NACCO INDUSTRIES INC
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
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.
Sep 30, 2026 · Filed Nov 4, 2026
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 2026-06-30; filed 2026-08-05.
0000789933-26-000144
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0000789933-26-000189
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 95 previous paragraphs and 106 current paragraphs.
35 unchanged; 45 reworded; 24 added; 14 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 18 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 (24)
Current report
Other (income) expense, net
Current report
During the three and nine months ended September 30, 2026, the Company and SWEPCO agreed to settle the excess funds from the Sabine Defined Benefit Plan. Under the settlement agreement, the Company assumed $2.5 million in Sabine-related medical, COBRA and post-retirement healthcare obligations for the $7.0 million of excess funds from the terminated Sabine Defined Benefit Plan, resulting in a gain of $4.5 million. During the nine months ended September 30, 2025, NACCO and
Current report
The $10.3 million reduction in net cash provided by operating activities was primarily due to changes in operating assets and liabilities during the first nine months of 2026 compared with the prior-year period. The decrease was mainly attributable to a significant increase in Trade accounts receivable during the first nine months of 2026 compared with a reduction in the prior-year period. Contract Mining's Trade accounts receivable increased due to higher revenues primarily from the commencement and ramp up of a new dragline mining services contract. Utility Coal Mining's Trade accounts receivable increased due to payment delays from MLMC's customer.
Current report
The unfavorable change in Trade accounts receivable was partially offset by a significant increase in Accounts payable during the first nine months of 2026 whereas Accounts payable remained relatively consistent during the first nine months of 2025. Accounts payable increased during the 2026 period primarily due to Contract Mining's dragline rebuild and commissioning activities as well as equipment purchases. In addition, the Company assumed approximately $5.5 million of Sabine employee-related obligations, which are recorded within Accounts payable. Cash was received from SWEPCO related to these obligations. See Note 1 to the Unaudited Condensed Consolidated Financial Statements for further discussion of Sabine.
Current report
During the three and nine months ended September 30, 2026, the Company recognized $3.4 million of expense related to obligations under a power purchase agreement associated with a solar development project. In October 2026, the counterparty drew on the related letter of credit, which satisfied the obligation and increased outstanding borrowings under the Company's revolving credit facility.
Current report
•An increase in Trade accounts receivable, due to higher revenues primarily from the commencement and ramp up of a new dragline mining services contract and payment delays from MLMC's customer.
Current report
These increases were partially offset by the following changes during the first nine months of 2026:
Current report
•An increase in Accounts payable, primarily due to certain dragline rebuild and commissioning activities as well as equipment purchases. In addition, $5.5 million of Sabine employee-related obligations contributed to higher Accounts Payable. See Note 1 to the Unaudited Condensed Consolidated Financial Statements for further discussion of Sabine.
Current report
•A decrease in Investments in unconsolidated subsidiaries, primarily due to intercompany tax settlements and distributions received from unconsolidated subsidiaries, partially offset by equity earnings recognized during the period.
Current report
The results of operations for the Utility Coal Mining segment were as follows for the three and nine months ended September 30:
Current report
Operating profit increased by $1.6 million and $10.3 million in the third quarter of 2026 and the first nine months of 2026, respectively, compared with the 2025 periods. These improvements were primarily due to favorable changes in gross (loss) profit mainly attributable to increases in the contractually determined sales price at MLMC and significantly lower inventory impairment charges. The 2026 periods included a $0.9 million inventory impairment charge whereas the third quarter of 2025 and the first nine months of 2025 included charges of $2.7 million and $7.0 million, respectively.
Current report
During the first nine months of 2026, lower customer demand resulting from outages and maintenance issues at the Red Hills Power Plant favorably affected results as reduced mining activity allowed for increased reclamation work. As a result, certain costs were recognized as reductions of MLMC's asset retirement obligation rather than through inventory and cost of sales, primarily in the first half of the year.
Current report
The results of operations for the Contract Mining segment were as follows for the three and nine months ended September 30:
Current report
Operating profit increased $3.0 million and $7.8 million in the third quarter and the first nine months of 2026, respectively, compared with the 2025 periods. These improvements were primarily due to increases in gross profit and earnings of unconsolidated operations.
Current report
During the first nine months of 2026, the improvement in operating profit was partially offset by an increase in selling, general and administrative expenses mainly due to higher employee-related costs.
