ 865.9
Hamilton Beach-Proctor-Silex 377.5 356.3 358.6
North American Coal 250.2 233.3 211.9
Kitchen Collection 63.9 53.7 45.5
Bellaire .6 3.0 6.0
Eliminations (6.2) (5.1) (4.1)
----------- ----------- -----------
$ 1,864.9 $ 1,549.4 $ 1,483.8
=========== =========== ===========
AMORTIZATION OF GOODWILL
NACCO Materials Handling Group $ 10.8 $ 10.8 $ 10.8
Hamilton Beach-Proctor-Silex 2.8 2.9 3.0
Kitchen Collection .1 .1 .1
----------- ----------- -----------
$ 13.7 $ 13.8 $ 13.9
=========== =========== ===========
OPERATING PROFIT
NACCO Materials Handling Group $ 65.8 $ 39.6 $ 44.3
Hamilton Beach-Proctor-Silex 25.3 11.8 19.3
North American Coal 48.6 45.2 41.6
Kitchen Collection 5.4 4.8 4.4
Bellaire (.1) (.1) (.1)
NACCO (9.9) (7.9) (8.2)
----------- ----------- -----------
$ 135.1 $ 93.4 $ 101.3
=========== =========== ===========
OPERATING PROFIT EXCLUDING GOODWILL AMORTIZATION
NACCO Materials Handling Group $ 76.6 $ 50.4 $ 55.1
Hamilton Beach-Proctor-Silex 28.1 14.7 22.3
North American Coal 48.6 45.2 41.6
Kitchen Collection 5.5 4.9 4.5
Bellaire (.1) (.1) (.1)
NACCO (9.9) (7.9) (8.2)
----------- ----------- -----------
$ 148.8 $ 107.2 $ 115.2
=========== =========== ===========
INTEREST INCOME
NACCO Materials Handling Group $ .8 $ .8 $ 1.5
North American Coal 3.0 2.1 2.1
Bellaire 1.3 1.0 1.5
NACCO 1.1 1.9 1.2
Eliminations (4.6) (3.9) (3.0)
----------- ----------- -----------
$ 1.6 $ 1.9 $ 3.3
=========== =========== ===========
INTEREST EXPENSE
NACCO Materials Handling Group $ (33.7) $ (40.4) $ (44.2)
Hamilton Beach-Proctor-Silex (7.5) (7.7) (8.6)
North American Coal (1.3) (.8) (1.0)
Kitchen Collection (.3) (.1) (.2)
NACCO (3.6) (2.3) (1.8)
Eliminations 4.6 3.9 3.0
----------- ----------- -----------
(41.8) (47.4) (52.8)
Project Mining Subsidiaries (18.6) (18.5) (13.2)
----------- ----------- -----------
$ (60.4) $ (65.9) $ (66.0)
=========== =========== ===========
OTHER-NET, INCOME (EXPENSE)
NACCO Materials Handling Group $ 2.9 $ (1.7) $ 2.9
Hamilton Beach-Proctor-Silex (.3) (4.1)
North American Coal (1.1) (1.4)
Bellaire .2 .1 .1
NACCO .5 1.0 .2
----------- ----------- -----------
$ 2.2 $ (4.7) $ 1.8
=========== =========== ===========
F-25
85
NOTE P--BUSINESS SEGMENTS--Continued
1994 1993 1992
------------------------------------------
NET INCOME (LOSS)
Before Extraordinary Charge
NACCO Materials Handling Group $ 18.7 $ (5.1) $ 1.3
Hamilton Beach Proctor-Silex 10.2 (1.0) 5.4
North American Coal 21.0 17.4 20.1
Kitchen Collection 3.1 2.7 2.4
Bellaire .8 2.6 .9
NACCO (6.1) (5.4) (6.1)
Minority interest (2.4) .4 (1.1)
----------- ---------- -----------
45.3 11.6 22.9
Extraordinary charge, net-of-tax (3.2) (3.3) (110.0)
----------- ---------- -----------
Net Income (Loss) $ 42.1 $ 8.3 $ (87.1)
=========== ========== ===========
TOTAL ASSETS
NACCO Materials Handling Group $ 906.2 $ 833.0 $ 854.3
Hamilton Beach Proctor-Silex 289.6 300.3 296.8
North American Coal 49.0 44.8 40.5
Kitchen Collection 26.0 23.3 19.9
Bellaire 87.1 93.6 95.5
NACCO 26.6 22.8 34.6
------------ ---------- -----------
1,384.5 1,317.8 1,341.6
Project mining subsidiaries 412.3 416.7 410.7
------------ ---------- -----------
1,796.8 1,734.5 1,752.3
Consolidating eliminations (102.5) (92.0) (67.4)
------------ ---------- -----------
$ 1,694.3 $ 1,642.5 $ 1,684.9
============ ========== ===========
DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSE
NACCO Materials Handling Group $ 32.2 $ 31.7 $ 32.1
Hamilton Beach Proctor-Silex 15.5 15.3 15.3
North American Coal 1.6 1.5 1.5
Kitchen Collection .9 .8 .8
Bellaire .2
NACCO .1 .3 .4
----------- --------- -----------
50.3 49.6 50.3
Project mining subsidiaries 29.9 28.5 22.2
----------- --------- -----------
$ 80.2 $ 78.1 $ 72.5
=========== ========= ===========
CAPITAL EXPENDITURES
NACCO Materials Handling Group $ 25.9 $ 20.2 $ 24.3
Hamilton Beach Proctor-Silex 13.4 12.2 10.8
North American Coal .4 1.0 1.1
Kitchen Collection 1.0 1.1 .6
NACCO .2 .2 .2
----------- --------- ----------
40.9 34.7 37.0
Project mining subsidiaries 11.7 23.0 37.4
----------- --------- ----------
$ 52.6 $ 57.7 $ 74.4
=========== ========= ==========
F-26
86
NOTE P--BUSINESS SEGMENTS--Continued
DATA BY GEOGRAPHIC AREA
Europe,
Africa and Asia-
Americas Middle East Pacific Eliminations Consolidated
-------- ----------- ------- ------------ ------------
1994
----
Sales to unaffiliated
customers $1,509.4 $ 294.4 $ 61.1 $ 1,864.9
Transfer between
geographic areas 49.2 130.6 $ (179.8)
--------- -------- -------- --------- ----------
Total revenues $1,558.6 $ 425.0 $ 61.1 $ (179.8) $ 1,864.9
======== ======== ======== ========= ==========
Operating profit $ 114.5 $ 15.4 $ 5.2 $ ---- $ 135.1
======== ======== ======== ========= ==========
Total assets $1,371.1 $ 309.6 $ 24.0 $ (10.4) $ 1,694.3
======== ======== ======== ========= ==========
1993
----
Sales to unaffiliated
customers $1,284.8 $ 222.2 $ 42.4 $ 1,549.4
Transfer between
geographic areas 31.5 81.2 $ (112.7)
-------- -------- -------- --------- ----------
Total revenues $1,316.3 $ 303.4 $ 42.4 $ (112.7) $ 1,549.4
======== ======== ======== ========= ==========
Operating profit $ 94.1 $ (2.4) $ 1.7 $ ---- $ 93.4
======== ======== ======== ========= ==========
Total assets $1,381.5 $ 274.8 $ 19.6 $ (33.4) $ 1,642.5
======== ======== ======== ========= ==========
1992
----
Sales to unaffiliated
customers $1,196.9 $ 251.5 $ 35.4 $ 1,483.8
Transfer between
geographic areas 32.1 89.2 $ (121.3)
-------- -------- -------- --------- ----------
Total revenues $1,229.0 $ 340.7 $ 35.4 $ (121.3) $ 1,483.8
======== ======== ======== ========= ==========
Operating profit $ 72.5 $ 28.7 $ .8 $ (.7) $ 101.3
======== ======== ======== ========= ==========
Total assets $1,384.4 $ 283.7 $ 18.3 $ (1.5) $ 1,684.9
======== ======== ======== ========= ==========
NACCO parent company expense reduced Americas operating profit
by $9.9 million, $7.9 million and $8.2 million in 1994, 1993 and
1992, respectively. The Asia-Pacific category above does not
include the operating results or assets of NMHG's 50% owned
Japanese joint venture, Sumitomo-Yale, as it is accounted for
using the equity method.
F-27
87
NOTE Q--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
A summary of the unaudited quarterly results of operations for
the year ended December 31 is as follows:
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
1994
----
TOTAL REVENUES
NACCO Materials Handling Group $ 245.3 $ 290.4 $ 289.7 $ 353.5
Hamilton Beach-Proctor-Silex 68.6 76.1 106.9 125.9
North American Coal(1) 59.3 58.8 68.3 63.8
Kitchen Collection 10.7 12.4 17.2 23.6
Bellaire(1) .1 .2 .2 .1
Eliminations (.8) (1.0) (2.0) (2.4)
-------- -------- -------- --------
383.2 436.9 480.3 564.5
GROSS PROFIT 77.8 90.8 97.2 111.6
OPERATING PROFIT
NACCO Materials Handling Group 11.1 19.8 14.5 20.4
Hamilton Beach-Proctor-Silex (.4) 3.5 9.6 12.6
North American Coal(1) 12.0 11.6 12.1 12.9
Kitchen Collection (.2) .2 1.6 3.8
Bellaire(1) (.1) (.1) .1
NACCO (2.2) (2.2) (2.4) (3.1)
-------- -------- -------- --------
20.3 32.8 35.3 46.7
-------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY
CHARGE 2.8 9.2 11.0 22.3
Extraordinary charge, net-of-tax (3.2)
-------- -------- -------- --------
NET INCOME $ 2.8 $ 6.0 $ 11.0 $ 22.3
======== ======== ======== ========
PER SHARE AMOUNTS:
INCOME BEFORE EXTRAORDINARY
CHARGE $ .31 $ 1.03 $ 1.23 $ 2.49
Extraordinary charge, net-of-tax (.36)
--------- --------- -------- --------
NET INCOME $ .31 $ .67 $ 1.23 $ 2.49
========= ========= ======== ========
F-28
88
NOTE Q--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)--Continued
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
1993
----
TOTAL REVENUES
NACCO Materials Handling Group $ 214.7 $ 228.7 $ 217.5 $ 247.3
Hamilton Beach Proctor-Silex 65.8 65.9 107.7 116.9
North American Coal(1) 54.0 54.0 63.4 61.9
Kitchen Collection 9.1 10.1 14.2 20.3
Bellaire(1) 1.0 1.0 .8 .2
Eliminations (.8) (.9) (1.9) (1.5)
--------- --------- --------- ---------
343.8 358.8 401.7 445.1
GROSS PROFIT 67.9 69.2 76.7 91.5
OPERATING PROFIT
NACCO Materials Handling Group 9.6 7.9 6.0 16.1
Hamilton Beach Proctor-Silex (2.7) (1.8) 7.3 9.0
North American Coal(1) 11.2 9.7 12.1 12.2
Kitchen Collection (.1) .2 1.4 3.3
Bellaire(1) (.1)
NACCO (2.1) (2.2) (2.0) (1.6)
--------- --------- --------- ---------
15.9 13.7 24.8 39.0
--------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY
CHARGE 0.0 (.2) 2.0 9.8
Extraordinary charge, net-of-tax (3.3)
--------- --------- --------- ---------
NET INCOME (LOSS) $ 0.0 $ (3.5) $ 2.0 $ 9.8
========= ========= ========= =========
PER SHARE AMOUNTS:
INCOME (LOSS) BEFORE
EXTRAORDINARY CHARGE $ .00 $ (.02) $ .23 $ 1.09
Extraordinary charge, net-of-tax (.37)
--------- --------- --------- ---------
NET INCOME (LOSS) $ .00 $ (.39) $ .23 $ 1.09
========= ========= ========= =========
<FN>
(1) The information for the first three quarters of 1994 and all quarters of
1993 have been adjusted from amounts previously reported. These
adjustments relate to the reclassification of certain royalty and other
payments previously classified with Bellaire that are more appropriately
classified with North American Coal.
F-29
89
NOTE R--PARENT COMPANY CONDENSED BALANCE SHEETS
The condensed balance sheets of NACCO, the parent company, at
December 31 are as follows:
1994 1993
-----------------------
Current assets (including current
intercompany amounts) $ 13.0 $ 7.8
Other assets 1.8 1.5
Investment in and advances from subsidiaries, net
Investments
NACCO Materials Handling Group 300.7 257.2
Hamilton Beach Proctor-Silex 104.7 111.3
North American Coal 15.1 37.2
Kitchen Collection 10.1 12.6
Bellaire (101.3) (102.1)
---------- ----------
329.3 316.2
Advances from subsidiaries (45.1) (67.8)
---------- ----------
284.2 248.4
Property, plant and equipment, net 1.2 1.3
Deferred income taxes 1.7
---------- ----------
Total Assets $ 301.9 $ 259.0
========== ==========
Current liabilities (including
current intercompany amounts) $ 18.9 $ 12.1
Deferred income and other 3.6 4.7
Deferred income taxes 6.6
Stockholders' equity 279.4 235.6
---------- ----------
Total Liabilities and Stockholders' Equity $ 301.9 $ 259.0
========== ==========
The credit agreement at NMHG prohibits the transfer
of assets to NACCO. The credit agreements at Hamilton Beach
Proctor-Silex and Kitchen Collection allow the transfer of assets
to NACCO under certain circumstances. The amount of NACCO s
investment in NMHG, Hamilton Beach Proctor-Silex and Kitchen
Collection that was restricted at December 31, 1994, totals
approximately $400.8 million. The revised credit agreement at
NMHG, see Note G--"Revolving Credit Agreements and Notes Payable"
will allow the transfer of $25.0 million to NACCO. There are no
restrictions on the transfer of assets from North American Coal
and its dividends and advances are the primary source of cash
for NACCO.
F-30
90
NACCO INDUSTRIES, INC. REPORT OF MANAGEMENT
To the Stockholders of NACCO Industries, Inc.:
The management of NACCO Industries, Inc. is responsible for the
preparation, content and integrity of the financial statements and
related information contained within this report. The accompanying
financial statements have been prepared in accordance with generally
accepted accounting principles and include amounts that are based on
informed judgments and estimates.
The Company's code of conduct, communicated throughout the
organization, requires adherence to high ethical standards in the
conduct of the Company s business.
NACCO Industries, Inc. and each of its subsidiaries maintain a
system of internal controls designed to provide reasonable assurance
as to the protection of assets and the integrity of the financial
statements. These systems are augmented by the selection of qualified
financial management personnel. In addition, an internal audit
function periodically assesses the internal controls.
Arthur Andersen LLP, independent certified public accountants,
audits NACCO Industries, Inc. and its subsidiaries' financial
statements. Its audits are conducted in accordance with generally
accepted auditing standards and provide an objective and independent
assessment that helps ensure fair presentation of the Company s
operating results and financial position. The independent accountants
have access to all financial records and related data of the Company,
as well as to the minutes of stockholders' and directors' meetings.
The Audit Committee of the Board of Directors, composed of
independent directors, meets regularly with the independent auditors
and internal auditors to review the scope of their audit reports and
to discuss any action to be taken. The independent auditors and the
internal auditors have free and direct access to the Audit Committee.
The Audit Committee also reviews the financial reporting process and
accounting policies of NACCO Industries, Inc. and each of its
subsidiaries.
Alfred M. Rankin, Jr. Frank B. O'Brien Steven M. Billick
--------------------- ---------------- -----------------
Alfred M. Rankin, Jr. Frank B. O'Brien Steven M. Billick
Chairman, President Senior Vice President-- Vice President and Controller
and Chief Executive Officer Corporate Development
and Chief Financial Officer
F-31
91
SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
PARENT COMPANY CONDENSED BALANCE SHEETS
December 31
------------------------
1994 1993
----- ----
(In thousands)
Current assets $ 279 $ 554
Net amounts receivable from subsidiaries 12,755 7,191
Other assets 1,753 1,544
Investment in and advances from
subsidiaries, net
Investments
NMHG 300,672 257,244
Hamilton Beach<>Proctor-Silex 104,694 111,251
North American Coal 15,125 37,150
Kitchen Collection 10,141 12,625
Bellaire Corporation (101,329) (102,125)
-------- --------
329,303 316,145
Advances from subsidiaries (45,061) (67,793)
-------- --------
284,242 248,352
Property, plant and equipment, net 1,198 1,323
Deferred income taxes 1,699
-------- --------
Total Assets $301,926 $258,964
======== ========
Current liabilities $ 18,942 $ 12,037
Deferred income and other 3,593 4,719
Deferred income taxes 6,582
Stockholders' equity 279,391 235,626
-------- --------
Total Liabilities and Stockholders' Equity $301,926 $258,964
======== ========
<FN>
See notes to parent company financial statements.
F-32
92
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
PARENT COMPANY STATEMENTS OF INCOME
Year Ended
December 31
-------------------------------------
1994 1993 1992
------- ------- --------
(In thousands)
Income (expense):
Intercompany interest income $ 1,068 $ 1,841 $ 1,283
Intercompany interest expense (3,510) (2,101) (1,676)
Other - net 464 829 60
------- ------- --------
(1,978) 569 (333)
Administrative and general expenses 9,903 7,831 8,200
------- ------- --------
Loss before income taxes (11,881) (7,262) (8,533)
Income tax benefit (5,825) (1,748) (2,456)
------- ------- --------
Net loss before equity in earnings of
subsidiaries and extraordinary charge (6,056) (5,514) (6,077)
Equity in earnings of subsidiaries before
extraordinary charge 51,328 17,107 28,945
Extraordinary charge, net-of-tax (3,218) (3,292) (110,000)
------- ------- --------
Net income (loss) $42,054 $ 8,301 $(87,132)
======= ======= ========
<FN>
See notes to parent company financial statements.
F-33
93
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
PARENT COMPANY STATEMENTS OF CASH FLOWS
Year Ended
December 31
---------------------------------
1994 1993 1992
-------- --------- --------
(In thousands)
Operating activities
Net income (loss) $ 42,054 $ 8,301 $(87,132)
Equity in earnings of subsidiaries (51,328) (17,107) (28,945)
Extraordinary charge, net-of-tax 3,218 3,292 110,000
-------- --------- --------
Parent company only net loss (6,056) (5,514) (6,077)
Deferred income taxes (4,866) 6,908 (2,834)
Income taxes net of intercompany tax
payments (3,442) (3,954) 1,964
Working capital changes 983 775 (1,469)
Changes in current intercompany amounts 69 49 1,106
Items of income or expense not requiring
cash outlays (577) 299 530
-------- --------- --------
Net cash used by operating activities (13,889) (1,437) (6,780)
Investing Activities
Capital contributions to subsidiaries
NMHG (24,273) (52,235)
Dividends and advances, net, received
from subsidiaries 40,009 45,883 33,165
Purchases of Hyster-Yale 12 3/8%
debentures (11,832) (22,061)
Reduction of investment in Hyster-Yale
12 3/8% debentures 3,946 25,529
Expenditures for equipment (85) (147) (246)
-------- --------- --------
Net cash provided by investing activities 19,597 7,198 10,858
Financing Activities
Cash dividends (6,040) (5,854) (5,645)
Treasury stock sales under stock option
and directors' compensation plans - net 251 212 1,622
Other - net 38 (75) (55)
-------- --------- --------
Net cash used by financing activities (5,751) (5,717) (4,078)
-------- --------- --------
Cash and cash equivalents
Increase (decrease) for the period (43) 44 -
Balance at the beginning of the period 47 3 3
-------- --------- --------
Balance at the end of the period $ 4 $ 47 $ 3
======== ========= ========
<FN>
See notes to parent company financial statements.
F-34
94
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
For The Year Ended December 31, 1994, 1993 and 1992
The notes to consolidated financial statements, included elsewhere in this Form
10-K, are hereby incorporated by reference into these notes to parent company
financial statements.
NOTE A - LONG-TERM OBLIGATIONS AND GUARANTEES
NACCO Industries, Inc. ("NACCO", the parent company) is a holding
company which owns four operating subsidiaries. It is NACCO's policy
not to guarantee the debt of such subsidiaries.
NOTE B - CASH DIVIDENDS AND ADVANCES TO NACCO
Dividends received from the subsidiaries were $62.7 million in 1994 and
$23.3 million in 1993 and 1992.
NOTE C - CAPITAL CONTRIBUTIONS TO SUBSIDIARIES
The 1993 capital contribution to NMHG of $52.2 million includes the
$26.7 million of cash contributed by NACCO to NMHG in 1993. In
addition, NACCO contributed previously purchased Hyster-Yale 12 3/8%
debentures with a cost to NACCO of $25.5 million (face value of $23.7
million) to NMHG in 1993.
NOTE D - UNRESTRICTED CASH
The amount of unrestricted cash available to NACCO, included in
Investment in and advances from subsidiaries, net was $8.8 million at
December 31, 1994.
F-35
95
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1994, 1993 and 1992
----------------------------------------------------------------------------------------------------------
COL A. COL B. COL C COL D. COL E.
----------------------------------------------------------------------------------------------------------
Balance Additions
at Charged Charged to (D)
Beginning to Other Balance at
Description of Costs and Accounts-- Deductions End of
Period Expenses Describe -Describe Period
----------------------------------------------------------------------------------------------------------
(In thousands)
1994
Reserves deducted from
asset accounts:
Allowance for doubtful
accounts $5,731 $1,240 $39(C) $2,538 (A) $4,472
Allowance for
discounts,
adjustments and
returns $5,397 $17,878 $17,107 (B) $6,168
1993
Reserves deducted from
asset accounts:
Allowance for doubtful
accounts $5,302 $1,056 $595 (A)
$32 (C) $5,731
Allowance for
discounts,
adjustments and
returns $7,097 $16,596 $18,296 (B) $5,397
1992
Reserves deducted from
asset accounts:
Allowance for doubtful
accounts $5,307 $845 $789 (A)
$61 (C) $5,302
Allowance for
discounts,
adjustments and
returns $6,860 $22,454 $22,217 (B) $7,097
<FN>
Note A - Accounts receivable balances written off, net of recoveries.
Note B - Payments.
Note C - Subsidiary's foreign currency translation adjustments and other.
Note D- Balances which are not requiredto be presented andthose which are immaterial have been omitted.
F-36
96
EXHIBIT INDEX
(3) Articles of Incorporation and By-laws.
(i) Restated Certificate of Incorporation of the Company is
incorporated by reference to Exhibit 3(i) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 1-9172.
(ii) Restated By-laws of the Company are incorporated by
reference to Exhibit 3(ii) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992,
Commission File Number 1-9172.
(4) Instruments defining the rights of security holders,
including indentures.
(i) The Company by this filing agrees, upon request, to file
with the Securities and Exchange Commission the instruments
defining the rights of holders of Long-Term debt of the
Company and its subsidiaries where the total amount of
securities authorized thereunder does not exceed 10% of the
total assets of the Company and its subsidiaries on a
consolidated basis.
(ii) The Mortgage and Security Agreement, dated April 8,
1976, between The Falkirk Mining Company (as Mortgagor) and
Cooperative Power Association and United Power Association
(collectively as Mortgagee) is incorporated by reference to
Exhibit 4(ii) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992, Commission File
Number 1-9172.
(iii) Indenture, dated as of August 3, 1989, between the
Company and United Trust Company of New York, Trustee, with
respect to the 12-3/8% Senior Subordinated Debentures due
August 1, 1999 (the form of which Debenture is included in
such Indenture) is incorporated herein by reference to
Exhibit 4(ii) of the Hyster-Yale Materials Handling, Inc.
("Hyster-Yale") Annual Report on Form 10-K for the fiscal
year ended December 31, 1989, Commission File Number
33-28812.
(iv) Stockholders' Agreement, dated as of March 15, 1990,
among the signatories thereto, the Company and Ameritrust
Company National Association, as depository, is
incorporated herein by reference to Exhibit 2 to the
Schedule 13D filed on March 29, 1990 with respect to the
Class B Common Stock, par value $1.00 per share, of NACCO
Industries, Inc.
