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Item 1A. Risk Factors

2026-03-04 compared with 2025-03-05 · 88 added, 117 removed, 225 unchanged (48% of the section changed)

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New factors may emerge or changes to these risks could occur that could materially affect our business.

Risks related to the Coal Mining segment

Business — Government Regulation and Environmental Matters on page 9 in this Form 10-K for discussion of regulations that could materially adversely affect our businesses.

Risks related to the Utility Coal Mining segment

MLMC is subject to risks associated with our capital investment, operating and equipment costs, changes in customer demand and inflationary adjustments.

Profitability at MLMC is affected by customer demand for coal, changes in the contractually determined sales price and actual costs incurred.

The MLMC contract is the only coal supply contract in which we are responsible for all operating costs, capital requirements and final mine reclamation.

As such, increased costs or decreased revenues could materially reduce our profitability.

As a significant portion of MLMC’s costs are fixed, reduction in dispatch and/or reduced mechanical availability of the Red Hills Power Plant can and historically has materially reduced operating results at MLMC.

Conversely, periods of higher dispatch can improve results.

In February 2026, MLMC received notice from its customer that the Red Hills Power Plant experienced an unplanned outage, which is expected to lead to reduced demand and an anticipated operating loss for MLMC during 2026.

Any reduction in customer demand at MLMC, including fluctuations in demand due to planned and unplanned outages at the customer's Red Hills Power Plant, unanticipated weather conditions, economic conditions, governmental regulations and inflationary adjustments could have a material adverse effect on MLMC's financial condition, results of operations and cash flows.

Termination of or default under long-term mining contracts could adversely affect our business, financial condition, results of operation and cash flows.

Substantially all of the Coal Mining segment's profits are derived from long-term mining contracts.

Although we have long-term contracts, numerous regulatory authorities, along with well-funded political and environmental activist groups, are devoting substantial resources to anti-coal activities to minimize or eliminate the use of coal as a source of electricity generation.

Any customer's premature facility closure or contract default could have a material adverse effect on our business, financial condition and results of operations.

Substantially all of the Utility Coal Mining segment's profits are derived from long-term mining contracts.

Although we have long-term contracts, any customer's premature facility closure or contract default could have a material adverse effect on our business, financial condition and results of operations.

The coal mining industry is subject to ongoing complex governmental regulations and legislation that could adversely impact our long-term mining contracts and our results of operations, liquidity, financial condition and cash flow.

The coal mining industry and the electric generation industry are subject to extensive regulation by federal, state and local authorities on matters concerning the health and safety of employees, land use, stream and wetland protection, permit and licensing requirements, air and water quality standards, plant and wildlife protection, reclamation and restoration of mining properties after mining, the discharge of GHGs and other materials into the environment, surface subsidence from underground mining and the effects that mining has on groundwater quality and availability.

The coal mining industry and the electric generation industry are subject to extensive regulation by federal, state and local authorities on matters concerning the health and safety of employees, land use, stream and wetland protection, permit and licensing requirements, air and water quality standards, plant and wildlife protection, reclamation and restoration of mining properties after mining, the discharge of GHGs and other materials into the environment and the effects that mining has on groundwater quality and availability.

Legislation mandating certain benefits for current and retired coal miners also affects the industry.

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We are required to prepare and present to federal, state or local authorities data pertaining to the impact the production and combustion of coal may have upon the environment.

The public, including non-governmental organizations, opposition groups and individuals, have statutory rights to comment upon and submit objections to requested permits and

approvals and to legally challenge certain permits subsequent to their issuance.

The public, including non-governmental organizations, opposition groups and individuals, have statutory rights to comment upon and submit objections to requested permits and approvals and to legally challenge certain permits subsequent to their issuance.

Compliance with these requirements is costly and time-consuming and may delay commencement or continuation of development or production.

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All of these factors could significantly reduce our profitability.

Congress has considered climate change legislation aimed at reducing GHG emissions, particularly from coal combustion by power plants.

Enactment of laws and passage of regulations regarding GHG emissions at the federal or state level, or other actions to limit carbon dioxide emissions, such as opposition by environmental groups of coal-fired power plants, could result in electric generators switching from coal to other fuel sources or premature facility closures.

