Good afternoon. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Warrior 4th Quarter and Full Year 2025 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following today's presentation, there will be an opportunity to have a question and answer session. This call today is being recorded and will be available for replay once the call is over on the company's website. I would now like to turn the call over to Brian Chopin, Chief Accounting Officer and Controller. Please go ahead, sir.

Good afternoon, and welcome, everyone, to Warrior's fourth quarter and full year 2025 earnings conference call. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the private securities litigation. reformat. Forward-looking statements, by their nature, address matters that are to different degrees uncertain. These uncertainties, which are described in more detail in the company's annual and quarterly reports filed with the SEC, may cause their actual future results to be materially different from those expected in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. For more information regarding forward-looking statements, please refer to the company's press releases and SEC filings. We will also be discussing certain non-GAAP financial measures, which are defined and reconciled to comparable GAAP financial measures in our fourth quarter press release furnished to the SEC on Form 8 , which is also posted on our website. Additionally, we will be filing our Form 10-K for the year ended December 31, 2025 with the SEC this afternoon. You can find additional information regarding the company on our website at www.warriormetcole.com, which also includes a fourth quarter supplemental slide deck that was posted this afternoon. today on the call with me are mr. Walt Scheller chief executive officer and mr. Dale Boyles chief financial officer after our formal remarks we will be happy to answer any questions with that I will now return the call over to Walt thanks Brian hello everyone and thank you for

