HCC 10-K & 10-Q changes, risk factors and insider trading

•Deterioration in global economic conditions, including the impacts of global pandemics, conflicts including wars, and inflation on our business, may adversely affect our business, results of operations and cash flows and if we fail to implement our business strategies successfully, our financial performance could be harmed;

•We may be unsuccessful or delayedexperience delays or operational challenges in developingcompleting the remaining development and ramp-up of Blue Creek, which could significantly affect our operations and/or limit our long-term growth;

•If transportation for our steelmaking coal is disrupted, unavailable or more expensive for our customers, our ability to sell steelmaking coal could suffer;

•Work stoppages, labor shortages and other labor relations matters may harm our business. Union-represented labor creates an increased risk of work stoppages and higher labor costs;

•Significant competition, as well as changes in foreign markets or economies, could harm our sales, profitability and cash flows;

•Our sales in foreign jurisdictions are subject to risks and uncertainties, such as newchanges in tariffs and other trade measures, which could adversely affect our results of operations, financial position and cash flows;

•Substantially all of our revenues are derived from the sale of steelmaking coal and our business may suffer from a substantial or extended decline in steelmaking coal pricing and demand or other factors beyond our control. This lack of diversification of our business could adversely affect our financial condition, results of operations and cash flows;

•Met coal mining involves many hazards and operating risks, and is dependent upon many factors and conditions beyond our control, which may cause our profitability and financial position to decline;

•Negative views with respect to environmental and social matters and related governance considerations could harm the perception of our Company by certain investors, environmental and climate change activist groups and financial institutions, including banks and insurance companies, adversely affecting our ability to obtain financing and insurance coverage, and otherwise achieve our strategic priorities;

•Our inability to develop steelmaking coal reserves in an economically feasible manner or our inability to acquire additional steelmaking coal reserves that are economically recoverable may adversely affect our business;

•Any significant downtime of our major pieces of mining equipment could impair our ability to supply steelmaking coal to our customers and materially and adversely affect our results of operations and cash flows;

•We may not recover our investments in our mining, exploration and other assets, which may require us to recognize impairment charges related to those assets;

•We are responsible for medical and disability benefits for black lung disease under federal law. Changes in the estimated claims to be paid or changes in the amount of collateral required may affect our operating results and cash flows;

•Extensive federal and state environmental, health and safety laws and regulations impose significant costs on our operations and future regulations could increase these costs, limit our ability to produce or adversely affect our ability to meet our customers' demands;

•Failure to obtain or renew surety bonds on acceptable terms could affect our ability to secure reclamation and coal lease obligations and, therefore, our ability to mine or lease steelmaking coal;

•We have reclamation and mine closing obligations. If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated;

•Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations and dividend policy, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments on the Notes;

•We may be unable to generate sufficient taxable income from future operations, which may limit or eliminate our ability to utilize our significant federal and state tax NOLs or our deferred tax assets;

•The market price of our common stock may fluctuate significantly and investors in our common stock could incur substantial losses;

•Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our Amended ABL Facility and the indenture governing the Notes (the "Indenture"), and will be on the sole discretion of the Board and will also depend on many factors;

•Our common stock is subject to the 382 Transfer Restrictions (as defined below) under our certificate of incorporation and the Amended Rights Agreement (as defined below) which are intended to prevent a Section 382 "ownership change," which if not complied with, could result in the forfeiture of such stock and related dividends or substantial dilution of the stock ownership, respectively; and Delaware law and our charter documents may impede or discourage a takeover or change of control, which could adversely affect the price of our common stock.

Our activities may be adversely affected by global pandemics or other widespread illnesses and the related effects on public health, which may prevent us from meeting our targeted production levels and/or executing our planned development initiatives (including, but not limited to, completing the remaining development and ramp-up of Blue Creek), negatively impact our customers’ demand for steelmaking coal and their ability to honor or renew contracts, adversely affect the health and welfare of Company personnel or prevent our vendors and contractors from performing normal and contracted activities.

Additionally, we face risks related to ongoing wars, including the Russia-Ukraine war that began in February 2022 and the Israel-Hamas war that began in October 2023, as well as trade disruptions related to the conflictconflicts in the Persian GulfGulf, the Red Sea and Red Sea.Venezuela. The extent and duration of the military conflicts, resulting sanctions and other trade measures, and future market or supply disruptions in these and other regions, are impossible to predict, but could be significant and may have a severe adverse effect on the region. Globally, various governments, such as the European Union, have banned imports from Russia including commodities such as natural gas and coal. These events significantly impacted coking coal markets by disrupting previously existing trading patterns.patterns and may lead to further volatility in the price of certain commodities, including steelmaking coal. The resulting volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, including as a result of tariffs and other trade measures imposed on steel, may significantly affect prices for our coal or the cost of supplies and equipment.