Congress continues to consider a variety of proposals to reduce GHG emissions from the combustion of coal and other fuels.

These proposals include emission taxes, emission reductions, including carbon tax and cap-and-trade programs, and mandates or incentives to generate electricity by using renewable energy sources, such as wind or solar power.

Some states have established programs to reduce GHG emissions.

Further, certain governmental agencies provide grants or other financial incentives to entities developing or selling alternative energy sources with lower levels of GHG emissions, which may lead to more competition from those entities.

The potential impact on us of future laws, regulations or other policies or circumstances will depend upon the degree to which any such laws, regulations or other policies or circumstances require electricity generators to diminish their reliance on coal as a fuel source.

The potential impact of future laws, regulations or other policies or circumstances will depend upon the degree to which any such laws, regulations or other policies or circumstances require electricity generators to diminish their reliance on coal as a fuel source.

Complicating these matters further, over the last several decades, U.S.

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We and/or our customers often do not have the ability to anticipate, or prepare in advance for, changes in regulatory approaches that may be implemented following a change in Administration.

The SCOTUS’s recent decision in Loper Bright Enterprises v.

Raimondo overturned the SCOTUS’s longstanding deferral to the applicable agency’s interpretation of ambiguous federal laws.

We are unable to predict whether, or to what extent, this decision will alter the outcome of judicial reviews of current or future regulations.

We do not know whether risks related to current and future regulations affecting us will be significantly mitigated by the decision in Loper Bright.

In view of the significant uncertainty surrounding each of these factors, it is not possible for us to predict reasonably the impact that any such laws, regulations or other policies may have on our business, financial condition and results of operations.

In view of the significant uncertainty surrounding each of these factors, it is not possible for us to reasonably predict the impact that any such laws, regulations or other policies may have on our business, financial condition and results of operations.

However, such impacts could have a material adverse effect on our business, financial condition and results of operations.

Business — Government Regulation on page 9 in this Form 10-K for discussion of regulations that could materially adversely affect the Coal Mining segment.

The loss of, or significant reduction in, purchases by NACCO's coal customers could adversely affect our business, financial condition, results of operation and cash flows.

Earnings from the Coal Mining segment's customers may fluctuate from time to time based on numerous factors, including market conditions and the realignment of customers' power generation portfolios that reduce the electric power generated from coal, which may be outside of our control.

If any of the Coal Mining segment's customers experience declining demand due to market, economic, regulatory or competitive conditions, it could have an adverse effect on our profitability, cash flows and financial position.

Earnings from the Utility Coal Mining segment's customers may fluctuate from time to time based on numerous factors, including market conditions and the realignment of customers' power generation portfolios that reduce the electric power generated from coal, which may be outside of our control.

If any of the Utility Coal Mining segment's customers experience declining demand due to market, economic, regulatory or competitive conditions, it could have an adverse effect on our profitability, cash flows and financial position.

In addition, if any customers were to significantly reduce or eliminate their purchases of coal from us or if we are unable to renew expiring long-term sales agreements with existing customers or enter into new supply agreements, our business, financial condition, results of operations and cash flows could be adversely affected.

Business — Business Developments on page 2 in this Form 10-K for further discussion.

MLMC is subject to risks associated with our capital investment, operating and equipment costs, growing use of alternative generation that competes with coal-fired generation, changes in customer demand and inflationary adjustments.

The profitability of MLMC is subject to the risk of loss of investment in this operation, increases in the cost of mining, changes in customer demand, adverse mining conditions and growing competition from alternative power generation that competes with coal-fired generation.

At MLMC, the costs of mining operations are not reimbursed by MLMC's customer.

As such, increased costs or decreased revenues could materially reduce our profitability.

Profitability at MLMC is affected by customer demand for coal and changes in the indices that determine sales price and actual costs incurred.

MLMC sells lignite at contractually agreed upon prices which are subject to changes in the level of established

indices over time.

All production costs at MLMC are capitalized into inventory and recognized in cost of sales as tons are delivered.

