Company: NC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000789933-25-000102
Chunk: 36

Company: NACCO INDUSTRIES INC
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 36
---
 evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Historically, our actual effective tax rates have differed from the statutory effective tax rate primarily due to the benefit received from percentage depletion. The effective rate benefit from percentage depletion varies 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, and as such the effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The benefit of percentage depletion is not directly related to the amount of consolidated pre-tax income recorded in a period. Accordingly, as a result of the reduction in 2025 income before income tax compared with 2024, the proportional effect of the benefit from percentage depletion on the effective income tax rate results in a negative forecasted effective tax rate for 2025. This contributed to the income tax benefit recorded for the three and nine months ended September 30, 2025. Each quarter, we update our estimate of the annual effective tax rate, and the cumulative impact of the change in the estimated annual tax rate is recorded, which can make quarterly comparisons not meaningful.

LIQUIDITY AND CAPITAL RESOURCES OF NACCO  

Cash Flows

The following tables detail the changes in cash flow for the nine months ended September 30:

 2025 2024 ChangeOperating activities:     Net cash provided by (used for) operating activities$39,502  $(2,879) $42,381 Investing activities:     Expenditures for property, plant and equipment and acquisition of mineral interests(34,342) (30,697) (3,645)Other1,532 (358)1,890 Net cash used for investing activities(32,810) (31,055) (1,755)Cash flow before financing activities$6,692  $(33,934) $40,626 

The $42.4 million change in net cash provided by (used for) operating activities was primarily due to a favorable change in the adjustments to reconcile net income to net cash provided by operating activities. The Company’s adjustments primarily include the business interruption insurance recoveries at MLMC in 2024, Gain on sale of assets, deferred income taxes, depreciation, depletion and amortization and stock-based compensation.

A change in operating assets and liabilities also contributed to the increase in net cash provided by (used for) operating