Q4 2025 Core Natural Resources Inc Earnings Call

February 12, 2026

Operator: Good morning, ladies and gentlemen, and welcome to the Core Natural Resources, Inc. Q4 2025 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 12 February 2026. I would now like to turn the call over to Deck Slone. Please go ahead.

Operator: Good morning, ladies and gentlemen, and welcome to the Core Natural Resources, Inc. Q4 2025 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, February 12 2026. I would now like to turn the call over to Deck Slone. Please go ahead.

Speaker #2: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator.

Speaker #2: This call is being recorded on Thursday, February 12, 2026. I would now like to turn the call over to Deck Slone. Please go ahead.

Speaker #2: Good morning from Cannonsburg, Pennsylvania, everyone, and thanks for joining us today. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the Private Securities Litigation Reform Act.

Deck S. Slone: Good morning from Canonsburg, Pennsylvania, everyone, and thanks for joining us today. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the Private Securities Litigation Reform Act. Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law.

Deck Slone: Good morning from Canonsburg, Pennsylvania, everyone, and thanks for joining us today. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the Private Securities Litigation Reform Act. Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain.

Speaker #2: Forward-looking statements, by their nature, address matters that are to different degrees uncertain. These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed in our forward-looking statements.

Deck Slone: These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law.

Speaker #2: We do not undertake to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law.

Speaker #2: I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release, a copy of which we have posted in the Investor section of our website, at corenaturalresources.com.

Deck S. Slone: I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release, a copy of which we have posted in the Investors section of our website at corenaturalresources.com. Also participating on this morning's call will be Jimmy Brock, our Chairman and CEO; Mitesh Thakkar, our President and CFO; and Bob Braithwaite, our Senior Vice President of Marketing and Sales. After some formal remarks from Jimmy and Mitesh, we will be happy to take questions. With that, I'll now turn the call over to Jimmy. Jimmy?

Deck Slone: I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release, a copy of which we have posted in the Investors section of our website at corenaturalresources.com. Also participating on this morning's call will be Jimmy Brock, our Chairman and CEO; Mitesh Thakkar, our President and CFO; and Bob Braithwaite, our Senior Vice President of Marketing and Sales. After some formal remarks from Jimmy and Mitesh, we will be happy to take questions. With that, I'll now turn the call over to Jimmy. Jimmy?

Speaker #2: Also, participating on this morning's call will be Jimmy Brock, our chairman and CEO, Patesh Thakkar, our president and CFO, and Bob Braithwaite, our senior vice president of marketing and sales.

Speaker #2: After some formal remarks from Jimmy and Matesh, we will be happy to take questions. With that, I'll now turn the call over to Jimmy.

Speaker #2: Jimmy?

Speaker #3: Thank you, Deck, and good morning, everyone. 2025 was a momentous year at Core Natural Resources. On January 14, we completed the transformational merger that formed Core and immediately turned our full focus on establishing a strong and fully integrated platform for long-term growth and success.

Jimmy Brock: Thank you, Dex, and good morning, everyone. 2025 was a momentous year at Core Natural Resources. On 14 January, we completed the transformational merger that formed Core and immediately turned our full focus on establishing a strong and fully integrated platform for long-term growth and success. Above all, we directed our attention to three priorities: capturing the tremendous value-driving synergies created by the combination, laying the foundation for operational excellence across our three major operating segments, and establishing a unified safety-driven culture. I'm pleased to report that we have made significant progress on all fronts. The integration process is nearly complete. We are operating as a single, cohesive unit, and we have set the stage for a step change in our operational execution.

Speaker #3: Above all, we directed our attention to three priorities capturing the tremendous value-driving synergies created by the combination. Laying the foundation for operational excellence across our three major operating segments, and establishing a unified safety-driven culture.

Speaker #3: I'm pleased to report that we have made significant progress on all fronts. The integration process is nearly complete. We are operating as a single cohesive unit, and we have set the stage for a step change in our operational execution.

Jimmy Brock: In short, here at the outset of our second year as a combined company, I am confident that we are now ready to deliver on Core's potential. Now, let me spend a few minutes on two key developments that are pivotal to our dramatically improved 2026 operational outlook. The first of these developments is the resumption of longwall mining at Leer South. As you know, Leer South experienced a combustion event early in 2025, an event that prevented the longwall from operating for nearly the entire year and resulted in approximately $100 million in fire suppression and idling costs. I'm pleased to report that since restarting the wall in mid-December, Leer South has returned to normal operations. During the first month of the year, the mine achieved its production target, and we are now focused on achieving even stronger execution going forward.

Speaker #3: In short, here at the outset of our second year as a combined company, I am confident that we are now ready to deliver on Core's potential.

Speaker #3: Now, let me spend a few minutes on two key developments that are pivotal to our dramatically improved 2026 operational outlook. The first of these developments is the resumption of long-oil mining at Lear South.

Speaker #3: As you know, Lear South experienced a combustion event early in 2025. An event that prevented the long-oil from operating for nearly the entire year, and resulted in approximately 100 million dollars in fire suppression and idling cost.

Speaker #3: I'm pleased to report that since restarting the wall in mid-December, Lear South has returned to normal operations. During the first month of the year, the mine achieved its production target and we are now focused on achieving even stronger execution going forward.

Speaker #3: As anticipated, mining conditions in the current district are highly favorable, and I fully expect Lear South to begin to showcase its status as a premier, world-class long-oil mine.

Jimmy Brock: As anticipated, mining conditions in the current district are highly favorable, and I fully expect Leer South to begin to showcase its status as a premier world-class longwall mine. The second development of note is the completion of the transition to the B seam at West Elk. If you recall, in recent years, West Elk had been mining in the last remaining panels of the E seam, where mining conditions were suboptimal. In 2025, we began transitioning to the B seam, where conditions are significantly more advantageous, and experienced a slower-than-expected startup in that new seam as we addressed elevated methane levels and an influx of water. As of December, these issues are behind us, and West Elk has begun running at very high productivity levels. The conditions in the B seam are exactly as advertised, and we are expecting a very strong operational performance in 2026.

Speaker #3: The second development of note is the completion of the transition to the B seam at West Elk. If you recall, in recent years, West Elk had been mining in the last remaining panels of the E seam, where mining conditions were sub-optimal.

Speaker #3: In 2025, we began transitioning to the B seam, where conditions are significantly more advantageous, and experienced a slower-than-expected startup in that new seam as we and an influx of water.

Speaker #3: As of December, these issues are behind us, and West Elk has begun running at very high productivity levels. The conditions in the B seam are exactly as advertised.

Speaker #3: And we are expecting a very strong operational performance in 2026. Our focus now is expanding the customer base for this high-quality coal, given the step-up in the mine's production capabilities.

Jimmy Brock: Our focus now is expanding the customer base for this high-quality coal, given the step up in the mine's production capabilities. Despite the just-discussed operational challenges and soft market environment, Core still displayed some of the value-driving attributes that makes the company's outlook so compelling. As you will recall, in February, the Core board deployed a capital return framework targeting the return of approximately 75% of free cash flow, with a significant majority of that return directed to share repurchases, complemented by a sustaining quarterly dividend of $0.10 per share. During 2025, Core returned a total of $245 million to stockholders via this program, which constituted nearly 100% of free cash flow generation.

Speaker #3: Despite the just discussed operational challenges and soft market environment, Core still displayed some of the value-driving attributes that makes the company's outlook so compelling.

Speaker #3: As you will recall, in February, the core board deployed a capital return framework targeting the return of approximately 75% of free cash flow with a significant majority of that return directed to share repurchases.

Speaker #3: Complemented by sustaining a quarterly dividend of 10 cents per share. During 2025, Core returned a total of $245 million to stockholders via this program, which constituted nearly 100% of free cash flow generation.

Speaker #3: Roughly $224 million of that total was directed to share repurchases, an effort that resulted in the buyback of around 6% of the company's shares outstanding.

Jimmy Brock: Roughly $224 million of that total was directed to share repurchases, an effort that resulted in the buyback of around 6% of the company's shares outstanding. Again, given the headwinds we have already discussed, that's an impressive achievement and underscores Core's great cash-generating potential, even in less than ideal circumstances. Needless to say, we believe there is great upside for even more substantial returns now the operating platform is at full sprint and given the recent signs of strengthening market environment. Now I'd like to discuss some of the many highlights on the public policy front, where the Trump administration continues to champion coal as a baseload fuel and critical mineral. The One Big Beautiful Bill Act, which was signed in July, contained numerous provisions supporting coal's critical role in the US energy equation and seeking to ensure the long-term health of the coal industry.

Speaker #3: Again, given the headwinds we have already discussed, that's an impressive achievement. And underscores Core's great cash-generating potential even in less than ideal circumstances. Needless to say, we believe there is great upside for even more substantial returns now that the and given the recent signs of strengthening market environment.

Speaker #3: Now, I’d like to discuss some of the many highlights on the public policy front, where the Trump administration continues to champion coal as a baseload fuel and critical mineral.

Speaker #3: The one big beautiful bill act, which was signed in July, contained numerous provisions supporting coal's critical role in the U.S. energy equation and seeking to ensure the long-term health of the coal industry.

Speaker #3: Among those provisions, the new law established a production tax credit for coal that is suitable for use in the production of steel. Marketly reduced the royalty rates for federally leased coal and eliminated some of the financial support for intermittent resources that have done little to fortify America's need for 24/7 baseload power.

Jimmy Brock: Among those provisions, the new law established a production tax credit for coal that is suitable for use in the production of steel, markedly reduced the royalty rates for federally leased coal, and eliminated some of the financial support for intermittent resources that have done little to fortify America's need for 24/7 baseload power. In addition to the One Big Beautiful Bill, the Trump administration has employed Section 202(c) of the Federal Power Act to delay, perhaps indefinitely, the planned retirements of coal-fired generation units in a growing number of states, including Michigan, Colorado, Indiana, and Washington. Given the upsurge in power demand precipitated by the AI data center build-out, we view the administration's effort on this front as farsighted and prudent.

Speaker #3: In addition to the one big beautiful bill, the Trump administration has employed Section 202(c) of the Federal Power Act to delay perhaps indefinitely the planned retirements of coal-fired generation units in a growing number of states.

Speaker #3: Including Michigan, Colorado, Indiana, and Washington. Given the upsurge in power demand precipitated by the AI data center buildout, we view the administration's effort on this front as far-sighted and prudent.

Speaker #3: The Trump administration also launched a comprehensive effort to address the slew of regulations put in place by the previous administrations in an effort to force the closure of coal-fired plants.

Jimmy Brock: The Trump administration also launched a comprehensive effort to address the slew of regulations put in place by the previous administrations in an effort to force the closure of coal-fired plants. In addition, the US Department of Energy is making funding available to facilitate the modernization of the US coal fleet to ensure that coal plays a central stabilizing role in the US power markets for a long time into the future. We're hopeful that the current tranche of funding is the first of many. Additionally, we're also enthusiastic about the administration's effort to support the development of a domestic rare earth elements industry, with some federal funding directed toward opportunities in the coal fields. We continue to monitor how such programs can apply to Core.

Speaker #3: In addition, the U.S. Department of Energy is making funding available to facilitate the modernization of the U.S. coal fleet to ensure that coal plays a center stabilizing role in U.S.

Speaker #3: power markets for a long time into the future. We're hopeful that the current tranche of funding is the first of many. Additionally, we're also enthusiastic about the administration's effort to support the development of a domestic rare earth elements industry.

Speaker #3: With some federal funding directed toward opportunities in the coal fields, we continue to monitor how such programs can apply to Core. Finally, the administration recently reinstated the National Coal Council, which provides another channel for ongoing, in-depth dialogue between coal producers, including Core, and policymakers.

Jimmy Brock: Finally, the administration recently reinstated the National Coal Council, which provides another channel for ongoing, in-depth dialogue between coal producers, including Core, and policymakers. I am serving as vice chair of the council and plan to devote significant time and attention to this important role going forward. Now let me turn the call over to Mitesh to provide the marketing and financial updates.

