What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-02-23 compared with 2022-03-07 · 208 added, 223 removed, 534 unchanged (45% of the section changed)

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Our common stock is registered by book-entry only.

The section of our Proxy Statement entitled “Stock Performance Graph” is incorporated herein by reference.

For information on securities authorized for issuance under our equity compensation plans, see “Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

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.

On May 3, 2022, the Board adopted a dividend policy.

Pursuant to this policy, the Board initially intended to pay aggregate cash dividends of $1.50 per share of common stock per year, with $0.375 per share paid each quarter.

Subsequently, during the year ended December 31, 2022, the Board increased the quarterly dividend amounts and also declared a one-time, special dividend.

Refer to Note 25 for subsequent event disclosures related to the Company’s dividend program.

The holders of the Company’s common stock are entitled to receive such dividends, if any, when they are declared by the Board.

Future dividends are subject to declaration by the Board and depend on Alpha’s future earnings and financial condition and other relevant factors.

Refer to Note 9 for further information related to the Company’s dividend program.

Repurchase of Common Stock

Refer to Note 25 for subsequent event disclosures related to our share repurchase program.

The following table summarizes information about shares of common stock that were repurchased during the fourth quarter of 2022.

Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (In thousands) (1),(2),(3)

October 1, 2022 through October 31, 2022 404,690 $ 155.20 404,690 $ 215,663

November 1, 2022 through November 30, 2022 274,206 $ 163.86 274,206 $ 570,731

December 1, 2022 through December 31, 2022 134,028 $ 149.40 134,028 $ 550,707

812,924 812,924

(1) On March 4, 2022, the Board adopted a share repurchase program that permitted the Company to repurchase up to an aggregate amount of $150 million of the Company's common stock.

On May 3, 2022 and November 4, 2022, the Board amended the share repurchase program to increase the aggregate amount the Company is permitted to repurchase to $600 million and $1 billion of the Company's common stock, respectively.

Refer to Notes 9 and 25 for additional information and subsequent event disclosures.

(2) The Company adopted a capital return program in 2019, including a stock repurchase plan with no expiration date that permitted the Company to repurchase up to an aggregate amount of $100 million of the Company’s common stock.

The Company suspended this stock repurchase plan on October 1, 2019 and does not currently intend to make further repurchases under it.

(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.

This amount does not include $122 thousand of stock repurchase related fees.

Refer to Note 9 for information about repurchases related to warrants during the current quarter.

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.

For discussion on results of operations and financial condition pertaining to 2020 and year-over-year comparisons between 2021 and 2020, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.

The following discussion includes forward-looking statements about our business, financial condition and results of operations, including discussions about management’s expectations for our business.

These statements represent projections, beliefs and expectations based on current circumstances and conditions and in light of recent events and trends, and you should not construe these statements either as assurances of performance or as promises of a given course of action.

Instead, various known and unknown factors are likely to cause our actual performance and management’s actions to vary, and the results of these variances may be both material and adverse.

See “Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A.

Risk Factors.”

Market Overview

In recent months, metallurgical coal markets have been influenced by additional global economic pressure and prolonged wartime impacts in Asia and Europe as a result of Russia’s invasion of Ukraine.

Slowing steel production across the world and persistent inflationary pressure have also contributed to current market dynamics.

Heavy rain and flooding in Australia interrupted coal production and exports within the fourth quarter.

China’s December 2022 reversal of its years-long, strict zero-COVID policy and the country’s decision to ease its ban on Australian coal are two additional factors expected to shape metallurgical market trade flows in the coming months.

Metallurgical coal indices experienced volatility throughout the fourth quarter of 2022 but this volatility decreased in the weeks following the quarter close.

The Australian Premium Low Volatile index increased from $270.50 per metric ton on October 1, 2022 to $294.50 per ton at year end.

East Coast Low Volatile index increased from $270.00 per metric ton on October 1, 2022 to $278.00 per metric ton at the end of the fourth quarter.

East Coast High Volatile A index moved from $287.00 per metric ton at the start of October to $275.00 per metric ton at quarter close.

East Coast High Volatile B fell from $284.00 per metric ton to $274.00 per metric ton on December 31, 2022.

