Financial Analysis

2. Acquisitions On August 1, 2025 (Acquisition Date), the Company acquired all the equity of Flame Aggregator, LLC, by causing Phoenix Global to merge with and into one of its indirect wholly owned subsidiaries with Phoenix Global surviving, pursuant to the Merger Agreement, dated as of May 27, 2025. This acquisition has been accounted for as a business combination. The acquisition of Phoenix Global expands our industrial services offerings including adding servicing of electric arc furnace operations and international markets to the Companys portfolio. The acquisition is included as part of the Company's Industrial Services segment. Subsequent to the preliminary acquisition purchase consideration disclosed as of December 31, 2025, the Company received $1.8 million during the first quarter of 2026 primarily related to the settlement of final working capital. The acquisition purchase consideration, in accordance with ASC 805, totaled $294.0 million in net cash payments. The Company has performed a preliminary valuation analysis of the fair market value of the assets and liabilities of Phoenix Global. The final purchase price allocation will be determined when the Company has completed its evaluation of the valuation analysis. Measurement period adjustments, if any, will be recognized in the reporting period in which the adjustment amounts are determined within twelve months from the Acquisition Date. Subsequent to the preliminary purchase price allocation disclosed as of March …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

8. Commitments and Contingent Liabilities Legal Matters Between 2005 and 2012, the U.S. Environmental Protection Agency (EPA) and the Ohio Environmental Protection Agency (OEPA) issued Notices of Violations, alleging violations of air emission operating permits for our Haverhill and Granite City cokemaking facilities. We worked in a cooperative manner with the EPA, the OEPA and the Illinois Environmental Protection Agency (IEPA) to address the allegations and, in November 2014, entered into a consent decree with these parties in federal district court in the Southern District of Illinois. On March 25, 2025, the consent decree was terminated for the Haverhill facility. The Granite City facility has also completed substantially all consent decree requirements, with the exception of the IEPA finalizing revisions to its air permit. Accordingly, on July 30, 2025, Granite City submitted a termination report to the EPA and IEPA requesting partial termination of the consent decree based on discussions with the agencies. The Company is a party to certain pending and threatened claims, including matters related to commercial disputes, employment claims, personal injury claims, common law tort claims, and environmental claims. Although the ultimate outcome of these claims cannot be ascertained at this time, it is reasonably possible that some portion of these claims could be resolved unfavorably to the Company. Management of the Company believes that any liability which may arise from t …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

7. Debt Total debt consisted of the following: June 30, 2026 December 31, 2025 (Dollars in millions) 4.875 percent senior notes, due 2029 (2029 Senior Notes) $ 500.0 $ 500.0 $325.0 Revolving Facility, due 2030 160.5 193.0 Total borrowings $ 660.5 $ 693.0 Debt issuance costs (6.6) (7.5) Total long-term debt $ 653.9 $ 685.5 Revolving Facility As of June 30, 2026, the Revolving Facility had an outstanding balance of $160.5 million, leaving $164.5 million available. Additionally, the Company has certain letters of credit totaling $5.7 million, which does not reduce the Revolving Facility's available balance. Covenants Under the terms of the Revolving Facility, the Company is subject to a maximum consolidated net leverage ratio of 4.50:1.00 and a minimum consolidated interest coverage ratio of 2.50:1.00. The Company's debt agreements contain other covenants and events of default that are customary for similar agreements and may limit our ability to take various actions including our ability to pay a dividend or repurchase our stock. If we fail to perform our obligations under these and other covenants, the lenders' credit commitment could be terminated and any outstanding borrowings, together with accrued interest, under the Revolving Facility could be declared immediately due and payable. The Company has a cross default provision that applies to our indebtedness having a principal amount in excess of $50.0 million. As of June 30, 2026, the Company was in compliance with all appli …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table provides disaggregated sales and other operating revenue by product or service, excluding intersegment revenues: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in millions) Sales and other operating revenue: Cokemaking $ 357.5 $ 397.2 $ 707.9 $ 788.5 Energy 9.3 12.5 19.8 25.3 Industrial Services 97.6 13.9 182.5 36.0 Operating and licensing fees 9.4 8.6 17.4 16.4 Other 1.5 1.9 2.8 3.9 Sales and other operating revenue $ 475.3 $ 434.1 $ 930.4 $ 870.1 The following table provides disaggregated sales and other operating revenue by customer: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in millions) Sales and other operating revenue: Cliffs Steel $ 290.0 $ 250.7 $ 555.0 $ 550.0 U.S. Steel 64.4 60.3 131.3 120.3 Other 120.9 123.1 244.1 199.8 Sales and other operating revenue $ 475.3 $ 434.1 $ 930.4 $ 870.1 The following table provides disaggregated sales and other operating revenue by domestic and international: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in millions) Sales and other operating revenue: Domestic $ 448.0 $ 425.5 $ 879.0 $ 853.7 International 27.3 8.6 51.4 16.4 Sales and other operating revenue $ 475.3 $ 434.1 $ 930.4 $ 870.1

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9. Fair Value Measurement The Company measures certain financial and non-financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. Level 2 - inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Cash and Cash Equivalents Certain assets and liabilities are measured at fair value on a recurring basis. The Company's cash and cash equivalents were measured at fair value at June 30, 2026 and Decem …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

4. Goodwill and Other Intangible Assets The Company's goodwill at June 30, 2026 and December 31, 2025, by segment, is summarized below: June 30, 2026 December 31, 2025 (Dollars in millions) Domestic Coke $ 3.4 $ 3.4 Industrial Services 51.9 52.2 Total $ 55.3 $ 55.6 Intangible assets, net, includes the intangibles detailed in the table below, excluding fully amortized intangible assets. June 30, 2026 December 31, 2025 Weighted - Average Remaining Amortization Years Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (Dollars in millions) Customer relationships 11 $ 14.4 $ 1.0 $ 13.4 $ 14.4 $ 0.4 $ 14.0 Trade names 9 5.8 0.4 5.4 5.8 0.2 5.6 Permits 16 31.7 9.4 22.3 31.7 8.6 23.1 Other 24 1.6 0.3 1.3 1.6 0.3 1.3 Total $ 53.5 $ 11.1 $ 42.4 $ 53.5 $ 9.5 $ 44.0 Total amortization expense for intangible assets subject to amortization was $0.8 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively, and $1.6 million and $0.7 million for the six months ended June 30, 2026 and 2025, respectively.

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5. Income Taxes At the end of each interim period, we make our best estimate of the annual effective tax rate and the impact of discrete items, if any, and adjust the rate as necessary. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in millions) Income before income tax expense $ 20.5 $ 4.4 $ 16.2 $ 29.4 Income tax expense 4.9 0.9 4.0 6.5 Effective tax rate 23.9 % 20.5 % 24.7 % 22.1 % The Company's effective tax rate was 23.9 percent and 24.7 percent for the three and six months ended June 30, 2026, respectively, and 20.5 percent and 22.1 percent for the three and six months ended June 30, 2025, respectively. For the three and six months ended June 30, 2026, the Companys effective tax rate differed from the federal statutory rate of 21.0 percent primarily due to losses in jurisdictions for which no tax benefit was recognized and a valuation allowance recorded against unused foreign tax credits, partially offset by earnings attributable to the Companys noncontrolling ownership interests in a partnership that are not subject to tax. For the three and six months ended June 30, 2025, the difference primarily reflected the impact of state taxes, compensation deduction limitations under Section 162(m) of the Internal Revenue Code and a valuation allowance recorded against unused foreign tax credits, partially offset by earnings attributable to the Companys noncontrolling ownership interests in a partnership that are not subject to tax. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recently Adopted Accounting Pronouncements In July 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05). The amendments in this update provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB Accounting Standards Codification 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient. The Company adopted this standard during the first quarter of 2026 applying the practical expedient and the impact to the consolidated financial statements was not material. Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses (ASU 2024-03). ASU 2024-03 requires additional disclosures aimed at enhancing the transparency and decision usefulness of income statement expenses. This ASU is effective for fiscal years beginning after December 15, 2026 as well as interim periods beginning after December 15, 2027 and requires either prospective application or retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the guidance on the related disc …

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10. Revenue from Contracts with Customers Cokemaking As of June 30, 2026, our coke sales agreements have approximately 17.0 million tons of unsatisfied or partially unsatisfied performance obligations, which are expected to be delivered over a weighted average remaining contract term of approximately eight years . Industrial Services The following table provides estimated fixed fee and take-or-pay revenue for unsatisfied or partially unsatisfied performance obligations from all of our multi-year industrial services contracts as of June 30, 2026, which are expected to be recognized over approximately the next 10 years. (Dollars in millions) 2026-2028 $ 278.6 2029-2031 152.4 2032-thereafter 84.2 Total estimated fixed fee and take-or-pay revenue $ 515.2 Disaggregated Sales and Other Operating Revenue The following table provides disaggregated sales and other operating revenue by product or service, excluding intersegment revenues: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in millions) Sales and other operating revenue: Cokemaking $ 357.5 $ 397.2 $ 707.9 $ 788.5 Energy 9.3 12.5 19.8 25.3 Industrial Services 97.6 13.9 182.5 36.0 Operating and licensing fees 9.4 8.6 17.4 16.4 Other 1.5 1.9 2.8 3.9 Sales and other operating revenue $ 475.3 $ 434.1 $ 930.4 $ 870.1 The following table provides disaggregated sales and other operating revenue by customer: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in millio …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

11. Business Segment Information Prior to the acquisition of Phoenix Global, the Company consisted of three reportable segments, Domestic Coke, Brazil Coke and Logistics. Following the acquisition, the Company has concluded the Phoenix Global operating segment will be included in a reportable segment, Industrial Services, with the Logistics operating segment. The decision to aggregate results from the similarities between the two businesses including, providing material handling services to industrial manufacturing customers under long-term contracts or annual purchase orders, similar economic characteristics, similar equipment and labor force as well as similar types and often overlapping customers. Additionally, the Company historically elected to present the Brazil cokemaking operations as a separate reportable segment without it meeting the quantitative thresholds requiring separate segment reporting. The Company reassessed this election and will no longer present the Brazil cokemaking operations as a separate reportable segment. Based on the materiality of the Brazil cokemaking operations, Brazil Coke is included in Corporate and Other. Following these changes, the Company now consists of two reportable segments, Domestic Coke and Industrial Services. Accordingly, the Company has recast all segment information for all prior periods presented herein to reflect this change. Corporate expenses that can be identified with a segment have been included in determining segment r …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing