Alpha Metallurgical Resources, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Alpha Metallurgical Resources, Inc. Opinions on the Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Alpha Metallurgical Resources, Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively, the financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Basis for Opinions The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. 80 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Asset Retirement Obligations As described in Notes 2 and 15 to the consolidated financial statements, the Company’s consolidated asset retirement obligation liability was $205 million as of December 31, 2023. The Company records the asset retirement obligation liability at fair value in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred. Changes to the liability at operations that are not currently being reclaimed are offset by increasing or decreasing the carrying amount of the related long-lived asset. Changes to the liability at operations that are currently being reclaimed are recorded to depreciation, depletion, and amortization. On at least an annual basis the Company reviews its estimated future cash flows for its asset retirement obligation liability. We identified the valuation of the asset retirement obligation liability as a critical audit matter because the estimate involves a high degree of subjectivity and auditing the significant assumptions utilized by management in estimating the amount of the liability requires judgment. In particular, the obligation liability is determined using a discounted cash flow technique and is based upon mining permit requirements and various assumptions including discount rates, inflation rate, estimates of disturbed acreage, timing of reclamation activities, and third-party reclamation costs. Our audit procedures related to the Company’s asset retirement obligation liability included the following, among others: – We obtained an understanding of the relevant controls related to the Company’s accounting for the asset retirement obligation liability, and tested such controls for design and operating effectiveness, including controls over management’s review of the significant assumptions and data inputs described above. – We compared significant valuation assumptions including the discount rates and inflation rate to market data and utilized a valuation specialist to assist in testing the Company’s discounted cash flow model. – We compared the estimates of disturbed acreage, timing of reclamation activities, and third-party reclamation costs to the prior year estimates, assessed consistency between timing of reclamation activities and projected mine lives, evaluated the appropriateness of the estimated costs based on mine type, and compared anticipated costs to recent operating data. – We utilized an external specialist who performed observations of mine site operations, conducted interviews of engineering personnel, assessed compliance with mine closure and post closure plan regulatory requirements, and evaluated the reasonableness of the engineering estimates and assumptions. /s/ RSM US LLP We have served as the Company's auditor since 2020. Atlanta, Georgia February 26, 2024 81 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share data) Year Ended December 31, 2023 2022 2021 Revenues: Coal revenues $ 3,456,630 $ 4,092,987 $ 2,252,624 Other revenues 14,787 8,605 6,062 Total revenues 3,471,417 4,101,592 2,258,686 Costs and expenses: Cost of coal sales (exclusive of items shown separately below) 2,356,138 2,285,969 1,677,782 Depreciation, depletion and amortization 136,869 107,620 110,047 Accretion on asset retirement obligations 25,500 23,765 26,520 Amortization of acquired intangibles, net 8,523 19,498 13,244 Asset impairment and restructuring — — ( 561 ) Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above) 82,390 71,618 63,901 Total other operating loss (income): Mark-to-market adjustment for acquisition-related obligations — 8,880 19,525 Other (income) expense ( 1,088 ) 3,363 ( 10,972 ) Total costs and expenses 2,608,332 2,520,713 1,899,486 Income from operations 863,085 1,580,879 359,200 Other (expense) income: Interest expense ( 6,923 ) ( 21,802 ) ( 69,654 ) Interest income 11,933 3,187 336 Loss on extinguishment of debt ( 2,753 ) — — Equity loss in affiliates ( 18,263 ) ( 14,346 ) ( 4,149 ) Miscellaneous (expense) income, net ( 1,620 ) 6,832 6,465 Total other expense, net ( 17,626 ) ( 26,129 ) ( 67,002 ) Income before income taxes 845,459 1,554,750 292,198 Income tax expense ( 123,503 ) ( 106,205 ) ( 3,408 ) Net income 721,956 1,448,545 288,790 Basic income per common share $ 51.18 $ 82.82 $ 15.66 Diluted income per common share $ 49.30 $ 79.49 $ 15.30 Weighted average shares - basic 14,106,466 17,490,886 18,441,175 Weighted average shares - diluted 14,642,856 18,222,397 18,871,682 Refer to accompanying Notes to Consolidated Financial Statements. 82 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) Year Ended December 31, 2023 2022 2021 Net income $ 721,956 $ 1,448,545 $ 288,790 Other comprehensive (loss) income, net of tax: Employee benefit plans: Current period actuarial (loss) gain $ ( 34,205 ) $ 56,485 $ 47,461 Income tax benefit (expense) 7,588 ( 12,888 ) — $ ( 26,617 ) $ 43,597 $ 47,461 Less: reclassification adjustments for amounts reclassified to earnings due to amortization of net actuarial (gain) loss and settlements ( 2,324 ) 3,555 6,021 Income tax benefit (expense) 516 ( 811 ) — $ ( 1,808 ) $ 2,744 $ 6,021 Total other comprehensive (loss) income, net of tax $ ( 28,425 ) $ 46,341 $ 53,482 Total comprehensive income $ 693,531 $ 1,494,886 $ 342,272 Refer to accompanying Notes to Consolidated Financial Statements. 83 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data) December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 268,207 $ 301,906 Short-term investments — 46,052 Trade accounts receivable, net of allowance for credit losses of $ 234 and $ 239 as of December 31, 2023 and 2022, respectively 509,682 407,210 Inventories, net 231,344 200,574 Short-term deposits 32 84,748 Short-term restricted cash — 24,547 Prepaid expenses and other current assets 39,032 49,384 Total current assets 1,048,297 1,114,421 Property, plant, and equipment, net of accumulated depreciation and amortization of $ 558,905 and $ 491,186 as of December 31, 2023 and 2022, respectively 588,992 442,645 Owned and leased mineral rights, net of accumulated depletion and amortization of $ 99,826 and $ 77,333 as of December 31, 2023 and 2022, respectively 451,160 451,062 Other acquired intangibles, net of accumulated amortization of $ 38,543 and $ 53,719 as of December 31, 2023 and 2022, respectively 46,579 55,102 Long-term restricted investments 40,597 105,735 Long-term restricted cash 115,918 28,941 Deferred income taxes 8,028 11,378 Other non-current assets 106,486 103,195 Total assets $ 2,406,057 $ 2,312,479 Liabilities and Stockholders’ Equity Current liabilities: Current portion of long-term debt $ 3,582 $ 3,078 Trade accounts payable 128,836 106,037 Acquisition-related obligations - current — 28,254 Accrued expenses and other current liabilities 177,512 265,256 Total current liabilities 309,930 402,625 Long-term debt 6,792 7,897 Workers’ compensation and black lung obligations 189,226 188,247 Pension obligations 101,908 110,836 Asset retirement obligations 166,509 142,048 Deferred income taxes 39,142 10,874 Other non-current liabilities 18,622 20,197 Total liabilities 832,129 882,724 Commitments and Contingencies (Note 21) Stockholders’ Equity Preferred stock - par value $ 0.01 , 5,000,000 shares authorized, none issued — — Common stock - par value $ 0.01 , 50,000,000 shares authorized, 22,058,135 issued and 12,938,679 outstanding at December 31, 2023 and 21,703,163 issued and 15,552,676 outstanding at December 31, 2022 221 217 Additional paid-in capital 834,482 815,442 Accumulated other comprehensive loss ( 40,587 ) ( 12,162 ) Treasury stock, at cost: 9,119,456 shares at December 31, 2023 and 6,150,487 shares at December 31, 2022 ( 1,189,715 ) ( 649,061 ) 84 Table of Contents Retained earnings 1,969,527 1,275,319 Total stockholders’ equity 1,573,928 1,429,755 Total liabilities and stockholders’ equity $ 2,406,057 $ 2,312,479 Refer to accompanying Notes to Consolidated Financial Statements. 85 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended December 31, 2023 2022 2021 Operating activities: Net income $ 721,956 $ 1,448,545 $ 288,790 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 136,869 107,620 110,047 Amortization of acquired intangibles, net 8,523 19,498 13,244 Amortization of debt issuance costs and accretion of debt discount 1,947 8,282 12,338 Loss on extinguishment of debt 2,753 — — Mark-to-market adjustment for acquisition-related obligations — 8,880 19,525 (Gain) loss on disposal of assets, net ( 6,817 ) 43 ( 9,911 ) Accretion on asset retirement obligations 25,500 23,765 26,520 Employee benefit plans, net 8,376 ( 4,492 ) ( 1,751 ) Deferred income taxes 39,722 ( 14,521 ) ( 163 ) Stock-based compensation 19,017 7,484 5,315 Equity loss in affiliates 18,263 14,346 4,149 Other, net ( 363 ) ( 761 ) ( 5,873 ) Changes in operating assets and liabilities Trade accounts receivable, net ( 102,477 ) 82,774 ( 336,240 ) Inventories, net ( 27,900 ) ( 63,169 ) ( 21,331 ) Prepaid expenses and other current assets 7,596 ( 12,031 ) 61,581 Deposits 80,729 ( 84,314 ) 26,853 Other non-current assets 3,837 11,268 ( 250 ) Trade accounts payable 15,666 3,721 25,154 Accrued expenses and other current liabilities ( 9,087 ) ( 6,872 ) 15,961 Acquisition-related obligations ( 28,254 ) ( 22,264 ) ( 18,121 ) Asset retirement obligations ( 19,189 ) ( 18,699 ) ( 16,306 ) Other non-current liabilities ( 45,508 ) ( 25,098 ) ( 24,588 ) Net cash provided by operating activities 851,159 1,484,005 174,943 Investing activities: Capital expenditures ( 245,373 ) ( 164,309 ) ( 83,300 ) Proceeds on disposal of assets 8,173 3,623 8,224 Cash paid for business acquired ( 11,919 ) ( 24,878 ) — Purchases of investment securities ( 207,065 ) ( 269,420 ) ( 17,985 ) Sales and maturities of investment securities 320,961 149,397 13,265 Capital contributions to equity affiliates ( 30,812 ) ( 19,556 ) ( 6,677 ) Other, net 35 ( 4,214 ) ( 3,382 ) Net cash used in investing activities ( 166,000 ) ( 329,357 ) ( 89,855 ) Financing activities: Repurchases of long-term debt — — ( 18,415 ) Principal repayments of long-term debt ( 2,314 ) ( 450,622 ) ( 119,097 ) Dividend and dividend equivalents paid ( 113,013 ) ( 13,360 ) — Common stock repurchases and related expenses ( 540,071 ) ( 521,803 ) ( 786 ) Proceeds from exercise of warrants 4,322 5,643 — Other, net ( 5,352 ) ( 1,726 ) ( 8,747 ) 86 Table of Contents Net cash used in financing activities ( 656,428 ) ( 981,868 ) ( 147,045 ) Net increase (decrease) in cash and cash equivalents and restricted cash 28,731 172,780 ( 61,957 ) Cash and cash equivalents and restricted cash at beginning of period 355,394 182,614 244,571 Cash and cash equivalents and restricted cash at end of period $ 384,125 $ 355,394 $ 182,614 Supplemental cash flow information: Cash paid for interest $ 5,207 $ 25,895 $ 63,061 Cash paid for income taxes $ 79,221 $ 139,663 $ 176 Cash received for income tax refunds $ 30 $ 6 $ 64,498 Supplemental disclosure of noncash investing and financing activities: Financing leases and capital financing - equipment $ 3,195 $ 9,833 $ 787 Accrued capital expenditures $ 25,004 $ 18,456 $ 9,964 Accrued common stock repurchases $ 8,118 $ 3,016 $ — Accrued dividend payable $ 2,863 $ 88,128 $ — The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows. As of December 31, 2023 2022 2021 Cash and cash equivalents $ 268,207 $ 301,906 $ 81,211 Short-term restricted cash — 24,547 11,977 Long-term restricted cash 115,918 28,941 89,426 Total cash and cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 384,125 $ 355,394 $ 182,614 Refer to accompanying Notes to Consolidated Financial Statements. 87 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Amounts in thousands) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Treasury Stock at Cost (Accumulated Deficit) Retained Earnings Total Stockholders’ Equity Balances, December 31, 2020 $ 206 $ 779,424 $ ( 111,985 ) $ ( 107,014 ) $ ( 360,529 ) $ 200,102 Net income — — — — 288,790 288,790 Other comprehensive income, net — — 53,482 — — 53,482 Stock-based compensation and issuance of common stock for share vesting 2 5,313 — — — 5,315 Common stock repurchases and related expenses — — — ( 786 ) — ( 786 ) Warrants exercises — 6 — — — 6 Balances, December 31, 2021 $ 208 $ 784,743 $ ( 58,503 ) $ ( 107,800 ) $ ( 71,739 ) $ 546,909 Net income — — — — 1,448,545 1,448,545 Other comprehensive income, net — — 46,341 — 46,341 Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances 2 5,415 — 2,067 — 7,484 Exercise of stock options — 1,172 — — — 1,172 Common stock repurchases and related expenses — — — ( 543,328 ) — ( 543,328 ) Warrants exercises 7 24,112 — — — 24,119 Cash dividend and dividend equivalents declared ($ 6.185 per share) — — — — ( 101,487 ) ( 101,487 ) Balances, December 31, 2022 $ 217 $ 815,442 $ ( 12,162 ) $ ( 649,061 ) $ 1,275,319 $ 1,429,755 Net income — — — — 721,956 721,956 Other comprehensive loss, net — — ( 28,425 ) — — ( 28,425 ) Stock-based compensation, issuance of common stock for share vesting, and common stock reissuances 2 12,127 — 6,888 — 19,017 Exercise of stock options — 225 — — — 225 Common stock repurchases and related expenses — — — ( 547,542 ) — ( 547,542 ) Warrants exercises 2 6,688 — — — 6,690 Cash dividend and dividend equivalents declared ($ 1.940 per share) — — — — ( 27,748 ) ( 27,748 ) Balances, December 31, 2023 $ 221 $ 834,482 $ ( 40,587 ) $ ( 1,189,715 ) $ 1,969,527 $ 1,573,928 Refer to accompanying Notes to Consolidated Financial Statements. 88 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) (1) Business and Basis of Presentation Business Alpha Metallurgical Resources, Inc. (“Alpha” or the “Company”), previously named Contura Energy, Inc., is a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Alpha is a leading U.S. supplier of metallurgical coal products for the steel industry. The Company was formed to acquire and operate certain of Alpha Natural Resources, Inc.’s core coal operations, as part of the Alpha Natural Resources, Inc. bankruptcy reorganization. The Company began operations on July 26, 2016 and currently operates mines in the Central Appalachia region. A merger with ANR, Inc. and Alpha Natural Resources Holdings, Inc. (together, the "Merger Companies”) was completed on November 9, 2018 (the “Merger”) pursuant to terms of the definitive merger agreement (the “Merger Agreement”). Upon the consummation of the transactions contemplated by the Merger Agreement, the Company began trading on the New York Stock Exchange under the ticker “CTRA.” Effective February 1, 2021, the Company changed its corporate name from Contura Energy, Inc. to Alpha Metallurgical Resources, Inc. to more accurately reflect its strategic focus on the production of metallurgical coal. Following the effectiveness of its name change, the Company’s ticker symbol on the New York Stock Exchange changed from “CTRA” to “AMR” effective on February 4, 2021. Basis of Presentation Together, the consolidated statements of operations, comprehensive income, balance sheets, cash flows and stockholders’ equity for the Company are referred to as the “Consolidated Financial Statements.” The Consolidated Financial Statements are also referenced across periods as “Consolidated Statements of Operations,” “Consolidated Statements of Comprehensive Income,” “Consolidated Balance Sheets,” “Consolidated Statements of Cash Flows,” and “Consolidated Statements of Stockholders’ Equity.” The Consolidated Financial Statements include all wholly owned subsidiaries’ results of operations for the years ended December 31, 2023, 2022, and 2021. All significant intercompany transactions have been eliminated in consolidation. The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). (2) Summary of Significant Accounting Policies Use of Estimates The preparation of the Company’s Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include inventories; mineral reserves and resources; long-lived asset impairments; reclamation obligations; post-employment and other employee benefit obligations; useful lives, depletion and amortization; reserves for workers’ compensation and black lung claims; deferred income taxes; income taxes payable; income taxes refundable and receivable; reserves for contingencies and litigation; and fair value of financial instruments. Estimates are based on facts and circumstances believed to be reasonable at the time; however, actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of cash held with reputable depository institutions and highly liquid, short-term investments, such as highly-rated money market funds, with original maturities of three months or less. Cash and cash equivalents are stated at cost, which approximates fair value. 