NACCO INDUSTRIES INC

SEPTEMBER 30, 2026

(In thousands, except as noted and per share amounts)

NOTE 1—Nature of Operations and Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of 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 portfolio of businesses. We operate under three reportable 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, long-term contract mining services. The Minerals and Royalties segment, which includes the Catapult Mineral Partners® (Catapult) business, acquires and promotes the development of mineral and royalty interests and other related investments.

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.

We also have items not directly attributable to an operating segment. These items primarily include administrative costs related to public company reporting requirements, including management and board compensation, the financial results of developing businesses and Bellaire Corporation (Bellaire). Bellaire manages long-term liabilities related to former Eastern U.S. underground mining activities.

See Note 8 for further discussion of segment reporting. Our reportable segments are further described below:

Utility Coal Mining Segment

The Utility Coal Mining segment operates surface coal mines under exclusive, long-term contracts to supply 100% of the fuel requirements for adjacent power plants and a synfuels plant. Each mine is fully integrated with the operation of these facilities.

During the three and nine months ended September 30, 2026, the Utility Coal Mining segment's operating coal mines were: The Coteau Properties Company (Coteau), Coyote Creek Mining Company, LLC (Coyote Creek), The Falkirk Mining Company (Falkirk) and Mississippi Lignite Mining Company (MLMC). Coteau, Falkirk and Coyote Creek are in North Dakota and MLMC is in Mississippi. Each of these mines produce lignite coal. MLMC’s coal supply contract contains a take or pay provision; however, the customer's financial condition has adversely affected the collectability of such claims, and there can be no assurance that such amounts will be collected in the future. All other coal supply contracts are requirements contracts. Certain coal supply contracts can be terminated early, which would result in a reduction to future earnings.

The MLMC contract is the only coal supply contract in which we are responsible for all operating costs, capital requirements and final mine reclamation; therefore, MLMC is consolidated within our financial statements. MLMC sells coal to its customer at a contractually agreed-upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates and includes adjustments for coal quality and certain reimbursable costs. Profitability at MLMC is affected by customer demand for coal, changes in the contractually determined sales price and actual costs incurred. MLMC's customer operates the Red Hills Power Plant, which supplies electricity to the Tennessee Valley Authority (TVA) under a long-term power purchase agreement. MLMC’s contract with its customer runs through April 1, 2032. Current mine area reserves are sufficient to meet contractual requirements through the 2032 contract term. TVA’s power portfolio includes coal, nuclear, hydroelectric, natural gas and renewables. The decision regarding which power plants to dispatch is determined by TVA. As a significant portion of MLMC’s costs are fixed, reduction in dispatch, reduced mechanical availability or other operational issues at the Red Hills Power Plant could adversely affect coal demand, customer liquidity and the collectability of amounts due under the contract and materially reduce operating results at MLMC.

The Sabine Mining Company (Sabine) operated the Sabine Mine in Texas. All production from Sabine was delivered to Southwestern Electric Power Company's (SWEPCO) Henry W. Pirkey Plant until its retirement in 2023. At that time, SWEPCO exercised an option agreement to purchase Sabine. In connection with this option agreement, the Company assumed responsibility for the administration and payment of approximately $5.5 million of Sabine employee-related obligations, which are recorded within Accounts payable on the Unaudited Condensed Consolidated Balance Sheets as of September 30, 2026. Cash was received from SWEPCO related to these obligations and any differences between estimated and actual payments will be settled between the parties. SWEPCO acquired all of Sabine's capital stock and assumed reclamation activities effective October 1, 2026.

At Coteau, Coyote Creek and Falkirk, we are paid a management fee per ton of coal or heating unit (MMBtu) delivered. Each contract specifies the indices and mechanics by which fees change over time, generally in line with broad measures of U.S. inflation. Our customers are responsible for funding all mine operating costs, including final mine reclamation, and directly or indirectly providing all of the capital required to build and operate the mine. This contract structure eliminates exposure to spot coal market price fluctuations while providing predictable income and cash flow with minimal capital investment. Other than at Coyote Creek, debt financing provided by or supported by the customers is without recourse to us. See Note 6 for further discussion of Coyote Creek's guarantees.

