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Merger with Arch Resources, Inc.
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Merger with Arch Resources, Inc. MERGER WITH ARCH RESOURCES, INC.:
On January 14, 2025, Core Natural Resources, Inc. (formerly known as CONSOL Energy Inc.), a Delaware corporation (the “Company”), completed its previously announced merger of equals transaction with Arch Resources, Inc., a Delaware corporation (“Arch”), pursuant to that certain Agreement and Plan of Merger, dated as of August 20, 2024 (the “Merger Agreement”), by and among the Company, Mountain Range Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and Arch. Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Arch (the “Merger”), with Arch continuing as the surviving corporation and as a wholly-owned subsidiary of the Company. In connection with the Merger, the Company issued 24.3 million shares of its common stock, which represents approximately 45% of the issued and outstanding shares of Company common stock after giving effect to such issuance. Based upon the closing price of the Company's common stock on January 13, 2025, the purchase consideration was approximately $2,481,368.

Prior to the closing of the Merger, on January 13, 2025, the Company purchased an aggregate principal amount of $98,075 of the outstanding (i) Solid Waste Disposal Facility Revenue Bonds (Arch Resources Project), Series 2020, and (ii) Solid Waste Disposal Facility Revenue Bonds (Arch Resources Project), Series 2021 (together, the “Arch Bonds”), which were issued by the West Virginia Economic Development Authority for the benefit of Arch (the “Arch Bond Purchase”). The Company also consented to the release of all liens, mortgages and security interests granted or purported to be granted pursuant to the security documents relating to the Arch Bonds and to the termination of all such security documents. The $98,075 of Arch Bonds purchased by the Company constituted all of the outstanding Arch Bonds. Upon the closing of the Merger, the pre-existing contractual relationship between the Company and Arch resulting from the Arch Bond Purchase became an intercompany relationship on a consolidated basis and, as such, was effectively settled on January 14, 2025. As such, total consideration transferred includes the effect of the Arch Bond Purchase and assumed liabilities excludes the obligations that were effectively settled. The settlement of this pre-existing relationship between the Company and Arch did not result in any material gain or loss. The Arch Bonds were successfully remarketed and reissued on March 27, 2025 to third-party investors. See Note 13 - Long-Term Debt for additional information.
The Merger joined two proven leadership teams and operating platforms to establish Core, a premier North American coal producer and exporter of high-quality, low-cost coals with offerings ranging from metallurgical to high calorific value thermal coals. With mining operations and terminal facilities across six states, Core owns 11 mines, including one of the largest, lowest cost and highest calorific value thermal coal mining complexes in North America and one of the largest, lowest cost and highest quality metallurgical coal mine portfolios in the United States. Core also has access to global markets via ownership interests in two export terminals on the U.S. Eastern seaboard, along with strategic connectivity to ports on the West Coast and Gulf of Mexico.
The Consolidated Statement of (Loss) Income for the three months ended March 31, 2025 includes Revenues of $505,596 and a Loss Before Income Tax of $78,736 attributable to Arch since the closing of the Merger on January 14, 2025. Merger-related costs before tax of approximately $49,182, which consisted of transaction costs of $20,490 and employee-related costs of $28,692, were incurred during the three months ended March 31, 2025. These costs have been reflected in Merger-Related Expenses in the Consolidated Statement of (Loss) Income for the three months ended March 31, 2025 and are reflected in the pro forma earnings for the three months ended March 31, 2024 in the table below.

The Company applied the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations, and recognized assets acquired and liabilities assumed at their estimated fair value as of the closing date of the Merger. Certain information necessary to complete the purchase price allocation is not yet available, including, but not limited to, final appraisals of assets acquired and liabilities assumed. As such, the preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. The Company will continue to obtain information to assist in finalizing the fair values of assets acquired and
liabilities assumed, which may differ materially from these preliminary estimates. The final purchase price allocation may include changes in allocations to mineral reserves, real and personal property and other changes to assets and liabilities. The Company expects to complete the purchase price allocation once it has received all necessary information, at which time the value of the assets acquired and liabilities assumed will be revised if necessary.

The following table presents the preliminary allocation of the aggregate purchase price based on estimated fair values:
Preliminary Purchase Price Allocation
Total Purchase Price Consideration$2,481,368 
Effective Settlement of Pre-Existing Relationships95,636 
Total Consideration Transferred$2,577,004 
Assets Acquired:
Cash and Cash Equivalents$217,593 
Short-Term Investments22,969 
Trade Receivables, net161,670 
Other Receivables, net6,483 
Inventories307,175 
Other Current Assets13,117 
Property, Plant and Equipment, net2,630,296 
Funds for Asset Retirement Obligations150,033 
Other Noncurrent Assets, net92,594 
Total Assets Acquired$3,601,930 
Liabilities Assumed:
Accounts Payable$211,227 
Current Portion of Long-Term Debt4,104 
Other Accrued Liabilities146,351 
Long-Term Debt6,667 
Postretirement Benefits Other Than Pensions37,118 
Pneumoconiosis Benefits111,313 
Asset Retirement Obligations248,773 
Workers’ Compensation36,254 
Salary Retirement786 
Deferred Income Taxes166,173 
Other Noncurrent Liabilities56,160 
Total Liabilities Assumed$1,024,926 
Net Assets Acquired$2,577,004 
The fair value and gross contractual amount of receivables acquired was $170,742. The Company expects to collect the entire contractual amount.

The fair value of acquired property, plant and equipment, which primarily includes mineral reserves and real and personal property, was measured using a combination of cost and income approach based on inputs that are not observable in the market and, as such, are Level 3 fair value measurements. Significant inputs used in the income approach included estimates of forecasted cash flows, which are impacted by the forecasted market price of coal as well as the expected timing of significant capital expenditures, among others. Significant inputs used in the cost approach included, but were not limited to, the replacement costs for similar assets, relative age of the assets, and any potential economic or functional obsolescence associated with the assets. The preliminary application of purchase accounting resulted in fair value adjustments of approximately $1,400,000.
As part of the preliminary purchase price allocation, the Company identified certain intangible assets related to certain contracts for which the contractual terms were preliminarily identified as being favorable in relation to current market terms. The estimated fair value of the identified intangible assets was $32,000 and was determined using the income approach based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. Significant inputs to the valuation of the identified intangible assets include future revenue estimates, future cost assumptions, estimated contract renewals, a discount rate assumption and an estimated required rate of return on the assets, among others. The identified intangible assets are amortized over their contractual life of approximately four years on a straight-line basis, which reflects the pattern in which the Company expects to consume the economic benefits of the assets.

The following unaudited pro forma information for the Company includes the results of operations as if the Merger had been consummated on January 1, 2024. The unaudited pro forma information is based on historical information and is adjusted for depreciation and depletion related to the fair value step-ups of property, plant and equipment as discussed above. Non-recurring merger-related costs before tax of $141,880, which consisted of total transaction costs of $76,153 and total employee-related costs of $65,727, have been reflected in the 2024 period. Employee-related costs primarily relate to the acceleration of the vesting of certain share-based awards granted to certain executives and employees of the Company and Arch prior to the Merger, as well as financial impacts of benefits provided under change in control agreements. Additionally, $2,559 of inventory step-up amortization related to the inventory acquired in the Merger has been reflected in the 2024 period. The pro forma information does not include any anticipated cost savings or other effects of the Merger. Accordingly, the unaudited pro forma information does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations. Pro forma adjustments were tax-effected at the statutory tax rate of 21% percent for purposes of calculating net (loss) income in the table below.

Three Months Ended
March 31,
20252024
Revenues$1,070,702 $1,227,167 
Net (Loss) Income$(80,308)$11,618