89 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Restricted Cash Amounts included in restricted cash represent cash and cash equivalents that are restricted as to withdrawal as required by certain agreements entered into by the Company and provide collateral to secure the certain obligations which have been written on the Company’s behalf. Refer to Note 21 for further information. Investments Short-term investments consist of U.S government securities. Restricted investments consist of Federal Deposit Insurance Company (“FDIC”) insured certificates of deposit, corporate fixed income, and U.S. government securities that are restricted as to withdrawal as required by certain agreements entered into by the Company and provide collateral to secure certain obligations which have been written on the Company’s behalf. All investments are classified as trading securities as of December 31, 2023 and 2022. Trading securities are recorded initially at cost and are adjusted to fair value at each reporting period with unrealized gains and losses recorded in current period earnings or loss. Refer to Note 21 for further information. Deposits Deposits represent cash deposits held at third parties as required by certain agreements entered into by the Company to provide cash collateral to secure the following obligations which have been written on the Company’s behalf. Refer to Note 21 for further information. Trade Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at their invoiced amounts and do not bear interest. The Company markets its coal primarily to international and domestic steel producers and electric utilities in the United States. Credit is extended based on an evaluation of a customer’s financial condition, including a review of third-party credit score information. Collateral is generally not required. Accounts receivable balances are monitored against approved credit limits. Credit limits are monitored and adjusted as considered necessary based on changes to a customer’s credit profile. If a customer’s credit deteriorates, the Company may reduce credit risk exposure by reducing credit limits, obtaining letters of credit (“LCs”), obtaining credit insurance, or requiring pre-payment for shipments. Credit losses have historically not been material. Account balances are written-off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Refer to Note 22 for further information. Inventories Coal is reported as inventory at the point in time the coal is extracted from the mine. Raw coal represents coal stockpiles that may be sold in current condition or may be further processed prior to shipment to a customer. Saleable coal represents coal stockpiles that require no further processing prior to shipment to a customer. Coal inventories are valued at the lower of average cost or net realizable value. The cost of coal inventories is determined based on the average cost of production, which includes labor, supplies, equipment costs, operating overhead, depreciation, and other related costs. Net realizable value considers the projected future sales price of the product, less estimated preparation and selling costs. Material and supplies inventories are valued at average cost, less an allowance for obsolete and surplus items. Refer to Note 6 for further information. Advanced Mining Royalties Lease rights to coal reserves are often acquired in exchange for royalty payments. Advanced mining royalties are advanced payments made to lessors under terms of mineral lease agreements that are recoupable against future production royalties. These advanced payments are deferred and charged to operations as the coal reserves are mined. The Company regularly reviews recoverability of advanced mining royalties and establishes or adjusts the allowance for advanced mining royalties as necessary using the specific identification method. Advanced royalty balances are generally charged off against the allowance when they are no longer recoupable. Advanced mining royalties are included within Other non-current assets on the Company’s Consolidated Balance Sheets. Refer to Note 9 for further information. 90 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Property, Plant, and Equipment, Net Costs for mine development incurred to expand capacity of operating mines or to develop new mines are capitalized and charged to operations on the units-of-production method over the estimated proven and probable reserve tons directly benefiting from the capital expenditures. Mine development costs include costs incurred for site preparation and development of the mines during the development stage less any incidental revenue generated during the development stage. Mining equipment, buildings, and other fixed assets are stated at cost and depreciated on a straight-line basis over estimated useful lives ranging from one to 25 years. Leasehold improvements are amortized using the straight-line method, over the shorter of the estimated useful lives or term of the lease. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When equipment is retired or disposed, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposal is recognized in Other (income) expense in the Company’s Consolidated Statements of Operations. Refer to Note 8 for further information. Owned and Leased Mineral Rights Owned and leased mineral rights, net of accumulated depletion and amortization, for the years ended December 31, 2023 and 2022 were $ 451,160 and $ 451,062 , respectively, and are reported in assets in the Company’s Consolidated Balance Sheets. These amounts include $ 27,473 and $ 20,284 of asset retirement obligation assets, net of accumulated amortization, associated with active mining operations for the years ended December 31, 2023 and 2022, respectively. Costs to obtain owned and leased mineral rights are capitalized and amortized to operations as depletion expense using the units-of-production method. Only proven and probable reserves are included in the depletion base. Depletion expense is included in Depreciation, depletion and amortization in the accompanying Consolidated Statements of Operations and was $ 23,944 , $ 23,078 , and $ 23,541 for the years ended December 31, 2023, 2022, and 2021 respectively. Depletion expense for the years ended December 31, 2023, 2022, and 2021 includes a credit of ($ 34 ), a credit of ($ 3,016 ), and an expense of $ 5,782 , respectively, related to revisions to asset retirement obligations. Refer to Note 15 for further disclosures related to asset retirement obligations. Leases In accordance with ASC 842, the Company recognizes right of use assets and lease liabilities on the Consolidated Balance Sheets for all leases with a term longer than 12 months. Some of these leases include both lease and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient to combine these components for all leases. The discount rates used to determine the present value of the lease assets and liabilities are based on the Company’s incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. As the rates implicit in most of the Company’s leases are not readily determinable, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. The Company uses the portfolio approach and groups leases by short-term and long-term categories, applying the corresponding incremental borrowing rates to these categories of leases. For leases with a term of 12 months or less, no right of use assets or liabilities are recognized on the Consolidated Balance Sheets and the Company recognizes the lease expense on a straight-line basis over the lease term. Additionally, the Company recognizes variable lease payments as an expense in the period incurred. The Company has elected to show net instead of gross amounts for right-of-use assets and liabilities within its Consolidated Statements of Cash Flows. Refer to Note 11 for further information. Acquired Intangibles The Company has recognized assets for acquired mine permits which were valued based on the replacement cost and lost profits method as of the Merger date. The balances of such assets as of December 31, 2023 and 2022, net of accumulated amortization, were $ 46,579 and $ 55,102 , respectively, and are included within Other acquired intangibles, net of accumulated amortization, on the Company’s Consolidated Balance Sheets. The acquired mine permits are amortized over the estimated life of the associated mine. Amortization expense is included in Amortization of acquired intangibles, net in the accompanying Consolidated Statements of Operations and was $ 8,523 , $ 19,498 , and $ 13,571 for the years ended December 31, 2023, 2022, and 2021, respectively. 91 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Additionally, the Company previously recognized assets for acquired above market-priced coal supply agreements and liabilities for acquired below market-priced coal supply agreements. The agreements were amortized over the actual number of tons shipped over the life of each contract. Amortization expense is included in Amortization of acquired intangibles, net in the accompanying Consolidated Statements of Operations and was $ 0 , $ 0 , and ($ 327 ) for the years ended December 31, 2023, 2022, and 2021, respectively. Future net amortization expense related to acquired intangibles is expected to be $ 6,703 , $ 5,892 , $ 5,373 , $ 4,790 , $ 4,790 , and $ 19,031 for 2024, 2025, 2026, 2027, 2028, and after 2028, respectively. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets of acquired companies. Goodwill for the years ended December 31, 2023 and 2022 was $ 11,124 and $ 10,736 , respectively, and is included within Other non-current assets on the Company’s Consolidated Balance Sheets. In January 2023, primarily to secure additional coal trucks and related equipment and facilities, the Company purchased substantially all the assets of a freight, hauling and transportation services business for $ 11,919 , resulting in $ 388 of goodwill. The acquired goodwill, related primarily to the acquired workforce and expected cost synergies, was allocated to the Company's Met reportable segment. In December 2022, the Company 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 the Company’s operations for $ 24,878 , which included $ 7,787 of working capital, $ 6,355 of property, plant, and equipment, and $ 10,736 of goodwill. The acquired goodwill, related primarily to the acquired workforce and expected cost synergies, was allocated to the Company’s Met reportable segment. Goodwill is not amortized; instead, it is tested for impairment annually as of October 31 of each year or more frequently if indicators of impairment exist. The Company assesses goodwill for impairment on a qualitative basis. If the Company determines that more likely than not the fair value of a reporting unit containing goodwill exceeds its carrying amount, no further impairment testing is required. If the qualitative assessment indicates that an impairment potentially exists, then the Company quantitatively tests goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is lower than its carrying amount, its goodwill is written down by the lesser of the amount by which the reporting units carrying amount exceeded its fair value or its carrying amount of goodwill. Asset Impairment Long-lived assets, such as property, plant, and equipment, mineral rights, and acquired intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset groups may not be recoverable. Recoverability of assets or asset groups to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. 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. The Company’s 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 coal reserves. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, the potential impairment is equal to the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. The Company estimates 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. These estimates generally constitute unobservable Level 3 inputs under the fair value hierarchy. The amount of impairment, if any, is allocated to the long-lived assets on a pro-rata basis, except that the carrying value of the individual long-lived assets are not reduced below their estimated fair value. 92 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Asset Retirement Obligations Minimum standards for mine reclamation have been established by various regulatory agencies and dictate the reclamation requirements at the Company’s operations. The Company’s asset retirement obligations consist principally of costs to reclaim acreage disturbed at surface operations and estimated costs to reclaim support acreage, treat mine water discharge, and perform other related functions at underground mines. The Company records these reclamation obligations at fair value in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred. Changes to the liability at operations that are not currently being reclaimed are offset by increasing or decreasing the carrying amount of the related long-lived asset. Changes to the liability at operations that are currently being reclaimed are recorded to Depreciation, depletion, and amortization. Over time, the liability is accreted and any capitalized cost is depreciated or depleted over the useful life of the related asset. To settle the liability, the obligation is paid, and any difference between the liability and the amount of cash paid is recorded within Depreciation, depletion and amortization within the Consolidated Statements of Operations at the time the reclamation work is completed. On at least an annual basis, the Company reviews its estimated future cash flows for its asset retirement obligations. Refer to Note 15 for further information. Income Taxes The Company recognizes 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 its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers 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. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its 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. The Company believes the deferred tax liabilities relied upon as future taxable income in its 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. Refer to Note 17 for further information. Deferred Financing Costs The costs to obtain new debt financing or amend existing financing agreements are generally deferred and amortized to interest expense over the life of the related indebtedness or credit facility using the effective interest method. Unamortized deferred financing costs are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts or premiums. Unamortized deferred financing costs associated with undrawn credit facilities are included in the Consolidated Balance Sheets within Other non-current assets. Revenue Recognition In accordance with ASC 606 Revenue from Contracts with Customers (“ASC 606”), the Company measures revenue based on the consideration specified in a contract with a customer and recognizes revenue as a result of satisfying its promise to transfer goods or services in a contract with a customer using the following general revenue recognition five-step model: (1) identify the contract; (2) identify performance obligations; (3) determine transaction price; (4) allocate transaction price; and (5) recognize revenue. Freight and handling costs paid to third-party carriers and invoiced to coal customers are recorded as freight and handling costs and freight and handling fulfillment revenues within cost of coal sales and coal revenues, respectively. Refer to Note 3 for further information. Workers’ Compensation and Pneumoconiosis (Black Lung) Benefits Workers’ Compensation As of December 31, 2023, the Company’s subsidiaries generally utilize high-deductible insurance programs for workers’ compensation claims at its operations with the exception of certain subsidiaries in which the Company is a qualified self-insurer for workers’ compensation obligations. The liabilities for workers’ compensation claims are estimates of the ultimate losses incurred based on the Company’s experience and include a provision for incurred but not reported losses. Adjustments to the probable ultimate liabilities are made annually based on an actuarial study and adjustments to the liability are recorded based on the results of this study. These short-term and long-term obligations are included in the Consolidated Balance Sheets within 93 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Accrued expenses and other current liabilities and Workers’ compensation and black lung obligations, respectively, with the related expected insurance receivables within Prepaid expenses and other current assets and Other non-current assets. As of December 31, 2023 and 2022, the workers’ compensation liability was net of a discount of $ 22,205 and $ 22,824 , respectively, related to fair value adjustments associated with acquisition accounting. Refer to Note 18 for further information. Black Lung Benefits The Company is required by federal and state statutes to provide benefits to employees for awards related to black lung. As of December 31, 2023, certain of the Company’s subsidiaries are insured for black lung obligations by a third-party insurance provider and certain subsidiaries are self-insured for state black lung obligations. Certain other subsidiaries are self-insured for federal black lung benefits and may fund benefit payments through a Section 501(c)(21) tax-exempt trust fund. Charges are made to operations for 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. The Company recognizes in its Consolidated Balance sheets the amount of the Company’s unfunded Accumulated Benefit Obligation (“ABO”) at the end of the year. The actuarial gains and losses recognized in accumulated other comprehensive income (loss) are amortized into components of net periodic benefit cost over the expected lifetime of active participants (the Company does not use a corridor method). These short-term and long-term obligations are included in the Consolidated Balance Sheets within Accrued expenses and other current liabilities and Workers’ compensation and black lung obligations, respectively. Refer to Note 18 for further information. Pension The Company is required to recognize the overfunded or underfunded status of a defined benefit pension plan as an asset or liability in its Consolidated Balance Sheets and to recognize changes in that funded status in the year in which the changes occur through other comprehensive (loss) income. The actuarial gains and losses recognized in accumulated other comprehensive income (loss) are amortized into components of net periodic benefit cost over the average future lifetime of participants expected to have benefits (the Company does not use a corridor method). The Company is required to measure plan assets and benefit obligations as of the date of the Company’s fiscal year-end Consolidated Balance Sheet and provide the required disclosures as of the end of each fiscal year. Refer to Note 18 for information. Postretirement Life Insurance Benefits As part of the Alpha Natural Resources, Inc. bankruptcy reorganization plan and the Retiree Committee Settlement Agreement, the Company assumed the liability for life insurance benefits for certain disabled and non-union retired employees. Provisions are made for estimated benefits based on annual evaluations prepared by independent actuaries. Adjustments to the probable ultimate liabilities are made annually based on an actuarial study and adjustments to the liability are recorded based on the results of this study. These obligations are included in the Consolidated Balance Sheets as Accrued expenses and other current liabilities and Other non-current liabilities. Refer to Note 18 for further information. Net Income per Share Basic net income per share is computed by dividing net income by the weighted-average number of outstanding common shares for the period. Diluted earnings per share reflects the potential dilution that could occur if instruments that may require the issuance of common shares in the future were settled and the underlying common shares were issued. Diluted earnings per share is computed by increasing the weighted-average number of outstanding common shares computed in basic earnings per share to include the additional common shares that would be outstanding after issuance and adjusting net income for changes that would result from the issuance. Only those securities that are dilutive are included in the calculation. In periods of loss, the number of shares used to calculate diluted earnings is the same as basic earnings per share. Refer to Note 5 for further information. Stock-Based Compensation The Company recognizes expense for stock-based compensation awards based on their grant-date fair value. The expense is recorded over the respective service period of the underlying award. Liability classified stock-based compensation awards are remeasured each reporting period at fair value until the award is settled. The Company recognizes forfeitures of stock-based compensation awards as they occur. Refer to Note 19 for further information. 