Coteau, Coyote Creek, and Falkirk each meet the definition of a variable interest entity (VIE). In each case, NACCO is not the primary beneficiary of the VIE as we do not exercise financial control; therefore, we do not consolidate the results of these operations within our financial statements. Instead, these contracts are accounted for as equity method investments. We regularly evaluate if there are reconsideration events which could change our conclusion as to whether these entities meet the definition of a VIE and the determination of the primary beneficiary. The income before income taxes associated with these VIEs is reported as Earnings of unconsolidated operations on the Unaudited Condensed Consolidated Statements of Operations and our investment is reported on the line Investments in unconsolidated subsidiaries in the Unaudited Condensed Consolidated Balance Sheets. The mines that meet the definition of a VIE are referred to collectively as the Unconsolidated Subsidiaries. For tax purposes, the Unconsolidated Subsidiaries are included within our consolidated U.S. tax return; therefore, the Income tax provision line on the Unaudited Condensed Consolidated Statements of Operations includes income taxes related to these entities. See Note 6 for further information on the Unconsolidated Subsidiaries.

We perform contemporaneous reclamation activities at each mine in the normal course of operations. Under all of the Unconsolidated Subsidiaries’ contracts, the customer has the obligation to fund final mine reclamation activities. Under certain contracts, the Unconsolidated Subsidiary holds the mine permit and is therefore responsible for final mine reclamation activities. To the extent the Unconsolidated Subsidiary performs such final reclamation, it is compensated for providing those services in addition to receiving reimbursement from customers for costs incurred.

Contract Mining Segment

The Contract Mining segment provides value-added contract mining and other services for producers of industrial minerals and products and other customers. The segment is a platform for our growth and diversification of mining activities outside of the thermal coal industry. Contract Mining provides contract mining services for independently owned mines, quarries and construction projects, creating value for our customers by performing the mining aspects of our customers’ operations. This allows customers to focus on their areas of expertise: materials handling and processing, product sales and distribution. As of September 30, 2026, the segment operates at quarries in Florida, Arkansas and Nebraska and began operations at a quarry in Arizona during the fourth quarter of 2026. During the nine months ended September 30, 2026, the segment began providing dragline services as part of a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida.

Also, Contract Mining's subsidiary, Sawtooth, is the exclusive provider of comprehensive mining services for the Thacker Pass lithium project in Humboldt County, Nevada. Thacker Pass is owned by a joint venture between Lithium Americas Corp. and General Motors Holdings LLC. The U.S. Department of Energy holds warrants to purchase five percent non-voting, non-transferable equity in this joint venture. Lithium Americas Corp. is targeting mechanical completion of Thacker Pass Phase 1 in late 2027, with ramp-up to commercial production through 2028. The contract requires reimbursement for costs of mining, capital expenditures and mine closure. Sawtooth will recognize a contractually agreed upon production fee once the mine is operating. In addition to providing comprehensive mining services, Sawtooth is currently assisting with certain construction services and will transport clay tailings once lithium production commences.

Minerals and Royalties Segment

The Minerals and Royalties segment derives income primarily by leasing our royalty and mineral interests to third-party exploration and production companies, and, to a lesser extent, other mining companies, granting them the rights to explore, develop, mine, produce, market and sell gas, oil, and coal in exchange for royalty payments based on the lessees' sales of those minerals.

The Minerals and Royalties segment owns royalty interests, mineral interests, non-participating royalty interests and overriding royalty interests (collectively mineral and royalty interests).

•Royalty Interest. Royalty interests generally result when the owner of a mineral interest leases the underlying minerals to an exploration and production company pursuant to an oil and gas lease. Typically, the resulting royalty interest is a cost-free percentage of production revenues for minerals extracted from the acreage. A holder of royalty interests is generally not responsible for capital expenditures or lease operating expenses, but royalty interests may be calculated net of post-production expenses. Royalty interests leased to producers expire upon the expiration of the oil and gas lease and revert to the mineral owner.

•Mineral Interest. Mineral interests are perpetual rights of the owner to explore, develop, exploit, mine and/or produce any or all of the minerals lying below the surface of the property. The holder of a mineral interest has the right to lease the minerals to an exploration and production company. Upon the execution of an oil and gas lease, the lessee (the exploration and production company) becomes the working interest owner and the lessor (the mineral interest owner) has a royalty interest.

•Non-Participating Royalty Interest (NPRI). NPRI is an interest in oil and gas production which is created from the mineral estate. The NPRI is expense-free, bearing no operational costs of production. The term non-participating indicates that the interest owner does not share in the bonus, rentals from a lease, nor the right to participate in the execution of oil and gas leases. The NPRI owner does, however, typically receive royalty payments.

•Overriding Royalty Interest (ORRI). ORRIs are created by carving out the right to receive royalties from a working interest. Like royalty interests, ORRIs do not confer an obligation to make capital expenditures or pay for lease operating expenses and have limited environmental liability; however, ORRIs may be calculated net of post-production expenses, depending on how the ORRI is structured. ORRIs that are carved out of working interests are linked to the same underlying oil and gas lease that created the working interest, and therefore, such ORRIs are typically subject to expiration upon the expiration or termination of the oil and gas lease.

We may own more than one type of mineral and royalty interest in the same tract of land. For example, where we own an ORRI in a lease on the same tract of land in which we own a mineral interest, the ORRI in that tract will relate to the same gross acres as the mineral interest in that tract.

We also maintain an Equity investment in Eiger Resources, a private company that holds operated and non-operated working interests in oil and natural gas assets in the Kansas and the Oklahoma portion of the Hugoton basin. See Note 7 for further information on Eiger Resources.

Other Items: During the three and nine months ended September 30, 2026, the Company recognized $3.4 million expense in Unallocated Items related to the termination of a power purchase agreement associated with a solar development project. The expense is included on the line Solar curtailment costs on the Unaudited Condensed Consolidated Statements of Operations. As of September 30, 2026, the obligation is included within Accounts payable on the Unaudited Condensed Consolidated Balance Sheets. 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. The $3.4 million power purchase agreement termination cost was contemplated within the approximately $7 million of potential curtailment costs disclosed in the Company’s Second Quarter 2026 Form 10-Q.

The Company continues to evaluate strategic alternatives for its solar development projects, including project sales, contract amendments and other transactions intended to monetize project value.The Company’s current strategy is to seek to transfer ownership of, or otherwise monetize, the projects rather than advance them into construction. The Company may incur additional costs associated with maintaining project rights, interconnection agreements and other contractual obligations while pursuing these alternatives. The amount and timing of any such costs will depend on the outcome and timing of ongoing discussions with counterparties and the Company's efforts to transfer ownership of, or otherwise monetize, the projects. Accordingly, the amount or range of additional costs cannot currently be reasonably estimated.

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 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 for further discussion of these funds.

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. The units-of-production method is based on the total tons expected to be mined by these assets over their estimated useful lives. Management believes the new method is preferable as it more closely matches the pattern in which the assets’ future economic benefits are expected to be consumed. The Company determined that the change in depreciation method is considered a change in accounting estimate affected by a change in accounting principle. Accordingly, this change was applied prospectively.

The effect of the change to the units of production method resulted in a reduction of $0.9 million and $2.4 million in depreciation expense during the three and nine months ended September 30, 2026, respectively. The Contract Mining segment’s total cost basis of machinery subject to the units of production method was $113.0 million as of September 30, 2026. Straight-line depreciation continues to be applied to other classes of assets where usage is time-based rather than activity-based.

