Company: NC
Filing Date: 2025-04-07
Form Type: ARS
Source: 0000789933-25-000013
Chunk: 19

Company: NACCO INDUSTRIES INC
Filing Date: 2025-04-07
Form: ARS
Chunk 19
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 maximizing efficiencies and operating capacity at mine locations to help customers with management fee contracts be more competitive. These activities benefit both customers and our 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 electricity dispatched from coal-fired power plants. We continue to look for ways to create additional value by utilizing our core mining competencies, which include reclamation and permitting. NACCO established ReGen Resources to utilize these skills to address the rapidly increasing demand for additional power generation sources in the United States through development of energy-related projects that utilize multiple generation technologies, such as solar combined with gas-fired generation, primarily on reclaimed mining properties. These projects could be developed by ReGen Resources directly or through joint ventures that include partners with expertise in energy development projects and their financing. Current opportunities in development include solar arrays, solar-gas hybrid projects and carbon capture on reclaimed mine land in Mississippi and Texas, as well as early-stage review of projects in other states. NACCO is committed to maintaining a conservative capital structure as it continues to grow and diversify, while avoiding unnecessary risk. We believe strategic diversification will generate cash that can be re-invested to strengthen and expand our businesses. We also continue to maintain the highest levels of customer service and operational excellence with an unwavering focus on safety and environmental stewardship. Business Developments Coal Mining Segment During 2023, Mississippi Lignite Mining Company (MLMC) received notice from its customer related to a boiler issue at the Red Hills Power Plant that began on December 15, 2023. We assessed MLMC's long-lived assets for impairment and recorded a $65.9 million impairment charge in 2023. See Note 9 to the Consolidated Financial Statements in this Form 10-K for further information on the long-lived asset impairment charge. While this issue has been resolved, it resulted in a reduction in customer demand which had a significant impact on our 2024 results of operations. We recognized income of $13.6 million in 2024 related to business interruption insurance recoveries that partially offset losses as a result of the boiler outage. 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