What changed in this filing

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Item 1. Financial Statements

2026-08-05 compared with 2026-05-05 · 321 added, 167 removed, 666 unchanged (42% of the section changed)

7 unchanged sentences

Trade accounts receivable 34,728 42,921

Oil and natural gas receivables 9,073 7,978

Accounts receivable from affiliates 10,177 6,906

30 unchanged sentences

Retirement benefit plans 4,348 4,558

Deferred revenue 12,674 10,593

Other long-term liabilities 7,808 7,938

13 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2026 2025 2026 2025

(In thousands, except per share data)

6 unchanged sentences

Amortization of intangible assets 196 245 347 407

Gain on sale of assets

Loss (gain) on sale of assets

205 ( 9 ) 199 ( 81 )

Operating profit 11,016 7,682

Asset impairment charges 11,984 — 11,984 —

31,633 20,009 51,479 37,967

Operating (loss) profit ( 2,267 ) ( 51 ) 8,749 7,631

Other expense (income)

3 unchanged sentences

(Gain) loss on equity securities ( 858 ) ( 349 ) ( 1,313 ) 521

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

Other, net 332 217 424 520

Income before income tax provision 9,827 5,127

Income tax provision 991 227

Net income $ 8,836 $ 4,900

Earnings per share:

Basic earnings per share $ 1.18 $ 0.67

Diluted earnings per share $ 1.17 $ 0.66

906 ( 2,045 ) 2,095 510

(Loss) income before income tax benefit ( 3,173 ) 1,994 6,654 7,121

Income tax benefit ( 2,210 ) ( 1,266 ) ( 1,219 ) ( 1,039 )

Net (loss) income $ ( 963 ) $ 3,260 $ 7,873 $ 8,160

(Loss) earnings per share:

Basic (loss) earnings per share $ ( 0.13 ) $ 0.44 $ 1.05 $ 1.10

Diluted (loss) earnings per share $ ( 0.13 ) $ 0.44 $ 1.04 $ 1.10

Basic weighted average shares outstanding 7,542 7,445 7,508 7,398

4 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2026 2025 2026 2025

(In thousands)

Net income $ 8,836 $ 4,900

Reclassification of pension and postretirement adjustments into earnings, net of $ 14 and $ 31 tax benefit in the three months ended March 31, 2026 and 2025, respectively.

Net (loss) income $ ( 963 ) $ 3,260 $ 7,873 $ 8,160

Reclassification of pension and postretirement adjustments into earnings, net of $ 15 and $ 29 tax benefit in the three and six months ended June 30, 2026, respectively, and net of $ 34 and $ 65 tax benefit in the three and six months ended June 30, 2025, respectively.

47 108 95 217

Total other comprehensive income 47 108 95 217

Comprehensive income $ 8,884 $ 5,009

Comprehensive (loss) income $ ( 916 ) $ 3,368 $ 7,968 $ 8,377

See notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED

SIX MONTHS ENDED

(In thousands)

Operating activities

Net cash provided by operating activities $ 12,374 $ 5,023

Net cash provided by (used for) operating activities $ 20,673 $ ( 2,753 )

Investing activities

1 unchanged sentence

Proceeds from the sale of assets 24 120

Return of equity method investment 999 —

Contributions to equity method investment ( 2,733 ) —

Return of equity method investments 4,448 —

Other ( 17 ) 795

8 unchanged sentences

Cash and cash equivalents

Total increase (decrease) for the period 3,453 ( 10,949 )

Total decrease for the period ( 4,185 ) ( 23,431 )

Balance at the beginning of the period 49,708 72,833

15 unchanged sentences

Balance, March 31, 2025 $ 5,877 $ 1,566 $ 35,718 $ 375,899 $ ( 9,943 ) $ 409,117

Stock-based compensation

9 — 2,505 — — 2,514

Conversion of Class B to Class A shares 2 ( 2 ) — — — —

— — — 3,260 — 3,260

Cash dividends on Class A and Class B common stock:

$ 0.2525 per share

— — — ( 1,879 ) — ( 1,879 )

Reclassification adjustment to net income, net of tax

— — — — 108 108

Balance, June 30, 2025 $ 5,888 $ 1,564 $ 38,223 $ 377,280 $ ( 9,835 ) $ 413,120

Balance, January 1, 2026 $ 5,864 $ 1,563 $ 42,427 $ 381,130 $ ( 1,741 ) $ 429,243

6 unchanged sentences

Balance, March 31, 2026 $ 5,978 $ 1,563 $ 43,200 $ 388,063 $ ( 1,693 ) $ 437,111

Stock-based compensation

6 — 1,916 — — 1,922

Conversion of Class B to Class A shares 1 ( 1 ) —

Net loss — — — ( 963 ) — ( 963 )

Cash dividends on Class A and Class B common stock:

$ 0.2625 per share

— — — ( 1,979 ) — ( 1,979 )

Reclassification adjustment to net income, net of tax

— — — — 47 47

Balance, June 30, 2026 $ 5,985 $ 1,562 $ 45,116 $ 385,121 $ ( 1,646 ) $ 436,138

See notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026

JUNE 30, 2026

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

9 unchanged sentences

In addition to the reportable segments discussed above, we also operate other businesses that are not currently reported as separate segments.

These businesses complement out existing operations and support our long-term growth strategic objectives.

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.

ReGen Resources is pursuing the advancement and monetization of power generation projects.

We also have items not directly attributable to an operating segment.

7 unchanged sentences

Each mine is fully integrated with the operation of these facilities.

During the three months ended March 31, 2026, the Utility Coal Mining segment's operating coal mines were:

During the six months ended June 30, 2026, the Utility Coal Mining segment's operating coal mines were:

The Coteau Properties Company (Coteau), Coyote Creek Mining Company, LLC (Coyote Creek), The Falkirk Mining Company (Falkirk) and Mississippi Lignite Mining Company (MLMC).

1 unchanged sentence

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.

MLMC’s coal supply contract contains a take or pay provision;

however, the customer's financial condition has adversely affected the collectability of such claims, and there can be no assurance that such amounts will be collected in the future.

All other coal supply contracts are requirements contracts.

Certain coal supply contracts can be terminated early, which would result in a reduction to future earnings.

9 unchanged sentences

The decision regarding which power plants to dispatch is determined by TVA.

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

Conversely, periods of higher dispatch can improve results.

As a significant portion of MLMC’s costs are fixed, reduction in dispatch, reduced mechanical availability or other operational issues at the Red Hills Power Plant could adversely affect coal demand, customer liquidity and the collectability of amounts due under the contract and materially reduce operating results at MLMC.

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

2 unchanged sentences

Sabine’s post-production operations primarily consist of reclamation and other land-related activities.

Under the provisions of the lignite mining agreement, SWEPCo is required to pay an amount equal to Sabine’s operating costs plus a management fee and

SWEPCo holds an option agreement to purchase Sabine, which SWEPCo exercised in 2023.

Under the provisions of the lignite

mining agreement, SWEPCo is required to pay an amount equal to Sabine’s operating costs plus a management fee and SWEPCo holds an option agreement to purchase Sabine, which SWEPCo exercised in 2023.

As a result, SWEPCo will take direct control over reclamation activities in October 2026.

20 unchanged sentences

Contract Mining Segment

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

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

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

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

This allows customers to focus on their areas of expertise:

materials handling and processing, product sales and distribution.