Over the first several weeks of 2023, all of the aforementioned indices increased from their quarter-end levels.

As of February 3, 2023, the two Low Volatile indices have increased to $350.25 per metric ton for Australian Premium Low Volatile and $315.00 per metric ton for U.S.

East Coast Low Volatile.

East Coast High Volatile A index was at $305.00 per metric ton on February 3, 2023, while the U.S.

East Coast High Volatile B was at $285.00 per ton on the same date.

2022 ended with several negative economic indicators suggesting a significant softening of the global economy.

Despite continued weakness among economic indicators for most areas of the world, January data suggests that pressures are easing, and rates of decline are slowing from their more significant drops in the prior months.

While still in contractionary territory, the world Purchasing Managers’ Index (“PMI”) increased slightly to 49.1 in January 2023 from 48.7 in December 2022.

Europe’s PMI moved upward to 48.8 in January from 47.8 in December, with the United States PMI index following a similar trajectory of 46.9 in January up from 46.2 in December.

Prior to China’s reopening, its PMI remained relatively flat month-over-month at 49.2 in January as compared to 49.0 in December.

Brazil’s month-to-month shift signaled the most improvement among Alpha’s key markets, with an increase to 47.5 in January from 44.2 in December.

With most of the world economy under the 50.0 mark, which indicates contraction, India continued to be a bright spot with January PMI of 55.4 as compared to 57.8 in December.

Global crude steel production data for December 2022 showed production of 140.7 million metric tons, a drop of 10.8% from December 2021.

Production in the Asia and Oceania region dropped 9.2% year-over-year, accounting for the bulk of the global decline.

China, the world’s largest steel-producing country, produced 77.9 million metric tons in December 2022, a decline of 9.8% from their year-ago December production level .

Several other regions posted significant declines for the comparison timeframe.

December 2022 crude steel production in the European Union of 9.2 million metric tons was a 16.7% decline as compared to its December 2021 level.

North American production of 8.8 million metric tons for December 2022 represented a 9.9% drop as compared to the year-ago period, while South American production of 3.3 million metric tons was a decrease of 3.8% against December 2021.

Among Alpha’s key markets, India was the only area with a year-over-year increase in production with 10.6 million metric tons produced in December 2022 which equaled a slight 0.8% increase over the year-ago period.

The American Iron and Steel Institute’s capacity utilization rate for U.S.

steel mills was 74.4% for the week ending February 11, 2023.

This is down in comparison to the year-ago period of the week ended February 11, 2022, when the capacity utilization rate was 80.8%.

In the seaborne thermal market, the API2 index started the fourth quarter of 2022 at $310.85 per metric ton and ended the year significantly lower at $190.50 per metric ton as of December 30, 2022.

This weakening trend has continued through the first few weeks of 2023, with the index at $139.30 per metric ton as of February 3, 2023.

COVID-19 Pandemic

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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.

East Coast Low

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—Human Capital Resources—Employee Safety, Health, and Welfare” for further COVID-19 related impacts.

Indirectly, through some of our third-party vendors, we and our customers have experienced some supply chain disruptions due to the COVID-19 pandemic.

The continued impact of the COVID-19 pandemic on our operational and financial performance will depend on certain developments, including the duration of the virus, the global economic impacts of the virus, its impact on our customers and suppliers, and the range of governmental and community reactions to the pandemic, which cannot be fully predicted.

Health and safety are core values of our Company and are the foundation for how we manage every aspect of our business.

We continue to monitor developments closely and adjust as necessary, including with respect to our implemented policies, procedures, and prevention measures to protect the safety and health of our employees.

Business Overview

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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.

As of December 31, 2022, our operations consisted of twenty-four active mines and eight coal preparation and load-out facilities, with approximately 3,730 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.

As of December 31, 2022, we had 336.7 million tons of reserves, which included 322.7 million tons of proven and probable metallurgical reserves, and 14.0 million tons of proven and probable thermal reserves.

Additionally, we had approximately 527.3 million tons of in situ bituminous coal resources.

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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 December 8, 2017, we closed a transaction with Blackjewel to sell our 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.

ESM to become wholly-owned subsidiaries of ESM and to complete the permit transfer process in connection with the ESM Transaction.

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 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.

Our former NAPP operations results of operations and financial position are reported as discontinued operations in the Consolidated Financial Statements for the year ended December 31, 2020.

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, 2022 and 2021, sales of met coal were 14.2 million tons and 13.9 million tons, respectively, and accounted for approximately 87% and 83%, respectively, of our coal sales volume.

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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.

Our sales of thermal coal were made primarily to large

utilities and industrial customers throughout the United States.

For the years ended December 31, 2022 and 2021 approximately 81% and 76%, respectively, of our coal revenues were derived from coal sales made to customers outside the United States.

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As of December 31, 2022, we have one reportable segment:

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.

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Refer to Notes 23 and 24 for additional disclosures on our reportable segment, geographic areas, and export coal revenue information.

As discussed in the “Market Overview” presented above, continued recessionary pressure and weakening economic conditions alongside the ongoing war between Russia and Ukraine have influenced metallurgical coal markets.

However, global coal supply remains tight and metallurgical coal indices have retained strength despite otherwise challenging macroeconomic conditions.

Certain operational challenges, including geological conditions and transportation issues, alongside increased labor and benefit costs for our workforce contributed to fewer shipped tons and higher cost of coal sales for the fourth quarter of 2022.

However, as further discussed in the “Results of Operations” presented below, our year ended December 31, 2022 results of operations still remain strong from a historical average perspective compared to the year ended December 31, 2021 due to higher coal sales realization as a result of an improved pricing environment during the current period.

Increasing coal demand coupled with a limited supply response contributed to a rise in coal prices in the current period compared to the prior year period.

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.

During the fourth quarter of 2022, in an effort to secure in-demand supplies and services, Maxxim purchased substantially all the assets of IPM, which manufactures essential mining equipment components, including gear cases.

Refer to Note 2 for additional information.

In addition, in January 2023, Maxxim completed a series of transactions to acquire a number of coal trucks and related equipment and facilities.

In November 2022, we acquired additional property rights and coal resources within our Power Mountain mining complex and plan to develop a second underground mine which will produce High-Vol.

B quality met coal from the Powellton seam with production expected to commence in 2023.

On March 4, 2022, the Board adopted a share repurchase program that permitted us to repurchase up to an aggregate amount of $150.0 million of our common stock.

On May 3, 2022, the Board amended the share repurchase program to increase the aggregate amount we are permitted to repurchase to $600.0 million of our common stock.

On November 4, 2022, the Board amended the share repurchase program to increase the aggregate amount we are permitted to repurchase to $1.0 billion of our common stock.

Repurchases may 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 has no expiration date, 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.

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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.

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

Factors Affecting Our Results of Operations

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All Other 0.5 million 97 % $94.08

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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We seek suppliers who identify and concentrate on implementing continuous improvement opportunities within their area of expertise.

To the extent upward pressure on costs

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.

To the extent upward pressure on costs 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

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Coal revenues increased $1,840.4 million, or 81.7%, for the year ended December 31, 2022 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.

The increase was primarily due to higher coal sales realization as a result of an improved pricing environment during the current period.

Increasing coal demand, resulting from improved economic activity, coupled with a limited supply response contributed to a rise in coal prices.

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Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above) 71,618 63,901 7,717 12.1 %

Total other operating (income) loss:

Total other operating loss (income):

Mark-to-market adjustment for acquisition-related obligations 8,880 19,525 (10,645) (54.5) %

Other income (10,972) (2,223) (8,749) (393.6) %

Other expense (income) 3,363 (10,972) 14,335 130.7 %

Total costs and expenses $ 2,520,713 $ 1,899,486 $ 621,227 32.7 %

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Cost of coal sales increased $608.2 million, or 36.2%, for the year ended December 31, 2022 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.

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.

The increase was primarily driven by royalties and taxes, salaries and wages expense, and supplies and maintenance expense, partially offset by inventory change during the current period.

Amortization of acquired intangibles, net.

Amortization of acquired intangibles, net increased $6.3 million, or 47.2%, for the year ended December 31, 2022 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.

The increase was primarily driven by accelerated current period amortization of certain acquired mine permits as a result of an update to the estimated life of the associated mines.

Selling, general and administrative.

Selling, general and administrative expenses increased $7.7 million, or 12.1%, for the year ended December 31, 2022 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.

This increase in expense was primarily related to increases of $3.6 million in wages and benefits expense, $2.4 million in stock compensation expense, and $2.1 million in professional fees.

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.

The mark-to-market adjustment for acquisition-related obligations resulted in an increase to income of $10.6 million for the year ended December 31, 2022 compared to the prior year period.

This increase was related to the $8.9 million Contingent Revenue Obligation mark-to-market adjustment recorded during the year ended December 31, 2022 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) .

Other income decreased $14.3 million, or 130.7%, for the year ended December 31, 2022 compared to the prior year period, primarily due to a decrease in income on sale of assets in the current period.

Other (Expense) Income

The following table summarizes information about our other (expense) income during the year ended December 31, 2022 and 2021:

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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.

Income Tax (Expense) Benefit

The following table summarizes information about our income tax (expense) benefit during the years ended December 31, 2021 and 2020:

Equity loss in affiliates.

Equity loss in affiliates increased $10.2 million, or 245.8%, for the year ended December 31, 2022 compared to the prior year period, primarily driven by a net decrease in net income of our equity affiliates.

Income Tax Expense

The following table summarizes information about our income tax expense during the years ended December 31, 2022 and 2021:

Year Ended December 31, Increase (Decrease)

(In thousands) 2022 2021 $ %

Income tax (expense) benefit $ (3,609) $ 2,164 $ (5,773) (266.8) %

Income tax expense $ (106,205) $ (3,408) $ (102,797) (3,016.3) %

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.

Income tax expense of $106.2 million was recorded for the year ended December 31, 2022 on income before income taxes of $1,554.8 million.

The effective tax rate differs from the federal statutory rate of 21% primarily due to the decrease in the valuation allowance and favorable permanent differences for the percentage depletion allowance and the foreign-derived intangible income deduction.

Income tax expense of $3.4 million was recorded for the year ended December 31, 2021 on income before income taxes of $292.2 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.

The discussion below contains “non-GAAP financial measures.” These are financial measures that 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”).

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Met segment operations non-GAAP coal revenues increased $1,696.3 million, or 94.6%, for the year ended December 31, 2022 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.

The increase was primarily due to higher average non-GAAP coal sales realization of $110.27 per ton resulting from an improved pricing environment compared to the prior year period.

All Other category non-GAAP coal revenues decreased $4.0 million, or 5.1%, for the year ended December 31, 2022 compared to the prior year period primarily due to a decrease in tons sold, partially offset by higher non-GAAP coal sales realization per ton in the current period.

Year Ended December 31, Increase (Decrease)

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Met segment operations non-GAAP cost of coal sales increased $465.2 million, or 38.5%, for the year ended December 31, 2022 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.

The increase was primarily driven by increased royalties and taxes, supplies and maintenance expense, and salaries and wages expense, partially offset by inventory change during the current period.

All Other category non-GAAP cost of coal sales decreased $7.1 million, or 11.8%, for the year ended December 31, 2022 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.

The decrease was primarily driven by a decrease in tons sold, inventory change during the current period, and decreased royalties and taxes, partially offset by increased salaries and wages expense and supplies and maintenance expense.

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

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(In thousands) Met All Other Consolidated

Net income (loss) from continuing operations $ 439,859 $ (152,930) $ 286,929

Net income (loss) $ 1,647,104 $ (198,559) $ 1,448,545

Interest expense 202 21,600 21,802

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Mark-to-market adjustment - acquisition-related obligations — 8,880 8,880

Gain on settlement of acquisition-related obligations — (1,125) (1,125)

Accretion on asset retirement obligations 13,590 10,175 23,765

Asset impairment and restructuring — (561) (561)

Amortization of acquired intangibles, net 15,699 3,799 19,498

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(In thousands) Met All Other Consolidated

Net loss from continuing operations $ (77,519) $ (163,951) $ (241,470)

Net income (loss) $ 439,859 $ (151,069) $ 288,790

Interest expense 184 69,470 69,654

Interest income (6) (330) (336)

Income tax benefit — (2,164) (2,164)

Income tax expense — 3,408 3,408

Depreciation, depletion and amortization 99,963 10,084 110,047

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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)

Management restructuring costs (1)

Loss on partial settlement of benefit obligations 1,607 1,359 2,966

Amortization of acquired intangibles, net 13,671 (427) 13,244

Adjusted EBITDA $ 567,270 $ (32,789) $ 534,481

(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:

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Adjusted EBITDA increased $1,209.4 million, or 213.2%, for the year ended December 31, 2022 compared to the prior year period.

The increase in Adjusted EBITDA was primarily driven by increased coal margin and coal sales volumes.

The increase in Adjusted EBITDA was primarily driven by increased coal margin.

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.

(In thousands, except for per ton data) Year Ended December 31, 2020 (2)

Coal revenues $ 233,083

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)

Accretion on asset retirement obligations 4,154

Amortization of acquired intangibles, net 861

Total Cost of coal sales $ 231,975

Freight and handling costs (11,135)

Depreciation, depletion and amortization - production (1)

Accretion on asset retirement obligations (4,154)

Amortization of acquired intangibles, net (861)

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

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

Depreciation, depletion and amortization - production (1)

Accretion on asset retirement obligations 4,154

Amortization of acquired intangibles, net 861

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.

Adjusted EBITDA decreased $3.2 million, or 9.9%, for the year ended December 31, 2022 compared to the prior year period.

The decrease in Adjusted EBITDA was primarily driven by a decrease in tons sold, partially offset by higher non-GAAP coal sales realization per ton in the current period.

Liquidity and Capital Resources

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 liquidity and capital resource requirements stem from the cost of our coal production and purchases, our capital expenditures, our debt service, our reclamation obligations, taxes, 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 believe that cash on hand and cash generated from our operations will be sufficient to meet our working capital requirements, anticipated capital expenditures, income taxes, debt service requirements, acquisition-related obligations, and reclamation obligations for the next 12 months and the reasonably foreseeable future.

We may also use cash in accordance with our share repurchase program and dividend program.

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

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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.

For example, if the new authorization process for all self-insured coal mine operators is adopted, it would substantially increase the collateral required to secure our self-insured federal black lung obligations.

Refer to the DCMWC Reauthorization Process section below for more information.

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.

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.

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Cash and cash equivalents $ 301,906

Short-term investments 46,052

Credit facility availability (1)

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Total cash collateral $ 245,334

(1) Includes $84,748 related to our dividend payable.

Refer to Note 9 for additional information.

Off-Balance Sheet Arrangements

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Letters of credit (1)

(1) Total face amount includes $30 thousand attributable to discontinued operations.

(1) 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.

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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.

As of December 31, 2022, we had $11.0 million of indebtedness outstanding.

Our indebtedness is comprised of financing leases and other financing obligations.

As of December 31, 2022, we had no outstanding borrowings under the Term Loan Credit Facility as a result of voluntary prepayments of $449.4 million of outstanding principal borrowings during the first and second quarters of 2022 in our continued strategic effort to reduce our outstanding debt and strengthen our balance sheet.

Effective with the final voluntary prepayment on June 3, 2022, the Term Loan Credit Agreement was terminated, and we were released of all underlying obligations including the Term Loan Credit Agreement covenants.

On December 6, 2021, we entered into the ABL Agreement which amended and restated the Amended and Restated Asset-Based Revolving Credit Agreement dated November 9, 2018, in its entirety, and includes the ABL Facility.

Under the 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 the facility having a maturity date of December 6, 2024.

The ABL Agreement extended the maturity date of the facility from the previous maturity of April 3, 2022.

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 the 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.

During the second quarter of 2022, in connection with our improved financial position, we received a reduction of $40.1 million in collateral requirements under the ABL Facility related to our self-insured workers compensation at certain locations in West Virginia.

Additionally, during the second quarter of 2022 and as part of routine surety program review and negotiation, we received a $16.5 million reduction in surety collateral requirements under the ABL Facility, while securing multi-year visibility on surety program terms and conditions.

These collateral releases increased our availability under the ABL Facility and thus our financial liquidity.

Refer to Note 14 for additional disclosures on long-term debt.

Acquisition-Related Obligations

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).

At December 31, 2022, we had $28.3 million of acquisition-related obligations outstanding.

Our acquisition-related obligations are primarily comprised of the Contingent Revenue Obligation, which has an offsetting short-term restricted cash amount held in escrow (refer to Note 15 and Note 22).

During the second quarter of 2022, we paid $16.2 million pursuant to the terms of the Contingent Revenue Obligation.

Capital Requirements

Our capital expenditures for the year ended December 31, 2022 were $164.3 million.

We expect to spend between $250.0 million and $280.0 million on capital expenditures during 2023.

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.

Our expected 2023 capital expenditures include the following carryover capital expenditures from 2022:

supplemental and technologically advanced safety equipment, development projects related to new mines and enhancements to some of our existing properties to support our broader production and shipment goals for 2023.

Contractual Obligations

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2023 2024 2025 2026 2027 After 2027 Total

Term Loan Credit Facility (1)

$ 44,944 $ 44,944 $ 470,158 $ — $ — $ — $ 560,046

Contingent Revenue Obligation 27,719 — — — — — 27,719

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Total $ 302,396 $ 113,290 $ 18,495 $ 13,489 $ 12,916 $ 62,118 $ 522,704

(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.

(1) Includes transportation commitments, minimum equipment purchase commitments, diesel fuel purchase commitments, and

electricity purchase commitments.

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

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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.

On June 3, 2022, in a significant step in further strengthening our balance sheet, we voluntarily prepaid in full the remaining outstanding principal borrowings of the Term Loan Credit Facility two years ahead of maturity.

On July 28, 2022, S&P Global Ratings upgraded its issuer credit rating on the Company to B from B- following our full repayment of the Term Loan Credit Facility and amid improving credit metrics.

The rating outlook was noted as stable.

On July 21, 2022, Moody’s Investors Service upgraded our Corporate Family Rating to B2 from B3, upgraded our Probability of Default Rating to B2-PD from B3-PD, assigned a B1 rating to our ABL Facility, and withdrew the B3 rating on our Term Loan Credit Facility following our full repayment.

Our Speculative Grade Liquidity Rating remained unchanged at SGL-2.

The rating outlook was revised to positive from stable.

On March 30, 2022, S&P Global Ratings upgraded its issuer-level rating on our senior secured debt to B from B- amid favorable market indicators and credit metrics.

The rating outlook was revised to positive from 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

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.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—COVID-19 Pandemic” for information on the impact of the COVID-19 pandemic on our business.

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.

As opportunities arise, we will continue to consider the possibility of refinancing, repayment or repurchase of any outstanding debt and amendment of our credit facility, 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.

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There can be no assurance that additional financing will be available on terms acceptable to us, or at all.

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.

During the year ended December 31, 2022, we paid federal and state income taxes of $139.7 million.

Refer to Note 18 for further income tax disclosures.

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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.

We contributed $3.4 million to the Pension Plans in 2022.

We expect to contribute $25.0 million to the Pension Plans in 2023, which includes amounts above the estimated minimum required contributions for the 2023 plan year.

Refer to Note 19 for further disclosures related to this obligation.

Discontinued Operations

Refer to Note 3 for disclosure on discontinued operations.

Refer to Note 3 for disclosure information on discontinued operations.

DCMWC Reauthorization Process

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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.

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

In February 2021, the U.S.

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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.

In January 2023, the DOL proposed for public comment new regulations which, if adopted, would substantially increase the collateral required to secure self-insured federal black lung obligations.

Under the proposed 120% minimum collateral requirement, we estimate we could be required to provide approximately $80.0 million to $100.0 million of collateral to secure certain of our black lung obligations.

A significant increase in these collateral obligations would have a materially adverse effect on 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, cash equivalents, and restricted cash decreased by $62.0 million and $103.1 million over the years ended December 31, 2021 and 2020, respectively.

Refer to Note 9 and “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” for information on the share repurchase program and the shares repurchased during the current period.

Also refer to Note 25 for information related to the Board’s approval to increase the aggregate amount permitted to be repurchased under the share repurchase program.

Dividend Program

Refer to Note 9 and Note 25 for information related to our dividend program, the cash dividends declared during the current period, and the related subsequent event disclosures which includes the declaration of the quarterly cash dividend.

Cash, cash equivalents, and restricted cash increased by $172.8 million and decreased by $62.0 million and $103.1 million over the years ended December 31, 2022, 2021, and 2020, respectively.

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

Year Ended December 31,

2022 2021 2020

Cash flows (in thousands):

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Net cash used in financing activities (981,868) (147,045) (22,376)

Net decrease in cash and cash equivalents and restricted cash $ (61,957) $ (103,109)

Net increase (decrease) in cash and cash equivalents and restricted cash $ 172,780 $ (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.

The increase in net cash provided by operating activities for year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily attributable to the improvement in our results from operations as discussed above in “Results of Operations,” primarily offset by an increase in deposits related to our January 2023 dividend payment and payments on operating liabilities.

The increase in net cash provided by operating activities for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily attributable to the improvement in our results from operations as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021, partially offset by changes in operating assets and liabilities.

The changes in operating assets and liabilities were primarily related to increases in our trade accounts receivable, net, partially offset by the receipt of the federal tax refund in 2021.

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).

The increase in net cash used in investing activities for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily driven by increases in net purchases of investment securities and capital expenditures.

In addition, we purchased substantially all of the assets of a mining equipment component manufacturing and rebuilding business (refer to Note 2 for further information).

The decrease in net cash used in investing activities for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily driven by the decrease in our capital expenditures which were near the maintenance capital level in 2021 and the cash paid on the sale of our former NAPP operations in 2020 (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).

The increase in net cash used in financing activities for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily driven by the voluntary prepayments of our remaining outstanding principal borrowings under the Term Loan Credit Facility and the common stock repurchases under our share repurchase program during the current period (refer to Note 9 and Note 14 for further information).

The increase in net cash used in financing activities for the year ended December 31, 2021 compared to the year ended December 31, 2020 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 2021 (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

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.

We are in compliance with all covenants under the ABL Agreement, as of December 31, 2022.

A breach of the covenants in the ABL 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 ABL Agreement, during any Liquidity Period (capitalized terms as defined in the 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 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, 2022, we were not in a Liquidity Period.

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We contributed $3.4 million to our Pension Plans for the year ended December 31, 2022.

For the year ended December 31, 2021,

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.

For the year ended December 31, 2022, we recorded a net periodic benefit credit of $10.4 million, which included a settlement of $0.2 million, for our Pension Plans and have recorded a net obligation of $110.8 million which are net of assets of $357.6 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, 2022 and 2021.

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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).

The Pension Plans investment targets are 58% equity securities and 42% fixed income funds (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.

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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.

Certain of our subsidiaries are insured for black lung benefit obligations by a third-party insurance provider and certain subsidiaries are self-insured for black lung benefit obligations and may fund certain 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.

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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.

As of December 31, 2022, we had estimated black lung benefit obligations of approximately $90.9 million, including amounts reported as current, which are net of assets of $2.5 million that are held in a tax-exempt trust fund.

For the year ended December 31, 2022, we recorded a net periodic benefit cost of $6.6 million for our black lung benefit obligations.

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, 2022 and 2021.

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, 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.

At December 31, 2022, a valuation allowance of $53.8 million has been provided on deferred tax assets not 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.

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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

discussion of the factors that could result in a change in our assumptions, see “Item 1A.

Our Contingent Revenue Obligation was assumed in connection with the Merger through the period ended December 31, 2022.

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

The Company forecasted future revenues through December 31, 2022, the end of the royalty period of the obligation for the properties subject to the obligation.

Discount rates were determined based on the risk associated with the projected cash flows.

If our assumptions didn’t materialize as expected, actual payments made under the obligation could have differed materially from our current estimates.

The corresponding final payment of the contingent revenue payment obligation is expected to be paid from a short-term restricted cash escrow account during the second quarter of 2023.

Refer to Note Note 15 and Note 17 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

For a further 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.

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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