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, 2022, there were 92 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. 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 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 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. Item 6. [Reserved] 55 Table of Contents 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, 2022 and 2021. 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. The U.S. 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. The U.S. 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. U.S. 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. The U.S. 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. 56 Table of Contents 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 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 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 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, 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, 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. 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 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. 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. 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. 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. Sales of thermal coal were 2.2 million tons and 2.9 million tons, respectively, and accounted for approximately 13% and 17%, 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 57 Table of Contents 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. 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, 2022, we have one reportable segment: Met. 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. 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 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. 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 focuses on our regional presence by combining forces to advance collective interests. 58 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 14, 2023, we had sales commitments for 2023 as follows: Tons % Priced Average Realized Price per Ton Met - Domestic $193.17 Met - Export $207.66 Met Total 15.5 million 38 % $195.89 Thermal 1.6 million 52 % $119.79 Met Segment 17.1 million 39 % $186.39 All Other 0.5 million 97 % $94.08 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 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 59 Table of Contents 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, 2022 and 2021 are discussed in these “Results of Operations” presented below. Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 Revenues The following table summarizes information about our revenues during the years ended December 31, 2022 and 2021: Year Ended December 31, Increase (Decrease) (In thousands, except for per ton data) 2022 2021 $ or Tons % Coal revenues $ 4,092,987 $ 2,252,624 $ 1,840,363 81.7 % Other revenues 8,605 6,062 2,543 41.9 % Total revenues $ 4,101,592 $ 2,258,686 $ 1,842,906 81.6 % Tons sold 16,378 16,839 (461) (2.7) % Coal revenues. 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 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. Refer to the “Non-GAAP Coal revenues” section below for further detail on coal revenues for the year ended December 31, 2022 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, 2022 and 2021: Year Ended December 31, Increase (Decrease) (In thousands) 2022 2021 $ % Cost of coal sales (exclusive of items shown separately below) $ 2,285,969 $ 1,677,782 $ 608,187 36.2 % Depreciation, depletion and amortization 107,620 110,047 (2,427) (2.2) % Accretion on asset retirement obligations 23,765 26,520 (2,755) (10.4) % Amortization of acquired intangibles, net 19,498 13,244 6,254 47.2 % Asset impairment and restructuring — (561) 561 100.0 % 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 loss (income): Mark-to-market adjustment for acquisition-related obligations 8,880 19,525 (10,645) (54.5) % 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 % Cost of coal sales. 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 royalties and taxes, salaries and wages expense, and supplies and maintenance expense, partially offset by inventory change during the current period. 60 Table of Contents 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 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 $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 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 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: Year Ended December 31, Increase (Decrease) (In thousands) 2022 2021 $ % Other (expense) income: Interest expense $ (21,802) $ (69,654) $ 47,852 68.7 % Interest income 3,187 336 2,851 848.5 % Equity loss in affiliates (14,346) (4,149) (10,197) (245.8) % Miscellaneous income (loss), net 6,832 6,465 367 5.7 % Total other expense, net $ (26,129) $ (67,002) $ 40,873 61.0 % Interest expense. Interest expense decreased $47.9 million, or 68.7%, for the year ended December 31, 2022 compared to the prior year period, primarily due to a decrease in debt outstanding. Refer to Note 14 for additional information. 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 $ (106,205) $ (3,408) $ (102,797) (3,016.3) % Income taxes. 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. Refer to Note 18 for additional information. 61 Table of Contents Non-GAAP Financial Measures 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”). 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, 2022 and 2021: 62 Table of Contents Year Ended December 31, 2022 (In thousands, except for per ton data) Met All Other Consolidated Coal revenues $ 4,018,515 $ 74,472 $ 4,092,987 Less: Freight and handling fulfillment revenues (529,043) (20) (529,063) Non-GAAP Coal revenues $ 3,489,472 $ 74,452 $ 3,563,924 Tons sold 15,478 900 16,378 Non-GAAP Coal sales realization per ton $ 225.45 $ 82.72 $ 217.60 Cost of coal sales (exclusive of items shown separately below) $ 2,225,771 $ 60,198 $ 2,285,969 Depreciation, depletion and amortization - production (1) 100,584 6,036 106,620 Accretion on asset retirement obligations 13,590 10,175 23,765 Amortization of acquired intangibles, net 15,699 3,799 19,498 Total Cost of coal sales $ 2,355,644 $ 80,208 $ 2,435,852 Less: Freight and handling costs (529,043) (20) (529,063) Less: Depreciation, depletion and amortization - production (1) (100,584) (6,036) (106,620) Less: Accretion on asset retirement obligations (13,590) (10,175) (23,765) Less: Amortization of acquired intangibles, net (15,699) (3,799) (19,498) Less: Idled and closed mine costs (21,646) (6,911) (28,557) Non-GAAP Cost of coal sales $ 1,675,082 $ 53,267 $ 1,728,349 Tons sold 15,478 900 16,378 Non-GAAP Cost of coal sales per ton $ 108.22 $ 59.19 $ 105.53 (1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions. Year Ended December 31, 2022 (In thousands, except for per ton data) Met All Other Consolidated Coal revenues $ 4,018,515 $ 74,472 $ 4,092,987 Less: Total Cost of coal sales (per table above) (2,355,644) (80,208) (2,435,852) GAAP Coal margin $ 1,662,871 $ (5,736) $ 1,657,135 Tons sold 15,478 900 16,378 GAAP Coal margin per ton $ 107.43 $ (6.37) $ 101.18 GAAP Coal margin $ 1,662,871 $ (5,736) $ 1,657,135 Add: Depreciation, depletion and amortization - production (1) 100,584 6,036 106,620 Add: Accretion on asset retirement obligations 13,590 10,175 23,765 Add: Amortization of acquired intangibles, net 15,699 3,799 19,498 Add: Idled and closed mine costs 21,646 6,911 28,557 Non-GAAP Coal margin $ 1,814,390 $ 21,185 $ 1,835,575 Tons sold 15,478 900 16,378 Non-GAAP Coal margin per ton $ 117.22 $ 23.54 $ 112.08 (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, 2021 (In thousands, except for per ton data) Met All Other Consolidated Coal revenues $ 2,173,647 $ 78,977 $ 2,252,624 Less: Freight and handling fulfillment revenues (380,457) (520) (380,977) Non-GAAP Coal revenues $ 1,793,190 $ 78,457 $ 1,871,647 Tons sold 15,569 1,270 16,839 Non-GAAP Coal sales realization per ton $ 115.18 $ 61.78 $ 111.15 Cost of coal sales (exclusive of items shown separately below) $ 1,607,157 $ 70,625 $ 1,677,782 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 $ 92,509 $ 1,826,871 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) (9,720) (26,578) 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 $ 78,977 $ 2,252,624 Less: Total Cost of coal sales (per table above) (1,734,362) (92,509) (1,826,871) GAAP Coal margin $ 439,285 $ (13,532) $ 425,753 Tons sold 15,569 1,270 16,839 GAAP Coal margin per ton $ 28.22 $ (10.66) $ 25.28 GAAP Coal margin $ 439,285 $ (13,532) $ 425,753 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 9,720 26,578 Non-GAAP Coal margin $ 583,348 $ 18,072 $ 601,420 Tons sold 15,569 1,270 16,839 Non-GAAP Coal margin per ton $ 37.47 $ 14.23 $ 35.72 (1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions. 64 Table of Contents Year Ended December 31, Increase (Decrease) (In thousands, except for per ton data) 2022 2021 $ or Tons % Met segment operations: Tons sold 15,478 15,569 (91) (0.6) % Non-GAAP Coal revenues $ 3,489,472 $ 1,793,190 $ 1,696,282 94.6 % Non-GAAP Coal sales realization per ton $ 225.45 $ 115.18 $ 110.27 95.7 % All Other category: Tons sold 900 1,270 (370) (29.1) % Non-GAAP Coal revenues $ 74,452 $ 78,457 $ (4,005) (5.1) % Non-GAAP Coal sales realization per ton $ 82.72 $ 61.78 $ 20.94 33.9 % Non-GAAP Coal revenues. 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 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) (In thousands, except for per ton data) 2022 2021 $ % Met segment operations: Non-GAAP Cost of coal sales $ 1,675,082 $ 1,209,842 $ 465,240 38.5 % Non-GAAP Cost of coal sales per ton $ 108.22 $ 77.71 $ 30.51 39.3 % Non-GAAP Coal margin per ton $ 117.22 $ 37.47 $ 79.75 212.8 % All Other category: Non-GAAP Cost of coal sales $ 53,267 $ 60,385 $ (7,118) (11.8) % Non-GAAP Cost of coal sales per ton $ 59.19 $ 47.55 $ 11.64 24.5 % Non-GAAP Coal margin per ton $ 23.54 $ 14.23 $ 9.31 65.4 % Non-GAAP cost of coal sales. 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 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 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. In the following tables, we calculate Adjusted cost of produced coal sold as non-GAAP cost of coal sales less purchased coal costs. 65 Table of Contents Year Ended December 31, 2022 (In thousands, except for per ton data) Met All Other Consolidated Non-GAAP Cost of coal sales $ 1,675,082 $ 53,267 $ 1,728,349 Less: cost of purchased coal sold (119,473) (37) (119,510) Adjusted cost of produced coal sold $ 1,555,609 $ 53,230 $ 1,608,839 Produced tons sold 14,938 900 15,838 Adjusted cost of produced coal sold per ton (1) $ 104.14 $ 59.14 $ 101.58 (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, 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. 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, 2022 and 2021: Year Ended December 31, 2022 (In thousands) Met All Other Consolidated Net income (loss) $ 1,647,104 $ (198,559) $ 1,448,545 Interest expense 202 21,600 21,802 Interest income (541) (2,646) (3,187) Income tax expense — 106,205 106,205 Depreciation, depletion and amortization 100,584 7,036 107,620 Non-cash stock compensation expense 4 7,480 7,484 Mark-to-market adjustment - acquisition-related obligations — 8,880 8,880 Accretion on asset retirement obligations 13,590 10,175 23,765 Amortization of acquired intangibles, net 15,699 3,799 19,498 Adjusted EBITDA $ 1,776,642 $ (36,030) $ 1,740,612 66 Table of Contents Year Ended December 31, 2021 (In thousands) Met All Other Consolidated Net income (loss) $ 439,859 $ (151,069) $ 288,790 Interest expense 184 69,470 69,654 Interest income (6) (330) (336) Income tax expense — 3,408 3,408 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 $ (32,789) $ 534,481 The following table summarizes Adjusted EBITDA for our Met segment operations and All Other category: Year Ended December 31, Increase (Decrease) (In thousands) 2022 2021 $ % Adjusted EBITDA Met operations $ 1,776,642 $ 567,270 $ 1,209,372 213.2 % All Other (36,030) (32,789) (3,241) (9.9) % Total $ 1,740,612 $ 534,481 $ 1,206,131 225.7 % Met segment operations. 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. All Other category. 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 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, 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, 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. 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. 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 67 Table of Contents 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, 2022: (in thousands ) December 31, 2022 Cash and cash equivalents $ 301,906 Short-term investments 46,052 Credit facility availability (1) 93,123 Total liquidity $ 441,081 (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, 2022, we had the following cash collateral on our Consolidated Balance Sheets: (in thousands ) December 31, 2022 Short-term and long-term restricted cash $ 53,488 Long-term restricted investments 105,735 Short-term and long-term deposits (1) 86,111 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 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, 2022, we had the following outstanding surety bonds and letters of credit: (in thousands ) December 31, 2022 Surety bonds $ 165,575 Letters of credit (1) $ 61,927 (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. and First Tennessee Bank National Association. Refer to Note 22, part (c) for further disclosures on off-balance sheet arrangements. 68 Table of Contents Debt Financing and Related Transactions 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, 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 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 The following is a summary of our significant contractual obligations as of December 31, 2022: (in thousands ) 2023 2024 2025 2026 2027 After 2027 Total Contingent Revenue Obligation 27,719 — — — — — 27,719 Minimum royalties 15,556 14,688 13,608 13,489 12,916 62,118 132,375 Coal purchase commitments 149,763 — — — — — 149,763 Unconditional purchase obligations (1) 109,358 98,602 4,887 — — — 212,847 Total $ 302,396 $ 113,290 $ 18,495 $ 13,489 $ 12,916 $ 62,118 $ 522,704 (1) Includes transportation commitments, minimum equipment purchase commitments, diesel fuel purchase commitments, and 69 Table of Contents 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. The table below reflects the estimated undiscounted cash flows for these obligations: (in thousands) 2023 2024 2025 2026 2027 After 2027 Total Asset retirement obligation $ 37,887 $ 37,154 $ 31,677 $ 19,745 $ 37,288 $ 309,583 $ 473,334 Pension benefit obligation (1) 31,084 31,103 31,136 31,215 31,264 890,135 1,045,937 Black lung benefit obligation 9,664 9,218 9,009 8,923 8,828 150,894 196,536 Postretirement life insurance benefit obligation 613 607 604 598 596 13,543 16,561 Workers’ compensation benefit obligation 9,537 6,603 5,517 4,954 4,560 63,830 95,001 Total $ 88,785 $ 84,685 $ 77,943 $ 65,435 $ 82,536 $ 1,427,985 $ 1,827,369 (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 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. 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 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. 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 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. 70 Table of Contents 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. 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 information 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 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. 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 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. 71 Table of Contents Cash Flows 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): Net cash provided by operating activities $ 1,484,005 $ 174,943 $ 129,236 Net cash used in investing activities (329,357) (89,855) (209,969) Net cash used in financing activities (981,868) (147,045) (22,376) 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 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 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, 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 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. 72 Table of Contents 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, 2022, we had recorded asset retirement obligation liabilities of $179.0 million, including amounts reported as current. While the precise amount of these future costs cannot be determined with certainty, as of December 31, 2022, we estimate that the aggregate undiscounted cost of final mine closures is approximately $473.3 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, 2022 and 2021. 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 $3.4 million to our Pension Plans for the year ended December 31, 2022. 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. 73 Table of Contents 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 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. 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, 2022. The expected long-term rate of return on plan assets assumption to be used in 2023 is expected to be 6.20%. 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 5.42% for the year ended December 31, 2022. 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, 2022 by approximately $1.5 million and decrease the projected benefit obligation as of December 31, 2022 by approximately $47.5 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, 2022 by approximately $2.0 million and increase the projected benefit obligation as of December 31, 2022 by approximately $57.5 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 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. 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 5.42% for the year ended December 31, 2022. 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, 2022 by approximately $0.3 million and decrease the projected benefit obligation as of December 31, 2022 by approximately $8.4 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, 2022 by approximately $0.4 million and increase the projected benefit obligation as of December 31, 2022 by approximately $10.2 million. 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, 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 74 Table of Contents 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. 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, 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. 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 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. 75 Table of Contents 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. 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.