
	MARCH 31 2024		DECEMBER 31 2023
	(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	61,844	$	85,109
Trade accounts receivable	27,958		37,429
Accounts receivable from affiliates	8,361		7,860
Inventories	75,755		77,000
Assets held for sale	7,270		6,466
Federal income tax receivable	845		845
Prepaid insurance	11,248		1,790
Other current assets	19,558		15,499
Total current assets	212,839		231,998
Property, plant and equipment, net	238,906		223,902

Intangibles, net	5,880		6,006
Deferred income taxes	15,113		15,081
Investments in unconsolidated subsidiaries	13,753		12,371
Operating lease right-of-use assets	7,876		8,667

Other non-current assets	43,631		41,683
Total assets	$	537,998	$	539,708
LIABILITIES AND EQUITY
Accounts payable	$	12,377	$	16,702
Accounts payable to affiliates	691		904
Revolving credit agreements	17,000		10,000
Current maturities of long-term debt	4,498		3,953
Asset retirement obligations	13,105		13,114
Accrued payroll	9,069		17,317

Deferred revenue	930		878

Other current liabilities	6,265		7,118
Total current liabilities	63,935		69,986
Long-term debt	28,377		22,003
Operating lease liabilities	7,962		8,782
Asset retirement obligations	38,550		39,499
Pension and other postretirement obligations	5,059		5,183

Liability for uncertain tax positions	5,795		5,795
Other long-term liabilities	6,707		6,120
Total liabilities	156,385		157,368
Stockholders' equity
Common stock:
Class A, par value $1 per share, 5,884,740 shares outstanding (December 31, 2023 - 5,882,845 shares outstanding)	5,885		5,883
Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,565,685 shares outstanding (December 31, 2023 - 1,565,819 shares outstanding)	1,566		1,566
Capital in excess of par value	29,073		28,672
Retained earnings	354,667		355,873
Accumulated other comprehensive loss	(9,578)		(9,654)
Total stockholders' equity	381,613		382,340
Total liabilities and equity	$	537,998	$	539,708

SEPTEMBER 30
2017 DECEMBER 31
2016
(In thousands, except share data)
ASSETS
Cash and cash equivalents $ 93,938
$ 69,308
Accounts receivable, net 9,070
13,389
Accounts receivable from affiliates 22,964
7,404
Inventories, net 30,580
28,927
Assets held for sale 1,373
2,016
Prepaid expenses and other 6,323
8,273
Current assets of discontinued operations —
252,415
Total current assets 164,248
381,732
Property, plant and equipment, net 116,336
115,106
Intangibles, net 44,036
45,678
Deferred income taxes 7,145
10,876
Investments in unconsolidated subsidiaries 27,281
31,054
Deferred costs 3,163
2,069
Other non-current assets 22,740
23,089
Long-term assets of discontinued operations —
58,417
Total assets $ 384,949
$ 668,021
LIABILITIES AND EQUITY

Accounts payable $ 8,466
$ 6,995
Accounts payable to affiliates 3,228
3,565
Current maturities of long-term debt 1,168
1,744
Accrued payroll 12,400
15,482
Asset retirement obligations 3,555
3,843
Accrued income taxes 3,442
—
Other current liabilities 10,964
9,954
Current liabilities of discontinued operations —
180,245
Total current liabilities 43,223
221,828
Long-term debt 57,573
94,295
Asset retirement obligations 39,482
38,262
Pension and other postretirement obligations 12,924
14,271
Deferred compensation 13,571
13,578
Other long-term liabilities 11,113
9,737
Long-term liabilities of discontinued operations —
55,757
Total liabilities 177,886
447,728
Stockholders' equity

Common stock:

Class A, par value $1 per share, 5,276,050 shares outstanding (December 31, 2016 - 5,207,955 shares outstanding) 5,276
5,208
Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,570,148 shares outstanding (December 31, 2016 - 1,570,915 shares outstanding) 1,570
1,571
Capital in excess of par value 2,219
—
Retained earnings 207,447
239,441
Accumulated other comprehensive loss (9,449 ) (25,927 )
Total stockholders' equity 207,063
220,293
Total liabilities and equity $ 384,949
$ 668,021

See notes to Unaudited Condensed Consolidated Financial Statements.

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NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	THREE MONTHS ENDED
	MARCH 31
	2024		2023
	(In thousands, except per share data)
Revenues	$	53,289	$	50,141
Cost of sales	46,271		46,784
Gross profit	7,018		3,357
Earnings of unconsolidated operations	13,307		13,824


Operating expenses
Selling, general and administrative expenses	15,453		14,876
Amortization of intangible assets	126		727
Gain on sale of assets	(11)		(236)

	15,568		15,367
Operating profit	4,757		1,814
Other (income) expense
Interest expense	1,111		545
Interest income	(1,127)		(1,155)
Closed mine obligations	455		409
Gain on equity securities	(1,041)		(628)


Other, net	(214)		(1,725)
	(816)		(2,554)
Income before income tax provision (benefit)	5,573		4,368
Income tax provision (benefit)	1,003		(1,324)
Net income	$	4,570	$	5,692

Earnings per share:
Basic earnings per share	$	0.61	$	0.77
Diluted earnings per share	$	0.61	$	0.76

Basic weighted average shares outstanding	7,452		7,428
Diluted weighted average shares outstanding	7,515		7,515

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
2017 2016 2017 2016
(In thousands, except per share data)
Revenues $ 21,941
$ 32,402
$ 78,341
$ 85,778
Cost of sales 19,466
30,755
66,711
75,926
Gross profit 2,475
1,647
11,630
9,852
Earnings of unconsolidated mines 16,197
15,102
44,627
40,785
Operating expenses
Selling, general and administrative expenses 11,723
10,765
31,809
30,786
Centennial asset impairment charge —
17,443
—
17,443
(Gain) loss on sale of assets

(475 ) 502
(3,500 ) 1,424
Amortization of intangible assets 435
818
1,641
1,936
11,683
29,528
29,950
51,589
Operating profit (loss) 6,989
(12,779 ) 26,307
(952 )
Other expense (income)
Interest expense 946
1,036
2,806
3,182
Income from other unconsolidated affiliates (313 ) (307 ) (932 ) (913 )
Closed mine obligations 336
223
1,071
948
Other, net, including interest income 64
(10 ) 15
2,229
1,033
942
2,960
5,446
Income (loss) from continuing operations before income tax provision (benefit) 5,956
(13,721 ) 23,347
(6,398 )
Income tax provision (benefit) from continuing operations 2,625
(11,589 ) 4,564
(13,970 )
Income (loss) from continuing operations 3,331
(2,132 ) 18,783
7,572
Discontinued operations, net of tax expense of $236 and $2,655 in the three and nine months ended September 30, 2017, respectively, and net of tax expense of $11,044 and $12,966 in the three and nine months ended September 30, 2016, respectively.
$ 5,067
$ 1,691
$ 1,381
$ (2,096 )
Net income (loss) $ 8,398
$ (441 ) $ 20,164
$ 5,476

Basic earnings (loss) per share:
Continuing operations $ 0.49
$ (0.31 ) $ 2.75
$ 1.11
Discontinued operations 0.74
0.25
0.20
(0.31 )
Basic earnings (loss) per share $ 1.23
$ (0.06 ) $ 2.95
$ 0.80

Diluted earnings (loss) per share:
Continuing operations $ 0.49
$ (0.31 ) $ 2.74
$ 1.10
Discontinued operations 0.74
0.25
0.20
(0.30 )
Diluted earnings (loss) per share $ 1.23
$ (0.06 ) $ 2.94
$ 0.80

Dividends per share $ 0.2725
$ 0.2675
$ 0.8125
$ 0.7975

Basic weighted average shares outstanding 6,839
6,786
6,825
6,831
Diluted weighted average shares outstanding 6,866
6,786
6,854
6,858

See notes to Unaudited Condensed Consolidated Financial Statements.

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NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~


	THREE MONTHS ENDED
	MARCH 31
	2024		2023
	(In thousands)
Net income	$	4,570	$	5,692

Reclassification of pension and postretirement adjustments into earnings, net of $23 and $6 tax benefit in the three months ended March 31, 2024 and March 31, 2023, respectively.	76		21
Total other comprehensive income	76		21
Comprehensive income	$	4,646	$	5,713

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
2017 2016 2017 2016
(In thousands)
Net income (loss) $ 8,398
$ (441 ) $ 20,164
$ 5,476
Foreign currency translation adjustment (18 ) (517 ) 1,725
(1,335 )
Deferred gain on available for sale securities 78
134
542
298
Current period cash flow hedging activity, net of $1,310 and $941 tax expense in the three and nine months ended September 30, 2017, and $169 tax expense and $819 tax benefit in the three and nine months ended September 30, 2016, respectively. 2,402
340
1,543
(1,541 )
Reclassification of hedging activities into earnings, net of $1,344 and $1,255 tax expense in the three and nine months ended September 30, 2017, respectively, and $149 and $254 tax benefit in the three and nine months ended September 30, 2016, respectively. (2,509 ) 312
(2,369 ) 420
Reclassification of pension and postretirement adjustments into earnings, net of $38 and $228 tax benefit in the three and nine months ended September 30, 2017, and $88 and $271 tax benefit in the three and nine months ended September 30, 2016, respectively. 191
166
515
468
Total other comprehensive income (loss) $ 144
$ 435
$ 1,956
$ (1,690 )
Comprehensive income (loss) $ 8,542
$ (6 ) $ 22,120
$ 3,786

See notes to Unaudited Condensed Consolidated Financial Statements.

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NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED
SEPTEMBER 30
2017 2016
(In thousands)
Operating activities
Net income $ 20,164
$ 5,476
Income (loss) from discontinued operations 1,381
(2,096 )
Income from continuing operations 18,783
7,572
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation, depletion and amortization 9,580
9,870
Amortization of deferred financing fees 387
278
Centennial asset impairment charge —
17,443
Deferred income taxes 3,731
14,858
Other 610
506
Working capital changes:
Affiliates receivable/payable 513
5,892
Accounts receivable (2,792 ) (9,840 )
Inventories (1,693 ) 5,860
Other current assets (100 ) 984
Accounts payable 2,289
(638 )
Income taxes receivable/payable 5,594
(20,966 )
Other current liabilities (2,084 ) (10,525 )
Net cash provided by operating activities of continuing operations 34,818
21,294
Net cash (used for) provided by operating activities of discontinued operations (7,700 ) 24,864
Net cash provided by (used for) operating activities 27,118
46,158

Investing activities
Expenditures for property, plant and equipment (9,211 ) (7,297 )
Proceeds from the sale of property, plant and equipment 2,006
4,281
Other 901
(2,587 )
Net cash used for investing activities of continuing operations (6,304 ) (5,603 )
Net cash used for investing activities of discontinued operations (4,345 ) (4,326 )
Net cash used for investing activities (10,649 ) (9,929 )

Financing activities
Reductions of long-term debt (35,008 ) (1,389 )
Cash dividends paid (5,552 ) (5,450 )
Cash dividends received from Hamilton Beach Brands Holding Co. (See Note 10) 38,000
10,000
Purchase of treasury shares —
(6,044 )
Other (1,324 ) (3 )
Net cash used for financing activities of continuing operations (3,884 ) (2,886 )
Net cash provided by (used for) financing activities of discontinued operations 3,747
(41,472 )
Net cash used for financing activities (137 ) (44,358 )

Effect of exchange rate changes on cash of continuing operations —
—
Effect of exchange rate changes on cash of discontinued operations 71
(104 )

Cash and cash equivalents
Total increase (decrease) for the period 16,403
(8,233 )
Net decrease related to discontinued operations 8,227
11,395
Balance at the beginning of the period 69,308
35,701
Balance at the end of the period $ 93,938
$ 38,863


	THREE MONTHS ENDED
	MARCH 31
	2024		2023
	(In thousands)
Operating activities





Net cash (used for) provided by operating activities	$	(9,758)	$	6,254

Investing activities
Expenditures for property, plant and equipment and acquisition of mineral interests	(14,483)		(7,879)
Proceeds from the sale of property, plant and equipment	11		272
Proceeds from the sale of private company equity units	—		1,153

Other	(163)		(10)
Net cash used for investing activities	(14,635)		(6,464)

Financing activities
Additions to long-term debt	1,327		2,112
Reductions of long-term debt	(1,295)		(1,456)
Net additions to revolving credit agreements	7,000		—
Cash dividends paid	(1,630)		(1,557)
Purchase of treasury shares	(4,274)		—

Net cash provided by (used for) financing activities	1,128		(901)

Cash and cash equivalents
Total decrease for the period	(23,265)		(1,111)
Balance at the beginning of the period	85,109		110,748
Balance at the end of the period	$	61,844	$	109,637

See notes to Unaudited Condensed Consolidated Financial Statements.