taking the time to join us today to discuss our fourth quarter and full year 2025 results. I'll start by providing an overview of the quarter before Dale reviews our results in additional detail. 2025 was a transformative year for Warrior as Blue Creek began reshaping our production profile, cost structure, and long-term earnings potential. This performance was exemplified by our fourth quarter operational and financial results which exceeded our expectations as we previously communicated the longwall operations at blue creek began production during the fourth quarter eight months ahead of schedule on budget and funded by cash flows from operations in continuing our trend of operational excellence throughout the entire blue creek project, the ramp-up of the Blue Creek Longwall was remarkably smooth, especially for a project of this scale, and delivered a strong operating performance during the fourth quarter. We received an annualized run rate of production during the quarter that well supports our increased volume guidance for 2026. I'll discuss our 2026 guidance later in my comments. Our strong performance in the fourth quarter, including a record-high quarterly sales volume, wrapped up a remarkably successful year despite weak market conditions for steel making coal we achieved double digit volume growth in both sales and production volumes for the full year 2025 which were also record high levels of output for the company this performance continued to reduce our first quartile cash costs leveraging the inherently lower cost structure of the blue Creek mine. In addition to the Blue Creek ramp-up, both Mine 7 and Mine 4 continued their high standards of strong performance, which is particularly important to the overall success of the company. Mine 4 set a new record-high output for both sales and production volume. Total sales volume for 2025 was 9.6 million short tons, a record high, and a 21% increase over the prior year production volume was 10.2 million short tons also a record high and a 24% increase over 2024 now let me turn to more specifics on the market conditions during the fourth quarter before I share more detail on our operational and financial performance the primary underlying drivers of the weak steelmaking coal markets for the fourth quarter or a continuation of the same factors we've been discussing each quarter for the past two years. In fact, Chinese steel export volumes for 2025 set a new record high of 119 million metric tons, a 7.2% increase year-over-year. Chinese crude steel production decreased by 4.4% during the same period, prompting the country to contemplate production control and implement export licenses. Beyond the sustained strength in key markets such as India, which grew its pig iron production by over 6% in 2025, global steel fundamentals have not shown significant improvement in the last couple of years. While global steelmaking coal markets remain challenged, a continuation of trends we've navigated successfully for the past two years, Warrior's disciplined execution and early contributions from blue creek allowed us to outperform despite the environment our primary index the pov fob australia performed above our expectations for the fourth quarter and averaged 182 dollars per short ton which was the highest quarterly average in 2025 and marked the first time at that level since december 2024 the index average was nine percent or 15 dollars per ton higher than the third quarter 2025 and was 1% lower than the fourth quarter 2024 as for the main second tier indices the Australian LV HCC index price continued its recovery from its low point in the second quarter and averaged $154 per short ton for the fourth quarter this was $17 per ton or 13% higher than the third quarter 2025 and 1% higher than the fourth quarter 2024 as a result the relativity of australian ld hcc index price to the australian pld index price improved from 82 percent for the third quarter to 85 for the fourth quarter 2025. in contrast to the australian ld hcc index price the average east coast hva index price decreased six dollars per ton or four percent in the fourth quarter from the third quarter and averaged 135 dollars per short ton as a result the relativity decreased from 85 percent for the third quarter to 75 percent for the fourth quarter 2025. we achieved a gross price realization of 75 percent for the fourth quarter 2025 compared to 83 percent in the third quarter 2025. while the average of both main pricing indices increased in the fourth quarter compared to the third quarter 2025 our lower gross price realization was primarily driven by a combination of four factors first our sales mix of high vol a quality was 8 percent higher second that higher sales mix of high vol a quality was primarily sold into the Pacific Basin we sold 18 percent more volume into the Pacific basin in the fourth quarter than the third quarter 2025 third the merge costs were temporarily higher in the fourth quarter due to longer vessel loading queues that were attributed to modernization work on a ship loader at the terminal and fourth we continue to experience elevated freight rates in the pacific basin as we continue to ramp up blue creek production and sales volume our quarterly gross price realization may be volatile, depending upon the relative index price, product mix, geography, tariffs, and freight rates to the Pacific Basin. However, on a long-term basis, including Blue Creek, we expect our annual gross price realization to be approximately 80% to 85%, assuming the relativities of the Australian LVHCC index price and U.S. East Coast HVA index price to the Australian PLV index price historical averages. However, this may not be achievable in 2026 and not until the overall market fundamentals of supply and demand become more balanced across the regions of the world. While Blue Creek products mix will influence our long-term average net selling price, Blue Creek's significantly lower cost structure is expected to more than offset this and drive substantial margin expansion for the company. Strong contractual demand combined with excellent performance from our legacy mines and the additional contribution from Blue Creek enabled Warrior to achieve a record-high quarterly sales volume in the fourth quarter of 2.9 million short tons. This result compares to 1.9 million tons in the same quarter of 2024, representing a 53 percent increase we sold 881,000 tons of Blue Creek steel making coal during the fourth quarter 2025 which were contractual volumes sold primarily into Asia ourselves by geography for the fourth quarter break down as follows 57% into Asia 34% into Europe and 9% into South America our Our spot volume was 6% for the fourth quarter of 2025 and was 9% for the full year. Production volume in the fourth quarter of 2025 was a record high 3.4 million short tons compared to 2.1 million in the same quarter of last year, representing a 61% increase. Production from our Blue Creek mine was 1.3 million tons during the fourth quarter and exceeded our expectations. Our coal inventory levels increased to 1.6 million short tons at the end of December compared to 1.1 million tons at the end of September 2025. The increase in inventory reflects the early startup of Blue Creek's longwall production. The early startup of the Blue Creek longwall was a major contributor to the higher volumes and profitability in the fourth quarter and for the full year 2025. As I noted earlier, the ramp up of production went smoothly and has already achieved the quarterly run rate of 1.5 million short tons however given the expected weak market conditions for steel making coal in 2026 we will start the year with an expected production level of 4.5 million short tons from Blue Creek we plan to sell the excess inventory that was built up in the fourth quarter before we ran to a higher production level we plan to ramp production in line with increases in contractual volumes to ensure we support pricing discipline while maximizing long-term value financially we dedicated another 69 million dollars of capital expenditures in the fourth quarter and 240 million dollars for the full year 2025 to the Blue Creek project that brings the total project capital expenditures to date to 957 million dollars as a reminder this is on a budget and fully paid out of cash flow without any funded debt our total The capital project estimate remains unchanged, ranging from $995 million to $1,075,000,000. The remaining capital to be spent on the Blue Creek project is expected to occur by the end of the first quarter of 2026. The remaining work is primarily related to finishing the barge loadout, finishing a third storage silo at the rail loadout, paving roads, completing storage and shop buildings, and other final project details none of this final work should have any impact on production from the new mine let me take a moment to step back and summarize a few key highlights for the year 2025 first we were able to start the Blue Creek long wall eight months ahead of schedule remain on budget and fund the entire project at a cash flow from operations second adding Blue Creek to our production profile as significant scale to our operations and significantly further improves the company's first quartile cost curve position which is expected to drive margin expansion in the future third we were successful in strategically expanding our total reserve base by finalizing two federal coal leases to obtain 53 million short tons of additional reserves it's also created access to other additional privately owned reserves Fourth, while we made significant investments in Blue Creek, we managed our costs and spending to meet or exceed all of our guidance targets for 2025. I'll now ask Dale to address our fourth quarter results in greater detail.

