Core Natural Resources, Inc.: Form 10-Q for the period ended Mar 31, 2025

You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in conjunction with the Consolidated Financial Statements and corresponding notes included elsewhere in this Form 10-Q. In addition, this Form 10-Q report should be read in conjunction with the Consolidated Financial Statements for the three-year period ended December 31, 2024 included in Core Natural Resources, Inc.'s Form 10-K, filed on February 20, 2025. This MD&A contains forward-looking statements and the matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those projected or implied in the forward-looking statements. Please see “Risk Factors” and “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

All amounts discussed are in millions of U.S. dollars, unless otherwise indicated. All tons discussed are on a clean coal equivalent basis.

Recent Developments

Merger

On January 14, 2025, the Company completed the Merger with Arch. Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Arch, with Arch continuing as the surviving corporation and as a wholly-owned subsidiary of the Company. See Note 2 - Merger with Arch Resources, Inc. in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Prior to the completion of the Merger, the Company consisted of two reportable segments, the PAMC segment and the CONSOL Marine Terminal segment. Following completion of the Merger, the Company adjusted its internal reporting structure and the Company's chief operating decision maker changed the manner in which he measures financial performance and allocates resources. Thus, the Company reassessed its reporting segments and the Company now consists of four reportable segments: (1) the High CV Thermal segment; (2) the Metallurgical segment; (3) the Powder River Basin (“PRB”) segment; and (4) the Baltimore Marine Terminal segment. Accordingly, the manner in which the Company reports its operations has been changed retrospectively, and all relevant prior period amounts have been recast to reflect this change.

Combustion-Related Activity at Leer South Mine

On January 13, 2025, an isolated combustion-related activity was reported at the Leer South mine, located in Barbour County, West Virginia. The Company temporarily sealed the Leer South mine's active longwall panel in order to extinguish such activity. The Company resumed development work with continuous miners in February 2025, and, based on collaborative, ongoing discussions with regulatory authorities, currently expects to resume longwall mining in mid-2025.

Our Business

We are a world-class producer and exporter of high-quality, low-cost coals, including metallurgical and thermal coals. With a focus on seaborne markets, we play an essential role in meeting the world's growing need for steel, infrastructure and energy, and have ownership interests in two marine export terminals.

The Merger joined two proven leadership teams and operating platforms to establish Core, a premier North American coal producer and exporter of high-quality, low-cost coals with offerings ranging from metallurgical to high calorific value thermal coals. With mining operations and terminal facilities across six states, Core owns 11 mines, including one of the largest, lowest cost and highest calorific value thermal coal mining complexes in North America and one of the largest, lowest cost and highest quality metallurgical coal mine portfolios in the United States. Core also has access to global markets via ownership interests in two export terminals on the U.S. Eastern seaboard, along with strategic connectivity to ports on the West Coast and Gulf of Mexico. The combined company expects to realize meaningful operating synergies through the optimization of support functions, greatly enhanced marketing opportunities and a significantly expanded logistics network, which will enhance the Company's ability to deliver coal reliably and efficiently to its global customers.

How We Evaluate Our Operations

Our management team uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability. The metrics include: (i) adjusted EBITDA, a non-GAAP financial measure; (ii) coal production and sales volumes; (iii) realized coal revenue, a non-GAAP financial measure; (iv) cash cost of coal sold, a non-GAAP financial measure; (v) realized coal revenue per ton sold, an operating ratio derived from non-GAAP financial measures; (vi) cash cost of coal sold per ton, an operating ratio derived from non-GAAP financial measures; and (vii) cash margin per ton sold, an operating ratio derived from non-GAAP financial measures.

We believe that adjusted EBITDA provides a helpful measure of comparing our operating performance with the performance of other companies that have different financing, capital structures and tax rates than ours. We believe that realized coal revenue and realized coal revenue per ton sold better reflect our revenue for the quality of coal sold and our operating results by including all income from coal sales. We believe cash cost of coal sold, cash cost of coal sold per ton and cash margin per ton sold normalize the volatility contained within comparable GAAP measures by adjusting for certain non-operating or non-cash transactions. Each of these non-GAAP measures are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

• our operating performance compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis, tax rates or capital structure;
• the ability of our assets to generate sufficient cash flow;
• our ability to incur and service debt and fund capital expenditures;
• the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities; and
• the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.

These non-GAAP financial measures should not be considered an alternative to cost of sales, net income (loss) or any other measure of financial performance presented in accordance with GAAP. These measures exclude some, but not all, items that affect measures presented in accordance with GAAP, and these measures and the way we calculate them may vary from those of other companies. As a result, the items presented below may not be comparable to similarly titled measures of other companies.

Reconciliation of Non-GAAP Financial Measures

We define realized coal revenue as revenues reported in the Consolidated Statements of (Loss) Income less transportation costs, transloading revenues and other revenues not directly attributable to coal sales. We define realized coal revenue per ton sold as realized coal revenue divided by tons sold. The following tables present a reconciliation by reportable segment of realized coal revenue and realized coal revenue per ton sold to revenues, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).

We evaluate our cash cost of coal sold on an aggregate basis by segment and our cash cost of coal sold per ton on a per-ton basis. Cash cost of coal sold includes items such as direct operating costs, royalty and production taxes and direct administration costs, and excludes transportation costs, indirect costs, other costs not directly attributable to the production of coal and depreciation, depletion and amortization costs on production assets. We define cash cost of coal sold per ton as cash cost of coal sold divided by tons sold.

The following tables present a reconciliation by reportable segment of cash cost of coal sold and cash cost of coal sold per ton to cost of sales, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).

We define adjusted EBITDA as (i) net income (loss) plus income taxes, net interest expense and depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as stock-based compensation and loss on debt extinguishment and (iii) certain one-time transactions, such as merger-related expenses. Adjusted EBITDA may also be adjusted for items that may not reflect the trend of future results by excluding transactions that are not indicative of our operating performance or that arise outside of the ordinary course of our business.

The following tables present a reconciliation by reportable segment of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands).

Results of Operations: Three Months Ended March 31, 2025 Compared with the Three Months Ended March 31, 2024

Revenues

The Company's revenues primarily include sales to customers of coal produced at our operations and coal purchased from third parties. The Company's revenues also include transloading services at the Port of Baltimore, as well as other revenues generated from customers.

As a result of the Merger, consolidated revenues in the three months ended March 31, 2025 were $471 million higher than the three months ended March 31, 2024, and sales tons increased by approximately 13.8 million tons in the period-to-period comparison. Our presence in the metallurgical coal market has expanded with two longwall mines and two continuous miner mines in West Virginia that produce a premium metallurgical product used in the global steel industry. Through the Merger, we also gained two thermal surface mines in the PRB, as well as another thermal longwall mine in Colorado. The PRB mines produce thermal coal for sale into domestic and international markets, while the thermal mine in Colorado produces a high-quality, high calorific value thermal product that can compete effectively in seaborne markets. See the discussion in “Operational Performance” below for further information about segment results.

Cost of Sales

Cost of sales includes items such as direct operating costs, royalty and production taxes, direct administration costs and transportation costs. As a result of the Merger, our consolidated cost of sales in the three months ended March 31, 2025 increased $516 million compared to the three months ended March 31, 2024. See the discussion in “Operational Performance” below for further information about segment results.

Depreciation, Depletion and Amortization

On a consolidated basis, depreciation, depletion and amortization costs were $122 million for the three months ended March 31, 2025, compared to $57 million for the three months ended March 31, 2024. The $65 million increase was primarily due to the Merger and the step-up in basis of assets acquired. See Note 2 - Merger with Arch Resources, Inc. in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

General and Administrative Costs

On a consolidated basis, general and administrative costs were $40 million for the three months ended March 31, 2025, compared to $21 million for the three months ended March 31, 2024. The $19 million increase in the period-to-period comparison was primarily due to increased compensation-related expenses as a result of the Merger.

Merger-Related Expenses

Merger-related expenses consist of non-recurring transaction costs and include, among others, employee retention costs, fees paid to financial, legal and accounting advisors, severance and benefit costs, filing fees and debt restructuring costs. See Note 2 - Merger with Arch Resources, Inc. in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Other Operating Income, net

Other operating income, net includes items such as coal reserve holding costs, miscellaneous other income and gain or loss on sales of assets. The $1 million increase in the period-to-period comparison was primarily due to additional other operating activities as a result of the Merger across various categories, none of which were individually material.

Interest Expense and Interest Income

On a consolidated basis, interest expense was $8 million for the three months ended March 31, 2025, compared to $5 million for the three months ended March 31, 2024. The $3 million increase in the period-to-period comparison was primarily due to increased fees associated with the Company's Revolving Credit Facility (as defined below) as a result of the January 2025 amendment and increased fees associated with additional finance leases in place during the three months ended March 31, 2025. See Note 13 - Long-Term Debt in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Interest income increased $2 million in the period-to-period comparison, primarily as a result of additional cash investments.

Loss on Debt Extinguishment

Loss on debt extinguishment of $12 million was recognized in the three months ended March 31, 2025 due to the amendment of the Company's Revolving Credit Facility and the refinancing of the Company's tax-exempt bonds. See Note 13 - Long-Term Debt in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Non-Service Related Pension and Postretirement Benefit Costs

Non-service related pension and postretirement benefit costs increased $2 million in the period-to-period comparison, primarily due to the impact of changes in actuarial assumptions made at the beginning of each year and as a result of the Merger.

Operational Performance: Three Months Ended March 31, 2025 Compared with the Three Months Ended March 31, 2024

Prior to the completion of the Merger, the Company consisted of two reportable segments, the PAMC segment and the CONSOL Marine Terminal segment. Following completion of the Merger, the Company adjusted its internal reporting structure and the Company's chief operating decision maker changed the manner in which he measures financial performance and allocates resources. Thus, the Company now consists of four reportable segments: (1) the High CV Thermal segment; (2) the Metallurgical segment; (3) the Powder River Basin (“PRB”) segment; and (4) the Baltimore Marine Terminal segment. Accordingly, the manner in which the Company reports its operations has been changed retrospectively, and all relevant prior period amounts have been recast to reflect this change.

The High CV Thermal segment consists of the Company's Pennsylvania Mining Complex and the West Elk mine located in Colorado. The Metallurgical segment consists of the Company's Leer, Leer South, Beckley, Mountain Laurel and Itmann coal mines in West Virginia. The PRB segment consists of the Company's Black Thunder and Coal Creek surface mining complexes located in Wyoming. The Baltimore Marine Terminal segment provides coal export terminal services through the Port of Baltimore.

Most of the production from the PRB segment is sold to U.S. power generators, who are systematically shifting their generating capacity to other, non-coal fuel and energy sources. As such, the Company is managing the shrinking of its operational footprint at its PRB operations and has put in place funding to pay for the eventual closure and final reclamation of these operations.

The Company evaluates the performance of its segments utilizing Adjusted EBITDA and various productivity metrics. Adjusted EBITDA measures the operating performance of the Company's segments and is used to allocate resources to the Company's segments. The following table presents results by reportable segment for each of the periods indicated.

(1) Adjusted EBITDA is a non-GAAP financial measure, and realized coal revenue per ton sold, cash cost of coal sold per ton and cash margin per ton sold are operating ratios derived from non-GAAP financial measures. See “How We Evaluate Our Operations - Reconciliation of Non-GAAP Financial Measures” above for definitions and reconciliations of these amounts to the most directly comparable GAAP measures.

HIGH CV THERMAL SEGMENT ANALYSIS:

As a result of the high CV thermal assets acquired in the Merger, sales volumes increased 0.7 million tons, realized coal revenue increased $41 million and cash cost of coal sold increased $45 million in the three months ended March 31, 2025. Adjusted EBITDA decreased $31 million in the period-to-period comparison, primarily due to a $5.15 decrease in realized coal revenue per ton sold as international markets continued to soften due to increased production in China, which weighed on Newcastle prices, coupled with weak demand in Europe, which weighed on API2 pricing.

METALLURGICAL SEGMENT ANALYSIS:

The metallurgical assets acquired in the Merger led to additional sales volumes of 2.1 million tons, realized coal revenue of $203 million and cash cost of coal sold of $185 million in the three months ended March 31, 2025. However, realized coal revenue per ton sold was significantly impacted by reduced metallurgical coal benchmark prices during the three months ended March 31, 2025, which remain challenged due to surplus production and weak demand. In addition to lower realization, Adjusted EBITDA was also impacted by $36 million of costs incurred during the current quarter related to the combustion incident at the Leer South mine.

PRB SEGMENT ANALYSIS:

The PRB assets were acquired in the Merger and as such, there was no activity during the three months ended March 31, 2024. The PRB segment produced and sold 10.7 million tons in the three months ended March 31, 2025. Adjusted EBITDA was $27 million in the current quarter.

BALTIMORE MARINE TERMINAL SEGMENT ANALYSIS:

Adjusted EBITDA for the three months ended March 31, 2025 was $13 million, compared to $17 million for the three months ended March 31, 2024. Throughput volumes at the Baltimore Marine Terminal were 4.3 million tons for the three months ended March 31, 2025, compared to 4.5 million tons for the three months ended March 31, 2024. Baltimore Marine Terminal revenue was $21 million for the three months ended March 31, 2025, compared to $25 million for the three months ended March 31, 2024.

Liquidity and Capital Resources

The Company's potential sources of liquidity include cash generated from operations, cash on hand, short-term investments, borrowings under the Revolving Credit Facility and securitization facilities (which are discussed and defined below), and, if necessary, the ability to issue additional equity or debt securities. The Company believes that cash generated from these sources, without needing to issue additional equity or debt securities, will be sufficient to meet its short-term working capital requirements, long-term capital expenditure requirements, and debt servicing obligations, as well as to provide required letters of credit.

On January 14, 2025, the Company completed the Merger with Arch pursuant to the Merger Agreement. In connection with the Merger, the Company entered into an amendment to its existing Revolving Credit Facility. The amendment increased the available revolving commitments from $355 million to $600 million and extended the scheduled maturity date of the Revolving Credit Facility to April 30, 2029. Additionally, the Company reduced the interest rate margin by 75 basis points while further enhancing financial flexibility.

Our total liquidity as of March 31, 2025 was comprised of the following:

(in millions)

36

Events that negatively impact our overall financial condition and liquidity could result in our inability to comply with our credit facility's financial covenants. This could limit our access to our credit facilities if we are unable to obtain waivers from our lenders or amend the credit facilities. Additionally, access to capital remains challenging for the Company's industry as a result of banking, institutional and investor environmental, social and governance (“ESG”) requirements and limitations, which tend to discourage investment in coal and other fossil fuel companies. However, the Company expects to maintain adequate liquidity through its operating cash flow, cash and cash equivalents on hand, and short-term investments, as well as its revolving credit facility and securitization facilities, to fund its working capital needs and capital expenditures in the short-term and long-term.

Uncertainty in the financial markets, tariffs and executive actions by the executive branch of the U.S. government and certain other foreign nations or sovereignties brings additional potential risks to the Company. These risks include a reduction of our ability to raise capital in the equity markets, less availability and higher costs of additional credit and potential counterparty defaults. Overall market disruptions, including as a result of recent or additional bank failures, high interest rates and sustained high inflation, may impact the Company's collection of trade receivables. As a result, the Company regularly monitors the creditworthiness of its customers and counterparties and manages credit exposure through payment terms, credit limits, prepayments and security.

The U.S. government significantly increased the rates and broadened the scope of tariffs imposed on goods imported into the United States from almost all countries. Although some of these tariffs have been rescinded or suspended, increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions, including China's imposition of a 125% tariff on the import of all U.S. goods. While tariffs and other retaliatory trade measures imposed by other countries on U.S. goods have not yet had a significant impact on our business or results of operations, these or additional changes in U.S. or international trade policy has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions and could lead to further weakened business conditions for the coal industry.