The wars, tradesanctions and monetaryother sanctions,trade measures, as well as any escalation of the conflicts and future developments, could significantly affect coking coal prices and the demand for our coal. This could have a material adverse effect on our business, financial condition and results of operations, along with our operating costs, making it difficult to execute our planned capital expenditure program or complete the remaining development and ramp-up of Blue Creek. Additionally, the geopolitical and macroeconomic consequences of the wars and associated sanctions and other trade measures cannot be predicted, but could severely impact the world economy. If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for our coal, causing a reduction in our revenues or an increase in our costs, which would materially adversely affect our results of operations, financial condition and cash flows.

If steelmaking coal prices drop to or below levels experienced in 2015 and the first half of 2016 for a prolonged period or if there are further downturns in economic conditions, particularly in developing countries such as China and India, our business, financial condition or results of operations could be adversely affected. While we are focused on cost control and operational efficiencies, there can be no assurance that these actions, or any others we may take, will be sufficient in response to challenging economic and financial conditions. In addition, the current level of steelmaking coal prices may not be sustainable.

Inflation rates in the U.S. haverecently increased to levels not seen in several years, and have been and continue to bewere even higher in the mining sector, which may result in decreased demand for our products, increases in our operating costs, constrained credit and liquidity, reduced government spending and volatility in financial markets. Future increases in costs for supplies that are used directly or indirectly in the normal course of our business and increases in other operating costs, such as increases in steel prices, freight rates, labor and other materials and supplies may negatively impact our profitability. Tariffs (including retaliatory tariffs) could also increase the cost of equipment as well as the parts and components to service our equipment. Our efforts to recover inflation-based or tariff-based cost increases from suppliers or customers may be hampered as a result of the structure of our contracts and the contract bidding process as well as competitive pressure in the industry, economic conditions and the countries to which we sell our coal. Accordingly, substantial inflation may have an adverse impact on our business, including the remaining development and ramp-up of Blue Creek, financial position, results of operations and cash flows. Inflation has also resulted in higher interest rates in the U.S., which could increase our cost of debt borrowing in the future.

Our ability to receive payment for steelmaking coal sold and delivered depends on the continued creditworthiness and financial stability of our customers. If we determine that a customer is not creditworthy or if a customer declares bankruptcy, we may not be required to deliver steelmaking coal sold under the customer’s sales contract. If this occurs, we may decide to sell the customer’s steelmaking coal on the spot market, which may be at prices lower than the contracted price, or we may be unable to sell the steelmaking coal at all. In addition, if customers refuse to accept shipments of our steelmaking coal for which they have an existing contractual obligation, our revenues will decrease and we may have to reduce production at our mines until our customers’ contractual obligations are honored. Further, competition with other steelmaking coal suppliers could cause us to extend credit to customers on terms that could increase the risk of payment default. Furthermore, our metallurgical customers operate in a highly competitive and cyclical industry where their creditworthiness could deteriorate rapidly. Our inability to collect payment from counterparties to our sales contracts may materially adversely affect our business, financial condition, results of operations and cash flows.

Our future financial performance and success are dependent in large part upon our ability to successfully implement our business strategies. We may not be able to implement our business strategies successfully or achieve the anticipated benefits. If we are unable to do so, our long-term growth, profitability and ability to service any debt we incur in the future may be materially adversely affected. Even if we are able to implement some or all of the key elements of our business plan successfully, our operating results may not improve to the extent we anticipate, or at all. Implementation of our business strategies, including the remaining development and ramp-up of Blue Creek, could also be affected by a number of factors beyond our control, such as global economic conditions, steelmaking coal prices, domestic and foreign steel demand, inflation and environmental, health and safety laws and regulations.

A key element of our business strategy involves increasing production at our existing mines and developingcompleting the remaining development and ramp-up of Blue Creek recoverable reserves in a cost-efficient manner. As we expand our business activities, there will be additional demands on our financial, technical, operational and management resources. These aspects of our strategy are subject to numerous risks and uncertainties, including:

•an inability to retain or hire experienced crews and other personnel and other labor relations matters;

•a lack of customer demand for our mined steelmaking coal;

•an inability to secure necessary equipment, raw materials or engineering in a timely manner to successfully execute our expansion plans;

•unanticipated delays that could limit or defer the production or expansion of our mining activities and jeopardize our long-term relationships with our existing customers and adversely affect our ability to obtain new customers for our mined steelmaking coal; and a lack of available cash or access to sufficient debt or equity financing for investment in our expansion.

We may be unsuccessful or delayedexperience delays or operational challenges in developingcompleting the remaining development and ramp-up of Blue Creek, which could significantly affect our operations and/or limit our long-term growth.