Speaker #3: I am serving as Vice Chair of the Council and plan to devote significant time and attention to this important role going forward. Now, let me turn the call over to Mitesh to provide the marketing and financial updates.

Speaker #2: Thank you, Jimmy, and good morning, everyone. Let me start by providing an update on our financial performance. This morning, we reported our Q4 2025 and full year 2025 financial results.

Mitesh B. Thakkar: Thank you, Jimmy, and good morning, everyone. Let me start by providing an update on our financial performance. This morning, we reported our Q4 2025 and full-year 2025 financial results. For Q4 2025, we reported a net loss of $79 million, or $1.54 per diluted share, and adjusted EBITDA of $103 million. The reported Q4 2025 adjusted EBITDA includes $25 million of Leer South fire and idle costs, and $11 million of West Elk idle costs, partially offset by $24 million of insurance recovery related to the FSK Bridge collapse. In the quarter, we spent $81 million on capital expenditures and generated $27 million in free cash flow.

Mitesh Thakkar: Thank you, Jimmy, and good morning, everyone. Let me start by providing an update on our financial performance. This morning, we reported our Q4 2025 and full-year 2025 financial results. For Q4 2025, we reported a net loss of $79 million, or $1.54 per diluted share, and adjusted EBITDA of $103 million. The reported Q4 2025 adjusted EBITDA includes $25 million of Leer South fire and idle costs, and $11 million of West Elk idle costs, partially offset by $24 million of insurance recovery related to the FSK Bridge collapse. In the quarter, we spent $81 million on capital expenditures and generated $27 million in free cash flow.

Speaker #2: For 4Q25, we reported a net loss of 79 million dollars or $1.54 for diluted share and adjusted EBITDA of 103 million dollars. The reported 4Q25 adjusted EBITDA includes 25 million dollars of leers out fire and idle costs and 11 million dollars of West Elk idle costs.

Speaker #2: Partially offset by 24 million dollars of insurance recovery related to the FSK bridge collapse. In the quarter, we spent 81 million dollars on capital expenditures and generated 27 million dollars in free cash flow.

Speaker #2: For 2025, we reported a net loss of 153 million dollars or $2.98 per diluted share and adjusted EBITDA of 512 million dollars. Our reported adjusted EBITDA includes the impact of 101 million dollars related to leers out fire and idle costs and 11 million dollars related to West Elk idle costs.

Mitesh B. Thakkar: For 2025, we reported a net loss of $153 million, or $2.98 per dilutive share, and Adjusted EBITDA of $512 million. Our reported Adjusted EBITDA includes the impact of $101 million related to Leer South fire and idle costs, and $11 million related to West Elk idle costs, partially offset by insurance recovery of $43 million. 2025 was a milestone year for Core, being the first operating year as a combined company. As Jimmy mentioned earlier, we managed through this challenging year, both on the operational and pricing front, while still being able to return capital to our shareholders. We also had several accomplishments that were masked amongst those challenges. For instance, we had tremendous success in integrating the two companies, streamlining the management teams, and exceeding the synergy targets.

Mitesh Thakkar: For 2025, we reported a net loss of $153 million, or $2.98 per dilutive share, and Adjusted EBITDA of $512 million. Our reported Adjusted EBITDA includes the impact of $101 million related to Leer South fire and idle costs, and $11 million related to West Elk idle costs, partially offset by insurance recovery of $43 million. 2025 was a milestone year for Core, being the first operating year as a combined company. As Jimmy mentioned earlier, we managed through this challenging year, both on the operational and pricing front, while still being able to return capital to our shareholders. We also had several accomplishments that were masked amongst those challenges. For instance, we had tremendous success in integrating the two companies, streamlining the management teams, and exceeding the synergy targets.

Speaker #2: Partially offset by insurance recovery of $43 million. 2025 was a milestone year for Core, being the first operating year as a combined company.

Speaker #2: As Jimmy mentioned earlier, we managed through this challenging year both on the operational and pricing front while still being able to return capital to our shareholders.

Speaker #2: We also had several accomplishments that were masked amongst those challenges. For instance, we had tremendous success in integrating the two companies, streamlining the management teams, and exceeding the synergy targets.

Speaker #2: We also leveraged a strong partnership with our financing partners to create a sustainable and robust capital structure that allows for strong capital returns and growth optionality.

Mitesh B. Thakkar: We also leveraged a strong partnership with our financing partners to create a sustainable and robust capital structure that allows for strong capital returns and growth optionality. Now, let me update you on the marketing front. In the domestic market, the current administration has supported several coal-focused initiatives, as Jimmy mentioned. These policy shifts have laid the groundwork for a stable regulatory and demand landscape, allowing ongoing investments in coal-fired power plants and delayed retirements. In 2025, there were approximately 16 gigawatts of coal capacity announced for retirement. However, we estimate only about 4 gigawatts were actually retired. On the usage side for 2025, we estimate the total US utility coal consumption was up 12% compared to 2024. In the PJM and MISO area specifically, we estimate coal-fired generation to have risen over 19% and 15%, respectively, when compared to 2024.

Mitesh Thakkar: We also leveraged a strong partnership with our financing partners to create a sustainable and robust capital structure that allows for strong capital returns and growth optionality. Now, let me update you on the marketing front. In the domestic market, the current administration has supported several coal-focused initiatives, as Jimmy mentioned. These policy shifts have laid the groundwork for a stable regulatory and demand landscape, allowing ongoing investments in coal-fired power plants and delayed retirements. In 2025, there were approximately 16 gigawatts of coal capacity announced for retirement. However, we estimate only about 4 gigawatts were actually retired. On the usage side for 2025, we estimate the total US utility coal consumption was up 12% compared to 2024. In the PJM and MISO area specifically, we estimate coal-fired generation to have risen over 19% and 15%, respectively, when compared to 2024.

Speaker #2: Now, let me update you on the marketing front. In the domestic market, the current administration has supported several coal-focused initiatives, as Jimmy mentioned. These policy shifts have laid the groundwork for a stable regulatory and demand landscape, allowing ongoing investments in coal-fired power plants and delayed retirements.

Speaker #2: In 2025, there were approximately 16 gigawatts of coal capacity announced for retirement. However, we estimate only about 4 gigawatts were actually retired. On the usage side for 2025, we estimate the total U.S.

Speaker #2: Utility coal consumption was up 12% compared to 2024. In the PJM and MISO areas specifically, we estimate coal-fired generation to have risen over 19% and 15%, respectively, when compared to 2024.

Speaker #2: According to the PJM resource adequacy planning department, over the next 10 years, the net energy load is projected to grow at an average rate of 5.3% per year compared to expectations of less than 1% in 2022.

Mitesh B. Thakkar: According to the PJM Resource Adequacy Planning Department, over the next 10 years, the net energy load is projected to grow at an average rate of 5.3% per year, compared to expectations of less than 1% in 2022. This forecast, as well as favorable support from the administration, provides an attractive backdrop for domestic coal demand for years to come. One of the areas of growth that we have mentioned over several years is the upsurge in power demand stemming from the build-out of new data centers. By 2030, it is expected that global data centers will see a 14% compound annual growth rate, resulting in approximately 100GW of new data centers.

Mitesh Thakkar: According to the PJM Resource Adequacy Planning Department, over the next 10 years, the net energy load is projected to grow at an average rate of 5.3% per year, compared to expectations of less than 1% in 2022. This forecast, as well as favorable support from the administration, provides an attractive backdrop for domestic coal demand for years to come. One of the areas of growth that we have mentioned over several years is the upsurge in power demand stemming from the build-out of new data centers. By 2030, it is expected that global data centers will see a 14% compound annual growth rate, resulting in approximately 100GW of new data centers.

Speaker #2: This forecast, as well as favorable support from the administration provides an attractive backdrop for domestic coal demand for years to come. One of the areas of growth that we have mentioned over several years is the upsurge in power demand stemming from the buildout of new data centers.

Speaker #2: By 2030, it is expected that global data centers will see a 14% compound annual growth rate resulting in approximately 100 gigawatt of new data centers.

Speaker #2: Of this global demand, the Americas are expected to account for approximately 50% of data center capacity and to experience an expected compound annual growth rate of 17% through 2030.

Mitesh B. Thakkar: Of this global demand, the Americas are expected to account for approximately 50% of data center capacity and to experience an expected compound annual growth rate of 17% through 2030. This data center boom is stemming in large part from AI, which is estimated to represent over half of the data center's workload. On the international coking front, heavy rainfall disrupted the Australian metallurgical coal supply. Starting in early January and continuing into February, both production and shipments were negatively impacted by flooding, which has caused a decrease in metallurgical supply in the export market. As such, we have seen an increase in PLV benchmark prices since the beginning of December, with PLV prices up by approximately 25% to around $250 per metric ton.

Mitesh Thakkar: Of this global demand, the Americas are expected to account for approximately 50% of data center capacity and to experience an expected compound annual growth rate of 17% through 2030. This data center boom is stemming in large part from AI, which is estimated to represent over half of the data center's workload. On the international coking front, heavy rainfall disrupted the Australian metallurgical coal supply. Starting in early January and continuing into February, both production and shipments were negatively impacted by flooding, which has caused a decrease in metallurgical supply in the export market. As such, we have seen an increase in PLV benchmark prices since the beginning of December, with PLV prices up by approximately 25% to around $250 per metric ton.

Speaker #2: This data center boom is stemming in large part from AI, which is estimated to represent over half of the data center's workload. On the international coking front, heavy rainfall disrupted the Australian metallurgical coal supply.

Speaker #2: Starting in early January, and continuing into February, both production and shipments were negatively impacted by flooding, which has caused a decrease in metallurgical supply in the export market.

Speaker #2: As such, we have seen an increase in PLV benchmark prices since the beginning of December, with PLV prices up by approximately 25% to around $250 per metric ton.

Speaker #2: Globally, according to the IEA, estimated global coal demand rose again in 2025 by approximately half of a percent to 8.9 billion metric tons. The uptick in global coal demand last year is now part of a multi-year pattern.

Mitesh B. Thakkar: Globally, according to the IEA, estimated global coal demand rose again in 2025 by approximately 0.5% to 8.9 billion metric tons. The uptick in global coal demand last year is now part of a multiyear pattern. This market landscape lays the backdrop for our contracting progress. Since Q3 2025, our marketing team has further expanded our contract book for 2026. We added approximately 7 million tons each to our sold positions in the high-CV thermal and PRB segments, bringing our contracted positions to 24 million tons and 47 million tons, respectively. Our metallurgical segment has nearly 7 million coking tons contracted for 2026, with approximately 2.4 million tons priced. Of our priced coking coal tons, approximately 2 million tons are in the domestic market, the vast majority of which were highwall.

Mitesh Thakkar: Globally, according to the IEA, estimated global coal demand rose again in 2025 by approximately 0.5% to 8.9 billion metric tons. The uptick in global coal demand last year is now part of a multiyear pattern. This market landscape lays the backdrop for our contracting progress. Since Q3 2025, our marketing team has further expanded our contract book for 2026. We added approximately 7 million tons each to our sold positions in the high-CV thermal and PRB segments, bringing our contracted positions to 24 million tons and 47 million tons, respectively. Our metallurgical segment has nearly 7 million coking tons contracted for 2026, with approximately 2.4 million tons priced. Of our priced coking coal tons, approximately 2 million tons are in the domestic market, the vast majority of which were highwall.

Speaker #2: This market landscape lays the backdrop for our contracting progress. Since Q3 '25, our marketing team has further expanded our contract book for 2026. We added approximately 7 million tons each to our sold positions in the high CV thermal and PRB segments, bringing our contracted positions to 24 million tons and 47 million tons, respectively.

Speaker #2: Our metallurgical segment has nearly 7 million coking tons contracted for 2026 with approximately 2.4 million tons priced. Of our priced coking coal tons, approximately 2 million tons are in the domestic market.

