Core Insights - The Black Bear Value Fund has underperformed compared to broader indices, returning -12.7% year-to-date against the S&P 500's +14.8% [11] - The fund's strategy focuses on long-term investments in underappreciated businesses, particularly in sectors currently facing challenges but with potential for recovery [4][28] Performance Overview - The Black Bear Value Fund returned -7.1% in September, -1.0% for the quarter, and -12.7% year-to-date [11] - In contrast, the S&P 500 returned +3.6% in September, +8.1% for the quarter, and +14.8% year-to-date [11] Investment Strategy - The fund emphasizes a private investing mindset, looking beyond short-term market noise to identify long-term value [4] - The portfolio is heavily weighted in sectors like homebuilding, chemical production, and metallurgical coal, which are currently underperforming but have long-term growth potential [4][28] Key Holdings Builders FirstSource (BLDR) - BLDR is experiencing a structural housing shortage in the USA, with management reducing their 2025 cash flow outlook from $800 million-$1.2 billion to $800 million-$1 billion [6][8] - The company has shifted focus to value-added products, which now account for over 40% of revenue, and has been actively buying back stock [7][9] Flagstar Financial (FLG) - FLG has undergone a significant turnaround, raising over $1 billion in capital and stabilizing its balance sheet [12][13] - The bank is trading at approximately 65% of a conservatively marked balance sheet, with potential for a 50-150% increase in value over the next 1-3 years [15] Lanxess (LXS.DE) - LXS has shifted its focus from cyclical, capital-intensive businesses to more stable, lower-capital businesses, increasing its US sales from 15% to nearly 30% [17] - The company is expected to generate €200-250 million in free cash flow in a normalized environment, with a potential cash inflow of €500 million from a joint venture [19][20] Tidewater (TDW) - TDW operates one of the largest fleets of offshore support vessels, with a strong long-term outlook despite near-term uncertainties [21] - The company is currently generating over $300 million in free cash flow, with expectations to increase this to $500 million-$1 billion in a normalized environment [23] Warrior Met Coal (HCC) - HCC is investing heavily in the Blue Creek mine, which is expected to significantly boost free cash flow once the investment period concludes [24][25] - The company anticipates generating $200 million-$850 million in annual free cash flow post-investment, translating to a 6-25% unlevered annual free cash flow yield [26][27]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Opportunity - Wall Street is investing heavily in AI, but there is a looming question regarding the energy supply needed to sustain this growth [2] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI data centers, making it a potentially lucrative investment [3][8] Energy Infrastructure - The company owns significant nuclear energy infrastructure, which is crucial for America's future power strategy [7] - It is capable of executing large-scale engineering, procurement, and construction projects across various energy sectors, including oil, gas, and renewables [7][8] Financial Position - The company is noted for being debt-free and having a substantial cash reserve, which is approximately one-third of its market capitalization [8] - It is trading at a low valuation of less than 7 times earnings, indicating a potentially undervalued investment opportunity [10] Market Trends - The current market dynamics include an onshoring boom due to tariffs, a surge in U.S. LNG exports, and a unique position in nuclear energy, all of which are expected to drive growth [14] - The influx of talent into the AI sector is anticipated to lead to rapid advancements and innovative ideas, further solidifying the importance of investing in AI [12] Conclusion - The company represents a unique investment opportunity at the intersection of AI and energy, with the potential for significant returns as the demand for energy in AI applications continues to rise [3][10][12]

Group 1 - Alpha Metallurgical Coal is the largest domestic producer of coking coal for steel production [1] - The company has been compared to peers such as Warrior Met Coal and Arch [1]

Company Overview - Warrior Met Coal is a U.S. metallurgical coal mining company operating in Alabama with two producing mines and a development project named Blue Creek, which is expected to commence longwall mining in Q1 [1] Investment Strategy - The focus is on investing in turnarounds within the natural resource industries, typically holding investments for 2-3 years, emphasizing value for downside protection while still allowing for significant upside potential [2] - The portfolio has achieved a compounded annual growth rate of 29% over the last 6 years [2]

Financial Data and Key Metrics Changes - The company recorded a net income of approximately $6 million or $0.11 per diluted share for Q2 2025, a significant decrease from $71 million or $1.35 per diluted share in the same quarter of 2024, primarily due to a 30% drop in average net selling prices [23][24] - Adjusted EBITDA for Q2 2025 was $54 million, down from $116 million in the same quarter last year, with an adjusted EBITDA margin of 18% compared to 29% in the prior year [23][24] - Total revenues decreased to $298 million in Q2 2025 from $397 million in Q2 2024, driven by lower average gross selling prices [24][30] Business Line Data and Key Metrics Changes - Sales volume increased by 6% to 2.2 million short tons in Q2 2025, compared to 2.1 million short tons in the same quarter last year [15] - The company achieved first commercial sales of 239,000 tons of steelmaking coal from the Blue Creek mine, which was ahead of schedule [15][19] - Production volume also rose by 6% to 2.3 million short tons in Q2 2025, compared to 2.2 million short tons in the same quarter of the previous year [16] Market Data and Key Metrics Changes - Average premium low-vol steelmaking coal index prices declined by 24% year-over-year in Q2 2025, with the primary index averaging $167 per short ton [10] - The relative price of the LVHCC index compared to the PLD index averaged 78%, significantly lower than the historical average of 88% [11] - Global pig iron production decreased by 1.3% in the first half of 2025, with China experiencing a 0.8% decline [13] Company Strategy and Development Direction - The company is accelerating the Blue Creek longwall startup to early Q1 2026, reflecting a strong focus on cost control and operational efficiency [7][19] - The company plans to maintain a flexible cost structure and high production volumes to navigate challenging market conditions [22][31] - The recent "One Big Beautifully Bill Act" is expected to provide tax benefits, including a permanent deduction on foreign-derived income and classification of metallurgical coal as a critical mineral [32][33] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing market weakness due to excess Chinese steel exports and lackluster global steel demand, with expectations of continued challenges in customer markets [8][34] - The company remains optimistic about potential trade agreements but acknowledges the uncertainty surrounding global trade and tariffs [34] - Management emphasized confidence in the company's asset base and cost structure to navigate