•uncertainties in the national and worldwide economy and the price of steelmaking coal;

•our ability to obtain additional debt and/or equity financing to fund the remaining development, permitting, constructionconstruction, ramp-up and mining activities of Blue Creek on terms that are acceptable to us, or at all;

•difficultiesdelays or delayschallenges in securingintegrating newly acquired federally owned mineral leases withininto the mine plan and obtaining associated approvals;

•the diversion of management’s attention from our existing mining operations;

•our ability to obtain favorable tax or other incentives;

•potential opposition from non-governmental organizations, local groups, or local residents;

•the fact that our development, construction, ramp-upcommissioning and operatingramp-up costs may be higher than our estimates and furthercould increase our planned capital expenditure and liquidity requirements;

•shortages of construction materials andmaterials, equipment or critical spare parts, and delays in the delivery of such materials and equipment;

•unanticipated facility or equipment malfunctions or breakdownsbreakdowns, including longwall equipment, ventilation systems and other critical infrastructure;

•delays fromassociated with unexpected adverse geological and/orconditions, weathergeotechnical variability, methane conditions, accidents,roof control challenges, or weather-related impacts, as well as accidents and other factors beyond our control;

•failure to obtain, or delays in obtaining, all necessary governmental and third-party rights-of-way, easements, permits, licenses and approvals;

•local infrastructure conditions and other logistical challenges; including rail, port or workforce availability;

•the possibility that we may have insufficient expertise to engagemanage inthe suchcommissioning developmentand activityramp-up phases profitably or without incurring inappropriateundue amountsoperational of risksrisk;

•the fact that the steelmaking coal reserves at Blue Creek may not be as economically recoverable as planned or may experience quality variability impacting market realizations;

•difficulties in integrating Blue Creek with our existing miningoperations, operationsincluding workforce training, sequencing of longwall moves and coordination of logistics, and failure to achieve any estimated economies of scale; and our ability to hire and retain qualified construction, commissioning, operations and maintenance personnel.

We cannot assure you that we will be able to overcome these risks or successfully developcomplete the remaining development, commissioning and ramp-up of Blue Creek. If we are unable to complete, or are substantially delayed in completing, the developmentramp-up of Blue Creek, our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders could be adversely affected. Furthermore, even if Blue Creek is successfullyfully developed, constructed,commissioned, and placed into operation,operating, we cannot assure you that it will operate at a profit sufficient to recover our total investment. In addition, ifonce itsin developmentfull is successful, the operation ofoperation, Blue Creek wouldwill exacerbateincrease our existingexposure to the mining and operationoperational risks discussed elsewhere in this Report, including, but not limited to,including risks relatedassociated towith increasing the concentration ofhaving our miningproduction operationsconcentrated in Alabama, mining hazards and operating risks, transportation risks, liability risks and regulatory risks. See “-Risks Related to Our Business-All of our mining operations are located in Alabama, making us vulnerable to risks associated with having our production concentrated in one geographic area”, “-Steelmaking coal mining involves many hazards and operating risks, and is dependent upon many factors and conditions beyond our control, which may cause our profitability and financial position to decline”, “-If transportation for our steelmaking coal is disrupted, unavailable or more expensive for our customers, our ability to sell steelmaking coal could suffer”, “-Our business is subject to inherent risks, some for which we maintain third party insurance. We may incur losses and be subject to liability claims that could have a material adverse effect on our financial condition, results of operations or cash flows” and “-Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation. In addition, federal, state or local regulatory agencies have the authority to order certain of our mines to be temporarily or permanently closed under certain circumstances, which could materially and adversely affect our ability to meet our customers’ demands.”

•difficulties in the integration of the assets and operations of the acquired businesses;

•inefficiencies and difficulties that arise because of unfamiliarity with new assets and the businesses associated with them and new geographic areas;

•the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk; and the diversion of management’s attention from other operations.

The following discussion and analysis provides a narrative of our results of operations and financial condition for the years ended December 31, 20242025 and December 31, 2023.2024. You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward‑looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in “Part I, Item 1A. Risk Factors,” our actual results could differ materially from the results described in, or implied by, the forward‑looking statements contained in the following discussion and analysis. Please see “Forward-Looking Statements.”

We are a U.S.-based, environmentally and socially minded supplier to the global steel industry. We are dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. We are a large-scale, low-cost producer and exporter of premium quality steelmaking coal, also known as hard coking coal (“HCC”), operating highly efficient longwall operations in our underground mines based in Alabama,Alabama. MineIn No.October 42025, andwe Minecommenced No.operations 7. We also are developingat our world-classtransformational Blue Creek mine basedeight inmonths Alabama.ahead of schedule.

As of December 31, 2024, Mine No. 4 and Mine No. 7,2025, our twothree operating mines,underground mines had approximately 82.4179.3 million metric tons of recoverable reserves and our Blue Creek mine contained 69.054.0 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves. As a result of our high-quality coal, our Mine No. 7 steelmaking coal realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free-On-Board Australian Index (the "S&P Platts Index"). Our Mine No. 4 and Blue Creek steelmaking coalcoals isare a High VolVolatility A ("HVA") quality coal that typically trades at a larger discount to the price of coal from Mine No. 7. We now primarily target the East Coast High Vol A indices priceindex for sales of our Mine No. 4 coal.and Blue Creek coals that are destined for the Atlantic Basin. Whereas we target a variety of indices, including Platts Premium Low Vol and Platts Low Vol HCC for sales destined to the Pacific Basins. Our Blue Creek coal is also primarily sold into Asia and is sold on a cost and freight ("CFR") basis. Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low-to-high volatile matter, low sulfur, low-to-mediumhigh ash,fluidity, and Lowhigh Vol to High Vol.strength. These qualities make our coal ideally suited as a coking coal for the manufacture of steel.

We sell substantially all of our steelmaking coal production to global steel producers. Steelmaking coal, which is converted to coke, is a critical input in the steel production process. Steelmaking coal is both consumed domestically in the countries where it is produced and exported by several of the largest producing countries, such as China, Australia, the United States, Canada and Russia. Therefore, demand for our coal will be highly correlated to conditions in the global steelmaking industry. The steelmaking industry’s demand for steelmaking coal is affected by a number of factors, including the cyclical nature of that industry’s business, technological developments in the steelmaking process and the availability of substitutes for steel such as aluminum, composites and plastics. A significant reduction in the demand for steel products would reduce the demand for steelmaking coal, which would have a material adverse effect upon our business. Similarly, if alternative ingredients are used in substitution for steelmaking coal in the integrated steel mill process, the demand for steelmaking coal wouldcould materially decrease, which could also materially adversely affect demand for our steelmaking coal.

Update on the DevelopmentCommencement of Blue Creek Longwall

Our CBACollective Bargaining Agreement contract with the United Mine Workers of America (“UMWA”) expired on April 1, 2021 and the labor union initiated a strike after an agreement on a new contract was not reached. As a result of the strike, we initially idled Mine No. 4 and scaled back operations at Mine No. 7. In the first quarter of 2022, we restarted operations at Mine No. 4. Due to the reduced operations at Mine No. 4 and Mine No. 7, we incurred idle mine expense of $12.1 million for the year ended December 31, 2022. This expense is reported separately in the Statements of Operations and represents expenses incurred while the respective mine was idled or operating below normal capacity, such as electricity, insurance and maintenance labor. We incurred no idle mine expenses for the years ended December 31, 20232023, December 31, 2024 or December 31, 2024.2025. We incurred business interruption expenses of approximately $0.5$0.1 million for the year ended December 31, 2024,2025, which represents ongoing legal expenses associated with the ongoing labor negotiations. We incurred $8.3$0.5 million and $23.5$8.3 million for the years ended December 31, 20232024 and December 31, 2022,2023, respectively, which represent non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, labor negotiations and other expenses. These expenses are also presented separately in the Consolidated Statements of Operations. On February 16, 2023, the labor union representing certain of the Company's hourly employees announced that they were ending the strike and made an unconditional offer to return to work. We continue to engage in good faith efforts with the labor union to reach an agreement on a new contract.

Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include: (i) Segment Adjusted EBITDAEBITDA, a non-GAAP financial measure; (ii) sales volumes and average selling price, which drive coal sales revenue; (iii) cash cost of sales, a non-GAAP financial measure; and (iv) Adjusted EBITDA, a non-GAAP financial measure. The following table presents supplementary data on a historical basis for each of the periods indicated.

We define Segment Adjusted EBITDA as net income adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative expenses, business interruption expenses, idle mine expenses, loss on early extinguishment of debt, other (expense) income, netinterest income, interest (income) expense, income tax benefit (expense) and certain transactions or adjustments that the CEO, our Chief Operating Decision Maker does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

•our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure;

•the ability of our assets to generate sufficient cash flow to pay distributions;

•our ability to incur and service debt and fund capital expenditures; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.

We evaluate our operations based on the volume of coal we can safely produce and sell in compliance with regulatory standards, and the prices we receive for our steelmaking coal. Our sales volume and sales prices are largely dependent upon the terms of our annual steelmaking coal sales contracts, for which prices generally are set on daily index averages oron a quarterly basis. The volume of steelmaking coal we sell is also a function of the pricing environment in the international steelmaking coal markets and the amounts of Low Vol and High Vol A coal that we sell. We evaluate the price we receive for our steelmaking coal based on our average net selling price per metric ton.

We evaluate our cash cost of sales on a cost per metric ton basis. Cash cost of sales is based on reported cost of sales and includes items such as freight, royalties, manpower, fuel and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Consolidated Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce steelmaking coal and sell it free-on-board at the Port of Mobile in Alabama. Our cash cost of sales per metric ton is calculated as cash cost of sales divided by the metric tons sold. Cash cost of sales is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

•our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.

We define Adjusted EBITDA as net income before net interest (income) expense, income tax expense,expense (benefit), depreciation and depletion, non-cash asset retirement obligation accretion and valuation adjustments, non-cash stock compensation expense, other non-cash accretion and valuation adjustments, non-cash mark-to-market loss (gain) loss on gas hedges, loss on early extinguishment of debt, business interruption expenses, idle mine expenses and other income and expenses. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

•our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.

(1)Represents non-cash accretion expense and valuation adjustment associated with our asset retirement obligations (see Note 89 to our consolidated financial statements).

(2)Represents non-cash stock compensation expense associated with equity awards (see Note 1216 to our consolidated financial statements).

(3)Represents non-cash accretion expense and valuation adjustments associated with our black lung obligations (see Note 10 to our consolidated financial statements).

(4)Represents non-cash mark-to-market losses (gains) losses recognized on our gas hedges (see Note 1718 to our consolidated financial statements).

(5)Represents a loss incurred in connection with the early extinguishment of debt (see Note 13 to our consolidated financial statements).debt.

(6)For the yearyears ended December 31, 2025 and 2024, represents ongoing legal expenses associated with the ongoing labor negotiations and for all other periods presented2023 represents non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, labor negotiations and other expenses.

(8)Represents non-recurring expenses incurred in connection with the ransomware attack discovered by the Company on July 29, 2023, proceeds received upon settlement of a lawsuit and COVID-19 pandemic related expenses.2023.

The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see “Forward-Looking Statements.”

In the threefirst monthsquarter ended March 31,of 2026, we completed the Blue Creek construction project,project. including the installation of the barge loadout, andWe invested approximately $66.1$71.3 million,million bringingin the current year, brining total project spending to $1,022.9$1,028.1 million. Final project costs were fully in line with our capital guidance, and no material additional project capital expenditures are expected. With construction complete, Blue Creek is positioned to continue driving higher production, lower costs, and improved cash flow generation as the operation advances through its ramp-up and optimization phase.

Warrior BC bid approximately $32 million for the Mine No. 1 Lease and has submitted a payment for approximately $6.4 million, which is the first of five equal payments. Warrior Mining bid approximately $15 million for the Mine No. 4 Lease and has submitted a payment for approximately $3.0 million, which is the first of five equal payments. Successive installments are due each year on the anniversary of the Leases for the next four years. These future installments were recorded at a discount using our credit-adjusted risk-free rate and are presented in the Consolidated Balance Sheets as short and long-term federal coal lease obligations. As of MarchJune 31,30, 20262026, the short-term and long-term obligations were $9.1 million and $24.4 million, respectively. As of December 31, 2025, the present value of the short-term and long-term obligations were $8.8 million and $23.7 million, respectively.

On July 4, 2025, the One, Big, Beautiful Bill Act ("OBBBA") was enacted into law and includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The changes include, among other things, an update to IRC Section 250 Deduction: FDII to Foreign-Derived Deduction Eligible Income ("FDDEI"), which provides for, among other things, a permanent deduction of 33.34% of FDDEI, which reduces the statutory tax rate to 14% of such income. The OBBBA also classified met coal as a critical mineral eligible for the advanced manufacturing production tax credit under Section 45X (the "45X Credit") of the Internal Revenue Code. The 45X Credit for met coal provides for a credit of 2.5% of eligible production costs through 2029. Section 50202 of the OBBBA also temporarily decreases the royalty rate for coal leases on federal lands to not more than 7% through 2034. We recognized a benefit from the 45X Credit of $8.4$9.7 million and $18.0 million for the three and six months ended MarchJune 31,30, 2026, which is reflected as a reduction to cost of sales in the Condensed Statements of Operations and a corresponding reduction to income taxestax payablereceivable included in prepaid expenses and other current liabilitiesreceivables in the Condensed Balance Sheets.

We define Segment Adjusted EBITDA as net income (loss) adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative expenses, business interruption expenses, interest income, interest expense, income tax benefit (expense) and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

We define Adjusted EBITDA as net income (loss) before net interest expense (income), income tax expense (benefit), depreciation and depletion, non-cash asset retirement obligation accretion, non-cash stock compensation expense, other non-cash accretion, non-cash mark-to-market loss (gain) loss on gas hedges and business interruption expenses. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

Three Months Ended MarchJune 31,30, 2026 and 2025

We produced 3.23.0 million metric tons of steelmaking coal for the three months ended MarchJune 31,30, 2026 compared to 2.02.1 million metric tons for the three months ended MarchJune 31,30, 2025, representing a 55.2%45.0% increase. The increased production was primarily driven by an increase in tons produced at the Blue Creek mine.

Sales for the three months ended MarchJune 31,30, 2026 were $448.5$503.6 million compared to $294.9$288.5 million for the three months ended MarchJune 31,30, 2025. The $153.6$215.1 million increase in sales was primarily driven by a $112.7$186.6 million increase due to a 38.2%64.7% increase in steelmaking coal sales volume primarily due to Blue Creek combined with a $40.9$28.6 million increase related to a $14.99$8.60 per metric ton increase in the average net selling price per metric ton of our steelmaking coal. The average net selling price of our steelmaking coal increased $14.99$8.60 from $149.71$143.31 per metric ton in the firstsecond quarter of 2025 to $164.70$151.91 per metric ton in the firstsecond quarter of 2026.

For the three months ended MarchJune 31,30, 2026, our geographic customer sales volume mix was 61%50% in Asia, 25%35% in Europe andEurope, 14% in South America.America and 1% in the United States. For the three months ended MarchJune 31,30, 2025, our geographic customer sales volume mix was 43.0%52% in Asia, 36.0%37% in Europe,Europe 20.0%and 11% in South America and 1.0% in the United States.America. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Other revenues for the three months ended MarchJune 31,30, 2026 were $10.1$6.1 million compared to $5.0$9.0 million for the three months ended MarchJune 31,30, 2025. Other revenues are comprised of revenue derived from our natural gas operations, gains and losses on our natural gas hedges and earned royalty revenue. The $5.1$2.9 million increasedecrease in other revenues iswas primarily due to anthe increaseprior year comparable period including a gain on mark-to-market gas hedges of $1.8 million. The decrease was also due to a decrease in the Southern Louisiana natural gas price average per Million British Thermal Unit ("MMBtu") of 52%14% offset partially byand a decrease in natural gas sales volumes of 7% compared to the prior year comparable period and a loss on mark-to-market gas hedges of $2.2 million which was included in the prior year comparable period.1%.

Cost of sales was $290.4$340.0 million, or 63.3%66.7% of total revenues, for the three months ended MarchJune 31,30, 2026, compared to $245.7$226.4 million, or 81.9%76.1% of total revenues for the three months ended MarchJune 31,30, 2025. The $44.7$113.6 million increase iswas primarily driven by a $93.3$145.2 million increase due to a 7531,302 thousand metric ton increase in steelmaking coal sales volume primarily driven by coal sales from the Blue Creek mine offset partially by a $48.6$31.6 million decrease due to a $17.85$9.54 per metric ton decrease in cash cost of sales per metric ton due to the sales mix of Blue Creek coal with its inherent lower cost structure, a benefit from the 45X Credit of $8.4$9.7 million, our disciplined approach to cost control,control and an increase in tons produced. For the three months ended MarchJune 31,30, 2026, cost of production represented 64%58% of cost of sales and transportation and royalties accounted for approximately 39%42% compared to cost of production of 66%67% and transportation and royalties of 34%33% for the three months ended MarchJune 31,30, 2025.

Cost of other revenues was $8.3$7.0 million or 1.8%1.4% of total revenues, for the three months ended MarchJune 31,30, 2026, compared to $7.9$8.2 million, or 2.6%2.8% of total revenues for the three months ended MarchJune 31,30, 2025. The increasedecrease iswas primarily driven by higherlower gas compression costs offset partially byand a 7%1% decrease in gas sales volumes.

Depreciation and depletion expenses were $52.3$58.3 million, or 11.4% of total revenues, for the three months ended MarchJune 31,30, 2026, compared to $45.3$43.3 million, or 15.1%14.5% of total revenues for the three months ended MarchJune 31,30, 2025. The $7.0$15.0 million increase in depreciation and depletion is primarily driven by an increase in additional assets placed into service at Blue Creek combined with a 38.2%64.7% increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

Selling, general and administrative expenses were $28.2$9.8 million, or 6.1%1.9% of total revenues, for the three months ended MarchJune 31,30, 2026, compared to $18.4$11.9 million, or 6.1%4.0% of total revenues, for the three months ended MarchJune 31,30, 2025. The $9.8$2.1 million increasedecrease in selling, general and administrative expenses for the period iswas primarily due to ana increasegain of $2.4 million related to recoveries received in employeeconnection relatedwith expenses,the includingWalter stockEnergy compensationbankruptcy expense.proceedings.

Interest expense was $3.2$5.5 million, or 0.7%1.1% of total revenues, for the three months ended MarchJune 31,30, 2026, compared to interest expense of $2.1$2.9 million, or 0.7%1.0% of total revenues, for the three months ended MarchJune 31,30, 2025. The $1.1$2.6 million increase iswas due to an increase in interest on additional financing leases.leases and imputed interest on the federal coal lease obligations.

Interest income was $2.6$2.1 million, or 0.6%0.4% of total revenues for the three months ended MarchJune 31,30, 2026, compared to $5.3$5.1 million, or 1.8%1.7% of total revenues for the three months ended MarchJune 31,30, 2025. The $2.7$2.9 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.

For the three months ended MarchJune 31,30, 2026, we recognized an income tax expense of $6.4$3.7 million compared to income tax benefitexpense of $6.0$4.3 million for the three months ended MarchJune 31,30, 2025. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period. The $6.4$3.7 million income tax expense for the three months ended MarchJune 31,30, 2026, iswas driven by pre-tax income and depletion and Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived IntangibleDeduction Eligible Income ("FDIIFDDEI") deductions. The prior year comparable period income tax benefitexpense iswas driven by a pre-tax loss and a tax benefit related toincome, depletion and FDII deductions.

The OBBBA was enacted on July 4, 2025, and updated the FDII to FDDEI, which provides for, among other things, a permanent deduction of 33.34% of FDDEI, which reduces the statutory tax rate to 14% of such income. The changes will take effect for taxable years beginning after December 31, 2025. The marginal well credit is a production-based tax credit that provides a credit for qualified natural gas production and is phased out when natural gas prices exceed certain thresholds.

Going forward, we plan to use cash to fund debt service payments on our Notes, the Amended ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, our reclamation obligations, our finance lease obligations, our black lung obligations, our federal coal lease obligations, professional fees and other non-recurring transaction expenses and strategic investments, stock repurchases, and, if declared, to pay our quarterly and/or special dividends. Our ability to fund our capital needs going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the Amended ABL Facility, and, in the case of any future strategic investments, capital needs or special dividends financed partially or wholly with debt financing and our ability to access the capital markets to raise additional capital.

Our total liquidity as of MarchJune 31,30, 2026 was $363.7$452.9 million, consisting of cash and cash equivalents of $202.6$302.3 million, short-term investments of $20.6$10.1 million, which is net of $10.0$10.1 million posted as collateral and $140.5 million available under our Amended ABL Facility. As of MarchJune 31,30, 2026, no loans were outstanding under the Amended ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the Amended ABL Facility.

In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of MarchJune 31,30, 2026, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our mining operations totaling $47.5 million, $18.6 million as collateral for self-insured black lung related claims, $16.0 million for federal coal leases and $6.4 million for miscellaneous purposes.

Cash and cash equivalent balances were $202.6$302.3 million and $300.0 million at MarchJune 31,30, 2026 and December 31, 2025, respectively.

Net cash usedprovided inby operating activities was $11.7$120.6 million for the threesix months ended MarchJune 31,30, 2026, and was primarily attributed to a net income of $72.3$159.8 million adjusted for depreciation and depletion expense of $52.3$110.6 million, stock based compensation expense of $10.1$12.6 million, deferred income tax expensebenefit of $1.9$6.4 million, accretion of asset retirement obligations of $1.1$2.2 million,million and amortization of debt issuance costs and debt discount of $0.4$0.8 million andoffset by an increase in our net working capital of $145.8$159.5 million,million. primarilyThe reflectingincrease in net working capital reflects higher accounts receivable due to higher sales volumes and the timing of sales, higher inventories due to higher production and lower accrued expenses due to timing of payments.

Net cash provided by operating activities was $10.9$48.5 million for the threesix months ended MarchJune 31,30, 2025, and was primarily attributed to a net loss of $8.2$2.6 million adjusted for depreciation and depletion expense of $45.3$88.5 million, stock based compensation expense of $8.1$10.1 million, deferred income tax benefit of $6.5 million, mark-to-market loss on gas hedges of $1.7$3.3 million, accretion of asset retirement obligations of $1.3$2.7 million, amortization of debt issuance costs and debt discount of $0.8 million and mark-to-market loss on gas hedges of $0.4 million,million andoffset by an increase in our net working capital of $31.8$45.3 million. The increase in our working capital was primarily driven by increases in accounts receivable due to higher sales volumes and the timing of sales, lower accrued expenses and higher accounts payable.

Net cash used in investing activities was $57.4$75.7 million and $77.8$172.1 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, primarily due to purchases of property, plant and equipment and mine development offset partially by proceeds from the sale of short term investments. Capital expenditures for the development of Blue Creek were $66.1 million and $55.3 million for the three months ended March 31, 2026 and 2025, respectively.

Net cash used in financing activities was $28.1$42.3 million for the threesix months ended MarchJune 31,30, 2026, primarily due to principal repayments of finance lease obligations of $18.6 million, payments for taxes related to net share settlement of equity awards of $14.8 million, principal repayments of finance lease obligations of $8.6 million and payment of regular quarterly dividends of $4.7$9.0 million.

Net cash provided by financing activities was $30.3$15.5 million for the threesix months ended MarchJune 31,30, 2025, primarily due to the receipt of proceeds on equipment financing for leases yet to commence of $48.8 million offset partially by payments for taxes related to net share settlement of equity awards of $9.4 million, payment of regular quarterly dividends of $5.2$9.4 million and principal repayments of finance lease obligations of $3.9$14.5 million.

During the threesix months ended MarchJune 31,30, 2026, we paid $4.7$9.0 million of regular quarterly dividends under the Capital Allocation Policy.

On October 28, 2025, our Board declared a regular quarterly cash dividend of $0.08 per share, which which was paid on November 14, 2025, to stockholders of record as of the close of business on November 7, 2025.

On April 20, 2026, the Board declared a regular quarterly cash dividend of $0.08 per share, which thewas Company plans to distributepaid on May 7, 2026, to stockholders of record as of the close of business on May 1, 2026.

On August 28, 2025, Warrior Met Coal, Inc. (the “Company”) entered into that certain First Amendment to Second Amended and Restated Asset-Based Revolving Credit Agreement (the “Amendment”), by and among the Company and certain of its subsidiaries, as borrowers, the guarantors party thereto, the lenders party thereto and Citibank, N.A. as administrative agent, which amends the Company's existing Second Amended and Restated Asset-Based Revolving Credit Agreement (the “credit facility”, and the credit facility as amended by the Amendment, the “Amended ABL Facility”). The Amendment, among other things, (i) increases the aggregate commitments available to be borrowed under the Amended ABL Facility by $27.0 million to $143.0 million; (ii) extends the maturity date of the credit facility to the earlier of (x) August 28, 2030 and (y) 91 days prior to the maturity date of the Company's 7.875% Senior Notes due 2028 (if such notes are still outstanding as of such date); and (iii) amends certain borrowing base calculations and other terms and provisions of the credit facility. As of MarchJune 31,30, 2026, no loans were outstanding under the Amended ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the Amended ABL Facility. At MarchJune 31,30, 2026, we had $140.5 million of availability under the Amended ABL Facility.

The Amended ABL Facility contains customary covenants for asset-based credit agreements of this type, including among other things: (i) requirements to deliver financial statements, other reports and notices; (ii) restrictions on the existence or incurrence of certain indebtedness; (iii) restrictions on the existence or incurrence of certain liens; (iv) restrictions on making certain restricted payments; (v) restrictions on making certain investments; (vi) restrictions on certain mergers, consolidations and asset dispositions; (vii) restrictions on certain transactions with affiliates; and (viii) restrictions on modifications to certain indebtedness. Additionally, the Amended ABL Facility contains a springing fixed charge coverage ratio of not less than 1.00 to 1.00, which ratio is tested if availability under the Amended ABL Facility is less than a certain amount. As of MarchJune 31,30, 2026, we were not subject to this covenant. Subject to customary grace periods and notice requirements, the Amended ABL Facility also contains customary events of default.

We were in compliance with all applicable covenants under the Amended ABL Facility as of MarchJune 31,30, 2026.

Our capital expenditures were $80.1$109.1 million and $68.5$143.5 million for the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. Capital expenditures for these periods are primarily related to investments required to developfinalize the development of Blue Creek as well as expenditures necessary to maintain our property, plant and equipment. Capital expenditures for the development of Blue Creek for the threesix months ended MarchJune 31,30, 2026 were $66.1$71.3 million and $1,022.9$1,028.1 million has been spent on this project to date. Our deferred mine development costs were $10.8$30.1 million for the threesix months ended MarchJune 31,30, 2025, and relate to the development of Blue Creek.

Our capital spending is expected to range from $155.0 million to $190.0 million for the full year 2026, consisting of sustaining capital expenditures of approximately $105.0 to $115.0 million and discretionary capital expenditures of approximately $50.0 to $75.0$71.3 million invested for the final construction of Blue Creek. Our sustaining capital expenditures include expenditures related to longwall operations and continuous miners.

As of MarchJune 31,30, 2026, there have been no material changes to our critical accounting estimates as described in the "Critical Accounting Policies" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2025 Annual Report.

In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of MarchJune 31,30, 2026, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our U.S. mining operations totaling $47.5 million, for collateral for self-insured black lung related claims totaling $18.6 million, for federal coal leases totaling $16.0 million and for miscellaneous purposes totaling $6.4 million.