NACCO INDUSTRIES INC
For the period ended Jun 30, 2025. Filed Aug 6, 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.
Jun 30, 2025 · Filed Aug 6, 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 2025-03-31; filed 2025-04-30.
0000789933-25-000023
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000789933-25-000041
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 109 previous paragraphs and 127 current paragraphs.
42 unchanged; 36 reworded; 43 added; 30 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 15 previous and 18 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 (43)
Current report
During the second quarter of 2025, we updated the names of our reportable segments to make it easier for our stakeholders to understand the business models within each segment. The Utility Coal Mining, Contract Mining and Minerals and Royalties segments were formerly the Coal Mining, North American Mining and Minerals Management segments, respectively. There were no changes to the composition of each segment and therefore no changes to historical segment reporting.
Current report
The Environmental Protection Agency (EPA)
Current report
In July 2025, the EPA issued a final rule and companion proposal that will extend the compliance deadlines for coal combustion residual (CCR) management unit (CCRMU) requirements.
Current report
In May 2025, the EPA granted an administrative petition for reconsideration of the portion of the Clean Air Act’s regional haze rule which disapproved North Dakota's state implementation plan. The EPA is required to submit status reports every 120 days, with the first report due October 2, 2025.
Current report
In May 2025, the EPA proposed to approve North Dakota’s CCR program application, which would allow the state, rather than the federal government, to manage coal ash disposal in surface impoundments and landfills.
Current report
Federal Coal Leasing
Current report
We enter into leases of federally owned coal for a small portion of the coal mined at certain of our North Dakota mines. These lease applications require review under the National Environmental Policy Act (NEPA). The Department of Interior’s Bureau of Land Management (BLM) conducted the NEPA process for almost five years on two federal coal lease applications with no published Environmental Assessments. In April 2025 and June 2025, respectively, the BLM published the draft Environmental Assessments for the lease applications in the Federal Register subject to a 30-day public comment period for the April publication and a 15-day public comment period for the June publication.
Current report
Other Regulations
Current report
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA includes changes to U.S. tax law including provisions for bonus depreciation, current expensing of research expenditures and changes to the interest deductibility threshold. The changes resulting from the tax provisions in OBBBA are not expected to have a material impact on our results of operations.
Current report
The OBBBA includes substantial changes to U.S. solar energy tax policy which could have a material impact on the solar projects being developed by ReGen Resources. Our investments in solar and other energy projects are dependent, in part, upon current state regulatory incentives and federal tax credits in order for the projects to be economically viable. We have approximately $4.5 million of capitalized assets associated with our solar projects. We have incurred, and will continue to incur, costs in connection with these projects and the results of operations and/or return on investment could be lower than anticipated.
Current report
Second Quarter of 2025 Compared with Second Quarter of 2024, and First Six Months Ended June 30, 2025 Compared with First Six Months Ended June 30, 2024
Current report
Other (income) expense, net
Current report
During the first quarter of 2025, $14.5 million of excess funds from the terminated Falkirk pension plan were directly transferred to the NACCO 401(k) plan. The NACCO 401(k) plan is a qualified replacement plan; therefore, these funds will be utilized to offset future profit sharing contributions to 401(k) plan participants. During the second quarter of 2025, NACCO and
Current report
Falkirk’s former customer agreed to settle the corresponding liability for $10.9 million, resulting in a $3.6 million Gain on settlement of excess funding liability.
Current report
The $2.9 million change in net cash used for operating activities was primarily due to a favorable change in non-cash items. The Company’s non-cash items primarily include Gain on sale of assets, deferred income taxes, depreciation, depletion and amortization and stock-based compensation.
Current report
•An increase in Prepaid insurance due to the timing of payments;
Current report
UTILITY COAL MINING SEGMENT
Current report
The results of operations for the Utility Coal Mining segment were as follows for the three and six months ended June 30:
Current report
Second Quarter of 2025 Compared with Second Quarter of 2024
Current report
Operating profit decreased by $1.5 million in the second quarter of 2025 compared with the second quarter of 2024, primarily due to an increase in gross loss, higher selling, general and administrative expenses and a decrease in earnings of unconsolidated operations.
Current report
Gross loss was unfavorable at MLMC during the second quarter of 2025 compared with the 2024 period. Although the cost per ton delivered improved during the second quarter of 2025, the contractual sales price per ton decreased. In addition, the number of tons sold exceeded tons mined resulting in the recognition of costs previously capitalized into inventory. In comparison, during the second quarter of 2024, inefficiencies at the customer's power plant created mining inefficiencies, and thus higher mining costs. The tons mined exceeded tons sold resulting in a portion of production costs being capitalized into inventory during the 2024 period.