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NACCO INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


	Class A Common Stock		Class B Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	(In thousands, except per share data)
Balance, January 1, 2023	$	5,783	$	1,566	$	23,706	$	404,924	$	(9,013)	$	426,966
Stock-based compensation	161		—		403		—		—		564

Net income	—		—		—		5,692		—		5,692
Cash dividends on Class A and Class B common stock: $0.2075 per share	—		—		—		(1,557)		—		(1,557)
Reclassification adjustment to net income, net of tax	—		—		—		—		21		21
Balance, March 31, 2023	$	5,944	$	1,566	$	24,109	$	409,059	$	(8,992)	$	431,686












Balance, January 1, 2024	$	5,883	$	1,566	$	28,672	$	355,873	$	(9,654)	$	382,340
Stock-based compensation	130		—		401		—		—		531
Purchase of treasury shares	(128)		—		—		(4,146)		—		(4,274)

Net income	—		—		—		4,570		—		4,570
Cash dividends on Class A and Class B common stock: $0.2175 per share	—		—		—		(1,630)		—		(1,630)
Reclassification adjustment to net income, net of tax	—		—		—		—		76		76
Balance, March 31, 2024	$	5,885	$	1,566	$	29,073	$	354,667	$	(9,578)	$	381,613

Accumulated Other Comprehensive Income (Loss)
Class A Common Stock Class B Common Stock Capital in Excess of Par Value Retained Earnings Foreign Currency Translation Adjustment Deferred Gain (Loss) on Available for Sale Securities Deferred Gain (Loss) on Cash Flow Hedging Pension and Postretirement Plan Adjustment Total Stockholders' Equity
(In thousands, except per share data)
Balance, January 1, 2016 $ 5,265
$ 1,572
$ —
$ 217,745
$ (5,455 ) $ 1,480
$ (112 ) $ (19,357 ) $ 201,138
Stock-based compensation 48
—
2,830
—
—
—
—
—
2,878
Conversion of Class B to Class A shares 1
(1 ) —
—
—
—
—
—
—
Purchase of treasury shares (109 ) —
(2,830 ) (3,105 ) —
—
—
—
(6,044 )
Net income —
—
—
5,476
—
—
—
—
5,476
Cash dividends on Class A and Class B common stock: $0.7975 per share —
—
—
(5,450 ) —
—
—
—
(5,450 )
Current period other comprehensive income (loss) —
—
—
—
(1,335 ) 298
(1,541 ) —
(2,578 )
Reclassification adjustment to net income —
—
—
—
—
—
420
468
888
Balance, September 30, 2016 $ 5,205
$ 1,571
$ —
$ 214,666
$ (6,790 ) $ 1,778
$ (1,233 ) $ (18,889 ) $ 196,308

Balance, January 1, 2017 $ 5,208
$ 1,571
$ —
$ 239,441
$ (7,533 ) $ 1,893
$ 393
$ (20,680 ) $ 220,293
Stock-based compensation 67
—
2,219
—
—
—
—
—
2,286
Conversion of Class B to Class A shares 1
(1 ) —
—
—
—
—
—
—
Net income —
—
—
20,164
—
—
—
—
20,164
Cash dividends on Class A and Class B common stock: $0.8125 per share —
—
—
(5,552 ) —
—
—
—
(5,552 )
Current period other comprehensive income (loss) —
—
—
—
1,725
542
1,543
—
3,810
Reclassification adjustment to net income —
—
—
—
—
—
(2,369 ) 515
(1,854 )
Hamilton Beach Brands Holding Company stock dividend (See Note 10) —
—
—
(46,606 ) 5,808
—
433
8,281
(32,084 )
Balance, September 30, 2017 $ 5,276
$ 1,570
$ 2,219
$ 207,447
$ —
$ 2,435
$ —
$ (11,884 ) $ 207,063

See notes to Unaudited Condensed Consolidated Financial Statements.

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NACCO INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2017~~MARCH 31, 2024

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

NOTE 1—Nature of Operations and Basis of Presentation

~~Nature of Operations~~

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of NACCO Industries, Inc. ~~(the “parent company” or “NACCO”~~® (“NACCO”) and its wholly owned subsidiaries (collectively, ~~“NACCO Industries, Inc. and Subsidiaries” or~~ the “Company”). NACCO brings natural resources to life by delivering aggregates, minerals, reliable fuels and environmental solutions through its robust portfolio of NACCO Natural Resources® businesses. The Company operates 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.

The Company has 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 and other developing businesses. Bellaire manages the Company’s long-term liabilities related to former Eastern U.S. underground mining activities. Intercompany accounts and transactions are eliminated in consolidation. See Note 8 for further discussion of segment reporting.

The ~~Company's primary~~Company’s operating ~~subsidiary~~segments are further described below:

Coal Mining Segment

The Coal Mining segment operates ~~in the mining industry. The North American Coal Corporation and its affiliated companies (collectively, “NACoal”) mine~~surface coal ~~primarily for use in~~mines under long-term contracts with power generation companies pursuant to a service-based business model. Coal is surface mined in North Dakota and ~~provide value-added services for natural resource companies.~~Mississippi. Each mine is fully integrated with its customer's operations.

~~On September 29, 2017,~~During the Company spun-off Hamilton Beach Brands Holding Company ("HBBHC"), a former wholly owned subsidiary. HBBHC is an operating holding company for two separate businesses: consumer, commercial and specialty small appliances (Hamilton Beach Brands, Inc. or "HBB") and specialty retail (The Kitchen Collection, LLC or "KC"). The financial position, results of operations and cash flows of HBBHC are reflected as discontinued operations for all periods presented throughthree months ended March 31, 2024, the ~~date of the spin-off. See Note 10 to the Unaudited Condensed Consolidated Financial Statements for further details regarding the spin-off.~~

~~NACoal has the following~~Coal Mining segment's operating coal ~~mining subsidiaries: Bisti Fuels Company, LLC ("Bisti"), Caddo Creek Resources Company, LLC (“Caddo Creek”), Camino Real Fuels, LLC (“Camino Real”),~~mines were: The Coteau Properties Company (“Coteau”), Coyote Creek Mining Company, LLC (“Coyote Creek”), ~~Demery Resources Company, LLC (“Demery”),~~ The Falkirk Mining Company (“Falkirk”)~~, Liberty Fuels Company, LLC (“Liberty”),~~ and Mississippi Lignite Mining Company (“MLMC”). Each of these mines supply lignite coal for power generation and ~~The Sabine Mining Company (“Sabine”).~~

~~All~~delivers its 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 ~~operating~~take or pay provision during the duration of certain specified events beyond the control of either party; all other coal ~~mining subsidiaries other than~~supply contracts are requirements contracts. Certain coal supply contracts can be terminated early, which would result in a reduction to future earnings.

The MLMC ~~are unconsolidated (collectively~~contract is the ~~"Unconsolidated Mines"). The Unconsolidated Mines were formed to develop, construct and/or operate surface~~only coal mines under long-term contracts and are capitalized primarily with debt financing provided by or supported by their respective customers, and without recourse to NACCO and NACoal. The contracts with the customers of the Unconsolidated Mines provide for reimbursement to the company at a price based on actual costs plus an agreed upon pre-tax profit per ton of coal sold or actual costs plus an agreed upon fee per btu of heating value delivered. The fees earned at each mine adjust over timesupply contract in ~~line with various indices~~ which ~~reflect general U.S. inflation rates.~~

~~Although NACoal owns 100% of the equity and manages the daily operations of the Unconsolidated Mines,~~ the Company ~~has determined that the equity capital provided by NACoal~~ is not sufficient to adequately finance the ongoing activities or absorb any expected losses without additional support from the customers. The customers have a controlling financial interest and have the power to direct the activities that most significantly affect the economic performance of the entities. As a result, NACoal is not the primary beneficiary and therefore does not consolidate these entities' financial position or results of operations. The income taxes resulting from operations of the Unconsolidated Mines are solely the responsibility of the Company. The pre-tax income from the Unconsolidated Mines is reported on the line “Earnings of unconsolidated mines” in the Consolidated Statements of Operations, with related taxes included in the provisionresponsible for ~~income taxes. The Company has included the pre-tax earnings of the Unconsolidated Mines above operating profit as they are an integral component of the Company's business and operating results.~~

~~MLMC is a consolidated entity because NACoal pays~~ all operating costs, capital requirements and ~~provides the capital for the mine.~~final mine reclamation; therefore, MLMC is consolidated within NACCO’s financial statements. MLMC sells coal to its ~~customer~~customer's Red Hills Power Plant at a contractually ~~agreed upon~~agreed-upon price which adjusts monthly, primarily based on changes in the level of established indices which reflect general U.S. inflation rates. ~~Centennial Natural Resources, LLC ("Centennial"), which ceased~~Profitability at MLMC is affected by customer demand for coal ~~production~~and changes in the ~~fourth quarter~~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. The Red Hills Power Plant 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. 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 ~~2015,~~the Red Hills Power Plant will result in reduced earnings at MLMC.

On December 18, 2023, MLMC received notice from its customer related to an issue that began on December 15, 2023 as a result of an issue that impacted one of two boilers at the Red Hills Power Plant. This issue has resulted in a reduction in customer demand which will have a significant impact on the Company's 2024 results of operations. Repairs to the boiler are expected to be completed during the second half of 2024.

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. Pirkey Plant (the “Pirkey Plant”). SWEPCO is ~~also~~an American Electric Power (“AEP”) company. As a result of the early retirement of the Pirkey Plant, Sabine ceased deliveries and final

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reclamation began on April 1, 2023. Funding for mine reclamation is the responsibility of SWEPCO, and Sabine receives compensation for providing mine reclamation services. Sabine will provide mine reclamation services through September 30, 2026. On October 1, 2026, SWEPCO is scheduled to acquire all of the capital stock of Sabine and complete the remaining mine reclamation.

At Coteau, Coyote Creek and Falkirk, the Company is paid a management fee per ton of coal or heating unit (MMBtu) delivered. Each contract specifies the indices and mechanics by which fees change over time, generally in line with broad measures of U.S. inflation. The 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. Other than at Coyote Creek, debt financing provided by or supported by the customers is without recourse to the Company. See Note 6 for further discussion of Coyote Creek's guarantees.

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 it does not exercise financial control; therefore, NACCO does not consolidate the results of these operations within its financial statements. Instead, these contracts are accounted for as equity method investments. The Company regularly evaluates if there are reconsideration events which could change the Company's conclusion as to whether these entities meet the definition of a VIE and the determination of the primary beneficiary. The income before income taxes associated with these VIEs is reported as Earnings of unconsolidated operations on the Unaudited Condensed Consolidated Statements of Operations and the Company’s investment is reported on the line Investments in unconsolidated subsidiaries in the Unaudited Condensed Consolidated Balance Sheets. The mines that meet the definition of a VIE are referred to collectively as the “Unconsolidated Subsidiaries.” For tax purposes, the Unconsolidated Subsidiaries are included within the NACCO consolidated ~~entity.~~U.S. tax return; therefore, the Income tax (benefit) provision line on the Unaudited Condensed Consolidated Statements of Operations includes income taxes related to these entities. See Note 6 for further information on the Unconsolidated Subsidiaries.

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

NAMining Segment

The NAMining segment provides value-added contract mining and other services for producers of industrial minerals. The segment is a platform for the Company’s growth and diversification of mining activities outside of the thermal coal industry. NAMining provides contract mining services for independently owned ~~limerock~~mines and quarries, ~~through its North American Mining ("NAM") division. NAM is reimbursed by~~creating value for its customers ~~based~~by performing the mining aspects of its customers’ operations. This allows customers to focus on ~~actual costs plus a management fee. The financial results~~their areas of expertise: materials handling and processing, product sales and distribution. As of March 31, 2024, NAMining operates in Florida, Texas, Arkansas, Virginia and Nebraska. In addition, Sawtooth Mining, LLC ("Sawtooth") has exclusive responsibility for ~~NAM are included in consolidated~~ mining ~~operations or unconsolidated mining operations based on each NAM entity's structure.~~

~~NACoal also provides coal handling, processing~~ and ~~drying~~mine closure services for ~~a number of customers. For example, NoDak Energy Services, LLC ("NoDak") operates~~the Thacker Pass lithium project in northern Nevada, including mine design, construction, operation and maintains a coal processing facility for a customer's power plant. The pre-tax income from NoDak is reported on the line "Income from other unconsolidated affiliates" in the "Other (income) expense" sectionmaintenance.

Certain of the ~~Consolidated Statements of Operations, with~~entities within the ~~related income taxes included in the provision for income taxes. North American Coal Royalty Company, a consolidated entity, provides surface~~NAMining segment are VIEs and ~~mineral acquisition and lease maintenance services related to the Company's operations.~~

~~All of the unconsolidated subsidiaries~~ are accounted for under the equity ~~method.~~method as Unconsolidated Subsidiaries. See Note 6 for further discussion.

Minerals Management Segment

The Minerals Management segment derives income primarily by leasing its 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.

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

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net of post-production expenses, and typically have no environmental liability. Royalty interests leased to producers expire upon the expiration of the oil and gas lease and revert to the mineral owner.

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

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

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

The Company may own more than one type of mineral and royalty interest in the same tract of land. For example, where the Company owns an ORRI in a lease on the same tract of land in which it owns 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 will benefit from the continued development of its mineral properties without the need for investment of additional capital once mineral and royalty interests have been acquired. The Minerals Management segment does not currently have any material investments under which it would be required to bear the cost of exploration, production or development.

The Company's acquisition criteria for building a blended portfolio of mineral and royalty interests includes (i) new wells anticipated to come online within one to two years of investment, (ii) areas with forecasted future development within five years after acquisition and (iii) existing producing wells further along the decline curve that will generate stable cash flow. In addition, acquisitions should extend the geographic footprint to diversify across multiple basins with a preliminary focus on the more oil-rich Permian basin and a secondary focus on other diversifying basins to increase regional exposure. While the current focus is on the acquisition of mineral and royalty interests, the Company would also consider investments in ORRIs, NPRIs or non-operating working interests under certain circumstances. The current acquisition strategy does not contemplate any near-term working interest investments in which the Company would act as the operator.

The Company 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 the Company’s legacy reserves were acquired as part of its historical coal mining operations.

Other Items: On December 1, 2022, the Company transferred its ownership interest in Midwest AgEnergy Group, LLC (“MAG”), a North Dakota-based ethanol business to HLCP Ethanol Holdco, LLC (“HLCP”). The Company received a payment of $1.2 million in the first quarter of 2023 in connection with a post-closing purchase price adjustment, which is included on the line "Other, net" within the accompanying Unaudited Condensed Consolidated Statements of Operations.

Basis of ~~Presentation~~

Presentation: These financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company at ~~September 30, 2017 and~~March 31, 2024, the results of its operations, comprehensive income, ~~(loss),~~ cash flows and changes in equity for the ~~nine~~three months ended~~September 30, 2017~~ March 31, 2024 and ~~2016~~2023 have been included. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016~~.2023.

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The balance sheet at December 31, ~~2016~~2023 has been derived from the audited financial statements at that date but does not include all of the information or notes required by U.S. GAAP for complete financial statements.

NOTE 2—~~Recently Issued Accounting Standards~~Revenue Recognition

~~Accounting Standards Not Yet Adopted~~Nature of Performance Obligations

~~In May 2014,~~At contract inception, the ~~FASB codified ASC 606, "Revenue Recognition - Revenue from Contracts~~Company assesses the goods and services promised in its contracts with ~~Customers," which supersedes most current revenue recognition guidance, including industry-specific guidance,~~customers and ~~requires an entity to recognize revenue in an amount~~identifies a performance obligation for each promised good or service that ~~reflects~~is distinct. To identify the ~~consideration to which~~performance obligations, the ~~entity expects to be entitled in exchange for transferring~~Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

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

At MLMC, each MMBtu delivered during the production period is considered a separate performance obligation. Revenue is recognized at the point in time that control of each MMBtu of lignite transfers to ~~customers~~the customer. 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 ~~provide additional disclosures.~~delivery of aggregates or other minerals is the performance obligation accounted for as a series. Performance momentarily creates an asset that the customer simultaneously receives and consumes; therefore, control is transferred to the customer over time. Consistent with the conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of progress is appropriate. As ~~amended,~~each month of service is completed, revenue is recognized for the ~~effective date~~amount of actual costs incurred, plus the management fee or fixed fee and the general and administrative fee (as applicable). Fluctuations in revenue from period to period result from changes in customer demand primarily due to increases and decreases in activity levels on individual contracts and variances in reimbursable costs. Revenue from 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 the Company. These arrangements result in the transfer of mineral rights for ~~public entities~~a period of time; however, no rights to the actual land are granted other than access for purposes of exploration, development, production and sales. The mineral rights revert back to the Company at the expiration of the contract.

Under these contracts, granting exclusive right, title, and interest in and to minerals, if any, is ~~annual reporting periods beginning after December 15, 2017~~the performance obligation. The performance obligation under these contracts represents a series of distinct goods or services whereby each day of access that is provided is distinct. The transaction price consists of a variable sales-based royalty and, ~~interim periods therein.~~

in certain arrangements, a fixed component in the form of an up-front lease bonus payment. As the amount of consideration the Company will ultimately be entitled to is entirely susceptible to factors outside its control, the entire amount of variable consideration is constrained at contract inception. The Company ~~anticipates adopting~~believes that the ~~new~~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 ~~guidance effective January 1, 2018 using~~from period to period generally result from changes in customer demand. Under the ~~modified retrospective method~~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. Performance momentarily creates an asset that the customer simultaneously receives and consumes; therefore, control is transferred to the customer as work is completed. Consistent with the ~~cumulative effect~~conclusion that the customer simultaneously receives and consumes the benefits provided, an input-based measure of ~~initially applying~~progress is appropriate. As each month of service is completed, revenue is recognized for the ~~standard recognized as an adjustment~~amount of actual costs incurred, plus the management fee or fixed fee. Fluctuations in revenue from period to ~~equity. The Company has developed a project plan with respect~~period result from changes in customer demand primarily due to ~~its implementation~~increases and decreases in activity levels of ~~this standard, including identification of revenue streams and review of~~individual contracts and ~~procedures currently~~variances in ~~place.~~reimbursable costs.

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Significant Judgments

The Company’s contracts with its customers 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 the Company's efforts to satisfy one or more, but not all of, the performance obligations (or to a specific outcome from satisfying the performance obligations) in the contract. Therefore, the Company allocates each variable payment (and subsequent changes to that payment) entirely to the specific performance obligation to which it relates. Management fees, as well as general and administrative fees, are also adjusted based on changes in specified indices (e.g., CPI) to compensate for general inflation changes. Index adjustments, if applicable, are effective prospectively.

Cost Reimbursement

Certain contracts include reimbursement from customers of actual costs incurred for the purchase of supplies, equipment and services in accordance with contractual terms. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof is highly dependent on factors outside of the Company’s control. Accordingly, reimbursable revenue is fully constrained and not recognized until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. The Company is 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.

At the Thacker Pass lithium project, in addition to management fee income, the customer will reimburse Sawtooth for up to $50 million of capital expenditures. Sawtooth will recognize revenue over the estimated useful life of the asset on a straight-line basis as the performance obligation is satisfied over time. Sawtooth recognized $1.5 million and $0.1 million in revenue for reimbursable costs during the three months ended March 31, 2024 and 2023, respectively. In accordance with the Thacker Pass mining agreement, the customer received a $3.5 million advance from Sawtooth, which is included in the ~~process~~long-term contract asset. The customer will 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.

Prior Period Performance Obligations

The Company records royalty income in the month production is delivered to the purchaser. As a mineral owner, the Company has limited visibility into when new wells start producing, and production statements may not be received for 30 to 90 days or more after the date production is delivered. As a result, the Company is required to estimate the amount of ~~completing its review~~production delivered to the purchaser of ~~customer contracts at its NACoal subsidiary, including~~ the ~~contracts~~product and the price that will be received for the sale of the product. The expected sales volumes and prices for these properties are estimated and recorded in "Trade accounts receivable" in the accompanying Unaudited Condensed Consolidated Balance Sheets. The difference between the Company’s ~~Unconsolidated Mines,~~estimates and ~~finalizing its conclusions on a variety of specific contractual terms. These include identification of additional~~the actual amounts received is recorded in the month that payment is received from the third-party lessee. For the three months ended March 31, 2024 and 2023, royalty income recognized in the reporting period related to performance obligations ~~specifically during~~satisfied in prior reporting periods was immaterial.

Disaggregation of Revenue

In accordance with ASC 606-10-50, the ~~pre-~~Company disaggregates revenue from contracts with customers into major goods and ~~post-coal production periods, variable compensation considerations~~service lines and ~~the~~ timing of ~~recognition~~transfer of royalty revenue. While the revenue of the Unconsolidated Mines is not consolidated within the Company’s financial statements, any change in the amount or timing of revenue recognition at the Unconsolidated Mines could have an impact on the company’s recognition of earnings from the unconsolidated mines.goods and services. The Company ~~is also in~~determined that disaggregating revenue into these categories achieves the ~~process~~disclosure objective of identifying and implementing any necessary changes to processes and controls to meet the standard's updated reporting and disclosure requirements. The Company continues to assess the potential impact of the standard and has not yet reached a conclusion as todepicting how the adoption of the standard will impact the Company's financial position, results of operations or cash flows. The adoption of this guidance will result in increased disclosures to help users of financial statements understand the nature, amount, timing, and ~~timing~~uncertainty of revenue and cash flows ~~arising from contracts.~~are affected by economic factors. The Company’s business consists of the Coal Mining, NAMining and Minerals Management segments as well as Unallocated Items. See Note 8 to the Unaudited Condensed Consolidated Financial Statements for further discussion of segment reporting.

~~In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition~~The following table disaggregates revenue by major sources as of March 31:


	THREE MONTHS ENDED
	MARCH 31
	2024		2023
Timing of Revenue Recognition
Goods transferred at a point in time	$	15,108	$	20,146
Services transferred over time	38,181		29,995
Total revenues	$	53,289	$	50,141

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Contract Balances

The opening and ~~Measurement~~closing balances of Financial Assets and Financial Liabilities," which modifies how entities measure equity investments and present changes in the fair value of financial liabilities; simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; changes presentation and disclosure requirements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the impact that this new guidance will have on the Company’s ~~financial position, results of operations, cash flows~~current and ~~related disclosures.~~

~~In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize~~long-term contract assets and liabilities ~~for~~and receivables are as follows:


	Contract balances
	Trade accounts receivable		Contract asset (long-term)		Contract liability (current)		Contract liability (long-term)
Balance, January 1, 2024	$	37,429	$	3,712	$	878	$	1,470
Balance, March 31, 2024	27,958		3,500		930		2,117
Increase (decrease)	$	(9,471)	$	(212)	$	52	$	647

As described above, the ~~rights~~Company enters into royalty contracts that grant exclusive right, title, and ~~obligations created by leased assets. ASU 2016-02~~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 ~~effective for interim~~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 both of the three months ended March 31, 2024 and ~~annual periods beginning after December 15, 2018, and early adoption is permitted.~~ 2023 included in the opening contract liability was $0.2 million. 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.

The Company ~~is currently evaluating how~~expects to recognize an additional $0.9 million in the remainder of 2024, $1.2 million in 2025, $0.1 million in 2026, less than $0.1 million in 2027 and $0.8 million in the years after 2027 related to ~~what extent ASU 2016-02 will affect~~ the ~~Company's financial position,~~contract liability remaining at March 31, 2024. The difference between the opening and closing balances of the Company’s contract balances results ~~of operations, cash flows~~from the timing difference between the Company’s performance and ~~related disclosures.~~ the customer’s payment.

The Company has no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

NOTE 3—Inventories

Inventories are summarized as follows:


	MARCH 31 2024		DECEMBER 31 2023
Coal	$	19,576	$	23,784
Mining supplies	56,179		53,216
Total inventories	$	75,755	$	77,000

During the three months ended March 31, 2024 and 2023, the Company recorded a $2.5 million and a $2.4 million inventory impairment charge, respectively, in the line “Cost of sales” in the accompanying Unaudited Condensed Consolidated Statements of Operations as mining costs exceeded net realizable value at MLMC.

Table of ~~these events could result in adjustments to the Company's financial statements and such adjustments could be material. The Company believes the current assumptions,~~Contents

judgments and other considerations used to estimate the current year accrued and deferred tax positions are appropriate. If the actual outcome of future tax consequences differs from these estimates and assumptions, due to changes or future events, the resulting change to the provision for income taxes could have a material impact on the Company's results of operations and financial position.

CONSOLIDATED FINANCIAL SUMMARY

The results of operations for NACCO were as follows for the three ~~and nine~~ months ended ~~September 30~~:March 31:


	THREE MONTHS
	2024			2023
Revenues:
Coal Mining	$	15,545		$	20,653
NAMining	24,483			20,633
Minerals Management	10,401			8,285
Unallocated Items	3,262			1,191
Eliminations	(402)			(621)
Total revenue	$	53,289		$	50,141
Operating profit (loss):
Coal Mining	$	(417)		$	313
NAMining	2,355			830
Minerals Management	7,930			6,044
Unallocated Items	(5,128)			(5,353)
Eliminations	17			(20)
Total operating profit	4,757			1,814
Interest expense	1,111			545
Interest income	(1,127)			(1,155)
Closed mine obligations	455			409
Gain on equity securities	(1,041)			(628)


Other, net	(214)			(1,725)
Other income, net	(816)			(2,554)
Income before income tax provision (benefit)	5,573			4,368
Income tax provision (benefit)	1,003			(1,324)
Net income	$	4,570		$	5,692

Effective income tax rate	18.0		%	(30.3)		%

THREE MONTHS NINE MONTHS
2017 2016 2017 2016
   NACoal operating profit (loss) ^(a)
$ 8,925
$ (10,912 ) $ 31,127
$ 3,653
   NACCO and Other operating loss ^(a)
(1,936 ) (1,867 ) (4,820 ) (4,605 )
Operating profit (loss) ^(a)
6,989
(12,779 ) 26,307
(952 )
   Interest expense 946
1,036
2,806
3,182
   Income from other unconsolidated affiliates (313 ) (307 ) (932 ) (913 )
   Closed mine obligations 336
223
1,071
948
   Other, net, including interest income 64
(10 ) 15
2,229
Other expense, net 1,033
942
2,960
5,446
Income (loss) before income tax provision (benefit) 5,956
(13,721 ) 23,347
(6,398 )
Income tax provision (benefit) 2,625
(11,589 ) 4,564
(13,970 )
Income (loss) from continuing operations $ 3,331
$ (2,132 ) $ 18,783
$ 7,572
Discontinued operations 5,067
1,691
1,381
(2,096 )
Net income (loss) $ 8,398
$ (441 ) $ 20,164
$ 5,476

Effective income tax rate from continuing operations 44.1 % 84.5 % 19.5 % 218.3 %

~~(a) All~~The components of ~~NACCO's Revenues are attributable to NACoal. As a result,~~ the ~~Company's results of operations, including Revenues, Operating~~change in revenues and operating profit ~~(loss) and Other expense, net, for NACoal and NACCO and Other~~ are discussed below in "Segment Results." ~~Amounts below income (loss) before income tax provision (benefit) are analyzed~~

First Quarter of 2024 Compared with First Quarter of 2023

Other (income) expense, net

Interest expense increased in the first quarter of 2024 compared with the respective 2023 period due to higher average borrowings as well as an increase in interest rates.

Gain on equity securities represents changes in the market price of invested assets reported at fair value. The change in the first quarter of 2024 compared with the respective 2023 period was 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.

On December 1, 2022, the Company transferred its ownership interest in Midwest AgEnergy Group, LLC (“MAG”), a ~~consolidated basis.~~North Dakota-based ethanol business to HLCP Ethanol Holdco, LLC (“HLCP”). The Company received a payment of $1.2 million in the first quarter of 2023 in connection with a post-closing purchase price adjustment, which is included on the line "Other, net" within the accompanying Unaudited Condensed Consolidated Statements of Operations.

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Income Taxes

The Company evaluates and updates its estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of actual earnings compared to projections of earnings between entities that benefit from percentage depletion and those that do not, the effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The quarterly income tax provision is generally comprised of tax expense on income or benefit on loss at the most recent estimated annual effective income tax rate, adjusted for the effect of discrete items.

The effective income tax rates from continuing operations for the three and nine months ended September 30, 2017 was a 44.1% and 19.5% expense on income, respectively, compared to an 84.5% and 218.3% benefit on loss for the three and nine months ended September 30, 2016. The change in income taxes was primarily due to a change in the effective income tax rate driven by a change in the mix of earnings, primarily the impact in three and nine months ended September 30, 2016 of the $17.4 million asset impairment charge, and the impact of discrete items. The effective income tax rates from continuing operations for the three and nine months ended September 30, 2017 include discrete income tax expense of $1.9 million and $1.6 million, respectively, primarily due to the establishment of a valuation allowance on deferred tax assets. The valuation allowance was established because the Company expects to be subject to Alternative Minimum Tax ("AMT") beginning in 2018 due to the change in the mix of earnings as a result of the spin-off of Hamilton Beach Holding. As a result of being subject to AMT beginning in 2018, the Company remeasured its deferred tax assets and liabilities using the AMT rate that is expected to apply to taxable income in future years in which those tax assets and liabilities are expected to be realized or settled. In addition, intraperiod tax allocation rules require the Company to allocate the income tax provision between continuing operations and other categories of earnings, such as discontinued operations. The income tax provision in the third quarter of 2017 reflects a change in estimate attributed to higher pretax income within continuing operations at companies that do not benefit from percentage depletion. According to the ordering rules of intraperiod tax allocation, the residual amount of change after determining the effective rate for continuing operations is allocated to discontinued operations.

The effective income tax rates from continuing operations for the three and nine months ended September 30, 2016 include discrete income tax expense of $0.7 million and discrete income tax benefit of $1.3 million, respectively. The income tax benefit for the three and nine months ended September 30, 2016, includes the effect of Centennial's asset impairment. See Note 10 ~~to the Unaudited Condensed Consolidated Financial Statements for further discussion of the 2016 Centennial asset impairment charge.~~

~~In addition, 2017 and 2016 effective tax rates from continuing operations include the effect of benefits from percentage depletion.The~~ benefit of percentage depletion is not directly related to the amount of consolidated pre-tax income recorded in a period. Accordingly, in periods where income before tax is relatively small, the proportional effect of the benefit from percentage depletion on the effective tax rate may be significant. In addition, as a result of the forecasted loss before income tax as of March 31, 2023, the effect of the benefit from percentage depletion resulted in a negative forecasted effective tax rate. Each quarter, the Company updates its estimate of the annual effective tax rate and the cumulative impact of the change in the estimated annual tax rate is recorded, which can additionally make quarterly comparisons not meaningful.

~~Liquidity and Capital Resources of~~

LIQUIDITY AND CAPITAL RESOURCES OF NACCO

Cash Flows

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


	2024		2023		Change
Operating activities:




Net cash (used for) provided by operating activities	$	(9,758)	$	6,254	$	(16,012)

Investing activities:
Expenditures for property, plant and equipment and acquisition of mineral interests	(14,483)		(7,879)		(6,604)
Other	(152)		1,415		(1,567)
Net cash used for investing activities	(14,635)		(6,464)		(8,171)
Cash flow before financing activities	$	(24,393)	$	(210)	$	(24,183)

The $16.0 million change in net cash (used for) provided by operating activities was primarily due to an unfavorable change in working capital, which was mainly the result of increases in Other current assets and Accounts receivable from affiliates during the first quarter of 2024 compared with significant decreases in the first quarter of 2023. The change in Other current assets was primarily due to changes in accrued royalties. The change in Accounts receivable from affiliates is primarily attributable to the amount and timing of payments from unconsolidated subsidiaries.

In addition, the Company entered into an Accounts Receivable Financing Program with a third party banking institution on March 14, 2024 for the sale of certain accounts receivables. Accounts receivable sold under the Accounts Receivable Financing Program for the quarter ended March 31, 2024 were $6.1 million. The net proceeds received were included in Net cash (used for) provided by operating activities in the Unaudited Consolidated Statement of Cash Flows.


	2024		2023		Change
Financing activities:
Net additions to long-term debt and revolving credit agreement	$	7,032	$	656	$	6,376
Cash dividends paid	(1,630)		(1,557)		(73)
Purchase of treasury shares	(4,274)		—		(4,274)

Net cash provided by (used for) financing activities	$	1,128	$	(901)	$	2,029

The change in net cash provided by (used for) financing activities was primarily due to an increase in debt borrowings during the first three months of 2024 compared with the first three months of 2023, partially offset by share repurchases during the first quarter of 2024.

Financing Activities

NACCO Natural Resources Corporation (“NACCO Natural Resources”), maintains a secured revolving line of credit of up to $150.0 million (the “Facility”) that expires in November 2025. Borrowings outstanding under the Facility were $17.0 million at

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March 31, 2024. At March 31, 2024, the excess availability under the Facility was $100.4 million, which reflects a reduction for outstanding letters of credit of $32.6 million.

NACCO has not guaranteed ~~NACoal's borrowings.~~any borrowings of NACCO Natural Resources. The ~~borrowing agreement at NACoal~~Facility allows for the payment to NACCO of dividends and advances under certain circumstances. Dividends (to the extent permitted by ~~NACoal's borrowing agreement)~~the Facility) and management fees are the primary sources of cash for NACCO and enable the Company to pay dividends to ~~stockholders.~~stockholders and repurchase shares.

~~Capital Structure~~

~~NACCO's consolidated capital structure is presented below:~~

SEPTEMBER 30
2017 DECEMBER 31
2016 Change
Cash and cash equivalents $ 93,938
$ 69,308
$ 24,630
Other net tangible assets 149,181
222,983
(73,802 )
Goodwill and intangible assets, net 44,036
45,678
(1,642 )
Net assets 287,155
337,969
(50,814 )
Total debt (58,741 ) (96,039 ) 37,298
Bellaire closed mine obligations (21,351 ) (21,637 ) 286
Total equity $ 207,063
$ 220,293
$ (13,230 )
Debt to total capitalization 22% 30% (8)%

The ~~components of change are discussed below in "Segment Results."~~

~~NACCO Industries, Inc. Outlook - Fourth Quarter 2017~~

Overall, in the fourth quarter of 2017, NACCO expects a substantial increase in consolidated income before income taxes from continuing operations compared with 2016 primarily driven by improvements at NACoal. The fourth quarter effective income tax rate related to continuing operations, excluding discrete items, is expected to be approximately 15%. Including discrete items recognized in the first nine months of 2017, NACCO expects the full year effective income tax rate related to continuing operations to be between 20 and 25%.

NACoal expects a modest increase in tons sold in the fourth quarter of 2017 compared with the fourth quarter of 2016. Income before income tax is also expected to increase in the fourth quarter of 2017 compared with the fourth quarter of 2016, resulting in a substantial increase in full-year 2017 income before income tax, including and excluding the effect of Centennial's 2016 third quarter asset impairment and $3.3 million of legal resolution charges in the fourth quarter of 2016. However, fourth quarter 2017 income before income tax is expected to be lower than the 2017 third quarter due to a decrease in earnings from unconsolidated mines as a result of reduced customer requirements and a reduction in royalty and other income.

Income before income tax at NACoal's consolidated operations in the fourth quarter of 2017 is expected to improve over the prior year due to lower operating expenses, including a reduction in lease expense. These improvements are expected to be partially offset by a substantial decrease in MLMC's fourth-quarter 2017 results primarily as a result of an increase in cost of sales attributable to the recognition of production costs capitalized into inventory during the outage at the customer's power plant in the third quarter. In the fourth quarter of 2017, Centennial's operating loss is expected to be modestly higher than in 2016, excluding Centennial's legal resolution charges and mine reclamation adjustment. Centennial will continue to evaluate strategies to optimize cash flow, including the continued assessment of a range of strategies for its remaining Alabama mineral reserves, including holding reserves with substantial unmined coal tons for sale or contract mining when conditions permit. Cash expenditures related to mine reclamation will continue until reclamation is complete, or ownership of, or responsibility for, the remaining mines is transferred.

Income before income tax in the fourth quarter of 2017 is also expected to benefit from an increase in earnings from the unconsolidated mining operations due to the start of production at Bisti on January 1, 2017. In addition, at NAM's

~~unconsolidated operations, an increase in the number of draglines being operated for customers is expected to contribute to the increase in earnings from the unconsolidated mining operations.~~

Cash flow before financing activities at NACoal is expected to be positive but decrease substantially in the fourth quarter of 2017 compared with the prior year quarter. However, full-year cash flow before financing is expected to increase moderately compared with 2016. Capital expenditures are estimated to be $8.5 million in the fourth quarter of 2017 and approximately $18 million for the full year.

On June 28, 2017, Southern Company and its subsidiary, Mississippi Power, issued a press release announcing they were immediately suspending start-up and operations activities involving the coal gasifier portion of the Kemper County energy facility. Liberty is the sole supplier of coal to fuel the gasifier. At this time, the future of the Kemper County coal gasification facility remains uncertain, and therefore the future of the Liberty Mine is uncertain. The terms of the contract specify that Mississippi Power is responsible for all mine closure costs, should that be required, with the Liberty Mine specified as the contractor to complete final mine closure. Should the decision to suspend operations of the gasifier and mine become permanent, it will unfavorably affect NACoal's long-term earnings under its contract with Mississippi Power.

~~NACCO Industries, Inc. Outlook - 2018~~

~~In 2018, NACCO expects consolidated income before income taxes from continuing operations to decrease moderately compared with 2017 and expects an effective income tax rate of approximately 25%.~~

In 2018, NACoal expects income before income taxes to decrease compared with 2017, primarily because of a substantial anticipated decrease in royalty and other income. Royalties on oil, gas and coal extracted by others are subject to changes in market forces and the activities of others, making it difficult to forecast whether recent high levels of income will continue. The absence of $3.5 million of gains on sales of assets, primarily realized at Centennial, during the first nine months of 2017 and higher NACoal operating expenses, which are expected to be partially offset by lower NACCO parent operating expenses, are also expected to contribute to the decrease in income before income taxes. These decreases are expected to be partially offset by improved results at MLMC due to an anticipated increase in customer demand. MLMC believes customer demand will be higher in the first half of 2018 compared with the second half of 2018 because MLMC's customer anticipates taking a planned outage at its power plant in the second half of the year. An increase in income from unconsolidated mines is also expected to partially offset the decline in income before income taxes.

~~Cash flow before financing activities is expected to decrease in 2018 compared with 2017, and capital expenditures are expected to be approximately $21 million in 2018.~~

While the current regulatory environment for development of new coal projects has improved, continued low natural gas prices and growth in renewable energy sources, such as solar and wind, could unfavorably affect the amount of electricity generation attributable to coal-fired power plants over the longer term. NACoal expects to continue efforts to develop opportunities for new or expanded coal mining projects, although future opportunities are likely to be very limited. In addition, NACoal continues to pursue additional non-coal mining opportunities, principally related to its NAM business and elsewhere where it might provide other value-added services.

~~SEGMENT RESULTS~~

~~THE NORTH AMERICAN COAL CORPORATION~~

~~FINANCIAL REVIEW~~

~~Tons of coal sold by NACoal's operating mines were as follows for the three and nine months ended~~ ~~September 30~~:

THREE MONTHS NINE MONTHS
2017 2016 2017 2016
(In millions)
Coteau 3.8
3.3
11.1
10.3
Falkirk 2.1
2.1
5.1
5.3
Sabine 1.1
1.1
2.6
3.3
Bisti 1.1
—
3.1
—
Camino Real 0.5
0.4
1.7
1.3
Coyote Creek 0.6
0.7
1.6
0.9
Other 0.2
0.2
0.9
0.4
Unconsolidated mines 9.4
7.8
26.1
21.5
MLMC 0.5
1.0
1.9
2.3
Total tons sold 9.9
8.8
28.0
23.8

NAM sold 6.4 million and 22.1 million cubic yards of limerock in the three and nine months ended September 30, 2017, respectively. This compares with 6.4 million and 20.3 million cubic yards of limerock in the three and nine months ended September 30, 2016, respectively.

~~The results of operations for NACoal were as follows for the three and nine months ended~~ ~~September 30~~:

THREE MONTHS NINE MONTHS
2017 2016 2017 2016
Revenue - consolidated mines $ 19,318
$ 30,628
$ 69,397
$ 79,780
Revenue - royalty and other 2,623
1,774
8,944
5,998
Total revenues 21,941
32,402
78,341
85,778
Cost of sales - consolidated mines 18,798
29,873
64,877
73,845
Cost of sales - royalty and other 613
821
1,698
1,908
Total cost of sales 19,411
30,694
66,575
75,753
Gross profit 2,530
1,708
11,766
10,025
Earnings of unconsolidated mines (a) 16,197
15,102
44,627
40,785
Selling, general and administrative expenses 9,842
8,959
27,125
26,354
Centennial asset impairment charge —
17,443
—
17,443
Amortization of intangible assets 435
818
1,641
1,936
(Gain) loss on sale of assets (475 ) 502
(3,500 ) 1,424
Operating profit 8,925
(10,912 ) 31,127
3,653
Interest expense 946
1,036
2,806
3,182
Other (income) expense, including income from other unconsolidated affiliates (183 ) (252 ) (733 ) 1,522
Income before income tax provision (benefit) $ 8,162
$ (11,696 ) $ 29,054
$ (1,051 )

~~(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of the Company's unconsolidated subsidiaries, including summarized financial information.~~

~~Third~~ ~~Quarter of~~ ~~2017~~ ~~Compared with~~ ~~Third~~ ~~Quarter of~~ ~~2016~~

~~The following table identifies the components of change in revenues for the~~ ~~third~~ ~~quarter of~~ ~~2017~~ ~~compared with the~~ ~~third~~ ~~quarter of~~ ~~2016~~:

Revenues
2016 $ 32,402
Increase (decrease) from:
Consolidated mines, excluding Centennial (11,931 )
Royalty and other 1,466
Centennial 4
2017 $ 21,941

Revenues decreased $10.5 million in the third quarter of 2017 compared with the third quarter of 2016 due to the consolidated mine, MLMC, selling fewer tons because of reduced customer requirements due to an outage during the third quarter of 2017. The decrease was partially offset by higher royalty and other revenues.

~~The following table identifies the components of change in operating profit (loss) for the~~ ~~third~~ ~~quarter of~~ ~~2017~~ ~~compared with the~~ ~~third~~ ~~quarter of~~ ~~2016~~:

Operating Profit (Loss)
2016 $ (10,912 )
Increase (decrease) from:
Centennial asset impairment charge in 2016 17,443
Royalty and other 1,707
Centennial, excluding the net gain on sales of assets 1,159
Earnings of unconsolidated mines 1,095
Net gain on sale of assets, primarily Centennial 977
Consolidated mines, excluding Centennial (1,661 )
Selling, general and administrative expenses (883 )
2017 $ 8,925

NACoal reported operating profit of $8.9 million in the third quarter of 2017 compared with an operating loss of $10.9 million in the third quarter of 2016. The operating loss in the third quarter of 2016 was primarily due to Centennial's $17.4 million asset impairment charge. See Note 10 to the Unaudited Condensed Consolidated Financial Statements for further discussion of the 2016 Centennial asset impairment charge.

Other changes in operating profit include increased royalty and other income, improved results at Centennial, and an increase in earnings of unconsolidated mines, as newer mines increased production. These items were partially offset by a decrease in results at the consolidated mines, principally MLMC. The decrease at MLMC was primarily due to fewer tons sold as a result of reduced customer requirements.

~~Interest expense decreased $0.1 million in the third quarter of 2017 compared with 2016 due to lower average borrowings under NACoal's revolving credit facility.~~

~~First Nine Months of 2017 Compared with First Nine Months of 2016~~

~~The following table identifies the components of change in revenues for the first nine months of 2017 compared with the first nine months of 2016:~~

Revenues
2016 $ 85,778
Increase (decrease) from:
Consolidated mines, excluding Centennial (10,603 )
Centennial (650 )
Royalty and other 3,816
2017 $ 78,341

Revenues decreased $7.4 million in the first nine months of 2017 compared with the first nine months of 2016 primarily due to the consolidated mine, MLMC, selling fewer tons as a result of decreased customer requirements. The decrease was partially offset by higher royalty and other revenues.

~~The following table identifies the components of change in operating profit for the first nine months of 2017 compared with the first nine months of 2016:~~

Operating Profit
2016 $ 3,653
Increase (decrease) from:
Centennial asset impairment charge in 2016 17,443
Net gain on sale of assets, primarily Centennial 4,924
Royalty and other 4,141
Earnings of unconsolidated mines 3,842
Centennial, excluding the net gain on sales of assets 2,660
Consolidated mines, excluding Centennial (4,619 )
Selling, general and administrative expenses (917 )
2017 $ 31,127

Operating profit increased $27.5 million in the first nine months of 2017 compared with the first nine months of 2016 primarily due to the absence of Centennial's $17.4 million asset impairment charge in the current year period. See Note 10 to the Unaudited Condensed Consolidated Financial Statements for further discussion of the 2016 Centennial asset impairment charge.

Other increases in operating profit include an increase in the net gain on sale of assets due primarily to a $2.3 million gain on the sale of a dragline at Centennial, improved results in royalty and other income and an increase in earnings of unconsolidated mines, as new mines began or increased production. These increases were partially offset by a decrease in results at the consolidated mines, principally MLMC. The decrease at MLMC was primarily due to fewer tons sold as a result of decreased customer requirements.

Interest expense decreased $0.4 million due to lower average borrowings under NACoal's revolving credit facility during the first nine months of 2017 compared with 2016. Other (income) expense, including income from other unconsolidated affiliates, had $0.7 million of income during the nine months ended September 30, 2017, compared with a $1.5 million loss in 2016. During the nine months ended September 30, 2016, NACoal reversed an indemnification receivable related to an uncertain tax position initially recorded as part of the Centennial acquisition that resulted in $2.2 million of other expense. The Company recorded an income tax benefit of $2.3 million as a result of the reversal of the corresponding uncertain tax position.

~~LIQUIDITY AND CAPITAL RESOURCES~~

~~Cash Flows~~

~~The following tables detail NACoal's changes in cash flow for the~~ ~~nine months endedSeptember 30~~:

2017 2016 Change
Operating activities:
Net income (loss) $ 27,675
$ (1,100 ) $ 28,775
Depreciation, depletion and amortization 9,305
9,594
(289 )
Centennial asset impairment charge —
17,443
(17,443 )
Other (3,054 ) 19,891
(22,945 )
Working capital changes 1,946
(29,339 ) 31,285
Net cash provided by operating activities 35,872
16,489
19,383

Investing activities:
Expenditures for property, plant and equipment (9,199 ) (7,280 ) (1,919 )
Other 2,847
1,634
1,213
Net cash used for investing activities (6,352 ) (5,646 ) (706 )

Cash flow before financing activities $ 29,520
$ 10,843
$ 18,677

The change in net cash provided by operating activities was primarily the result of favorable working capital and net income changes, partially offset by the change in other during the first nine months of 2017 compared with the first nine months of 2016. A significant decrease in accrued payroll as a result of payments made during the first nine months of 2016, as well as the change in net intercompany accounts receivable/payable, contributed to the change in working capital in the first nine months of 2016. The change in other was primarily due to the change in deferred taxes.

The change in net cash used for investing activities was primarily attributable to an increase in expenditures for property, plant and equipment at MLMC, partially offset by proceeds from the sale of equipment at Centennial in the first nine months of 2017 compared with 2016.

2017 2016 Change
Financing activities:
Net reductions to long-term debt and revolving credit agreements $ (35,008 ) $ (1,389 ) $ (33,619 )
Cash dividends paid to NACCO (4,000 ) (4,300 ) 300
Other (1,324 ) —
(1,324 )
Net cash used for financing activities $ (40,332 ) $ (5,689 ) $ (34,643 )

The change in net cash used for financing activities was primarily from a significant reduction in borrowings on NACoal's revolving credit facility during the first nine months of 2017 when compared with the first nine months of 2016.

~~Financing Activities~~

NACoal has an unsecured revolving line of credit of up to $150.0 million (the “NACoal Facility”) that expires in August 2022. Borrowings outstanding under the NACoal Facility were $50.0 million at September 30, 2017. At September 30, 2017, the excess availability under the NACoal Facility was $98.6 million, which reflects a reduction for outstanding letters of credit of $1.4 million.

~~The NACoal~~ Facility has performance-based pricing, which sets interest rates based upon NACCO Natural Resources achieving various levels of debt to EBITDA ratios, as defined in the ~~NACoal~~ Facility. Borrowings bear interest at a floating rate plus a margin based on the level of debt to EBITDA ratio achieved. The applicable margins, effective ~~September 30, 2017,~~March 31, 2024, for base rate and ~~LIBOR~~SOFR loans were ~~1.00%~~1.23% and ~~2.00%~~2.23%, respectively. The ~~NACoal~~ Facility has a commitment fee which is based upon achieving various levels of debt to EBITDA ratios. The commitment fee was ~~0.35%~~0.34% on the unused commitment at September 30, 2017. The floating rate of interest applicable to the NACoal Facility at September 30, 2017 was 3.39% including the floating rate margin and the effect of the interest rate swap agreement.March 31, 2024.

The ~~NACoal~~ Facility contains restrictive covenants, which require, among other things, ~~NACoal~~NACCO Natural Resources to maintain a maximum net debt to EBITDA ratio of ~~3.00~~2.75 to 1.00 and an interest coverage ratio of not less than 4.00 to 1.00. The ~~NACoal~~ 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 ~~2.00~~1.50 to 1.00, or if greater than ~~2.00~~1.50 to 1.00, a Fixed Charge Coverage Ratio of 1.10 to 1.00, in conjunction with maintaining unused availability thresholds of borrowing capacity, as defined in the ~~NACoal~~ Facility, of $15.0 million. At ~~September 30, 2017, NACoal~~March 31, 2024, NACCO Natural Resources was in compliance with all financial covenants in the ~~NACoal~~ Facility.

~~NACoal~~The obligations under the Facility are guaranteed by certain of NACCO Natural Resource's 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.

The Company believes funds available from cash on hand, at the ~~Company, the NACoal~~ Facility and operating cash flows will provide sufficient liquidity to meet its operating needs and commitments arising during the next twelve months and until the expiration of the ~~NACoal Facility.~~Facility in November 2025.

Expenditures for property, plant and equipment and mineral interests

Expenditures for property, plant and equipment and mineral interests were $14.5 million during the first three months of 2024, primarily for the acquisition of land at Mitigation Resources and equipment at NAMining. Planned expenditures for the remainder of 2024 are expected to be approximately $11 million in the Coal Mining segment, $27 million in the NAMining segment, $20 million in the Minerals Management segment and $3 million in Unallocated Items.

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

Capital Structure

NACCO's consolidated capital structure is presented below:


	MARCH 31 2024		DECEMBER 31 2023		Change
Cash and cash equivalents	$	61,844	$	85,109	$	(23,265)
Other net tangible assets	386,952		349,934		37,018
Intangible assets, net	5,880		6,006		(126)
Net assets	454,676		441,049		13,627
Total debt	(49,875)		(35,956)		(13,919)
Bellaire closed mine obligations	(23,188)		(22,753)		(435)
Total equity	$	381,613	$	382,340	$	(727)
Debt to total capitalization	12%		9%		3%

The increase in other net tangible assets at March 31, 2024 compared with December 31, 2023 was mainly the result of increases in Property, plant and equipment and Prepaid insurance during the first quarter of 2024.

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Contractual Obligations, Contingent Liabilities and Commitments

Since December 31, ~~2016~~,2023, there have been no significant changes in the total amount of ~~NACoal's~~NACCO's contractual obligations, contingent liabilities or commercial commitments, or the timing of cash flows in accordance with those obligations as reported on page 4858 in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2023. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of certain guarantees related to Coyote Creek.

~~Capital Expenditures~~

SEGMENT RESULTS

Expenditures for property, plant and equipment were $9.2 million during the first nine months of 2017. NACoal estimates that its capital expenditures for the remainder of 2017 will be an additional $8.5 million, primarily for dragline purchases, as well as land and machinery and equipment at MLMC. These expenditures are expected to be funded from internally generated funds and bank borrowings.

COAL MINING SEGMENT

~~Capital Structure~~

~~NACoal's capital structure is presented below:~~

SEPTEMBER 30
2017 DECEMBER 31
2016 Change
Cash and cash equivalents $ 166
$ 10,978
$ (10,812 )
Other net tangible assets 144,354
145,028
(674 )
Coal supply agreements, net 44,036
45,678
(1,642 )
Net assets 188,556
201,684
(13,128 )
Total debt (58,741 ) (96,039 ) 37,298
Total equity $ 129,815
$ 105,645
$ 24,170
Debt to total capitalization 31% 48% (17)%

The decrease in net assets was primarily due to the change in cash and cash equivalents from a significant reduction in borrowings on NACoal's revolving credit facility during the first nine months of 2017.

~~NACCO AND OTHER~~

FINANCIAL REVIEW

~~Operating Results~~

~~The results~~Tons of ~~operations at NACCO and Other~~coal delivered by the Coal Mining segment were as follows for the three ~~and nine~~ months ended ~~September 30~~:March 31:


	THREE MONTHS
	2024	2023
Unconsolidated operations	5,480	6,192
Consolidated operations	455	711
Total tons delivered	5,935	6,903

THREE MONTHS NINE MONTHS
2017 2016 2017 2016
Revenues $ —
$ —
$ —
$ —
Operating loss $ (1,936 ) $ (1,867 ) $ (4,820 ) $ (4,605 )
Other expense $ 270
$ 158
$ 887
$ 742
Loss before income tax provision (benefit) $ (2,206 ) $ (2,025 ) $ (5,707 ) $ (5,347 )

~~Third Quarter of 2017 Compared with Third Quarter of 2016 and First Nine Months of 2017 Compared with First Nine Months of 2016~~

The ~~increase in~~results of operations for the ~~operating loss~~Coal Mining segment were as follows for the three months ended ~~September 30, 2017~~March 31:


	THREE MONTHS
	2024		2023
Revenues	$	15,545	$	20,653
Cost of sales	20,943		25,878
Gross loss	(5,398)		(5,225)
Earnings of unconsolidated operations(a)	12,007		12,466

Selling, general and administrative expenses	6,910		6,437
Amortization of intangible assets	126		727
Gain on sale of assets	(10)		(236)
Operating (loss) profit	$	(417)	$	313

(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of the Company's unconsolidated subsidiaries, including summarized financial information.

Revenues decreased 24.7% in the first quarter of 2024 compared with ~~2016 was~~the first quarter of 2023 primarily due to ~~higher professional~~a reduction in customer requirements at MLMC as a result of an ongoing issue that impacts one of two boilers at the Red Hills Power Plant. Repairs to the boiler are expected to be completed during the second half of 2024.

The following table identifies the components of change in Operating (loss) profit for the first quarter of 2024 compared with the first quarter of 2023:


	Operating (Loss) Profit
2023	$	313
Increase (decrease) from:
Selling, general and administrative expenses	(473)
Earnings of unconsolidated operations	(459)
Gain on sale of assets	(226)
Gross loss	(173)
Amortization of intangibles	601
2024	$	(417)

Operating (loss) profit decreased $0.7 million in the first quarter of 2024 compared with the first quarter of 2023 primarily due to an increase in selling, general and ~~outside service fees.~~administrative expenses and a decrease in the earnings of unconsolidated operations.

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The increase in ~~the operating loss for the nine months ended September 30, 2017 compared with 2016~~selling, general and administrative expenses was primarily due to higher employee-related ~~costs and higher professional and outside service fees, partially~~costs.

The decrease in the earnings of unconsolidated operations was primarily due to a reduction in customer requirements at Coteau.

The reduction in revenues at MLMC was offset by ~~an increase~~a reduction in cost of goods sold, resulting in a comparable gross loss in both the first quarter of 2024 and 2023. Gross loss in the ~~management fees charged to NACoal.~~

~~Other expense increased during both~~first quarter of 2024 and the ~~three and nine months~~first quarter of ~~2017 compared with 2016, primarily as~~2023 included a ~~result of an increase in the Closed mine obligations due to revisions of estimated cash flows for the Bellaire asset retirement obligation.~~

~~Management Fees~~

The management fee charged to NACoal represents the allocation of corporate overhead of the parent company. Following are the parent company management fees included in NACoal's selling, general and administrative expenses for the three and nine months ended ~~September 30~~:

THREE MONTHS NINE MONTHS
2017 2016 2017 2016
NACoal $ 1,686
$ 1,786
$ 4,830
$ 4,419

~~In addition, the parent company received management fees from Hamilton Beach Holding of $1.1~~$2.5 million and ~~$1.0~~$2.4 million inventory impairment charge, respectively, to write down MLMC's coal inventory to its net realizable value.

NORTH AMERICAN MINING ("NAMining") SEGMENT

FINANCIAL REVIEW

Tons delivered by the NAMining segment were as follows for the three months ended ~~September 30, 2017 and 2016, respectively, and $3.1 million~~March 31:


	THREE MONTHS
	2024	2023


Total tons delivered	15,173	14,829

The results of operations for ~~both~~ the ~~nine~~NAMining segment were as follows for the three months ended ~~September 30, 2017~~March 31:


	THREE MONTHS
	2024		2023
Total revenues	$	24,483	$	20,633
Reimbursable costs	12,855		12,092
Revenues excluding reimbursable costs	$	11,628	$	8,541

Total revenues	$	24,483	$	20,633
Cost of sales	21,671		19,241
Gross profit	2,812		1,392
Earnings of unconsolidated operations(a)	1,365		1,358
Selling, general and administrative expenses	1,823		1,920
Gain on sale of assets	(1)		—
Operating profit	$	2,355	$	830

(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of the Company's unconsolidated subsidiaries, including summarized financial information.

Total revenues increased 18.7% in the first quarter of 2024 compared with the first quarter of 2023 primarily due to an improvement at the consolidated quarries. An increase in reimbursable costs at Sawtooth, which have an offsetting amount in cost of sales and ~~2016.~~have no impact on operating profit, also contributed to the improvement in total revenues.

The following table identifies the components of change in Operating profit for the first quarter of 2024 compared with the first quarter of 2023:


	Operating Profit
2023	$	830
Increase (decrease) from:
Gross profit	1,420
Selling, general and administrative expenses	97
Earnings of unconsolidated operations	7
Gain on sale of assets	1
2024	$	2,355

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Operating profit increased $1.5 million in the first quarter of 2024 compared with the first quarter of 2023 primarily due to an increase in gross profit. This improvement was mainly the result of favorable pricing and delivery mix and improved margins at the limestone quarries resulting from mutually beneficial contract amendments.

MINERALS MANAGEMENT SEGMENT

FINANCIAL REVIEW

As an owner of royalty and mineral interests, the Company’s access to information concerning activity and operations of its royalty and mineral interests is limited. The Company does not have information that would be available to a company with oil and natural gas operations because detailed information is not generally available to owners of royalty and mineral interests. Consequently, the exact number of wells producing from or drilling on the Company’s mineral interests at a given point in time is not determinable. The following table sets forth the Company’s estimate of the number of gross and net productive wells:


	March 31, 2024		March 31, 2023
	Gross	Net	Gross	Net
Oil	1,740	8.8	1,048	3.3
Natural Gas	261	12.9	251	10.1
Total	2,001	21.7	1,299	13.4

Gross wells are the total wells in which an interest is owned. Net wells are calculated based on the Company's net royalty interest, factoring in both ownership percentage of gross wells and royalty rate.

Oil and natural gas prices have been historically volatile and may continue to be volatile in the future. The table below demonstrates such volatility with the average price as reported by the United States Energy Information Administration for the three months ended March 31:



	2024		2023
West Texas Intermediate Average Crude Oil Price	$	77.56	$	76.08
Henry Hub Average Natural Gas Price	$	2.13	$	2.65

The following table sets forth the estimated oil and natural gas production data related to the Company’s mineral and royalty interests as well as certain price and cost information for the three months ended March 31:


	2024 (4)		2023 (4)
Production data:
Oil (bbl) (1)	38,194		24,024
NGL (bbl) (1)	12,542		14,375
Residue gas (Mcf) (2)	2,143,948		1,874,900
Total BOE (3)	408,060		350,882
Average realized prices:
Oil (bbl) (1)	$	69.07	$	69.82
NGL (bbl) (1)	$	23.83	$	23.81
Residue gas (Mcf) (2)	$	2.84	$	3.12
Average unit cost
BOE (3)	$	2.31	$	3.80

(1) Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume.

(2) Mcf. One thousand cubic feet of natural gas at the contractual pressure and temperature bases.

(3) BOE. Barrel of Oil Equivalent, a conversion factor of 6 MCF of gas was used for 1 equivalent bbl of oil.

(4) As an owner of mineral and royalty interests, the Company’s access to information concerning activity and operations of its royalty and mineral interests is limited. As a result, the Company estimated February and March 2024 data with volumes projected from prior well production and pricing based on public pricing data adjusted for expense information.

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



	2024		2023
Revenues	$	10,401	$	8,285
Cost of sales	1,364		1,052
Gross profit	9,037		7,233
Loss from unconsolidated operations	(65)		—
Selling, general and administrative expenses	1,042		1,189


Operating profit	$	7,930	$	6,044

Revenues and operating profit increased in the first quarter of 2024 compared with the respective 2023 period, primarily due to an increase in production volumes.

UNALLOCATED ITEMS AND ELIMINATIONS

FINANCIAL REVIEW

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


	THREE MONTHS
	2024		2023
Operating loss	$	(5,111)	$	(5,373)

The operating loss in the first quarter of 2024 decreased compared with the respective 2023 period due to higher earnings at Mitigation Resources.

NACCO Industries, Inc. Outlook

Coal Mining Outlook

In ~~connection with the spin-off of HBBHC,~~2024, the Company expects overall coal deliveries to increase modestly from 2023 levels primarily due to anticipated higher deliveries at Coteau and HBBHC entered into a Transition Services Agreement ("TSA"). Under the terms of the TSA, the Company will provide various services to HBBHC on a transitional basis, as needed, for varying periods after the spin-off date. None of the transition servicesFalkirk. These improvements are expected to ~~exceed one year. NACCO~~be partly offset by reduced deliveries at MLMC, due to an ongoing boiler issue, and the cessation of coal deliveries at the Company's Sabine Mine in April 2023.

Strong operating profit compared with a significant 2023 operating loss, which included a $60.8 million impairment charge, and substantially higher Segment Adjusted EBITDA are expected in 2024. These anticipated increases are primarily due to an expected improvement in results at MLMC and higher earnings at Falkirk and Coteau in the second half of 2024.

MLMC expects to ~~receive net aggregate fees~~incur a loss in 2024, albeit significantly less than in 2023, mainly as a result of fewer tons delivered. While total production costs at MLMC are anticipated to decrease substantially from 2023 levels, they are expected to remain above historical levels throughout 2024 until deliveries return to normal and a pit extension is completed later this year. In addition, the effect of the impairment charge taken in 2023 will result in lower depreciation and amortization expense and contribute to the lower production costs.

An anticipated increase in 2024 earnings at the unconsolidated coal mining operations is driven primarily by an expectation for increased deliveries at Coteau and Falkirk, as well as a higher per ton management fee at Falkirk beginning in June 2024 when temporary price concessions end.

2024 capital expenditures are expected to total approximately ~~$1.0~~$13 million.

NAMining Outlook

In 2023, NAMining executed a 15-year contract to mine phosphate at a quarry in central Florida. Production is expected to commence in the second quarter of 2024 once commissioning of a dragline is complete. The business also amended and extended existing limestone contracts in late 2023 that contain mutually advantageous contract terms and expanded the scope of work with another customer. As a result of these new and modified contracts, as well as improvements at existing operations, NAMining expects substantial quarterly growth in operating profit and Segment Adjusted EBITDA in each remaining 2024 quarter, leading to significantly improved full-year results over 2023.

Sawtooth has exclusive responsibility for mining and mine closure services at Thacker Pass, including mine design,

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construction, operation and maintenance. Thacker Pass is owned by Lithium Americas Corp. (TSX: LAC) (NYSE: LAC). Thacker Pass will supply all of Lithium Americas' lithium-bearing ore requirements. In March 2023, Lithium Americas commenced construction at Thacker Pass. With construction underway, Sawtooth acquired mining equipment totaling $23.3 million in 2023. These capital expenditures will be reimbursed by Lithium Americas over a five-year period, and Sawtooth will recognize the associated revenue over the ~~term~~estimated useful life of the ~~TSA~~asset. Sawtooth will be reimbursed for all costs of mining and mine closure and will recognize a contractually agreed upon production fee. The Company expects to continue to recognize moderate income prior to the commencement of Phase 1 lithium production, estimated to begin in 2027/2028.

In 2024, capital expenditures are expected to be approximately $33 million. These expenditures are primarily for the acquisition of draglines and dragline parts, as well as other equipment to support existing contracts and the new and modified contracts previously discussed.

Minerals Management Outlook

The Minerals Management segment derives income primarily from ~~HBBHC. Upon expiration~~royalty-based leases under which lessees make payments to the Company based on their sale of natural gas, oil, natural gas liquids and coal, extracted primarily by third parties. As an owner of royalty and mineral interests, the Company’s access to information concerning activity and operations with respect to its interests is limited. The Company's expectations are based on the best information currently available. Changing prices of natural gas and oil could have a significant impact on Minerals Management’s operating profit.

In December 2023, Minerals Management completed a significant acquisition of mineral interests within the Midland Basin, the eastern sub-basin of the ~~TSA,~~oil-rich Permian Basin, which included 43.4 thousand gross acres and 2.5 thousand net royalty acres. This acquisition is expected to continue to be accretive to 2024 earnings and provide opportunities for longer-term growth.

In 2024, operating profit and Segment Adjusted EBITDA are expected to decrease moderately compared with the ~~parent company will no longer receive fees~~prior year, excluding the 2023 impairment charge of $5.1 million. Lower operating expenses are expected to partially offset the anticipated profit decline. The forecasted reduction in profitability is primarily driven by current market expectations for natural gas and oil market prices, as well as development and production assumptions on currently owned reserves. .

Development of additional wells on existing interests in excess of current expectations, or ~~incur expenses related~~acquisitions of additional interests, could be accretive to future results.

In 2024, Minerals Management is targeting additional investments of up to $20 million. Future investments are expected to be accretive, but each investment's contribution to near-term earnings is dependent on the details of that investment, including the size and type of interests acquired and the stage and timing of mineral development.

Mitigation Resources Outlook

Mitigation Resources continues to build on the substantial foundation it has established over the past several years. Mitigation Resources currently has ten mitigation banks and four permittee-responsible mitigation projects located in Tennessee, Mississippi, Alabama, Texas, Florida and Pennsylvania. In addition, Mitigation Resources is providing ~~centralized~~ecological restoration services for abandoned surface mines, as well as pursuing additional environmental restoration projects. It was named a designated provider of abandoned mine land restoration by the State of Texas. Mitigation Resources anticipates expanding its business in 2024, with a focus on generating a modest operating profit by 2025 and ~~stewardship activities~~achieving sustainable profitability in future years.

Consolidated Outlook

Overall, the Company expects to ~~HBBHC~~generate net income in 2024 compared with the substantial 2023 consolidated net loss, which included a $65.9 million impairment charge. Adjusted EBITDA is also expected to increase significantly over 2023. These improvements are primarily due to anticipated increased profitability at the ~~spin-off.~~Coal Mining segment from improved results at MLMC, Falkirk and Coteau. The effect of NAMining's growth and profit improvement initiatives are also expected to contribute to improved 2024 results. Additional contracts for NAMining or Mitigation Resources, or the acquisition of additional mineral interests at Minerals Management could be accretive to the current forecast.

The Company is ~~currently evaluating the manner~~taking steps to terminate its defined benefit pension plan in ~~which future management fees will be allocated to NACoal.~~

~~Contractual Obligations, Contingent Liabilities and Commitments~~

~~Since December 31, 2016, there have been no significant changes~~2024. In connection with this action, NACCO is anticipating a non-cash settlement charge in the second half of the year, which is expected to partly offset the improved 2024 operating results.

Consolidated capital expenditures are expected to total approximately $76 million in 2024. In 2024, cash flow before financing activities is expected to be a moderate use of cash.

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Long-term Growth and Diversification

Management is focused on transforming NACCO into a broad-based natural resources company and is optimistic about the Company's long-term business outlook. NACCO's businesses provide critical inputs for electricity generation, construction and development, and the production of industrial minerals and chemicals. Increasing demand for electricity, on-shoring and current federal policies are creating favorable macroeconomic trends within these industries. The Company believes its businesses have competitive advantages that provide value to customers and create long-term value for stockholders. The Company is pursuing growth and diversification by strategically leveraging its core mining and natural resources management skills to build a strong portfolio of affiliated businesses. Opportunities for growth remain strong. Acquisitions of additional mineral interests and improvements in the outlook for Coal Mining segment customers, as well as new contracts at Mitigation Resources and NAMining should be accretive to the Company's outlook.

The Minerals Management segment continues to pursue acquisitions of mineral and royalty interests in the United States. Catapult, the Company’s business unit focused on managing and expanding the Company’s portfolio of oil and gas mineral and royalty interests, has developed a strong network to source and secure new acquisitions. The goal is to construct a high-quality diversified portfolio of oil and gas mineral and royalty interests in the United States that delivers near-term cash flow yields and long-term projected growth. The Company believes this business will provide unlevered after-tax returns on invested capital in the mid-teens as it matures. This business model has the potential to deliver higher average operating margins over the life of a reserve than traditional oil and gas companies that bear the cost of exploration, production and/or development as these costs are borne entirely by third-party exploration and development companies that lease the minerals.

NAMining is focused on continuing to evaluate new business opportunities and drive profitable growth in line with refined strategic objectives. After pausing on business development in early 2023, NAMining has better identified how to enhance operational excellence, where to focus and scale, and how to drive profitable growth. New contracts and contract extensions are central to the business' organic growth strategy, and the Company expects NAMining to be a substantial contributor to operating profit over time.

Mitigation Resources continues to expand its business, which creates and sells stream and wetland mitigation credits, provides services to those engaged in permittee-responsible mitigation and provides other environmental restoration services. This business offers an opportunity for growth and diversification in an industry where the Company has substantial knowledge and expertise and a strong reputation. The Company believes that Mitigation Resources can provide solid rates of return on capital employed as this business matures.

NACCO also continues to pursue activities which can strengthen the resiliency of its existing coal mining operations. The Company remains focused on managing coal production costs and maximizing efficiencies and operating capacity at mine locations to help customers with management fee contracts be more competitive. These activities benefit both customers and the Company's Coal Mining segment, as fuel cost is a significant driver for power plant dispatch. Increased power plant dispatch results in increased demand for coal by the Coal Mining segment's customers. Fluctuating natural gas prices, weather and availability of renewable energy sources, such as wind and solar, could affect the amount of ~~NACCO~~electricity dispatched from coal-fired power plants. While the Company realizes the coal mining industry faces political and ~~Other contractual obligations, contingent liabilities or commercial commitments, or~~regulatory challenges and demand for coal is projected to decline over the ~~timing~~longer-term, the Company believes coal should be an essential part of ~~cash flows in accordance with those obligations as reported on page 65~~the energy mix in the ~~Company's Annual Report on Form 10-K~~United States for the ~~year ended December 31, 2016.~~foreseeable future.

The Company continues to look for ways to create additional value by utilizing its core mining competencies which include reclamation and permitting. The Company is working to utilize these skills through development of utility-scale solar projects on reclaimed mining properties. Reclaimed mining properties offer large tracts of land that could be well-suited for solar and other energy-related projects. These projects could be developed by the Company itself or through joint ventures that include partners with expertise in energy development projects. In 2023, NACCO formed ReGen Resources to pursue such projects, including the development of a solar farm on reclaimed land at MLMC.

NACCO is committed to maintaining a conservative capital structure as it continues to grow and diversify, while avoiding unnecessary risk. The Company believes strategic diversification will generate cash that can be re-invested to strengthen and expand the businesses. The Company also continues to maintain the highest levels of customer service and operational excellence with an unwavering focus on safety and environmental stewardship.

FORWARD-LOOKING STATEMENTS

The statements contained in this Form 10-Q that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those

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presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) ~~the potential closure~~changes to or termination of the Liberty Mine in Mississippi, (2) changes in tax laws or regulatory requirements, including changes in mining or power plant emission regulations and health, safety or environmental legislation, (3) changes in costs related to geological conditions, repairs and maintenance, new equipment and replacement parts, fuelcustomer or other ~~similar items, (4)~~third-party contracts, or a customer or other third party default under a contract, (2) any customer's premature facility closure or extended project development delay, (3) regulatory actions, including the United States Environmental Protection Agency's 2023 proposed rules relating to mercury and greenhouse gas emissions for coal-fired power plants, changes in mining permit requirements or delays in obtaining mining permits that could affect deliveries to customers, (4) a significant reduction in purchases by the Company's customers, including as a result of changes in coal consumption patterns of U.S. electric power generators, or changes in the power industry that would affect demand for the Company's coal and other mineral reserves, (5) changes in the prices of hydrocarbons, particularly diesel fuel, natural gas, natural gas liquids and oil as result of factors such as OPEC and/or government actions, geopolitical developments, economic conditions and regulatory changes, as well as supply and demand dynamics, (6) changes in development plans by third-party lessees of the Company's mineral interests, (7) 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; federal and state legislative and regulatory initiatives relating to hydraulic fracturing and U.S. export of natural gas; 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, (8) failure to obtain adequate insurance coverages at reasonable rates, (9) supply chain disruptions, including price increases and shortages of parts and materials, (10) 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, (11) the ability of the Company to access credit in the current economic environment, or obtain financing at reasonable rates, or at all, and to maintain surety bonds for mine reclamation as a result of current market sentiment for fossil fuels, (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) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or ~~limerock~~aggregates requirements, ~~(6)~~(15) weather or equipment problems that could affect deliveries to customers, ~~(7) changes in the power industry that would affect demand for NACoal's reserves, (8)~~(16) changes in the costs to reclaim ~~NACoal~~ mining areas, ~~(9)~~(17) costs to pursue and develop new mining, mitigation, oil and gas and solar development opportunities and other value-added service opportunities, (10) changes to or termination of a long-term mining contract, or a customer default under a contract, (11) the timing and pricing of transactions to dispose of assets at the Centennial operations, (12)(18) delays or reductions in coal or aggregates deliveries, ~~at NACoal's newer mines,~~(19) the ability to successfully evaluate investments and ~~(13) increased competition,~~achieve intended financial results in new business and growth initiatives, (20) disruptions from natural or human causes, including ~~consolidation within~~severe weather, accidents, fires, earthquakes and terrorist acts, any of which could result in suspension of operations or harm to people or the ~~industry.~~environment, and (21) the ability to attract, retain, and replace workforce and administrative employees.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~INTEREST RATE RISK~~

~~The~~As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company entered into certain financing arrangements that require interest payments based on floating interest rates. As such, the Company's financial results are subject to changes in the market rate of interest. There is an inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not ~~quantifiable or predictable because of the variability of future interest rates and business financing requirements. To reduce the exposure~~required to changes in the market rate of interest, NACoal has entered into interest rate swap agreements for a portion of their floating rate financing arrangements. The Company does not enter into interest rate swap agreements for trading purposes. Terms of the interest rate swap agreements provide ~~for the subsidiaries to receive a variable interest rate and pay a fixed interest rate.~~this information.

The fair value of the Company's interest rate swap agreements was a net payable of less than $0.1 million at September 30, 2017. A hypothetical 10% change in interest rates would not cause a material change in the fair value of the interest rate swap agreements at September 30, 2017 and, assuming no changes in the Company's financial structure as it stands, would not have a material effect on annual interest expense.

~~COMMODITY PRICE RISK~~

The Company uses certain commodities, including steel and diesel fuel, in the normal course of its operations. As such, the cost of operations is subject to variability as the market for these commodities changes. The Company monitors this risk and utilizes forward purchase contracts to manage a portion of NACoal's exposure related to diesel fuel volatility. There have been no material changes in the Company's commodity price risk during the third quarter of 2017.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures: An evaluation was carried out under the supervision and with the participation of the Company's management, including the principal executive officer and the principal financial officer, of the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, these officers have concluded that the Company's disclosure controls and procedures are effective.

Changes in internal control over financial reporting: During the ~~third~~first quarter of ~~2017,~~2024, there have been no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1Legal Proceedings

None.

Item 1ARisk Factors

NoDuring the quarter ended March 31, 2024, there have been no material changes to the risk factors ~~for NACoal or General from~~previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~ 2023.

Item 2Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds and Issuer Purchases of Equity Securities

~~None.~~


Issuer Purchases of Equity Securities (1)
Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of the Publicly Announced Program	(d) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
Month #1 (January 1 to 31, 2024)	34,616	$	36.49	34,616	$	17,222,979
Month #2 (February 1 to 29, 2024)	37,803	$	35.38	37,803	$	15,885,509
Month #3 (March 1 to 31, 2024)	55,268	$	30.28	55,268	$	14,211,994
Total	127,687	$	33.47	127,687	$	14,211,994

(1) During 2023, the Company established a stock repurchase program allowing for the purchase of up to $20.0 million of the Company's Class A Common Stock outstanding through December 31, 2025. See Note 4 to the Unaudited Condensed Consolidated Financial Statements for further discussion of the Company's stock repurchase program.

Item 3Defaults Upon Senior Securities

None.

Item 4Mine Safety Disclosures

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 filed with this Quarterly Report on Form 10-Q for the period ended ~~September 30, 2017.~~March 31, 2024.

Item 5Other Information

None.

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Item 6Exhibits


Exhibit
Number*
~~Exhibit~~
Number*	Description of Exhibits

10.1		~~Separation~~Form of Cashless Exercise Award Agreement ~~dated as of September 29, 2017, between~~for the NACCO Industries, Inc. ~~and Hamilton Beach Brands Holding Company, is incorporated by reference to Exhibit 10.1 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017.~~Executive Long-Term Incentive Compensation Plan.**
~~10.2~~31(i)(1)		Transition Services Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, is incorporated by reference to Exhibit 10.2 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017.
~~10.3~~	Tax Allocation Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, is incorporated by reference to Exhibit 10.3 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017.
~~10.4~~	Amended and Restated Stockholders' Agreement, dated as of September 29, 2017, among NACCO Industries, Inc., the other signatories thereto and NACCO Industries, Inc., as depository, is incorporated by reference to Exhibit 10.4 of NACCO Industries, Inc.'s Current Report on Form 8-K, filed on October 5, 2017.
~~10.5~~	Transfer Restriction Agreement, dated as of September 29, 2017, by and among the Issuer, NACCO and the signatories thereto, is incorporated by reference to Exhibit 2 of Schedule 13D, filed on October 6, 2017.
~~10.6~~	Consulting Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Alfred M. Rankin, Jr., is incorporated by reference to Exhibit 10.5 of NACCO Industries, Inc.'s Current Report on Form 8-K, filed on October 5, 2017.
~~31(i)(1)~~	Certification of J.C. Butler, Jr. pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act
31(i)(2)		Certification of Elizabeth I. Loveman pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act
32		Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by J.C. Butler, Jr. and Elizabeth I. Loveman
95		Mine Safety Disclosure Exhibit
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Numbered in accordance with Item 601 of Regulation S-K.

** Filed herewith.

~~Signatures~~

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NACCO Industries, Inc.

(Registrant)

Date:

~~November~~May 1, ~~2017~~2024

/s/ Elizabeth I. Loveman

Elizabeth I. Loveman

Senior Vice President and Controller

(principal financial and accounting officer)

3133



(Mark One)
þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~September 30, 2017~~	March 31, 2024


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	Date		(Level 1)		(Level 2)		(Level 3)
	March 31, 2024
Assets:
Equity securities	$	18,284	$	18,284	$	—	$	—

	$	18,284	$	18,284	$	—	$	—




	December 31, 2023
Assets:
Equity securities	$	17,208	$	17,208	$	—	$	—
	$	17,208	$	17,208	$	—	$	—



			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
Description	Date		(Level 1)		(Level 2)		(Level 3)
	September 30, 2017
Assets:
Available for sale securities	$	8,715	$	8,715	$	—	$	—
	$	8,715	$	8,715	$	—	$	—
Liabilities:
Interest rate swap agreements	$	3	$	—	$	3	$	—
	$	3	$	—	$	3	$	—

	December 31, 2016
Assets:
Available for sale securities	$	7,882	$	7,882	$	—	$	—
	$	7,882	$	7,882	$	—	$	—
Liabilities:
Interest rate swap agreements	$	339	$	—	$	339	$	—
	$	339	$	—	$	339	$	—



	THREE MONTHS ENDED				NINE MONTHS ENDED
	SEPTEMBER 30				SEPTEMBER 30
	2017		2016		2017		2016
Revenues	$	203,134	$	178,009	$	571,862	$	483,360
Gross profit	$	23,126	$	21,367	$	64,981	$	59,788
Income before income taxes	$	16,602	$	14,755	$	45,928	$	41,122



	THREE MONTHS ENDED					NINE MONTHS ENDED
	SEPTEMBER 30					SEPTEMBER 30
	2017			2016		2017			2016
HBBHC Operating Statement Data:
Revenues	$	181,713		$	188,390	$	474,971		$	486,442
Cost of goods sold	133,586			138,329		353,436			364,052
Gross profit	48,127			50,061		121,535			122,390
Operating expenses ^(a)	40,697			36,583		114,379			110,117
Operating profit	7,430			13,478		7,156			12,273
Interest expense	423			286		1,300			1,115
Other expense, net	40			457		(939		)	288
Income before income taxes	6,967			12,735		6,795			10,870
Income tax expense	2,708			4,003		2,655			3,323
HBBHC net income	$	4,259		$	8,732	$	4,140		$	7,547
NACCO expenses related to the spin-off	1,664			—		2,759			—
NACCO discontinued operations income tax expense (benefit) adjustments	(2,472		)	7,041		—			9,643
NACCO discontinued operations	$	5,067		$	1,691	$	1,381		$	(2,096	)


☐
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to



	SEPTEMBER 30 2017			DECEMBER 31 2016
	(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	93,938		$	69,308
Accounts receivable, net	9,070			13,389
Accounts receivable from affiliates	22,964			7,404
Inventories, net	30,580			28,927
Assets held for sale	1,373			2,016
Prepaid expenses and other	6,323			8,273
Current assets of discontinued operations	—			252,415
Total current assets	164,248			381,732
Property, plant and equipment, net	116,336			115,106
Intangibles, net	44,036			45,678
Deferred income taxes	7,145			10,876
Investments in unconsolidated subsidiaries	27,281			31,054
Deferred costs	3,163			2,069
Other non-current assets	22,740			23,089
Long-term assets of discontinued operations	—			58,417
Total assets	$	384,949		$	668,021
LIABILITIES AND EQUITY
Accounts payable	$	8,466		$	6,995
Accounts payable to affiliates	3,228			3,565
Current maturities of long-term debt	1,168			1,744
Accrued payroll	12,400			15,482
Asset retirement obligations	3,555			3,843
Accrued income taxes	3,442			—
Other current liabilities	10,964			9,954
Current liabilities of discontinued operations	—			180,245
Total current liabilities	43,223			221,828
Long-term debt	57,573			94,295
Asset retirement obligations	39,482			38,262
Pension and other postretirement obligations	12,924			14,271
Deferred compensation	13,571			13,578
Other long-term liabilities	11,113			9,737
Long-term liabilities of discontinued operations	—			55,757
Total liabilities	177,886			447,728
Stockholders' equity
Common stock:
Class A, par value $1 per share, 5,276,050 shares outstanding (December 31, 2016 - 5,207,955 shares outstanding)	5,276			5,208
Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,570,148 shares outstanding (December 31, 2016 - 1,570,915 shares outstanding)	1,570			1,571
Capital in excess of par value	2,219			—
Retained earnings	207,447			239,441
Accumulated other comprehensive loss	(9,449		)	(25,927		)
Total stockholders' equity	207,063			220,293
Total liabilities and equity	$	384,949		$	668,021



	THREE MONTHS						NINE MONTHS
	2017			2016			2017			2016
NACoal operating profit (loss) ^(a)	$	8,925		$	(10,912	)	$	31,127		$	3,653
NACCO and Other operating loss ^(a)	(1,936		)	(1,867		)	(4,820		)	(4,605		)
Operating profit (loss) ^(a)	6,989			(12,779		)	26,307			(952		)
Interest expense	946			1,036			2,806			3,182
Income from other unconsolidated affiliates	(313		)	(307		)	(932		)	(913		)
Closed mine obligations	336			223			1,071			948
Other, net, including interest income	64			(10		)	15			2,229
Other expense, net	1,033			942			2,960			5,446
Income (loss) before income tax provision (benefit)	5,956			(13,721		)	23,347			(6,398		)
Income tax provision (benefit)	2,625			(11,589		)	4,564			(13,970		)
Income (loss) from continuing operations	$	3,331		$	(2,132	)	$	18,783		$	7,572
Discontinued operations	5,067			1,691			1,381			(2,096		)
Net income (loss)	$	8,398		$	(441	)	$	20,164		$	5,476

Effective income tax rate from continuing operations	44.1		%	84.5		%	19.5		%	218.3		%



	Revenues
2016	$	32,402
Increase (decrease) from:
Consolidated mines, excluding Centennial	(11,931		)
Royalty and other	1,466
Centennial	4
2017	$	21,941



	Operating Profit (Loss)
2016	$	(10,912	)
Increase (decrease) from:
Centennial asset impairment charge in 2016	17,443
Royalty and other	1,707
Centennial, excluding the net gain on sales of assets	1,159
Earnings of unconsolidated mines	1,095
Net gain on sale of assets, primarily Centennial	977
Consolidated mines, excluding Centennial	(1,661		)
Selling, general and administrative expenses	(883		)
2017	$	8,925



	Revenues
2016	$	85,778
Increase (decrease) from:
Consolidated mines, excluding Centennial	(10,603		)
Centennial	(650		)
Royalty and other	3,816
2017	$	78,341