Alpha Metallurgical Coal (NYSE: AMR ) is the largest domestic producer of coking coal for steel production. I've covered the stock in the past with respect to my investments in peers like Warrior Met Coal ( HCC ) and Arch, which isAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation fo ...

Group 1 - A mine electrician at the Marfork Preparation Plant suffered a fatal accident, identified as Eric Bartram, who had nearly two decades of experience [1] - The CEO of Alpha Metallurgical Resources expressed deep sadness over the incident and extended condolences to the family of the deceased [1] - The Marfork Preparation Plant is operated by Marfork Coal Company, LLC, a subsidiary of Alpha Metallurgical Resources [1][3] Group 2 - The company is collaborating with federal and state agencies to investigate the circumstances surrounding the accident [2] - Alpha Metallurgical Resources is a Tennessee-based mining company with operations in Virginia and West Virginia, supplying metallurgical products to the global steel industry [3]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $46.1 million, significantly up from $5.7 million in Q1 2025 [10] - Total tons shipped in Q2 2025 were 3.9 million, an increase from 3.8 million tons in Q1 2025 [10] - Cost of coal sales decreased to $100.06 per ton in Q2 from $110.34 per ton in Q1, marking the best cost performance since 2021 [11][18] - Total liquidity at the end of Q2 2025 was $556.9 million, up from $485.8 million at the end of Q1 2025 [12][8] Business Line Data and Key Metrics Changes - Metallurgical segment realizations increased to an average of $119.43 per ton in Q2 from $118.61 in Q1 [10] - Realizations for metallurgical sales in Q2 were a total weighted average of $122.84 per ton, up from $122.08 per ton in Q1 [11] - SG&A expenses decreased to $11.9 million in Q2 from $12.6 million in Q1 [11] Market Data and Key Metrics Changes - U.S. East Coast High Vol A and High Vol B pricing mechanisms reached multi-year lows, with High Vol A falling from $168 per ton to $161 per ton [7][23] - The Australian premium low vol index increased from $169 per metric ton on April 1 to $173.5 per metric ton on June 30 [22] - The U.S. East Coast Low Vol Index rose from $174 per metric ton in April to $175 per metric ton in June [22] Company Strategy and Development Direction - The company is committed to fine-tuning guidance as it gains a better understanding of market conditions for the remainder of 2025 [6] - A buyback program has been restarted on an opportunistic basis, reflecting a commitment to shareholder returns [9] - The company is developing the Kingston Wildcat mine, with expectations of first coal production and shipping late this year [18] Management's Comments on Operating Environment and Future Outlook - Management noted challenges in metallurgical coal markets due to weak steel demand and global economic uncertainty [6][20] - The company is focused on strengthening its balance sheet and liquidity position to capitalize on future opportunities [8] - Management expressed cautious optimism about maintaining cost improvements and operational efficiencies [30] Other Important Information - The passage of the One Big Beautiful Bill Act allows metallurgical coal produced between 2026 and 2029 to be eligible for a refundable tax credit, potentially providing a cash benefit of $30 million to $50 million annually [14] - The company is closely monitoring federal legislation related to metallurgical coal's designation as a critical mineral [13] Q&A Session Summary Question: Can you walk us through where the savings came from? - Management indicated that savings were roughly 50% from productivity improvements and 50% from actual spending reductions, with a 10% increase in tons per man hour contributing significantly [30][31] Question: How much further improvement could we see in 2026? - Management was cautious about predicting costs for 2026 but acknowledged the possibility of costs dipping below $100 per ton [34] Question: How are you approaching domestic contracting? - The company emphasized the importance of sustaining business in 2026 with pricing that works over a twelve-month term, rather than focusing solely on spot prices [36] Question: What met price are you assuming in the back half of the year? - Management indicated they are holding flat with current prices, as there has not been much variation from January to now [43] Question: How do you think recent trade tensions could impact your business? - Management reported no negative feedback from customers in India and Brazil, indicating business as usual [45] Question: How many domestic tons do you have contracted for 2025? - The company expects to ship around 3.5 million tons domestically in 2025, with limited spot activity this year [46] Question: What are the expected expenditures on the DTA project? - Management confirmed that spending would remain around $25 million per year, with completion expected around 2028 [50] Question: How might the Union Pacific and Norfolk Southern merger impact your business? - Management expressed confidence in their strong relationship with Norfolk Southern and anticipated minimal impact from the merger [52][53]

Company Overview - Alpha sold 171 million tons of coal in 2024[11] - Alpha's adjusted EBITDA in 2024 was $408 million[11] - Export sales accounted for 76% of Alpha's sales mix, while domestic sales made up 24%[11] Production and Reserves - Total production in 2024 was 157 million tons[18] - Total reserves as of year-end 2024 were 299 million tons[18] - Marfork Mining Complex accounted for 29% of 2024 production and 31% of total reserves[18] Financial Performance - In 2024, the average realized price for domestic coal was $152 per ton, while the average realized price for export coal was $140 per ton[37] - Alpha plans to invest approximately $27 million per year in DTA for infrastructure and equipment upgrades over the next 5 years[53] - Free cash flow for 2024 was $349 million[43] Safety and Environment - Alpha's safety performance shows approximately 35% lower Total Reportable Incident Rate vs industry average[16] - Alpha's safety performance shows approximately 70% lower Non-Fatal Days Lost vs industry average[16] - Alpha has planted over 53 million trees since 2016[16]

Company Performance - Alpha Metallurgical reported a quarterly loss of $0.38 per share, significantly better than the Zacks Consensus Estimate of a loss of $2.38, representing an earnings surprise of +84.03% [1] - The company posted revenues of $550.27 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 3%, and down from $803.97 million year-over-year [2] - Over the last four quarters, Alpha Metallurgical has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [2] Stock Movement and Outlook - Alpha Metallurgical shares have declined approximately 35.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at -$1.97 for the coming quarter and -$6.70 for the current fiscal year [7] Industry Context - The Mining - Miscellaneous industry, to which Alpha Metallurgical belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Alpha Metallurgical's stock performance [5][6]

