Alpha Metallurgical Resources, Inc. 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 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. As of December 31, 2021, there were 115 registered holders of record of our common stock. 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 The payment of dividends is subject to certain limitations, as set forth in the terms of our borrowing arrangements. During the years ended 2021 and 2020, we did not pay dividends on our common stock. Our board of directors periodically evaluates the initiation of dividends. There is no assurance as to the amount or payment of dividends in the future because they will be subject to ongoing board of directors review and authorization will be based on a number of factors, including terms of our borrowing arrangements, business and market conditions, our future financial performance, and other capital priorities. Repurchase of Common Stock Refer to Note 25 for subsequent event disclosures related to our share repurchase program. Item 6. [Reserved] Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides a narrative of our results of operations and financial condition for the years ended December 31, 2021 and 2020. 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 The COVID-19 pandemic has had negative impacts on our business, results of operations, financial condition and cash flows. Refer to “Item 1. Business—Human Capital Resources—Employee Health and Welfare” for further COVID-19 related impacts. The full extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on certain developments, including the continued 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 still cannot be fully predicted. Our current view of the impacts of COVID-19 to our customers and suppliers is discussed below in the Market Overview section. We have not experienced significant supply chain disruptions due to the COVID-19 pandemic. We continue to monitor developments closely. All of our coal mining operations have been classified as essential in the states in which we operate enabling them to continue operations throughout the COVID-19 pandemic. 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 include, but are not limited to, employee communications on COVID-19 monitoring and precautionary measures, enhanced cleaning and sterilization practices, and remote work arrangements. We will continue to evaluate these policies, procedures, and precautionary measures in light of further developments as necessary or appropriate. Market Overview Metallurgical coal markets exhibited volatility and strength in the final months of 2021, with the U.S. East Coast indices rising to new calendar-year highs in the fourth quarter. Each of the U.S. East Coast indices finished the year more than double where it started at the beginning of January 2021, and the Australian Premium Low Volatile index more than tripled over the same twelve-month period. Looking specifically at movement within the fourth quarter, the U.S. East Coast High Volatile A index was at $377 per metric ton on October 1, 2021 and ended the quarter at $340 per metric ton on December 31, 2021. The U.S. East Coast Low 55 Table of Contents Volatile index began at $412 per metric ton at the start of the quarter and moved to $320 per metric ton at quarter close. The Australian Premium Low Volatile index also ended lower, going from $390 per metric ton on October 1, 2021 down to $357 per metric ton on December 31, 2021. Supply conditions remain tight in the metallurgical coal markets, with demand in Alpha’s key markets continuing to be strong. Across the globe, economic indicators reflect an inconsistent growth landscape as the uneven recovery continues from COVID-19 pandemic-related labor and supply-chain challenges. While still representing positive, yet slowing, economic growth, the world manufacturing Purchasing Managers’ Index (“PMI”) of 53.2 in January 2022 represented a 15-month low for the metric. In December and January, the United States PMI indices of 57.7 and 55.5, respectively, continued to come off their mid-year highs. Brazil and India, two of Alpha’s important foreign markets, also posted lower January PMI levels as compared to their December indices. India’s PMI slipped from 55.5 in December to 54.0 in January, and Brazil dipped further into economic contraction from 49.8 in December to 47.8 in January. China’s PMI also slid from 50.9 to 49.1. Alpha’s key market of Europe was the exception to the general pattern of slowing growth for the time period, with its PMI indices improving modestly from 58.0 in December to 58.7 in January. The World Steel Association’s (“WSA”) global crude steel production was 158.7 million metric tons in December 2021, a 3.0% decrease as compared to the year-ago period of December 2020. Steel production in the European Union held roughly flat year over year, with December 2021 levels just 1.4% lower than in December 2020. North American crude steel production of 9.7 million metric tons for the month represented a 7.5% increase over the year-ago period. China’s production level of 86.2 million metric tons was down 6.8% as compared to December of 2020. The capacity utilization rate for U.S. steel mills, which is measured by the American Iron and Steel Institute, was 79.8% for the week ending February 12, 2022. While this level is lower than the recent high in the mid-80s, it still represents sustained steel demand in North America. In the thermal coal market, strong demand and tight supply conditions remain, alongside volatility in the indices. Alpha’s last remaining thermal operation, the Slabcamp mine, is on schedule to mine out and cease operation in summer of 2022. Alpha continues to ship coal in accordance with existing contracts. We are monitoring developments in Ukraine as well as the related export controls and financial and economic sanctions imposed on certain industry sectors and parties in Russia by the U.S., the U.K., the European Union and others. Although we do not presently foresee direct material adverse effects upon our business, financial condition or results of operations as a result of developments in Ukraine and the consequent controls and sanctions, these factors may affect companies in many sectors and could lead to increased market volatility and uncertainty, which could affect us in turn. Business Overview 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 reliably supply metallurgical coal products to the steel industry. We operate high-quality, cost-competitive coal mines across the CAPP coal basin. As of December 31, 2021, our operations consisted of twenty active mines and eight coal preparation and load-out facilities, with approximately 3,500 employees. We produce, process, and sell met coal and thermal coal. 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, 2021, we had 351.1 million tons of reserves, 335.8 million tons of proven and probable metallurgical reserves, and 15.3 million tons of proven and probable thermal reserves. Additionally, we had approximately 381.7 million tons of in situ bituminous coal resources. We began operations on July 26, 2016, with mining operations in NAPP, CAPP, and the PRB. 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 Newport News, 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, we closed a transaction with Blackjewel L.L.C. (“Blackjewel”) to sell our Eagle Butte and Belle Ayr mines (the “Western Mines”) located in the PRB, Wyoming, along with related coal reserves, equipment, infrastructure and other real properties (our former PRB operations). On October 4, 2019, we closed on the ESM Transaction in connection with Blackjewel’s subsequent bankruptcy filing. On May 29, 2020, certain of our subsidiaries (Contura Coal West, LLC and Contura Wyoming Land, LLC), one of which held the mining permits for the Western Mines, were merged with certain subsidiaries of 56 Table of Contents ESM to become wholly-owned subsidiaries of ESM and to complete the permit transfer process in connection with the 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). The disposition of our former NAPP operations accelerated our strategic exit from thermal coal production to shift our focus toward met coal production. The former 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. 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. For the years ended December 31, 2021 and 2020, sales of met coal were 13.9 million tons and 12.3 million tons, respectively, and accounted for approximately 83% and 80%, respectively, of our coal sales volume. Sales of thermal coal were 2.9 million tons and 3.2 million tons, respectively, and accounted for approximately 17% and 20%, 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 Asia, Europe, and the Americas. Our sales of thermal coal were made primarily to large utilities and industrial customers throughout the United States. For the years ended December 31, 2021 and 2020 approximately 76% and 64%, respectively, of our coal revenues were derived from coal sales made to customers outside the United States. In addition, we generate other revenues from equipment sales, rentals, terminal and processing fees, coal and environmental analysis fees, royalties and the sale of natural gas. 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, 2021, we have one reportable segment: Met. To conform to the current period reportable segment presentation, the prior periods have been restated to reflect the change in reportable segments. Our Met segment operations consist of high-quality met coal mines, including Deep Mine 41, Road Fork 52, Black Eagle, and Lynn Branch. The coal produced by our Met segment operations is predominantly met coal with some amounts of thermal coal being produced as a byproduct of mining. In addition to the one reportable segment, our All Other category includes general corporate overhead and corporate assets and liabilities, our former CAPP - Thermal operations consisting of one active mine and one preparation plant in West Virginia, and the elimination of certain intercompany activity, as well as expenses associated with certain idled/closed mines. Refer to Notes 23 and 24 for additional disclosures on our reportable segment, geographic areas, and export coal revenue information. Other Business Development s We announced on March 7, 2022 that our board of directors authorized a share repurchase program allowing for the expenditure of up to $150.0 million for the repurchase of our common stock. Repurchases will be made from time to time in accordance with applicable securities laws in the open market, and may include repurchases pursuant to Rule 10b5-1 trading plans. The share repurchase program is effective immediately and has no expiration date, and repurchases may begin as soon as March 9, 2022. The repurchase program does not obligate us to acquire any particular amount of common stock or to acquire shares on any particular timetable, and the program may be suspended at any time at our discretion. The timing and amount of share repurchases will be determined by our management based on our evaluation of market conditions, the trading price of the stock, applicable legal requirements, compliance with the provisions of our debt agreements, and other factors. 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. 57 Table of Contents Factors Affecting Our Results of Operations Sales Agreements We manage our commodity price risk for coal sales through the use of coal supply agreements. As of February 25, 2022, we had sales commitments for 2022 as follows: Tons % Priced Average Realized Price per Ton Met - Domestic $189.31 Met - Export $236.99 Met Total 14.5 million 39 % $204.75 Thermal 1.0 million 100 % $52.46 Met Segment 15.5 million 44 % $180.36 All Other 0.7 million 82 % $57.24 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. Our realized price per ton of coal is influenced by many factors that vary by region, including (i) coal quality, which includes energy (heat content), sulfur, ash, volatile matter and moisture content; (ii) differences in market conventions concerning transportation costs and volume measurement; and (iii) regional supply and demand. • Coal Quality . The energy content or heat value of thermal coal is a significant factor influencing coal prices as higher energy coal is more desirable to consumers and typically commands a higher price in the market. The heat value of coal is commonly measured in British thermal units or the amount of heat needed to raise the temperature of one pound of water by one-degree Fahrenheit. Coal from the Eastern and Midwest regions of the United States tends to have a higher heat value than coal found in the western United States. 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 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 . Coal sales contracts are priced according to conventions specific to the market into which such coal is to be sold. Our domestic sales contracts are typically priced free on board (“FOB”) at our mines and on a short ton basis. Our international sales contracts are typically priced FOB at the shipping port from which such coal is delivered and on a metric ton basis. 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 further away from the end user of the coal may command lower prices. • Regional Supply and Demand . Our realized price per ton is influenced by market forces of the regional market into which such coal is to be sold. Market pricing may vary according to region and lead to different discounts or premiums to the most directly comparable benchmark price for such coal product. Costs. Our results of operations are dependent upon our ability to maximize productivity and control costs. Our primary expenses are for operating supply costs, repair and maintenance expenditures, cost of purchased coal, royalties, wages and benefits, freight and handling costs and taxes incurred in selling our coal. Principal goods and services we use in our operations include maintenance and repair parts and services, electricity, fuel, roof control and support items, explosives, tires, conveyance structure, ventilation supplies and lubricants. Our management strives to aggressively control costs and improve operating performance to mitigate external cost pressures. We experience volatility in operating costs related to fuel, explosives, steel, tires, contract services and healthcare, among others, and take measures to mitigate the increases in these costs at all operations. We have a centralized sourcing group for major supplier contract negotiation and administration, for the negotiation and purchase of major capital goods, and to support the business units. We promote competition between suppliers and seek to develop relationships with suppliers that focus on lowering our costs. We seek suppliers who identify and concentrate on implementing continuous improvement opportunities within their area of expertise. To the extent upward pressure on costs 58 Table of Contents exceeds our ability to realize sales increases, or if we experience unanticipated operating or transportation difficulties, our operating margins would be negatively impacted. We may also experience difficult geologic conditions, delays in obtaining permits, labor shortages, unforeseen equipment problems, and unexpected shortages of critical materials such as tires, fuel and explosives that may result in adverse cost increases and limit our ability to produce at forecasted levels. Results of Operations Our results of operations for the years ended December 31, 2021 and 2020 are discussed in these “Results of Operations” presented below. Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020 Revenues The following table summarizes information about our revenues during the years ended December 31, 2021 and 2020: Year Ended December 31, Increase (Decrease) (In thousands, except for per ton data) 2021 2020 $ or Tons % Coal revenues $ 2,252,597 $ 1,413,124 $ 839,473 59.4 % Other revenues 5,989 3,063 2,926 95.5 % Total revenues $ 2,258,586 $ 1,416,187 $ 842,399 59.5 % Tons sold 16,839 15,513 1,326 8.5 % Coal revenues. Coal revenues increased $839.5 million, or 59.4%, for the year ended December 31, 2021 compared to the prior year period. The increase was primarily due to an increase in tons sold and higher coal sales realization within our Met segment operations as a result of an improved pricing environment during the second half of 2021. Increasing coal demand, resulting from improved economic activity, coupled with a limited supply response contributed to a rise in coal prices. Refer to the “Non-GAAP Coal revenues” section below for further detail on coal revenues for the year ended December 31, 2021 compared to the prior year period. Cost and Expenses The following table summarizes information about our costs and expenses during the years ended December 31, 2021 and 2020: Year Ended December 31, Increase (Decrease) (In thousands) 2021 2020 $ % Cost of coal sales (exclusive of items shown separately below) $ 1,679,742 $ 1,281,011 $ 398,731 31.1 % Depreciation, depletion and amortization 110,047 139,885 (29,838) (21.3) % Accretion on asset retirement obligations 26,520 26,504 16 0.1 % Amortization of acquired intangibles, net 13,244 9,214 4,030 43.7 % Asset impairment and restructuring (561) 83,878 (84,439) (100.7) % Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above) 63,901 57,356 6,545 11.4 % Total other operating (income) loss: Mark-to-market adjustment for acquisition-related obligations 19,525 (8,750) 28,275 323.1 % Other income (10,972) (2,223) (8,749) (393.6) % Total costs and expenses $ 1,901,446 $ 1,586,875 $ 314,571 19.8 % Cost of coal sales. Cost of coal sales increased $398.7 million, or 31.1%, for the year ended December 31, 2021 compared to the prior year period. The increase was primarily driven by an increase in tons sold in the current period relative to the prior 59 Table of Contents year period and increased supplies and maintenance expense, royalties and taxes, and salaries and wages expense, partially offset by inventory change during the current period. Depreciation, depletion and amortization. Depreciation, depletion and amortization decreased $29.8 million, or 21.3%, for the year ended December 31, 2021 compared to the prior year period. The decrease in depreciation, depletion and amortization was primarily a result of asset disposals and asset impairments throughout the prior year. Amortization of acquired intangibles, net. Amortization of acquired intangibles, net increased $4.0 million, or 43.7%, for the year ended December 31, 2021 compared to the prior year period. The increase was primarily driven by the lower current period amortization related to below-market acquired coal supply agreements. Asset impairment and restructuring. Asset impairment and restructuring decreased $84.4 million, or 100.7%, for the year ended December 31, 2021 compared to the prior year period. For the year ended December 31, 2021, asset impairment and restructuring included long-lived asset impairment of $60 thousand and restructuring expense of ($621) thousand. For the year ended December 31, 2020, asset impairment and restructuring included long-lived asset impairment of $81.0 million and restructuring expense of $2.9 million. Refer to Note 8 for further information. Selling, general and administrative. Selling, general and administrative expenses increased $6.5 million, or 11.4%, for the year ended December 31, 2021 compared to the prior year period. This increase in expense was primarily related to increases of $4.3 million in incentive pay, $2.1 million in stock compensation expense, and $1.2 million in wages and benefits expense, partially offset by decreases of $1.6 million in professional fees and $0.7 million in severance expense. Mark-to-market adjustment for acquisition-related obligations. The mark-to-market adjustment for acquisition-related obligations resulted in an increase in expense of $28.3 million for the year ended December 31, 2021 compared to the prior year period. This decrease was related to the $19.5 million Contingent Revenue Obligation mark-to-market adjustment recorded during the year ended December 31, 2021 due to changes in underlying fair value assumptions during the current period. Refer to Note 17 for Contingent Revenue Obligation fair value input assumptions. Other income . Other income increased $8.7 million, or 393.6%, for the year ended December 31, 2021 compared to the prior year period, primarily due to a gain on sale of assets, net, of $9.9 million and a gain on settlement of acquisition-related obligations of $1.1 million in the current period. Other (Expense) Income The following table summarizes information about our other (expense) income during the year ended December 31, 2021 and 2020: Year Ended December 31, Increase (Decrease) (In thousands) 2021 2020 $ % Other (expense) income: Interest expense $ (69,654) $ (74,528) $ 4,874 6.5 % Interest income 334 7,027 (6,693) (95.2) % Equity loss in affiliates (4,149) (3,473) (676) (19.5) % Miscellaneous income (loss), net 6,867 (1,972) 8,839 448.2 % Total other expense, net $ (66,602) $ (72,946) $ 6,344 8.7 % Interest expense. Interest expense decreased $4.9 million, or 6.5%, for the year ended December 31, 2021 compared to the prior year period, primarily due to a decrease in debt outstanding. Refer to Note 14 for additional information. Interest income. Interest income decreased $6.7 million, or 95.2%, for the year ended December 31, 2021 compared to the prior year period. The decrease was primarily due to the interest income recorded during the three months ended June 30, 2020 associated with the federal income tax interest receivable related to the net operating loss carryback claim. Miscellaneous income (loss), net. Miscellaneous income (loss), net increased $8.8 million, or 448.2%, for the year ended December 31, 2021 compared to the prior year period. The increase was primarily due to the increase in the net periodic benefit credit for pension obligations. Refer to Note 19 for additional information. 60 Table of Contents Income Tax (Expense) Benefit The following table summarizes information about our income tax (expense) benefit during the years ended December 31, 2021 and 2020: Year Ended December 31, Increase (Decrease) (In thousands) 2021 2020 $ % Income tax (expense) benefit $ (3,609) $ 2,164 $ (5,773) (266.8) % Income taxes. Income tax expense of $3.6 million was recorded for the year ended December 31, 2021 on income from continuing operations before income taxes of $290.5 million. The effective tax rate differs from the federal statutory rate of 21% primarily due to the decrease in the valuation allowance. 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. Refer to Note 18 for additional information. Non-GAAP Financial Measures The discussion below contains “non-GAAP financial measures.” These are financial measures which either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP” or “GAAP”). Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA,” “non-GAAP coal revenues,” “non-GAAP cost of coal sales,” “non-GAAP coal margin,” 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 or any other measure of operating results or liquidity presented in accordance with GAAP. We use non-GAAP coal revenues to present coal revenues generated, excluding freight and handling fulfillment revenues. 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, 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, and idled and closed mine costs. Non-GAAP cost of coal sales per ton for our operations is calculated as non-GAAP cost of coal sales divided by tons sold. Non-GAAP coal margin per ton for our coal operations is calculated as non-GAAP coal sales realization per ton for our coal operations less non-GAAP cost of coal sales per ton for our coal operations. We also use Adjusted cost of produced coal sold to distinguish the cost of captive produced coal from the effects of purchased coal. The presentation of these measures should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. 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 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. Included below are reconciliations of non-GAAP financial measures to GAAP financial measures. The following tables summarize certain financial information relating to our coal operations for the years ended December 31, 2021 and 2020: 61 Table of Contents Year Ended December 31, 2021 (In thousands, except for per ton data) Met All Other Consolidated Coal revenues $ 2,173,647 $ 78,950 $ 2,252,597 Less: Freight and handling fulfillment revenues (380,457) (520) (380,977) Non-GAAP Coal revenues $ 1,793,190 $ 78,430 $ 1,871,620 Tons sold 15,569 1,270 16,839 Non-GAAP Coal sales realization per ton $ 115.18 $ 61.76 $ 111.15 Cost of coal sales (exclusive of items shown separately below) $ 1,607,157 $ 72,585 $ 1,679,742 Depreciation, depletion and amortization - production (1) 99,963 9,362 109,325 Accretion on asset retirement obligations 13,571 12,949 26,520 Amortization of acquired intangibles, net 13,671 (427) 13,244 Total Cost of coal sales $ 1,734,362 $ 94,469 $ 1,828,831 Less: Freight and handling costs (380,457) (520) (380,977) Less: Depreciation, depletion and amortization - production (1) (99,963) (9,362) (109,325) Less: Accretion on asset retirement obligations (13,571) (12,949) (26,520) Less: Amortization of acquired intangibles, net (13,671) 427 (13,244) Less: Idled and closed mine costs (16,858) (11,680) (28,538) Non-GAAP Cost of coal sales $ 1,209,842 $ 60,385 $ 1,270,227 Tons sold 15,569 1,270 16,839 Non-GAAP Cost of coal sales per ton $ 77.71 $ 47.55 $ 75.43 (1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions. Year Ended December 31, 2021 (In thousands, except for per ton data) Met All Other Consolidated Coal revenues $ 2,173,647 $ 78,950 $ 2,252,597 Less: Total Cost of coal sales (per table above) (1,734,362) (94,469) (1,828,831) GAAP Coal margin $ 439,285 $ (15,519) $ 423,766 Tons sold 15,569 1,270 16,839 GAAP Coal margin per ton $ 28.22 $ (12.22) $ 25.17 GAAP Coal margin $ 439,285 $ (15,519) $ 423,766 Add: Depreciation, depletion and amortization - production (1) 99,963 9,362 109,325 Add: Accretion on asset retirement obligations 13,571 12,949 26,520 Add: Amortization of acquired intangibles, net 13,671 (427) 13,244 Add: Idled and closed mine costs 16,858 11,680 28,538 Non-GAAP Coal margin $ 583,348 $ 18,045 $ 601,393 Tons sold 15,569 1,270 16,839 Non-GAAP Coal margin per ton $ 37.47 $ 14.21 $ 35.71 (1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions. 62 Table of Contents Year Ended December 31, 2020 (In thousands, except for per ton data) Met All Other Consolidated Coal revenues $ 1,263,855 $ 149,269 $ 1,413,124 Less: Freight and handling fulfillment revenues (206,509) (12,940) (219,449) Non-GAAP Coal revenues $ 1,057,346 $ 136,329 $ 1,193,675 Tons sold 13,070 2,443 15,513 Non-GAAP Coal sales realization per ton $ 80.90 $ 55.80 $ 76.95 Cost of coal sales (exclusive of items shown separately below) $ 1,140,556 $ 140,455 $ 1,281,011 Depreciation, depletion and amortization - production (1) 124,060 14,568 138,628 Accretion on asset retirement obligations 14,214 12,290 26,504 Amortization of acquired intangibles, net 12,889 (3,675) 9,214 Total Cost of coal sales $ 1,291,719 $ 163,638 $ 1,455,357 Less: Freight and handling costs (206,509) (12,940) (219,449) Less: Depreciation, depletion and amortization - production (1) (124,060) (14,568) (138,628) Less: Accretion on asset retirement obligations (14,214) (12,290) (26,504) Less: Amortization of acquired intangibles, net (12,889) 3,675 (9,214) Less: Idled and closed mine costs (16,640) (12,240) (28,880) Non-GAAP Cost of coal sales $ 917,407 $ 115,275 $ 1,032,682 Tons sold 13,070 2,443 15,513 Non-GAAP Cost of coal sales per ton $ 70.19 $ 47.19 $ 66.57 (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 All Other Consolidated Coal revenues $ 1,263,855 $ 149,269 $ 1,413,124 Less: Total Cost of coal sales (per table above) (1,291,719) (163,638) (1,455,357) GAAP Coal margin $ (27,864) $ (14,369) $ (42,233) Tons sold 13,070 2,443 15,513 GAAP Coal margin per ton $ (2.13) $ (5.88) $ (2.72) GAAP Coal margin $ (27,864) $ (14,369) $ (42,233) Add: Depreciation, depletion and amortization - production (1) 124,060 14,568 138,628 Add: Accretion on asset retirement obligations 14,214 12,290 26,504 Add: Amortization of acquired intangibles, net 12,889 (3,675) 9,214 Add: Idled and closed mine costs 16,640 12,240 28,880 Non-GAAP Coal margin $ 139,939 $ 21,054 $ 160,993 Tons sold 13,070 2,443 15,513 Non-GAAP Coal margin per ton $ 10.71 $ 8.62 $ 10.38 (1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions. 63 Table of Contents Year Ended December 31, Increase (Decrease) (In thousands, except for per ton data) 2021 2020 $ or Tons % Met segment operations: Tons sold 15,569 13,070 2,499 19.1 % Non-GAAP Coal revenues $ 1,793,190 $ 1,057,346 $ 735,844 69.6 % Non-GAAP Coal sales realization per ton $ 115.18 $ 80.90 $ 34.28 42.4 % All Other category: Tons sold 1,270 2,443 (1,173) (48.0) % Non-GAAP Coal revenues $ 78,430 $ 136,329 $ (57,899) (42.5) % Non-GAAP Coal sales realization per ton $ 61.76 $ 55.80 $ 5.96 10.7 % Non-GAAP Coal revenues. Met segment operations non-GAAP coal revenues increased $735.8 million, or 69.6%, for the year ended December 31, 2021 compared to the prior year period. The increase was primarily due to an increase in tons sold and higher average non-GAAP coal sales realization of 42.4% per ton resulting from an improved pricing environment compared to the prior year period. All Other category non-GAAP coal revenues decreased $57.9 million, or 42.5%, for the year ended December 31, 2021 compared to the prior year period primarily due to a decrease in thermal tons sold as we continued our strategic shift to focus on met coal production. Year Ended December 31, Increase (Decrease) (In thousands, except for per ton data) 2021 2020 $ % Met segment operations: Non-GAAP Cost of coal sales $ 1,209,842 $ 917,407 $ 292,435 31.9 % Non-GAAP Cost of coal sales per ton $ 77.71 $ 70.19 $ 7.52 10.7 % Non-GAAP Coal margin per ton $ 37.47 $ 10.71 $ 26.76 249.9 % All Other category: Non-GAAP Cost of coal sales $ 60,385 $ 115,275 $ (54,890) (47.6) % Non-GAAP Cost of coal sales per ton $ 47.55 $ 47.19 $ 0.36 0.8 % Non-GAAP Coal margin per ton $ 14.21 $ 8.62 $ 5.59 64.8 % Non-GAAP cost of coal sales. Met segment operations non-GAAP cost of coal sales increased $292.4 million, or 31.9%, for the year ended December 31, 2021 compared to the prior year period. The increase was primarily driven by an increase in tons sold in the current period relative to the prior year period and increased supplies and maintenance expense, royalties and taxes, and salaries and wages expense, partially offset by inventory change during the current period. All Other category non-GAAP cost of coal sales decreased $54.9 million, or 47.6%, for the year ended December 31, 2021 compared to the prior year period. The decrease was primarily driven by a decrease in thermal tons sold and decreased supplies and maintenance expense and royalties and taxes, partially offset by increased salaries and wages expense and inventory change during the current period. Our non-GAAP cost of coal sales includes purchased coal costs. In the following tables, we calculate Adjusted cost of produced coal sold as non-GAAP cost of coal sales less purchased coal costs. 64 Table of Contents Year Ended December 31, 2021 (In thousands, except for per ton data) Met All Other Consolidated Non-GAAP Cost of coal sales $ 1,209,842 $ 60,385 $ 1,270,227 Less: cost of purchased coal sold (97,872) (660) (98,532) Adjusted cost of produced coal sold $ 1,111,970 $ 59,725 $ 1,171,695 Produced tons sold 14,638 1,265 15,903 Adjusted cost of produced coal sold per ton (1) $ 75.96 $ 47.21 $ 73.68 (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, 2020 (In thousands, except for per ton data) Met All Other Consolidated Non-GAAP Cost of coal sales $ 917,407 $ 115,275 $ 1,032,682 Less: cost of purchased coal sold (85,769) (925) (86,694) Adjusted cost of produced coal sold $ 831,638 $ 114,350 $ 945,988 Produced tons sold 11,941 2,429 14,370 Adjusted cost of produced coal sold per ton (1) $ 69.65 $ 47.08 $ 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. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that is presented as a supplemental measure and is not intended to replace financial performance or liquidity 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. 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, 2021 and 2020: Year Ended December 31, 2021 (In thousands) Met All Other Consolidated Net income (loss) from continuing operations $ 439,859 $ (152,930) $ 286,929 Interest expense 184 69,470 69,654 Interest income (6) (328) (334) Income tax expense — 3,609 3,609 Depreciation, depletion and amortization 99,963 10,084 110,047 Non-cash stock compensation expense 28 5,287 5,315 Mark-to-market adjustment - acquisition-related obligations — 19,525 19,525 Gain on settlement of acquisition-related obligations — (1,125) (1,125) Accretion on asset retirement obligations 13,571 12,949 26,520 Asset impairment and restructuring — (561) (561) Amortization of acquired intangibles, net 13,671 (427) 13,244 Adjusted EBITDA $ 567,270 $ (34,447) $ 532,823 65 Table of Contents Year Ended December 31, 2020 (In thousands) Met All Other Consolidated Net loss from continuing operations $ (77,519) $ (163,951) $ (241,470) Interest expense (2,014) 76,542 74,528 Interest income (63) (6,964) (7,027) Income tax benefit — (2,164) (2,164) Depreciation, depletion and amortization 124,060 15,825 139,885 Non-cash stock compensation expense 289 4,607 4,896 Mark-to-market adjustment - acquisition-related obligations — (8,750) (8,750) Accretion on asset retirement obligations 14,214 12,290 26,504 Asset impairment and restructuring 46,317 37,561 83,878 Management restructuring costs (1) 501 440 941 Loss on partial settlement of benefit obligations 1,607 1,359 2,966 Amortization of acquired intangibles, net 12,889 (3,675) 9,214 Adjusted EBITDA $ 120,281 $ (36,880) $ 83,401 (1) Management restructuring costs are related to severance expense associated with senior management changes during the three months ended March 31, 2020. The following table summarizes Adjusted EBITDA for our Met segment operations and All Other category: Year Ended December 31, Increase (Decrease) (In thousands) 2021 2020 $ % Adjusted EBITDA Met operations $ 567,270 $ 120,281 $ 446,989 371.6 % All Other (34,447) (36,880) 2,433 6.6 % Total $ 532,823 $ 83,401 $ 449,422 538.9 % Met segment operations. Adjusted EBITDA increased $447.0 million, or 371.6%, for the year ended December 31, 2021 compared to the prior year period. The increase in Adjusted EBITDA was primarily driven by increased coal margin and coal sales volumes. All Other category. Adjusted EBITDA increased $2.4 million, or 6.6%, for the year ended December 31, 2021 compared to the prior year period. The increase in Adjusted EBITDA was primarily driven by decreases in cost of coal sales and increases in sales realization per ton, partially offset by a decrease in thermal tons sold. Discontinued Operations The former 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 discontinued operating results which are reported within the All Other category that have been derived from our Consolidated Financial Statements for the year ended December 31, 2020. 