In periods of limited or no deliveries, MLMC may be required to reduce inventory carrying value using the lower of cost and net realizable value approach, which could adversely affect MLMC’s results of operations.

Diesel fuel is heavily weighted among the indices used to determine the coal sales price.

The diesel fuel-related component of the coal sales price is based on average price changes over time whereas the impact on actual costs from changes in diesel fuel prices is more immediate;

therefore, fluctuations in diesel fuel prices can result in significant fluctuations in earnings at MLMC.

Any reduction in customer demand at MLMC, including, but not limited to, reduced availability of the customer’s power plant, dispatch of power generated by other energy sources, fluctuations in demand due to unanticipated weather conditions, planned and unplanned outages at the customer's Red Hills Power Plant, economic conditions, governmental regulations and inflationary adjustments could have a material adverse effect on MLMC's financial condition, results of operations and cash flows.

The Coal Mining segment's Unconsolidated Subsidiaries are subject to risks created by changes in customer demand and inflationary adjustments.

The Utility Coal Mining segment's Unconsolidated Subsidiaries are subject to risks created by changes in customer demand and inflationary adjustments.

The contracts with the Unconsolidated Subsidiaries' customers are primarily based on a management fee approach, whereby compensation includes reimbursement of all operating costs, plus a fee based on the amount of coal delivered.

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During the production stage, the Unconsolidated Subsidiaries' customers pay us our agreed upon fee only for the coal delivered to them for consumption or use.

As a result, reduced coal usage by customers for any reason, including, but not limited to, reduced availability of the customer’s power plant, dispatch of power generated by other energy sources, fluctuations in demand due to unanticipated weather conditions, planned and unplanned outages at the Coal Mining segment's customers' facilities, economic conditions and governmental regulations could have a material adverse effect on our results of operations.

As a result, reduced coal usage by customers for any reason, including, but not limited to, reduced availability of the customer’s power plant, dispatch of power generated by other energy sources, fluctuations in demand due to unanticipated weather conditions, planned and unplanned outages at the Utility Coal Mining segment's customers' facilities, economic conditions and governmental regulations could have a material adverse effect on our results of operations.

Because of the contractual price formulas for the management fees at these Unconsolidated Subsidiaries, the profitability of these operations is also subject to fluctuations in inflationary adjustments (or lack thereof) that can impact the agreed upon management fees.

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competition from alternative fuel sources for power generation, such as natural gas, nuclear, hydroelectric, wind and solar power, and the location, availability, quality and price of those alternative fuel sources;

environmental and other governmental regulations, including those impacting coal-fired power plants;

and energy conservation efforts and related governmental policies.

and environmental and other governmental regulations.

Changes in the utility industry that affect NACCO's customers could also adversely affect us.

The increased availability of renewable energy sources has contributed to a reduction in demand for coal-fired electric power generation.

Competition from natural gas-fired plants that are relatively more efficient, less expensive to construct and less difficult to permit than coal-fired plants have the most potential to continue to displace a significant amount of coal-fired electric power generation.

Federal and state mandates for increased use of electricity derived from renewable energy sources have also adversely affected demand for coal-fired electric power generation.

Such mandates make alternative fuel sources more competitive with coal-fired electric power generation.

Any of these risks could result in a decrease in coal consumption by our customers and could have a material adverse effect on our business, financial condition and results of operations.

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Such changes could have a material adverse effect on our business and could significantly reduce our profitability.

The Coal Mining segment's customers' operations require significant capital expenditures.

Maintaining and installing environmental controls on power plants requires significant capital expenditures.

Any delay or reduction in making capital expenditures to maintain or upgrade coal-fired power plants by the Coal Mining segment's customers, principally electric utilities, could result in an increase in outage days and a corresponding decrease in coal consumption.

A decrease in coal consumption could have a material adverse effect on the Coal Mining segment's financial condition, results of operations and cash flows.

The Utility Coal Mining segment's customers' operations require significant capital expenditures.

Maintaining power plants requires significant capital expenditures.

Any delay or reduction in making capital expenditures to maintain or upgrade coal-fired power plants by the Utility Coal Mining segment's customers, principally electric utilities, could result in an increase in outage days and a corresponding decrease in coal consumption.