Over the past few years, the insurance and surety markets have been increasingly challenging, particularly for coal companies. We have experienced rising premiums, reduced coverage and/or fewer providers willing to underwrite policies and surety bonds. Terms have generally become more unfavorable, including increases in the amount of collateral required to secure surety bonds. However, more recently, we have seen insurance rates stabilize and even decrease on certain lines of coverage, as new insurance carriers have entered the market. Further cost burdens on our ability to maintain adequate insurance and bond coverage may adversely impact our operations, financial position and liquidity.

The Company has a $151 million fund in place that will cover, in part, future reclamation costs of the thermal assets in the PRB. Additionally, the Company maintains a $12 million Global Water Treatment Trust Fund that will fund future water treatment obligations in Pennsylvania, as well as replace surety bonds and related collateral requirements. The Company expects to contribute a minimum of $2 million per year to the Global Water Treatment Trust Fund. These amounts are included in Funds for Asset Retirement Obligations on the Consolidated Balance Sheets.

In December 2024, the Office of Workers' Compensation Programs (the “OWCP”) issued a final rule revising the regulations under the Black Lung Benefits Act related to self-insurance by coal mine operators. Under the new standard, self-insured coal mine operators are required to post additional security for the Black Lung benefit liabilities. The final rule requires a security amount equal to 100% of a self-insured operator's projected black lung liabilities. The rule became effective on January 13, 2025, and operators were required to remit the increased security amount within one year. The final rule, including any assessments, is subject to appeal. In February 2025, the Company received letters from the OWCP that additional guidance regarding the final rule will be provided at a future date.

The Company participates in the United Mine Workers of America (the “UMWA”) Combined Benefit Fund and the UMWA 1992 Benefit Plan for which benefits are reflected in the Company's consolidated financial statements when paid. These benefit arrangements may result in additional liabilities that are not recognized on the Consolidated Balance Sheet at March 31, 2025. The various multi-employer benefit plans are discussed in Note 17—Other Employee Benefit Plans in the Notes to the Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The Company's total contributions under the Coal Industry Retiree Health Benefit Act of 1992 were $1 million for the three months ended March 31, 2025 and 2024. The Company also uses a combination of surety bonds, corporate guarantees and letters of credit to secure its financial obligations for employee-related, environmental, performance and various other items which are not reflected on the Consolidated Balance Sheet at March 31, 2025. Management believes these items will expire without being funded. See Note 14—Commitments and Contingent Liabilities in the Notes to the Consolidated Financial Statements included in Item 1 of this Form 10-Q for additional details of the various financial guarantees that have been issued by the Company.

Cash Flows (in millions)

Net cash used in operating activities decreased $187 million in the period-to-period comparison, primarily due to the overall decrease in segment earnings and other working capital changes that occurred throughout both periods. The decrease in segment earnings was primarily due to the decrease in realized coal revenue per ton sold as a result of lower API2 prices and reduced metallurgical coal benchmark prices, as well as additional costs incurred in the current quarter related to the combustion event at the Leer South mine.

Net cash provided by investing activities increased $319 million in the period-to-period comparison, primarily due to cash acquired via the Merger, partially offset by the purchase of Arch's tax-exempt bonds. The Company liquidated its remaining U.S. Treasury securities during the three months ended March 31, 2025, resulting in net proceeds of $75 million. Capital expenditures increased $23 million primarily due to expenditures at the operations acquired in the Merger, partially offset by reduced equipment-related expenditures and rebuilds at the PAMC during the three months ended March 31, 2025.

Net cash used in financing activities decreased $26 million in the period-to-period comparison. Cash outflows related to share repurchases totaled $101 million in the three months ended March 31, 2025, compared to $58 million in the three months ended March 31, 2024. During the three months ended March 31, 2025, the Company successfully amended its Revolving Credit Facility and refinanced the Company's tax-exempt bonds. Proceeds of $114 million were received in connection with the bond refinancing, and fees associated with these transactions amounted to $16 million. Additionally, dividend payments increased $10 million period-over-period.

Revolving Credit Facility

In November 2017, the Company entered into a revolving credit facility with PNC Bank, N.A. (the “Revolving Credit Facility”). The Revolving Credit Facility has been amended several times, the most recent of which occurred in January 2025 in connection with the Merger. The January 2025 amendment increased the available revolving commitments from $355 million to $600 million while extending the scheduled maturity date to April 30, 2029. Additionally, the Company reduced the applicable interest margin on its borrowings and letters of credit under the Revolving Credit Facility by 75 basis points.

Borrowings under the Revolving Credit Facility may be used for general corporate purposes, including working capital, capital expenditures and permitted acquisitions. Amounts repaid under the Revolving Credit Facility may be reborrowed, subject to satisfaction of the conditions to each credit extension. The Credit Agreement provides that up to the full amount of the Revolving Credit Facility will be available for the issuance of letters of credit (the “Letters of Credit”) by each lender under the Revolving Credit Facility, including Arch letters of credit that are deemed to be issued under the Revolving Credit Facility. The Company may increase the revolving credit commitments on the same terms or incur term “A” loans in an aggregate amount of up to $150 million.

Borrowings under the Revolving Credit Facility bear interest at a floating rate that is, at the Company’s option, either (i) SOFR plus a SOFR adjustment of 0.10% plus an applicable margin or (ii) an alternate base rate plus an applicable margin. The applicable margin for the Revolving Credit Facility ranges from 3.00% to 3.75% (for SOFR loans) and 2.00% to 2.75% (for alternate base rate loans), depending on the total net leverage ratio.

The Company’s obligations under the Credit Agreement are fully and unconditionally guaranteed by subsidiaries of the Company that own any portion of the Company’s Pennsylvania Mining Complex, its marine terminal at the Port of Baltimore and specified coal reserves and, subject to certain customary exceptions, all other existing or future direct or indirect wholly-owned material restricted subsidiaries of the Company, including subsidiaries acquired pursuant to the Merger. The obligations under the Credit Agreement are secured by, subject to certain exceptions (including a limitation of pledges of equity interests in certain subsidiaries and certain thresholds with respect to real property), a first-priority lien on the Company's and certain subsidiaries' significant assets.

The Credit Agreement contains a number of customary affirmative covenants and a number of negative covenants, including (subject to certain exceptions) limitations on (among other things): indebtedness, liens, investments, acquisitions, asset dispositions, restricted payments, mergers, consolidations, divisions and other fundamental changes, transactions with affiliates and prepayments of junior indebtedness. The Credit Agreement will require prepayment of Revolving Credit Loans and/or Swing Loans if (x) Excess Balance Sheet Cash is greater than $125 million and (y) the sum of Revolving Credit Loans, Swing Loans and Letter of Credit Obligations (other than in respect of undrawn Letters of Credit) is greater than 25% of the Revolving Credit Commitments, in each case as of the last day of any calendar month.

The Credit Agreement also includes financial covenants, including (i) a maximum first lien gross leverage ratio, (ii) a maximum total net leverage ratio, and (iii) a minimum interest coverage ratio. Under the Revolving Credit Facility, the maximum first lien gross leverage ratio is 1.50 to 1.00, the maximum total net leverage ratio is 2.50 to 1.00 and the minimum interest coverage ratio is 3.00 to 1.00. The Credit Agreement contains customary events of default, including with respect to a failure to make payments when due, cross-default and cross-judgment default and certain bankruptcy and insolvency events.

The Company's first lien gross leverage ratio was 0.09 to 1.00 at March 31, 2025. The Company's total net leverage ratio was (0.03) to 1.00 at March 31, 2025. The Company's interest coverage ratio was 93.93 to 1.00 at March 31, 2025. The Company was in compliance with all covenants under the Revolving Credit Facility as of March 31, 2025.

At March 31, 2025, there were no borrowings outstanding under the Revolving Credit Facility and the facility is currently only used for providing letters of credit, with $185 million of letters of credit outstanding, leaving $415 million of unused capacity. From time to time, the Company is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies' statutes and regulations. The Company sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company's borrowing facility capacity.

Securitization Facilities

At March 31, 2025, certain U.S. subsidiaries of Core Natural Resources were parties to two trade accounts receivable securitization facilities with financial institutions for the sale on a continuous basis of eligible trade accounts receivable.

Pursuant to the securitization facility of the Company that was in place prior to the Merger (the “Legacy CONSOL Securitization Facility”), CONSOL Thermal Holdings LLC, an indirect, wholly-owned subsidiary of the Company, sells trade receivables to CONSOL Pennsylvania Coal Company LLC, a wholly-owned subsidiary of the Company. CONSOL Marine Terminals LLC, a wholly-owned subsidiary of the Company, and CONSOL Pennsylvania Coal Company LLC sell and/or contribute trade receivables (including receivables sold to CONSOL Pennsylvania Coal Company LLC by CONSOL Thermal Holdings LLC) to CONSOL Funding LLC, a wholly-owned subsidiary of the Company (the “SPV”). The SPV, in turn, pledges its interests in the receivables to PNC Bank, N.A., which either makes loans or issues letters of credit on behalf of the SPV. The maximum amount of advances and letters of credit outstanding under the Legacy CONSOL Securitization Facility may not exceed $100 million. In July 2022, the Legacy CONSOL Securitization Facility was amended to, among other things, extend the maturity date to July 29, 2025.

Loans under the Legacy CONSOL Securitization Facility accrue interest at a reserve-adjusted market index rate equal to the applicable term SOFR rate. Loans and letters of credit under the Legacy CONSOL Securitization Facility also accrue a program fee and a letter of credit participation fee, respectively, ranging from 2.00% to 2.50% per annum depending on the total net leverage ratio of the Company. In addition, the SPV paid certain structuring fees to PNC Capital Markets LLC and pays other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

The agreements comprising the Legacy CONSOL Securitization Facility contain various customary representations and warranties, covenants and default provisions which provide for the termination and acceleration of the commitments and loans under the Legacy CONSOL Securitization Facility in certain circumstances including, but not limited to, failure to make payments when due, breach of representation, warranty or covenant, certain insolvency events or failure to maintain the security interest in the trade receivables, and defaults under other material indebtedness. The Company guarantees the performance of the obligations of CONSOL Thermal Holdings LLC, CONSOL Marine Terminals LLC and CONSOL Pennsylvania Coal Company LLC under the securitization, and will guarantee the obligations of any additional originators or successor servicer that may become party to the Legacy CONSOL Securitization Facility. However, neither the Company nor its affiliates will guarantee collectability of receivables or the creditworthiness of obligors thereunder.

On January 14, 2025 and in connection with the Merger, the securitization facility of Arch that was in place prior to the Merger (the “Legacy Arch Securitization Facility”) was amended to permit the Legacy Arch Securitization Facility to remain outstanding following consummation of the Merger, including by amending the change of control provisions thereunder. Pursuant to the Legacy Arch Securitization Facility, Arch Receivable Company, LLC, an SPV that is a wholly-owned subsidiary of the Company, supports the issuance of letters of credit and requests for cash advances. The Legacy Arch Securitization Facility has a maximum borrowing capacity of $150 million. In August 2022, the Legacy Arch Securitization Facility was amended to, among other things, extend the maturity date to August 1, 2025.

At March 31, 2025, eligible accounts receivable yielded $151 million of borrowing capacity. At March 31, 2025, the facilities had no outstanding borrowings and approximately $96 million of letters of credit outstanding, leaving $55 million of unused capacity. The Company has not derecognized any receivables due to its continued involvement in the collections efforts.

Series 2025 Bonds

On March 27, 2025, the Company borrowed the proceeds of tax-exempt bonds issued by (i) the Pennsylvania Economic Development Financing Authority (“PEDFA”) in the aggregate principal amount of $98 million (the “PEDFA Bonds”), at a fixed rate of 5.45% for an initial term of ten years on an unsecured basis, pursuant to a Bond Purchase Agreement, dated March 19, 2025, by and among Jefferies LLC, as the representative acting on behalf of itself, KeyBanc Capital Markets Inc., PNC Capital Markets LLC, Goldman Sachs & Co. LLC, B. Riley Securities, Inc. and TCBI Securities, Inc. (collectively, the “Underwriters”), PEDFA and the Company; (ii) the Maryland Economic Development Corporation (“MEDCO”) in the aggregate principal amount of $103 million (the “MEDCO Bonds”), at a fixed rate of 5.00% for an initial term of ten years on an unsecured basis, pursuant to a Bond Purchase Agreement, dated March 19, 2025, by and among the Underwriters, MEDCO and the Company; and (iii) the West Virginia Economic Development Authority (“WVEDA”) in the aggregate principal amount of $106 million (the “WVEDA Bonds” and together with the PEDFA Bonds and the MEDCO Bonds, the “Bonds”), at a fixed rate of 5.45% for an initial term of ten years on an unsecured basis, pursuant to a Bond Purchase Agreement, dated March 19, 2025, by and among the Underwriters, WVEDA and the Company.

The Company will use (i) a portion of the proceeds of the PEDFA Bonds to finance and refinance the costs of acquisition, construction, improvement, installation and equipping of certain solid waste disposal facilities located at the Bailey Preparation Plant in West Finley, Pennsylvania in part by refunding in full PEDFA’s outstanding $75 million Solid Waste Disposal Revenue Bonds, Series 2021A (CONSOL Energy Inc. Project), (ii) the proceeds from the MEDCO Bonds to refinance the costs of acquisition, construction, improvement, installation and equipping of certain improvements, modifications and additions to a coal transshipment terminal located in the Canton area of the Port of Baltimore by refunding in full MEDCO’s outstanding $103 million Port Facilities Refunding Revenue Bonds (CNX Marine Terminals Inc. Port of Baltimore Facility) Series 2010 and (iii) a portion of the proceeds of the WVEDA Bonds to finance and refinance the costs of acquisition, construction, improvement, installation and equipping of certain solid waste disposal facilities relating to a longwall coal mining complex known as the Leer South Mine located in Barbour County, West Virginia in part by refunding in full WVEDA’s outstanding $53 million Solid Waste Disposal Facility Revenue Bonds (Arch Resources Project), Series 2020 and $45 million Solid Waste Disposal Facility Revenue Bonds (Arch Resources Project), Series 2021.

The (i) PEDFA Bonds were issued pursuant to an indenture (the “PEDFA Indenture”), dated March 1, 2025, by and between PEDFA and Wilmington Trust, National Association, as trustee (the “Trustee”), and PEDFA made a loan of the proceeds of the PEDFA Bonds to the Company pursuant to a Loan Agreement, dated March 1, 2025 (the “PEDFA Loan Agreement”), between PEDFA and the Company; (ii) MEDCO Bonds were issued pursuant to an indenture (the “MEDCO Indenture”), dated March 1, 2025, by and between MEDCO and the Trustee, and MEDCO made a loan of the proceeds of the MEDCO Bonds to the Company pursuant to a Loan Agreement, dated March 1, 2025 (the “MEDCO Loan Agreement”), between MEDCO and the Company; and (iii) WVEDA Bonds were issued pursuant to an indenture (the “WVEDA Indenture” and together with the PEDFA Indenture and the MEDCO Indenture, the “Indentures”), dated March 1, 2025, by and between WVEDA and the Trustee, and WVEDA made a loan of the proceeds of the WVEDA Bonds to the Company pursuant to a Loan Agreement, dated as of March 1, 2025 (the “WVEDA Loan Agreement” and together with the PEDFA Loan Agreement and MEDCO Loan Agreement, the “Loan Agreements”), between WVEDA and the Company. Under the terms of the Loan Agreements, the Company agreed to make all payments of principal, interest and other amounts at any time due on the respective Bonds or under the respective Indenture.

Material Cash Requirements

The Company expects to make payments of $30 million on its long-term debt and operating and finance lease obligations, including interest, in the next 12 months.