Thanks, Walt. Our fourth quarter results continue to the sequential improvement quarter after quarter throughout 2025. As Walt discussed earlier, the steelmaking coal markets continue to be pressured in the fourth quarter by the same factors that we have discussed over the last two years. Despite these market conditions, we continue to outperform expectations for 2025 as we met or exceeded our full year 2025 guidance targets on the back of a strong fourth quarter both operationally and financially. Let me first highlight our fourth quarter financial results compared to the third quarter of 2025. Our fourth quarter adjusted EBITDA of $93 million was 31% higher than the third quarter of 2025, primarily due to the following factors. First, our sales volumes were 22% higher in the fourth quarter, including an increase of tons sold from Blue Creek. Second, our average net selling price was $6 per ton lower in the fourth quarter, primarily due to a higher mix of high ball A volume sold, and that volume was sold into the Pacific Basin on a CFR basis at elevated freight rates. In addition, demurrage was temporarily higher in the fourth quarter, as Walt noted earlier. This result was offset by the increase in the average price indices quarter over quarter. Third, cash costs per ton were $7 lower in the fourth quarter and were primarily attributed to Blue Creek's inherently low cost structure, which increased our cash margin per ton. And finally, operating cash flows of $76 million were $29 million lower than the third quarter of 2025. This result is attributed to the increase in working capital, primarily for accounts receivable and inventory as we ramped up the Blue Creek long wall in the fourth quarter our spending for capital expenditures and mine development were a combined twenty million dollars lower in the fourth quarter compared to the third quarter of 2025 primarily due to lower investments in Blue Creek free cash flow was about nine million dollars lower in the fourth quarter now let me compare the fourth quarter of 2025 to the prior year fourth quarter results warrior recorded net income of 23 million dollars or 44 cents per diluted share compared to net income of 1 million dollars or 2 cents per diluted share in the same quarter of 2024 we reported adjusted EBITDA 93 million dollars in the fourth quarter of 2025 compared to 53 million dollars in the same quarter of 2024 an increase of 75% our adjusted EBITDA margin grew to 24% in the fourth quarter of 2025 compared to 18% in the same quarter of last year despite the PLV index being 1.3% lower in the fourth quarter of 2025 on a per ton basis our adjusted EBITDA margin grew to $32 per short time in the fourth quarter of 2025, compared to $28 in last year's fourth quarter. The primary drivers of these improvements came from 53% higher sales volumes, lower cash cost, including the low-cost Blue Creek tons sold, lower variable transportation and royalty cost, and tightly managing and controlling all other production costs. These improvements were partially offset by a 16% lower average net selling price. Total revenues were $384 million in the fourth quarter of this year compared to $297 million in the same quarter of last year. The total increase of $87 million was primarily due to the 53% higher sales volumes impact of $154 million, all set by the impact of a decrease in average gross selling prices of $52 million and a higher mix of high-ball 8 tons sold of $13 million. In addition, demurrage and other charges were $6 million higher compared to last year's fourth quarter. This resulted in an average net selling price of $130 per short ton in the fourth quarter of 2025 compared to $155 per ton in the fourth quarter of last year. Cash cost of sales were $270 million, or 72% of mining revenues, in the fourth quarter this year compared to $226 million or 77% of mining revenues in the fourth quarter of last year. Of the $44 million net increase in cash cost of sales, there was a $119 million increase in cost which were attributed to the 53% increase in sales volumes. These higher costs were offset partially by $75 million of lower costs that were driven by leverage of lower cost blue creek tons sold and lower variable transportation royalty costs on lower average steel making coal price indices in addition we continue to rationalize and tightly manage our spending on supplies repairs and maintenance expenses throughout the operations to maintain our low cost profile tax cost of sales per short ton f ob port was approximately $94 in the fourth quarter of 2025 compared to $120 in the same quarter last year the 22 percent decrease was primarily related to lower overall spending at the legacy mines of $11 per ton due to tightly managing our overall spending more variable station royalty cost of five dollars per ton on lower steel oil prices and ten dollars per ton from the incremental sales of low-cost Blue Creek tons. These lower costs resulted in higher cash margins per ton. Our fourth quarter 2025 SG&A expenses were $18 million and were less than $1 million higher than the same quarter of the prior year, primarily due to higher employee-related expenses. Depreciation and depletion expenses were $56 million, which was higher than the fourth quarter of 2024, primarily due to the additional assets placed in the service at Blue Creek and the higher sales volumes in 2025 we recorded income tax expense of approximately 13 million dollars on pre-tax income of 36 million dollars in the fourth quarter 2025 our full year 2025 effective income tax rate varied from the statutory federal income tax rate of 21% primarily due to tax benefits recognized for depletion expense, marginal gas well credits, and a form-derived intangible income deduction which exceeded pre-tax book income, resulting in an effective income tax rate of a negative 5% for the full year. Now let's turn to cash flows from the fourth quarter of 2025. Cash flows from operating activities were $76 million in the fourth quarter of 2025 and were $22 million higher than the previous year's fourth quarter despite Blue Creek's negative impact on working capital working capital increased by eight million dollars during the fourth quarter as the company ramped up production and sales volumes at Blue Creek free cash flow was a negative 28 million dollars due to 76 million dollars in operating cash flows less cash used for capital expenditures in mind development of a hundred and four million dollars capital spending totaled $94 million, which included $69 million spent on Blue Creek, as previously noted. Mine development costs for Blue Creek in the fourth quarter were $10 million. Now that Blue Creek Longwall has started production, we do not expect to incur any mine development costs in 2026. While investments in Blue Creek and other development projects drove higher capital spending in 2025, the company continued to maintain strong liquidity and delivered year-over-year improvements in cost efficiency, positioning Warrior for enhanced profitability as Blue Creek ramps toward full production. Our total available liquidity at the end of the fourth quarter this year was $484 million and consisted of cash and cash equivalents of $300 million, short-term investments of $43 million, and $141 million available under our ABL facility. And finally, let me turn to our current outlook and guidance for the full year 2026 as detailed in our earnings release. We expect steelmaking coal markets to remain generally consistent with 2025 levels. However, we entered 2026 from a position of significant strength with higher contracted volumes, record production capacity, and a structurally lower cost base driven by blue While the assumption that prices will remain consistent with 2025 may seem conservative given the recent rally in index pricing, we believe the recent global mining production disruption and inclement weather events may be temporary, and we expect PLV prices may revert downward following the remediation of these disruptions. We anticipate total sales and production volumes to be significantly higher in 2026 than 2025 as a result of starting the Blue Creek longwall eight months early and reaching new record high output levels overall company contracted volume for 2026 is approximately 90% of total sales volume our sales volume guidance is approximately a half million tons higher than our production volume to reduce our inventory levels to our optimal target target level of a just below 1 million short tons and lastly we expect to spend the remaining construction capex of 50 to 75 million dollars on the Blue Creek project in the first quarter of 2026 from a free cash flow perspective we expect the first half of 2026 to be free cash flow negative due to the ramp up of sales and production at Blue Creek increasing our working capital and spending the remaining project capital expenditures in the first quarter we expect to be free cash flow positive in the second half of the year obviously these expectations are highly dependent upon the steel making coal markets and actual pricing indices I will now turn it back to Walt for his final comments thanks

