HALLADOR ENERGY CO
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
HNRG$10.59+4.9%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001104659-26-093468
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001628280-26-072347
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 157 current paragraphs.
37 unchanged; 56 reworded; 64 added; 13 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 54 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (64)
Current report
•Forward-Looking Statements. This section provides a description of certain factors that could cause actual results or events to differ materially from anticipated results or events.
Current report
•Overview. This section provides a general description of our business and recent events.
Current report
•Material Changes in Results of Operations. This section provides an analysis of our results of operations for the three and nine months ended September 30, 2026 and 2025.
Current report
•Material Changes in Financial Condition. This section provides an analysis of our liquidity and our condensed consolidated statements of cash flows.
Current report
•changes in macroeconomic and market conditions and market volatility, and the impact of such changes and volatility on our financial position;
Current report
•fluctuations in weather, natural gas and electricity commodity costs, inflation and economic conditions that impact demand of our customers and our operating results;
Current report
•the outcome or escalation of current international hostilities;
Current report
•changes in competition, or changes in electricity, natural gas or coal prices, demand, and availability which could affect our operating results and cash flows;
Current report
•risks associated with the expansion of our operations and properties, including through acquisitions and other strategic transactions, which may not be completed on anticipated terms, or at all;
Current report
•risks relating to our ability to fund and perform our obligations under the Asset Purchase Agreement (the "APA") with Energy World Corporation Ltd. for the acquisition of turbine equipment, including the sufficiency of the proceeds of the KLIM Facility and our ability to secure any additional financing for the remaining purchase price and related costs on a timely basis or at all, and the risk of default, forfeiture of amounts paid, or termination of the related agreements if we are unable to do so;
Current report
•risks relating to the international and domestic transportation, refurbishment, and delivery of the turbine equipment acquired under the APA, including delays, damage or loss in transit, and costs that exceed our current estimates;
Current report
•risks relating to our ability to participate in the MISO ERAS program, which ultimately requires the approval of MISO of our application and is a capital intensive project subject to construction, operational, financial, regulatory and legal risks that could impact the project’s viability and/or timeline;
Current report
•risks relating to our ability to secure agreements in support of the development and construction of planned projects, including the expansion of the Merom Station through the ERAS program;
Current report
•risks relating to the development, financing, construction, commissioning, and operation of the Turtle Creek Project, including cost overruns from equipment, materials, labor or other expenses; delays; the performance of contractors, equipment suppliers, and other counterparties; the availability and cost of natural gas supply and pipeline transportation; permitting, interconnection, and other regulatory requirements; and our ability to achieve the Commercial Operation of the Turtle Creek Project (the date on which it does so, the "Commercial Operation Date") by the date required under the Credit Agreement governing the KLIM Facility (the "KLIM Credit Agreement"), the failure of which would constitute an event of default;
Current report
•risks relating to our indebtedness under the KLIM Facility, including its substantial cost, which reflects paid-in-kind ("PIK") interest and the premium payable upon repayment in full of the term loans to the extent necessary for each lender to have received cash payments and outstanding principal (including PIK interest) equal to at least 1.35 times its funded term commitment, increasing to 1.50 times if the maturity date is extended (the "MOIC Premium"); the financial and other covenants thereunder, including minimum unrestricted cash, debt service coverage, and leverage requirements and the limited cure rights available; mandatory prepayments from excess cash flow; increases in the PIK interest rate if the Closing Date Intercompany Loan is not repaid when required; the liens securing the KLIM Facility on substantially all of our assets, including the Merom Station and certain mining assets; restrictions on distributions and transfers of cash from Turtle Creek Gas Holdings, LLC ("Turtle Creek") and its subsidiaries; cross-default provisions; and our ability to refinance the KLIM Facility on or around the Commercial Operation Date on acceptable terms, or at all;
Current report
•risks arising from the fact that a portion of our contracted forward sales position is subject to regulatory approval or is based on our estimates rather than fixed commitments, including that the revenue we ultimately realize from our contracts could be materially lower than the amounts we have disclosed;
Current report
•legislation, regulations, administrative actions (e.g., executive orders), and court decisions and interpretations thereof, including those relating to the environment and the release of greenhouse gases (“GHG”), wastewater discharge and effluent limitation guidelines (“ELG”), coal combustion residuals, mining, miner health and safety, and health care, as well as those relating to data privacy protection;
Current report
•deregulation of the electric utility industry or the effects of any adverse change in the coal industry, electric utility industry, or general economic conditions;
Current report
•dependence on significant or long-term customer contracts, including renewing customer contracts upon expiration of existing contracts, and the risk that regulatory approvals (including from the Indiana Utility Regulatory Commission) or other conditions required for certain of our contracts are not obtained or satisfied on a timely basis, on acceptable terms, or at all;
Current report
•changes in the geopolitical environment in industries in which our customers operate;
Current report
•changes in attitude toward environmental, social, and governance (“ESG”) matters among regulators, investors and parties with which we do business;
Current report
•the effect of changes in taxes or tariffs and other trade measures, including uncertainty regarding tariffs on imports into the United States, which could impact the Company’s procurement and sourcing strategies;
Current report
•risks relating to inflation and increasing interest rates;
Current report
•liquidity constraints, including due to restrictions contained in our debt agreements or other arrangements, limitations on our access to cash held in restricted and project-level accounts, and those resulting from any future unavailability of financing;
Current report
•the effects of any future issuance of debt or equity securities, including dilution to our existing stockholders and the imposition of additional restrictive covenants;
Current report
•customer bankruptcies, a decline in customer creditworthiness, or customer cancellations or breaches to existing contracts, including failures to make payments when due;
Current report
•customer delays or failure to take coal or electricity under contracts;
Current report
•adjustments made in price, volume or terms to existing coal or electricity contracts;
Current report
•risks associated with our prepaid delivered energy contracts and other fixed-price commitments, including obligations to deliver electricity at prices that may be below prevailing market prices;
Current report
•our productivity levels and margins earned on our coal or electricity sales;
Current report
•supply chain disruptions and changes in equipment, raw material, service or labor costs or availability, including due to inflationary pressures;
Current report
•changes in the availability of skilled labor;
Current report
•our ability to maintain satisfactory relations with our employees;
Current report
•increases in labor costs, adverse changes in work rules, or cash payments or projections associated with workers’ compensation claims;
Current report
•increases in transportation costs and risk of transportation delays or interruptions;
Current report
•operational interruptions due to geologic, permitting, labor, weather-related or other factors, including challenges in operating an aging coal-fired power plant, unplanned equipment failures, and forced or extended maintenance outages, such as those we experienced in the first half of 2026;
Current report
•the risk that the Merom Station may not continue to operate economically through its currently estimated useful life of 2040, including as a result of environmental compliance costs, market conditions, or regulatory changes, which could result in accelerated depreciation or impairment charges;
Current report
•risks associated with major mine-related or other accidents, mine fires, mine floods or other interruptions, including unanticipated operating conditions and other events that are not within our control;
Current report
•results of litigation, including claims not yet asserted;
Current report
•difficulty maintaining our surety bonds for mine reclamation;
Showing the first 40 of 64 passages. Open the source sections for the rest.
