Company: NC
Filing Date: 2025-04-07
Form Type: DEF 14A
Source: 0000789933-25-000012
Chunk: 38

Company: NACCO INDUSTRIES INC
Filing Date: 2025-04-07
Form: DEF 14A
Chunk 38
---
ayout Percentage                             |     |           |     |                    |     |                                       |     |                    |     |                        |     | 158.3%                      |

(1) For the 2024 performance period, the Company's ROTCE is calculated as: (a) Earnings Before Interest After-Tax after adjustments divided by (b) Total Capital Employed after adjustments. Earnings Before Interest After-Tax is equal to the consolidated net income from continuing operations plus the sum of interest expense, net of interest income, less 23% for taxes. Total Capital Employed is equal to (c) the sum of the average debt and average stockholders' equity less (d) average consolidated cash. Average debt, stockholders' equity and consolidated cash are calculated by taking the sum of (1) the balance at the beginning of the year and (2) the balance at the end of each of the next twelve months and dividing the sum by thirteen. Adjustments to ROTCE included: (a) impacts from certain trusts established to manage legacy liabilities; (b) mark-to-market adjustments on stock holdings; (c) environmental expenses; (d) black lung liability; (e) deferred financing fees; and (f) costs relating to valuation allowances against deferred tax assets. Adjustments to operating profit discussed in Note (1) to the Short-Term Plan Performance Criteria and Achievement table above also impacted ROTCE.

(2) For the 2024 performance period, the Consolidated Operating Profit is calculated as: (a) operating profit under U.S. GAAP as applied on January 1, 2024, less the fully burdened expenses accrued for incentives under the 2024 Short-Term and Long-Term Equity Plans, net of savings, compared with the amounts included in the 2024 annual operating plan and (b) included the following adjustments (1) exclude Mississippi Lignite Mining Company (MLMC) operating profit variance to annual operating plan due to boiler issue (see Note (3) below for separate MLMC performance metric); (2) exclude variance to annual operating plan for growth projects; (3) elimination of any after-tax differences, net of savings in results for certain locations' post production period; and (4) results attributable to new projects entered into during 2024.

(3) We do not disclose the Project Focus List targets or results due to their competitively sensitive nature. They are highly specific, task-oriented goals which focus on the Company's efforts to protect its existing business and grow