What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-02-26 compared with 2023-02-23 · 168 added, 253 removed, 489 unchanged (46% of the section changed)

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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.

Pursuant to the dividend policy adopted by the Board on May 3, 2022, the Board declared quarterly cash dividends on the Company’s common stock during the years ended December 31, 2023 and 2022.

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.

The decision to declare and pay cash dividends will be made by the Board and will depend on the Company’s earnings, financial condition and other relevant factors.

On August 2, 2023, the Board determined to end the Company’s fixed dividend program following the quarterly dividend declared and paid in the fourth quarter of 2023.

Refer to Note 7 for further information related to the Company’s dividend program.

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The following table summarizes information about shares of common stock that were repurchased during the fourth quarter of 2023.

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

Total Number of Shares Purchased (1)

Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (In thousands) (2)(3)(4)

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521,003 498,874

(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.

(1) Includes 22,129 common shares repurchased from employees to satisfy the employees’ statutory tax withholdings upon the vesting of stock grants.

Shares that are repurchased to satisfy the employees’ statutory tax withholdings are recorded in treasury stock at cost.

(2) On February 21, 2023 and October 31, 2023, the Board approved increases to the existing common share repurchase program adopted March 4, 2022, bringing the total authorization to repurchase the Company’s stock to $1.2 billion and $1.5 billion, respectively.

Refer to Note 7 for additional information.

(3) 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.

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(4) 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.

This amount does not include stock repurchase related fees and excise taxes.

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

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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.

Throughout 2023, metallurgical coal markets generally showed strength with periods of volatility in the face of economic pressures, geopolitical uncertainty, and global recessionary fears.

Macroeconomic conditions around the world remain inconsistent, with some economies, like the United States, exhibiting continued resilience to these external pressures, while others, like the European Union, having experienced a significant downturn.

While central bankers in the United States and Europe are expected to lower interest rates within the 2024 calendar year in response to easing inflation, uncertainty remains regarding when those actions may be taken and how quickly they may impact overall economic conditions.

Organizations such as the International Monetary Fund and The World Bank have issued muted expectations about global growth prospects for 2024-2025, citing a slower-than-historical-average pace of expansion and downside risks related to geopolitical shocks, supply disruptions, or prolonged tight monetary conditions.

Geopolitical strife—namely the Russian war in Ukraine and the violence in the Middle East—has impacted coal markets by upending natural trade flows and, at times, causing shipping delays due to violence stemming from these conflicts.

Continued volatility in metallurgical markets is possible as these macroeconomic and geopolitical circumstances evolve.

Metallurgical coal indices ended the fourth quarter within a few percentage points of where they started in October 2023, with the U.S.

East Coast High Volatile B index representing the largest move, an increase of 6%, of the four indices Alpha closely monitors.

The Australian Premium Low Volatile index decreased from $333.00 per metric ton at the start of the fourth quarter to $323.75 metric ton at the end of December.

East Coast Low Volatile index increased from $258.00 per metric ton at the beginning of October to $268.00 per metric ton at the end of December.

East Coast High Volatile A index moved from $288.00 per metric ton at the start of the fourth quarter to $281.00 per metric ton at quarter close, and the U.S.

East Coast High Volatile B index increased from $238.00 per metric ton to $252.00 per metric ton at the end of the year.

Since then, all four indices have softened.

The Australian Premium Low Volatile declined from its quarter-close level to $315.00 per metric ton on February 15, 2024.

East Coast indices of Low Volatile, High Volatile A and High Volatile B measured $265.00, $262.00, and $221.00 per ton, respectively, as of the same date.

The world manufacturing Purchasing Managers’ Index (“PMI”) increased to 50.0 in January 2024, up from 49.0 in December 2023 and breaking a 16-month stretch of below-50.0 contractionary levels.

India, an important market for Alpha, recorded January 2024 PMI of 56.5, up from 54.9 in December 2023.

PMI data for the United States rose to 50.7 in January 2024, up from a December 2023 level of 47.9, marking the strongest improvement in operating conditions since September 2022.

Brazilian PMI also progressed from its December 2023 level of 48.4, with the January 2024 PMI of 52.8 representing an 18-month high for the country’s manufacturing economy.

China’s headline PMI was unchanged from December 2023 to January 2024, coming in at 50.8.

While still firmly in contractionary territory, Europe’s PMI data show positive momentum, with the January 2024 manufacturing PMI hitting a 10-month high of 46.6, up significantly from 44.4 in December 2023.

As compiled by the World Steel Association (“WSA”), December 2023 global crude steel production of 135.7 million metric tons from 71 countries represented a decrease of 5.3% in comparison to the year-ago period.

The largest steel-producing country, China, produced 67.4 million metric tons in December 2023, 14.9% less than it produced in December 2022.

The next largest producer, India, posted an increased December 2023 production level of 12.1 million metric tons, up 9.5% from its December 2022 level.

Crude steel production in the United States of 6.8 million metric tons in December 2023 represented an

increase of 7.6% from the year-ago period.

South Korea produced 5.4 million metrics tons of steel in December 2023, an increase of 2.7% over production from December 2022.

Turkey and Iran produced 3.2 million metric tons and 2.9 million metric tons in December 2023, which represented the two largest year-over-year percentage increases (21.2% and 12.1%, respectively) among the top ten steel-producing countries.

In terms of regional analysis, December 2023 crude steel production represented an increase against the year-ago period for all reporting regions but the Asia and Oceania region, which contains both India and China, and South America.

Asia and Oceania produced 96.4 million metric tons of crude steel for the month, a 9.7% decrease from December 2022, while South America’s 3.2 million metric tons was a 3.2% decrease from December 2022.

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

steel mills was 77.0% for the week ending February 10, 2024.

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.

This is lower than the year-ago period when the capacity utilization rate was 80.5%.

In the seaborne thermal market, the API2 index started the fourth quarter at $124.85 per metric ton and decreased to $103.85 per metric ton at the end of December 2023.

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.

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

As of December 31, 2023, our operations consisted of twenty-two active mines and nine coal preparation and load-out facilities, with approximately 4,160 employees.

We produce, process, and sell met coal and thermal coal.

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As of December 31, 2023, we had 316.0 million tons of reserves, which included 303.0 million tons of proven and probable metallurgical reserves and 12.9 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.

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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, 2023 and 2022, sales of met coal were 15.3 million tons and 14.2 million tons, respectively, and accounted for approximately 90% and 87%, 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 both in the United States and across the world.

For the years ended December 31, 2023 and 2022 approximately 74% and 81%, respectively, of our coal revenues were derived from coal sales made to customers outside the United States.

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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.

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 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 22 and 23 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.

As discussed in the “Market Overview” presented above, monetary tightening in the United States and Europe, weak economic conditions across the globe, and geopolitical unrest from the ongoing war between Russia and Ukraine and violence in the Middle East influenced metallurgical coal markets in 2023.

Our year ended December 31, 2023 results of operations were impacted by volatility in coal indices stemming from these factors.

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.

During 2023, development was completed and production began at our Rolling Thunder and Checkmate Powellton mines within our Power Mountain and Elk Run mining complexes, respectively, which produce High-Vol.

B quality met coal from the Powellton coal seam.

In August 2023, we completed our transition to a pure-play metallurgical producer with the closure of Slabcamp, which was our last remaining thermal mine.

In the first quarter of 2023, we completed a series of transactions to acquire a number of coal trucks and related equipment and facilities to secure trucking services for our operations.

In December 2022, we purchased substantially all of the assets of a mining equipment component manufacturing and rebuild business to help secure the supply of certain underground mining equipment parts needed for our operations.

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.

Factors Affecting Our Results of Operations

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Met Segment 17.1 million 40 % $154.68

All Other 0.5 million 97 % $94.08

Realized Pricing.

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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 domestic sales contracts are typically priced free on board (“FOB”) at our mines and on a short

Our international sales contracts are typically priced FOB at the shipping port from which such coal is delivered and on a metric ton basis.

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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.

The 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.

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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.

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.

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.

Coal revenues decreased $636.4 million, or 15.5%, for the year ended December 31, 2023 compared to the prior year period.

The decrease was primarily due to a 20.7% reduction in average coal sales realization within our Met segment as pricing moderated from the higher levels experienced during the prior year, partially offset by a 6.9% increase in coal sales volumes.

The elevated coal sales pricing environment in the prior year period was driven by increased coal demand, resulting from improved economic activity, coupled with limited supply response.

Coal revenues within our All Other category also declined due to the closure of Slabcamp, which was our last remaining thermal mine, in August of 2023.

Refer to the “Non-GAAP Coal revenues” section below for further detail on coal revenues for the year ended December 31, 2023 compared to the prior year period.

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Amortization of acquired intangibles, net 8,523 19,498 (10,975) (56.3) %

Asset impairment and restructuring — (561) 561 100.0 %

Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above) 82,390 71,618 10,772 15.0 %

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Mark-to-market adjustment for acquisition-related obligations — 8,880 (8,880) (100.0) %

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

Other (income) expense (1,088) 3,363 (4,451) (132.4) %

Total costs and expenses $ 2,608,332 $ 2,520,713 $ 87,619 3.5 %

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.

Cost of coal sales increased $70.2 million, or 3.1%, for the year ended December 31, 2023 compared to the prior year period as a result of increased costs due to inflationary pressure and increased levels of coal purchases partially offset by lower royalties, taxes, and freight and handling costs due to the lower coal pricing environment.

Depreciation, depletion and amortization.

Depreciation, depletion and amortization increased $29.2 million, or 27.2%, for the year ended December 31, 2023 compared to the prior year period.

The increase was primarily due to an increase in capital expenditures.

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.

Amortization of acquired intangibles, net decreased $11.0 million, or 56.3%, for the year ended December 31, 2023 compared to the prior year period.

The decrease was primarily driven by accelerated prior 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 $10.8 million, or 15.0%, for the year ended December 31, 2023 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.

This increase was primarily related to increases of $10.8 million in stock compensation expense and $1.7 million in wages and benefits expense, partially offset by decreases of $2.0 million in professional services fees and $0.7 million in incentive pay.

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:

The mark-to-market adjustment for acquisition-related obligations was $8.9 million for the year ended December 31, 2022.

As the royalty period for our Contingent Revenue Obligation ended on December 31, 2022, there was no mark-to-market adjustment recorded during the year ended December 31, 2023.

Refer to Notes 14 and 16 for additional information on the Contingent Revenue Obligation.

Other (income) expense .

Other income increased $4.5 million, or 132.4%, for the year ended December 31, 2023 compared to the prior year period, primarily due to an increase in income on sale of assets in the current period.

Total Other Expense, Net

The following table summarizes information about our total other expense, net during the years ended December 31, 2023 and 2022:

Year Ended December 31, Increase (Decrease)

(In thousands) 2023 2022 $ %

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 $ (17,626) $ (26,129) $ 8,503 32.5 %

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.

Total other expense, net decreased $8.5 million, or 32.5%, for the year ended December 31, 2023 compared to the prior year period, primarily related to decreased interest expense due to a reduction in outstanding debt and increased interest income due to rising interest rates, partially offset by an increase in net periodic benefit costs for pension obligations.

Income Tax Expense

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Income tax expense of $123.5 million was recorded for the year ended December 31, 2023 on income before income taxes of $845.5 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.

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

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.

Refer to Note 17 for additional information.

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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.

Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA,” “non-GAAP coal revenues,” “non-GAAP cost of coal sales,” and “non-GAAP coal margin.” 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, financial performance, or liquidity presented 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.

We use non-GAAP coal revenues to present coal revenues generated, excluding freight and handling fulfillment revenues.

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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.

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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.

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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.

Met segment operations non-GAAP coal revenues decreased $521.6 million, or 14.9%, for the year ended December 31, 2023 compared to the prior year period.

The decrease was primarily due to a $46.05, or 20.4%, reduction in average non-GAAP coal sales realization as prices moderated from the higher levels experienced during the prior year period, partially offset by a 6.9% increase in Met coal sales volumes.

The elevated coal sales pricing environment in the prior year period was driven by increased coal demand, resulting from improved economic activity, coupled with limited supply response.

All Other category non-GAAP coal revenues decreased $24.7 million, or 33.2%, for the year ended December 31, 2023 compared to the prior year period primarily due to a decline in coal sales volumes with the closure of Slabcamp, which was our last remaining thermal mine, in August of 2023.

Year Ended December 31, Increase (Decrease)

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Met segment operations non-GAAP cost of coal sales increased $172.3 million, or 10.3%, for the year ended December 31, 2023 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.

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

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

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.

The increase was primarily driven by a 6.9% increase in Met coal sales volumes combined with a 3.2% increase in average non-GAAP cost of coal sales per ton.

The increase in average non-GAAP cost of coal sales per ton was primarily driven by inflationary pressures and increased levels of coal purchases, partially offset by lower royalties and taxes as a result of a lower coal pricing environment.

All Other category non-GAAP cost of coal sales decreased $10.5 million, or 19.7%, for the year ended December 31, 2023 compared to the prior year period primarily due to the closure of Slabcamp, which was our last remaining thermal mine, in August of 2023.

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, 2023 and 2022:

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Non-cash stock compensation expense 96 18,921 19,017

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

Loss on extinguishment of debt — 2,753 2,753

Accretion on asset retirement obligations 14,886 10,614 25,500

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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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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.

Adjusted EBITDA decreased $688.8 million, or 38.8%, for the year ended December 31, 2023 compared to the prior year period.

The decrease in Adjusted EBITDA was primarily driven by decreased coal margin and lower non-GAAP coal sales realization per ton in the current period.

All Other category.

Adjusted EBITDA decreased $18.7 million, or 51.8%, for the year ended December 31, 2023 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.

The decrease in Adjusted EBITDA was primarily driven by a decrease in tons sold and decreased coal margin, 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, 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.

Our primary sources of liquidity are derived from existing unrestricted cash balances, proceeds from future coal sales, and amounts available under our revolving credit agreement.

Our primary capital resource requirements stem from the cost of our coal production and purchases, selling and administrative expenses, taxes, capital expenditures, debt service obligations, reclamation obligations, and collateral requirements.

We believe that cash on hand and cash generated from our operations will be sufficient to meet our working capital, anticipated capital expenditure, income tax, debt service, collateral and reclamation obligations requirements for the next 12 months and the reasonably foreseeable future.

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

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

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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.

We may need to raise additional funds if market conditions deteriorate, if one or more of our assumptions prove to be incorrect or if we choose to expand our acquisition or development efforts or any other activity more rapidly than we presently anticipate and we may not be able to do so in a timely fashion, on terms acceptable to us, or at all.

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 $ 268,207

Short-term investments 46,052

Credit facility availability (1)

Minimum liquidity requirement (75,000)

Total liquidity $ 287,311

(1) Comprised of our unused commitments available under the Second Amended and Restated Asset-Based Revolving Credit Agreement, subject to limitations described therein.

(1) Comprised of our unused commitments available under our New ABL Agreement after considering $60.9 million of outstanding LCs, 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.

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December 31, 2023

Short-term and long-term restricted cash $ 53,488

Long-term restricted cash $ 115,918

Long-term restricted investments 40,597

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Total cash collateral $ 161,897

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

Refer to Note 9 for additional information.

Off-Balance Sheet Arrangements

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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:

We also use bank LCs to collateralize certain obligations.

As of December 31, 2023, we had the following outstanding surety bonds and LCs:

(in thousands )

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Letters of credit (1)

(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.

(1) The LCs outstanding are under the New ABL Agreement dated October 27, 2023.

Refer to Note 21, part (c) for further disclosures on off-balance sheet arrangements.

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.

On October 27, 2023, we terminated our existing ABL Agreement and entered into a New ABL Agreement.

Under the New ABL Facility, we may borrow cash or obtain LCs, on a revolving basis, in an aggregate amount of up to $155.0 million.

We may request an increase to the capacity of the facility of up to $75.0 million provided that $25.0 million may be solely for the purpose of providing additional availability to obtain cash collateralized LCs.

Availability under the New ABL Facility is calculated monthly and fluctuates based on qualifying amounts of coal inventory and trade accounts receivable (the “Borrowing Base”).

Generally, under the terms of the New ABL Facility, to the extent outstanding borrowings and LC’s exceed the Borrowing Base, the specified amount of cash would be restricted and used to collateralize any excess outstanding amounts.

The New ABL Facility matures on October 27, 2027.

Refer to Note 13 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.

During the first quarter of 2023, we paid the final calculated payment pursuant to terms of the Contingent Revenue Obligation.

At December 31, 2023, we had no acquisition-related obligations outstanding.

Refer to Note 14 for additional disclosures on acquisition-related obligations.

Capital Requirements

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We expect to spend between $210.0 million and $240.0 million on capital expenditures during 2024.

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.

At the midpoint of guidance, this total includes approximately $171 million in sustaining maintenance capital, approximately $33 million in planned projects to invest in mine development, and approximately $21 million in carryover from 2023 due to timing and availability of supplies and contract labor.

Contractual Obligations

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2024 2025 2026 2027 2028 After 2028 Total

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

Minimum royalties $ 14,357 $ 14,394 $ 13,160 $ 11,901 $ 11,851 $ 89,025 $ 154,688

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Total $ 502,243 $ 81,069 $ 13,160 $ 11,901 $ 11,851 $ 89,025 $ 709,249

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

electricity purchase commitments.

(1) Includes contractual commitments related to the purchase of equipment, diesel fuel, and electricity as well as for rail freight and export terminal costs, including approximately $48.4 million in 2024 for expected DTA funding.

See below for further discussion.

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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Total $ 91,340 $ 84,689 $ 76,021 $ 83,965 $ 85,626 $ 1,404,965 $ 1,826,606

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

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

Refer to Note 18 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.

On August 3, 2023, S&P Global Ratings upgraded its issuer credit rating on the Company to B+ from B based on the strength of our balance sheet.

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.

On November 6, 2023, S&P Global Ratings affirmed our B+ issuer credit rating and stable rating outlook on the New ABL Facility.

On July 18, 2023, Moody’s Investors Service upgraded our Corporate Family Rating to B1 from B2, upgraded our Probability of Default Rating to B1-PD from B2-PD, and affirmed our B1 rating on the ABL Facility.

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.

The rating outlook was revised to stable from positive.

On November 3, 2023, Moody’s Investors Service maintained our B1 Corporate Family Rating, B1-PD Probability of Default Rating, and SGL-2 Speculative Grade Liquidity Rating, and affirmed our B1 rating on the New ABL Facility.

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 own a 65.0% interest in DTA, a coal export terminal in Newport News, Virginia.

DTA provides us with the ability to fulfill a broad range of customer coal quality requirements through coal blending, while also providing storage capacity and transportation flexibility.

DTA is in need of capital investment to maximize functionality and minimize downtime due to mechanical issues.

Under the terms of our partnership related agreements with respect to our investment in DTA, we are required to fund our proportionate share of DTA’s ongoing operating and capital costs.

Beyond our share of routine operating costs, we expect we will invest up to an incremental $25.0 million per year for infrastructure and equipment upgrades at DTA over the next 6 years.

Our 2024 funding of DTA (including routine operating and capital costs and infrastructure and equipment upgrades) is expected to total approximately $48.4 million.

We continually strive to enhance our capital structure and financial flexibility.

As opportunities arise, we will continue to consider the possibility of refinancing or repayment 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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Refer to Note 17 for further income tax disclosures.

Pension Plans

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

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

Effective as of December 31, 2023, the assets and liabilities of the Pension Plans were merged into one qualified non-contributory defined benefit pension plan (“Pension Plan”).

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.

Benefits are frozen under the Pension Plan.

Annual funding contributions to the Pension Plan 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.

We contributed $25.0 million to the Pension Plan in 2023 and expect to contribute $25.0 million in 2024, including amounts above the estimated minimum required contributions for the respective plan years.

Refer to Note 18 for further disclosures related to the Pension Plan and the related obligation.

DCMWC Reauthorization Process

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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.

The DCMWC reauthorization was 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, would have been 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.

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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.

The DOL 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.

If our appeal is unsuccessful, we may be required to provide additional LCs 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.

The DOL has indicated that it expects that some form of these new regulations could go into effect in the first quarter or early second quarter of 2024.

A significant increase in these collateral obligations could have a materially adverse effect on our liquidity.

Share Repurchase Program

Refer to Note 7 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.

Refer to Note 7 for information related to our dividend program.

Cash, cash equivalents, and restricted cash increased by $28.7 million and $172.8 million and decreased by $62.0 million over the years ended December 31, 2023, 2022, and 2021, respectively.

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

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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.

The decrease in net cash provided by operating activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily attributable to lower coal sale realizations, increased operating costs due to inflationary pressures, and increased levels of coal purchases, partially offset by lower royalties and taxes as a result of the lower coal pricing environment.

The increase in net cash provided by operating activities for the 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 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, 2022, primarily offset by an increase in deposits related to our January 2023 dividend payment and payments on operating liabilities.

Investing Activities.

The decrease in net cash used in investing activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by increased cash flows from net sales and maturities of investment securities, partially offset by increased capital expenditures.

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).

The decrease in net cash used in financing activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by decreases in principal repayments of long-term debt as a result of the payoff of the Term Loan Credit Facility in the prior year period, partially offset by increases in dividend and dividend equivalents paid which included the payment of a one time dividend of $5.00 per share in 2023 and common stock repurchases under our share repurchase program during the current period.

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.

We are in compliance with all covenants under the New ABL Agreement, as of December 31, 2023, including the requirement that we maintain minimum liquidity, as defined in the New ABL Agreement, of $75.0 million.

A breach of the covenants in the New ABL Agreement could result in a default under the terms of such agreement, and the respective lenders could then elect to declare any amounts borrowed due and payable and require outstanding LCs to be cash collateralized.

In addition, a default under the terms of would inhibit our ability to make certain restricted payments, as defined in the New ABL Agreement, including the Company’s ability to repurchase shares of the Company’s common stock.

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.

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.

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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.

We had three non-contributory defined benefit retirement Pension Plans covering certain of our salaried and non-union hourly employees, all of which were frozen.

Effective as of December 31, 2023, the assets and liabilities of the Pension Plans were merged into one qualified non-contributory defined benefit Pension Plan.

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.

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.

Funding of the Pension Plan is in accordance with requirements of ERISA, and our contributions can be deducted for federal income tax purposes.

We contributed $25.0 million to our Pension Plan for the year ended December 31, 2023.

For the year ended December 31, 2023, we recorded a net periodic benefit cost of $2.7 million for our Pension Plan and have recorded a net obligation of $101.9 million which is net of assets of $376.5 million.

Refer to Note 18 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for disclosures summarizing the changes in this projected benefit obligation for the years ended December 31, 2023 and 2022.

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

Refer to Note 18 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 Plan.

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

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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 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).

The Pension Plan investment targets are 58% equity securities and 42% fixed income funds (refer to Note 18 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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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 weighted average discount rate used to determine the pension benefit obligation was 5.10% for the year ended December 31, 2023.

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.

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For the year ended December 31, 2023, we recorded a net periodic benefit cost of $3.8 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.

Refer to Note 18 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, 2023 and 2022.

Income Taxes.

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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.

Refer to Note 2 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.

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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