Current report
Revenues decreased 34.1% and 4.3% in the third quarter and the first nine months of 2026, respectively, compared with the 2025 periods, primarily due to lower natural gas revenues partially offset by higher oil revenues. These changes were mainly attributable to fluctuations in commodity prices. Decreased natural gas production also contributed to the reduction in revenues but was partially offset by increased oil production.
Current report
Operating profit decreased by $0.3 million and increased by $1.1 million in the third quarter and the first nine months of 2026, respectively, compared with the 2025 periods. These changes were primarily due to lower gross profit offset by increased earnings from unconsolidated operations.
Current report
The reductions in gross profit during the 2026 periods were mainly attributable to fluctuations in commodity prices. Decreased natural gas production also contributed to the reduction in gross profit but was partially offset by increased oil production.
Current report
During the first nine months of 2026, the improvement in operating profit was also partially offset by an increase in selling, general and administrative expenses mainly due to higher employee-related costs.
Current report
Full-year Utility Coal Mining operating profit is anticipated to improve, while fourth-quarter operating results are expected to be lower than the prior-year quarter due to reduced customer demand and higher diesel fuel costs at MLMC. Earnings at the unconsolidated mining operations are also expected to contribute to the decline primarily due to Sabine's owner assuming reclamation activities effective October 1, 2026.
Current report
As a result of earnings contributions from new long-term contracts, we anticipate substantial year-over-year growth in Contract Mining operating profit and Segment Adjusted EBITDA in both the fourth-quarter and full-year 2026. We expect continued Contract Mining operating profit growth in 2027, which will include a full year of contributions from the Palm Beach County, Florida and Arizona quarry contracts.
Current report
We expect fourth-quarter and full-year 2026 operating profit and Segment Adjusted EBITDA at Minerals and Royalties to decline from the respective prior-year periods, primarily as a result of lower anticipated royalty income, partially offset by higher expected income from Eiger Resources. In 2027, the Minerals and Royalties segment is expected to continue generating meaningful earnings and cash flow, although operating profit is expected to moderate from 2026 levels.
Current report
Overall, full-year consolidated operating profit is expected to be comparable to the prior year, including approximately $15 million of solar-related impairment and curtailment costs recognized through third-quarter 2026. Strong underlying business performance through the first nine months of 2026 positions NACCO to deliver a substantial year-over-year increase in full-year consolidated Adjusted EBITDA, which excludes solar impairment charges recognized in second-quarter 2026 and a $7.8 million pension settlement charge, $6.0 million after tax, recorded in fourth-quarter 2025. Income before income taxes and net income are also expected to increase year over year.
Current report
In the fourth quarter, net income is expected to increase year over year, primarily due to the absence of the pension settlement charge. Fourth-quarter 2026 consolidated operating profit and Adjusted EBITDA could be lower than the prior-year quarter depending on the timing of solar project curtailment costs.
Removed paragraphs (14)
Previous report
Other expense (income), net
Previous report
The $23.4 million improvement in net cash provided by (used for) operating activities was primarily due to favorable changes in operating assets and liabilities during the first six months of 2026 compared with the prior-year period. The improvement in operating assets and liabilities was mainly attributable to decreases in Prepaid profit sharing and Prepaid insurance and lower cash requirements associated with vendor deposits.
Previous report
Other items
Previous report
Inventory increased mainly as the result of higher coal and mining supplies inventory, including growth associated with the Contract Mining segment's expansion.
Previous report
The results of operations for the Utility Coal Mining segment were as follows for the three and six months ended June 30:
Previous report
Operating profit increased by $5.1 million and $8.7 million in the second quarter of 2026 and the first six months of 2026, respectively, compared with the 2025 periods. These improvements were primarily due to favorable changes in gross profit (loss), earnings of unconsolidated operations and selling, general and administrative expenses.
Previous report
The improvements in gross profit (loss) were primarily due to a reduction in cost per ton delivered and an increase in the contractually determined sales price at MLMC. Lower customer demand resulting from outages and maintenance issues at the Red Hills Power Plant resulted in a shift of certain costs from inventory and cost of sales to reduce MLMC’s asset retirement obligation, which favorably impacted 2026 results. In addition, the second quarter of 2025 and the first six months of 2025 included a $1.3 million and a $4.3 million inventory impairment charge, respectively, to write down MLMC's coal inventory to its net realizable value.
Previous report
The decrease in selling, general and administrative expenses during the 2026 periods was mainly attributable to lower contributions expense, as the 2025 periods included costs associated with a multi-year charitable pledge.
Previous report
The results of operations for the Contract Mining segment were as follows for the three and six months ended June 30:
Previous report
Revenues increased 46.1% and 11.0% in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods, primarily due to higher oil and gas revenues as well as increased coal revenues. The higher revenues were mainly attributable to increased commodity prices.
Previous report
Strong first-half 2026 operating performance across our reportable segments is expected to drive year‑over‑year improvements in full-year 2026 Consolidated Adjusted EBITDA, which excludes the solar impairment charges and a $7.8 million pre-tax pension settlement charge recorded in 2025. While we expect Consolidated Adjusted EBITDA to remain strong in the second half of 2026, growth is expected to moderate relative to both the first half of 2026 and prior-year periods.
Previous report
We also expect second-half consolidated operating profit and net income to decline from first-half 2026 and prior-year levels. Expectations for lower second-half operating profit are primarily driven by potential additional solar project curtailment costs and expected inventory write-downs at MLMC. Given the effect of the realized and anticipated 2026 charges, we expect full-year operating profit and net income will be significantly lower than in 2025. Comparisons to prior-year net income also reflect a $6.0 million after-tax pension settlement charge recognized in the second half of 2025.
Previous report
As a result of earnings contributions from new contracts, we anticipate substantial year-over-year growth in Contract Mining operating profit and Segment Adjusted EBITDA for both the second half and full year of 2026. Second-half results are expected to moderate from the strong first-half levels as customer demand is projected to decline, primarily in the fourth quarter.
Previous report
We expect significant operating profit improvement in the Contract Mining segment in 2027. This growth is driven by a full year of the dragline services contract in Palm Beach County, Florida, and contributions from operations at the Arizona quarry as well as potential new deals in the pipeline.
Reworded paragraphs (45)
Previous wording
In addition to the reportable segments discussed above, we also operate other businesses that are not currently reported as separate segments. These businesses complement our existing operations and support our long-term growth strategic objectives. Mitigation Resources of North America® (Mitigation Resources) provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions. ReGen Resources is pursuing the advancement and monetization of power generation projects. See Note 1 to the Unaudited Condensed Consolidated Financial Statements within this Form 10-Q for further discussion of our reportable segments.
Current wording
In addition to the reportable segments discussed above, we also operate other businesses that are not currently reported as separate segments. These businesses complement our existing operations and support our long-term growth objectives. This primarily includes Mitigation Resources of North America® (Mitigation Resources), which provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions. See Note 1 to the Unaudited Condensed Consolidated Financial Statements within this Form 10-Q for further discussion of our reportable segments.
Previous wording
Our results of operations were as follows for the three and six months ended June 30:
Current wording
Our results of operations were as follows for the three and nine months ended September 30:
Previous wording
The components of the change in revenues and operating (loss) profit are discussed below in Segment Results.
Current wording
The components of the change in revenues and operating profit are discussed below in Segment Results.
Previous wording
Second Quarter of 2026 Compared with Second Quarter of 2025, and First Six Months Ended June 30, 2026 Compared with First Six Months Ended June 30, 2025
Current wording
Third Quarter of 2026 Compared with Third Quarter of 2025, and First Nine Months Ended September 30, 2026 Compared with First Nine Months Ended September 30, 2025
Previous wording
Interest expense decreased in the second quarter of 2026 and the first six months of 2026 compared with the respective 2025 periods due to an increase in capitalized interest and lower average interest rates, partially offset by higher average borrowings.
Current wording
Interest expense increased in the third quarter of 2026 and the first nine months of 2026 compared with the respective 2025 periods primarily due to higher average borrowings and increased average interest rates.
Previous wording
Interest income decreased in the second quarter of 2026 and the first six months of 2026 compared with the respective 2025 periods due to lower earnings on reduced invested cash balances.
Current wording
Interest income decreased in the third quarter of 2026 and the first nine months of 2026 compared with the respective 2025 periods due to lower earnings on reduced invested cash balances.