66 Table of Contents (In thousands, except for per ton data) Year Ended December 31, 2020 (2) Coal revenues $ 233,083 Less: Freight and handling fulfillment revenues (11,135) Non-GAAP Coal revenues $ 221,948 Tons sold 5,420 Non-GAAP Coal sales realization per ton $ 40.95 Cost of coal sales (exclusive of items shown separately below) $ 215,390 Depreciation, depletion and amortization - production (1) 11,570 Accretion on asset retirement obligations 4,154 Amortization of acquired intangibles, net 861 Total Cost of coal sales $ 231,975 Less: Freight and handling costs (11,135) Less: Depreciation, depletion and amortization - production (1) (11,570) Less: Accretion on asset retirement obligations (4,154) Less: Amortization of acquired intangibles, net (861) Less: Idled and closed mine costs (3,102) Non-GAAP Cost of coal sales $ 201,153 Tons sold 5,420 Non-GAAP Cost of coal sales per ton $ 37.11 (1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions. (2) Includes minor residual activity related to our former PRB operations. (In thousands, except for per ton data) Year Ended December 31, 2020 (2) Coal revenues $ 233,083 Less: Total Cost of coal sales (per table above) (231,975) GAAP Coal margin $ 1,108 Tons sold 5,420 GAAP Coal margin per ton $ 0.20 GAAP Coal margin $ 1,108 Add: Depreciation, depletion and amortization - production (1) 11,570 Add: Accretion on asset retirement obligations 4,154 Add: Amortization of acquired intangibles, net 861 Add: Idled and closed mine costs 3,102 Non-GAAP Coal margin $ 20,795 Tons sold 5,420 Non-GAAP Coal margin per ton $ 3.84 (1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions. (2) Includes minor residual activity related to our former PRB operations. Refer to Note 3 for disclosures on the Cumberland Back-to-Back Coal Supply Agreements. 67 Table of Contents Liquidity and Capital Resources Overview Our primary liquidity and capital resource requirements stem from the cost of our coal production and purchases, our capital expenditures, our debt service, our reclamation obligations, our regulatory costs and settlements and associated costs. 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 and the reasonably foreseeable future. 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. These assumptions are inherently subject to significant business, political, economic, regulatory, environmental and competitive uncertainties, pending and existing climate-related initiatives, contingencies and risks, all of which are difficult to predict and many of which are beyond our control. Increased scrutiny of ESG matters specific to the coal sector could negatively influence our ability to raise capital in the future and result in a reduced number of surety and insurance providers. We may need to raise additional funds if market conditions deteriorate, and we may not be able to do so in a timely fashion, on terms acceptable to us, or at all; or one or more of our assumptions prove to be incorrect or if we choose to expand our acquisition, exploration, appraisal, or development efforts or any other activity more rapidly than we presently anticipate. Additionally, we may elect to raise additional funds before we need them if the conditions for raising capital are favorable. We may seek to sell equity or debt securities or obtain additional bank credit facilities. The sale of equity securities could result in dilution to our stockholders. The incurrence of additional indebtedness could result in increased fixed obligations and additional covenants that could restrict our operations. Liquidity The following table summarizes our total liquidity as of December 31, 2021: (in thousands ) December 31, 2021 Cash and cash equivalents $ 81,211 Credit facility availability (1) 33,963 Total liquidity $ 115,174 (1) Comprised of our unused commitments available under the Second Amended and Restated Asset-Based Revolving Credit Agreement, subject to limitations described therein. Cash Collateral We are required to provide cash collateral to secure our obligations under certain worker’s compensation, black lung, reclamation-related obligations, financial payments and other performance obligations, and other operating agreements. Additionally, we have short-term restricted cash held in escrow related to our Contingent Revenue Obligation (refer to Note 15). 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 to the DCMWC Reauthorization Process section 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). As of December 31, 2021, we had the following cash collateral on our Consolidated Balance Sheets: (in thousands ) December 31, 2021 Short-term and long-term restricted cash $ 101,403 Long-term restricted investments 28,443 Short-term and long-term deposits 1,394 Total cash collateral $ 131,240 Off-Balance Sheet Arrangements 68 Table of Contents We are required to provide financial assurance in order to perform the post-mining reclamation required by our mining permits, pay workers’ compensation claims under workers’ compensation laws in various states, pay federal black lung benefits, and perform certain other obligations. In order to provide the required financial assurance, we generally use surety bonds for post-mining reclamation and workers’ compensation obligations. We also use bank letters of credit to collateralize certain obligations. As of December 31, 2021, we had the following outstanding surety bonds and letters of credit: (in thousands ) December 31, 2021 Surety bonds (1) $ 176,119 Letters of credit (2) $ 121,650 (1) Total face amount includes $30 thousand attributable to discontinued operations. (2) The letters of credit outstanding are under the Second Amended and Restated Asset-Based Revolving Credit Agreement dated December 6, 2021 and the Credit and Security Agreement dated June 30, 2017, and related amendments, between ANR, Inc. and First Tennessee Bank National Association. Refer to Note 22, part (c) for further disclosures on off-balance sheet arrangements. Debt Financing and Related Transactions At December 31, 2021, we had $454.7 million of indebtedness outstanding before debt discount and issuance costs. Our indebtedness is primarily comprised of our Credit Agreement entered into on June 14, 2019 that provides for a senior secured term loan facility in the aggregate principal amount of $561.8 million with a maturity date of June 14, 2024 (the “Term Loan Credit Facility”). The Term Loan Credit Facility permits us, subject to approval of the administrative agent and the lenders providing the financing, to request incremental term loans up to an aggregate amount of $50.0 million subject to certain conditions in the Credit Agreement, in increments not less than $25.0 million or the remaining availability. In a continued strategic effort to reduce our outstanding debt and strengthen our balance sheet, we repurchased at a discount certain outstanding principal borrowings of $18.7 million and made voluntary prepayments of $81.0 million of outstanding principal borrowings under the Term Loan Credit Facility during the third and fourth quarters of 2021. During the first quarter of 2022, we made additional voluntary prepayments of $150.0 million of outstanding principal borrowings under the Term Loan Credit Facility. Subject to continued coal market strength and available liquidity, we are planning to continue our efforts to substantially deleverage the balance sheet in coming quarters. On December 6, 2021, we entered into the Second Amended and Restated Asset-Based Revolving Credit Agreement (“New ABL Agreement”). The New ABL Agreement amended and restated the Amended and Restated Asset-Based Revolving Credit Agreement dated November 9, 2018, in its entirety, and includes a senior secured asset-based revolving credit facility (“the New ABL Facility”). Under the New ABL Facility, we may borrow cash from the Lenders (as defined therein) or cause the L/C Issuers (as defined therein) to issue letters of credit, on a revolving basis, in an aggregate amount of up to $155.0 million, of which no more than $150.0 million may represent outstanding letters of credit ($125.0 million on a committed basis and another $25.0 million on an uncommitted cash collateralized basis) with a maturity date of December 6, 2024. The New ABL Agreement extended the maturity date of the facility from the previous maturity of April 3, 2022. Availability under the New 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 New ABL Facility, we may be required to cash collateralize the New ABL Facility to the extent outstanding borrowings and letters of credit under the New ABL Facility exceed the Borrowing Base after considering covenant limitations. On July 26, 2021, we repaid in full the West Virginia allocation of the Lexington Coal Company (“LCC”) note payable (“LCC Note Payable”) in the amount of $21.2 million. The final $7.7 million payment was originally due in July of 2022, but we negotiated the return of $14.0 million of surety collateral in exchange for early repayment, which allowed us to eliminate that portion of the debt a year early and at a lower net cash outflow than was previously expected in 2021. In October 2021, we elected to repay in full the remaining LCC Note Payable in the amount of $2.3 million and the remaining obligation to contribute into the LCC’s water treatment restricted accounts (the “LCC Water Treatment Stipulation”) in the amount of $5.0 million. Refer to Note 14 for additional disclosures on long-term debt. Acquisition-Related Obligations 69 Table of Contents At December 31, 2021, we had $41.6 million of acquisition-related obligations outstanding before discount. Our acquisition-related obligations are primarily comprised of the Contingent Revenue Obligation which has an offsetting $17.6 million of short-term restricted cash held in escrow as of the first quarter of 2022 (refer to Note 15). Capital Requirements We expect to spend between $160.0 million and $190.0 million on capital expenditures during 2022. Our expected capital expenditures include an increase from our estimates in the prior year due to inflationary pressure on labor and supplies and plans for several important projects that will help modernize and strategically improve our operations and preparation plant infrastructure. Contractual Obligations The following is a summary of our significant contractual obligations as of December 31, 2021: (in thousands ) 2022 2023 2024 2025 2026 After 2026 Total Term Loan Credit Facility (1) $ 44,944 $ 44,944 $ 470,158 $ — $ — $ — $ 560,046 Contingent Revenue Obligation 17,524 22,988 — — — — 40,512 Minimum royalties 14,665 14,418 13,620 12,525 12,396 56,771 124,395 Coal purchase commitments 37,335 — — — — — 37,335 Unconditional purchase obligations (2) 46,514 105,750 87,825 — — — 240,089 Total $ 160,982 $ 188,100 $ 571,603 $ 12,525 $ 12,396 $ 56,771 $ 1,002,377 (1) Includes cash interest payable on this obligation, with an interest rate of 10.00% as of December 31, 2021. (2) Includes transportation commitments, minimum equipment purchase commitments, and diesel fuel purchase commitments. Refer to Note 22 for further information. Additionally, we have long-term liabilities relating to asset retirement obligations, pension benefits, black lung benefits, postretirement life insurance benefits, and workers’ compensation benefits. The table below reflects the estimated undiscounted cash flows for these obligations: (in thousands) 2022 2023 2024 2025 2026 After 2026 Total Asset retirement obligation $ 32,802 $ 35,495 $ 35,663 $ 24,079 $ 35,865 $ 256,029 $ 419,933 Pension benefit obligation (1) 30,949 30,944 31,161 31,497 31,657 940,537 1,096,745 Black lung benefit obligation 7,295 7,208 7,254 7,329 7,497 158,467 195,050 Postretirement life insurance benefit obligation 602 568 569 571 570 14,237 17,117 Workers’ compensation benefit obligation 10,612 7,757 6,277 5,497 5,076 72,759 107,978 Total $ 82,260 $ 81,972 $ 80,924 $ 68,973 $ 80,665 $ 1,442,029 $ 1,836,823 (1) The estimated undiscounted cash flows will be paid from the defined benefit pension plan assets held within the defined benefit pension plan trust. Refer to Note 19 for further disclosures related to this obligation. Business Updates On December 14, 2021, S&P Global Ratings upgraded its issuer credit rating on the Company to B- from CCC+ and its issuer-level rating on our senior secured debt to B- from CCC+ amid favorable market indicators. The rating outlook was noted as stable. On September 14, 2021, Moody’s Investors Service ("Moody's") upgraded our Corporate Family Rating to B3 from Caa1, Probability of Default Rating to B3-PD from Caa1-PD, Senior Secured First Lien Bank Credit Facility Rating to B3 (LGD4) from Caa2 (LGD4), and Speculative Grade Liquidity Rating to SGL-2 from SGL-3 which were upgraded from Moody’s previous ratings which were released on April 16, 2021. The rating outlook was noted as stable. Should we receive any negative outlook ratings in the future, such negative outlook ratings would result in 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. The COVID-19 pandemic has had negative impacts on our business, results of operations, financial condition, and cash flows. The full extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on 70 Table of Contents 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 still cannot be fully predicted. We continually strive to enhance our capital structure and financial flexibility and reduce cash outflows from operations. As future opportunities arise, we will consider the possibility of refinancing, repayment or repurchase of outstanding debt and amendment of our credit facilities, and may consider the sale of other assets or businesses, and such other measures as we believe circumstances warrant. We may decide to pursue or not pursue these opportunities at any time. 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 facilities. As a regular part of our business, we review opportunities for, and engage in discussions and negotiations concerning, the acquisition or disposition of coal mining and related infrastructure assets and interests in coal mining companies, and acquisitions or dispositions of, or combinations or other strategic transactions involving companies with coal mining or other energy assets. When we believe that these opportunities are consistent with our strategic plans and our acquisition or disposition criteria, we will make bids or proposals and/or enter into letters of intent and other similar agreements. These bids or proposals, which may be binding or non-binding, are customarily subject to a variety of conditions and usually permit us to terminate the discussions and any related agreement if, among other things, we are not satisfied with the results of due diligence. Any acquisition opportunities we pursue could materially affect our liquidity and capital resources and may require us to incur indebtedness, seek equity capital or both. There can be no assurance that additional financing will be available on terms acceptable to us, or at all. Income Taxes In August 2021, we received an expected $64.2 million federal income tax refund and a $5.4 million associated interest payment related to a net operating loss (“NOL”) carryback claim. Refer to Note 18 for further income tax disclosures. Pension Plans We sponsor three qualified non-contributory pension plans (“Pension Plans”) which cover certain salaried and non-union hourly employees. 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. Annual funding contributions to the Pension Plans are made as recommended by consulting actuaries based upon the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) funding standards. Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006. As a result of the recent funding relief granted under the American Rescue Plan Act, contributions requirements to the pension plans were reduced relative to our previous estimates, and we contributed $6.6 million to the Pension Plans in 2021. We expect our minimum required contributions to be $4.4 million to the pension plans in 2022. Refer to Note 19 for further disclosures related to this obligation. Discontinued Operations Refer to Note 3 for disclosure on discontinued operations. 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 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 Natural Resources Inc. 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 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 71 Table of Contents which the calculation was derived. In February 2021, the U.S. Department of Labor (“DOL”) withdrew its Federal Register notice seeking comments on its bulletin describing its new method of calculating collateral requirements. The Department removed the bulletin from its website in May 2021. On February 10, 2022, a telephone conference was held with DCMWC and DOL decision makers wherein we presented facts and arguments in support of our appeal. No ruling has been made on the appeal, but during the call we indicated that we would be willing to allocate an additional $10.0 million in collateral. If our appeal is unsuccessful, we may be required to provide additional letters of credit in order to receive self-insurance reauthorization from the DCMWC or insure these black lung obligations through a third party provider, which would likely also require us to provide additional collateral. Either of these outcomes would significantly reduce our liquidity. Share Repurchase Program On March 4, 2022, our board of directors adopted a share repurchase program that permits us to repurchase up to an aggregate amount of $150.0 million of our common stock. Share repurchases may be made from time to time through open market transactions, block trades, tender offers, or otherwise. Repurchases under the program 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. Cash Flows Cash, cash equivalents, and restricted cash decreased by $62.0 million and $103.1 million over the years ended December 31, 2021 and 2020, respectively. The net change in cash, cash equivalents, and restricted cash was attributable to the following: Year Ended December 31, 2021 2020 Cash flows (in thousands): Net cash provided by operating activities $ 174,943 $ 129,236 Net cash used in investing activities (89,855) (209,969) Net cash used in financing activities (147,045) (22,376) Net decrease in cash and cash equivalents and restricted cash $ (61,957) $ (103,109) Operating Activities. The increase in net cash provided by operating activities for the year ended December 31, 2021 compared to the prior year period was primarily attributable to the improvement in our results from operations as discussed above in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations,” partially offset by changes in operating assets and liabilities, primarily attributable to an increase in our working capital. Our working capital increase was primarily driven by an increase in our trade accounts receivable, net, partially offset by the receipt of the federal tax refund in the current year as discussed above. Investing Activities. The decrease in net cash used in investing activities for the year ended December 31, 2021 compared to the prior year period was primarily driven by the decrease in our capital expenditures which were near the maintenance capital level in the current year period and the cash paid on the sale of our former NAPP operations in the prior year period (refer to Note 3 for further information). Financing Activities. The increase in net cash used in financing activities for the year ended December 31, 2021 compared to the prior year period was primarily driven by the repurchase and voluntary prepayments of our outstanding principal borrowings under the Term Loan Credit Facility during the second half of the current year period (refer to Note 14 for further information). Analysis of Material Debt Covenants We are in compliance with all covenants under the Credit Agreement’s Term Loan Credit Facility and the New ABL Agreement, as of December 31, 2021. A breach of the covenants in the Credit Agreement’s Term Loan Credit Facility or the Amended and Restated Asset-Based Revolving Credit Agreement could result in a default under the terms of such agreement, and the respective lenders could then elect to declare all amounts borrowed due and payable. Pursuant to the New ABL Agreement, during any Liquidity Period (capitalized terms as defined in the New ABL Agreement), our Fixed Charge Coverage Ratio cannot be less than 1.0 as of the last day of any Test Period, commencing with the Test Period ended immediately preceding the commencement of such Liquidity Period. The Fixed Charge Coverage Ratio is 72 Table of Contents calculated as (a) Consolidated EBITDA of the Company and its Restricted Subsidiaries for such period, minus non-financed Capital Expenditures (including Capital Expenditures financed with the proceeds of any Loans) paid or payable currently in cash by the Company or any of its Subsidiaries for such period to (b) the Fixed Charges of the Company and its Restricted Subsidiaries during such period. As of December 31, 2021, we were not in a Liquidity Period. Critical Accounting Policies and Estimates 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 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. As future events and their effects cannot be determined with precision, actual results may differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. Reclamation. Our asset retirement obligations arise from the federal Surface Mining Control and Reclamation Act of 1977 and similar state statutes, which require that mine property be restored in accordance with specified standards and an approved reclamation plan. Significant reclamation activities include reclaiming refuse and slurry ponds, reclaiming the pit and support acreage at surface mines, sealing portals at deep mines, and the treatment of water. We determine the future cash flows necessary to satisfy our reclamation obligations on a permit-by-permit basis based upon current permit requirements and various estimates and assumptions, including estimates of disturbed acreage, cost estimates, and assumptions regarding productivity. We are also faced with increasingly stringent environmental regulation, much of which is beyond our control, which could increase our costs and materially increase our asset retirement obligations. Estimates of disturbed acreage are determined based on approved mining plans and related engineering data. Cost estimates are based upon third-party costs. Productivity assumptions are based on historical experience with the equipment that is expected to be utilized in the reclamation activities. Our asset retirement obligations are initially recorded at fair value. In order to determine fair value, we use assumptions including a discount rate and third-party margin. Each is discussed further below: • Discount Rate. Asset retirement obligations are initially recorded at fair value. We utilize discounted cash flow techniques to estimate the fair value of our obligations. We base our discount rate on the rates of treasury bonds with maturities similar to expected mine lives and adjust for our credit standing as necessary after considering funding and assurance provisions. Changes in our credit standing could have a material impact on our asset retirement obligations. • Third-Party Margin. The measurement of an obligation at fair value is based upon the amount a third party would demand to perform the obligation. Because we plan to perform a significant amount of the reclamation activities with internal resources, a third-party margin was added to the estimated costs of these activities. This margin was estimated based upon our historical experience with contractors performing similar types of reclamation activities. The inclusion of this margin will result in a recorded obligation that is greater than our estimates of our cost to perform the reclamation activities. If our cost estimates are accurate, the excess of the recorded obligation over the cost incurred to perform the work will be recorded as a reduction to depreciation, depletion and amortization within our Consolidated Statements of Operations at the time that reclamation work is completed. On at least an annual basis, we review our reclamation liabilities and make necessary adjustments for permit changes as granted by state authorities, additional costs resulting from accelerated mine closures, and revisions to cost estimates and productivity assumptions to reflect current experience and updated plans. At December 31, 2021, we had recorded asset retirement obligation liabilities of $164.2 million, including amounts reported as current. While the precise amount of these future costs cannot be determined with certainty, as of December 31, 2021, we estimate that the aggregate undiscounted cost of final mine closures is approximately $419.9 million. Refer to Note 16 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for reclamation disclosures including a table summarizing the changes in asset retirement obligations for the years ended December 31, 2021 and 2020. Retirement Plans. We have three non-contributory defined benefit retirement plans (the “Pension Plans”) covering certain of our salaried and non-union hourly employees, all of which are frozen. Benefits are based on either the employee’s compensation prior to retirement or stated amounts for each year of service with us. Funding of the Pension Plans is in accordance with requirements of ERISA, and our contributions can be deducted for federal income tax purposes. We contributed $6.6 million to our Pension Plans for the year ended December 31, 2021. For the year ended December 31, 2021, 73 Table of Contents we recorded a net periodic benefit credit of $11.5 million, which included a settlement of $0.4 million, for our Pension Plans and have recorded net obligations of $159.9 million. Refer to Note 19 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for disclosures summarizing the changes in these projected benefit obligations for the years ended December 31, 2021 and 2020. 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. Refer to Note 19 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a summary of these assumptions and additional disclosures related to our Pension Plans. 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. We establish the expected long-term rate of return on plan assets at the beginning of each fiscal year based upon historical returns and projected returns on the underlying mix of invested assets. The Pension Plans investment targets are 60% equity securities and 40% fixed income funds, based on the assumption the Pension Plans have a funded status level less than 90% (refer to Note 19 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional disclosures on this assumption). Investments are rebalanced on a periodic basis to stay within these targeted guidelines. The expected long-term rate of return on plan assets assumption used to determine net periodic benefit expense was 5.80% for the year ended December 31, 2021. The expected long-term rate of return on plan assets assumption to be used in 2022 is expected to be 5.80%. Any difference between the actual experience and the assumed experience is deferred as an unrecognized actuarial gain or loss and amortized into expense in future periods. • The discount rate represents our estimate of the interest rate at which pension benefits could be effectively settled. Assumed discount rates are used in the measurement of the projected and accumulated benefit obligations and the interest cost component of the net periodic benefit expense. In estimating that rate, we use rates of return on high quality, fixed income investments. The weighted average discount rate used to determine the pension benefit obligations was 2.92% for the year ended December 31, 2021. The differences resulting from actual versus assumed discount rates are amortized into pension net periodic benefit expense (credit) over the remaining average life of the active plan participants. A one percentage-point increase in the discount rate would increase the net periodic pension cost for the year ended December 31, 2021 by approximately $3.3 million and decrease the projected benefit obligation as of December 31, 2021 by approximately $83.5 million. The corresponding effects of a one percentage-point decrease in discount rate would decrease the net periodic pension cost for the year ended December 31, 2021 by approximately $4.5 million and increase the projected benefit obligation as of December 31, 2021 by approximately $104.8 million. Coal Workers’ Pneumoconiosis. We are required by federal and state statues to provide benefits to employees for awards related to coal workers’ pneumoconiosis disease (black lung). Certain of our subsidiaries are insured for black lung benefit obligations by a third-party insurance provider and certain subsidiaries are self-insured for state black lung benefit obligations and may fund benefit payments through a Section 501(c)(21) tax-exempt trust fund. Provisions are made for estimated benefits based on annual evaluations prepared by independent actuaries. Charges are made to operations for self-insured black lung claims, as determined by an independent actuary at the present value of the actuarially computed liability for such benefits over the employee’s applicable term of service. These actuarially determined liabilities use various actuarial assumptions, including the discount rate, future cost trends, demographic assumptions, and return on plan assets to estimate the costs and obligations for these items. • The discount rate represents our estimate of the interest rate at which black lung benefit obligations could be effectively settled. Assumed discount rates are used in the measurement of the black lung benefit obligations and the interest cost and service cost components of the net periodic benefit expense. In estimating that rate, we use rates of return on high quality, fixed income investments. The weighted average discount rate used to determine black lung benefit obligations was 2.96% for the year ended December 31, 2021. The differences resulting from actual versus assumed discount rates are amortized into black lung net periodic benefit cost over the remaining average life of the active plan participants. A one percentage-point increase in the discount rate would increase the net periodic black lung benefit cost for the year ended December 31, 2021 by approximately $0.6 million and decrease the projected benefit obligation as of December 31, 2021 by approximately $14.4 million. The corresponding effects of a one percentage-point decrease in discount rate would decrease the net periodic black lung benefit cost for the year ended December 31, 2021 by approximately $0.8 million and increase the projected benefit obligation as of December 31, 2021 by approximately $18.4 million. 74 Table of Contents If our assumptions do not materialize as expected, actual cash expenditures and costs that we incur could differ materially from our current estimates. Moreover, regulatory changes could affect our obligation to satisfy these or additional obligations. As of December 31, 2021, we had estimated black lung benefit obligations of approximately $114.5 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. Refer to Note 19 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for disclosures summarizing these underlying assumptions and the changes in these projected benefit obligations for the years ended December 31, 2021 and 2020. Income Taxes. We recognize deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. In evaluating our ability to recover our deferred tax assets within the jurisdiction in which they arise, we consider all available positive and negative evidence, including the expected reversals of deferred tax liabilities, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. We assess the realizability of our deferred tax assets, including scheduling the reversal of our deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. 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, 2021, a valuation allowance of $172.9 million has been provided on federal and state net operating losses and other deferred tax assets not currently expected to provide future tax benefits. Refer to Note 18 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional disclosures on income taxes. Asset Impairment. U.S. 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. Step one evaluates the recoverability of an asset group by comparing its projected future net undiscounted cash flows to its carrying value. If the carrying value of an asset group exceeds its projected future net undiscounted cash flows, step two is performed whereby the fair value of the asset group is estimated and compared to its carrying amount. 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. 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, 2021, long-lived asset impairment of $60 was recorded in the All Other category to reduce the carrying value of property, plant, and equipment, net, due to capital spending during the period at previously impaired locations requiring the impairment of certain additional assets not considered recoverable. 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 our All Other category, 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 $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. Refer to Note 2 and Note 8 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. The Company forecasts future revenues for the duration of the obligation for the properties subject to the obligation. Discount rates are determined based on the risk associated with the projected cash flows. If our assumptions do not materialize as expected, actual payments made under the obligation could differ materially from our current estimates. For a further 75 Table of Contents discussion of the factors that could result in a change in our assumptions, see “Item 1A. Risk Factors” in this Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. New Accounting Pronouncements. Refer to Note 2 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for disclosures related to new accounting policies adopted. 76 Table of Contents