94 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Warrants On July 26, 2016 (the “Initial Issue Date”), the Company issued warrants, which were classified as equity instruments, and were exercisable for cash or on a cashless basis at any time from the Initial Issue Date until July 26, 2023, and no fractional shares were issued upon warrant exercises. The exercise price and the warrant share number were adjusted in respect of certain dilutive events with respect to common stock. At 5:00 pm Eastern time on July 26, 2023 the Company’s Series A Warrants expired pursuant to their terms. Refer to Note 7 for additional information. Equity Method Investments Investments and membership interests in joint ventures are accounted for under the equity method of accounting if the Company has the ability to exercise significant influence, but not control, over the entity. Under the equity method of accounting, the Company’s proportionate share of the entity’s comprehensive income or loss each reporting period is reflected in Equity loss in affiliates in the Consolidated Statements of Operations. Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. The carrying values of the Company’s equity method investments are included within Other non-current assets on the Company’s Consolidated Balance Sheets. Refer to Notes 9 and 10 for additional information. Recent Accounting Guidance Segment Disclosures : In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This update requires public entities to disclose significant segment expenses that are regularly provided to its chief operating decision maker and other segment items and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The additional disclosures are required to be provided on a retrospective basis. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company will provide the additional required disclosures upon adoption. Income Tax Disclosures : In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). This update requires public business entities to disclose in their income tax rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide additional details about the reconciling items in categories meeting a quantitative threshold. The guidance will also require entities to disclose income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The additional disclosures are required to be provided on a prospective basis with the option to provide retrospectively. The amendments are effective for fiscal years beginning after December 15, 2024. The Company will provide the additional required disclosures upon adoption. (3) Revenue Disaggregation of Revenue from Contracts with Customers ASC 606 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc.) that depict how the nature, amount, timing, and uncertainty of revenue and cash flow are affected by economic factors. ASC 606 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue. 95 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) The Company earns revenues primarily through the sale of coal produced at Company operations and coal purchased from third parties. The Company extracts, processes and markets met and thermal coal from deep and surface mines for sale to steel and coke producers, industrial customers, and electric utilities. The Company conducts mining operations only in the United States with mines in Central Appalachia. The Company has one reportable segment: Met. In addition to the one reportable segment, the All Other category includes general corporate overhead and corporate assets and liabilities, the former CAPP - Thermal operations, and the elimination of certain intercompany activity, as well as expenses associated with certain idled/closed mines. Refer to Note 23 for further segment information. The Company has disaggregated revenue between met coal and thermal coal and export and domestic revenues which depicts the pricing and contract differences between the two. Export revenue generally is derived by spot or short term contracts with pricing determined at the time of shipment or based on a market index; whereas domestic revenue is characterized by contracts that typically have a term of one year or longer and with fixed pricing terms. The following tables disaggregate the Company’s coal revenues by product category and by market to depict how the nature, amount, timing, and uncertainty of the Company’s coal revenues and cash flows are affected by economic factors: Year Ended December 31, 2023 2022 2021 Export met coal revenues $ 2,412,960 $ 3,195,516 $ 1,675,147 Export thermal coal revenues 126,108 107,961 30,879 Total export coal revenues $ 2,539,068 $ 3,303,477 $ 1,706,026 Domestic met coal revenues $ 865,667 $ 687,795 $ 396,160 Domestic thermal coal revenues 51,895 101,715 150,438 Total domestic coal revenues $ 917,562 $ 789,510 $ 546,598 Total met coal revenues $ 3,278,627 $ 3,883,311 $ 2,071,307 Total thermal coal revenues 178,003 209,676 181,317 Total coal revenues $ 3,456,630 $ 4,092,987 $ 2,252,624 Performance Obligations The Company considers each individual transfer of coal on a per shipment basis to the customer a performance obligation. The pricing terms of the Company’s contracts with customers include fixed pricing, variable pricing, or a combination of both fixed and variable pricing. All the Company’s revenue derived from contracts with customers is recognized at a point in time. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied as of December 31, 2023. 2024 2025 2026 2027 2028 Total Estimated coal revenues (1) $ 124,612 $ — $ — $ — $ — $ 124,612 (1) Amounts only include estimated coal revenues associated with contracts with customers with fixed pricing with original expected duration of more than one year. The Company has elected not to disclose the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period for performance obligations with either of the following conditions: 1) the remaining performance obligation is part of a contract that has an original expected duration of one year or less; or 2) the remaining performance obligation has variable consideration that is allocated entirely to a wholly unsatisfied performance obligation. (4) Accumulated Other Comprehensive Loss The following tables summarize the changes to accumulated other comprehensive loss during the years ended December 31, 2023, 2022, and 2021: 96 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Balance January 1, 2023 Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss Balance December 31, 2023 Employee benefit costs $ ( 12,162 ) $ ( 26,617 ) $ ( 1,808 ) $ ( 40,587 ) Balance January 1, 2022 Other comprehensive income before reclassifications Amounts reclassified from accumulated other comprehensive loss Balance December 31, 2022 Employee benefit costs $ ( 58,503 ) $ 43,597 $ 2,744 $ ( 12,162 ) Balance January 1, 2021 Other comprehensive income before reclassifications Amounts reclassified from accumulated other comprehensive loss Balance December 31, 2021 Employee benefit costs $ ( 111,985 ) $ 47,461 $ 6,021 $ ( 58,503 ) The following table summarizes the amounts reclassified from accumulated other comprehensive loss and the Consolidated Statements of Operations line items affected by the reclassification during the years ended December 31, 2023, 2022, and 2021: Details about accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in the Consolidated Statements of Operations Year Ended December 31, 2023 2022 2021 Employee benefit costs: Amortization of actuarial (gain) loss (1) $ ( 2,324 ) $ 3,311 $ 5,653 Miscellaneous (expense) income, net Settlement (1) — 244 368 Miscellaneous (expense) income, net Total before income tax $ ( 2,324 ) $ 3,555 $ 6,021 Income tax benefit (expense) 516 ( 811 ) — Income tax expense Total, net of income tax $ ( 1,808 ) $ 2,744 $ 6,021 (1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit costs (credits) for certain employee benefit plans. Refer to Note 18. (5) Net Income per Share The number of shares used to calculate basic net income per common share is based on the weighted average number of the Company’s outstanding common shares during the respective period. The number of shares used to calculate diluted net income per common share is based on the number of common shares used to calculate basic net income per common share plus the dilutive effect of stock options and other stock-based instruments held by the Company’s employees and directors during the period, and the Company’s outstanding warrants. The dilutive effect of outstanding stock-based instruments is determined by application of the treasury stock method. The stock options and warrants become dilutive for diluted net income per common share calculations when the market price of the Company’s common stock exceeds the exercise price. Anti-dilution also occurs in periods of a net loss, and the dilutive impact of all warrants and share-based compensation awards are excluded. For the years ended December 31, 2023, 2022, and 2021, respectively, 1,240 , 0 , and 717,992 warrants, stock options, and other stock-based instruments were excluded from the computation of dilutive net income per common share because they would have been anti-dilutive. When applying the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share are higher than the Company’s average stock price during an applicable period. The following table presents the net income per common share for the years ended December 31, 2023, 2022, and 2021: 97 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Year Ended December 31, 2023 2022 2021 Basic Net income $ 721,956 $ 1,448,545 $ 288,790 Weighted average common shares outstanding - basic 14,106,466 17,490,886 18,441,175 Net income per common share - basic $ 51.18 $ 82.82 $ 15.66 Diluted Weighted average common shares outstanding - basic 14,106,466 17,490,886 18,441,175 Diluted effect of warrants 81,352 275,715 35,574 Diluted effect of stock options 1,400 4,171 1,753 Diluted effect of other stock-based instruments 453,638 451,625 393,180 Weighted average common shares outstanding - diluted 14,642,856 18,222,397 18,871,682 Net income per common share - diluted $ 49.30 $ 79.49 $ 15.30 (6) Inventories, net Inventories, net consisted of the following: December 31, 2023 2022 Raw coal $ 52,508 $ 57,382 Saleable coal 120,000 91,474 Materials, supplies and other, net 58,836 51,718 Total inventories, net $ 231,344 $ 200,574 (7) Capital Stock Share Repurchase Program On February 21, 2023, the Company’s Board of Directors (the “Board”) approved a $ 200,000 increase to the existing common share repurchase program that the Board adopted on March 4, 2022, bringing the total authorization to repurchase the Company’s stock to $ 1,200,000 . On October 31, 2023, the Board approved an additional $ 300,000 increase to the share repurchase program, bringing the total authorization to repurchase the Company’s stock to $ 1,500,000 . Share repurchases may be made from time to time through open market transactions, block trades, tender offers, or otherwise, and the program has no expiration date. The share repurchase program does not obligate the Company 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 the Company’s discretion. Repurchases under the program are subject to market and business conditions, available liquidity, the Company’s cash needs, restrictions under agreements or obligations, legal or regulatory requirements or restrictions and other relevant factors. As of December 31, 2023, the Company had repurchased an aggregate of 6,475,271 shares under the program for an aggregate purchase price of approximately $ 1,040,128 (comprised of $ 1,039,934 of share repurchases and $ 194 of related fees). The Company has also accrued a stock repurchase excise tax of $ 4,665 related to the share repurchase program as of December 31, 2023, which is recorded in treasury stock at cost. Dividend Program 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 years ended December 31, 2022 and 2023 the Board increased the quarterly dividend amounts. In addition, pursuant to the terms of certain stock-based compensation awards under the Company’s Management Incentive Plan (the “MIP”) and Long- 98 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Term Incentive Plan (the “LTIP”), dividend equivalent amounts for each quarterly dividend will become payable at various vesting dates with respect to each underlying outstanding award. The Board declared the following dividends on the Company’s common stock during the year ended December 31, 2023: Total Dividend per Share Total Dividends Paid (1) Declaration Date Holders of Record Date Payable Date $ 0.44 $ 6,602 February 21, 2023 March 15, 2023 April 3, 2023 $ 0.50 $ 7,001 May 3, 2023 June 15, 2023 July 5, 2023 $ 0.50 $ 6,736 August 2, 2023 September 15, 2023 October 3, 2023 $ 0.50 $ 6,510 October 31, 2023 December 1, 2023 December 15, 2023 $ 1.94 $ 26,849 (1) Excludes dividend equivalents paid or accrued of $ 899 as of December 31, 2023. 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 and to focus instead on the Company’s share repurchase program. Warrants On July 26, 2016, the Company issued 810,811 warrants, which were classified as equity instruments. Pursuant to the underlying warrant agreement, the warrants were exercisable for cash or on a cashless basis at any time until their expiration, and no fractional shares were to be issued upon warrant exercise. Pursuant to the underlying warrant agreement (refer to Note 2), the exercise price was adjusted from $ 45.086 per share to $ 44.972 per share as of the March 15, 2023 dividend record date and to $ 44.820 per share as of the June 15, 2023 dividend record date, while the warrant share number remained unchanged at 1.20 . At 5:00 pm Eastern time on July 26, 2023 the Company’s Series A Warrants expired pursuant to their terms. As of December 31, 2023, no warrants remained outstanding as the warrants expired during the third quarter of 2023. For the year ended December 31, 2023, the Company issued 169,028 shares of common stock resulting from exercises of its warrants and, pursuant to the terms of the underlying warrant agreement, withheld 20,139 of the issued shares in satisfaction of the warrant exercise price and in lieu of fractional shares, which were subsequently reclassified as treasury stock in the amount of $ 2,368 . As of December 31, 2022, 190,838 warrants were outstanding, with a total of 229,006 shares underlying the un-exercised warrants. For the year ended December 31, 2022, the Company issued 702,182 shares of common stock resulting from exercises of its warrants and, pursuant to the terms of the underlying warrant agreement, withheld 187,857 of the issued shares in satisfaction of the warrant exercise price and in lieu of fractional shares, which were subsequently reclassified as treasury stock in the amount of $ 18,509 . As of December 31, 2021, 801,246 warrants were outstanding, with a total of 921,433 shares underlying the un-exercised warrants. For the year ended December 31, 2021, the Company issued 143 shares of common stock resulting from exercises of its warrants and, pursuant to the terms of the underlying warrant agreement, withheld 17 of the issued shares in satisfaction of the warrant exercise price and in lieu of fractional shares, which were subsequently reclassified as treasury stock. 99 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) (8) Property, Plant, and Equipment, net Property, plant, and equipment, net, consisted of the following: December 31, 2023 2022 Plant and mining equipment $ 890,327 $ 723,056 Mine development 162,285 130,144 Land 32,033 27,937 Office equipment, software and other 5,356 3,111 Construction in progress 57,896 49,583 Total property, equipment and mine development costs $ 1,147,897 $ 933,831 Less accumulated depreciation and amortization ( 558,905 ) ( 491,186 ) Total property, plant, and equipment, net $ 588,992 $ 442,645 Included in plant and mining equipment are assets under financing leases totaling $ 10,964 and $ 13,139 with accumulated depreciation of $ 5,015 and $ 7,710 as of December 31, 2023 and 2022, respectively. Depreciation and amortization expense associated with property, plant, equipment and non-mineral asset retirement obligation assets, net, was $ 112,925 , $ 84,542 , and $ 86,506 for the years ended December 31, 2023, 2022, and 2021 respectively. Depreciation expense for the years ended December 31, 2023, 2022, and 2021 includes an expense of $ 7,343 , and credits of ($ 1,344 ) and ($ 307 ), respectively, related to revisions to asset retirement obligations. Refer to Note 15 for further disclosures related to asset retirement obligations. As of December 31, 2023, the Company had unconditional purchase obligations for approximately $ 48,557 of new equipment purchase commitments expected to be acquired at various dates in 2024. (9) Other Non-Current Assets Other non-current assets consisted of the following: December 31, 2023 2022 Advanced mining royalties $ 7,493 $ 7,476 Long-term deposits 5,350 1,363 Equity method investments 31,670 23,070 Workers’ compensation receivables 37,951 44,734 Goodwill 11,124 10,736 Other 12,898 15,816 Total other non-current assets $ 106,486 $ 103,195 (10) Equity Method Investments The Company holds a 65 % partnership interest in Dominion Terminal Associates LLP (“DTA”) which operates a ground storage-to-vessel coal transloading facility in Newport News, Virginia for use by its partners. As the Company shares power with its minority partner through equal management committee representation, the Company does not control DTA. Under the terms of operating and throughput and handling agreements, each partner is charged its share of cash operating costs in exchange for the right to use the facility’s loading capacity and is required to make periodic cash advances to fund such costs. 100 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) The Company’s equity method investees do not have long-term debt obligations and the Company is not contingently obligated to make any future financing-related payments with respect to its equity method investees. (11) Leases The Company’s lease population consists primarily of vehicle and heavy equipment leases and leases for office equipment. The Company’s building and land leases relate to corporate office space and certain site offices. The Company determines whether a contract contains a lease based on whether the Company obtains the right to control the use of specifically identifiable property, plant, and equipment for a period of time in exchange for consideration. For the years ended December 31, 2023, 2022, and 2021 the Company identified no instances requiring significant judgment in determining whether any contracts entered into during the period were or were not leases. Additionally, the Company had no material sublease agreements within the scope of ASC 842 or lease agreements for which the Company was the lessor for the years ended December 31, 2023, 2022, and 2021. Renewal options in the Company’s lease population primarily relate to month-to-month extensions on vehicle leases and are immaterial both individually and in the aggregate. The Company includes renewal options that are reasonably certain to be exercised in the measurement of lease liabilities. As of December 31, 2023, the Company does not intend to exercise any termination options on existing leases. As of December 31, 2023 and 2022, the Company had the following right-of-use assets and lease liabilities within the Company’s Consolidated Balance Sheets: December 31, 2023 December 31, 2022 Assets Balance Sheet Classification Financing lease assets Property, plant, and equipment, net $ 5,949 $ 5,429 Operating lease right-of-use assets Other non-current assets 4,038 4,488 Total lease assets $ 9,987 $ 9,917 Liabilities Balance Sheet Classification Financing lease liabilities - current Current portion of long-term debt $ 1,280 $ 1,052 Operating lease liabilities - current Accrued expenses and other current liabilities 572 612 Financing lease liabilities - long-term Long-term debt 3,997 3,744 Operating lease liabilities - long-term Other non-current liabilities 3,466 3,876 Total lease liabilities $ 9,315 $ 9,284 Total lease costs and other lease information for the years ended December 31, 2023, 2022, and 2021 included the following: Year Ended December 31, 2023 2022 2021 Lease cost (1) Financing lease cost: Amortization of leased assets $ 1,444 $ 2,644 $ 2,061 Interest on lease liabilities 651 315 245 Operating lease cost 1,127 1,113 1,383 Short-term lease cost 1,315 1,234 786 Total lease cost $ 4,537 $ 5,306 $ 4,475 (1) The Company had no variable lease costs or sublease income for the years ended December 31, 2023, 2022, and 2021. 101 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Year Ended December 31, 2023 2022 2021 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,571 $ 5,556 $ 4,478 Operating cash flows from financing leases $ 651 $ 315 $ 245 Operating cash flows from operating leases $ 2,443 $ 2,347 $ 2,169 Financing cash flows from financing leases $ 1,477 $ 2,894 $ 2,064 Right-of-use assets obtained in exchange for new financing lease liabilities $ 1,891 $ 4,728 $ 703 Right-of-use assets obtained in exchange for new operating lease liabilities $ 206 $ 48 $ 275 Lease Term and Discount Rate Weighted-average remaining lease term in years - financing leases 5.10 5.90 1.75 Weighted-average remaining lease term in years - operating leases 6.30 7.10 7.88 Weighted-average discount rate - financing leases 12.3 % 13.5 % 9.6 % Weighted-average discount rate - operating leases 11.4 % 11.6 % 11.3 % The Company has elected to show net instead of gross amounts for right-of-use assets and liabilities within its Consolidated Statements of Cash Flows. The following table summarizes the maturity of the Company’s lease liabilities on an undiscounted cash flow basis and a reconciliation to the lease liabilities recognized in the Company’s Consolidated Balance Sheets as of December 31, 2023: Financing Leases Operating Leases Lease cost 2024 $ 1,850 $ 1,003 2025 1,740 952 2026 1,205 918 2027 646 747 2028 360 677 Thereafter 1,387 1,412 Total future minimum lease payments $ 7,188 $ 5,709 Imputed interest ( 1,911 ) ( 1,671 ) Present value of future minimum lease payments $ 5,277 $ 4,038 As of December 31, 2023, the Company had no leases with future commencement dates that will create significant rights or obligations for the Company. 102 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) (12) Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: December 31, 2023 2022 Wages and benefits $ 62,811 $ 69,458 Workers’ compensation 10,482 11,651 Black lung 10,687 9,664 Taxes other than income taxes 31,236 24,959 Asset retirement obligations 38,915 36,963 Dividend payable 2,342 86,118 Freight accrual 8,461 7,181 Other 12,578 19,262 Total accrued expenses and other current liabilities $ 177,512 $ 265,256 (13) Long-Term Debt Long-term debt consisted of the following: December 31, 2023 2022 Notes payable and other $ 5,097 $ 6,179 Financing leases 5,277 4,796 Total long-term debt $ 10,374 $ 10,975 Less current portion ( 3,582 ) ( 3,078 ) Long-term debt, net of current portion $ 6,792 $ 7,897 Second Amended and Restated Asset-Based Revolving Credit Agreement On December 6, 2021, the Company entered into the Second Amended and Restated Asset-Based Revolving Credit Agreement (“ABL Agreement”) with Citibank N.A as administrative agent, collateral agent, swingline lender, and letter of credit (“LC”) issuer and the other lenders party thereto (the “Lenders”), and BMO Harris Bank N.A and Eclipse Business Capital LLC as co-collateral agents. The ABL Agreement included a senior secured asset-based revolving credit facility (the “ABL Facility”) under which the Company could borrow cash or obtain LCs, on a revolving basis, in an aggregate amount of up to $ 155,000 , of which no more than $ 150,000 could represent outstanding LCs ($ 125,000 on a committed basis and another $ 25,000 on an uncommitted cash collateralized basis). The facility’s maturity date was December 6, 2024. Under the terms of the ABL Agreement, LCs fees were calculated at 5.25 %, while borrowings bore interest based on the character of the loan (defined as either secured overnight financing rate “SOFR” Loan (“SOFR Loan”) or “Base Rate Loan”) plus an applicable rate of 4.50 % for SOFR Loans and 3.50 % for Base Rate Loans. Pursuant to terms of the ABL Agreement, the Company elected the character of the loan, the interest period, and could provide notice of continuation or conversion of the borrowed principal amount with the ability to repay the borrowed principal amount in advance of the maturity date without penalty. As of December 31, 2022, no borrowings were outstanding under the ABL Facility. Any LC issued under the ABL Facility bore a commitment fee rate of 0.50 %, and a fronting fee of 0.25 % of the face amount under each LC. As of December 31, 2022, the Company had $ 61,877 LCs outstanding under the ABL Facility. 103 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) New ABL Agreement On October 27, 2023, the Company terminated its existing ABL Agreement and along with certain of its directly and indirectly owned subsidiaries (the “Borrowers”) entered into a new Credit Agreement (the “New ABL Agreement”) with Regions Bank, as lender, swingline lender, LC issuer, administrative agent, collateral agent, and lead arranger, along with ServisFirst Bank and Texas Capital Bank, as joint lead arrangers and the other lenders party thereto. In connection with the termination, the Company recorded a loss on extinguishment of debt of $ 2,753 related to the write-off of unamortized debt issuance costs for and fees paid to exiting lenders. The New ABL Agreement continues to include an asset-based revolving credit facility (the “New ABL Facility”) which allows the Company to borrow cash or obtain LCs, on a revolving basis, in an aggregate amount of up to $ 155,000 . The Company may request an increase to the capacity of the facility of up to $ 75,000 provided that $ 25,000 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, trade accounts receivable and in certain circumstances specified amounts of cash. The Company must maintain minimum Liquidity, as defined in the New ABL Agreement, of $ 75,000 . The New ABL Facility matures on October 27, 2027. As part of the transition from the previous ABL Facility to the New ABL Facility, the Company temporarily cash collateralized outstanding LCs until replacement LCs could be issued under the New ABL Facility. As of December 31, 2023, the Company had $ 31 of cash collateralized LCs remaining to be replaced. During the first quarter of 2024, the remaining cash collateralized LCs from the previous ABL Facility were cancelled with no replacement required and the cash collateral was returned. Under the terms of the New ABL Facility, LC fees will be calculated at 3.25 % (including a fronting fee of 0.25 %) while future borrowings will bear interest based on the character of the loan (defined as either a “Term Secured Overnight Financing Rate Loan” (or “Term SOFR Loan”) or a “Base Rate Loan”) plus an applicable rate of 3.10 % for a Term SOFR Loan and 2.00 % for a Base Rate Loan. The Company may elect the character and interest period for each loan. All amounts borrowed may be repaid prior to maturity without penalty. A commitment fee of 0.375 % will be charged on any unused capacity. As of December 31, 2023, the Company had no amount borrowed and $ 60,896 LCs outstanding under the New ABL Facility. The New ABL Facility is guaranteed by substantially all of Alpha’s directly and indirectly owned subsidiaries that are not Borrowers (the “Guarantors”) and is secured by all or substantially all assets of the Borrowers and Guarantors. The New ABL Agreement and related documents contain negative and affirmative covenants including certain financial covenants. The Company is in compliance with all covenants under these agreements as of December 31, 2023. Future Maturities Future maturities of long-term debt as of December 31, 2023 are as follows: 2024 $ 3,582 2025 3,425 2026 1,637 2027 451 2028 200 After 2028 1,079 Total long-term debt $ 10,374 (14) Acquisition-Related Obligations Acquisition-related obligations consisted of the following: 104 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) December 31, 2023 2022 Contingent Revenue Obligation $ — $ 27,719 Environmental Settlement Obligations — 535 Total acquisition-related obligations $ — $ 28,254 Less current portion — ( 28,254 ) Acquisition-related obligations, net of current portion $ — $ — Contingent Revenue Obligation As a result of the Merger, the Company assumed a contingent revenue payment obligation (the “Contingent Revenue Obligation”) to certain of the Merger Companies’ creditors pursuant to the terms stipulated within the bankruptcy settlement previously entered into by the Merger Companies. Pursuant to terms of the obligation, the annual obligation was limited to revenues derived from legacy operations for the Merger Companies and did not include revenues related to legacy Alpha Metallurgical Resources, Inc. operations. The Contingent Revenue Obligation consisted of a contingent revenue payment of 1.5 % of annual gross revenues of the legacy operations for the Merger Companies up to $ 500,000 and 1.0 % of annual gross revenue of the legacy operations for the Merger Companies in excess of $ 500,000 through the period ended December 31, 2022. During the first quarter of 2023, the Company paid the final calculated payment pursuant to terms of the Contingent Revenue Obligation. Refer to Note 16 for further disclosures related to the fair value assignment and methods used. Refer to Note 20 for disclosures related to a Contingent Revenue Obligation repurchase transaction with a related party during the fourth quarter of 2021. (15) Asset Retirement Obligations The following table summarizes the changes in asset retirement obligations for the years ended December 31, 2023 and 2022: Total asset retirement obligations at December 31, 2021 $ 164,172 Accretion for the period 23,765 Sites added during the period 9,602 Revisions in estimated cash flows 304 Expenditures for the period ( 18,832 ) Total asset retirement obligations at December 31, 2022 $ 179,011 Accretion for the period 25,500 Sites added during the period 204 Revisions in estimated cash flows (1) 20,946 Expenditures for the period ( 20,237 ) Total asset retirement obligations at December 31, 2023 $ 205,424 Less current portion (2) ( 38,915 ) Long-term portion $ 166,509 (1) The revisions in estimated cash flows resulted primarily from a decrease in the discount rate and changes in mine plans. (2) Included within Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheets. Refer to Note 12. (16) Fair Value of Financial Instruments and Fair Value Measurements The estimated fair values of financial instruments are determined based on relevant market information. These estimates involve uncertainty and cannot be determined with precision. 105 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) The carrying amounts for cash and cash equivalents, trade accounts receivable, net, prepaid expenses and other current assets, restricted cash, deposits, trade accounts payable, notes payable and other, financing leases, accrued expenses and other current liabilities, and environmental settlement obligations approximate fair value as of December 31, 2023 and 2022 due to the short maturity of these instruments. The following table sets forth by level, within the fair value hierarchy, the Company’s financial and non-financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2023 and 2022. Financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the determination of fair value for assets and liabilities and their placement within the fair value hierarchy levels. December 31, 2023 Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Trading securities (1) $ 40,597 $ — $ 40,597 $ — (1) Classified as Long-term restricted investments on the Company’s Consolidated Balance Sheets. December 31, 2022 Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Contingent Revenue Obligation $ 27,719 $ — $ — $ 27,719 Trading securities (1) $ 151,787 $ — $ 151,787 $ — (1) Includes $ 46,052 classified as Short-term investments and $ 105,735 classified as Long-term restricted investments on the Company’s Consolidated Balance Sheets. The following tables are reconciliations of the financial and non-financial assets and liabilities that were accounted for at fair value on a recurring basis and that were categorized within Level 3 of the fair value hierarchy: December 31, 2022 Payments Loss Recognized in Earnings Transfer In (Out) of Level 3 Fair Value Hierarchy December 31, 2023 Contingent Revenue Obligation $ 27,719 $ ( 27,719 ) $ — $ — $ — December 31, 2021 Payments Loss Recognized in Earnings Transfer In (Out) of Level 3 Fair Value Hierarchy December 31, 2022 Contingent Revenue Obligation $ 35,005 $ ( 16,166 ) $ 8,880 $ — $ 27,719 (1) The loss recognized in earnings resulted primarily from an increase in forecasted future revenue as of December 31, 2022. The following methods and assumptions were used to estimate the fair values of the assets and liabilities in the tables above: Level 2 Fair Value Measurements Trading Securities - Typically includes certificates of deposit, corporate fixed income, and U.S. government securities. The fair values are obtained from a third-party pricing service provider. The fair values provided by the pricing service provider are based on observable market inputs including credit spreads and broker-dealer quotes, among other inputs. The Company classifies the prices obtained from the pricing services within Level 2 of the fair value hierarchy because the underlying inputs are directly observable from active markets. However, the pricing models used entail a certain amount of subjectivity and therefore differing judgments in how the underlying inputs are modeled could result in different estimates of fair value. 106 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Level 3 Fair Value Measurements Contingent Revenue Obligation - The fair value of the Contingent Revenue Obligation was estimated using a Black-Scholes pricing model. The inputs included in the Black-Scholes pricing model are the Company’s forecasted future revenue, the stated royalty rate, the remaining periods in the obligation, annual risk-free interest rate based on the U.S. Constant Maturity Treasury Curve and annualized volatility. The annualized volatility was calculated by observing volatilities for comparable companies with adjustments for the Company's size and leverage. As the royalty period ended on December 31, 2022, the fair value of the remaining obligation as of that date represents the actual final calculated payment made during the first quarter of 2023. Refer to Note 14 for additional information. (17) Income Taxes Significant components of income tax expense (benefit) were as follows: Year Ended December 31, 2023 2022 2021 Current tax expense: Federal $ 80,254 $ 114,106 $ 2,422 State 3,527 6,620 1,149 Total current $ 83,781 $ 120,726 $ 3,571 Deferred tax expense (benefit): Federal $ 35,824 $ ( 1,726 ) $ ( 3 ) State 3,898 ( 12,795 ) ( 160 ) Total deferred $ 39,722 $ ( 14,521 ) $ ( 163 ) Total income tax expense (benefit): Federal $ 116,078 $ 112,380 $ 2,419 State 7,425 ( 6,175 ) 989 Total $ 123,503 $ 106,205 $ 3,408 A reconciliation of statutory federal income tax expense on income to the actual income tax expense is as follows: Year Ended December 31, 2023 2022 2021 Federal statutory income tax expense $ 177,547 $ 326,497 $ 61,362 Increase (decrease) in taxes due to: Percentage depletion allowance ( 36,685 ) ( 50,277 ) ( 11,864 ) Foreign-derived intangible income deduction ( 24,291 ) ( 69,917 ) ( 1,453 ) Change in valuation allowances ( 5,658 ) ( 119,082 ) ( 78,043 ) State taxes, net of federal tax impact 5,932 14,625 12,440 State apportioned tax rate change, net of federal tax impact 2,863 273 8,751 Capital loss carryforward expiration — 140 10,552 Non-deductible compensation 9,934 5,573 1,429 Stock-based compensation ( 6,968 ) ( 3,588 ) 405 Other, net 829 1,961 ( 171 ) Income tax expense $ 123,503 $ 106,205 $ 3,408 107 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Deferred income taxes result from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes. The net deferred tax assets and liabilities included in the Consolidated Balance Sheets include the following amounts: Year Ended December 31, 2023 2022 Deferred tax assets: Asset retirement obligations $ 44,600 $ 39,200 Reserves and accruals not currently deductible 8,141 10,572 Workers’ compensation and black lung obligations 39,432 38,099 Pension obligations 18,409 23,826 Equity method investments 1,271 1,555 Net operating loss carryforwards 35,835 43,716 Capital loss carryforwards 45,491 48,940 Acquisition-related obligations — 6,194 Other 9,496 7,171 Gross deferred tax assets 202,675 219,273 Less valuation allowance ( 48,143 ) ( 53,801 ) Deferred tax assets $ 154,532 $ 165,472 Deferred tax liabilities: Property, plant and mineral reserves $ ( 172,336 ) $ ( 148,189 ) Acquired intangibles, net ( 9,478 ) ( 11,995 ) Prepaid expenses ( 3,658 ) ( 4,215 ) Restricted cash — ( 556 ) Other ( 174 ) ( 13 ) Total deferred tax liabilities ( 185,646 ) ( 164,968 ) Net deferred tax (liabilities) assets $ ( 31,114 ) $ 504 Changes in the valuation allowance were as follows: Year Ended December 31, 2023 2022 2021 Valuation allowance beginning of period $ 53,801 $ 172,883 $ 263,387 Decrease in valuation allowance recorded to income tax expense ( 5,658 ) ( 119,082 ) ( 78,043 ) Decrease in valuation allowance not affecting income tax expense — — ( 12,461 ) Valuation allowance end of period $ 48,143 $ 53,801 $ 172,883 At December 31, 2023, the Company has recorded a deferred tax asset of $ 26,494 for federal net operating loss carryforwards, which represents the tax-effected amount of net operating loss carryforwards mathematically available for utilization prior to statutory expiration. Underlying this deferred tax asset are approximately $ 12,000 of gross federal net operating loss carryforwards that are subject to an annual Internal Revenue Code Section 382 limitation of approximately $ 1,000 and approximately $ 114,000 of gross federal net operating loss carryforwards that are subject to an annual Internal Revenue Code Section 382 limitation of approximately $ 17,500 . These federal net operating loss carryforwards were generated before 2018 and will expire between years 2035 and 2037. The Company has a gross federal capital loss carryforward of approximately $ 208,000 . The capital loss carryforward will expire in 2025. A valuation allowance is recorded against the federal and state capital loss carryforwards and certain state net operating loss carryforwards. The Company has no liability for uncertain tax positions for the years ended December 31, 2023, 2022, and 2021. 108 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) The Company’s policy is to classify interest and penalties related to uncertain tax positions as part of income tax expense. As of December 31, 2023 and 2022, the Company had no accrued interest and penalties. As of December 31, 2023, tax years 2020 – 2023 remain open to federal and state examination. During the third quarter of 2021, the IRS concluded its audit of the Company’s 2016 federal income tax return and associated net operating loss (“NOL”) carryback claim. The audit conclusion did not result in any material impact to the financial statements or related disclosures. Following the conclusion of the audit, the Company received the $ 64,160 carryback claim tax refund and $ 5,425 of accrued interest. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. Among other provisions, the IRA enacted a 15% corporate alternative minimum tax and a 1% excise tax on repurchases of corporate stock for tax years beginning after December 31, 2022. The Company determined that it is not subject to the corporate alternative minimum tax for the year ended December 31, 2023. Refer to Note 7 for information on the excise tax on repurchases of the Company’s corporate stock. (18) Employee Benefit Plans The Company provides several types of benefits for its employees, including a defined benefit and defined contribution pension plan, workers’ compensation and black lung benefits, and postretirement life insurance. The Company does not participate in any multi-employer plans. The components of net periodic benefit cost (credit) other than the service cost component for black lung are included in the line item Miscellaneous (expense) income, net, in the Consolidated Statements of Operations. Company Administered Defined Benefit Pension Plan In connection with the Merger, the Company assumed three qualified non-contributory defined benefit pension plans, which covered certain salaried and non-union hourly employees. The qualified non-contributory defined benefit pension plans were collectively referred to as the “Pension Plans.” 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”). Benefits are frozen under the 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 with the Company. The Pension Plan utilizes a cash balance formula for certain of its participants. The cash balance formula provides guaranteed rates of interest on accumulated balances of 6 % for balances accumulated prior to 2004 and 4 % on balances accumulated thereafter. Annual funding contributions to the Pension Plan are made as recommended by consulting actuaries based upon the ERISA funding standards. Projected contributions are based on the latest available data and include the impact of the funding relief granted by the American Rescue Plan Act (“ARPA”) and the application of the interest rate stabilization guidance under ARPA. Plan assets consist of equity securities, fixed income funds, commingled short-term funds, private equity funds, and a guaranteed insurance contract. The Pension Plan offers certain eligible participants the option to elect to receive lump sum benefits, which resulted in a partial plan settlement and the accelerated recognition of a portion of the accumulated other comprehensive loss during the years ended December 31, 2022 and 2021. Refer to the disclosures below for further information on the partial plan settlements. The following tables set forth the Pension Plan’s accumulated benefit obligation, fair value of plan assets and funded status for the years ended December 31, 2023 and 2022. 109 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Year Ended December 31, 2023 2022 Change in benefit obligations: Accumulated benefit obligation at beginning of period: $ 468,442 $ 668,055 Interest cost 23,973 15,981 Actuarial loss (gain) 18,239 ( 182,441 ) Benefits paid ( 32,288 ) ( 30,378 ) Settlement — ( 2,775 ) Accumulated benefit obligation at end of period $ 478,366 $ 468,442 Change in fair value of plan assets: Fair value of plan assets at beginning of period $ 357,606 $ 508,125 Actual return on plan assets 26,129 ( 120,796 ) Employer contributions 25,011 3,430 Benefits paid ( 32,288 ) ( 30,378 ) Settlement — ( 2,775 ) Fair value of plan assets at end of period $ 376,458 $ 357,606 Funded status $ ( 101,908 ) $ ( 110,836 ) Accrued benefit cost at end of period (1) $ ( 101,908 ) $ ( 110,836 ) (1) Amounts are classified as long-term on the Consolidated Balance Sheets as there are sufficient plan assets to make expected benefit payments to plan participants in the succeeding twelve months. Gross amounts related to benefit obligations recognized in accumulated other comprehensive loss consisted of the following as of December 31, 2023 and 2022: December 31, 2023 2022 Net actuarial loss $ 26,059 $ 12,683 The following table details the components of net periodic benefit cost (credit): Year Ended December 31, 2023 2022 2021 Interest cost $ 23,973 $ 15,981 $ 13,566 Expected return on plan assets ( 21,996 ) ( 28,733 ) ( 28,732 ) Amortization of net actuarial loss 730 2,111 3,217 Settlement — 244 412 Net periodic benefit cost (credit) $ 2,707 $ ( 10,397 ) $ ( 11,537 ) Other changes in plan assets and benefit obligation recognized in other comprehensive income (loss) are as follows: Year Ended December 31, 2023 2022 2021 Actuarial loss (gain) (1) $ 14,106 $ ( 32,912 ) $ ( 37,004 ) Amortization of net actuarial loss ( 730 ) ( 2,111 ) ( 3,217 ) Settlement — ( 244 ) ( 412 ) Total recognized in other comprehensive income (loss) $ 13,376 $ ( 35,267 ) $ ( 40,633 ) (1) For the year ended December 31, 2023, the actuarial loss was primarily attributable to a decrease in the weighted-average discount rate actuarial assumption used in determining the benefit obligation. For the year ended December 31, 2022, the 110 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) actuarial gain was primarily attributable to an increase in the weighted-average discount rate actuarial assumption used in determining the benefit obligation partially offset by the loss on plan assets. The following table presents information applicable to plans with accumulated benefit obligations in excess of plan assets: Year Ended December 31, 2023 2022 Projected benefit obligation $ 478,366 $ 468,442 Accumulated benefit obligation $ 478,366 $ 468,442 Fair value of plan assets $ 376,458 $ 357,606 The weighted-average actuarial assumption used in determining the benefit obligation as of December 31, 2023 and 2022 was as follows: December 31, 2023 2022 Discount rate 5.10 % 5.42 % The weighted-average actuarial assumptions used to determine net periodic benefit cost (credit) for the years ended December 31, 2023, 2022, and 2021 were as follows: Year Ended December 31, 2023 2022 2021 Discount rate for benefit obligation 5.42 % 2.92 % 2.62 % Discount rate for interest cost 5.27 % 2.44 % 1.96 % Expected long-term rate of return on plan assets 6.20 % 5.80 % 5.80 % The discount rate assumptions were determined from a high-quality corporate bond yield-curve timing of the Company’s projected cash out flows. The expected long-term rate of return on assets of the Pension Plan is established each year in consultation with the plan’s actuaries and outside investment advisors. This rate is determined by taking into consideration the Pension Plan’s target asset allocation, expected long-term rates of return on each major asset class by reference to long-term historic ranges, inflation assumptions, and the expected additional value from active management of the Pension Plan’s assets. For the determination of net periodic benefit cost in 2024, the Company will utilize an expected long-term rate of return on plan assets of 6.20 %. Assets of the Pension Plan are held in trusts and are invested in accordance with investment guidelines that have been established by the Company’s Benefits Committee in consultation with outside investment advisors. The target allocation for 2024 and the actual asset allocation as reported at December 31, 2023 are as follows: Target Allocation Percentages 2024 Percentage of Plan Assets 2023 Equity securities 58.0 % 54.0 % Fixed income funds 42.0 % 42.0 % Other — % 4.0 % Total 100.0 % 100.0 % The asset allocation targets have been set with the expectation that the Pension Plan’s assets will fund the expected liability within an appropriate level of risk. In determining the appropriate target asset allocations, the Benefits Committee considers the demographics of the Pension Plan’s participants, the funded status of the plan, the Company’s contribution philosophy, the Company’s business and financial profile, and other associated risk factors. The Pension Plan’s assets are periodically rebalanced among the major asset categories to maintain the asset allocation within a specified range of the target allocation percentage. The target allocation between equity securities and fixed income funds is determined by reference to the funded status percentage for the Pension Plan. The plan administrator uses a one-way de-risking glide path whereby the fixed income 111 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) funds allocation increases as the funded status improves. At a 90.0 % funded status level, the glide path calls for a 50 / 50 equity securities and fixed income funds mix. During the year ended December 31, 2021, one of the Pension Plans’ funded status levels reached 90.0 % and the related plan assets were adjusted accordingly to the new allocation. The Company contributed $ 25,011 to the Pension Plan during the year ended December 31, 2023. The Company expects to contribute $ 25,000 to the Pension Plan in 2024, which includes amounts above the estimated minimum required contributions for the 2024 plan year. The following represents expected future pension benefit payments for the next ten years: 2024 $ 31,491 2025 31,496 2026 31,392 2027 31,333 2028 31,180 2029-2033 152,086 $ 308,978 The fair values of the Company’s Pension Plan’s assets as of December 31, 2023, by asset category are as follows: Asset Category Total Quoted Market Prices in Active Market for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities: Multi-asset fund (1) $ 205,181 $ — $ 205,181 $ — Fixed income funds: Bond fund (2) 156,235 — 156,235 — Commingled short-term fund (3) 1,307 — 1,307 — Other types of investments: Guaranteed insurance contract 12,230 — — 12,230 Total $ 374,953 $ — $ 362,723 $ 12,230 Receivable (4) 849 Total assets at fair value 375,802 Private equity funds measured at net asset value practical expedient (5) 656 Total plan assets $ 376,458 (1) This fund contains equities (domestic and international), real estate and bonds. (2) This fund contains bonds representing a diversity of sectors and maturities. This fund also includes mortgage-backed securities and U.S. Treasuries. (3) This fund contains cash and highly liquid short-term investments in a collective investment fund. (4) Receivable for investments sold at December 31, 2023, which approximates fair value. (5) In accordance with Accounting Standards Update 2015-07, investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total value of assets of the plans. Changes in Level 3 plan assets for the period ended December 31, 2023 were as follows: 112 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Guaranteed Insurance Contract Beginning balance, December 31, 2022 $ 11,912 Actual return on plan assets: Relating to assets still held at the reporting date 596 Purchases, sales and settlements ( 278 ) Ending balance, December 31, 2023 $ 12,230 The fair values of the Company’s Pension Plan’s assets as of December 31, 2022, by asset category are as follows: Asset Category Total Quoted Market Prices in Active Market for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Equity securities: Multi-asset fund (1) $ 198,262 $ — $ 198,262 $ — Fixed income funds: Bond fund (2) 144,197 — 144,197 — Commingled short-term fund (3) 1,339 — 1,339 — Other types of investments: Guaranteed insurance contract 11,912 — — 11,912 Total $ 355,710 $ — $ 343,798 $ 11,912 Receivable (4) 1,145 Total assets at fair value 356,855 Private equity funds measured at net asset value practical expedient (5) 751 Total plan assets $ 357,606 (1) This fund contains equities (domestic and international), real estate and bonds. (2) This fund contains bonds representing a diversity of sectors and maturities. This fund also includes mortgage-backed securities and U.S. Treasuries. (3) This fund contains cash and highly liquid short-term investments in a collective investment fund. (4) Receivable for investments sold at December 31, 2022, which approximates fair value. (5) In accordance with Accounting Standards Update 2015-07, investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total value of assets of the plans. Changes in Level 3 plan assets for the period ended December 31, 2022 were as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Guaranteed Insurance Contract Beginning balance, December 31, 2021 $ 11,652 Actual return on plan assets: Relating to assets still held at the reporting date 562 Purchases, sales and settlements ( 302 ) Ending balance, December 31, 2022 $ 11,912 The following is a description of the valuation methodologies used for assets measured at fair value: 113 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Level 1 Plan Assets: Assets consist of individual security positions that are easily traded on recognized market exchanges. These securities are priced and traded daily, and therefore the fund is valued daily. Level 2 Plan Assets: Funds consist of individual security positions that are mostly securities easily traded on recognized market exchanges. These securities are priced and traded daily, and therefore the fund is valued daily. Level 3 Plan Assets: Assets are valued monthly or quarterly based on the Market Value provided by managers of the underlying fund investments. The Market Value provided typically reflects the fair value of each underlying fund investment, including unrealized gains and losses. Workers’ Compensation and Pneumoconiosis (Black Lung) The Company is required by federal and state statutes to provide benefits to employees for awards related to workers’ compensation and black lung. The Company’s subsidiaries utilize high-deductible third-party insurance for worker’s compensation and black lung obligations with the exception of certain subsidiaries in which the Company is a qualified self-insurer for workers’ compensation and/or black lung obligations. The Company’s subsidiaries that are self-insured for black lung benefits may fund certain benefit payments through a Section 501(c) (21) tax-exempt trust fund. Pursuant to the Merger Agreement, the Company assumed a reinsurance contract with a third party. In 2017, the Merger Companies made a lump sum payment in exchange for a reinsurance company’s agreement to administer and pay certain future workers’ compensation and state black lung obligations in the state of Kentucky. Pursuant to the Merger Agreement, the Company assumed the estimated liability for these future claims. As the liabilities are paid by the insurance company, the prepaid insurance amounts will be reduced by a corresponding amount. The Company accrues for workers’ compensation liability by recognizing costs when it is probable that a covered liability has been incurred and the cost can be reasonably estimated. The Company’s estimates of these costs are adjusted based upon actuarial studies and include a provision for incurred but not reported losses. Actual losses may differ from these estimates, which could increase or decrease the Company’s costs. Additionally, the liability for black lung benefits is estimated by an independent actuary by prorating the accrual of actuarially projected benefits over the employee’s applicable term of service. Adjustments to the probable ultimate liability for workers’ compensation and black lung are made annually based on actuarial valuations. For the Company’s subsidiaries that are insured with a high-deductible insurance plan for workers’ compensation and black lung claims, the insurance premium expense for the years ended December 31, 2023, 2022 and 2021 was $ 10,676 , $ 9,274 , and $ 8,630 , respectively. Workers’ Compensation The table below presents workers’ compensation amounts recognized in the Consolidated Balance Sheets: December 31, 2023 2022 Current liabilities $ 10,482 $ 11,651 Long-term liabilities 92,655 107,028 Total liabilities $ 103,137 $ 118,679 Less expected insurance receivable (1) ( 39,920 ) ( 46,866 ) Workers’ compensation obligations, net of expected insurance receivables $ 63,217 $ 71,813 (1) Included within Prepaid expenses and other current assets and Other non-current assets in the Consolidated Balance Sheets. Workers’ compensation (credit) expense for high-deductible insurance plans for the years ended December 31, 2023, 2022, and 2021 was ($ 271 ), ($ 1,995 ), and $ 664 , respectively, included within Cost of coal sales in the Consolidated Statements of Operations. 114 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Black Lung The following tables set forth the accumulated black lung benefit obligations, fair value of plan assets and funded status for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Change in benefit obligation: Accumulated benefit obligation at beginning of period $ 93,421 $ 117,142 Service cost 2,051 2,642 Interest cost 4,660 2,722 Actuarial loss (gain) 20,019 ( 21,060 ) Benefits paid ( 10,280 ) ( 8,025 ) Accumulated benefit obligation at end of period $ 109,871 $ 93,421 Change in fair value of plan assets: Fair value of plan assets at beginning of period $ 2,538 $ 2,664 Actual return on plan assets 75 ( 126 ) Benefits paid ( 10,280 ) ( 8,025 ) Employer contributions 10,280 8,025 Fair value of plan assets at end of period (1) 2,613 2,538 Funded status $ ( 107,258 ) $ ( 90,883 ) Accrued benefit cost at end of period $ ( 107,258 ) $ ( 90,883 ) (1) Assets of the plan are held in a Section 501(c)(21) tax-exempt trust fund and consist primarily of government debt securities. All assets are classified as Level 1 and valued based on quoted market prices. The table below presents amounts recognized in the Consolidated Balance Sheets: December 31, 2023 2022 Current liabilities $ 10,687 $ 9,664 Long-term liabilities 96,571 81,219 Total liabilities $ 107,258 $ 90,883 Gross amounts related to the black lung benefit obligations recognized in accumulated other comprehensive loss consisted of the following as of December 31, 2023 and 2022: December 31, 2023 2022 Net actuarial loss (gain) $ 12,630 $ ( 10,198 ) The following table details the components of the net periodic benefit cost for the black lung benefit obligations: Year Ended December 31, 2023 2022 2021 Service cost $ 2,051 $ 2,642 $ 2,972 Interest cost 4,660 2,722 2,463 Expected return on plan assets ( 50 ) ( 53 ) ( 54 ) Amortization of net actuarial (gain) loss ( 2,833 ) 1,257 2,453 Net periodic benefit cost $ 3,828 $ 6,568 $ 7,834 115 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Other changes in the black lung plan assets and benefit obligations recognized in other comprehensive income (loss) are as follows: Year Ended December 31, 2023 2022 2021 Actuarial loss (gain) (1) $ 19,995 $ ( 20,881 ) $ ( 9,649 ) Amortization of net actuarial gain (loss) 2,833 ( 1,257 ) ( 2,453 ) Total recognized in other comprehensive income (loss) $ 22,828 $ ( 22,138 ) $ ( 12,102 ) (1) For the year ended December 31, 2023, the actuarial loss was primarily attributable to a decrease in the weighted-average discount rate actuarial assumption used in determining the benefit obligations and an increase in new claimants. For the year ended December 31, 2022, the actuarial gain was primarily attributable to an increase in the weighted-average discount rate actuarial assumption used in determining the benefit obligations. The weighted-average assumptions related to black lung obligations used to determine the benefit obligation as of December 31, 2023 and 2022 were as follows: December 31, 2023 2022 Discount rate 5.13 % 5.42 % Federal black lung income benefit trend rate 2.50 % 2.50 % Federal black lung medical benefit trend rate 5.00 % 5.00 % The weighted-average assumptions related to black lung benefit obligations used to determine net periodic benefit cost were as follows: Year Ended December 31, 2023 2022 2021 Discount rate for benefit obligation 5.42 % 2.96 % 2.75 % Discount rate for service cost 5.58 % 3.24 % 3.15 % Discount rate for interest cost 5.23 % 2.37 % 1.96 % Federal black lung income benefit trend rate 2.50 % 2.50 % 2.00 % Federal black lung medical benefit trend rate 5.00 % 5.00 % 5.00 % Expected return on plan assets 2.00 % 2.00 % 2.00 % Estimated future cash payments related to black lung benefit obligations for the next 10 years ending after December 31, 2023 are as follows: Year ending December 31: 2024 $ 10,687 2025 10,301 2026 10,082 2027 9,937 2028 9,857 2029-2033 24,037 $ 74,901 Postretirement Life Insurance Benefits As part of the Alpha Natural Resources, Inc. bankruptcy reorganization process and the Retiree Committee Settlement Agreement, the Company assumed the unfunded liability for life insurance benefits for certain disabled and non-union retired 116 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) employees. Provisions are made for estimated benefits and adjustments to the probable ultimate liabilities are made annually based on an actuarial study prepared by independent actuaries. As of December 31, 2023 and 2022, the postretirement life insurance benefit obligation was $ 8,857 , including a current portion of $ 613 , and $ 8,761 , including a current portion of $ 648 , respectively, which are included in the Consolidated Balance Sheets as Other non-current liabilities and Accrued expenses and other current liabilities. Defined Contribution and Profit-Sharing Plans The Company sponsors defined contribution plans to assist its eligible employees in providing for retirement. Generally, under the terms of these plans, employees make voluntary contributions through payroll deductions and the Company makes matching and/or discretionary contributions, as defined by each plan. The Company’s total contributions to these plans for the years ended December 31, 2023, 2022, and 2021 were $ 16,435 , $ 19,385 , and $ 10,275 , respectively. During the third quarter of 2022, the Company announced a year-end discretionary employer contribution under the Alpha Metallurgical Resources 401(k) Retirement Savings Plan (the “Plan”) equal to the 2 % of the Plan participants’ annual salaries. Effective in June 2021, the Company’s matching contributions under the Plan were reinstated after being suspended due to weak market conditions during the second quarter of 2020. Self-insured Medical Plan The Company is self-insured for health benefit coverage for all of its active employees. Estimated liabilities for health and medical claims are recorded based on the Company’s historical experience and include a component for incurred but not paid claims. During the years ended December 31, 2023, 2022, and 2021, the Company incurred total expenses of $ 86,745 , $ 68,706 , and $ 62,351 , respectively, which primarily include claims processed and an estimate for claims incurred but not paid. ( 19) Stock-Based Compensation Awards The MIP is currently authorized for the issuance of awards of up to 1,201,202 shares of common stock, and as of December 31, 2023, there were 90,970 shares of common stock available for grant under the MIP. The LTIP is currently authorized for the issuance of awards of up to 1,500,000 shares of common stock, and as of December 31, 2023, there were 819,305 shares of common stock available for grant under the LTIP. Pursuant to the Merger Agreement, the Company assumed the ANR Inc. 2017 Equity Incentive Plan (the “ANR EIP”), which had underlying ANR shares that were converted to 89,766 Contura Energy, Inc. shares. The ANR EIP is no t authorized for additional issuance of awards of shares of common stock, and as of December 31, 2023, there were no shares of common stock available for grant under the ANR EIP. As of December 31, 2023, the Company had three types of stock-based awards outstanding: time-based restricted stock units, performance-based restricted stock units, and performance-based cash awards. Upon vesting and settlement or exercise of the stock-based awards outstanding, the Company issues authorized and unissued shares of the Company’s common stock to the recipient. Stock-based compensation expense totaled $ 20,856 , $ 9,841 , and $ 7,468 for the years ended December 31, 2023, 2022, and 2021, respectively. For the years ended December 31, 2023, 2022, and 2021, approximately 95 %, 92 %, and 89 %, respectively, of stock-based compensation expense was reported as selling, general and administrative expenses, and the remainder was recorded as cost of coal sales. The Company is authorized to repurchase common shares from employees (upon the election by the employee) to satisfy the employees’ statutory tax withholdings upon the vesting of stock grants. Shares that are repurchased to satisfy the employees’ statutory tax withholdings are recorded in treasury stock at cost. During the year ended December 31, 2023, the Company repurchased 81,287 shares of its common stock issued pursuant to awards under the MIP and LTIP for a total purchase amount of $ 17,333 , or $ 213.23 average price paid per share. During the year ended December 31, 2022, the Company repurchased 94,460 shares of its common stock issued pursuant to awards under the MIP and LTIP for a total purchase amount of $ 7,867 , or $ 83.28 average price paid per share. During the year ended December 31, 2021, the Company repurchased 50,363 shares of its common stock issued pursuant to awards under the MIP and LTIP for a total purchase amount of $ 785 , or $ 15.60 average price paid per share. On November 8, 2023, the Company modified the terms of certain outstanding stock-based compensation awards previously granted to Mr. Stetson, the executive chair of the Board. Pursuant to the terms of the modification, upon the completion of his service as executive chair as of the end of the day on December 31, 2023, and his appointment by the Board 117 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) as non-executive chair of the Board effective as of January 1, 2024, the pro-rata vesting of his outstanding incentive awards was to be calculated as if his separation date were instead December 31, 2024. The modification resulted in total incremental compensation cost of $ 6,717 for the year ended December 31, 2023 and impacted the time-based restricted stock units and performance-based restricted stock units granted to him under the LTIP during the years ended December 31, 2023 and 2022. Awards held by other employees were not affected by the modification. As all modified awards are fully vested, there is no remaining compensation cost to be recognized as of December 31, 2023. 2023 Awards Granted During the year ended December 31, 2023, the Company granted certain key employees and non-employee directors 35,018 time-based restricted stock units under the LTIP with a weighted average grant date fair value of $ 165.43 based on the Company’s closing stock price at the trading day before the date of the grant. Awards granted to key employees on January 25, 2023 will vest ratably over a three-year period from the date of the grant in accordance with the vesting schedule, subject to the participant’s continuous service with the Company through each applicable vesting date. Per the terms of the transition agreement between Mr. Stetson and the Company, dated November 18, 2022, relating to his service as the Company’s executive chair of the Board, and then as its non-executive chair, awards granted to Mr. Stetson were to vest pro-rata as of December 31, 2023, the last day of his service as the Company’s executive chair, reflecting his service through that date. The transition agreement was later amended as discussed above. Restricted stock units were also granted to a non-employee director on February 2, 2023, which vested on May 2, 2023, and to multiple non-employee directors on May 3, 2023, which will vest on the first to occur of (i) May 2, 2024, (ii) the director’s separation of service due to the director’s death or physical or mental incapacity to perform his or her usual duties, (iii) the director’s service as a member of the Board is terminated, for any reason other than removal for cause, as of a date that is more than six months after the date of grant, and (iv) a change in control. Additionally, during the year ended December 31, 2023, the Company granted certain key employees 49,701 performance-based restricted stock units under the LTIP, which represent the number of shares of common stock that may be issued based on the achievement of targeted performance levels related to pre-established relative total shareholder return goals and annually determined operational goals over a three year period. These awards are scheduled to cliff vest on the third anniversary of the date of the grant, subject to the participant’s continuous service with the Company through the applicable vesting date and the satisfaction of the performance criteria. Per the terms of the transition agreement between Mr. Stetson and the Company, dated November 18, 2022, relating to his service as the Company’s executive chair of the Board, and then as its non-executive chair, the awards granted to Mr. Stetson were to vest pro-rata as of December 31, 2023, the last day of his service as the Company’s executive chair, reflecting his service through that date. The transition agreement was later amended as discussed above. The performance-based restricted stock units have the potential to be earned from 0 % to 200 % of the targeted performance level, depending on actual results. Upon vesting and settlement of these awards, the Company will issue authorized and previously unissued shares of the Company’s common stock to the recipient. The 29,816 operational performance-based restricted stock units were valued based on the Company’s closing stock price on the trading day before the date of the grant and had a weighted average grant date fair value of $ 171.07 . For the awards with operational performance conditions, the Company reassesses at each reporting date whether achievement of each of the performance conditions was probable and adjusts the accrual of stock-based compensation expense as needed. Of the 19,885 relative total shareholder return performance-based restricted stock units, 2,093 were valued based on the Company’s closing stock price on the trading day before the date of the grant and had a weighted average grant date fair value of $ 171.07 , and 17,792 were valued relative to the stock price performance of a comparator group and had a weighted average grant date fair value of $ 267.18 based on a Monte Carlo simulation. The Monte Carlo simulation incorporated the assumptions as presented in the following table: Relative performance-based restricted stock units Start price (1) $ 151.35 Valuation date stock price (2) $ 176.44 Expected volatility (3) 102.06 % Risk-free interest rate (4) 3.82 % Expected dividend yield (5) — % (1) The start price for the Company represented the average closing stock price over the twenty trading days ending on December 31, 2022, assuming dividends distributed during this period were reinvested in additional shares of the Company’s stock on the ex-dividend date. (2) The valuation date stock price represented the closing value on the grant date. 118 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) (3) The expected volatility assumption was based on the historical volatility of the price of the Company’s stock. (4) The annual risk-free interest rate equaled the yield on the semi-annual zero coupon U.S. Treasury rates converted to continuously compounded rates that had a term equal to the length of the remaining performance measurement period as of the valuation date. (5) The expected dividend yield represented the investments return to a share of the Company’s stock that is not available to the holder of the performance-based restricted stock unit. 2022 Awards Granted During the year ended December 31, 2022, the Company granted certain key employees and non-employee directors 95,111 time-based restricted stock units under the MIP and LTIP with a weighted average grant date fair value of $ 96.60 based on the Company’s closing stock price at the trading day before the date of the grant. Awards granted to key employees on January 25, 2022 will vest ratably over a three-year period from the date of the grant in accordance with the vesting schedule, subject to the participant’s continuous service with the Company through each applicable vesting date. Restricted stock units were also granted to non-employee directors on May 3, 2022, which vested on May 2, 2023. An award granted to Mr. Stetson, the Chief Executive Officer (“CEO”), on November 18, 2022, in advance of his transition to executive chair of the Board on January 1, 2023, vested over the course of 2023 in accordance with the vesting schedule, subject to the participant’s continuous service with the Company through each applicable vesting date. Additionally, during the year ended December 31, 2022, the Company granted certain key employees 60,857 performance-based restricted stock units under the LTIP, which represent the number of shares of common stock that may be issued based on the achievement of targeted performance levels related to pre-established relative total shareholder return goals and annually determined operational goals over a three year period. These awards are scheduled to cliff vest on the third anniversary of the date of the grant, subject to the participant’s continuous service with the Company through the applicable vesting date and the satisfaction of the performance criteria. These performance-based restricted stock units have the potential to be earned from 0 % to 200 % of the targeted performance level, depending on actual results. Upon vesting and settlement of these awards, the Company will issue authorized and previously unissued shares of the Company’s common stock to the recipient. The 36,515 operational performance-based restricted stock units were valued based on the Company’s closing stock price on the trading day before the date of the grant and had a weighted average grant date fair value of $ 60.37 . For the awards with operational performance conditions, the Company reassesses at each reporting date whether achievement of each of the performance conditions was probable and adjusts the accrual of stock-based compensation expense as needed. The 24,342 relative total shareholder return performance-based restricted stock units were valued relative to the stock price performance of a comparator group and had a weighted average grant date fair value of $ 97.33 based on a Monte Carlo simulation. The Monte Carlo simulation incorporated the assumptions as presented in the following table: Relative performance-based restricted stock units Start price (1) $ 53.29 Valuation date stock price (2) $ 61.09 Expected volatility (3) 106.48 % Risk-free interest rate (4) 1.26 % Expected dividend yield (5) — % (1) The start price for the Company represented the average closing stock price over the twenty trading days ending on December 31, 2021, assuming dividends distributed during this period were reinvested in additional shares of the Company’s stock on the ex-dividend date. (2) The valuation date stock price represented the closing price on the grant date. (3) The expected volatility assumption was based on the historical volatility of the price of the Company’s stock. (4) The annual risk-free interest rate equaled the yield on the semi-annual zero coupon U.S. Treasury rates converted to continuously compounded rates that had a term equal to the length of the remaining performance measurement period as of the valuation date. (5) The expected dividend yield represented the investments return to a share of the Company’s stock that is not available to the holder of the performance-based restricted stock unit. Additionally, during the year ended December 31, 2022, the Company granted certain key employees performance-based cash incentive awards under the LTIP with a target award amount of $ 1,105 . The cash to be awarded is based on the 119 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) achievement of pre-established relative total shareholder return goals over a three-year period. These awards are scheduled to cliff vest on the third anniversary of the date of the grant, subject to the participant’s continuous service with the Company through the applicable vesting date and the satisfaction of the performance criteria. These awards have the potential to be distributed from 0 % to 200 % of the targeted performance level, depending on actual results. Upon vesting of these awards, the Company issues cash to the recipient. These awards are classified as a liability, and the Company reassesses at each reporting date the fair value of the award and adjusts the accruals of stock-based compensation expense as appropriate based on a Monte Carlo simulation. As of December 31, 2023 and 2022, the liability for these awards totaled $ 1,233 and $ 374 , respectively. The performance-based cash incentive awards were valued relative to the stock price performance of a comparator group and had a weighted average grant date fair value as a percent of target dollar value of 61.97 % based on a Monte Carlo simulation. The Monte Carlo simulation incorporates the assumptions as presented in the following table: Performance-based cash incentive awards Start price (1) $ 53.29 Valuation date stock price (2) $ 61.09 Expected volatility (3) 106.48 % Risk-free interest rate (4) 1.26 % Expected dividend yield (5) — % (1) The start price for the Company represented the average closing stock price over the twenty trading days ending on December 31, 2021, assuming dividends distributed during this period were reinvested in additional shares of the Company’s stock on the ex-dividend date. (2) The valuation date stock price represented the closing price on the grant date. (3) The expected volatility assumption was based on the historical volatility of the price of the Company’s stock. (4) The annual risk-free interest rate equaled the yield on the semi-annual zero coupon U.S. Treasury rates converted to continuously compounded rates that had a term equal to the length of the remaining performance measurement period as of the valuation date. (5) The expected dividend yield represented the investments return to a share of the Company’s stock that is not available to the holder of the performance-based restricted stock unit. 2021 Awards Granted During the year ended December 31, 2021, the Company granted certain key employees and non-employee directors 223,496 time-based restricted stock units under the MIP and LTIP with a weighted average grant date fair value of $ 12.03 based on the Company’s closing stock price at the trading day before the date of the grant. Awards granted to key employees will vest ratably over a three-year period from the date of the grant in accordance with the vesting schedule, subject to the participant’s continuous service with the Company through each applicable vesting date. Restricted stock units were also granted to non-employee directors on February 10, 2021, which vested on April 30, 2021, and on May 1, 2021, which vested on April 30, 2022. Additionally, during the year ended December 31, 2021, the Company granted certain key employees 167,587 performance-based restricted stock units under the LTIP, which represent the number of shares of common stock that may be issued based on the achievement of targeted performance levels related to pre-established relative total shareholder return goals and annually determined operational goals over a three year period. These awards are scheduled to cliff vest on the third anniversary of the date of the grant, subject to the participant’s continuous service with the Company through the applicable vesting date and the satisfaction of the performance criteria. These performance-based restricted stock units have the potential to be earned from 0 % to 200 % of the targeted performance level, depending on actual results. Upon vesting and settlement of these awards, the Company will issue authorized and previously unissued shares of the Company’s common stock to the recipient. The 100,552 operational performance-based restricted stock units were valued based on the Company’s closing stock price on the trading day before the date of the grant and had a weighted average grant date fair value of $ 12.00 . For the awards with operational performance conditions, the Company reassesses at each reporting date whether achievement of each of the performance conditions was probable and adjusts the accrual of stock-based compensation expense as needed. The 67,035 relative total shareholder return performance-based restricted stock units were valued relative to the stock price 120 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) performance of a comparator group and had a weighted average grant date fair value of $ 16.18 based on a Monte Carlo simulation. The Monte Carlo simulation incorporated the assumptions as presented in the following table: Relative performance-based restricted stock units Start price (1) $ 11.81 Valuation date stock price (2) $ 11.34 Expected volatility (3) 98.54 % Risk-free interest rate (4) 0.18 % Expected dividend yield (5) — % (1) The start price for the Company represented the average closing stock price over the twenty trading days ending on December 31, 2020, assuming dividends distributed during this period were reinvested in additional shares of the Company’s stock on the ex-dividend date. (2) The valuation date stock price represented the closing price on the grant date. (3) The expected volatility assumption was based on the historical volatility of the price of the Company’s stock. (4) The annual risk-free interest rate equaled the yield on the semi-annual zero coupon U.S. Treasury rates converted to continuously compounded rates that had a term equal to the length of the remaining performance measurement period as of the valuation date. (5) The expected dividend yield represented the investments return to a share of the Company’s stock that is not available to the holder of the performance-based restricted stock unit. Additionally, during the year ended December 31, 2021, the Company granted certain key employees performance-based cash incentive awards under the LTIP with a target award amount of $ 927 . The cash to be awarded is based on the achievement of pre-established relative total shareholder return goals over a three-year period. These awards are scheduled to cliff vest on the third anniversary of the date of the grant, subject to the participant’s continuous service with the Company through the applicable vesting date and the satisfaction of the performance criteria. These awards have the potential to be distributed from 0 % to 200 % of the targeted performance level, depending on actual results. Upon vesting of these awards, the Company issues cash to the recipient. These awards are classified as a liability, and the Company reassesses at each reporting date the fair value of the award and adjusts the accruals of stock-based compensation expense as appropriate based on a Monte Carlo simulation. As of December 31, 2023 and 2022, the liability for these awards totaled $ 1,609 and $ 812 , respectively. The performance-based cash incentive awards were valued relative to the stock price performance of a comparator group and had a weighted average grant date fair value as a percent of target dollar value of 51.73 % based on a Monte Carlo simulation. The Monte Carlo simulation incorporates the assumptions as presented in the following table: Performance-based cash incentive awards Start price (1) $ 11.81 Valuation date stock price (2) $ 11.34 Expected volatility (3) 98.54 % Risk-free interest rate (4) 0.18 % Expected dividend yield (5) — % (1) The start price for the Company represented the average closing stock price over the twenty trading days ending on December 31, 2020, assuming dividends distributed during this period were reinvested in additional shares of the Company’s stock on the ex-dividend date. (2) The valuation date stock price represented the closing price on the grant date. (3) The expected volatility assumption was based on the historical volatility of the price of the Company’s stock. (4) The annual risk-free interest rate equaled the yield on the semi-annual zero coupon U.S. Treasury rates converted to continuously compounded rates that had a term equal to the length of the remaining performance measurement period as of the valuation date. (5) The expected dividend yield represented the investments return to a share of the Company’s stock that is not available to the holder of the performance-based restricted stock unit. 121 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) Restricted Stock Units Time-Based Restricted Stock Units Time-based restricted stock unit activity for the year ended December 31, 2023 is summarized in the following table: Time-based restricted stock unit activity: Number of Shares Weighted-Average Grant Date Fair Value Non-vested shares outstanding at December 31, 2022 248,369 $ 41.02 Granted 35,018 $ 165.43 Vested (1) ( 178,664 ) $ 54.50 Forfeited ( 837 ) $ 149.38 Non-vested shares outstanding at December 31, 2023 103,886 $ 58.91 (1) Includes 6,753 shares with deferred settlement pursuant to the award agreements. As of December 31, 2023, there was $ 2,011 of unrecognized compensation cost related to non-vested time-based restricted stock units which is expected to be recognized as expense over a weighted-average period of 1.45 years. The total fair value of shares vested, including awards with deferred settlements, during the years ended December 31, 2023, 2022, and 2021, was $ 35,204 , $ 20,275 , and $ 5,544 , respectively. Performance-Based Restricted Stock Units Relative performance-based restricted stock unit activity for the year ended December 31, 2023 based on target achievement of the performance criteria is summarized in the following table: Relative performance-based restricted stock unit activity: Number of Shares Weighted-Average Grant Date Fair Value Non-vested shares outstanding at December 31, 2022 91,377 $ 37.80 Granted 19,885 $ 257.06 Vested ( 10,502 ) $ 106.82 Forfeited ( 1,045 ) $ 167.08 Non-vested shares outstanding at December 31, 2023 99,715 $ 72.90 As of December 31, 2023, there was $ 3,809 of unrecognized compensation cost related to non-vested relative performance-based restricted stock units which is expected to be recognized as expense over a weighted-average period of 1.92 years. The total fair value of shares vested during the year ended December 31, 2023 was $ 3,559 . Operational performance-based restricted stock unit activity for the year ended December 31, 2023 based on target achievement of the performance criteria is summarized in the following table: Operational performance-based restricted stock unit activity: Number of Shares Weighted-Average Fair Value Non-vested shares outstanding at December 31, 2022 137,067 $ 24.89 Granted 29,816 $ 171.07 Vested ( 15,753 ) $ 74.61 Forfeited ( 1,568 ) $ 150.24 Non-vested shares outstanding at December 31, 2023 149,562 $ 47.48 As of December 31, 2023, there was $ 1,446 of unrecognized compensation cost related to non-vested operational performance-based restricted stock units, based on the probability of achievement as of December 31, 2023, which is expected 122 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) to be recognized as expense over a weighted-average period of 1.70 years.The total fair value of shares vested during the year ended December 31, 2023 was $ 5,339 . Stock Options 30-Day Volume-Weighted Average Price (“VWAP”) Stock Options 30-day VWAP stock option activity for the year ended December 31, 2023 is summarized in the following table: Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2022 3,407 $ 66.13 4.18 $ 273 Exercisable at December 31, 2022 3,407 $ 66.13 4.18 $ 273 Granted — $ — Exercised ( 3,407 ) $ 66.13 $ 515 Forfeited or Expired — $ — Outstanding at December 31, 2023 — $ — $ — Exercisable at December 31, 2023 — $ — $ — (1) The aggregate intrinsic value of outstanding and exercisable options is calculated as the difference between the exercise price and the Company’s stock price at each reporting period end. The aggregate intrinsic value of exercised options is calculated as the difference between the exercise price and the Company’s stock price on the exercise date. As of December 31, 2023, there was no unrecognized compensation cost related to the 30-day VWAP stock options. Performance-Based Cash Incentive Awards Performance-based cash incentive award activity for the year ended December 31, 2023 based on target achievement of the performance criteria is summarized in the following table: Performance-based cash incentive award activity: Target Dollar Value Weighted-Average Fair Value as a % of Target Dollar Value Non-vested awards outstanding at December 31, 2022 $ 3,958 166.29 % Granted — — % Vested ( 2,054 ) 200.00 % Forfeited ( 28 ) 130.43 % Non-vested awards outstanding at December 31, 2023 $ 1,876 190.30 % As of December 31, 2023, there was $ 728 of unrecognized compensation cost related to non-vested performance-based cash incentive awards, based on the probability of achievement as of December 31, 2023, which is expected to be recognized as expense over a weighted-average period of 1.01 years. (20) Related Party Transactions There were no material related party transactions for the year ended December 31, 2023. During the year ended December 31, 2021, the Company, through a privately negotiated transaction with an underlying Contingent Revenue Obligation creditor, repurchased 7.75 % of the outstanding rights of the Contingent Revenue Obligation at an aggregate purchase price of $ 2,091 . The underlying Contingent Revenue Obligation creditor was an existing shareholder (related party) as of the repurchase date. Refer to Note 14 for additional disclosures on this acquisition-related obligation. Additionally, during the year ended December 31, 2021, the Company repurchased at a discount certain outstanding principal 123 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) borrowings made under the Term Loan Credit Facility from existing shareholders through privately negotiated transactions. Refer to Note 13 for additional disclosures on long-term debt. (21) Commitments and Contingencies (a) General Estimated losses from loss contingencies are accrued by a charge to income when information available indicates that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the Consolidated Financial Statements when it is at least reasonably possible that a loss may be incurred and that the loss could be material. (b) Commitments and Contingencies Commitments The Company leases coal mining and other equipment under long-term financing and operating leases with varying terms. Refer to Note 11 for further information on leases. In addition, the Company leases mineral interests and surface rights from landowners under various terms and royalty rates. Coal royalty expense was $ 185,398 , $ 226,366 , and $ 113,685 for the years ended December 31, 2023, 2022, and 2021, respectively. Minimum royalty obligations under coal leases total $ 14,357 , $ 14,394 , $ 13,160 , $ 11,901 , $ 11,851 , and $ 89,025 for 2024, 2025, 2026, 2027, 2028, and after 2028, respectively. Other Commitments As of December 31, 2023, the Company has obligations under certain coal purchase agreements that contain minimum quantities to be purchased in 2024 totaling an estimated $ 236,848 . The Company also has outstanding unconditional purchase obligations for 2024 and 2025 totaling $ 251,038 and $ 66,675 , respectively, related to the purchase of equipment, diesel fuel, and electricity, as well as for rail freight and export terminal costs (including $ 48,405 in 2024 for DTA funding.) Under the terms of its partnership related agreements with respect to its investment in DTA, the Company is required to fund its proportionate share of DTA’s ongoing operating and capital costs. In November 2023, the Company, together with DTA management announced that DTA needed additional capital investment to maximize functionality and minimize downtime due to mechanical issues. Beyond the Company’s share of routine operating costs, it expects to invest up to an incremental $ 25,000 per year for infrastructure and equipment upgrades at DTA over the next 6 years. The Company’s 2024 funding of DTA includes routine operating and capital costs and infrastructure and equipment upgrades. Contingencies Extensive regulation of the impacts of mining on the environment and of maintaining workplace safety has had, and is expected to continue to have, a significant effect on the Company’s costs of production and results of operations. Further regulations, legislation or litigation in these areas may also cause the Company’s sales or profitability to decline by increasing costs or by hindering the Company’s ability to continue mining at existing operations or to permit new operations. During the normal course of business, contract-related matters arise between the Company and its customers. When a loss related to such matters is considered probable and can reasonably be estimated, the Company records a liability. During the first half of 2023, the Company purchased and sold 399 tons, totaling $ 15,170 , under the Cumberland Back-to-Back Coal Supply Agreements. For the year ended December 31, 2022, the Company purchased and sold 1,617 tons, totaling $ 62,171 , under the Cumberland Back-to-Back Coal Supply Agreements. As of June 30, 2023, the Cumberland Back-to-Back Coal Supply Agreements had been fully performed. 124 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) (c) Guarantees and Financial Instruments with Off-Balance Sheet Risk In the normal course of business, the Company is a party to certain guarantees and financial instruments with off-balance sheet risk, such as bank LCs, performance or surety bonds, and other guarantees and indemnities related to the obligations of affiliated entities which are not reflected in the Company’s Consolidated Balance Sheets. However, the underlying liabilities that they secure, such as asset retirement obligations, workers’ compensation liabilities, and royalty obligations, are reflected in the Company’s Consolidated Balance Sheets. The Company is required to provide financial assurance in order to perform the post-mining reclamation required by its 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, the Company generally uses surety bonds for post-mining reclamation and workers’ compensation obligations. The Company can also use bank LCs to collateralize certain obligations. As of December 31, 2023, the Company had $ 31 of cash collateralized LCs remaining to be replaced as part of the transition from the previous ABL Facility to the New ABL Facility and $ 60,896 in LCs outstanding under the New ABL Facility. During the first quarter of 2024, the remaining cash collateralized LCs from the previous ABL Facility were cancelled with no replacement required and the cash collateral was returned. As of December 31, 2023, the Company had outstanding surety bonds with a total face amount of $ 177,109 to secure various obligations and commitments. To secure the Company’s reclamation-related obligations, the Company has $ 33,858 of collateral in the form of restricted cash and restricted investments supporting these obligations as of December 31, 2023. The Company meets frequently with its surety providers and has discussions with certain providers regarding the extent of and the terms of their participation in the program. These discussions may cause the Company to shift surety bonds between providers or to alter the terms of their participation in our program. To the extent that surety bonds become unavailable or the Company’s surety bond providers require additional collateral, the Company would seek to secure its obligations with LCs, cash deposits or other suitable forms of collateral. The Company’s failure to maintain, or inability to acquire, surety bonds or to provide a suitable alternative would have a material adverse effect on its liquidity. These failures could result from a variety of factors including lack of availability, higher cost or unfavorable market terms of new surety bonds, and the exercise by third-party surety bond issuers of their right to refuse to renew the surety. Amounts included in restricted cash provide collateral to secure the following obligations: December 31, 2023 2022 Workers’ compensation and black lung obligations $ 104,998 $ 15,334 Reclamation-related obligations 685 3,220 Financial payments and other performance obligations 10,235 10,387 Contingent Revenue Obligation escrow — 24,547 Total restricted cash $ 115,918 $ 53,488 Less current portion — ( 24,547 ) Restricted cash, net of current portion $ 115,918 $ 28,941 Amounts included in restricted investments provide collateral to secure the following obligations: 125 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) December 31, 2023 2022 Workers’ compensation and black lung obligations $ 2,514 $ 72,136 Reclamation-related obligations 33,173 31,718 Financial payments and other performance obligations 4,910 1,881 Total restricted investments (1) $ 40,597 $ 105,735 (1) Classified as long-term trading securities as of December 31, 2023 and 2022. Amounts included in deposits provide collateral to secure the following obligations: December 31, 2023 2022 Workers’ compensation obligations $ 4,500 $ — Reclamation-related obligations — 102 Financial payments and other performance obligations 32 391 Other operating agreements 850 85,618 Total deposits $ 5,382 $ 86,111 Less current portion ( 32 ) ( 84,748 ) Total deposits, net of current portion (1) $ 5,350 $ 1,363 (1) Included within Other non-current assets on the Company’s Consolidated Balance Sheets. 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 the DCMWC, the Company filed an application and supporting documentation for reauthorization to self-insure certain of its black lung obligations in October 2019. As a result of this application, the DCMWC notified the Company in a letter dated February 21, 2020 that the Company was reauthorized to self-insure certain of its black lung obligations for a period of one-year from February 21, 2020. The DCMWC reauthorization was contingent, however, upon the Company’s providing collateral of $ 65,700 to secure certain of its black lung obligations. This proposed collateral requirement would have been an increase from the approximate $ 2,600 in collateral that the Company currently provides to secure these self-insured black lung obligations. The reauthorization process provided the Company 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. The Company exercised this right of appeal in connection with the substantial increase in the amount of required collateral. 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 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 the Company presented facts and arguments in support of its appeal. No ruling has been made on the appeal, but during the call the Company indicated that it would be willing to allocate an additional $ 10,000 in collateral. If the Company’s appeal is unsuccessful, the Company may be required to provide additional LCs to receive the self-insurance reauthorization from the DCMWC or alternatively insure these black lung obligations through a third-party provider that would likely also require the Company 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, the Company estimates it could be required to provide approximately $ 80,000 to $ 100,000 of collateral to secure certain of its black lung obligations. 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 the Company’s liquidity. (d) Legal Proceedings Litigation has been initiated against certain of our subsidiaries in which the plaintiffs allege violations of the Fair Labor Standards Act due to alleged failure to compensate for time “donning” and “doffing” equipment and to account for the effects in the calculation of overtime rates and pay. The plaintiffs seek collective action certification. We cannot reasonably estimate a 126 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) range of potential exposure at this time. We believe the plaintiffs’ claims are without merit, but if we were ultimately unsuccessful in defending against this litigation, it could have a material, adverse effect upon our liquidity and results of operations. In addition, the Company is party to other legal proceedings from time to time. These proceedings, as well as governmental examinations, could involve various business units and a variety of claims including, but not limited to, contract disputes, personal injury claims, property damage claims (including those resulting from blasting, trucking and flooding), environmental and safety issues, securities-related matters and employment matters. While some legal matters may specify the damages claimed by the plaintiffs, many seek an unquantified amount of damages. Even when the amount of damages claimed against the Company or its subsidiaries is stated, (i) the claimed amount may be exaggerated or unsupported; (ii) the claim may be based on a novel legal theory or involve a large number of parties; (iii) there may be uncertainty as to the likelihood of a class being certified or the ultimate size of the class; (iv) there may be uncertainty as to the outcome of pending appeals or motions; and/or (v) there may be significant factual issues to be resolved. As a result, if such legal matters arise in the future, the Company may be unable to estimate a range of possible loss for matters that have not yet progressed sufficiently through discovery and development of important factual information and legal issues. The Company records accruals based on an estimate of the ultimate outcome of these matters, but these estimates can be difficult to determine and involve significant judgment. (22) Concentration of Credit Risk and Major Customers The Company markets produced, processed, and purchased coal to customers in the United States and in international markets. The following table presents additional information on our total revenues and top customers: Year Ended December 31, 2023 2022 2021 Total coal revenues $ 3,456,630 $ 4,092,987 $ 2,252,624 Total revenues 3,471,417 4,101,592 2,258,686 Export coal revenues 2,539,068 3,303,477 1,706,026 Top customer as % of total revenues 13 % 25 % 13 % Top 10 customers as % of total revenues 74 % 70 % 64 % Number of customers exceeding 10% of total revenues 2 1 2 Number of customers exceeding 10% of total trade accounts receivable, net 3 2 3 Domestic coal revenue as % of total coal revenues 26 % 19 % 24 % Export coal revenue as % of total coal revenues 74 % 81 % 76 % Countries with export coal revenue exceeding 10% of total revenues India India India, China, Brazil Met coal as % of coal sales volume 90 % 87 % 83 % Thermal coal as % of coal sales volume 10 % 13 % 17 % (23) Segment Information The Company extracts, processes and markets met and thermal coal from deep and surface mines for sale to steel and coke producers, industrial customers, and electric utilities. The Company conducts mining operations only in the United States with mines in Central Appalachia. The Company has one reportable segment: Met, which consists of five active mines and two preparation plants in Virginia, seventeen active mines and six preparation plants in West Virginia, as well as expenses associated with certain idled/closed mines. 127 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) In addition to the one reportable segment, the All Other category includes general corporate overhead and corporate assets and liabilities, the 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. Reportable segment operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is the Chief Executive Officer of the Company. Segment operating results and capital expenditures for the year ended December 31, 2023 were as follows: Year Ended December 31, 2023 Met All Other Consolidated Total revenues $ 3,417,395 $ 54,022 $ 3,471,417 Depreciation, depletion, and amortization $ 125,716 $ 11,153 $ 136,869 Amortization of acquired intangibles, net $ 8,523 $ — $ 8,523 Adjusted EBITDA $ 1,087,803 $ ( 54,692 ) $ 1,033,111 Capital expenditures $ 238,916 $ 6,457 $ 245,373 Segment operating results and capital expenditures for the year ended December 31, 2022 were as follows: Year Ended December 31, 2022 Met All Other Consolidated Total revenues $ 4,023,688 $ 77,904 $ 4,101,592 Depreciation, depletion, and amortization $ 100,584 $ 7,036 $ 107,620 Amortization of acquired intangibles, net $ 15,699 $ 3,799 $ 19,498 Adjusted EBITDA $ 1,776,642 $ ( 36,030 ) $ 1,740,612 Capital expenditures $ 160,679 $ 3,630 $ 164,309 Segment operating results and capital expenditures for the year ended December 31, 2021 were as follows: Year Ended December 31, 2021 Met All Other Consolidated Total revenues $ 2,176,080 $ 82,606 $ 2,258,686 Depreciation, depletion, and amortization $ 99,963 $ 10,084 $ 110,047 Amortization of acquired intangibles, net $ 13,671 $ ( 427 ) $ 13,244 Adjusted EBITDA $ 567,270 $ ( 32,789 ) $ 534,481 Capital expenditures $ 79,185 $ 4,115 $ 83,300 128 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the year ended December 31, 2023: Year Ended December 31, 2023 Met All Other Consolidated Net income (loss) $ 938,495 $ ( 216,539 ) $ 721,956 Interest expense 731 6,192 6,923 Interest income ( 644 ) ( 11,289 ) ( 11,933 ) Income tax expense — 123,503 123,503 Depreciation, depletion and amortization 125,716 11,153 136,869 Non-cash stock compensation expense 96 18,921 19,017 Loss on extinguishment of debt — 2,753 2,753 Accretion on asset retirement obligations 14,886 10,614 25,500 Amortization of acquired intangibles, net 8,523 — 8,523 Adjusted EBITDA $ 1,087,803 $ ( 54,692 ) $ 1,033,111 The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the year ended December 31, 2022: Year Ended December 31, 2022 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 ) $ 1,740,612 129 Table of Contents ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands except share and per share data) The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the year ended December 31, 2021: Year Ended December 31, 2021 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 No asset information has been disclosed as the CODM does not regularly review asset information by reportable segment. 130 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.