[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights that the report includes forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations - The report contains **forward-looking statements**, identified by terms like **'anticipate,' 'believe,' 'expect,' etc.**, which are based on current expectations and beliefs but are subject to **significant uncertainties and factors beyond the company's control**[9](index=9&type=chunk) - Key factors that may cause actual results to differ materially include **depressed coal prices**, the company's financial performance and liquidity, worldwide market demand for coal and steel, transportation availability and costs, regulatory compliance costs (e.g., MSHA's silica regulations, environmental laws), trade barriers (tariffs), and **increased volatility due to geopolitical events** (e.g., Ukraine and the Middle East)[10](index=10&type=chunk) [Glossary](index=6&type=section&id=Glossary) This section provides definitions for key terms used throughout the report, covering company-specific nomenclature, types of coal, mining and processing terminology, and industry-standard acronyms - Defines **'Alpha'** as **Alpha Metallurgical Resources, Inc.** and clarifies its previous name, **Contura Energy, Inc.**[14](index=14&type=chunk) - Distinguishes between **'Metallurgical coal' (met coal)**, suitable for coke production in steel manufacturing, characterized by high BTU and low ash/sulfur, and **'Thermal coal,'** used by power plants and industrial boilers, generally with lower BTU and higher volatile matter[21](index=21&type=chunk)[28](index=28&type=chunk) - Explains key mining and environmental terms such as **'Coal reserves'** (economically mineable part of a resource), **'Preparation plant'** (facility for crushing, sizing, and washing coal), and **'Reclamation'** (restoring land after mining activities)[16](index=16&type=chunk)[23](index=23&type=chunk)[26](index=26&type=chunk) [Part I - Financial Information](index=9&type=section&id=Part%20I%20-%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=9&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Alpha Metallurgical Resources, Inc. and its subsidiaries for the three and six months ended June 30, 2025 and 2024 [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This table presents the company's condensed consolidated statements of operations, detailing revenues, costs, and net income (loss) for the three and six months ended June 30, 2025 and 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $550,274 | $803,969 | $1,082,231 | $1,668,041 | | Total costs and expenses | $547,619 | $733,293 | $1,119,751 | $1,455,487 | | Income (loss) from operations | $2,655 | $70,676 | $(37,520) | $212,554 | | Net (loss) income | $(4,954) | $58,909 | $(38,901) | $185,904 | | Basic (loss) income per common share | $(0.38) | $4.53 | $(2.98) | $14.29 | | Diluted (loss) income per common share | $(0.38) | $4.49 | $(2.98) | $14.11 | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) This table presents the company's condensed consolidated statements of comprehensive (loss) income, detailing net (loss) income and other comprehensive items for the three and six months ended June 30, 2025 and 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net (loss) income | $(4,954) | $58,909 | $(38,901) | $185,904 | | Total other comprehensive (loss) income, net of tax | $(192) | $(8,483) | $895 | $(7,733) | | Total comprehensive (loss) income | $(5,146) | $50,426 | $(38,006) | $178,171 | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table presents the company's condensed consolidated balance sheets, detailing assets, liabilities, and stockholders' equity as of June 30, 2025 and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Total current assets | $988,225 | $1,036,669 | | Total assets | $2,373,114 | $2,438,708 | | Total current liabilities | $243,341 | $251,109 | | Total liabilities | $759,404 | $789,211 | | Total stockholders' equity | $1,613,710 | $1,649,497 | - **Cash and cash equivalents** decreased from **$481.578 million** at December 31, 2024, to **$449.027 million** at June 30, 2025[35](index=35&type=chunk) - **Inventories, net**, increased from **$169.269 million** at December 31, 2024, to **$207.251 million** at June 30, 2025[35](index=35&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table presents the company's condensed consolidated statements of cash flows, detailing cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $75,412 | $334,199 | | Net cash used in investing activities | $(95,167) | $(140,531) | | Net cash used in financing activities | $(9,273) | $(122,538) | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(29,028) | $71,130 | | Cash and cash equivalents and restricted cash at end of period | $575,133 | $455,255 | [Condensed Consolidated Statements of Stockholders' Equity](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This table presents the company's condensed consolidated statements of stockholders' equity, detailing changes in equity accounts from December 31, 2024, to June 30, 2025 | Metric | Balances, December 31, 2024 | Net loss (Q1 2025) | Other comprehensive income, net (Q1 2025) | Stock-based compensation, etc. (Q1 2025) | Common stock repurchases (Q1 2025) | Dividend equivalents (Q1 2025) | Balances, March 31, 2025 | Net loss (Q2 2025) | Other comprehensive loss, net (Q2 2025) | Stock-based compensation, etc. (Q2 2025) | Balances, June 30, 2025 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Common Stock | $224 | — | — | — | — | — | $224 | — | — | — | $224 | | Additional Paid-in Capital | $839,804 | — | — | $2,066 | — | — | $841,870 | — | — | $4,018 | $845,888 | | Accumulated Other Comprehensive (Loss) Income | $(50,082) | — | $1,087 | — | — | — | $(48,995) | — | $(192) | — | $(49,187) | | Treasury Stock at Cost | $(1,296,916) | — | — | $1,371 | $(5,155) | — | $(1,300,700) | — | — | — | $(1,300,700) | | Retained Earnings | $2,156,467 | $(33,947) | — | — | — | $(81) | $2,122,439 | $(4,954) | — | — | $2,117,485 | | Total Stockholders' Equity | $1,649,497 | $(33,947) | $1,087 | $3,437 | $(5,155) | $(81) | $1,614,838 | $(4,954) | $(192) | $4,018 | $1,613,710 | [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, offering further context and breakdowns of various financial accounts and accounting policies [(1) Business and Basis of Presentation](index=15&type=section&id=(1)%20Business%20and%20Basis%20of%20Presentation) Alpha Metallurgical Resources, Inc. is a Tennessee-based mining company specializing in high-quality metallurgical coal for the global steel industry - **Alpha** is a leading U.S. supplier of **metallurgical coal products** for the steel industry, with global customers and operations in Virginia and West Virginia[41](index=41&type=chunk) - The interim **Condensed Consolidated Financial Statements** are **unaudited** and prepared in accordance with **U.S. GAAP and SEC rules for Form 10-Q**[43](index=43&type=chunk) [(2) Revenue](index=15&type=section&id=(2)%20Revenue) The company primarily generates revenue from selling metallurgical and thermal coal, disaggregated by product category and market to reflect differing pricing and contract terms - Revenue is primarily from the **sale of met and thermal coal**, extracted, processed, and marketed to steel/coke producers, industrial customers, and electric utilities[45](index=45&type=chunk) - Export revenue is typically from **spot or short-term contracts with market-indexed pricing**, while domestic revenue is from **longer-term, fixed-price contracts**[46](index=46&type=chunk) | Revenue Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Export met coal revenues | $378,021 | $634,176 | $754,761 | $1,306,915 | | Export thermal coal revenues | $16,958 | $12,684 | $35,933 | $41,246 | | Total export coal revenues | $394,979 | $646,860 | $790,694 | $1,348,161 | | Domestic met coal revenues | $147,377 | $145,815 | $276,039 | $299,110 | | Domestic thermal coal revenues | $6,319 | $7,455 | $11,609 | $14,142 | | Total domestic coal revenues | $153,696 | $153,270 | $287,648 | $313,252 | | Total met coal revenues | $525,398 | $779,991 | $1,030,800 | $1,606,025 | | Total thermal coal revenues | $23,277 | $20,139 | $47,542 | $55,388 | | Total coal revenues | $548,675 | $800,130 | $1,078,342 | $1,661,413 | [(3) Accumulated Other Comprehensive Loss](index=16&type=section&id=(3)%20Accumulated%20Other%20Comprehensive%20Loss) The accumulated other comprehensive loss, primarily related to employee benefit costs, showed a slight decrease from $(50.082) million at the beginning of 2025 to $(49.187) million by June 30, 2025 | Metric | Balance January 1, 2025 | Other comprehensive loss before reclassifications | Amounts reclassified from accumulated other comprehensive loss | Balance June 30, 2025 | | :----------------------- | :---------------------- | :---------------------------------------------- | :---------------------------------------------------------- | :-------------------- | | Employee benefit costs | $(50,082) | $(1,312) | $2,207 | $(49,187) | - **Amortization of net actuarial loss** for **employee benefit costs** reclassified from accumulated other comprehensive loss to **miscellaneous expense, net**, was **$1.432 million** for the **three months** and **$2.822 million** for the **six months** ended June 30, 2025[51](index=51&type=chunk) [(4) Net (Loss) Income Per Share](index=17&type=section&id=(4)%20Net%20(Loss)%20Income%20Per%20Share) For the three and six months ended June 30, 2025, the company reported a basic and diluted net loss per common share, a significant decline from net income per share in the prior year periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net (loss) income | $(4,954) | $58,909 | $(38,901) | $185,904 | | Weighted average common shares outstanding - basic | 13,057,749 | 13,013,684 | 13,052,706 | 13,007,905 | | Net (loss) income per common share - basic | $(0.38) | $4.53 | $(2.98) | $14.29 | | Weighted average common shares outstanding - diluted | 13,057,749 | 13,111,010 | 13,052,706 | 13,173,803 | | Net (loss) income per common share - diluted | $(0.38) | $4.49 | $(2.98) | $14.11 | - For the three and six months ended June 30, 2025, **74,473** and **26,458 securities**, respectively, were **excluded from the computation of dilutive net income per common share** because they would have been **anti-dilutive**[53](index=53&type=chunk) - In periods of **net loss**, the **dilutive impact of all share-based compensation awards is excluded**; for the three and six months ended June 30, 2025, this impacted **15,163** and **29,925 weighted average shares**, respectively[54](index=54&type=chunk) [(5) Inventories, net](index=18&type=section&id=(5)%20Inventories,%20net) Total inventories, net, increased to $207.251 million as of June 30, 2025, from $169.269 million at December 31, 2024, primarily driven by a rise in saleable coal inventory | Inventory Category | June 30, 2025 | December 31, 2024 | | :----------------------- | :-------------------- | :-------------------- | | Raw coal | $39,595 | $39,689 | | Saleable coal | $99,505 | $65,129 | | Materials, supplies and other, net | $68,151 | $64,451 | | Total inventories, net | $207,251 | $169,269 | [(6) Accrued Expenses and Other Current Liabilities](index=18&type=section&id=(6)%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Total accrued expenses and other current liabilities increased slightly to $153.304 million as of June 30, 2025, from $151.560 million at December 31, 2024 | Category | June 30, 2025 | December 31, 2024 | | :------------------------------- | :-------------------- | :-------------------- | | Wages and benefits | $51,177 | $48,642 | | Workers' compensation | $9,444 | $9,444 | | Black lung | $11,209 | $11,209 | | Taxes other than income taxes | $24,419 | $27,995 | | Asset retirement obligations | $30,348 | $29,938 | | Freight accrual | $10,904 | $16,144 | | Other | $15,803 | $8,188 | | Total accrued expenses and other current liabilities | $153,304 | $151,560 | [(7) Long-Term Debt](index=18&type=section&id=(7)%20Long-Term%20Debt) Total long-term debt remained stable at $5.769 million as of June 30, 2025, with the ABL Agreement amended to increase the facility size to $225 million and extend its maturity to May 4, 2029 | Category | June 30, 2025 | December 31, 2024 | | :------------------------------- | :-------------------- | :-------------------- | | Notes payable and other | $2,319 | $1,786 | | Financing leases | $3,450 | $3,998 | | Total long-term debt | $5,769 | $5,784 | | Less current portion | $(2,625) | $(2,916) | | Long-term debt, net of current portion | $3,144 | $2,868 | - On May 6, 2025, the **ABL Agreement** was amended to increase the **ABL Facility** to **$225 million** (from $155 million) and extend its **maturity** to **May 4, 2029**[62](index=62&type=chunk) - As of June 30, 2025, the Company had no amounts borrowed and **$42.149 million** in **LCs outstanding** under the **ABL Facility**, and was in **compliance with all covenants**, including maintaining **minimum Liquidity** of **$75 million**[63](index=63&type=chunk)[64](index=64&type=chunk) [(8) Asset Retirement Obligations](index=19&type=section&id=(8)%20Asset%20Retirement%20Obligations) Total asset retirement obligations increased slightly to $220.391 million at June 30, 2025, from $219.743 million at December 31, 2024, due to accretion and new sites, offset by revisions and expenditures | Metric | Amount | | :------------------------------------------ | :-------------------- | | Total asset retirement obligations at December 31, 2024 | $219,743 | | Accretion for the period | $11,122 | | Sites added during the period | $475 | | Revisions in estimated cash flows | $(2,972) | | Expenditures for the period | $(7,977) | | Total asset retirement obligations at June 30, 2025 | $220,391 | | Less current portion | $(30,348) | | Long-term portion | $190,043 | - **Revisions in estimated cash flows** for **asset retirement obligations** primarily resulted from **changes in mine plans and reclamation timing**[66](index=66&type=chunk) [(9) Fair Value of Financial Instruments and Fair Value Measurements](index=20&type=section&id=(9)%20Fair%20Value%20of%20Financial%20Instruments%20and%20Fair%20Value%20Measurements) The company's financial instruments approximate fair value due to short maturity, with trading securities valued at fair value using Level 2 inputs from third-party pricing services - Carrying amounts for **cash and cash equivalents, trade accounts receivable, prepaid expenses, restricted cash, deposits, trade accounts payable, notes payable, financing leases, and accrued expenses approximate fair value due to their short maturity**[69](index=69&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | | :----------------- | :-------------------- | :-------------------- | | Trading securities | $42,450 | $43,131 | - **Trading securities** are classified within **Level 2 of the fair value hierarchy**, with fair values obtained from **third-party pricing services based on observable market inputs including credit spreads and broker-dealer quotes**[72](index=72&type=chunk) [(10) Income Taxes](index=20&type=section&id=(10)%20Income%20Taxes) For the six months ended June 30, 2025, the company recorded an income tax benefit of $12.685 million on a pre-tax loss of $51.586 million, with a new Section 45X credit expected to provide $30-50 million in annual cash benefits - For the six months ended June 30, 2025, the company recorded an **income tax benefit** of **$12.685 million** on a **loss before income taxes** of **$51.586 million**, with an **effective tax rate** of **24.6%**[73](index=73&type=chunk) - The **'One Big Beautiful Bill Act' (OBBBA)**, signed July 4, 2025, adds **metallurgical coal** to the list of **'applicable critical minerals'** for the **Section 45X credit**, providing a **refundable tax credit** equal to **2.5% of production costs** for **tax years 2026 through 2029**[75](index=75&type=chunk) - The company anticipates the **Section 45X credit** will serve