NACCO INDUSTRIES INC
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
NC$33.99+2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0000789933-24-000055
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0000789933-25-000023
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 151 previous paragraphs and 109 current paragraphs.
25 unchanged; 41 reworded; 42 added; 82 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
Government Regulation Update: There have been no material changes to the Government Regulation previously disclosed on pages 9 through 17 in our Annual Report on Form 10-K for the year ended December 31, 2024, except as follows:
Current report
On April 9, 2025, President Trump signed four executive orders designed to boost the U.S. coal industry, outlining steps to protect coal-fired power plants and expedite leases for coal mining on U.S. land.
Current report
On March 12, 2025, the Trump Administration announced that the Environmental Protection Agency (EPA) will undertake 31 historic actions of deregulation, including, but not limited to:
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•Reconsideration of regulations on power plants (Clean Power Plan 2.0);
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•Reconsideration of regulations on the oil and gas industry;
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•Reconsideration of Mercury and Air Toxics Standards (MATS);
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•Reconsideration of mandatory Greenhouse Gas Reporting Program;
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•Reconsideration of limitations, guidelines and standards for the Steam Electric Power Generating Industry to ensure low-cost electricity while protecting water resources;
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•Reconsideration of wastewater regulations for oil and gas development to help unleash American energy;
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•Reconsideration of the Risk Management Program rule;
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•Reconsideration of the 2009 Endangerment Finding and regulations and actions that rely on that Finding;
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•Reconsideration of Particulate Matter National Ambient Air Quality Standards;
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•Reconsideration of multiple National Emission Standards for Hazardous Air Pollutants for American energy and manufacturing sectors;
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•Restructuring the Regional Haze Program;
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•Overhauling the Social Cost of Carbon;
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•Redirecting enforcement resources to the EPA’s core mission;
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•Ending the Good Neighbor Plan;
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•Working with states and tribes to resolve massive backlog with State Implementation Plans and Tribal Implementation Plans;
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•Prioritizing the coal ash program to expedite state permit reviews and update coal ash regulations (CCR Rule).
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President Trump, paired with Republican control of Congress, is likely to continue to have a significant impact on the regulatory environment, particularly for fossil fuels. It is not yet clear how existing regulations affecting existing fossil fuel assets will be reconsidered or repealed.
Current report
The United States has recently enacted and proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, could restrict our access to suppliers and increase the cost of equipment and supplies imported into the U.S.
Current report
Our results of operations were as follows for the three months ended March 31:
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First Quarter of 2025 Compared with First Quarter of 2024
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The $14.8 million change in net cash provided by (used for) operating activities was primarily due to a net favorable change in working capital. The favorable change in working capital was mainly the result of a change in timing of insurance payments as well as a larger decrease in Trade accounts receivable during the first quarter of 2025 when compared with the first quarter of 2024. The decrease in Trade accounts receivable is primarily due to the timing of payments. These favorable working capital changes were partially offset by an increase in Deposits with vendors.
Current report
•A decrease in Accrued payroll for payments made during the first quarter of 2025 related to our incentive compensation plans;
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•An increase in Deposits with vendors for equipment; and
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•An increase in Property, plant and equipment during the first quarter of 2025.
Current report
These changes were partially offset by a decrease in Trade accounts receivable during the first quarter of 2025 due to the timing of payments, as well as lower revenue in the first quarter of 2025 compared with the fourth quarter of 2024.
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(a)See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of our unconsolidated subsidiaries.
Current report
The decrease in gross loss at MLMC was primarily due to a decrease in the cost per ton delivered during the first quarter of 2025 compared with the first quarter of 2024. The reduction in cost per ton delivered was primarily attributable to an increase in the number of tons severed and tons sold at MLMC in the first quarter of 2025 as the boiler issue that impacted the customer's Red Hills Power Plant has been resolved. The first quarter of 2025 and 2024 included a $3.0 million and a $2.5 million inventory impairment charge, respectively, to write down MLMC's coal inventory to its net realizable value.
Current report
(a)See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of our unconsolidated subsidiaries.
Current report
Operating profit decreased $0.4 million in the first quarter of 2025 compared with the first quarter of 2024. The change in Operating profit was primarily due to a decrease in earnings of unconsolidated operations and an increase in selling, general and administrative expenses, partially offset by an increase in gross profit. The decrease in earnings of unconsolidated operations was primarily due to a reduction in tons delivered. The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs. The improvement in gross profit was mainly the result of an increase in part sales, partially offset by a reduction in tons delivered.
Current report
Operating profit in the first quarter of 2025 was comparable to the first quarter of 2024. A decrease in gross profit and an increase in selling, general and administrative expenses was offset by an increase in earnings of unconsolidated operations. The $0.6 million increase in earnings of unconsolidated operations was primarily related to an additional $15.7 million investment in Eiger, LLC during the fourth quarter of 2024.
Current report
The operating loss increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to higher employee-related and outside service costs, partially offset by higher earnings at Mitigation Resources.
Current report
In 2025, the Coal Mining segment anticipates solid customer demand, with deliveries expected to increase modestly from 2024. We expect a more favorable near-term regulatory environment for the fossil fuel industry moving forward. These developments are expected to further support coal as an essential part of the energy mix in the United States for the foreseeable future.
Current report
The Coal Mining segment expects to benefit from the expiration of temporary price concessions at Falkirk and increased customer requirements at Coteau. In addition, MLMC continues to recover from inefficiencies experienced while its customer's Red Hills Power Plant operated on one of two generation units for more than half of 2024. With the power plant now anticipated to operate at a level consistent with historical averages, coal deliveries are expected to return to more normal levels, resulting in moderate cost efficiencies. However, an anticipated reduction in the 2025 contractually determined per ton sales price compared with 2024 is expected to offset these improvements, causing MLMC results to decline from prior year levels. An expected increase in operating expenses will contribute to an overall anticipated moderate year-over-year decrease in Coal Mining segment operating profit.
Current report
NAMining is expected to generate increasing levels of operating profit over time as benefits of new and extended contracts add to the profitability of existing contracts. During 2024, NAMining executed three new or amended existing contracts, which are expected to deliver net present value after-tax cash flows of approximately $20 million over contract terms that range from 6 to 20 years. NAMining is expected to deliver improved results in 2025, with anticipated lower first half results offset by expected performance gains in the second half of the year. While customer demand is projected to remain relatively stable year-over-year, profitability improvements will be driven by operational efficiencies and an increased focus on part sales. NAMining is continuously seeking to enter into new or amended contracts to solidify its position as the foundation for NACCO's mining-related growth initiatives.
Current report
The Minerals Management segment, through its Catapult business, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. In late 2024, Minerals Management invested an additional $15.7 million in Eiger, a company that holds non-operated working interests in oil and natural gas assets in the Kansas and Oklahoma portions of the Hugoton basin. This investment, accounted for under the equity method, is expected to be accretive and contribute to the anticipated improvement in 2025 operating profit compared with 2024. First-half earnings are expected to be comparable to prior year results with an anticipated significant improvement in the second half given expected trends in oil and natural gas prices and projected volumes.
Current report
Minerals Management continues to build its portfolio with a mix of producing wells, near-term development opportunities and undeveloped acreage. We believe our data-driven approach to acquisitions and our long-term perspective provides a competitive advantage as undeveloped assets provide additional upside potential over the life of the reserve. While we continue to budget up to $20 million annually to expand our portfolio and provide long-term stable cash flow generation, our business model allows flexibility regarding the cadence and type of investment based on available opportunities that we believe will create long-term value and generate increasing profitability.
Current report
Mitigation Resources provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services. This business is an avenue for growth and diversification in an area where NACCO has built a strong reputation based on its substantial knowledge and expertise. Mitigation Resources continues to expand, and as of March 31, 2025, has projects located in Alabama, Florida, Georgia, Mississippi, Pennsylvania, Tennessee and Texas.
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Removed paragraphs (82)
Previous report
The Company’s operating segments are further described below:
Previous report
The Coal Mining segment operates surface coal mines under long-term contracts with power generation companies pursuant to a service-based business model. Coal is surface mined in North Dakota and Mississippi. Each mine is fully integrated with its customer's operations.
Previous report
During the three and nine months ended September 30, 2024, the Coal Mining segment's operating coal mines were: The Coteau Properties Company (“Coteau”), Coyote Creek Mining Company, LLC (“Coyote Creek”), The Falkirk Mining Company (“Falkirk”) and Mississippi Lignite Mining Company (“MLMC”). Each of these mines supply lignite coal for power generation and delivers its coal production to an adjacent power plant or synfuels plant under a long-term supply contract. While MLMC’s coal supply contract contains a take or pay provision, the contract contains a force majeure provision that allows for the temporary suspension of the take or pay provision during the duration of certain specified events beyond the control of either party; all other coal supply contracts are requirements contracts. Certain coal supply contracts can be terminated early, which would result in a reduction to future earnings.
Previous report
The MLMC contract is the only coal supply contract in which the Company is responsible for all operating costs, capital requirements and final mine reclamation; therefore, MLMC is consolidated within NACCO’s financial statements. MLMC sells coal to its customer's Red Hills Power Plant at a contractually agreed-upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates. Profitability at MLMC is affected by customer demand for coal and changes in the indices that determine sales price and actual costs incurred. As diesel fuel is heavily weighted among the indices used to determine the coal sales price, fluctuations in diesel fuel prices can result in significant fluctuations in earnings at MLMC. The Red Hills Power Plant supplies electricity to the Tennessee Valley Authority (“TVA”) under a long-term power purchase agreement. MLMC’s contract with its customer runs through April 1, 2032. TVA’s power portfolio includes coal, nuclear, hydroelectric, natural gas and renewables. The decision regarding which power plants to dispatch is determined by TVA. Reduction in dispatch of the Red Hills Power Plant will result in reduced earnings at MLMC.
Previous report
On December 18, 2023, MLMC received notice from its customer related to a mechanical issue that began on December 15, 2023 and impacted one of two boilers at the Red Hills Power Plant. While this issue has been resolved, it resulted in a reduction in customer demand which had a significant impact on the Company's results of operations during the first nine months of 2024. The Company recognized income of $13.6 million in the third quarter of 2024 related to business interruption insurance recoveries to partially offset losses related to the boiler outage.
Previous report
The Sabine Mining Company (“Sabine”) operates the Sabine Mine in Texas. All production from Sabine was delivered to Southwestern Electric Power Company's (“SWEPCO”) Henry W. Pirkey Plant (the “Pirkey Plant”). SWEPCO is an American Electric Power (“AEP”) company. As a result of the early retirement of the Pirkey Plant, Sabine ceased deliveries and commenced final reclamation on April 1, 2023. Funding for mine reclamation is the responsibility of SWEPCO, and Sabine receives compensation for providing mine reclamation services. Sabine will provide mine reclamation services through September 30, 2026. On October 1, 2026, SWEPCO is scheduled to acquire all of the capital stock of Sabine and complete the remaining mine reclamation.
Previous report
At Coteau, Coyote Creek and Falkirk, the Company is paid a management fee per ton of coal or heating unit (MMBtu) delivered. Each contract specifies the indices and mechanics by which fees change over time, generally in line with broad measures of U.S. inflation. The customers are responsible for funding all mine operating costs, including final mine reclamation, and directly or indirectly providing all of the capital required to build and operate the mine. This contract structure eliminates exposure to spot coal market price fluctuations while providing income and cash flow with minimal capital investment. Other than at Coyote Creek, debt financing provided by or supported by the customers is without recourse to the Company. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for further discussion of Coyote Creek's guarantees.
Previous report
Coteau, Coyote Creek, Falkirk and Sabine each meet the definition of a variable interest entity ("VIE"). In each case, NACCO is not the primary beneficiary of the VIE as it does not exercise financial control; therefore, NACCO does not consolidate the results of these operations within its financial statements. Instead, these contracts are accounted for as equity method investments. The Company regularly evaluates if there are reconsideration events which could change the Company's conclusion as to whether these entities meet the definition of a VIE and the determination of the primary beneficiary. The income before income taxes associated with these VIEs is reported as Earnings of unconsolidated operations on the Unaudited Condensed Consolidated Statements of Operations and the Company’s investment is reported on the line Investments in unconsolidated subsidiaries in the Unaudited Condensed Consolidated Balance Sheets. The mines that meet the definition of a VIE are referred to collectively as the “Unconsolidated Subsidiaries.” For tax purposes, the Unconsolidated Subsidiaries are included within the NACCO consolidated U.S. tax return; therefore, the Income tax provision (benefit) line on the Unaudited Condensed Consolidated Statements of Operations includes income taxes related to these entities. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for further information on the Unconsolidated Subsidiaries.
Previous report
The Company performs contemporaneous reclamation activities at each mine in the normal course of operations. Under all of the Unconsolidated Subsidiaries’ contracts, the customer has the obligation to fund final mine reclamation activities. Under certain contracts, the Unconsolidated Subsidiary holds the mine permit and is therefore responsible for final mine reclamation activities. To the extent the Unconsolidated Subsidiary performs such final reclamation, it is compensated for providing those services in addition to receiving reimbursement from customers for costs incurred.
Previous report
NAMining Segment
Previous report
The NAMining segment provides value-added contract mining and other services for producers of industrial minerals. The segment is a platform for the Company’s growth and diversification of mining activities outside of the thermal coal industry. NAMining provides contract mining services for independently owned mines and quarries, creating value for its customers by performing the mining aspects of its customers’ operations. This allows customers to focus on their areas of expertise: materials handling and processing, product sales and distribution. As of September 30, 2024, NAMining operates in Florida, Texas, Arkansas, Virginia and Nebraska. In addition, Sawtooth Mining, LLC ("Sawtooth") has exclusive responsibility for mining and mine closure services for the Thacker Pass lithium project in northern Nevada, including mine design, construction, operation and maintenance.
Previous report
Certain of the entities within the NAMining segment are VIEs and are accounted for under the equity method as Unconsolidated Subsidiaries. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for further discussion.
Previous report
The Minerals Management segment derives income primarily by leasing its royalty and mineral interests to third-party exploration and production companies, and, to a lesser extent, other mining companies, granting them the rights to explore, develop, mine, produce, market and sell gas, oil, and coal in exchange for royalty payments based on the lessees' sales of those minerals.
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The Minerals Management segment owns royalty interests, mineral interests, non-participating royalty interests and overriding royalty interests.
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•Royalty Interest. Royalty interests generally result when the owner of a mineral interest leases the underlying minerals to an exploration and production company pursuant to an oil and gas lease. Typically, the resulting royalty interest is a cost-free percentage of production revenues for minerals extracted from the acreage. A holder of royalty interests is generally not responsible for capital expenditures or lease operating expenses, but royalty interests may be calculated net of post-production expenses, and typically have no environmental liability. Royalty interests leased to producers expire upon the expiration of the oil and gas lease and revert to the mineral owner.
Previous report
•Mineral Interest. Mineral interests are perpetual rights of the owner to explore, develop, exploit, mine and/or produce any or all of the minerals lying below the surface of the property. The holder of a mineral interest has the right to lease the minerals to an exploration and production company. Upon the execution of an oil and gas lease, the lessee (the exploration and production company) becomes the working interest owner and the lessor (the mineral interest owner) has a royalty interest.
Previous report
•Non-Participating Royalty Interest (“NPRIs”). NPRI is an interest in oil and gas production which is created from the mineral estate. The NPRI is expense-free, bearing no operational costs of production. The term “non-participating” indicates that the interest owner does not share in the bonus, rentals from a lease, nor the right to participate in the execution of oil and gas leases. The NPRI owner does, however, typically receive royalty payments.
Previous report
•Overriding Royalty Interest (“ORRIs”). ORRIs are created by carving out the right to receive royalties from a working interest. Like royalty interests, ORRIs do not confer an obligation to make capital expenditures or pay for lease operating expenses and have limited environmental liability; however, ORRIs may be calculated net of post-production expenses, depending on how the ORRI is structured. ORRIs that are carved out of working interests are linked to the same underlying oil and gas lease that created the working interest, and therefore, such ORRIs are typically subject to expiration upon the expiration or termination of the oil and gas lease.
Previous report
The Company may own more than one type of mineral and royalty interest in the same tract of land. For example, where the Company owns an ORRI in a lease on the same tract of land in which it owns a mineral interest, the ORRI in that tract will relate to the same gross acres as the mineral interest in that tract.
Previous report
The Minerals Management segment will benefit from the continued development of its mineral properties without the need for investment of additional capital once mineral and royalty interests have been acquired. The Minerals Management segment does not currently have any material investments under which it would be required to bear the cost of exploration, production or development.
Previous report
The Company's acquisition criteria for building a blended portfolio of mineral and royalty interests includes (i) new wells anticipated to come online within one to two years of investment, (ii) areas with forecasted future development within five years after acquisition and (iii) existing producing wells further along the decline curve that will generate stable cash flow. In addition, acquisitions should extend the geographic footprint to diversify across multiple basins with a preliminary focus on the more oil-rich Permian basin and a secondary focus on other diversifying basins to increase regional exposure. While the current focus is on the acquisition of mineral and royalty interests, the Company would also consider investments in ORRIs, NPRIs or non-operating working interests under certain circumstances. The current acquisition strategy does not contemplate any near-term working interest investments in which the Company would act as the operator.
Previous report
The Company also manages legacy royalty and mineral interests located in Ohio (Utica and Marcellus shale natural gas), Louisiana (Haynesville shale and Cotton Valley formation natural gas), Texas (Cotton Valley and Austin Chalk formation natural gas), Mississippi (coal), Pennsylvania (coal, coalbed methane and Marcellus shale natural gas), Alabama (coal, coalbed methane and natural gas) and North Dakota (coal, oil and natural gas). The majority of the Company’s legacy reserves were acquired as part of its historical coal mining operations.
Previous report
Government Regulation Update
Previous report
In May 2024, the Environmental Protection Agency (“EPA”) published the final rules for Greenhouse Gas (“GHG”) emissions and Mercury Air Toxics Standards (“MATS”) in the Federal Register. The final MATS and GHG rules will require compliance as early as 2027 and 2032, respectively. The Company is in the process of determining the implications of these rules.
Previous report
Previous efforts by the EPA were met with extensive litigation and there has been a similar response to the new GHG and MATS rules. State coalitions have filed lawsuits challenging both of these rules. Several other entities, including electric generators and industry groups, have joined the lawsuits. In July 2024 and October 2024, stay motions for the GHG and MATS rules were denied by the U.S. Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit Court”), respectively. Following the D.C. Circuit Court denial, emergency stay motions were filed for the GHG and MATS rules with the Supreme Court of the United States ("SCOTUS”). In October 2024, the SCOTUS denied the stay applications for the GHG and MATS rules. The GHG and MATS cases will continue through the normal procedures in the D.C. Circuit Court without stays in place. The Company cannot predict the full impact of the MATS and GHG rules on the operations of the coal-fired generation facilities operated by its customers.
