What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-04 compared with 2025-03-05 · 412 added, 444 removed, 1250 unchanged (41% of the section changed)

21 unchanged sentences

We have adopted an insider trading policy that governs the purchase, sale and other disposition of our securities by our directors, officers and employees that is designated to promote compliance with insider trading laws, rules, regulations and applicable listing standards.

A copy of our insider trading policy is filed as Exhibit 19 to this Annual Report on Form 10-K for the year ended December 31, 2024.

A copy of our insider trading policy was filed as Exhibit 19 to the Annual Report on Form 10-K for the year ended December 31, 2024.

EXECUTIVE COMPENSATION

14 unchanged sentences

3.1(i) Restated Certificate of Incorporation of the Company is incorporated herein by reference to Exhibit 3(i) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992, Commission File Number 1-9172.

3.1(ii) Certificate of Ame ndment of the Restated Certificate of Incorporation of the Comp any, dated July 23, 2024, is incorporated herein by referen ce to Exhibit 3(ii) to the Company's Quarterly Report on Form 10-Q, filed by the Company on July 31, 2024, Commis s ion File Number 1-9172.

3.1(ii) Certificate of Amendment of the Restated Certificate of Incorporation of the Company, dated July 23, 2024, is incorporated herein by reference to Exhibit 3(ii) to the Company's Quarterly Report on Form 10-Q, filed by the Company on July 31, 2024, Commission File Number 1-9172.

3.1(iii) Amended and Restated By-laws of the Company are incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed by the Company on December 18, 2014, Commission File Number 1-9172.

23 unchanged sentences

Non-Employee Directors' Equity Compensation Plan (Amended and Restated May 19, 2021), dated as of February 20, 2024, is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on February 22, 2024, Commission File Number 1-9172.

10.6* NACCO Industries, Inc.

Non-Employee Directors' Equity Compensation Plan (Amended and Restated May 14, 2025) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on May 19, 2025, Commission File Number 1-9172.

10.7* Form of Award Agreement for the NACCO Industries, Inc.

1 unchanged sentence

10.8* Form of Cashless Exercise Award Agreement for the NACCO Industries, Inc.

Executive Long-Term Incentive Compensation Plan is incorporated herein by reference to Exhibit 10.

1 to the Company's Quarterly Report on Form 10- Q, filed by the Company on May 1, 2024 , Commission File Number 1-9172.

Executive Long-Term Incentive Compensation Plan is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on May 1, 2024, Commission File Number 1-9172.

10.9* Form of Non-Cashless Exercise Award Agreement for the NACCO Industries, Inc.

15 unchanged sentences

Rankin, Jr., is incorporated by reference to Exhibit 10.1 of NACCO Industries, Inc.'s Current Report on Form 8-K, filed on December 23, 2024, Commission File Number 1-9172.

Exhibit Number Exhibit Description

10.15* NACCO Industries, Inc.

1 unchanged sentence

10.16* The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K, filed by the Company on December 19, 2007, Commission File Number 1-9172.

Exhibit Number Exhibit Description

10.17* Amendment No.

17 unchanged sentences

2 to Lignite Sales Agreement, Settlement Agreement and Release by and between Mississippi Lignite Mining Company and Choctaw Generation Limited Partnership, LLLP, dated as of November 24, 2021, is incorporated herein by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, Commission File Number 1-9172.

Exhibit Number Exhibit Description

10.31 Termination Agreement and Release, by and among The Falkirk Mining Company, Great River Energy and NoDak Energy Investments Corporation, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.

1 unchanged sentence

1 to Termination Agreement and Release, by and between The Falkirk Mining Company, NoDak Energy Investments Corporation and Great River Energy, dated as of December 28, 2021, is incorporated herein by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, Commission File Number 1-9172.

Exhibit Number Exhibit Description

10.33*** Coal Sales Agreement, by and between The Falkirk Mining Company and Rainbow Energy Center, LLC, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 1-9172.

21 unchanged sentences

6 to The North American Coal Corporation Supplemental Retirement Benefit Plan (Amended and Restated as of January 1, 2008) is incorporated herein by reference to Exhibit 10.52 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, Commission File Number I-9172.

Exhibit Number Exhibit Description

10.47 Agreement, dated as of March 16, 2015, among The North American Coal Corporation, Otter Tail Power Company, Northern Municipal Power Agency, Montana-Dakota Utilities Co., a division of MDU Resources Group, Inc.

1 unchanged sentence

The North American Coal Corporation Excess Retirement Plan (Amended and Restated Effective January 1, 2020) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on December 18, 2019, Commission File Number 1-9172.

Exhibit Number Exhibit Description

10.49* The NACCO Natural Resources Excess Retirement Plan (Effective January 1, 2025) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on December 17, 2024, Commission File Number 1-9172.

10.50* Amendment No.

1 to the NACCO Natural Resources Excess Retirement Plan (Effective January 1, 2026) is incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company on December 16, 2025, Commission File Number 1-9172.

Amended and Restated Credit Agreement by and among The North American Coal Corporation and the Guarantors party thereto and the Lenders party thereto and KeyBank National Association as Syndication Agent, PNC Bank National Association as Administrative Agent and KeyBanc Capital Markets Inc.

6 unchanged sentences

(19) NACCO Industries, Inc.

Insider Trading Policy

Insider Trading Policy is incorporated herein by reference to Exhibit 19 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, Commission File Number I-9172.

Subsidiaries.

20 unchanged sentences

Rankin is attached hereto as Exhibit 24.7.

24.8** A copy of a power of attorney for Roger F.

Rankin is attached hereto as Exhibit 24.8.

24.9** A copy of a power of attorney for Lori J.

Robinson is attached hereto as Exhibit 24.9.

24.8** A copy of a power of attorney for Valerie Gentile Sachs is attached hereto as Exhibit 24.8.

13 unchanged sentences

(95)** Mine Safety Disclosure Exhibit.

Technical Report Summary relating to the Mississippi Lignite Mining Company, effective date as of December 31, 2024.

96.1 Technical Report Summary relating to the Mississippi Lignite Mining Company, effective date as of December 31, 2024, is incorporated herein by reference to Exhibit 96.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, Commission File Number I-9172.

(97.1) NACCO Industries, Inc.

Dodd-Frank Clawback Policy

Dodd-Frank Clawback Policy is incorporated herein by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, Commission File Number I-9172.

(99.1**) Reserve Report of Catapult Mineral Partners.

35 unchanged sentences

Rankin Director March 4, 2026

Rankin Director March 5, 2025

Robinson Director March 5, 2025

* Valerie Gentile Sachs Director March 4, 2026

39 unchanged sentences

We have audited the accompanying consolidated balance sheets of NACCO Industries, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(b) (collectively referred to as the “consolidated financial statements”).

and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(b) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S.

17 unchanged sentences

Unconsolidated subsidiaries – accounting for variable interest entities

Description of the Matter

As discussed in Note 1 and 16 to the consolidated financial statements, certain of the operating coal mines and entities within the NAMining segment, collectively referred to as the “Unconsolidated Subsidiaries,” are variable interest entities (VIEs) and are accounted for under the equity method.

Description of the Matter As discussed in Note 1 and 16 to the consolidated financial statements, certain of the operating coal mines and entities within the Contract Mining segment, collectively referred to as the “Unconsolidated Subsidiaries,” are variable interest entities (VIEs) and are accounted for under the equity method.

In each case, NACCO is not the primary beneficiary of the VIE as it does not exercise financial control.

6 unchanged sentences

The Company also monitors for reconsideration events relating to the Unconsolidated Subsidiaries, which necessitates on-going critical judgments over whether any such events have arisen that require a re-evaluation of prior accounting judgments.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated and tested the design and operating effectiveness of the controls surrounding the Company’s application of the variable interest model and the processes to continually assess the implications of significant transactions and events that could trigger a VIE reconsideration event.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated and tested the design and operating effectiveness of the controls surrounding the Company’s application of the variable interest model and the processes to continually assess the implications of significant transactions and events that could trigger a VIE reconsideration event.

For those entities where the Company has determined it is not the primary beneficiary, we evaluated the Company’s accounting for and disclosure of the Unconsolidated Subsidiaries under the equity method in accordance with the generally accepted accounting principles.

45 unchanged sentences

Amortization of intangible assets 750 531

(Gain) loss on sale of assets

( 5,146 ) 221

Long-lived asset impairment charge — 65,887

65,139 134,722

Operating profit (loss)

Gain on sale of assets ( 286 ) ( 5,146 )

78,315 65,139

Operating profit 21,981 35,705

Other expense (income)

2 unchanged sentences

Closed mine obligations 457 2,381

Gain on equity securities

( 1,805 ) ( 1,958 )

Loss (gain) on equity securities 726 ( 1,805 )

Gain on settlement of excess funding liability ( 3,590 ) —

Pension settlement charge 7,804 —

Other, net 738 345

2,059 ( 5,979 )

Income (loss) before income tax benefit

33,646 ( 64,158 )

Income before income tax benefit 13,144 33,646

Income tax benefit

( 4,430 ) ( 95 )

Net income (loss)

$ 33,741 $ ( 39,587 )

Earnings (loss) per share:

Basic earnings (loss) per share

$ 4.58 $ ( 5.29 )

Diluted earnings (loss) per share

$ 4.55 $ ( 5.29 )

Net income $ 17,574 $ 33,741

Earnings per share:

Basic earnings per share $ 2.37 $ 4.58

Diluted earnings per share $ 2.35 $ 4.55

Basic weighted average shares outstanding 7,423 7,363

3 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31

(In thousands)

Net income (loss)

$ 33,741 $ ( 39,587 )

Other comprehensive (loss) income

Current period pension and postretirement plan adjustment, net of $ 205 and $ 615 tax

benefit in 2024 and 2023, respectively

Net income $ 17,574 $ 33,741

Other comprehensive income (loss)

Current period pension and postretirement plan adjustment, net of $ 557 tax expense

and $ 205 tax benefit in 2025 and 2024, respectively

1,888 ( 706 )

2 unchanged sentences

and $ 89 tax benefit in 2025 and 2024, respectively

Total other comprehensive loss ( 398 ) ( 641 )

Comprehensive income (loss)

$ 33,343 $ ( 40,228 )

Total other comprehensive income (loss) 8,311 ( 398 )

Comprehensive income $ 25,885 $ 33,343

See notes to the Consolidated Financial Statements.

7 unchanged sentences

Accounts receivable from affiliates

Prepaid profit sharing 11,529 —

Inventories 63,648 94,608

Assets held for sale 12,774 14,159

Prepaid insurance 5,546 1,740

Other current assets 21,860 25,899

2 unchanged sentences

Intangibles, net 4,725 5,475

Mining supplies inventory 34,795 —

Deferred income taxes 14,001 14,641

3 unchanged sentences

17,696 18,663

Equity method investment in Eiger, LLC

Equity method investment in Eiger Resources 33,723 19,147

Other non-current assets 29,505 25,768

4 unchanged sentences

Accounts payable to affiliates

Revolving credit agreements — 10,000

Current maturities of long-term debt 9,080 4,179

1 unchanged sentence

Accrued payroll 19,863 22,663

Excess funding liability 5,450 —

Other current liabilities 10,299 8,752

2 unchanged sentences

Long-term revolving credit agreement

75,000 70,000

Operating lease liabilities 7,950 9,042

Asset retirement obligations 39,516 39,780

Pension and other postretirement obligations 4,787 5,183

Liability for uncertain tax positions 794 5,795

Retirement benefit plans 4,558 4,787

Other long-term liabilities 18,531 12,908

16 unchanged sentences

Operating Activities

Net income (loss)

$ 33,741 $ ( 39,587 )

Net income $ 17,574 $ 33,741

Adjustments to reconcile net income to net cash provided by operating activities:

3 unchanged sentences

Stock-based compensation 8,280 5,832

(Gain) loss on sale of assets

( 5,146 ) 221

Gain on sale of assets ( 286 ) ( 5,146 )

Inventory impairment charges

Long-lived asset impairment charge — 65,887

Pension settlement charge 7,804 —

Other 7,242 ( 3,971 )

Working capital changes:

Changes in operating assets and liabilities:

Accounts receivable 2,916 ( 11,725 )

10 unchanged sentences

Equity method investment ( 16,702 ) ( 16,556 )

Proceeds from the sale of private company equity units — 3,574

Return of equity method investment 3,295 —

Other ( 282 ) ( 139 )

2 unchanged sentences

Net additions to revolving credit agreement

60,000 10,000

Additions to long-term debt 624 5,232

Reductions to long-term debt ( 4,643 ) ( 4,914 )

(Reductions) additions to note payable to affiliate ( 346 ) 624

Debt issuance costs

1 unchanged sentence

Purchase of treasury shares ( 2,534 ) ( 9,944 )

Net cash provided by financing activities

Net cash (used for) provided by financing activities ( 9,858 ) 36,727

Cash and Cash Equivalents

12 unchanged sentences

Purchase of treasury shares ( 317 ) — — ( 9,627 ) — ( 9,944 )

Net loss — — — ( 39,587 ) — ( 39,587 )

Net income — — — 33,741 — 33,741

Cash dividends on Class A and Class B common stock:

2 unchanged sentences

Current period other comprehensive income, net of tax — — — — ( 706 ) ( 706 )

Pension settlement, net of tax — — — — 1,398 1,398

Reclassification adjustment to net income, net of tax — — — — 308 308

2 unchanged sentences

Purchase of treasury shares ( 62 ) — — ( 2,472 ) — ( 2,534 )

Conversion of Class B to Class A shares 3 ( 3 ) — — — —

Net income — — — 17,574 — 17,574

3 unchanged sentences

Current period other comprehensive income, net of tax — — — — 1,888 1,888

Pension settlement, net of tax — — — — 6,033 6,033

Reclassification adjustment to net income, net of tax — — — — 390 390

10 unchanged sentences

We operate under three business segments:

Coal Mining, North American Mining ® (NAMining) and Minerals Management.

The Coal Mining segment operates surface coal mines for power generation companies.

The NAMining segment is a trusted mining partner for producers of aggregates, activated carbon, lithium and other industrial minerals.

The Minerals Management segment, which includes the Catapult Mineral Partners (Catapult) business, acquires and promotes the development of mineral interests.

Mitigation Resources of North America ® (Mitigation Resources) provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services.

In addition, ReGen Resources is pursuing opportunities to develop new power generation resources.

We have items not directly attributable to a reportable segment that are not included in the reported financial results of the operating segment.

These items primarily include administrative costs related to public company reporting requirements, including management and board compensation, and the financial results of Bellaire Corporation (Bellaire), Mitigation Resources, ReGen Resources and other developing businesses.

Bellaire manages our long-term liabilities related to former Eastern U.S.

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 strategic objectives.

Mitigation Resources of North America ® (Mitigation Resources) provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions.

ReGen Resources is pursuing opportunities to develop new power generation resources.

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.

Intercompany accounts and transactions are eliminated in consolidation.

During 2025, we changed the names of our reportable segments to make it easier for our stakeholders to understand the business activities within each segment.

The Utility Coal Mining, Contract Mining and Minerals and Royalties segments were formerly the Coal Mining, North American Mining and Minerals Management segments, respectively.

There were no changes to the composition of each segment and therefore no changes to historical segment reporting.

See Note 15 to the Consolidated Financial Statements for further discussion of segment reporting.

Our operating segments are further described below:

Coal Mining Segment

The Coal Mining segment operates surface coal mines under long-term contracts with power generation companies pursuant to a service-based business model.

Coal is surface mined in North Dakota and Mississippi.

Each mine is fully integrated with our customer's operations.

As of December 31, 2024, the Coal Mining segment's operating coal mines were:

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.

As of December 31, 2025, 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).

Each of these mines supply lignite coal for power generation and delivers our coal production to an adjacent power plant or synfuels plant under a long-term supply contract.

While MLMC’s coal supply contract contains a take or pay provision, the contract contains a force majeure provision that allows for the temporary suspension of the take or pay provision during the duration of certain specified events beyond the control of either party;

all other coal supply contracts are requirements contracts.

Coteau, Falkirk and Coyote Creek are in North Dakota and MLMC is in Mississippi.

Each of these mines produce lignite coal.

While MLMC’s coal supply contract contains a take or pay provision, 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.

2 unchanged sentences

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.

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

As diesel fuel is heavily weighted among the indices used to determine the coal sales price, fluctuations in diesel fuel prices can result in significant fluctuations in earnings at MLMC.

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.

Reduction in dispatch of the Red Hills Power Plant will result in reduced earnings at MLMC.

During 2023, MLMC received notice from our customer related to a boiler issue at the Red Hills Power Plant that began on December 15, 2023.

We assessed MLMC's long-lived assets for impairment and recorded a $ 65.9 million impairment charge in 2023.

See Note 9 to the Consolidated Financial Statements in this Form 10-K for further information on the long-lived asset impairment charge.

While this issue has been resolved, it resulted in a reduction in customer demand which had a significant impact on our results of operations during 2024.

We recognized income of $ 13.6 million in 2024 related to business interruption insurance recoveries to partially offset losses related to the boiler outage.

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 materially reduce operating results at MLMC.

Conversely, periods of higher

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

dispatch can improve results.

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

These factors increased per ton operating costs which adversely affected operating results in both 2024 and 2025.

In December 2023, MLMC received notice from its customer related to a boiler issue at the Red Hills Power Plant.

While this issue has been resolved, it resulted in a reduction in customer demand which had a significant impact on our results of operations during 2024.

We recognized income of $ 13.6 million in 2024 related to business interruption insurance recoveries that partially offset losses related to the boiler outage.

The Sabine Mining Company (Sabine) operates the Sabine Mine in Texas.

All production from Sabine was delivered to

Southwestern Electric Power Company's (SWEPCO) Henry W.

All production from Sabine was delivered to Southwestern Electric Power Company's (SWEPCO) Henry W.

Pirkey Plant (the Pirkey Plant).

SWEPCO is an American

Electric Power (AEP) company.

SWEPCO is an American Electric Power (AEP) company.

As a result of the early retirement of the Pirkey Plant, Sabine ceased deliveries and commenced final reclamation on April 1, 2023.

1 unchanged sentence

Sabine will provide mine reclamation services through September 30, 2026.

As of October 1, 2026, SWEPCO has an obligation to acquire all of the capital stock of Sabine and complete the remaining mine reclamation.

As of October 1, 2026, SWEPCO is obligated to acquire all of the capital stock of Sabine and complete the remaining mine reclamation.

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.

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 income and cash flow with minimal capital investment.

Each contract specifies the indices and mechanics by which fees change over time, generally in line with broad measures of U.S.

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.

1 unchanged sentence

Coteau, Coyote Creek, Falkirk and Sabine each meet the definition of a variable interest entity (VIE).

In each case, NACCO

is not the primary beneficiary of the VIE as we do not exercise financial control;

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.

10 unchanged sentences

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.

NAMining Segment

The NAMining segment provides value-added contract mining and other services for producers of industrial minerals.

Contract Mining Segment

The Contract Mining segment provides value-added contract mining and other services for producers of industrial minerals and products.

The segment is a platform for our growth and diversification of mining activities outside of the thermal coal industry.

NAMining provides contract mining services for independently owned mines and quarries, creating value for our customers by performing the mining aspects of our customers’ operations.

Contract Mining provides contract mining services for independently owned mines and quarries, 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 December 31, 2024, NAMining operates in Florida, Texas, Arkansas, Virginia and Nebraska.

In addition, Sawtooth Mining, LLC (Sawtooth) will be 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.

(TSX:LAC) (NYSE:

LAC) and General Motors Holdings LLC.

Thacker Pass commenced construction in 2023 and is targeting initial production in 2027.

Sawtooth will be reimbursed for costs of mining, capital expenditures and mine closure and will recognize a contractually agreed upon production fee once the mine is operating.

In addition to providing comprehensive mining services, Sawtooth is currently assisting with certain construction services and will transport clay tailings once lithium production commences

During 2024 and 2023, NAMining amended and extended existing limestone contracts with two customers and expanded the scope of work with several other customers.

New contracts signed in 2024 are expected to be accretive to earnings starting in 2026.

As of December 31, 2025, the Contract Mining segment operates at quarries in Florida, Arkansas and Nebraska and is expected to begin operations at a quarry in Arizona during the first half of 2026.

Beginning in 2026, the Contract Mining segment will also provide dragline services as part of a U.S.

Army Corps of Engineers construction project in Palm Beach County, Florida.

In addition, 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Minerals Management Segment

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

Americas Corp.

(TSX:LAC) (NYSE:

LAC) and General Motors Holdings LLC.

Department of Energy holds warrants to purchase five percent non-voting, non-transferable equity in this joint venture.

Thacker Pass is targeting initial lithium production in late 2027.

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.

1 unchanged sentence

Typically, the resulting royalty interest is a cost-free percentage of production revenues for minerals extracted from the acreage.

A holder of royalty interests is generally not responsible for capital expenditures or lease operating expenses, but royalty interests may be calculated net of post-production expenses, and typically have no environmental liability.

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.

16 unchanged sentences

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.

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

The Minerals Management segment will benefit from the continued

development of our mineral properties without the need for investment of additional capital once mineral and royalty interests

have been acquired as the capital costs or lease operating expenses are born entirely by the operators or working interest

During 2024 and 2023, Minerals Management invested a total of $ 19.1 million, including $ 15.7 million in the fourth quarter of

2024, in Eiger, LLC (Eiger), which holds non-operated working interests in oil and natural gas assets in the Kansas and the Oklahoma portion of the Hugoton basin.

This entity meets the definition of a VIE.

As of December 31, 2025 and 2024, the Minerals and Royalties segment holds an equity investment of $ 33.7 million and $ 19.1 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.

Although we own less than 20 %, Eiger Resources meets the definition of a VIE.

NACCO is not the primary beneficiary of the VIE as it does not exercise financial control;

1 unchanged sentence

Instead, this contract is accounted for as an equity method investment.

During 2024, we recorded $ 0.6 million, which represented our share of earnings, as Earnings of unconsolidated operations on the Consolidated Statements of Operations.

Our investment is reported on the line Equity method investment in Eiger, LLC in the Consolidated Balance Sheets.

Due to a lag in Eiger's financial reporting, earnings or losses from this investment will be recorded on a one quarter lag.

Excluding the Eiger investment described above, total consideration for acquisitions of mineral and royalty interests was $ 0.7 million and $ 36.7 million, in 2024 and 2023, respectively.

The 2024 acquisitions include 13.7 thousand gross acres and 0.6 thousand net royalty acres.

The 2023 acquisitions included 43.4 thousand gross acres and 2.5 thousand net royalty acres.

Our investment is reported on the line Equity method investment in Eiger Resources in the Consolidated Balance Sheets.

The Minerals and Royalties segment records its share of earnings as Earnings of unconsolidated operations on the Consolidated Statements of Operations.

Due to the timing and availability of financial information, earnings or losses from this investment are recorded on a one quarter lag.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

We also manage legacy royalty and mineral interests located in Ohio (Utica and Marcellus shale natural gas), Louisiana (Haynesville shale and Cotton Valley formation natural gas), Texas (Cotton Valley and Austin Chalk formation natural gas), Mississippi (coal), Pennsylvania (coal, coalbed methane and Marcellus shale natural gas), Alabama (coal, coalbed methane and natural gas) and North Dakota (coal, oil and natural gas).

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

Beginning balance

$ 19,147 $ 2,800

Share of earnings

Capital contributions

15,000 15,700

Distributions received

Ending balance

$ 33,723 $ 19,147

Excluding the Eiger Resources investment described above, total consideration for acquisitions of mineral and royalty interests was $ 4.7 million and $ 0.7 million, in 2025 and 2024, respectively.

The 2025 acquisitions include 10.5 thousand gross acres and 0.4 thousand net royalty acres.

The 2024 acquisitions included 13.7 thousand gross acres and 0.6 thousand net royalty acres.

The Minerals and Royalties segment also manages legacy royalty and mineral interests located in Ohio (Utica and Marcellus shale natural gas), Louisiana (Haynesville shale and Cotton Valley formation natural gas), Texas (Cotton Valley and Austin Chalk formation natural gas), Mississippi (coal), Pennsylvania (coal, coalbed methane and Marcellus shale natural gas), Alabama (coal, coalbed methane and natural gas) and North Dakota (coal, oil and natural gas).

The majority of our legacy reserves were acquired as part of our historical coal mining operations.

1 unchanged sentence

Net royalty acres are calculated based on our ownership and royalty rate, normalized to a standard 1/8 th royalty lease, and assumes a 1/4 th royalty rate for unleased acres.

See Note 17 for further discussion of Minerals Management.

At December 31, 2024 and 2023, we had $ 14.2 million and $ 6.5 million classified as Assets held for sale, primarily for draglines at NAMining and a building, respectively.

During 2024, we had cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code.

In May 2024, we sold land for $ 7.0 million and recognized a $ 4.5 million gain in the Minerals Management segment, which is included on the line (Gain) loss on sale of assets within the accompanying Consolidated Statements of Operations.

We structured this transaction in a manner that qualified as a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code and used all of the net proceeds from the sale during the year ended December 31, 2024.

During 2023, our Board of Directors approved the termination of the Combined Defined Benefit Plan (Combined Plan) and participants were offered lump-sum distributions as part of the termination process.

As a result of the lump-sum distributions, we recognized a non-cash, pension settlement charge of $ 1.8 million in 2023 on the line Other, net within the accompanying Consolidated Statements of Operations.

See Note 17 for further discussion of Minerals and Royalties.

At December 31, 2025 and 2024, we had $ 12.8 million and $ 14.2 million classified as Assets held for sale on the Consolidated Balance Sheets.

During 2025, we sold three draglines that were classified as Assets held for sale as of December 31, 2024 and recognized a $ 0.1 million gain in the Contract Mining segment, which is included on the line Gain on sale of assets within the Consolidated Statements of Operations.

At December 31, 2025, Assets held for sale consists of two draglines not in use in the Contract Mining Segment and an office building in North Dakota in Unallocated Items.

During 2025, we terminated the NACCO Combined Defined Benefit Plan (Combined Plan) and settled all future obligations by transferring the remaining benefit obligations to a third-party insurance company.

Although the plan was overfunded, we recognized a non-cash, pension settlement charge of $ 7.8 million on the line Pension settlement charge within the Consolidated Statements of Operations.

The $ 7.8 million settlement charge accelerated the recognition of the net loss recorded in Accumulated other comprehensive loss that would have otherwise been recognized in subsequent periods.

See Note 14 to the Consolidated Financial Statements in this Form 10-K for further information on the Combined Plan.

On December 1, 2022, we transferred our ownership interest in Midwest AgEnergy Group, LLC (MAG) to HLCP Ethanol Holdco, LLC.

We received cash payments totaling $ 3.6 million during 2023 in connection with MAG and recognized the gain on the line Other, net within the accompanying Consolidated Statements of Operations.

During 2025, the Company and Falkirk’s former customer agreed to settle the Falkirk Defined Benefit Plan for $ 10.9 million, resulting in a gain of $ 3.6 million on the line Gain on settlement of excess funding liability within the Consolidated Statements of Operations.

In accordance with the agreement reached with the former customer, $ 5.5 million was paid to the former customer during 2025.

The remaining $ 5.4 million, recorded on the line Excess funding liability on the Consolidated Balance Sheets at December 31, 2025, will be paid to the former customer in 2026.

The excess funds from the terminated Combined Plan and the Falkirk Defined Benefit Plan will be utilized by the NACCO 401(k) plan, which is a qualified replacement plan.

These funds will be used for future profit sharing contributions to eligible 401(k) plan participants.

Total remaining funds are $ 14.6 million as of December 31, 2025.

The current portion of $ 11.5 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 Consolidated Balance Sheet as of December 31, 2025.

During 2024, we sold land for $ 7.0 million and recognized a $ 4.5 million gain in the Minerals and Royalties segment, which is included on the line Gain on sale of assets within the Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

NOTE 2— Significant Accounting Policies

18 unchanged sentences

Acquisitions of royalty interests of oil and natural gas properties are considered asset acquisitions and are recorded at cost.

As an owner of mineral and royalty interests and not working interests, we are not required to make capital expenditures and did not make capital expenditures to convert proved undeveloped reserves from undeveloped to developed.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Acquisition costs of proved royalty and mineral interests are amortized using the units of production method over the life of the property, which is estimated using proved reserves.

For purposes of amortization, interests in oil and natural gas properties are grouped in a reasonable aggregation of properties with common geological structural features or stratigraphic condition.

For purposes of amortization, interests in oil and natural gas properties are grouped in a reasonable aggregation of properties.

We review and evaluate our royalty interests in oil and natural gas properties for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

8 unchanged sentences

Fair value is estimated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Identifying and assessing whether impairment indicators exist, or if events or changes in circumstances have occurred, including assumptions about future power plant dispatch levels, changes in future sales price, operating costs and other factors that impact anticipated revenue and customer demand, requires significant judgment.

We determined that indicators of impairment existed at MLMC during the fourth quarter of 2023 and, as a result, MLMC's long-lived assets were reviewed for impairment.

We assessed the recoverability of the MLMC asset group and determined that the assets were not fully recoverable when compared to the remaining future undiscounted cash flows from these assets.

As a result, we estimated the fair value of the asset group which resulted in a non-cash, long-lived asset impairment charge of $ 65.9 million in 2023.

See Note 9 for further discussion of our impairment analysis.

Self-insurance Liabilities:

7 unchanged sentences

We maintain a long-term incentive program that allow for the grant of shares of Class A common stock, subject to restrictions, as a means of retaining and rewarding selected employees for long-term performance and to increase their ownership in NACCO.

Shares awarded under the plans are fully vested and entitle the stockholder to all rights of common stock ownership except that shares may not be assigned, pledged or otherwise transferred during the restriction period.

Shares awarded under the plans are fully vested and entitle the stockholder to all rights of common

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

stock ownership except that shares may not be assigned, pledged or otherwise transferred during the restriction period.

In general, for shares awarded for years ended December 31, 2025 and December 31, 2024, the restriction period ends at the earliest of (i) three years after the participant's retirement date, (ii) three , five or ten years from the award date, or (iii) the participant's death or permanent disability.

4 unchanged sentences

We also have a stock compensation plan for non-employee directors under which a portion of the annual retainer for each non-employee director is paid in restricted shares of Class A common stock.

For the year ended December 31, 2024 and 2023, $ 110,000 ($ 150,000 for the Chairman) of the non-employee director's annual retainer of $ 175,000 ($ 250,000 for the Chairman) was paid in restricted shares of Class A common stock.

Shares awarded under the plan are fully vested and entitle the stockholder to all rights of common stock ownership except that shares may not be assigned, pledged, hypothecated or

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

otherwise transferred during the restriction period.

For the year ended December 31, 2025, $ 112,000 ($ 195,000 for the Chairman) of the non-employee director's annual retainer of $ 179,000 ($ 300,000 for the Chairman) was paid in restricted shares of Class A common stock.

For the year ended December 31, 2024, $ 110,000 ($ 150,000 for the Chairman) of the non-employee director's annual retainer of $ 175,000 ($ 250,000 for the Chairman) was paid in restricted shares of Class A common stock.

Shares awarded under the plan are fully vested and entitle the stockholder to all rights of common stock ownership except that shares may not be assigned, pledged, hypothecated or otherwise transferred during the restriction period.

In general, the restriction period ends at the earliest of (i) ten years from the award date, (ii) the date of the director's death or permanent disability, (iii) five years (or earlier with the approval of the Board of Directors) after the director's date of retirement from the Board of Directors, (iv) the date the director has both retired from the Board of Directors and has reached age 70 , or (v) at such other time as determined by the Board of Directors in their sole and absolute discretion.

2 unchanged sentences

These voluntary shares are not subject to any restrictions.

There were no shares issued under voluntary elections in 2024.

Total shares issued under voluntary elections were 1,603 in 2023.

There were no shares issued under voluntary elections in 2025 and 2024.

After the issuance of these shares, there were 175,687 shares of Class A common stock available for issuance under this plan.

16 unchanged sentences

Accounting Standards Adopted in 2025:

Effective for the year ended December 31, 2024, we adopted ASU No.

2023-07, Segment Reporting (Topic 280), (ASU 2023-07), which enhances reportable segment disclosure requirements in part by requiring entities to disclose significant expenses related to their reportable segments.

ASU 2023-07 also requires disclosure of the title and position of the company’s Chief Operating Decision Maker (CODM) and how the CODM uses financial reporting to assess segment performance and allocate resources.

During 2025, we adopted ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09) on a prospective basis, which requires entities to disclose more detailed information about their effective tax rate reconciliation as well as information on income taxes paid.

The adoption of this standard only impacts disclosures and did not have a material impact on our Financial Statements.

Accounting Standards Not Yet Adopted:

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which requires entities to disclose more detailed information about their effective tax rate reconciliation as well as information on income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

The adoption of this standard only impacts disclosures and is not expected to have a material impact on our Financial Statements.

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.

Reclassification:

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

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03), which requires

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

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.

Reclassification:

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

NOTE 3— Revenue Recognition

Nature of Performance Obligations:

At contract inception, we assess the goods and services promised in our contracts with customers and identifies a performance obligation for each promised good or service that is distinct.

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.

4 unchanged sentences

Fluctuations in revenue from period to period generally result from changes in customer demand.

At NAMining, 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.

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;

3 unchanged sentences

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 part sales is recognized upon transfer of control of the parts to the customer.

The Minerals Management segment enters into contracts which grant the right to explore, develop, produce and sell minerals controlled by us.

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;

6 unchanged sentences

We believe that the pricing provisions of royalty contracts are customary in the industry.

Up-front lease bonus payments represent the fixed portion of the transaction price and are recognized over the primary term of the contract, which is generally three to five years .

Mitigation Resources generates and sells stream and wetland mitigation credits (known as mitigation banking) and provides services to those engaged in permittee-responsible stream and wetland mitigation.

Each mitigation credit sale is considered a separate performance obligation.

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 customer demand.

Under the permittee-responsible stream and wetland mitigation model, the contracts are generally structured as a management fee agreement under which Mitigation Resources is reimbursed for all costs incurred in performing the required mitigation plus an agreed profit percentage or a fixed fee.

The mitigation services provided is the performance obligation and is accounted for as a series.

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;

1 unchanged sentence

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.

Fluctuations in revenue from period to period result from changes in customer demand primarily due to increases and decreases in activity levels of individual contracts and variances in reimbursable costs.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

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:

Our contracts with our customers in the Coal Mining and NAMining segments contain different types of variable consideration including, but not limited to, management fees that adjust based on volumes or MMBtu delivered.

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.

2 unchanged sentences

Index adjustments, if applicable, are effective prospectively.

In the Minerals Management 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.

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.

4 unchanged sentences

For the years ended December 31, 2025 and 2024, differences between our estimates and the actual amounts received from operators were immaterial .

For the years ended December 31, 2024 and 2023, any changes in estimates were immaterial .

Cost Reimbursement:

2 unchanged sentences

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 records the associated revenue at the gross amount billed to the customer with the related costs recorded as an expense within cost of sales.

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.

1 unchanged sentence

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 either pay a $ 4.7 million success fee to Sawtooth upon achieving commercial mining milestones or repay the $ 3.5 million advance if such commercial mining milestones are not met.

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 prices for these properties are estimated and recorded in Trade accounts receivable in the accompanying Consolidated Balance Sheets.

The expected sales volumes and prices for these properties are estimated and recorded in Other current assets in the Consolidated Balance Sheets.

The difference between our estimates and the actual amounts received is recorded in the month that payment is received from the third-party lessee.

During the years ended December 31, 2024 and 2023, royalty income recognized in the reporting period related to production satisfied in prior reporting periods was immaterial and $ 1.4 million, respectively.

During the years ended December 31, 2025 and 2024, royalty income recognized in the reporting period relating to production satisfied in prior periods was $ 1.5 million and immaterial , respectively.

Disaggregation of Revenue:

1 unchanged sentence

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 Coal Mining, NAMining and Minerals Management segments as well as Unallocated Items.

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.

6 unchanged sentences

Major Goods/Service Lines 2025 2024

Coal Mining $ 68,611 $ 85,415

NAMining 119,600 90,532

Minerals Management 34,579 32,985

Utility Coal Mining $ 88,188 $ 68,611

Contract Mining 140,013 119,600

Minerals and Royalties 37,630 34,579

Unallocated Items

15,080 17,707

Eliminations ( 3,713 ) ( 2,789 )

1 unchanged sentence

Timing of Revenue Recognition

Goods transferred at a point in time $ 66,506 $ 83,273

Services transferred over time 171,202 131,521

Transferred at a point in time

$ 92,331 $ 66,506

Transferred over time

184,867 171,202

Total revenues $ 277,198 $ 237,708

8 unchanged sentences

Increase (decrease) $ ( 6,785 ) $ 69 $ — $ 874 $ 5,474

As described above, we enter into royalty contracts that grant exclusive right, title, and interest in and to minerals.

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.

The timing of the payment of the fixed portion of the transaction price is upfront, however,

the performance obligation is satisfied over the primary term of the contract, which is generally three to five years .

Therefore, at the time any such up-front payment is received, a contract liability is recorded which represents deferred revenue.

The amount of royalty revenue recognized in the years ended December 31, 2024 and December 31, 2023 that was included in the opening contract liability was $ 0.7 million and $ 0.8 million, respectively.

This revenue consists of up-front lease bonus payments received under royalty contracts that are recognized over the primary term of the royalty contracts, which are generally three to five years .

We expect to recognize $ 0.5 million in 2025, $ 0.1 million in 2026 and 2027, $ 1.0 million in 2028, $ 2.4 million in 2029 and $ 1.5 million thereafter related to the contract liability remaining at December 31, 2024.

We expect to recognize $ 1.4 million in 2026, $ 0.3 million in 2027, $ 1.2 million in 2028, $ 0.2 million in 2029 and 2030 and $ 8.7 million thereafter related to the contract liability remaining at December 31, 2025.

The difference between the opening and closing balances of our contract balances results from the timing difference between our performance and the customer’s payment.

We have no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

NOTE 4— Inventories

4 unchanged sentences

The weighted average method is used for inventory valuation.

During the year ended December 31, 2024 and 2023, we recorded $ 9.6 million and $ 7.5 million of inventory impairment charges, respectively, in the line Cost of sales in the accompanying Consolidated Statements of Operations as mining costs exceeded net realizable value of coal inventory at MLMC.

During the year ended December 31, 2025 and 2024, we recorded $ 7.0 million and $ 9.6 million of inventory impairment charges, respectively, in the line Cost of sales in the Consolidated Statements of Operations as mining costs exceeded 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 on day-to-day operations.

Mining supplies inventory not expected to be utilized within the next 12 months is classified as long-term on the Consolidated Balance Sheet.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

NOTE 5— Property, Plant and Equipment, Net

4 unchanged sentences

Property, plant and equipment, at cost 500,787 457,847

Less allowances for depreciation, depletion, amortization and impairment

Less allowances for depreciation, depletion and amortization

213,241 198,390

1 unchanged sentence

Total depreciation, depletion and amortization expense on property, plant and equipment was $ 24.5 million and $ 24.1 million during 2025 and 2024, respectively.

During 2023, we recorded a non-cash, long-lived asset impairment charge of $ 65.9 million.

See Note 9 for further discussion of the impairment charge.

NOTE 6— Intangible Assets

9 unchanged sentences

Amortization expense for intangible assets was $ 0.8 million and $ 0.5 million in 2025 and 2024, respectively.

During 2023, we recorded a non-cash, long-lived asset impairment charge of $ 65.9 million.

See Note 9 for further discussion of the impairment charge.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

NOTE 7— Asset Retirement Obligations

Our obligations associated with the retirement of long-lived assets are recognized at fair value at the time the legal obligations are incurred.

Upon initial recognition of a liability, a corresponding amount is capitalized as part of the carrying value of the related long-lived asset and is depreciated either by the straight-line method or the units-of-production method.

Upon initial recognition of a liability, a corresponding amount is capitalized as part of the carrying value of the related long-lived asset within Property, Plant and Equipment, net in the Consolidated Balance Sheets.

The asset is depreciated either by the straight-line method or the units-of-production method.

The liability is accreted each period until the liability is settled, at which time the liability is removed.

The depreciation of the asset and the accretion of the liability are both recorded in the line Cost of sales in the Consolidated Statements of Operations.

If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized.

3 unchanged sentences

We review our asset retirement obligations at each mine site at least annually and makes necessary adjustments for permit changes and for revisions of estimates of the timing and extent of reclamation activities and cost estimates.

The accretion of the liability is being recognized over the estimated life of each individual asset retirement obligation and is recorded in the line Cost of sales in the accompanying Consolidated Statements of Operations.

The associated asset is recorded in Property, Plant and Equipment, net in the accompanying Consolidated Balance Sheets.

The depreciation of the asset is recorded in the line Cost of sales in the accompanying Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

A reconciliation of our beginning and ending aggregate carrying amount of the asset retirement obligations are as follows:

Coal Mining Unallocated Items NACCO

Utility Coal Mining Unallocated Items NACCO Consolidated

Balance at January 1, 2024 $ 33,044 $ 19,569 $ 52,613

Liabilities incurred during the period 1,920 — 1,920

Liabilities settled during the period ( 6,115 ) ( 960 ) ( 7,075 )

6 unchanged sentences

Balance at December 31, 2025 $ 28,577 $ 19,124 $ 47,701

During 2023, we acquired 100 % of the membership interests in the Marshall Mine.

We received $ 2.2 million of cash, assumed the asset retirement obligation estimated to be approximately $ 1.9 million and recognized a gain of approximately $ 0.3 million in the line Other, net in the accompanying Consolidated Statements of Operations.

The asset retirement obligation’s fair value was determined using a discounted cash flow technique and is based upon permit requirements and various estimates and assumptions that would be used by market participants, including estimates of disturbed acreage, reclamation costs and assumptions regarding equipment productivity.

Bellaire's legacy liabilities include obligations for water treatment and other environmental remediation that arose as part of the normal course of closing these underground mining operations.

1 unchanged sentence

Bellaire’s asset retirement obligation is included in the table above in the Unallocated Items column.

Prior to 2023, Bellaire established a $ 5.0 million Mine Water Treatment Trust to provide a financial assurance mechanism in order to assure the long-term treatment of post-mining discharges.

The fair value of Bellaire's Mine Water Treatment assets, which are recognized as a component of Equity securities on the Consolidated Balance Sheets, are $ 12.3 million and $ 11.2 million at December 31, 2024 and December 31, 2023, respectively, and are legally restricted for purposes of settling the Bellaire asset retirement obligation.

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.

The fair value of Bellaire's Mine Water Treatment assets are $ 13.5 million and $ 12.3 million at December 31, 2025 and December 31, 2024, respectively, and is recognized as a component of Equity securities in the Consolidated Balance Sheets.

See Note 9 for further discussion of the Mine Water Treatment Trust.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

NOTE 8— Current and Long-Term Financing

13 unchanged sentences

Weighted average stated interest rate on total borrowings 6.1 % 6.4 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Annual maturities of total debt, excluding leases, are as follows:

1 unchanged sentence

Interest paid on total debt was $ 7.0 million and $ 5.3 million during 2025 and 2024, respectively.

Interest capitalized was $ 1.5 million during 2025.

In September 2024, NACCO Natural Resources amended its secured revolving line of credit (Facility) to increase the revolving credit commitments to $ 200.0 million and extend the maturity to September 2028.

4 unchanged sentences

The applicable margins, effective December 31, 2025, for base rate and Term Secured Overnight Financing Rate loans were 1.50 % and 2.50 %, respectively.

The Facility has a commitment fee which is based upon achieving various levels of debt to EBITDA ratios.

The Facility has a commitment fee which is based upon achieving various levels of net debt to EBITDA ratios.

The commitment fee was 0.40 % on the unused commitment at December 31, 2025.

3 unchanged sentences

At December 31, 2025, NACCO Natural Resources was in compliance with all financial covenants in the Facility.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

The obligations under the Facility are guaranteed by certain of NACCO Natural Resources' direct and indirect, existing and future domestic subsidiaries, and is secured by certain assets of NACCO Natural Resources and the guarantors, subject to customary exceptions and limitations.

1 unchanged sentence

At December 31, 2025 and 2024, the balance of the note was $ 7.3 million and $ 7.7 million and the interest rate was 3.75 % and 4.15 %, respectively.

We have ten notes payable that are secured by thirteen specified units of equipment, bear interest at a weighted average rate of 5.50 %, and expire at various dates through 2030.

We have ten notes payable that are secured by twelve specified units of equipment, bear interest at a weighted average rate of 5.48 %, and expire at various dates through 2030.

One note includes a principal payment of $ 4.4 million at the end of the term on December 15, 2026.

At December 31, 2025 and 2024, the outstanding balances of the notes payable were $ 18.5 million and $ 21.8 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

NOTE 9— Fair Value Disclosure

7 unchanged sentences

Equity securities $ 17,696 $ 17,696 $ — $ —

Prepaid profit sharing

14,579 14,579 — —

Fair Value Measurements at Reporting Date Using

$ 32,275 $ 32,275 $ — $ —

Quoted Prices in Significant

4 unchanged sentences

$ 18,663 $ 18,663 $ — $ —

Bellaire's Mine Water Treatment Trust invests in available for sale securities that are reported at fair value based upon quoted market prices in active markets for identical assets;

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 Mine Water Treatment Trust realized a gain of $ 1.5 million and $ 1.6 million in the years ended December 31, 2024 and 2023, respectively.

The fair value of the Mine Water Treatment Trust was $ 13.5 million and $ 12.3 million at December 31, 2025 and December 31, 2024, respectively, and is recognized as a component of Equity securities in the Consolidated Balance Sheets.

We recognized gains of $ 1.4 million and $ 1.5 million in the years ended December 31, 2025 and 2024, respectively, related to the Mine Water Treatment Trust.

See Note 7 for further discussion of Bellaire's Mine Water Treatment Trust.

Prior to 2023, we invested $ 2.0 million in equity securities of a public company with a diversified portfolio of royalty producing mineral interests.

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.

We recognized a gain of $ 0.3 million and $ 0.4 million in the years ended December 31, 2024 and 2023, respectively, related to the investment in these equity securities.

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

There were no transfers into or out of Levels 1, 2 or 3 during the year ended December 31, 2024.

Nonrecurring Fair Value Measurements:

On December 18, 2023, MLMC received notice from its customer related to a boiler issue at the Red Hills Power Plant that began on December 15, 2023.

We determined the reduction in customer demand

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

caused by this issue was an indicator of potential impairment as of December 31, 2023 and, as a result, reviewed MLMC's long-lived assets for impairment.

We assessed the recoverability of the MLMC asset group and determined that the assets were not fully recoverable when compared to the remaining future undiscounted cash flows from the asset group.

As a result, we estimated the fair value of the asset group which resulted in a non-cash, long-lived asset impairment charge of $ 65.9 million.

The asset impairment charge was recorded as Long-lived asset impairment charge in the Consolidated Statement of Operations for the year ended December 31, 2023.

The $ 65.9 million relates exclusively to MLMC;

however, $ 60.8 million and $ 5.1 million were recorded on the Coal Mining segment and the Minerals Management segment, respectively, as certain MLMC land assets were recorded within the Minerals Management segment.

The impairment charge was allocated to the long-lived assets of the asset group on a pro rata basis using the relative carrying amount of those assets in relation to their fair value.

The analysis for the land and real estate and other property, plant and equipment was calculated using market data for similar assets, which are classified as Level 2 inputs.

The analysis of certain other long-term assets was calculated using unobservable inputs with little or no market data, which are classified as Level 3 inputs.

While the boiler issue at the customer's Red Hills Power Plant has been resolved, it resulted in a reduction in customer demand which had a significant impact on our results of operations during 2024.

We recognized income of $ 13.6 million in 2024 related to business interruption insurance recoveries to partially offset losses related to the boiler outage.

The fair value of this investment was $ 4.2 million and $ 6.3 million at December 31, 2025 and December 31, 2024, respectively, and is recognized as a component of Equity securities in the Consolidated Balance Sheets.

We recognized a loss of $ 2.1 million and a gain of $ 0.3 million in the years ended December 31, 2025 and 2024, respectively, related to the investment in these equity securities.

The change in fair value of equity securities is reported on the line Loss (gain) on equity securities in the Other expense (income) section of the Consolidated Statements of Operations.

In 2025, excess funds from the terminated Combined Plan and the Falkirk Defined Benefit Plan were transferred to a separate investment account.

These funds will be utilized for future profit sharing contributions to eligible 401(k) plan participants.

The Prepaid profit sharing balance 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.

See Note 1 for further discussion of the Prepaid profit sharing balance.

There were no transfers into or out of Levels 1, 2 or 3 during the years ended December 31, 2025 and 2024.

Other Fair Value Measurement Disclosures:

2 unchanged sentences

The fair value and the book value of revolving credit agreements and long-term debt, excluding finance leases, was $ 100.1 million and $ 100.8 million, respectively, at December 31, 2025 and $ 97.9 million and $ 99.4 million, respectively, at December 31, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Financial instruments that potentially subject us to concentration of credit risk consist principally of accounts receivable.

Under our mining contracts, we recognize revenue and a related receivable as coal or other aggregates are delivered or predevelopment services are provided.

These mining contracts provide for monthly settlements.

These mining contracts generally provide for settlements within 60 days.

Our significant credit concentration is uncollateralized;

8 unchanged sentences

Our lease agreements do not contain lease payments that depend on an index or a rate, as such, minimum lease payments do not include variable lease payments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Leased assets and liabilities include the following at December 31:

17 unchanged sentences

Total lease expense $ 8,516 $ 8,990

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Future minimum finance and operating lease payments were as follows at December 31, 2025:

6 unchanged sentences

Subsequent to 2030

— 2,557 2,557

Total minimum lease payments 63 13,028 $ 13,091

1 unchanged sentence

Present value of net minimum lease payments $ 57 $ 10,420

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

As most of our leases do not provide an implicit rate, we determine the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

21 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

NOTE 12— Stockholders' Equity and Earnings Per Share

9 unchanged sentences

Stock Repurchase Program:

On November 7, 2023, our Board of Directors approved a stock purchase program (2023 Stock Repurchase Program) providing for the purchase of up to $ 20.0 million of our outstanding Class A common stock through

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

December 31, 2025.

NACCO's previous repurchase program (2021 Stock Repurchase Program) would have expired on December 31, 2023 but was terminated and replaced by the 2023 Stock Repurchase Program.

During 2024, we repurchased 316,950 shares of Class A Common Stock under the 2023 Stock Repurchase Program for an aggregate purchase price of $ 9.9 million.

During 2023, we repurchased 47,095 shares of Class A Common Stock under the 2021 Stock Repurchase Program for an aggregate purchase price of $ 1.6 million and 43,872 shares of Class A Common Stock under the 2023 Stock Repurchase Program for an aggregate purchase price of $ 1.5 million.

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 2025, we repurchased 61,554 shares of Class A Common Stock for an aggregate purchase price of $ 2.5 million.

During 2024, we repurchased 316,950 shares of Class A Common Stock for an aggregate purchase price of $ 9.9 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.

6 unchanged sentences

Basic weighted average shares outstanding 7,423 7,363

Dilutive effect of restricted stock awards 48 N/A

Dilutive effect of restricted stock awards 58 48

Diluted weighted average shares outstanding 7,481 7,411

Basic earnings (loss) per share

Basic earnings per share

$ 2.37 $ 4.58

Diluted earnings (loss) per share

Diluted earnings per share

$ 2.35 $ 4.55

7 unchanged sentences

Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

The components of Income (loss) before income tax benefit and the Income tax benefit for the years ended December 31 are as follows:

Income (loss) before income tax benefit

The components of Income before income tax benefit and the Income tax benefit for the years ended December 31 are as follows:

Income before income tax benefit

Domestic $ 13,159 $ 33,637

12 unchanged sentences

$ ( 4,430 ) $ ( 95 )

We made income tax payments of $ 5.2 million and $ 1.4 million during 2024 and 2023, respectively.

During the same periods, income tax refunds totaled $ 1.0 million and $ 14.9 million, respectively.

Cash paid for income taxes (net of refunds) were as follows:

Total net income tax payments

We made income tax payments of $ 5.2 million and received income tax refunds of $ 1.0 million during 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before the provision for income taxes.

A reconciliation of the federal statutory and effective income tax rate for the years ended December 31 is as follows:

Income (loss) before income tax benefit

A reconciliation of the federal statutory and effective income tax rate, applying ASU 2023-09 prospectively, for the year ended December 31 is as follows:

Income before income tax benefit

Statutory taxes

$ 2,760 21.0 %

State and local income taxes, net of federal income tax effect (a)

Research and development credit ( 604 ) ( 4.6 ) %

Nondeductible compensation

Nondeductible meals

Changes in unrecognized tax benefits

( 57 ) ( 0.4 ) %

Other reconciling items:

Percentage depletion

( 5,398 ) ( 41.1 ) %

Deferred tax adjustments

( 2,429 ) ( 18.5 ) %

( 34 ) ( 0.3 ) %

Income tax benefit at the effective income tax rate

$ ( 4,430 ) ( 33.7 ) %

(a) During the year ended December 31, 2025, state taxes in Louisiana, North Dakota, Mississippi and Pennsylvania made up the majority of the tax effect in this category.

The reconciliation from the statutory federal income tax rate to our effective income tax rate, applying ASC 740 prior to the adoption of ASU 2023-09, is as follows:

Income before income tax benefit

Statutory taxes at 21.0 %

6 unchanged sentences

Income tax benefit

$ ( 95 ) $ ( 24,571 )

Effective income tax rate ( 0.3 ) %

We recorded an income tax benefit of $ 0.1 million for the year ended December 31, 2024 on income before income tax of $ 33.6 million, or 0.3 %, compared to an income tax benefit of $ 24.6 million on loss before income tax of $ 64.2 million, or 38.3 %, for the year ended December 31, 2023.

The years ended December 31, 2024 and 2023 both included $ 4.0 million of discrete tax benefits, primarily from the reversal of uncertain tax provisions.

Excluding the $ 4.0 million of discrete tax benefits in each year, the effective income tax rate in 2024 and 2023 was 11.5 % and 32.0 %, respectively.

We recorded an income tax benefit of $ 4.4 million for the year ended December 31, 2025 on income before income tax of $ 13.1 million, or ( 33.7 )%, compared to an income tax benefit of $ 0.1 million on income before income tax of $ 33.6 million, or ( 0.3 )%, for the year ended December 31, 2024.

The years ended December 31, 2025 and 2024 included $ 1.9 million and $ 4.0 million of discrete tax benefits, primarily for deferred tax adjustments and the reversal of uncertain tax provisions, respectively.

Excluding the respective $ 1.9 million and $ 4.0 million of discrete tax benefits, the effective income tax rate was ( 19.5 )% and 11.5 % in 2025 and 2024, respectively.

The change in the effective income tax rate for 2025 compared to 2024, excluding the impact of discrete items, is primarily due to an increase in losses at entities that do not benefit from percentage depletion.

Losses generated by these entities generate tax deductions at the statutory rate.

This shift in the mix of pre-tax income resulted in a benefit tax rate in 2025.

In addition, the benefit from percentage depletion is not directly related to the amount of pre-tax income recorded in a period.

Accordingly, in periods where income or loss before income tax is relatively small, the proportional effect of the benefit from percentage depletion on the effective tax rate may be significant.

When income tax expense is recorded, the benefit from percentage depletion decreases the effective income tax rate, while the effect is to increase the effective income tax rate when a benefit for income taxes is recorded.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

The change in the effective income tax rate for 2024 compared to 2023, excluding the impact of the long-lived asset impairment charge and discrete items, is primarily due to an increase in earnings at entities that do not qualify for percentage depletion.

The benefit from percentage depletion is not directly related to the amount of pre-tax income recorded in a period.

Accordingly, in periods where income or loss before income tax is relatively small, the proportional effect of the benefit from percentage depletion on the effective tax rate may be significant.

A detailed summary of the total deferred tax assets and liabilities in our Consolidated Balance Sheets resulting from differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes is as follows:

20 unchanged sentences

December 31, 2025

Net deferred tax

asset Valuation

allowance Carryforwards

expire during:

Net deferred tax asset

Valuation allowance

Carryforwards expire during:

State net operating loss $ 19,327 $ 15,168 2026-2045

Federal net operating loss

7,050 — Indefinite

Research credit

391 — 2044-2045

$ 26,768 $ 15,168

December 31, 2024

Net deferred tax

asset Valuation

allowance Carryforwards

expire during:

Net deferred tax asset

Valuation allowance

Carryforwards expire during:

State net operating loss $ 15,584 $ 14,610 2025-2044

1 unchanged sentence

Based upon the review of historical earnings and the relevant expiration of carryforwards, including utilization limitations in the various state taxing jurisdictions, we believe the valuation allowances are appropriate and do not expect to release valuation allowances within the next twelve months that would have a significant effect on our financial position or results of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Since 2021, we have participated in a voluntary program with the IRS called Compliance Assurance Process (CAP).

4 unchanged sentences

Management believes any potential adjustment would not materially affect our financial condition or results of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

The following is a reconciliation of our total gross unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the financial statements for the years ended December 31, 2025 and 2024.

Approximately $ 0.6 million and $ 2.8 million of the gross unrecognized tax benefits as of December 31, 2024 and 2023, respectively, relate to permanent items that, if recognized, would impact the effective income tax rate.

Approximately $ 0.6 million of the gross unrecognized tax benefits as of December 31, 2025 and 2024 relate to permanent items that, if recognized, would impact the effective income tax rate.

This amount differs from the gross unrecognized tax benefits presented in the table below due to (1) the deferred tax asset which would be available if the position were not sustained upon audit and (2) the decrease in U.S.

5 unchanged sentences

We recognized a net benefit of less than $ 0.1 million in interest and penalties related to uncertain tax positions during 2025 and 2024.

The total amount of interest and penalties accrued was $ 0.2 million as of December 31, 2024 and 2023.

The total amount of interest and penalties accrued was less than $ 0.1 million and $ 0.2 million as of December 31, 2025 and 2024, respectively.

We expect the amount of unrecognized tax benefits will change within the next 12 months;

2 unchanged sentences

Defined Benefit Plans:

We maintain defined benefit pension plans that provide benefits based on years of service and average compensation during certain periods.

Prior to 2023, we amended the Combined Plan to freeze pension benefits for all employees.

We also amended the Supplemental Retirement Benefit Plan (SERP) to freeze all pension benefits.

All of our eligible employees, including employees whose pension benefits are frozen, receive retirement benefits under defined contribution retirement plans.

During 2023, our Board of Directors approved the termination of the Combined Plan and participants were offered lump-sum distributions as part of the termination process.

As a result of the lump-sum distributions, we recognized a non-cash, pension settlement charge of $ 1.8 million on the Other, net line within the accompanying Consolidated Statements of Operations.

The $ 1.8 million charge represents a pro rata portion of the unrecognized net loss recorded in Accumulated other comprehensive loss.

During 2025, we terminated the Combined Plan and settled all future obligations by transferring the remaining benefit obligations to a third-party insurance company.

The $ 8.3 million in excess funds from the Combined Plan will be utilized by the NACCO 401(k) plan, which is a qualified replacement plan.

These funds will be used for future profit sharing contributions to eligible 401(k) plan participants.

The current portion of $ 5.2 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 Consolidated Balance Sheets as of December 31, 2025.

Although the Combined Plan was over funded, we recognized a non-cash pension settlement charge of $ 7.8 million on the Pension settlement charge line within the Consolidated Statements of Operations.

The $ 7.8 million settlement charge accelerated the recognition of the net loss recorded in Accumulated other comprehensive loss that would have otherwise been recognized in subsequent periods.

As of December 31, 2025, we continue to maintain a Supplemental Retirement Benefit Plan (SERP) that provides benefits based on years of service and average compensation during certain periods.

In a previous period, the SERP was amended to freeze all pension benefits.

The SERP pays monthly benefits to participants directly out of corporate funds.

The assumptions used in accounting for the defined benefit plans were as follows for the years ended December 31:

3 unchanged sentences

5.02 % - 5.04 %

Expected long-term rate of return on assets for net periodic benefit cost 5.00 % 7.00 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Expected long-term rate of return on assets for net periodic benefit cost N/A 5.00 %

Set forth below is detail of the net periodic pension expense for the defined benefit plans for the years ended December 31:

5 unchanged sentences

Net periodic pension expense

Set forth below is detail of other changes in plan assets and benefit obligations recognized in other comprehensive loss for the years ended December 31:

Current year actuarial loss

$ 960 $ 2,560

Amortization of actuarial loss ( 270 ) ( 51 )

Amortization of prior service cost ( 58 ) ( 58 )

Settlements — ( 1,815 )

Total recognized in other comprehensive loss $ 632 $ 636

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Set forth below is detail of other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss for the years ended December 31:

Current year actuarial (gain) loss

$ ( 2,604 ) $ 960

Amortization of actuarial loss ( 355 ) ( 270 )

Amortization of prior service cost ( 58 ) ( 58 )

Settlements ( 7,804 ) —

Total recognized in other comprehensive (income) loss

$ ( 10,821 ) $ 632

The following table sets forth the changes in the benefit obligation and the plan assets during the year and the funded status of the defined benefit plans at December 31:

2 unchanged sentences

Interest cost 1,189 1,360

Actuarial (gain) loss

Actuarial gain

( 1,645 ) ( 427 )

9 unchanged sentences

Settlements ( 19,936 ) —

Plan asset transfer to qualified replacement plan

Fair value of plan assets at end of year

10 unchanged sentences

$ 1,368 $ 9,731

We recognize as a component of benefit (income) cost, as of the measurement date, any unrecognized actuarial net gains or losses that exceed 10% of the larger of the projected benefit obligations or the plan assets, defined as the corridor.

Amounts outside the corridor are amortized over the average expected remaining service of active participants expected to benefit under the retiree medical plans or over the average expected remaining lifetime of inactive participants for the pension plans.

The (gain) loss amounts recognized in AOCI are not expected to be fully recognized until the plan is terminated or as settlements occur, which would trigger accelerated recognition.

Prior service costs resulting from plan changes are also in AOCI.

Our policy is to make contributions to fund our pension plans within the range allowed by applicable regulations.

We maintain one supplemental defined benefit plan that pays monthly benefits to participants directly out of corporate funds.

All other pension benefit payments are made from assets of the pension plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Future pension benefit payments expected to be paid from assets of the pension plans are:

2030 - 2034 10,860

The expected long-term rate of return on defined benefit plan assets reflects management's expectations of long-term rates of return on funds invested to provide for benefits included in the projected benefit obligations.

In establishing the expected long-term rate of return assumption for plan assets, we consider the historical rates of return over a period of time that is consistent with the long-term nature of the underlying obligations of these plans as well as a forward-looking rate of return.

The historical and forward-looking rates of return for each of the asset classes used to determine our estimated rate of return assumption were based upon the rates of return earned or expected to be earned by investments in the equivalent benchmark market indices for each of the asset classes.

Expected returns for pension plans are based on a calculated market-related value for pension plan assets.

Under this methodology, asset gains and losses resulting from actual returns that differ from our expected returns are recognized in the market-related value of assets ratably over three years.

The pension plans maintain investment policies that, among other things, establish a portfolio asset allocation methodology with percentage allocation bands for individual asset classes.

The investment policies provide that investments are reallocated between asset classes as balances exceed or fall below the appropriate allocation bands.

The following is the actual allocation percentage and target allocation percentage for the pension plan assets at December 31:

Allocation 2023 Actual

Allocation Target Allocation

Fixed income securities 99.2 % 99.1 % 90.0 % - 100.0 %

Money market funds 0.8 % 0.6 % 0.0 % - 10.0 %

Cash equivalents — % 0.3 % 0.0 %

The asset allocation reflects the move into fixed income securities to mitigate volatility prior to the termination of the Combined Plan, currently expected to occur in 2025.

The defined benefit pension plans do not have any direct ownership of NACCO common stock.

The fair value of each major category of our pension plan assets are valued using quoted market prices in active markets for identical assets, or Level 1 in the fair value hierarchy.

Following are the values as of December 31:

Fixed income securities $ 28,028 $ 29,866

Money market funds 223 181

Cash equivalents — 81

Total $ 28,251 $ 30,128

Future SERP payments are expected to be $ 0.5 million per year through 2027, $ 0.4 million in 2028 through 2030 and $ 1.5 million in the five years thereafter.

Postretirement Health Care:

We also maintain health care plans which provide benefits to grandfathered eligible retired employees.

We maintain health care plans which provide benefits to grandfathered eligible retired employees.

All of our health care plans have a cap on our share of the costs.

1 unchanged sentence

These plans have no assets.

Under our current policy, plan benefits are funded at the time they are due to participants.

Plan benefits are funded at the time they are due to participants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6 unchanged sentences

Health care cost trend rate assumed for next year 6.50 % - 7.50 %

6.25 % - 6.50 %

Rate to which the cost trend rate is assumed to decline (ultimate trend rate) 4.75 %

6 unchanged sentences

Net periodic benefit expense $ 170 $ 152

Set forth below is detail of other changes in benefit obligations recognized in other comprehensive (income) loss for the years ended December 31:

Current year actuarial (gain) loss

Set forth below is detail of other changes in benefit obligations recognized in other comprehensive loss (income) for the years ended December 31:

Current year actuarial loss (gain)

$ 159 $ ( 49 )

1 unchanged sentence

Amortization of prior service credit — 6

Total recognized in other comprehensive (income) loss

Total recognized in other comprehensive loss (income)

$ 67 $ ( 118 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

The following sets forth the changes in benefit obligations during the year and the funded status of the postretirement health care plans at December 31:

3 unchanged sentences

Interest cost 70 75

Actuarial (gain) loss

Actuarial loss (gain)

Benefits paid ( 159 ) ( 195 )

Benefit obligation at end of year $ 1,496 $ 1,418

Funded status at end of year $ ( 1,418 ) $ ( 1,579 )

Amounts recognized in the balance sheets consist of:

4 unchanged sentences

Actuarial loss $ 483 $ 416

Prior service credit — ( 6 )

Deferred taxes ( 110 ) ( 95 )

Future postretirement health care benefit payments expected to be paid are:

2030 - 2034 582

Future postretirement health care benefit payments are expected to be approximately $ 0.2 million per year through 2030 and $ 0.6 million in the five years thereafter.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Defined Contribution Plans:

4 unchanged sentences

Our operating segments are:

(i) Coal Mining, (ii) NAMining and (iii) Minerals Management.

(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 CODM, utilizes Operating profit (loss) to evaluate segment performance and allocate resources.

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 for income taxes and net income) are presented and discussed within this Form 10-K on a consolidated basis.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

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-K on a consolidated basis.

See Note 1 for additional discussion of our reportable segments.

1 unchanged sentence

The accounting policies of the reportable segments are described in Note 2.

In 2024 and 2023, three customers and two customers, respectively, accounted for more than 10% of consolidated revenue.

In both 2025 and 2024, three customers accounted for 10% or more of consolidated revenue.

The following represents the revenue attributable to each of these entities as a percentage of consolidated revenue for those years:

1 unchanged sentence

Segment 2025 2024

Coal Mining customer 29 % 40 %

NAMining customer 24 % 22 %

NAMining customer 11 % 7 %

Utility Coal Mining customer 32 % 29 %

Contract Mining customer 25 % 24 %

Contract Mining customer 10 % 11 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

The following tables provide segment financial information and a reconciliation of segment results to consolidated results for the years ended December 31:

Coal Mining $ 68,611 $ 85,415

NAMining 119,600 90,532

Minerals Management 34,579 32,985

Utility Coal Mining $ 88,188 $ 68,611

Contract Mining 140,013 119,600

Minerals and Royalties 37,630 34,579

Unallocated Items 15,080 17,707

2 unchanged sentences

Cost of sales

Coal Mining $ 79,375 $ 108,760

NAMining 110,821 83,719

Minerals Management 5,234 3,969

Utility Coal Mining $ 94,155 $ 79,375

Contract Mining 129,876 110,821

Minerals and Royalties 5,666 5,234

Unallocated Items 12,654 15,323

2 unchanged sentences

Earnings of unconsolidated operations

Coal Mining $ 51,821 $ 44,633

NAMining 5,010 5,361

Minerals Management 647 —

Utility Coal Mining $ 54,471 $ 51,821

Contract Mining 4,789 5,010

Minerals and Royalties 2,571 647

Unallocated Items ( 8 ) ( 2 )

1 unchanged sentence

Operating expenses*

Coal Mining $ 30,358 $ 92,630

NAMining 8,017 8,826

Minerals Management 1,065 9,598

Utility Coal Mining $ 31,349 $ 30,358

Contract Mining 9,159 8,017

Minerals and Royalties 5,427 1,065

Unallocated Items 32,380 25,699

Total $ 78,315 $ 65,139

*Operating expenses consist of Selling, general and administrative expenses, Amortization of intangible assets, (Gain) loss on sale of assets and Long-lived asset impairment charges.

*Operating expenses consist of Selling, general and administrative expenses, Amortization of intangible assets and Gain on sale of assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Operating profit (loss)

Coal Mining $ 24,311 $ ( 71,342 )

NAMining 5,772 3,348

Minerals Management 28,927 19,418

Utility Coal Mining $ 17,155 $ 24,311

Contract Mining 5,767 5,772

Minerals and Royalties 29,108 28,927

Unallocated Items ( 29,962 ) ( 23,317 )

2 unchanged sentences

Expenditures for property, plant and equipment and acquisition of mineral interests

Coal Mining $ 8,292 $ 6,609

NAMining 30,556 36,073

Minerals Management 1,079 38,881

Utility Coal Mining $ 8,020 $ 8,292

Contract Mining 31,968 30,556

Minerals and Royalties 7,710 1,079

Unallocated Items 5,588 15,492

1 unchanged sentence

Depreciation, depletion and amortization

Coal Mining $ 9,476 $ 17,569

NAMining 9,811 8,172

Minerals Management 4,273 3,067

Utility Coal Mining $ 8,815 $ 9,476

Contract Mining 10,854 9,811

Minerals and Royalties 4,579 4,273

Unallocated Items 1,029 1,092

Total $ 25,277 $ 24,652

Asset information by segment is not discretely maintained for internal reporting or used in evaluating performance.

Utility Coal Mining $ 125,715 $ 125,301

Contract Mining 213,571 204,889

Minerals and Royalties 115,545 99,905

Unallocated Items**

206,397 201,592

Total $ 661,228 $ 631,687

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

NOTE 16— Unconsolidated Subsidiaries

Each of our wholly owned Unconsolidated Subsidiaries, within the Coal Mining and NAMining segments, meet the definition of a VIE.

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 manages 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.

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.

4 unchanged sentences

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 for payment of 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.

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-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

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.

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.

Summarized financial information for the Unconsolidated Subsidiaries is as follows:

11 unchanged sentences

Reimbursed costs have offsetting expenses and have no impact on income before income taxes.

Income before income taxes represents the Earnings of the unconsolidated operations within the Coal Mining and NAMining segments.

Income before income taxes represents the Earnings of the unconsolidated operations within the Utility Coal Mining and Contract Mining segments.

We received dividends of $ 51.5 million and $ 48.8 million from the Unconsolidated Subsidiaries in 2025 and 2024, respectively.

NOTE 17— Supplemental Oil and Gas Disclosures (Unaudited)

The Minerals Management 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 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.

As an owner of royalty and mineral interests, our access to information concerning activity and operations of our royalty and mineral interests is limited.

We do not have information that would be available to a company with working interests in oil and natural gas operations because detailed information is not generally available to owners of royalty and mineral interests.

See Note 1, Note 2 and Note 15 for additional discussion of the Minerals Management segment.

See Note 1, Note 2 and Note 15 for additional discussion of the Minerals and Royalties segment.

Capitalized Oil and Natural Gas Costs:

5 unchanged sentences

Net royalty interests in oil and natural gas properties $ 63,985 $ 63,087

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

Oil and Natural Gas Reserves:

3 unchanged sentences

Reserves have been estimated using deterministic and probabilistic methods.

All reserves estimates have

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NACCO INDUSTRIES, INC.

AND SUBSIDIARIES

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

been prepared using standard engineering practices generally accepted by the petroleum industry and conform to guidelines developed and adopted by the SEC.

All reserves estimates have been prepared using standard engineering practices generally accepted by the petroleum industry and conform to guidelines developed and adopted by the SEC.

The following table presents our estimated net proved oil and natural gas reserves as of December 31 based on the reserve report prepared by Haas & Cobb Petroleum Consultants, our independent petroleum engineering firm.

38 unchanged sentences

December 31, 2024 74,400 30,280 135,830

Purchases 2,208 38 5,237

Extensions and discoveries 54,481 7,547 172,125

( 3,322 ) ( 1,914 ) ( 10,017 )

Revisions of previous estimates (3)

1 unchanged sentence

December 31, 2025 83,559 17,528 251,964

One stock tank barrel, or 42 U.S.

gallons liquid volume.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

(Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures)

One stock tank barrel, or 42 U.S.

gallons liquid volume.

One thousand cubic feet of natural gas at the contractual pressure and temperature bases.

3 unchanged sentences

As of December 31, 2025, PUD reserves consists of 126 wells in various stages of drilling or completions.

As of December 31, 2024, less than 1 % of our total proved reserves were classified as PUDs.

As of December 31, 2025, approximately 2 % of our total proved reserves were classified as PUDs.

Standardized Measure of Discounted Future Net Cash Flows:

35 unchanged sentences

22,696 10,172

( 30,005 ) ( 30,885 )

Conversions 8,041 ( 5,867 )

22 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures