NACCO INDUSTRIES INCNC
NACCO INDUSTRIES INC Fair Value Disclosure
Fair Value Disclosure
Recurring Fair Value Measurements: The following table presents our assets accounted for at fair value on a recurring basis:
| Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||
| Quoted Prices in | Significant | |||||||||||||||||||||||||
| Active Markets for | Significant Other | Unobservable | ||||||||||||||||||||||||
| Identical Assets | Observable Inputs | Inputs | ||||||||||||||||||||||||
| Description | December 31, 2025 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Equity securities | $ | 17,696 | $ | 17,696 | $ | — | $ | — | ||||||||||||||||||
Prepaid profit sharing | 14,579 | 14,579 | — | — | ||||||||||||||||||||||
| $ | 32,275 | $ | 32,275 | $ | — | $ | — | |||||||||||||||||||
| Quoted Prices in | Significant | |||||||||||||||||||||||||
| Active Markets for | Significant Other | Unobservable | ||||||||||||||||||||||||
| Identical Assets | Observable Inputs | Inputs | ||||||||||||||||||||||||
| Description | December 31, 2024 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Equity securities | $ | 18,663 | $ | 18,663 | $ | — | $ | — | ||||||||||||||||||
| $ | 18,663 | $ | 18,663 | $ | — | $ | — | |||||||||||||||||||
Bellaire's Mine Water Treatment Trust invests in equity securities that are reported at fair value based upon quoted market prices in active markets for identical assets; therefore, they are classified as Level 1 within the fair value hierarchy. The fair value of the Mine Water Treatment Trust was $13.5 million and $12.3 million at December 31, 2025 and December 31, 2024, respectively, and is recognized as a component of Equity securities in the Consolidated Balance Sheets. We recognized gains of $1.4 million and $1.5 million in the years ended December 31, 2025 and 2024, respectively, related to the Mine Water Treatment Trust. See Note 7 for further discussion of Bellaire's Mine Water Treatment Trust.
In a previous period, we invested $2.0 million in equity securities of a public company with a diversified portfolio of royalty producing mineral interests. The investment is reported at fair value based upon quoted market prices in active markets for identical assets; therefore, it is classified as Level 1 within the fair value hierarchy. The fair value of this investment was $4.2 million and $6.3 million at December 31, 2025 and December 31, 2024, respectively, and is recognized as a component of Equity securities in the Consolidated Balance Sheets. We recognized a loss of $2.1 million and a gain of $0.3 million in the years ended December 31, 2025 and 2024, respectively, related to the investment in these equity securities.
The change in fair value of equity securities is reported on the line Loss (gain) on equity securities in the Other expense (income) section of the Consolidated Statements of Operations.
In 2025, excess funds from the terminated Combined Plan and the Falkirk Defined Benefit Plan were transferred to a separate investment account. These funds will be utilized for future profit sharing contributions to eligible 401(k) plan participants. The Prepaid profit sharing balance is reported at fair value based upon quoted market prices in active markets for identical assets; therefore, it is classified as Level 1 within the fair value hierarchy. See Note 1 for further discussion of the Prepaid profit sharing balance.
There were no transfers into or out of Levels 1, 2 or 3 during the years ended December 31, 2025 and 2024.
Other Fair Value Measurement Disclosures: The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments. The fair values of revolving credit agreements and long-term debt, excluding finance leases, were determined using current rates offered for similar obligations taking into account subsidiary credit risk, which is Level 2 as defined in the fair value hierarchy. The fair value and the book value of revolving credit agreements and long-term debt, excluding finance leases, was $100.1 million and $100.8 million, respectively, at December 31, 2025 and $97.9 million and $99.4 million, respectively, at December 31, 2024.
Financial instruments that potentially subject us to concentration of credit risk consist principally of accounts receivable. Under our mining contracts, we recognize revenue and a related receivable as coal or other aggregates are delivered or predevelopment services are provided. These mining contracts generally provide for settlements within 60 days. Our significant credit concentration is uncollateralized; however, historically minimal credit losses have been incurred. To further reduce credit risk associated with accounts receivable, we perform periodic credit evaluations of our customers, but do not generally require advance payments or collateral.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Mar 5, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 2, 2022 | |
| 2020 | Mar 3, 2021 | |
| 2019 | Mar 4, 2020 | |
| 2018 | Mar 6, 2019 | |
| 2017 | Mar 7, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Mar 2, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.