As of March 31, 2026, 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 second half of 2026.

During the first quarter of 2026, the Contract Mining segment began providing dragline services as part of a U.S.

As of June 30, 2026, the segment operates at quarries in Florida, Arkansas and Nebraska and is expected to begin operations at a quarry in Arizona during the fourth quarter of 2026.

During the six months ended June 30, 2026, the segment began providing dragline services as part of a U.S.

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

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.

Also, Contract Mining's subsidiary, Sawtooth, is the exclusive provider of comprehensive mining services for the Thacker Pass lithium project in Humboldt County, Nevada.

Thacker Pass is owned by a joint venture between Lithium Americas Corp.

18 unchanged sentences

Upon the execution of an oil and gas lease, the lessee (the exploration and production company) becomes the working interest owner and the lessor (the mineral interest owner) has a royalty interest.

• Non-Participating Royalty Interest (NPRIs).

• Non-Participating Royalty Interest (NPRI).

NPRI is an interest in oil and gas production which is created from the mineral estate.

2 unchanged sentences

The NPRI owner does, however, typically receive royalty payments.

• Overriding Royalty Interest (ORRIs).

• Overriding Royalty Interest (ORRI).

ORRIs are created by carving out the right to receive royalties from a working interest.

11 unchanged sentences

Accordingly, this change was applied prospectively.

The effect of the change to the units of production method resulted in a reduction of $ 0.9 million in depreciation expense and an estimated $ 0.9 million increase in net income, or approximately $ 0.12 per basic and diluted share for the three months ended March 31, 2026.

The Contract Mining segment’s total cost basis of machinery subject to units of production method was $ 94.2 million as of March 31, 2026.

The effect of the change to the units of production method resulted in a reduction of $ 0.7 million and $ 1.6 million in depreciation expense during the three and six months ended June 30, 2026, respectively.

The Contract Mining segment’s total cost basis of machinery subject to the units of production method was $ 103.9 million as of June 30, 2026.

Straight-line depreciation continues to be applied to other classes of assets where usage is time-based rather than activity-based.

As of March 31, 2026 and December 31, 2025, we had $ 12.2 million and $ 12.8 million, respectively, classified as Assets held for sale on the Unaudited Condensed Consolidated Balance Sheets.

As of March 31, 2026, 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.

As of June 30, 2026 and December 31, 2025, we had $ 19.9 million and $ 12.8 million, respectively, classified as Assets held for sale on the Unaudited Condensed Consolidated Balance Sheets.

As of June 30, 2026, Assets held for sale consists of two draglines not in use in the Contract Mining segment as well as an office building in North Dakota and land in Texas within Unallocated Items.

Accounting Standards Not Yet Adopted:

3 unchanged sentences

We are currently in the process of evaluating the impact of this ASU on our Financial Statements and related disclosures.

In May 2026, the FASB issued Accounting Standards Update ASU No.

2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818) (ASU 2026-02), which establishes recognition, measurement, presentation and disclosure requirements for environmental credits and related environmental credit obligations.

The guidance is effective for public business entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those

annual reporting periods, with early adoption permitted.

We are currently in the process of evaluating the impact of this ASU on our Financial Statements and related disclosures.

Basis of Presentation:

4 unchanged sentences

GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair

presentation of our financial position at March 31, 2026, the results of our operations, comprehensive income, cash flows and changes in equity for the three months ended March 31, 2026 and 2025 have been included.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of our financial position at June 30, 2026, the results of our operations, comprehensive income, cash flows and changes in equity for the six months ended June 30, 2026 and 2025 have been included.

These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

1 unchanged sentence

GAAP for complete financial statements.

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

NOTE 2— Revenue Recognition

28 unchanged sentences

therefore, control is transferred to the customer as work is completed.

Consistent with the conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate.

Consistent with the conclusion

that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate.

As each month of service is completed, revenue is recognized for the amount of actual costs incurred, plus the fixed fee.

5 unchanged sentences

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.

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.

11 unchanged sentences

We typically receive payment for oil and natural gas sales within 90 days of the month of delivery.

For the three months ended March 31, 2026 and 2025, respectively, differences between our estimates and the actual amounts received from operators were immaterial .

For the three months ended June 30, 2026, the difference between our prior period estimates and the actual amounts received from operators resulted in a favorable adjustment of $ 1.6 million.

For the six months ended June 30, 2026 and the three and six months ended June 30, 2025, differences between our estimates and the actual amounts received from operators were immaterial .

Cost Reimbursement:

10 unchanged sentences

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 Other current assets in the Unaudited Condensed 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 three months ended March 31, 2026 and 2025, royalty income recognized in the reporting period relating to production satisfied in prior periods was immaterial and $ 1.5 million, respectively.

The expected sales volumes and estimated prices for these properties are estimated and recorded in Oil and natural gas receivable in the Unaudited Condensed Consolidated Balance Sheets.

During the three and six months ended June 30, 2026 and the three months ended June 30, 2025, royalty income recognized in the reporting period relating to production satisfied in prior periods was immaterial .

During the six months ended June 30, 2025, royalty income recognized in the reporting period relating to production satisfied in prior periods was $ 1.5 million.

Disaggregation of Revenue:

4 unchanged sentences

See Note 8 for further discussion of segment reporting.

The following table disaggregates revenue by major sources as of March 31:

THREE MONTHS ENDED

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

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2026 2025 2026 2025

Timing of Revenue Recognition

11 unchanged sentences

$ 42,921 $ 382 $ 3,500 $ 1,358 $ 10,593

Balance at March 31, 2026

Balance at June 30, 2026

34,728 551 3,500 1,743 12,674

Increase (decrease) $ ( 8,193 ) $ 169 $ — $ 385 $ 2,081

We expect to recognize $ 0.8 million in the remainder of 2026, $ 1.1 million in 2027, $ 1.2 million in 2028, $ 0.2 million in 2029 and 2030, and $ 9.8 million thereafter related to the contract liability remaining at March 31, 2026.

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 expect to recognize $ 0.6 million in the remainder of 2026, $ 1.4 million in 2027, $ 1.2 million in 2028, $ 0.2 million in 2029 and 2030, and $ 10.8 million thereafter related to the contract liability remaining at June 30, 2026.

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

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

5 unchanged sentences

Total inventories $ 104,380 $ 98,443

We recorded inventory impairment charges of $ 3.0 million during the three months ended March 31, 2025.

We recorded inventory impairment charges of $ 1.3 million and $ 4.3 million during the three and six months ended June 30, 2025, respectively.

The inventory impairment charges are in the Cost of sales line in the accompanying Unaudited Condensed Consolidated Statements of Operations as mining costs exceeded the net realizable value of coal inventory at MLMC.

Mining supplies inventory consists primarily of critical spare parts to support Contract Mining’s dragline operations and other general supplies used 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 Unaudited Condensed Consolidated Balance Sheet.

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

NOTE 4— Stockholders' Equity

2 unchanged sentences

NACCO's previous repurchase program would have expired on December 31, 2025 but was terminated and replaced by the 2025 Stock Repurchase Program.

During the three months ended March 31, 2026, there were no stock repurchases.

During the three months ended March 31, 2025, we repurchased 22,198 shares of Class A common stock for an aggregate purchase price of $ 0.7 million.

The timing and amount of any repurchases under the 2025 Stock Repurchase Program are determined at the discretion of our management based on a number of factors, including the availability of capital, other capital allocation alternatives, market

conditions for our Class A common stock and other legal and contractual restrictions.

During the three months ended June 30, 2026 and 2025, and the six months ended June 30, 2026, there were no stock repurchases.

During the six months ended June 30, 2025, we repurchased 22,198 shares of Class A common stock for an aggregate purchase price of $ 0.7 million.

The 2025 Stock Repurchase Program does not require us to acquire any specific number of shares and may be modified, suspended, extended or terminated by us without prior notice and may be executed through open market purchases, privately negotiated transactions or otherwise.

8 unchanged sentences

Description Date (Level 1) (Level 2) (Level 3)

March 31, 2026

June 30, 2026

Equity securities $ 19,121 $ 19,121 $ — $ —

10 unchanged sentences

therefore, they are classified as Level 1 within the fair value hierarchy.

The fair value of the Mine Water Treatment Trust was $ 13.1 million and $ 13.5 million at March 31, 2026 and December 31, 2025, respectively, and is recognized as a component of Equity securities in the Unaudited Condensed Consolidated Balance Sheets.

We recognized losses of $ 0.4 million and $ 0.3 million during the three months ended March 31, 2026 and 2025, respectively, related to the Mine Water Treatment Trust.

The fair value of the Mine Water Treatment Trust was $ 14.3 million and $ 13.5 million at June 30, 2026 and December 31, 2025, respectively, and is recognized as a component of Equity securities in the Unaudited Condensed Consolidated Balance Sheets.

We recognized gains of $ 1.2 million and $ 0.8 million during the three and six months ended June 30, 2026, respectively, and gains of $ 0.8 million and $ 0.5 million during the three and six months ended June 30, 2025, respectively, related to the Mine Water Treatment Trust.

In a previous period, we invested $ 2.0 million in equity securities of a public company with a diversified portfolio of royalty producing mineral interests.

1 unchanged sentence

therefore, it is classified as Level 1 within the fair value hierarchy.

The fair value of this investment was $ 5.1 million and $ 4.2 million at March 31, 2026 and December 31, 2025, respectively, and is recognized as a component of Equity securities in the Unaudited Condensed Consolidated Balance Sheets.

We recognized a gain of $ 0.9 million and a loss of $ 0.6 million during the three months ended March 31, 2026 and 2025, respectively, related to the investment in these equity securities.

The fair value of this investment was $ 4.8 million and $ 4.2 million at June 30, 2026 and December 31, 2025, respectively, and is recognized as a component of Equity securities in the Unaudited Condensed Consolidated Balance Sheets.

We recognized a loss of $ 0.4 million and a gain of $ 0.5 million during the three and six months ended June 30, 2026, respectively, and losses of $ 0.4 million and $ 1.0 million during the three and six months ended June 30, 2025, respectively, related to the investment in these equity securities.

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

During 2025, excess funds from the terminated Combined Defined Benefit Plan and the Falkirk Defined Benefit Plan were invested in a money market fund.

These funds are recorded on the line Prepaid profit sharing in the Unaudited Condensed Consolidated Balance Sheets and will be utilized to fund future profit sharing contributions to eligible 401(k) plan participants.

These funds are recorded on the line Prepaid profit sharing in the Unaudited Condensed Consolidated Balance Sheets and are being utilized to fund profit sharing contributions to eligible 401(k) plan participants.

The money market investment is reported at fair value based upon quoted market prices in active markets for identical assets;

therefore, it is classified as Level 1 within the fair value hierarchy.

There were no transfers into or out of Levels 1, 2 or 3 during the three months ended March 31, 2026 and 2025.

During the second quarter of 2025, the Company and Falkirk’s former customer agreed to settle the corresponding liability for $ 10.9 million, resulting in a gain of $ 3.6 million on the

Unaudited Condensed Consolidated Statement of Operations.

The remaining $ 5.4 million liability recorded on the line Excess funding liability on the Unaudited Condensed Consolidated Balance Sheet at December 31, 2025 was paid to the former customer in the second quarter of 2026.

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

Nonrecurring Fair Value Measurements:

During the second quarter of 2026, the Company recognized impairment charges related to certain solar development projects within ReGen Resources.

The carrying value of these projects primarily consisted of an equity method investment, transformer deposits, site development costs and other project-related capitalized expenditures.

Management identified events and circumstances indicating that the carrying amounts of certain solar development projects may not be recoverable, including changing market conditions, lower-than-expected projected monetization values, contractual pricing considerations and increased development and execution risks.

Management concluded that the fair values of certain project assets and investments were below their carrying amounts.

As a result, the Company recorded total asset impairment charges of $ 12.0 million in Unallocated Items.

The impairment charges are reported on the line Asset impairment charges in the Unaudited Condensed Consolidated Statements of Operations.

As of June 30, 2026, we have approximately $ 4.2 million of capitalized assets associated with solar development projects.

The fair value measurements were classified as a Level 3 measurement within the fair value hierarchy because significant unobservable inputs were utilized in determining fair value.

Observable market prices were not available due to the absence of an active market for the underlying projects and a lack of comparable market transactions.

Significant assumptions considered by management included expected project timing, the probability and timing of anticipated tax credit monetization, potential recoverability of development expenditures and potential value associated with equipment and assignable contractual rights.

NOTE 6— Unconsolidated Subsidiaries

5 unchanged sentences

See Note 1 for a discussion of these entities.

The Investment in the unconsolidated subsidiaries and related tax positions totaled $ 15.5 million and $ 14.8 million at March 31, 2026 and December 31, 2025, respectively.

Our risk of loss relating to these entities is limited to our invested capital, which was $ 5.6 million and $ 6.7 million at March 31, 2026 and December 31, 2025, respectively.

Earnings of Unconsolidated Subsidiaries were $ 15.6 million and $ 15.4 million during the three months ended March 31, 2026 and 2025, respectively.

The Investment in the unconsolidated subsidiaries and related tax positions totaled $ 14.8 million at June 30, 2026 and December 31, 2025.

Our risk of loss relating to these entities is limited to our invested capital, which was $ 5.4 million and $ 6.7 million at June 30, 2026 and December 31, 2025, respectively.

Earnings of Unconsolidated Subsidiaries were $ 15.2 million and $ 30.8 million during the three and six months ended June 30, 2026, respectively, and $ 12.9 million and $ 28.3 million during the three and six months ended June 30, 2025, respectively.

NACCO Natural Resources is a party to certain guarantees related to Coyote Creek.

5 unchanged sentences

NOTE 7— Eiger Resources

As of both March 31, 2026 and December 31, 2025, the Minerals and Royalties segment holds an equity investment of $ 33.7 million 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.

As of June 30, 2026 and December 31, 2025, the Minerals and Royalties segment holds an equity investment of $ 29.3 million and $ 33.7 million, respectively, in Eiger Resources, which holds operated and non-operated working interests in oil and natural gas assets in the Kansas and the Oklahoma portion of the Hugoton basin.

Eiger Resources meets the definition of a VIE.

4 unchanged sentences

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

During the three months ended March 31, 2026 and 2025, we recorded our share of earnings of $ 1.0 million and $ 0.6 million, respectively.

We recorded our share of losses of $ 1.1 million and $ 0.1 million during the three and six months ended June 30, 2026, respectively, and earnings of $ 0.3 million and $ 0.8 million during the three and six months ended June 30, 2025, respectively.

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

1 unchanged sentence

Balance at January 1, 2026

Share of earnings

Capital contributions

Share of losses ( 100 )

Distributions received

Balance at March 31, 2026

Balance at June 30, 2026

NOTE 8— Business Segments

8 unchanged sentences

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

THREE MONTHS ENDED

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2026 2025 2026 2025

Utility Coal Mining $ 21,477 $ 28,626 $ 38,168 $ 47,865

11 unchanged sentences

Total $ 57,108 $ 61,415 $ 105,592 $ 117,332

Earnings of unconsolidated operations

Earnings (losses) of unconsolidated operations

Utility Coal Mining $ 13,646 $ 11,656 $ 27,754 $ 26,119

1 unchanged sentence

Minerals and Royalties ( 1,061 ) 251 ( 100 ) 805

Unallocated Items — ( 1 ) — ( 1 )

Total $ 14,164 $ 13,138 $ 30,735 $ 29,124

5 unchanged sentences

Total $ 31,633 $ 20,009 $ 51,479 $ 37,967

Operating profit (loss)

Operating (loss) profit

Utility Coal Mining $ 6,280 $ 1,222 $ 13,704 $ 5,013

4 unchanged sentences

Total $ ( 2,267 ) $ ( 51 ) $ 8,749 $ 7,631

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

THREE MONTHS ENDED

*Operating expenses (income) consist of Selling, general and administrative expenses, Amortization of intangible assets, Loss (gain) on sale of assets and Asset impairment charges.

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30 JUNE 30

2026 2025 2026 2025

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

28 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.

NOTE 10— Subsequent Events

Subsequent to June 30, 2026, management began evaluating additional strategic activities to monetize its solar development projects.

Such activities include project sale opportunities, contract amendments, the disposition of project assets and other actions.

If these activities are not successful, management estimates that curtailment costs could approximate $ 7 million based on information currently available.

- Management's Discussion and Analysis of Financial Condition and Results of Operations

14 unchanged sentences

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.

ReGen Resources is pursuing the advancement and monetization of power generation projects.

See Note 1 to the Unaudited Condensed Consolidated Financial Statements within this Form 10-Q for further discussion of our reportable segments.

11 unchanged sentences

CONSOLIDATED FINANCIAL SUMMARY

Our results of operations were as follows for the three months ended March 31:

Our results of operations were as follows for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

Utility Coal Mining $ 21,477 $ 28,626 $ 38,168 $ 47,865

4 unchanged sentences

Total revenue $ 72,310 $ 68,235 $ 135,085 $ 133,806

Operating profit (loss):

Operating (loss) profit:

Utility Coal Mining $ 6,280 $ 1,222 $ 13,704 $ 5,013

3 unchanged sentences

Eliminations (2) 3 9 19

Total operating profit

Total operating (loss) profit (2,267) (51) 8,749 7,631

Interest expense 1,620 1,944 3,278 3,718

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(Gain) loss on equity securities

(858) (349) (1,313) 521

Gain on settlement of excess funding liability

— (3,590) — (3,590)

Other, net 332 217 424 520

Other expense, net

Income before income tax provision

Income tax provision

Net income $ 8,836 $ 4,900

Other expense (income), net 906 (2,045) 2,095 510

(Loss) income before income tax benefit (3,173) 1,994 6,654 7,121

Income tax benefit (2,210) (1,266) (1,219) (1,039)

Net (loss) income $ (963) $ 3,260 $ 7,873 $ 8,160

Effective income tax rate 69.7 % (63.5) % (18.3 %) (14.6) %

The components of the change in revenues and operating profit are discussed below in Segment Results.

First Quarter of 2026 Compared with First Quarter of 2025

Other expense, net

Interest income decreased in the first quarter of 2026 compared with the 2025 period due to lower earnings on reduced invested cash balances.

The components of the change in revenues and operating (loss) profit are discussed below in Segment Results.

Second Quarter of 2026 Compared with Second Quarter of 2025, and First Six Months Ended June 30, 2026 Compared with First Six Months Ended June 30, 2025

Other expense (income), net

Interest expense decreased in the second quarter of 2026 and the first six months of 2026 compared with the respective 2025 periods due to an increase in capitalized interest and lower average interest rates, partially offset by higher average borrowings.

Interest income decreased in the second quarter of 2026 and the first six months of 2026 compared with the respective 2025 periods due to lower earnings on reduced invested cash balances.

(Gain) loss on equity securities represents changes in the market price of invested assets reported at fair value.

The favorable change in the first quarter of 2026 compared with the 2025 period is due to fluctuations in the market prices of the exchange-traded equity securities.

The favorable change in the second quarter of 2026 and the first six months of 2026 compared with the respective 2025 periods is due to fluctuations in the market prices of the exchange-traded equity securities.

See Note 5 to the Unaudited Condensed Consolidated Financial Statements for further discussion of equity securities.

We evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws.

During 2025, $14.5 million of excess funds from the terminated Falkirk pension plan were directly transferred to the NACCO 401(k) plan.

The NACCO 401(k) plan is a qualified replacement plan;

therefore, these funds will be utilized to offset future profit sharing contributions to 401(k) plan participants.

During the second quarter of 2025, NACCO and Falkirk’s former

customer agreed to settle the corresponding liability for $10.9 million, resulting in a $3.6 million Gain on settlement of excess funding liability.

We evaluate and update our estimated annual effective income tax rate based on current and forecasted operating results and tax laws.

Historically, our actual effective tax rates have differed from the statutory effective tax rate primarily due to the benefit received from percentage depletion.

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

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

Each quarter, we update our estimate of the annual effective tax rate, and the cumulative impact of the change in the estimated annual effective tax rate is recorded, which can make quarterly comparisons not meaningful.

LIQUIDITY AND CAPITAL RESOURCES

The following tables detail the changes in cash flow for the three months ended March 31:

The following tables detail the changes in cash flow for the six months ended June 30:

2026 2025 Change

Operating activities:

Net cash provided by operating activities

$ 12,374 $ 5,023 $ 7,351

Net cash provided by (used for) operating activities $ 20,673 $ (2,753) $ 23,426

Investing activities:

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Cash flow before financing activities $ (19,526) $ (13,788) $ (5,738)

The $7.4 million favorable change in net cash provided by operating activities was primarily due to changes in operating assets and liabilities.

This improvement was mainly attributable to an increase in Accounts payable during the first quarter of 2026, primarily due to purchases related to ReGen Resources' solar projects, whereas Accounts payable decreased during the first quarter of 2025 due to the timing of expenditures in the Coal Mining and Contract Mining segments.

In addition, a decrease in Accounts receivable, mainly attributable to lower revenues at MLMC, contributed to the improvement but was partially offset by cash payments associated with reclamation work at MLMC during the first quarter of 2026.

The $23.4 million improvement in net cash provided by (used for) operating activities was primarily due to favorable changes in operating assets and liabilities during the first six months of 2026 compared with the prior-year period.

The improvement in operating assets and liabilities was mainly attributable to decreases in Prepaid profit sharing and Prepaid insurance and lower cash requirements associated with vendor deposits.

2026 2025 Change

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$ 15,341 $ (9,643) $ 24,984

The change in net cash provided by (used for) financing activities was primarily due to additions in debt borrowings during the first three months of 2026 compared with reductions during the first three months of 2025 as well as a decrease in share repurchases during the first three months of 2026.

The change in net cash provided by (used for) financing activities was primarily due to additions in debt borrowings during the first six months of 2026 compared with reductions during the first six months of 2025 and the absence of share repurchases during the first six months of 2026.

Financing Activities

NACCO Natural Resources has a $200.0 million secured revolving line of credit (Facility) that matures in September 2028.

Borrowings outstanding under the Facility were $100.0 million at March 31, 2026.

At March 31, 2026, the excess availability under the Facility was $49.5 million, which reflects a reduction for outstanding letters of credit of $50.5 million.

Borrowings outstanding under the Facility were $95.0 million at June 30, 2026.

At June 30, 2026, the excess availability under the Facility was $69.1 million, which reflects a reduction for outstanding letters of credit of $35.9 million.

NACCO has not guaranteed any borrowings of NACCO Natural Resources.

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Borrowings bear interest at a floating rate plus a margin based on the level of debt to EBITDA ratio achieved.

The applicable margins, effective March 31, 2026, for base rate and Term Secured Overnight Financing Rate loans were 1.75% and 2.75%, respectively.

The applicable margins, effective June 30, 2026, for base rate and Term Secured Overnight Financing Rate loans were 1.75% and 2.75%, respectively.

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

The commitment fee was 0.45% on the unused commitment at March 31, 2026.

During the three months ended March 31, 2026, the average borrowing under the Facility was $84.7 million and the weighted-average annual interest rate was 6.52%.

The commitment fee was 0.45% on the unused commitment at June 30, 2026.

During the three and six months ended June 30, 2026, the average borrowing under the Facility was $102.8 million and $93.8 million, respectively, and the weighted-average annual interest rate was 6.42% and 6.36%, respectively.

The Facility contains restrictive covenants, which require, among other things, NACCO Natural Resources to maintain a maximum net debt to EBITDA ratio of 2.75 to 1.00 and an interest coverage ratio of not less than 4.00 to 1.00.

The Facility provides the ability to make loans, dividends and advances to NACCO, with some restrictions based on maintaining a maximum debt to EBITDA ratio of 1.50 to 1.00, or if greater than 1.50 to 1.00, a Fixed Charge Coverage Ratio of 1.10 to 1.00.

At March 31, 2026, NACCO Natural Resources was in compliance with all financial covenants in the Facility.

At June 30, 2026, NACCO Natural Resources was in compliance with all financial covenants in the Facility.

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.

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Expenditures for property, plant and equipment and mineral interests

Actual expenditures were $33.4 million during the first three months of 2026, primarily for land in Tennessee at Mitigation Resources and a dragline in the Contract Mining segment.

Actual expenditures were $41.9 million during the first six months of 2026, primarily for land in Tennessee at Mitigation Resources and draglines in the Contract Mining segment.

Planned expenditures for the remainder of 2026 are expected to be approximately $35 million.

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Expenditures are expected to be funded from internally generated funds and/or bank borrowings.

In July 2026, MLMC's customer notified MLMC that payment of coal invoices would be delayed due to operational issues at the Red Hills Power Plant that reduced the customer's cash receipts and liquidity.

As of June 30, 2026, MLMC had $12.5 million in Trade accounts receivable outstanding, of which $7.2 million was past due.

Management is actively monitoring collectability and the potential impact on MLMC's liquidity and working capital requirements.

See Item 1A Risk Factors on page 30 within this Form 10-Q for further discussion of MLMC.

Capital Structure

9 unchanged sentences

Debt to total capitalization 22% 19% 3%

The change in other net tangible assets at March 31, 2026 compared with December 31, 2025 was mainly the result of an increase in Property, plant and equipment and a decrease in Accrued payroll for incentive compensation payments made during the first quarter of 2026.

These increases were partially offset by a decrease in Trade accounts receivable primarily due to lower revenue at MLMC during the first quarter of 2026 compared with the fourth quarter of 2025.

The change in other net tangible assets at June 30, 2026 compared with December 31, 2025 was mainly the result of increases in Property, plant and equipment and inventory during the first six months of 2026.

Property, plant and equipment increased primarily due to investments in Contract Mining and Mitigation Resources supporting the Company’s growth initiatives.

Inventory increased mainly as the result of higher coal and mining supplies inventory, including growth associated with the Contract Mining segment's expansion.

Contractual Obligations, Contingent Liabilities and Commitments

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FINANCIAL REVIEW

Tons of coal delivered by the Utility Coal Mining segment were as follows for the three months ended March 31:

Tons of coal delivered by the Utility Coal Mining segment were as follows for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

Unconsolidated operations 4,920 3,736 10,434 9,352

1 unchanged sentence

Total tons delivered 5,553 4,626 11,558 10,833

The results of operations for the Utility Coal Mining segment were as follows for the three months ended March 31:

The results of operations for the Utility Coal Mining segment were as follows for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

Revenues $ 21,477 $ 28,626 $ 38,168 $ 47,865

1 unchanged sentence

Gross profit (loss)

373 (1,701) 1,114 (5,032)

Earnings of unconsolidated operations (a)

2 unchanged sentences

Amortization of intangible assets 196 245 347 407

Gain on sale of assets

Loss (gain) on sale of assets 122 (14) 122 (86)

Operating profit $ 6,280 $ 1,222 $ 13,704 $ 5,013

(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of our unconsolidated subsidiaries.

During the first quarter of 2026, MLMC's customer's power plant experienced a maintenance outage.

As a result, revenues decreased 13.2% in the first quarter of 2026 compared with the first quarter of 2025 due to lower customer requirements.

This decrease was partially offset by an increase in the contractually determined per ton sales price at MLMC.

The following table identifies the components of change in Operating profit for the first quarter of 2026 compared with the first quarter of 2025:

During the 2026 periods, MLMC's customer's power plant experienced unplanned outages and maintenance issues which resulted in lower customer requirements.

As a result, revenues decreased 25.0% and 20.3% in the second quarter of 2026 and the first six months of 2026, respectively, compared with the 2025 periods.

This decrease was partially offset by an increase in the contractually determined per ton sales price.

The following table identifies the components of change in Operating profit for the second quarter of 2026 compared with the second quarter of 2025:

Operating Profit

1 unchanged sentence

Gross profit (loss)

Amortization of intangibles 11

Earnings of unconsolidated operations 1,990

Selling, general and administrative expenses 1,081

Amortization of intangibles 49

Net change on sale of assets (136)

The following table identifies the components of change in Operating profit for the first six months of 2026 compared with the first six months of 2025:

Operating Profit

Increase (decrease) from:

Gross profit (loss)

Earnings of unconsolidated operations 1,635

Selling, general and administrative expenses 1,058

Operating profit increased by $3.6 million in the first quarter of 2026 compared with the first quarter of 2025, primarily due to a reduction in cost per ton delivered at MLMC.

Lower demand during the Red Hills Power Plant outage resulted in a shift of certain costs from inventory and cost of sales to reduce MLMC’s asset retirement obligation, which favorably impacted quarterly results.

In addition, the first quarter of 2025 included a $3.0 million inventory impairment charge to write down MLMC's coal inventory to its net realizable value.

The increase in operating profit was partially offset by a decrease in earnings of unconsolidated operations primarily due to a lower management fee at Sabine during the first quarter of 2026.

Amortization of intangibles 60

Net change on sale of assets (208)

2026 $ 13,704

Operating profit increased by $5.1 million and $8.7 million in the second quarter of 2026 and the first six months of 2026, respectively, compared with the 2025 periods.

These improvements were primarily due to favorable changes in gross profit (loss), earnings of unconsolidated operations and selling, general and administrative expenses.

The improvements in gross profit (loss) were primarily due to a reduction in cost per ton delivered and an increase in the contractually determined sales price at MLMC.

Lower customer demand resulting from outages and maintenance issues at the Red Hills Power Plant resulted in a shift of certain costs from inventory and cost of sales to reduce MLMC’s asset retirement obligation, which favorably impacted 2026 results.

In addition, the second quarter of 2025 and the first six months of 2025 included a $1.3 million and a $4.3 million inventory impairment charge, respectively, to write down MLMC's coal inventory to its net realizable value.

The increase in earnings of unconsolidated operations was primarily due to higher customer demand at Coteau and Coyote Creek, partially offset by a lower management fee at Sabine during the 2026 periods.

The decrease in selling, general and administrative expenses during the 2026 periods was mainly attributable to lower contributions expense, as the 2025 periods included costs associated with a multi-year charitable pledge.

CONTRACT MINING SEGMENT

FINANCIAL REVIEW

Tons delivered by the Contract Mining segment were as follows for the three months ended March 31:

Tons delivered by the Contract Mining segment were as follows for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

Total tons delivered 16,013 13,947 30,973 26,800

The results of operations for the Contract Mining segment were as follows for the three months ended March 31:

The results of operations for the Contract Mining segment were as follows for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

Total revenues $ 36,919 $ 30,723 $ 69,558 $ 62,249

5 unchanged sentences

Earnings of unconsolidated operations (a)

1,579 1,232 3,081 2,201

Selling, general and administrative expenses 2,583 2,286 4,997 4,433

Gain on sale of assets (5) —

Loss on sale of assets 105 — 100 —

Operating profit

1 unchanged sentence

(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of our unconsolidated subsidiaries.

Revenues excluding reimbursable costs increased 31.7% in the first quarter of 2026 compared with the 2025 period primarily due to a new dragline mining service contract as well as higher customer requirements at the consolidated limestone quarries.

Revenues excluding reimbursable costs increased 34.5% and 33.1% in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods, primarily due to the commencement and ramp up of a new dragline mining services contract during 2026 as well as higher customer requirements at the consolidated limestone quarries.

Reimbursable costs have an offsetting amount in cost of sales and have no impact on gross profit.

The following table identifies the components of change in Operating profit for the first quarter of 2026 compared with the first quarter of 2025:

The following table identifies the components of change in Operating profit for the second quarter of 2026 compared with the second quarter of 2025:

Operating Profit

2 unchanged sentences

Earnings of unconsolidated operations 347

Selling, general and administrative expenses (297)

Net change on sale of assets

The following table identifies the components of change in Operating profit for the first six months of 2026 compared with the first six months of 2025:

Operating Profit

Increase (decrease) from:

Gross profit 4,557

Earnings of unconsolidated operations 880

Selling, general and administrative expenses (564)

Operating profit improved by $2.0 million in the first quarter of 2026 compared with the first quarter of 2025, primarily due to increases in gross profit and earnings of unconsolidated operations.

These improvements were mainly the result of an increase in tons delivered, improved margins at limestone quarries and contributions from a new dragline mining service contract, partially offset by lower profit on part sales.

The improved margins were partially due to $0.9 million in lower depreciation expense.

Net change on sale of assets

Operating profit increased $2.8 million and $4.8 million in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods.

These improvements were primarily due to increases in gross profit and earnings of unconsolidated operations.

The favorable change in gross profit was mainly the result of contributions from a new dragline mining services contract and improved margins at limestone quarries.

The increase in earnings of unconsolidated operations was primarily due to higher customer requirements as a result of an additional dragline operating at a new quarry pursuant to an existing contract.

The improvements in operating profit were partially offset by increases in selling, general and administrative expenses mainly due to higher employee-related costs.

The improved margins were partially due to lower depreciation expense in the 2026 periods.

Effective January 1, 2026, the Company’s Contract Mining segment changed its depreciation method for certain assets (primarily draglines and other large mining equipment) from the straight-line method to the units-of-production method.

3 unchanged sentences

The following table sets forth our estimate of the number of gross and net productive wells:

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

Gross Net Gross Net

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Oil and natural gas prices have been historically volatile and may continue to be volatile in the future.

The table below shows the average prices as reported by the United States Energy Information Administration for the three months ended March 31:

The table below shows the average prices as reported by the United States Energy Information Administration for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

West Texas Intermediate Average Crude Oil Price $ 95.99 $ 64.63 $ 83.98 $ 68.23

Henry Hub Average Natural Gas Price $ 2.95 $ 3.19 $ 3.87 $ 3.67

These indicated prices do not necessarily reflect the contract terms for our sales.

These indicated prices do not necessarily reflect the contract terms for our mineral and royalty interests.

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.

The results of operations for the Minerals and Royalties segment were as follows for the three months ended March 31:

The results of operations for the Minerals and Royalties segment were as follows for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

Oil and natural gas revenues $ 8,484 $ 5,981 $ 16,311 $ 15,098

Other revenues

2,133 1,287 3,852 3,072

Total Revenues $ 10,617 $ 7,268 $ 20,163 $ 18,170

2 unchanged sentences

Gross profit 9,339 6,282 17,764 14,940

Earnings from unconsolidated operations

(Losses) earnings from unconsolidated operations (1,061) 251 (100) 805

Selling, general and administrative expenses 1,530 1,328 3,181 2,633

1 unchanged sentence

Operating profit $ 6,748 $ 5,205 $ 14,484 $ 13,112

Revenues decreased 12.4% in the first quarter of 2026 compared with the first quarter of 2025 primarily due to lower natural gas revenue as a result of decreased production.

The following table identifies the components of change in Operating profit for the first quarter of 2026 compared with the first quarter of 2025:

Revenues increased 46.1% and 11.0% in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods, primarily due to higher oil and gas revenues as well as increased coal revenues.

The higher revenues were mainly attributable to increased commodity prices.

Receivables from third-party lessees for which we did not receive actual production information, either due to timing delays or due to the unavailability of data at the time when revenues are recognized, are estimated using expected sales volumes and estimated prices.

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

Revenue in the second quarter of 2026 included a $1.6 million favorable adjustment primarily related to first quarter 2026 pricing estimates.

Revenue in the six months ended June 30, 2025 included a $1.5 million favorable adjustment.

The following table identifies the components of change in Operating profit for the second quarter of 2026 compared with the second quarter of 2025:

Operating Profit

Increase (decrease) from:

Selling, general and administrative expenses, including Gain on sale of assets

Gross profit 3,057

Earnings of unconsolidated operations 407

Operating profit decreased by $0.2 million in the first quarter of 2026 compared with the first quarter of 2025 primarily due to an increase in selling, general and administrative expenses and lower gross profit.

The increase in selling, general and administrative expenses was primarily due to higher employee-related costs.

The decrease in gross profit was mainly due to lower production, partially offset by a decrease in depletion expense.

These decreases were partially offset by an improvement in earnings of unconsolidated operations related to an additional investment in Eiger Resources during the fourth quarter of 2024.

(Losses) earnings from unconsolidated operations (1,312)

Selling, general and administrative expenses (202)

The following table identifies the components of change in Operating profit for the first six months of 2026 compared with the first six months of 2025:

Operating Profit

2025 $ 13,112

Increase (decrease) from:

Gross profit 2,824

(Losses) earnings from unconsolidated operations (905)

Selling, general and administrative expenses, including Gain on sale of assets

2026 $ 14,484

Operating profit increased by $1.5 million and $1.4 million in the second quarter and the first six months of 2026, respectively, compared with the 2025 periods, primarily due to higher gross profit mainly attributable to favorable commodity prices.

These improvements were partially offset by losses from unconsolidated operations related to an investment in Eiger Resources.

The unfavorable change in Eiger's results was primarily attributable to commodity hedge positions rather than underlying production.

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

In addition, selling, general and administrative expenses increased primarily due to higher employee-related costs.

UNALLOCATED ITEMS AND ELIMINATIONS

FINANCIAL REVIEW

Unallocated Items and Eliminations were as follows for the three months ended March 31:

Unallocated Items and Eliminations were as follows for the three and six months ended June 30:

THREE MONTHS SIX MONTHS

2026 2025 2026 2025

Revenues $ 3,297 $ 1,618 $ 7,196 $ 5,522

Operating loss $ (19,060) $ (7,488) $ (27,192) $ (13,474)

The operating loss increased in the first quarter of 2026 compared to the first quarter of 2025 primarily due to higher operating expenses at Mitigation Resources and a $0.5 million long-lived asset impairment charge for an office building in North Dakota that is held for sale.

Revenues increased in the second quarter and the first six months of 2026 compared to the 2025 periods, primarily due to higher restoration and reclamation service revenue at Mitigation Resources.

The operating loss increased in the second quarter and the first six months of 2026 compared to the 2025 periods, primarily due to $12.0 million of impairment charges related to certain solar development projects within ReGen Resources.

See Note 5 to the Unaudited Condensed Consolidated Financial Statements and Item 1A Risk Factors on page 30 within this Form 10-Q for further discussion of the impairment charges and ReGen Resources, respectively.

NACCO Industries, Inc.

NACCO Industries is a growing diversified natural resources company with a unique business model strategically positioned to deliver stable and growing financial returns over the long term.

Our business model is purposely built for durability and resilience with an expanding portfolio of long-term contracts, relationships and investments that leverage our proven operational expertise, disciplined capital allocation and an entrepreneurial yet patient approach.

NACCO Industries is a diversified natural resources company with a unique business model strategically positioned to deliver stable and growing financial returns over the long term.

Our business model is purposefully built for durability and resilience with an expanding portfolio of long-term contracts, relationships and investments that leverage our proven operational expertise, disciplined capital allocation and an entrepreneurial yet patient approach.

We have methodically built unique capabilities and clear competitive advantages that allow us to pursue a wide range of growth opportunities, often completely integrated into customers’ operations in partnership-based relationships.

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Our foundation rests on a stable base of long-term coal mining contracts and legacy mineral and royalty assets, which generate dependable recurring cash flows.

As new long-term contracts and investments are added across the Company, these new multi-year agreements create a “layering effect" as their contributions compound.

The momentum our operations experienced in the second half of 2025 and the first quarter of 2026 is expected to continue throughout the remainder of 2026, resulting in meaningful year‑over‑year improvements in consolidated operating profit, net income and Adjusted EBITDA.

Excluding the effect of a $6 million after-tax pension settlement charge in 2025, year‑over‑year growth is expected to moderate in the second half of 2026 as anticipated results are compared against stronger prior-year operational performance.

At our Utility Coal Mining segment, operated by North American Coal, we expect a meaningful increase in operating profit compared with 2025, primarily in the first half of 2026.

We anticipate improved results at MLMC if the customer's power plant is able to operate as planned.

An expected increase in the contractually determined per ton sales price and a lower cost per ton delivered are also anticipated to contribute to this improvement.

We expect these operating profit improvements to be partly offset by lower earnings at the unconsolidated mining operations due to reduced income associated with the wind down of reclamation services at Sabine.

As new long-term contracts and investments are added across the Company, these new multi-year agreements create a “layering effect" as their contributions compound over time.

While these long-term agreements and investments are intended to strengthen our earnings base over time, we continually evaluate whether individual projects or initiatives remain aligned with our strategic and financial objectives.

As part of this process, changing market conditions, regulatory developments and project-specific challenges led us to reassess certain solar investments during the 2026 second quarter.

In early July, we began pursuing a range of alternatives, including potential asset

sales, contract amendments and other strategic actions, to monetize these investments and reduce our exposure.

Depending on the outcome of these activities, additional curtailment costs could be incurred.

Strong first-half 2026 operating performance across our reportable segments is expected to drive year‑over‑year improvements in full-year 2026 Consolidated Adjusted EBITDA, which excludes the solar impairment charges and a $7.8 million pre-tax pension settlement charge recorded in 2025.

While we expect Consolidated Adjusted EBITDA to remain strong in the second half of 2026, growth is expected to moderate relative to both the first half of 2026 and prior-year periods.

We also expect second-half consolidated operating profit and net income to decline from first-half 2026 and prior-year levels.

Expectations for lower second-half operating profit are primarily driven by potential additional solar project curtailment costs and expected inventory write-downs at MLMC.

Given the effect of the realized and anticipated 2026 charges, we expect full-year operating profit and net income will be significantly lower than in 2025.

Comparisons to prior-year net income also reflect a $6.0 million after-tax pension settlement charge recognized in the second half of 2025.

At our Utility Coal Mining segment, operated by North American Coal, full-year customer demand is expected to be comparable and operating profit is expected to increase year over year due to a shift in focus to reclamation activities in the first half of 2026.

During the second half of 2026, customer demand is expected to decline modestly compared with the prior-year period, provided MLMC's customer's power plant operates as currently planned.

Operating results at MLMC are expected to decline from the first half of 2026, particularly in the third quarter, due to lower customer demand, higher diesel fuel costs and an anticipated inventory impairment charge.

A higher contractually determined per ton sales price is anticipated to mitigate the lower demand.

Earnings at the unconsolidated mining operations are also expected to decline primarily due to reclamation services at Sabine concluding as of September 30, 2026.

Looking ahead to 2027, overall customer demand for coal is expected to remain consistent with 2026, while profitability is expected to improve.

This increase is driven by anticipated improvements at MLMC if the customer's power plant is able to operate more consistently, as well as continued stable earnings at our unconsolidated operations.

Anticipated improved results at the remaining unconsolidated mining locations should mostly offset the absence of reclamation income at Sabine.

The Contract Mining segment, operated by North American Mining, serves as our mining growth platform.

We are building a growing portfolio of long-term contracts through geographic and mineral expansion that are expected to strengthen the foundation for sustained profitability in this segment.

In early 2026, we commenced activities under a multi-year dragline services contract as part of a U.S.

In early 2026, we commenced activities under a new dragline services contract as part of a U.S.

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

We also anticipate commencing operations at a new limestone quarry in Arizona during the second half of 2026.

We also anticipate commencing operations at a new limestone quarry in Arizona during fourth-quarter 2026.

Sawtooth, a North American Mining subsidiary, provides exclusive comprehensive mining services at Thacker Pass, which is owned by a joint venture led by Lithium Americas Corp.

Sawtooth will supply all of the lithium-bearing ore requirements for our customer's Thacker Pass lithium processing facility, which is currently under construction.

This project is providing stable income during construction and is expected to contribute increased income and long-term cash flows once lithium production commences, which is targeted for late 2027.

As a result of earnings contributions from new contracts and continued momentum from 2025 activities, we anticipate a substantial year-over-year increase in operating profit and Segment Adjusted EBITDA in the Contract Mining segment.

This project is providing stable income during construction and is expected to contribute increased income and long-term cash flows as lithium production commences and ramps up to full production, which is targeted for 2028.

As a result of earnings contributions from new contracts, we anticipate substantial year-over-year growth in Contract Mining operating profit and Segment Adjusted EBITDA for both the second half and full year of 2026.

Second-half results are expected to moderate from the strong first-half levels as customer demand is projected to decline, primarily in the fourth quarter.

We expect significant operating profit improvement in the Contract Mining segment in 2027.

This growth is driven by a full year of the dragline services contract in Palm Beach County, Florida, and contributions from operations at the Arizona quarry as well as potential new deals in the pipeline.

The Minerals and Royalties segment, managed by Catapult, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States.

The Catapult team is expanding its portfolio by leveraging a data-driven approach to capital deployment that incorporates a longer-term view of production and development.

This segment also holds a meaningful equity investment in a company that has operating and non-operating working interests in oil and natural gas assets.

Anticipated increases in income from our equity holding combined with higher oil prices are expected to be more than offset by

anticipated production declines and a changing mix of production and development activity, resulting in an overall year-over-year decrease in Minerals and Royalties' operating profit and Segment Adjusted EBITDA.

Changes in commodity prices or production and development assumptions, including as a result of the ongoing Middle East conflict, could alter current expectations.

This segment also holds a meaningful equity investment in Eiger Resources that has working interests in oil and natural gas assets.

Anticipated increases in income from Eiger Resources and the benefit of higher oil prices are projected to be more than offset by anticipated production declines and a changing mix of production and development activity.

As a result, operating profit and Segment Adjusted EBITDA are expected to decline compared with the first half of 2026 as well as the second-half and full-year 2025.

The Minerals and Royalties segment is projected to continue generating meaningful earnings and cash flow in 2027, while operating profit is expected to moderate primarily due to normal production declines and a continuation of the current moderate

pace of domestic development activity.

Changes in commodity prices or production and development assumptions, including effects of the ongoing Middle East conflict, could alter current expectations.

Mitigation Resources provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions.

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Mitigation Resources is expected to deliver increasing profitability over time from the sale of mitigation credits and as reclamation and restoration services expand.

This business, while currently variable in performance due to permit and project timing, is expected to generate a profit in the second half of 2026 and move toward more consistent and improving results over time as the business expands.

This business, while currently variable in performance due to permit and project timing, is expected to generate a profit in 2027 and move toward more consistent and improving results over time as the business expands and its portfolio of mitigation projects matures.

We continue to invest in our businesses to support future growth.

Capital expenditures totaled $33 million in the first quarter of 2026.

We anticipate additional spending of up to $57 million over the remainder of the year, primarily for business development opportunities.

These expenditures will be made only if projects meet our growth investment criteria.

As a result, we anticipate a greater use of cash before financing in 2026 compared with 2025.

Based on the current project pipeline, we anticipate investing up to $35 million in the remainder of the year, primarily for business development opportunities.

These expenditures will be made only if projects meet our disciplined capital investment criteria.

While we anticipate a moderate year-over-year increase in cash generated from operations, cash flow before financing is projected to remain a use of cash in 2026, reflecting our planned investment activity.

We expect full-year 2026 cash flow before financing to improve modestly over 2025, and continue to improve into 2027.

We remain confident in our ability to deliver improving results and increasing cash flow over time.

Earnings are expected to benefit from continued expansion in Contract Mining and Mitigation Resources, along with improved operating performance across our other businesses.

Looking ahead, as our recent investments mature, they are expected to support sustained earnings growth and stronger cash flow.

Our businesses provide essential inputs for electricity generation, construction and development, and industrial production.

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Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation:

(1) a significant reduction in demand by the Company's customers, (2) changes in the prices of hydrocarbons, particularly diesel fuel, natural gas, natural gas liquids and oil as a result of factors such as OPEC and/or government actions, geopolitical developments, economic conditions and regulatory changes, as well as supply and demand dynamics, (3) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or aggregates requirements, (4) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (5) changes in development plans by third-party lessees of the Company's mineral interests, (6) failure or delays by the Company's lessees in achieving expected production of natural gas and other hydrocarbons;

(1) a significant reduction in demand by the Company's customers from extended power plant outages, weather conditions or other events that would change the level of customers' coal or aggregates requirements, (2) customer liquidity constraints that could increase exposure to customer credit risk, (3) changes in the prices of hydrocarbons, particularly diesel fuel, natural gas, natural gas liquids and oil as a result of factors such as OPEC and/or government actions, geopolitical developments, economic conditions and regulatory changes, as well as supply and demand dynamics, (4) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (5) costs to pursue and develop new mining, mitigation, oil and gas and power generation development opportunities and other value-added service opportunities, (6) the ability to successfully evaluate investments and achieve intended financial results in new business and growth initiatives, (7) changes in development plans by third-party lessees of the Company's mineral interests, (8) failure or delays by the Company's lessees in achieving expected production of natural gas and other hydrocarbons;

the availability and cost of transportation and processing services in the areas where the Company's oil and gas reserves are located;

and the ability of lessees to obtain capital or financing needed for well-development operations and leasing and development of oil and gas reserves on federal lands, (7) any customer's premature facility closure or extended project development delay, (8) federal and state legislative and regulatory actions affecting fossil fuels, (9) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (10) failure to obtain adequate insurance coverages at reasonable rates, (11) changes in tax laws or regulatory requirements, including the elimination of, or reduction in, the percentage depletion tax deduction, changes in mining or power plant emission regulations and health, safety or environmental legislation, (12) impairment charges, (13) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (14) equipment problems that could affect deliveries to customers, (15) changes in the costs to reclaim mining areas, (16) costs to pursue and develop new mining, mitigation, oil and gas and power generation development opportunities and other value-added service opportunities, (17) the

ability to successfully evaluate investments and achieve intended financial results in new business and growth initiatives, (18) disruptions from natural or human causes, including severe weather, accidents, fires, earthquakes and terrorist acts, any of which could result in suspension of operations or harm to people or the environment, and (19) the ability to attract, retain, and replace workforce and administrative employees.

and the ability of lessees to obtain capital or financing needed for well-development operations and leasing and development of oil and gas reserves on federal lands, (9) any customer's premature facility closure or extended project development delay, (10)

federal and state legislative and regulatory actions affecting fossil fuels, (11) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (12) changes in tax laws or regulatory requirements, including the elimination of, or reduction in, the percentage depletion tax deduction, changes in mining or power plant emission regulations and health, safety or environmental legislation, (13) impairment charges, (14) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (15) equipment problems that could affect deliveries to customers, (16) changes in the costs to reclaim mining areas, (17) disruptions from natural or human causes, including severe weather, accidents, fires, earthquakes and terrorist acts, any of which could result in suspension of operations or harm to people or the environment, and (18) the ability to attract, retain, and replace workforce.

Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-Q

Item 1. Financial Statements