What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-15 compared with 2020-03-18 · 413 added, 424 removed, 423 unchanged (66% of the section changed)

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Price range of our common stock

Upon the consummation of the transactions contemplated by the Merger Agreement, Contura began trading on the New York Stock Exchange under the ticker “CTRA” on November 9, 2018.

Previously, Contura shares traded on the OTC market under the ticker “CNTE.” The following table sets forth, for the periods indicated, the high and low sales prices per share of our common stock reported in the OTC market and the New York Stock Exchange.

Upon the consummation of the transactions contemplated by the Merger Agreement, we began trading on the New York Stock Exchange under the ticker “CTRA” on November 9, 2018.

Following the effectiveness of our name change on February 1, 2021, our ticker symbol on the New York Stock Exchange changed from “CTRA” to “AMR” effective on February 4, 2021.

The following table sets forth, for the periods indicated, the high and low sales prices per share of our common stock reported on the New York Stock Exchange.

2020 High Low

First Quarter $9.15 $1.93

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Fourth Quarter $14.32 $6.37

2019 High Low

First Quarter $66.00 $54.21

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The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.

Our common stock is registered by book-entry only.

Dividend Policy

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During the years ended 2020 and 2019, we did not pay dividends on our common stock.

Refer to Note 13 for information on the dividend paid in 2017.

Our Board of Directors periodically evaluates the initiation of dividends.

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Average Price

Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Share Repurchase Programs (2)

Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Share Repurchase Programs (2)

Approximate Dollar

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October 1, 2020 through October 31, 2020

— $ — — $ 67,552

November 1, 2020 through November 30, 2020

— $ — — $ 67,552

December 1, 2020 through December 31, 2020

3,138 $ 12.15 — $ 67,552

3,138 — $ 67,552

(1) We are authorized to repurchase common shares from employees (upon the election by the employee) to satisfy the employees’ statutory tax withholdings upon the vesting of stock grants.

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As of October 1, 2019, we suspended the Company Repurchase Plan.

(3) We cannot estimate the number of shares that will be repurchased because decisions to purchase are subject to market and business conditions, levels of available liquidity, our cash needs, restrictions under agreements or obligations, legal or regulatory requirements or restrictions, and other relevant factors.

regulatory requirements or restrictions, and other relevant factors.

This amount does not include $16 thousand of stock repurchase related fees.

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Selected Financial Data

The following table presents selected financial and other data for the most recent five fiscal periods.

The term “Successor” refers to Contura and its subsidiaries for periods beginning as of July 26, 2016 and thereafter.

The term “Predecessor” refers to Contura on a carve-out basis using Predecessor Alpha’s historical basis and our assets, liabilities and operating results while they were under Predecessor Alpha’s ownership.

The selected historical consolidated and combined financial data for the years ended December 31, 2019, 2018, and 2017, and as of December 31, 2019 and 2018 have been derived from our audited consolidated financial statements for the year ended December 31, 2019, which are included elsewhere in this Annual Report on Form 10-K.

The selected historical consolidated and combined financial data for the Successor period from July 26, 2016 to December 31, 2016 and for the Predecessor period from January 1, 2016 to July 25, 2016, and as of December 31, 2017, have been derived from our audited consolidated and Predecessor combined financial statements for the year ended December 31, 2018, which are not included this Annual Report on Form 10-K.

The selected historical combined financial data for the Predecessor year ended December 31, 2015 and as of December 31, 2016 and December 31, 2015 have been derived from the audited Predecessor financial statements that are not included in this Annual Report on Form 10-K.

The selected historical combined financial data for the Predecessor year as of July 25, 2016 have been derived from Contura’s unaudited financial statements, which are not included in this Annual Report on Form 10-K.

As a result of our acquisition of certain Predecessor Alpha core coal operations in connection with Predecessor Alpha’s restructuring, the Successor consolidated financial statements on and after July 25, 2016 are not comparable with the Predecessor combined financial statements prior to that date.

Our Predecessor combined financial statements and condensed combined financial statements include allocations of expenses for certain corporate functions historically performed by Predecessor Alpha, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, employee benefits and incentives, insurance and stock-based compensation.

These costs may not be representative of costs incurred by us as an independent company.

Consequently, the financial information included here may not necessarily reflect our financial position, results of operations and cash flows in the future or what our financial condition, results of operations and cash flows would have been had we been an independent company during the periods presented.

The results of operations for the historical periods included in the following table are not necessarily indicative of the results to be expected for future periods.

In addition, see Item 1A “Risk Factors” of this Annual Report on Form 10-K for a discussion of risk factors that could impact our future results of operations.

In addition, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8 “Financial Statements and Supplementary Data” for additional financial information.

SELECTED HISTORICAL CONSOLIDATED AND COMBINED FINANCIAL DATA

(Amounts in thousands, except share and per share data)

For the Year Ended December 31, 2019

For the Year Ended December 31, 2018

For the Year Ended December 31, 2017

For the Period from July 26, 2016 to December 31, 2016

For the Period from January 1, 2016 to July 25, 2016

For the Year Ended December 31, 2015

Statements of Operations Data:

Coal revenues

Freight and handling revenues

Other revenues

Total revenues

Costs and expenses:

Cost of coal sales (exclusive of items shown separately below)

Depreciation, depletion and amortization

Accretion on asset retirement obligations

Amortization of acquired intangibles, net

Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately above)

Merger-related costs

Secondary offering costs (1)

Asset impairment and restructuring (2)

Goodwill impairment (3)

Total other operating (income) loss:

Mark-to-market adjustment for acquisition-related obligations

Gain on settlement of acquisition-related obligations

Other (income) expenses

Total costs and expenses

(Loss) income from operations

Other (expense) income:

Interest expense

Interest income

Mark-to-market adjustment for warrant derivative liability

Loss on modification and extinguishment of debt

Equity loss in affiliates

Bargain purchase gain

Miscellaneous (loss) income, net

Total other expense, net

(Loss) income from continuing operations before reorganization items and income taxes

Reorganization items, net

(Loss) income from continuing operations before income taxes

Income tax benefit

Net (loss) income from continuing operations

Discontinued operations:

(Loss) income from discontinued operations before income taxes

Income tax benefit (expense) from discontinued operations

For the Year Ended December 31, 2019

For the Year Ended December 31, 2018

For the Year Ended December 31, 2017

For the Period from July 26, 2016 to December 31, 2016

For the Period from January 1, 2016 to July 25, 2016

For the Year Ended December 31, 2015

Statements of Operations Data:

(Loss) income from discontinued operations

Net (loss) income

Basic (loss) income per common share:

(Loss) income from continuing operations

(Loss) income from discontinued operations

Net (loss) income

Diluted (loss) income per common share:

(Loss) income from continuing operations

(Loss) income from discontinued operations

Net (loss) income

Weighted average shares - basic

Weighted average shares - diluted

Statement of Cash Flows Data:

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

As of December 31,

As of July 25, 2016

As of December 31, 2015

Balance Sheet Data (at period end):

Cash and cash equivalents

Working capital (6)

Total current and non-current assets – discontinued operations

Notes payable and long-term debt, including current portion, net

Total current and non-current liabilities – discontinued operations

Total liabilities (7)

Stockholders’ equity/Predecessor business equity

(1) Secondary offering costs reflect expenses incurred in connection with the withdrawn secondary offering of our common stock.

(2) Asset impairment for the year ended December 31, 2019 includes a long-lived asset impairment of $9,176 and $50,993 related to asset groups within the CAPP - Met and CAPP - Thermal reporting segments, respectively, and an asset impairment of $6,155 primarily related to the write-off of prepaid purchased coal as a result of Blackjewel’s Chapter 11 bankruptcy filing on July 1, 2019.

Asset impairment and restructuring expenses for the year ended December 31, 2015 include long-lived asset impairment of $224,139 and $72,012 related to asset groups within the NAPP and CAPP - Met reporting segments, respectively.

Goodwill impairment for the year ended December 31, 2019 includes impairment charges of $124,353 within the CAPP - Met reporting segment.

Historical basic income (loss) per share is calculated based on the weighted average common shares outstanding for the year ended December 31, 2019, December 31, 2018, December 31, 2017 and for the period from July 26, 2016 to December 31, 2016.

For the years ended December 31, 2018 and December 31, 2017, the dilutive effect of stock options and other stock-based instruments is considered when calculating the diluted earnings per share as the Company generated net income during these periods.

There was no dilutive effect to common shares outstanding for the year ended December 31, 2019 and the period from July 26, 2016 to December 31, 2016 as in periods of net loss, the number of shares used to calculate diluted earnings per share is the same as basic earnings per share.

Cash flow data includes discontinued operations.

Working capital (current assets less current liabilities) calculation includes cash and cash equivalents but excludes discontinued operations.

Total liabilities as of July 25, 2016 and December 31, 2015 include $35,693 and $72,242, respectively, of liabilities subject to compromise related to Alpha’s bankruptcy filing.

Not applicable.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related notes and the risk factors included elsewhere in this Annual Report on Form 10-K.

COVID-19 Pandemic

In the first quarter of 2020, the COVID-19 virus was declared a pandemic by the World Health Organization.

The COVID-19 pandemic has had negative impacts on our business, results of operations, financial condition and cash flows.

A continued period of reduced demand for our products could have additional significant adverse consequences for us.

The full extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, its impact on our customers and suppliers and the range of governmental and community reactions to the pandemic, which are still uncertain and cannot be fully predicted at this time.

Our current view of the impacts of COVID-19 to our customers and suppliers is discussed below in the Market Overview section.

Additionally, refer to Note 1 for further discussion of the COVID-19 pandemic impacts to our business and Note 8 for discussion of certain strategic actions announced during the second quarter of 2020 with respect to two of our thermal coal mining complexes in an effort to strengthen our financial performance.

All of our coal mining operations have been classified as essential in the states in which we operate.

Health and safety are core values of our company and are the foundation for how we manage every aspect of our business and we have therefore implemented policies, procedures and prevention measures to protect our employees during the COVID-19 pandemic.

These policies, procedures and prevention measures include, but are not limited to, employee communications on COVID-19 monitoring and precautionary measures, enhanced cleaning and sterilization practices, limiting contractor access to our properties, limiting business travel, implementing social distancing measures by staggering shift times, limiting in-person meetings and meeting sizes, and remote work arrangements.

We will continue to evaluate these policies, procedures and precautionary measures for further enhancements as necessary.

We have not experienced significant supply chain disruptions due the COVID-19 pandemic.

We will continue to monitor these developments closely.

Market Overview

After strong metallurgical coal prices in the first half of 2019 with Atlantic High-Vol.

A prices averaging approximately $200 per metric ton, the coal market encountered weakness beginning in July of 2019, resulting in prices averaging approximately $50 per metric ton lower in the second half of 2019.

This had a negative impact on our results during the third and fourth quarters of 2019.

While the economic softness and resulting coal price weakness was felt across our international markets, the most significant steel production downturns occurred in Europe and South America.

This economic softness has continued into 2020 and has been further worsened by the growing impact of the coronavirus.

We view the current market softness for metallurgical coal to be driven by subdued demand.

Reductions in North American production and limited capital expenditures have maintained the metallurgical coal supply, and we anticipate an improved outlook for metallurgical coal demand as the coronavirus crisis subsides, and international tariff agreements are implemented.

While the thermal markets also experienced weakness, the impact on our 2019 results was more subdued due to the presence of longer-term contracts.

After a challenging COVID-19-afflicted 2020, the Australian metallurgical coal market, despite the recent pullback, has shown meaningful improvement in 2021, with the Australian premium hard coking coal index increasing 22% to $125 per metric ton in February since the end of 2020 and up nearly 30% since the lows of mid-November.

The Atlantic High-Vol A indices have also performed well after reaching a low of $105 in mid-August.

The current February High-Vol A index of $153 per metric ton represents a 46% improvement over that period.

Global manufacturing and industrial production are continuing to show growth in all regions with the manufacturing Purchasing Managers’ Indices (“PMI”) above 50.0 in the U.S., Europe, Brazil, India, and China, which is showing the most moderate growth among the major producers at 50.9 in January.

According to the World Steel Association (“WSA”), December 2020 crude steel production increased compared to the same prior year period in most producing regions.

The overall global growth of 5.8% was driven mainly by China and Europe, which grew 7.7% and 10.2% in December, respectively.

For the full year 2020, the global crude steel production declined less than 1%, led by declines in North America and Europe.

South America, driven by Brazil, exhibited the strongest growth of any

major region, growing 16.3% in December.