through the current environment [34] Other Important Information - Cash cost of sales in Q2 2025 was $225 million, representing 78% of mining revenues, with a cash cost of sales per short ton of approximately $101 [25][26] - Free cash flow was negative $57 million for Q2 2025, influenced by capital expenditures for Blue Creek, but the underlying business generated approximately $40 million of free cash flow excluding these investments [29][30] Q&A Session Summary Question: Cost guidance and expectations for the second half of the year - Management acknowledged strong performance but indicated planning for potential cost increases due to maintenance and repairs [36][39] Question: Impact of Brazilian tariffs and market diversion - Management noted that Brazilian steelmakers are still willing to take coal, but the market dynamics have shifted with more high-vol A tons moving into Asia [40][43] Question: Blue Creek project costs and production expectations - Management indicated that costs for Blue Creek are expected to be higher than previous guidance due to current market conditions, with production potentially reaching around 4 million tons next year [48][60] Question: Pricing and gross realization targets - Management confirmed risks to the gross realization target due to widening price spreads and increased sales of high-vol A coal [55] Question: Impact of the Union Pacific and Norfolk Southern merger - Management expressed confidence that the merger would not significantly impact their shipping operations due to the dedicated nature of their rail routes [74]

[Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines the inherent risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements, identified by specific terms, which are inherently subject to **risks and uncertainties**[8](index=8&type=chunk) - Key risks encompass **global pandemics, inflation, tariffs, customer relations, rising costs, labor issues, competition, litigation, cybersecurity threats, and various operational and regulatory challenges**[8](index=8&type=chunk)[11](index=11&type=chunk) [Part I. Financial Information](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed financial statements and management's discussion and analysis of financial performance [Item 1. Financial Statements](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section provides the unaudited condensed financial statements and detailed notes for Warrior Met Coal, Inc [Condensed Statements of Operations](index=7&type=section&id=Condensed%20Statements%20of%20Operations) This section presents the company's unaudited condensed statements of operations for the specified periods Condensed Statements of Operations (in thousands, except per-share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $297,523 | $396,524 | $597,466 | $900,036 | | Total Costs and Expenses | $289,800 | $325,620 | $607,127 | $680,055 | | Operating Income (Loss) | $7,723 | $70,904 | $(9,661) | $219,982 | | Net Income (Loss) | $5,606 | $70,711 | $(2,562) | $207,700 | | Basic Net Income (Loss) per Share | $0.11 | $1.35 | $(0.05) | $3.98 | | Diluted Net Income (Loss) per Share | $0.11 | $1.35 | $(0.05) | $3.97 | | Dividends per Share | $0.08 | $0.08 | $0.16 | $0.66 | [Condensed Balance Sheets](index=8&type=section&id=Condensed%20Balance%20Sheets) This section presents the company's unaudited condensed balance sheets as of June 30, 2025, and December 31, 2024 Condensed Balance Sheets (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------- | :-------------------------- | :---------------- | | Total Current Assets | $852,745 | $887,062 | | Total Assets | $2,645,402 | $2,591,516 | | Total Current Liabilities | $185,627 | $170,430 | | Total Liabilities | $565,117 | $500,699 | | Total Stockholders' Equity | $2,080,285 | $2,090,817 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section presents the company's unaudited condensed statements of cash flows for the specified periods Condensed Statements of Cash Flows (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $48,463 | $251,033 | | Net Cash Used in Investing Activities | $(172,097) | $(223,309) | | Net Cash Provided by (Used in) Financing Activities | $15,490 | $(56,898) | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(108,144) | $(29,174) | | Cash, Cash Equivalents and Restricted Cash at End of Period | $390,988 | $709,023 | [Condensed Statements of Changes in Stockholders' Equity](index=10&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section presents the company's unaudited condensed statements of changes in stockholders' equity Condensed Statements of Changes in Stockholders' Equity (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Common Stock, End of Period | $548 | $545 | $548 | $545 | | Additional Paid in Capital, End of Period | $290,677 | $281,801 | $290,677 | $281,801 | | Retained Earnings, End of Period | $1,839,636 | $1,816,617 | $1,839,636 | $1,816,617 | | Total Stockholders' Equity, End of Period | $2,080,285 | $2,048,387 | $2,080,285 | $2,048,387 | [Notes to Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and specific financial line items [Note 1. Business and Basis of Presentation](index=11&type=section&id=Note%201.%20Business%20and%20Basis%20of%20Presentation) This note describes Warrior Met Coal's business as a steelmaking coal supplier and the basis of financial statement presentation - Warrior Met Coal is a U.S.-based, low-cost producer and exporter of **premium quality steelmaking coal (HCC)** from Alabama, primarily serving Europe, South America, and Asia[23](index=23&type=chunk)[80](index=80&type=chunk) - Ancillary revenues are generated from **natural gas** extracted as a byproduct and **royalty revenues** from leased properties[23](index=23&type=chunk)[71](index=71&type=chunk) - The Collective Bargaining Agreement with the labor union expired on **April 1, 2021**, with negotiations for a new contract ongoing[25](index=25&type=chunk)[89](index=89&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=11&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's significant accounting policies, including revenue recognition and estimates - Significant accounting policies remain **consistent with the 2024 Annual Report**[26](index=26&type=chunk) - Financial statements rely on **management estimates and assumptions**, which may differ from actual results[27](index=27&type=chunk) - Revenue is recognized upon **transfer of control of goods** to customers, with pricing for average pricing contracts based on estimated consideration[33](index=33&type=chunk) - The company maintains **trade credit insurance** on most customers, historically recognizing no material credit losses[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 3. Inventories, net](index=12&type=section&id=Note%203.%20Inventories%2C%20net) This note provides a breakdown of the company's net inventories, including coal and raw materials Inventories, net (in thousands) | Inventory Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Coal | $105,972 | $118,504 | | Raw materials, parts, supplies and other, net | $108,943 | $89,086 | | Total inventories, net | $214,915 | $207,590 | [Note 4. Income Taxes](index=13&type=section&id=Note%204.