As of September 30, 2026 and December 31, 2025, we had $20.3 million and $12.8 million, respectively, classified as Assets held for sale on the Unaudited Condensed Consolidated Balance Sheets. As of September 30, 2026, Assets held for sale consists of two draglines not in use in the Contract Mining segment as well as an office building in North Dakota and land in Texas and Tennessee within Unallocated Items.

Accounting Standards Not Yet Adopted: In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03), which requires entities to disclose disaggregated information about certain income statement expense line items in the notes to their financial statements on an annual and interim basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently in the process of evaluating the impact of this ASU on our Financial Statements and related disclosures.

In May 2026, the FASB issued Accounting Standards Update ASU No. 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818) (ASU 2026-02), which establishes recognition, measurement, presentation and disclosure requirements for environmental credits and related environmental credit obligations. The guidance is effective for public business entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently in the process of evaluating the impact of this ASU on our Financial Statements and related disclosures.

Basis of Presentation: These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of our financial position at September 30, 2026, the results of our operations, comprehensive income, cash flows and changes in equity for the nine months ended September 30, 2026 and 2025 have been included. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

The balance sheet at December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information or notes required by U.S. GAAP for complete financial statements.

Certain reclassifications have been made to the prior periods’ Unaudited Condensed Consolidated Financial Statements to conform to the current period's presentation.

NOTE 2—Revenue Recognition

Nature of Performance Obligations: At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promised good or service that is distinct. To identify the performance obligations, we consider all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

Each mine or mine area has a contract with our respective customer that represents a contract under ASC 606. For our consolidated entities, our performance obligations vary by contract and consist of the following:

At MLMC, each MMBtu delivered during the production period is considered a separate performance obligation. Revenue is recognized at the point in time that control of each MMBtu of lignite transfers to the customer. Fluctuations in revenue from period to period generally result from changes in customer demand.

In the Contract Mining segment, the management service to oversee the operation of the equipment, and delivery of aggregates or other minerals is the performance obligation accounted for as a series. Performance momentarily creates an asset that the customer simultaneously receives and consumes; therefore, control is transferred to the customer over time. Consistent with the conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate. As each month of service is completed, revenue is recognized for the amount of actual costs incurred, plus the management fee or fixed fee and the general and administrative fee (as applicable). Fluctuations in revenue from period to period result from changes in customer demand primarily due to increases and decreases in activity levels on individual contracts and variances in reimbursable costs. Revenue from equipment sales and part sales is recognized upon transfer of control to the customer.

The Minerals and Royalties segment enters into contracts which grant the right to explore, develop, produce and sell minerals controlled by us. These arrangements result in the transfer of mineral rights for a period of time; however, no rights to the actual land are granted other than access for purposes of exploration, development, production and sales. The mineral rights revert back to us at the expiration of the contract.

Under these contracts, granting exclusive right, title, and interest in and to minerals, if any, is the performance obligation. The performance obligation under these contracts represents a series of distinct goods or services whereby each day of access that is provided is distinct. The transaction price consists of a variable sales-based royalty and, in certain arrangements, a fixed component in the form of an up-front lease bonus payment. As the amount of consideration we will ultimately be entitled to is entirely susceptible to factors outside of our control, the entire amount of variable consideration is constrained at contract inception. We believe that the pricing provisions of royalty contracts are customary in the industry.

Mitigation Resources provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions. For restoration and reclamation services, the service contracts are generally structured as an agreement under which Mitigation Resources is reimbursed for all costs incurred plus a fixed fee. The services provided represent the performance obligation and are accounted for as a series. Performance momentarily creates an asset that the customer simultaneously receives and consumes; therefore, control is transferred to the customer as work is completed. Consistent with the conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate. As each month of service is completed, revenue is recognized for the amount of actual costs incurred, plus the fixed fee. Fluctuations in revenue from period to period result from increases and decreases in activity levels of individual contracts and variances in reimbursable costs.

Mitigation Resources also generates and sells stream and wetland mitigation credits (known as mitigation banking). In mitigation banking, each mitigation credit sale is considered a separate performance obligation. Mitigation banks are regulated and approved by the U.S. Army Corps of Engineers and other federal, state and local agencies. Mitigation credits are released in phases over the life of the mitigation bank. Revenue is recognized at the point in time that control of each mitigation credit transfers to the customer. Fluctuations in revenue from period to period generally result from changes in timing of mitigation credit releases and/or customer demand.

Significant Judgments: The contracts with our customers in the Utility Coal Mining and Contract Mining segments contain different types of variable consideration including, but not limited to, management fees that adjust based on volumes or MMBtu delivered. However, the terms of these variable payments relate specifically to our efforts to satisfy one or more, but not all, of the performance obligations (or to a specific outcome from satisfying the performance obligations) in the contract. Therefore, we allocate each variable payment (and subsequent changes to that payment) entirely to the specific performance obligation to which it relates. Management fees, as well as general and administrative fees, are also adjusted based on changes in specified indices (e.g., CPI) to compensate for general inflation changes. Index adjustments, if applicable, are effective prospectively.

In the Minerals and Royalties segment, we have the right to receive revenues from the sale of oil and natural gas through sales of the third-party lessees in which we own a mineral or royalty interest. Revenue is recognized at the point control of the product is transferred from the operator to the purchaser. Those purchasers remit payment to the operator and the operator, in turn, remits payment to us. 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 month that payment is received from the third-party lessee. We typically receive payment for oil and natural gas sales within 90 days of the month of delivery. For the three months ended September 30, 2026, the difference between our prior period pricing estimates and the actual amounts received from operators resulted in an unfavorable adjustment of $1.1 million. For the nine months ended September 30, 2026 and the three and nine months ended September 30, 2025, differences between our estimates and the actual amounts received from operators were immaterial.

Cost Reimbursement: Certain contracts include reimbursement from customers of actual costs incurred for the purchase of supplies, equipment and services in accordance with contractual terms. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof are highly dependent on factors outside of our control. Accordingly, reimbursable revenue is fully constrained and not recognized until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. We are considered a principal in such transactions and record the associated revenue at the gross amount billed to the customer with the related costs recorded as an expense within cost of sales.

At the Thacker Pass lithium project, in addition to management fee income, the customer will reimburse Sawtooth for certain capital expenditures. Sawtooth will recognize revenue over the estimated useful life of the asset on a straight-line basis as the performance obligation is satisfied over time. In prior years, the customer received a $3.5 million advance from Sawtooth, which is included in the long-term contract asset. The customer will pay a $4.7 million success fee to Sawtooth if commercial mining milestones are met, at which time Sawtooth will recognize the revenue for the difference between the success fee and the amount advanced. If commercial mining milestones are not met, the customer will only repay the $3.5 million advance.

Prior Period Performance Obligations: As discussed above, we record royalty income in the month production is delivered to the purchaser. The expected sales volumes and estimated prices for these properties are estimated and recorded in Oil and natural gas receivable in the Unaudited Condensed Consolidated Balance Sheets. During the three and nine months ended September 30, 2026 and the three months ended September 30, 2025, royalty income recognized in the reporting period relating to production satisfied in prior periods wasimmaterial. During the nine months ended September 30, 2025, royalty income recognized in the reporting period relating to production volumes for prior periods was $1.5 million.

Disaggregation of Revenue: In accordance with ASC 606-10-50, we disaggregate revenue from contracts with customers into major goods and service lines and timing of transfer of goods and services. We determined that disaggregating revenue into these categories achieves the disclosure objective of depicting how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Our business consists of the Utility Coal Mining, Contract Mining and Minerals and Royalties segments as well as Unallocated Items. Revenue included in Unallocated Items is primarily related to Mitigation Resources. See Note 8 for further discussion of segment reporting.

The following table disaggregates revenue by major sources as of September 30:

Contract Balances: The opening and closing balances of our current and long-term contract assets and liabilities and receivables are as follows:

We expect to recognize $0.9 million in the remainder of 2026, $1.9 million in 2027, $1.3 million in 2028, $0.2 million in 2029 and 2030, and $11.9 million thereafter related to the contract liability remaining at September 30, 2026. The difference between the opening and closing amounts of our contract balances results from the timing difference between our performance and the customer’s payment.

We haveno contract assets recognized from the costs to obtain or fulfill a contract with a customer.

NOTE 3—Inventories

Inventories are summarized as follows:

We recorded inventory impairment charges of $0.9 million during the three and nine months ended September 30, 2026 and $2.7 million and $7.0 million during the three and nine months ended September 30, 2025, respectively. The inventory impairment charges are in the Cost of sales line in the accompanying Unaudited Condensed Consolidated Statements of Operations as mining costs exceeded the net realizable value of coal inventory at MLMC.

Mining supplies inventory consists primarily of critical spare parts to support Contract Mining’s dragline operations and other general supplies used in day-to-day operations. Mining supplies inventory not expected to be utilized within the next 12 months is classified as long-term on the Unaudited Condensed Consolidated Balance Sheets.

NOTE 4—Stockholders' Equity

Stock Repurchase Program: On November 18, 2025, our Board of Directors approved a stock purchase program (2025 Stock Repurchase Program) providing for the purchase of up to $20.0 million of our outstanding Class A common stock through December 31, 2027. NACCO's previous repurchase program would have expired on December 31, 2025 but was terminated and replaced by the 2025 Stock Repurchase Program. During the three months ended September 30, 2026 and 2025, and the nine months ended September 30, 2026, there wereno stock repurchases. During the nine months ended September 30, 2025, we repurchased 22,198 shares of Class A common stock for an aggregate purchase price of $0.7 million.

The timing and amount of any repurchases under the 2025 Stock Repurchase Program are determined at the discretion of our management based on a number of factors, including the availability of capital, other capital allocation alternatives, market conditions for our Class A common stock and other legal and contractual restrictions. The 2025 Stock Repurchase Program does not require us to acquire any specific number of shares and may be modified, suspended, extended or terminated by us without prior notice and may be executed through open market purchases, privately negotiated transactions or otherwise. All or part of the repurchases under the 2025 Stock Repurchase Program may be implemented under a Rule 10b5-1 trading plan, which would allow repurchases under pre-set terms at times when we might otherwise be restricted from doing so under applicable securities laws.

NOTE 5—Fair Value Disclosure

Recurring Fair Value Measurements: The following table presents our assets accounted for at fair value on a recurring basis:

In a previous period, Bellaire established a $5.0 million Mine Water Treatment Trust, which is legally restricted for purposes of settling the Bellaire asset retirement obligation, to assure the long-term treatment of post-mining discharges. Bellaire's Mine Water Treatment Trust invests in equity securities that are reported at fair value based upon quoted market prices in active markets for identical assets; therefore, they are classified as Level 1 within the fair value hierarchy. The fair value of the Mine Water Treatment Trust was $13.7 million and $13.5 million at September 30, 2026 and December 31, 2025, respectively, and is recognized as a component of Equity securities in the Unaudited Condensed Consolidated Balance Sheets. We recognized a loss of less than $0.1 million and a gain of $0.8 million during the three and nine months ended September 30, 2026, respectively, and gains of $0.7 million and $1.2 million during the three and nine months ended September 30, 2025, respectively, related to the Mine Water Treatment Trust.