The Red Hills Power Plant operated at below full baseload capacity and experienced periods of reduced mechanical availability during 2024 and 2025.

A decrease in coal consumption could have a material adverse effect on the Utility Coal Mining segment's financial condition, results of operations and cash flows.

We face numerous uncertainties in estimating economically recoverable reserves and resources, and inaccuracies in estimates could result in lower than expected revenues, higher than expected costs and decreased profitability.

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Our inability to satisfy those requirements may cause the leasehold interest to terminate.

Risks related to the NAMining segment

We have experienced growth in our NAMining business in recent periods and we may not be able to sustain growth or manage future growth effectively.

We have expanded our overall NAMining business, operations and headcount in recent periods.

NAMining’s operating expenses may continue to increase as we scale the NAMining business.

Risks related to the Contract Mining segment

We have experienced growth in our Contract Mining business in recent periods and we may not be able to sustain growth or manage future growth effectively.

We have expanded our overall Contract Mining business, operations and headcount in recent periods.

The Contract Mining segment's operating expenses may increase as we continue to scale the Contract Mining business.

We must effectively integrate, develop and motivate employees, while integrating new equipment and customers in an efficient and effective manner.

We anticipate that it will continue to incur costs and capital expenditures associated with future growth prior to realizing the full measure of anticipated long-term benefits, and the return on these investments may be lower, may develop more slowly than expected or may never be realized.

We anticipate that we will continue to incur costs and capital expenditures associated with future growth prior to realizing the full measure of anticipated long-term benefits, and the return on these investments may be lower, may develop more slowly than expected or may never be realized.

If we are unable to manage this growth and the associated expenses effectively, we may not be able to take advantage of market opportunities or remain competitive.

We may also fail to execute on our business plan or respond to competitive pressures, any of which could adversely affect the NAMining business, operating results and financial condition.

NAMining faces competition from aggregates producers that choose to self-perform mining operations and from other mining companies.

NAMining faces competition from existing and prospective customers that are capable of performing, or engaging other companies to perform the services NAMining provides.

NAMining cannot be certain that our existing customers will continue to outsource these services to NAMining in the future, which could adversely affect the NAMining business, operating results and financial condition.

We may also fail to execute on our business plan or respond to competitive pressures, any of which could adversely affect the Contract Mining business, operating results and financial condition.

Our Contract Mining business faces competition from customers that choose to self-perform mining operations and from other mining companies.

We face competition from existing and prospective customers that are capable of performing, or engaging other companies to perform the services we provide.

We cannot be certain that our existing customers will continue to outsource these services to us in the future, which could adversely affect the Contract Mining business, operating results and financial condition.

We are subject to risks involved in the development of new mining projects.

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New mining projects can take up to several years to complete, are complex and require significant capital expenditures.

These projects are subject to significant risks, including delays or reductions in making capital expenditures by NAMining's customers, timely regulatory approvals, extreme weather events, unexpected increases in the cost of required materials, and disputes with third party providers of materials, equipment or services, and a completed project may not yield the anticipated operational or financial benefit, any of which could have a material adverse effect on our business, financial condition and results of operations.

NAMining operations are currently geographically concentrated and therefore subject to regional economic risk, regulatory conditions, natural disasters, severe weather events or other circumstances affecting Florida.

As of December 31, 2024, over 75% of the quarries NAMining operates are located in Florida.

A prolonged economic downturn or adverse change in regulatory conditions in the Florida mining or construction industry could result in a significant reduction in demand for NAMining’s services.

The occurr ence of one or more natural disasters, severe weather events, terrorist attacks, or disruptive political events in Florida could adversely affect the NAMining business.

Risks related to the Minerals Management segment

These projects are subject to significant risks, including delays or reductions in making capital expenditures by Contract Mining's customers, timely regulatory approvals, extreme weather events, unexpected increases in the cost of required materials, and disputes with third party providers of materials, equipment or services, and a completed project may not yield the anticipated operational or financial benefit, any of which could have a material adverse effect on our business, financial condition and results of operations.