%20Income%20Taxes) This note details income tax expenses and benefits, including the impact of the new One, Big, Beautiful Bill Act (OBBBA) Income Tax Expense (Benefit) (in thousands) | Period | 2025 | 2024 | | :--------------------- | :--------------- | :--------------- | | 3 Months Ended June 30 | $4,310 (expense) | $8,519 (expense) | | 6 Months Ended June 30 | $(1,720) (benefit) | $27,641 (expense) | - The **One, Big, Beautiful Bill Act (OBBBA)**, enacted July 4, 2025, updates the IRC Section 250 Deduction to FDDEI, reducing the statutory tax rate to **14%** for such income, effective after December 31, 2025[40](index=40&type=chunk)[121](index=121&type=chunk)[134](index=134&type=chunk) - OBBBA also classifies metallurgical coal as a **critical mineral** eligible for a **2.5% advanced manufacturing production tax credit (45X Credit)** through 2029 and temporarily decreases the royalty rate for coal leases on federal lands to not more than **7%** through 2034[40](index=40&type=chunk)[88](index=88&type=chunk) [Note 5. Debt](index=13&type=section&id=Note%205.%20Debt) This note outlines the company's debt structure, primarily Senior Secured Notes and the ABL Facility Debt Summary (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | Interest Rate | Final Maturity | | :------------------- | :------------ | :---------------- | :------------ | :------------- | | Senior Secured Notes | $156,517 | $156,517 | 7.875% | December 2028 | | ABL Borrowings | $— | $— | Varies | December 2026 | | Debt discount | $(2,592) | $(2,905) | | | | Total debt | $153,925 | $153,612 | | | - The company has paid down **$193.5 million** in principal on the Senior Secured Notes since inception[42](index=42&type=chunk)[164](index=164&type=chunk) - As of June 30, 2025, there were **no outstanding loans** under the ABL Facility, with **$2.5 million** in letters of credit issued and **$113.5 million** of availability[46](index=46&type=chunk)[159](index=159&type=chunk) [Note 6. Leases](index=14&type=section&id=Note%206.%20Leases) This note details the company's lease arrangements, including finance lease assets and liabilities Lease Information (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Finance lease right-of-use assets, net | $128,787 | $56,702 | | Total finance lease liabilities | $81,780 | $19,425 | | Weighted average remaining lease term (months) | 76.9 | 17.9 | | Weighted average discount rate | 7.24% | 7.25% | Lease Expense (in thousands) | Lease Cost Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $6,233 | $8,206 | $12,679 | $20,812 | | Amortization of leased assets | $5,733 | $5,775 | $11,457 | $11,533 | | Interest on lease liabilities | $1,858 | $2,322 | $3,167 | $2,673 | | Net lease cost | $13,824 | $16,303 | $27,303 | $35,018 | [Note 7. Net Income (Loss) per Share](index=15&type=section&id=Note%207.%20Net%20Income%20(Loss)%20per%20Share) This note details the calculation of basic and diluted net income (loss) per share for the specified periods Net Income (Loss) per Share (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $5,606 | $70,711 | $(2,562) | $207,700 | | Basic EPS | $0.11 | $1.35 | $(0.05) | $3.98 | | Diluted EPS | $0.11 | $1.35 | $(0.05) | $3.97 | [Note 8. Commitments and Contingencies](index=16&type=section&id=Note%208.%20Commitments%20and%20Contingencies) This note covers environmental accruals, litigation, transportation agreements, and coal royalty expenses - The company accrues for environmental expenses related to mine reclamation but had **no other environmental or litigation accruals** as of June 30, 2025[53](index=53&type=chunk)[54](index=54&type=chunk) - Transportation and throughput agreements include annual minimum tonnage guarantees, but **no liability was recorded** as of June 30, 2025[55](index=55&type=chunk) Coal Royalty Expenses (in millions) | Period | 2025 | 2024 | | :--------------------- | :---- | :---- | | 3 Months Ended June 30 | $18.9 | $33.2 | | 6 Months Ended June 30 | $41.2 | $76.1 | [Note 9. Stockholders' Equity](index=16&type=section&id=Note%209.%20Stockholders'%20Equity) This note details authorized shares, stock repurchase programs, and dividend declarations - The company has **$59.4 million** remaining authorized for share repurchases under the New Stock Repurchase Program[61](index=61&type=chunk) - The regular quarterly cash dividend was increased to **$0.08 per share** in February 2024[62](index=62&type=chunk)[156](index=156&type=chunk) - A special cash dividend of **$0.50 per share** was declared and paid in February/March 2024[62](index=62&type=chunk)[158](index=158&type=chunk) [Note 10. Derivative Instruments](index=17&type=section&id=Note%2010.%20Derivative%20Instruments) This note describes the company's use of natural gas swap contracts to hedge price exposure - The company uses natural gas swap contracts to hedge price exposure, with **2,750,000 MMBtu contracts outstanding** as of June 30, 2025, a decrease from 5,500,000 MMBtu at December 31, 2024[64](index=64&type=chunk)[175](index=175&type=chunk) Natural Gas Swap Contract Gains/Losses (in millions) | Period | Realized Loss (2025) | Unrealized Gain (2025) | Unrealized Loss (2025) | | :--------------------- | :------------------- | :--------------------- | :--------------------- | | 3 Months Ended June 30 | $(0.4) | $1.8 | N/A | | 6 Months Ended June 30 | $(0.9) | N/A | $(0.4) | [Note 11. Fair Value of Financial Instruments](index=18&type=section&id=Note%2011.%20Fair%20Value%20of%20Financial%20Instruments) This note presents the fair value measurements of financial liabilities, including natural gas swap contracts and Senior Secured Notes Fair Value Measurements of Natural Gas Swap Contracts (in thousands) | Date | Level 2 | Total | | :-------------- | :------ | :---- | | June 30, 2025 | $1,356 | $1,356 | | December 31, 2024 | $1,835 | $1,835 | - The estimated fair value of the Senior Secured Notes was approximately **$158.9 million** as of June 30, 2025, based on Level 2 observable market data[70](index=70&type=chunk) [Note 12. Segment Information](index=18&type=section&id=Note%2012.%20Segment%20Information) This note details the company's operating segments, now including Blue Creek, aggregated into a single Mining segment - The company now has three operating segments: Mine No. 4, Mine No. 7, and the Blue Creek mine, aggregated into one reportable segment called **"Mining"**[72](index=72&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - Natural gas and royalty businesses are reported under an **"All Other"** category, as they do not meet the criteria for reportable segments[73](index=73&type=chunk)[92](index=92&type=chunk) - The Chief Executive Officer (CODM) measures financial performance and allocates resources based on **Segment Adjusted EBITDA**[72](index=72&type=chunk)[95](index=95&type=chunk) Segment Revenues (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Mining | $288,491 | $390,424 | $583,424 | $888,423 | | All other | $9,032 | $6,099 | $14,042 | $11,613 | | Total revenues | $297,523 | $396,524 | $597,466 | $900,036 | Segment Profit (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Segment profit | $62,079 | $129,120 | $111,277 | $341,531 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides a detailed narrative of the company's financial condition and operational results for the specified periods [Overview](index=21&type=section&id=Overview) This overview describes Warrior Met Coal's business as a premium steelmaking coal producer and market dynamics - As of December 31, 2024, Mine No. 4 and Mine No. 7 had approximately **82.4 million metric tons** of recoverable reserves, with the undeveloped Blue Creek mine containing **69.0 million metric tons**[81](index=81&type=chunk) - The company's high-quality coal is ideally suited as **coking coal for steel manufacturing** due to its low sulfur and low-to-medium ash content[81](index=81&type=chunk) - Demand for the company's coal is highly correlated to the **global steelmaking industry**, influenced by cyclicality, technology, and substitutes[82](index=82&type=chunk) [Update on the Development of Blue Creek](index=21&type=section&id=Update%20on%20the%20Development%20of%20Blue%20Creek) This section provides an update on the Blue Creek mine development, including increased capacity and production milestones - Blue Creek mine's nameplate capacity increased by **25% to 5.4 million metric tons**, boosting overall company capacity by **75% to 12.7 million metric tons per year**[83](index=83&type=chunk) - The Blue Creek project is **ahead of schedule**, with longwall startup anticipated in early Q1 2026[84](index=84&type=chunk) - First commercial sales of **217 thousand metric tons** from Blue Creek occurred in Q2 2025, ahead of schedule[85](index=85&type=chunk) Blue Creek Production and Investment | Metric | 2025 (Expected) | 2026 (Expected) | 2027 (Expected) | To Date (Investment) | Total Project Cost (Estimate) | | :------------------------- | :-------------- | :-------------- | :-------------- | :------------------- | :---------------------------- | | Production (k metric tons) | 900 | 3,600 | 4,400 | N/A | N/A | | Investment (millions) | $225-$250 | N/A | N/A | $823.5 | $995-$1,075 | [Recent Developments](index=23&type=section&id=Recent%20Developments) This section covers recent market conditions, including coal prices, and the impact of the One, Big, Beautiful Bill Act (OBBBA) - Premium low-vol index prices declined **24% YoY in Q2 2025**, averaging **$184.22 per metric ton**, due to weak steel demand and economic slowdown[86](index=86&type=chunk) - The Platts Index price for premium LV coal was **$182.00 per metric ton** as of July 14, 2025, expected to remain between $182.00 and $195.00 for the rest of the year[86](index=86&type=chunk) - The OBBBA introduces a permanent **33.34% deduction for FDDEI** (reducing tax rate to 14%), a **2.5% 45X Credit** for metallurgical coal, and temporarily decreases federal coal lease royalty rates to not more than **7%** through 2034[88](index=88&type=chunk) [Collective Bargaining Agreement](index=23&type=section&id=Collective%20Bargaining%20Agreement) This section notes the expiration of the Collective Bargaining Agreement and ongoing negotiations - The Collective Bargaining Agreement expired on **April 1, 2021**, with negotiations for a new contract ongoing[89](index=89&type=chunk) [How We Evaluate Our Operations](index=23&type=section&id=How%20We%20Evaluate%20Our%20Operations) This section describes the company's operating segments and key metrics used for performance evaluation - The company's operating segments now include Mine No. 4, Mine No. 7, and the Blue Creek mine, aggregated into a single **"Mining"** reportable segment[90](index=90&type=chunk)[91](index=91&type=chunk) - Key performance metrics include **Segment Adjusted EBITDA, sales volumes, average net selling price, cash cost of sales, and Adjusted EBITDA**[93](index=93&type=chunk) Key Operating Metrics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Segment Adjusted EBITDA | $62,079 | $129,120 | $111,277 | $341,531 | | Metric tons sold (thousands) | 2,013 | 1,904 | 3,983 | 3,835 | | Metric tons produced (thousands) | 2,094 | 1,970 | 4,139 | 3,831 | | Average net selling price per metric ton | $143.31 | $205.05 | $146.48 | $231.66 | | Cash cost of sales per metric ton | $111.53 | $136.39 | $117.63 | $141.82 | | Adjusted EBITDA | $53,568 | $115,943 | $93,056 | $316,140 | [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section provides a detailed breakdown of the company's financial performance for the specified periods [Three Months Ended June 30, 2025 and 2024](index=27&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes the company's financial performance for the three months ended June 30, 2025, compared to 2024 Key Financials (3 Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------ | :------- | :------- | :--------- | :--------- | | Total Revenues | $297,523 | $396,524 | $(99,001) | (25.0)% | | Net Income | $5,606 | $70,711 | $(65,105) | (92.1)% | | Sales | $288,491 | $390,424 | $(101,933) | (26.1)% | | Other revenues | $9,032 | $6,099 | $2,933 | 48.1% | | Cost of sales | $226,412 | $261,305 | $(34,893) | (13.4)% | | Depreciation & depletion | $43,255 | $38,150 | $5,105 | 13.4% | | SG&A | $11,923 | $15,492 | $(3,569) | (23.0)% | | Interest expense | $2,890 | $915 | $1,975 | 215.8% | | Interest income | $5,083 | $9,241 | $(4,158) | (45.0)% | Per Unit Metrics (3 Months Ended June 30) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------ | :------ | :--------- | :--------- | | Metric tons sold (thousands) | 2,013 | 1,904 | 109 | 5.7% | | Metric tons produced (thousands) | 2,094 | 1,970 | 124 | 6.3% | | Average net selling price per metric ton | $143.31 | $205.05 | $(61.74) | (30.1)% | | Cash cost of sales per metric ton | $111.53 | $136.39 | $(24.86) | (18.2)% | - The geographic customer sales volume mix for Q2 2025 was **52% Asia, 37% Europe, and 11% South America**, shifting from 41% Asia, 38% Europe, and 21% South America in Q2 2024[112](index=112&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=29&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes the company's financial performance for the six months ended June 30, 2025, compared to 2024 Key Financials (6 Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :------------------------ | :------- | :------- | :--------- | :--------- | | Total Revenues | $597,466 | $900,036 | $(302,570) | (33.6)% | | Net (Loss) Income | $(2,562) | $207,700 | $(210,262) | (101.2)% | | Sales | $583,424 | $888,423 | $(304,999) | (34.3)% | | Other revenues | $14,042 | $11,613 | $2,429 | 20.9% | | Cost of sales | $472,147 | $546,892 | $(74,745) | (13.7)% | | Depreciation & depletion | $88,532 | $78,173 | $10,359 | 13.2% | | SG&A | $30,365 | $34,352 | $(3,987) | (11.6)% | | Interest expense | $4,997 | $2,036 | $2,961 | 145.4% | | Interest income | $10,376 | $17,395 | $(7,019) | (40.3)% | Per Unit Metrics (6 Months Ended June 30) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------------- | :------ | :------ | :--------- | :--------- | | Metric tons sold (thousands) | 3,983 | 3,835 | 148 | 3.9% | | Metric tons produced (thousands) | 4,139 | 3,831 | 308 | 8.0% | | Average net selling price per metric ton | $146.48 | $231.66 | $(85.18) | (36.8)% | | Cash cost of sales per metric ton | $117.63 | $141.82 | $(24.19) | (17.1)% | - The geographic customer sales volume mix for the six months ended June 30, 2025, was **47% Asia, 37% Europe, and 16% South America**, compared to 44% Asia, 37% Europe, 18% South America, and 1% United States in the prior year[125](index=125&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity position, cash flows, capital expenditures, and capital allocation policy Total Liquidity (in millions) | Metric | June 30, 2025 | | :-------------------------------------- | :------------ | | Cash and cash equivalents | $383.3 | | Short-term investments (net of collateral) | $38.1 | | Long-term investments | $10.1 | | ABL Facility availability | $113.5 | | **Total Liquidity** | **$545.0** | - Net cash provided by operating activities decreased significantly to **$48.5 million** for the six months ended June 30, 2025, from $251.0 million in the prior year, primarily due to a net loss and changes in working capital[149](index=149&type=chunk)[150](index=150&type=chunk) - Capital expenditures for Blue Creek development were **$107.0 million** for the six months ended June 30, 2025, with **$823.6 million** spent on the project to date[151](index=151&type=chunk)[168](index=168&type=chunk) - The company's Capital Allocation Policy includes a regular quarterly cash dividend of **$0.08 per share** and allows for special dividends or stock repurchases based on excess cash generation and market conditions[153](index=153&type=chunk)[154](index=154&type=chunk) - The company is responsible for black lung liabilities, appealing a DOL requirement to increase collateral to **$28 million** (from $39.8 million initially requested), with new rules requiring **100% security** for self-insured operators[140](index=140&type=chunk)[141](index=141&type=chunk) - Total capital spending for full year 2025 is expected to range from **$315.0 million to $350.0 million**, including **$225.0 million to $250.0 million** for Blue Creek development[169](index=169&type=chunk) [Critical Accounting Policies](index=35&type=section&id=Critical%20Accounting%20Policies) This section confirms no material changes to critical accounting estimates as of June 30, 2025 - No material changes to critical accounting estimates as of June 30, 2025, as described in the **2024 Annual Report**[172](index=172&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) This section details the company's use of surety bonds and letters of credit for various obligations Off-Balance Sheet Arrangements (as of June 30, 2025, in millions) | Purpose | Amount | | :--------------------------- | :----- | | Post-mining reclamation | $47.0 | | Self-insured black lung related claims | $18.6 | | Miscellaneous purposes | $12.6 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's exposure to commodity price, credit, interest rate, inflation, and tariff risks [Commodity Price Risk](index=36&type=section&id=Commodity%20Price%20Risk) This section addresses the company's exposure to price fluctuations in steelmaking coal and natural gas - Steelmaking coal sales are subject to **market price fluctuations** due to indexed pricing terms in supply contracts[174](index=174&type=chunk) - Natural gas swap contracts are used to hedge price exposure, with **2,750,000 MMBtu contracts outstanding** as of June 30, 2025[175](index=175&type=chunk) - Price risk for production supplies like diesel fuel and steel is managed through **strategic sourcing contracts**[176](index=176&type=chunk) [Credit Risk](index=36&type=section&id=Credit%20Risk) This section outlines the company's credit risk from trade receivables and mitigation strategies - Credit risk is concentrated in trade receivables, mitigated by **trade credit insurance, letters of credit, cash collateral, or prepayments**[177](index=177&type=chunk) - Historically, the company has recognized **no material credit losses**[177](index=177&type=chunk) [Interest Rate Risk](index=36&type=section&id=Interest%20Rate%20Risk) This section details the company's exposure to interest rate fluctuations on its variable-rate ABL Facility - Senior Secured Notes have a **fixed interest rate of 7.875%**[178](index=178&type=chunk) - The ABL Facility has a **variable interest rate** based on SOFR or an alternate base rate[179](index=179&type=chunk) - A **100-basis point change** in interest rates would impact annual interest expense under the ABL Facility by approximately **$1.1 million**, assuming full utilization[179](index=179&type=chunk) [Impact of Inflation](index=36&type=section&id=Impact%20of%20Inflation) This section discusses the impact of inflation on production costs and mitigation strategies - Inflationary pressures on production supplies and labor have led to **rising costs**[180](index=180&type=chunk) - Mitigation strategies include **earlier purchase orders, short-term contracts, and leveraging supplier relationships**[180](index=180&type=chunk) [Tariff Risks](index=36&type=section&id=Tariff%20Risks) This section addresses potential impacts of new or retaliatory tariffs on the company's operations and demand - Tariffs could result in **reduced economic activity, increased operating costs, decreased demand for steelmaking coal, supply chain disruptions, and material pricing changes**[181](index=181&type=chunk)[182](index=182&type=chunk) - The company is currently **assessing the impact of tariffs** on its financial statements and business[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of June 30, 2025 - Disclosure controls and procedures were evaluated and deemed **effective** as of June 30, 2025[183](index=183&type=chunk) - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[184](index=184&type=chunk) - Management acknowledges that controls provide only **reasonable assurance** due to inherent limitations and resource constraints[185](index=185&type=chunk) [Part II. Other Information](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity sales, defaults, mine safety, and other disclosures [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the company's involvement in ordinary course lawsuits and their potential financial impact - The company is party to lawsuits in the ordinary course of business, accruing costs when a loss is **probable and estimable**[188](index=188&type=chunk) - The company believes the final outcome of current litigation will **not have a material adverse effect** on its financial statements[188](index=188&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section reiterates that no material changes occurred to the risk factors disclosed in the 2024 Annual Report - No material changes to the risk factors disclosed in the **2024 Annual Report**[189](index=189&type=chunk) - The company's performance can be impacted by numerous factors, and new or currently immaterial risks may become material[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no share repurchases under the New Stock Repurchase Program during Q2 2025 - No shares were repurchased under the New Stock Repurchase Program during the three months ended June 30, 2025[190](index=190&type=chunk) - Approximately **$59.0 million** remains authorized for share repurchases under the New Stock Repurchase Program[190](index=190&type=chunk) [Item 3. Defaults on Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20on%20Senior%20Securities) This section confirms that the company reported no defaults on senior securities - No defaults on senior securities were reported[192](index=192&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are provided as Exhibit 95 to the Form 10-Q - Mine safety disclosures are provided in **Exhibit 95** of this Form 10-Q[193](index=193&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section notes that no directors or officers adopted or terminated Rule 10b5-1 trading plans during Q2 2025 - No directors or officers adopted or terminated **Rule 10b5-1 trading arrangements** during the three months ended June 30, 2025[194](index=194&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and certifications - The report includes a list of exhibits, such as **corporate governance documents, certifications, and XBRL data**[195](index=195&type=chunk) [Signatures](index=41&type=section&id=SIGNATURES) This section confirms the report was signed by Dale W. Boyles, CFO, on August 6, 2025 - The report was signed by **Dale W. Boyles, Chief Financial Officer**, on August 6, 2025[201](index=201&type=chunk)

Financial Performance - Revenue decreased by 25% to $2975 million for the three months ended June 30, 2025, compared to $3965 million in 2024[17] - Net income decreased by 92% to $56 million for the three months ended June 30, 2025, compared to $707 million in 2024[17] - Adjusted EBITDA decreased by 54% to $536 million for the three months ended June 30, 2025, compared to $1159 million in 2024[17] - For the six months ended June 30, 2025, the company recorded a net loss of $26 million, a 101% change compared to a net income of $2077 million in 2024[21] - Revenue decreased by 34% to $5975 million for the six months ended June 30, 2025, from $9000 million in 2024[21] - Adjusted EBITDA decreased by 71% to $931 million for the six months ended June 30, 2025, compared to $3161 million in 2024[21] Production and Sales - Coal production increased by 6% to 2308 thousand short tons for the three months ended June 30, 2025, compared to 2172 thousand short tons in 2024[17] - Coal sales increased by 6% to 2219 thousand short tons for the three months ended June 30, 2025, compared to 2098 thousand short tons in 2024[17] - Coal production increased by 8% to 4562 thousand short tons for the six months ended June 30, 2025, compared to 4223 thousand short tons in 2024[21] - Coal sales increased by 4% to 4391 thousand short tons for the six months ended June 30, 2025, compared to 4227 thousand short tons in 2024[21] Blue Creek Project - The company achieved commercial sales of 239 thousand short tons of Blue Creek steelmaking coal ahead of schedule[10] - The company invested $518 million in the continued development of Blue Creek, bringing the total project-to-date capital expenditures to $8235 million[12] - The longwall startup at Blue Creek is accelerated to early first quarter of 2026[11]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Warrior Met Coal experienced a significant decline in Q2 2025 net income and Adjusted EBITDA due to weaker steelmaking coal markets, despite achieving first commercial sales from Blue Creek mine [Second Quarter 2025 Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) Q2 2025 saw a sharp decline in net income and Adjusted EBITDA due to weaker coal prices, offset by early Blue Creek mine sales Q2 2025 vs Q2 2024 Financial Overview | Metric | Q2 2025 | Q2 2024 | Change | | :---------------- | :------ | :------ | :----- | | Net Income | $5.6M | $70.7M | -92.1% | | Diluted EPS | $0.11 | $1.35 | -91.8% | | Adjusted EBITDA | $53.6M | $115.9M | -53.8% | - Average index price for premium low-vol steelmaking coal was **24% lower year-over-year**[3](index=3&type=chunk) - First commercial sales of Blue Creek steelmaking coal were achieved ahead of schedule[1](index=1&type=chunk)[4](index=4&type=chunk) [Key Operational and Financial Highlights](index=1&type=section&id=Key%20Operational%20and%20Financial%20Highlights) Blue Creek mine achieved first commercial sales and accelerated longwall startup, contributing to increased volumes and reduced cash costs - Achieved first commercial sales of **239 thousand short tons** of steelmaking coal from the Blue Creek mine ahead of schedule[4](index=4&type=chunk) - Produced **348 thousand short tons** from continuous miner development on the first longwall panel at Blue Creek[4](index=4&type=chunk) - Announced the acceleration of the longwall startup at Blue Creek to **early first quarter of 2026**[4](index=4&type=chunk) Q2 2025 Operational Highlights | Metric | Value | YoY Change | | :-------------------------------- | :-------------------- | :--------- | | Total Sales & Production Volumes | 6% increase | +6% | | Cash Cost of Sales (FOB port) per short ton | $101.17 | -18% | | Cash Provided by Operating Activities | $37.5 million | N/A | [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO highlighted strong operations and positive cash flows despite market headwinds, with Blue Creek sales marking a key revenue milestone - Warrior delivered strong operational results, maintained positive cash margins, and generated positive operating cash flows despite headwinds in the global steelmaking industry[5](index=5&type=chunk) - The first commercial sales from the Blue Creek mine represent a critical inflection point, marking the beginning of a transition from capital investment to revenue generation[5](index=5&type=chunk) - The Blue Creek mine's inherently low-cost structure reinforces confidence in its long-term value and role in driving sustainable shareholder returns[5](index=5&type=chunk) [Company Information](index=1&type=section&id=Company%20Information) Warrior Met Coal is a leading U.S. producer and exporter of high-quality steelmaking coal for the global steel industry [About Warrior Met Coal](index=1&type=section&id=About%20Warrior%20Met%20Coal) Warrior Met Coal is a premier U.S. producer and exporter of high-quality non-thermal metallurgical coal for global steel production - Warrior is the leading dedicated U.S.-based producer and exporter of high-quality steelmaking coal for the global steel industry[2](index=2&type=chunk) - The company is dedicated entirely to mining non-thermal metallurgical (met) steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia[25](index=25&type=chunk) - Warrior produces premium quality met coal (hard-coking coal, HCC) from the Blue Creek coal seam, which contains very low sulfur and has strong coking properties, making it ideally suited as a base feed coal for steel makers[25](index=25&type=chunk) [Second Quarter 2025 Financial and Operating Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operating%20Results) Q2 2025 results show increased volumes from Blue Creek, but lower revenues and net income due to weaker coal prices [Operating Results](index=2&type=section&id=Operating%20Results) Q2 2025 saw a 6% increase in sales and production volumes year-over-year, primarily driven by the Blue Creek mine Q2 2025 Operating Volumes | Metric | Q2 2025 (k short tons) | Q2 2024 (k short tons) | YoY Change | | :---------------- | :--------------------- | :--------------------- | :--------- | | Tons Sold | 2,219 | 2,098 | +6% | | Tons Produced | 2,308 | 2,172 | +6% | - The increase in sales and production volumes was primarily attributable to Blue Creek, which produced **348 thousand short tons**[6](index=6&type=chunk)[7](index=7&type=chunk) - Inventory levels remained consistent at **1.2 million short tons** as of June 30, 2025, compared to March 31, 2025[7](index=7&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) Total revenues and net income declined significantly in Q2 2025 due to lower selling prices, despite cost control efforts [Revenues and Selling Prices](index=2&type=section&id=Revenues%20and%20Selling%20Prices) Total revenues decreased by 25% in Q2 2025, driven by a 30.1% drop in average net selling price per short ton Q2 2025 Revenues and Selling Prices | Metric | Q2 2025 | Q2 2024 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Total Revenues | $297.5M | $396.5M | -25.0% | | Average Net Selling Price per Short Ton | $130.01 | $186.09 | -30.1% | - The average gross selling price realization was approximately **80%** of the Platts Premium Low Vol FOB Australian index price for Q2 2025, primarily driven by a higher sales mix of high-vol A steelmaking coal and a lower price index relativity to premium low-vol[8](index=8&type=chunk) [Costs and Expenses](index=2&type=section&id=Costs%20and%20Expenses) Cost of sales decreased, with cash cost of sales per short ton falling 18% due to lower prices and Blue Creek's low-cost structure Q2 2025 Costs and Expenses | Metric | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Cost of Sales | $226.4M | $261.3M | -13.3% | | Cash Cost of Sales (FOB port) per Short Ton | $101.17 | $123.78 | -18.2% | | Selling, General and Administrative Expenses | $11.9M | $15.5M | -23.2% | | Depreciation and Depletion | $43.3M | $38.2M | +13.4% | - The decrease in cash cost of sales per short ton was driven primarily by lower steelmaking coal prices and its effect on Warrior's variable cost structure (wages, transportation, royalties), combined with disciplined cost control, operational efficiency, and the sales mix of Blue Creek coal and its inherent lower cost structure[9](index=9&type=chunk) - Depreciation and depletion expenses increased primarily due to depreciation expense recognized on additional assets placed into service at Blue Creek and higher sales volumes[11](index=11&type=chunk) [Net Income and EPS](index=1&type=section&id=Net%20Income%20and%20EPS) Net income and diluted EPS saw substantial declines in Q2 2025, primarily due to weaker market conditions and lower selling prices Q2 2025 Net Income and EPS | Metric | Q2 2025 | Q2 2024 | YoY Change | | :---------------- | :------ | :------ | :--------- | | Net Income | $5.6M | $70.7M | -92.1% | | Diluted EPS | $0.11 | $1.35 | -91.8% | [Cash Flow and Liquidity](index=3&type=section&id=Cash%20Flow%20and%20Liquidity) Operating cash flows decreased significantly, resulting in negative free cash flow, while total liquidity remained robust Q2 2025 Cash Flow Summary | Metric | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Net Cash Provided by Operating Activities | $37.5M | $147.0M | -74.5% | | Capital Expenditures and Mine Development | $94.3M | $121.6M | -22.4% | | Free Cash Flow | -$56.7M | $25.4M | N/A (negative shift) | - Capital expenditures for Q2 2025 included **$51.8 million** for the continued development of Blue Creek, bringing the project-to-date total to **$823.5 million**[13](index=13&type=chunk) - Total liquidity as of June 30, 2025, was **$545.0 million**, consisting of cash and cash equivalents (**$383.3M**), short-term investments (**$38.1M**), long-term investments (**$10.1M**), and available liquidity under its ABL Facility (**$113.5M**)[15](index=15&type=chunk) [Capital Allocation](index=3&type=section&id=Capital%20Allocation) Warrior's Board declared a regular quarterly cash dividend of $0.08 per share, payable in August 2025 [Dividends](index=3&type=section&id=Dividends) A regular quarterly cash dividend of $0.08 per share was declared on July 29, 2025, payable in August - A regular quarterly cash dividend of **$0.08 per share** was declared on July 29, 2025[16](index=16&type=chunk) - The dividend is payable on August 15, 2025, to stockholders of record as of August 8, 2025[16](index=16&type=chunk) [Company Outlook](index=3&type=section&id=Company%20Outlook) Warrior Met Coal updated its full-year 2025 guidance, projecting coal sales and production volumes, and capital expenditures [Full Year 2025 Guidance](index=4&type=section&id=Full%20Year%202025%20Guidance) Full-year 2025 guidance includes projected coal sales of 8.8-9.5 million short tons and significant capital expenditures for Blue Creek Full Year 2025 Guidance | Metric | Range | | :---------------------------------- | :-------------------------- | | Coal Sales | 8.8 - 9.5 million short tons | | Coal Production | 8.3 - 9.1 million short tons | | Cash Cost of Sales (FOB port) | $110 - $120 per short ton | | Capital Expenditures for Sustaining Existing Mines | $90 - $100 million | | Capital Expenditures for Blue Creek Project | $225 - $250 million | | Mine Development Costs for Blue Creek Project | $85 - $100 million | | Depreciation and Depletion | $185 - $210 million | | Selling, General and Administrative Expenses | $65 - $75 million | | Interest Expense | $10 - $15 million | | Interest Income | $15 - $20 million | - The 2025 production and sales guidance includes approximately **1.0 million short tons** of High Vol A steelmaking coal from the Blue Creek continuous miner units, expected to be sold primarily in the second half of 2025[19](index=19&type=chunk) [Key Factors Affecting Outlook](index=4&type=section&id=Key%20Factors%20Affecting%20Outlook) The 2025 outlook is influenced by longwall moves, HCC index pricing, sales geography, trade policies, and inflationary pressures - Key factors that may affect the full year 2025 outlook include: one longwall move in Q2 and three planned longwall moves before year-end (two in Q3 and one in Q4), HCC index pricing, geography of sales and freight rates, trade and tariff policies, exclusion of other non-recurring costs, new labor contract, and inflationary pressures[22](index=22&type=chunk) - Capital expenditures consist of approximately **$90-$100 million** for sustaining existing mines and **$225-$250 million** for the development of the Blue Creek reserves[20](index=20&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section explains and reconciles non-GAAP financial measures like Adjusted EBITDA and free cash flow to GAAP equivalents [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures provide supplemental insights into performance and aid comparisons, but may not be comparable across entities - Non-GAAP financial measures are provided as supplemental information for financial measures prepared in accordance with GAAP, offering additional insights into company performance and aiding in comparisons against other companies[22](index=22&type=chunk)[23](index=23&type=chunk) - The company does not provide reconciliations of its outlook for cash cost of sales (free-on-board port) to GAAP cost of sales due to the unreasonable efforts exception, as certain non-cash and non-recurring items are difficult to predict[21](index=21&type=chunk) [Reconciliation of Cash Cost of Sales (Free-on-Board Port) to GAAP Cost of Sales](index=8&type=section&id=Reconciliation%20of%20Cash%20Cost%20of%20Sales%20%28Free-on-Board%20Port%29%20to%20GAAP%20Cost%20of%20Sales) This reconciliation details the adjustments from GAAP cost of sales to arrive at the non-GAAP cash cost of sales (FOB port) Reconciliation of Cash Cost of Sales (FOB Port) to GAAP Cost of Sales (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Cost of Sales (GAAP) | $226,412 | $261,305 | $472,147 | $546,892 | | Asset Retirement Obligation Accretion | (966) | (703) | (1,931) | (1,405) | | Stock Compensation Expense | (942) | (912) | (1,684) | (1,625) | | **Cash Cost of Sales (FOB Port) (Non-GAAP)** | **$224,504** | **$259,690** | **$468,532** | **$543,862** | - Cash cost of sales (free-on-board port) is a non-GAAP measure that includes items such as freight, royalties, labor, fuel, and other production and sales cost items, adjusted for certain GAAP classifications[34](index=34&type=chunk) [Reconciliation of Adjusted EBITDA to GAAP Net Income](index=9&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20GAAP%20Net%20Income) Adjusted EBITDA is reconciled from net income by adding back non-cash and non-operating items, showing a significant Q2 2025 decline Reconciliation of Adjusted EBITDA to GAAP Net Income (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net Income (Loss) | $5,606 | $70,711 | $(2,562) | $207,700 | | Interest Income, Net | (2,195) | (8,327) | (5,380) | (15,360) | | Income Tax Expense (Benefit) | 4,310 | 8,519 | (1,720) | 27,641 | | Depreciation and Depletion | 43,255 | 38,150 | 88,532 | 78,173 | | Asset Retirement Obligation Accretion | 1,331 | 1,298 | 2,662 | 2,595 | | Stock Compensation Expense | 2,045 | 5,040 | 10,098 | 14,187 | | Other Non-Cash Accretion | 495 | 451 | 989 | 902 | | Non-Cash Mark-to-Market (Gain) Loss on Gas Hedges | (1,303) | — | 415 | — | | Business Interruption | 24 | 101 | 22 | 302 | | **Adjusted EBITDA (Non-GAAP)** | **$53,568** | **$115,943** | **$93,056** | **$316,140** | - Adjusted EBITDA margin decreased to **18.0%** in Q2 2025 from **29.2%** in Q2 2024[36](index=36&type=chunk) - Adjusted EBITDA per short ton decreased to **$24.14** in Q2 2025 from **$55.26** in Q2 2024[36](index=36&type=chunk) [Reconciliation of Adjusted Net Income to GAAP Net Income](index=9&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income%20to%20GAAP%20Net%20Income) Adjusted net income is derived from GAAP net income by adjusting for business interruption expenses, net of tax Reconciliation of Adjusted Net Income to GAAP Net Income (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net Income (Loss) | $5,606 | $70,711 | $(2,562) | $207,700 | | Business Interruption, Net of Tax | 14 | 89 | 13 | 267 | | **Adjusted Net Income (Loss) (Non-GAAP)** | **$5,620** | **$70,800** | **$(2,549)** | **$207,967** | - Adjusted net income (loss) per share—diluted was **$0.11** in Q2 2025, compared to **$1.35** in Q2 2024[37](index=37&type=chunk) [Reconciliation of Free Cash Flow to GAAP Net Cash Provided by Operating Activities](index=10&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow%20to%20GAAP%20Net%20Cash%20Provided%20by%20Operating%20Activities) Free cash flow, a non-GAAP measure, is calculated by subtracting purchases of property, plant and equipment and mine development costs from net cash provided by operating activities Reconciliation of Free Cash Flow (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net Cash Provided by Operating Activities | $37,546 | $146,975 | $48,463 | $251,033 | | Purchases of Property, Plant and Equipment and Mine Development Costs | (94,251) | (121,619) | (173,598) | (223,309) | | **Free Cash Flow (Non-GAAP)** | **$(56,705)** | **$25,356** | **$(125,135)** | **$27,724** | - Free cash flow conversion was **-105.9%** in Q2 2025, compared to **21.9%** in Q2 2024[40](index=40&type=chunk) [Condensed Financial Statements](index=7&type=section&id=Condensed%20Financial%20Statements) This section presents the condensed statements of operations, cash flows, and balance sheets for Q2 2025 [Condensed Statements of Operations](index=7&type=section&id=Condensed%20Statements%20of%20Operations) The condensed statements of operations show total revenues of $297.5 million for Q2 2025, down from $396.5 million in Q2 2024 Condensed Statements of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Total Revenues | $297,523 | $396,524 | $597,466 | $900,036 | | Operating Income (Loss) | $7,723 | $70,904 | $(9,661) | $219,982 | | Net Income (Loss) | $5,606 | $70,711 | $(2,562) | $207,700 | | Diluted Net Income (Loss) Per Share | $0.11 | $1.35 | $(0.05) | $3.97 | [Quarterly Supplemental Financial Data](index=8&type=section&id=Quarterly%20Supplemental%20Financial%20Data) Supplemental data highlights increased volumes but decreased average net selling price and cash margin per ton in Q2 2025 Quarterly Supplemental Financial Data | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Tons Sold (k short tons) | 2,219 | 2,098 | 4,391 | 4,227 | | Tons Produced (k short tons) | 2,308 | 2,172 | 4,562 | 4,223 | | Average Net Selling Price ($/short ton) | $130.01 | $186.09 | $132.87 | $210.18 | | Cash Cost of Sales (FOB port) per Short Ton ($/short ton) | $101.17 | $123.78 | $106.70 | $128.66 | | Cash Margin per Ton ($/short ton) | $28.84 | $62.31 | $26.17 | $81.52 | [Condensed Statements of Cash Flows](index=10&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly decreased, leading to a net decrease in cash for Q2 2025 Condensed Statements of Cash Flows (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net Cash Provided by Operating Activities | $37,546 | $146,975 | $48,463 | $251,033 | | Net Cash Used in Investing Activities | $(94,332) | $(121,619) | $(172,097) | $(223,309) | | Net Cash (Used in) Provided by Financing Activities | $(14,819) | $(10,191) | $15,490 | $(56,898) | | Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | $(71,605) | $15,165 | $(108,144) | $(29,174) | | Cash, Cash Equivalents and Restricted Cash at End of Period | $390,988 | $709,023 | $390,988 | $709,023 | [Condensed Balance Sheets](index=11&type=section&id=Condensed%20Balance%20Sheets) Total assets and liabilities increased as of June 30, 2025, primarily due to property, plant, and equipment additions Condensed Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Total Assets | $2,645,402 | $2,591,516 | | Total Liabilities | $565,117 | $500,699 | | Total Stockholders' Equity | $2,080,285 | $2,090,817 | | Cash and Cash Equivalents | $383,251 | $491,547 | | Property, Plant and Equipment, Net | $1,675,295 | $1,549,470 | [Additional Information](index=5&type=section&id=Additional%20Information) This section provides details on the conference call, forward-looking statements, and company contact information [Conference Call Details](index=5&type=section&id=Conference%20Call%20Details) Warrior Met Coal held a conference call on August 6, 2025, to discuss its second quarter 2025 financial results - A conference call to discuss second quarter 2025 results was held on August 6, 2025, at 4:30 p.m. ET[24](index=24&type=chunk) - Access to the live event, archived recording, and telephone playback details were provided for investors and analysts[24](index=24&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements subject to various risks and uncertainties that could alter actual results - Forward-looking statements include those regarding 2025 guidance, sales and production growth, ability to maintain cost structure, demand, pricing trends, management of liquidity, cash flows, expenses, expected capital expenditures, and the development of the Blue Creek project[26](index=26&type=chunk) - These statements are subject to risks, uncertainties, and other factors, many outside the Company's control, that could cause actual results to differ materially, including fluctuations in coal pricing/demand, trade policies, inflation, geopolitical events, operational issues, and regulatory changes[26](index=26&type=chunk)[27](index=27&type=chunk) - The Company does not undertake any obligation to update or revise any forward-looking statement, except as required by law[28](index=28&type=chunk) [Contacts](index=6&type=section&id=Contacts) Contact information for investor relations and media inquiries is provided for further communication - For Investors: Dale W. Boyles, 205-554-6129, dale.boyles@warriormetcoal.com[29](index=29&type=chunk) - For Media: D'Andre Wright, 205-554-6131, dandre.wright@warriormetcoal.com[29](index=29&type=chunk)

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