Core Natural Resources, Inc.

Previous wording

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.

Current wording

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 Quarterly Report on Form 10-Q. In addition, this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements for the three-year period ended December 31, 2024 included in the Company's Annual Report on 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.

Previous wording

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.

Current wording

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 in the Notes to the Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

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.

Current wording

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 (“CODM”) 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.

Previous wording

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.

Current wording

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 Company personnel and regulatory officials re-entered the sealed area of the mine on June 10, 2025. Thereafter, ventilation to the full mine was re-established, hydraulic pressure along the longwall face was restored and an extensive evaluation of the mine's major equipment and infrastructure was conducted. As expected, the longwall was largely unaffected by the combustion event, and major components and systems remain in good condition. On June 26, 2025, the operating team found it necessary to evacuate the mine and begin restoring pumpable seals to the affected area in the wake of an increase in carbon monoxide levels. The Company is working closely with federal and state officials on a plan to recover and reposition the longwall equipment by the end of October, with the objective of resuming longwall production shortly thereafter.

Previous wording

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.

Current wording

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 the Gulf of America. 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.

Previous wording

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.

Current wording

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, defined as realized coal revenue per ton sold less cash cost of coal sold per ton.

Previous wording

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.

Current wording

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 loss on debt extinguishment and (iii) other adjustments, such as stock-based compensation and 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.

Previous wording

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.

Current wording

The Company's revenues primarily include sales to customers of coal produced at our operations and, to a lesser extent, 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

Cost of sales includes items such as direct operating costs, royalty and production taxes, direct administration costs and transportation costs. Our consolidated cost of sales in the three months ended June 30, 2025 increased $569 million compared to the three months ended June 30, 2024. As a result of the Merger, the legacy Arch operations incurred cost of sales of $511 million during the three months ended June 30, 2025. Cost of sales at legacy CONSOL's PAMC and the Itmann mine increased $64 million in the period-to-period comparison, primarily due to increased sales tons. Cost of sales at the Baltimore Marine Terminal increased $1 million in the period-to-period comparison, primarily due to increased throughput volumes. See the discussion in “Operational Performance” below for further information about segment results. The remaining $7 million decrease in the period-to-period comparison was the result of additional operating overhead and certain actuarial costs during the three months ended June 30, 2024.

Previous wording

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.

Current wording

On a consolidated basis, depreciation, depletion and amortization costs were $169 million for the three months ended June 30, 2025, compared to $55 million for the three months ended June 30, 2024, resulting in a $114 million increase. The assets acquired in the Merger resulted in an additional $98 million of depreciation, depletion and amortization expense in the three months ended June 30, 2025. See Note 2 - Merger with Arch in the Notes to the Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q for additional information. The remaining increase was primarily the result of additional capital expenditures at the legacy CONSOL operations and adjustments to the Company's asset retirement obligations in the three months ended June 30, 2025, none of which were individually material.

Previous wording

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.

Current wording

On a consolidated basis, general and administrative costs were $35 million for the three months ended June 30, 2025, compared to $21 million for the three months ended June 30, 2024. The $14 million increase in the period-to-period comparison was primarily due to increased headcount as a combined company, as well as non-recurring transaction costs, including fees paid to financial, legal and accounting advisors, severance and benefit costs, filing fees and debt restructuring costs, as a result of the Merger. See Note 2 - Merger with Arch in the Notes to the Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

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.

Current wording

Other operating expense (income), net includes items such as coal reserve holding costs, miscellaneous other income and gain or loss on sales of assets. The $6 million change in the period-to-period comparison was primarily due to additional other operating activities across various categories, none of which were individually material.

Previous wording

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.

Current wording

The Company consists of four reportable segments: (1) the High CV Thermal segment; (2) the Metallurgical segment; (3) the PRB segment; and (4) the Baltimore Marine Terminal segment. 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 consists of the Company's coal export terminal operations in the Port of Baltimore.

Previous wording

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.

Current wording

Most of the production from the PRB segment is sold to U.S. power generators, who in recent years have indicated a shift in their generating capacity to other, non-coal fuel and energy sources. As such, the Company is managing its operational footprint at its PRB operations to meet current demand and has put in place funding to pay for the eventual closure and final reclamation of these operations.

Previous wording

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.

Current wording

All metallurgical assets, except Itmann, were acquired in the Merger, resulting in additional sales volumes of 2.0 million tons, realized coal revenue of $206 million and cash cost of coal sold of $183 million in the three months ended June 30, 2025. However, realized coal revenue per ton sold was significantly impacted by reduced metallurgical coal benchmark prices during the three months ended June 30, 2025, which remained challenged due to surplus production within the industry and weak demand. Adjusted EBITDA was also impacted by $21 million of costs incurred during the current quarter related to the combustion incident at the Leer South mine.

Previous wording

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.

Current wording

The PRB assets were acquired in the Merger and, as such, there was no activity during the three months ended June 30, 2024. The PRB segment produced and sold 12.6 million tons in the three months ended June 30, 2025. Adjusted EBITDA was $16 million in the current quarter.

Previous wording

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.

Current wording

Adjusted EBITDA for the three months ended June 30, 2025 was $15 million, compared to $6 million for the three months ended June 30, 2024. In 2024, throughput volumes and revenue from those volumes were interrupted until May 20, 2024 as a result of the Francis Scott Key Bridge collapse. Accordingly, throughput volumes at the Baltimore Marine Terminal were 4.9 million tons for the three months ended June 30, 2025, compared to 2.3 million tons for the three months ended June 30, 2024. Baltimore Marine Terminal revenue was $23 million for the three months ended June 30, 2025, compared to $12 million for the three months ended June 30, 2024.

Previous wording

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.

Current wording

On a consolidated basis, interest expense was $18 million for the six months ended June 30, 2025, compared to $10 million for the six months ended June 30, 2024. The $8 million increase in the period-to-period comparison was primarily due to interest incurred on the WVEDA Bonds, as well as interest incurred on additional equipment financing arrangements entered into during the six months ended June 30, 2025 and increased fees associated with the Company's Revolving Credit Facility (as defined below) as a result of the January 2025 amendment.

Previous wording

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.

Current wording

Loss on debt extinguishment of $12 million was recognized in the six months ended June 30, 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 Quarterly Report on Form 10-Q for additional information.

Previous wording

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.

Current wording

Adjusted EBITDA decreased $8 million in the period-to-period comparison, primarily due to a $5.87 decrease in realized coal revenue per ton sold as international markets continued to soften, which weighed on Newcastle prices, coupled with weak demand in Europe, which weighed on API2 pricing. The reduced realization was partially offset by a 2.0 million ton increase in PAMC sales volumes year-over-year.

Previous wording

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.

Current wording

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 equity or debt securities. The Company believes that cash generated from these sources, without needing to issue 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 or surety bonds necessary for the Company's operations.

Previous wording

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.

Current wording

Events that negatively impact our operations, overall financial condition and liquidity could result in our inability to comply with the Revolving Credit Facility's financial covenants. This could limit our ability to borrow under the Revolving Credit Facility if we are unable to obtain necessary waivers or amendments. 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 the Revolving Credit Facility and its securitization facilities, to fund its working capital needs and capital expenditures in the short-term and long-term.

Previous wording

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.

Current wording

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 bring additional potential risks to the Company. These risks could impact our ability to raise capital in the equity and debt markets, or result in higher costs to obtain additional capital or credit as well as increase potential counterparty defaults. In addition, market disruptions and uncertainty, including as a result of potential tariffs and executive actions, high interest rates and sustained high inflation, may impact the Company's revenues and collection of trade receivables. The Company regularly monitors the creditworthiness of its customers and counterparties and manages credit exposure through payment terms, credit limits, prepayments and security.

Previous wording

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.

Current wording

The global landscape on rates and the scope of tariffs imposed on goods imported into and out of the United States from multiple countries around the world continues to evolve and be uncertain, as the U.S. government continues to negotiate its position with multiple countries and across various industries and goods. While the evolving global trade landscape relating to tariffs and 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 as of June 30, 2025, these or additional changes in U.S. or international trade policy have increased uncertainty regarding the ultimate effect of the tariffs on economic conditions and could lead to further weakened business conditions for the coal industry.

Previous wording

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.

Current wording

At June 30, 2025, the Company has a $153 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.

Previous wording

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.

Current wording

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 June 30, 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 $2 million for the six months ended June 30, 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 that are not reflected on the Consolidated Balance Sheet at June 30, 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 Quarterly Report on Form 10-Q for additional details of the various financial guarantees that have been issued by the Company.

Previous wording

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.

Current wording

Net cash provided by (used in) investing activities changed by $279 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 six months ended June 30, 2025, resulting in net proceeds of $75 million. Capital expenditures increased $56 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 six months ended June 30, 2025.

Previous wording

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.

Current wording

Net cash used in financing activities increased $49 million in the period-to-period comparison. Cash outflows related to share repurchases totaled $183 million in the six months ended June 30, 2025, compared to $71 million in the six months ended June 30, 2024. In connection with the Merger, the Company successfully amended its Revolving Credit Facility and refinanced its tax-exempt bonds. Proceeds of $114 million were received in connection with the bond refinancing, and fees associated with these transactions amounted to $17 million. Additionally, dividend payments increased $15 million period-over-period.

Previous wording

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.

Current wording

In November 2017, the Company entered into a revolving credit facility with PNC Bank, N.A. (“PNC”) (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.

Previous wording

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.

Current wording

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 Revolving Credit Facility 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.

Previous wording

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.

Current wording

The Company’s obligations under the Revolving Credit Facility 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 Revolving Credit Facility 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.

Previous wording

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.

Current wording

The Revolving Credit Facility 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 Revolving Credit Facility 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.

Previous wording

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.

Current wording

The Revolving Credit Facility 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 Revolving Credit Facility 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.

Previous wording

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.

Current wording

The Company's first lien gross leverage ratio was 0.13 to 1.00 at June 30, 2025. The Company's total net leverage ratio was (0.03) to 1.00 at June 30, 2025. The Company's interest coverage ratio was 68.42 to 1.00 at June 30, 2025. The Company was in compliance with all covenants under the Revolving Credit Facility as of June 30, 2025.

Previous wording

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.

Current wording

At June 30, 2025, there were no borrowings outstanding under the Revolving Credit Facility and the facility is currently only used for providing letters of credit, with $153 million of letters of credit outstanding, leaving $447 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.

Previous wording

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.

Current wording

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 special purpose vehicle and wholly-owned subsidiary of the Company (“CONSOL Funding”). CONSOL Funding, in turn, pledges its interests in the receivables to PNC, which either makes loans or issues letters of credit on behalf of CONSOL Funding. 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.

Previous wording

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.

Current wording

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, CONSOL Funding paid certain structuring fees to PNC Capital Markets LLC (“PNC CM”) and pays other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

Previous wording

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.

Current wording

The agreements comprising the Legacy CONSOL Securitization Facility contain various customary representations and warranties, covenants and default provisions that 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.

Previous wording

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.

Current wording

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, a special purpose vehicle and 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.