Company: NC
Filing Date: 2025-04-07
Form Type: ARS
Source: 0000789933-25-000013
Chunk: 174

Company: NACCO INDUSTRIES INC
Filing Date: 2025-04-07
Form: ARS
Chunk 174
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 taxes at 21.0% $ 7,066 $ (13,473) State and local income taxes 556 (4,392) Non-deductible expenses 927 1,071 Percentage depletion (4,683) (3,455) R&D and other federal credits (796) (109) Settlements and uncertain tax positions (2,273) (3,512) Other, net (892) (701) Income tax benefit $ (95) $ (24,571) Effective income tax rate (0.3) % 38.3 % We recorded an income tax benefit of $0.1 million for the year ended December 31, 2024 on income before income tax of $33.6 million, or 0.3%, compared to an income tax benefit of $24.6 million on loss before income tax of $64.2 million, or 38.3%, for the year ended December 31, 2023. The years ended December 31, 2024 and 2023 both included $4.0 million of discrete tax benefits, primarily from the reversal of uncertain tax provisions. Excluding the $4.0 million of discrete tax benefits in each year, the effective income tax rate in 2024 and 2023 was 11.5% and 32.0%, respectively. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NACCO INDUSTRIES, INC. AND SUBSIDIARIES (Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures) F-28

The change in the effective income tax rate for 2024 compared to 2023, excluding the impact of the long-lived asset impairment charge and discrete items, is primarily due to an increase in earnings at entities that do not qualify for percentage depletion. The benefit from percentage depletion is not directly related to the amount of pre-tax income recorded in a period. Accordingly, in periods where income or loss before income tax is relatively small, the proportional effect of the benefit from percentage depletion on the effective tax rate may be significant. When income tax expense is recorded, the benefit from percentage depletion decreases the effective income tax rate, while the effect is to increase the effective income tax rate when a benefit for income taxes is recorded. A detailed summary of the total deferred tax assets and liabilities in our Consolidated Balance Sheets resulting from differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes