Core Natural Resources, Inc.CNR
Core Natural Resources, Inc. Income Taxes Disclosure
NOTE 5—INCOME TAXES:
The components of income tax (benefit) expense were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| U.S. Federal | $ | 349 | $ | 34,009 | $ | 100,572 | |||||||||||
| U.S. State | 135 | 1,413 | 7,287 | ||||||||||||||
| 484 | 35,422 | 107,859 | |||||||||||||||
| Deferred: | |||||||||||||||||
| U.S. Federal | (76,470) | 9,557 | 12,528 | ||||||||||||||
| U.S. State | (4,501) | (737) | 1,593 | ||||||||||||||
| (80,971) | 8,820 | 14,121 | |||||||||||||||
| Total Income Tax (Benefit) Expense | $ | (80,487) | $ | 44,242 | $ | 121,980 | |||||||||||
During the year ended December 31, 2025, the Company adopted ASU 2023-09 Income Taxes prospectively. A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rate of 21% to loss before income tax for the year ended December 31, 2025 is as follows:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| Amount | Percent | ||||||||||
| Statutory U.S. federal income tax rate | $ | (49,078) | 21.0 | % | |||||||
State income taxes, net of federal tax benefit (a) | (3,449) | 1.5 | |||||||||
| Research and development tax credits | (750) | 0.3 | |||||||||
| Nontaxable or nondeductible items: | |||||||||||
| Excess tax depletion | (36,346) | 15.6 | |||||||||
| Compensation | 6,896 | (3.0) | |||||||||
| Other | 2,017 | (0.9) | |||||||||
| Changes in unrecognized tax positions | (843) | 0.4 | |||||||||
| Other adjustments | 1,066 | (0.5) | |||||||||
| Income Tax Benefit / Effective Rate | $ | (80,487) | 34.4 | % | |||||||
(a) State taxes in Pennsylvania, Maryland and West Virginia made up the majority of the tax effect in this category for the year ended December 31, 2025.
A reconciliation of income tax expense and the amount computed by applying the statutory federal income tax rate of 21% to earnings before income tax for the years ended December 31, 2024 and 2023 is as follows:
| Year Ended December 31, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Amount | Percent | Amount | Percent | ||||||||||||||||||||
| Statutory U.S. federal income tax rate | $ | 69,436 | 21.0 | % | $ | 163,353 | 21.0 | % | |||||||||||||||
| State income taxes, net of federal tax benefit | 3,017 | 0.9 | 7,618 | 1.0 | |||||||||||||||||||
| Excess tax depletion | (22,397) | (6.8) | (26,802) | (3.5) | |||||||||||||||||||
| Foreign derived intangible income | (4,501) | (1.4) | (23,545) | (3.0) | |||||||||||||||||||
| Uncertain tax positions | (1,452) | (0.4) | 36 | — | |||||||||||||||||||
| Compensation | 1,480 | 0.5 | 2,284 | 0.3 | |||||||||||||||||||
| Tax credits | (1,000) | (0.3) | (700) | (0.1) | |||||||||||||||||||
| State rate change and prior period adjustments | (644) | (0.2) | (809) | (0.1) | |||||||||||||||||||
| Other | 303 | 0.1 | 545 | 0.1 | |||||||||||||||||||
| Income Tax Expense / Effective Rate | $ | 44,242 | 13.4 | % | $ | 121,980 | 15.7 | % | |||||||||||||||
Significant components of deferred tax assets and liabilities were as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred Tax Asset: | |||||||||||
| Net operating loss | $ | 222,317 | $ | 1,097 | |||||||
| Pneumoconiosis benefits | 59,729 | 31,663 | |||||||||
| Postretirement benefits other than pensions | 44,587 | 40,226 | |||||||||
| Asset retirement obligations | 43,406 | 40,445 | |||||||||
| Other | 55,568 | 43,638 | |||||||||
| Total Deferred Tax Asset | 425,607 | 157,069 | |||||||||
| Valuation Allowance | (75,338) | — | |||||||||
| Net Deferred Tax Asset | 350,269 | 157,069 | |||||||||
| Deferred Tax Liability: | |||||||||||
| Equity Partnerships | (410,966) | (155,039) | |||||||||
| Property, plant and equipment | (54,626) | (39,154) | |||||||||
| Other | (14,790) | (12,090) | |||||||||
| Total Deferred Tax Liability | (480,382) | (206,283) | |||||||||
| Net Deferred Tax Liability | $ | (130,113) | $ | (49,214) | |||||||
At December 31, 2025, the Company had gross federal net operating loss carryforwards of $717,286. Of these carryforwards, $112,605 will expire, if not utilized, starting in 2037. The remaining carryforwards have no expiration; however, they can only be used to offset 80% of the Company’s U.S. federal taxable income in any taxable year.
At December 31, 2025, the net operating loss deferred tax asset of $222,317 comprised federal and state components of $150,636 and $71,681, respectively. Certain state net operating loss carryforwards will begin to expire starting in 2026.
The Company assesses the need for a valuation allowance against its deferred tax assets, including temporary differences and tax attributes, through a review of all available positive and negative evidence. On the basis of this assessment, as of December 31, 2025, the Company had a valuation allowance against certain state net operating loss and capital loss carryforwards.
A reconciliation of the beginning and ending amount of the valuation allowance is as follows:
| Year Ended December 31, | |||||
| 2025 | |||||
| Balance at January 1 | $ | — | |||
| Valuation Allowance Acquired in Merger | 77,269 | ||||
| Deductions | (1,931) | ||||
Balance at December 31 (a) | $ | 75,338 | |||
(a) There were no valuation allowances during the years ended December 31, 2024 and 2023.
Income Taxes Paid
Income taxes paid by jurisdiction were as follows:
| Year Ended December 31, | |||||
| 2025 | |||||
| U.S. federal income taxes paid, net of refunds received | $ | 450 | |||
| State and local income taxes paid, net of refunds received | 50 | ||||
| Total Income Taxes Paid | $ | 500 | |||
Unrecognized Tax Benefits
The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at January 1 | $ | — | $ | 1,987 | $ | 1,941 | |||||||||||
| Additions based on tax positions related to the current year | — | — | 22 | ||||||||||||||
| Additions for tax positions of prior years | 6,808 | — | 24 | ||||||||||||||
| Reductions due to the statute of limitations | (855) | — | — | ||||||||||||||
| Settlements | — | (1,987) | — | ||||||||||||||
| Balance at December 31 | $ | 5,953 | $ | — | $ | 1,987 | |||||||||||
If recognized, the Company’s unrecognized tax benefits at December 31, 2025 would impact the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The Company had no accrued interest and penalties at December 31, 2025 and 2024.
The Company expects a decrease in its net unrecognized tax benefits of $844 during the next 12 months due to the expiration of statutes.
The Company is primarily subject to taxation in the U.S. and its various states. Due to the existence of federal and state net operating losses, the Company’s federal and state income tax returns may be open to examination beyond the typical statutes of limitations periods.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 9, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2019 | Feb 14, 2020 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.