Speaker #2: The vast majority of which were high wall. Now, let me provide our outlook for 2026. Starting with the high CV thermal segment, we are expecting 30 to 32 million sales tons of which 76% are contracted at the midpoint.

Mitesh B. Thakkar: Now, let me provide our outlook for 2026. Starting with the high-CV thermal segment, we are expecting 30 to 32 million sales tons, of which 76% are contracted at the midpoint. Of those committed and collar tons, we project coal revenue to be over $57 per ton. We expect the average cash cost of coal sold for 2026 to be $38 to $39.50 per ton, an improvement versus 2025 levels. For the metallurgical segment, we are expecting coking sales between 8.6 and 9.4 million tons. On the committed tons that are priced, we are expecting average coal revenue of approximately $120 per ton.

Mitesh Thakkar: Now, let me provide our outlook for 2026. Starting with the high-CV thermal segment, we are expecting 30 to 32 million sales tons, of which 76% are contracted at the midpoint. Of those committed and collar tons, we project coal revenue to be over $57 per ton. We expect the average cash cost of coal sold for 2026 to be $38 to $39.50 per ton, an improvement versus 2025 levels. For the metallurgical segment, we are expecting coking sales between 8.6 and 9.4 million tons. On the committed tons that are priced, we are expecting average coal revenue of approximately $120 per ton.

Speaker #2: Of those committed and collared tons, we project coal revenue to be over $57 per ton. We expect the average cash cost of coal sold for 2026 to be $38 to $39.50 per ton, an improvement versus 2025 levels.

Speaker #2: For the metallurgical segment, we are expecting coking sales between 8.6 and 9.4 million tons. On the committed tons that are priced, we are expecting average coal revenue of approximately $120 per ton.

Speaker #2: As a metallurgical market strengthens due to the reduced Australian supply, we are encouraged by our ability to take advantage of this uptick in pricing for our committed and open tons.

Mitesh B. Thakkar: As the metallurgical market strengthens due to the reduced Australian supply, we are encouraged by our ability to take advantage of this uptick in pricing for our committed and open tons. We expect an average cash cost of coal sold of $88 to $94 per ton, reflecting normalized performance at Leer South versus 2025 levels. Within this guidance, we layered in our expected benefits from the One Big Beautiful Bill that Jimmy discussed earlier. Our cash cost guidance range for our high-CV thermal and metallurgical segment includes the benefit of the 45X tax credit. It should be noted that this credit is applied in the year that the product is sold, but the cash benefit is received during the year in which the tax return is filed.

Mitesh Thakkar: As the metallurgical market strengthens due to the reduced Australian supply, we are encouraged by our ability to take advantage of this uptick in pricing for our committed and open tons. We expect an average cash cost of coal sold of $88 to $94 per ton, reflecting normalized performance at Leer South versus 2025 levels. Within this guidance, we layered in our expected benefits from the One Big Beautiful Bill that Jimmy discussed earlier. Our cash cost guidance range for our high-CV thermal and metallurgical segment includes the benefit of the 45X tax credit. It should be noted that this credit is applied in the year that the product is sold, but the cash benefit is received during the year in which the tax return is filed.

Speaker #2: We expect an average cash cost of coal sold of $88 to $94 per ton, reflecting normalized performance at Leer South versus 2025 levels. Within this guidance, we layered in our expected benefits from the one big, beautiful bill that Jimmy discussed earlier.

Speaker #2: Our cash cost guidance range for our high CV thermal and metallurgical segment includes the benefit of the 45x tax credit. It should be noted that this credit is applied in the year that the product is sold, but the cash benefit is received during the year in which the tax return is filed.

Mitesh B. Thakkar: As such, we anticipate recognizing the benefits of the credits in 2026 cash costs, but will not receive the cash effect until 2027. For the PRB segment, we are expecting sales of between 47 and 50 million tons, with 47.4 million tons contracted at an average coal revenue of approximately $14.15 per ton. We expect an average cash cost range of $13 to $13.50 per ton. On the capital expenditures front, for 2026, we expect a range of $325 to $375 million. This capital expenditure range includes approximately $300 to $350 million tied to maintenance-related spending, while the balance is earmarked for various growth initiatives, including investments in critical minerals, battery technology, aerospace and defense, and other innovative coal-related products.

Mitesh Thakkar: As such, we anticipate recognizing the benefits of the credits in 2026 cash costs, but will not receive the cash effect until 2027. For the PRB segment, we are expecting sales of between 47 and 50 million tons, with 47.4 million tons contracted at an average coal revenue of approximately $14.15 per ton. We expect an average cash cost range of $13 to $13.50 per ton. On the capital expenditures front, for 2026, we expect a range of $325 to $375 million. This capital expenditure range includes approximately $300 to $350 million tied to maintenance-related spending, while the balance is earmarked for various growth initiatives, including investments in critical minerals, battery technology, aerospace and defense, and other innovative coal-related products.

Speaker #2: As such, we anticipate recognizing the benefits of the credits in 2026 cash costs but will not receive the cash effect until 2027. For the PRB segment, we are expecting sales of between 47 and 50 million tons with 47.4 million tons contracted at an average coal revenue of approximately $14.15 per ton we expect an average cash cost range of $13 to $13.50 per ton.

Speaker #2: On the capital expenditures front for 2026, we expect a range of $325 to $375 million. This capital expenditure range includes approximately $300 to $350 million tied to maintenance-related spending while the balance is earmarked for various growth initiatives including investments in critical minerals, battery technology, aerospace and defense, and other innovative coal-related products.

Speaker #2: Lastly, we expect cash-based SG&A to be between $85 million to $100 million. As stated at the time of the merger announcement, we anticipate longer-term cash-based SG&A to be approximately $90 million, which aligns with the current midpoint of our guidance.

Mitesh B. Thakkar: Lastly, we expect cash-based SG&A to be between $85 to 100 million. As stated at the time of the merger announcement, we anticipate a longer-term cash-based SG&A to be approximately $90 million, which aligns with the current midpoint of our guidance. In summary, when comparing 2026 versus 2025, there are several positives to look forward to from a financial perspective. First, we do not expect to incur any idling costs across the high-CV thermal and metallurgical segments after incurring $112 million of such costs in aggregate in 2025. Second, we anticipate receiving additional insurance proceeds for Leer South during 2026, which is expected to outpace 2025 levels. Third, we expect to only incur approximately $10 million in merger-related expenses in 2026, compared to $66 million in 2025.

Mitesh Thakkar: Lastly, we expect cash-based SG&A to be between $85 to 100 million. As stated at the time of the merger announcement, we anticipate a longer-term cash-based SG&A to be approximately $90 million, which aligns with the current midpoint of our guidance. In summary, when comparing 2026 versus 2025, there are several positives to look forward to from a financial perspective. First, we do not expect to incur any idling costs across the high-CV thermal and metallurgical segments after incurring $112 million of such costs in aggregate in 2025. Second, we anticipate receiving additional insurance proceeds for Leer South during 2026, which is expected to outpace 2025 levels. Third, we expect to only incur approximately $10 million in merger-related expenses in 2026, compared to $66 million in 2025.

Speaker #2: In summary, when comparing 2026 versus 2025, there are several positives to look forward to from a financial perspective. First, we do not expect to incur any idling cost across the high CV thermal and metallurgical segments after incurring $112 million of such costs in aggregate in 2025.

Speaker #2: Second, we anticipate receiving additional insurance proceeds for leers south during 2026 which is expected to outpace 2025 levels. Third, we expect to only incur approximately $10 million in merger-related expenses in 2026 compared to $66 million in 2025.

Speaker #2: Finally, and most importantly, we anticipate strong operational performance at leers south and west south mines which was not the case in 2025. With that, let me provide a quick update on rare earth elements and critical materials.

Mitesh B. Thakkar: Finally, and most importantly, we anticipate strong operational performance at Leer South and West Elk mines, which was not the case in 2025. With that, let me provide a quick update on rare earth elements and critical materials. Since our last earnings call, our innovations group has continued to advance our efforts on the rare earth elements and critical materials front. In the PRB, we have drilled additional core holes at strategically selected locations. Initial lab results are consistent with our previous findings, showing enriched ash-basis rare earth elements concentrations near the coal seam margins. In Northern App, we have been working with Virginia Tech and L3 Process Technologies to develop a concentration, upgrading, and extraction strategy for the PAMC, and we recently entered into an exclusive option to license Virginia Tech's technology.

Mitesh Thakkar: Finally, and most importantly, we anticipate strong operational performance at Leer South and West Elk mines, which was not the case in 2025. With that, let me provide a quick update on rare earth elements and critical materials. Since our last earnings call, our innovations group has continued to advance our efforts on the rare earth elements and critical materials front. In the PRB, we have drilled additional core holes at strategically selected locations. Initial lab results are consistent with our previous findings, showing enriched ash-basis rare earth elements concentrations near the coal seam margins. In Northern App, we have been working with Virginia Tech and L3 Process Technologies to develop a concentration, upgrading, and extraction strategy for the PAMC, and we recently entered into an exclusive option to license Virginia Tech's technology.

Speaker #2: Since our last earnings call, our innovations group has continued earth elements and critical materials front. In the PRB, we have drilled additional core holes at strategically selected locations.

Speaker #2: Initial lab results are consistent with our previous findings showing enriched ash bases, rare earth elements concentrations near the coal seam margins. In northern app, we have been working with Virginia Tech and L3 process technologies to develop a concentration of grading and extraction strategy for the PMC and we recently entered into an exclusive option to license Virginia Tech's technology.

Speaker #2: We expect to have additional updates on our efforts in the eastern and western United States in the coming months. We continue to make further progress on the coal-based battery materials front as well as on our aerospace and defense tooling and parts initiatives.

Mitesh B. Thakkar: We expect to have additional updates on our efforts in the Eastern and Western United States in the coming months. We continue to make further progress on the coal-based battery materials front, as well as on our aerospace and defense tooling and parts initiatives. Our innovations team is rapidly building a platform focused on disruptive solutions for our nation's most pressing national security needs. Now, let me pass it back to Jimmy for some quick closing remarks before we open the call for Q&A.

Mitesh Thakkar: We expect to have additional updates on our efforts in the Eastern and Western United States in the coming months. We continue to make further progress on the coal-based battery materials front, as well as on our aerospace and defense tooling and parts initiatives. Our innovations team is rapidly building a platform focused on disruptive solutions for our nation's most pressing national security needs. Now, let me pass it back to Jimmy for some quick closing remarks before we open the call for Q&A.

Speaker #2: Our innovations team is rapidly building a platform focused on disruptive solutions for our nation's most pressing national security Jimmy for some quick closing remarks before we open the call for Q&A.

Speaker #2: Thank you, Mitesh. In closing, for 2026, we will be focused on a few key areas. The first and most important priority for us in 2026 is regaining and strengthening our operating excellence and performance.

Jimmy Brock: Thank you, Mitesh. In closing, for 2026, we will be focused on a few key areas. The first and most important priority for us in 2026 is regaining and strengthening our operating excellence and performance. We will continue to focus on running every operation safely and efficiently while reducing costs across the board, as implied by our guidance. As we put the Leer South incident and the West Elk delay behind us, we will migrate our focus to finding additional areas to optimize and drive efficiency improvements across the operations. Second, as Mitesh laid out, we expect to see strong positive momentum from an earnings perspective related to 2025, underpinned by a strong operating performance as well as significant reduction in merger-related expenses, and an increase in insurance recovery compared to 2025.

Speaker #2: We will continue to focus on running every operation safely and efficiently while reducing costs across the board as implied by our guidance. As we put the leers south incident and the west out delay behind us, we will migrate our focus to finding additional areas to optimize and drive efficiency improvements across the operations.

Speaker #2: Second, as Mitesh laid out, we expect to see strong positive momentum from an earnings perspective related to 2025, underpinned by a strong operating performance as well as significant reduction in merger-related expenses and an increase in insurance recovery compared to 2024.

