What changed in this filing

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Item 1A. Risk Factors

2022-02-22 compared with 2021-02-24 · 132 added, 106 removed, 721 unchanged (25% of the section changed)

8 unchanged sentences

• Global pandemics, such as the COVID-19 pandemic, may occur which could adversely affect our business, financial condition and results of operations;

• Deterioration in global economic conditions may adversely affect our business, results of operations and cash flows;

• If we fail to implement our business strategies successfully, our financial performance could be harmed;

• Deterioration in global economic conditions may adversely affect our business, results of operations and cash flows and if we fail to implement our business strategies successfully, our financial performance could be harmed;

• We may be unsuccessful or delayed in developing Blue Creek, which could significantly affect our operations and/or limit our long-term growth;

• If transportation for our met coal is disrupted, unavailable or more expense for our customers, our ability to sell met coal could suffer;

• If transportation for our met coal is disrupted, unavailable or more expensive for our customers, our ability to sell met coal could suffer;

• Work stoppages, labor shortages and other labor relations matters may harm our business.

Union-represented labor creates an increased risk of work stoppages and higher labor costs;

• We require a skilled workforce to run our business.

If we cannot hire qualified people to meet replacement or expansion needs, we may not be able to achieve planned results;

• Significant competition, as well as changes in foreign markets or economies, could harm our sales, profitability and cash flows;

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• We may be unable to generate sufficient taxable income from future operations, which may limit or eliminate our ability to utilize our significant tax NOLs or our deferred tax assets;

• Changes in the method pursuant to which LIBOR rates are determined and potential phasing out of LIBOR after 2021 may affect our financial results;

• The transition from LIBOR to SOFR may affect our financial results;

Risks Related to the Ownership of our Common Stock

• The market price of our common stock may fluctuate significantly and investors in our common stock could incur substantial losses;

• If securities or industry analysts adversely change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline;

• Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenant of our ABL Facility and the indenture governing the Notes, and will be on the sole discretion of the Board and will also depend on many factors;

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Though the global impact of COVID-19 is rapidly evolving and remains highly uncertain, the outbreak may ultimately cause a significant decline in global steel production and, in turn, reduce demand for met coal.

As mentioned elsewhere in this Annual Report, we are highly dependent on the global steel industry.

We are highly dependent on the global steel industry.

Our sales are primarily derived from coal shipments to customers located in regions that are, or may become, heavily affected by the COVID-19 outbreak, particularly Asia and Europe.

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In addition, future governmental policy changes in foreign countries may be detrimental to the global coal market.

For example, the Chinese government has from time to time implemented regulations and promulgated new laws or restrictions on their domestic coal industry, sometimes with little advance notice, which has impacted worldwide coal demand, supply and

For example, the Chinese government has from time to time implemented regulations and promulgated new laws or restrictions, such as the unofficial ban on Australian coal in November 2020, on their domestic coal industry, sometimes with little advance notice, which has impacted worldwide coal demand, supply and prices.

The ban on Australian coal has significantly impacted the global met coal market in recent years.

During the past several years, the Chinese government has initiated a number of anti-smog measures aimed at reducing hazardous air emissions through temporary production capacity restrictions with the steel, coal and coal-fired power sectors.

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Globally the market is evolving to shorter term pricing.

Many of our met coal supply agreements are priced on the basis of a variety of indices, where prices are determined on or before shipment by averaging the leading spot indexes reported in the market.

Many of our met coal supply agreements are

priced on the basis of a variety of indices, where prices are determined on or before shipment by averaging the leading spot indexes reported in the market.

As a result, our sales are subject to fluctuations in market pricing and we are not protected from oversupply or market conditions where we cannot sell our coal at economic prices.

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For the year ended December 31, 2021, we derived approximately 84.6% of our total sales revenues from our five largest customers.

There are inherent risks whenever a significant percentage of total revenues are concentrated with a limited

number of customers, and it is not possible for us to predict the future level of demand for our met coal that will be generated by our largest customers.

There are inherent risks whenever a significant percentage of total revenues are concentrated with a limited number of customers, and it is not possible for us to predict the future level of demand for our met coal that will be generated by our largest customers.