Previous report
Review of the newly established carbon dioxide emission guidelines for existing coal-fired, steam generating electric generating units ("EGUs") indicate that the compliance deadline for coal-fired plants planning to install carbon capture and sequestration/storage technology has been extended to January 1, 2032 in order to operate beyond 2039. If a coal-fired plant intends to close prior to 2032, no controls will be required and if a plant plans to close between 2032 and 2039, they must begin co-firing with natural gas by January 1, 2030.
Previous report
The MATS rules finalize changes for the filterable particulate matter surrogate emission standard for non-mercury metal hazardous air pollutants for existing coal-fired EGUs, the filterable particulate matter emission standard compliance demonstration requirements, and the mercury emission standard for lignite-fired EGUs. Review of the MATS rules indicate that the EPA significantly reduced the fine particulate matter emission standard for all existing coal-fired EGUs and will require continuous monitoring equipment to demonstrate compliance. Furthermore, the EPA elected to remove the lignite subcategory for mercury limits and will require lignite-fired EGUs to meet the same standard as other types of coal.
Previous report
Substantially all of the Coal Mining segment's profits are derived from long-term mining contracts. These new rules may raise the cost of fossil fuel generated energy, making coal-fired power plants less competitive, and/or result in early closure of the coal-fired EGU's operated by the Company's customers which could have an adverse impact on demand for coal and ultimately result in the early closure of the mines servicing these plants, including closure of the Company's coal mines. The Company cannot predict the full impact of the MATS and GHG rules on the operations of the coal-fired EGUs operated by its customers and any early closure of the Company's mines could have a material adverse effect on the Company’s business, financial condition and results of operations.
Previous report
The EPA promulgated a regional haze program designed to protect and to improve visibility at and around Class I Areas, which are generally National Parks, National Wilderness Areas and International Parks. State implementation of the EPA’s Regional Haze Rule could require Coyote Creek’s customers to incur significant new costs at the Coyote Station power plant, which could result in the premature closure of the power plant and the Coyote Creek mine. The North Dakota Department of Environmental Quality (“NDDEQ”) finalized its state implementation plan and submitted it to the EPA for approval in August 2022. The NDDEQ determined that visibility progress was being made and did not require significant emissions controls at Coyote Station power plant. Notwithstanding NDDEQ’s determination, the EPA may require additional costly emission controls and it may not be economically feasible for Coyote Creek's customers to invest in such equipment, which could result in early retirement of Coyote Station and the Coyote Creek mine. In July 2024, the EPA issued a proposed partial denial of the state implementation plan. The Company submitted comments to the EPA on the proposed partial denial during the third quarter of 2024.
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The results of operations for NACCO were as follows for the three and nine months ended September 30:
Previous report
Third Quarter of 2024 Compared with Third Quarter of 2023, and First Nine Months of 2024 Compared with First Nine Months of 2023
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On December 1, 2022, the Company transferred its ownership interest in Midwest AgEnergy Group, LLC (“MAG”), a North Dakota-based ethanol business to HLCP Ethanol Holdco, LLC (“HLCP”). The Company received a payment of $1.2 million in the first quarter of 2023 in connection with a post-closing purchase price adjustment, which is included on the line Other, net within the accompanying Unaudited Condensed Consolidated Statements of Operations.
Previous report
The $65.9 million change in net cash (used for) provided by operating activities was primarily due to a net unfavorable change in working capital as well as a decrease in net income adjusted for non-cash items, primarily the $13.6 million receivable related to business interruption insurance recoveries at MLMC. The unfavorable change in working capital was mainly the result of:
Previous report
•An increase in Other current assets during the first nine months of 2024 compared with a modest increase in the first nine months of 2023. The change in Other current assets was mainly due to an increase in vendor deposits.
Previous report
•An increase in coal and mining supplies inventory during the first nine months of 2024 compared with a decrease in the first nine months of 2023.
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•A modest increase in Trade accounts receivable during the first nine months of 2024 compared with a decrease in the first nine months of 2023. The 2023 decrease in Trade accounts receivable was due to a delay in payments by a customer from December 31, 2022.
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•A modest decrease in Accounts payable during the first nine months of 2024 compared with an increase in the first nine months of 2023. The increase in 2023 accounts payable was primarily due to equipment acquired for the Thacker Pass lithium project.
Previous report
In addition, the Company entered into an Accounts Receivable Financing Program with a third-party banking institution on March 14, 2024 for the sale of certain accounts receivables. Accounts receivable sold under the Accounts Receivable Financing Program for the three and nine months ended September 30, 2024 were $16.6 million and $33.7 million, respectively. The net proceeds received were included in Net cash (used for) provided by operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows.
Previous report
Cash held by 1031 exchange facilitator
Previous report
The Company has cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. In the first nine months of 2024, the Company sold land for $7.0 million and recognized a $4.5 million gain in the Minerals Management segment. The Company structured this transaction in a manner that qualified as a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code. The net proceeds are being held in escrow by a third-party intermediary until the Company purchases replacement property. A total of $1.7 million in property related to this like-kind exchange was acquired during the first nine months of 2024. The Company had $5.3 million and $0.0 million of restricted cash at September 30, 2024 and December 31, 2023, respectively, which is reported on the line Cash held by 1031 exchange facilitator in the Unaudited Condensed Consolidated Balance Sheets. The Company is evaluating other acquisitions which, if executed, could utilize some or all of the remaining restricted cash.
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Reworded paragraphs (41)
Previous wording
Management's Discussion and Analysis of Financial Condition and Results of Operations include NACCO Industries, Inc.® (“NACCO”) and its wholly owned subsidiary, NACCO Natural Resources Corporation® (“NACCO Natural Resources”). NACCO Natural Resources brings natural resources to life by delivering aggregates, minerals, reliable fuels and environmental solutions through its robust business portfolio. The Company operates under three business segments: Coal Mining, North American Mining®("NAMining") and Minerals Management. The Coal Mining segment operates surface coal mines for power generation companies. The NAMining segment is a trusted mining partner for producers of aggregates, activated carbon, lithium and other industrial minerals. The Minerals Management segment, which includes the Catapult Mineral Partners ("Catapult") business, acquires and promotes the development of mineral interests. Mitigation Resources of North America® ("Mitigation Resources") provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services.
Current wording
Management's Discussion and Analysis of Financial Condition and Results of Operations include NACCO Industries, Inc.® (NACCO) and its wholly owned subsidiary, NACCO Natural Resources Corporation® (NACCO Natural Resources and with NACCO collectively, the Company, we, our or us). NACCO Natural Resources brings natural resources to life by delivering aggregates, minerals, reliable fuels and environmental solutions through our robust business portfolio. We operate under three business segments: Coal Mining, North American Mining®(NAMining) and Minerals Management. The Coal Mining segment operates surface coal mines for power generation companies. The NAMining segment is a trusted mining partner for producers of aggregates, activated carbon, lithium and other industrial minerals. The Minerals Management segment, which includes the Catapult Mineral Partners (Catapult) business, acquires and promotes the development of mineral interests and investments. Mitigation Resources of North America® (Mitigation Resources) provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services. In addition, ReGen Resources is pursuing opportunities to develop new power generation resources. See Note 1 to the Unaudited Condensed Consolidated Financial Statements within this Form 10-Q for further discussion of our operating segments.
Previous wording
The Company has items not directly attributable to a reportable segment that are not included in the reported financial results of the operating segment. These items primarily include administrative costs related to public company reporting requirements, including management and board compensation, and the financial results of Bellaire Corporation ("Bellaire"), Mitigation Resources and other developing businesses. Bellaire manages the Company’s long-term liabilities related to former Eastern U.S. underground mining activities.
Current wording
We have items not directly attributable to a reportable segment that are not included in the reported financial results of the operating segment. These items primarily include administrative costs related to public company reporting requirements, including management and board compensation, and the financial results of Bellaire Corporation (Bellaire), Mitigation Resources, ReGen Resources and other developing businesses. Bellaire manages our long-term liabilities related to former Eastern U.S. underground mining activities.
Previous wording
Refer to the discussion of the Company's Critical Accounting Policies and Estimates as disclosed on pages 52 through 53 in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The Company's Critical Accounting Policies and Estimates have not materially changed since December 31, 2023.
Current wording
Refer to the discussion of our Critical Accounting Policies and Estimates as disclosed on pages 50 through 51 in our Annual Report on Form 10-K for the year ended December 31, 2024. Our Critical Accounting Policies and Estimates have not materially changed since December 31, 2024.
Previous wording
Interest expense increased in the third quarter of 2024 and the first nine months of 2024 compared with the respective 2023 periods due to higher average borrowings as well as an increase in interest rates.
Current wording
Interest expense increased in the first quarter of 2025 compared with the first quarter of 2024 due to higher average borrowings, partially offset by a decrease in interest rates.
Previous wording
Interest income decreased in the third quarter of 2024 and the first nine months of 2024 compared with the respective 2023 periods due to lower earnings on reduced cash balances.
Current wording
Interest income decreased in the first quarter of 2025 compared with the first quarter of 2024 due to lower earnings on reduced cash balances.
Previous wording
(Gain) loss on equity securities represents changes in the market price of invested assets reported at fair value. The change in the third quarter of 2024 and the first nine months of 2024 compared with the respective 2023 periods was due to fluctuations in the market prices of the exchange-traded equity securities. See Note 5 to the Unaudited Condensed Consolidated Financial Statements forfurther discussion of equity securities.
Current wording
Loss (gain) on equity securities represents changes in the market price of invested assets reported at fair value. The change in the first quarter of 2025 compared with the first quarter of 2024 was due to fluctuations in the market prices of the exchange-traded equity securities. See Note 5 to the Unaudited Condensed Consolidated Financial Statements forfurther discussion of equity securities.
Previous wording
The Company evaluates and updates its estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of actual earnings compared to projections of earnings between entities that benefit from percentage depletion and those that do not, the effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The benefit of percentage depletion is not directly related to the amount of consolidated pre-tax income recorded in a period. Accordingly, in periods where income before tax is relatively small, the proportional effect of the benefit from percentage depletion on the effective tax rate may be significant. In addition, as a result of a forecasted full-year 2023 loss before income tax as of September 30, 2023, the effect of the benefit from percentage depletion resulted in a negative forecasted effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate, and the cumulative impact of the change in the estimated annual tax rate is recorded, which can make quarterly comparisons not meaningful.
Current wording
We evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. For the three months ended March 31, 2024, the effective income tax rate was impacted by a $0.8 million discrete tax item. Without the discrete tax item, the effective income tax rate for the three months ended March 31, 2024 would have been 4.1%. There were no discrete tax items for the three months ended March 31, 2025. Historically, our actual effective tax rates have differed from the statutory effective tax rate primarily due to the benefit received from percentage depletion. The benefit from percentage depletion varies based upon the mix and timing of actual earnings compared to projections of earnings between entities that benefit from percentage depletion and those that do not, and as such the effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The benefit of percentage depletion is not directly related to the amount of consolidated pre-tax income recorded in a period. Accordingly, in periods where income before tax is relatively small, the proportional effect of the benefit from percentage depletion on the effective tax rate may be significant. Each quarter, we update our estimate of the annual effective tax rate, and the cumulative impact of the change in the estimated annual tax rate is recorded, which can make quarterly comparisons not meaningful.
Previous wording
The following tables detail NACCO's changes in cash flow for the nine months ended September 30:
Current wording
The following tables detail the changes in cash flow for the three months ended March 31:
Previous wording
The change in net cash provided by (used for) financing activities was primarily due to additions in debt borrowings during the first nine months of 2024 compared with reductions during the first nine months of 2023, partially offset by an increase in share repurchases during the first nine months of 2024.
Current wording
The change in net cash (used for) provided by financing activities was primarily due to reductions in debt borrowings during the first three months of 2025 compared with additions during the first three months of 2024, partially offset by a decrease in share repurchases during the first three months of 2025.
Previous wording
In September 2024, NACCO Natural Resources amended its secured revolving line of credit to increase the revolving credit commitments to $200.0 million (the “Facility”) and extend the maturity to September 2028. Borrowings outstanding under the Facility were $37.2 million at September 30, 2024. At September 30, 2024, the excess availability under the Facility was $130.9 million, which reflects a reduction for outstanding letters of credit of $31.9 million.