Speaker #2: Third, we will continue to support the Trump administration in its efforts to preserve and upgrade the US coal fleet. Expand US coal exports and ensure the long-term health and viability of the US coal industry.

Jimmy Brock: Third, we will continue to support the Trump administration in its efforts to preserve and upgrade the US coal fleet, expand US coal exports, and ensure the long-term health and viability of the US coal industry. Fourth, we will continue to advance our efforts in the growth areas of rare earths and critical materials with a prudent capital allocation strategy. Last but not least, our employees. Throughout the organization in 2025, we effectively worked together to mitigate the effect of the Leer South incident as much as possible. The team successfully managed costs and ensured each operation did its part in running as efficiently and safely as possible. I am grateful for our team members' dedication and pleased with how this challenging year was managed. I want to thank all our employees for their dedication and hard work, which carried us through a very turbulent 2025.

Speaker #2: Fourth, we will continue to advance our efforts in the growth areas of rare earths and critical materials with a prudent capital allocation strategy. Last but not least, our employees.

Speaker #2: Throughout the organization in 2025, we effectively work together to mitigate the effect of the leers south incident as much as possible. The team successfully managed costs and ensured each operation did its part in running as efficiently and safely as possible.

Speaker #2: I am grateful for our team members' dedication. I'm pleased with how this challenging year was managed. I want to thank all our employees for their dedication and hard work, which carried us through a very turbulent 2025.

Speaker #2: I specifically want to thank all our corporate employees who worked hard and spent countless hours streamlining policies, procedures, and systems, even as they grappled with the loss of their departing colleagues.

Jimmy Brock: I specifically want to thank all our corporate employees who worked hard and spent countless hours streamlining policies, procedures, and systems, even as they grappled with the loss of their departing colleagues. With that, I will hand the call back over to the operator to begin the Q&A portion of our call. Operator, can you please provide the instructions to our callers?

Speaker #2: With that, I will end the call back over to the operator to begin the Q&A portion of our call. Operator, can you please provide the instructions to our callers?

Speaker #2: Yes, sir. Thank you, ladies and gentlemen. We will now begin the question and answer session. And if you wish to ask a question, please press star and one on your touchstone phone and wait for your name to be announced.

Operator: Yes, sir. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press star and one on your touchtone phone and wait for your name to be announced. Once again, star and one if you wish to ask a question. We now have the first question. This comes from Nick Childs from B. Riley Securities. Your line is now open. Please go ahead.

Speaker #2: Once again, star and one if you wish to ask a question. And we now have the first question. This comes from Nick Chiles from B Riley Securities.

Speaker #2: Your line is now open. Please go ahead.

Speaker #3: Yeah, thank you so much, operator. Good morning, guys. My first question just on the high CV committed and priced $57 there. A few parts, but could you break this out just for the PAMC portion, maybe for a comparison to legacy results?

Nick Giles: Yeah, thank you so much, operator. Good morning, guys.

Jimmy Brock: Good morning.

Nick Giles: My first question, just on the high CV committed and priced $57 there. You know, few parts, but could you break this out, just for the PAMC portion, maybe for a comparison to legacy results? And then where are you seeing domestic netbacks today for PAMC coal, and how do you think about upside on the back of these positive developments? Thanks a lot.

Speaker #3: And then, where are you seeing domestic netbacks today for PAMC coal, and how do you think about upside on the back of these positive developments?

Speaker #3: Thanks a lot.

Speaker #4: Sure, Nick. It's Bob. Right now, we have roughly about 20 and a half of the 23 and a half million tons that are committed or contracted for high CV.

Bob Braithwaite: Sure, Nick, it's Bob. Right now we have roughly about 20.5 of the 23.5 million tons that are committed or contracted for high CV, 20.5 are for PAMC. Right now, about 12 million of those, I'll say, are domestic, 8.5 export. About 4 million of those are linked to API2. And again, the reason why we gave a fixed price versus a range is we have less variable contracts in 2026. But of the 4 million tons that are linked to API2, we used about a $97 API2 price when we put in that guidance. So, you know, January was over 99. We're over 100 today, so there's certainly some upside there.

Speaker #4: 20 and a half are for PAMC. Right now, about 12 million of those I'll say are domestic, 8 and a half export. About 4 million of those are linked to API 2.

Speaker #4: And again, the reason why we gave a fixed price versus a range is we have less variable contracts in 2026, but of the 4 million tons that are linked to API 2, we used about a $97 API 2 price when we put in that guidance.

Speaker #4: So January was over 99. We're over 100 today. So there's certainly some upside there. Our sensitivity, give or take, is roughly about 10 cents a ton.

Bob Braithwaite: Our sensitivity, give or take, is roughly about $0.10 a ton both on the up and down. That leaves us to call it, you know, 5.5, 6 million tons left to sell PAMC. Very excited about what we're seeing now. It's not only domestic. We are seeing some opportunities domestically as well on a spot basis, due to the recent cold weather we experienced in January. Plus, as Mitesh and Jimmy both mentioned, the growth in power demand due to data centers. But I'm also encouraged by what we're seeing on the export front, specifically in India. You know, a month ago, CFR India prices were in that $115 to $120 range. Today, they're $125 to $130.

Speaker #4: Both on the up and down. That leaves us call it 5 and a half, 6 million tons left to sell PMC. Very excited about what we're seeing now.

Speaker #4: It's not only domestic. We are seeing some opportunities domestically as well on a spot basis due to the recent cold weather we experienced in January, plus, as Mitesh and Jimmy both mentioned, the growth in power demand due to data centers.

Speaker #4: But I'm also encouraged by what we're seeing on the export front, specifically in India. A month ago, CFR India prices were in that 115, 120 range.

Speaker #4: Today, they're 125 to 130. So we have been seeing some improvement there and been able to capture some of that upside on some of these open tons.

Bob Braithwaite: So we have been seeing some improvement there and been able to capture some of that upside on some of these open tons.

Speaker #3: So Nick, I would add that in addition to all those comments, look, last year, that 45 million ton increase in coal consumption really did pretty much chew up the latent capacity.

Deck S. Slone: ... So, so Nick, I would add that, you know, in addition to all those comments, look, last year, that 45 million ton increase in coal consumption really did pretty much chew up the latent capacity, excuse me, that was out there. So look, you know, your question of where things might go, look, it could start to get tight. If we see another year, another significant uptick in demand and coal consumption, you know, you could start to see some upward momentum on those prices. Haven't seen it fully yet, but expect that could come.

Deck Slone: ... So, so Nick, I would add that, you know, in addition to all those comments, look, last year, that 45 million ton increase in coal consumption really did pretty much chew up the latent capacity, excuse me, that was out there. So look, you know, your question of where things might go, look, it could start to get tight. If we see another year, another significant uptick in demand and coal consumption, you know, you could start to see some upward momentum on those prices. Haven't seen it fully yet, but expect that could come.

Speaker #3: Excuse me, that was out there. So look, your question of where things might go, look, it could start to get tight if we see another year, another significant uptick in demand and coal consumption.

Speaker #3: You could start to see some upward momentum on those prices. Haven't seen it fully yet, but expect that could come.

Nick Giles: Guys, I appreciate all that color. Maybe just as a follow-up on that, you've spoken about it before, but where are you seeing things in the outer years for the order book? I mean, has it really been a duration benefit? Are you seeing any, you know, upside potential in pricing in some of those outer years?

Speaker #4: Guys, I appreciate all that color. Maybe just as a follow-up on that, you've spoken about it before, but where are you seeing things in the outer years for the order book?

Speaker #4: I mean, has it really been a duration benefit? Are you seeing any upside potential in pricing in some of those outer years?

Paul Lang: We are. If you look at our release this morning, you know, we contracted over 38 million tons last quarter forward, and, you know, some of those contracts went as far out as 2030. So our book is very well positioned, and I'll just tell you in general, in general terms, our pricing is in contango as we move out to the forward years.

Speaker #5: We are. If you look at our release this morning, we contracted over 38 million tons last quarter forward. And some of those contracts, when it's far out, is 20, 30.

Speaker #5: So our book is very well positioned. And I'll just tell you, in general, in general terms, our pricing is in contango as we move out to the forward years.

Speaker #4: Great. Great. My second question was more turning to Mitesh, you outlined some of the moving pieces in the financials, whether it's insurance recoveries or now the 45x credits.

Nick Giles: Great. Great. My second question was more turning to, Mitesh, you outlined some of the moving pieces in the financials, whether it's, you know, insurance recoveries or now the 45X credits. So I was just hoping you could touch on what this all means for shareholder returns. I mean, should we think about shareholder returns as being a little bit more lumpy in nature? And then I had one more on the CapEx side. There was a bit of a step up there year-over-year, so curious what was driving that. Thanks.

Speaker #4: So I was just hoping you could touch on what this all means for shareholder returns. I mean, should we think about shareholder returns as being a little bit more lumpy in nature?

Speaker #4: And then I had one more on the CapEx side. There was a bit of a step up there year-on-year, so curious what was driving that.

Speaker #4: Thanks.

Speaker #3: Yeah. So let me address the CapEx front first. On the CapEx front, remember, we have leers south fully up and running now, right? So there's maintenance CapEx tied to leers south that's going to show up as well.

Mitesh B. Thakkar: Yeah. So, let me address the CapEx front first. On the CapEx front, remember, we have Leer South fully up and running now, right? So there's maintenance CapEx tied to Leer South that's gonna show up as well. And, as we laid out in our press release, we are spending a little bit more, and I covered it in my prepared remarks, too. We are-- we're gonna spend a little bit more on some of the rare earth and innovation types project as well, that is, that is included in that guidance. I think about $25 million out of our total guidance on the CapEx spending front is tied to rare earth efficiency improvement and some of the critical minerals efforts, including coal products, included in that number.

Mitesh Thakkar: Yeah. So, let me address the CapEx front first. On the CapEx front, remember, we have Leer South fully up and running now, right? So there's maintenance CapEx tied to Leer South that's gonna show up as well. And, as we laid out in our press release, we are spending a little bit more, and I covered it in my prepared remarks, too. We are-- we're gonna spend a little bit more on some of the rare earth and innovation types project as well, that is, that is included in that guidance. I think about $25 million out of our total guidance on the CapEx spending front is tied to rare earth efficiency improvement and some of the critical minerals efforts, including coal products, included in that number.

Speaker #3: And as we laid out in our press release, we are spending a little bit more. And I covered it in my prepared remarks too.

Speaker #3: We're going to spend a little bit more on some of the rare earth and innovations types project as well. That is included in that guidance.

Speaker #3: I think about 25 million dollars out of our total guidance on the CapEx spending front is tied to rare earth efficiency improvement and some of the critical minerals efforts, including coal-to-products included in that number.

Mitesh B. Thakkar: On the cash flow side, obviously, we expect insurance proceeds to be higher next year versus this year. Just providing some perspective, we had two insurance claim events, the Baltimore Bridge-related claim and Leer South-related claim. We settled the Baltimore Bridge claim for a net of $40 million, of which $10 million was received in Q1 2025, and $24 million was booked in Q4 2025. We still have about $6 million that is gonna be booked in Q1 2026, for the Baltimore side. And on the Leer South side, we have so far booked about $19 million in 2025, and we expect another $10 million to be booked in Q1 2026 associated with the firefighting expenses.

Speaker #3: On the cash flow side, obviously, insurance is we expect insurance proceeds to be higher next year versus this year. Just providing some perspective, we had two insurance claim events, the Baltimore bridge-related claim and leers south-related claim.

Mitesh Thakkar: On the cash flow side, obviously, we expect insurance proceeds to be higher next year versus this year. Just providing some perspective, we had two insurance claim events, the Baltimore Bridge-related claim and Leer South-related claim. We settled the Baltimore Bridge claim for a net of $40 million, of which $10 million was received in Q1 2025, and $24 million was booked in Q4 2025. We still have about $6 million that is gonna be booked in Q1 2026, for the Baltimore side. And on the Leer South side, we have so far booked about $19 million in 2025, and we expect another $10 million to be booked in Q1 2026 associated with the firefighting expenses.

Speaker #3: We settled the Baltimore bridge claim for a net of $40 million. Of which, $10 million was received in first quarter of '25 and $24 million was booked in fourth quarter of '25.

Speaker #3: We still have about $6 million that is going to be booked in one Q26 for the Baltimore side. And on the leers south side, we have so far booked about $19 million in 2025.

Speaker #3: And we expect another $10 million to be booked in one Q26 associated with the firefighting expenses. We also believe there's going to be a lost income claim of around more than $100 million.

Mitesh B. Thakkar: We also believe there's gonna be a lost income claim of around more than $100 million, so I think that's gonna play out as well. So we feel good about how cash flow is gonna look like on a year-over-year basis, including the fact that we are not gonna have almost $112 million of idling costs that we had in 2025. And as we have said in the past, I think we'll continue to make sure that from a capital allocation standpoint we continue to prioritize share buybacks.

Mitesh Thakkar: We also believe there's gonna be a lost income claim of around more than $100 million, so I think that's gonna play out as well. So we feel good about how cash flow is gonna look like on a year-over-year basis, including the fact that we are not gonna have almost $112 million of idling costs that we had in 2025. And as we have said in the past, I think we'll continue to make sure that from a capital allocation standpoint we continue to prioritize share buybacks.

Speaker #3: So I think that's going to play out as well. So we feel good about how cash flow is going to look like. On a year-over-year basis, including the fact that we are not going to have almost $112 million of idling costs that we had in 2025.

Speaker #3: And as we have said in the past, I think we'll continue to make sure that, from a capital allocation standpoint, we continue to prioritize share buybacks.

Paul Lang: Yeah, and Nick, as far as the shareholder return, as you well know, we had the formula whereas we returned 75% of our free cash flow to shareholders. If you look at 2025, not the best of years for us, we still returned probably 100% of our free cash flow or really close to it, to shareholders. So we should have an opportunity here in 2026 as we hit our targets and going forward to even provide more, and we certainly will stick with the form that we have in place today, which is 75% of our free cash flow or better.

Speaker #5: Yeah. And Nick, as far as the shareholder return, as you well know, we had the formula whereas we returned 75% of our free cash flow to shareholders.

Speaker #5: If you look at 2025, not the best of years for us. We still return probably 100% of our free cash flow or really close to it to shareholders.

Speaker #5: So we should have an opportunity here in 2026 as we hit our targets and going forward to even provide more. And we certainly will stick with the form that we have in place today, which is 75% of our free cash flow or better.

Nick Giles: Got it. Well, guys, that's very good to hear. I appreciate all the detail and continued best of luck.

Speaker #4: Got it. Well, guys, that's very good to hear. I appreciate all the detail. And continued best of luck.

Speaker #3: Thanks, Nick.

Paul Lang: Thanks, Nick.

Speaker #6: Thank you. And the next question comes from Chris Lafemina from Jefferies. Your line is now open. Please go ahead.

Deck S. Slone: Thank you. And the next question comes from Chris LaFemina from Jefferies. Your line is now open. Please go ahead.

Deck Slone: Thank you. And the next question comes from Chris LaFemina from Jefferies. Your line is now open. Please go ahead.

Chris LaFemina: Thanks, operator. Hi, guys. Thanks for taking my question. So I'm just trying to,

Speaker #3: Great job. Thanks, operator. Hi, guys. Thanks for taking my question. So I'm just trying to I'm just trying to understand the progression on the unit cost.

Mitesh B. Thakkar: Thank you, Chris.

Mitesh Thakkar: Thank you, Chris.

Chris LaFemina: I'm just trying to understand the progression on the unit cost. So if we look at the unit cost guidance for 2026, it's kind of in line with where you were in the first half of 2025. I mean, obviously, Leer South was down in Q2, but there's not really evidence of costs being significantly lower in 2026 than they were right when the merger first was completed. And you've guided to $150 million or more synergies, and in addition to that, you have 45X tax credits. I understand that, you know, that's being offset by lower prices in those contracts, but I would have thought that the trend on costs would have been more, more, more downward than we're seeing.

Speaker #3: So if we look at your unit cost guidance for 2026, it's kind of in line with where you were in the first half of 2025.

Speaker #3: I mean, obviously, Leer South was down in the second quarter, but does that really evidence costs being significantly lower in 2026 than they were right when the merger first was completed?

Speaker #3: And you've guided to $150 million or more synergies. And in addition to that, you have 45x tax credits. I understand that you're not that's being offered at lower prices in those contracts, but I would have thought that the trend on costs would have been more downward than we're seeing.

Speaker #3: And so my first question is, where are those synergies kind of showing up in the P&L here? And are they in is there a significant portion of synergies in 2026 guidance, or is it that costs as the year progresses will go down?

Chris LaFemina: So my first question is, you know, where are those synergies kind of showing up in the PNL here? And are they in or is there a significant portion of synergies in 2026 guidance, or is it that, you know, costs as the year progresses will go down, synergies will be a bigger factor each subsequent quarter? And then the second question I have is... Well, actually, let me ask that one first. Just in terms of synergies and where they're showing up in the PNL and why are we not seeing bigger cost reductions for next year? Thank you.

Speaker #3: There are synergies will be a bigger factor each subsequent quarter. And then the second question I have is, well, actually, let me ask you that one first.

Speaker #3: So just in terms of synergies and where they're showing up in the P&L, and why we're not seeing bigger cost reductions for next year.

Speaker #3: Thank you. So Chris, I'll take the synergy side, and Jimmy's going to address the cost side as well. So on the synergy side, I think if you look at what we have said in the past from a synergy perspective, what the three buckets are—so, one of the key buckets on the synergy side has been headcount-related, which, a lot of that shows up on the SG&A front.

Mitesh B. Thakkar: So Chris, I'll take the synergy side, and, and Jimmy is gonna address the cost side, as well. So on the synergy side, I think if you look at what we have said in the past from a synergy perspective, what the key buckets are. So one of the key buckets on the synergy side has been headcount related, which a lot of that shows up on the SG&A front. And based on our guidance for cash basis, SG&A, that we have provided and what you have seen us do, you can come up with a reasonable conclusion of almost a 40% improvement on that front. I think the other part of the synergies was on the marketing and logistics side.

Mitesh Thakkar: So Chris, I'll take the synergy side, and, and Jimmy is gonna address the cost side, as well. So on the synergy side, I think if you look at what we have said in the past from a synergy perspective, what the key buckets are. So one of the key buckets on the synergy side has been headcount related, which a lot of that shows up on the SG&A front. And based on our guidance for cash basis, SG&A, that we have provided and what you have seen us do, you can come up with a reasonable conclusion of almost a 40% improvement on that front. I think the other part of the synergies was on the marketing and logistics side.

Speaker #3: And based on our guidance for cash-based SG&A, that we have provided and what you would what you have seen us do, you can come up with a reasonable conclusion of almost a 40% improvement on that front.

Speaker #3: I think the other part of the synergies was on the marketing and logistics side. So that shows up in some of the byproduct credits byproduct sales price that we have disclosed in our earnings release as well.

Mitesh B. Thakkar: So that shows up in some of the by-product credits, by-product sales price that we have disclosed in in our earnings release as well. I think it's the last page of the earnings release. You will see a number that is $47 on by-product credits that is related to blending. If you think about legacy Arch, when they didn't have other products to blend, I think that they were selling it in the high 20s and low 30s, so there is a significant $10 plus uplift on that. So that flows into the realization bucket.

Mitesh Thakkar: So that shows up in some of the by-product credits, by-product sales price that we have disclosed in in our earnings release as well. I think it's the last page of the earnings release. You will see a number that is $47 on by-product credits that is related to blending. If you think about legacy Arch, when they didn't have other products to blend, I think that they were selling it in the high 20s and low 30s, so there is a significant $10 plus uplift on that. So that flows into the realization bucket.

Speaker #3: I think it's the last page of the earnings release. You will see a number that is $47 on byproduct credits that is related to blending.

Speaker #3: If you look at think about legacy arch, when they didn't have other products to blend, I think that they were selling it in the high 20s and low 30s.

Speaker #3: So, there is a significant $10-plus uplift on that. So that flows into the realization bucket. Now, part of the reason you might not be seeing the full power of that marketing and blending synergies is because the overall market has been down since the merger, whether it comes to metallurgical coal or whether it comes to thermal coal pricing as well.

Mitesh B. Thakkar: Now, part of the reason you might not be seeing the full power of that marketing and blending synergies is because the overall market has been down since the merger, whether it comes to metallurgical coal or whether it comes to thermal coal pricing as well. So when they come down, the blending-related synergies kind of decline a little bit. And then the third bucket is of finance, financing and insurance-related synergies that we have talked about in the past, realigning the balance sheet, improving liquidity, all sorts of things, right? Finally, on the operations side, supply chain is one part of the synergies. The cross current to that was some of the impact related to tariffs that was not envisioned at the time of the announcement of the merger, right?

Mitesh Thakkar: Now, part of the reason you might not be seeing the full power of that marketing and blending synergies is because the overall market has been down since the merger, whether it comes to metallurgical coal or whether it comes to thermal coal pricing as well. So when they come down, the blending-related synergies kind of decline a little bit. And then the third bucket is of finance, financing and insurance-related synergies that we have talked about in the past, realigning the balance sheet, improving liquidity, all sorts of things, right? Finally, on the operations side, supply chain is one part of the synergies. The cross current to that was some of the impact related to tariffs that was not envisioned at the time of the announcement of the merger, right?

Speaker #3: So, when they came—when they come down, the blending-related synergies kind of decline a little bit. And then the third bucket is financing and insurance-related synergies that we have talked about in the past: realigning the balance sheet, improving liquidity, all sorts of things, right?

Speaker #3: Finally, on the operations side, supply chain is one part of the synergies. The cross-current to that was some of the impact related to tariffs that was not envisioned at the time of the announcement of the merger, right?

Mitesh B. Thakkar: So, that's a little bit of a wash there. Jim, yeah, Carl?

Mitesh Thakkar: So, that's a little bit of a wash there. Jim, yeah, Carl?

Speaker #3: So that's a little bit of a wash there. Jimmy.

Speaker #5: Yeah. Whether part of those synergies is being offset by inflation, which I assume would have been a factor, right?

Chris LaFemina: About whether part of those synergies are being offset by inflation, which I assume would have been-

Mitesh B. Thakkar: Correct.

Mitesh Thakkar: Correct.

Chris LaFemina: Right.

Mitesh B. Thakkar: Yes.

Mitesh Thakkar: Yes.

Speaker #3: Correct.

Speaker #5: Okay. But if we were to look so if we're thinking about costs into 2027, I know you haven't given guidance yet, but would you expect all else equal unit costs to be low in the first half of 2027 than they will be in the first half of 2026?

Chris LaFemina: Okay, but if we were to look, so if we're thinking about costs into 2027, I know you haven't given guidance yet, but would you expect all else equal, unit costs to be low in the first half of 2027 than they will be in the first half of 2026? In other words, is the impact of all these benefits going to increase over time, or should we see most of it through the first half of 2026 and kind of flatline from there?

Speaker #5: In other words, is the impact of all these benefits going to increase over time, or should we see most of it through the first half of 2026 and a flat line from there?

Speaker #3: So I think overall, just in synergy in general, I think we still have a lot of some of the IT systems that are not fully integrated.

Mitesh B. Thakkar: So, I think overall, just in synergy in general, I think we still have a lot of, some of the IT systems that are not fully integrated. So I think first half versus second half, I would expect second half to be better than the first half. So there's gonna be a ramp-up as those systems roll off. And so I think there is, there is that part of it, too. And always remember, in the first half, particularly in the first quarter, you always have weather impacts, logistics, whether it's railroads, whether it's, terminal operations, all of those. So there is a little bit of that as well. So it could be a little bit more of a ramp-up from the first quarter.

Mitesh Thakkar: So, I think overall, just in synergy in general, I think we still have a lot of, some of the IT systems that are not fully integrated. So I think first half versus second half, I would expect second half to be better than the first half. So there's gonna be a ramp-up as those systems roll off. And so I think there is, there is that part of it, too. And always remember, in the first half, particularly in the first quarter, you always have weather impacts, logistics, whether it's railroads, whether it's, terminal operations, all of those. So there is a little bit of that as well. So it could be a little bit more of a ramp-up from the first quarter.

Speaker #3: So I think first half versus second half, I would expect second half to be better than the first half. So there's going to be a ramp-up as those systems roll off.

Speaker #3: And so I think there is that part of it too. And always remember, in the first half, particularly in the first quarter, you always have weather impacts logistics, whether it's railroads, whether it's the terminal operations, all of those.

Speaker #3: So there is a little bit of that as well. So it could be a little bit more of a ramp-up from the first quarter.

Speaker #5: And Chris, when you look at the cost, the unit cost, particularly with our guidance that we put out here in 2026, we've got to it certainly implies that we believe we'll have cost improvement in 2026 versus 2025.

Paul Lang: And Chris, when you look at the cost, the unit cost, particularly with our guidance that we put out here in 2026, you know, we've got it. It certainly implies that we believe we'll have cost improvement in 2026 versus 2025. One of the things that I personally am gonna do, along with our chief operating officer and all of our operating folks, is get laser-focused on unit cost. Now that we have all of our assets up and running at full speed, we're excited about where we can get to. Now, with that being said, you know, there was some maintenance costs associated with the longwall moves pulling forward. There was some fixed costs associated with, you know, just the assortment of less tons.

Speaker #5: One of the things that I personally am going to do along with our chief operating officer, and all of our operating folks, is get laser-focused on unit costs.

Speaker #5: Now that we have all of our assets up and running at full speed, we're excited about where we can get to. Now, with that being said, there were some maintenance costs associated with the long-haul moves pulling forward.

Speaker #5: There were some fixed costs associated with just the assortment of less tons. But as we move into 2026, I think within the guidance that we give here, we will be focused to get those numbers and even beat those.

Paul Lang: But as we move into 2026, I think within the guidance that we give here, we will be focused to get those numbers and even beat those. So as we move forward, I would expect a more steady cost, unit cost, and those should improve quarter by quarter as long as we stay in, in the same where we're mining. Now, we do have and, you know, as you know, it's been advertised that Leer Mine was in the best yield, the thickest seam they had. We're moving into a new district. We don't know exactly what that yield is gonna be yet, but it's still gonna be a great producing wall. We expect it to produce at much lower unit cost than we have. So pretty excited about 2026.

Speaker #5: So as we move forward, I would expect a more steady cost unit cost. And those should improve quarter by quarter as long as we stay in the same where we're mining.

Speaker #5: Now, we do have as you know, it's been advertised that LEAR mines was in the best yield, the thickest seam they had. We're moving into a new district.

Speaker #5: We don't know exactly what that yield is going to be yet, but it's still going to be a great producing wall. We expect it to produce at much lower unit costs than we have.

Speaker #5: So, pretty excited about 2026. I know 2025 had a lot of noise, a lot of calculations for cost. But I'm really excited about where these units can get to.

Paul Lang: I know 2025 had a lot of noise, a lot of calculations for cost, but I'm really excited about where these units can get to, you know, PMC as, as well as the PRB and the Leer complex as well, on the met side.

Speaker #5: PMC as well as the PRB and the LEAR compacts as well. On the Met side. Thanks. That's really helpful. And just one more quick one on the markets, maybe a question for Deck, actually.

Chris LaFemina: Thanks. That's really helpful. And just one more quick one on the markets, maybe a question for Deck, actually. What are you seeing in the high-vol market now with Leer South ramping back up? I mean, that market is obviously really dislocated from the premium low-vol market. And, you know, what's your expectation as to how those spreads will change over time, and what are you seeing right now in the market? Thank you for the answers. I appreciate it.

Speaker #5: What are you seeing in the high volume market now with LEAR South ramping back up? I mean, that market is obviously really dislocated from the premium low-volume market.

Speaker #5: And what's your expectation as to how those spreads will change over time and what are you seeing right now in the market? And thank you for the answers.

Speaker #5: I appreciate it.

Speaker #3: Yeah. Actually, Chris, maybe Bobby will start with where we are at the moment, and then maybe I'll give a few thoughts on the macro.

Deck S. Slone: Yeah. Actually, Chris, maybe Bobby will start with what--how, where we are and, and at the moment, and then maybe I'll give a few thoughts on the macro.

Deck Slone: Yeah. Actually, Chris, maybe Bobby will start with what--how, where we are and, and at the moment, and then maybe I'll give a few thoughts on the macro.

Speaker #6: Yeah. I mean, as far as we announced this morning $6.7 million tons. We already have contracted. The exciting part about that is we do have some linkage to PLV, which I think you're indicating there are some widespreads between where PLV indexes and US East Coast indexes are.

Bob Braithwaite: Yeah, I mean, you know, we, we announced this morning, 6.7 million tons. We already have contracted. You know, the exciting part about that is we do have some linkage to, to PLV, which I think you're indicating there are some wide spreads between where PLV indexes and, and US East Coast indexes are. We are seeing additional appetite in the Asian markets. You know, they typically contract on a fiscal year basis, so April through March. We are in active negotiations today, for some significant volumes. So I do feel good about our ability to contract those, especially against, PLV prices.

Speaker #6: We are seeing additional appetite in the Asian markets. They typically contract on a fiscal year basis. So April through March, we are an active negotiations today.

Speaker #6: For some significant volumes. So I do feel good about our ability to contract those, especially against PLV prices. So, when you look at what we have left to sell at our midpoint—call it 2.3 million tons—the majority of that is high-vol, call it 1.8 million, and about 500,000 tons of that is low-vol.

Bob Braithwaite: So when you look at what we have left to sell at our midpoint, call it 2.3 million tons, majority of that is high vol, call it 1.8, about 500,000 tons of that's low vol. I would anticipate most of that high vol being contracted into the Asian market. And I also would say, you know, if we see these US utilization rates continue to climb, they've been hovering at 75% to 79%, but we have seen some recent upticks. You know, that could open up some opportunity for us domestically as well. So do feel good about where our book is.

Speaker #6: I would anticipate most of that high-vol being contracted into the Asian market. And I also would say, if we see these U.S. utilization rates continue to climb—they've been hovering at 75% to 79%—but we have seen some recent upticks.

Speaker #6: That could open up some opportunity for us domestically as well. So do feel good about where our book is. The spreads, I think, will continue to shrink as we move forward, although right now we're certainly doing what we can to take advantage of the spread and link more toward PLV.

Bob Braithwaite: The spreads, I think, will continue to shrink as we move forward, although right now we're certainly doing what we can to take advantage of the spread and link more toward PLV.

Speaker #5: Yeah. And Chris, maybe a point on that, on the spreads. Look, if you look historically, 2017 through mid-2024, the average spread between PLV and HVA was about $10.

Deck S. Slone: You know, Chris, maybe a point on that, on the spreads. Look, you know, if you look historically, 2017 through mid-2024, the average spread between PLV and HVA was about $10. So it's obviously blown out in a very significant way, in a way that you can't say, you know, value and use doesn't explain, you know, a $90 spread between PLV and HVA. So as Bobby said, look, we'll try to take full advantage of that by committing as many times against PLV as we can. But, you know, there is an opportunity here. We expect that spread to shrink significantly. Look, I think there's been some concern about additional high-vol coming into the market or coming back into the market, which, you know, is valid.

Deck Slone: You know, Chris, maybe a point on that, on the spreads. Look, you know, if you look historically, 2017 through mid-2024, the average spread between PLV and HVA was about $10. So it's obviously blown out in a very significant way, in a way that you can't say, you know, value and use doesn't explain, you know, a $90 spread between PLV and HVA. So as Bobby said, look, we'll try to take full advantage of that by committing as many times against PLV as we can. But, you know, there is an opportunity here. We expect that spread to shrink significantly. Look, I think there's been some concern about additional high-vol coming into the market or coming back into the market, which, you know, is valid.

Speaker #5: So it's obviously blown out in a very significant way in a way that you can't say value and use doesn't explain a $90 spread between PLV and HVA.

Speaker #5: So as Bobby said, look, we'll try to take full advantage of that by committing as many tons against PLV as we can. But there is an opportunity here.

Speaker #5: We expect that spread to shrink significantly. Look, I think there's been some concern about additional high-vol A coming into the market or coming back into the market.

Speaker #5: Which is valid. You do have some mines that are returning. And right now, everything else is running well. Always the caveat, there will be mines that go out.

Deck S. Slone: You do have some mines that are returning, and right now everything else is running well. Always the caveat, you know, there will be mines that go out. You know, typically, you have 5 to 10% of the global, you know, mining fleet that is, you know, experiencing some sort of operational difficulty. So it's not like, you know, that capacity comes back, and everything else runs like a Swiss watch. We don't expect that. But it's also true that if you look in 2025, you had production down 6 million tons in Australia, down 6 million tons, or exports rather, down 6 million tons in Australia, 6 million tons in the US. So, you know, that's a real counterbalance against some capacity coming back online. So look, we feel like there is balance returning.

Deck Slone: You do have some mines that are returning, and right now everything else is running well. Always the caveat, you know, there will be mines that go out. You know, typically, you have 5 to 10% of the global, you know, mining fleet that is, you know, experiencing some sort of operational difficulty. So it's not like, you know, that capacity comes back, and everything else runs like a Swiss watch. We don't expect that. But it's also true that if you look in 2025, you had production down 6 million tons in Australia, down 6 million tons, or exports rather, down 6 million tons in Australia, 6 million tons in the US. So, you know, that's a real counterbalance against some capacity coming back online. So look, we feel like there is balance returning.

Speaker #5: Typically, you have 5% to 10% of the global mining fleet that is experiencing some sort of operational difficulty. So it's not like that capacity comes back and everything else runs like a Swiss watch.

Speaker #5: We don't expect that. But it's also true that if you look in 2025, you had production down 6 million tons in Australia, down 6 million tons, or exports, rather, down 6 million tons in Australia, 6 So that's a real counterbalance against some capacity coming back online.

Speaker #5: So look, we feel like there is balance returning. Indian imports of coke and coal were up nearly 10 million tons. In 2025. So look, lots of positive signs here.

Deck S. Slone: You know, Indian imports of Coking Coal were up nearly 10 million tons in 2025. So look, lots of positive signs here. So we expect this market to normalize here in the not-too-distant future. But clearly, we've been under some pressure, you know, through 2025 and are only now getting sort of, you know, back towards, you know, some positive signs.

Deck Slone: You know, Indian imports of Coking Coal were up nearly 10 million tons in 2025. So look, lots of positive signs here. So we expect this market to normalize here in the not-too-distant future. But clearly, we've been under some pressure, you know, through 2025 and are only now getting sort of, you know, back towards, you know, some positive signs.

Speaker #5: So we expect this market to normalize here in the not-too-distant future. But clearly, we've been under some pressure through 2025 and are only now getting sort of back towards some positive signs.

Speaker #5: Thank you, guys.

Mitesh B. Thakkar: Thank you, guys.

Mitesh Thakkar: Thank you, guys.

Speaker #6: Thank you.

Bob Braithwaite: Thank you.

Operator: Thank you. The next question comes from Nathan Martin from The Benchmark Company. Please go ahead.

Speaker #7: Thank you. And the next question comes from Nathan Martin from the Benchmark Company. Please go ahead.

Speaker #8: Yeah. Thanks, operator. Good morning, everyone.

Nathan Martin: Yeah, thanks, operator. Good morning, everyone.

Speaker #9: Morning, Nathan.

Bob Braithwaite: Good morning, Nate.

Mitesh B. Thakkar: Good morning.

Mitesh Thakkar: Good morning.

Nathan Martin: Bob, question for you. You mentioned earlier, sensitivity to API2 price for the High CV thermal segment. Any sensitivity you could provide for PJM West power prices or even Petcoke that you could share?

Speaker #8: Bob, question for you. You mentioned earlier sensitivity to API 2 price for the high CV thermal segment. Any sensitivity you could provide for PGM West power prices or even petcoke that you could share?

Speaker #6: Yeah. So for PGM, it's fairly irrelevant right now. Our new contract with that specific customer we negotiated a fixed price. We certainly seen a much higher I'll call it base than what we received on the net back.

Bob Braithwaite: Yeah. So for PJM, it's, it's fairly irrelevant right now. Our new contract with that specific customer, we negotiated a fixed price. We've certainly seen a much higher, I'll call it, base than what we received on the, on the net back. We did have some volume carry into Q1. So sensitivity there, Nate, is... I don't want to say it's irrelevant, but it doesn't become very relevant as we move forward in 2026 and 2027. In terms of what we're seeing on the petcoke side, just as an example, you know, recently, petcoke prices have improved to closer to-- CFR petcoke prices have improved around $125, $130.

Speaker #6: We did have some volume carry into Q1. So sensitivity there, Nate, is I don't want to say it's irrelevant, but it doesn't become very relevant as we move forward in 2026 and 2027.

Speaker #6: In terms of what we're seeing on the Petcoke side, just as an example, recently, Petcoke prices have improved to close to the CFR Petcoke price have improved around 125, 130.

Speaker #6: That's netting back roughly a six-handle back to the mine where previously, we were contracting in December when Petcoke prices were closer to that 115, 120.

Bob Braithwaite: That's netting back roughly a $6 handle back to the mine, where previously, you know, we were contracting in December, when Petcoke prices were closer to that $115, $120, we were, you know, low $50s. So we've seen at least a 10 to 15% improvement in our overall net back with the improvement in Petcoke prices.

Speaker #6: We were low 50s. So we've seen at least a 10 to 15 percent improvement in our overall net back with the improvement in Petcoke prices.

Speaker #8: Okay, appreciate that, Bob. Maybe one other one for you. Thinking about West Elk, can you talk a little about the marketing efforts for that coal, given the potential for additional production out? You guys are in the BC?

Nathan Martin: Okay, appreciate that, Bob. Maybe one other one for you. You know, thinking about West Elk, you know, can you talk a little about the marketing efforts for that coal, given the potential for, you know, additional production now that you guys are in the B Seam?

Speaker #6: Yeah. So a couple of things. We've really once we entered the BC, the quality has significantly improved, especially from a heating standpoint. So the team has been doing a really good job.

Bob Braithwaite: Yeah, so you know, a couple things. We've really. You know, once we entered the B Seam, the quality has significantly improved, especially from a heating standpoint. So the team has been doing a really good job in developing that coal into utilities, mainly into the East. You know, the coal traditionally has gone into the industrial markets out in the West and also into the export markets. We still have that business, but now that we're focusing on getting the 5+ million tons out of West Elk, the incremental volume, we're certainly looking to develop into the East. We've already been successful in securing 4 utility customers in the East, two that we currently have under contract. Two, I would say, we're in the process of doing trials.

Speaker #6: And developing that coal into utilities, mainly into the East. The coal traditionally has gone into the industrial markets out in the West and also into the export markets.

Speaker #6: We still have that business. But now that we're focusing on getting to five-plus million tons out of West Elk, the incremental volume we're certainly looking to develop into the east.

Speaker #6: We've already been successful in securing four utility customers in the East—two that we currently have under contract, and two I would say we're in the process of doing trials.

Speaker #6: So again, look, forward to our ability to secure meaningful volumes into the utility business into the east.

Bob Braithwaite: So again, look forward to our ability to secure meaningful volumes into the utility business into the East.

Speaker #5: And just for reference, this is a business that is being developed 6 to 12 months ago. We didn't have any utility business in the East for West Elk coal.

Mitesh B. Thakkar: Just for reference, this is a business that is being developed. 6, 12 months ago, we didn't have any utility business in the East for West Elk coal. I think, with the demand growth that we are seeing everywhere in terms of data center and AI, I think, there is a lot of potential to benefit from that growth in the East, and we are very optimistic that we'll be able to capture some of that growth out of West Elk.

Mitesh Thakkar: Just for reference, this is a business that is being developed. 6, 12 months ago, we didn't have any utility business in the East for West Elk coal. I think, with the demand growth that we are seeing everywhere in terms of data center and AI, I think, there is a lot of potential to benefit from that growth in the East, and we are very optimistic that we'll be able to capture some of that growth out of West Elk.

Speaker #5: I think with the demand growth that we are seeing everywhere in terms of data center and AI, I think there's a lot of potential to benefit from that growth in the east.

Speaker #5: And we're very optimistic that we'll be able to capture some of that growth out of West Elk.

Speaker #8: All right. Very helpful, guys. Appreciate the time. Best of luck.

Nathan Martin: All right. Very helpful, guys. Appreciate the time. Best of luck.

Speaker #6: Thank you.

Bob Braithwaite: Thanks.

Deck S. Slone: Thanks, Nate.

Deck Slone: Thanks, Nate.

Speaker #5: Thanks, Nate.

Operator: Thank you. And the next question comes from George Aida from UBS. Your line is now open. Please go ahead.

Speaker #7: Thank you. And the next question comes from George Ada from UBS, your line is now open. Please go ahead.

Speaker #10: Yeah. Hi, Den. So I'm my line dropped out. But maybe just quickly for mutation. Sorry if this has been asked. But the 45X credit confirming all PAMC is eligible and also West Elk and maybe the timing of the 100 million insurance to come still.

George Aida: Yeah. Hi, gents. Sorry, my line dropped out, but maybe just quickly from Mitesh, and sorry if this has been asked, but the 45X credit, confirming all PAMC is eligible and also West Elk, and maybe the timing of the $100 million insurance to come still, is that weighted to late in the year, would you expect?

Speaker #10: Is that weighted to late in the year? Would you expect?

Speaker #8: Yeah. So on the 45X credit, George, I think both the metallurgical segment and high CV thermal segment are going to benefit from it. And we have modeled it in our guidance.

Mitesh B. Thakkar: Yeah. So, on the 45X credit, George, I think both the metallurgical segment and the high CV thermal segment are gonna benefit from it, and we have modeled it in our guidance. And, then on the insurance proceeds, I think what the way,

Mitesh Thakkar: Yeah. So, on the 45X credit, George, I think both the metallurgical segment and the high CV thermal segment are gonna benefit from it, and we have modeled it in our guidance. And, then on the insurance proceeds, I think what the way,

Speaker #8: And then on the insurance proceeds, I think what the way we'll file all our claims here in the first half now, there is going to be a cadence.

Deck S. Slone: ... We'll file all our claims here in the first half. Now, there is gonna be a cadence. We are gonna start receiving, as I mentioned early on, we've started receiving some stuff in Q1, which I already mentioned. From a modeling perspective, I would assume that it's more second to fourth quarter loaded, rather than first quarter, but we are getting some stuff. It's just timing, and you know, they go through the claim process, and there's some back and forth. So, again, we're trying to push as hard as we can, but sometimes, as you know, the insurance company also go through their own due diligence process.

Deck Slone: ... We'll file all our claims here in the first half. Now, there is gonna be a cadence. We are gonna start receiving, as I mentioned early on, we've started receiving some stuff in Q1, which I already mentioned. From a modeling perspective, I would assume that it's more second to fourth quarter loaded, rather than first quarter, but we are getting some stuff. It's just timing, and you know, they go through the claim process, and there's some back and forth. So, again, we're trying to push as hard as we can, but sometimes, as you know, the insurance company also go through their own due diligence process.

Speaker #8: We're going to start receiving, as I mentioned earlier on, we'll start receiving some stuff in Q1, which I already mentioned. From a modeling perspective, I would assume that it's more second to fourth quarter loaded.

Speaker #8: Rather than first quarter. But we are getting some stuff. It's just timing, and they go through the claim process, and there's some back and forth.

Speaker #8: So again, we're trying to push as hard as we can, but sometimes, as you know, the insurance company also go through their own due diligence process.

Speaker #10: Yeah, okay. No, thanks, Mitesh. And then probably for Jimmy more so. But I mean, 2025 wasn't the best year operationally, with less South and West Elk in the more challenging scene.

George Aida: Yep. Okay. Now, thanks, Mitesh, and then probably for Jimmy more so, but I mean, 2025 wasn't the best year operationally with Leer South and West Elk in the more challenging scene. But, like, what tangible things have you guys done to give us more incremental confidence in the operational delivery for 2026? I mean, volumes this year look good. Yeah, there's some tailwinds helping on the cash cost front, but how do we gain conviction in delivery this year? And maybe a reminder as well, any operations in any challenging parts of the mine plan besides Leer?

Speaker #10: But what tangible things have you guys done to give us more incremental confidence in the operational delivery for 2026? I mean, volumes this year look good.

Speaker #10: There's some tailwinds helping on the cash cost front. But how do we gain conviction in delivery this year? And maybe a reminder as well, any operations in any challenging parts of the mine plan besides Lehr?

Speaker #8: No, I think that's what gives us so much excitement about 2026. As I said earlier, we have all of our assets up and running now.

Paul Lang: No, I, I think that's what gives us so much excitement about 2026. As I said earlier, you know, we have all of our assets up and running now. We've done some things that we think is gonna really help our costs going forward, such as schedule change, such as looking at how we're producing on certain walls. That's what we did in prior years, and quite frankly, we're in great conditions at West Elk. Really excited about that there. I think we can... It, it's gonna depend on the market, you know, on transportation for West Elk, but we're certainly in a position at the mine to produce at high productivity levels. You know, we have Leer South back up and running now. I think they're gonna do great things there. The-- of course, mining is mining.

Speaker #8: We've done some things that we think is going to really help our costs going forward, such as schedule change, such as looking at how we're producing on certain walls.

Speaker #8: That's what we did in prior years. And quite frankly, we're in great conditions at West Elk really excited about that there. I think we can it's going to depend on the market, on transportation for West Elk.

Speaker #8: But we're certainly in a position at the mine to produce at high productivity levels. We have Lehr South back up and running now. I think they're going to do great things there.

Speaker #8: Of course, mining's mining. You always have incidents come up here and there. But as a whole, I feel really, really good about core in 2026 and beyond.

Paul Lang: You always have incidents come up here and there, but as a whole, I feel really, really good about Core in 2026 and beyond. I think we're gonna continue to work on, you know, cost structures and things that will help us. You know, Leer moving over into the North district there, you know, we'll probably have a little better geology and maybe a little less yield coming out of that, but the team is laser-focused on doing that and, you know, getting our longwall moves in the right cadence to whereas we can move and produce to our guidance or above that, I think is gonna be what you see in 2026.

Speaker #8: I think we're going to continue to work on cost structures and things will help us. Lehr moving over into the north district there, we'll probably have a little better geology, maybe a little less yield coming out of that.

Speaker #8: But the team is laser-focused on doing that. And getting our longwall moves in the right cadence, to where we can move and produce to our guidance or above that, I think is going to be what you'll see in 2026.

Speaker #10: Yeah. Yeah. I know that's clear. And then maybe the US coal fleet capacity factor, this is getting a lot of attention and interest. But we haven't really seen it annualized much higher than 50%.

George Aida: Yep. Yeah, okay. No, that's clear. And then maybe the US coal fleet capacity factor, like, this is getting a lot of attention and interest, but we haven't really seen it annualized much higher than 50%. We've had patches of in the 70s with the weather and gas prices bouncing. But, like, how do you guys think about this on a sustainable six-month view? Like, could we see 60% US coal fleet capacity? Is that a fair assumption for potential second half, or is that still too aggressive?

Speaker #10: We've had patches in the 70s with the weather and gas prices—bouncing. But how do you guys think about this on a sustainable six-month view?

Speaker #10: Could we see 60% U.S. coal fleet capacity? Is that a fair assumption for the potential second half, or is that still too aggressive?

Deck S. Slone: You know, so, George, as we said, look, it's running at-- we're running about 49% at this point, it's Deck. And, look, actually, you know, you only have to go back to the aughts, to the early part of the century to, you know, to see when they were, they were running at 70 to 72% capacity factors, and, and even then, that was with cycling down, right? So they definitely can run at much higher levels than the 49%. Quite frankly, we saw them running at 61% in January and February of 2025. So, you know, that demonstrates that they, you know, that, that they sort of proved it in, in, in winter, and, you know, earlier in 2025, they, they demonstrated that, and again, still with a lot of cycling down.

Deck Slone: You know, so, George, as we said, look, it's running at-- we're running about 49% at this point, it's Deck. And, look, actually, you know, you only have to go back to the aughts, to the early part of the century to, you know, to see when they were, they were running at 70 to 72% capacity factors, and, and even then, that was with cycling down, right? So they definitely can run at much higher levels than the 49%. Quite frankly, we saw them running at 61% in January and February of 2025. So, you know, that demonstrates that they, you know, that, that they sort of proved it in, in, in winter, and, you know, earlier in 2025, they, they demonstrated that, and again, still with a lot of cycling down.

Speaker #8: So George, as we said, look, it's running. We're running about 49% at this point. It's DAC. And look, actually, you only have to go back to the early part of the century to see when they were running at 70 to 72 percent capacity factors.

Speaker #8: And even then, that was with cycling down, right? So they definitely can run at much higher levels than the 49%, quite frankly. We saw them running at 61% in January and February of 2025.

Speaker #8: So that demonstrates that they sort of proved it in winter and early in 2025. They demonstrated that. And again, still with a lot of cycling down.

Speaker #8: So, look, we're highly supportive of the Trump administration's efforts to induce additional investment and to try to make these plants young again in that way.

Deck S. Slone: So look, we're highly supportive of the Trump administration's efforts to, you know, induce additional investment and to try to, you know, make these plants young again in that way. But even now, we think they can operate at much higher capacity factors than they are now. You know, we've seen that, and look, the math is pretty simple. I mean, if you go from a 49% capacity factor to a, you know, a 60, you know, a 65% capacity factor, if you increase by, you know, if you increase that capacity factor by 50%, you know, the consumption can increase by 50%. You know, that suggests another 200 million tons of coal consumption, without really doing anything much to the fleet at all. So again, we're enthused about where that's leading.

Deck Slone: So look, we're highly supportive of the Trump administration's efforts to, you know, induce additional investment and to try to, you know, make these plants young again in that way. But even now, we think they can operate at much higher capacity factors than they are now. You know, we've seen that, and look, the math is pretty simple. I mean, if you go from a 49% capacity factor to a, you know, a 60, you know, a 65% capacity factor, if you increase by, you know, if you increase that capacity factor by 50%, you know, the consumption can increase by 50%. You know, that suggests another 200 million tons of coal consumption, without really doing anything much to the fleet at all. So again, we're enthused about where that's leading.

Speaker #8: But even now, we think they can operate at much higher capacity factors than they are now. We've seen that. And look, the math is pretty simple.

Speaker #8: I mean, if you go from a 49% capacity factor to a 65% capacity factor, if you increase that capacity factor by 50%, the consumption can increase by 50%.

Speaker #8: That suggests another 200 million tons of coal consumption without really doing anything much to the fleet at all. So again, we're enthused about where that's leading.

Speaker #10: Yeah. Yeah. And George, one last thing I'll just add. I would say it's very encouraging is talking to a lot of our utility customers.

Bob Braithwaite: Yeah, and, George, one last thing I'll just add. I would say it's very encouraging, you know, talking to a lot of our utility customers, investments are happening, and I think Deck mentioned that at the last point of his comments there, is that these utilities are investing in their coal fleet, so they can continue to run at these higher capacity factors as this additional load comes online. So that's very encouraging.

Speaker #10: Investments are happening. And I think Deck mentioned that at the last point of his comments there, is that these utilities are investing in their coal fleet.

Speaker #10: So they can continue to run at these higher capacity factors as this additional load comes online. So that's very encouraging.

Speaker #8: And I'd add one final point, George. The Trump administration also really focused on not allowing additional coal-fired plants to close. They've used their 202C authority under the federal Power Act to ensure that plants that may be a year ago, two years ago, three years ago were viewed as inessential, non-essential, are now being preserved.

Deck S. Slone: And I'd, I'd add one final point, George. The Trump administration also, you know, really focused on not allowing additional coal-fired plants to close. They've used their 202(c) authority under the Federal Power Act, you know, to ensure that plants that, you know, maybe a year ago, two years ago, three years ago, were viewed as inessential, non-essential, are now being preserved. And I think it's gonna become very clear very quickly that those plants, you know, are in fact needed with the power demand growth we're seeing. You know, we talked about the overall growth, but, you know, if in fact, we're gonna see 3.5, 4% power demand growth, you're going to need all that base load capacity and more.

Deck Slone: And I'd, I'd add one final point, George. The Trump administration also, you know, really focused on not allowing additional coal-fired plants to close. They've used their 202(c) authority under the Federal Power Act, you know, to ensure that plants that, you know, maybe a year ago, two years ago, three years ago, were viewed as inessential, non-essential, are now being preserved. And I think it's gonna become very clear very quickly that those plants, you know, are in fact needed with the power demand growth we're seeing. You know, we talked about the overall growth, but, you know, if in fact, we're gonna see 3.5, 4% power demand growth, you're going to need all that base load capacity and more.

Speaker #8: And I think it's going to become very clear very quickly that those plants are, in fact, needed with the power demand growth we're seeing.

Speaker #8: We talked about the overall growth. But in fact, we're going to see three and a half to four percent power demand growth. You're going to need all that baseload capacity and more.

George Aida: So just on that, like, do you think if I put in my US thermal coal model, like 60% for second half 2026 or first half 2027, like, does that sound too aggressive to you for a half?

Speaker #10: I just on that, do you think if I put in my US thermal coal model, 60% for second half 26. Or first half 2027?

Speaker #10: Does that sound too aggressive to you for a half?

Deck S. Slone: Probably not that fast. That's probably too fast to jump up to that level, but I think we get there. I think that's just over the next several years.

Deck Slone: Probably not that fast. That's probably too fast to jump up to that level, but I think we get there. I think that's just over the next several years.

Speaker #8: Probably not that fast. That's probably too fast to jump up to that level. But I think we get there. I think that's just over the next several years.

Speaker #11: I think it's going to depend. There are several factors for that. The price of gas, what the demand is, all of those things. So I would say it'll take a little longer than second half of the year.

Paul Lang: I think it's gonna depend, you know, there are several factors for that. You know, the price of gas, what the demand is, all of those things. So I would, I would say it'll take a little longer than the second half of the year.

Operator: ... To get to 60.

Speaker #11: To get to 60.

George Aida: Right. Okay, yeah. But, like, if gas prices and energy prices sort of in the high 3s, even like is US power coal demand sort of high 400s in 2027, say, a reasonable thought? Or is that, again, still a bit too optimistic in your view at least, guys?

Speaker #10: Right. Okay. Yeah. But if gas prices and energy prices are sort of in the high threes, even, is U.S. power coal demand sort of in the high 400s in 2027, say, a reasonable thought?

Speaker #10: Or is that, again, still a bit too optimistic in your view, at least, guys?

Speaker #11: Yeah. George, another thing I think we have to consider too is coal production, right? As you probably saw from the earnings releases that have come out so far, there hasn't been a significant push to increase production and one of the variables here is going to be how fast can the industry ramp up if the industry decides to ramp up, right?

Mitesh B. Thakkar: Yeah. George, another thing I think we have to consider, too, is like, coal production, right? Like, as you probably saw from the earnings releases that have come out so far, there hasn't been a significant push to increase production. And, you know, one of the variable here is gonna be, you know, how fast can the industry ramp up, if the industry decides to ramp up, right? And to see that happening, you need to see strong pricing signals as well. So I think from a cycle perspective, I think the price need to go much higher than where it is today to be able to backfill into some of that demand growth.

Mitesh Thakkar: Yeah. George, another thing I think we have to consider, too, is like, coal production, right? Like, as you probably saw from the earnings releases that have come out so far, there hasn't been a significant push to increase production. And, you know, one of the variable here is gonna be, you know, how fast can the industry ramp up, if the industry decides to ramp up, right? And to see that happening, you need to see strong pricing signals as well. So I think from a cycle perspective, I think the price need to go much higher than where it is today to be able to backfill into some of that demand growth.

Speaker #11: And to see that happening, you need to see strong pricing signals as well. So I think from a cycle perspective, I think the price need to go much higher than where it is today to be able to backfill into some of that demand growth.

Mitesh B. Thakkar: You could run into a situation where the utilities do want to run more, but there's not enough coal, so they will have to pay up for it, so to speak, right? That's gonna happen. It's just a matter of timing. Then you come back to that question: is the pricing signal strong enough for the coal producers to invest for capacity expansion or debottlenecking or whatever?

Speaker #11: You could run into a situation where the utilities do want to run more, but there's not enough coal. So they will have to pay up for it, so to speak, right?

Mitesh Thakkar: You could run into a situation where the utilities do want to run more, but there's not enough coal, so they will have to pay up for it, so to speak, right? That's gonna happen. It's just a matter of timing. Then you come back to that question: is the pricing signal strong enough for the coal producers to invest for capacity expansion or debottlenecking or whatever?

Speaker #11: And that's going to happen it's just a matter of timing. And then you come back to that question is, is the pricing signal strong enough for the coal producers to invest for capacity expansion or debottlenecking or whatever?

Speaker #10: Right. Okay. Now, thanks, Mitesh. I'm guessing West Elk going to sort of 6 million tons, maybe slightly higher, is really the only lever you guys could pull in terms of that volume front?

George Aida: Right. Okay. Now, thanks, Mitesh. I'm guessing West Elk going to sort of 6 million tons, maybe slightly higher, is really the only lever you guys could pull in terms of that volume front?

Mitesh B. Thakkar: That... Yep.

Mitesh Thakkar: That... Yep.

Speaker #11: Yeah. Well, I think West Elk, as I said, it ran at a really high productivity level in January. It's going to depend on what the market is about.

Paul Lang: Well, I, I think West Elk, you know, as I said, it ran at a really high productivity level in January. It's gonna depend on what the market is. I've always said, we will run to the market, but I think the capability of West Elk is certainly there. You know, it's gonna depend on customers and rails, but it's a great mine. It's ready to go. We have a good team there that's ready to produce, and they certainly could produce that 6 million tons if the market is there for it.

Speaker #11: I've always said we will run to the market. But I think the capability of West Elk is certainly there. It's going to depend on customers and rails.

Speaker #11: But it's a great mine. It's ready to go. We have a good team there that's ready to produce. And they certainly could produce at 6 million tons if the market's there for it.

George Aida: Awesome. Thanks, James.

Speaker #10: Awesome. Thanks, James.

Speaker #11: Thank you.

Paul Lang: Thank you.

Speaker #8: Thanks, George.

Mitesh B. Thakkar: Thanks, George.

Mitesh Thakkar: Thanks, George.

Speaker #11: Thank you, George.

Operator: Thank you, George.

Speaker #10: Thank you. And there are no further questions that came through. And this concludes our conference call for today. Thank you all for participating. You may now disconnect.

Operator: Thank you. There are no further questions that came through, and this concludes our conference call for today. Thank you all for participating. You may now disconnect.

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