In a previous period, we invested $2.0 million in equity securities of a public company with a diversified portfolio of royalty producing mineral interests. The investment is reported at fair value based upon quoted market prices in active markets for identical assets; therefore, it is classified as Level 1 within the fair value hierarchy. The fair value of this investment was $5.3 million and $4.2 million at September 30, 2026 and December 31, 2025, respectively, and is recognized as a component of Equity securities in the Unaudited Condensed Consolidated Balance Sheets. We recognized gains of $0.5 million and $1.1 million during the three and nine months ended September 30, 2026, respectively, and losses of $0.4 million and $1.4 million during the three and nine months ended September 30, 2025, respectively, related to the investment in these equity securities.

The change in fair value of equity securities is reported on the line (Gain) loss on equity securities in the Other (income) expense section of the Unaudited Condensed Consolidated Statements of Operations.

During 2025 and 2026, excess funds from terminated defined benefit plans were invested in a money market fund and are being utilized to fund profit sharing contributions to eligible 401(k) plan participants. The current portion of $12.5 million is recorded on the line Prepaid profit sharing and the long-term portion of $3.1 million is recorded on the line Other non-current assets on the Unaudited Condensed Consolidated Balance Sheets as of September 30, 2026. The money market investment is reported at fair value based upon quoted market prices in active markets for identical assets; therefore, it is classified as Level 1 within the fair value hierarchy.

There were no transfers into or out of Levels 1, 2 or 3 during the nine months ended September 30, 2026 and 2025.

Nonrecurring Fair Value Measurements: During the nine months ended September 30, 2026, the Company recognized impairment charges related to certain solar development projects. The carrying value of these projects primarily consisted of an equity method investment, transformer deposits, site development costs and other project-related capitalized expenditures.

Management identified events and circumstances indicating that the carrying amounts of certain solar development projects may not be recoverable, including changing market conditions, lower-than-expected projected monetization values, contractual pricing considerations and increased development and execution risks. Management concluded that the fair values of certain project assets and investments were below their carrying amounts. As a result, the Company recorded total asset impairment charges of $12.0 million in Unallocated Items. The impairment charges are reported on the line Solar asset impairment charges in the Unaudited Condensed Consolidated Statements of Operations. As of September 30, 2026, we have capitalized assets with a fair value of approximately $4.0 million associated with solar development projects.

The fair value measurements were classified as a Level 3 measurement within the fair value hierarchy because significant unobservable inputs were utilized in determining fair value. Observable market prices were not available due to the absence of an active market for the underlying projects and a lack of comparable market transactions. Significant assumptions considered by management included expected project timing, the probability and timing of anticipated tax credit monetization, potential recoverability of development expenditures and potential value associated with equipment and assignable contractual rights.

NOTE 6—Unconsolidated Subsidiaries

Each of our wholly owned Unconsolidated Subsidiaries, within the Utility Coal Mining and Contract Mining segments, meet the definition of a VIE. The Unconsolidated Subsidiaries are capitalized primarily with debt financing provided by or supported by their respective customers, and generally without recourse to us. Although we own 100% of the equity and manage the daily operations of the Unconsolidated Subsidiaries, we have determined that the equity capital provided by us is not sufficient to adequately finance the ongoing activities or absorb any expected losses without additional support from the customers. The customers have a controlling financial interest and have the power to direct the activities that most significantly affect the economic performance of the entities. As a result, we are not the primary beneficiary and therefore do not consolidate these entities' financial positions or results of operations. See Note 1 for a discussion of these entities.

The Investment in the unconsolidated subsidiaries and related tax positions totaled $0.8 million and $14.8 million at September 30, 2026 and December 31, 2025, respectively. The decrease during the first nine months of 2026 is due to intercompany tax settlements and distributions received from unconsolidated subsidiaries, partially offset by equity earnings recognized during the period. Our risk of loss relating to these entities is limited to our invested capital, which was $5.2 million and $6.7 million at September 30, 2026 and December 31, 2025, respectively. Earnings of Unconsolidated Subsidiaries were $15.8 million and $46.6 million during the three and nine months ended September 30, 2026, respectively, and $15.4 million and $43.7 million during the three and nine months ended September 30, 2025, respectively.