Current report
The decrease in earnings of unconsolidated operations was primarily due to lower customer demand at Coteau, Coyote and Falkirk, partially offset by higher per ton management fees, mainly the result of temporary price concessions ending at Falkirk in June 2024.
Current report
First Six Months of 2025 Compared with First Six Months of 2024
Current report
Revenues increased 56.7% in the first six months of 2025 compared with the first six months of 2024 primarily due to an increase in customer requirements at MLMC. A boiler issue at the customer's Red Hills Power Plant reduced customer requirements in 2024.
Current report
Operating profit increased by $2.7 million in the first six months of 2025 compared with the first six months of 2024 primarily due to an increase in earnings of unconsolidated operations and a decrease in gross loss. These improvements were partially offset by higher selling, general and administrative expenses.
Current report
CONTRACT MINING SEGMENT
Current report
The results of operations for the Contract Mining segment were as follows for the three and six months ended June 30:
Current report
Second Quarter of 2025 Compared with Second Quarter of 2024
Current report
First Six Months of 2025 Compared with First Six Months of 2024
Current report
Operating profit decreased $2.5 million in the first six months of 2025 compared with the first six months of 2024. The change in Operating profit was primarily due to a decrease in gross profit, a decrease in earnings of unconsolidated operations and an increase in selling, general and administrative expenses. The reduction in gross profit was mainly the result of a decrease in tons delivered and higher operating costs, including unexpected repairs and maintenance costs, partially offset by an increase in part sales. 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.
Current report
MINERALS AND ROYALTIES SEGMENT
Current report
The results of operations for the Minerals and Royalties segment were as follows for the three and six months ended June 30:
Current report
Operating profit decreased $2.4 million in both the second quarter and the first six months of 2025 compared with 2024 periods, primarily due to the absence of a $4.5 million prior year gain on sale of land. These decreases were partially offset by improvements in gross profit due to higher natural gas prices.
Current report
While the current quarter presented some unexpected operational challenges, our business model is purposely built for durability and resilience. Our foundation rests on a stable base of long-term coal-mining contracts, generating dependable recurring cash flows. As new long-term contracts are added each year in our other businesses, these multi-year agreements create a “layering” effect as their contributions compound. This, combined with income generated by our Mineral and Royalty assets, provide cash flow stability. We remain confident in our ability to deliver improving results during the second half of 2025, with momentum building as we move into 2026.
Current report
Over the remainder of the year, we anticipate a substantial increase in consolidated operating profit compared to the first half, although full-year results will be lower than the prior year due in part to $13.6 million of business interruption insurance income recognized in the third quarter of 2024. In addition, we intend to terminate our defined benefit pension plan in the fourth quarter of 2025. Although the plan is currently over funded, a significant non-cash settlement charge is anticipated upon termination. The pension settlement charge and lower operating profit are expected to lead to a substantial year-over-year decrease in net income and EBITDA compared with the 2024 second half and full year.
Current report
Our Utility Coal Mining segment, operated by North American Coal, constitutes the foundation of our business, anchored by a stable portfolio of long-term mining contracts. We anticipate customer demand to remain steady in the second half of 2025 and throughout 2026 at the unconsolidated mining operations. At MLMC, results for the 2025 second half are expected to improve over the first half of 2025. However, a reduction in the 2025 contractually determined per ton sales price compared with 2024 is anticipated to continue to offset expected improvements in cost efficiencies, causing MLMC's and the Utility Coal Mining segment's 2025 second half and full year results to decline from the respective prior year levels, which include the business interruption insurance income. Looking ahead, we expect improving profitability for this segment in 2026, driven by continued stable earnings at our unconsolidated operations and anticipated improvements at MLMC in both sales price and cost per ton delivered, particularly if the customer's power plant is able to operate more consistently.
Current report
The Contract Mining segment, operated by North American Mining, represents our mining growth platform, benefiting from ongoing geographic and mineral expansion and the signing of new, more favorable long-term contracts. Each new contract perpetuates the compounding effect that underpins our growth strategy—much like building an annuity portfolio over time. For example, in 2024, the Contract Mining segment executed three new or amended contracts, which are projected to generate approximately $20 million in after-tax net present value cash flows over contract terms ranging from 6 to 20 years. Our expanding pipeline of potential deals and continued engagement with customers position this segment as a key pillar for future growth.
Current report
Near term, while overall customer demand within the Contract Mining segment is expected to remain stable year-over-year, profitability improvements in the 2025 second half and full year are expected to be driven by operational efficiencies and an increased focus on parts sales. This momentum is expected to continue into 2026.