Turkey posted one of the most impressive growth rates in December and for the full year 2020, with crude steel production growing 17.7% and 6.0%, respectively.

We concluded our 2021 domestic metallurgical contracts during the fourth quarter.

In total, we expect to sell approximately 14 million tons from our Met reportable segment in 2021.

Coking coal prices have risen from their recent multi-year lows.

Trade tensions between Australia and China forced Australian coal producers to sell at weaker prices and encouraged them to divert and re-sell cargoes away from China into other markets.

These actions have opened the door for some North American coking coal producers to ship coal to China at higher netbacks than could be achieved in Atlantic Basin markets.

In addition, we see demand improving in other Atlantic Basin and global markets.

At this time, we are also seeing increasing spot interest from both domestic and seaborne customers and prospective customers which has resulted in an increase in shipments.

In connection with the company’s strategic focus on optimizing metallurgical coal production, we continue striving to match our available products and production with customer demand.

On the thermal side, as of the end of December, natural gas prices had not achieved the previously forecasted levels.

Since that time, severe weather has resulted in high consumer electricity demand and lower production, causing stress to the energy system in parts of the U.S.

Natural gas inventories are poised to drop to the five-year average for the first time since the end of 2019.

Central Appalachian thermal coal burns for our customers have not yet been significantly impacted by the fluctuations in natural gas prices, but we have seen increased demand associated with the recent severe weather.

Internationally, Europe and Asia have also experienced severe weather, supply disruptions, reductions in coal capacity, and high carbon prices limiting opportunities for US coal.

Increased ESG pressures are forcing expedited closure of coal units, domestically and abroad.

US thermal coal producers are continuing to reduce investment in thermal coal.

At our thermal coal operations, we have significantly reduced inventories at all locations, and are matching our sales and production to make for an orderly transition to lower thermal coal production.

As Alpha enters 2021, we continue to evaluate market conditions for our metallurgical coal products amid residual uncertainty attributable to the continued concern around the COVID-19 pandemic.

The impact the pandemic may have on demand continues to make customer demand forecasts challenging.

Depending on the extent and timing of global and national economic stabilization and recovery, our ability to estimate future customer coal demand remains limited.

Business Overview

We are a large-scale provider of met and thermal coal to a global customer base, operating high-quality, cost-competitive coal mines across two major U.S.

coal basins (CAPP and NAPP).

As of December 31, 2019 , our operations consisted of twenty-nine active mines and ten coal preparation and load-out facilities, with approximately 4,360 employees.

We produce, process, and sell met coal and thermal coal from operations located in Virginia, West Virginia and Pennsylvania.

We are a Tennessee-based mining company with operations across Virginia and West Virginia.

With customers across the globe, high-quality reserves and significant port capacity, we are a leading U.S.

supplier of metallurgical products for the steel industry.

We operate high-quality, cost-competitive coal mines across the CAPP coal basin.

As of December 31, 2020, our operations consisted of twenty-three active mines and eight coal preparation and load-out facilities, with approximately 3,250 employees.

We produce, process, and sell met coal and thermal coal from operations located in Virginia and West Virginia.

We also sell coal produced by others, some of which is processed and/or blended with coal produced from our mines prior to resale, with the remainder purchased for resale.

As of December 31, 2019 , we had 1.3 billion tons of reserves, including 861.0 million tons of proven reserves and 469.9 million tons of probable reserves.

As of December 31, 2020, we had 623.5 million tons of reserves, including 445.0 million tons of proven reserves and 178.5 million tons of probable reserves.

We began operations on July 26, 2016, with mining operations in NAPP, CAPP, and the PRB.

Through the Acquisition, Contura acquired a significant reserve base.

We also acquired Alpha’s 40.6% interest in the DTA coal export terminal in eastern Virginia, and on March 31, 2017, we acquired a portion of another partner’s ownership stake and increased our interest to 65.0%.

Through the Acquisition, we acquired a significant reserve base.

We also acquired Alpha Natural Resources Inc.’s 40.6% interest in the DTA coal export terminal in eastern Virginia, and on March 31, 2017, we acquired a portion of another partner’s ownership stake and increased our interest to 65.0%.

We merged with Alpha Natural Resources Holdings, Inc.

and ANR, Inc.

on November 9, 2018.

On December 8, 2017, the Company closed a transaction to sell the Eagle Butte and Belle Ayr mines located in the PRB, Wyoming, along with related coal reserves, equipment, infrastructure and other real properties.

The PRB results of operations and financial position are reported as discontinued operations in the Consolidated Financial Statements.

The historical information in the accompanying Notes to the Consolidated Financial Statements has been restated to reflect the effects of the PRB operations being reported as discontinued operations in the Consolidated Financial Statements.

Refer to Note 3 for information related to Blackjewel’s subsequent bankruptcy filing and the related ESM Transaction.

On December 10, 2020, we closed on a transaction with Iron Senergy Holdings, LLC, to sell our thermal coal mining operations located in Pennsylvania consisting primarily of our Cumberland mining complex and related property (our former NAPP operations).

This transaction accelerated our strategic exit from thermal coal production to shift our focus toward met coal production.

The former PRB and NAPP operations results of operations and financial position are reported as discontinued operations in the Consolidated Financial Statements.

The historical information in the accompanying Notes to the Consolidated Financial Statements has been restated to reflect the effects of these former operations being reported as discontinued operations in the Consolidated Financial Statements.

Refer to Note 3 for further information on discontinued operations.

The Merger with Alpha Natural Resources Holdings, Inc.

and ANR, Inc.

was completed on November 9, 2018.

Refer to Note 3 for information on terms of the Merger Agreement.

For the years ended December 31, 2020 and 2019, sales of met coal were 12.3 million tons and 12.7 million tons, respectively, and accounted for approximately 80% and 74%, respectively, of our coal sales volume.

Sales of thermal coal were 10.8 million tons and 6.5 million tons, respectively, and accounted for approximately 45.4% and 36.8%, respectively, of our coal sales volume.

Sales of thermal coal were

3.2 million tons and 4.5 million tons, respectively, and accounted for approximately 20% and 26%, respectively, of our coal sales volume.

Our sales of met coal were made primarily to steel companies in the northeastern and midwestern regions of the United States and in several countries in Europe, Asia and the Americas.

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We also record freight and handling fulfillment revenue within coal revenues for freight and handling services provided in delivering coal to certain customers, which are a component of the contractual selling price.

As of December 31, 2019 , we have three reportable segments:

CAPP - Met, CAPP - Thermal, and NAPP.

As of December 31, 2020, we have two reportable segments:

Met and CAPP - Thermal.

To conform to the current period reportable segments presentation, the prior periods have been restated to reflect the change in reportable segments.

Refer to Note 25 for additional disclosures on reportable segments including export coal revenue information.

Business Developments

Merger with Alpha Natural Resources Holdings, Inc.

and ANR, Inc.

Refer to Note 3 for information on Alpha Merger and terms of the Merger Agreement.

Sale of PRB Operations

Discontinued operations consist of ongoing activity related to our former PRB operations.

On December 8, 2017, we closed a transaction with Blackjewel to sell our Eagle Butte and Belle Ayr mines located in Wyoming.

However, during the post-closing mine permit transfer period, we were required to maintain our existing reclamation bonds and related collateral.

To facilitate permit transfer to the Buyer, during 2018, we agreed to backstop a total of $44.8 million of Blackjewel’s bonding obligations with respect to the Eagle Butte and Belle Ayr permits by entering into secondary general indemnification agreements and providing letters of credit totaling $18.8 million to sureties as collateral for our indemnification obligations.

Blackjewel agreed that, by June 30, 2019, it would enter into additional financial arrangements and cause each surety to release and return each letter of credit and cancel our general indemnification agreements.

Indemnity bonds in the amount of $26.0 million were issued by a third-party insurer in our favor to insure Blackjewel’s performance obligations with respect to cancellation of the general indemnification agreements and return of the letters of credit.

On July 1, 2019, prior to the transfer of the permits, Blackjewel announced that it and certain affiliated entities had filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of West Virginia (the “Bankruptcy Court”), which cases, along with the cases filed by certain other affiliates of Blackjewel a few weeks later, are being jointly administered under the caption In re Blackjewel, L.L.C., Case No.

19-30289 (Bankr.

On July 25, 2019, we announced that we would seek to serve as the stalking horse purchaser for certain assets offered for sale through Blackjewel’s bankruptcy proceedings.

On August 6, 2019, the Bankruptcy Court verbally approved our purchase of the Eagle Butte and Belle Ayr mines in Wyoming and the Pax Surface Mine in West Virginia for $33.8 million pending resolution of outstanding objections and approval of certain regulatory agencies.

In connection with our agreement to serve as stalking horse purchaser, we made a purchase deposit of $8.1 million (the “Stalking Horse Purchase Deposit”).

On August 29, 2019, as a result of ongoing objections with respect to the Wyoming mines, the Bankruptcy Court entered an order approving the separate sale of the Pax Surface Mine to us for $6.2 million (comprised, in part, of $5.1 million credited against the Stalking Horse Deposit).

On September 18, 2019, we announced that we had entered into an agreement which would allow a third party to purchase the Eagle Butte and Belle Ayr mines from Blackjewel and assume associated reclamation obligations.

On October 4, 2019, the Bankruptcy Court entered an order approving the sale by Blackjewel of the Belle Ayr and Eagle Butte mines to ESM, an affiliate of FM Coal, LLC (“FM Coal”).

The closing of the ESM acquisition occurred on October 18, 2019.

As discussed above, we were the former owner of the Western Assets.

As the mine permit transfer process relating to our sale of the Western Assets to Blackjewel had not been completed prior to Blackjewel’s filing for Chapter 11 bankruptcy protection, we remained the permitholder in good standing for both mines and maintained surety bonding to cover related reclamation and other obligations.

In connection with ESM’s acquisition of the Western Assets from Blackjewel, on October 18, 2019 (the “ESM Transaction”), Contura and ESM finalized an agreement which provided, among other items, for the transfer of the Western Asset permits from Contura to ESM once certain approvals for their transfer have been obtained and for the assumption by ESM of the related reclamation obligations.

In connection with the closing of the ESM Transaction, the surety bonding previously maintained by us for the benefit of the DEQ was released and has been replaced with substitute surety bonds arranged for by ESM in the amount of approximately $238.0 million.

In accordance with separate agreements with ESM’s surety providers, we have no liability with respect to the substitute surety bonds.

In addition, pursuant to an agreement with ESM, FM Coal, and the United States Department of Interior’s Office of Surface Mining, Reclamation and Enforcement (“OSM”), OSM has agreed that we would not be linked to any future bond forfeiture related to the Western Assets nor any Surface Mining Control and Reclamation Act of 1977 violations by ESM prior to permit transfer.

ESM is operating the mines during the permit transfer process and has agreed to use commercially reasonable efforts to cause the permits to be transferred as promptly as possible.

As Blackjewel’s surety bonds

were also released in connection with the ESM Transaction, our $44.8 million backstop of Blackjewel’s bonding program and $18.8 million supporting letters of credit were released.

Pursuant to the terms of the ESM Transaction, we agreed to pay ESM $90.0 million ($81.3 million at closing and an additional $8.7 million into escrow pursuant to terms to be mutually agreed upon between the parties).

In addition, we agreed to finalize the conveyance of certain Wyoming real property to ESM upon release of such property as collateral by the DEQ, waive its rights to the remaining $3.1 million of the Stalking Horse Purchase Deposit provided to Blackjewel in connection with the stalking horse agreement, and pay certain Blackjewel debtor-in-possession (“DIP”) lenders $3.0 million of principal and interest pursuant to an existing agreement between us and those lenders.

Refer to Note 22 .

ESM agreed to indemnify us and our affiliates against all reclamation liabilities related to the Western Assets and against claims by the federal government, the State of Wyoming, or Campbell County, Wyoming for royalties, ad valorem taxes, and other amounts relating to the Western Assets for the period beginning on December 8, 2017.

As of the ESM Transaction closing date, our asset retirement obligation with respect to the Western Assets totaled $152.9 million.

Prior to the transfer of the Western Asset permits to ESM, we will continue to have potential risk with respect to the related reclamation obligations.

However, given (i) the release of our bonding obligations described above and the posting of substitute bonds by ESM, (ii) the agreement with ESM’s surety providers that release us from liability with respect to the substitute bonds or the obligations secured thereby, (iii) the terms of the OSM agreement, (iv) the terms on which ESM is authorized to operate pursuant to the permits, and (v) the ESM indemnity with respect to the reclamation obligations, we expect the remaining risk to be low.

As a result, following the closing of the ESM Transaction and payment of amounts to ESM, our remaining reclamation obligation was reduced to zero during the three months ended December 31, 2019.

We will closely monitor the permit transfer process and periodically re-assess our reclamation obligations as required.

We received approximately $9.0 million of cash collateral returned related to the release of our surety bonds.

Additionally, in connection with the closing of the ESM Transaction, we paid $13.5 million to Campbell County, Wyoming for accrued ad valorem back taxes for 2018 and were released from all claims related thereto.

Pursuant to an agreement with ESM, the State of Wyoming Department of Revenue, and Blackjewel, the State of Wyoming Department of Revenue released us from any outstanding claims related to state tax obligations arising from or related to the Western Mines for any period through and including the closing date of the transaction.

In connection with the ESM Transaction, we recorded a $59.5 million gain within the depreciation, depletion, and amortization within discontinued operations in the Consolidated Statements of Operations during the three months ended December 31, 2019 as a result of the reduction of the reclamation obligation partially offset by the consideration paid in connection with the transaction as discussed above.

Refer to Note 4 for additional disclosure information on discontinued operations.

Other Business Development s

Effective February 1, 2021, we changed our corporate name from Contura Energy, Inc.

to Alpha Metallurgical Resources, Inc.

for rebranding to more accurately reflect our strategic focus on the production of met coal.

Following the effectiveness of our name change, our ticker symbol on the New York Stock Exchange changed from “CTRA” to “AMR” effective on February 4, 2021.

During the third quarter of 2020, we joined three other regional coal producers to restructure and expand the Virginia Coal & Energy Alliance to now be named the Metallurgical Coal Producers Association (“MCPA”) focusing on issues specific to the U.S.’s metallurgical coal industry.

Additionally, the MCPA will focus on our regional presence by combining forces to advance collective interests.

Factors Affecting Our Results of Operations

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We manage our commodity price risk for coal sales through the use of coal supply agreements.

As of March 6, 2020, we expect to ship on sales commitments of approximately 6.4 million tons of NAPP coal for 2020, all of which is priced at an average realized price per ton of $43.43, 12.3 million tons of CAPP - Met coal for 2020, 52% of which is priced at an average realized price per ton of $97.91, and 3.0 million tons of CAPP - Thermal coal for 2020, all of which is priced at an average realized price per ton of $55.95.

As of March 11, 2021, we have sales commitments as follows:

Tons % Priced Average Realized Price per Ton

Met 14.0 million 56 % $80.68

CAPP - Thermal 1.5 million 100 % $57.57

Due to the significant uncertainty in the worldwide coal markets due to COVID-19, there is risk of reduction in future shipments due to deferrals and utilization of force majeure clauses in customer contracts.

Realized Pricing .

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Coal volatility is a significant factor influencing met coal pricing as coal with a lower volatility has historically been more highly valued and typically commands a higher price in the market.

The volatility refers to the loss in mass, less moisture, when coal is heated in the absence of

The volatility of met coal determines the percentage of feed coal that actually becomes coke, known as coke yield, with lower volatility producing a higher coke yield.

The volatility refers to the loss in mass, less moisture, when coal is heated in the absence of air.

The volatility of met coal determines the percentage of feed coal that becomes coke, known as coke yield, with lower volatility producing a higher coke yield.

• Market Conventions.

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Accordingly, for international sales contracts, we typically bear the cost of transportation from our mines to the applicable outbound shipping port, and our coal sales realization per ton calculation reflects the conversion of such tonnage from metric tons into short tons, as well as the elimination of the freight and handling fulfillment component of coal sales revenue.

In addition, for domestic sales contracts, as customers typically bear the cost of transportation from our mines, our operations located farther away from the end user of the coal may command lower prices.

In addition, for domestic sales contracts, as customers typically bear the cost of transportation from our mines, our operations located further away from the end user of the coal may command lower prices.

• Regional Supply and Demand.

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Our results of operations for the years ended December 31, 2020 and 2019 are discussed in these “Results of Operations” presented below.

For the discussion of our results of operations and financial condition for the year ended December 31, 2018 compared to the year ended December 31, 2017, refer to “ Part II—Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019

The following table summarizes information about our revenues during the years ended December 31, 2020 and 2019:

Year Ended December 31,

Increase (Decrease)

(In thousands)

Year Ended December 31, Increase (Decrease)

(In thousands, except for per ton data) 2020 2019 $ or Tons %

Coal revenues $ 1,413,124 $ 1,995,934 $ (582,810) (29.2) %

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Total revenues $ 1,416,187 $ 2,001,280 $ (585,093) (29.2) %

Tons sold 15,513 17,152 (1,639) (9.6) %

Coal revenues.

Coal revenues increased $261.1 million , or 12.9% , for the year ended December 31, 2019 compared to the prior year period.

The increase was primarily due to higher coal sales volume of 6.1 million tons resulting from inclusion of a full year of activity from the properties acquired in the Merger.

Coal revenues decreased $582.8 million, or 29.2%, for the year ended December 31, 2020 compared to the prior year period.

The decrease was primarily due to lower total overall coal sales volume and lower coal sales realization within our Met operations as a result of a weaker pricing environment impacted by the COVID-19 pandemic.

Refer to the Coal Operations section below for further detail on coal revenues for the year ended December 31, 2020 compared to the prior year period.

Costs and Expenses

Cost and Expenses

The following table summarizes information about our costs and expenses during the years ended December 31, 2020 and 2019:

Year Ended December 31,

Increase (Decrease)

Year Ended December 31, Increase (Decrease)

(In thousands) 2020 2019 $ %

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Merger-related costs — 1,090 (1,090) (100.0) %

Asset impairment

Asset impairment and restructuring 83,878 66,324 17,554 26.5 %

Goodwill impairment — 124,353 (124,353) (100.0) %

Total other operating (income) loss:

Total other operating income:

Mark-to-market adjustment for acquisition-related obligations (8,750) (3,564) (5,186) (145.5) %

Gain on settlement of acquisition-related obligations

Other income (2,223) (974) (1,249) (128.2) %

Total costs and expenses $ 1,586,875 $ 2,170,383 $ (583,508) (26.9) %

Cost of coal sales.

Cost of coal sales increased $263.6 million , or 15.9% , for the year ended December 31, 2019 compared to the prior year period.

The increase was primarily driven by an increase in tons sold from properties acquired in the Merger and the related supplies and maintenance expense, salaries and wages expense, and royalties and taxes, partially offset by a decrease in the cost of purchased coal during the current period.

Cost of coal sales decreased $386.8 million, or 23.2%, for the year ended December 31, 2020 compared to the prior year period.

The decrease was primarily driven by a decrease in tons sold in the current period relative to the prior year period and decreased costs of purchased coal, salaries and wages expense, and supplies and maintenance expense as we continue to improve our cost management to achieve operational efficiencies, partially offset by inventory change during the current period.

Depreciation, depletion and amortization.

Depreciation, depletion and amortization increased $151.2 million , or 195.0% , for the year ended December 31, 2019 compared to the prior year period.

The increase in depreciation, depletion and amortization primarily related to increased purchases of machinery and equipment, increased asset development during the current period, and additions of property, plant and equipment, and owned and leased mineral rights as a result of the Merger.

Depreciation, depletion and amortization decreased $75.9 million, or 35.2%, for the year ended December 31, 2020 compared to the prior year period.

The decrease in depreciation, depletion and amortization primarily related to asset impairments and revisions to asset retirement obligations during the current period.

Accretion on asset retirement obligations.

Accretion on asset retirement obligations increased $2.6 million, or 11.1%, for the year ended December 31, 2020 compared to the prior year period.

This increase was primarily due to an increase in our asset retirement obligations as a result of the Merger.

This increase was primarily driven by an increase in our credit-adjusted risk-free rate used to discount the obligations relative to the prior period.

Amortization of acquired intangibles, net.

Amortization of acquired intangibles, net increased $12.4 million, or 388.9%, for the year ended December 31, 2020 compared to the prior year period.

The amortization is primarily related to the acquired above and below market-priced coal supply agreements and acquired mine permits as a result of the Merger.

In the prior period, there was more amortization of below market-priced coal supply agreements compared to the current period.

The increase was primarily driven by the lower current period amortization related to below-market acquired coal supply agreements.

Selling, general and administrative.

Selling, general and administrative expenses increased $19.7 million , or 33.2% , for the year ended December 31, 2019 compared to the prior year period.

This increase in expense was primarily related to increases of $7.6 million in professional fees, $5.6 million in wages and benefits expense, and $4.9 million in severance pay, partially offset by a decrease of $2.7 million in stock compensation expense during the current period.

Merger-related costs.

Merger-related costs decreased $50.7 million , or 97.9% , for the year ended December 31, 2019 compared to the prior year period.

The merger-related costs related primarily to professional fees, severance pay, and incentive pay incurred related to the Merger Agreement entered into with the Alpha Companies.

Asset impairment .

Asset impairment for the year ended December 31, 2019 includes a long-lived asset impairment of $60.2 million related to asset groups recorded within the CAPP - Met and CAPP - Thermal reporting segments and an asset impairment of $6.1 million primarily related to the write-off of prepaid purchased coal as a result of Blackjewel’s Chapter 11 bankruptcy filing on July 1, 2019.

Refer to Note 2 and Note 4 for further information.

Goodwill impairment .

We recorded a goodwill impairment of $124.4 million during the year ended December 31, 2019 .

Selling, general and administrative expenses decreased $21.6 million, or 27.4%, for the year ended December 31, 2020 compared to the prior year period.

This decrease in expense was primarily related to decreases of $6.5 million in severance expense, $5.8 million in wages and benefits expense, $4.8 million in stock compensation expense, and $4.4 million in professional fees, partially offset by an increase of $2.8 million in incentive pay.

Asset impairment and restructuring.

Asset impairment and restructuring increased $17.6 million, or 26.5%, for the year ended December 31, 2020 compared to the prior year period.

Asset impairment and restructuring for the year ended December 31, 2020 includes long-lived asset impairments of $81.0 million related to asset groups recorded within the Met and CAPP - Thermal reporting segments and restructuring expense of $2.9 million recorded in CAPP - Thermal and All Other reporting segments.

Asset impairment and restructuring for the year ended December 31, 2019 includes a long-lived asset impairment of $60.2 million related to asset groups recorded within the Met and CAPP - Thermal reporting segments and an asset impairment of $6.2 million primarily related to the write-off of prepaid purchased coal as a result of Blackjewel’s Chapter 11 bankruptcy filing on July 1, 2019.

Refer to Note 8 for further information.

Mark-to-market adjustment for acquisition-related obligations.

For the year ended December 31, 2019 , we recorded a mark-to-market adjustment for acquisition-related obligations of ($3.6) million related to the Contingent Revenue Obligation assumed as a result of the Merger.

Other income.

Other income decreased by $15.7 million , or 96.5% , for the year ended December 31, 2019 compared to the prior year period.

The other income in the prior year period was primarily attributable to a gain on disposal of assets of $16.4 million related to the sale of a disposal group within the Company’s CAPP - Met segment.

Other Income (Expense)

The following table summarizes information about our other income (expense) during the years ended December 31, 2019 and 2018 :

Year Ended December 31,

Increase (Decrease)

The mark-to-market adjustment for acquisition-related obligations resulted in an increase to income of $5.2 million for the year ended December 31, 2020 compared to the adjustment in the prior year period.

This increase was related to changes in underlying fair value assumptions during the current period.

Refer to Note 18 for Contingent Revenue Obligation fair value input assumptions.

Other (Expense) Income

The following table summarizes information about our other (expense) income during the year ended December 31, 2020 and 2019:

Year Ended December 31, Increase (Decrease)

(In thousands) 2020 2019 $ %

Other income (expense):

Other (expense) income:

Interest expense $ (74,528) $ (67,521) $ (7,007) (10.4) %

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Interest expense.

Interest expense increased $28.0 million , or 72.1% , for the year ended December 31, 2019 compared to the prior year period, primarily due to an increase in debt outstanding, higher interest rates, and larger accretion of debt discounts related to the debt facilities in place during the current period.

Interest expense increased $7.0 million, or 10.4%, for the year ended December 31, 2020 compared to the prior year period, primarily due to an increase in debt outstanding and higher interest rates related to the debt facilities in place during the current period.

Additionally, there were higher letters of credit fees due to higher letters of credit outstanding under the Amended and Restated Asset-Based Revolving Credit Agreement during the current period.

Refer to Note 15 for additional information.

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During the year ended December 31, 2019, we recorded a loss on modification of debt of $0.3 million, primarily related to modification fees paid under the refinance, and a loss on extinguishment of debt of $26.2 million, primarily related to the write-off of outstanding debt discounts and unamortized debt issuance costs under the Amended and Restated Credit Agreement dated November 9, 2018.

The loss on modification and extinguishment of debt of $12.0 million for the year ended December 31, 2018 primarily related to the write-off of certain outstanding debt discounts, debt issuance costs, and debt fees incurred in connection with the Amended and Restated Credit Agreement entered into by the Company on November 9, 2018.

Refer to Note 15 for additional information.

Miscellaneous loss, net.

Miscellaneous loss, net decreased $8.2 million, or 80.7%, for the year ended December 31, 2020 compared to the prior year period, primarily due to the decrease in pension obligation net periodic benefit costs due to lower settlement charges and interest costs during the current period.

Refer to Note 20 for additional information.

Income Tax Benefit

The following table summarizes information about our income tax benefit during the years ended December 31, 2020 and 2019:

Year Ended December 31,

Increase (Decrease)

Year Ended December 31, Increase (Decrease)

(In thousands) 2020 2019 $ %

1 unchanged sentence

Income taxes.

Income tax benefit of $57.6 million was recorded for the year ended December 31, 2019 on a loss from

continuing operations before income taxes of $260.7 million .

Income tax benefit of $2.2 million was recorded for the year ended December 31, 2020 on a loss from continuing operations before income taxes of $243.6 million.

The effective tax rate differs from the federal statutory rate of 21% primarily due to the increase in the valuation allowance, partially offset by the permanent impact of percentage depletion deductions, the impact of state income taxes, net of federal tax impact, and a refund of previously sequestered AMT Credits.

Income tax benefit of $53.3 million was recorded for the year ended December 31, 2019 on a loss from continuing operations before income taxes of $272.9 million.

The effective tax rate differs from the federal statutory rate of 21% primarily due to the impact of state income taxes, net of federal impact, the net operating loss carryback benefit, and the permanent impact of the percentage depletion deduction, mostly offset by the impact of the non-deductible goodwill impairment and the increase in the valuation allowance.

Income tax benefit of $165.4 million was recorded for the year ended December 31, 2018 on income from continuing operations before income taxes of $137.5 million .

The effective tax rate is lower than the federal statutory rate of 21% primarily due to the impact of the net operating loss carryback benefit and the reduction in the valuation allowance.

Refer to Note 19 for additional information.

Coal Operations

We extract, process and market met and thermal coal from surface and deep mines for sale to steel and coke producers, industrial customers, and electric utilities.

The Company conducts mining operations only in the United States with mines in Central and Northern Appalachia.

Our CAPP - Met operations consist of high-quality met coal mines, such as Deep Mine 41, which predominantly produce low-ash met coal, including High-Vol.

B, Mid-Vol., and Low-Vol., which is shipped to domestic and international coke and steel producers.

While the CAPP - Met operations produce predominantly met coal, they also produce some amounts of thermal coal as a byproduct of mining.

CAPP - Met operations consist of seven active mines and two preparation plants in Virginia, sixteen active mines and five preparation plants in West Virginia, as well as expenses associated with certain idled/closed mines.

Our CAPP - Thermal operations consist of surface and underground thermal coal mines primarily producing low sulfur, high BTU thermal coal for electricity generation, as well as specialty coal for industrial customers, with some met coal produced as a byproduct.

CAPP - Thermal consists of five active mines and two preparation plants in West Virginia, as well as expenses associated with certain idled/closed mines.

Our NAPP operations produce primarily high-BTU thermal coal.

This thermal coal has metallurgical properties, but it is higher in sulfur content than typical products sold in the metallurgical coal market.

Limited volumes can be placed in the metallurgical coal market where customers have the flexibility to accommodate quantities of higher sulfur coal in their coking coal blends.

Our thermal coal is primarily sold to the domestic power generation industry.

Our NAPP operations consist of one active mine in Pennsylvania and one preparation plant, as well as expenses associated with one closed mine.

Our All Other category is not included in all of our coal operations results of operations as it includes general corporate overhead and corporate assets and liabilities, idled and closed mine costs, and the elimination of certain intercompany activity.

Our Met operations consist of high-quality met coal mines, including Deep Mine 41, Road Fork 52, Black Eagle, and Lynn Branch.

The coal produced by Met operations is predominantly met coal with some amounts of thermal coal being produced as a byproduct of mining.

Our CAPP - Thermal operations consist of one underground thermal coal mine.

The coal produced by CAPP - Thermal operations is predominantly thermal coal with some met coal byproduct.

Our All Other category is not included in our Coal Operations results of operations as it includes general corporate overhead and corporate assets and liabilities and the elimination of certain intercompany activity.

Refer to Item 1.

Business and Notes 24 and 25 for additional financial information about reportable segments and geographic areas.

Non-GAAP Financial Measures

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GAAP” or “GAAP”).

Specifically, we make use of the non-GAAP financial measure “Adjusted EBITDA,” “non-GAAP coal revenues,” “non-GAAP cost of coal sales,” and “Adjusted cost of produced coal sold.” We use Adjusted EBITDA to measure the operating performance of our segments and allocate resources to the segments.

Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA,” “non-GAAP coal revenues,” “non-GAAP cost of coal sales,” and “Adjusted cost of produced coal sold.” We use Adjusted EBITDA to measure the operating performance of our segments and allocate resources to the segments.

Adjusted EBITDA does not purport to be an alternative to net income (loss) as a measure of operating performance.

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Non-GAAP coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold.

We use non-GAAP cost of coal sales to adjust cost of coal sales to remove freight and handling costs, idled and closed mine costs and coal inventory acquisition accounting impacts.

We use non-GAAP cost of coal sales to adjust cost of coal sales to remove freight and handling costs, depreciation, depletion and amortization - production (excluding the depreciation, depletion and amortization related to selling, general and administrative functions), accretion on asset retirement obligations, amortization of acquired intangibles, net, idled and closed mine costs and coal inventory acquisition accounting impacts.

Non-GAAP cost of coal sales per ton for our operations is calculated as non-GAAP cost of coal sales divided by tons sold.

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The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends and to adjust for items that may not reflect the trend of future results by excluding transactions that are not indicative of our core operating performance.

Furthermore, analogous measures are used by industry analysts to evaluate the Company’s operating

Furthermore, analogous measures are used by industry analysts to evaluate the Company’s operating performance.

Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments.

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Year Ended December 31, 2020

(In thousands, except for per ton data)

CAPP - Thermal

All Other (3)

(In thousands, except for per ton data) Met CAPP - Thermal All Other Consolidated

Coal revenues $ 1,263,855 $ 148,880 $ 389 $ 1,413,124

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Non-GAAP Coal revenues $ 1,057,346 $ 135,940 $ 389 $ 1,193,675

Tons sold 13,070 2,437 6 15,513

Non-GAAP Coal sales realization per ton $ 80.90 $ 55.78 $ 64.83 $ 76.95

Cost of coal sales

Cost of coal sales (exclusive of items shown separately below) $ 1,140,556 $ 136,944 $ 3,511 $ 1,281,011

Depreciation, depletion and amortization - production (1)

124,060 20,453 (5,885) 138,628

Accretion on asset retirement obligations 14,214 9,285 3,005 26,504

Amortization of acquired intangibles, net 12,889 (3,775) 100 9,214

Total Cost of coal sales $ 1,291,719 $ 162,907 $ 731 $ 1,455,357

Freight and handling costs (206,509) (12,940) — (219,449)

Depreciation, depletion and amortization - production (1)

(124,060) (20,453) 5,885 (138,628)

Accretion on asset retirement obligations (14,214) (9,285) (3,005) (26,504)

Amortization of acquired intangibles, net (12,889) 3,775 (100) (9,214)

Idled and closed mine costs (16,640) (8,973) (3,267) (28,880)

cost impact of coal inventory fair value adjustment (1)

Non-GAAP Cost of coal sales $ 917,407 $ 115,031 $ 244 $ 1,032,682

Tons sold 13,070 2,437 6 15,513

Non-GAAP Cost of coal sales per ton $ 70.19 $ 47.20 $ 40.67 $ 66.57

Coal margin per ton (2)

Idled and closed mine costs per ton

Cost impact of coal inventory fair value adjustment per ton

(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

Year Ended December 31, 2020

(In thousands, except for per ton data) Met CAPP - Thermal All Other Consolidated

Coal revenues $ 1,263,855 $ 148,880 $ 389 $ 1,413,124

Total Cost of coal sales (per table above) (1,291,719) (162,907) (731) (1,455,357)

GAAP Coal margin $ (27,864) $ (14,027) $ (342) $ (42,233)

Tons sold 13,070 2,437 6 15,513

GAAP Coal margin per ton $ (2.13) $ (5.76) $ (57.00) $ (2.72)

GAAP Coal margin $ (27,864) $ (14,027) $ (342) $ (42,233)

Depreciation, depletion and amortization - production (1)

124,060 20,453 (5,885) 138,628

Accretion on asset retirement obligations 14,214 9,285 3,005 26,504

Amortization of acquired intangibles, net 12,889 (3,775) 100 9,214

Idled and closed mine costs 16,640 8,973 3,267 28,880

Non-GAAP Coal margin $ 139,939 $ 20,909 $ 145 $ 160,993

Tons sold 13,070 2,437 6 15,513

Non-GAAP Coal margin per ton $ 10.71 $ 8.58 $ 24.17 $ 10.38

(1) The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

(2) Coal margin per ton for our coal operations is calculated as coal sales realization per ton for our coal operations less cost of coal sales per ton for our coal operations.

(3) The fourth quarter of 2019 included coal revenues and cost of coal sales related to tons produced as a byproduct of an idle mine’s reclamation.

(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

Year Ended December 31, 2019

(In thousands, except for per ton data)

CAPP - Thermal

(In thousands, except for per ton data) Met CAPP - Thermal All Other Consolidated

Coal revenues $ 1,709,863 $ 285,390 $ 681 $ 1,995,934

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Non-GAAP Coal revenues $ 1,467,814 $ 251,257 $ 681 $ 1,719,752

Tons sold 12,926 4,218 8 17,152

Non-GAAP Coal sales realization per ton $ 113.56 $ 59.57 $ 85.13 $ 100.27

Cost of coal sales

Cost of coal sales (exclusive of items shown separately below) $ 1,389,619 $ 274,320 $ 3,829 $ 1,667,768

Depreciation, depletion and amortization - production (1)

152,835 57,483 4,025 214,343

Accretion on asset retirement obligations 9,599 10,929 3,337 23,865

Amortization of acquired intangibles, net 10,389 (13,578) — (3,189)

Total Cost of coal sales $ 1,562,442 $ 329,154 $ 11,191 $ 1,902,787

Freight and handling costs (242,049) (34,133) — (276,182)

Depreciation, depletion and amortization - production (1)

(152,835) (57,483) (4,025) (214,343)

Accretion on asset retirement obligations (9,599) (10,929) (3,337) (23,865)

Amortization of acquired intangibles, net (10,389) 13,578 — 3,189

Idled and closed mine costs (8,699) (2,702) (3,164) (14,565)

Cost impact of coal inventory fair value adjustment (2)

(4,751) (3,458) — (8,209)

Non-GAAP Cost of coal sales $ 1,134,120 $ 234,027 $ 665 $ 1,368,812

Tons sold 12,926 4,218 8 17,152

Non-GAAP Cost of coal sales per ton $ 87.74 $ 55.48 $ 83.13 $ 79.80

Coal margin per ton (2)

Idled and closed mine costs per ton

Cost impact of coal inventory fair value adjustment per ton

Non-GAAP coal margin per ton

(1) The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

(2) Coal margin per ton for our coal operations is calculated as coal sales realization per ton for our coal operations less cost of coal sales per ton for our coal operations.

(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2) The cost impact of the coal inventory fair value adjustment as a result of the Merger was completed during the three months ended June 30, 2019.