Previous wording
(Gain) loss on equity securities represents changes in the market price of invested assets reported at fair value. The favorable change in the second quarter of 2026 and the first six months of 2026 compared with the respective 2025 periods is 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 favorable change in the third quarter of 2026 and the first nine months of 2026 compared with the respective 2025 periods is 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
During 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 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 wording
Falkirk’s former customer agreed to settle the excess funds from the Falkirk Defined Benefit Plan. Under the settlement agreement, the Company paid $10.9 million for the $14.5 million of excess funds from the terminated Falkirk Defined Benefit Plan, resulting in a $3.6 million gain. These gains are recorded on the line Gain on settlements of excess funding liabilities on the Unaudited Condensed Consolidated Statements of Operations. All excess funds were transferred to the NACCO 401(k) plan, a qualified replacement plan, and are being utilized to offset profit sharing contributions to 401(k) plan participants. See Note 5 to the Unaudited Condensed Consolidated Financial Statements for further discussion of these funds.
Previous wording
We evaluate and update our estimated annual effective income tax rate 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. When income tax expense is recorded, the benefit from percentage depletion decreases the effective income tax rate, while the effect is to increase the effective income tax rate when a benefit for income taxes is recorded. Each quarter, we update our estimate of the annual effective tax rate, and the cumulative impact of the change in the estimated annual effective tax rate is recorded, which can make quarterly comparisons not meaningful.
Current wording
We evaluate and update our estimated annual effective income tax rate 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 tax 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. When income tax expense is recorded, the benefit from percentage depletion decreases the effective income tax rate, while the effect is to increase the effective income tax rate when a benefit for income taxes is recorded. Each quarter, we update our estimate of the annual effective tax rate, and the cumulative impact of the change in the estimated annual effective tax rate is recorded, which can make quarterly comparisons not meaningful.
Previous wording
The following tables detail the changes in cash flow for the six months ended June 30:
Current wording
The following tables detail the changes in cash flow for the nine months ended September 30:
Previous wording
In July 2026, MLMC's customer notified MLMC that payment of coal invoices would be delayed due to operational issues at the Red Hills Power Plant that reduced the customer's cash receipts and liquidity. As of June 30, 2026, MLMC had $12.5 million in Trade accounts receivable outstanding, of which $7.2 million was past due. Management is actively monitoring collectability and the potential impact on MLMC's liquidity and working capital requirements. See Item 1A Risk Factors on page 30 within this Form 10-Q for further discussion of MLMC.
Current wording
In July 2026, MLMC's customer notified MLMC that payment of coal invoices would be delayed due to operational issues at the Red Hills Power Plant that reduced the customer's cash receipts and liquidity. The customer has made payments on outstanding invoices; however, certain payments continue to be delayed. As of September 30, 2026, MLMC had $25.5 million in Trade accounts receivable outstanding, of which $8.8 million was past due. Management is actively monitoring collectability and the potential impact on MLMC's liquidity and working capital requirements. See Item 1A Risk Factors on page 32 within this Form 10-Q for further discussion of MLMC.
Previous wording
The change in net cash provided by (used for) financing activities was primarily due to additions in debt borrowings during the first six months of 2026 compared with reductions during the first six months of 2025 and the absence of share repurchases during the first six months of 2026.
Current 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 2026 compared with reductions during the first nine months of 2025.
Previous wording
NACCO Natural Resources has a $200.0 million secured revolving line of credit (Facility) that matures in September 2028. Borrowings outstanding under the Facility were $95.0 million at June 30, 2026. At June 30, 2026, the excess availability under the Facility was $69.1 million, which reflects a reduction for outstanding letters of credit of $35.9 million.
Current wording
NACCO Natural Resources has a $200.0 million secured revolving line of credit (Facility) that matures in September 2028. Borrowings outstanding under the Facility were $105.5 million at September 30, 2026. At September 30, 2026, the excess availability under the Facility was $58.7 million, which reflects a reduction for outstanding letters of credit of $35.8 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 June 30, 2026, 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, 2026. During the three and six months ended June 30, 2026, the average borrowing under the Facility was $102.8 million and $93.8 million, respectively, and the weighted-average annual interest rate was 6.42% and 6.36%, 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 September 30, 2026, 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 September 30, 2026. During the three and nine months ended September 30, 2026, the average borrowing under the Facility was $105.3 million and $97.6 million, respectively, and the weighted-average annual interest rate was 6.77% and 6.54%, respectively.
Previous 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.
Current wording
While the timing of collections from MLMC's customer remains uncertain, 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
Actual expenditures were $41.9 million during the first six months of 2026, primarily for land in Tennessee at Mitigation Resources and draglines in the Contract Mining segment.
Current wording
Actual expenditures were $44.3 million during the first nine months of 2026, primarily for land in Tennessee at Mitigation Resources and draglines in the Contract Mining segment.
Previous wording
Planned expenditures for the remainder of 2026 are expected to be approximately $35 million. This amount includes $3 million in the Utility Coal Mining segment, $10 million in the Contract Mining segment, $20 million in the Minerals and Royalties segment and $2 million in growth businesses included in Unallocated Items. The majority of these expenditures relate to business development opportunities and will only be made if the projects meet our growth investment criteria. Expenditures are expected to be funded from internally generated funds and/or bank borrowings.
Current wording
Planned expenditures for the remainder of 2026 are expected to be approximately $32 million. This amount includes $2 million in the Utility Coal Mining segment, $7 million in the Contract Mining segment, $20 million in the Minerals and Royalties segment and $3 million in growth businesses included in Unallocated Items. Planned expenditures in 2027 are expected to be approximately $56 million. The majority of these expenditures relate to business development opportunities and will only be made if the projects meet our growth investment criteria. Expenditures are expected to be funded from internally generated funds and/or bank borrowings.
Previous wording
The change in other net tangible assets at June 30, 2026 compared with December 31, 2025 was mainly the result of increases in Property, plant and equipment and inventory during the first six months of 2026. Property, plant and equipment increased primarily due to investments in Contract Mining and Mitigation Resources supporting the Company’s growth initiatives.
Current wording
The increase in other net tangible assets at September 30, 2026 compared with December 31, 2025 was mainly the result of the following changes during the first nine months of 2026:
Previous wording
Since December 31, 2025, 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 52 in our Annual Report on Form 10-K for the year ended December 31, 2025. 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, 2025, other than the changes discussed 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 52 in our Annual Report on Form 10-K for the year ended December 31, 2025. 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 Utility Coal Mining segment were as follows for the three and six months ended June 30:
Current wording
Tons of coal delivered by the Utility Coal Mining segment were as follows for the three and nine months ended September 30:
Previous wording
During the 2026 periods, MLMC's customer's power plant experienced unplanned outages and maintenance issues which resulted in lower customer requirements. As a result, revenues decreased 25.0% and 20.3% in the second quarter of 2026 and the first six months of 2026, respectively, compared with the 2025 periods. This decrease was partially offset by an increase in the contractually determined per ton sales price.
Current wording
Revenues increased 5.7% and decreased 12.7% in the third quarter of 2026 and the first nine months of 2026, respectively, compared with the 2025 periods. The third quarter revenue increase was primarily due to a higher contractually determined per ton sales price, partially offset by a decrease in customer requirements at MLMC. Revenues decreased in the first nine months of 2026, primarily due to lower customer requirements, partially offset by a higher per ton sales price. During 2026, MLMC's customer's power plant experienced unplanned outages and maintenance issues which resulted in lower customer requirements, primarily during the first half of the year.
Previous wording
The increase in earnings of unconsolidated operations was primarily due to higher customer demand at Coteau and Coyote Creek, partially offset by a lower management fee at Sabine during the 2026 periods.
Current wording
During the first nine months of 2026, an increase in earnings of unconsolidated operations and a decrease in selling, general and administrative expenses also contributed to the improvement in operating profit. The increase in earnings of unconsolidated operations was primarily due to higher customer demand at Coteau, partially offset by a lower management fee at Sabine. The decrease in selling, general and administrative expenses was mainly attributable to lower employee-related costs.
Previous wording
Tons delivered by the Contract Mining segment were as follows for the three and six months ended June 30:
Current wording
Tons delivered by the Contract Mining segment were as follows for the three and nine months ended September 30:
Previous wording
Revenues excluding reimbursable costs increased 34.5% and 33.1% in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods, primarily due to the commencement and ramp up of a new dragline mining services contract during 2026 as well as higher customer requirements at the consolidated limestone quarries. Reimbursable costs have an offsetting amount in cost of sales and have no impact on gross profit.
Current wording
Revenues excluding reimbursable costs increased 75.1% and 47.5% in the third quarter and the first nine months of 2026, respectively, compared with the 2025 periods. These improvements were primarily due to the commencement and ramp up of a new dragline mining services contract and an increase in equipment sales during 2026. Reimbursable costs have an offsetting amount in cost of sales and therefore have no impact on gross profit.
Previous wording
Operating profit increased $2.8 million and $4.8 million in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods. These improvements were primarily due to increases in gross profit and earnings of unconsolidated operations. The favorable change in gross profit was mainly the result of contributions from a new dragline mining services contract and improved margins at limestone quarries. The increase in earnings of unconsolidated operations was primarily due to higher customer requirements as a result of an additional dragline operating at a new quarry pursuant to an existing contract. The improvements in operating profit were partially offset by increases in selling, general and administrative expenses mainly due to higher employee-related costs.
Current wording
The favorable changes in gross profit were mainly the result of contributions from a new dragline mining services contract.
Previous wording
The improved margins were partially due to lower depreciation expense in the 2026 periods. Effective January 1, 2026, the Company’s Contract Mining segment changed its depreciation method for certain assets (primarily draglines and other large mining equipment) from the straight-line method to the units-of-production method. See Note 1 to the Unaudited Condensed Consolidated Financial Statements for further discussion of this change.
Current wording
The improvements were also due to lower depreciation expense in the 2026 periods. Effective January 1, 2026, the Company’s Contract Mining segment changed its depreciation method for certain assets (primarily draglines and other large mining equipment) from the straight-line method to the units-of-production method. See Note 1 to the Unaudited Condensed Consolidated Financial Statements for further discussion of this change.
Previous wording
Oil and natural gas prices have been historically volatile and may continue to be volatile in the future. The table below shows the average prices as reported by the United States Energy Information Administration for the three and six months ended June 30:
Current wording
Oil and natural gas prices have been historically volatile and may continue to be volatile in the future. The table below shows the average prices as reported by the United States Energy Information Administration for the three and nine months ended September 30:
Previous wording
The results of operations for the Minerals and Royalties segment were as follows for the three and six months ended June 30:
Current wording
The results of operations for the Minerals and Royalties segment were as follows for the three and nine months ended September 30:
Previous wording
Receivables from third-party lessees for which we did not receive actual production information, either due to timing delays or due to the unavailability of data at the time when revenues are recognized, are estimated using expected sales volumes and estimated prices. The difference between our estimates and the actual amounts received is recorded in the period that payment is received from the third-party lessee. Revenue in the second quarter of 2026 included a $1.6 million favorable adjustment primarily related to first quarter 2026 pricing estimates. Revenue in the six months ended June 30, 2025 included a $1.5 million favorable adjustment.
Current wording
Receivables from third-party lessees for which we did not receive actual production information, either due to timing delays or due to the unavailability of data at the time when revenues are recognized, are estimated using expected sales volumes and estimated prices. The difference between our estimates and the actual amounts received is recorded in the period that payment is received from the third-party lessee. Revenue in the three months ended September 30, 2026, included a $1.1 million unfavorable adjustment primarily related to second quarter 2026 pricing estimates. Revenue in the nine months ended September 30, 2025, included a $1.5 million favorable adjustment related to production volumes for prior periods.
Previous wording
Operating profit increased by $1.5 million and $1.4 million in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods, primarily due to higher gross profit mainly attributable to favorable commodity prices. These improvements were partially offset by losses from unconsolidated operations related to an investment in Eiger Resources. The unfavorable change in Eiger's results was primarily attributable to commodity hedge positions rather than underlying production. Due to the timing and availability of financial information, earnings or losses from this investment are recorded on a one quarter lag. In addition, selling, general and administrative expenses increased primarily due to higher employee-related costs.
Current wording
The higher earnings from unconsolidated operations during the 2026 periods relate to an investment in Eiger Resources. The favorable changes in Eiger Resources' results were primarily due to fluctuations in commodity hedge positions and improvements in underlying production. Due to the timing and availability of financial information, earnings or losses from this investment are recorded on a one quarter lag.
Previous wording
Unallocated Items and Eliminations were as follows for the three and six months ended June 30:
Current wording
Unallocated Items and Eliminations were as follows for the three and nine months ended September 30:
Previous wording
Revenues increased in the second quarter and the first six months of 2026 compared to the 2025 periods, primarily due to higher restoration and reclamation service revenue at Mitigation Resources.
Current wording
Revenues increased in the third quarter and the first nine months of 2026 compared to the 2025 periods, primarily due to higher restoration and reclamation service revenue and increased credit sales at Mitigation Resources.
Previous wording
The operating loss increased in the second quarter and the first six months of 2026 compared to the 2025 periods, primarily due to $12.0 million of impairment charges related to certain solar development projects within ReGen Resources. See Note 5 to the Unaudited Condensed Consolidated Financial Statements and Item 1A Risk Factors on page 30 within this Form 10-Q for further discussion of the impairment charges and ReGen Resources, respectively.
Current wording
The operating loss increased in the third quarter and the first nine months of 2026 compared to the 2025 periods. These unfavorable changes were primarily due to $3.4 million of solar curtailment costs associated with obligations under a power purchase agreement during the 2026 periods. In addition, the Company recorded $12.0 million of solar impairment charges related to certain development projects during the nine months ended September 30, 2026. See Note 1 and Note 5 to the Unaudited Condensed Consolidated Financial Statements for further discussion of these charges. See Item 1A Risk Factors on page 32 within this Form 10-Q for further discussion of solar development projects.
Previous wording
NACCO Industries is a diversified natural resources company with a unique business model strategically positioned to deliver stable and growing financial returns over the long term. Our business model is purposefully built for durability and resilience with an expanding portfolio of long-term contracts, relationships and investments that leverage our proven operational expertise, disciplined capital allocation and an entrepreneurial yet patient approach. We have methodically built unique capabilities and clear competitive advantages that allow us to pursue a wide range of growth opportunities, often completely integrated into customers’ operations in partnership-based relationships. We have multiple vectors for value creation, and we are steadfastly committed to delivering compounding returns and expanding investor value over the long term.
Current wording
NACCO Industries is a diversified natural resources company with a unique business model strategically positioned to deliver stable and growing financial returns over the long term. Our business model is purposefully built for durability and resilience with an expanding portfolio of long-term contracts, relationships and investments that leverage our proven operational expertise, disciplined capital allocation and entrepreneurial, yet patient approach. We have methodically built distinctive capabilities and clear competitive advantages that allow us to pursue a wide range of growth opportunities, often completely integrated into customers’ operations in partnership-based relationships. We have multiple vectors for value creation, and we are steadfastly committed to delivering compounding returns and expanding investor value over the long term, as evidenced by our reportable segments each contributing over $7 million of Segment Adjusted EBITDA in third-quarter 2026.
Previous wording
While these long-term agreements and investments are intended to strengthen our earnings base over time, we continually evaluate whether individual projects or initiatives remain aligned with our strategic and financial objectives. As part of this process, changing market conditions, regulatory developments and project-specific challenges led us to reassess certain solar investments during the 2026 second quarter. In early July, we began pursuing a range of alternatives, including potential asset sales, contract amendments and other strategic actions, to monetize these investments and reduce our exposure. Depending on the outcome of these activities, additional curtailment costs could be incurred.
Current wording
While these long-term agreements and investments are intended to strengthen our earnings base over time, we continually evaluate whether individual projects or initiatives remain aligned with our strategic and financial objectives. During the second quarter of 2026, changing market conditions, regulatory developments and project-specific challenges led us to reassess certain solar investments. We continue to evaluate strategic alternatives for our solar development projects, including project sales, contract amendments and other transactions intended to monetize project value. We recognized $3.4 million of curtailment costs in third-quarter 2026. We expect to incur certain additional costs in fourth-quarter 2026 and may incur further costs associated with these projects in future years; however, the amount and timing of such costs will depend on ongoing discussions with counterparties and our efforts to transfer ownership of, or otherwise monetize, the projects.
Previous wording
At our Utility Coal Mining segment, operated by North American Coal, full-year customer demand is expected to be comparable and operating profit is expected to increase year over year due to a shift in focus to reclamation activities in the first half of 2026. During the second half of 2026, customer demand is expected to decline modestly compared with the prior-year period, provided MLMC's customer's power plant operates as currently planned. Operating results at MLMC are expected to decline from the first half of 2026, particularly in the third quarter, due to lower customer demand, higher diesel fuel costs and an anticipated inventory impairment charge. A higher contractually determined per ton sales price is anticipated to mitigate the lower demand. Earnings at the unconsolidated mining operations are also expected to decline primarily due to reclamation services at Sabine concluding as of September 30, 2026.
Current wording
At our Utility Coal Mining segment, operated by North American Coal, full-year 2026 operating profit is expected to increase over 2025. At MLMC, full-year operating results are expected to improve primarily due to the shift in focus to reclamation activities in the first half of 2026 and lower year-over-year inventory impairment charges, while earnings at the unconsolidated mining operations are anticipated to be comparable to 2025.
Previous wording
Looking ahead to 2027, overall customer demand for coal is expected to remain consistent with 2026, while profitability is expected to improve. This increase is driven by anticipated improvements at MLMC if the customer's power plant is able to operate more consistently, as well as continued stable earnings at our unconsolidated operations. Anticipated improved results at the remaining unconsolidated mining locations should mostly offset the absence of reclamation income at Sabine.
Current wording
Looking ahead to 2027, overall customer demand for coal is expected to remain consistent with 2026, while profitability is expected to improve. This increase is driven by anticipated improvements at MLMC if the customer's power plant is able to operate more consistently, as well as continued stable earnings at our unconsolidated operations. Improved results at Coteau and Falkirk are expected to largely offset the absence of reclamation income at Sabine.
Previous wording
The Contract Mining segment, operated by North American Mining, serves as our mining growth platform. We are building a growing portfolio of long-term contracts through geographic and mineral expansion that are expected to strengthen the foundation for sustained profitability in this segment. In early 2026, we commenced activities under a new dragline services contract as part of a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida. We also anticipate commencing operations at a new limestone quarry in Arizona during fourth-quarter 2026.
Current wording
The Contract Mining segment, operated by North American Mining, serves as our mining growth platform. We are building a portfolio of long-term contracts through geographic and mineral expansion that are expected to strengthen the foundation for sustained profitability in this segment. In early 2026, we commenced activities under a new multi-year dragline services contract as part of a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida. In early October, we also commenced operations at a new limestone quarry in Arizona under a contract mining agreement that spans over a decade.
Previous wording
Sawtooth, a North American Mining subsidiary, provides exclusive comprehensive mining services at Thacker Pass, which is owned by a joint venture led by Lithium Americas Corp. Sawtooth will supply all of the lithium-bearing ore requirements for our customer's Thacker Pass lithium processing facility, which is currently under construction. This project is providing stable income during construction and is expected to contribute increased income and long-term cash flows as lithium production commences and ramps up to full production, which is targeted for 2028.
Current wording
Sawtooth, a North American Mining subsidiary, provides exclusive comprehensive mining services at Thacker Pass, which is owned by a joint venture led by Lithium Americas Corp. Sawtooth will supply all the lithium-bearing ore requirements for our customer's Thacker Pass lithium processing facility, which is currently under construction. This project provides stable income during construction and is expected to contribute increased income and long-term cash flows as lithium production commences and ramps up to full production under a 20-year contract mining agreement. Lithium Americas is targeting mechanical completion of Thacker Pass Phase 1 in late 2027, with ramp-up to commercial production through 2028.
Previous wording
The Minerals and Royalties segment, managed by Catapult, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. The Catapult team is expanding its portfolio by leveraging a data-driven approach to capital deployment that incorporates a longer-term view of production and development. This segment also holds a meaningful equity investment in Eiger Resources that has working interests in oil and natural gas assets. Anticipated increases in income from Eiger Resources and the benefit of higher oil prices are projected to be more than offset by anticipated production declines and a changing mix of production and development activity. As a result, operating profit and Segment Adjusted EBITDA are expected to decline compared with the first half of 2026 as well as the second-half and full-year 2025. The Minerals and Royalties segment is projected to continue generating meaningful earnings and cash flow in 2027, while operating profit is expected to moderate primarily due to normal production declines and a continuation of the current moderate pace of domestic development activity. Changes in commodity prices or production and development assumptions, including effects of the ongoing Middle East conflict, could alter current expectations.
Current wording
The Minerals and Royalties segment, managed by Catapult, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. The Catapult team is expanding its portfolio by leveraging a data-driven approach to capital deployment that incorporates a longer-term view of production and development. This segment also holds a meaningful equity investment in Eiger Resources, which holds working interests in oil and natural gas assets.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
•An increase in Property, plant and equipment, primarily due to investments in Contract Mining and Mitigation Resources supporting the Company’s growth initiatives.
Current report — wording carried from elsewhere
The increases in earnings of unconsolidated operations were primarily due to higher customer requirements as a result of an additional dragline operating at a new quarry since September 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
federal and state legislative and regulatory actions affecting fossil fuels, (11) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (12) 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, (13) impairment charges, (14) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (15) equipment problems that could affect deliveries to customers, (16) changes in the costs to reclaim mining areas, (17) disruptions from natural or human causes, including severe weather, accidents, fires, earthquakes and terrorist acts, any of which could result in suspension of operations or harm to people or the environment, and (18) the ability to attract, retain, and replace workforce.