Company: NC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000789933-25-000102
Chunk: 57

Company: NACCO INDUSTRIES INC
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 57
---
 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.We may own more than one type of mineral and royalty interest in the same tract of land. For example, where we own an ORRI in a lease on the same tract of land in which we own a mineral interest, the ORRI in that tract will relate to the same gross acres as the mineral interest in that tract. As of September 30, 2025 and December 31, 2024, Minerals and Royalties holds an equity investment of $19.1 million in Eiger Resources, which holds non-operated working interests in oil and natural gas assets in the Kansas and the Oklahoma portion of the Hugoton basin. This entity meets the definition of a VIE. NACCO is not the primary beneficiary of the VIE as it does not exercise financial control; therefore, we do not consolidate the results of these operations within our financial statements. Instead, this contract is accounted for as an equity method investment. During the three months ended September 30, 2025 and 2024, we recorded our share of earnings of $1.1 million and $0.2 million, respectively. During the nine months ended September 30, 2025 and 2024, we recorded our share of earnings of $1.9 million and $0.4 million, respectively. These earnings are presented in the line Earnings of unconsolidated operations on the Unaudited Condensed Consolidated Statements of Operations. Our investment is reported on the line Equity method investment in Eiger Resources in the Unaudited Condensed Consolidated Balance Sheets. Due to the timing and availability of financial information, earnings or losses from this investment are recorded on a one quarter lag. Other Items: During the first nine months of 2025, $14.5 million of excess funds from the terminated Falkirk pension plan were directly transferred to the NACCO 401(k) plan.