We expect to renew, extend or enter into new supply agreements with these and other customers;

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Even if we are able to implement some or all of the key elements of our business plan successfully, our operating results may not improve to the extent we anticipate, or at all.

Implementation of our business strategies, including the development of Blue Creek, could also be affected by a number of factors beyond our control, such as global economic conditions (including effects of the COVID-19 pandemic), met coal prices, domestic and foreign steel demand, and environmental, health and safety laws and regulations.

Implementation of our business strategies, including the development of Blue Creek, could also be affected by a number of factors beyond our control, such as

global economic conditions (including effects of the COVID-19 pandemic), met coal prices, domestic and foreign steel demand, and environmental, health and safety laws and regulations.

A key element of our business strategy involves increasing production at our existing mines and developing Blue Creek recoverable reserves in a cost-efficient manner.

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Accordingly, we may not be able to complete the development of Blue Creek on schedule, at the budgeted cost or at all, and any such delays or increased costs could have a material adverse effect on our financial condition, results of operations or cash flows.

We initially delayed spending the $25.0 million that we budgeted for the development of the Blue Creek project until at least July 1, 2020 and have now further delayed the development of that project until at least summer 2021.

We initially delayed the development of the Blue Creek project until at least July 1, 2020 and have now further delayed the development of that project.

Due to the ongoing uncertainty related to the COVID-19 pandemic, the Chinese ban on Australian coal and our CBA contract negotiations with the UMWA, we incurred minimal spend on the development of Blue Creek in 2021.

Our planned development of Blue Creek involves numerous risks, including, but not limited to, the following:

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• our ability to obtain additional debt and/or equity financing to fund the development, permitting, construction and mining activities of Blue Creek on terms that are acceptable to us, or at all;

• difficulties or delays in securing federally owned mineral leases within the mine plan;

• the diversion of management’s attention from our existing mining operations;

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Acquisitions may require substantial capital or the incurrence of substantial indebtedness.

Our capitalization and results of operations may change

significantly as a result of future acquisitions.

Our capitalization and results of operations may change significantly as a result of future acquisitions.

Acquisitions and business expansions involve numerous risks, including the following:

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Also, following an acquisition, we may discover previously unknown liabilities associated with the acquired business or assets for which we have no recourse under applicable indemnification provisions.

If a new business generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our results of operations may be adversely affected.

If a new business generates

insufficient revenue or if we are unable to efficiently manage our expanded operations, our results of operations may be adversely affected.

If transportation for our met coal is disrupted, unavailable or more expensive for our customers, our ability to sell met coal could suffer.

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We use equipment in our met coal mining and transportation operations such as continuous mining units, conveyors, shuttle cars, rail cars, locomotives, roof bolters, shearers and shields.

Some equipment and materials are needed to comply with

regulations, such as proximity detection devices on continuous mining machines.

Some equipment and materials are needed to comply with regulations, such as proximity detection devices on continuous mining machines.

We procure some of this equipment from a concentrated group of suppliers, and obtaining this equipment often involves long lead times.

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If cash flow generated by our operations or available borrowings under our bank financing arrangements are insufficient to meet our capital requirements and we are unable to access the capital markets on acceptable terms or at all, we could be forced to curtail the expansion of our existing mines and the development of our properties, which, in turn, could lead to a decline in our production and could materially and adversely affect our business, financial condition and results of operations..

Work stoppages, labor shortages and other labor relations matters may harm our business.

Work stoppages, such as the strike initiated by the UMWA in April 2021, labor shortages and other labor relations matters may harm our business.

Union-represented labor creates an increased risk of work stoppages and higher labor costs.

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Union-represented labor creates an increased risk of work stoppages and higher labor costs.

As of December 31, 2020, 67.2% of our employees were represented by the UMWA.

In connection with the acquisition of certain assets of Walter Energy, we negotiated the CBA with the UMWA, which was ratified by UMWA’s members on February 16, 2016 and has a five-year term.

If we are unable to negotiate the renewal of the CBA before its expiration date on April 1, 2021, our operations and our profitability could be adversely affected.

