Core Natural’s 2027 High-Cv Pricing and Insurance Proceeds Timeline Clash in Earnings Calls

Date of Call: Aug 6, 2026

Financials Results

• EPS: $2.51 per diluted share, compared to $0.42 per diluted share in Q1-26

Guidance:

• High-CV thermal segment: Contracted volume >31 million tons for 2026; average realized revenue ~$58 per tonne; cash cost guidance raised $1 to $39-$40.50 per ton.
• Metallurgical segment: Contracted volume 8.7 million tons for 2026; ~6 million tons at ~$121 revenue per ton; cash cost guidance lowered $2.50 at midpoint to $86-$91 per ton.
• Powder River Basin (PRB) segment: Contracted volume ~50 million tons at $14.27 per tonne; cash cost guidance raised $0.25 to $13.25-$13.75 per ton.

Business Commentary:

Strong Financial Performance:

• Core Natural Resources Incorporated reported net income of $126 million or $2.51 per diluted share for Q2 2026, compared to $21 million in Q1 2026, with adjusted EBITDA of $324 million.
• The improvement was driven by strong operational performance in high-CV thermal and metallurgical segments and the recognition of incremental insurance proceeds from the LearSouth claim settlement.

Operational Cost Reduction:

• Cash costs in the metallurgical segment decreased to $85.65 per ton, reflecting a $7 per ton reduction quarter over quarter.
• This was due to improved mining conditions, favorable sales, and normalized power costs, alongside ongoing execution improvements at Longwall Mines.

Coal Sales and Market Dynamics:

• High-CV thermal coal sales increased to 8.4 million tons in Q2 2026 from 7.7 million tons in Q1 2026, with a realized revenue of $58.11 per ton.
• The increase was supported by strong demand and favorable sales conditions, despite low natural gas prices affecting the Powder River Basin segment's volumes.

Capital Return and Share Repurchase:

• The company returned $68 million to shareholders in Q2 2026, up from $47 million in Q1 2026, representing over 80% of free cash flow since the program's inception.
• The increase in capital returns is attributed to strong cash generation and the collection of insurance proceeds, with plans for further increases in the coming quarters.

Innovation and Diversification:

• Core Natural Resources was awarded a grant for a pilot-scale facility to extract rare earth elements and critical minerals, highlighting its focus on innovation.
• This initiative aligns with national strategic importance and aims to unlock greater value from the coal supply chain, alongside other ventures like aerospace and defense components.

Sentiment Analysis:

Overall Tone: Positive

• Management stated, 'The results of the second quarter were a testament to the continued execution of our strategy, and we are pleased to report a significant step up in our financial performance.' Also noted: 'The stage is set for a further step up in capital returns in coming quarters' and 'we are preparing CORE to succeed on all fronts.'

Q&A:

• Question from George Edie (UBS Financial): What price are you getting for 2027 tons in the high CV segment and what percent is contracted next year? Is $60 a ton about right for next year consolidated?
  Response: More than 50% contracted for 2027; India tons in $60 range, West Elk in upper 40s to low 50s; overall average realization upper 50s to low 60s.

• Question from George Edie (UBS Financial): How to forecast thermal byproduct price?
  Response: Expect $50-$55 per ton for balance of 2026, depending on export market and API2 prices.

• Question from George Edie (UBS Financial): What are the impacts of the DTA outage and latest updates?
  Response: CORE is a 35% owner; impact is manageable due to marketing efforts and insurance; exact damage and timing for full impact not yet known.

• Question from Nick Gills (B. Reilly Securities): How to think about metallurgical cost cadence and volume for back half?
  Response: Cost improvements are sustainable and may be improved further; costs could be volatile quarter-to-quarter but are at a good place.

• Question from Nick Gills (B. Reilly Securities): How should we think about cadence of share repurchases in Q3 and Q4?
  Response: Expect heavier share buyback percentages in Q3/Q4 using insurance proceeds; plan to return 75% of free cash flow to shareholders.

• Question from Nathan Martin (Benchmark Company): What is a comfortable target for liquidity and balance sheet given high cash levels?
  Response: Aim for net debt neutral balance sheet; tolerate some leverage; have liquidity to support aggressive share repurchases if share price provides opportunity.

• Question from Nathan Martin (Benchmark Company): What is the split between PAMC and West Elk for high CV guidance and breakdown of committed price tons?
  Response: ~26 million tons PAMC, ~5 million tons West Elk to reach high end of guidance; of 30.9 million tons committed, 15 million PAMC and 3.3 million West Elk in back half; 2.4 million tons linked to API2 at $110 price.

• Question from Nathan Martin (Benchmark Company): How are weak high vol markets impacting realizations and what improves the market?
  Response: Weakness is temporary and seasonal; expect improvement in back half as higher-cost production exits and new blast furnace capacity adds long-term demand, especially in Asia.

• Question from Matthew Key (Texas Capitol): What is the metallurgical production outlook for 2027?
  Response: Expect production between 8.5 million and 9 million tons for 2027.

• Question from Matthew Key (Texas Capitol): Will 2027 book have greater exposure to API2 benchmark?
  Response: Expect a very similar portfolio year-on-year between indexed and fixed-price contracts.

• Question from Chris Lapamina (Jefferies): What drove the substantial cost reductions in Q2 despite inflation?
  Response: Integration of best practices from acquired companies, schedule changes, operational improvements, and geological enhancements leading to sustainable cost improvements.

• Question from Nick Gills (B. Reilly Securities): Can you clarify DTA impact on realizations and timing for full operation?
  Response: Impact is manageable and reflected in guidance; no extra costs embedded in cash cost guide; still assessing damage; no exact timing for full operation yet.

• Question from Nick Gills (B. Reilly Securities): What are revenues and long-term opportunity for Core Innovations group?
  Response: Aerospace & defense vertical generates ~$20 million revenue; other verticals (rare earths, building products, battery tech) are early-stage but have large total addressable markets; capital allocation includes selective bolt-on acquisitions.

Contradiction Point 1

2027 High-CV Segment Contracted Volume Percentage

Contradiction on the level of 2027 volume already contracted for the High-CV segment.

George Edie (UBS Financial) - George Edie (UBS Financial)

2026Q2: Currently, more than 50% is contracted for 2027. - [Bob Braithwaite](CCO)

What is the price for 2027 tons in the high-CV segment, what percentage is contracted next year, and is $60 a ton a reasonable starting point for next year's consolidated pricing? - George Eddy (UBS)

2026Q1: For the High CV segment, roughly 50% of the 2027 volume is contracted. - [Bob Braithwaite](CCO)

Contradiction Point 2

Timing of Insurance Proceeds from Baltimore Bridge Claim

Contradiction on when insurance proceeds from a key claim will start to be received.

Nick Gills (B. Reilly Securities) - Nick Gills (B. Reilly Securities)

2026Q2: With insurance proceeds collected in late Q2, Core expects heavier share buybacks in Q3 and Q4. - [Jimmy Brock](CEO) & [Mitesh Thakkar](CFO)

How will insurance inflows and working capital affect the timing of share repurchases in Q3 and Q4? - George Eddy (UBS)

2026Q1: Approvals are expected to start trickling in during Q2. - [Mitesh Thakkar](CFO)

Contradiction Point 3

High-CV Thermal Pricing Outlook and Contracted Tons

Inconsistent guidance on pricing for 2027 and the volume breakdown of committed tons.

George Edie (UBS Financial) - George Edie (UBS Financial)

2026Q2: Currently, more than 50% is contracted for 2027... India tons are around $60 per ton, while West Elk tons are in the upper 40s to low 50s range. - [Bob Braithwaite](Chief Commercial Officer)

What is the expected price per ton for the high-CV segment in 2027, what percentage of high-CV is contracted for next year, and is $60 a ton a reasonable starting point for next year's consolidated pricing? - Nick Giles (B. Riley Securities)

20260212-2025 Q4: The pricing is largely fixed with fewer variable contracts... For the 4 million tons linked to API2, a price of ~$97 was used in guidance. The current API2 price is over $100, representing potential upside. - [Robert Braithwaite](Senior Vice President of Marketing and Sales)

Contradiction Point 4

Metallurgical Segment Production Guidance for 2027

Contradiction on the expected production volume for the metallurgical segment in 2027.

Matthew Key (Texas Capitol) - Matthew Key (Texas Capitol)

2026Q2: production from the Lear South complex is expected to be between 8.5 and 9 million tons in 2027. - [Jimmy Brock](CEO)

How will incremental production potential in the metallurgical segment in 2027 compare to 2026? - Nick Giles (B. Riley Securities)

20260212-2025 Q4: The increase is driven by: (1) Full maintenance CapEx for the now-operational Leer South mine... - [Mitesh Thakkar](CFO) and [James Brock](CEO)

Contradiction Point 5

Insurance Proceeds Timeline and Cadence

Contradiction on when major insurance proceeds will be collected.

Nick Gills (B. Reilly Securities) - Nick Gills (B. Reilly Securities)

2026Q2: With insurance proceeds collected in late Q2, Core expects heavier share buybacks in Q3 and Q4. - [Mitesh Thakkar](CFO) & [Jimmy Brock](CEO)

How will insurance inflows and working capital impact the cadence of share repurchases in Q3 and Q4? - George Eadie (UBS Investment Bank)

2025Q3: Most funds are expected to be collected in early 2026. - [Mitesh Thakkar](CFO)