(v) Amendment to Stockholders' Agreement, dated as of April 6,
1990, among the signatories thereto, the
X-1
97
Company and Ameritrust Company National Association, as
depository, is incorporated herein by reference to Exhibit 4
to the Amendment No. 1 of the Schedule 13D filed on April 11,
1990 with respect to the Class B Common Stock, par value $1.00
per share. of NACCO Industries, Inc.
(vi) Amendment to Stockholders' Agreement, dated as of April
6, 1990, among the signatories thereto, the Company and
Ameritrust Company National Association, as depository, is
incorporated herein by reference to Exhibit 5 to the
Amendment No. 1 of the Schedule 13D filed on April 11, 1990
with respect to the Class B Common Stock, par value $1.00
per share, of NACCO Industries, Inc.
(vii) Amendment to Stockholders' Agreement, dated as of
November 17, 1990, among the signatories thereto, the
Company and Ameritrust Company National Association, as
depository, is incorporated herein by reference to the
Amendment No. 2 of the Schedule 13D filed on March 18, 1991
with respect to the Class B Common Stock, par value $1.00 per
share, of NACCO Industries, Inc.
(10) Material contracts.
*(i) The NACCO Industries, Inc. 1975 Stock Option Plan (as
amended and restated as of July 17, 1986) is incorporated
herein by reference to Exhibit 10(i) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, Commission File Number 1-9172.
*(ii) Form of Incentive Stock Option Agreement for incentive
stock options granted before 1987 under The NACCO
Industries, Inc. 1975 Stock Option Plan (as amended and
restated as of July 17, 1986) is incorporated herein by
reference to Exhibit 10(ii) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991,
Commission File Number 1-9172.
*(iii) Form of Incentive Stock Option Agreement for
incentive stock options granted after 1986 under The NACCO
Industries, Inc. 1975 Stock Option Plan (as amended and
restated as of July 17, 1986) is incorporated herein by
reference to Exhibit 10(iii) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991,
Commission File Number 1-9172.
X-2
98
*(iv) Form of Non-Qualified Stock Option Agreement under The
NACCO Industries, Inc., 1975 Stock Option Plan (as amended
and restated as of July 17, 1986) is incorporated herein by
reference to Exhibit 10(iv) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991,
Commission File Number 1-9172.
*(v) The NACCO Industries, Inc. 1981 Stock Option Plan (as
amended and restated as of July 17, 1986) is incorporated
herein by reference to Exhibit 10(v) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, Commission File Number 1-9172.
*(vi) Form of Non-Qualified Stock Option Agreement under The
NACCO Industries, Inc. 1981 Stock Option Plan (as amended
and restated as of July 17, 1986) is incorporated herein by
reference to Exhibit 10(vi) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991,
Commission File Number 1-9172.
*(vii) Form of Incentive Stock Option Agreement for
incentive stock options granted before 1987 under The NACCO
Industries, Inc. 1981 Stock Option Plan (as amended and
restated as of July 17, 1986) is incorporated herein by
reference to Exhibit 10(vii) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991,
Commission File Number 1-9172.
*(viii) Form of Incentive Stock Option Agreement for
incentive stock options granted after 1986 under The NACCO
Industries, Inc. 1981 Stock Option Plan (as amended and
restated as of July 17, 1986) is incorporated herein by
reference to Exhibit 10(viii) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991,
Commission File Number 1-9172.
*(ix) The Retirement Benefit Plan for Alfred M. Rankin, Jr.,
effective as of January 1, 1994 is attached hereto as
Exhibit 10 (ix).
*(x) Amendment No. 1 to the Retirement Benefit Plan for
Alfred M. Rankin, Jr., dated as of March 15, 1995, is
attached hereto as Exhibit 10 (x).
*(xi) The North American Coal Corporation Deferred
Compensation Plan for Management Employees (formerly known
as the NACCO Industries, Inc. Deferred Compensation Plan for
Management Employees) dated
X-3
99
December 1, 1989, is incorporated herein by reference to Exhibit
10(xiii) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, Commission File
Number 1-9172.
*(xii) Instrument of Merger by and between North American
Coal, Hamilton Beach/Proctor-Silex and NACCO Materials
Handling Group, Inc., effective as of December 31, 1994,
relating to certain defined benefit plans, is attached
hereto as Exhibit 10(xii).
*(xiii) Amendment No. 3 to the NACCO Materials Handling
Group, Inc. Cash Balance Plan, effective as of December 31,
1994, is incorporated herein by reference to Exhibit 10(ciii) to
the Hyster-Yale Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, Commission File Number 33-
28812.
*(xiv) Form of the North American Coal Annual Incentive Plan
is attached hereto as Exhibit 10(xiv).
(xv) Agreement of Merger, dated as of January 20, 1988,
among NACCO Industries, Inc., Housewares Holding Company,
WE-PS Merger, Inc. and WearEver-ProctorSilex, Inc., is
incorporated herein by reference to pages 8 through 97 of
Exhibit 2 to the Company's Current Report on Form 8-K, dated
February 1, 1988, Commission File Number 1-9172.
(xvi) Shareholders Agreement, dated January 20, 1988, among
NACCO Industries, Inc. and the shareholders named therein is
incorporated herein by reference to pages 98 through 108 of
Exhibit 2 to the Company's Current Report on Form 8-K, dated
February 1, 1988, Commission File Number 1-9172.
*(xvii) Amendment No. 1 to the NACCO Industries, Inc.
Deferred Compensation Plan for Management Employees, dated
January 1, 1993, is incorporated by reference to Exhibit
10(xvii) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992, Commission File Number
1-9172.
*(xviii) Amendment No. 1 to the Hyster-Yale Long-Term
Incentive Compensation Plan, effective as of January 1,
1994, is incorporated herein by reference to Exhibit
10(lxxxviii) to the Hyster-Yale Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, Commission File
Number 33-28812.
(xix) Agreement and Plan of Merger, dated as of April 7,
1989, among NACCO Industries, Inc., Yale Materials
X-4
100
Handling Corporation, Acquisition I, Esco Corporation, Hyster
Company and Newesco, is incorporated herein by reference to
Exhibit 2.1 to Hyster-Yale Materials Handling, Inc.'s
Registration Statement on Form S-1 filed May 17, 1989
(Registration Statement Number 33-28812).
(xx) Agreement and Plan of Merger, dated as of April 7,
1989, among NACCO Industries, Inc., Yale Materials Handling
Corporation, Acquisition II, Hyster Company and Newesco, is
incorporated herein by reference to Exhibit 2.2 to
Hyster-Yale Materials Handling, Inc.'s Registration
Statement on Form S-1 filed May 17, 1989 (Registration
Statement Number 33-28812).
*(xxi) Amendment No. 2 to the NACCO Materials Handling
Group, Inc. Unfunded Benefit Plan (As Amended and Restated
Effective October 1, 1994), effective as of January 1, 1995,
is incorporated by reference to Exhibit 10(cvii) to Hyster-
Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, Commission File Number 33-28812.
*(xxii) Instrument of Adoption and Merger for NACCO
Industries, Inc. for the NACCO Materials Handling Group,
Inc. Unfunded Benefit Plan (As Amended and Restated
Effective October 1, 1994) dated December 30, 1994, is
attached here to as Exhibit 10(xxii).
*(xxiii) Instrument of Withdrawal and Transfer of Liabilities
from The North American Coal Corporation Deferred
Compensation Plan for Management Employees, effective as of
December 31, 1994, is attached hereto as Exhibit 10(xxiii).
*(xxiv) Amendment No. 4 to the NACCO Materials Handling
Group, Inc. Profit Sharing Plan, dated as of November 30,
1994, is incorporated herein by reference to Exhibit 10(ci)
to the Hyster-Yale Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, Commission File Number 33-
28812.
*(xxv) The Hamilton Beach/Proctor-Silex, Inc. Unfunded
Benefit Plan (As Amended and Restated Effective as of
January 1, 1995), is attached hereto as Exhibit 10(xxv).
*(xxvi) Amendment No. 3 to the Hamilton Beach/Proctor-Silex,
Inc. Profit Sharing Retirement Plan, dated as of December
31, 1994, is attached hereto as Exhibit 10(xxvi).
X-5
101
*(xxvii) Amendment No. 6 to The North American Coal
Corporation Salaried Employees Pension Plan (As Amended and
Restated as of January 1, 1989), effective December 31,
1994, is attached hereto as Exhibit 10(xxvii).
*(xxviii) Instrument of Merger, Amendment and Transfer of
Sponsorship of Benefit Plans, effective as of August 31,
1994, is attached hereto as Exhibit 10(xxviii).
*(xxix) Amendment No. 1 to The Hamilton Beach/Proctor-Silex,
Inc. Unfunded Benefit Plan (As Amended and Restated
Effective January 1, 1995), effective as of January 1, 1995,
is attached hereto as Exhibit 10(xxix).
*(xxx) Amendment No. 3 to The North American Coal Corporation
Deferred Compensation Plan for Management Employees,
effective as of January 1, 1995, is attached hereto as
Exhibit 10(xxx).
*(xxxi) Amendment No. 4 to The North American Coal
Corporation Deferred Compensation Plan for Management
Employees, effective April 1, 1995, is attached hereto as
Exhibit 10(xxxi).
*(xxxii) Amendment No. 5A to The North American Coal
Corporation Salaried Employees Pension Plan, dated March 15,
1995, is attached hereto as Exhibit 10(xxxii).
*(xxxiiii) Amendment No. 2A to The Hamilton Beach/Proctor-
Silex, Inc. Profit Sharing Retirement Plan, dated as of
March 15, 1995, is attached hereto as Exhibit 10(xxxiii).
*(xxxiv) Amendment No. 3 to The North American Coal
Corporation Retirement Savings Plan (As Amended and Restated
Effective as of January 1, 1993), dated as of November 30,
1994, is attached as Exhibit 10(xxxiv).
*(xxxv) Amendment No. 5 to the NACCO Materials Handling
Group, Inc. Profit Sharing Plan, dated March 15, 1995,
is incorporated herein by reference to Exhibit 10(cii)
to the Hyster-Yale Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, Commission File
Number 33-28812.
*(xxxvi) Amendment No. 2A to the NACCO Materials Handling
Group, Inc. Cash Balance Plans,dated as of March 15, 1995, is
incorporated herei by referene to Exhibit 10(cx) to the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, Commission File Number 33-28812.
X-6
102
(xxxvii)-(xlvii) Intentionally Left Blank
(xlviii) Reorganization and Merger Agreement, dated as of
October 11, 1990, among Housewares Holding Company, HB-PS
Holding Company, Inc., Proctor-Silex, Inc., Precis [521]
Ltd., Glen Electric, Ltd. and Hamilton Beach, Inc. is
incorporated herein by reference to Exhibit 10(lv) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172. The
Company by this filing agrees, upon request, to file with
the Securities and Exchange Commission any of the Exhibits
and/or Schedules to the Reorganization and Merger Agreement.
(xlix) Shareholders Agreement, dated as of October 11, 1990,
among Housewares Holding Company, HB-PS Holding Company,
Inc., Precis [521] Ltd. and Hamilton Beach Inc. is
incorporated herein by reference to Exhibit 10(lvi) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
(l) Indemnity Agreement, dated as of October 11, 1990, among
Hamilton Beach Inc., Glen Dimplex, Precis [521] Ltd. and
Glen Electric, Ltd. is incorporated herein by reference to
Exhibit 10(lvii) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990, Commission File
Number 1-9172.
(li) Credit Agreement, dated as of October 11, 1990, among
Hamilton Beach/Proctor-Silex, Proctor-Silex Canada Inc.
("Proctor-Silex Canada"), Proctor-Silex S.A. de C.V.
("PSM"), the Lenders party thereto, The Chase Manhattan Bank
(National Association), as United States agent for such
Lenders (the United States Agent"), and The Chase Manhattan
Bank of Canada, as Canadian agent for such Lenders (the
Canadian Agent") is incorporated herein by reference to
Exhibit 10(lviii) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990, Commission
File Number 1-9172. The Company by this filing agrees, upon
request, to file with the Securities and Exchange Commission
any of the Exhibits and/or Schedules to the Credit
Agreement.
(lii) First Amendment to the Credit Agreement, dated as of
December 31, 1990, among Hamilton Beach/Proctor-Silex,
Proctor-Silex Canada, PSM, the Lenders party thereto, the
United States Agent, and the Canadian Agent is incorporated
herein by reference to Exhibit 10(lvix) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, Commission File Number 1-9172.
X-7
103
(liii) Second Amendment to the Credit Agreement, dated as of
March 1, 1991, among Hamilton Beach/Proctor-Silex,
Proctor-Silex Canada, PSM, the Lenders party thereto, the United
States Agent and the Canadian Agent is incorporated herein by
reference to Exhibit 10(lx) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990,
Commission File Number 1-9172.
(liv) Pledge Agreement re: 66% Pledge of PSC Stock, dated as
of October 11, 1990, between Hamilton Beach/Proctor-Silex
and The Chase Manhattan Bank (National Association) is
incorporated herein by reference to Exhibit 10(lx) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
(lv) Pledge Agreement re: 66% Pledge of PSM Stock, dated as
of October 11, 1990, between Hamilton Beach/Proctor-Silex
and The Chase Manhattan Bank (National Association) is
incorporated herein by reference to Exhibit 10(lxii) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
(lvi) Pledge Agreement re: 34% pledge of PSC Stock, dated as
of October 11, 1990, between Hamilton Beach/Proctor-Silex
and The Chase Manhattan Bank (National Association) is
incorporated herein by reference to Exhibit 10(lxiii) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
(lvii) Pledge Agreement re: 33.2% Pledge of PSM Stock, dated
as of October 11, 1990, between Hamilton Beach Proctor/Silex
and The Chase Manhattan Bank (National Association) is
incorporated herein by reference to Exhibit 10(lxiv) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
(lviii) Pledge Agreement, dated as of October 11, 1990,
between Housewares Holding Company and The Chase Manhattan
Bank (National Association) is incorporated herein by
reference to Exhibit 10(lxv) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990,
Commission File Number 1-9172.
(lix) Pledge Agreement, dated as of October 11, 1990,
between HB-PS Holding Company, Inc. and The Chase Manhattan
Bank (National Association) is incorporated
X-8
104
herein by reference to Exhibit 10(lxvi) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990,
Commission File Number 1-9172.
(lx) Security Agreement, dated as of October 11, 1990,
between Hamilton Beach/Proctor-Silex and The Chase
Manhattan Bank (National Association), as the United States
agent, is incorporated herein by reference to Exhibit
10(lxvii) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990, Commission File
Number 1-9172.
(lxi) Collateral Assignment of Patents and Trademarks and
Security Agreement, dated as of October 11, 1990, between
Hamilton Beach/Proctor-Silex and The Chase Manhattan Bank
(National Association), as the United States agent, is
incorporated herein by reference to Exhibit 10(lxviii) to
the Company s Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
(lxii) NACCO Supplemental Agreement, dated as of October 11,
1990, between NACCO and The Chase Manhattan Bank (National
Association), as the United States agent, is incorporated
herein by reference to Exhibit 10(lxix) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, Commission File Number 1-9172.
(lxiii) Housewares Supplemental Agreement, dated as of
October 11, 1990, between Housewares Holding Company and The
Chase Manhattan Bank (National Association), as the United
States agent, is incorporated herein by reference to Exhibit
10(lxx) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, Commission File Number
1-9172.
(lxiv) Holdings Supplemental Agreement, dated as of October
11, 1990, between HB-PS Holding Company, Inc. and The Chase
Manhattan Bank (National Association), as the United States
agent, is incorporated herein by reference to Exhibit
10(lxxi) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, Commission File Number
1-9172.
(lxv) Override Agreement, dated as of October 11, 1990,
among the Company, Housewares Holding Company, Glen Dimplex,
Precis [521] Ltd., Glen Electric, Ltd. and The Chase
Manhattan Bank (National Association), as the United States
agent, is incorporated herein by reference to Exhibit
10(lxxii) to the Company's Annual Report on
X-9
105
Form 10-K for the fiscal year ended December 31, 1990,
Commission File Number 1-9172.
(lxvi) General Security Agreement, dated as of October 11,
1990, by Proctor-Silex Canada to and in favor of The Chase
Manhattan Bank of Canada, as the Canadian agent, is
incorporated herein by reference to Exhibit 10(lxxiii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
*(lxvii) The Hamilton Beach/Proctor-Silex, Inc. Profit
Sharing Retirement Plan (as amended and restated effective
January 1, 1992) is incorporated by reference to Exhibit
10(lxvii) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992, Commission File
Number 1-9172.
*(lxviii) Form of the Hamilton Beach/Proctor-Silex, Inc.
Annual Incentive Compensation Plan is attached hereto as
Exhibit 10(lxviii).
*(lxix) Hamilton Beach/Proctor-Silex, Inc. Long-Term
Incentive Compensation Plan, effective January 1, 1993, is
incorporated by reference to Exhibit 10(lxix) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Commission File Number 1-9172.
(lxx) Amendment to the Third Amended and Restated Operating
Agreement, dated as of January 31, 1990, between Hyster
Company and AT&T Commercial Finance Corporation is
incorporated herein by reference to Exhibit 10(xlvii) to the
Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 33-28812.
*(lxxi) The North American Coal Corporation Salaried
Employees Pension Plan (As Amended and Restated as of
January 1, 1989) is attached hereto as Exhibit 10(lxxi).
*(lxxii) Amendment No. 1 to the North American Coal
Corporation Salaried Employees Pension Plan (As Amended
and Restated as of January 1, 1989), dated as of August
6, 1993, is attached hereto as Exhibit 10(lxxii).
*(lxxiii) Amendment No. 2 to the North American Coal
Corporation Salaried Employees Pension Plan (As Amended
and Restated as of January 1, 1989), dated as of December 29,
1993, is attached hereto as Exhibit 10(lxxiii).
X-10
106
(lxxiv) Short-Term Promissory Note, dated October 19, 1990,
between the Company and Citibank, N.A. is incorporated
herein by reference to Exhibit 10(lxxxi) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, Commission File Number 1-9172.
(lxxv) Commitment, dated as of October 1, 1990, between the
Company and Morgan Guaranty Trust Company of New York is
incorporated herein by reference to Exhibit 10(lxxxii) to
the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990, Commission File Number 1-9172.
(lxxvi) Promissory Grid Note between the Company and
Ameritrust Company National Association is incorporated
herein by reference to Exhibit 10(lxxxiii) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, Commission File Number 1-9172.
(lxxvii) First Amendment to the NACCO Supplemental
Agreement, dated as of March 1, 1991, between the Company
and The Chase Manhattan Bank (National Association), as the
United States agent, is incorporated herein by reference to
Exhibit 10(lxxxiv) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990, Commission
File Number 1-9172.
(lxxviii) First Amendment to the Housewares Supplemental
Agreement, dated as of March 1, 1991, between Housewares
Holding Company and The Chase Manhattan Bank (National
Association), as the United States agent, is incorporated
herein by reference to Exhibit 10(lxxxv) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, Commission File Number 1-9172.
(lxxix) First Amendment to the Holdings Supplemental
Agreement, dated as of March 1, 1991, between HB-PS Holding
Company and The Chase Manhattan Bank (National Association),
as the United States agent, is incorporated herein by
reference to Exhibit 10(lxxxvi) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1990, Commission File Number 1-9172.
*(lxxx) The Yale Materials Handling Corporation Deferred
Incentive Compensation Plan (also known as The Yale
Materials Handling Corporation Short-Term Incentive
Compensation Deferral Plan), dated March 1, 1984, is
incorporated herein by reference to Exhibit 10(lxxi) to
X-11
107
the Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Commission File Number 33-28812.
*(lxxxi) Hyster-Yale Materials Handling, Inc. Annual
Incentive Compensation Plan is incorporated herein by
reference to Exhibit 10(lxxxiii) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1990, Commission File Number 1-9172.
*(lxxxii) Hyster-Yale Materials Handling, Inc. Long-Term
Incentive Compensation Plan, dated as of January 1, 1990, is
incorporated herein by reference to Exhibit 10(lxxxix) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 1-9172.
(lxxxiii)- (lxxxv) Intentionally Left Blank
(lxxxvi) Amendment to the Third Amended and Restated
Operating Agreement, dated as of November 7, 1991, between
Hyster Company and AT&T Commercial Finance Corporation is
incorporated herein by reference to Exhibit 10(1) to the
Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1991, Commission File Number 33-28812.
*(lxxxvii) Agreement and Plan of Merger dated as of December
20, 1993, between Hyster Company, an Oregon corporation, and
Hyster Company, a Delaware corporation, is incorporated
herein by reference to Exhibit 10(lxxviii) to Hyster-Yale
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, Commission File Number 33-28812.
*(lxxxviii) Agreement and Plan of Merger dated as of
December 20, 1993, between Yale Materials Handling
Corporation, a Delaware corporation, Hyster Company, a
Delaware corporation, and Hyster-Yale Materials Handling,
Inc., a Delaware corporation, is incorporated herein by
reference to Exhibit 10(lxxix) to Hyster-Yale Annual Report
on Form 10-K for the fiscal year ended December 31, 1993,
Commission File Number 33-28812.
*(lxxxix) Form of NACCO Industries, Inc. Annual Incentive
Compensation Plan is attached hereto as Exhibit 10(lxxxix).
*(xc) Amendment No. 3 to The North American Coal Corporation
Salaried Employees Pension Plan (As Amended and Restated as
of January 1, 1989), dated as of March 11, 1994, is attached
hereto as Exhibit 10(xc).
X-12
108
*(xci) The NACCO Materials Handling Group, Inc. Unfunded
Benefit Plan, Amended and Restated as of October 1, 1994, is
incorporated herein by reference to Exhibit 10(cv) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, Commission File Number 33-28812.
(xcii) Credit Agreement, dated as of September 27, 1991,
among the North American Coal Corporation, Citibank, N.A.,
Ameritrust Company National Association and Morgan Guaranty
Trust Company of New York, as agent is incorporated herein
by reference to Exhibit 10(xcii) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, Commission File Number 1-9172.
(xciii) Assumption Agreement, made as of December 20, 1991,
between the Company and Citicorp North America, Inc., as
agent is incorporated herein by reference to Exhibit
10(xciii) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1991, Commission File
Number 1-9172.
(xciv) Subordination Agreement, dated September 27, 1991,
among The North American Coal Corporation, the Company and
Morgan Guaranty Trust Company of New York, as agent, is
incorporated herein by reference to Exhibit 10(xciv) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991, Commission File Number 1-9172.
(xcv)-(xcvi) Intentionally Left Blank
(xcvii) Marketing Agreement, dated as of January 1, 1992, by
and between, Yale Materials Handling Corporation and
Jungheinrich Aktiengellschaft (AG) is incorporated herein by
reference to Exhibit 10(lviii) to the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31,
1991, Commission File Number 33-28812.
*(xcviii) The North American Coal Corporation Value
Appreciation Plan, as amended on March 11, 1992 is
incorporated herein by reference to Exhibit 10(xcviii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991, Commission File Number 1-9172.
*(xcix) Amendment No. 1 to The North American Coal
Corporation Value Appreciation Plan, dated as of
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109
December 14, 1994, is attached hereto as Exhibit 10(xcix).
(c)- (civ) Intentionally Left Blank
*(cv) Master Trust Agreement between NACCO Industries, Inc.
and State Street Bank and Trust Company, dated October 1,
1992, is incorporated by reference to Exhibit 10(cv) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Commission File Number 1-9172.
*(cvi) Amendment No. 1 to the Master Trust Agreement between
NACCO Industries, Inc. and State Street Bank and Trust
Company, effective January 1, 1993, is attached hereto as
Exhibit 10(cvi).
*(cvii) The North American Coal Corporation Retirement
Savings Plan (formerly known as the NACCO Industries, Inc.
Savings Plan), effective January 1, 1993, is incorporated
by reference to Exhibit 10(cvii) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1992, Commission File Number 1-9172.
(cviii)-(cix) Intentionally Left Blank
*(cx) NACCO Industries, Inc. Executive Long-Term Incentive
Compensation Plan, effective January 1, 1991, is
incorporated by reference to Exhibit 10(cx) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 1-9172.
*(cxi) NACCO Industries, Inc. Non-Employee Directors' Equity
Compensation Plan, effective January 1, 1992, is
incorporated by reference to Exhibit 10(cxi) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Commission File Number 1-9172.
(cxii)-(cxiii) Intentionally Left Blank
*(cxiv) The Hyster-Yale Profit Sharing Plan, amended and
restated as of November 11, 1992, is incorporated herein by
reference to Exhibit 10(lxii) of the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31,
1992, Commission File Number 33-28812.
(cxv) Intentionally Left Blank
(cxvi) Amendment to the Third Amended and Restated Operating
Agreement, dated as of January 31, 1990, between Hyster
Company and PacifiCorp Credit, Inc. is incorporated herein
by reference to Exhibit 10(xlvi) to
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the Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Commission File Number 33-28812.
*(cxvii) The Hyster-Yale Cash Balance Plan, is incorporated
herein by reference to Exhibit 10(lxv) of the Hyster-Yale
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 33-28812.
(cxviii)-(cxxiii) Intentionally Left Blank
*(cxxiv) Amendment No. 1 to the Hamilton
Beach/Proctor-Silex, Inc. Profit Sharing Retirement Plan, as
restated effective January 1, 1989, is incorporated by
reference to Exhibit 10(cxxiv) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File Number 1-9172.
*(cxxv) The Hamilton Beach/Proctor-Silex, Inc. Employees'
Retirement Savings Plan, as amended and restated effective
January 1, 1994, is incorporated by reference to Exhibit
10(cxxv) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, Commission File Number
1-9172.
(cxxvi) Intentionally Left Blank
*(cxxix) Amendment No. 1, dated as of May 13, 1993, to the
Hyster-Yale Profit Sharing Plan (now known as the NACCO
Materials Handling Group Profit Sharing Plan) is
incorporated herein by reference to Exhibit 10 (lxxxi) of
the Hyster-Yale Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Commission File Number
33-28812.
*(cxxx) Amendment No. 2, dated effective January 1, 1994, to
the Hyster-Yale Profit Sharing Plan (now known as the NACCO
Materials Handling Group Profit Sharing Plan) is
incorporated herein by reference to Exhibit 10 (lxxxv) of
the Hyster-Yale Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Commission File Number
33-28812.
*(cxxxi) Amendment No. 1 dated as of May 27, 1993 to the
Hyster-Yale Cash Balance Plan (now known as the NACCO
Materials Handling Group Cash Balance Plan) is incorporated
herein by reference to Exhibit 10 (lxxxvi) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File Number 33-28812.
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111
*(cxxxii) Amendment No. 2 effective as of December 31, 1993
to the Hyster-Yale Cash Balance Plan (now known as the NACCO
Materials Handling Group Cash Balance Plan) is incorporated
herein by reference to Exhibit 10 (lxxxvii) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File Number 33-28812.
*(cxxxiii) Amendment No. 2 effective as of December 31, 1993
to the Hyster-Yale Materials Handling, Inc. Long-Term
Incentive Compensation Plan is incorporated herein by
reference to Exhibit 10 (lxxxxiii) of the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File Number 33-28812.
*(cxxxiv) Amendment No. 1 effective as of January 1, 1994 to
The North American Coal Corporation Retirement Savings Plan
is incorporated herein by reference to Exhibit 10(cxxxiv) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File Number 1-9172.
*(cxxxv) Amendment No. 2 effective as of January 1, 1994 to
The North American Coal Corporation Retirement Savings Plan
is incorporated herein by reference to Exhibit 10(cxxxv) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File Number 1-9172.
*(cxxxvi) Amendment No. 1 effective as of January 1, 1994 to
the Hyster-Yale Materials Handling, Inc. Annual Incentive
Compensation Plan (now known as the NACCO Materials Handling
Group, Inc. Annual Incentive Compensation Plan) is
incorporated herein by reference to Exhibit 10(lxxxx) to the
Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File Number 33-28812.
(cxxxvii) Intentionally Left Blank
*(cxxxviii) Master Trust Agreement for Defined Benefit Plans
between NACCO Industries, Inc. and State Street Bank and
Trust Company, dated January 1, 1994 is incorporated herein
by reference to Exhibit 10(cxxxviii)to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File Number 1-9172.
*(cxxxix) Amendment No. 1 to the Master Trust Agreement for
the Defined Benefit Plans between NACCO Industries, Inc. and
State Street Bank and Trust Company, effective
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112
as of January 1, 1995, is attached hereto as Exhibit 10(cxxxix).
(cxl) Amendment No. 4 dated as of June 24, 1993 to the
Credit Agreement among Hamilton Beach/Proctor-Silex, Inc.,
Proctor-Silex Canada, Inc., Proctor-Silex S.A. deC.V., the
banks named on the signatory pages and The Chase Manhattan
Bank is incorporated herein by reference to Exhibit (cxxxx)
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Commission File Number 1-9172.
(cxli) Consent and Authorization with reference made to the
Credit Agreement dated October 11, 1990, as amended among
Hamilton Beach/Proctor-Silex, Inc., Proctor-Silex Canada,
Inc., Proctor-Silex S.A. de C.V., the banks named on the
signatory pages and The Chase Manhattan Bank is incorporated
herein by reference to Exhibit (cxxxxi) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, Commission File Number 1-9172.
(cxlii) Amendment No. 5 to the Credit Agreement dated as of
December 23, 1993 among Hamilton Beach/Proctor-Silex, Inc.,
Proctor-Silex Canada, Inc., Proctor-Silex S.A. de C.V., the
banks and financial institutions listed on the signature
pages thereto, The Chase Manhattan Bank, a United States
Agent, The Chase Manhattan Bank of Canada, as Canadian Agent
is incorporated herein by reference to Exhibit 10(cxxxxii)
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Commission File Number 1-9172.
(cxliii) Amendment No. 1 to the Credit Agreement dated as of
July 28, 1993 among The North American Coal Corporation and
the banks listed on the signatory pages and Morgan Trust
Company of New York, as Agent is incorporated herein by
reference to Exhibit 10(cxxxxiii) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File Number 1-9172.
(cxliv) Amendment No. 1 to the Term Loan Agreement,
effective as of February , 1993, between The Kitchen
Collection, Inc. and Society National Bank is incorporated
herein by reference to Exhibit 10(cxxxxiv) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, Commission File Number 1-9172.
(cxlv) Amended and Restated Credit Agreement dated as of
July 30, 1993 among Citicorp North America, Inc.,
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113
Hyster-Yale Materials Handling, Inc., and Hyster Company is
incorporated herein by reference to Exhibit 10(lxxvi) to the
Hyster-Yale Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993, Commission File Number 33- 28812.
(cxlvi) Reaffirmation Amendment and Acknowledgment Agreement
dated July 30, 1993 among Hyster-Yale Materials Handling,
Inc., Yale Materials Handling Corporation, Hyster Company,
the Company and Citicorp North America, Inc., individually
and as Agent for the various Lenders, is incorporated herein
by reference to Exhibit 10(lxxx) to the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File Number 33-28812.
(cxlvii) Amendment No. 1 dated as of December 31, 1993 to
the Amended and Restated Credit Agreement dated as of July
30, 1993 among Hyster-Yale Materials Handling, Inc., Yale
Materials Handling Corporation, Hyster Company, the Lenders
party thereto, and Citicorp North America, Inc.,
individually and as Agent, is incorporated herein by
reference to Exhibit 10(lxxxi) to the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File Number 33-28812.
(cxlviii) Reaffirmation, Amendment and Acknowledgment
Agreement dated as of December 31, 1993 among Hyster-Yale
Materials Handling, Inc., Yale Materials Handling
Corporation, Hyster Company and Citicorp North America,
Inc., as Agent for the Lenders, is incorporated herein by
reference to Exhibit 10(lxxxii) to the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, Commission File Number 33-28812.
(cxlix) Reaffirmation, Amendment and Acknowledgment
Agreement dated as of January 1, 1994 among Hyster-Yale
Materials Handling, Inc., NACCO Materials Handling Group,
Inc. and Citicorp North America, Inc. as Agent for the
Lenders, is incorporated herein by reference to Exhibit
10(lxxxiii) to the Hyster-Yale Annual Report on Form 10-K
for the fiscal year ended December 31, 1993, Commission File
Number 33-28812.
(cl) Amended and Restated Credit Agreement, dated as of
May 10, 1994 among Hamilton Beach#Proctor-Silex, Inc.,
Proctor-Silex Canada, Inc., Proctor-Silex S.A. DE C.V.,
the banks named on the signatory pages and the Chase
Manhattan Bank is incorporated herein by reference to
as
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114
Exhibit 10 (cl) to the NACCO Industries, Inc. Quarterly
Report on Form 10-Q for the quarter ended June 30, 1994,
Commission File Number 1-9172.
(cli) Confirmation Agreement dated May 10, 1994 among
Hamilton Beach#Proctor-Silex, Inc., Housewares Holding
Company, Precis [521] Ltd., HB-PS Holding Company, Glen
Dimplex, Glen Electric, Ltd., the banks named on the
signatory pages, the Chase Manhattan Bank and the Chase
Manhattan Bank of Canada is incorporated herein by
reference to Exhibit 10 (cli) to the NACCO Industries,
Inc. Quarterly Report on Form 10-Q for the quarter
ended on June 30, 1994, Commission File Number 1-9172.
(clii) Term Note Agreement dated May 10, 1994 by and
between The Kitchen Collection, Inc. and Society
National Bank is incorporated herein by reference to as
Exhibit 10 (clii) to the NACCO Industries, Inc.
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, Commission File Number 1-9172.
*(cliii) Amendment No. 2 to The North American Coal
Corporation Deferred Compensation Plan for Management
Employees, effective January 1, 1994, is incorporated
herein by reference to Exhibit 10 (cliii) to the NACCO
Industries, Inc. Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, Commission File Number 1-
9172.
*(cliv) Amendment No. 2 to the Hamilton Beach#Proctor-
Silex, Inc. Profit Sharing Retirement Plan, effective
March 15, 1994 is incorporated herein by reference to
as Exhibit 10 (cliv) to the NACCO Industries, Inc.
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, Commission File Number 1-9172.
(clv) Intentionally Left Blank
*(clvii) Amendment No. 3 to The North American Coal
Corporation Salaried Employees Pension Plan, effective
March 15, 1994 is incorporated herein by reference to
as Exhibit 10 (clvii) to the NACCO Industries, Inc.
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, Commission File Number 1-9172.
*(clviii) Amendment No. 2 to the Hyster-Yale Materials
Handling, Inc. Annual Incentive Compensation Plan effective
January 1, 1994 is incorporated herein by reference to
Exhibit 10 (1xxxxiv) to the Hyster-Yale Quarterly Report on
Form 10-Q for the quarter ended June 30, 1994, Commission
File Number 33-28812.
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115
*(clix) Amendment No. 3 to the Hyster-Yale Materials
Handling, Inc. Long-Term Incentive Compensation Plan
effective January 1, 1994 is incorporated herein by
reference to Exhibit 10 (lxxxxv) to the Hyster-Yale
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, Commission File Number 33-28812.
*(clx) Amendment No. 3 to the NACCO Materials
Handling Group, Inc. Profit Sharing Plan effective
January 1, 1994 is incorporated herein by reference to
Exhibit 10 (lxxxxvi) to the Hyster-Yale Quarterly
Report on Form 10-Q for the quarter ended June 30,
1994, Commission File Number 33-28812.
(clxi) Intentionally Left Blank
*(clxii) Amendment No. 2, dated June 29, 1994, to the
Amended and Restated Credit Agreement among Hyster-Yale
Materials Handling, Inc., NACCO Materials Handling
Group, Inc., the banks listed on the signatory page and
Citicorp North America, Inc. is incorporated herein by
reference to Exhibit 10 (lxxxxviii) to the Hyster-Yale
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, Commission File Number 33-28812.
*(clxiii) Amendment No. 4 to the North American Coal
Corporation Salaried Employees Pension Plan (As Amended
and Restated as of January 1, 1989), effective January
1, 1994 is incorporated herein by reference to Exhibit
10 (clxiii) to the NACCO Industries, Inc. Quarterly
Report on Form 10-Q for the quarter ended September 30,
1994, Commission File Number 1-9172.
*(clxiv) Amendment No. 5 to The North American
Coal Corporation Salaried Employees Pension Plan (As
Amended and Restated as of January 1, 1989) effective
as of July 1, 1994 is incorporated herein by reference
to as Exhibit (clxiv) to the NACCO Industries, Inc,
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994, Commission File Number 1-9172.
*(clxv) The North American Coal Corporation
Supplemental Retirement Benefit Plan as amended and
restated effective September 1, 1994 is incorporated by
reference to Exhibit 10 (clxv) to the NACCO Industries,
Inc. Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994, Commission File Number 1-
9172.
*(clxvi) Amendment No. 1 to The NACCO Materials
Handling Group, Inc. Unfunded Benefit Plan (As Amended
and Restated effective October 1, 1994) is incorporated
X-20
116
herein by reference to Exhibit 10 (xcix) to the Hyster-Yale
Quarterly Report on Form 10-Q for the quarter ended September
30, 1994, Commission File Number 33-28812.
(clxvii) Amendment dated as of January 1, 1994 to
the Third Amendment and Restated Operating Agreement
dated as of November 7, 1991, between NACCO Materials
Handling Group and AT&T Commercial Finance Corporation
is incorporated herein by reference to Exhibit 10(c) to
the Hyster-Yale Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994, Commission File
Number 330-28812.
(11) Statement re computation of per share earnings. The
computation of earnings per share is attached hereto as
Exhibit 11.
(21) Subsidiaries. A list of the subsidiaries of the Company is
attached hereto as Exhibit 21.
(23) Consents of experts and counsel.
(i) The consent of Arthur Andersen LLP, independent
accountant, is attached hereto as Exhibit 23(i).
(24) Powers of Attorney
(i) A manually signed copy of a power of attorney for Owsley
Brown II is attached hereto as Exhibit 24(i).
(ii) A manually signed copy of a power of attorney for John
J. Dwyer is attached hereto as Exhibit 24(ii).
(iii) A manually signed copy of a power of attorney for
Robert M. Gates is attached as Exhibit 24(iii)
(iv) A manually signed copy of a power of attorney for E.
Bradley Jones is attached hereto as Exhibit 24(iv).
(v) A manually signed copy of a power of attorney for Dennis
W. LaBarre is attached hereto as Exhibit 24(v).
(vi) A manually signed copy of a power of attorney for
Alfred M. Rankin, Jr. is attached hereto as Exhibit 24(vi).
(vii) A manually signed copy of a power of attorney for John
C. Sawhill is attached hereto as Exhibit 24(vii).
(viii) A manually signed copy of a power of attorney for
Britton T. Taplin is attached hereto as Exhibit 24 (viii).
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117
(ix) A manually signed copy of a power of attorney for Frank
E. Taplin, Jr. is attached hereto as Exhibit 24 (ix).
(x) A manually signed copy of a power of attorney for Steven
M. Billick is attached hereto as Exhibit 24(x).
(27) Financial Data Schedule -- filed electronically for SEC
information purposes only.
(99) Other exhibits not required to otherwise be filed.**
(i) Audited Financial Statements for The North American Coal
Corporation for the fiscal year ended December 31, 1994, are
attached as Exhibit 99(i).
(ii) Audited Financial Statements for Hamilton
Beach/Proctor-Silex, Inc. for the fiscal year ended December
31, 1994, are attached as Exhibit 99(ii).
(iii) Audited Financial Statements for The Kitchen
Collection, Inc. for the fiscal year ended
December 31, 1994, are attached as Exhibit 99(iii).
(iv) Audited Financial Statements for NACCO Materials
Handling Group, Inc. for the fiscal year ended December 31,
1994, are incorporated herein by reference to Item 8, Item
14(A)(1) and (2), and Item 14(D) to the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, Commission File Number 33-28812.
______________________________
* Management contract or compensation plan or arrangement required
to be filed as an exhibit pursuant to Item 14(c) of this Annual
Report on Form 10-K.
** Audited Financial Statements of subsidiary companies are not
required disclosures and are included only for information. These
statements do not reflect certain adjustments (including
X-22
118
reclassifications and eliminations) that are required by GAAP in
the preparation of NACCO Industries, Inc. and subsidiaries
consolidated financial statements included in Part IV hereof, and
should be read accordingly.
Exhibit.doc
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