Current report
The Minerals and Royalties segment, led by Catapult, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. The business is a scalable platform for growth, with its data-driven approach to portfolio expansion and disciplined capital deployment providing a distinct competitive advantage in the U.S. market.
Current report
In July 2025, Catapult completed a $4.2 million acquisition of mineral interests within the Midland Basin which included 10,500 gross acres and approximately 400 net royalty acres. The acquisition includes a mix of producing wells, as well as additional upside opportunities through future development with existing operators in the area. This business also has an investment in a company that holds non-operated working interests in oil and natural gas assets. These investments are expected to contribute to the anticipated improvement in second-half operating profit compared with both the first half of 2025 and second half of 2024. Improvements in operating profit are expected to continue into 2026.
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Removed paragraphs (30)
Previous report
•Prioritizing the coal ash program to expedite state permit reviews and update coal ash regulations (CCR Rule).
Previous report
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.
Previous report
First Quarter of 2025 Compared with First Quarter of 2024
Previous report
Other expense (income), net
Previous report
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.
Previous report
•An increase in Property, plant and equipment during the first quarter of 2025.
Previous report
COAL MINING SEGMENT
Previous report
The results of operations for the Coal Mining segment were as follows for the three months ended March 31:
Previous report
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 report
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 report
NORTH AMERICAN MINING (NAMining) SEGMENT
Previous report
The results of operations for the NAMining segment were as follows for the three months ended March 31:
Previous report
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 report
MINERALS MANAGEMENT SEGMENT
Previous report
The results of operations for the Minerals Management segment were as follows for the three months ended March 31:
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
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 report
Mitigation Resources reported its second consecutive quarter of profitability in the first quarter of 2025 and is expected to achieve full-year 2025 profitability based on current expectations for the timing of permit approvals and mitigation credit releases, as well as income generated from service-related projects. Mitigation Resources is expected to increase profitability over time, and provide a return on capital employed in the mid-teens as the business matures.
Previous report
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 report
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 report
Consolidated capital expenditures are expected to total approximately $64 million in 2025, which includes approximately $13 million for Coal Mining, $23 million for NAMining, $20 million for Minerals Management and $8 million predominantly for ReGen Resources and other growth businesses. Based on our current business plan, we project a steady increase in annual cash flow generation beginning in 2025.
Previous report
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 report
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.
Reworded paragraphs (36)
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 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.
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: Utility Coal Mining, Contract Mining and Minerals and Royalties. The Utility Coal Mining segment, operated by North American Coal®, manages surface coal mines that are exclusive, long-term fuel providers for power generation companies. The Contract Mining segment, operated by North American Mining®, is a leading provider of a broad range of specialized contract mining services for producers of industrial minerals. The Minerals and Royalties segment, which includes the Catapult Mineral Partners (Catapult) business, acquires and promotes the development of mineral interests and related investments.
Previous 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.
Current wording
We have items not directly attributable to a reportable segment, which are therefore excluded from the 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
•Reconsideration of regulations on power plants (Clean Power Plan 2.0);
Current wording
In June 2025, the EPA announced plans to repeal regulations on power plants (Clean Power Plan 2.0) and Mercury and Air Toxics Standards (MATS).
Previous wording
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:
Current wording
In March 2025, the Trump Administration announced that the EPA will undertake historic actions of deregulation, as discussed above, but also including:
Previous wording
•Ending the Good Neighbor Plan;
Current wording
•Ending the Good Neighbor Plan; and
Previous wording
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 wording
In April 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.
Previous wording
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 wording
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 such policies, treaties or tariffs could be implemented, could restrict our access to suppliers and increase the cost of equipment and supplies imported into the U.S.
Previous wording
Our results of operations were as follows for the three months ended March 31:
Current wording
Our results of operations were as follows for the three and six months ended June 30:
Previous 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.
Current wording
Interest expense increased in the second quarter of 2025 and the first six months of 2025 compared with the respective 2024 periods due to higher average borrowings, partially offset by lower average interest rates.
Previous 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.
Current wording
Interest income decreased in the second quarter of 2025 and the first six months of 2025 compared with the respective 2024 periods due to lower earnings on reduced invested cash balances.
Previous 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.
Current wording
(Gain) loss on equity securities represents changes in the market price of invested assets reported at fair value. The change in the second quarter of 2025 and the first six months of 2025 compared with the respective 2024 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.
Previous 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.
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. Historically, our actual effective tax rates have differed from the statutory effective tax rate primarily due to the benefit received from percentage depletion. The effective rate 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. This contributed to the income tax benefit recorded for the three and six months ended June 30, 2025. 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 the changes in cash flow for the three months ended March 31:
Current wording
The following tables detail the changes in cash flow for the six months ended June 30:
Previous 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.
Current wording
The change in net cash (used for) provided by financing activities was primarily due to reductions in debt borrowings during the first six months of 2025 compared with additions during the first six months of 2024, partially offset by a decrease in share repurchases during the first six months of 2025.
Previous 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.
Current wording
In September 2024, NACCO Natural Resources amended its 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 June 30, 2025. At June 30, 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
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%.
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 June 30, 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 June 30, 2025. During the three and six months ended June 30, 2025, the average borrowing under the Facility was $66.0 million and $62.7 million, respectively, and the weighted-average annual interest rate was 7.05% and 7.00%, respectively.
Previous 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.
Current wording
Expenditures for property, plant and equipment were $12.0 million during the first six months of 2025, primarily for equipment in the Contract Mining segment. Planned expenditures for the remainder of 2025 are expected to be approximately $74 million. This amount includes $11 million in the Utility Coal Mining segment, $31 million in the Contract Mining segment, $20 million in the Minerals and Royalties segment and $12 million in growth businesses included in Unallocated Items. Expenditures are expected to be funded from internally generated funds and/or bank borrowings.
Previous wording
•A decrease in Accrued payroll for payments made during the first quarter of 2025 related to our incentive compensation plans;
Current wording
•A decrease in Accrued payroll for payments made during the first six months of 2025 related to our incentive compensation plans; and
Previous wording
•An increase in Deposits with vendors for equipment; and
Current wording
•An increase in Deposits with vendors.
Previous wording
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.
Current wording
These changes were partially offset by a decrease in Trade accounts receivable during the first six months of 2025 due to the timing of payments.
Previous 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.
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
Previous wording
Tons of coal delivered by the Coal Mining segment were as follows for the three months ended March 31:
Current wording
Tons of coal delivered by the Utility Coal Mining segment were as follows for the three and six months ended June 30:
Previous 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.
Current wording
Revenues increased 90.9% in the second quarter of 2025 compared with the second quarter of 2024 primarily due to an increase in customer requirements at MLMC. A boiler issue at the customer's Red Hills Power Plant reduced customer requirements in 2024.
Previous 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.
Current wording
The increase in earnings of unconsolidated operations was primarily due to higher per ton management fees, mainly the result of temporary price concessions ending at Falkirk in June 2024, partially offset by lower customer demand at Coteau, Coyote and Falkirk.
Previous wording
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 wording
The improvement in gross loss at MLMC was primarily due to a reduction in the cost per ton delivered during the first six months of 2025 compared with the 2024 period. The reduction in cost per ton delivered was primarily attributable to an increase in the tons sold at MLMC in the first six months of 2025 due to the resolution of the boiler issue that impacted the customer's Red Hills Power Plant during 2024.
Previous wording
Tons delivered by the NAMining segment were as follows for the three months ended March 31:
Current wording
Tons delivered by the Contract Mining segment were as follows for the three and six months ended June 30:
Previous 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.
Current wording
Total revenues increased in the second quarter of 2025 compared with the second 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 increased 2.9% in the second quarter of 2025 compared with the 2024 period, as an increase in part sales was partially offset by fewer tons delivered due to reduced customer requirements, in part due to operational delays at several quarries.
Previous wording
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 wording
Operating profit decreased $2.1 million in the second quarter of 2025 compared with the second quarter of 2024. The change in Operating profit was primarily due to a decrease in gross profit, an increase in selling, general and administrative expenses and a decrease in earnings of unconsolidated operations. The reduction in gross profit was mainly the result of a decrease in tons delivered and higher operating costs, including unexpected equipment repairs and maintenance costs, partially offset by an increase in part sales. The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs. The decrease in earnings of unconsolidated operations was primarily due to a reduction in tons delivered.
Previous wording
The table below shows the average prices as reported by the United States Energy Information Administration for the three months ended March 31:
Current wording
Oil and natural gas prices have been historically volatile and may continue to be volatile in the future. The table below demonstrates such volatility and shows the average prices as reported by the United States Energy Information Administration for the three and six months ended June 30:
Previous 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.
Current wording
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
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.
Current wording
Revenues increased 29.9% and 13.6% in the second quarter and the first six months of 2025, respectively, compared with the 2024 periods, primarily due to an increase in natural gas revenue as a result of higher natural gas prices, partially offset by decreased production volumes.
Previous wording
Unallocated Items and Eliminations were as follows for the three months ended March 31:
Current wording
Unallocated Items and Eliminations were as follows for the three and six months ended June 30:
Previous wording
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 wording
The operating loss increased in the second quarter and first six months of 2025 compared to the 2024 periods primarily due to higher employee-related and outside service costs. The increase in outside services is mainly attributable to developing businesses.