Contract Mining operations are currently geographically concentrated and therefore subject to regional economic risk, regulatory conditions, natural disasters, severe weather events or other circumstances affecting Florida.

As of December 31, 2025, over 80% of the Contract Mining segment's quarries are located in Florida.

A prolonged economic downturn or adverse change in regulatory conditions in the Florida mining or construction industry could result in a significant reduction in demand for our services.

The occurr ence of one or more natural disasters, severe weather events, terrorist attacks, or disruptive political events in Florida could adversely affect the Contract Mining business.

Risks related to the Minerals and Royalties segment

We have no control over the timing of the development and operation of our natural gas, oil and coal reserves extracted by third parties.

We own mineral and royalty interests in the continental United States.

The Minerals Management segment does not currently have any material investments under which it would be required to bear the cost of exploration, production or development.

The Minerals and Royalties segment does not currently have any material investments under which it would be required to bear the cost of exploration, production or development.

We primarily derive income from royalty-based leases under which lessees make payments to us based on their sale of natural gas, oil and coal.

Future royalty-based income is dependent on the number of oil and gas wells being developed and operated on our mineral acreage.

The decision to pursue development and operation of oil and gas wells is made by third-party operators, not by us, and depends on a number of factors outside of our control, including fluctuations in commodity prices (primarily natural gas), regulatory risk, our lessees' willingness and ability to incur well-development and other operating costs, the rate of production of the reserves and changes in the availability and continuing development of infrastructure.

Lower commodity prices may reduce the amount of oil and natural gas that third-party operators can produce economically.

In the event that new federal or state restrictions related to the hydraulic fracturing process are adopted in areas where we own mineral and royalty interests, our lessees may incur additional costs or permitting requirements to comply with such requirements that may be significant and could result in added restrictions, delays or curtailments in the pursuit of exploration, development, or production activities.

The decision to pursue development and operation of oil and gas wells is made by third-party operators, not by us, and depends on a number of factors outside of our control, including fluctuations in commodity prices, regulatory risk, our lessees' willingness and ability to incur well-development and other operating costs, the rate of production of the reserves and changes in the availability and continuing development of infrastructure.

Lower commodity prices and/or increased costs may reduce the amount of oil and natural gas that third-party operators can produce economically.

In addition, if a lessee were to experience financial difficulty, the lessee might not be able to pay our royalty payments or continue operations.

A failure on the part of the lessee to make royalty payments may give us the right to terminate the lease, repossess the property and enforce payment obligations under the lease.

If we repossessed any of our properties, we would seek a replacement lessee.

A failure on the part of the lessee to make royalty payments may give us certain rights;

and if possible, we would seek a replacement lessee.

However, we may not be able to find a replacement lessee or might not be able to enter into a new lease on favorable terms within a reasonable period of time.

In addition, if we are able to enter into a new

lease with a new lessee, the replacement lessee may not achieve the same levels of production or sales prices as the lessee it replaced.

In addition, if we are able to enter into a new lease with a new lessee, the replacement lessee may not achieve the same levels of production or sales prices as the lessee it replaced.

Any of these risks could materially reduce our expected royalty income and profitability.

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Unless our third-party lessees conduct successful ongoing well development activities or we continually acquire mineral and royalty interests, production and income related to our mineral and royalty interests will decline as those reserves are depleted.

The future cash flow and results of operations of the Minerals Management segment are highly dependent on third-party operators’ success in developing our current and future mineral and royalty interests.

The future cash flow and results of operations of the Minerals and Royalties segment are highly dependent on third-party operators’ success in developing our current and future mineral and royalty interests.

These operators may not have access to the capital needed to develop our mineral interests.

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Further, the decline curve we use to project future royalty income is subject to numerous assumptions and limitations.

Natural gas wells have high initial production rates and follow a natural decline before settling into relatively stable, long-term production.

Decline rates can vary due to factors like well depth, well length, formation pressure and facility design.

Any of these risks could materially reduce our expected royalty income and profitability.

Substantially all of the Minerals Management segment’s revenues are derived from royalty payments that are based on the price at which oil and natural gas produced from the acreage underlying our interests are sold.

