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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

     ☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

    

     For the quarterly period ended September 30, 2025

    

     ☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

    

     For the transition period from _____________ to _____________                              

    

Commission File Number: 001-38061

Warrior Met Coal, Inc.

(Exact name of registrant as specified in its charter)


Delaware		81-0706839
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

16243 Highway 216
Brookwood	Alabama	35444
(Address of Principal Executive Offices)		(Zip Code)

(205) 554-6150

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	HCC	New York Stock Exchange
Rights to Purchase Series A Junior Participating Preferred Stock, par value $0.01 per share	--	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	ý	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

Number of shares of common stock outstanding as of November 3, 2025: 52,570,156

TABLE OF CONTENTS


Forward-Looking Statements		1

Part I. Financial Information		3
Item 1.	Financial Statements	3
	Condensed Statements of Operations for the three and nine months ended September 30, 2025 (Unaudited) and September 30, 2024 (Unaudited)	3
	Condensed Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024	4
	Condensed Statements of Cash Flows for the nine months ended September 30, 2025 (Unaudited) and September 30, 2024 (Unaudited)	5
	Condensed Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2025 (Unaudited) and September 30, 2024 (Unaudited)	6
	Notes to Condensed Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32

Part II. Other Information		32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults on Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34

Signatures		35

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this "Form 10-Q" or "this report") includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to our future prospects, developments and business strategies, including any potential changes to our production and sales volumes as a result of our negotiations with the labor union representing certain of our hourly employees. We have used the words “anticipate,” “approximately,” “assume,” “believe,” “could,” “contemplate,” “continue,” “estimate,” “expect,” “target,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should” and similar terms and phrases, including in references to assumptions, in this report to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to:

•

the impact of global pandemics, including the impact of any such pandemic on our business, employees, suppliers and customers, the metallurgical ("met") or steelmaking coal and steel industries, and global economic markets;

•

the impacts of inflation and tariffs on our business, including on our costs and our profitability;

•

our relationships with, and other conditions affecting, our customers;

•

successful implementation of our business strategies;

•

unavailability of, or price increases in, the transportation of our met or steelmaking coal;

•

significant cost increases and fluctuations, and delay in the delivery of raw materials, mining equipment and purchased components;

•

work stoppages, negotiation of labor contracts, employee relations and workforce availability;

•

competition and foreign currency fluctuations;

•

litigation, including claims not yet asserted;

•

terrorist attacks or security threats, including cybersecurity threats;

•

global steel demand and the downstream impact on steelmaking coal prices;

•

impact of weather and natural disasters on demand and production;

•

a substantial or extended decline in pricing or demand for steelmaking coal;

•

inherent difficulties and challenges in the coal mining industry that are beyond our control;

•

our ability to develop or acquire steelmaking coal reserves in an economically feasible manner;

•

geologic, equipment, permitting, site access, operational risks and new technologies related to mining;

•

inaccuracies in our estimates of our steelmaking coal reserves;

•

costs associated with our workers’ compensation benefits;

•

challenges to our licenses, permits and other authorizations;

•

challenges associated with environmental, health and safety laws and regulations;

•

regulatory requirements associated with federal, state and local regulatory agencies, and such agencies’ authority to order temporary or permanent closure of our mines;

•

climate change concerns and our operations’ impact on the environment;

•

failure to obtain or renew surety bonds on acceptable terms, which could affect our ability to secure reclamation and coal lease obligations;

•

our obligations surrounding reclamation and mine closure;

•

our substantial indebtedness and debt service requirements;

•

our ability to comply with covenants in our Amended ABL Facility (as defined below) and Indenture (as defined below);

•

our ability to maintain adequate liquidity and the cost, availability and access to capital and financial markets;

•

our expectations regarding our future cash tax rate as well as our ability to effectively utilize our federal and state net operating loss carry forwards (“NOLs”);

•

our ability to continue paying our quarterly dividend or pay any special dividend;

•

the timing and amount of any stock repurchases we make under our New Stock Repurchase Program (as defined below) or otherwise;

•

any consequences related to our transfer restrictions under our certificate of incorporation and our NOL rights agreement;

•

geopolitical events, including the effects of the Russia-Ukraine war and the ongoing conflict in the Middle East; and

•

the inability to transport our products to customers due to rail performance issues or the impact of weather and mechanical failures at the McDuffie Terminal at the Port of Mobile in Alabama.

These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth under “Part II, Item 1A. Risk Factors,” “Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q, and those set forth from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). These documents are available through our website at www.warriormetcoal.com or through the SEC's Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov. In light of such risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements.

When considering forward-looking statements made by us in this Form 10-Q, or elsewhere, such statements speak only as of the date on which we make them. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this Form 10-Q after the date of this Form 10-Q, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this Form 10-Q or elsewhere might not occur.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per-share amounts)

(Unaudited)


	For the three months ended September 30,						For the nine months ended September 30,
	2025			2024			2025			2024
Revenues:
Sales	$	319,969		$	319,944		$	903,393		$	1,208,366
Other revenues		8,620			7,776			22,662			19,389
Total revenues		328,589			327,720			926,055			1,227,755
Costs and expenses:
Cost of sales (exclusive of items shown separately below)		239,525			231,598			711,672			778,489
Cost of other revenues (exclusive of items shown separately below)		7,546			8,854			23,629			29,491
Depreciation and depletion		43,594			36,642			132,126			114,815
Selling, general and administrative		17,200			11,510			47,566			45,861
Total costs and expenses		307,865			288,604			914,993			968,656
Operating income		20,724			39,116			11,062			259,099
Interest expense		(2,307	)		(1,422	)		(7,304	)		(3,458	)
Interest income		4,435			8,679			14,812			26,074
Income before income tax (benefit) expense		22,852			46,373			18,570			281,715
Income tax (benefit) expense		(13,746	)		4,607			(15,466	)		32,248
Net income	$	36,598		$	41,766		$	34,036		$	249,467
Basic and diluted net income per share:
Net income per share—basic	$	0.70		$	0.80		$	0.65		$	4.78
Net income per share—diluted	$	0.70		$	0.80		$	0.65		$	4.78
Weighted average number of shares outstanding—basic		52,594			52,330			52,549			52,167
Weighted average number of shares outstanding—diluted		52,650			52,394			52,578			52,221
Dividends per share:	$	0.08		$	0.08		$	0.24		$	0.74