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. 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.
Current wording
NACCO is a growing diversified natural resource company, strategically positioned to deliver consistent financial returns. Our businesses operate exclusively in the U.S. and provide critical inputs for electricity generation, construction and development, and the production of industrial minerals and products. Increasing demand for electricity, on-shoring and current federal policies are creating favorable macroeconomic trends within these industries. We continue to capitalize on these tailwinds, pursuing longer-term growth opportunities. Through disciplined capital allocation, operational expertise and an entrepreneurial yet cautious approach to growth, we have unique capabilities and clear competitive advantages that enable us to capture a wide range of attractive growth opportunities. Our platform is supported by multiple vectors for value creation, and we are steadfastly committed to delivering compounding returns and expanding investor value over the long term.
Previous 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.
Current wording
Sawtooth, a North American Mining subsidiary, 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. This project is currently providing stable income during the construction phase and will contribute enhanced income and long-term cash flows once lithium production commences. Phase 1 lithium production is estimated to begin in late 2027.
Previous wording
The statements contained in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (2) any customer's premature facility closure or extended project development delay, (3) federal and state legislative and regulatory actions affecting fossil fuels, (4) a significant reduction in purchases by the Company's customers, including as a result of changes in coal consumption patterns of U.S. electric power generators, or changes in the power industry that would affect demand for the Company's coal and other mineral reserves, (5) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (6) changes in the prices of hydrocarbons, particularly diesel fuel, natural gas, natural gas liquids and oil as a result of factors such as OPEC and/or government actions, geopolitical developments, economic conditions and regulatory changes, as well as supply and demand dynamics, (7) changes in development plans by third-party lessees of the Company's mineral interests, (8) failure or delays by the Company's lessees in achieving expected production of natural gas and other hydrocarbons; the availability and cost of transportation and processing services in the areas where the Company's oil and gas reserves are located; and the ability of lessees to obtain capital or financing needed for well-development operations and leasing and development of oil and gas reserves on federal lands, (9) failure to obtain adequate insurance coverages at reasonable rates, (10) changes in tax laws or regulatory requirements, including the elimination of, or reduction in, the percentage depletion tax deduction, changes in mining or power plant emission regulations and health, safety or environmental legislation, (11) impairment charges, (12) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (13) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or aggregates requirements, (14) weather or equipment problems that cou…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The statements contained in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) a significant reduction in demand by the Company's customers, (2) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or aggregates requirements, (3) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (4) changes in the prices of hydrocarbons, particularly diesel fuel, natural gas, natural gas liquids and oil as a result of factors such as OPEC and/or government actions, geopolitical developments, economic conditions and regulatory changes, vehicle electrification, as well as supply and demand dynamics, (5) changes in development plans by third-party lessees of the Company's mineral interests, (6) failure or delays by the Company's lessees in achieving expected production of natural gas and other hydrocarbons; the availability and cost of transportation and processing services in the areas where the Company's oil and gas reserves are located; and the ability of lessees to obtain capital or financing needed for well-development operations and leasing and development of oil and gas reserves on federal lands, (7) any customer's premature facility closure or extended project development delay, (8) federal and state legislative and regulatory actions affecting fossil fuels, (9) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (10) failure to obtain adequate insurance coverages at reasonable rates, (11) changes in tax laws or regulatory requirements, including the elimination of, or reduction in, the percentage depletion tax deduction, changes in mining or power plant emission regulations and health, safety or environmental legislation, (12) impairment charges, (13) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (14) equipment problems that could affect deliveries to customers, (15) changes in the costs to reclaim mining areas, (16) costs to pursue and develop new mining, mitigation, oil and gas and power generation development opportu…
Excerpt shortened here; the source contains the full paragraph.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Mitigation Resources of North America® (Mitigation Resources) provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services. 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.
Current report — wording carried from elsewhere
December 31, 2024. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of certain guarantees related to Coyote Creek.
Current report — wording carried from elsewhere
The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs.
Current report — wording carried from elsewhere
The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs.
Current report — wording carried from elsewhere
Total revenues increased in the first six months of 2025 compared with the first six months 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 increased 3.0% in the first six months of 2025 compared with the 2024 period, as an increase in part sales was partially offset by fewer tons delivered due to reduced customer requirements, in part due to operational delays at several quarries.
Current report — wording carried from elsewhere
These indicated prices do not necessarily reflect the contract terms for our sales.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•Reconsideration of Mercury and Air Toxics Standards (MATS);