Dale order is exceptionally well positioned to deliver higher free cash flow and long-term value creation we expect 2026 sales volumes to be more than 30 percent higher than 2025 and production volumes to be more than 20 percent higher than 2025 driven by the contribution of the new Blue Creek mine over the entire year we expect to reduce our coal inventory levels to just below 1 million tons which has been reflected on our sales volume guidance in addition we've included approximately 4.5 million tons of production from our Blue Creek mine which could potentially be higher if we continue to be successful with the trial shipment and engage in more long-term contracts with customers currently we have 90% of our 2026 midpoint sales volume under contract including 85% of the Blue Creek volume as you look at current steelmaking coal market conditions pricing levels remain notably strong and well above our original expectations. We believe this elevated pricing environment is primarily due to tightness in the premium quality segment as a result of recent supply constraints stemming from Australian weather disruptions and mine production-related challenges in Australia. While it's difficult to predict how quickly supply chains will normalize, we anticipate that prices will remain supported through most of the first quarter. However, we believe these disruptions are temporary, and unless global steel fundamentals significantly improve, PLD prices should retreat and continue to be impacted by the same market factors that we've seen over the last two years. As a result of the recent increase in PLD price, the East Coast highball A price has become disconnected from the Pacific Basin indices and may weigh down overall gross price realizations due to the abundant supply of that quality of coal. While we have lots of cautious optimism, we run our company to prepare for the downside risk of weak steelmaking coal markets and hope we're conservative on our price assumptions, as Dale just noted in his comments. In conclusion, 2025 marked a transformational year for Warrior. The early start-up of Blue Creek and the strategic expansion of our reserve base has strengthened the foundation of our long-term growth strategy and significantly enhanced our ability to meet sustained global demand for premium steelmaking coal. With Blue Creek now contributing meaningfully to our scale and cost structure, we enter 2026 from a position of exceptional strength. supported by expected record volumes, a stronger first quartile cost platform, disciplined capital allocation, and a clear pathway to higher free cash flow generation. Our world-class assets, operational excellence, and commitment to long-term value creation positions Warrior to deliver stronger financial results and increase stockholder returns as we move forward. We appreciate your continued support and look forward to updating you on our progress throughout the year. With that, we'd like to open the call for questions. Operator?