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share and per-share data)


	September 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	336,283		$	491,547
Short-term investments		56,242			14,622
Trade accounts receivable		141,985			140,867
Inventories, net		219,050			207,590
Income tax receivable		3,066			—
Prepaid expenses and other receivables		45,402			32,436
Total current assets		802,028			887,062
Restricted cash		7,814			7,585
Mineral interests, net		76,469			72,245
Property, plant and equipment, net		1,762,829			1,549,470
Deferred income taxes		3,427			3,210
Long-term investments		2,025			44,604
Other long-term assets		28,204			27,340
Total assets	$	2,682,796		$	2,591,516
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	46,214		$	40,178
Accrued expenses		100,533			85,369
Asset retirement obligations		13,032			13,032
Short-term financing lease liabilities		25,155			13,208
Other current liabilities		9,416			18,643
Total current liabilities		194,350			170,430
Long-term debt		154,087			153,612
Asset retirement obligations		74,425			72,138
Black lung obligations		34,879			34,467
Long-term financing lease liabilities		57,329			6,217
Deferred income taxes		49,751			63,835
Total liabilities		564,821			500,699
Stockholders’ Equity:
Common stock, $0.01 par value, (140,000,000 shares authorized as of September 30, 2025 and December 31, 2024; 54,791,997 issued and 52,570,156 outstanding as of September 30, 2025; 54,533,374 issued and 52,311,533 outstanding as of December 31, 2024)		548			545
Preferred stock, $0.01 par value per share (10,000,000 shares authorized; no shares issued and outstanding)		—			—
Treasury stock, at cost (2,221,841 shares as of September 30, 2025 and December 31, 2024)		(50,576	)		(50,576	)
Additional paid in capital		296,017			289,808
Retained earnings		1,871,986			1,851,040
Total stockholders’ equity		2,117,975			2,090,817
Total liabilities and stockholders’ equity	$	2,682,796		$	2,591,516

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	For the nine months ended September 30,
	2025			2024
OPERATING ACTIVITIES
Net income	$	34,036		$	249,467
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and depletion		132,126			114,815
Deferred income tax benefit		(14,301	)		(3,355	)
Stock based compensation expense		15,309			15,061
Amortization of debt issuance costs and debt discount		1,225			1,188
Accretion of asset retirement obligations		3,993			3,897
Mark-to-market gain on gas hedges		(295	)		—
Changes in operating assets and liabilities:
Trade accounts receivable		(1,118	)		(54,402	)
Income tax receivable		(3,066	)		7,833
Inventories, net		(8,708	)		(8,094	)
Prepaid expenses and other receivables		(13,514	)		(3,727	)
Accounts payable		13,179			6,146
Accrued expenses and other current liabilities		(1,383	)		(403	)
Other		(4,326	)		(15,185	)
Net cash provided by operating activities		153,157			313,241
INVESTING ACTIVITIES
Purchase of property, plant and equipment		(226,054	)		(326,542	)
Deferred mine development costs		(71,776	)		(19,544	)
Acquisition of leased mineral rights		(9,363	)		—
Proceeds from (purchase of) investments		1,267			(49,721	)
Net cash used in investing activities		(305,926	)		(395,807	)
FINANCING ACTIVITIES
Dividends paid		(13,618	)		(40,475	)
Proceeds from equipment financing		48,771			—
Principal repayments of finance lease obligations		(28,035	)		(12,735	)
Payments for taxes related to net share settlement of equity awards		(9,384	)		(11,777	)
Net cash used in financing activities		(2,266	)		(64,987	)
Net decrease in cash, cash equivalents and restricted cash		(155,035	)		(147,553	)
Cash, cash equivalents and restricted cash at beginning of period		499,132			738,197
Cash, cash equivalents and restricted cash at end of period	$	344,097		$	590,644

Cash and cash equivalents at beginning of period	$	491,547		$	738,197
Restricted cash at beginning of period		7,585			—
Cash, cash equivalents and restricted cash at beginning of period	$	499,132		$	738,197

Cash and cash equivalents at end of period	$	336,283		$	583,158
Restricted cash at end of period		7,814			7,486
Cash, cash equivalents and restricted cash at end of period	$	344,097		$	590,644

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)


	For the three months ended September 30,						For the nine months ended September 30,
	2025			2024			2025			2024
Common Stock
Balance, beginning of period	$	548		$	545		$	545		$	542
Issuance of shares		—			—			3			3
Balance, end of period		548			545			548			545
Preferred Stock
Balance, beginning of period		—			—			—			—
Balance, end of period		—			—			—			—
Treasury Stock
Balance, beginning of period		(50,576	)		(50,576	)		(50,576	)		(50,576	)
Balance, end of period		(50,576	)		(50,576	)		(50,576	)		(50,576	)
Additional Paid in Capital
Balance, beginning of period		290,676			281,801			289,808			279,332
Stock based compensation expense		5,341			917			15,596			15,166
Tax withholdings on vested equity awards		—			—			(9,387	)		(11,780	)
Balance, end of period		296,017			282,718			296,017			282,718
Retained Earnings
Balance, beginning of period		1,839,636			1,816,617			1,851,040			1,645,148
Net income		36,598			41,766			34,036			249,467
Dividends declared		(4,248	)		(4,243	)		(13,090	)		(40,475	)
Balance, end of period		1,871,986			1,854,140			1,871,986			1,854,140
Total Stockholders' Equity	$	2,117,975		$	2,086,827		$	2,117,975		$	2,086,827

The accompanying notes are an integral part of these condensed financial statements.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

Note 1. Business and Basis of Presentation

Description of the Business

Warrior Met Coal, Inc. (the "Company") is a U.S.-based, environmentally and socially minded supplier to the global steel industry. The Company is 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. The Company is 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 its underground mines based in Alabama. The HCC that the Company produces from the Blue Creek coal seam contains very low sulfur and has strong coking properties. The Company also generates ancillary revenues from the sale of natural gas extracted as a byproduct from the underground coal mines and royalty revenues from leased properties.

Basis of Presentation

The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. For further information, refer to the financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"). Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2025. The balance sheet at December 31, 2024 has been derived from the audited financial statements for the year ended December 31, 2024 included in the 2024 Annual Report.

Collective Bargaining Agreement

The Company's Collective Bargaining Agreement ("CBA") with the labor union representing certain of the Company's hourly employees expired on April 1, 2021. The Company continues to engage in good faith efforts with the labor union to reach an agreement on a new contract.

Note 2. Summary of Significant Accounting Policies

The Company's significant accounting policies are consistent with those disclosed in Note 2 to its audited financial statements included in the 2024 Annual Report.

Use of Estimates

The Company prepares its financial statements in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include short-term deposits and highly liquid investments that have original maturities of three months or less when purchased and are stated at cost, which approximates fair value. Restricted cash consists of cash that the Company is contractually obligated to maintain in a money market account as collateral for workers' compensation claims. Restricted cash is classified as noncurrent based on the nature of the restriction.

Investments

Instruments with maturities greater than three months, but less than twelve months, are included in short-term investments. The Company purchases fixed income securities and certificates of deposits with varying maturities that are classified as available for sale and are carried at fair value. Securities classified as held to maturity are those securities that management has the intent and ability to hold to maturity.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

As of September 30, 2025 and December 31, 2024, short-term investments consisted of $56.2 million and $14.6 million, respectively, in cash and fixed income securities. The short-term investments as of September 30, 2025 and December 31, 2024 consisted of $9.8 million and $9.5 million, respectively, posted as collateral for the self-insured black lung related claims asserted by or on behalf of former employees of Walter Energy, Inc. ("Walter Energy") and its subsidiaries, which were assumed by the Company and relate to periods prior to March 31, 2016. The Company also had $46.4 million and $5.1 million in fixed income securities with maturities less than twelve months as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, long-term investments consisted of $2.0 million and $44.6 million in fixed income securities with maturities greater than twelve months, respectively.

Revenue Recognition

Revenue is recognized when performance obligations under the terms of a contract with the Company's customers are satisfied; for all contracts this occurs when control of the promised goods have been transferred to the Company's customers and risk of loss passes to such customer. For coal shipments to domestic customers via rail or truck, control is typically transferred when the railcar or truck is loaded. For coal shipments to international customers via ocean vessel, control is transferred when the vessel is loaded at the Port of Mobile in Alabama. Occasionally, the Company will sell coal stockpiles at the barge loadout or port upon which control, title and risk of loss transfers when stockpiles are segregated. For all steelmaking coal sales under average pricing contracts where pricing is not finalized when revenue is recognized, revenue is recorded based on estimated consideration to be received at the date of the sale. For natural gas sales, control is transferred when the gas has been transferred to the pipeline. Revenue is disaggregated between coal sales within the Company's mining segment and natural gas sales included in all other revenues, as disclosed in Note 12.

The Company's coal and gas sales generally include up to 45-day payment terms following the transfer of control of the goods to the customer unless secured by a letter of credit which could include up to 60-day payment terms. The Company typically does not include extended payment terms in its contracts with customers.

Trade Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable are stated at cost. Trade accounts receivable represent customer obligations that are derived from revenue recognized from contracts with customers. Credit is extended based on an evaluation of the individual customer's financial condition. The Company maintains trade credit insurance on the majority of its customers and the geographic regions of coal shipments to these customers. In some instances, the Company requires letters of credit, cash collateral or prepayments from its customers on or before shipment to mitigate the risk of loss. These efforts have consistently resulted in the Company recognizing no historical credit losses. The Company also has never had to have a claim against its trade credit insurance policy.

In order to estimate the allowance for credit losses on trade accounts receivable, the Company utilizes an aging approach in which potential impairment is calculated based on how long a receivable has been outstanding (e.g., current, 1-31 days, 31-60 days, etc.). The Company calculates an expected credit loss rate based on the Company’s historical credit loss rate, the risk characteristics of its customers, and the current steelmaking coal and steel market environments. As of September 30, 2025 and December 31, 2024, the estimated allowance for credit losses was immaterial and did not have a material impact on the Company's financial statements.

Note 3. Inventories, net

Inventories, net are summarized as follows (in thousands):


	September 30, 2025		December 31, 2024
Coal	$	107,981	$	118,504
Raw materials, parts, supplies and other, net		111,069		89,086
Total inventories, net	$	219,050	$	207,590

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

Note 4. Income Taxes

For the three and nine months ended September 30, 2025 and 2024, the Company estimated its annual effective tax rate and applied this effective tax rate to its year-to-date pretax income at the end of the interim reporting period. The tax effect of unusual or infrequently occurring items, including the effects of changes in tax laws or rates and changes in judgment about the realizability of deferred tax assets, are reported in the interim period in which they occur. For the three and nine months ended September 30, 2025, the Company had income tax benefit of $13.7 million and $15.5 million, respectively. The effective income tax rate for the nine months ended September 30, 2025 varied from the statutory federal income tax rate of 21%, primarily due to tax benefits related to depletion, marginal gas well credits and a discrete return to provision adjustment related to Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Intangible Income ("FDII") deductions. For the three and nine months ended September 30, 2024, the Company had income tax expense of $4.6 million and $32.2 million, respectively. These periods also include a benefit related to depletion and IRC Section 250 Deduction: FDII.