Year Ended December 31, 2019

Increase (Decrease)

(In thousands, except for per ton data) Met CAPP - Thermal All Other Consolidated

Coal revenues $ 1,709,863 $ 285,390 $ 681 $ 1,995,934

Total Cost of coal sales (per table above) (1,562,442) (329,154) (11,191) (1,902,787)

GAAP Coal margin $ 147,421 $ (43,764) $ (10,510) $ 93,147

Tons sold 12,926 4,218 8 17,152

GAAP Coal margin per ton $ 11.40 $ (10.38) $ (1,313.75) $ 5.43

GAAP Coal margin $ 147,421 $ (43,764) $ (10,510) $ 93,147

Depreciation, depletion and amortization - production (1)

152,835 57,483 4,025 214,343

Accretion on asset retirement obligations 9,599 10,929 3,337 23,865

Amortization of acquired intangibles, net 10,389 (13,578) — (3,189)

Idled and closed mine costs 8,699 2,702 3,164 14,565

Cost impact of coal inventory fair value adjustment (2)

4,751 3,458 — 8,209

Non-GAAP Coal margin $ 333,694 $ 17,230 $ 16 $ 350,940

Tons sold 12,926 4,218 8 17,152

Non-GAAP Coal margin per ton $ 25.82 $ 4.08 $ 2.00 $ 20.46

(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2) The cost impact of the coal inventory fair value adjustment as a result of the Merger was completed during the three months ended June 30, 2019.

Year Ended December 31, Increase (Decrease)

(In thousands, except for per ton data) 2020 2019 $ %

CAPP - Met operations

Met operations 13,070 12,926 144 1.1 %

CAPP - Thermal operations 2,437 4,218 (1,781) (42.2) %

NAPP operations

Non-GAAP Coal revenues:

CAPP - Met operations

Met operations $ 1,057,346 $ 1,467,814 $ (410,468) (28.0) %

CAPP - Thermal operations $ 135,940 $ 251,257 $ (115,317) (45.9) %

NAPP operations

Non-GAAP Coal sales realization per ton:

CAPP - Met operations

Met operations $ 80.90 $ 113.56 $ (32.66) (28.8) %

CAPP - Thermal operations $ 55.78 $ 59.57 $ (3.79) (6.4) %

NAPP operations

Average $ 76.95 $ 100.27 $ (23.32) (23.3) %

Non-GAAP segment coal revenues.

CAPP - Met operations non-GAAP coal revenues increased $105.1 million , or 7.7% , for the year ended December 31, 2019 compared to the prior year period.

The increase in CAPP - Met operations non-GAAP

coal revenues was primarily due to higher coal sales volume of 2.2 million tons as a result of the Merger, partially offset by lower non-GAAP coal sales realization of $14.01 per ton.

CAPP - Thermal operations non-GAAP coal revenues increased $215.6 million , or 604.1% , for the year ended December 31, 2019 compared to the prior year period.

The increase in CAPP - Thermal operations non-GAAP coal revenues was primarily due to higher coal sales volume of 3.6 million tons and higher non-GAAP coal sales realization of $3.11 per ton.

The CAPP - Thermal operations were acquired as part of the Alpha Merger and only the post-merger activity is reflected in the prior year results.

NAPP operations non-GAAP coal revenues decreased $3.9 million , or 1.4% , for the year ended December 31, 2019 compared to the prior year period.

The decrease in NAPP operations non-GAAP coal revenues was primarily due to lower non-GAAP coal sales realization of $2.52 per ton, partially offset by higher coal sales volumes of 0.3 million tons.

Year Ended December 31,

Increase (Decrease)

Met operations non-GAAP coal revenues decreased $410.5 million, or 28.0%, for the year ended December 31, 2020 compared to the prior year period.

The decrease in Met operations non-GAAP coal revenues was primarily due to lower non-GAAP coal sales realization of $32.66 per ton as a result of a weaker pricing environment resulting from the impacts of the COVID-19 pandemic.

CAPP - Thermal operations non-GAAP coal revenues decreased $115.3 million, or 45.9%, for the year ended December 31, 2020 compared to the prior year period.

The decrease in CAPP - Thermal operations non-GAAP coal revenues was due to lower coal sales volumes of 1.8 million tons and lower non-GAAP coal sales realization of $3.79 per ton as a result of a weaker pricing environment resulting from the impacts of the COVID-19 pandemic.

Year Ended December 31, Increase (Decrease)

(In thousands, except for per ton data) 2020 2019 $ %

Non-GAAP Cost of coal sales:

CAPP - Met operations

Met operations $ 917,407 $ 1,134,120 $ (216,713) (19.1) %

CAPP - Thermal operations $ 115,031 $ 234,027 $ (118,996) (50.8) %

NAPP operations

Non-GAAP Cost of coal sales per ton:

CAPP - Met operations

Met operations $ 70.19 $ 87.74 $ (17.55) (20.0) %

CAPP - Thermal operations $ 47.20 $ 55.48 $ (8.28) (14.9) %

NAPP operations

Non-GAAP Coal margin per ton:

CAPP - Met operations

Met operations $ 10.71 $ 25.82 $ (15.11) (58.5) %

CAPP - Thermal operations $ 8.58 $ 4.08 $ 4.50 110.3 %

NAPP operations

Non-GAAP cost of coal sales.

CAPP - Met operations non-GAAP cost of coal sales increased $114.6 million , or 11.2% , for the year ended December 31, 2019 compared to the prior year period.

The increase in CAPP - Met operations non-GAAP cost of coal sales was primarily due to increases in tons sold, salaries and wages expense, supplies and maintenance expense, and royalties and taxes related to properties acquired in the Merger, partially offset by decreased costs of purchased coal during the current period.

The non-GAAP costs of coal sales per ton decreased by $7.70 primarily due to higher productivity as measured by clean tons per foot and feet per shift.

CAPP - Thermal operations non-GAAP cost of coal sales increased $197.2 million , or 534.6% , for the year ended December 31, 2019 compared to the prior year period.

For the year ended December 31, 2019, CAPP - Thermal operations non-GAAP cost of coal sales consisted of 4.2 million tons sold at a non-GAAP coal margin per ton of $4.09 .

The non-GAAP coal margin per ton increased $5.98 , or 316.4% , from the prior year period primarily due to improved sales realization.

The CAPP - Thermal operations were acquired as part of the Alpha Merger and only the post-merger activity is reflected in the prior year results.

NAPP operations non-GAAP cost of coal sales increased $5.5 million , or 2.3% , for the year ended December 31, 2019 compared to the prior year period.

The increase in NAPP operations non-GAAP cost of coal sales was primarily due to an increase in tons sold in the current period relative to the prior period, partially offset by a reduction in non-GAAP cost of coal sales per ton.

Met operations non-GAAP cost of coal sales decreased $216.7 million, or 19.1%, for the year ended December 31, 2020 compared to the prior year period.

The decrease in Met operations non-GAAP cost of coal sales was primarily driven by decreased costs of purchased coal, salaries and wages expense, supplies and maintenance expense, and royalties and taxes, partially offset by inventory change during the current period.

CAPP - Thermal operations non-GAAP cost of coal sales decreased $119.0 million, or 50.8%, for the year ended December 31, 2020 compared to the prior year period.

The decrease in CAPP - Thermal operations non-GAAP cost of coal sales was primarily due to a decrease in tons sold in the current period relative to the prior year period and decreased supplies and maintenance expense and salaries and wages expense, partially offset by inventory change during the current period.

Our non-GAAP cost of coal sales includes purchased coal costs.

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Year Ended December 31, 2020

(In thousands, except for per ton data)

CAPP - Thermal

(In thousands, except for per ton data) Met CAPP - Thermal All Other Consolidated

Non-GAAP Cost of coal sales $ 917,407 $ 115,031 $ 244 $ 1,032,682

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Adjusted cost of produced coal sold per ton (1)

$ 69.65 $ 47.09 $ 40.67 $ 65.83

(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

Year Ended December 31, 2019

(In thousands, except for per ton data)

CAPP - Thermal

(In thousands, except for per ton data) Met CAPP - Thermal All Other Consolidated

Non-GAAP Cost of coal sales $ 1,134,120 $ 234,027 $ 665 $ 1,368,812

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Adjusted cost of produced coal sold per ton (1)

$ 83.57 $ 55.50 $ 83.13 $ 75.82

(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

Segment Adjusted EBITDA

Segment Adjusted EBITDA for our reportable segments is a non-GAAP financial measure presented as a supplemental measure and is not intended to replace financial performance measures determined in accordance with GAAP.

Segment Adjusted EBITDA for our reportable segments is a financial measure.

This non-GAAP financial measure is presented as a supplemental measure and is not intended to replace financial performance measures determined in accordance with GAAP.

Moreover, this measure is not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies.

Segment Adjusted EBITDA is presented because management believes it is a useful indicator of the financial performance of our coal operations.

The following tables present a reconciliation of net (loss) income to Adjusted EBITDA for the years ended December 31, 2019 and 2018 :

Segment Adjusted EBITDA is presented because management believes it is

a useful indicator of the financial performance of our coal operations.

The following tables present a reconciliation of net income (loss) to Adjusted EBITDA for the years ended December 31, 2020 and 2019:

Year Ended December 31, 2020

(In thousands)

CAPP - Thermal

Net income (loss) from continuing operations

(In thousands) Met CAPP - Thermal All Other Consolidated

Net loss from continuing operations $ (77,519) $ (52,520) $ (111,431) $ (241,470)

Interest expense (2,014) 6 76,536 74,528

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Depreciation, depletion and amortization 124,060 20,453 (4,628) 139,885

Merger-related costs

Non-cash stock compensation expense 289 8 4,600 4,897

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Accretion on asset retirement obligations 14,214 9,285 3,005 26,504

Loss on modification and extinguishment of debt

Asset impairment (1)

Goodwill impairment (2)

Cost impact of coal inventory fair value adjustment (3)

Gain on assets acquired in an exchange transaction (4)

Asset impairment and restructuring (1)

46,317 36,719 842 83,878

Management restructuring costs (2)

501 5 435 941

Loss on partial settlement of benefit obligations 1,607 (328) 1,687 2,966

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Adjusted EBITDA $ 120,281 $ 9,853 $ (46,732) $ 83,402

(1) Asset impairment for the year ended December 31, 2019 includes a long-lived asset impairment of $60.2 million related to asset groups recorded within the CAPP - Met and CAPP - Thermal reporting segments and an asset impairment of $6.1 million primarily related to the write-off of prepaid purchased coal as a result of Blackjewel’s Chapter 11 bankruptcy filing on July 1, 2019.

Refer to Note 2 and Note 4 for further information.

(2) The goodwill impairment testing as of December 31, 2019 resulted in a goodwill impairment of $124.4 million to write down the full carrying value of goodwill.

(1) Asset impairment and restructuring for the year ended December 31, 2020 includes long-lived asset impairments of $81.0 million related to asset groups recorded within the Met and CAPP - Thermal reporting segments and restructuring expense of $2.9 million recorded in CAPP - Thermal and All Other reporting segments.

Refer to Note 8 for further information.

(3) The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

(4) During the year ended December 31, 2019 , we entered into an exchange transaction which primarily included the release of the PRB overriding royalty interest owed to us in exchange for met coal reserves which resulted in a gain of $9.1 million .

(5) Management restructuring costs are related to severance expense associated with senior management changes in the year ended December 31, 2019.

(2) Management restructuring costs are related to severance expense associated with senior management changes during the three months ended March 31, 2020.

Year Ended December 31, 2019

(In thousands)

CAPP - Thermal

(In thousands) Met CAPP - Thermal All Other Consolidated

Net income (loss) from continuing operations $ 7,944 $ (97,398) $ (130,164) $ (219,618)

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Merger-related costs — — 1,090 1,090

Management restructuring costs (1)

Non-cash stock compensation expense 1,494 71 10,783 12,348

Mark-to-market adjustment - acquisition-related obligations — — (3,564) (3,564)

Gain on settlement of acquisition-related obligations

Gain on sale of disposal group (2)

Accretion on asset retirement obligations 9,599 10,929 3,337 23,865

Loss on modification and extinguishment of debt — — 26,459 26,459

Asset impairment (1)

15,034 50,993 297 66,324

Goodwill impairment (2)

124,353 — — 124,353

Cost impact of coal inventory fair value adjustment (3)

4,751 3,458 — 8,209

Gain on assets acquired in an exchange transaction (4)

(9,083) — — (9,083)

Management restructuring costs (5)

— — 7,720 7,720

Loss on partial settlement of benefit obligations (1) — 6,447 6,446

Amortization of acquired intangibles, net 10,389 (13,578) — (3,189)

Adjusted EBITDA $ 316,006 $ 11,981 $ (63,883) $ 264,104

(1) Asset impairment for the year ended December 31, 2019 includes a long-lived asset impairment of $60.2 million related to asset groups recorded within the Met and CAPP - Thermal reporting segments and an asset impairment of $6.2 million primarily related to the write-off of prepaid purchased coal as a result of Blackjewel’s Chapter 11 bankruptcy filing on July 1, 2019.

Refer to Note 8 for further information.

(2) The goodwill impairment testing as of December 31, 2019 resulted in a goodwill impairment of $124.4 million to write down the full carrying value of goodwill.

Refer to Note 2 for further information.

(3) The cost impact of the coal inventory fair value adjustment as a result of the Merger was completed during the three months ended June 30, 2019.

(4) During the year ended December 31, 2019, the Company entered into an exchange transaction which primarily included the release of the PRB overriding royalty interest owed to the Company in exchange for met coal reserves which resulted in a gain of $9.1 million.

(5) Management restructuring costs are related to severance expense associated with senior management changes in the year ended December 31, 2019.

(2) We recorded a gain on disposal of assets of $16.4 million within other (income) expense within the Consolidated Statements of Operations.

(3) The cost impact of the coal inventory fair value adjustment as a result of the Alpha Merger was completed during the three months ended June 30, 2019.

The following table summarizes Adjusted EBITDA for our three reportable segments and All Other category:

Year Ended December 31,

Increase (Decrease)

The following table summarizes Adjusted EBITDA for our two reportable segments and All Other category:

Year Ended December 31, Increase (Decrease)

(In thousands) 2020 2019 $ %

Adjusted EBITDA

CAPP - Met operations

Met operations $ 120,281 $ 316,006 $ (195,725) (61.9) %

CAPP - Thermal operations 9,853 11,981 (2,128) (17.8) %

NAPP operations

CAPP - Met operations.

All Other (46,732) (63,883) 17,151 26.8 %

Total $ 83,402 $ 264,104 $ (180,702) (68.4) %

Met operations.

Adjusted EBITDA decreased $195.7 million, or 61.9%, for the year ended December 31, 2020 compared to the prior year period.

The decrease in Adjusted EBITDA was primarily driven by decreased non-GAAP coal margin per ton of $6.31 , partially offset by an increase in tons sold relative to the prior period.

The decrease in Adjusted EBITDA was primarily driven by decreased non-GAAP coal sales realization per ton of $32.66, or 28.8%, due to a weaker pricing environment resulting from the impact of the COVID-19 pandemic.

CAPP - Thermal operations.

Adjusted EBITDA for the CAAP - Thermal operations was $12.0 million for the year ended December 31, 2019 .

The CAPP- Thermal operations were acquired as part of the Alpha Merger and only the post-merger activity was reflected in the prior period.

NAPP operations.

Adjusted EBITDA decreased $13.2 million , or 29.7% , for the year ended December 31, 2019 compared to the prior year period.

The decrease in Adjusted EBITDA was primarily driven by decreased non-GAAP coal margin per ton of $1.73 .

All Other category.

Adjusted EBITDA decreased $2.1 million, or 17.8%, for the year ended December 31, 2020.

compared to the prior year period.

The decrease in Adjusted EBITDA was primarily driven by increases in costs associated with idled properties acquired in the Merger and increases in professional services fees, wages and benefits expenses, and severance pay.

The decrease in Adjusted EBITDA was primarily driven by decreased coal sales volumes of 1.8 million tons, or 42.2%, and decreased non-GAAP coal sales realization per ton of $3.79, or 6.4%, due to a weaker pricing and demand environment resulting from the COVID-19 pandemic.

All Other category.

Adjusted EBITDA increased $17.2 million, or 26.8%, for the year ended December 31, 2020 compared to the prior year period.

The increase in Adjusted EBITDA was primarily driven by decreases in selling, general and administrative expenses and increased gain on sale of assets.

Discontinued Operations

The former PRB and NAPP operations results of operations and financial position are reported as discontinued operations in the Consolidated Financial Statements.

Refer to Note 3 for further information on discontinued operations.

The following tables summarize certain financial information relating to the PRB and NAPP discontinued operating results which are reported within the All Other reporting segment that have been derived from our consolidated financial statements for the years ended December 31, 2020 and 2019.

Year Ended December 31,

(In thousands, except for per ton data) 2020 2019

Coal revenues $ 233,083 $ 286,073

Freight and handling fulfillment revenues (11,135) (8,827)

Non-GAAP Coal revenues $ 221,948 $ 277,246

Tons sold 5,420 7,484

Non-GAAP Coal sales realization per ton $ 40.95 $ 37.05

Cost of coal sales (exclusive of items shown separately below) $ 215,390 $ 256,336

Depreciation, depletion and amortization - production (1)

11,570 99,405

Accretion on asset retirement obligations 4,154 9,894

Amortization of acquired intangibles, net 861 3,101

Total Cost of coal sales $ 231,975 $ 368,736

Freight and handling costs (11,135) (8,827)

Depreciation, depletion and amortization - production (1)

(11,570) (99,405)

Accretion on asset retirement obligations (4,154) (9,894)

Amortization of acquired intangibles, net (861) (3,101)

Idled and closed mine costs (3,102) (4,005)

Non-GAAP Cost of coal sales $ 201,153 $ 243,504

Tons sold 5,420 7,484

Non-GAAP Cost of coal sales per ton $ 37.11 $ 32.54

(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

Year Ended December 31,

(In thousands, except for per ton data) 2020 2019

Coal revenues $ 233,083 $ 286,073

Total Cost of coal sales (per table above) (231,975) (368,736)

GAAP Coal margin $ 1,108 $ (82,663)

Tons sold 5,420 7,484

GAAP Coal margin per ton $ 0.20 $ (11.05)

GAAP Coal margin $ 1,108 $ (82,663)

Depreciation, depletion and amortization - production (1)

11,570 99,405

Accretion on asset retirement obligations 4,154 9,894

Amortization of acquired intangibles, net 861 3,101

Idled and closed mine costs 3,102 4,005

Non-GAAP Coal margin $ 20,795 $ 33,742

Tons sold 5,420 7,484

Non-GAAP Coal margin per ton $ 3.84 $ 4.51

(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

Refer to Note 3 for disclosures on the Cumberland and PRB Back-to-Back Coal Supply Agreements.

Liquidity and Capital Resources

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Our primary sources of liquidity are derived from sales of coal, our debt financing and miscellaneous revenues.

We believe that cash on hand and cash generated from our operations will be sufficient to meet our working capital requirements, anticipated capital expenditures, debt service requirements, acquisition-related obligations, and reclamation obligations for the next 12 months.

We have relied on a number of assumptions in budgeting for our future activities.

We believe that cash on hand, cash generated from our operations, and expected tax refunds will be sufficient to meet our working capital requirements, anticipated capital expenditures, debt service requirements, acquisition-related obligations, and reclamation obligations for the next 12 months.

We rely on a number of assumptions in budgeting for our future activities.

These include the costs for mine development to sustain capacity of our operating mines, our cash flows from operations, effects of regulation and taxes by governmental agencies, mining technology improvements and reclamation costs.

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The incurrence of additional indebtedness could result in increased fixed obligations and additional covenants that could restrict our operations.

At December 31, 2019 , we had total liquidity of $327.8 million, including cash and cash equivalents of $212.8 million and $115.0 million of unused commitments available under the Amended and Restated Asset-Based Revolving Credit Agreement, subject to limitations described therein.

On June 14, 2019, we entered into a $561.8 million Term Loan Credit Facility under the Credit Agreement.

On November 9, 2018, we entered into a $225.0 million asset-based revolving credit facility under the Amended and Restated Asset-Based Revolving Credit Agreement expiring on April 3, 2022.

Refer to Note 15 for disclosures on long-term debt.

Weak market conditions and depressed coal prices have resulted in operating losses.

Liquidity and Cash Collateral

At December 31, 2020, we had cash and cash equivalents of $139.2 million and no remaining unused capacity under the Amended and Restated Asset-Based Revolving Credit Agreement (the “ABL Facility”).

Availability under the ABL Facility is calculated on a monthly basis and fluctuates based on qualifying amounts of coal inventory and trade accounts receivable (the “Borrowing Base”) and the facility's covenant limitations related to our Fixed Charge Coverage Ratio (refer to Analysis of Material Debt Covenants below).

In accordance with terms of the ABL Facility, we may be required to cash collateralize the ABL Facility to the extent outstanding borrowings and letters of credit under the ABL Facility exceed the Borrowing Base after considering covenant limitations.

Due to fluctuations of the Borrowing Base, we were required to post $25.0 million of cash collateral in January 2021 to remain in compliance with the terms of the ABL Facility as of December 31, 2020.

In February 2021, a portion of the posted cash collateral was used to repay the remaining $3.4 million in borrowings under the ABL Facility.

In March 2021, the remaining posted cash collateral was returned to unrestricted cash.

To secure our obligations under certain worker’s compensation, black lung, and reclamation obligations and financial guarantees, we are required to provide cash collateral.

At December 31, 2020, we had cash collateral in the amounts of $96.0 million, $23.8 million, and $27.2 million classified as long-term restricted cash, long-term restricted investments, and long-term deposits, respectively, on our Consolidated Balance Sheets.

Future regulatory changes relating to these obligations could result in increased obligations, additional costs, or additional collateral requirements which could require greater use of alternative sources of funding for this purpose, which would reduce our liquidity.

Refer below for information related to the new authorization process for self-insured coal mine operators being implemented by the U.S.

Department of Labor (Division of Coal Mine Workers’ Compensation).

Additionally, as December 31, 2020, we had $9.3 million of short-term restricted cash held in escrow related to our contingent revenue obligation.

Refer to Note 16 for further information regarding the contingent revenue obligation.

Business Updates

With respect to global economic events, there continues to be uncertainty and weakness in the coal industry.

On December 14, 2020, S&P Global Ratings affirmed their June 2, 2020 downgrades on their issuer credit ratings on the Company and their issue-level rating on our senior secured debt.

On June 2, 2020, S&P Global Ratings downgraded their issuer credit rating on the Company from “B-” to “CCC+” and their issue-level rating on our senior secured debt from “B” to “CCC+” amid weak market indicators.

The rating outlook was noted as negative.

On April 13, 2020, Moody’s Investors Service downgraded the Company’s Corporate Family Rating to Caa1 from B3, Senior Secured Bank Credit Facility to Caa2 from Caa1, and Probability of Default Rating to Caa1 from B3.

The rating outlook was changed from stable to negative.

These issues bring potential liquidity risks for us, including the risks of declines in our stock value, declines in our cash and cash equivalents, less availability and higher costs of additional credit, and requests for additional collateral by surety providers.

During the second quarter of 2020, as a result of the weakening coal market conditions due in part to the impact of the global COVID-19 pandemic, we announced that we would take certain strategic actions with respect to two of our thermal coal

mining complexes in an effort to strengthen our financial performance and improve forecasted liquidity.

We announced that an underground mine and preparation plant located in West Virginia would be idled during the third quarter of 2020.

In addition, we decided not to move forward with the construction of a new refuse impoundment at our Cumberland mine in Pennsylvania and would therefore no longer spend the significant capital required in connection with the project.

On December 10, 2020, we announced the closing of our previously announced agreement to divest our Cumberland mining operations and related property to a third-party purchaser for total consideration of $50.0 million, comprised of approximately $20.0 million in cash and $30.0 million in surety bonding collateral, resulting in a loss on sale of $36.1 million.

Refer to Note 3 for additional disclosure information on this transaction, the divestiture of our former PRB operations and the related ESM Transaction, and the related discontinued operations.

Weak market conditions and depressed coal prices have resulted in operating losses in recent quarters.

If market conditions do not improve, we expect to continue to experience operating losses and cash outflows in the coming quarters, which would adversely affect our liquidity.

In particular, we expect a decrease in cash and cash equivalents to the extent that capital expenditures and other cash obligations, including our debt service obligations, exceed cash generated from our operations.

We have continued to take steps to enhance our capital structure and financial flexibility and reduce cash outflows from operations in the near term, including reductions in our SG&A and overhead costs, reductions in production volumes, and the amendment of our credit facility.

The COVID-19 pandemic has had negative impacts on our business, results of operations, financial condition, and cash flows.

A continued period of reduced demand for our products could have significant adverse consequences on our business.

The full extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on various developments, including the duration and spread of the outbreak, its impact on our customers and suppliers and the range of governmental and community reactions to the pandemic, which are still uncertain and cannot be fully predicted at this time.

We have continued to take steps to enhance our capital structure and financial flexibility and reduce cash outflows from operations in the near term, including reductions in our operating, SG&A, and overhead costs, reductions in production volumes, and the amendment of our credit facility.

We expect to engage in similar efforts in the future as opportunities arise through refinancing, repayment or repurchase of outstanding debt, amendment of our credit facilities, and other methods, and may consider the sale of other assets or businesses, and such other measures as circumstances warrant.

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Access to additional funds from liquidity-generating transactions or other sources of external financing is subject to market conditions and certain limitations, including our credit rating and covenant restrictions in our credit facility and indentures.

On March 27, 2020, the CARES Act was enacted into law.

As a result of the CARES Act, AMT Credits of $66.1 million were received in the fourth quarter of 2020.

As of December 31, 2020, the Company has recorded $64.2 million of current federal income tax receivable and associated interest receivable of $5.2 million related to an NOL carryback claim.

Refer to Note 19.

Pension Plans

We sponsor three qualified non-contributory pension plans (“Pension Plans”) which cover certain salaried and non-union hourly employees.

Participants accrue benefits either based on certain formulas, the participant’s compensation prior to retirement or plan specified amounts for each year of service.

Participants accrued benefits either based on certain formulas, the participant’s compensation prior to retirement or plan specified amounts for each year of service.

Benefits are frozen under these Pension Plans.

1 unchanged sentence

Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006.

We expect to contribute $23.2 million to the Pension Plans in 2020.

We expected to contribute $25.5 million to the Pension Plans in 2021 based on our estimates prior to the recent funding relief granted under the American Rescue Plan Act.

We now expect these amounts may be reduced, as a result of the relief, and are in the process of quantifying the impact.

Refer to Note 20 for further disclosures related to this obligation.

To secure our obligations under certain worker’s compensation, black lung, reclamation-related obligations, general liabilities, and financial guarantees and other, we are required to provide cash collateral.

At December 31, 2019 , we had cash collateral in the amounts of $122.5 million, $8.9 million, and $21.9 million classified as long-term restricted cash, short-term and long-term deposits, and long-term restricted investments, respectively, on our Consolidated Balance Sheets.

regulatory changes relating to these obligations could result in increased obligations, additional costs, or additional collateral requirements which could require greater use of alternative sources of funding for this purpose, which would reduce our liquidity.

Refer to Note 27 for the subsequent event related to the new authorization process for self-insured coal mine operators being implemented by the U.S.

Department of Labor (Division of Coal Mine Workers’ Compensation).

Additionally, we have $12.4 million of short-term restricted cash held in escrow related to our contingent revenue obligation.

Refer to Note 16 for further information regarding the contingent revenue obligation.

In November 2019, we announced the accelerated construction of a new impoundment at our Cumberland mine, for which we received the related permit in March 2020.

This project was previously scheduled to begin in 2021.

We estimate the cost of construction to be $61 million and expect that the project will require approximately two years to complete.

With respect to global economic events, there continues to be uncertainty and weakness in the coal industry.

On December 11, 2019, S&P Global Ratings downgraded their issuer credit rating on Contura from ‘B’ to ‘B-’ and their issue-level rating on our senior secured debt from ‘B+’ to ‘B’ amid weak market conditions.

The rating outlook was noted as stable.

On February 27, 2020, Moody’s Investors Service downgraded Contura’s Corporate Family Rating to B3 from B2, senior secured term loan to Caa1 from B3, and Speculative Grade Liquidity Rating to SGL-3 from SGL-2.

The rating outlook is negative.

DCMWC Reauthorization Process

In July 2019, the U.S.

Department of Labor (Division of Coal Mine Workers’ Compensation or “DCMWC”) began implementing a new authorization process for all self-insured coal mine operators.

As requested by DCMWC, we filed in October 2019 an application and supporting documentation for reauthorization to self-insure certain of our black lung obligations.

As a result of this application, the DCMWC notified us in a letter dated February 21, 2020 and received by us on February 24, 2020, that we were reauthorized to self-insure certain of our black lung obligations for a period of one-year from February 21, 2020.

As requested by DCMWC, we filed an application and supporting documentation for reauthorization to self-insure certain of our black lung obligations in October 2019.

As a result of this application, the DCMWC notified us in a letter dated February 21, 2020 that we were reauthorized to self-insure certain of our black lung obligations for a period of one-year from February 21, 2020.

The DCMWC reauthorization is contingent, however, upon us providing collateral of $65.7 million to secure certain of our black lung obligations.

This collateral requirement, which the DCMWC advises represents 70% of our estimated future liability according to the DCMWC’s estimation methodology, is an increase of approximately 2,400% from the approximately $2.6 million in collateral which we (previously by Alpha prior to the Merger) have provided since 2016 to secure these self-insured black lung obligations.

prior to the Merger) have provided since 2016 to secure these self-insured black

lung obligations.

Future liability has not previously been estimated by the DCMWC in connection with the reauthorization process but is now being considered as part of its new collateral-setting methodology.

The reauthorization process provided us with the right to appeal the security determination in writing within 30 days of the date of the notification, which appeal period the DCMWC has agreed to extend to April 22, 2020 , and we plan to exercise this right of appeal.

The reauthorization process provided us with the right to appeal the security determination in writing within 30 days of the date of the notification, which appeal period the DCMWC agreed to extend to May 22, 2020, and we exercised this right of appeal.

We strongly disagree with the DCMWC’s substantially higher collateral determination and the methodology through which the calculation was derived.

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Either of these outcomes would significantly reduce our liquidity.

Capital Return Program

Refer to Note 13 for disclosures on the capital return program and related stock repurchases during the period.

Sale of PRB Operations

Refer to Note 4 and Item 7 Business Developments for disclosure information on discontinued operations.

Cash, cash equivalents, and restricted cash decreased by $129.6 million and increased by $283.3 million over the years ended December 31, 2019 and 2018 , respectively.

Cash, cash equivalents, and restricted cash decreased by $103.1 million and $129.6 million over the years ended December 31, 2020 and 2019, respectively.

The net change in cash, cash equivalents, and restricted cash was attributable to the following:

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Net cash provided by operating activities $ 129,236 $ 131,880

Net cash (used in) provided by investing activities

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Net cash used in investing activities (209,969) (191,752)

Net cash used in financing activities (22,376) (69,694)

Net decrease in cash and cash equivalents and restricted cash $ (103,109) $ (129,566)

Operating Activities

Net cash flows from operating activities consist of net (loss) income adjusted for non-cash items, such as depreciation, depletion and amortization, goodwill impairment, asset impairment, accretion on asset retirement obligations, and changes in net working capital.

Net cash provided by operating activities for the year ended December 31, 2019 was $131.9 million and was primarily attributable to net loss of $316.3 million adjusted for depreciation, depletion and amortization of $315.2 million , goodwill impairment of $124.4 million , asset impairment of $83.5 million , accretion on asset retirement obligations of $33.8 million , loss on modification and extinguishment of debt of $26.5 million , employee benefit plans, net, of $20.8 million , amortization of debt issuance costs and accretion of debt discount of $14.1 million , and stock-based compensation of $12.4 million , partially offset by deferred income taxes of $12.1 million , and a $9.1 million gain on assets acquired in an exchange transaction.

The change in our operating assets and liabilities of ($172.8) million was primarily attributable to decreases in asset retirement obligations of $111.6 million , increases in inventories, net, of $40.7 million , decreases in other non-current liabilities of $33.6 million , decreases trade accounts payable of $28.1 million , decreases in acquisition-related obligations of $28.1 million , decreases in accrued expenses and other current liabilities of $25.5 million , and increases in other non-current assets of $24.5 million , partially offset by decreases in prepaid expenses and other current assets of $56.7 million , resulting primarily from income tax refunds of $72.2 million , and decreases in trade accounts receivable, net, of $47.4 million .

Net cash provided by operating activities for the year ended December 31, 2018 was $158.4 million and was primarily attributable to net income of $299.2 million adjusted for depreciation, depletion and amortization of $77.5 million, employee benefit plans, net, of $9.2 million, accretion on asset retirement obligations of $10.0 million, loss on modification and extinguishment of debt of $12.0 million and stock-based compensation of $13.4 million, partially offset by a $16.9 million gain on disposal of assets and changes in deferred income taxes of $66.7 million.

The change in our operating assets and liabilities of ($191.3) million was primarily attributed to increases in trade accounts receivable of $84.1 million, increases in prepaid expenses and other current assets of $44.3 million, increases in other non-current assets of $36.7 million, decreases in acquisition-related obligations of $14.5 million, and decreases in other non-current liabilities of $19.9 million, partially offset by decreases in inventories, net, of $33.2 million.

Net cash flows from operating activities consist of a net loss adjusted for non-cash items.

Net cash provided by operating activities for the year ended December 31, 2020 was $129.2 million and was primarily attributable to net loss of $446.9 million adjusted for asset impairment and restructuring of $256.5 million, depreciation, depletion and amortization of $151.5 million, deferred income taxes of $33.1 million, loss on sale of business of $36.1 million, accretion on asset retirement obligations of $30.7 million, amortization of debt issuance costs and accretion of debt discount of $14.8 million.

The change in our operating assets and liabilities of $34.4 million was primarily attributable to decreases in trade accounts receivable, net, of $91.2 million, decreases in inventories, net, of $48.7 million, and decreases in prepaid expenses and other current assets of $28.2 million, partially offset by decreases in other non-current liabilities of $43.8 million, decreases in acquisition-related obligations of $32.6 million, decreases in trade accounts payable of $28.6 million, and decreases in asset retirement obligations of $19.4 million.

The change in our operating assets and liabilities of ($172.8) million was primarily attributable to decreases in asset retirement obligations of $111.6 million, increases in inventories, net, of $40.7 million, decreases in other non-current liabilities of $33.6 million, decreases in trade accounts payable of $28.1 million, decreases in acquisition-related obligations of $28.1 million, decreases in accrued expenses and other current liabilities of $25.5 million, and increases in other non-current assets of $24.5 million, partially offset by decreases in prepaid expenses and other current assets of $56.7 million, resulting primarily from income tax refunds of $72.2 million, and decreases in trade accounts receivable, net, of $47.4 million.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2019 was $191.8 million , primarily driven by capital expenditures of $192.4 million , purchases of investment securities of $92.9 million , and capital contributions to equity affiliates of $10.1 million , partially offset by maturity of investment securities of $100.3 million .

Net cash provided by investing activities for the year ended December 31, 2018 was $102.2 million, primarily driven by cash, cash equivalents and restricted cash acquired in acquisition, net of amounts paid of $198.5 million, partially offset by capital expenditures of $81.9 million, payments on disposition of assets of $10.3 million, and capital contributions to equity affiliates of $5.3 million.

Net cash used in investing activities for the year ended December 31, 2020 was $210.0 million, primarily driven by capital expenditures of $154.0 million, cash paid on sale of business of $52.2 million, and purchases of investment securities of $21.1 million, partially offset by maturity of investment securities of $16.7 million.

Net cash used in investing activities for the year ended December 31, 2019 was $191.8 million, primarily driven by capital expenditures of $192.4 million, purchases of investment securities of $92.9 million, partially offset by maturity of investment securities of $100.3 million.

Financing Activities

Net cash used in financing activities for the year ended December 31, 2020 was $22.4 million, primarily attributable to principal repayments of debt of $59.8 million and principal repayments of notes payable of $16.7 million, partially offset by proceeds from borrowings on debt of $57.5 million.

Net cash used in financing activities for the year ended December 31, 2019 was $69.7 million, primarily attributable to principal repayments of debt of $552.8 million, common stock repurchases and related expenses of $37.6 million, and principal repayments of notes payable of $14.8 million, partially offset by proceeds from borrowings on debt of $544.9 million.

Net cash provided by financing activities for the year ended December 31, 2018 was $22.7 million, primarily attributable to net proceeds from borrowings on debt of $537.8 million, partially offset by principal repayments of debt of $471.7 million, common stock repurchases and related expenses of $20.3 million, debt issuance costs of $14.9 million, form S-4 costs of $3.9 million, and principal repayments of notes payable of $3.8 million.

Long-Term Debt

On November 9, 2018, we entered into a $225.0 million ABL Facility under the Amended and Restated Asset-Based Revolving Credit Agreement expiring on April 3, 2022.

On June 14, 2019, we entered into a $561.8 million Term Loan Credit Facility under the Credit Agreement.

Refer to Note 15 for additional disclosures on long-term debt.

Analysis of Material Debt Covenants

We were in compliance with all covenants under the Credit Agreement and the Amended and Restated Asset-Based Revolving Credit Agreement, as of December 31, 2019 .

We are in compliance with all covenants under the Credit Agreement and the Amended and Restated Asset-Based Revolving Credit Agreement, as of December 31, 2020.

A breach of the covenants in the Credit Agreement and the Amended and Restated Asset-Based Revolving Credit Agreement could result in a default under the terms of the agreement and the respective lenders could elect to declare all amounts borrowed due and payable.

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(in thousands )

2021 2022 2023 2024 2025 After 2025 Total

Long-term debt (1)

$ 24,993 $ 21,468 $ 8,118 $ 536,519 $ — $ — $ 591,098

Other debt (2)

3,837 3,347 1,182 109 — — 8,475

Acquisition-related obligations 8,144 4,247 — — — — 12,391

Contingent revenue obligation (3)

Equipment purchase commitments (4)

11,395 13,209 13,702 — — — 38,306

Minimum equipment purchase commitments 5,008 — 170 — — — 5,178

Transportation commitments 29 338 — — — — 367

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Coal purchase commitments 44,707 — — — — — 44,707

(1) Includes Term Loan Credit Facility principal amounts of $5.6 million in 2020, $5.6 million in 2021, $5.6 million in 2022, $5.6 million in 2023, and $536.5 million in 2024.

Cash interest payable on this obligation, with an interest rate of 9.00% as of December 31, 2019, would be approximately $51.0 million in 2020, $53.4 million in 2021, $55.3 million in 2022, $54.8 million in 2023, and $24.7 million in 2024.

Also includes Lexington Coal Company (“LCC”) Note Payable principal amounts of $17.5 million in 2020, $17.5 million in 2021, and $10.0 million in 2022 and LCC Water Treatment Stipulation principal amounts of $1.9 million in 2020, $2.5 million in 2021, $2.5 million in 2022, and $2.5 million in 2023.

Total $ 115,031 $ 58,210 $ 37,906 $ 549,170 $ 11,712 $ 47,621 $ 819,650

(1) Includes Term Loan Credit Facility principal amounts of $5.6 million in 2021, $5.6 million in 2022, $5.6 million in 2023, and $536.5 million in 2024.

Cash interest payable on this obligation, with an interest rate of 9.00% as of December 31, 2020, would be approximately $53.4 million in 2021, $55.3 million in 2022, $54.8 million in 2023, and $24.7 million in 2024.

Also includes Lexington Coal Company (“LCC”) Note Payable principal amounts of $17.5 million in 2021 and $10.0 million in 2022, LCC Water Treatment Stipulation principal amounts of $1.9 million in 2021, $2.5 million in 2022, and $2.5 million in 2023, and the senior secured asset-based revolving credit facility (“ABL Facility”) principal amount of $3.4 million in 2022.

Refer to Note 15 for principal payment and interest rate terms.

(2) Includes financing lease obligation principal amounts of $3.3 million in 2020, $2.8 million in 2021, $1.7 million in 2022, and $0.2 million in 2023.

Cash interest payable on these obligations with interest rates ranging between 2.49% and 11.32%, would be approximately $0.3 million in 2020, $0.2 million in 2021, $0.1 million in 2022, and $5 thousand in 2023.

Other debt includes principal amounts of $0.2 million in 2020, $0.6 million in 2021, and $0.5 million in 2022.

(2) Includes financing lease obligation principal amounts of $2.0 million in 2021, $1.7 million in 2022, $0.3 million in 2023, and $6 thousand in 2024.

Cash interest payable on these obligations with interest rates ranging between 2.49% and 27.39%, would be approximately $0.2 million in 2021, $0.1 million in 2022, and $15 thousand in 2023.

Other debt includes principal amounts of $1.8 million in 2021, $1.6 million in 2022, $0.9 million in 2023, and $0.1 million in 2024.

(3) Refer to Note 16 for further disclosures related to this obligation.

(4) Represents obligations under certain equipment purchase agreements that contain minimum quantities to be purchased in 2020 and 2022.

(5) Includes an estimated $3.7 million related to contractually committed variable priced tons from vendors with historical performance resulting in less than 20% of the committed tonnage being delivered.

Additionally, we have long-term liabilities relating to asset retirement obligations, pension, black lung benefits, life insurance benefits, and workers’ compensation benefits.

The table below reflects the estimated undiscounted cash flows for these obligations:

(in thousands)

(in thousands) 2021 2022 2023 2024 2025 After 2025 Total

Asset retirement obligation $ 25,490 $ 34,180 $ 28,330 $ 35,725 $ 42,622 $ 330,075 $ 496,422

Pension benefit obligation (1)

31,178 31,267 31,628 32,149 32,426 981,075 1,139,723

Black lung benefit obligation 6,810 6,929 7,038 7,112 7,244 177,472 212,605

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Workers’ compensation benefit obligation 13,155 9,351 7,185 6,106 5,633 80,382 121,812

Total $ 77,261 $ 82,315 $ 74,767 $ 81,678 $ 88,512 $ 1,583,913 $ 1,988,446

(1) The estimated undiscounted cash flows will be paid from the defined benefit pension plan assets held within the defined benefit pension plan trust.

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The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

We base our estimates on historical experience and on various other factors and assumptions, including

the current economic environment, that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We base our estimates on historical experience and on various other factors and assumptions, including the current economic environment, that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We evaluate our estimates and assumptions on an ongoing basis and adjust such estimates and assumptions as facts and circumstances require.

Foreign currency and energy markets, and fluctuations in demand for steel products have combined to increase the uncertainty inherent in such estimates and assumptions.

Foreign currency and energy markets, and fluctuations in demand for steel products have combined to

increase the uncertainty inherent in such estimates and assumptions.

As future events and their effects cannot be determined with precision, actual results may differ significantly from these estimates.

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We contributed $22.7 million to our Pension Plans for the year ended December 31, 2020.

For the year ended December 31, 2019 , we recorded a net periodic benefit cost of $5.5 million , which included a settlement of $6.2 million, for our Pension Plans and have recorded net obligations of $204.1 million .

The calculation of the net periodic benefit expense (credit) and projected benefit obligation associated with our Pension Plans requires the use of a number of assumptions, which are used by our independent actuaries to make the underlying

calculations.

For the year ended December 31, 2020, we recorded a net periodic benefit credit of $4.7 million, which included a settlement of $1.6 million, for our Pension Plans and have recorded net obligations of $218.7 million.

Changes in these assumptions can result in different net periodic benefit expense and liability amounts, and actual experience can differ from the assumptions.

The expected long-term rate of return on plan assets is an assumption of the rate of return on plan assets reflecting the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation.

• The expected long-term rate of return on plan assets is an assumption of the rate of return on plan assets reflecting the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the

projected benefit obligation.

We establish the expected long-term rate of return at the beginning of each fiscal year based upon historical returns and projected returns on the underlying mix of invested assets.

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Moreover, regulatory changes could affect our obligation to satisfy these or additional obligations.

As of December 31, 2019 , we had estimated black lung obligations of approximately $120.1 million , including amounts reported as current, which are net of assets of $2.7 million that are held in a tax-exempt trust fund.

As of December 31, 2020, we had estimated black lung obligations of approximately $124.8 million, including amounts reported as current and within discontinued operations, which are net of assets of $2.7 million that are held in a tax-exempt trust fund.

Income Taxes.

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We believe the deferred tax liabilities relied upon as future taxable income in our assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized.

At December 31, 2019 , a valuation allowance of $133.0 million has been provided on federal and state net operating losses and gross deferred tax assets not expected to provide future tax benefits.

At December 31, 2020, a valuation allowance of $263.4 million has been provided on federal and state net operating losses and other deferred tax assets not expected to provide future tax benefits.

Asset Impairment.

GAAP requires that a long-lived asset group that is held and used should be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset group might

not be recoverable.

Once indicators of potential impairment are identified, testing of a long-lived asset group for impairment is a two-step process.

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The amount of any potential impairment is equal to the excess of an asset group’s carrying value over its estimated fair value.

The amount of any potential impairment is allocated to the individual long-lived assets within the asset group on a pro-rata basis, except that the carrying value of individual long-lived assets are not reduced below their individual estimated fair values.

The amount of

any potential impairment is allocated to the individual long-lived assets within the asset group on a pro-rata basis, except that the carrying value of individual long-lived assets are not reduced below their individual estimated fair values.

Long-lived assets located in a close geographic area are grouped together for purposes of impairment testing when, after considering revenue and cost interdependencies, circumstances indicate the assets are used together to produce future cash flows.

Our asset groups generally consist of the assets and applicable liabilities of one or more mines and preparation plants and associated coal reserves for which cash flows are largely independent of cash flows of other mines, preparation plants and associated reserves.

During the year ended December 31, 2019, we determined that indicators of impairment were present for three long-lived asset groups within each of our CAPP - Met and CAPP - Thermal reporting segments and performed impairment testing as of December 31, 2019.

We performed long-lived asset impairment tests as of November 30, 2020, August 31, 2020, May 31, 2020, and February 29, 2020.

In total, we determined that indicators of impairment with respect to five long-lived asset groups within our Met reporting segment, three long-lived asset groups within its CAPP - Thermal reporting segment, and one long-lived asset group within discontinued operations existed during the year ended December 31, 2020.

At December 31, 2020, we determined that the carrying amounts of the asset groups exceeded both their undiscounted cash flows and their estimated fair values.

As a result, the Company recorded a long-lived asset impairment of $60.2 million.

Our estimates of undiscounted cash flows are dependent upon a number of significant management estimates about future performance including sales volumes and prices, costs to produce, income taxes, and capital spending, among others.

As a result, the Company recorded a long-lived asset impairment of $228.6 million, including $147.6 million recorded within discontinued operations.

We estimate the fair value of an asset group generally using discounted cash flow analysis based on estimates of future sales volumes, coal prices, production costs, and a risk-adjusted cost of capital.

Changes in any of these assumptions could materially impact the estimated undiscounted cash flows of our asset groups.

Additionally, during the year ended December 31, 2019, the Company recorded additional asset impairments of $6.2 million primarily related to the write-off of prepaid purchased coal as a result of Blackjewel’s Chapter 11 bankruptcy filing on July 1, 2019.

Refer to Note 2 and Note 8 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

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instead, it is tested for impairment annually as of October 31 of each year, or more frequently if indicators of impairment exist.

We performed an interim goodwill impairment test as of August 31, 2019 due to a decline in the Company’s market capitalization to amounts below book value combined with a decline in global metallurgical coal pricing which indicated that the fair value of the CAPP - Met segment reporting unit may have been below its carrying value.

Following the quantitative testing, we concluded that the fair value of the reporting unit exceeded its carrying value and no amounts of goodwill were impaired.

As of October 31, 2019, we performed our annual goodwill impairment test and concluded that more likely than not the fair value of its CAPP - Met reporting unit to which our goodwill is allocated exceeded its carrying value.

As a result, no amounts of goodwill were considered impaired as a result of impairment testing at October 31, 2019.

However, due to the continued weakening in coal market pricing combined with a significant market price decline for our stock late in the fourth quarter of 2019, we performed an interim goodwill impairment test as of December 31, 2019.

Following the quantitative testing, we concluded that the carrying value of the CAPP - Met reporting unit exceeded its fair value and recorded a goodwill impairment of $124.4 million to write down the full carrying value of goodwill.

Refer to Note 2 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

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The valuation methodology utilized to estimate the fair value of the reporting units is based on both a market and income approach and is within the range of fair values yielded under each approach.

The income approach is based on a discounted cash flow methodology in which expected future net cash flows are discounted to present value, using an appropriate after-tax weighted average cost of capital (discount rate).

The income approach is based on a discounted cash flow methodology based on estimates of future sales volumes, coal prices, production costs, and a risk-adjusted cost of capital.

The market approach is based on a guideline company and similar transaction methodology.

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Under the similar transactions approach, recent merger and acquisition transactions for companies that have similar operations to the Company’s reporting units are used to estimate the fair value of the Company’s reporting units.

The income approach is dependent upon a number of significant management estimates about future performance including sales volumes and prices, costs to produce, income taxes, capital spending, working capital changes and the after-tax weighted average cost of capital.

The income approach is dependent upon a number of significant management estimates about future performance.

Changes in any of these assumptions could materially impact the estimated fair value of our reporting units.

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For a further discussion of the factors that could result in a change in our assumptions, see “Risk Factors” in this Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission.

As of December 31, 2019, our goodwill balance was fully impaired.

Refer to Note 2 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

Contingent Revenue Obligation.

Our contingent revenue obligation was assumed in connection with the Merger.

Determining the fair value of this obligation requires management’s judgment and the utilization of independent valuation experts, and involves the use of significant estimates and assumptions with respect to forecasts of future revenues and discount rates.

Determining the fair value of this obligation requires management’s judgment and the utilization of independent valuation

experts, and involves the use of significant estimates and assumptions with respect to forecasts of future revenues and discount rates.

The Company forecasts future revenues for the duration of the obligation for the properties subject to the obligation.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity