Alpha Metallurgical Resources(AMR) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements 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] - 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] 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] - 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][28] - 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][23][26] Part I - Financial Information 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 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 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 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 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] - Inventories, net, increased from $169.269 million at December 31, 2024, to $207.251 million at June 30, 2025[35] Condensed Consolidated Statements of Cash Flows 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 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 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 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] - The interim Condensed Consolidated Financial Statements are unaudited and prepared in accordance with U.S. GAAP and SEC rules for Form 10-Q[43] (2) Revenue 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] - 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] | 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 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] (4) Net (Loss) Income Per Share 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] - 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] (5) Inventories, net 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 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 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] - 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][64] (8) Asset Retirement Obligations 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] (9) Fair Value of Financial Instruments and Fair Value Measurements 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] | 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] (10) Income Taxes 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] - 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] - 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] (11) Employee Benefit Plans 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] (12) Related Party Transactions 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] - The Company routinely provides capital contributions to Dominion Terminal Associates (DTA), its equity method investee[81] (13) Commitments and Contingencies 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] - 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] - 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][173] | 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][170] (14) Segment Information 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] - 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] - The Company adopted Accounting Standards Update (ASU) 2023-07, changing its reported segment measure of profit or loss to net income[102] | 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][116] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] - 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] - 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] Business Overview 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] - For the three and six months ended June 30, 2025, sales of met coal accounted for approximately 92% of total coal sales volume[115] - 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] - 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] Factors Affecting Our Results of Operations 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] - 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] Results of Operations 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 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 | $(185,674) | (25.3)% | - Average cost of coal sales per ton decreased 15.3% due to lower sales volumes, reduced freight and handling costs, lower royalties and taxes, and cost reduction efforts including wage reductions and idling higher-cost production sources[126] | Metric | 2025 | 2024 | Change ($) | 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 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 | $(335,736) | (23.1)% | - Average cost of coal sales per ton decreased 12.5% due to lower sales volumes, reduced freight and handling costs, lower royalties and taxes, and cost reduction efforts including wage reductions and idling higher-cost production sources[139] | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--------------- | :------- | :------- | :--------- | :--------- | | Adjusted EBITDA | $51,716 | $305,558 | $(253,842) | (83.1)% | Liquidity and Capital Resources 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] | (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] - 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] - 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] - 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] Critical Accounting Policies and Estimates 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] - 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] - Future impairment charges may occur if projected coal pricing weakens further or if mines are required to be idled for extended periods[183] Item 3. Quantitative and Qualitative Disclosures about Market Risk 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][186] | 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] - 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][191] Item 4. Controls and Procedures 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] - 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] - 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] Part II - Other Information This section provides additional information including legal proceedings, risk factors, equity security sales, mine safety disclosures, and other corporate updates Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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] - 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] - 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] - 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] Item 4. Mine Safety Disclosures 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] Item 5. Other Information 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][207] - 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] - 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] Item 6. Exhibits 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]