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 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 metallurgical 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 metallurgical coal provides for a credit of 2.5% of eligible production costs in tax years 2026 through 2029. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. For the provisions effective in 2025, there was no material impact to our effective tax rate for the quarter ended September 30, 2025, and we do not expec the impact to be material to our full year 2025 effective tax rate. For the provisions, effective in 2026, we are currently assessing the potential impact of these tax law changes on our business and financial results.

Note 5. Debt

The Company's debt consisted of the following (in thousands):


	September 30, 2025			December 31, 2024			Weighted Average Interest Rate			Final Maturity
Senior Secured Notes	$	156,517		$	156,517			7.875	%	December 2028
ABL Borrowings		—			—		Varies(1)			September 2028(2)
Debt discount		(2,430	)		(2,905	)
Total debt		154,087			153,612
Less: current debt		—			—
Total long-term debt	$	154,087		$	153,612

(1)

Borrowings under the Amended ABL Facility bear interest at a rate equal to Secured Overnight Financing Rate ("SOFR") ranging from 1.5% to 2.0% or an alternate base rate plus an applicable margin, which is determined based on the average availability of the commitments under the Amended ABL Facility, ranging from 0.5% to 1.0%.

(2)

The Amended ABL Facility extends the maturity date 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).

Senior Secured Notes

On December 6, 2021, the Company issued $350.0 million in aggregate principal amount of 7.875% senior secured notes due 2028 (the “Notes”) at an initial price of 99.3% of their face amount. The Notes were issued to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States in accordance with Regulation S under the Securities Act. The Company used the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of the Company’s outstanding 8.00% senior secured notes due 2024 (the “Existing Notes”), including payment of the redemption premium in connection with such redemption. Since inception, the Company has paid down principal totaling $193.5 million on the Notes. The Notes will mature on December 1, 2028.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

Amended ABL Facility

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 September 30, 2025, 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. As of September 30, 2025, the Company had $140.5 million of availability under the Amended ABL Facility (calculated net of $2.5 million of letters of credit outstanding at such time).

Note 6. Leases

The Company enters into rental agreements for certain mining equipment that are for periods of 12 months or less, some of which include options to extend the leases. Leases that are for periods of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense on these agreements on a straight-line basis over the lease term. Additionally, the Company has certain finance leases for mining equipment that expire over various contractual periods. These leases have remaining lease terms of one to ten years and include an option to renew. Amortization expense for finance leases is included in depreciation and depletion expense.

Supplemental balance sheet information related to leases was as follows (in thousands):


	September 30, 2025			December 31, 2024
Finance lease right-of-use assets, net(1)	$	138,411		$	56,702
Finance lease liabilities
Current		25,155			13,208
Noncurrent		57,329			6,217
Total finance lease liabilities	$	82,484		$	19,425

Weighted average remaining lease term - finance leases (in months)		66.7			17.9
Weighted average discount rate - finance leases(2)		7.32	%		7.25	%

(1)

Finance lease right-of-use assets are recorded net of accumulated amortization of $59.0 million and $50.3 million and are included in property, plant and equipment, net in the Condensed Balance Sheets as of September 30, 2025 and the Balance Sheets as of December 31, 2024, respectively.

(2)

When an implicit discount rate is not readily available in a lease, the Company uses its incremental borrowing rate based on information available at the commencement date when determining the present value of lease payments.

The components of lease expense were as follows (in thousands):


	For the three months ended September 30,				For the nine months ended September 30,
	2025		2024		2025		2024
Operating lease cost(1):	$	5,259	$	7,176	$	17,938	$	27,988
Finance lease cost:
Amortization of leased assets		5,904		5,548		17,361		17,081
Interest on lease liabilities		2,367		866		5,534		3,539
Net lease cost	$	13,530	$	13,590	$	40,833	$	48,608

(1)

Includes leases that are for periods of 12 months or less.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

Maturities of lease liabilities for the Company's finance leases as of September 30, 2025 were as follows (in thousands):


	Finance Leases(1)
2025	$	9,187
2026		28,960
2027		20,756
2028		18,556
2029		8,445
Thereafter		9,055
Total		94,959
Less: amount representing interest		(12,475	)
Present value of lease liabilities	$	82,484

(1)

Finance lease payments include $5.9 million of future payments required under signed lease agreements that have not yet commenced.

Supplemental cash flow information related to the Company's leases was as follows (in thousands):


	For the nine months ended September 30,
	2025			2024
Cash paid (received) for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	5,534		$	3,539
Financing cash flows from finance leases	$	(20,736	)	$	12,735
Non-cash right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	78,317		$	9,263

Note 7. Net Income per Share

Basic and diluted net income per share was calculated as follows (in thousands, except per share data):


	For the three months ended September 30,				For the nine months ended September 30,
	2025		2024		2025		2024
Numerator:
Net income	$	36,598	$	41,766	$	34,036	$	249,467
Denominator:
Weighted-average shares used to compute net income per share—basic		52,594		52,330		52,549		52,167
Dilutive restrictive stock awards		56		64		29		54
Weighted-average shares used to compute net income per share—diluted		52,650		52,394		52,578		52,221
Net income per share—basic	$	0.70	$	0.80	$	0.65	$	4.78
Net income per share—diluted	$	0.70	$	0.80	$	0.65	$	4.78

Note 8. Commitments and Contingencies

Environmental Matters

The Company is subject to a wide variety of laws and regulations concerning the protection of the environment, both with respect to the construction and operation of its plants, mines and other facilities and with respect to remediating environmental conditions that may exist at its own and other properties.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

The Company believes it is in compliance with federal, state and local environmental laws and regulations. The Company accrues for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and can be reasonably estimated. As of September 30, 2025 and December 31, 2024, there were no accruals for environmental matters other than asset retirement obligations for mine reclamation.

Miscellaneous Litigation

From time to time, the Company is party to lawsuits arising in the ordinary course of business. The Company records costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on the Company’s future results of operations cannot be predicted with certainty as any such effect depends on future results of operations and the amount and timing of the resolution of such matters. As of September 30, 2025 and December 31, 2024, there were no items accrued for miscellaneous litigation.

Other Commitments and Contingencies

The Company is party to various transportation and throughput agreements with rail and barge transportation providers and the Alabama State Port Authority. These agreements contain annual minimum tonnage guarantees with respect to coal transported from the mine sites to the Port of Mobile in Alabama, the unloading of rail cars or barges, and the loading of vessels. If the Company does not meet its minimum throughput obligations, which are based on annual minimum amounts, it is required to pay the transportation providers or the Alabama State Port Authority a contractually specified amount per metric ton for the difference between the actual throughput and the minimum throughput requirement. At September 30, 2025 and December 31, 2024, the Company had no liability recorded for minimum throughput requirements.

Royalty Obligations

A substantial amount of the coal that the Company mines is produced from mineral reserves leased from third-party landowners. These leases convey mining rights to the Company in exchange for royalties to be paid to the landowner as either a fixed amount per ton or as a percentage of the sales price. Although coal leases have varying renewal terms and conditions, they generally last for the economic life of the reserves. Coal royalty expenses were $17.6 million and $58.8 million and $25.6 million and $101.7 million for the three and nine months ended September 30, 2025 and 2024, respectively.

Note 9. Stockholders' Equity

Common Shares

The Company is authorized to issue up to 140,000,000 common shares, $0.01 par value per share. Holders of common shares are entitled to receive dividends when authorized by the Board.

Stock Repurchase Program

On March 26, 2019, the Board approved the Company's second stock repurchase program (the “New Stock Repurchase Program”) that authorizes repurchases of up to an aggregate of $70.0 million of the Company's outstanding common stock. The Company fully exhausted its previous stock repurchase program (the "First Stock Repurchase Program") of $40.0 million of its outstanding common stock. The New Stock Repurchase Program does not require the Company to repurchase a specific number of shares or have an expiration date. The New Stock Repurchase Program may be suspended or discontinued by the Board at any time without prior notice.

Under the New Stock Repurchase Program, the Company may repurchase shares of its common stock from time to time, in amounts, at prices and at such times as the Company deems appropriate, subject to market and industry conditions, share price, regulatory requirements and other considerations as determined from time to time by the Company. The Company’s repurchases may be executed using open market purchases or privately negotiated transactions in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act, and repurchases may be executed pursuant to Rule 10b5-1 under the Exchange Act. Repurchases will be subject to limitations in the Amended ABL Facility and the Indenture. The Company intends to fund repurchases under the New Stock Repurchase Program from cash on hand and/or other sources of liquidity. Any future repurchases of shares of the Company's common stock will be subject to the 1% excise tax under the Inflation Reduction Act.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

As of September 30, 2025 and December 31, 2024, the Company has repurchased 500,000 shares under the New Stock Repurchase Program for approximately $10.6 million, leaving approximately $59.4 million of share repurchases authorized under the New Stock Repurchase Program.

Dividends

The Company has declared the following dividends on common shares as of the filing date of this Form 10-Q:


Dividend per Share		Dividend Type	Declaration Date	Record Date	Payable Date
$	0.08	Quarterly	February 9, 2024	February 20, 2024	February 26, 2024
$	0.50	Special	February 9, 2024	March 1, 2024	March 7, 2024
$	0.08	Quarterly	April 25, 2024	May 6, 2024	May 13, 2024
$	0.08	Quarterly	July 26, 2024	August 6, 2024	August 13, 2024
$	0.08	Quarterly	October 25, 2024	November 5, 2024	November 12, 2024
$	0.08	Quarterly	February 11, 2025	February 24, 2025	March 3, 2025
$	0.08	Quarterly	April 23, 2025	May 5, 2025	May 12, 2025
$	0.08	Quarterly	July 29, 2025	August 8, 2025	August 15, 2025
$	0.08	Quarterly	October 28, 2025	November 7, 2025	November 14, 2025

Preferred Shares

The Company is authorized to issue up to 10,000,000 shares of preferred stock, $0.01 par value per share.

Note 10. Derivative Instruments

The Company enters into natural gas swap contracts from time to time to hedge the exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sales. As of September 30, 2025 and December 31, 2024, the Company had 1,500,000 and 5,500,000 metric million British thermal unit gas contracts outstanding, respectively.

The Company’s natural gas swap contracts economically hedge certain risks but are not designated as hedges for financial reporting purposes. All changes in the fair value of these derivative instruments are recorded as other revenues in the Condensed Statements of Operations. The Company had realized losses of $0.2 million and $1.1 million for the three and nine months ended September 30, 2025, respectively, and had unrealized gains of $0.7 million and $0.3 million for the three and nine months ended September 30, 2025, respectively. The Company had no such gains or losses for the three and nine months ended September 30, 2024. The Company records all derivative instruments at fair value and had liabilities recorded of $0.4 million and $1.8 million as of September 30, 2025 and December 31, 2024, respectively.

Note 11. Fair Value of Financial Instruments

The following table presents information about the Company’s financial liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair value (in thousands):


	Fair Value Measurements as of September 30, 2025 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Natural gas swap contracts	$	—	$	431	$	—	$	431


	Fair Value Measurements as of December 31, 2024 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Natural gas swap contracts	$	—	$	1,835	$	—	$	1,835

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

During the nine months ended September 30, 2025, there were no transfers between Level 1, Level 2 and Level 3. The Company uses quoted dealer prices for similar contracts in active over-the-counter markets for determining fair value of Level 2 liabilities. There were no changes to the valuation techniques used to measure liability fair values on a recurring basis during the nine months ended September 30, 2025.

The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

Cash, cash equivalents and restricted cash, short-term investments, receivables and trade accounts payable — The carrying amounts reported in the Condensed Balance Sheets approximate fair value due to the short-term nature of these assets and liabilities.

Long-term investments — The amortized cost carrying amount reported in the Condensed Balance Sheets approximates fair value due to the nature of fixed income securities.

Debt — The Company's outstanding debt is carried at cost. As of September 30, 2025 and December 31, 2024, there were no borrowings outstanding under the Amended ABL Facility, with $140.5 million available, net of outstanding letters of credit of $2.5 million. The estimated fair value of the Notes as of September 30, 2025 was approximately $159.3 million based upon observable market data (Level 2).

Note 12. Segment Information

The Company generates revenue primarily through the production of steelmaking coal for sale to the steel industry. The Company also generates ancillary revenues from the sale of natural gas extracted as a byproduct from the underground coal mines and royalty revenues from leased properties.

Following the commencement of revenue-generating activities for the Blue Creek mine during the three months ended June 30, 2025, the manner in which the Company's chief operating decision maker (“CODM”), the Chief Executive Officer, measures financial performance and allocates resources changed. The Company reassessed its segment reporting and has determined that it continues to have one reportable segment identified as Mining which consists of: Mine No. 4, Mine No. 7 and the Blue Creek mine.

The Company has determined that its natural gas and royalty businesses did not meet the criteria in ASC 280 to be considered as a reportable segment. Therefore, the Company has included their results in an “all other” category as a reconciling item to consolidated amounts. The Company recast prior period information related to the change in segments, however, there were no revenues or cost of revenues associated with the Blue Creek mine.

The Company does not allocate all of its assets, or its depreciation and depletion expense, selling, general and administrative expenses, transactions costs, interest income (expense), and income tax expense (benefit) by segment.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

The following tables include reconciliations of segment information to consolidated amounts (in thousands):


	For the three months ended September 30,				For the nine months ended September 30,
	2025		2024		2025		2024
Revenues
Mining	$	319,969	$	319,944	$	903,393	$	1,208,366
All other		8,620		7,776		22,662		19,389
Total revenues	$	328,589	$	327,720	$	926,055	$	1,227,755

Segment profit
Revenue	$	319,969	$	319,944	$	903,393	$	1,208,366
Cash cost of sales (exclusive of depreciation and depletion)(1)		237,216		229,744		705,748		773,605
Other segment items(2)		2,309		1,854		5,924		4,884
Segment profit	$	80,444	$	88,346	$	191,721	$	429,877

Transportation and royalties
Mining	$	79,347	$	78,029	$	237,031	$	293,909
All other		—		—		—		—
Total transportation and royalties	$	79,347	$	78,029	$	237,031	$	293,909

Depreciation and depletion
Mining	$	41,492	$	34,415	$	125,497	$	108,496
All other		2,102		2,227		6,629		6,319
Total depreciation and depletion	$	43,594	$	36,642	$	132,126	$	114,815

Assets
Mining	$	2,540,831	$	2,433,606	$	2,540,831	$	2,433,606
All other		141,965		146,842		141,965		146,842
Total assets	$	2,682,796	$	2,580,448	$	2,682,796	$	2,580,448

Capital expenditures
Mining	$	81,353	$	114,196	$	222,599	$	321,108
All other		1,225		1,682		3,455		5,434
Total capital expenditures	$	82,578	$	115,878	$	226,054	$	326,542

(1)

The significant expense category and amounts align with the segment-level information that is regularly reviewed by the CODM, inclusive of transportation and royalties and exclusive of depreciation and depletion.

(2)

Other segment items include non-cash charges to cost of sales (exclusive of depreciation and depletion) of asset retirement obligation accretion and valuation adjustments and stock compensation expense.

WARRIOR MET COAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)

For the three and nine months ended September 30, 2025 and 2024, the Company's Mining segment had revenues comprising greater than 10% from the following customers:


	For the three months ended September 30,				For the nine months ended September 30,
Customers(1)	2025		2024		2025		2024
Customer A	$	51,234	$	—	$	105,117	$	—
Customer B		38,837		—		—		—
Customer C		—		53,445		—		190,138
Customer D		—		45,322		—		190,811
Customer E		—		35,245		—		182,075
Customer F		—		—		—		178,087

(1)

Customers with a zero did not trip the 10% quantitative threshold for that period.

The Company evaluates the performance of its segment based on Segment Adjusted EBITDA, which is defined as net income adjusted for other revenues; cost of other revenues; depreciation and depletion expense; selling, general and administrative expenses; interest income, net; income tax benefit (expense) and certain transactions or adjustments that the CODM does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA should not be considered as an alternative to cost of sales under GAAP and may not be comparable to other similarly titled measures used by other companies. Below is a reconciliation of Segment Adjusted EBITDA to net income (loss), which is its most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands):


	For the three months ended September 30,						For the nine months ended September 30,
	2025			2024			2025			2024
Segment Adjusted EBITDA	$	80,444		$	88,346		$	191,721		$	429,877
Other revenues		8,620			7,776			22,662			19,389
Cost of other revenues		(7,546	)		(8,854	)		(23,629	)		(29,491	)
Depreciation and depletion		(43,594	)		(36,642	)		(132,126	)		(114,815	)
Selling, general and administrative		(17,200	)		(11,510	)		(47,566	)		(45,861	)
Interest income, net		2,128			7,257			7,508			22,616
Income tax benefit (expense)		13,746			(4,607	)		15,466			(32,248	)
Net income	$	36,598		$	41,766		$	34,036		$	249,467

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and nine months ended September 30, 2025 and September 30, 2024. 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, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 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.”

Overview

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, Mine No. 4 and Mine No. 7. We also commenced longwall operations at our transformational Blue Creek mine based in Alabama eight months ahead of schedule in October 2025.

As of December 31, 2024, based on a reserve report prepared by Marshall Miller & Associates, Inc. ("Marshall Miller"), Mine No. 4 and Mine No. 7, had approximately 82.4 million metric tons of recoverable reserves and our Blue Creek mine contained 69.0 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves, which total 108.7 million metric tons. 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 Australia Index Price (the "S&P Platts Index"). Our Mine No. 4 and Blue Creek steelmaking coal are a High Volatility A ("HVA") quality that typically trades at a larger discount to the price of coal from Mine No. 7. We now primarily target the LV hard coking coal indices price for our Mine No. 4 and Blue Creek mine coal. Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and Low Vol to High Vol. 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 steel producers outside of the United States. 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 would materially decrease, which could also materially adversely affect demand for our steelmaking coal.

Commencement of Blue Creek Longwall

On February 21, 2025, we provided an update on the Blue Creek project. Due to the implementation of innovative technologies and best practices we increased nameplate capacity of the Blue Creek mine 25% to 5.4 million metric tons from the original production plan of 4.4 million metric tons. The additional capacity increases our overall nameplate capacity by 75%, from 7.3 million metric tons per year to 12.7 million metric tons per year. We also have the ability to increase our overall nameplate capacity to 83% or an additional 0.6 million metric tons to 6.0 million metric tons per year by adding an additional continuous miner unit. We expect the addition of Blue Creek to enhance our already advantageous position on the global cost curve, improve our profitability and cash flow generation, and cement our position as a leading pure play steelmaking coal producer.

We commenced longwall operations at the Blue Creek mine eight months ahead of schedule and on budget in October 2025 and expect the commissioning towards full production to be completed in early 2026. Due to the accelerated startup of the longwall, we expect to produce approximately 1.6 million metric tons in 2025, of which we have produced 702 thousand metric tons as of September 30, 2025 and expect to produce approximately 4.1 to 4.4 million metric tons in 2026, which is an increase from the original estimated 2.7 million metric tons.

Other significant milestones achieved in the development of the Blue Creek project were the completion and installation of the Blue Creek overland clean coal belt along with the remaining modules of the preparation plant in October 2025, and made significant progress on the barge loadout facility. We have invested approximately $887.7 million in the project to date, including $64.2 million in the third quarter of 2025 and $171.2 million year-to-date. We remain on budget and expect to spend a total of $225 to $250 million in 2025 on the continued development of Blue Creek. Our baseline total project cost estimate ranges from $995 million to $1.075 billion. We expect to have largely spent any remaining amounts for Blue Creek after the end of the fiscal year by the end of the first quarter of 2026.

Strategic Expansion Through Federal Lease Acquisition

At the end of the third quarter of 2025, we were the successful bidder in a federal coal lease sale administered by the Bureau of Land Management (the "BLM"). The coal leases include approximately 14,050 acres in Tuscaloosa County, Alabama, with an estimated 53 million metric tons of high-quality steelmaking coal reserves. The total bid for the leases was $46.8 million and the acquisition of these leases represents a significant step in our long-term growth strategy, enhancing our reserve base and extending the life of our core mining operations. During the third quarter of 2025, we made the first deposit payment of $9.4 million of the total $46.8 million, which is refundable if the transaction does not close. Once we have closed this acquisition, the newly leased areas will be adjacent to existing infrastructure, allowing for efficient integration into our current operations and capital planning. While several regulatory and administrative steps remain before the acquisition is finalized, we are actively engaged with the relevant agencies to ensure timely progress and compliance with all requirements.

Recent Developments

Weak market conditions continued into the third quarter of 2025 marked by continued weakness in the global steelmaking coal industry, with premium low-vol index prices declining 13% from the prior year comparable quarter and 27% year-over-year. The Platts Premium Low-Vol index averaged $183.51 per metric ton for the third quarter of 2025 compared to $210.67 for the third quarter of 2024. The lower seaborne prices were driven by weak steel demand from China and India, trade and tariff uncertainties, a slowdown in global economic growth and seasonal demand decline. As of October 10, 2025, the Platts index price for premium LV coal was $192.00 per metric ton. Despite the continued weakness of Premium Low-Vol index prices, second tier coals, such as HVA and LV hard coking coal, have seen a material improvement in price relative to Premium Low-Vol index prices, improving from a low of 76% of the Premium Low Vol index price in July 2025 to a high of 89% of the Premium Low Vol index price in September 2025. Per the Wood Mackenzie global metallurgical coal short-term outlook released in September 2025, a gradual firming is anticipated for premium LV coal, supported by the seasonal return of Indian buyers after the monsoon season. This seasonal restocking cycle, combined with resilient steel production, positions India as a pivotal source for near-term demand. Premium LV coal is expected to remain volatile but broadly rangebound between $185.00 and $195.00 per metric ton for the remainder of the year.

The United States government continues to engage in a broad range of tariffs on foreign goods imported into the U.S., with certain nations and regions responding with retaliatory tariffs on U.S. goods. The trade and tariff uncertainties have continued to contribute to lower seaborne prices. Any new tariffs as well as other trade measures that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for steelmaking coal, disruptions in our supply chain, material changes in the pricing of steelmaking coal, limits on trade with the U.S. or other potentially adverse economic outcomes. It is too early to quantify the impact of the tariffs on the Company's financial statements. We continue to analyze the impact of tariffs on our business and actions we can take to minimize their impact.

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 metallurgical 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 metallurgical 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 are currently assessing the impact of the OBBBA on our consolidated financial statements.

Collective Bargaining Agreement

How We Evaluate Our Operations

As discussed in Note 12 - Segment Information to our condensed financial statements included in Part I, Item 1 of this Form 10-Q, following the commencement of revenue-generating activities for the Blue Creek mine during the three months ended June 30, 2025, the manner in which our chief operating decision maker, the Chief Executive Officer, measures financial performance and allocates resources changed. We reassessed our segment reporting and determined that we continued to have one reportable segment identified as Mining which consists of Mine No. 4, Mine No. 7 and the Blue Creek mine.

We determined that our natural gas and royalty businesses did not meet the criteria in ASC 280, Segment Reporting, to be considered as a reportable segment. Therefore, we have included their results in an "all other" category as a reconciling item to consolidated amounts. We recast prior period information related to the change in segments, however, there were no revenues or cost of revenues associated with the Blue Creek mine.

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 EBITDA (as defined below), a non-GAAP financial measure; (ii) sales volumes and average net 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.


	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2025			2024			2025			2024
Segment Adjusted EBITDA	$	80,444		$	88,346		$	191,721		$	429,877
Metric tons sold		2,137			1,688			6,120			5,523
Metric tons produced		2,040			1,739			6,179			5,570
Average net selling price per metric ton	$	149.73		$	189.54		$	147.61		$	218.79
Cash cost of sales per metric ton	$	111.00		$	136.10		$	115.32		$	140.07
Cost of production %		67	%		66	%		67	%		63	%
Transportation and royalties %		33	%		34	%		33	%		37	%
Adjusted EBITDA	$	70,641		$	78,492		$	163,697		$	394,634

Segment Adjusted EBITDA

We define Segment Adjusted EBITDA as net income adjusted for other revenues; cost of other revenues; depreciation and depletion expense; selling, general and administrative expenses; interest income, net; income tax expense (benefit) 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 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 dividends;

•

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.

Sales Volumes and Average Net Selling Price

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 on 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 LV and HVA coal that we sell. We evaluate the price we receive for our steelmaking coal based on our average net selling price per metric ton.

Our average net selling price per metric ton represents our coal net sales revenue divided by total metric tons of coal sold. In addition, our average net selling price per metric ton is net of demurrage and quality specification adjustments. We normally compete on a delivered basis when negotiating contract and spot transactions with our global customers. However, depending on market dynamics and other circumstances, the burden of ocean freight may be borne entirely by the supplier, shared between both partners, or assumed entirely by the customer. In the instance when we are responsible for the freight, the freight costs will reduce our net sales revenues and impact our net selling price realizations.

Cash Cost of Sales

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 accounting principles generally accepted in the United States ("GAAP"), are classified in the Condensed Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce met coal and sell it FOB 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 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.

We believe that this non-GAAP financial measure provides additional insight into our operating performance, and reflects how management analyzes our operating performance and compares that performance against other companies for purposes of business decision making by excluding the impact of certain items that management does not believe are indicative of our core operating performance. We believe that cash cost of sales presents a useful measure of our controllable costs and our operational results by including all costs incurred to produce met coal and sell it FOB at the Port of Mobile in Alabama. Period-to-period comparisons of cash cost of sales are intended to help management identify and assess additional trends that potentially impact us and that may not be shown solely by period-to-period comparisons of cost of sales. Cash cost of sales should not be considered an alternative to cost of sales or any other measure of financial performance or liquidity presented in accordance with GAAP. Cash cost of sales excludes some, but not all, items that affect cost of sales, and our presentation may vary from the presentations of other companies. As a result, cash cost of sales as presented below may not be comparable to similarly titled measures of other companies.

The following table presents a reconciliation of cash cost of sales to total cost of sales, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.


	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2025			2024			2025			2024
Cost of sales (exclusive of depreciation and depletion)	$	239,525		$	231,598		$	711,672		$	778,489
Asset retirement obligation accretion		(965	)		(702	)		(2,896	)		(2,107	)
Stock compensation expense		(1,344	)		(1,152	)		(3,028	)		(2,777	)
Cash cost of sales	$	237,216		$	229,744		$	705,748		$	773,605

Adjusted EBITDA

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

We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net income and our presentation of Adjusted EBITDA may vary from that presented by other companies.

The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.


	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2025			2024			2025			2024
Net income	$	36,598		$	41,766		$	34,036		$	249,467
Interest income, net		(2,128	)		(7,257	)		(7,508	)		(22,616	)
Income tax (benefit) expense		(13,746	)		4,607			(15,466	)		32,248
Depreciation and depletion		43,594			36,642			132,126			114,815
Asset retirement obligation accretion (1)		1,331			1,302			3,993			3,897
Stock compensation expense (2)		5,211			874			15,309			15,061
Other non-cash accretion (3)		494			451			1,483			1,353
Mark-to-market gain on gas hedges (4)		(710	)		-			(295	)		-
Business interruption (5)		(3	)		107			19			409
Adjusted EBITDA	$	70,641		$	78,492

WARRIOR MET COAL, INC. 10-Q