REVENUE

3 Months Ended

Mar. 31, 2026

REVENUE

REVENUE

(6) REVENUE

Revenue from Contracts with Customers

We account for contracts with customers when the parties have executed the contract and are committed to performing their respective obligations, the rights of each party are identified, payment terms are identified, the contract has commercial substance, and it is probable substantially all the consideration will be collected. We recognize revenue when we satisfy a performance obligation by transferring control of a good or service to a customer.

Electric Operations

We concluded that for a Power Purchase Agreement (“PPA”) that is not determined to be a lease or derivative, the definition of a contract and the criteria in ASC 606, Revenue from Contracts with Customers (“ASC 606”), is met at the

time a PPA is executed by the parties, as this is the point at which enforceable rights and obligations are established. Accordingly, we concluded that a PPA that is not determined to be a lease or derivative constitutes a valid contract under ASC 606.

Under accredited capacity PPAs, we recognize revenue daily, based on an output method of capacity made available as part of any stand-ready obligations for contracted accredited capacity performance obligations.

For delivered energy PPAs, we recognize revenue daily for the actual delivered MWh of electricity. For the prepaid delivered energy PPAs, we recognize revenue daily for the funds received for the actual delivered MWh of electricity plus any accretion attributable to the time value of money.

When there is an outage at one of the generating units at Merom or energy hours at the Merom Hub are priced below our production cost, we have the option to make net hourly purchases of power in the MISO market to satisfy our obligations, which we record as cost of purchased power in our condensed consolidated statements of operations.

Coal operations

Our coal revenue is derived from sales to customers of coal produced at our mining facilities. Our customers typically purchase coal free on board from our mine sites where title, risk of loss, and control pass to the customer. Our customers arrange for and bear the costs of transporting their coal from our mines to their plants or other specified discharge points. Our customers are typically domestic utility companies. Coal sales agreements with our customers are fixed-priced, fixed-volume supply contracts, but some include a pre-determined escalation in price for each year and some allow for our customers to vary the fixed-volume by pre-determined quantities during a set period, such as quarterly. The terms of our coal sales agreements result from competitive bidding and extensive negotiations with customers. Consequently, the terms of these contracts vary by customer.

Coal sales agreements typically contain coal quality specifications which require the raw coal sold by us to the customer to be (i) substantially free of magnetic material and other foreign material impurities and (ii) crushed to a maximum size as set forth in the respective coal sales agreement. Price adjustments are made and billed in the month the coal sale was recognized based on quality standards that are specified in the coal sales agreement, such as British thermal unit factor, moisture, ash, and sulfur content, and can result in either increases or decreases in the value of the coal shipped. When applicable, we have constrained the expected value of variable consideration in our estimation of transaction price and only included this consideration to the extent that it is probable that a significant revenue reversal will not occur.

Disaggregation of Revenue

Revenue is disaggregated by revenue source for our Electric Operations and by primary geographic markets for our Coal Operations, as we believe this best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors.

Electric Operations

	Three Months Ended March 31,
	2026		2025
Delivered energy (including contract liability amortization)	$	49,562	$	72,136
Accredited capacity		15,534		13,807
Total Electric Operations sales	$	65,096	$	85,943

Coal Operations

	Three Months Ended March 31,
	2026		2025
Third party Indiana customers	$	25,913	$	20,314
Other customers		9,167		9,871
Total Coal Operations sales	$	35,080	$	30,185

Performance Obligations

A performance obligation is a promise in a contract with a customer to provide distinct goods or services. Performance obligations are the unit of account for purposes of applying the revenue recognition standard and therefore determine when and how revenue is recognized.

Electric Operations

We concluded that each MWh of delivered energy is capable of being distinct as a customer could benefit from each on its own by using/consuming it as a part of its operations. We also concluded that the stand-ready obligation to be available to provide electricity is capable of being distinct as each unit of accredited capacity provides an economic benefit to the holder and could be sold by the customer.

Coal Operations

In most of our coal contracts, the customer contracts with us to provide coal that meets certain quality criteria. We consider each ton of coal a separate performance obligation and allocate the transaction price using the base price per the contract, increased or decreased for quality adjustments.

The following table illustrates the balance of all current Electric and Coal Operations contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2026 and disaggregated by segment and contract duration (in thousands).

	2026		2027		2028		2029		Total
Delivered energy revenue	$	135,590	$	142,290	$	57,700	$	13,860	$	349,440
Accredited capacity revenue		52,820		75,260		73,280		20,440		221,800
Coal Operations revenue (1)		117,030		141,850		29,500		—		288,380
Total revenue	$	305,440	$	359,400	$	160,480	$	34,300	$	859,620

(1) Coal Operations revenue consists of consolidated revenue excluding our intercompany revenues from Merom.

Contract Balances

Under ASC 606, the timing of when a performance obligation is satisfied can affect the presentation of accounts receivable, contract assets and contract liabilities. The main distinction between accounts receivable and contract assets is whether consideration is conditional on something other than the passage of time. A receivable is an entity’s right to consideration that is unconditional.

Under the typical payment terms of our contracts with customers, the customer pays us the contracted price for electricity or accredited capacity. For coal contracts, the customer pays us a base price for the coal, increased or decreased for any quality adjustments. Amounts billed and due are recorded as trade accounts receivable and included in accounts receivable in our condensed consolidated balance sheets. Payments received prior to fulfilling our performance obligations are included in contract liabilities in our condensed consolidated balance sheets. When the Company receives customer payments more than one year in advance of the related performance obligations, in accordance with ASC 606, the Company adjusts the transaction price for the significant financing component associated with these contracts at risk adjusted market rates. The resulting interest accretion is recognized as interest expense over the period between the customer payment date and the expected satisfaction of the performance obligation.

The following table shows our beginning and ending accounts receivable balances from contracts with customers for the periods presented (in thousands):

	March 31,
	2026		2025
Accounts receivable from contracts with customers - beginning balance	$	13,989	$	15,438
Accounts receivable from contracts with customers - ending balance	$	9,152	$	12,582

As the Company fulfills its contractual obligations, we recognized those amounts in revenue. The following table reconciles our beginning and ending contract liabilities for the periods presented (in thousands):

	March 31,
	2026		2025
Total contract liabilities - beginning balance	$	149,057	$	146,719
Cash payments received on future contract obligations		46,874		37,297
Accretion on contract liabilities		2,834		1,560
Revenue recognized, cash payment received in prior period		(36,447)		(35,669)
Total contract liabilities - ending balance	$	162,318	$	149,907