Thank you. At this time, I would like to remind everyone that to ask a question, please press the star, then the number one button on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press the star, then number two button. We will now pause just a moment to compile the Q&A roster. And your first question today comes from the line of Nick Giles with B. Reilly. Please proceed.

Thanks, Operator. Good evening, guys, and congrats on the continued progress. You know, you've come out with some really robust guidance here in 2026, and costs are being guided to a range of 95 to 110, fairly wide. But, you know, just my first question was, what's the POV price assumption you're using? And then given that costs in the fourth quarter came in below the low end of this range, I mean, what would prevent, you know, that level of cost being repeated in the first half year? Thanks very much.

Thanks, Nick. Good question. The POV assumption there is a range of $185 to $215. So it's a little wider just, you know, thinking about the potential increases related to transportation and royalties with the elevated pricing here early in the year. Uncertain as to how long that will continue throughout 26, but we do expect the PLB prices to come back down.

On the cost side, good question there.

You know, strong cost performance from the existing mines in Blue Creek. So what's going to keep it that low would be prices staying this low, right, because if we have elevated pricing, which we will have in the first quarter, it appears, then obviously our transportation and royalty costs go up. So the cash cost of production should be fairly steady, but transportation and royalties would be higher.

Got it. No, I appreciate that detail, Dale. Just to confirm, you said $185 to $215. That's on a short-ton basis, correct? Okay, great. Thanks. Second one was, you know, I think you alluded to some of this in your prepared remarks, but, you know, how should we be thinking about working capital over the course of 2026? Is it fair to assume you'll build kind of early in the year here? And then same thing on the tax side. I think you had a tax benefit in 2025, but what should we be penciling in for cash taxes in 2026?

on the working capital it definitely the ramp up of accounts receivable and inventory because we'll be selling more of the Blue Creek tons this year so expect that but as we said in our prepared remarks too we're going to try to take our overall inventories down a half million tons that's probably going to come more evenly over the year so the first half the first quarter will weight heavily on working capital and we should get a little relief in the second quarter definitely in the in the second half of the year from a tax standpoint that really depends on pricing and you know that the 45x credit kicks in in 2026 and we've said that's about a 40 million dollar benefit to warriors so you know with these price assumptions I would say we might not be a cash taxpayer in 26. If prices stay at a higher level, we will be, but just not a large amount, I don't think.

Got it. Really helpful. One last one, if I could. You've been really successful in adding some federal leases here in the recent months. I think you made – there was one more tranche since we last spoke. And so I was just wondering if you could remind us what those payments look like. I think they're spread out over a number of years.

Yeah, that's right. In total, it's four years, and they're about $9 million a year. So there's four payments left.

And that would be reflected in the guide or outside the scope of the guidance? That's all in there. Got it. Well, guys, I really appreciate all the detail. I'll turn it over for now, but continue. Best of luck. Thanks.

And the next question is from George Eady with UBS. Please proceed.

Yeah, g'day, gents. Can I just go back to guidance again? I mean, you came in 600,000 tons above original production sales for $25 and $20 a ton above the original midpoint on cost. These cash cost numbers, even in my estimates, that's been putting in that PLV range you said still seem very conservative I mean can you talk through maybe how you came there still year on year like I struggle to see even running 195 PLV a short time and how you can sort of not

be looking to be guidance again thanks okay George yeah I mean we built into the guidance you know just some conservatism and we said in our comments here and hope you're wrong on the price assumptions so specifically I'm not really sure what you're targeting other than you know we tried to match the cost guidance with kind of where prices might be for the year in that range but you may have some of that early in the year and if they do that downward you would have some impact now one of the things you have to remember that was a PLB assumption and if you looked at the relativities of the low vaults HCC to the PLB that was about 85 percent and here in the fourth first quarter has been running about 80 percent so very similar to what we've seen in 25 on the flip side though the US East Coast index is running at about 65 percent relativity so anything we sell into the land and it's going to have you know some margin offset there because of that so those are some of the factors you know that we just tried to consider here and be conservative on because we don't know why the trend on the East Coast of LA index is so disconnected from the other indexes so you know just trying to think about how that might trend the

rest of this year yep okay no thanks darling just your comment earlier about being free cash by positive in the second half I mean through that comment from working capital before if I assume a sort of net neutral working cap position in second quarter and it's hard to not see your free cash by positive second quarter of it depends on prices as well but is it is a quite good chance even it's sort of us is trending a bit lower we could see a lot of free cash

in the second half and second quarter sir yeah I think we could give it for the prices have been recently if they stay that way in the first quarter we could see you know we could see the second quarter break even but you know still too early to tell there but I do think the second half we will be generating a

lot of cash yeah and just on that day also cash 300 million is that still a nice minimum buffer and should we start thinking from second half all that cash growth gets given back to shareholders and can you remind us how to think about returns from the second half or should all that come back out the door or if

not why not well I think our cash level right now at 300 million is plus the investments I guess it's about 342 so that's about where we want to see it on long-term basis maybe slightly higher so we might build some cash just a little bit there but i do expect us to start returning cash to shareholders uh in the near future now is that this year in the second half it's dependent on pricing but i would expect that you know we would start returning that cash now in what forms um you know i think what we've said and been pretty consistent about We think that'll be through a higher fixed quarterly dividend because we're going to be a significantly larger company with all the volume increases. And then we would supplement that with some special cash dividends and maybe some selected stock buybacks to take advantage of opportunities there. So I think we would see an accommodation of those forms.

all right so just on that dale like share prices below 86 today like um i think you and i both think that's cheap like why not start going now with the buyback and getting ahead of that before the stock gets more expensive i mean i think you think also the shares are probably going to get

higher like why not go early on the buyback well it's a possibility i'm not going to commit to a particular stock price uh we'll just have to look at what are the cash needs of the business at the time and what's the best distribution or the best way to distribute that cash to shareholders okay

thanks thanks dad thanks a lot thanks and the next question is from katya johnson with bmo

capital markets please proceed hi thank you for taking my questions you mentioned earlier that there's a big disconnect right between high vol-a and the POV markets. With more high vol-a volume coming to the market over next year, is there a risk that this disconnect could actually at least stay or even potentially

become wider? I think you're right. I think it will stay for a while. You know, when we look at the tons that have been brought into the market with med invest bringing their mind back online lear south coming back online and blue creek coming online uh that's quite a few tons that need to be absorbed that's going to take some time so i think that we're probably looking at a market that's fully supplied for the time being i think that will get absorbed and just over what time it takes for that to happen I'm not quite sure, but I think given some of the things where growth is occurring, I think those times will get absorbed and we'll get back to a more balanced market.

And then maybe I missed this, but Dale, you talked about working capital built in the first half. How much of a build could we see?

Well, really, it depends on the prices, Katia, because that influences our receivables quite a bit and how quickly can we bring down our inventories. But, you know, it could be upwards of $50 million or better in the first half.

Okay.

And the next question comes from Chris LaFamina with Jefferies. Please proceed.

Hey, thanks, Operator. Most of my questions have been answered, but I just have maybe one or two follow-ups. So the first is back on the point of capital returns. You know, you comment on maintaining that level of cash on the balance sheet, but you also have a net cash position. so you have financial capacity to use some debt. And I understand in mining, in particular in coal mining, balance sheet is sacred, but, you know, you'll be a low-cost producer, and if prices fall, you'll be an even lower-cost producer, and you can weather the storm pretty much no matter how bad it gets. So the question is, would you consider using balance sheet for buybacks in the environment where prices were a lot lower? I know there's a lot of hypothetical situations there, but could you use balance sheet, and if not, why wouldn't you?

That's my first question. Yeah, no, good question, Chris. I mean, I think, you know, we've kind of done things a little different than the rest of the industry, right, in the past. So, you know, if prices were to decrease quite significantly, to me, if we have that cash on the balance sheet, that would be an opportunity, a real opportunity for us to take advantage of a buyback. So I think that would be a good situation that we would look to do that.

Okay, good. I'll leave it at that. Good luck.

And the next question is a follow-up from Nick Giles with B. Riley. Please proceed.

Hey, thanks so much for taking my follow-up. There's been a lot of, you know, questions around the realizations, but just for the avoidance of any doubt, can you just remind us what you said on what you're assuming for the relativity as it relates to your guidance? Like, obviously, there's a relativity assumption attached to that cost guidance, so just curious what those are.

yeah in just overall gross price realizations we're looking at about 75 percent for the year so we hopefully we're conservative there but if you look at the East Coast index index it's 65 today and so that has a big significant impact and like say it's it's been decreasing it decreased in the fourth quarter six six bucks a ton so that went from 85 to 75 percent so a big swing during that's a third quarter to the fourth quarter I think we need to be

careful about how we look at relativities and remember that you know right now our assumption is high ball lays pretty well supplied in through and the relativities will improve, that means the low ball price has to come down to it. So I prefer to see the relativities stay apart if the high ball price isn't going to increase.

Understood. No, I appreciate that perspective, Walt. And maybe just one more if I could. You know, it looks like sustaining CAPEX ticked up by, you know, maybe $20 million or so. Not a huge step change, just given you do have a new mine coming online. What should we be assuming in kind of 2027 and beyond for sustaining capital?

Well, I think where we're looking at CapEx for this year, that's going to be pretty normal for where we are right now. I think we'll see an uptick of $20 million to $30 million a year. I don't know how quickly that will occur, but as we continue to run Blue Creek and have replacement capital for continuous miners and long walls and things like that we'll see up an uptick of 20 to 30 million dollars yeah that's

right Nick so sorry I was going to add add some to that so if you factor in Blue Creek at 20 to 30 million you're probably looking at you know 110 to 140 somewhere roughly on a run rate basis okay understood years we can pull that down depending on the price environment but you're going to be you know each year is going to increase for a while because of Blue Creek has more and more things you know need to be replaced etc going forward okay okay and

I lied I promise this will be my last question but just anything more to add on the contracting activity i think you spoke to it but you know kind of where do things stand from a contracting perspective for blue creek uh could any could any incremental contracting activity limit the volatility in your realizations or are you really um you know at the mercy of of the

market if you will i don't think it's going to limit the volatility any more than we see the high vol a price its volatility is going to be the only limit on the blue creek price volatility and in terms of volumes and percentages contracted right now we're i think about 80 80 85 percent and you know as we see that number uh increase uh and we see that inventory level come down that's where we'll start to see the opportunity to start to increase production levels because

what we've seen we can clearly do that okay well kudos to Charles and his team on that front and guys congrats again on all the progress thanks so much thank

you thanks Nick and as a reminder if you do have a question please press star then one our next question comes from Nathan Martin with the benchmark company please

proceed thanks operator good afternoon gentlemen question on mine for I mean running it at record levels really above its name plate capacity I think the last few years are you guys expecting that to continue and then related you know could you break down full year sales guide into twelve and a half to thirteen and a half million tons by mine I think it would be helpful anyone trying to understand how to think about the potential quality mix well I think we'll

see mine four running about the same level what did like this past year and mine seven running about the same level it did this past year and then we'll see the four and a half from from Blue Creek in terms of mine for mine for has done an outstanding job of managing their production up and at the same time they're spending and their their costs down and I would expect that to continue they achieved very very well last year and I don't see a reason why that will change

I appreciate that, Walt. And then I know there's some questions on shareholder returns, but maybe taking a step back, you know, how should we think about your priorities for free cash flow overall?

Well, I think the priorities once we get past Blue Creek would be to return cash to shareholders. You know, until these markets change and demand any further growth on volumes, we would be focused on shareholder returns.

all right very helpful guys that's all i had left um best of luck in 26. thank you and at this time

there are no further questions in the queue i would now like to turn the call back over to mr

scheller for any final comments that concludes our call this afternoon thank you again for joining us today and we appreciate your interest in warrior thank you this concludes today's conference you

may not disconnect your lines and have a pleasant day.