Removed paragraphs (13)
Previous report
Our contracted forward sales for accredited capacity, energy, and coal are detailed below with estimated revenue from forward sales of $2.4 billion as of June 30, 2026.
Previous report
Forward **Sales Position ***
Previous report
Other operating and maintenance costs increased $5.6 million, or 52.3%, from the second quarter of 2025. The increase was driven by increased maintenance activities in connection with the planned major maintenance outage. The impacted generating unit came back online in July 2026.
Previous report
Other operating revenue decreased $2.9 million or 92.6% compared to the second quarter of 2025, which included $3.0 million of revenue received related to contractual negotiations on an exclusivity agreement that did not recur in 2026.
Previous report
Coal Operations
Previous report
or 6.4%, versus the second quarter of 2025, attributable to the 8.6% increase in our average third party price per ton, which more than offset a 2.0% decrease in tons sold to third parties.
Previous report
Other operating and maintenance costs increased $4.6 million, or 25.1%, which is largely attributable to higher mine expansion costs as well as the increase in total tons sold of 44,000, or 4.9%, versus the second quarter of 2025. Labor expenses increased $1.0 million, or 5.4%, from the second quarter of 2025, leading to a small increase in labor cost per ton sold of $0.09 per ton up to $21.62 per ton for the three months ended June 30, 2026.
Previous report
Depreciation, Depletion and Amortization increased by $4.0 million compared to the second quarter of 2025, largely as a result of a $4.8 million out-of-period adjustment recorded during the second quarter of 2025 due to an overstatement of depreciation, depletion and amortization expense in the first quarter of 2025.
Previous report
Other operating and maintenance costs increased $1.0 million, or 2.4%, which is attributable to higher mine expansion costs, offset by the decrease in total tons sold of 0.2 million, or 8.8%, versus the first six months of 2025. Labor expenses increased $1.4 million, or 3.7%, from the six months ended June 30, 2025; however, because tons sold declined 8.8%, labor cost per ton sold rose $2.66 to $22.06 per ton as production at the mine outpaced coal sales.
Previous report
Depreciation, Depletion and Amortization decreased by $1.6 million, or 15.3%, compared to the first six months of 2025.
Previous report
We are evaluating financing alternatives to fund the remaining purchase price and related costs, which may include project-level financing, structured financing arrangements supported by our contracted revenue base, proceeds from long-term offtake agreements, borrowings under our New Credit Facility, and issuances of debt or equity securities. There can be no assurance that financing will be available on acceptable terms, or at all.
Previous report
If we are unable to obtain financing on a timely basis, we may seek to renegotiate or extend the payment terms under the APA, which may not be available to us on acceptable terms or at all. If we are unable to renegotiate or extend the payment terms, a failure to make payments when due could result in termination of the APA, the forfeiture of amounts we have already paid, and other damages. In addition, our ability to incur additional indebtedness under our New Credit Facility to fund the remaining purchase price and related costs is subject to compliance with the financial covenants described under*“Item 1. Financial Statements - Note 4 – Bank Debt”* to our unaudited condensed consolidated financial
Previous report
statements, as amended, and there can be no assurance that we will have sufficient availability under those covenants when needed, or that our lenders would agree to further amend those covenants if required.
Reworded paragraphs (56)
Previous wording
The following discussion and analysis, which should be read in conjunction with our consolidated financial statements and the discussion and analysis included in our 2025 10-K, is intended to assist in providing an understanding of changes in our results of operations and financial condition and is organized as follows:
Current wording
The following discussion and analysis included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 10-K”), is intended to assist in providing an understanding of changes in our results of operations and financial condition and is organized as follows:
Previous wording
Certain statements and information in this Quarterly Report on Form 10-Q may constitute “forward-looking statements.” These statements are based on our beliefs as well as assumptions made by, and information currently available to us. When used in this document, the words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “may,” “project,” “will,” and similar expressions identify forward-looking statements. Without limiting the foregoing, all statements relating to our future outlook, anticipated capital expenditures, future cash flows and borrowings and sources of funding are forward-looking statements. These statements reflect our current views with respect to future events and are subject to numerous assumptions that we believe are open to a wide range of uncertainties and business risks, and actual results may differ materially from those discussed in these statements. Among the factors that could cause actual results to differ from those in the forward-looking statements are:
Current wording
Certain statements and information in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor provisions of those sections. These statements are based on our beliefs as well as assumptions made by, and information currently available to us. When used in this document, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will,” “would,” and similar expressions or the negative thereof identify forward-looking statements. Without limiting the foregoing, all statements relating to our future outlook, anticipated capital expenditures, future cash flows and borrowings and sources of funding, as well as statements regarding the development, financing, cost, timing, and completion of our 460 MW natural gas-fired peaking generation facility in Sullivan County, Indiana (the "Turtle Creek Project"); the delivery, financing, and deployment of the turbine equipment we have agreed to acquire and the related expansion of the Merom Generating Station (the "Merom Station"); the potential refinancing of our senior secured term loan facility entered into on September 15, 2026 with Kennedy Lewis Investment Management LLC ("KLIM") and the other lenders party thereto (the "KLIM Facility"); our contracted forward sales position and the revenue we expect to realize from it; the anticipated terms, effects, and regulatory approval of our power purchase and capacity agreements; the estimated useful life of the Merom Station; and our evaluation of strategic transactions are forward-looking statements. These statements reflect our current views with respect to future events as of the date of this Quarterly Report on Form 10-Q and are subject to numerous assumptions that we believe are open to a wide range of uncertainties and business risks, and actual results may differ materially from those expressed or implied in these statements. Among the factors that could cause actual results to differ from those in the forward-looking statements are:
Previous wording
require us to sell the project together with the equipment or sell the equipment on a standalone basis, potentially at a loss;
Current wording
•risks that we may be unable to deploy the turbine equipment acquired under the APA as planned, including because the Midcontinent Independent System Operator (“MISO”) does not approve our Expedited Resource Addition Study (“ERAS”) application or the related expansion project does not otherwise proceed, which could require us to sell the project together with the equipment or sell the equipment on a standalone basis, potentially at a loss;
Previous wording
If one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may differ materially from those described in any forward-looking statement. When considering forward-looking statements, you should also keep in mind the risk factors described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K. The risk factors could also cause our actual results to differ materially from those contained in any forward-looking statement. We disclaim any obligation to update the above list or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments, unless required by law. You should consider the information above when reading any forward-looking statements contained in this Quarterly Report on Form 10-Q; other reports filed by us with the U.S. Securities and Exchange Commission (“SEC”); our press releases; our website www.halladorenergy.com and written or oral statements made by us or any of our officers or other authorized persons acting on our behalf.
Current wording
If one or more of these or other risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may differ materially from those described in any forward-looking statement. The foregoing list of factors is not exhaustive, and it is not possible for us to predict or identify all such risks and uncertainties. When considering forward-looking statements, you should also keep in mind the risk factors described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as supplemented by “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q and our subsequent filings with the SEC. The risk factors could also cause our actual results to differ materially from those contained in any forward-looking statement. We disclaim any obligation to update or revise any forward-looking statements to reflect new information, future events or developments, unless required by applicable law. Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of any other written or oral statement, the date on which it is made, and you should not place undue reliance on them. You should consider the information above when reading any forward-looking statements contained in this Quarterly Report on Form 10-Q; other reports filed by us with the SEC; our press releases; our website www.halladorenergy.com and written or oral statements made by us or any of our officers or other authorized persons acting on our behalf.
Previous wording
Hallador is a vertically integrated, independent power producer (“IPP”) and fuel company with operations primarily in Indiana. The Company operates across multiple stages of the energy supply chain, from accredited capacity and energy to coal. The Company’s electric operations are located within the MISO footprint. Our operations include Hallador Power which provides accredited capacity and energy to utilities and other energy market participants through its MISO interconnection, and Sunrise which mines bituminous coal in Indiana to serve various power plants in the Midwest and Southeast United States.
Current wording
Hallador is a vertically integrated, independent power producer (“IPP”) and fuel company with operations primarily in Indiana. The Company operates across multiple stages of the energy supply chain, from accredited capacity and energy to coal. The Company’s electric operations are located within the MISO footprint. Our operations include Hallador Power Company, LLC ("Hallador Power"), which provides accredited capacity and energy to utilities and other energy market participants through its MISO interconnection, and Sunrise Coal, LLC ("Sunrise"), which mines bituminous coal in Indiana to serve various power plants in the Midwest and Southeast United States.
Previous wording
*Accredited Capacity.*Hallador Power, the Company’s wholly-owned electric subsidiary, owns and operates the Merom Power Plant (“Merom”), a 1,080 MW coal-fired power generating station, consisting of two steam turbine generators. Unit 1 entered commercial operations in 1982 and Unit 2 in 1983. The units are dispatched through its MISO interconnection. In order to purchase energy through the MISO system, an end user must supply or purchase accredited capacity for an equivalent load. As accredited capacity is primarily available in large quantities from dispatchable sources of energy, such as natural gas and coal-fired power plants, Hallador Power sells accredited capacity to utilities and other energy market participants within the MISO system through Power Purchase Agreements (“PPA”) and other bilateral transactions.
Current wording
Accredited Capacity. Hallador Power, the Company’s wholly owned electric subsidiary, owns and operates the Merom Station, a 1,080 MW coal-fired power generating station, consisting of two steam turbine generators. Unit 1 entered commercial operations in 1982 and Unit 2 in 1983. The units are dispatched through its MISO interconnection. In order to purchase energy through the MISO system, an end user must supply or purchase accredited capacity for an equivalent load. As accredited capacity is primarily available in large quantities from dispatchable sources of energy, such as natural gas and coal-fired power plants, Hallador Power sells accredited capacity to utilities and other energy market participants within the MISO system through Power Purchase Agreements (“PPA”) and other bilateral transactions.
Previous wording
*Coal.*Sunrise, the Company’s wholly-owned mining subsidiary, mines coal from reserves found in the Illinois Basin (“ILB”). Coal mined by Sunrise is used as a primary fuel source for generating electricity at various power plants in the Midwest and Southeast United States. In addition, Sunrise has a developed infrastructure for the transport of coal, which is typically sold free on board from the shipping point, including rail networks and truck loading systems, facilitating the efficient movement of the resource from the mine to its customers. Sunrise’s Oaktown Mining Complex is about twenty miles from Merom, which is located in Sullivan County, Indiana, enabling Merom and Sunrise to take advantage of low-cost fuel on a delivered basis.
Current wording
Coal. Sunrise, the Company’s wholly owned mining subsidiary, mines coal from reserves found in the Illinois Basin (“ILB”). Coal mined by Sunrise is used as a primary fuel source for generating electricity at various power plants in the Midwest and Southeast United States. In addition, Sunrise has a developed infrastructure for the transport of coal, which is typically sold free on board from the shipping point, including rail networks and truck loading systems, facilitating the efficient movement of the resource from the mine to its customers. Sunrise’s Oaktown Mining Complex is about twenty miles from Merom, enabling Merom and Sunrise to take advantage of low-cost fuel on a delivered basis.
Previous wording
We strive to achieve margin expansion through organic revenue growth and profitability in our operations by negotiating and fulfilling contracts for accredited capacity, wholesale energy, and thermal coal to utilities and other energy market participants. We continue to monitor opportunities to expand the capacity of our electric generation capabilities through expansion of existing facilities utilizing MISO’s ERAS program, or via acquisition. We continue to evaluate other strategic transactions that could add diversification, durability, scale, and geographic expansion opportunities to our Electric Operations. While these opportunities are limited and complex, we believe that Hallador is well-positioned to transform retiring and/or underperforming assets into future opportunities. This will enable us to supply high-demand end users, such as data centers and industrial customers, with minimal impact to retail consumers. In addition, we focus our organic capital investments on strategic maintenance projects to maintain our safe operational performance and improve the reliability of Merom.
Current wording
We strive to achieve margin expansion through organic revenue growth and profitability in our operations by negotiating and fulfilling contracts for accredited capacity, wholesale energy, and thermal coal to utilities and other energy market participants. We continue to progress the development of the Turtle Creek Project, while monitoring opportunities to expand the capacity of our electric generation capabilities through further development, or via acquisition. We continue to evaluate other strategic transactions that could add diversification, durability, scale, and geographic expansion opportunities to our Electric Operations. While these opportunities are limited and complex, we believe that Hallador is well-positioned to transform retiring and/or underperforming assets into future opportunities. This will enable us to supply high-demand end users, such as data centers and industrial customers, with minimal impact to retail consumers. In addition, we focus our organic capital investments on strategic maintenance projects to maintain our safe operational performance and improve the reliability of Merom.
Previous wording
Turbine Equipment Acquisition. On May 30, 2026, we entered into an APA with Energy World Corporation Ltd. to acquire approximately 460 MW of Siemens gas turbines, generators, a steam turbine, and ancillary equipment for a total purchase price of $350.0 million. We expect to incur approximately $100.0 million of additional costs for transportation, refurbishment, insurance, and logistics in connection with the delivery of the equipment. The equipment supports our proposed expansion of generation capacity through MISO's ERAS program. We retain the flexibility to determine the path that best creates value for shareholders, including advancing the full project, selling the project together with the equipment, or selling the equipment on a standalone basis. See “Note 14 — Commitments and Contingencies” to the condensed consolidated financial statements and*“Liquidity and Capital Resources”* below* *for additional information.
Current wording
Turbine Equipment Acquisition. On May 30, 2026, we entered into an APA with Energy World Corporation Ltd. ("the Seller"), to acquire approximately 460 MW of Siemens gas turbines, generators, a steam turbine, and ancillary equipment for a total purchase price of $350.0 million. In October 2026, the equipment was loaded onto an ocean-going vessel, was exported from the Philippines, and title and control of the equipment transferred to Hallador. In October 2026, we made the third and fourth installment payments under the APA totaling$315.0 million, consisting of a $50.0 million payment to the Seller and a $265.0 million payment into an escrow account held by the Seller. As of October 31, 2026, we had paid$349.8 million of the $350.0 million purchase price, including the escrowed amount, with the remaining approximately$0.2 million payable to third party vendors on behalf of the Seller. We expect to incur approximately $100.0 million of additional costs for transportation, refurbishment, insurance, and logistics in connection with the delivery of the equipment. The equipment supports our proposed expansion of generation capacity through MISO's ERAS program. We retain the flexibility to determine the path that best creates value for shareholders, including advancing the full project, selling the project together with the equipment, or selling the equipment on a standalone basis. See “Note 15 — Commitments and Contingencies” to the condensed consolidated financial statements and“Liquidity and Capital Resources” below for additional information.
Previous wording
We are experiencing competition in both our Electric and Coal Operations. This competition drives lower market prices for our products and services. Competitors for our Electric Operations include other power generators who bid into the MISO system, while competitors for our Coal Operations include other mining entities that are able to service our existing and potential customers via truck or rail within the Midwest and Southeast United States.* *
Current wording
We are experiencing competition in both our Electric and Coal Operations. This competition has the potential to drive lower market prices for our products and services. Competitors for our Electric Operations include other power generators who bid into the MISO system, while competitors for our Coal Operations include other mining entities that are able to service our existing and potential customers via truck or rail within the Midwest and Southeast United States.
Previous wording
Actual revenue related to forward sales positions may differ materially for various reasons, including unit contingencies, price adjustment features for coal quality and cost escalations, volume optionality provisions, including rollover of unfulfilled coal commitments into future periods, and potential force majeure events. Certain contracted forward sales positions included above are subject to approval by the Indiana Utility Regulatory Commission. Forward sales figures in the 2026 column are for the period from July 1, 2026 through December 31, 2026.
Current wording
1 Total Forward Sales Position as of September 30, 2026, including the impacts of both the Energy PPA and the Capacity PPA executed on October 7, 2026. Actual revenue related to forward sales positions may differ materially for various reasons, including unit contingencies, price adjustment features for coal quality and cost escalations, volume optionality provisions, including rollover of unfulfilled coal commitments into future periods, and potential force majeure events. Certain contracted forward sales positions included above are subject to approval by the Indiana Utility Regulatory Commission. Forward sales figures in the 2026 column are for the period from October 1, 2026 through December 31, 2026.
Previous wording
(1) Other operating costs primarily include costs for lime dust.
Current wording
1 Other operating costs primarily include costs for lime dust.
Previous wording
(2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable included in fuel and other operating costs.
Current wording
2 Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable included in fuel and other operating costs.
Previous wording
Segment operating revenues from electric operations decreased $0.5 million, or 0.8%, compared to the second quarter of 2025, attributable to a $3.2 million decrease in sales of delivered energy that was partially offset by a $2.8 million increase in accredited capacity revenue. The price per MWh for delivered energy decreased 20.8% year-over-year from $52.66 for the three-month period ended June 30, 2025 to $41.69 in 2026, primarily attributable to contract mix, driven by increased deliveries under lower-priced prepaid forward sales contracts. Our Electric Operations generated a slightly increased quantity of MWh and purchased an additional 0.1 million MWh for resale resulting in a net increase of energy sales of 0.1 million MWh, an increase of 17.1% compared to the second quarter of 2025. The annual planned major maintenance outages had a significant impact on the total MWh generated during both the three months ended June 30, 2026 and 2025. Accredited capacity revenue increased 17.4% to $18.6 million for the three-month period ended June 30, 2026 from $15.8 million in the comparable prior year period.
Current wording
Segment operating revenues from electric operations decreased $0.4 million, or 0.4%, compared to the third quarter of 2025, attributable to a $3.6 million decrease in sales of delivered energy that was partially offset by a $3.2 million increase in accredited capacity revenue. The price per MWh for delivered energy decreased 3.1% year-over-year from $49.29 for the three-month period ended September 30, 2025 to $47.76 in 2026, primarily attributable to contract mix, driven by increased deliveries under lower-priced prepaid forward sales contracts. Our Electric Operations generated 0.1 million lower MWh, offset by the purchase of an additional 0.1 million MWh for resale resulting in a 1.6% reduction in total MWh sold compared to the third quarter of 2025. Accredited capacity revenue increased 20.8% to $18.7 million for the three-month period ended September 30, 2026 from $15.5 million in the comparable prior year period driven by improved prices.
Previous wording
Fuel costs on a segment basis increased $3.9 million, or 18.4%, from the second quarter of 2025. The increase is due to electric power generation increasing by 5.7% coupled with an increase in the cost of coal consumed of 2.7%, from $53.38 per ton in 2025 to $54.82 per ton in 2026 along with an increase in tons consumed. Fuel costs on a consolidated basis were relatively unchanged from the second quarter of 2025 at $14.7 million, as fewer tons purchased from third parties, reflecting a heavier reliance on coal from Sunrise, offset a 6.0% increase in the average price per ton of coal purchased from third parties. Natural gas pricing did not impact the demand for coal, as the average spot price at Chicago citygate only increased by $0.02 per thousand cubic feet to $2.94 per thousand cubic feet in April 2026 compared to April 2025. The weather year-over-year had a muted impact on the demand for electricity.
Current wording
Fuel costs on a segment basis decreased $1.3 million, or 2.9%, from the third quarter of 2025. The decrease includes a $2.6 million coal inventory adjustment recorded in the third quarter of 2025 that did not recur in 2026, partially offset by higher non-coal fuel costs, primarily fuel oil consumed during the start-ups. Coal costs decreased $0.3 million, due to lower electric power generation of 8.0% and the benefit of the coal mix used, partially offset by a higher burn rate and an increase in the cost of coal consumed of 2.4%, from$54.22 per ton in 2025 to$55.51 per ton in 2026. Fuel costs on a consolidated basis increased$1.6 million, or 6.1%, reflecting a heavier reliance on coal from third-parties combined with a 6.2% increase in the average price per ton of coal purchased from third parties. Weather and natural gas pricing had a muted impact on the demand for coal, as the average spot price at Chicago citygate increased $0.10 per thousand cubic feet to $3.75 per thousand cubic feet in July 2026 compared to July 2025.
Previous wording
Cost of purchased power increased $6.5 million, or 297.5%, from the second quarter of 2025. 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 economic net hourly purchases of power in the MISO market to satisfy our obligations, which we record as cost of purchased power. In 2026, we purchased an incremental 0.1 million MWh compared to 2025, an increase of 119.0% that was further impacted by the energy pricing dynamics at the time of the purchases.
Current wording
Cost of purchased power increased $9.0 million, or 435.3%, from the third quarter of 2025. 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 economic net hourly purchases of power in the MISO market to satisfy our obligations, which we record as cost of purchased power. In 2026, we purchased an incremental 0.1 million MWh compared to 2025, an increase of 202.1% that was further impacted by the energy pricing dynamics at the time of the purchases.
Previous wording
Labor expenses increased $1.0 million or 12.9% for the second quarter of 2026 versus the comparable period in 2025 driven by the impact of incremental maintenance efforts associated with the planned major maintenance outage in combination with annual wage increases.
Current wording
Labor expenses increased $1.8 million or 23.3% for the third quarter of 2026 versus the comparable period in 2025 driven by the impact of incremental maintenance efforts associated with the completion of the 2026 planned major maintenance outage in combination with annual wage increases.
Previous wording
Depreciation, depletion and amortization increased $0.3 million, or 6.2%, from the second quarter of 2025 as incremental depreciation from recent capital expenditures placed in service was only partially offset by lower depreciation expense from extending the estimated useful lives of the Merom Generating Station and related assets through 2040. This change was accounted for prospectively as a change in accounting estimate and decreased depreciation expense by $1.2 million for the three months ended June 30, 2026. See*“Note 1 – Basis of Presentation”* to the condensed consolidated financial statements for further information.
Current wording
Depreciation, depletion and amortization decreased $2.1 million, or 40.0%, from the third quarter of 2025 as lower depreciation expense from extending the estimated useful lives of the Merom Station and related assets through 2040, was only partially offset by incremental depreciation from recent capital expenditures placed in service. The change in estimated useful life was accounted for prospectively beginning in the second quarter of 2026 as a change in accounting estimate and decreased depreciation expense by $3.6 million for the three months ended September 30, 2026. See“Note 1 – Basis of Presentation” to the condensed consolidated financial statements for further information.
Previous wording
Income before income taxes decreased $21.4 million from $11.6 million of income before taxes in the second quarter of 2025 to a loss before income taxes of $9.8 million in the second quarter of 2026, which is attributable to the items described in the discussion above.
Current wording
Income before income taxes decreased $7.2 million from $18.3 million in the third quarter of 2025 to $11.0 millionin the third quarter of 2026, which is attributable to the items described in the discussion above.
Previous wording
Segment operating revenues from electric operations for the six months ended June 30, 2026 decreased $18.6 million, or 12.8% compared to the first half of 2025, attributable to a $23.1 million decrease in sales of delivered energy partially offset by a $4.5 million increase in accredited capacity revenue. Our Electric Operations generated 0.4 million fewer MWh, but purchased an additional 0.2 million MWh for resale resulting in a net decrease of energy sales of 0.3 million MWh, a decrease of 12.1% compared to the first half of 2025. Lower plant availability in the first half of 2026 due to equipment issues at Merom had a significant impact on the total MWh generated. The impacted generating unit underwent a planned major maintenance outage beginning in May and the unit returned to operation in July. The price per MWh for delivered energy decreased 8.8% year-over-year from $48.61 for the six-month period ended June 30, 2025 to $44.31 in 2026. Accredited capacity revenue increased 15.1% to $34.1 million for the six-month period ended June 30, 2026 from $29.7 million in the comparable prior year period.
Current wording
Segment operating revenues from electric operations for the nine months ended September 30, 2026 decreased $19.0 million, or 8.0% compared to the first nine months of 2025, attributable to a $26.7 million decrease in sales of delivered energy partially offset by a $7.7 million increase in accredited capacity revenue. Our Electric Operations generated 0.6 million fewer MWh, but purchased an additional 0.2 million MWh for resale resulting in a net decrease of energy sales of 0.3 million MWh, a decrease of 7.9% compared to the first nine months of 2025. Lower plant availability in the first half of 2026 due to equipment issues at Merom had a significant impact on the total MWh generated. The impacted generating unit underwent a planned major maintenance outage beginning in May and the unit returned to operation in July. The price per MWh for delivered energy decreased 6.4% year-over-year from $48.88 for the nine-month period ended September 30, 2025 to $45.76 in 2026. Accredited capacity revenue increased 17.1% to $52.8 million for the nine-month period ended September 30, 2026 from $45.1 million in the comparable prior year period.
Previous wording
Fuel costs on a segment basis decreased $6.6 million, or 11.1%, from the first half of 2025. The decrease is due to electric power generation falling by 0.4 million MWh, or 20.3%. We consumed 0.1 million fewer tons of coal on both a segment and consolidated basis in 2026 compared to 2025. The decrease in electric power generation was largely attributable to the equipment issues experienced during Q1 2026, which resulted in 0.4 million lower MWh generated during the six months ended June 30, 2026, compared to the same period in 2025. The decrease was partially offset by an increase in the cost of coal consumed from $53.65 per ton in 2025 to $54.69 per ton in 2026. Fuel costs on a consolidated basis were relatively unchanged from the first half of 2025 at $29.1 million down from $29.3 million in 2025.
Current wording
Fuel costs on a segment basis decreased$7.9 million, or 7.6%, from the first nine months of 2025. The decrease is due to electric power generation falling by 0.6 million MWh, or 15.2%. We consumed 0.2 million fewer tons of coal on both a segment and consolidated basis in 2026 compared to 2025. Equipment issues experienced during the first quarter of 2026 accounted for 0.5 million MWh of the 0.6 million MWh decline in generation for the nine months ended September 30, 2026. The decrease was partially offset by an increase in the cost of coal consumed from$53.88 per ton in 2025 to$55.05 per ton in 2026 and by$2.3 million of additional fuel oil consumed during start-ups associated with the equipment issues noted above. Fuel costs on a consolidated basis increased $1.8 million, or 3.1% to $59.2 million for the nine months ended September 30, 2026.
Previous wording
Other operating and maintenance costs increased $9.9 million, or 65.2%, from the first half of 2025. The increase was driven by increased maintenance activities attributable to the aforementioned equipment issues at Merom in combination with expenses from the planned major maintenance outage. The impacted generating unit returned to service in July 2026.
Current wording
Other operating and maintenance costs increased $7.7 million, or 31.1%, from the first nine months of 2025. The increase was driven by $4.3 million of additional costs associated with the more significant scope of the planned major maintenance outage completed in 2026, a $1.8 million increase in property insurance premiums, and $1.9 million of higher consumable supplies, materials and maintenance services reflecting the equipment issues experienced at Merom. The impacted generating unit returned to service in July 2026.
Previous wording
Cost of purchased power increased $14.5 million, or 160.7%, from the first half of 2025. 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 economic net hourly purchases of power in the MISO market to satisfy our obligations, which we record as cost of purchased power. In 2026, we purchased an incremental 0.2 million MWh compared to 2025, an increase of 69.9% that was further impacted by the energy pricing dynamics at the time of the purchases.
Current wording
Cost of purchased power increased $23.5 million, or 212.1%, versus the nine-month period ended September 30, 2025. 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 economic net hourly purchases of power in the MISO market to satisfy our obligations, which we record as cost of purchased power. In 2026, we purchased an incremental 0.2 million MWh compared to 2025, an increase of 94.3% that was further impacted by the energy pricing dynamics at the time of the purchases.
Previous wording
Utilities expense increased $2.0 million, or 98.9%, compared to 2025, which was largely attributable to the frequency and timing of energy intensive start-ups of the generating units.
Current wording
Utilities expense increased $2.5 million, or 62.4%, compared to 2025, which was largely attributable to the frequency and timing of energy intensive start-ups of the generating units during the first half of 2026.
Previous wording
Labor expenses increased $1.0 million, or 6.1% in the first half of 2026 versus the comparable period in 2025 driven by the impact of incremental maintenance efforts associated with planned major maintenance outage in combination with annual wage increases.
Current wording
Labor expenses increased $2.8 million, or 11.9% in the nine-month period ended September 30, 2026 versus the comparable period in 2025 driven by the impact of incremental maintenance efforts associated with the planned major maintenance outage in combination with annual wage increases.
Previous wording
Other operating revenue decreased $2.8 million or 88.5% compared to the first half of 2025. This decrease primarily reflects the $3.0 million exclusivity agreement fee received in the second quarter of 2025.
Current wording
Other operating revenue decreased $2.9 million or 84.7% compared to the first nine months of 2025. This decrease primarily reflects the $3.0 million exclusivity agreement fee recognized in the second quarter of 2025.
Previous wording
Depreciation, depletion and amortization increased $1.5 million, or 14.9%, compared to the first half of 2025, driven by capital additions placed in service, partially offset by a $1.2 million decrease resulting from the change in the estimated useful life of the Merom Generating Station described above.
Current wording
Depreciation, depletion and amortization decreased $0.5 million, or 3.3%, compared to the first nine months of 2025, driven by a $4.8 million decrease resulting from the change in the estimated useful life of the Merom Station described above partially offset by capital additions placed in service.
Previous wording
Interest expense increased $0.5 million, or 27.8%, from the second quarter of 2025. The increase in our interest expense primarily relates to accretion on our prepaid delivered energy contracts that were entered into in 2024 and 2025. Hallador has not entered into any new prepaid delivered energy contracts in 2026.
Current wording
Interest expense increased $3.3 million, or 53.0%, during the nine-month period ended September 30, 2026 versus the comparable period in 2025. The increase in our interest expense primarily relates to interest on the KLIM Facility ($2.7 million) and a$1.4 million increase in accretion on our prepaid delivered energy contracts entered into in 2024 and 2025. Hallador has not entered into any new prepaid delivered energy contracts in 2026.
Previous wording
Income before income taxes decreased $45.7 million from $30.8 million of income before taxes in the first half of 2025 to a loss before taxes of $14.9 million in the first half of 2026, which is attributable to the items described in the discussion above.
Current wording
Income before income taxes decreased $52.9 million from $49.1 million of income before taxes in the first nine months of 2025 to a loss before taxes of $3.9 million in the first nine months of 2026, which is attributable to the items described in the discussion above.
Previous wording
Segment operating revenue from coal operations (including intercompany sales to Merom) increased $5.3 million, or 11.7%, compared to the second quarter of 2025. The increase was driven by higher volume in combination with an increase in the average sales price for our coal. We sold 0.9 million tons of coal during the second quarter of 2026, an increase of 44,000 tons, or 4.9%, versus 2025. Our average sales price, on a segment basis, increased $3.31 per ton from $51.16 per ton to $54.47 per ton. The increased sales were driven by improved coal demand from Merom in preparation for summer, as Sunrise sold 59,000 incremental tons to Merom, partially offset by a 2.0% decrease in tons sold to third parties in the second quarter of 2026 compared to 2025. On a consolidated basis, third party sales increased $2.5 million,
Current wording
Segment operating revenue from coal operations (including intercompany sales to Merom) decreased $18.2 million, or 26.4%, compared to the third quarter of 2025. The decrease was driven by lower volume partially offset by an increase in the average sales price for our coal. We sold 0.9 million tons of coal during the third quarter of 2026, a decrease of 0.4 million tons, or 31.0%, versus 2025. Our average sales price, on a segment basis, increased $3.38 per ton from $50.79 per ton to $54.17 per ton. Sunrise sold 16.9% fewer tons to Merom during the third quarter of 2026 compared to 2025, as Merom drew down its coal inventory, while tons sold to third parties decreased 0.4 million tons, or 35.8%. On a consolidated basis, third party sales decreased$15.1 million, or 29.5%, versus the third quarter of 2025, as the decrease in tons sold was partially offset by a 9.9% increase in our average third party price per ton from$50.79 in 2025 to $55.80 in 2026.
Previous wording
Interest expense decreased $1.8 million, or 93.1%, from $1.9 million for the three months ended June 30, 2025 to $0.1 million in 2026. The decrease is attributable to the paydown of the Company’s previous bank facility from $30.0 million at December 31, 2025, while the new bank facility is not held within the Coal Operations segment.
Current wording
Interest expense decreased $2.2 million, or 95.3%, from $2.3 million for the three months ended September 30, 2025. The decrease is attributable to the paydown of the Company’s prior bank facility in March 2026, while the new bank facility is not held within the Coal Operations segment.
Previous wording
Income before income taxes decreased by $3.3 million from income before income taxes of $1.4 million in the second quarter of 2025 to a loss before income taxes of $1.9 million in 2026. The main drivers of this change in income (loss) before income taxes are described in the discussion above.
Current wording
Income before income taxes decreased by $11.2 million from income before income taxes of $6.1 million in the third quarter of 2025 to a loss before income taxes of $5.0 million in 2026. The main drivers of this change in income (loss) before income taxes are described in the discussion above.
Previous wording
Segment operating revenue from coal operations (including intercompany sales to Merom) decreased $3.0 million, or 3.0%, compared to the six months ended June 30, 2025. The decrease was driven by lower volume partially offset by an increase in the average sales price for our coal. We sold 1.8 million tons of coal during the first six months of 2026, a decrease of 0.2 million tons, or 8.8%, versus 2025. Our average sales price, on a segment basis, increased $3.26 per ton from $51.15 per ton to $54.41 per ton. The decreased sales were driven by lower coal demand from Merom due to the aforementioned equipment issues. Sunrise sold 0.2 million fewer tons of coal to Merom, offset by a 2.0% increase in tons sold to third parties in the six months ended June 30, 2026 compared to 2025. On a consolidated basis, third party sales increased $7.3 million, or 10.8%, versus the first half of 2025 attributable to 2.0% more tons sold to third parties, supplemented by an 8.5% increase in our average third party price per ton.
Current wording
Segment operating revenue from coal operations (including intercompany sales to Merom) decreased $21.2 million, or 12.5%, compared to the nine months ended September 30, 2025. The decrease was driven by lower volume partially offset by an increase in the average sales price for our coal. We sold 2.7 million tons of coal during the first nine months of 2026, a decrease of 0.6 million tons, or 17.9%, versus 2025. Our average sales price, on a segment basis, increased $3.33 per ton from $51.00 per ton to $54.33 per ton. Sunrise sold 0.3 million fewer tons of coal to Merom due to the aforementioned equipment issues, while tons sold to third parties decreased 14.3%. On a consolidated basis, third party sales decreased$7.8 million, or 6.5%, versus the first nine months of 2025, as the decrease in tons sold was partially offset by a 9.1% increase in our average third party price per ton from$51.08 in 2025 to$55.72 in 2026.
Previous wording
Interest expense decreased $3.0 million, or 76.0%, from $3.9 million for the six months ended June 30, 2025 to $0.9 million in 2026. The decrease is attributable to the paydown of the Company’s previous bank facility from $30.0 million at December 31, 2025, while the new bank facility is not held within the Coal Operations segment.
Current wording
Interest expense decreased $5.2 million, or 83.2%, from $6.3 million for the nine months ended September 30, 2025 to $1.1 million in 2026. The decrease is attributable to the paydown of the Company’s prior bank facility in March 2026, while the new bank facility is not held within the Coal Operations segment.
Previous wording
Loss before income taxes increased by $1.2 million, or 33.1% compared to the first six months of 2025. The main drivers of this change in loss before income taxes are described in the discussion above.
Current wording
Income (loss) before income taxes decreased by $12.4 million from income before income taxes of $2.4 million in the first nine months of 2025 to a loss before income taxes of $9.9 million in the nine-month period ended September 30, 2026. The main drivers of this change in income (loss) before income taxes are described in the discussion above.
Previous wording
(i)Average cost per ton sold is calculated as the sum of the Coal Operation’s fuel, other operating and maintenance costs, utilities and labor costs divided by tons sold for the respective period in this table. Coal Operations costs are presented in the “Discussion and Analysis of our Reportable Segments” above.
Current wording
1 Average cost per ton sold is calculated as the sum of the Coal Operation’s fuel, other operating and maintenance costs, utilities and labor costs divided by tons sold for the respective period in this table. Coal Operations costs are presented in the “Discussion and Analysis of our Reportable Segments” above.
Previous wording
Our effective tax rate (“ETR”) is estimated at ~6.4% and ~0% for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, we estimated our annual ETR based upon projected annual income (loss), forecasted permanent tax differences, discrete items, and statutory rates in states in which we operate. Our ETR differs from the statutory rate due primarily to statutory depletion in excess of tax basis and changes in the valuation allowance. The deduction for statutory percentage depletion does not necessarily change proportionately to changes in income (loss) before income taxes.
Current wording
Our effective tax rate (“ETR”) is estimated at ~0% for the nine months ended September 30, 2026 and 2025, respectively. Income tax expense of $1.8 million was recorded in the three months ended September 30, 2026, compared with a year-to-date income tax benefit of $1.7 million recorded through June 30, 2026. The change reflects a decrease in our estimated annual ETR. At June 30, 2026, we forecasted full-year pretax income, whereas at September 30, 2026, we forecast a full-year pretax loss, primarily due to financing costs related to the KLIM Facility, including the loss on extinguishment of the TCB Credit Facility and interest expense, and expected operating results. Our annual income tax estimate primarily reflects the change in our net deferred tax liability that is not offset by net operating loss carryforwards, which are limited to 80% of taxable income. For the nine months ended September 30, 2026, we estimated our annual ETR based upon projected annual income (loss), forecasted permanent tax differences, discrete items, and statutory rates in states in which we operate. Our ETR differs from the statutory rate due primarily to the valuation allowance and, historically, statutory depletion in excess of tax basis. The deduction for statutory percentage depletion does not necessarily change proportionately to changes in income (loss) before income taxes.
Previous wording
We are a holding company that is dependent on the capital resources of our subsidiaries to satisfy our liquidity requirements at the corporate level. Each of our significant operating subsidiaries typically generate cash from operating
Current wording
We are a holding company that is dependent on the capital resources of our subsidiaries to satisfy our liquidity requirements at the corporate level. Each of our significant operating subsidiaries typically generate cash from operating activities, but our ability to access the liquidity of these and other subsidiaries may be limited by tax and legal considerations, and other factors.
Previous wording
Hallador had $34.9 million of cash and restricted cash as of June 30, 2026 versus $15.4 million at December 31, 2025.
Current wording
Hallador had$433.0 million of cash and restricted cash as of September 30, 2026 versus$15.4 million at December 31, 2025.
Previous wording
Our short-term sources of corporate liquidity include (i) cash and cash equivalents held by Hallador, (ii) cash provided by operations, (iii) interest income received on our cash and cash equivalents and, (iv) borrowing availability under our new credit facility. For the details of the borrowing availability under our credit facility, see*“Item 1. Financial Statements - Note 4 – Bank Debt”*to our unaudited condensed consolidated financial statements.
Current wording
Our short-term sources of corporate liquidity include (i) cash and cash equivalents held by Hallador, (ii) cash provided by operations, (iii) interest income received on our cash and cash equivalents. For the details of the borrowing capacity under our credit facility, see“Item 1. Financial Statements - Note 5 – Debt”to our unaudited condensed consolidated financial statements.
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Previous report — wording carried elsewhere
Interest expense increased $1.7 million, or 48.0%, from the first half of 2025. The increase in our interest expense primarily relates to accretion on our prepaid delivered energy contracts that were entered into in 2024 and 2025. Hallador has not entered into any new prepaid delivered energy contracts in 2026.
Previous report — wording carried elsewhere
activities, but our ability to access the liquidity of these and other subsidiaries may be limited by tax and legal considerations, and other factors.