Substantially all of the Minerals and Royalties segment’s revenues are derived from royalty payments that are based on the price at which oil and natural gas produced from the acreage underlying our interests are sold.

Prices of oil and natural gas are volatile due to factors beyond our control.

A substantial or extended decline in commodity prices may adversely affect the Minerals Management segment’s financial condition or results of operations.

The Minerals Management segment’s revenues and operating results depend significantly upon the prevailing prices for oil and natural gas.

A substantial or extended decline in commodity prices may adversely affect the Minerals and Royalties segment’s financial condition or results of operations.

The Minerals and Royalties segment’s revenues and operating results depend significantly upon the prevailing prices for oil and natural gas.

Historically, oil and natural gas prices have been volatile and are subject to fluctuations in response to changes in:

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domestic and foreign governmental regulations and taxes;

the continued threat of terrorism and the impact of military and other action, including ongoing conflicts in foreign nations and associated oil and natural gas import bans as well as economic sanctions such as those imposed by the U.S.

on oil and gas exports from Iran;

the proximity, cost, availability and capacity of oil and natural gas pipelines and other transportation facilities;

the price and availability of alternative fuels;

volatility in the political, legal and regulatory environments due to the U.S.

presidential election;

volatility in the political, legal and regulatory environments;

and overall domestic and global economic conditions.

A substantial or extended decline in commodity prices may adversely affect the Minerals Management segment’s financial condition or results of operations.

A substantial or extended decline in commodity prices may adversely affect the Minerals and Royalties segment’s financial condition or results of operations.

The marketability of oil and natural gas production is dependent upon transportation, pipelines and refining facilities and continued operation of the U.S.

Any limitation in the availability of these items could interfere with our third-party lessee’s ability to market oil and natural gas production and may adversely affect the Minerals Management segment’s financial condition or results of operations.

Any limitation in the availability of these items could interfere with our third-party lessee’s ability to market oil and natural gas production and may adversely affect the Minerals and Royalties segment’s financial condition or results of operations.

The marketability of our third-party lessee’s production depends in part on the availability, proximity, and capacity of pipelines, tanker trucks, and other transportation methods, and processing and refining facilities owned by third parties as well as continued reliable operation of the U.S power grid.

Any significant disruption in the U.S.

power grid, gathering system or transportation, processing, or refining-facility capacity could reduce our third-party lessee’s ability to market oil production and may adversely affect the Minerals Management segment’s financial condition or results of operations.

power grid, gathering system or transportation, processing, or refining-facility capacity could reduce our third-party lessee’s ability to market oil production and may adversely affect the Minerals and Royalties segment’s financial condition or results of operations.

Risks related to long-term growth strategy

Our investments in mitigation solutions, comprehensive reclamation and restoration construction services as well as solar and other energy-related development projects are subject to substantial risks and uncertainties.

There are risks associated with NACCO's ability to execute on our longer term growth strategy, including our investment in mitigation solutions, comprehensive reclamation and restoration construction services as well as clean energy projects through our Mitigation Resources of North America and ReGen Resources businesses, and our ability to develop and manage such projects profitably.

There are risks associated with NACCO's ability to execute on our longer term growth strategy, including our investment in mitigation solutions, comprehensive reclamation and restoration construction services as well as other energy-related projects through our Mitigation Resources of North America and ReGen Resources businesses, and our ability to develop and manage such projects profitably.

These include political and regulatory developments that may make it more costly, or impossible, to pursue these business opportunities, logistical risks and potential delays related to construction, permitting and regulatory approvals;

operational risk that the projects will not perform according to expectations;

weather conditions or other factors beyond our

All of the aforementioned risks could reduce the viability of project development.

weather conditions or other factors beyond our control.

General concerns about the fundamental soundness of the economy may cause customers to defer projects, even if they have available financing.

Prolonged uncertainties in the capital markets, or the returns of constrained capital market conditions, could have adverse effects on our customers.

All of the aforementioned risks could reduce the viability of project development, which would adversely affect our financial condition and results of operations.

The OBBBA includes substantial changes to U.S.

solar energy tax policy which could have a material impact on the

projects being developed by ReGen Resources.

Current projects in development include solar arrays, solar-gas hybrid projects, thermal generation and carbon capture primarily on reclaimed mining properties in Louisiana, Mississippi, Ohio, Pennsylvania and Texas.

ReGen develops energy infrastructure projects directly as well as through joint ventures.

Our investments in solar projects are dependent, in part, on federal tax incentives to preserve economic value.

We believe all current solar projects have been safe harbored in order to preserve tax credit eligibility.

We have approximately $8.4 million of capitalized assets associated with our solar projects.

We have incurred, and will continue to incur, costs in connection with these projects and the results of operations and/or return on investment could be lower than anticipated.

These projects face the risk that the current state regulatory programs and tax laws may expire or be adversely modified and could have a material adverse effect on our operating results and financial condition.

Operating results may vary significantly from period to period and are inherently unpredictable.

Demand for our mitigation credits and mitigation services has been, and will likely continue to be, cyclical in nature and vulnerable to downturns in the general economy, as well as downturns in government infrastructure spending.

We base our planned operating expenses in part on our expectations of future revenue, and a significant portion of our expenses are fixed in the short-term.

We have and will continue to incur costs in connection with these projects and the results of operations and/or return on investment could be negative or lower than anticipated and we may need to write-down the value of capitalized assets associated with these projects.

Furthermore, our ability to forecast results may be hindered or inaccurate and the projects may not perform as predicted.

Even if these projects are profitable in the long term, they may not be profitable in the short term, and results of operations are unlikely to be even quarter over quarter.

In addition, our investments in solar and other energy projects are dependent, in part, upon current state regulatory incentives and federal tax credits in order for the projects to be economically viable.

Even if these projects are profitable in the long term, they may not be profitable in the short term, and results of operations will not be even quarter over quarter, and this could have a material adverse effect on our operating results and financial condition.

Risks related to corporate structure

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(iii) changes in government regulation;

(iv) potential or actual military conflicts or acts of terrorism;

(v) announcements concerning NACCO, our customers or competitors;

(vi) lack of trading liquidity as a result of low trading volumes could make it difficult for investors to sell shares;

and (vii) the general state of the securities market.

(iv) military conflicts, inclusive of acts of terrorism;

(v) supply chain disruptions, inclusive of tariff effects;

(vi) announcements concerning NACCO, our customers or competitors;

(vii) lack of trading liquidity as a result of low trading volumes could make it difficult for investors to sell shares;

and (viii) the general state

of the securities market.

In addition, the stock market in general has experienced significant volatility that often has been unrelated to the operating performance of companies whose shares are traded.

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Current and future capital and credit market conditions could adversely affect our ability to obtain bank financing on reasonable terms.

Certain financial institutions have acted to limit available financing for companies in the fossil fuel industry, including coal mining, which could result in increases in costs of borrowing or in our ability to maintain financing at current levels.

We may be unable to obtain financing on reasonable terms.

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Our wholly-owned subsidiary has a revolving line of credit of up to $200.0 million that expires in September 2028.

Our ability to access the capital markets and the costs and terms of available financing depends on many factors, including perceived credit risks of companies with coal and/or oil and gas exposure as a result of current market sentiment for fossil fuels.

Certain financial institutions have taken actions to limit available financing to entities that produce or use fossil fuels.

The volatility in the energy industry and additional perceived credit risks of companies with coal and/or oil and gas exposure has resulted in traditional bank lenders seeking to reduce or eliminate their lending exposure to these companies.

Our ability to access the capital markets and the costs and terms of available financing depends on many factors.

An inability to obtain bank financing, or refinance with terms that are as favorable as the existing terms of such indebtedness, could have a material adverse effect on our operating results and financial condition.

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Federal and state laws require us to provide financial assurance or financial security to secure performance or payment of certain long-term obligations, such as mine closure or reclamation costs, federal and state workers’ compensation and black lung benefit costs, leases, transmission interconnection construction costs, power purchase agreement delivery obligations and other obligations.

Future federal and state laws and regulations, regional transmission organizations and power purchase agreement customers may require higher amounts of financial security, including as a result of changes to certain factors used

to calculate the bonding or security amounts.

Bond issuers may demand higher fees or additional collateral, including cash or letters of credit or other terms less favorable upon renewals.

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That failure could result from a variety of factors, including lack of availability, higher expense or unfavorable market terms, the exercise by third-party surety bond issuers of their right to refuse to renew the surety and restrictions on availability of collateral for current and future third-party surety bond issuers under the terms of our financing arrangements.

In addition, as a result of increasing credit pressures on the coal industry, it is possible that surety bond providers could demand other forms of collateral as a condition to providing or maintaining surety bonds.

Any such demands, could have a material adverse impact on our liquidity and financial position.

Any such factors, could have a material adverse impact on our liquidity and financial position.

If we are unable to meet collateral requirements and cannot otherwise obtain or retain required surety bonds, it may be unable to satisfy legal requirements necessary to conduct mining operations.

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Insurance coverage is increasingly expensive, contains more stringent terms and may be difficult to obtain in the future.

A number of global insurance companies have taken steps to limit coverage for companies in the fossil fuel industry, including coal mining, which could result in significant increases in costs of insurance or in our ability to maintain insurance coverage at current levels.

We hold a number of insurance policies, including director and officers’ liability and property and casualty insurance coverages.

Because we are involved in coal mining, costs of insurance may increase substantially or insurance carriers may limit or decide not to insure us in the future.

In addition, if we make significant insurance claims under our insurance policies, such claims may have a material adverse effect on our ability to obtain future insurance coverage at commercially reasonable rates.

If we make significant insurance claims under our insurance policies, such claims may have a material adverse effect on our ability to obtain future insurance coverage at commercially reasonable rates.

Limited, or an inability to obtain, insurance coverage, significant increases in the premiums or deductibles of insurance, or losses in excess of our liability insurance coverage limits, could have a material adverse effect on our operating results and financial condition.

Increasing emphasis and changing expectations with respect to environmental, social and governance matters may impose additional costs on us or expose us to new or additional risks.

Expectations relating to environmental, social and governance (ESG) matters have been rapidly evolving.

Government organizations are enhancing or advancing legal, regulatory and disclosure requirements specific to ESG matters.

The heightened focus on ESG issues requires the continuous monitoring of various and evolving laws, regulations, standards and expectations and the associated reporting requirements.

Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices.

We could face pressures from investors, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability.

Investors may request that we implement ESG procedures or standards as a condition to maintain their investment or to make further investments.

Lenders and insurers may also limit lending to and insuring of companies that do not meet certain ESG measures endorsed by them.

Additionally, we may face reputational challenges in the event our ESG practices are inconsistent with the third-party views of acceptable ESG practices.

Further, there is an increasing number of state-level anti-ESG initiatives in the United States that may conflict with other regulatory requirements or various stakeholders’ expectations.

Companies which do not adapt to or comply with regulatory, investor or stakeholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.

We may be subject to litigation seeking to hold energy companies accountable for the effects of climate change.

Increasing attention to climate change risk has also resulted in a recent trend of governmental investigations and private litigation by local and state governmental agencies as well as private plaintiffs in an effort to hold energy companies accountable for the effects of climate change.

Other public nuisance lawsuits have been brought in the past against power, coal, oil and gas companies alleging that their operations are contributing to climate change.

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Cyber threats and cyber attackers can be sponsored by nation states or sophisticated criminal organizations or be the work of independent hackers.

As cyber threats evolve and become more difficult to detect and successfully defend against, one or more cyber attacks might defeat our, or a third-party service provider's, security measures in the future.

The rapid evolution and increased availability of artificial intelligence (AI) may intensify cybersecurity risks by making cyber-attacks more sophisticated and cybersecurity incidents more difficult to detect, contain and mitigate.

As threat actors adopt and deploy AI tools, the speed and sophistication of cyber threats and privacy risks may increase across our environment and those of our customers and vendors.

Employee error or other irregularities may also result in a failure of security measures and a breach of information systems.

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What changed 10-K

Item 1A. Risk Factors