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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, 1993 Commission File No. 1-9172
NACCO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1505819
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
5875 Landerbrook Drive
Mayfield Heights, Ohio 44124-4017
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(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, 1994:
$335,171,382
Number of shares of Class A Common Stock outstanding at February 28, 1994:
7,178,085
Number of shares of Class B Common Stock outstanding at February 28, 1994:
1,762,493
DOCUMENTS INCORPORATED BY REFERENCE
(a) The Company's Proxy Statement for its 1994 annual meeting of
stockholders, incorporated herein by reference in Part III.
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PART I
ITEM 1. BUSINESS
GENERAL
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 was the parent company of Hyster Company ("Hyster") and
Yale Materials Handling Corporation ("Yale"). On January 1, 1994 Yale was
merged into Hyster and Hyster changed its name to NACCO Materials Handling
Group, Inc. (For convenience of reference NACCO Materials Handling Group, Inc.
and Hyster-Yale hereinafter referred to as "NMHG"). This action was the final
step in NMHG's strategy to combine the company's administrative, design,
engineering and manufacturing capabilities into a unified group. NMHG will
continue to market two full lines of forklift trucks and related service parts
under the Hyster(R) and Yale(R) brand names. NMHG accounted for 59% and 42% of
NACCO's revenues and operating profits, respectively, in 1993.
(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 23% and 13% of NACCO's revenues and
operating profits, respectively, in 1993.
(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 15% and 47% of NACCO's revenues and operating profits,
respectively, in 1993.
(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 5% of NACCO's revenues and operating
profits, respectively, in 1993.
Additional information relating to financial and operating data on a
segment basis (including NACCO, which reduced operating profits by 7% in 1993)
is set forth in Management's Discussion and Analysis of Results of Operations
and Financial Condition on pages 27 through 50 contained in Part II hereof and
in Note P to the Consolidated Financial Statements on pages F-25 through F-28
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.
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SIGNIFICANT EVENTS
In August 1993, NACCO and NMHG's two minority stockholders made a
proportional capital contribution of $53.8 million in the form of (a)
previously purchased 12-3/8% NMHG subordinated debentures with a face value of
$23.7 million and a purchase value by NACCO of $25.5 million, and (b) a cash
contribution of $28.3 million.
The cash contribution enabled NMHG to call approximately $26.5 million
face value of subordinated debentures at a price of 107.5. This, and the
capital contribution by NACCO of previously purchased subordinated debentures,
allowed NMHG to retire approximately $50.2 million face value of these
debentures.
As part of this transaction, NMHG amended its existing senior bank
credit agreement. This amendment permits equity infusions to be used for cash
purchases of debentures and, after August 1994, permits use of internally
generated funds to retire up to $75.0 million of additional subordinated
debentures if certain debt to capitalization ratios are achieved. In addition,
the amendment modifies the bank loan repayment schedules and provides for
favorable performance-based interest rate incentives.
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 50% and 41% of
NACCO's assets and liabilities, respectively, as of December 31, 1993, while
its operations accounted for 59% and 42% of NACCO's revenues and operating
profits, respectively, in 1993.
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. In the most recent business cycle the
North American market for forklift trucks reached its lowest level in 1991 and
increased in both 1992 and 1993 over prior year levels. The European and
Japanese markets generally have been in decline since 1990.
The forklift truck industry historically has 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.
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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 completed a series of plant and parts depot
consolidations with the closure of its Wednesfield, England manufacturing plant
in early 1992. NMHG now provides all design, manufacturing and administrative
functions. Products are marketed and sold through two separate groups 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.
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 80%, 79%, and 77% of NMHG's net sales in 1993, 1992
and 1991, 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
the United Kingdom. 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 20%, 21%, and 23% of NMHG net sales in 1993,
1992 and 1991, 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
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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. In Japan, although its share is currently small, NMHG has a
distribution system through S-Y.
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 1993 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
order's revocation. If the U.S. Congress approves legislation implementing the
Uruguay round of GATT negotiations, 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.
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B. Europe
From 1986 through 1993, 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. Discussions
are continuing between European Community and Japanese government officials;
however, these informal restraints are expected to continue in 1994. 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.
C. Australia
In 1987 an Australian producer of forklift trucks filed an antidumping
action against imports from Japan. Voluntary price undertakings were
negotiated with all major Japanese producers including S-Y. The S-Y
undertaking expired in 1991. The Australian producer has filed a legal
challenge to the validity of the price undertakings. Meanwhile, in 1991 this
same producer filed an antidumping action against imports from the United
Kingdom. In this action Hyster Europe was found to be dumping and duties have
been imposed on imports from the company's Craigavon, Northern Ireland and
Irvine, Scotland factories. Hyster Australia challenged this finding and in
the interim sourced its product elsewhere. In the summer of 1993 both of these
antidumping actions were terminated.
PRODUCT DESIGN AND DEVELOPMENT
NMHG spent $20.7 million, $21.9 million, and $19.2 million on product
design and development activities in 1993, 1992 and 1991, 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 $4.0 million, $3.7 million, and $3.8 million on product design
and development in 1993, 1992 and 1991, respectively.
BACKLOG
As of December 31, 1993, NMHG's backlog of unfilled orders for
forklift trucks was approximately 12,100 units, or $206 million. This compares
to the backlog as of December 31, 1992 of approximately 12,100 units, or $203
million. Backlog represents unit orders to NMHG's manufacturing plants from
independent dealerships, retail customers and contracts with the U.S.
Government. Although these orders are believed to be firm, such
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orders may be subject to cancellation or modification.
SOURCES
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. The company believes that
both dealer networks contribute significantly to its competitive position in
the industry and intends to keep the separate networks intact and to continue
to market products separately under the Hyster(R) and Yale(R) brand names.
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
As of February 28, 1994, NMHG had approximately 5,000 employees.
Employees in the Danville, Illinois manufacturing and parts depot operations
are unionized, as are tool room employees located in Portland, Oregon. A
three-year contract for the Danville union employees was signed in 1991, which
will expire in June, 1994. A new one-year contract was signed in 1993 with the
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Portland tool room union which will expire in October 1994. 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 good.
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
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 18% and 13% of NACCO's assets and liabilities, respectively, as
of December 31, 1993, while its operations accounted for 23% and 13% of NACCO's
revenues and operating profits, respectively, in 1993.
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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) name, and heat generating appliances such as toasters,
irons, coffeemakers and toaster ovens which are primarily marketed under the
Proctor-Silex(R) name. The company markets its products primarily in North
America. 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, Sears,
Canadian Tire, and Montgomery Ward. 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 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, 1993 was approximately $13.1
million. This compares with the aggregate backlog as of December 31, 1992 of
approximately $7.0 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, 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, $2.5 million, and
$2.3 million on product design and development activities in 1993, 1992 and
1991, respectively.
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
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available from various suppliers.
COMPETITION
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.
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
As of February 28, 1994, Hamilton Beach/Proctor-Silex's work force
consisted of approximately 4,400 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.
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C. NORTH AMERICAN COAL
GENERAL
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, 1993 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- 16 through F-17 contained in Part IV hereof.
Project mining subsidiaries accounted for 25% and 30% of NACCO's assets and
liabilities, respectively, as of December 31, 1993, while their operations
accounted for 14% and 45% of the Company's revenues and operating profits,
respectively, in 1993.
SALES AND MARKETS
The principal customers of North American Coal are electric utilities
and a synfuels plant. In 1993, sales to one customer, which supplies coal to
four facilities, accounted for 46% of North American Coal's revenues compared
with 44% in 1992 and 1991. The distribution of sales in the last five years
has been as follows:
DISTRIBUTION
-----------------------
Total
Tons Sold Electric Synfuels
(Millions) Utilities Plant
---------- --------- --------
1993 26.5 75% 25%
1992 24.5 74% 26%
1991 21.7 73% 27%
1990 20.8 71% 29%
1989 21.5 72% 28%
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 1993 were as follows:
1993 Sales
Mine and Customer Tonnage Contract
Mining Operation Location (Plant) (Millions) Expires
- ---------------- -------- -------- ---------- --------
Project Mining
Subsidiaries
--------------
The Coteau Freedom (1) Dakota Coal 6.5 2007
Properties Mine; Company
Company Beulah, (Great Plains
North Synfuels
Dakota Project)
(surface)
Dakota Coal 5.5 2007
Company
(Antelope
Valley
Station)
Dakota Coal 2.0 2007
Company
(Leland Olds
Station)
Dakota Coal .9 1997
Company
(Stanton Station
of United Power
Association)
The Falkirk Falkirk (1) United Power 7.6 2013
Mining Mine; Association/
Company Under- Cooperative
wood, Power
North Association
Dakota (Coal Creek
(surface) Station)
The Sabine South (1) Southwestern 3.5 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 .5 (2) 2001
Mining Coushatta, Louisiana
Company Louisiana Electric
(Joint Venture (surface) Company (Dolet
with Phillips Hills Power Plant)
Coal Company)
- - 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) The amount represents the total (100%) of the 1993 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 is expected to produce from 4.5 to 6.5 million tons of lignite
annually. The two generating units have been delayed and are now expected to
be completed in 2005 and 2007. North American Coal and a subsidiary 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 is no
longer obligated to pay minimum royalties to North American Coal. 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 1994 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 $1.1 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 (Synfuels Plant), which is supplied
by
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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. To date, however, the four pipelines' contracts with the Synfuels
Plant are unaffected and the FERC has permitted the four pipelines to recover
their costs associated with continuing to perform under the contracts. 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 the continued operation of the Great Plains Synfuels Plant
and Coteau's supply of coal to the Plant will be adversely affected. Coteau
sold approximately 6.5 million tons of lignite to the Synfuels Plant in 1993.
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, 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 eighth largest commercial
coal producer in the United States.
EMPLOYEES
As of February 28, 1994, North American Coal had approximately 850
employees.
D. KITCHEN COLLECTION
Kitchen Collection is a national specialty retailer of kitchenware,
small electric appliances and related accessories which operated 104 retail
stores as of February 28, 1994. 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 accounted for 1% of NACCO's assets and its
liabilities as of December 31, 1993, while its operations accounted for 3% and
5% of NACCO's revenues and operating profits, respectively, in 1993.
-13-
15
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; Hyster forklift truck
marketing and sales operations for North America
Flemington, X Yale forklift truck marketing
New Jersey and sales operations for North
America and certain NMHG engineering operations
Greenville, North X Manufacture of forklift trucks;
Carolina NMHG manufacturing and other staff operations for North America
Irvine, Scotland X Manufacture of forklift trucks
Lenoir, North X Manufacture of component
Carolina parts for forklift trucks
Nijmegen, The X Manufacture of forklift
Netherlands trucks and component parts; distribution of service parts for
forklift trucks
-14-
16
LOCATION OWNED LEASED FUNCTION/PRINCIPAL PRODUCTS
Portland, Oregon X Technical center for testing of
prototype equipment and component parts
Portland, Oregon X NMHG corporate and product development 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
Wolverhampton, X Yale forklift truck marketing
England and sales operations for Europe
NMHG intends to sell its Flemington, New Jersey facility and intends
to either lease back a portion of the office space in this facility or to rent
suitable office space in the same area. NMHG also intends to sell one of its
facilities located in Danville, Illinois which is currently vacant. There is
no certainty that any such transactions will occur.
Each of NMHG's principal U.S. facilities is encumbered as security
for the obligations under NMHG's bank financing. The facilities in Berea,
Kentucky and Sulligent, Alabama are leased pursuant to industrial development
bond financings which permit NMHG to acquire the properties for nominal amounts
upon redemption or repayment of the bonds.
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
Clinton, North X Warehouse
Carolina
Collierville, X Distribution center
Tennessee
-15-
17
LOCATION OWNED LEASED FUNCTION/PRINCIPAL PRODUCTS
El Paso, Texas X Distribution center
Glen Allen, Virginia X Corporate headquarters
Juarez, Chihuahua, X Two assembly plants;
Mexico manufacture of 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 components
North Carolina
Toronto, Ontario, X Proctor-Silex, Canada sales
Canada and administration
headquarters
Washington, North X Distribution and warranty
Carolina repair center; manufacture and
assembly of blenders, mixers,
food processors, motors and
commercial products; plastics
molding facility
Sales offices are also leased in several cities in the United States
and Canada.
In February 1991, Hamilton Beach/Proctor-Silex announced that it was
integrating certain facilities, including the Clinton, North Carolina facility,
with other manufacturing facilities. The integration of the Clinton facility
into the Washington facility was completed in 1993.
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 82% of which are lignite deposits
in North Dakota.
-16-
18
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
undeveloped. The table which follows gives detailed information as to North
American Coal's in-place reserves as of December 31, 1993 for the mines listed
under Item 1 "North American Coal" on page 11. The reserves of the South
Hallsville No. 1 Mine, which is 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 542.5 6,767 0.8%
Falkirk Mine, 679.1 6,200 0.6%
North Dakota
Oxbow Mine,
Louisiana (1) 3.0 7.0 6,722 0.7%
------- ------
Total Developed 1,224.6 7.0
Undeveloped
- -----------
North Dakota 571.2 6,428 0.7%
Texas 125.8 125.2 6,208 0.9%
Eastern 73.3 72.2 12,070 3.3%
------- -----
Total Undeveloped 199.1 768.6
------- -----
1,423.7 775.6
======= =====
(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 a warehouse/distribution facility in Chillicothe,
Ohio and the remainder of its retail stores. A typical store is approximately
3,200 square feet.
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.
-17-
19
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-
20
OFFICERS OF THE COMPANY
NAME AGE CURRENT POSITION OTHER POSITIONS
Ward Smith 63 Chairman of the Board of NACCO (since From prior to 1989 to May 1991,
prior to 1989) Chairman and Chief
Executive Officer of NACCO.
Alfred M. Rankin, Jr. 52 President and Chief Executive Officer From April 1989 to May 1991,
of NACCO (since May 1991) President and Chief Operating
Officer of NACCO. From prior
to 1989 to February 1989,
Vice Chairman and Chief
Operating Officer of Eaton
Corporation (manufacturer of highly
engineered products serving
automotive, industrial and
commercial markets).
Frank B. O'Brien 47 Senior Vice President - Corporate From January 1, 1993 to December
Development and Chief Financial Officer of 31, 1993, Senior Vice President -
NACCO (since January 1994) Corporate Development of NACCO.
From prior to 1989 to December 31,
1992, Vice President - Corporate
Development of NACCO.
Steven M. Billick 37 Vice President and Controller From prior to 1989 to July 1991,
of NACCO (since July 1991) Partner, Deloitte & Touche
(accounting firm).
Charles A. Bittenbender 44 Vice President, General Counsel and From prior to 1989 to June 1990,
Secretary of NACCO (since July 1990) Deputy General Counsel, G.D. Searle
& Co. (research-based manufacturer
and marketer of pharmaceutical
products).
R. Robertson Hilton 43 Vice President and Treasurer of From January 1991 to October 1992,
NACCO (since October 1992) Senior Vice President and Head,
International Marketing Department,
The First National Bank of Chicago
(money center bank). From
September 1989 to December 1990,
Vice President and Head,
International Marketing Department.
From prior to 1989 to August 1989,
Vice President and Head, Cleveland
Regional Office.
-19-
21
PRINCIPAL OFFICERS OF THE COMPANY'S SUBSIDIARIES
A. NMHG
NAME AGE CURRENT POSITION OTHER POSITIONS
Reginald R. Eklund 53 President and Chief Executive From August 1993 to September 1993,
Officer of NMHG (since Vice President of Hyster and
September 1992) Yale. From September 1992 to
August 1993, President and Chief
Executive Officer of Hyster.
From June 1989 to September 1992,
President and Chief Operating
Officer of NMHG. From prior to
1989 to August 1993, President
and Chief Executive Officer of
Yale.
Bergen I. Bull 54 Vice President, General Counsel From November 1990 to December
and Secretary of NMHG 1993, Vice President and Assistant
(since October 1989) Secretary of Yale. From prior to
1989 to December 1993, Vice
President, Corporate
Administration, General
Counsel and Secretary of Hyster.
G. Michael Decker 52 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 both
Hyster and Yale. From 1991 to
1993, Vice President, Finance,
Secretary and Chief Financial
Officer for Doehler Jarvis Ltd.
Partnership (casting
manufacturer). From 1989 to 1990,
Senior Vice President Finance
Treasurer and Chief Financial
Officer, and prior to 1989, Vice
President, Finance, Treasurer
and Chief Financial Officer of
The Manitowoc Company, Inc.
(manufacturer serving
heavy construction, food service
and shipbuilding industries).
-20-
22
PRINCIPAL OFFICERS OF THE COMPANY'S SUBSIDIARIES
A. NMHG - Continued
NAME AGE CURRENT POSITION OTHER POSITIONS
Roger A. Jensen 54 Controller of NMHG (since From prior to 1989, Controller of
March 1990) Hyster.
Jeffrey C. Mattern 41 Treasurer of NMHG (since From August 1992, Treasurer of both
August 1992) Hyster and Yale. From prior to
1989 to July 1992, Assistant
Treasurer for Harnischfeger
Industries, Inc. (manufacturer
papermaking machinery, mining
and materials handling equipment).
Frank G. Muller 52 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
1989 to May 1992, Vice President,
Manufacturing, Yale.
David M. Pollock 48 Vice President, Managing Director, From May 1992 to December 1993,
NMHG Europe (since May 1992) Vice President of Yale. From
October 1989 to May 1992, Vice
President, Managing Director,
Hyster Europe. From prior to 1989,
Vice President and Managing
Director, Hyster Europe Limited for
Hyster.
-21-
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PRINCIPAL OFFICERS OF THE COMPANY'S SUBSIDIARIES
B. Hamilton Beach/Proctor-Silex
Name Age Current Position Other Positions
George C. Nebel 55 President and Chief Executive From January 1991 to December 1991,
Officer of Hamilton Beach/Proctor- President and Chief Operating
Silex (since January 1992) Officer of Hamilton Beach/Proctor-
Silex. From prior to 1989 to
December 1990, President and Chief
Executive Officer of Roadmaster
Corporation (manufacturer of
bicycles, fitness equipment and
junior riding products).
Judith B. McBee 46 Executive Vice President - From January 1990 to October 1990,
Marketing/Sales of Hamilton Executive Vice President -
Beach/Proctor-Silex (since Marketing/Sales of Proctor-Silex.
October 1990) From prior to 1989 to January
1990, Executive Vice President -
Marketing of Proctor-Silex
Charles B. Hoyt 46 Vice President - Finance and From August 1990 to October 1990,
Chief Financial Officer of Vice President and Chief
Hamilton Beach/Proctor-Silex Financial Officer of Proctor-
(since October 1990) Silex. From prior to 1989 to
August 1990, Vice President -
Finance and Treasurer of Yale.
Ronald C. Eksten 50 Vice President, General Counsel From prior to 1989 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 51 Vice President, Engineering/Product From January 1989 to October 1990,
Development of Hamilton Beach/ Vice President, Engineering of
Proctor-Silex (since October 1990) Hamilton Beach Inc.
Jack J. Pountney 65 Vice President - President, Proctor-Silex From prior to 1989, President,
Canada (since June 1993) Proctor-Silex Canada
Ronald A. Rosati 41 Vice President - Commercial Products From April 1990 to June 1991, Sales
(since July 1991) Operations Manager, Kraft
Foodservice (distributor to
foodservice industry). From
prior to 1989 to March 1990,
owner/operator Rocky
Rococo Pizza (two restaurants in
Gainesville, Florida).
James H. Taylor 36 Vice President and Treasurer of From September 1989 to October
Hamilton Beach/Proctor-Silex 1990, Vice President and
(since October 1990) Treasurer of Proctor-Silex. From
prior to 1989 to September 1989,
Corporate Treasurer of
Proctor-Silex.
-22-
24
PRINCIPAL OFFICERS OF THE COMPANY'S SUBSIDIARIES
C. NORTH AMERICAN COAL
NAME AGE CURRENT POSITION OTHER POSITIONS
Clifford R. Miercort 54 President of North American Coal
(since prior to 1989) and Chief
Executive Officer of North American
Coal (since April 1989)
H. Dean Jacot 51 Executive Vice President and From prior to 1989 to October 1989,
Chief Operating Officer of Vice President of North American
North American Coal (since Coal.
October 1989)
Herschell A. Cashion 51 Vice President - Business
Development of North American
Coal (since prior to 1989)
Thomas A. Koza 47 Vice President - Law and From prior to 1989 to July 1990,
Administration of North Vice President, General Counsel
American Coal (since October and Secretary of NACCO. From prior
1989); Secretary of North to 1989 to October 1989, Vice
American Coal (since prior to 1989) President and General Counsel of
North American Coal.
K. Donald Grischow 46 Controller of North American From prior to 1989 to April 1989,
Coal (since prior to 1989); and Assistant Treasurer of North
Treasurer of North American Coal American Coal.
(since April 1989)
-23-
25
PRINCIPAL OFFICERS OF THE COMPANY'S SUBSIDIARIES
D. KITCHEN COLLECTION
NAME AGE CURRENT POSITION OTHER POSITIONS
Randall D. Lynch 47 President and Chief Executive Officer of Kitchen From prior to 1989 to June 1991,
Collection (since June 1991) President of Kitchen Collection.
Randolph J. Gawelek 46 Executive Vice President and Secretary of Kitchen
Collection (since prior to 1989)
-24-
26
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:
1993
-------------------------------------
SALES PRICE CASH
-------------------
HIGH LOW DIVIDEND
------ ------- --------
First quarter $55.00 - $44.00 16.0c.
Second quarter $58.25 - $50.00 16.5c.
Third quarter $52.13 - $43.63 16.5c.
Fourth quarter $52.00 - $42.00 16.5c.
1992
------------------------------------
Sales Price Cash
--------------------
High Low Dividend
------- ------- --------
First quarter $55.50 - $46.63 15.5c.
Second quarter $60.00 - $41.50 16.0c.
Third quarter $47.50 - $37.13 16.0c.
Fourth quarter $52.25 - $34.25 16.0c.
At December 31, 1993, there were approximately 900 Class A common
stockholders of record and 600 Class B common stockholders of record.
-25-
27
ITEM 6. SELECTED FINANCIAL DATA
NACCO Industries, Inc. and Subsidiaries
Year Ended December 31
--------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
-------------- ------------- ------------- ------------- --------------
(In thousands, except per share, percentage and employee data)
Total revenues $ 1,549,371 $ 1,483,779 $ 1,369,195 $ 1,384,993 $ 1,187,570
Operating profit $ 93,384 $ 101,280 $ 94,532 $ 106,484 $ 125,363
Income before extraordinary charge $ $11,593 $ 22,868 $ 20,038 $ 28,189 $ 55,820
Extraordinary charge, net-of-tax (3,292) (110,000)
------------- ------------ --------------- ---------------- ---------------
Net income (loss) $ 8,301 $ (87,132) $ 20,038 $ 28,189 $ 55,820
Total assets $ 1,642,493 $ 1,684,889 $ 1,629,663 $ 1,767,098 $ 1,724,767
Notes payable $ 357,788 $ 459,906 $ 442,279 $ 533,692 $ 605,874
Stockholders' equity $ 235,626 $ 238,316 $ 350,188 $ 353,293 $ 303,986
Total employees 10,879 10,497 9,858 11,111 10,725
Per share of stock:
Income before extraordinary
charge $ 1.30 $ 2.57 $ 2.26 $ 3.18 $ 6.29
Extraordinary charge, net-of-tax (0.37) (12.37)
-------------- ------------- --------------- --------------- ---------------
Net income (loss) $ 0.93 $ (9.80) $ 2.26 $ 3.18 $ 6.29
Cash dividends $ .655 $ .635 $ .615 $ .595 $ .575
Market value $ 51.50 $ 51.75 $ 47.50 $ 30.25 $ 55.50
Stockholders' equity $ 26.35 $ 26.67 $ 39.43 $ 39.79 $ 34.25
Return on stockholders' equity 5%* 7%* 6% 8% 21%
Average shares outstanding 8,938 8,891 8,878 8,877 8,874
* Based on net income before extraordinary charge.
-26-
28
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL SUMMARY
Income before extraordinary charge for 1993 was $11.6 million, or
$1.30 per share, compared with income before extraordinary charge of $22.9
million, or $2.57 per share, in 1992. Net income for 1991 was $20.0 million,
or $2.26 per share. An extraordinary charge of $3.3 million, or $0.37 per
share, was recognized in 1993 resulting in net income of $8.3 million, or $0.93
per share. This extraordinary charge relates to the retirement of NACCO
Materials Handling Group's Hyster-Yale 12 3/8% subordinated debentures and is
discussed in more detail in Note B to the consolidated financial statements on
page F-11 and in this discussion and analysis on page 32.
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-11 and in this discussion
and analysis on page 49.
ACCOUNTING CHANGE
The Company has adopted Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" (SFAS 109), effective January 1, 1993,
and has elected to retroactively apply its provisions to January 1, 1989, as
permitted by this Standard. Accordingly, retained earnings and net goodwill
have been adjusted as of January 1, 1991, to reflect the cumulative impact of
applying this Standard, and the consolidated financial statements and
subsidiary financial data for the years ending December 31, 1992 and 1991, have
been restated for the effects of SFAS 109. The adoption of this Standard is
discussed in more detail in Notes A and M to the consolidated financial
statements on pages F-10 and F-20.
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. ("NACCO Materials Handling
Group"), Hamilton Beach/Proctor-Silex, Inc. ("Hamilton Beach/Proctor-Silex"),
and The Kitchen Collection, Inc. ("Kitchen Collection"). These four
subsidiaries operate 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-25.
-27-
29
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO MATERIALS HANDLING GROUP
NACCO Materials Handling Group, 97% owned by NACCO, designs,
manufactures and markets forklift trucks and related service parts under the
Hyster and Yale brand names.
FINANCIAL REVIEW
The results of operations for NACCO Materials Handling Group were as
follows for the year ended December 31:
1993 1992 1991
------ ------ ------
(In millions)
Revenues
North America $645.4 $579.0 $499.2
Europe 220.5 251.5 264.1
Asia 42.3 35.4 27.3
------ ------ ------
$908.2 $865.9 $790.6
====== ====== ======
Operating profit
North America $ 40.3 $ 15.5 $ 2.2
Europe (2.4) 28.7 38.7
Asia 1.7 .8 .5
Eliminations (.7) .1
------ ------ ------
$ 39.6 $ 44.3 $ 41.5
====== ====== ======
Net income (loss) before
extraordinary charge $ (5.1) $ 1.3 $ 1.1
Extraordinary charge (3.3)
------ ------ ------
Net income (loss) $ (8.4) $ 1.3 $ 1.1
====== ====== ======
-28-
30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
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)
-------- ---------- ---------
(In millions)
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
Manufacturing cost (10.8) (7.1)
Other operating expense (.7) (.5)
Foreign currency translation (37.2) (16.3) (10.8)
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 price discounting prevented significant price
improvements in 1993 in the forklift industry, pricing in North America and
Europe has been 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. NACCO Materials
Handling Group also realized improved global market share in 1993.
Service parts business continued to recover in North America, which
included higher volumes and sales of higher-margin service parts resulting in a
favorable impact on revenues and operating profit. Higher revenues from the
North American service parts business were partially offset by weak European
markets. Favorable service parts mix, however, reduced the impact of lower
European volume on operating profit from the service parts business.
-29-
31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
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 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.
1992 COMPARED WITH 1991
The following schedule details the components of the changes in
revenues, operating profit and net income for 1992 compared with 1991:
Operating Net
Revenues Profit Income
-------- ------------ ------
(In millions)
1991 $790.6 $41.5 $1.1
Increase (Decrease) in 1992 from:
Unit volume 86.4 20.0 13.2
Sales mix (29.8) (14.3) (9.4)
Average sales price (3.7) (3.7) (2.4)
Service parts 11.5 5.3 3.5
Manufacturing cost 5.2 3.4
Reduction in restructuring reserve 1.5 1.0
Other operating expense (12.1) (8.0)
Foreign currency translation 10.9 .9 .6
Other income and expense 3.6
Differences between effective and
statutory tax rates (5.3)
------ -------- -----
1992 $865.9 $44.3 $1.3
====== ===== ====
Increased unit volume in 1992 was the result of economic improvement
in North America partially offset by softening markets in Europe and the Far
East. In addition, NACCO Materials Handling Group increased market share in
North America and Europe in 1992. Price discounting, which continued to be
prevalent in the forklift industry, and mix changes to lower margin-products,
primarily in Europe, reduced revenues and operating profits. The improvement
in results of operations from service parts was primarily due to increased
parts volume. Manufacturing costs decreased due to reductions in overhead from
continued savings realized from the consolidation of operations and higher
overall volume. Operating expenses increased as marketing programs for
existing and new products and new product development programs were implemented
in 1992.
-30-
32
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO MATERIALS HANDLING GROUP--Continued
FINANCIAL REVIEW---Continued
OTHER INCOME AND EXPENSE
Below is a detail of other income and expense for the year ended
December 31:
1993 1992 1991
------ ------ ------
(In millions)
Other income (expense)
Interest income $ .8 $ 1.5 $ 4.8
Interest expense (40.4) (44.2) (49.5)
Other-net (1.7) 2.9 ( .5)
------ ------ ------
$(41.3) $(39.8) $(45.2)
------ ------ ------
------ ------ ------
Interest Income
The decrease in interest income in 1993 compared with 1992 is due
primarily to lower levels of excess cash available for investment. The
substantial reduction in interest income in 1992 compared with 1991 is the
result of lower levels of excess cash available for investment, primarily in
Europe, and lower interest rates.
Interest Expense
The debt restructuring and equity infusion in 1993 reduced outstanding
debt and lowered overall effective interest rates resulting in reduced interest
expense in 1993 (see the "Extraordinary Charge" discussion which follows). The
reduction in interest expense in 1992 compared with 1991 is due to lower levels
of debt and lower interest rates.
Other-Net
Other-net for 1993 is expense of $1.7 million compared with income of
$2.9 million in 1992 and expense of $0.5 million in 1991. Other-net consists
primarily of equity in the earnings of the Sumitomo-Yale 50% owned joint
venture (S-Y) and gains and losses on the sale of assets. The increase in the
value of the Japanese yen compared with other global currencies and depressed
European and Japanese markets resulted in significant losses of approximately
$3.9 million at S-Y in 1993. During the second quarter of 1993 NACCO Materials
Handling Group sold its former manufacturing site in Wednesfield, England for
$3.3 million resulting in a net pretax gain of $2.1 million. During 1992 NACCO
Materials Handling Group experienced foreign currency exchange gains due to the
decrease in the value of the British pound sterling compared with other
currencies. During 1993 these exchange gains were not repeated. In 1993 NACCO
Materials Handling Group hedged this exposure. Other-net was also favorably
affected in 1992 by reduced losses from retail branch operations classified as
net assets held for sale.
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33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO MATERIALS HANDLING GROUP--Continued
FINANCIAL REVIEW--Continued
PROVISION FOR INCOME TAXES
Below is a detail of income (loss) before income taxes, provisions
(benefit) for income taxes and the effective tax rate for the year ended
December 31:
1993 1992 1991
---- ---- ----
(In millions, except percentage data)
Income (loss) before income taxes and
extraordinary charge $(1.7) $4.5 $(3.7)
Provision (benefit) for income taxes $ 3.4 $3.2 $(4.8)
Effective tax rate Not meaningful 70.7% (128.5)%
Expenses not deductible for tax purposes, which primarily include
amortization of goodwill associated with the acquisition of Hyster Company,
were approximately level in 1993, 1992 and 1991. These non-deductible expenses
increased the effective tax rate above statutory levels and resulted in a tax
provision in 1993 despite a loss before income taxes. In addition, NACCO
Materials Handling Group began providing for U.S. taxes in 1993 on foreign
earnings taxed at overall lower rates in anticipation of future repatriations.
Due to higher levels of pretax income in 1992, the non-deductible expenses had
a smaller impact on the effective tax rate in 1992. In addition, the tax
benefit reported in 1991 includes a favorable adjustment related to estimated
income tax liabilities for prior years of $2.6 million. No such adjustment was
required in 1992 or 1993.
EXTRAORDINARY CHARGE
The extraordinary charge in 1993 of $3.3 million, net of $2.0 million
in tax benefits, was recognized in the second quarter of 1993. This charge
represents the loss from the write-off of premiums and unamortized debt
issuance costs associated with the retirement of approximately $50.2 million
face value of NACCO Materials Handling Group's Hyster-Yale 12-3/8% subordinated
debentures. NACCO Materials Handling Group retired the debentures as a result
of a contribution by NACCO of previously purchased subordinated debentures
with a face value of $23.7 million, and an equity infusion of $28.3 million
($26.7 million from NACCO) which enabled NACCO Materials Handling Group to call
approximately $26.5 million face value of subordinated debentures at a price of
107.5. Refer to Note G, "Revolving Credit Agreements and Notes Payable," for
additional information.
BACKLOG
NACCO Materials Handling Group's backlog of orders at December 31,
1993, was approximately 12,100 forklift truck units, compared with 12,100 and
10,100 units at December 31, 1992 and 1991, respectively. While retail
customer order demand grew in North America during 1993, dealers have remained
cautious in placing future factory orders, and factory-to-dealer delivery
lead-times have been reduced resulting in level backlog between years. During
1992 backlog increased significantly in North America, while Europe and the
Far East continued to experience reduced levels of backlog. The market
declines experienced in North America and in most European countries during
1991 resulted in lower 1991 backlog.
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34
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO MATERIALS HANDLING GROUP--Continued
1994 OUTLOOK
Historically, the forklift truck industry has been cyclical. Economic
conditions in the various markets in which the industry's customers operate
affect demand. Current external economic forecasts and recent factory order
information indicate continued economic improvement in North America. However,
Europe and Japan continue to be plagued by recessionary pressures. While no
near-term economic recovery is forecast for these regions, improvements in the
North American economy and favorable worldwide interest rates should lead to a
global recovery.
NACCO Materials Handling Group will continue to introduce new products
in 1994. Improved profitability is dependent on continual efforts to reduce
costs.
LIQUIDITY AND CAPITAL RESOURCES
The previously discussed retirement of subordinated debentures, the
majority of which were retired during the third quarter of 1993, has been
reflected as a reduction in notes payable on the consolidated balance sheet as
of December 31, 1993. In connection with the retirement of these subordinated
debentures, NACCO Materials Handling Group amended its existing senior bank
credit agreement. This amendment permits equity infusions to be used for cash
purchases of subordinated debentures. In addition, after August 1994, the
amendment permits NACCO Materials Handling Group to use internally generated
funds to retire up to $75.0 million of additional subordinated debentures if
certain debt-to-capitalization ratios are achieved. The amendment also
modifies the bank loan repayment schedules and provides NACCO Materials
Handling Group with more favorable performance-based interest rate incentives.
The amendment to the bank loan repayment schedule reduced the required payments
in 1994 and 1995 by $35.0 million and $16.0 million, respectively. In
addition, the original 1996 installment has been increased by $0.7 million, and
the amended schedule requires a $50.3 million payment in 1997.
NACCO Materials Handling Group had available all of its $100.0 million
revolving credit facility at December 31, 1993.
Expenditures for property, plant and equipment were $20.2 million in
1993 and $24.3 million in 1992, and are anticipated to be approximately $25.0
million in 1994. The majority of these expenditures are for improvements in
manufacturing efficiencies and tooling related to the production of various new
products. Capital for these expenditures has been and is expected to be
provided primarily by internally generated funds and capital grants from local
governments.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO MATERIALS HANDLING GROUP--Continued
LIQUIDITY AND CAPITAL RESOURCES--Continued
During 1993 NACCO Materials Handling Group repatriated $18.3 million
of unremitted 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.
NACCO Materials Handling Group completed the sales of all of its
retail operations during 1992. Sales proceeds in 1992 of approximately $21.3
million, which resulted in net cash received of approximately $18.0 million
after the payment of taxes and expenses, were used to reduce bank debt.
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36
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
HAMILTON BEACH/PROCTOR-SILEX
Hamilton Beach/Proctor-Silex, 80% 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:
1993 1992 1991
------ ------ -----
(In millions)
Revenues $356.3 $358.6 $351.9
Operating profit $ 11.8 $ 19.3 $ 20.3
Net income (loss) $ (1.0) $ 5.4 $ 2.5
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)
-------- ------------ --------
(In millions)
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)
Manufacturing cost (1.1) (.7)
Other operating expense (1.2) (.8)
Foreign currency translation (2.9) (2.9) (1.9)
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)
====== ===== =====
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37
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
HAMILTON BEACH/PROCTOR-SILEX--Continued
FINANCIAL REVIEW--Continued
1993 COMPARED WITH 1992--Continued
The higher volume is 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
has offset the increases in other product lines. The adverse sales mix is the
result of the 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 to the U.S. dollar. The increase in other operating
expense in 1993 is primarily the result of higher marketing and selling costs.
1992 COMPARED WITH 1991
The following schedule details the components of the changes in
revenues, operating profit and net income for 1992 compared with 1991:
Operating Net
Revenues Profit Income
-------- ------------ ------
(In millions)
1991 $351.9 $20.3 $2.5
Increase (Decrease) in 1992 from:
Unit volume 18.7 5.2 3.5
Sales mix (8.1) (2.2) (1.5)
Average sales price (3.9) (3.9) (2.6)
Manufacturing cost (1.3) (.8)
Other operating expense 1.2 .8
Other income and expense 3.5
------ ----- ----
1992 $358.6 $19.3 $5.4
====== ===== ====
Improved unit volume performance resulted primarily from a significant
increase for 1992 in sales of juice extractors and increased sales of toasters
and certain other products. The unit volume improvement was tempered somewhat
by decreased sales of blenders and close-out products as compared with 1991.
Increased sales of opening price-point models, primarily in the coffeemaker,
toaster oven, iron and toaster product lines, and continued price competition
in the housewares industry have reduced average selling prices. Reductions in
other operating expenses resulted primarily from additional efficiencies gained
from the merger of Hamilton Beach and Proctor-Silex which reduced selling and
administrative expenses.
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38
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
HAMILTON BEACH/PROCTOR-SILEX--Continued
FINANCIAL REVIEW--Continued
OTHER INCOME AND EXPENSE
Below is a detail of other income and expense for the year ended
December 31:
1993 1992 1991
------ ------ ------
(In millions)
Other income (expense)
Interest expense $ (7.7) $ (8.6) $(12.8)
Other-net (4.1) (1.1)
------ ------- ------
$(11.8) $ (8.6) $(13.9)
====== ======= ======
Interest Expense
The reduction in interest expense in 1993 compared with 1992 is due to
lower levels of borrowings. The reduction in interest expense in 1992 compared
with 1991 is due to lower interest rates and improved levels of working
capital. Hamilton Beach/Proctor-Silex received the maximum reductions
available to its interest rates during 1993 when certain ratios were achieved.
Other-Net
The increase in other-net in 1993 results primarily from the
settlement of certain litigation during the year.
PROVISION FOR INCOME TAXES
Below is a detail of income before income taxes, provisions for income
taxes and the effective tax rate for the year ended December 31:
1993 1992 1991
--------- --------- -------
(In millions, except percentage data)
Income before income taxes -- $10.7 $6.4
Provision for income taxes $1.0 $ 5.3 $3.9
Effective tax rate Not meaningful 50.0% 60.2%
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 1993, 1992
and 1991. These non- deductible expenses resulted in a tax provision in 1993
despite breakeven pretax earnings. Due to higher levels of pretax income in
1992 these non-deductible expenses had a smaller impact on the effective tax
rate in 1992 compared with 1991.
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39
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
HAMILTON BEACH/PROCTOR-SILEX--Continued
FINANCIAL REVIEW--Continued
1994 OUTLOOK
Hamilton Beach/Proctor-Silex expects 1994 total industry unit
shipments to be slightly lower than 1993 levels for most core products. During
1994, Hamilton Beach/Proctor-Silex expects to introduce a number of new and
redesigned products to better meet consumer demand and to improve its product
placements. Improved profitability is dependent on continual efforts to
reduce costs.
LIQUIDITY AND CAPITAL RESOURCES
The Hamilton Beach/Proctor-Silex credit agreement requires that a
portion of annual excess cash flow that is generated, as defined in the
agreement, be used to prepay the term note. Accordingly, Hamilton Beach/
Proctor-Silex prepaid $4.7 million of its 1997 installment in February 1993,
$5.0 million of the 1997 installment in September 1992 and $4.7 million of the
1997 installment and $2.0 million of the 1993 installment in March 1992. As a
result of effective working capital management, the revolving credit facility
was reduced to $95.0 million in the second quarter of 1993, the availability of
which is determined based on percentages of eligible accounts receivable and
inventory. As of December 31, 1993, $26.1 million of the revolving credit
facility was available.
Expenditures for property, plant and equipment were $12.2 million in
1993 and $10.8 million in 1992, and are anticipated to be approximately $14.0
million in 1994. 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.
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40
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NORTH AMERICAN COAL
North American Coal mines and markets lignite for use primarily as
fuel for power generation by electric utilities and general industry. 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
Substantially all of North American Coal's operations are conducted by
project mining subsidiaries. These subsidiaries ship coal to utility customers
pursuant to long-term contracts, which expire between 2001 and 2013. These
long-term contracts provide for the sale of lignite based on actual cost plus a
profit per ton. The profit component is adjusted for the effects of inflation
as measured by government-published indices. 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, however, is
not significantly affected by changes in operating costs at these contract
mines.
The results for "Other mining operations" have been adjusted to
exclude the previously combined results of Bellaire Corporation, a
non-operating subsidiary of NACCO. Bellaire's results are reviewed on pages 48
and 49 of this discussion and analysis. The results of operations for North
American Coal were as follows for the year ended December 31:
1993 1992 1991
------ ------ ------
(In millions)
Tons sold
Project mining subsidiaries 26.1 23.9 21.6
Other mining operations .4 .6 .1
------ ------ ------
26.5 24.5 21.7
====== ====== ======
Revenues
Project mining subsidiaries $216.4 $191.3 $173.7
Other mining operations 15.9 19.8 8.7
------ ------ ------
$232.3 $211.1 $182.4
====== ====== ======
Operating profit
Project mining subsidiaries $ 42.0 $ 34.4 $ 34.1
Other mining operations 2.2 6.4 1.1
------ ------ ------
$ 44.2 $ 40.8 $ 35.2
====== ====== ======
Net income
Project mining subsidiaries $ 15.7 $ 16.1 $ 16.9
Other mining operations .3 3.4 .3
------ ------ ------
$ 16.0 $ 19.5 $ 17.2
====== ====== ======
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41
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NORTH AMERICAN COAL--Continued
FINANCIAL REVIEW--Continued
1993 COMPARED WITH 1992
North American Coal sold a record 26.5 million tons of lignite in 1993
compared with 24.5 million tons in 1992. Higher sales tonnage and higher
interest expense at the project mines, which is included in the cost of coal
passed through to the utility customers, increased revenues and operating
profit in 1993 compared with 1992. The decrease in net income from project
mining subsidiaries is due to a change in the mix of tons sold to
lower-profit-per-ton lignite reserves. The loss of the minimum royalty
payments (see "Other" which follows) reduced the revenues and operating profit
of other mining operations by approximately $3.6 million in 1993.
1992 COMPARED WITH 1991
North American Coal sold 24.5 million tons of lignite in 1992,
compared with 21.7 million tons in 1991. Revenues increased in 1992 to $211.1
million compared with $182.4 million in 1991. Operating profit increased to
$40.8 million in 1992 from $35.2 million in 1991, principally due to increased
volume. Decreased average selling prices somewhat offset the impact from
volume increases. In 1992 other mining operations include a subsidiary which
was not consolidated prior to 1992.
OTHER INCOME AND EXPENSE
Below is a detail of other income and expense for the year ended
December 31:
1993 1992 1991
------ ------ ------
(In millions)
Other income (expense)
Interest income $ 2.1 $ 2.1 $ 2.1
Interest expense (19.3) (14.2) (16.2)
Other-net (1.1) (1.4) 1.1
------ ------ ------
$(18.3) $(13.5) $(13.0)
====== ====== ======
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42
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NORTH AMERICAN COAL--Continued
FINANCIAL REVIEW--Continued
OTHER INCOME AND EXPENSE--Continued
Interest Expense
Interest expense related to the financing of the project mining
subsidiaries is $18.0 million for 1993, $13.2 million for 1992 and $13.6
million for 1991. Such interest expense is included in the cost of coal which
is passed through to the utility customers.
Other-Net
Other-net for 1993 is expense of $1.1 million as compared with expense
of $1.4 million in 1992 and income of $1.1 million in 1991. Other-net includes
equity earnings of unconsolidated subsidiaries of $1.6 million in 1991 related
to a subsidiary which has been consolidated beginning in 1992.
PROVISION FOR INCOME TAXES
Below is a detail of income before income taxes, provisions for income
taxes and the effective tax rate for the year ended December 31:
1993 1992 1991
---- ---- ----
(In millions, except percentage data)
Income before income taxes $25.9 $27.3 $22.2
Provision for income taxes $ 9.9 $ 7.8 $ 5.0
Effective tax rate 38.1% 28.5% 22.5%
The increase in the 1993 effective tax rate compared with 1992 is
primarily due to the impact of SFAS 109 on accounting for percentage depletion
deductions, the increase in the federal tax rate and miscellaneous state income
tax changes. The increase in the 1992 effective tax rate compared with 1991
was primarily due to the effect of SFAS 109 on accounting for percentage
depletion.
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43
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NORTH AMERICAN COAL--Continued
FINANCIAL REVIEW--Continued
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 have agreed that, in light of the delayed development
of the mining project to which such leases were assigned, effective January 1,
1993, the utility is no longer obligated to pay Royalty Company minimum
royalties, which amounted to approximately $3.6 million per year. Termination
of this minimum royalty obligation reduced North American Coal's net income
approximately $2.4 million, after tax, in 1993. Under the original agreement,
this royalty obligation would have terminated at the end of 2005.
1994 OUTLOOK
North American Coal expects to increase the tons of coal shipped in
1994, and should surpass all previous production records. North American Coal
continues to seek opportunities for future growth by acquiring or developing
high-quality, low-sulphur western coal.
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
1996) can be extended one additional year, on an annual basis, upon the mutual
consent of North American Coal and the bank group, beginning in 1994. North
American Coal had $34.0 million of its revolving credit facility available at
December 31, 1993.
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 do not prevent the project mining subsidiaries from paying
dividends in amounts equal to their retained earnings.
Expenditures for property, plant and equipment by the project mining
subsidiaries were $23.0 million in 1993 and $37.4 million in 1992, and are
anticipated to be approximately $30.6 million in 1994. These expenditures
relate to the development and improvement of the project mining subsidiaries'
mines and are financed by the utility customers.
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44
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NORTH AMERICAN COAL--Continued
LIQUIDITY AND CAPITAL RESOURCES--Continued
The condensed balance sheets for North American Coal's project mining
subsidiaries and other mining operations were as follows at December 31:
Project Mining Other Mining
Subsidiaries Operations
-------------------- ------------------
1993 1992 1993 1992
------ ------ ------ ------
(In millions)
Net current assets $ 10.5 $ 3.2 $12.8 $14.8
Property, plant and equipment, net 296.0 302.3 21.3 22.0
Net other assets (liabilities) 37.8 35.5 (5.8) (3.9)
Obligations of project mining
subsidiaries (338.5) (334.1)
Long-term debt (.4) (.5)
------- ------- ----- -----
Stockholder's equity $ 5.8 $ 6.9 $27.9 $32.4
======= ======= ===== =====
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45
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
THE 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 being 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:
1993 1992 1991
-------- -------- ---------
(In millions, except number of stores)
Number of stores 104 86 72
Revenues $53.7 $45.5 $36.8
Operating profit $ 4.8 $ 4.4 $ 2.8
Net income $ 2.7 $ 2.4 $ 1.5
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
-------- ------------- ------
(In millions)
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 has not yet impacted specialty retailers. The use of
markdowns on selected products to increase customer traffic and competitive
pricing pressures on specific product lines have negatively affected operating
profit.
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46
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
THE KITCHEN COLLECTION--Continued
FINANCIAL REVIEW--Continued
1992 COMPARED WITH 1991
The following schedule details the components of the changes in
revenues, operating profit and net income for 1992 compared with 1991:
Operating Net
Revenues Profit Income
-------- ----------- ------
(In millions)
1991 $36.8 $2.8 $1.5
Increase (Decrease) in 1992 from:
Stores opened in 1992 3.4 .4 .2
Stores opened in 1991 2.5 .5 .3
Comparable stores 2.8 .9 .6
Other (.2) (.1)
Other income and expense .1
Differences between effective and
statutory tax rates (.2)
------ ---- ----
1992 $45.5 $4.4 $2.4
===== ==== ====
Kitchen Collection's revenues and operating profit increased in 1992
through the addition of new stores and improved results at comparable stores.
The improved results at the comparable stores were due to an increase in
consumer spending activity. While revenues increased substantially, operating
profit increased by a higher amount due to increased volume, a mix shift to
higher-margin products and less use of discounts and markdowns.
OTHER INCOME AND EXPENSE
Interest expense was $0.1 million, $0.2 million and $0.4 million in
1993, 1992 and 1991, respectively. The reduction in interest expense in 1993
compared with 1992 and in 1992 compared with 1991 is due to lower levels of
borrowings and lower interest rates.
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47
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
THE KITCHEN COLLECTION--Continued
FINANCIAL REVIEW--Continued
PROVISION FOR INCOME TAXES
Below is a detail of income before income taxes, provisions for income
taxes and the effective tax rate for the year ended December 31:
1993 1992 1991
------ ------ ------
(In millions, except percentage data)
Income before income taxes $4.7 $4.2 $2.4
Provision for income taxes $2.0 $1.8 $.9
Effective tax rate 40.6% 41.6% 37.8%
LIQUIDITY AND CAPITAL RESOURCES
Expenditures for property, plant and equipment were $1.1 million in
1993 and $0.6 million in 1992, and are anticipated to be approximately $1.4
million in 1994. These expenditures are primarily for new store openings and
improvements to existing facilities and are funded internally. At December 31,
1993, Kitchen Collection had available all of its $2.5 million line of credit,
which expires on May 31, 1994 and is renewable annually at that time.
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48
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO AND OTHER
FINANCIAL REVIEW
ADMINISTRATIVE AND GENERAL EXPENSES
NACCO incurred administrative and general expenses of $7.9 million,
$8.2 million and $7.2 million during 1993, 1992 and 1991, respectively.
OTHER INCOME AND EXPENSE
Below is a detail of other income and expense for the year ended
December 31:
1993 1992 1991
------ ------ ------
(In millions)
Other income (expense)
Interest income $ 1.9 $ 1.2
Interest expense (2.3) (1.8) $ (2.9)
Other-net 1.0 .2 .3
----- -------- -------
$ .6 $ (.4) $ (2.6)
===== ======== ======
Interest income and expense primarily relate to intercompany items
which are eliminated in consolidation. Other-net in 1993 includes a pension
curtailment gain of $0.4 million. Refer to Note N, "Retirement Benefit Plans,"
for additional information.
PROVISION FOR INCOME TAXES
Below is a detail of loss before income taxes, income tax benefit and
the effective tax rate for NACCO for the year ended December 31:
1993 1992 1991
---- ---- ----
(In millions, except percentage data)
Loss before income taxes $(7.3) $(8.6) $(9.8)
Income tax benefit $(1.9) $(2.5) $(2.0)
Effective tax rate 24.1% 28.9% 20.1%
INTEREST RATE PROTECTION
NACCO Materials Handling Group, Hamilton Beach/Proctor-Silex and
North American Coal 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.
-47-
49
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
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 impacted 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 NACCO Materials Handling Group and Hamilton Beach/Proctor-Silex
debt agreements include loan covenants which prohibit the payment of dividends
to NACCO. The debt agreement at Kitchen Collection allows for the payment of
dividends under certain circumstances. There are no such 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.
BELLAIRE CORPORATION
Bellaire Corporation ("Bellaire") is a non-operating subsidiary of
NACCO. Bellaire's results of operations include royalty payments received on
certain coal reserves and, during 1992 and 1991, the activities of the Indian
Head Mine. The Indian Head Mine ceased mining operations in April 1992 when
its sales contract expired due to the exhaustion of its economically
recoverable coal reserves.
Bellaire's revenues were $4.0 million, $6.8 million and $13.2 million
in 1993, 1992 and 1991, respectively. During 1993 Bellaire had operating
profit of $0.9 million compared with $0.7 million in 1992 and $1.9 million in
1991. Bellaire's net income before extraordinary charge was $4.0 million, $1.5
million and $6.0 million in 1993, 1992 and 1991, respectively. In 1993,
Bellaire recognized a significant tax benefit due to the effect of the increase
in the federal tax rate on its deferred taxes.
-48-
50
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
In October 1992 the Coal Industry Retiree Health Benefit Act of 1992
was passed by Congress and signed into law. This legislation will require
Bellaire to incur additional costs for retiree medical expenses of certain
United Mine Worker retirees. Based upon information received from various
sources and initial actuarial assumptions and analysis, 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
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 will tend to
diminish over time, but could continue as long as 40 to 50 years, or as long as
there are eligible participants. The tax benefit related to this charge will
be realized as these cash payments are made. Management expects domestic
taxable earnings to continue to be sufficient to realize the full amount of the
deferred tax asset recognized. On January 29, 1993, Bellaire filed a lawsuit
challenging the constitutionality of this new law.
The condensed balance sheets for Bellaire were as follows at December 31:
1993 1992
---- ----
(In millions)
Net current assets $ 18.2 $ 19.3
Property, plant and equipment, net .5 .5
Deferred taxes and other assets 67.0 66.8
Obligation to United Mine Workers
of America Combined Benefit Fund (163.2) (165.8)
Other liabilities (21.2) (23.5)
------- -------
Deficit $ (98.7) $(102.7)
======= =======
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 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 from royalties received, are funded by NACCO.
-49-
51
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES--Continued
NACCO AND OTHER--Continued
LIQUIDITY AND CAPITAL RESOURCES--Continued
RECENTLY ISSUED ACCOUNTING STANDARDS
The Company has not yet adopted SFAS No. 112 "Employers' Accounting
for Postemployment Benefits." A discussion of this standard is included in
Note O to the consolidated financial statements on page F-25 of this annual
report.
EFFECTS OF INFLATION
The Company believes that inflation has not materially impacted its
results of operations in 1993 and does not expect inflation to be a significant
item in 1994.
-50-
52
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.
-51-
53
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Directors of the Company is set forth in the
1994 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
1994 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 1994 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 1994 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.
-52-
54
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 1993.
(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-33 of this Annual Report on Form 10-K.
-53-
55
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 30, 1994
-54-
56
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. President and March 30, 1994
- ----------------------- Chief Executive Officer
Alfred M. Rankin, Jr. (Principal Executive
Officer), Director
Frank B. O'Brien Senior Vice President - March 30, 1994
- ----------------------- Corporate Development
Frank B. O'Brien and Chief Financial
Officer (Principal
Financial Officer)
*Steven M. Billick Vice President and March 30, 1994
- ----------------------- Controller (Principal
Steven M. Billick Accounting Officer)
*Ward Smith Chairman of the Board March 30, 1994
- ----------------------- and Director
Ward Smith
*Owsley Brown II Director March 30, 1994
- -----------------------
Owsley Brown II
*John J. Dwyer Director March 30, 1994
- -----------------------
John J. Dwyer
*Robert M. Gates Director March 30, 1994
- -----------------------
Robert M. Gates
*E. Bradley Jones Director March 30, 1994
- -----------------------
E. Bradley Jones
*Dennis W. LaBarre Director March 30, 1994
- -----------------------
Dennis W. LaBarre
*John C. Sawhill Director March 30, 1994
- -----------------------
John C. Sawhill
*Britton T. Taplin Director March 30, 1994
- -----------------------
Britton T. Taplin
*Frank E. Taplin, Jr. Director March 30, 1994
- -----------------------
Frank E. Taplin, Jr.
*Richard B. Tullis Director March 30, 1994
- -----------------------
Richard B. Tullis
-55-
57
*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 30, 1994
- ------------------------------------
Frank B. O'Brien, Attorney-in-Fact
-56-
58
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, 1993
NACCO INDUSTRIES, INC.
MAYFIELD HEIGHTS, OHIO
F-1
59
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 Accountants--Year ended December 31, 1993, 1992
and 1991
Statements of consolidated income--Year ended December 31, 1993, 1992
and 1991.
Consolidated balance sheets--December 31, 1993 and December 31, 1992.
Statements of consolidated cash flows--Year ended December 31, 1993,
1992 and 1991.
Statements of consolidated stockholders' equity--Year ended December
31, 1993, 1992 and 1991.
Notes to consolidated financial statements--December 31, 1993.
NACCO Industries, Inc. Report of Management--Year ended December 31,
1993, 1992 and 1991.
The following consolidated financial statement schedules of NACCO Industries,
Inc. and Subsidiaries are included in Item 14(d):
Schedule III--Condensed Financial Information of the
Parent
Schedule V--Property, plant and equipment
Schedule VI--Accumulated depreciation, depletion and
amortization of property, plant and
equipment
Schedule VIII--Valuation and qualifying accounts
Schedule IX--Short-term borrowings
Schedule X--Supplementary income statement information
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
60
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, 1993 and 1992, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1993. 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, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
As explained in Note A to the consolidated financial statements, the Company
has given retroactive effect to the change in accounting for income taxes as
permitted by Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."
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 & Co.
Cleveland, Ohio
February 18, 1994
F-3
61
CONSOLIDATED STATEMENTS OF INCOME
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31
----------------------------------------------------------------
1993 1992 1991
----------- ------------ ------------
(In thousands, except per share data)
Net sales $1,538,805 $1,470,005 $1,359,295
Other operating income 10,566 13,774 9,900
---------- ---------- ----------
TOTAL REVENUES 1,549,371 1,483,779 1,369,195
Cost of sales 1,244,051 1,171,231 1,072,223
---------- ---------- ----------
GROSS PROFIT 305,320 312,548 296,972
Selling, administrative and
general expenses 198,149 197,393 188,682
Amortization of goodwill 13,787 13,875 13,758
---------- ---------- ----------
OPERATING PROFIT 93,384 101,280 94,532
Other income (expense)
Interest income 1,880 3,294 6,725
Interest expense (65,930) (66,032) (77,103)
Other - net (4,670) 1,787 1,798
---------- ---------- ----------
(68,720) (60,951) (68,580)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES, MINORITY INTEREST
AND EXTRAORDINARY CHARGE 24,664 40,329 25,952
Provision for income taxes 13,511 16,346 5,366
---------- ---------- ----------
INCOME BEFORE MINORITY INTEREST
AND EXTRAORDINARY CHARGE 11,153 23,983 20,586
Minority interest 440 (1,115) (548)
---------- ---------- ----------
INCOME BEFORE EXTRAORDINARY CHARGE 11,593 22,868 20,038
Extraordinary charge, net-of-tax (3,292) (110,000)
---------- ---------- ----------
NET INCOME (LOSS) $ 8,301 $ (87,132) $ 20,038
========== ========== ==========
PER SHARE:
Income Before Extraordinary Charge $ 1.30 $ 2.57 $ 2.26
Extraordinary charge, net-of-tax (.37) (12.37)
---------- ---------- ----------
Net Income (Loss) $ .93 $ (9.80) $ 2.26
========== ========== ==========
See notes to consolidated financial statements.
F-4
62
CONSOLIDATED BALANCE SHEETS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31
--------------------------------
1993 1992
------------- -------------
(In thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 29,149 $ 33,847
Accounts receivable, net 200,112 181,198
Inventories 238,168 245,739
Prepaid expenses and other 37,373 32,530
---------- ----------
504,802 493,314
OTHER ASSETS 45,438 66,547
PROPERTY, PLANT AND EQUIPMENT, NET 496,213 508,590
DEFERRED CHARGES
Goodwill, net 487,963 501,748
Deferred costs and other 64,663 63,890
Deferred income taxes 43,414 50,800
---------- ----------
596,040 616,438
---------- ----------
TOTAL ASSETS $1,642,493 $1,684,889
========== ==========
F-5
63
CONSOLIDATED BALANCE SHEETS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
December 31
-----------------------------
1993 1992
---------- -----------
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 148,397 $ 125,849
Revolving credit agreements 35,178 19,196
Current maturities of long-term obligations 55,016 34,215
Income taxes 27,198 30,734
Accrued payroll 19,750 19,721
Other current liabilities 111,916 109,881
---------- ----------
397,455 339,596
NOTES PAYABLE - not guaranteed by
the parent company 357,788 459,906
OBLIGATIONS OF PROJECT MINING SUBSIDIARIES -
not guaranteed by the parent company or
its North American Coal subsidiary 338,504 334,128
OBLIGATION TO UNITED MINE WORKERS
OF AMERICA COMBINED BENEFIT FUND 163,217 165,802
SELF-INSURANCE RESERVES AND OTHER 108,648 106,492
MINORITY INTEREST 41,255 40,649
STOCKHOLDERS' EQUITY
Common stock:
Class A, par value $1 per share, 7,177,075
shares outstanding (1992 -- 7,112,946 shares
outstanding) 7,177 7,113
Class B, par value $1 per share, convertible
into Class A on a one-for-one basis, 1,763,503
shares outstanding (1992 --
1,822,423 shares outstanding) 1,764 1,823
Capital in excess of par value 2,548 2,342
Retained income 226,212 223,765
Foreign currency translation adjustment and other (2,075) 3,273
---------- ----------
235,626 238,316
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,642,493 $1,684,889
========== ==========
See notes to consolidated financial statements.
F-6
64
CONSOLIDATED STATEMENTS OF CASH FLOWS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31
---------------------------------------------
1993 1992 1991
---------- ----------- -----------
(In thousands)
OPERATING ACTIVITIES
Net income (loss) $ 8,301 $ (87,132) $ 20,038
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Extraordinary charge, net-of-tax 2,007 110,000
Depreciation, depletion and amortization 78,063 72,509 71,178
Deferred income taxes 5,176 6,159 5,290
Currency exchange (gain) loss 103 (5,691) (1,517)
Other noncash items (8,047) (15,185) (353)
Working capital changes:
Accounts receivable (22,926) 943 25,660
Inventories 8,505 (19,214) 25,187
Other current assets (2,213) 2,902 20,120
Accounts payable and other liabilities 3,341 (18,323) (14,535)
---------- ----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 72,310 46,968 151,068
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (57,661) (74,354) (54,156)
Proceeds from the sale of businesses 21,229 1,058
Proceeds from the sale of other assets 27,600 1,707 2,631
Notes receivable 4,664 1,431 1,518
Net (increase) decrease in assets held for sale (180) 1,338 1,119
---------- ----------- ----------
NET CASH USED BY INVESTING ACTIVITIES (25,577) (48,649) (47,830)
FINANCING ACTIVITIES
Additions to long-term obligations
and revolving credit 82,890 138,641 109,063
Reductions of long-term obligations
and revolving credit (144,616) (169,103) (258,271)
Additions to (reductions of) advances
from customers (7,208) 26,107 11,182
Financing of other short-term obligations 16,172
Cash dividends paid (5,854) (5,645) (5,461)
Capital grants 3,741 2,020 1,848
Other - net 4,926 (5,163) (336)
---------- ----------- ----------
NET CASH USED BY FINANCING ACTIVITIES (49,949) (13,143) (141,975)
Effect of exchange rate changes on cash (1,482) (3,615) (9,803)
---------- ----------- ----------
CASH AND CASH EQUIVALENTS
Decrease for the year (4,698) (18,439) (48,540)
Balance at the beginning of the year 33,847 52,286 100,826
---------- ----------- ----------
BALANCE AT THE END OF THE YEAR $ 29,149 $ 33,847 $ 52,286
========== =========== ==========
See notes to consolidated financial statements.
F-7
65
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Year Ended December 31
---------------------------------------------
1993 1992 1991
------------ ----------- -----------
(In thousands)
CLASS A COMMON STOCK
Beginning balance $ 7,113 $ 7,040 $ 6,964
Conversion of Class B shares to
Class A shares 60 26 75
Sale of treasury shares under
stock option and
compensation plans 4 56 2
Purchase of treasury shares (9) (1)
-------- --------- ---------
7,177 7,113 7,040
CLASS B COMMON STOCK
Beginning balance 1,823 1,842 1,914
Conversion of Class B shares to
Class A shares (60) (26) (75)
Sale of shares under stock
option plans 1 7 3
-------- --------- ---------
1,764 1,823 1,842
CAPITAL IN EXCESS OF PAR VALUE
Beginning balance 2,342 774 737
Sale of shares under stock
option and compensation plans 206 1,912 54
Purchase of treasury shares (344) (17)
-------- --------- ---------
2,548 2,342 774
RETAINED INCOME
Beginning balance 223,765 316,542 301,563
Cumulative effect of accounting change 402
Net income (loss) 8,301 (87,132) 20,038
Cash dividends on Class A and Class B
common stock:
1993 $.655 per share (5,854)
1992 $.635 per share (5,645)
1991 $.615 per share (5,461)
-------- --------- ---------
226,212 223,765 316,542
FOREIGN CURRENCY TRANSLATION
ADJUSTMENT AND OTHER
Beginning balance 3,273 23,990 41,713
Foreign currency translation adjustment and other (5,348) (20,717) (17,723)
-------- --------- ---------
(2,075) 3,273 23,990
-------- --------- ---------
TOTAL STOCKHOLDERS' EQUITY $235,626 $ 238,316 $ 350,188
======== ========= =========
See notes to consolidated financial statements.
F-8
66
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
(TABULAR DOLLARS IN THOUSANDS, EXCEPT PER SHARE 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 method (LIFO) for domestic
manufacturing inventories and under the first-in, first-out method (FIFO) 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.
When property is retired or otherwise disposed of, the cost and
related accumulated depreciation are removed from the appropriate accounts.
Any gains or losses on property dispositions are included in other - net.
Repairs, maintenance and improvements that do not extend the useful life of
property are expensed.
GOODWILL: Goodwill represents the excess purchase price paid over the fair
value of the net assets acquired. Goodwill is amortized on a straight-line
basis over a 40-year period and is included in amortization expense on the
Company's consolidated statements of income. 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 is still 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. These costs are 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 $23.4 million, $24.4 million and $21.5 million in 1993,
1992 and 1991, respectively.
F-9
67
NOTE A--ACCOUNTING POLICIES--Continued
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, 1993, was
25,000,000 shares and 6,756,176 shares, respectively. Treasury shares of Class
A stock totalling 840,564 and 844,873 at December 31, 1993 and 1992,
respectively, have been deducted from shares outstanding.
FINANCIAL INSTRUMENTS: The fair value of financial instruments, except as
otherwise disclosed, approximated their carrying values at December 31, 1993.
Fair values have been determined through information obtained from quoted
market sources and management estimates.
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.
The Company enters into forward foreign exchange contracts to reduce
its exposure to foreign currency fluctuations. These contracts hedge certain
foreign currency denominated receivables and payables and foreign currency
commitments. Gains and losses in foreign currency denominated receivables and
payables are reported currently in income, while gains and losses from
commitments are deferred and recognized as part of the cost of the underlying
transaction being hedged.
INTEREST RATE SWAP AGREEMENTS: The differential between the floating interest
rate and the fixed interest rate which is to be paid or received is recognized
as interest rates change over the life of the agreement.
ACCOUNTING CHANGE: The Company has adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109), effective January
1, 1993, and has elected to retroactively apply its provisions to January 1,
1989, as permitted by this Standard. Accordingly, retained earnings and net
goodwill have been adjusted as of January 1, 1991, to reflect the cumulative
impact of applying this Standard. The adjustment to retained earnings, which
is immaterial, consists of the cumulative effect of this change in accounting
method at January 1, 1989, and the impact on previously reported net income for
the years ended December 31, 1989 and 1990. The adjustment to net goodwill
represents the cumulative impact of SFAS 109 on purchase accounting for the
acquisitions of Hyster and Hamilton Beach as of January 1, 1991. In addition,
certain assets and liabilities acquired in purchase business combinations have
been adjusted from their net-of-tax amounts to their gross, pre-tax balances as
required by this Standard.
The consolidated financial statements for the year ended December 31,
1992 and 1991, included in this annual report, have been restated for the
effects of SFAS 109. The resulting impact on net income (loss) is not
material. Refer to Note M, "Income Taxes," for additional information.
F-10
68
NOTE A--ACCOUNTING POLICIES--Continued
EARNINGS PER SHARE: The calculation of net income per share of stock 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
1993
The extraordinary charge of $3.3 million, net of $2.0 million in tax
benefits, was recognized in the second quarter of 1993. This charge represents
the loss from the write-off of premiums and unamortized debt issuance costs
associated with the retirement of approximately $50.2 million face value of
NACCO Materials Handling Group's Hyster-Yale 12-3/8% subordinated debentures.
NACCO Materials Handling Group has retired these debentures as a result of a
contribution by NACCO of previously purchased subordinated debentures with a
face value of $23.7 million, and an equity infusion of $28.3 million ($26.7
million from NACCO) which enabled NACCO Materials Handling Group to call
approximately $26.5 million face value of subordinated debentures at a price of
107.5. Refer to Note G, "Revolving Credit Agreements and Notes Payable," for
additional information.
1992
In October 1992 the Coal Industry Retiree Health Benefit Act of 1992 was
passed by Congress and signed into law. This legislation will require Bellaire
Corporation (a wholly owned subsidiary of NACCO) to incur additional costs for
retiree medical expenses of certain United Mine Worker retirees. Bellaire is
no longer in the business of operating coal mines. Based upon information
received from various sources and initial actuarial assumptions and analysis, 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 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 would tend to
diminish over time, but could continue as long as 40 to 50 years, or as long as
there are eligible participants. The tax benefit related to this charge will
be realized as these cash payments are made. Management expects domestic
taxable earnings to continue to be sufficient to realize the full amount of the
deferred tax asset recognized. On January 29, 1993, Bellaire filed a lawsuit
challenging the constitutionality of this new law.
F-11
69
NOTE C--ACCOUNTS RECEIVABLE
Allowances for doubtful accounts, returns, discounts and adjustments of
$11.1 million and $12.4 million at December 31, 1993 and 1992, respectively,
were deducted from accounts receivable.
NOTE D--INVENTORIES
Inventories are summarized as follows:
December 31
-----------------------------
1993 1992
--------- ---------
Manufacturing inventories:
Finished goods and service parts $117,578 $120,287
Raw materials and work in process 95,616 109,904
LIFO reserve (10,197) (11,478)
-------- --------
Total manufacturing inventories 202,997 218,713
Coal 7,619 6,189
Mining supplies 16,194 12,367
Retail inventories 11,358 8,470
-------- --------
$238,168 $245,739
======== ========
The cost of manufacturing inventories has been determined by the LIFO
method for 69% and 70% of such inventories as of December 31, 1993 and 1992,
respectively.
NOTE E--PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment includes the following:
December 31
-----------------------------
1993 1992
---------- ---------
Coal lands and real estate $ 74,973 $ 74,320
Plant and equipment 304,163 306,189
Plant and equipment of project
mining subsidiaries 403,029 388,349
-------- --------
782,165 768,858
Less allowances for depreciation,
depletion and amortization 285,952 260,268
-------- --------
$496,213 $508,590
======== ========
Total depreciation, depletion and amortization expense on property,
plant and equipment was $60.1 million, $53.6 million and $52.7 million during
1993, 1992 and 1991, respectively.
Proven and probable coal reserves approximated 2.2 billion tons and 2.1
billion tons at December 31, 1993 and 1992, respectively.
NOTE F--DEFERRED CHARGES
Accumulated amortization of goodwill, patents and trademarks was $66.4
million and $52.1 million at December 31, 1993 and 1992, respectively. Total
amortization expense of goodwill, patents and trademarks was $14.3 million,
$14.4 million and $14.3 million during 1993, 1992 and 1991, respectively.
Total amortization expense of deferred financing costs was $3.7 million
during 1993, and $4.0 million during 1992 and 1991.
F-12
70
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
NACCO Materials Handling Group'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 million
Amount available at December 31, 1993 $100.0 million
Current interest rate Prime plus 0.75% or
LIBOR plus 1.875%
Average interest rate during 1993 6.05%
Commitment fee 0.5%
Expiration date 1997
The retirement of subordinated debentures discussed in Note B
"Extraordinary Charge," has been reflected as a reduction in notes payable on
the consolidated balance sheet as of December 31, 1993. In connection with
the retirement of these subordinated debentures, NACCO Materials Handling Group
amended its existing senior bank credit agreement. This amendment permits
equity infusions to be used for cash purchases of subordinated debentures and,
after August 1994, permits NACCO Materials Handling Group to use internally
generated funds to retire up to $75.0 million of additional subordinated
debentures if certain debt-to-capitalization ratios are achieved. In addition,
the amendment modifies the bank loan repayment schedules and provides NACCO
Materials Handling Group with more favorable performance-based interest rate
incentives. On January 1, 1994, NACCO Materials Handling Group's interest rates
were reduced 0.25% based on these incentives.
HAMILTON BEACH / PROCTOR-SILEX
Hamilton Beach / Proctor-Silex's credit agreement, dated October 11,
1990, provides for a term note and a revolving credit facility. The revolving
credit facility permits advances up to $95.0 million, the availability of which
is based on percentages of eligible accounts receivable and inventory. The
following summarizes the revolving credit facility:
Amount of revolver $95.0 million
Amount available at December 31, 1993 $26.1 million
Current interest rate Prime rate plus 0.25% or
LIBOR plus 1.25%
Average interest rate during 1993 5.99%
Commitment fee 0.375%
Expiration date 1995
Total borrowings under the revolving credit facility at December 31,
1993, were $48.3 million. At December 31, 1993, $37.0 million of the total
borrowings outstanding is not expected to be repaid during 1994 and is
classified as long-term debt on the Company's consolidated balance sheets.
The current interest rate for Hamilton Beach/Proctor-Silex above
reflects a 1.00% rate reduction that was in place at December 31, 1993 when an
interest coverage ratio was achieved.
F-13
71
NOTE G--REVOLVING CREDIT AGREEMENTS AND NOTES PAYABLE--Continued
REVOLVING CREDIT AGREEMENTS--Continued
NORTH AMERICAN COAL
North American Coal has in place a revolving credit facility. The
following summarizes this facility:
Amount of revolver $50.0 million
Amount available at December 31, 1993 $34.0 million
Current interest rate LIBOR plus 0.4375%
Average interest rate during 1993 6.15%
Total commitment and facility fee 0.25%
Expiration date 1996
The expiration date of this facility can be extended one additional
year, on an annual basis, upon the mutual consent of North American Coal and
the bank group, beginning in 1994.
NOTES PAYABLE
Subsidiary notes payable, less current maturities, consist of the
following:
December 31
---------------------------
1993 1992
----------- ----------
NACCO MATERIALS HANDLING GROUP
Term note with interest currently
at lender's prime rate plus
0.75% or LIBOR plus 1.875%
(average interest rate of
6.51% during 1993) payable
1994 to 1997 and secured by all assets $139,279 $164,341
12.375% senior subordinated
debentures payable in 1999
with a mandatory sinking fund
payment on August 1, 1998
of $100.0 million 149,752 200,000
Long-term portion of revolving credit facility 25,500
Other 1,312 1,020
HAMILTON BEACH / PROCTOR-SILEX
Term note with interest currently
at lender's prime rate plus
0.25% or LIBOR
plus 1.25% (average interest
rate of 7.70% during 1993)
payable 1994 to 1997 and
secured by all assets 28,145 38,145
Long-term portion of revolving credit facility 37,000 28,000
KITCHEN COLLECTION
Term note with interest currently
at lender's prime rate or LIBOR
plus 1.50% (average interest
rate of 5.50% during 1993)
payable 1994 to 1997 1,900 2,400
NORTH AMERICAN COAL 400 500
-------- --------
$357,788 $459,906
======== ========
F-14
72
NOTE G--REVOLVING CREDIT AGREEMENTS AND NOTES PAYABLE--Continued
NOTES PAYABLE--Continued
The senior subordinated debentures are callable by NACCO Materials
Handling Group prior to maturity at redemption prices (expressed as percentages
of the principal amount) as follows: during the 12-month period beginning
August 1, 1993 - 107.5%; 1994 - 105.0%; 1995 - 102.5%. At December 31, 1993,
the fair value of these debentures was $161.0 million.
Note maturities for the next five years, including current maturities,
are as follows:
1994 $ 39,400
1995 94,542
1996 61,034
1997 52,119
1998 100,341
Thereafter 49,752
---------
$397,188
========
Interest paid was $48.4 million, $54.4 million and $63.5 million during
1993, 1992 and 1991, respectively.
The credit agreements for NACCO Materials Handling Group, 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, 1993, the subsidiaries
were in compliance with all the covenants in the debt agreements.
INTEREST RATE PROTECTION
NACCO Materials Handling Group, Hamilton Beach / Proctor-Silex and North
American Coal have entered into interest rate swap agreements and/or purchased
interest rate caps which provide protection against significant increases in
interest rates for a portion of their floating rate debt. These agreements are
with major commercial banks; therefore, the risk of credit loss from
nonperformance by the banks is minimal. The Company evaluates its exposure to
floating rate debt on an ongoing basis.
F-15
73
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 impact 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:
1993 1992
--------- ---------
Capitalized lease obligations $145,126 $132,846
Non-interest-bearing advances from customers 133,347 140,555
Promissory notes with interest rates ranging
from 3.25% to 10.94% during 1993 60,031 60,727
--------- ---------
$338,504 $334,128
======== ========
The annual maturities of the promissory notes are: 1994 -- $6.2
million; 1995 -- $6.9 million; 1996 -- $2.9 million; 1997 -- $2.5 million; 1998
- -- $2.0 million; thereafter -- $45.7 million. Advances from customers are used
to develop, operate and provide for the ongoing working capital needs of
certain project mining subsidiaries.
Interest paid was $17.5 million, $13.2 million and $13.7 million during
1993, 1992 and 1991 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, 1993:
Capital Operating
Leases Leases
--------- ----------
1994 $ 20,905 $ 87
1995 19,811 34
1996 18,863 26
1997 17,906 13
1998 17,192
Subsequent to 1998 165,478
-------- ------
Total minimum lease payments 260,155 $160
====
Amounts representing interest (105,663)
--------
Present value of net minimum
lease payments 154,492
Current maturities (9,366)
---------
$145,126
========
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.
F-16
74
NOTE H--OBLIGATIONS OF PROJECT MINING SUBSIDIARIES--Continued
Project mining assets recorded under capital leases are included with
property, plant and equipment and consist of the following at December 31:
1993 1992
-------- --------
Plant and equipment $187,006 $167,718
Accumulated amortization (63,711) (55,631)
-------- --------
$123,295 $112,087
======== ========
During 1993, 1992 and 1991, the project mining subsidiaries incurred
capital lease obligations of $22.4 million, $12.0 million and $7.6 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, $0.2 million and $0.1 million during 1993, 1992 and 1991,
respectively.
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.
NOTE I--LEASE COMMITMENTS
Future minimum operating lease payments, excluding project mining
subsidiaries, at December 31, 1993, are as follows:
1994 $11,535
1995 10,168
1996 8,917
1997 7,361
1998 6,213
Subsequent to 1998 14,099
--------
Total minimum operating lease payments $58,293
=======
Rental expense for all operating leases, excluding project mining
subsidiaries, amounted to $15.3 million, $13.7 million and $12.2 million during
1993, 1992 and 1991, respectively.
F-17
75
NOTE J--CONTINGENCIES
NACCO and certain subsidiaries are named as defendants to various legal
proceedings and claims, which are incidental to their ordinary course of
business. Management believes that it has meritorious defenses and will
vigorously defend itself in these actions. Although the ultimate disposition
of these proceedings is not presently determinable, management does not believe
that such proceedings would have a material adverse effect upon the financial
statements of the Company.
NACCO Materials Handling Group is subject to recourse or repurchase
obligations under various financing arrangements for certain independently
owned retail dealerships at December 31, 1993. Also, certain dealer loans are
guaranteed by NACCO Materials Handling Group. When NACCO Materials Handling
Group is the guarantor of the principal amount financed, a security interest is
usually maintained in certain assets of parties for whom NACCO Materials
Handling Group is guaranteeing debt. Total amounts subject to recourse or
repurchase obligation at December 31, 1993, were $72.4 million. Losses
anticipated under the terms of the recourse or repurchase obligations are not
significant and have been provided for financial reporting purposes.
NACCO Materials Handling Group and Hamilton Beach/Proctor-Silex enter
into foreign exchange contracts generally with maturities of 12 months or less.
These contracts typically are with major international financial institutions
and, accordingly, the risk of loss from nonperformance by these institutions is
minimal.
F-18
76
eNOTE K--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, 1993
all stock options outstanding were exercisable. There were options for 80,701
Class A shares at December 31, 1993 and 1992, respectively, and 80,100 Class B
shares at December 31, 1993 and 1992, respectively, available for grant under
the plans.
The following summarizes stock option transactions during 1993, 1992 and 1991:
Outstanding
--------------------------
Class A Class B Price Range
--------- -------- -------------
January 1, 1991 96,340 12,321
Exercised (2,000) (2,600) $8.46 - $15.92
------- ------
December 31, 1991 94,340 9,721
Exercised (53,340) (6,121) $8.46 - $32.00
Cancelled (1,500)
------- --------
December 31, 1992 39,500 3,600
Exercised (500) (900) $15.92
------- ------
December 31, 1993 39,000 2,700
====== =====
The following summarizes stock options outstanding at December 31, 1993:
Options Outstanding Option
-----------------------
Date of Grant Class A Class B Price
----------------- ------- ------- -------
May 2, 1984 5,500 2,700 $15.92
January 12, 1989 8,500 32.00
March 1, 1989 25,000 35.56
------ -----
39,000 2,700
====== =====
NOTE L--OTHER INCOME (EXPENSE)
Items included in other-net are as follows:
Year Ended December 31
--------------------------------------------
1993 1992 1991
--------- --------- ---------
Equity in earnings (losses) of
unconsolidated subsidiaries $(3,923) $ (571) $ 1,153
Litigation settlement (3,464)
Gain on sale of assets 2,303 248 1,304
Net loss from net assets
held for sale (159) (2,240) (3,470)
Currency transaction gains 121 5,628 1,636
Miscellaneous 452 (1,278) 1,175
------- ------ -------
$(4,670) $ 1,787 $ 1,798
======= ======= =======
F-19
77
NOTE L--OTHER INCOME (EXPENSE)--Continued
Equity in earnings of unconsolidated subsidiaries includes income of
$1.6 million in 1991 related to a subsidiary which was consolidated beginning
in 1992. The financial statements for 1991 have not been restated to
consolidate this subsidiary because the impact is not material.
NOTE M--INCOME TAXES
As discussed in Note A, "Accounting Policies," the Company has adopted
SFAS 109 effective January 1, 1993, and has retroactively applied its
provisions to January 1, 1989. SFAS 109 requires, among other things, the
measurement of deferred tax assets or liabilities based on the difference
between the financial statement and income tax bases of assets and liabilities
using the enacted marginal tax rate. Deferred income tax expense or benefit is
based on the changes in the assets and liabilities from period to period. The
prior method of accounting for income taxes measured deferred income tax
expense or benefit based on timing differences between the recognition of
income and expenses for financial reporting purposes and for purposes of filing
federal income tax returns at income tax rates in effect when the differences
arose.
The components of income before income taxes on a legal entity basis are as follows:
Year Ended December 31
-----------------------------------------
1993 1992 1991
------- ------- -------
Domestic $18,247 $ 4,935 $(29,237)
Foreign 6,417 35,394 55,189
-------- ------- --------
Income before income taxes
and extraordinary charge $24,664 $40,329 $25,952
======= ======= =======
Domestic income before income taxes has been reduced by all interest on
acquisition indebtedness and amortization of goodwill and deferred financing
fees of approximately $55.1 million, $59.4 million and $70.6 million during
1993, 1992 and 1991, respectively.
Provision for income taxes consists of the following:
Year Ended December 31
------------------------------------------
1993 1992 1991
------- ------- -------
Current tax expense (benefit):
Federal $ 8,447 $ 3,878 $(14,488)
State 2,659 1,340 270
Foreign 4,376 6,772 10,342
------- -------- --------
Total current 15,482 11,990 (3,876)
------- -------- --------
Deferred tax expense (benefit):
Federal 3,572 2,845 7,769
State (1,195) 572 469
Foreign (4,348) 939 1,004
-------- -------- ---------
Total deferred (1,971) 4,356 9,242
-------- -------- ---------
Provision for income taxes $13,511 $16,346 $ 5,366
======= ======= =========
F-20
78
NOTE M--INCOME TAXES--Continued
The Company made income tax payments of $16.3 million, $30.8 million and
$25.5 million during 1993, 1992 and 1991, respectively. During the same
period, income tax refunds totaled $5.1 million, $5.3 million and $30.0
million, respectively.
At December 31, 1993, the Company had cumulative undistributed earnings
at its foreign subsidiaries of $76.1 million. It is the Company's intention to
reinvest $45.2 million of these undistributed earnings of its foreign
subsidiaries and thereby indefinitely postpone their remittance. There has
been no provision made for taxes on the undistributed earnings which are
reinvested indefinitely. In addition, it is not practicable to estimate the
amount of the deferred tax liability on such earnings. The remaining
undistributed earnings of $30.9 million can be remitted without a material
charge to earnings.
Upon remittance, 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 $4.8 million.
A reconciliation of federal statutory and effective income tax follows:
1993 1992 1991
------ ------ ------
Income before taxes $24,664 $40,329 $25,952
======= ======= =======
Statutory taxes at 35% in 1993
and 34% in 1992 and 1991 $ 8,632 $13,712 $ 8,824
Percentage depletion (1,595) (2,451) (2,931)
Export benefits (845) (265) (907)
Differences between foreign
and statutory tax rates 107 (3,594) (3,155)
Adjustment of estimated income
tax liabilities for prior years 62 15 (3,432)
Amortization of excess purchase
price 4,824 4,736 4,730
Earnings reported net of taxes 1,054 (131) (409)
State income taxes 1,017 1,818 483
Other-net 255 2,506 2,163
------- ------- -------
Provision for taxes $13,511 $16,346 $ 5,366
======= ======= =======
Effective rate 54.78% 40.53% 20.68%
======= ======= ======
F-21
79
NOTE M--INCOME TAXES--Continued
A summary of the components of the net deferred tax balance in the Company's consolidated balance sheets resulting from
differences in the book and tax basis of assets and liabilities follows:
DEFERRED TAX ASSET (LIABILITY) AT DECEMBER 31, 1993
------------------------------------------------------------
CURRENT NON-CURRENT
-------------------------- ------------------------
DOMESTIC FOREIGN DOMESTIC FOREIGN
-------- ------- -------- -------
Inventories $ (26,110) $ 1,404
Accrued expenses and reserves 13,807 218 $ 24,641
Employee benefits 1,725 12,438 $ (2,305)
Net operating loss carryforwards 2,203 6,121 4,742
Reserve for obligation to
United Mine Workers of
America Combined Benefit Fund 56,399
Depreciation and depletion (40,350) (5,413)
Unrepatriated earnings (4,881)
Other 1,949 (414) (9,575) (55)
---------- -------- --------- ----------
$ ( 6,426) $ 7,329 $ 43,414 $ (7,773)
========= ======= ======== ========
Deferred Tax Asset (Liability) at December 31, 1992
------------------------------------------------------------
Current Non-Current
-------------------------- ------------------------
Domestic Foreign Domestic Foreign
-------- ------- -------- -------
Inventories $ (27,415) $ 964
Accrued expenses and reserves 16,542 405 $ 25,095
Employee benefits 1,609 9,806 $(2,271)
Net operating loss carryforwards 530 5,275
Reserve for obligation to
United Mine Workers of
America Combined Benefit Fund 56,667
Depreciation and depletion (40,258) (5,304)
Minimum tax credits 2,257
Other 736 504 (5,785)
---------- -------- ---------- ----------
$ (5,741) $ 1,873 $ 50,800 $(7,575)
========= ======= ======== =======
The Company and certain of its subsidiaries are currently under
examination for federal and various state income tax returns. The Company will
vigorously contest any material assessment and believes that any potential
adjustment would not materially impact future earnings.
F-22
80
NOTE N--RETIREMENT BENEFIT PLANS
The Company maintains various 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 $5.2 million in 1993 and 1992 and $4.9
million in 1991. Plan assets consist primarily of publicly traded stocks, GICs
and government and corporate bonds.
The following is a detail of consolidated net periodic pension expense and the assumptions used in accounting for the
defined benefit plans for the years ended December 31:
UNITED STATES PLANS
1993 1992 1991
------- ------- -------
Service cost $4,940 $ 4,813 $ 3,828
Interest cost on projected
benefit obligation 6,941 6,326 5,035
Actual gain on plan assets (5,720) (4,940) (10,616)
Curtailment gain (440)
Net amortization and deferral
of actuarial (gains) losses 334 (253) 5,614
------- ------- -------
Net periodic pension expense $6,055 $ 5,946 $ 3,861
====== ======= =======
Assumptions:
Weighted average discount rates 7.50% 8.00-8.25% 8.00-8.25%
Rate of increase in compensation
levels 4.00-6.00% 4.50-6.75% 5.00-6.75%
Expected long-term rate of return
on assets 9.00% 9.00% 9.00%
F-23
81
NOTE N--RETIREMENT BENEFIT PLANS--Continued
UNITED KINGDOM PLANS
1993 1992 1991
---- ---- ----
Service cost $1,403 $1,794 $1,241
Interest cost on projected
benefit obligation 2,138 2,854 1,651
Actual (gain) loss on plan assets (2,460) 2,808 (5,133)
Net amortization and deferral
of actuarial (gains) losses (220) (6,111) 3,291
------ ------ ------
Net periodic pension expense $ 861 $1,345 $1,050
====== ====== ======
Assumptions:
Weighted average discount rates 8.00% 9.50% 9.50%
Rate of increase in compensation
levels 5.00% 6.50% 7.00%
Expected long-term rate of return
on assets 8.00% 9.50% 9.50%
The following sets forth the funded status of the plans and amounts recognized in the consolidated balance sheets at
December 31:
U.S. Plans U.K. Plans
-------------------- ------------------
1993 1992 1993 1992
---- ---- ----- -----
Actuarial present value of benefit obligation:
Vested accumulated benefit obligation $69,082 $ 55,045 $21,860 $21,727
Nonvested accumulated benefit obligation 5,216 4,435 177 160
-------- -------- ------- -------
Total accumulated benefit obligation 74,298 59,480 22,037 21,887
Value of future salary projections 22,804 22,076 2,223 2,296
-------- -------- ------- -------
Total projected benefit obligation 97,102 81,556 24,260 24,183
Fair value of plan assets 71,893 64,114 28,811 25,699
-------- -------- ------- -------
Plan assets in excess of (less than)
projected benefit obligation (25,209) (17,442) 4,551 1,516
Amounts available to (reduce) increase
future pension expense:
Unamortized balance of the initial
transition amount (1,437) (3,249) (614) (826)
Unamortized cumulative actuarial loss (gain) 4,118 (1,877) 1,040 6,582
Unamortized prior service cost 3,594 4,360 1,291
Adjustment for minimum pension liability (7,948) (2,626)
-------- --------- ------- --------
Pension asset (liability) recognized in
consolidated balance sheet $(26,882) $(20,834) $ 6,268 $ 7,272
======== ======== ======= ========
F-24
82
NOTE N--RETIREMENT BENEFIT PLANS--Continued
During the fourth quarter of 1993 the NACCO parent company plan was
merged with the plan of one of its subsidiaries' resulting in a curtailment
gain of $0.4 million which is included in net periodic pension expense.
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. 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 $5.5 million in 1993 and $4.6 million in 1992 and 1991.
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 detailed disclosures required by
Statement of Financial Accounting Standards No. 106, "Accounting for
Postretirement Benefits Other Than Pensions," have not been made because the
amounts are not material.
NOTE O--POSTEMPLOYMENT BENEFIT PLANS
In November 1992 Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits," was issued. The Company
will be required to adopt this new method of accounting for benefits paid to
former or inactive employees after employment but before retirement no later
than 1994. This new standard requires, among other things, that the expected
cost of these benefits be recognized when they are earned or become payable
when certain conditions are met rather than the current method which recognizes
these costs when they are paid. The adoption of this standard will not
materially impact the Company's financial condition or its results of
operations.
NOTE P--BUSINESS SEGMENTS
The Company has four operating subsidiaries. NACCO Materials Handling
Group designs, manufactures and markets forklift trucks and related service
parts under the Hyster and Yale 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"
have been adjusted to exclude the previously combined results of Bellaire
Corporation, a non-operating subsidiary of NACCO.
F-25
83
NOTE P--BUSINESS SEGMENTS--Continued
1993 1992 1991
---- ---- ----
(In millions)
REVENUES
NACCO Materials Handling Group $ 908.2 $ 865.9 $ 790.6
Hamilton Beach/Proctor-Silex 356.3 358.6 351.9
North American Coal 232.3 211.1 182.4
Kitchen Collection 53.7 45.5 36.8
Bellaire 4.0 6.8 13.2
Eliminations (5.1) (4.1) (5.7)
-------- -------- --------
$1,549.4 $1,483.8 $1,369.2
======== ======== ========
AMORTIZATION OF GOODWILL
NACCO Materials Handling Group $ 10.8 $ 10.8 $ 10.8
Hamilton Beach/Proctor-Silex 2.9 3.0 2.9
Kitchen Collection .1 .1 .1
---------- ---------- -----------
$ 13.8 $ 13.9 $ 13.8
======== ========= =========
OPERATING PROFIT
NACCO Materials Handling Group $ 39.6 $ 44.3 $ 41.5
Hamilton Beach/Proctor-Silex 11.8 19.3 20.3
North American Coal 44.2 40.8 35.2
Kitchen Collection 4.8 4.4 2.8
Bellaire .9 .7 1.9
NACCO (7.9) (8.2) (7.2)
---------- ---------- ----------
$ 93.4 $ 101.3 $ 94.5
======== ========= =========
INTEREST INCOME
NACCO Materials Handling Group $ .8 $ 1.5 $ 4.8
North American Coal 2.1 2.1 2.1
Bellaire 1.0 1.5 4.5
NACCO 1.9 1.2
Eliminations (3.9) (3.0) (4.7)
---------- ---------- ---------
$ 1.9 $ 3.3 $ 6.7
======== ========= =========
INTEREST EXPENSE
NACCO Materials Handling Group $ (40.4) $ (44.2) $ (49.5)
Hamilton Beach/Proctor-Silex (7.7) (8.6) (12.8)
North American Coal (19.3) (14.2) (16.2)
Kitchen Collection (.1) (.2) (.4)
NACCO (2.3) (1.8) (2.9)
Eliminations 3.9 3.0 4.7
---------- ---------- ----------
$ (65.9) $ (66.0) $ (77.1)
======== ========= =========
OTHER-NET, INCOME (EXPENSE)
NACCO Materials Handling Group $ (1.7) $ 2.9 $ ( .5)
Hamilton Beach/Proctor-Silex (4.1) (1.1)
North American Coal (1.1) (1.4) 1.1
Bellaire 1.2 .1 2.0
NACCO 1.0 .2 .3
---------- ----------- -----------
$ (4.7) $ 1.8 $ 1.8
======== ========= =========
F-26
84
NOTE P--BUSINESS SEGMENTS--Continued
1993 1992 1991
---- ---- ----
(In millions)
NET INCOME (LOSS)
Before Extraordinary Charge
NACCO Materials Handling Group $ (5.1) $ 1.3 $ 1.1
Hamilton Beach/Proctor-Silex (1.0) 5.4 2.5
North American Coal 16.0 19.5 17.2
Kitchen Collection 2.7 2.4 1.5
Bellaire 4.0 1.5 6.0
NACCO (5.4) (6.1) (7.8)
Minority interest .4 (1.1) (.5)
---------- --------- ---------
11.6 22.9 20.0
Extraordinary charge, net-of-tax (3.3) (110.0)
---------- --------- ---------
Net Income (Loss) $ 8.3 $ (87.1) $ 20.0
========== ========= =========
TOTAL ASSETS
NACCO Materials Handling Group $ 833.0 $ 854.3 $ 896.9
Hamilton Beach/Proctor-Silex 300.3 296.8 314.2
North American Coal 41.4 38.5 20.0
Kitchen Collection 23.3 19.9 16.8
Bellaire 97.0 97.5 54.8
NACCO 22.8 34.6 3.7
---------- --------- ---------
1,317.8 1,341.6 1,306.4
Project mining subsidiaries 416.7 410.7 371.1
---------- --------- ---------
1,734.5 1,752.3 1,677.5
Consolidating eliminations (92.0) (67.4) (47.8)
---------- --------- ---------
$ 1,642.5 $ 1,684.9 $ 1,629.7
========== ========= =========
DEPRECIATION, DEPLETION AND
AMORTIZATION EXPENSE
NACCO Materials Handling Group $ 31.7 $ 32.1 $ 32.5
Hamilton Beach/Proctor-Silex 15.3 15.3 15.3
North American Coal 1.5 1.5 .2
Kitchen Collection .8 .8 .7
Bellaire .2 2.0
NACCO .3 .4 .2
---------- --------- ---------
49.6 50.3 50.9
Project mining subsidiaries 28.5 22.2 20.3
---------- --------- ---------
$ 78.1 $ 72.5 $ 71.2
========== ========= =========
CAPITAL EXPENDITURES
NACCO Materials Handling Group $ 20.2 $ 24.3 $ 17.2
Hamilton Beach/Proctor-Silex 12.2 10.8 4.7
North American Coal 1.0 1.1 .1
Kitchen Collection 1.1 .6 .6
Bellaire .5
NACCO .2 .2 1.2
---------- --------- ---------
34.7 37.0 24.3
Project mining subsidiaries 23.0 37.4 29.9
---------- --------- ---------
$ 57.7 $ 74.4 $ 54.2
========== ========= =========
F-27
85
NOTE P--BUSINESS SEGMENTS--Continued
DATA BY GEOGRAPHIC AREA
United All
States Europe Other Eliminations Consolidated
---------- --------- ------- ------------ ------------
(In millions)
1993
- ----
Sales to unaffiliated
customers $1,243.8 $220.5 $ 85.1 $1,549.4
Transfer between
geographic areas 55.0 81.2 12.8 $(149.0)
-------- ------ ------ ------- --------
Total revenues $1,298.8 $301.7 $ 97.9 $(149.0) $1,549.4
======== ====== ====== ======= ========
Operating profit $ 91.3 $ (2.4) $ 4.9 $ (.4) $ 93.4
======== ====== ====== ======= ========
Total assets $1,366.1 $274.8 $ 36.5 $ (34.9) $1,642.5
======== ====== ====== ======= ========
1992
- ----
Sales to unaffiliated
customers $1,159.2 $251.5 $ 73.1 $1,483.8
Transfer between
geographic areas 63.4 89.2 $(152.6)
-------- ------ ------ ------- --------
Total revenues $1,222.6 $340.7 $ 73.1 $(152.6) $1,483.8
======== ====== ====== ======= ========
Operating profit $ 70.4 $ 28.7 $ 2.9 $ (.7) $ 101.3
======== ====== ====== ======= ========
Total assets $1,367.0 $283.7 $ 37.2 $( 3.0) $1,684.9
======== ====== ====== ======= ========
1991
- ----
Sales to unaffiliated
customers $1,037.8 $264.1 $ 67.3 $1,369.2
Transfer between
geographic areas 51.6 64.3 $(115.9)
-------- ------ ------ ------- --------
Total revenues $1,089.4 $328.4 $ 67.3 $(115.9) $1,369.2
======== ====== ====== ======= ========
Operating profit $ 50.0 $ 38.7 $ 5.3 $ .5 $ 94.5
======== ====== ====== ======= ========
Total assets $1,237.8 $363.3 $ 31.0 $ (2.4) $1,629.7
======== ====== ====== ======= ========
NACCO parent company expense reduced U.S. operating profit by $7.9
million, $8.2 million and $7.2 million in 1993, 1992 and 1991, respectively.
The all other category above does not include the operating results or assets
of NACCO Materials Handling Group's 50% owned Japanese joint venture,
Sumitomo-Yale, as it is accounted for using the equity method.
F-28
86
NOTE Q--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
A summary of the unaudited quarterly results of operations for the years
ended December 31, 1993 and 1992, is as follows:
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
(In millions, except per share data)
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 53.8 53.9 63.1 61.5
Kitchen Collection 9.1 10.1 14.2 20.3
Bellaire 1.2 1.1 1.1 .6
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 (1)
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 11.0 9.6 11.8 11.8
Kitchen Collection (.1) .2 1.4 3.3
Bellaire .2 .3 .4
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
====== ====== ====== ======
F-29
87
NOTE Q--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)--Continued
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- -------
(In millions, except per share data)
1992
- ----
TOTAL REVENUES
NACCO Materials Handling Group $199.7 $217.7 $215.1 $ 233.4
Hamilton Beach/Proctor-Silex 65.4 73.7 108.2 111.3
North American Coal 45.3 47.4 57.7 60.7
Kitchen Collection 7.6 8.8 12.3 16.8
Bellaire 2.4 2.1 .8 1.5
Eliminations (.7) (1.0) (1.6) (.8)
------ ------ ------ -------
319.7 348.7 392.5 422.9
GROSS PROFIT 66.8 70.4 84.7 90.6
OPERATING PROFIT (1)
NACCO Materials Handling Group 9.7 10.9 11.1 12.6
Hamilton Beach/Proctor-Silex (2.7) .6 10.5 10.9
North American Coal 10.2 9.5 10.7 10.4
Kitchen Collection .1 .4 1.4 2.5
Bellaire .3 .2 .2
NACCO (2.1) (1.9) (2.0) (2.2)
------ ------ ------ -------
15.5 19.5 31.9 34.4
------ ------ ------ -------
INCOME BEFORE EXTRAORDINARY
CHARGE .7 1.0 9.3 11.9
Extraordinary charge, net-of-tax (110.0)
------ ------ ------ -------
NET INCOME (LOSS) $ .7 $ 1.0 $ 9.3 $ (98.1)
====== ====== ====== =======
PER SHARE AMOUNTS:
INCOME BEFORE EXTRAORDINARY
CHARGE $ .08 $ .11 $ 1.05 $ 1.35
Extraordinary charge, net-of-tax (12.37)
------ ------ ------ -------
NET INCOME (LOSS) $ .08 $ .11 $ 1.05 $(11.02)
====== ====== ====== =======
(1) In the third quarter of 1993, the Company reclassified amortization
of intangibles as an operating expense. The information for the first and
second quarters of 1993 and for all quarters in 1992 has been restated from
amounts previously reported in the Company's Forms 10-Q to reflect this
reclassification.
F-30
88
NOTE R--PARENT COMPANY CONDENSED BALANCE SHEETS
The condensed balance sheets of NACCO, the parent company, are as
follows:
December 31
-------------------------
1993 1992
-------- --------
Current assets (including current
intercompany amounts) $ 7,745 $ 1,263
Other assets 1,544 2,150
Investment in and advances
from subsidiaries, net 248,352 247,230
Property, plant and equipment, net 1,323 1,398
Deferred income taxes 293
--------- ---------
Total Assets $ 258,964 $ 252,334
========= =========
Current liabilities (including
current intercompany amounts) $ 12,037 $ 8,730
Deferred income and other 4,719 5,288
Deferred income taxes 6,582
Stockholders' equity 235,626 238,316
--------- ---------
Total Liabilities and Stockholders' Equity $ 258,964 $ 252,334
========= =========
The debt agreements at NACCO Materials Handling Group and Hamilton
Beach / Proctor-Silex prohibit the transfer of assets to NACCO. The debt
agreement at Kitchen Collection allows the transfer of assets to NACCO under
certain circumstances. The amount of restricted net assets at December 31,
1993, total approximately $372.3 million. There are no such restrictions for
North American Coal and its dividends and advances are the primary source of
cash for NACCO.
F-31
89
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 & Co., 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
President and Senior Vice President- Vice President and
Chief Executive Corporate Development Controller
Officer and Chief Financial Officer
F-32
90
SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
PARENT COMPANY CONDENSED BALANCE SHEETS
December 31
-------------------------------------------
1993 1992
----------------- ------------------
(In thousands)
Current assets $554 $1,263
Net amounts receivable from subsidiaries 7,191
Other assets 1,544 2,150
Investment in and advances from subsidiaries, net
Investments
NMHG 257,244 230,445
Hamilton Beach<>Proctor-Silex 111,251 113,805
North American Coal 33,762 39,301
Kitchen Collection 12,625 11,627
Bellaire Corporation (98,737) (102,717)
------------- ----------------
316,145 292,461
Advances from subsidiaries (67,793) (45,231)
------------- ----------------
248,352 247,230
Property, plant and equipment, net 1,323 1,398
Deferred income taxes 293
------------- ----------------
Total Assets $258,964 $252,334
============= ================
Current liabilities $12,037 $4,167
Net amounts payable to subsidiaries 4,563
Deferred income and other 4,719 5,288
Deferred income taxes 6,582
Stockholders' equity 235,626 238,316
------------- ----------------
Total Liabilities and Stockholders' Equity $258,964 $252,334
============= ================
See notes to parent company financial statements.
F-33
91
SCHEDULE III--CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
PARENT COMPANY STATEMENTS OF INCOME
Year Ended
December 31
----------------------------------------------------
1993 1992 1991
-------------- ---------------- ----------------
(In thousands)
Income (expense):
Intercompany interest income (including
other interest income of $13
in 1991) $1,841 $1,283 $13
Intercompany interest expense (2,076) (1,676) (2,250)
Interest expense (25) (594)
Other - net 829 60 165
------------- -------------- ---------------
569 (333) (2,666)
Administrative and general expenses 7,831 8,200 7,144
------------- -------------- ---------------
Loss before income taxes (7,262) (8,533) (9,810)
Income tax benefit (1,748) (2,456) (1,974)
------------- -------------- ---------------
Net loss before equity in earnings of
subsidiaries and extraordinary charge (5,514) (6,077) (7,836)
Equity in earnings of subsidiaries before
extraordinary charge 17,107 28,945 27,874
Extraordinary charge, net-of-tax (3,292) (110,000)
------------- -------------- ---------------
Net income (loss) $8,301 ($87,132) $20,038
============= ============== ===============
See notes to parent company financial statements.
F-34
92
SCHEDULE III--CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
PARENT COMPANY STATEMENTS OF CASH FLOWS
Year Ended
December 31
-------------------------------------------
1993 1992 1991
--------- ---------- --------
(In thousands)
Operating activities
Net income (loss) $8,301 ($87,132) $20,038
Equity in earnings of subsidiaries (17,107) (28,945) (27,874)
Extraordinary charge, net-of-tax 3,292 110,000
--------- ------------ ---------
Parent company only net loss (5,514) (6,077) (7,836)
Deferred income taxes 6,908 (2,834) (678)
Income taxes net of intercompany tax payments (3,954) 1,964 5,890
Working capital changes 775 (1,469) 165
Changes in current intercompany amounts 49 1,106 2,352
Items of income or expense not requiring cash outlays 299 530 327
--------- ------------ ---------
Net cash provided (used) by operating activities (1,437) (6,780) 220
Investing Activities
Capital contributions to subsidiaries
NMHG (52,235)
Hamilton Beach<>Proctor-Silex (4,000)
Dividends and advances received from subsidiaries 45,883 33,165 23,552
Purchases of Hyster-Yale 12 3/8% debentures (11,832) (22,061)
Reduction of investment in Hyster-Yale
12 3/8% debentures 25,529
Expenditures for equipment (147) (246) (1,254)
--------- ------------ ---------
Net cash provided (used) by investing activities 7,198 10,858 18,298
Financing Activities
Repayments of revolving credit agreements (13,825)
Cash dividends (5,854) (5,645) (5,461)
Treasury stock sales under stock option and
directors' compensation plans - net 212 1,622 41
Other - net (75) (55) 730
--------- ------------ ---------
Net cash used by financing activities (5,717) (4,078) (18,515)
--------- ------------ ---------
Cash and cash equivalents
Increase for the period 44 0 3
Balance at the beginning of the period 3 3
--------- ------------ ---------
Balance at the end of the period $47 $3 $3
========= ============ =========
See notes to parent company financial statements.
F-35
93
SCHEDULE III--CONDENSED FINANCIAL INFORMATION OF THE PARENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
For The Year Ended December 31, 1993, 1992 and 1991
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 $23.3 million in 1993
and 1992, and $38.0 million in 1991.
NOTE C - CAPITAL CONTRIBUTIONS TO SUBSIDIARIES
The capital contribution to NMHG of $52.2 million in 1993 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 minimal at
December 31, 1993 and 1992.
F-36
94
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
- ----------------------------------------------------------------------------------------------------------------------------
COL A. COL B. COL C. COL D. COL E. COL F.
- ----------------------------------------------------------------------------------------------------------------------------
Other
Balance at Changes-- Balance at
Beginning of Additions Add (Deduct) End of
Classification Period At Cost Retirements --Describe Period
- ----------------------------------------------------------------------------------------------------------------------------
(In thousands)
1993
Surface lands and real estate $23,865 $945 $762 $937 (F) $24,985
Coal lands and leaseholds 50,455 420 37 (850) (F) 49,988
-------------- --------------- --------------- --------------- --------------
74,320 1,365 799 87 74,973
Plants and mine development 196,563 6,007 11,482 (574) (F) 190,514
Equipment 321,058 38,625 22,148 (17,062) (F) 320,473
Leased plant and equipment 176,917 9,296 3,140 13,132 (F) 196,205
-------------- --------------- --------------- --------------- --------------
694,538 53,928 (C) 36,770 (4,504) 707,192
-------------- --------------- --------------- --------------- --------------
Totals $768,858 $55,293 $37,569 (D) ($4,417) $782,165
============== =============== =============== =============== ==============
(H)
1992
Surface lands and real estate $23,242 $2,406 $275 ($1,508) (F) $23,865
Coal lands and leaseholds 47,973 (A) 223 44 2,303 (E) 50,455
-------------- --------------- --------------- --------------- --------------
71,215 2,629 (B) 319 795 74,320
Plants and mine development 191,963 8,509 172 3,428 (E)
(7,165) (F) 196,563
Equipment 271,314 61,622 13,760 8,295 (E)
(6,413) (F) 321,058
Leased plant and equipment 167,255 12,037 2,377 2 (F) 176,917
-------------- --------------- --------------- --------------- --------------
630,532 82,168 (C) 16,309 (1,853) 694,538
-------------- --------------- --------------- --------------- --------------
Totals $701,747 $84,797 $16,628 (D) ($1,058) $768,858
============== =============== =============== =============== ==============
(H)
1991
Surface lands and real estate $22,921 $701 $290 ($90) (F) $23,242
Coal lands and leaseholds 47,869 3,752 70 105 (G) 51,656
-------------- --------------- --------------- --------------- --------------
70,790 4,453 (B) 360 15 74,898
Plants and mine development 185,890 7,715 1,386 (256) (F) 191,963
Equipment 235,656 43,821 7,569 (327) (G)
(267) (F) 271,314
Leased plant and equipment 165,213 3,893 2,168 317 (G) 167,255
-------------- --------------- --------------- --------------- --------------
586,759 55,429 (C) 11,123 (533) 630,532
-------------- --------------- --------------- --------------- --------------
Totals $657,549 $59,882 $11,483 (D) ($518) $705,430
============== =============== =============== =============== ==============
See the following page for explanation of notes.
F-37
95
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
Note A - The balance at the beginning of the period has been restated to reflect a balance sheet reclassification that was made
during 1992.
Note B - Additions primarily relate to the purchase of coal lands and coal leases by a project mining subsidiary.
Note C - Additions relate to the continuing development of mines of subsidiary companies and the replacement and upgrading of
equipment for mines and manufacturing facilities of subsidiary companies.
Note D - Retirements in 1993 and 1992 related primarily to the disposal of manufacturing equipment in the ordinary course of
business. Retirements in 1991 included $8.1 million relating to mining equipment.
Note E - Consolidation of a mining subsidiary's assets which were not consolidated in prior years.
Note F - Reclasses between groupings, subsidiary's foreign currency translation adjustments and other.
Note G - Mining subsidiary's lease restructuring.
Note H - Where appropriate amounts have been restated to reflect the adoption of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes ("SFAS 109"). The restatement adjustments reflect the SFAS 109 requirement that
assets acquired in a purchase business combination be reported at their gross cost and not net-of-tax.
Note I - The annual provisions for depreciation have been computed principally in accordance with the following ranges of rates:
1993 1992 1991
------------ ------------- -------------
Plants and mine development 3% to 25% 3% to 25% 2% to 20%
Equipment 3% to 33% 3% to 33% 6% to 33%
Leased plant and equipment 4% to 50% 4% to 50% 4% to 20%
F-38
96
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
- ----------------------------------------------------------------------------------------------------------------
COL A. COL B. COL C. COL D. COL E. COL F.
- ----------------------------------------------------------------------------------------------------------------
Additions Other
Balance at Charged to Changes-- Balance at
Beginning of Costs and Add (Deduct) End of
Classification Period Expenses Retirements --Describe Period
- ----------------------------------------------------------------------------------------------------------------
(In thousands)
1993
Coal lands and leaseholds $6,629 $3,487 $11 $133 (C) $10,238
Plants and mine development 64,242 9,448 9,795 (210)(C) 63,685
Equipment 131,472 35,383 20,897 (427)(C) 145,531
Leased plant and equipment 57,925 11,713 3,140 66,498
---------- --------------- --------------- --------------- ---------------
Totals $260,268 $60,031 $33,843 (A) ($504) $285,952
========== =============== =============== =============== ===============
(D)
1992
Coal lands and leaseholds $5,519 $677 $8 $386 (B)
55 (C) $6,629
Plants and mine development 57,237 9,127 65 533 (B)
(2,590)(C) 64,242
Equipment 109,486 33,714 10,905 1,652 (B)
(2,475)(C) 131,472
Leased plant and equipment 50,269 10,035 2,377 (2)(C) 57,925
---------- --------------- --------------- --------------- ---------------
Totals $222,511 $53,553 $13,355(A) ($2,441) $260,268
========== =============== =============== =============== ===============
(D)
1991
Coal lands and leaseholds $5,250 $304 $29 ($6)(C) $5,519
Plants and mine development 47,911 9,765 465 26 (C) 57,237
Equipment 82,538 32,709 5,523 (238)(C) 109,486
Leased plant and equipment 42,121 9,877 2,168 439 (C) 50,269
---------- --------------- --------------- --------------- ---------------
Totals $177,820 $52,655 $8,185(A) $221 $222,511
========== =============== =============== =============== ===============
Note A - Retirements in 1993 and 1992 related primarily to the disposal of manufacturing equipment in the ordinary course of
business. Retirements in 1991 included $6.7 million relating to the mining operations.
Note B - Consolidation of a mining subsidiary's assets which were not consolidated in prior years.
Note C - Subsidiary's foreign currency translation adjustments, reclasses between groupings and other.
Note D - Where appropriate amounts have been restated to reflect the adoption of Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes ("SFAS 109"). The restatement adjustments reflect the SFAS 109 requirement that assets
acquired in a purchase business combination be reported at their gross cost and not net-of-tax.
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SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
- -------------------------------------------------------------------------------------------------------------------------
COL A. COL B. COL C. COL D. COL E.
- -------------------------------------------------------------------------------------------------------------------------
Additions
------------------------------------- (D)
Balance at Charged to Charged to Balance at
Beginning of Costs and Other Accounts Deductions End of
Description Period Expenses --Describe --Describe Period
- -------------------------------------------------------------------------------------------------------------------------
(In thousands)
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
1991
Reserves deducted from asset
accounts:
Allowance for doubtful accounts $8,894 $2,562 $6,105 (A)
44 (C) $5,307
Allowance for discounts,
adjustments and returns $11,231 $21,849 $26,220 (B) $6,860
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 required to be presented and those which are immaterial have been omitted.
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SCHEDULE IX--SHORT-TERM BORROWINGS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
- ------------------------------------------------------------------------------------------------------------------------------------
COL A. COL B. COL C. COL D. COL E. COL F.
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum Average Weighted
Amount Amount Average
Balance at Weighted Outstanding Outstanding Interest Rate
Category of Aggregate End of Average During the During the During the
Short-Term Borrowings Period Interest Rate Period Period (A) Period (B)
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except percentage data)
1993
Revolving credit agreements and
notes payable to bank $35,178 5.2% $99,292 $46,675 6.2%
1992
Revolving credit agreements and
notes payable to bank $19,196 5.4% $83,081 $39,490 7.4%
1991
Revolving credit agreements and
notes payable to bank $21,546 7.4% $159,154 $72,746 8.4%
Note A - The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances
during the period by the number of days in the period.
Note B - The weighted average interest rate during the period was computed by dividing the total interest expense for the borrowing
by the average amount outstanding during the period.
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SCHEDULE X--SUPPLEMENTARY INCOME STATEMENT INFORMATION
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
- -----------------------------------------------------------------------------------------------------------------------
COL A. COL B.
- -----------------------------------------------------------------------------------------------------------------------
Charged to Costs
Item and Expenses
- -----------------------------------------------------------------------------------------------------------------------
(In thousands)
1993
Maintenance and repairs $42,846
Taxes other than payroll and income taxes:
Severance $17,209
Advertising costs $22,578
1992
Maintenance and repairs $38,880
Taxes other than payroll and income taxes:
Severance $16,204
Advertising costs $24,578
1991
Maintenance and repairs $31,212
Depreciation and amortization of intangible assets, preoperating
costs and similar deferral:
Patents, trademarks and goodwill $14,266
Taxes other than payroll and income taxes:
Severance $14,792
Advertising costs $21,786
Note - The captions not presented are less than 1% of total revenues.
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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 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.
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101
(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 Exhibit 7 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.
*(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
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102
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) Retirement Benefit Plan, dated December 18, 1989, between Ward
Smith, Chairman, President and Chief Executive Officer of the Company,
and the Company is incorporated herein by reference to Exhibit 10(xi)
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, Commission File Number 1-9172.
*(x) Retirement Benefit Plan, dated December 18, 1989, between Alfred
M. Rankin, Jr., President and Chief Operating Officer of the Company,
and the Company is incorporated herein by reference to Exhibit 10(xii)
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, Commission File Number 1-9172.
*(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 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) Amendment Number 7 to the Credit Agreement, dated as of May 19,
1992, among Citicorp North America, Inc., Hyster-Yale Materials
Handling, Inc., Yale Materials Handling Corporation and Hyster Company
is incorporated herein by reference to Exhibit 10(lxxiv) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 33-28812.
(xiii) Amendment Number 8 to the Credit Agreement, dated as of
January 14, 1993, among Citicorp North America, Inc., Hyster-Yale
Materials Handling, Inc., Yale Materials Handling Corporation and
Hyster Company is incorporated herein by reference to Exhibit 10(lxxv)
of the Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Commission File Number 33-28812.
*(xiv) The Yale Materials Handling Corporation Unfunded Deferred
Compensation Plan is incorporated herein by reference to Exhibit
10(xliv) of the Hyster-Yale Annual Report on Form 10-K for the fiscal
year ended December 31, 1989, Commission File Number 33-28812.
(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.
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103
*(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) Termination and Cancellation Agreement, dated as of December
16, 1992, between Yale Materials Handling Corporation and Reginald R.
Eklund is incorporated herein by reference to Exhibit 10(lix) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 33-28812.
(xix) Agreement and Plan of Merger, dated as of April 7, 1989, among
NACCO Industries, Inc., Yale Materials 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) Credit Agreement, dated May 26, 1989, among the 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 10.11 to Amendment No. 1 filed June 9, 1989 to Hyster-Yale
Materials Handling, Inc.'s Registration Statement on Form S-1
(Registration Statement Number 33-28812).
(xxii) Exhibits and Schedules to Credit Agreement, dated May 26,
1989, among Hyster-Yale Materials Handling, Inc., Yale Materials
Handling Corporation, Hyster Company, the Lenders party thereto and
Citicorp North America, Inc. is incorporated herein by reference to
Exhibit 10.17 to Amendment No. 3 filed July 18, 1989 to Hyster-Yale
Materials Handling, Inc.'s Registration Statement on Form S-1
(Registration Statement Number 33-28812).
(xxiii) Security Agreement, dated as of May 26, 1989, by Hyster
Company in favor of Citicorp North America, Inc. (as agent for the
Lenders party to the Credit Agreement) is incorporated herein by
reference to Exhibit 10.18 to Amendment No. 3 filed July 18, 1989 to
Hyster-Yale Materials Handling, Inc.'s Registration Statement on Form
S-1 (Registration Statement Number 33-28812).
(xxiv) Security Agreement, dated as of May 26, 1989, by Yale
Materials Handling Corporation in favor of Citicorp North America,
Inc. (as agent for the Lenders party to the Credit Agreement) is
incorporated herein by reference to Exhibit 10.19 to Amendment No. 3
filed July 18, 1989 to Hyster-Yale Materials Handling, Inc.'s
Registration Statement on Form S-1 (Registration Statement Number
33-28812).
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104
(xxv) Security Agreement, dated as of May 26, 1989, by Hyster-Yale
Materials Handling, Inc. in favor of Citicorp North America, Inc. (as
agent for the Lenders party to the Credit Agreement) is incorporated
herein by reference to Exhibit 10.20 to Amendment No. 3 filed July 18,
1989 to Hyster-Yale Materials Handling, Inc.'s Registration Statement
on Form S-1 (Registration Statement Number 33-28812).
(xxvi) Trademark and License Security Agreement, dated as of May 26,
1989, by Hyster Company in favor of Citicorp North America, Inc.
(as agent for the Lenders party to the Credit Agreement) is
incorporated herein by reference to Exhibit 10.21 to Amendment No. 3
filed July 18, 1989 to Hyster-Yale Materials Handling, Inc.'s
Registration Statement on Form S-1 (Registration Statement Number
33-28812).
(xxvii) Trademark and License Security Agreement, dated as of May 26,
1989, by Yale Materials Handling Corporation in favor of Citicorp
North America, Inc. (as agent for the Lenders party to the Credit
Agreement) is incorporated herein by reference to Exhibit 10.22 to
Amendment No. 3 filed July 18, 1989 to Hyster-Yale Materials Handling,
Inc.'s Registration Statement on Form S-1 (Registration Statement
Number 33-28812).
(xxviii) Patent and License Security Agreement, dated as of May 26,
1989, by Hyster Company in favor of Citicorp North America, Inc. (as
agent for the Lenders party to the Credit Agreement) is incorporated
herein by reference to Exhibit 10.23 to Amendment No. 3 filed July 18,
1989 to Hyster-Yale Materials Handling, Inc.'s Registration Statement
on Form S-1 (Registration Statement Number 33-28812).
(xxix) Patent and License Security Agreement, dated as of May 26,
1989, by Yale Materials Handling Corporation in favor of Citicorp
North America, Inc. (as agent for the Lenders party to the Credit
Agreement) is incorporated herein by reference to Exhibit 10.24 to
Amendment No. 3 filed July 18, 1989 to Hyster-Yale Materials Handling,
Inc.'s Registration Statement on Form S-1 (Registration Statement
Number 33-28812).
(xxx) Aircraft Security Agreement, dated as of May 26, 1989, by
Hyster Company in favor of Citicorp North America, Inc. (as agent for
the Lenders party to the Credit Agreement) is incorporated herein by
reference to Exhibit 10.25 to Amendment No. 3 filed July 18, 1989 to
Hyster-Yale Materials Handling, Inc.'s Registration Statement on Form
S-1 (Registration Statement Number 33-28812).
(xxxi) Hyster Company Pledge Agreement, dated as of May 26, 1989, by
Hyster Company in favor of Citicorp North America, Inc. (as agent for
the Lenders party to the Credit Agreement) is incorporated herein by
reference to Exhibit 10.26 to Amendment No. 3 filed July 18, 1989 to
Hyster-Yale Materials Handling, Inc.'s Registration Statement on Form
S-1 (Registration Statement Number 33-28812).
(xxxii) Instrument of Pledge, dated as of May 26, 1989, by Hyster
Company and Hyster, B.V. in favor of Citicorp North America, Inc. (as
agent for the Lenders party to the Credit Agreement) is incorporated
herein by reference to Exhibit 10.27 to Amendment No. 3 filed July 18,
1989 to Hyster-Yale Materials Handling, Inc.'s Registration Statement
on Form S-1 (Registration Statement Number 33-28812).
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105
(xxxiii) Deed of Charge, dated as of May 26, 1989, by Hyster Europe
Limited and Hyster Company in favor of Citicorp North America, Inc.
(as agent for the Lenders party to the Credit Agreement) is
incorporated herein by reference to Exhibit 10.28 to Amendment No. 3
filed July 18, 1989 to Hyster-Yale Materials Handling, Inc.'s
Registration Statement on Form S-1 (Registration Statement Number
33-28812).
(xxxiv) Brazilian Pledge Agreement, dated as of May 26, 1989, by
Hyster Company and Hyster Overseas Capital Corporation in favor of
Citicorp North America, Inc. (as agent for the Lenders party to the
Credit Agreement) is incorporated herein by reference to Exhibit 10.29
to Amendment No. 3 filed July 18, 1989 to Hyster-Yale Materials
Handling, Inc.'s Registration Statement on Form S-1 (Registration
Statement Number 33-28812).
(xxxv) Australian Pledge Agreement, dated as of May 26, 1989, by
Hyster Company in favor of Citicorp North America, Inc. (as agent for
the Lenders party to the Credit Agreement) is incorporated herein by
reference to Exhibit 10.30 to Amendment No. 3 filed July 18, 1989 to
Hyster-Yale Materials Handling, Inc.'s Registration Statement on Form
S-1 (Registration Statement Number 33-28812).
(xxxvi) Pledge Agreement, dated as of May 26, 1989, by Yale Materials
Handling Corporation in favor of Citicorp North America, Inc. (as
agent for the Lenders party to the Credit Agreement) is incorporated
herein by reference to Exhibit 10.31 to Amendment No. 3 filed July 18,
1989 to Hyster-Yale Materials Handling, Inc.'s Registration Statement
on Form S-1 (Registration Statement Number 33-28812).
(xxxvii) Yale Materials Handling Corporation Pledge Agreement, dated
as of May 26, 1989, by Yale Materials Handling Corporation in favor of
Citicorp North America, Inc. (as agent for the Lenders party to the
Credit Agreement) is incorporated herein by reference to Exhibit 10.32
to Amendment No. 3 filed July 18, 1989 to Hyster-Yale Materials
Handling, Inc.'s Registration Statement on Form S-1 (Registration
Statement Number 33-28812).
(xxxviii) Deed of Charge, dated as of May 26, 1989, by Yale Materials
Handling Corporation and Yale Materials Handling Limited in favor of
Citicorp North America, Inc. (as agent for the Lenders party to the
Credit Agreement) is incorporated herein by reference to Exhibit 10.33
to Amendment No. 3 filed July 18, 1989 to Hyster-Yale Materials
Handling, Inc.'s Registration Statement on Form S-1 (Registration
Statement Number 33-28812).
(xxxix) Holding Pledge Agreement, dated as of May 26, 1989, by
Hyster-Yale Materials Handling, Inc. in favor of Citicorp North
America, Inc. (as agent for the Lenders party to the Credit Agreement)
is incorporated herein by reference to Exhibit 10.34 to Amendment No.
3 filed July 18, 1989 to Hyster-Yale Materials Handling, Inc.'s
Registration Statement on Form S-1 (Registration Statement Number
33-28812).
(xl) NACCO Industries, Inc. I Pledge Agreement, dated as of May 26,
1989, by Acquisition I in favor of Citicorp North America, Inc. (as
agent for the Lenders party to the Credit Agreement) is incorporated
herein by reference to Exhibit 10.35 to Amendment No. 3 filed July 18,
1989 to Hyster-Yale Materials Handling, Inc.'s Registration Statement
on Form S-1 (Registration Statement Number 33-28812).
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106
(xli) Guaranty, dated as of May 26, 1989, by Hyster Company in favor
of Citicorp North America, Inc. (as agent for the Lenders party to the
Credit Agreement) is incorporated herein by reference to Exhibit 10.36
to Amendment No. 3 filed July 18, 1989 to Hyster-Yale Materials
Handling, Inc.'s Registration Statement on Form S-1 (Registration
Statement Number 33-28812).
(xlii) Guaranty, dated as of May 26, 1989, by Yale Materials Handling
Corporation in favor of Citicorp North America, Inc. (as agent for the
Lenders party to the Credit Agreement) is incorporated herein by
reference to Exhibit 10.37 to Amendment Number 3 filed July 18, 1989
to Hyster-Yale Materials Handling, Inc.'s Registration Statement on
Form S-1 (Registration Statement Number 33-28812).
(xliii) Guaranty, dated as of May 26, 1989, by Hyster-Yale Materials
Handling, Inc. in favor of Citicorp North America, Inc. (as agent for
the Lenders party to the Credit Agreement) is incorporated herein by
reference to Exhibit 10.38 to Amendment No. 3 filed July 18, 1989 to
Hyster-Yale Materials Handling, Inc.'s Registration Statement on Form
S-1 (Registration Statement Number 33-28812).
(xliv) Guaranty and Security Agreement, dated as of May 26, 1989, by
Acquisition I in favor of Citicorp North America, Inc. (as agent for
the Lenders party to the Credit Agreement) is incorporated herein by
reference to Exhibit 10.39 to Amendment No. 3 filed July 18, 1989 to
Hyster-Yale Materials Handling, Inc.'s Registration Statement on Form
S-1 (Registration Statement Number 33-28812).
(xlv) Amendment No. 1 to the Credit Agreement, dated as of August 21,
1989, among Citicorp North America, Inc., Hyster-Yale Materials
Handling, Inc., Yale Materials Handling Corporation and Hyster Company
is incorporated herein by reference to Exhibit 10(xli) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, Commission File Number 33-28812.
(xlvi) Amendment No. 2 to the Credit Agreement, dated as of November
7, 1989, among Citicorp North America, Inc., Hyster-Yale Materials
Handling, Inc., Yale Materials Handling Corporation and Hyster Company
is incorporated herein by reference to Exhibit 10(xlii) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, Commission File Number 33-28812.
(xlvii) Amendment No. 3 to the Credit Agreement, dated as of January
31, 1990, among Citicorp North America, Inc., Hyster-Yale Materials
Handling, Inc., Yale Materials Handling Corporation and Hyster Company
is incorporated herein by reference to Exhibit 10(xliii) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, Commission File Number 33-28812.
(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.
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107
(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.
(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(lxi) 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
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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 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.
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(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
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 Value Appreciation Plan
is incorporated herein by reference to Exhibit 10(lxxviii) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, Commission File Number 1-9172.
*(lxxii) The NACCO Industries, Inc. $200,000 Cap Plan is incorporated
herein by reference to Exhibit 10(lxxix) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990,
Commission File Number 1-9172.
*(lxxiii) The NACCO Industries, Inc. Supplemental Retirement Benefit
Plan (As Amended and Restated as of January 1, 1990) is incorporated
herein by reference to Exhibit 10(lxxx) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990, Commission
File Number 1-9172.
(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.
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110
(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 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(lxxxviii) 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) Amendment No. 4 to the Credit Agreement, dated as of June
27, 1990, among Citicorp North America, Inc., Hyster-Yale Materials
Handling, Inc., Yale Materials Handling Corporation and Hyster Company
is incorporated herein by reference to Exhibit (xc) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1990, Commission File Number 1-9172.
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111
(lxxxiv) Amendment No. 5 to the Credit Agreement, dated as of March
27, 1991, among Citicorp North America, Inc., Hyster-Yale Materials
Handling, Inc., Yale Materials Handling Corporation and Hyster Company
is incorporated herein by reference to Exhibit 10(xlv) to the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File Number 33-28812.
(lxxxv) Amendment No. 6 to the Credit Agreement, dated as of October
22, 1991, among Citicorp North America, Inc., Hyster-Yale Materials
Handling, Inc., Yale Materials Handling Corporation and Hyster Company
is incorporated herein by reference to Exhibit 10(xlvi) to the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File Number 33-28812.
(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(l) to the Hyster-Yale Annual Report on Form
10-K for the fiscal year ended December 31, 1991, Commission File
Number 33-28812.
*(lxxxvii) Employment Agreement, effective May 8, 1991, between Ward
Smith, Chairman of the Board of the Company and the Company is
incorporated herein by reference to Exhibit 10(lxxxvii) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Commission File Number 1-9172.
*(lxxxviii) Amendment No. 2 to the Retirement Benefit Plan, effective
May 8, 1991, between Ward Smith, Chairman of the Board of the Company
and the Company is incorporated herein by reference to Exhibit
10(lxxxviii) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, Commission File Number 1-9172.
*(lxxxix) Form of NACCO Industries, Inc. Annual Incentive
Compensation Plan is attached hereto as Exhibit 10(lxxxix).
*(xc) Hamilton Beach/Proctor Silex, Inc. Long-Term
Incentive Compensation Plan, dated February 12, 1991, is incorporated
herein by reference to Exhibit 10(xc) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991, Commission
File Number 1-9172.
*(xci) Hyster-Yale Unfunded Benefit Plan, effective February 10,
1993, is incorporated herein by reference to Exhibit 10(lx) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, 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
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112
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) Amendment No. 8 to The Yale Materials Handling Corporation
Employee Profit Sharing and Stock Ownership Plan is incorporated
herein by reference to Exhibit 10(lv) to the Hyster-Yale Annual Report
on Form 10-K for the fiscal year ended December 31, 1991, Commission
File Number 33-28812.
*(xcvi) Amendment No. 9 to The Yale Materials Handling Corporation
Employee Profit Sharing and Stock Ownership Plan is incorporated
herein by reference to Exhibit 10(lvi) to the Hyster-Yale Annual
Report on Form 10-K for the fiscal year ended December 31, 1991,
Commission File Number 33-28812.
(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) Intentionally Left Blank
*(c) Amendment No. 3 to the Hamilton Beach/Proctor-Silex, Inc.
Employees' Retirement Savings Plan (formerly known as the Hamilton
Beach/Proctor-Silex, Inc. Salaried Employees' Retirement Savings Plan)
is incorporated by reference to Exhibit 10(c) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992,
Commission File Number 1-9172.
*(ci) Tenth Amendment to The Yale Materials Handling Corporation
Employee Profit Sharing and Stock Ownership Plan, dated April 1, 1992,
is incorporated herein by reference to Exhibit 10(lxviii) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 33-28812.
*(cii) Eleventh Amendment to The Yale Materials Handling Corporation
Profit Sharing Retirement Plan (formerly known as The Yale Materials
Handling Corporation Employee Profit Sharing and Stock Ownership
Plan), effective as of April 1, 1992, is incorporated herein by
reference to Exhibit 10(lxix) of the Hyster-Yale Annual Report on Form
10-K for the fiscal year ended December 31, 1992, Commission File
Number 33-28812.
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113
*(ciii) Twelfth Amendment to The Yale Materials Handling Corporation
Profit Sharing Retirement Plan (formerly known as The Yale Materials
Handling Corporation Employee Profit Sharing and Stock Ownership
Plan), effective as of November 1, 1992, is attached hereto as Exhibit
10(lxx) of the Hyster-Yale Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File Number 33-28812.
*(civ) Amendment No. 1 to the Hamilton Beach/Proctor-Silex, Inc.
Salaried Employees' Retirement Savings Plan is attached incorporated
by reference to Exhibit 10(civ) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992, Commission File
Number 1-9172.
*(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. 2 to the Hamilton Beach/Proctor-Silex, Inc.
Salaried Employees' Retirement Savings Plan is incorporated by
reference to Exhibit 10(cvi) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992, Commission File
Number 1-9172.
*(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) Instrument of Amendment and Merger of Society National Bank
and Trust Agreement into the Master Trust Agreement, effective January
1, 1993, between NACCO Industries, Inc. and State Street Bank and
Trust Company, is incorporated by reference to Exhibit 10(cviii) to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 1-9172.
*(cix) Amendment Following Termination of The North American Coal
Corporation Pension Plan for Salaried Employees, dated August 14,
1992, is incorporated by reference to Exhibit 10(cix) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992, Commission File Number 1-9172.
*(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) Instrument of Merger of Defined Contribution Plans, effective
November 1, 1992, is incorporated herein by reference to Exhibit
10(lxiii) of the Hyster-Yale Annual Report
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114
on Form 10-K for the fiscal year ended December 31, 1992, Commission
File Number 33-28812.
*(cxiii) Instrument of Amendment and Merger of the July 1, 1986 Trust
Agreement between Bergen Bull, Roger Jensen and Hyster Company into
the Master Trust Agreement, dated October 1, 1992, between NACCO
Industries, Inc. and State Street Bank and Trust Company is
incorporated herein by reference to Exhibit 10(lxvii) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 33-28812.
*(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) Instrument of Merger, Amendment and Termination of The Yale
Materials Handling Corporation Profit Sharing Retirement Plan,
effective as of November 1, 1992, is incorporated herein by reference
to Exhibit 10(lxiv) of the Hyster-Yale Annual Report on Form 10-K for
the fiscal year ended December 31, 1992, Commission File Number
33-28812.
(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 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) Release and Settlement Agreement between J. Phillip Frazier
and Hyster-Yale Materials Handling, Inc., dated August 31, 1992, is
incorporated herein by reference to Exhibit 10(lxxii) of the
Hyster-Yale Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 33-28812.
*(cxix) Hamilton Beach/Proctor-Silex, Inc. Deferred Compensation Plan
for George C. Nebel is incorporated by reference to Exhibit 10(cxix)
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, Commission File Number 1-9172.
*(cxx) Hamilton Beach/Proctor-Silex, Inc. Unfunded Benefit Plan,
effective March 10, 1992, is incorporated by reference to Exhibit
10(cxx) to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File Number 1-9172.
*(cxxi) Hamilton Beach/Proctor-Silex, Inc. Salaried Employees'
Retirement Savings Plan is incorporated by reference to Exhibit
10(cxxi) to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File Number 1-9172.
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115
*(cxxii) The NACCO Industries, Inc. Pension Plan for Salaried
Employees, amended and restated as of January 1, 1993, is attached
hereto as Exhibit 10(cxxii).
*(cxxiii) Instrument of Merger of the NACCO Industries, Inc. Pension
Plan for Salaried Employees into The North American Corporation
Salaried Employees Pension Plan, effective December 31, 1993, is
attached hereto as Exhibit 10(cxxiii).
*(cxxiv) Amendment No. 1 to the Hamilton Beach/Proctor-Silex, Inc.
Profit Sharing Retirement Plan, as restated effective January 1, 1989,
is attached hereto as Exhibit 10(cxxiv).
*(cxxv) The Hamilton Beach/Proctor-Silex, Inc. Employees' Retirement
Savings Plan, as amended and restated effective January 1, 1994, is
attached hereto as Exhibit 10(cxxv).
*(cxxvi) Amendment No. 1 to the Hamilton Beach/Proctor-Silex, Inc.
Retirement Plan for Salaried Employees (As Restated Effective January
1, 1989) is attached hereto as Exhibit 10(cxxvi).
*(cxxvii) Amendment No. 1 to the Retirement Benefit Plan, effective
December 31, 1993, between Alfred M. Rankin, Jr., President and Chief
Executive Officer of the Company, and the Company is attached hereto
as Exhibit 10(cxxvii).
*(cxxviii) Amendment No. 3 to the Retirement Benefit Plan, effective
December 31, 1993, between Ward Smith, Chairman of the Board of the
Company and the Company is attached hereto as Exhibit 10(cxxviii).
*(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 (lxxxv) 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.
*(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.
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116
*(cxxxiii) Amendment No. 2 effective as of December 31, 1993 to the Hyster-Yale
Material Handling, Inc. Long-Term Incentive Compensation Plan is incorporated
herein by reference to Exhibit 10 (lxxxviii) 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 Saving Plan is attached hereto as Exhibit
10(cxxxiv).
*(cxxxv) Amendment No. 2 effective as of January 1, 1994 to The North American
Coal Corporation Retirement Savings Plan is attached hereto as Exhibit
10(cxxxv).
*(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) Amendment No. 1 effective January 1, 1994 to the Hyster-Yale
Unfunded Benefit Plan (now known as the NACCO Materials Handling Group, Inc.
Unfunded Benefit Plan) is incorporated herein by reference to Exhibit
10(lxxxix) to the Hyster-Yale Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File Number 33-28812.
*(cxxxviii) Master Trust Agreement for Defined Benefit Plan between NACCO
Industries, Inc. and State Street Bank and Trust Company, dated Janury 1, 1994
is attached as Exhibit 10(cxxxviii).
*(cxxxix) Thirteenth Amendment dated February 15, 1993 to the Yale Materials
Handling Corporation Profit Sharing Retiremenmt Plan is incorporated herein by
reference to Exhibit 10(lxxxxi) to the Hyster-Yale Annual Report on Form 10-K
for the fiscal year ended December 31, 1993, Commission File Number 33-28812.
(cxxxx) 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. de C.V., the banks named on the signatory pages and The Chase Manhattan
Bank is attached hereto as Exhibit (cxxxx).
(cxxxxi) 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 attached hereto as Exhibit
(cxxxxi).
(cxxxxii) 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 hereto, The Chase Manhattan Bank, as United States Agent, The
Chase Manhattan Bank of Canada is attached hereto as Exhibit 10(cxxxxii).
(cxxxxiii) 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 attached hereto as
Exhibit 10(cxxxxiii).
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117
(cxxxxiv) Amendment No. 1 to the Term Loan Agreement, effective as of
February 1993, between The Kitchen Collection, Inc. and Society
National Bank is attached hereto as Exhibit 10(cxxxxiv).
(cxxxxv) Amended and Restated Credit Agreement dated as of January
14, 1993 among Citicorp North America, Inc., 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.
(cxxxxvi) Reaffirmation Amendment and Acknowledgement 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.
(cxxxxvii) 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.
(cxxxxviii) Reaffirmation, Amendment and Acknowledgement 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.
(cxxxxix) Reaffirmation, Amendment and Acknowledgement 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.
(11) Statement re computation of per share earnings. The computation of
earnings per share is attached hereto as Exhibit 11.
(22) Subsidiaries. A list of the subsidiaries of the Company is attached
hereto as Exhibit 22.
(24) Consents of experts and counsel.
(i) The consent of Arthur Andersen & Co., independent accountant, is
attached hereto as Exhibit 24(i).
(25) Powers of Attorney
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(i) A manually signed copy of a power of attorney for Owsley Brown II
is attached hereto as Exhibit 25(i).
(ii) A manually signed copy of a power of attorney for John J. Dwyer
is attached hereto as Exhibit 25(ii).
(iii) A manually signed copy of a power of attorney for Robert M.
Gates is attached as Exhibit 25(iii).
(iv) A manually signed copy of a power of attorney for E. Bradley
Jones is attached hereto as Exhibit 25(iv).
(v) A manually signed copy of a power of attorney for Dennis W.
LaBarre is attached hereto as Exhibit 25(v).
(vi) A manually signed copy of a power of attorney for Alfred M.
Rankin, Jr. is attached hereto as Exhibit 25(vi).
(vii) A manually signed copy of a power of attorney for John C.
Sawhill is attached hereto as Exhibit 25(vii).
(viii) A manually signed copy of a power of attorney for Ward Smith
is attached hereto as Exhibit 25(viii).
(ix) A manually signed copy of a power of attorney for Britton T.
Taplin is attached hereto as Exhibit 25(ix).
(x) A manually signed copy of a power of attorney for Frank E.
Taplin, Jr. is attached hereto as Exhibit 25(x).
(xi) A manually signed copy of a power of attorney for Richard B.
Tullis is attached hereto as Exhibit 25(xi).
(xii) A manually signed copy of a power of attorney for
Steven M. Billick is attached hereto as Exhibit 25(xii).
(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, 1993, are attached
as Exhibit 99(i).
(ii) Audited Financial Statements for Hamilton Beach/Proctor-Silex,
Inc. for the fiscal year ended December 31, 1993, are attached as
Exhibit 99(ii).
(iii) Audited Financial Statements for The Kitchen Collection, Inc.
for the fiscal year ended December 31, 1993, are attached as Exhibit
99(iii).
(iv) Audited Financial Statements for NACCO Materials Handling Group,
Inc. for the fiscal year ended December 31, 1993, are incorporated
herein by reference to Item 8,
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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, 1993, Commission File
Number 33-28812.
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* 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
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.
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