The Company expects to make payments of $72 million on its employee-related long-term liabilities in the next 12 months, including obligations that the Company has under multi-employer plans.

The Company expects to make payments of $84 million on its environmental obligations and $140 million on its other current liabilities in the next 12 months.

The Company believes it will be able to satisfy these material requirements with cash generated from operations, cash on hand, short-term investments, borrowings under the Revolving Credit Facility and securitization facilities, and, if necessary, cash generated from its ability to issue additional equity or debt securities.

Debt

At March 31, 2025, the Company had total long-term debt and finance lease obligations of $374 million outstanding, including the current portion of $37 million. This long-term debt consisted of:

• An aggregate principal amount of $106 million of WVEDA Bonds, which were issued to finance a coal refuse disposal area at the Leer South mine, which bear interest at 5.45% per annum for an initial term of ten years and mature in January 2055. Interest on the WVEDA Bonds is payable on April 1 and October 1 of each year.
• An aggregate principal amount of $103 million of MEDCO Bonds, which were issued to finance the Baltimore Marine Terminal, which bear interest at 5.00% per annum for an initial term of ten years and mature in July 2048. Interest on the MEDCO Bonds is payable on February 1 and August 1 of each year.
• An aggregate principal amount of $98 million of PEDFA Bonds, which were issued to finance the ongoing expansion of the coal refuse disposal area at the Central Preparation Plant, which bear interest at 5.45% per annum for an initial term of ten years and mature in January 2051. Interest on the PEDFA Bonds is payable on June 1 and December 1 of each year.
• An aggregate principal amount of $26 million of finance leases with a weighted average interest rate of 6.63%.
• Advanced royalty commitments of $6 million with a weighted average interest rate of 8.10% per annum.
• An aggregate principal amount of $35 million of other debt arrangements.

At March 31, 2025, the Company had no borrowings outstanding and approximately $185 million of letters of credit outstanding under the $600 million Revolving Credit Facility. At March 31, 2025, the Company had no borrowings outstanding and approximately $96 million of letters of credit outstanding under the $250 million securitization facilities.

Stock Repurchases

On February 18, 2025, the Company's Board of Directors approved a capital return framework that involves a mix of dividends and share repurchases. The repurchase program permits the repurchase, from time to time, of the Company's outstanding shares of common stock in an aggregate amount of up to $1 billion, subject to certain limitations in the Company's debt agreements.

During the three months ended March 31, 2025, the Company repurchased and retired 1,377,294 shares of the Company's common stock at an average price of $73.52 per share.

Total Equity and Dividends

Total equity attributable to the Company was $3,896 million at March 31, 2025 and $1,568 million at December 31, 2024. See the Consolidated Statements of Stockholders' Equity in Item 1 of this Form 10-Q for additional details.

The declaration and payment of dividends by the Company is at the discretion of the Company's Board of Directors. The Revolving Credit Facility and the Series 2025 Bonds include certain covenants limiting the Company's ability to declare and pay dividends.

On May 8, 2025, the Company announced a $0.10 per share dividend in an aggregate amount of approximately $5.3 million, payable on June 13, 2025 to all stockholders of record as of May 30, 2025.

Critical Accounting Estimates

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make judgments, estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There have been no material changes to the Company's critical accounting estimates from the Annual Report on Form 10-K for the year ended December 31, 2024, except as set forth below.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting, which requires that once control is obtained, all the assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition. The determination of fair values of identifiable assets and liabilities requires estimates and the use of valuation techniques when fair value is not readily available and requires a significant amount of management judgment. Although the Company believes its estimates of fair values are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the determination of fair value of the assets acquired in the Merger. During the measurement period (a period not to exceed 12 months from the closing date of the Merger), the Company may record adjustments to the assets acquired and liabilities assumed due to the use of preliminary information in its initial estimates. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of the federal securities laws. With the exception of historical matters, the matters discussed in this Quarterly Report on Form 10-Q are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that involve risks and uncertainties that could cause actual results and outcomes to differ materially from results expressed in or implied by our forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,” or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date of this Quarterly Report on Form 10-Q; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following:

• deterioration in economic conditions (including continued inflation) or changes in consumption patterns of our customers may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital;
• volatility and wide fluctuation in coal prices based upon a number of factors beyond our control;
• an extended decline in the prices we receive for our coal affecting our operating results and cash flows;
• significant downtime of our equipment or inability to obtain equipment, parts or raw materials;
• decreases in the availability of, or increases in the price of, commodities or capital equipment used in our coal mining operations;
• our reliance on major customers, our ability to collect payment from our customers and uncertainty in connection with our customer contracts;
• our inability to acquire additional coal reserves or resources that are economically recoverable;
• alternative steel production technologies that may reduce demand for our coal;
• the availability and reliability of transportation facilities and other systems that deliver our coal to market and fluctuations in transportation costs;
• a loss of our competitive position;
• foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad;
• the risks related to the fact that a significant portion of our production is sold in international markets (and may grow) and our compliance with export control and anti-corruption laws;
• coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions;
• the impact of current and future regulations to address climate change, the discharge, disposal and clean-up of hazardous substances and wastes and employee health and safety on our operating costs as well as on the market for coal;
• the risks inherent in coal operations, including being subject to unexpected disruptions caused by adverse geological conditions, equipment failure, delays in moving out longwall equipment, railroad derailments, security breaches or terroristic acts and other hazards, delays in the completion of significant construction or repair of equipment, fires, explosions, seismic activities, accidents and weather conditions;
• failure to obtain or renew surety bonds or insurance coverages on acceptable terms;
• the effects of coordinating our operations with oil and natural gas drillers and distributors operating on our land;
• our inability to obtain financing for capital expenditures on satisfactory terms;
• the effects of our securities being excluded from certain investment funds as a result of ESG practices;
• the effects of global conflicts on commodity prices and supply chains;
• the effect of new or existing laws or regulations or tariffs and other trade measures;
• our inability to find suitable joint venture partners or acquisition targets or integrating the operations of future acquisitions into our operations;
• obtaining, maintaining and renewing governmental permits and approvals for our coal operations;
• the effects of asset retirement obligations, employee-related long-term liabilities and certain other liabilities;
• uncertainties in estimating our economically recoverable coal reserves;
• defects in our chain of title for our undeveloped reserves or failure to acquire additional property to perfect our title to coal rights;
• the outcomes of various legal proceedings, including those that are more fully described herein;
• the risk of our debt agreements, our debt and changes in interest rates affecting our operating results and cash flows;
• information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident;
• the potential failure to retain and attract qualified personnel of the Company;
• failure to maintain effective internal control over financial reporting;
• uncertainty with respect to the Company’s common stock, potential stock price volatility and future dilution;
• uncertainty regarding the timing and value of any dividends we may declare;
• uncertainty as to whether we will repurchase shares of our common stock;
• inability of stockholders to bring legal action against us in any forum other than the state courts of Delaware;
• the risk that the businesses of the Company and Arch will not be integrated successfully;
• the risk that the anticipated benefits of the Merger may not be realized or may take longer to realize than expected;
• the risks related to new or existing tariffs and other trade measures; and
• other unforeseen factors.

The above list of factors is not exhaustive or necessarily in order of importance. Additional information concerning factors that could cause actual results to differ materially from those in forward-looking statements include those discussed under “Risk Factors” elsewhere in this report and the other filings we make with the Securities and Exchange Commission (“SEC”). The Company disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

The Company's exposures to market risk have not materially changed since December 31, 2024. Please see these quantitative and qualitative disclosures about market risk in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the year ended December 31, 2024.

Disclosure Controls and Procedures

Core Natural Resources, under the supervision and with the participation of its management, including Core's principal executive officer and principal financial officer, evaluated the effectiveness of the Company's “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, Core Natural Resources' principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025 to ensure that information required to be disclosed by Core Natural Resources in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by Core Natural Resources, Inc. in such reports is accumulated and communicated to Core's management, including Core's principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Under SEC guidelines, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year following an acquisition while integrating the acquired company. During the first quarter of 2025, we completed the Merger and began integrating the acquired assets into our internal control over financial reporting. We have excluded the acquired operations of Arch from our assessment of the Company's internal control over financial reporting, but will continue to evaluate and monitor our internal control over financial reporting and will continue to evaluate the operating effectiveness of related key controls. Arch constituted approximately 50% of total revenues for the three months ended March 31, 2025 and approximately 53% of total assets as of March 31, 2025.

Except as noted above, there were no changes in the Company's internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act, that occurred during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

In addition to the other information set forth in this quarterly report, including the risk factor set forth below, you should carefully consider the factors described in “Part 1 - Item 1A. Risk Factors” of Core Natural Resources, Inc.'s 2024 Form 10-K. These described risks are not the only risks the Company faces. Additional risks and uncertainties not currently known to Core Natural Resources, Inc. or that the Company currently deems to be immaterial also may materially adversely affect Core's business, results of operations, financial condition and cash flows.

New or existing tariffs and other trade measures could adversely affect our business, results of operations, financial condition and cash flows.

New or existing tariffs and other trade measures could adversely affect our business, results of operations, financial condition and cash flows, either directly or indirectly through various adverse impacts on our significant customers. During the last several years, the U.S. Government imposed tariffs on steel and aluminum and a broad range of other products imported into the U.S. In response to the tariffs imposed by the U.S., the European Union, Canada, Mexico and China have announced tariffs on U.S. goods and services. In February 2025, China announced a 15% tariff on coal and liquified natural gas products from the United States. In April 2025, the U.S. Government imposed tariffs on all imports with limited exceptions. This included additional tariffs on imports from China, and China again responded with a 125% tariff on the import of all U.S. goods. These actions are unprecedented and have caused substantial uncertainty and volatility in financial markets. These tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries, could result in reduced economic activity, increased costs in operating our business, reduced demand and changes in purchasing behaviors for thermal and metallurgical coal, limits on trade with the United States or other potentially adverse economic outcomes. Changes in tariffs and trade restrictions can be announced with little or no advance notice. The adoption and expansion of tariffs or other trade restrictions, increasing trade tensions, or other changes in governmental policies related to taxes, tariffs, trade agreements or policies, are difficult to predict, which makes attendant risks difficult to anticipate and mitigate. If we are unable to navigate further changes in U.S. or international trade policy, it could have a material adverse impact on our business and results of operations. Additionally, we sell coal into the export thermal market and the export metallurgical market. Accordingly, our international sales may also be impacted by the tariffs and other restrictions on trade between the U.S. and other countries. We cannot predict further developments, and such existing or future tariffs could have a material adverse effect on our business, results of operations, financial condition and cash flows.