Current wording
In September 2024, NACCO Natural Resources amended the secured revolving line of credit (Facility) to increase the revolving credit commitments to $200.0 million and extend the maturity to September 2028. Borrowings outstanding under the Facility were $65.0 million at March 31, 2025. At March 31, 2025, the excess availability under the Facility was $90.5 million, which reflects a reduction for outstanding letters of credit of $44.5 million.
Previous wording
NACCO has not guaranteed any borrowings of NACCO Natural Resources. The Facility allows for the payment to NACCO of dividends and advances under certain circumstances. Dividends (to the extent permitted by the Facility) and management fees are the primary sources of cash for NACCO and enable the Company to pay dividends to stockholders and repurchase shares.
Current wording
NACCO has not guaranteed any borrowings of NACCO Natural Resources. The Facility allows for the payment to NACCO of dividends and advances under certain circumstances. Dividends (to the extent permitted by the Facility) and management fees are the primary sources of cash for NACCO and enable us to pay dividends to stockholders and repurchase shares.
Previous wording
The Facility has performance-based pricing, which sets interest rates based upon NACCO Natural Resources achieving various levels of debt to EBITDA ratios, as defined in the Facility. Borrowings bear interest at a floating rate plus a margin based on the level of debt to EBITDA ratio achieved. The applicable margins, effective September 30, 2024, for base rate and Term SOFR loans were 1.75% and 2.75%, respectively. The Facility has a commitment fee which is based upon achieving various levels of debt to EBITDA ratios. The commitment fee was 0.45% on the unused commitment at September 30, 2024. During the three and nine months ended September 30, 2024, the average borrowing under the Facility was $28.2 million and $21.5 million, respectively, and the weighted-average annual interest rate was 8.63% and 9.27%, respectively.
Current wording
The Facility has performance-based pricing, which sets interest rates based upon NACCO Natural Resources achieving various levels of debt to EBITDA ratios, as defined in the Facility. Borrowings bear interest at a floating rate plus a margin based on the level of debt to EBITDA ratio achieved. The applicable margins, effective March 31, 2025, for base rate and Term Secured Overnight Financing Rate loans were 1.75% and 2.75%, respectively. The Facility has a commitment fee which is based upon achieving various levels of debt to EBITDA ratios. The commitment fee was 0.45% on the unused commitment at March 31, 2025. During the three months ended March 31, 2025, the average borrowing under the Facility was $59.5 million and the weighted-average annual interest rate was 6.87%.
Previous wording
The Company believes funds available from cash on hand, the Facility and operating cash flows will provide sufficient liquidity to meet its operating needs and commitments arising during the next twelve months and until the expiration of the Facility in September 2028.
Current wording
We believe funds available from cash on hand, the Facility and operating cash flows will provide sufficient liquidity to meet our operating needs and commitments arising during the next twelve months and until the expiration of the Facility in September 2028.
Previous wording
Expenditures for property, plant and equipment and mineral interests were $30.7 million during the first nine months of 2024, primarily for equipment at the NAMining and Coal Mining segments as well as land at Mitigation Resources. Planned expenditures for the remainder of 2024 are expected to be approximately $4 million in the Coal Mining segment, $12 million in the NAMining segment, $20 million in the Minerals Management segment and $2 million in Unallocated Items. Planned expenditures in 2025 are expected to be approximately $48 million.
Current wording
Expenditures for property, plant and equipment were $8.8 million during the first three months of 2025, primarily for equipment in the NAMining segment. Planned expenditures for the remainder of 2025 are expected to be approximately $55 million. This amount includes $12 million in the Coal Mining segment, $16 million in the NAMining segment, $20 million in the Minerals Management segment and $7 million in growth businesses included in Unallocated Items. Expenditures are expected to be funded from internally generated funds and/or bank borrowings.
Previous wording
The increase in other net tangible assets at September 30, 2024 compared with December 31, 2023 was mainly the result of increases in Property, plant and equipment, Inventory and Other current assets during the first nine months of 2024. The increase in Inventory was mainly due to higher coal and mining supplies inventory. The increase in Other current assets is primarily due to $7.8 million in vendor deposits. The $13.6 million receivable related to business interruption insurance recoveries at MLMC also contributed to the change in other net tangible assets.
Current wording
The increase in other net tangible assets at March 31, 2025 compared with December 31, 2024 was mainly the result of:
Previous wording
Since December 31, 2023, other than the changes identified above, there have been no significant changes in the total amount of NACCO's contractual obligations, contingent liabilities or commercial commitments, or the timing of cash flows in accordance with those obligations as reported on page 58 in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of certain guarantees related to Coyote Creek.
Current wording
Since December 31, 2024, other than the changes identified above, there have been no significant changes in the total amount of NACCO's contractual obligations, contingent liabilities or commercial commitments, or the timing of cash flows in accordance with those obligations as reported on pages 56 and 57 in our Annual Report on Form 10-K for the year ended December 31, 2024. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of certain guarantees related to Coyote Creek.
Previous wording
Tons of coal delivered by the Coal Mining segment were as follows for the three and nine months ended September 30:
Current wording
Tons of coal delivered by the Coal Mining segment were as follows for the three months ended March 31:
Previous wording
The results of operations for the Coal Mining segment were as follows for the three and nine months ended September 30:
Current wording
The results of operations for the Coal Mining segment were as follows for the three months ended March 31:
Previous wording
Revenues decreased 5.1% in the third quarter of 2024 compared with the third quarter of 2023 primarily due to a reduction in customer requirements at MLMC as a result of a mechanical issue that impacted one of two boilers at the Red Hills Power Plant.
Current wording
Revenues increased 23.8% in the first quarter of 2025 compared with the first quarter of 2024 due to an increase in customer requirements at MLMC. The first quarter of 2024 was impacted by lower customer requirements as a result of a boiler issue at the customer's Red Hills Power Plant.
Previous wording
The following table identifies the components of change in Operating profit (loss) for the third quarter of 2024 compared with the third quarter of 2023:
Current wording
The following table identifies the components of change in Operating profit (loss) for the first quarter of 2025 compared with the first quarter of 2024:
Previous wording
Operating profit (loss) improved by $24.6 million in the third quarter of 2024 compared with the third quarter of 2023 primarily due to MLMC's business interruption insurance recoveries for the issue at the Red Hills Power Plant, a decrease in the gross loss and an increase in earnings of unconsolidated operations.
Current wording
Operating profit (loss) improved by $4.2 million in the first quarter of 2025 compared with the first quarter of 2024, primarily due to a decrease in the gross loss, excluding inventory impairment charges, and an increase in earnings of unconsolidated operations.
Previous wording
The increase in earnings of unconsolidated operations was primarily due to a higher per ton management fee beginning in June 2024 when temporary price concessions ended and an increase in customer demand at Falkirk. Improved results at Coteau also contributed to the increase in earnings of unconsolidated operations.
Current wording
The increase in earnings of unconsolidated operations was primarily due to improved results at Falkirk, mainly due to a higher per ton management fee beginning in June 2024 when temporary price concessions ended. An increase in demand at Coteau also contributed to the increase in earnings of unconsolidated operations.
Previous wording
Tons delivered by the NAMining segment were as follows for the three and nine months ended September 30:
Current wording
Tons delivered by the NAMining segment were as follows for the three months ended March 31:
Previous wording
The results of operations for the NAMining segment were as follows for the three and nine months ended September 30:
Current wording
The results of operations for the NAMining segment were as follows for the three months ended March 31:
Previous wording
Total revenues increased 48.8% in the third quarter of 2024 compared with the third quarter of 2023, primarily due to an increase in reimbursable costs, which have an offsetting amount in cost of sales and have no impact on gross profit. Revenues excluding reimbursable costs increased 24.1% mainly due to favorable pricing and delivery mix at the consolidated limestone quarries. This increase was partially offset by a reduction in tons delivered primarily due to an increase in planned customer outages and significant rain events in Florida during the third quarter of 2024.
Current wording
Total revenues increased 28.8% in the first quarter of 2025 compared with the first quarter of 2024, primarily due to an increase in reimbursable costs, which have an offsetting amount in cost of sales and have no impact on gross profit. Revenues excluding reimbursable costs were comparable in the first quarter of 2025 compared with the 2024 period, as an increase in part sales was largely offset by fewer tons delivered due to reduced customer requirements.
Previous wording
The following table identifies the components of change in Operating profit for the first nine months of 2024 compared with the first nine months of 2023:
Current wording
The following table identifies the components of change in Operating profit for the first quarter of 2025 compared with the first quarter of 2024:
Previous wording
The following table sets forth the Company’s estimate of the number of gross and net productive wells:
Current wording
The following table sets forth our estimate of the number of gross and net productive wells:
Previous wording
Gross wells are the total wells in which an interest is owned. Net wells are calculated based on the Company's net royalty interest, factoring in both ownership percentage of gross wells and royalty rate.
Current wording
Gross wells are the total wells in which an interest is owned. Net wells are calculated based on our net royalty interest, factoring in both ownership percentage of gross wells and royalty rate.
Previous wording
Oil and natural gas prices have been historically volatile and may continue to be volatile in the future. The table below demonstrates volatility with the average prices as reported by the United States Energy Information Administration for the three and nine months ended September 30:
Current wording
The table below shows the average prices as reported by the United States Energy Information Administration for the three months ended March 31:
Previous wording
These indicated prices do not necessarily reflect the contract terms for the Company's sales. As an owner of royalty and mineral interests, the Company’s access to information concerning activity and operations of its royalty and mineral interests is limited. The Company does not have information that would be available to a company with working interests in oil and natural gas operations because detailed information is not generally available to owners of royalty and mineral interests.
Current wording
These indicated prices do not necessarily reflect the contract terms for our sales. As an owner of royalty and mineral interests, our access to information concerning activity and operations of our royalty and mineral interests is limited. We do not have information that would be available to a company with working interests in oil and natural gas operations because detailed information is not generally available to owners of royalty and mineral interests.
Previous wording
The results of operations for the Minerals Management segment were as follows for the three and nine months ended September 30:
Current wording
The results of operations for the Minerals Management segment were as follows for the three months ended March 31:
Previous wording
Revenues and operating profit increased in the third quarter of 2024 and the first nine months of 2024 compared with the respective 2023 periods, primarily due to an increase in oil and natural gas revenue as a result of higher production volumes. Increased oil production volumes are mainly related to an acquisition that closed during the fourth quarter of 2023. These improvements were partially offset by a reduction in other revenues, primarily coal royalty income. In addition, revenues during the first nine months of 2023 included $1.4 million of settlement income. Operating profit in the first nine months of 2024 included a $4.5 million gain on the sale of land related to legacy operations.
Current wording
Revenues increased 4.8% in the first quarter of 2025 compared with the first quarter of 2024, primarily due to an increase in natural gas revenue as a result of higher natural gas prices. These improvements were partially offset by a reduction in oil revenues and other revenues, primarily coal royalty income.
Previous wording
Unallocated Items and Eliminations were as follows for the three and nine months ended September 30:
Current wording
Unallocated Items and Eliminations were as follows for the three months ended March 31:
Previous wording
NACCO's businesses provide critical inputs for electricity generation, construction and development, and the production of industrial minerals and chemicals. Increasing demand for electricity, on-shoring and current federal policies are creating favorable macroeconomic trends within these industries. Management is confident in the Company's trajectory and business prospects as it prepares for 2025 and longer-term growth opportunities.
Current wording
NACCO's businesses provide critical inputs for electricity generation, construction and development, and the production of industrial minerals and chemicals. Increasing demand for electricity, on-shoring and current federal policies are creating favorable macroeconomic trends within these industries. We are confident in our trajectory and business prospects in 2025, and we continue to prepare for longer-term growth opportunities. Specifically for 2025, we expect to generate a moderate year-over-year increase in consolidated operating profit.
Previous wording
Sawtooth is the exclusive provider of comprehensive mining services at Thacker Pass, which is owned by Lithium Americas Corp. (TSX: LAC) (NYSE: LAC). Sawtooth will supply all of the lithium-bearing ore requirements for Thacker Pass, which is currently under construction. Sawtooth will be reimbursed for costs of mining, capital expenditures and mine closure and will recognize a contractually agreed upon production fee once the mine is operating. In addition to providing comprehensive mining services, Sawtooth Mining is currently assisting with certain construction services and will transport clay tailings once lithium production commences. Phase 1 lithium production is estimated to begin in 2027. Prior to that time, the Company expects to continue to recognize moderate income.