as a source of **additional liquidity** in future years, with an **estimated annual cash benefit** in the range of **$30 million to $50 million**[167](index=167&type=chunk) [(11) Employee Benefit Plans](index=21&type=section&id=(11)%20Employee%20Benefit%20Plans) The net periodic benefit cost for pension obligations was $1.326 million and for black lung obligations was $3.061 million for the three months ended June 30, 2025 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Interest cost | $5,821 | $6,066 | $11,626 | $11,815 | | Expected return on plan assets | $(4,916) | $(4,713) | $(9,836) | $(10,455) | | Amortization of net actuarial loss | $421 | $566 | $799 | $864 | | Net periodic benefit cost | $1,326 | $1,919 | $2,589 | $2,224 | | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Service cost | $536 | $601 | $1,071 | $1,202 | | Interest cost | $1,463 | $1,307 | $2,926 | $2,614 | | Expected return on plan assets | $(14) | $(13) | $(27) | $(26) | | Amortization of net actuarial loss | $1,076 | $721 | $2,152 | $1,442 | | Net periodic benefit cost | $3,061 | $2,616 | $6,122 | $5,232 | - The Company expects to pay **$16.966 million** in **minimum required contributions** to the pension plan in 2025[78](index=78&type=chunk) [(12) Related Party Transactions](index=22&type=section&id=(12)%20Related%20Party%20Transactions) There were no material related party transactions for the six months ended June 30, 2025 or 2024, with the company routinely providing capital contributions to Dominion Terminal Associates (DTA) - There were **no material related party transactions** for the six months ended June 30, 2025 or 2024[81](index=81&type=chunk) - The Company routinely provides **capital contributions to Dominion Terminal Associates (DTA)**, its **equity method investee**[81](index=81&type=chunk) [(13) Commitments and Contingencies](index=22&type=section&id=(13)%20Commitments%20and%20Contingencies) The company accrues estimated losses from contingencies, with coal royalty expenses of $50.487 million for the six months ended June 30, 2025, and faces potential significant collateral requirements for black lung obligations - **Coal royalty expense** was **$50.487 million** for the six months ended June 30, 2025, compared to **$81.232 million** for the same period in 2024[84](index=84&type=chunk) - The Company expects to invest an average of approximately **$27 million per year** for **infrastructure and equipment upgrades at Dominion Terminal Associates (DTA)** over the next **5 years**[85](index=85&type=chunk) - The Company is involved in a **lawsuit against New York's Climate Change Superfund Act**, believing it to be **unconstitutional**, and warns that if upheld, it could **materially, adversely affect its liquidity**[96](index=96&type=chunk)[173](index=173&type=chunk) | Obligation Type | Restricted Cash (June 30, 2025) | Restricted Investments (June 30, 2025) | Deposits (June 30, 2025) | | :------------------------------------ | :------------------------------ | :----------------------------------- | :----------------------- | | Workers' compensation and black lung obligations | $115,550 | $2,637 | $4,108 | | Reclamation-related obligations | $1,540 | $33,736 | — | | Financial payments and other performance obligations | $9,016 | $6,077 | — | | Other operating agreements | — | — | $874 | | Total | $126,106 | $42,450 | $4,982 | - The **2025 Final Rule by the U.S. Department of Labor regarding self-insured black lung obligations** could require an additional **$80 million to $100 million of collateral**, which the Company is currently evaluating[95](index=95&type=chunk)[170](index=170&type=chunk) [(14) Segment Information](index=24&type=section&id=(14)%20Segment%20Information) Alpha operates one reportable segment, 'Met,' focused on metallurgical coal mining in the Central Appalachia (CAPP) basin, serving domestic and international steel and coke producers, with thermal coal as a byproduct - The Company has **one reportable operating segment: Met**, which consists of **six active mining complexes** primarily producing **metallurgical quality coal** for **domestic and international steel and coke producers**[98](index=98&type=chunk) - Due to the **cessation of mining activity in the former CAPP – Thermal operating segment in 2023**, the **Chief Operating Decision Maker (CODM)** began managing the Company on a **consolidated basis in 2024**, making **Met segment assets and operating results consistent with consolidated results**[101](index=101&type=chunk) - The Company adopted **Accounting Standards Update (ASU) 2023-07**, changing its **reported segment measure of profit or loss to net income**[102](index=102&type=chunk) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $550,274 | $803,969 | $1,082,231 | $1,668,041 | | Net (loss) income | $(4,954) | $58,909 | $(38,901) | $185,904 | - **Export coal revenues accounted for 72% and 73% of total coal revenues** for the three and six months ended June 30, 2025, respectively, with India and Brazil being countries exceeding **10% of total revenues**[105](index=105&type=chunk)[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive narrative discussion and analysis of the company's financial condition and results of operations for the three and six months ended June 30, 2025 and 2024 [Market Overview](index=27&type=section&id=Market%20Overview) Metallurgical coal markets experienced lackluster pricing and further deterioration in Q2 2025 due to depressed steel demand, economic uncertainty, geopolitical unrest, and shifting trade policies - **Metallurgical coal markets experienced lackluster pricing and further deterioration in Q2 2025** due to **depressed steel demand, economic uncertainty, geopolitical unrest, and shifting trade policies**[108](index=108&type=chunk) - The **U.S. East Coast High Volatile B index reduced by 5.1% in Q2 2025**, while the **Australian Premium Low Volatile index increased from $169.00 to $173.50 per metric ton**[110](index=110&type=chunk) - **Global crude steel production decreased by 5.8% in June 2025 compared to June 2024**, with **China's production down 9.2% and Germany's down 15.9%**, while **India's production increased by 13.3%**[112](index=112&type=chunk) [Business Overview](index=28&type=section&id=Business%20Overview) Alpha Metallurgical Resources, Inc. is a leading U.S. supplier of metallurgical coal, operating 19 active mines and 8 facilities in the CAPP basin, with met coal sales accounting for approximately 92% of total coal sales volume - **Alpha operates nineteen active mines and eight active coal preparation and load-out facilities in the CAPP coal basin**, with approximately **3,890 employees**[114](index=114&type=chunk) - For the three and six months ended June 30, 2025, **sales of met coal accounted for approximately 92% of total coal sales volume**[115](index=115&type=chunk) - Approximately **72% and 73% of coal revenues** for the three and six months ended June 30, 2025, respectively, were derived from **coal sales made to customers outside the United States**[116](index=116&type=chunk) - As of December 31, 2024, the company had **298.6 million tons of reserves**, including **287.8 million tons of proven and probable metallurgical reserves**[114](index=114&type=chunk) [Factors Affecting Our Results of Operations](index=28&type=section&id=Factors%20Affecting%20Our%20Results%20of%20Operations) The company's operating results are significantly influenced by coal sales agreements, realized pricing, and its ability to control costs, with sales commitments for 14.3 million tons of met coal and 1.0 million tons of thermal coal for 2025 | Coal Type | Tons (million) | % Priced | Average Realized Price per Ton | | :---------------- | :------------- | :------- | :----------------------------- | | Met - Domestic | (not specified) | (not specified) | $152.21 | | Met - Export | (not specified) | (not specified) | $112.17 | | Met Total | 14.3 | 69% | $127.37 | | Thermal | 1.0 | 100% | $80.52 | | Met Segment Total | 15.3 | 72% | $122.54 | - **Realized price per ton is influenced by coal quality (energy, sulfur, ash, volatile matter, moisture content), market conventions concerning transportation costs and volume measurement, and regional supply and demand**[121](index=121&type=chunk) - **Primary expenses include operating supply costs, repair and maintenance, purchased coal, royalties, wages and benefits, freight and handling, and taxes, with volatility in fuel, explosives, steel, tires, and contract services**[122](index=122&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) The company experienced significant declines in revenues and profitability for both the three and six months ended June 30, 2025, primarily driven by weakened global steel demand and lower metallurgical coal pricing [Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=29&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030,%202024) For the three months ended June 30, 2025, total revenues decreased by 31.6% to $550.274 million, resulting in a net loss of $4.954 million and a 60.3% decrease in Adjusted EBITDA | Metric | 2025 | 2024 | Change ($) | Change (%) | | :---------------- | :------- | :------- | :--------- | :--------- | | Coal revenues | $548,675 | $800,130 | $(251,455) | (31.4)% | | Other revenues | $1,599 | $3,839 | $(2,240) | (58.3)% | | Total revenues | $550,274 | $803,969 | $(253,695) | (31.6)% | | Tons sold (thousands) | 3,886 | 4,552 | (666) | (14.6)% | | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | :--------- | | Cost of coal sales | $479,953 | $663,809 | $(183,856) | (27.7)% | | Depreciation, depletion and amortization | $44,822 | $43,380 | $1,442 | 3.3% | | Selling, general and administrative expenses | $15,216 | $18,805 | $(3,589) | (19.1)% | | Total costs and expenses | $547,619 | $733,293 | $(185,674) | (25.3)% | - **Average cost of coal sales per ton decreased 15.3%** due to lower sales volumes, reduced freight and handling costs, lower royalties and taxes, and cost reduction efforts including wage reductions and idling higher-cost production sources[126](index=126&type=chunk) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--------------- | :------- | :------- | :--------- | :--------- | | Adjusted EBITDA | $46,065 | $115,995 | $(69,930) | (60.3)% | [Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=33&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030,%202024) For the six months ended June 30, 2025, total revenues decreased by 35.1% to $1,082.231 million, resulting in a net loss of $38.901 million and an 83.1% decrease in Adjusted EBITDA | Metric | 2025 | 2024 | Change ($) | Change (%) | | :---------------- | :----------- | :----------- | :--------- | :--------- | | Coal revenues | $1,078,342 | $1,661,413 | $(583,071) | (35.1)% | | Other revenues | $3,889 | $6,628 | $(2,739) | (41.3)% | | Total revenues | $1,082,231 | $1,668,041 | $(585,810) | (35.1)% | | Tons sold (thousands) | 7,644 | 8,917 | (1,273) | (14.3)% | | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--------------------------------- | :----------- | :----------- | :--------- | :--------- | | Cost of coal sales | $984,537 | $1,312,122 | $(327,585) | (25.0)% | | Depreciation, depletion and amortization | $88,732 | $84,081 | $4,651 | 5.5% | | Selling, general and administrative expenses | $30,640 | $41,182 | $(10,542) | (25.6)% | | Total costs and expenses | $1,119,751 | $1,455,487 | $(335,736) | (23.1)% | - **Average cost of coal sales per ton decreased 12.5%** due to lower sales volumes, reduced freight and handling costs, lower royalties and taxes, and cost reduction efforts including wage reductions and idling higher-cost production sources[139](index=139&type=chunk) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--------------- | :------- | :------- | :--------- | :--------- | | Adjusted EBITDA | $51,716 | $305,558 | $(253,842) | (83.1)% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily derived from existing unrestricted cash balances, future coal sales, and its revolving credit agreement, with total liquidity at $556.878 million as of June 30, 2025 - **Primary sources of liquidity are existing unrestricted cash balances, proceeds from future coal sales, and amounts available under the revolving credit agreement**[150](index=150&type=chunk) | (in thousands) | June 30, 2025 | | :-------------------------- | :-------------- | | Cash and cash equivalents | $449,027 | | Credit facility availability | $182,851 | | Minimum liquidity requirement | $(75,000) | | Total liquidity | $556,878 | - **Capital expenditures** for the six months ended June 30, 2025, were **$73.1 million**, with a **full-year 2025 projection of $130 million to $150 million**, including **$98 million** for **sustaining maintenance capital** and **$32 million** for **planned mine development projects**[158](index=158&type=chunk) - The company expects the **Section 45X credit** from the **'One Big Beautiful Bill Act'** to serve as a source of **additional liquidity** in future years, with an **estimated annual cash benefit of $30 million to $50 million**[167](index=167&type=chunk) - The **2025 Final Rule by the U.S. Department of Labor regarding self-insured black lung obligations** could require an additional **$80 million to $100 million of collateral**[170](index=170&type=chunk) - **Net cash provided by operating activities** for the six months ended June 30, 2025, decreased primarily due to a reduction in Met segment non-GAAP coal margin[177](index=177&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The preparation of financial statements requires management to make estimates and assumptions, significantly influenced by foreign currency and energy markets, with no impairment charges required during the six months ended June 30, 2025 - **Management's estimates and assumptions are influenced by foreign currency and energy markets, and fluctuations in demand for steel products, increasing the inherent uncertainty**[182](index=182&type=chunk) - During the six months ended June 30, 2025, the Marfork, Power Mountain, Elk Run, and Kepler mining complexes were tested for impairment due to recent declines in metallurgical coal spot pricing, but **no impairment charges were required**[183](index=183&type=chunk) - **Future impairment charges may occur if projected coal pricing weakens further or if mines are required to be idled for extended periods**[183](index=183&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to commodity price risk for coal sales and operational supplies, interest rate risk from its floating-rate ABL facility, and foreign currency risk from international coal sales denominated in U.S. dollars - The company manages **commodity price risk for coal sales through coal supply agreements** and for supplies (diesel fuel, steel, explosives) through **strategic sourcing contracts**[185](index=185&type=chunk)[186](index=186&type=chunk) | Metric | Budgeted Usage in Gallons | % Priced | Average Realized Price per Gallon | | :----------- | :------------------------ | :------- | :-------------------------------- | | Diesel fuel | 21.4 million | 89.0% | $2.76 | - The **senior secured asset-based revolving credit facility bears a floating rate of interest for any cash borrowings, but no cash borrowings were outstanding as of June 30, 2025**[188](index=188&type=chunk) - While **transactions are denominated in U.S. dollars**, **changes in foreign currency exchange rates may provide foreign competitors with a competitive advantage or lead overseas customers to seek decreased prices, adversely affecting the competitiveness of the company's coal in international markets**[190](index=190&type=chunk)[191](index=191&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The **CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025**[192](index=192&type=chunk) - There were **no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the period**[193](index=193&type=chunk) - The company acknowledges that **control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving desired control objectives and may not prevent or detect all errors and fraud**[194](index=194&type=chunk) [Part II - Other Information](index=42&type=section&id=Part%20II%20-%20Other%20Information) This section provides additional information including legal proceedings, risk factors, equity security sales, mine safety disclosures, and other corporate updates [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13, part (d), of the unaudited Condensed Consolidated Financial Statements for a detailed description of the company's legal proceedings - Information concerning the Company's legal proceedings is incorporated by reference from **Note 13, part (d)**, to the unaudited Condensed Consolidated Financial Statements[196](index=196&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section highlights the significant risk of sustained low demand for metallurgical coal and potential negative trade impacts from unpredictable tariff policies, which could reduce coal prices and revenues - A period of **sustained low demand for metallurgical coal** and the potential for **negative trade impacts from changing and unpredictable tariff policies** could reduce coal prices and revenues[198](index=198&type=chunk) - For the six months ended June 30, 2025, **coal export revenues accounted for approximately 73% of total coal revenues**, making the company **highly exposed to international market conditions and trade policies**[199](index=199&type=chunk) - The **increasing reliance of the U.S. steel industry on processes that do not use coke (e.g., electric arc furnaces) could decrease the amount of met coal sold and the prices received, adversely impacting earnings and coal reserve value**[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common stock during the three months ended June 30, 2025, with $401.283 million remaining available under the $1.5 billion common share repurchase program | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased | | :--------------------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------- | | April 1, 2025 through April 30, 2025 | — | $— | $401,283 | | May 1, 2025 through May 31, 2025 | — | $— | $401,283 | | June 1, 2025 through June 30, 2025 | — | $— | $401,283 | - The **total authorization to repurchase the Company's stock under the existing common share repurchase program adopted on March 4, 2022, is $1.5 billion**[204](index=204&type=chunk) - A **separate $100 million stock repurchase plan from 2019, with $67.6 million remaining**, was suspended on October 1, 2019, and the Company does not currently intend to make further repurchases under it[204](index=204&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information concerning mine safety violations and other regulatory matters, as required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, is included in Exhibit 95 to this Quarterly Report on Form 10-Q - Information concerning mine safety violations and other regulatory matters is included in **Exhibit 95** to this Quarterly Report on Form 10-Q[205](index=205&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) On May 6, 2025, the company amended its Credit Agreement, increasing revolving commitments to $225 million, extending maturity to May 4, 2029, and permitting up to $500 million in convertible notes - On May 6, 2025, the Company amended its Credit Agreement, increasing the **revolving commitments** and **letter of credit sublimit** to **$225 million** and extending the stated **revolving commitment termination date** to **May 4, 2029**[206](index=206&type=chunk)[207](index=207&type=chunk) - The amendment reduced the **interest rate margin range** for **Term SOFR Loans** to **2.25%-2.75%** and for **Base Rate Loans** to **1.25%-1.75%**[207](index=207&type=chunk) - The amendment permits the incurrence of up to **$500 million** of **senior secured notes** or **senior unsecured convertible notes**, subject to certain terms and conditions[207](index=207&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, certifications, and financial information in Inline XBRL - The **exhibit index lists key documents such as the Third Amended and Restated Certificate of Incorporation, Fourth Amended and Restated Bylaws, Certifications Pursuant to Rule 13a-14(a) and 18 U.S.C. §1350, Mine Safety Disclosure Exhibit, and financial information formatted in Inline XBRL**[213](index=213&type=chunk)

[Financial Highlights and CEO Commentary](index=1&type=section&id=Financial%20Highlights%20and%20CEO%20Commentary) Alpha's Q2 2025 financial highlights, key metrics, and CEO commentary on performance and outlook are presented [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Alpha reported a Q2 2025 net loss of $5.0 million, Adjusted EBITDA of $46.1 million, improved cost of coal sales, and strong liquidity Financial Highlights (in millions USD, except per share and tons) | Financial Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net (loss) income | ($5.0 million) | ($33.9 million) | $58.9 million | | Net (loss) income per diluted share | ($0.38) | ($2.60) | $4.49 | | Adjusted EBITDA | $46.1 million | $5.7 million | $116.0 million | | Operating cash flow | $53.2 million | $22.2 million | $138.1 million | | Tons of coal sold (millions) | 3.9 | 3.8 | 4.6 | - Achieved total liquidity of **$556.9 million** as of June 30 - Realized the best quarterly cost of coal sales performance since 2021 - Lowered 2025 cost of coal sales guidance to **$101-$107 per ton** - Reduced SG&A guidance to **$48-$54 million** - Increased net cash interest income guidance to **$6-$12 million**[4](index=4&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Andy Eidson praised cost performance from savings initiatives, reducing full-year guidance, and highlighted strong liquidity - The CEO highlighted significant improvement in the cost of coal sales due to previously announced savings initiatives taking effect[5](index=5&type=chunk) - The company's total liquidity reached **$557 million** as of June 30, positioning it to capitalize on opportunities[5](index=5&type=chunk) [Operational and Financial Performance](index=2&type=section&id=Operational%20and%20Financial%20Performance) Alpha's Q2 2025 overall financial performance, coal revenues, sales realization, and cost of coal sales are detailed [Overall Financial Performance](index=2&type=section&id=Overall%20Financial%20Performance) Q2 2025 net loss was $5.0 million ($0.38 per share), a significant improvement from Q1, with Adjusted EBITDA growing to $46.1 million Net Loss Performance (in millions USD, except per share) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net Loss | ($5.0 million) | ($33.9 million) | | Net Loss per Diluted Share | ($0.38) | ($2.60) | Adjusted EBITDA Performance (in millions USD) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Total Adjusted EBITDA | $46.1 million | $5.7 million | [Coal Revenues and Sales Realization](index=2&type=section&id=Coal%20Revenues%20and%20Sales%20Realization) Met Segment coal revenues rose to $548.7 million in Q2 2025, with net realized pricing per ton increasing to $119.43, driven by export sales Met Segment Coal Revenues and Tons Sold (in millions USD and tons) | Metric (Met Segment) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Coal Revenues | $548.7 million | $529.7 million | | Tons Sold (millions) | 3.9 | 3.8 | Met Segment Coal Sales Realization (per ton) | Metric (Met Segment) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Coal Sales Realization (per ton) | $119.43 | $118.61 | Met Segment Sales Breakdown (Q2 2025) | Met Segment Sales Breakdown (Q2 2025) | Tons Sold (Millions) | Realization/ton | % of Met Tons Sold | | :--- | :--- | :--- | :--- | | Export - Other Pricing Mechanisms | 1.7 | $113.82 | 47% | | Domestic | 0.9 | $152.28 | 26% | | Export - Australian Indexed | 1.0 | $109.75 | 27% | | **Total Met Coal** | **3.6** | **$122.84** | **100%** | [Cost of Coal Sales](index=3&type=section&id=Cost%20of%20Coal%20Sales) Met segment's cost of coal sales per ton improved to $100.06 in Q2 2025, primarily due to lower labor and supplies expenses Met Segment Cost of Coal Sales (per ton) | Metric (Met Segment, per ton) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Cost of Coal Sales | $100.06 | $110.34 | - The primary drivers for the reduction in cost of coal sales were lower expenses related to labor and supplies[14](index=14&type=chunk) [Capital Management and Outlook](index=3&type=section&id=Capital%20Management%20and%20Outlook) Alpha's liquidity, capital resources, share repurchase plans, and updated 2025 guidance are presented [Liquidity and Capital Resources](index=3&type=section&id=Liquidity%20and%20Capital%20Resources) Alpha's liquidity reached $556.9 million by Q2 2025, with increased operating cash flow, and a new tax credit is expected to provide $30-50 million annually - As of June 30, 2025, total liquidity was **$556.9 million**, consisting of **$449.0 million** in cash and **$182.9 million** of unused ABL availability[17](index=17&type=chunk) - Cash provided by operating activities rose to **$53.2 million** in Q2 2025, up from **$22.2 million** in Q1 2025, while capital expenditures decreased to **$34.6 million** from **$38.5 million**[15](index=15&type=chunk) - The 'One Big Beautiful Bill Act' introduces a Section 45X tax credit for metallurgical coal. The company estimates this could provide an annual cash benefit of **$30 million to $50 million** for tax years 2026 through 2029[18](index=18&type=chunk) [Share Repurchase Program](index=4&type=section&id=Share%20Repurchase%20Program) Alpha plans to restart its opportunistic share repurchase program, with approximately $400 million remaining under its $1.5 billion authorization - The company intends to restart its share repurchase program opportunistically after having strengthened its liquidity position[19](index=19&type=chunk) - There is approximately **$400 million** remaining under the **$1.5 billion** share repurchase authorization[19](index=19&type=chunk) [2025 Guidance](index=4&type=section&id=2025%20Guidance) Alpha updated its 2025 guidance, lowering cost of coal sales and SG&A, while raising idle operations expense and net cash interest income, with 69% of metallurgical coal committed 2025 Guidance Updates (in millions USD, except per ton) | 2025 Guidance Item | Previous Range | New Range | | :--- | :--- | :--- | | Cost of Coal Sales (per ton) | $103.00 - $110.00 | $101.00 - $107.00 | | SG&A | $53 million - $59 million | $48 million - $54 million | | Idle Operations Expense | $18 million - $28 million | $21 million - $29 million | | Net Cash Interest Income | $2 million - $10 million | $6 million - $12 million | - As of July 30, 2025, the company has committed and priced **69%** of its 2025 metallurgical coal at an average price of **$127.37 per ton**, and **100%** of its thermal coal at **$80.52 per ton**[22](index=22&type=chunk) Key 2025 Guidance Metrics (in millions of tons and USD) | 2025 Guidance | Low | High | | :--- | :--- | :--- | | **Shipments (millions of tons)** | | | | Met Segment - Total | 14.6 | 16.0 | | **Costs per ton** | | | | Met Segment | $101.00 | $107.00 | | **Expenses (millions)** | | | | SG&A | $48 | $54 | | Capital Expenditures | $130 | $150 | [Financial Statements](index=8&type=section&id=Financial%20Statements) Alpha's condensed consolidated statements of operations, balance sheets, cash flows, and non-GAAP reconciliations are presented [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement shows a net loss of $5.0 million for Q2 2025, a downturn from Q2 2024's net income, primarily due to lower coal revenues Condensed Consolidated Statements of Operations (in thousands USD, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $550,274 | $803,969 | | Income (loss) from operations | $2,655 | $70,676 | | Net (loss) income | $(4,954) | $58,909 | | Diluted (loss) income per common share | $(0.38) | $4.49 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $2.37 billion, liabilities $759.4 million, cash $449.0 million, and equity $1.61 billion Condensed Consolidated Balance Sheets (in thousands USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $449,027 | $481,578 | | Total current assets | $988,225 | $1,036,669 | | Total assets | $2,373,114 | $2,438,708 | | Total current liabilities | $243,341 | $251,109 | | Total liabilities | $759,404 | $789,211 | | Total stockholders' equity | $1,613,710 | $1,649,497 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities decreased to $75.4 million, with $95.2 million used in investing activities Condensed Consolidated Statements of Cash Flows (in thousands USD) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $75,412 | $334,199 | | Net cash used in investing activities | $(95,167) | $(140,531) | | Net cash used in financing activities | $(9,273) | $(122,538) | | Net (decrease) increase in cash | $(29,028) | $71,130 | [Adjusted EBITDA Reconciliation](index=12&type=section&id=Adjusted%20EBITDA%20Reconciliation) This table reconciles the GAAP net loss of $5.0 million to a non-GAAP Adjusted EBITDA of $46.1 million for Q2 2025, adjusting for DD&A Adjusted EBITDA Reconciliation (in thousands USD) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net (loss) income | $(4,954) | $(33,947) | $58,909 | | Adjustments (Interest, Taxes, DD&A, etc.) | $51,019 | $39,598 | $57,086 | | **Adjusted EBITDA** | **$46,065** | **$5,651** | **$115,995** | [Results of Operations (Non-GAAP Reconciliation)](index=13&type=section&id=Results%20of%20Operations%20(Non-GAAP%20Reconciliation)) This section reconciles GAAP to non-GAAP coal revenues and cost of coal sales, showing a Q2 2025 Non-GAAP coal margin of $19.36 per ton Non-GAAP Coal Operations Reconciliation (per ton) | Metric (per ton) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Non-GAAP Coal sales realization | $119.43 | $118.61 | $141.86 | | Non-GAAP Cost of coal sales | $100.06 | $110.34 | $109.31 | | **Non-GAAP Coal margin** | **$19.36** | **$8.27** | **$32.54** | [Appendix](index=6&type=section&id=Appendix) This section includes non-GAAP financial measure explanations, conference call details, and forward-looking statements [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) The company explains its use of non-GAAP measures like Adjusted EBITDA and non-GAAP coal margin for clearer understanding of core operating trends - The company uses non-GAAP measures like Adjusted EBITDA and non-GAAP coal margin to supplement GAAP results, believing they are useful indicators of financial performance and help in understanding core operating trends[32](index=32&type=chunk)[33](index=33&type=chunk) [Conference Call Information](index=6&type=section&id=Conference%20Call%20Information) Alpha Metallurgical Resources will host a conference call on August 8, 2025, at 10:00 a.m. Eastern time to discuss Q2 2025 results - A conference call is scheduled for August 8, 2025, at 10:00 a.m. Eastern time to discuss the quarterly results[27](index=27&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward%20Looking%20Statements) This section contains a safe harbor statement, cautioning that forward-looking statements involve risks and uncertainties, and actual results may differ - The report contains forward-looking statements that are subject to risks and uncertainties, and actual results may differ. The company does not intend to update these statements[29](index=29&type=chunk)

Financial Performance - Alpha Metallurgical Resources reported a net loss of $5.0 million for Q2 2025, an improvement from a net loss of $33.9 million in Q1 2025 and a profit of $58.9 million in Q2 2024 [4][5] - Adjusted EBITDA for Q2 2025 was $46.1 million, significantly up from $5.7 million in Q1 2025 [4][30] - Operating cash flow increased to $53.2 million in Q2 2025, compared to $22.2 million in Q1 2025 [8] Coal Revenues - Total coal revenues for Q2 2025 were $548.7 million, slightly up from $529.7 million in Q1 2025 [4][5] - The metallurgical segment's coal revenues (excluding freight and handling) were $464.1 million for Q2 2025, compared to $445.7 million in Q1 2025 [4][5] - The average realized price for metallurgical coal was $119.43 per ton in Q2 2025, up from $118.61 per ton in Q1 2025 [6][32] Cost Management - The cost of coal sales per ton decreased to $100.06 in Q2 2025 from $110.34 in Q1 2025, attributed to improved cost performance [7][32] - The company has lowered its full-year cost of coal sales guidance to a range of $101 to $107 per ton, down from $103 to $110 per ton [5][13] Liquidity and Capital Resources - As of June 30, 2025, total liquidity was $556.9 million, including cash and cash equivalents of $449.0 million [9][5] - Capital expenditures for Q2 2025 were $34.6 million, a decrease from $38.5 million in Q1 2025 [8] Guidance Adjustments - The company has reduced its SG&A expense guidance for 2025 to a range of $48 million to $54 million, down from $53 million to $59 million [5][14] - Idle operations expense guidance has been increased to a range of $21 million to $29 million, up from $18 million to $28 million [5][14] Future Opportunities - The recent legislation signed into law includes a refundable tax credit for metallurgical coal production, which could provide an annual cash benefit estimated between $30 million and $50 million [10][11] - The company plans to restart its share repurchase program, having achieved a significant increase in liquidity [12]

Core Viewpoint - Alpha Metallurgical Resources (AMR) is identified as a vulnerable stock despite being in a hot industry, with significant negative earnings revisions leading to its designation as today's Bear of the Day [1]. Company Summary - AMR, a metallurgical coal producer, benefited from post-pandemic steel demand and the energy crisis of 2022, but these favorable conditions are diminishing [2]. - The company specializes in met coal for steelmaking, which theoretically provides a resilient profile, but market sentiment has shifted negatively [3]. - AMR currently holds a Zacks Rank of 5 (Strong Sell), indicating severe negative earnings estimate revisions [4]. Earnings Performance - Over the past 90 days, the Zacks Consensus Estimate for AMR's current year earnings has dropped from $11.75 to a loss of $5.95 per share, while next year's estimates fell from $41.59 to $17.65 [5]. - The company has missed earnings expectations for three consecutive quarters, with shortfalls of 70%, 128%, and 81% [5]. Industry Context - The Mining – Miscellaneous industry is ranked in the Bottom 33% of Zacks Industry Rank, although some stocks within the industry, such as Contango ORE (CTGO) and Materion (MTRN), maintain a Zacks Rank of 1 (Strong Buy) [6].

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $5.7 million, down from $53 million in Q4 2024 [11] - Tons shipped in Q1 2025 were 3.8 million, a decrease from 4.1 million tons in Q4 2024 [11] - Average realization for metallurgical coal sales in Q1 was $122.08 per ton, down from $132.63 per ton in Q4 [12] - Cost of coal sales for the metallurgical segment increased to $110.34 per ton in Q1, up from $108.82 per ton in Q4 [12] - Total liquidity as of March 31, 2025, was $485.8 million, down from $519.4 million at the end of Q4 2024 [13] Business Line Data and Key Metrics Changes - Metallurgical coal segment realizations decreased quarter over quarter, with export met tons priced against Atlantic indices realizing $119.39 per ton in Q1, down from $122.24 in Q4 [11][12] - Incidental thermal portion of the metallurgical segment saw an increase in realization to $79.39 per ton in Q1 from $75.39 in Q4 [12] - CapEx for Q1 was $38.5 million, down from $42.7 million in Q4 [13] Market Data and Key Metrics Changes - Metallurgical coal markets remained under pressure with pricing levels deteriorating due to weak steel demand [22] - All four indices monitored by the company fell 8% or more during Q1, with the Australian Premium Low Vol Index dropping 15.5% [22] - As of May 8, 2025, the Australian premium low vol index increased to $190.5 per metric ton from its quarter-end level [24] Company Strategy and Development Direction - The company is focused on liquidity and safeguarding its financial position amid challenging market conditions [6][9] - Adjustments to sales volume guidance were announced, with expected shipments for the year now at 15.3 million tons, down from 16.7 million tons [8] - The Kingston Wildcat project is expected to continue on schedule despite the downward revision to planned development CapEx [9][20] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the rest of the year due to weak steel demand and increased uncertainty from tariffs and trade policies [6][8] - The company has taken difficult actions, including cutting production at higher-cost operations and reducing wages across the enterprise [7][19] - Management remains optimistic about the Kingston Wildcat project, which is expected to ramp up to a full run rate of approximately 1 million tons per year by 2026 [20] Other Important Information - The company has secured an amendment to its asset-based lending facility, increasing its size from $155 million to $225 million [10] - The company did not repurchase any shares in Q1 under its share buyback program due to market conditions [15] Q&A Session Summary Question: Recent cost-cutting measures and cost guidance - Management confirmed that recent cost-cutting measures have helped offset the loss of fixed cost absorption, maintaining guidance relatively firm despite production cuts [34][35] Question: CapEx reductions and growth projects - Most capital reductions are related to closures and reallocating assets, with no significant impact on future business [38][39] Question: Realization side and market conditions - In a weak market, discounting against indices is common, but not universal; some recent business concluded at a premium to the index [48] Question: Shipment guidance and domestic vs export - The reduction in shipment guidance primarily affects export tons, with confidence in maintaining overall guidance despite operational changes [46][47] Question: Opportunities in the marketplace - Management is cautious about pursuing M&A opportunities, focusing on internal projects like Kingston Wildcat for strengthening the portfolio [50][51] Question: Domestic market considerations - The domestic market is currently among the higher pricing, but management will evaluate customer needs over the summer [56][57] Question: Potential for small competitors exiting the market - There is still potential for small competitors to exit the market, with liquidity concerns affecting less well-capitalized companies [60][61]