NACCO Natural Resources is a party to certain guarantees related to Coyote Creek. Under certain circumstances of default or termination of Coyote Creek’s Lignite Sales Agreement (LSA), NACCO Natural Resources would be obligated to pay a make-whole amount to Coyote Creek’s third-party lenders. The make-whole amount is based on the excess, if any, of the discounted value of the remaining scheduled debt payments over the principal amount. In addition, in the event Coyote Creek’s LSA is terminated by Coyote Creek’s customers, NACCO Natural Resources is obligated to purchase Coyote Creek’s dragline and rolling stock for the then net book value of those assets. To date, no payments have been required from NACCO Natural Resources since the inception of these guarantees. We believe that the likelihood NACCO Natural Resources would be required to perform under the guarantees is remote, and no amounts related to these guarantees have been recorded.

NOTE 7—Eiger Resources

As of September 30, 2026 and December 31, 2025, the Minerals and Royalties segment held an equity investment of $31.4 million and $33.7 million, respectively, in Eiger Resources, which holds operated and non-operated working interests in oil and natural gas assets in the Kansas and the Oklahoma portion of the Hugoton basin. Eiger Resources meets the definition of a VIE. As we own less than 20%, NACCO does not exercise financial control and is not the primary beneficiary of the VIE; therefore, we do not consolidate the results of these operations within our financial statements. Instead, this investment is accounted for using the equity method. Our investment is reported on the line Equity method investment in Eiger Resources in the Unaudited Condensed Consolidated Balance Sheets. The Minerals and Royalties segment records its share of earnings as Earnings of unconsolidated operations on the Unaudited Condensed Consolidated Statements of Operations. We recorded our share of earnings of $4.3 million and $4.2 million during the three and nine months ended September 30, 2026, respectively, and $1.1 million and $1.9 million during the three and nine months ended September 30, 2025, respectively. Due to the timing and availability of financial information, earnings or losses from this investment are recorded on a one quarter lag.

Changes in the Eiger Resources equity method investment balance are summarized as follows:

NOTE 8—Business Segments

Our operating segments are: (i) Utility Coal Mining, (ii) Contract Mining and (iii) Minerals and Royalties. We determine our reportable segments by first identifying our operating segments, and then by assessing whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. Our President and Chief Executive Officer, who is the Chief Operating Decision Maker (CODM), utilizes Operating profit (loss) to evaluate segment performance and allocate resources. Our CODM considers actual, budgeted and forecasted Operating profit (loss) from operations on a monthly basis for evaluating the performance of each segment and making decisions about allocating capital and other resources to each segment.

All financial statement line items below operating profit (other income, including interest expense and interest income, the provision (benefit) for income taxes and net income) are presented and discussed within this Form 10-Q on a consolidated basis.

See Note 1 for a discussion of our reportable segments. All current operations reside in the U.S.

The following table provides segment financial information and a reconciliation of segment results to consolidated results:

*Operating expenses consist of Selling, general and administrative expenses, Amortization of intangible assets, (Gain) loss on sale of assets, Solar asset impairment charges and Solar curtailment costs.

**Unallocated Items consist primarily of Cash and cash equivalents, assets of growth businesses, Deferred income taxes and Investments in unconsolidated subsidiaries.

NOTE 9—Contingencies

Various legal and regulatory proceedings and claims have been or may be asserted against NACCO and certain subsidiaries relating to the conduct of their businesses. These proceedings and claims are incidental to the ordinary course of our business. Management believes that it has meritorious defenses and will vigorously defend us in these actions. Any costs that management estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, we disclose the nature of the contingency and, in some circumstances, an estimate of the possible loss.

These matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of an adverse impact on our financial position, results of operations and cash flows of the period in which the ruling occurs, or in future periods.