Current wording
NAMining's subsidiary, Sawtooth, is the exclusive provider of comprehensive mining services at Thacker Pass, which is owned through a joint venture between Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) and General Motors Holdings LLC. Sawtooth will supply all of the lithium-bearing ore requirements for Thacker Pass, which is currently under construction. We expect to continue to recognize moderate income at Sawtooth while it assists with certain construction services. Once the mine is operating, Sawtooth will be reimbursed for costs of mining, capital expenditures and mine closure and will recognize a contractually agreed upon production fee. In addition to providing comprehensive mining services, Sawtooth will receive a fee to transport clay tailings once lithium production commences. Phase 1 lithium production is estimated to begin in late 2027.
Previous wording
Mitigation Resources, which provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services, continues to build on the substantial foundation it has established over the past several years. Mitigation Resources business offers an opportunity for growth and diversification in an industry where the Company has substantial knowledge and expertise and a strong reputation. It currently has ten mitigation banks and four permittee-responsible mitigation projects located in Tennessee, Mississippi, Alabama, Texas, Florida and Pennsylvania. In addition, Mitigation Resources is providing ecological restoration services for abandoned surface mines, as well as pursuing additional environmental restoration projects. It was named a designated provider of abandoned mine land restoration by the State of Texas. The Company believes that Mitigation Resources can provide solid rates of return on capital employed as this business matures. Mitigation Resources expects to achieve profitability beginning in 2025 based on current expectations for new projects, as well as timing of permit approvals and mitigation credit releases.
Current wording
Mitigation Resources also provides ecological restoration services for abandoned surface mines and plans to pursue other environmental restoration projects. It was named a designated provider of abandoned mine land restoration by the State of Texas, and in January 2025 secured a restoration project in Kentucky that is expected to be accretive to earnings beginning in 2026.
Previous wording
The Company continues to look for ways to create additional value by utilizing its core mining competencies which include reclamation and permitting. NACCO established ReGen Resources to utilize these skills to address the rapidly increasing demand for additional power generation sources in the United States through development of solar and other energy-related projects on reclaimed mining properties. These projects could be developed by the Company itself or through joint ventures that include partners with expertise in energy development projects. Current opportunities under review include solar arrays, solar-gas hybrid projects and carbon capture on reclaimed mine land in Mississippi, Pennsylvania and Texas.
Current wording
We established ReGen Resources in 2023 to address the rapidly increasing demand for additional power generation sources in the United States through development of energy and energy-related projects that utilize multiple-generation technologies, such as solar combined with gas-fired generation, primarily on reclaimed mining properties. These projects could be developed by ReGen Resources directly or through joint ventures that include partners with expertise in energy development projects. Current projects include solar arrays, solar-gas hybrid projects and carbon capture projects on reclaimed mine land in Mississippi and Texas. Additional projects in other states are in early-stage review.
Previous wording
The Company is taking actions to terminate its defined benefit pension plan, which will eliminate future volatility from changes in the pension obligation. Once complete, obligations under the terminated plan will be transferred to a third-party insurance provider. The Company expects to utilize surplus assets to fund a qualified replacement plan, reducing future cash funding requirements. Although the plan is currently over funded, NACCO is anticipating a non-cash settlement charge in 2025 upon termination.
Current wording
We are taking actions to terminate our defined benefit pension plan in 2025, which will eliminate future earnings volatility from changes in the pension obligation. Once complete, obligations under the terminated plan will be transferred to a third-party insurance provider. Surplus assets are expected to be utilized to fund a qualified replacement plan, reducing future cash funding requirements. Although the plan is currently over funded, a significant non-cash settlement charge is anticipated upon termination, which is expected to lead to a substantial year-over-year decrease in net income and EBITDA compared with 2024. Excluding the anticipated settlement charge, net income is expected to decrease moderately from the prior year.
Previous wording
The Company believes its businesses have competitive advantages that provide value to customers and create long-term value for stockholders. The Company is pursuing growth and diversification by strategically leveraging its core mining and natural resources management skills to build a robust portfolio of affiliated businesses. Opportunities for growth remain strong. Acquisitions of additional mineral interests and improvements in the outlook for Coal Mining segment customers, as well as new contracts at Mitigation Resources and NAMining should be accretive to the Company's longer-term outlook.
Current wording
We believe that each of our businesses has competitive advantages that provide value to customers and create long-term value for stockholders. We are pursuing organic growth and diversification by strategically leveraging our core natural resources management skills to build a robust portfolio of affiliated businesses. Opportunities for growth remain strong and are increasing amid recent successes and a significant positive change in the regulatory environment, particularly for fossil fuels. Acquisitions of additional mineral interests and improvements in the outlook for Coal Mining segment customers, as well as new contracts at Mitigation Resources and NAMining should be accretive to the longer-term outlook.
Previous wording
NACCO is committed to maintaining a conservative capital structure as it continues to grow and diversify, while avoiding unnecessary risk. The Company believes strategic diversification will generate cash that can be re-invested to strengthen and expand the businesses. The Company also continues to maintain the highest levels of customer service and operational excellence with an unwavering focus on safety and environmental stewardship.
Current wording
We are committed to maintaining a conservative capital structure as we continue to grow and diversify, while avoiding unnecessary risk. We believe strategic diversification will generate cash that can be re-invested to strengthen and expand the businesses or distributed to investors in the form of share repurchases or dividends. We continue to maintain the highest levels of customer service and operational excellence with an unwavering focus on safety and environmental stewardship.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The following table identifies the components of change in Operating profit for the first quarter of 2025 compared with the first quarter of 2024:
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Expenditures are expected to be funded from internally generated funds and/or bank borrowings.
Previous report — wording carried elsewhere
The increase in earnings of unconsolidated operations was primarily due to a higher per ton management fee beginning in June 2024 when temporary price concessions ended at Falkirk. Improved results at Coteau also contributed to the increase in earnings of unconsolidated operations.
Previous report — wording carried elsewhere
Total revenues increased 32.2% in the first nine months of 2024 compared with the first nine months of 2023 primarily due to an increase in reimbursable costs, which have an offsetting amount in cost of sales and have no impact on gross profit. Revenues excluding reimbursable costs increased 30.5% mainly due to favorable pricing at the consolidated limestone quarries and an increase in the scope of work at Sawtooth.