Future work stoppages, labor union issues or labor disruptions at our mining operations, as well as at the operations of key customers or service providers, could impede our ability to produce and deliver our products, to receive critical equipment and supplies or to collect payment.

As of March 31, 2021, 66.8% of our employees were represented by the UMWA.

In connection with the acquisition of certain assets of Walter Energy, we negotiated the CBA with the UMWA, which was ratified by the UMWA’s members on February 16, 2016 and had a five-year term.

The CBA contract with the UMWA expired on April 1, 2021, and the UMWA initiated a strike.

While the Company has business continuity plans in place, the strike may still cause disruption to production and shipment activities and our operations and profitability could be adversely affected.

In addition, future work stoppages, labor union issues or labor disruptions at our mining operations, as well as at the operations of key customers or service providers, could impede our ability to produce and deliver our products, to receive critical equipment and supplies or to collect payment.

This may increase our costs or impede our ability to operate one or more of our operations.

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In addition, some of our global competitors have significantly greater financial resources and/or a broader portfolio of coals than we do, and in recent periods a number of our competitors idled production in light of lower met coal prices in 2015 and the first half of 2016.

The production that was idled by our competitors may restart, and in some instances has already restarted, and may affect domestic and foreign met coal supply into the seaborne market and associated prices and impact our ability to retain or attract met coal customers.

The production that was idled by our competitors may restart, and in some instances

has already restarted, and may affect domestic and foreign met coal supply into the seaborne market and associated prices and impact our ability to retain or attract met coal customers.

Further, potential changes to international trade agreements, trade concessions, foreign currency fluctuations or other political and economic arrangements may benefit met coal producers operating in countries other than the United States.

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New tariffs and other trade measures could adversely affect our results of operations, financial position and cash flows.

On March 8, 2018, former President Trump signed proclamations imposing a 25 percent tariff on imports of certain steel mill products and aluminum products.

continues to impose tariffs of 7.5 percent and 25.0 percent on certain Chinese-origin products.

In response to the tariffs imposed by the U.S., other countries, including China and European Union member countries have announced tariffs on U.S.

goods and services.

The continuation of these tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S.

or retaliatory trade measures or tariffs implemented by other countries, could result in reduced economic activity, increased costs in operating our business, reduced demand and changes in purchasing behaviors for met coal, limits on trade with the United States or other potentially adverse economic outcomes.

In addition, trade conflicts between the U.S.

and other nations that result in imposition of barriers to trade, such as import tariffs, could materially and adversely affect the international demand and pricing for our coal.

While, the imposition of these trade barriers by other nations have not yet had a significant impact on our business or results of operations, we cannot predict further developments, and such existing or future tariffs could have a material adverse effect on our results of operations, financial position and cash flows.

If these barriers endure, or are enhanced, our coal exports may decline, and increased domestic supply could cause competition among coal producers in the U.S.

to intensify, potentially resulting in additional downward pressure on domestic coal prices and our business, financial condition and results of operations.

New and existing tariffs as well as other trade measures that may be implemented by the U.S.

or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for met coal, material changes in the pricing of met coal, limits on trade with the United States or other potentially adverse economic outcomes.

While we have been successful at

managing the impacts of trade barriers on our business so far, we cannot predict future developments, and such existing or future tariffs could have a material adverse effect on our results of operations, financial position and cash flows.

We may be subject to litigation, the disposition of which could negatively affect our profitability and cash flow in a particular period, or have a material adverse effect on our business, financial condition and results of operations.

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While to date we have not experienced any material losses relating to cyber incidents, as cyber incidents continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents.

Our executive officers and other key personnel are important to our success and the loss of one or more of these individuals could harm our business.

Our executive officers and other key personnel have significant experience in the met coal or other commodity businesses and the loss of certain of these individuals could harm our business.

Moreover, there may be a limited number of persons with the requisite experience and skills to serve in our senior management positions.

Although we have been successful in attracting qualified individuals for key management and corporate positions in the past, there can be no assurance that we will continue to be successful in attracting and retaining a sufficient number of qualified personnel in the future or that we will be able to do so on acceptable terms.

The loss of key management personnel could harm our ability to successfully manage our business functions, prevent us from executing our business strategy and have a material adverse effect on our results of operations and cash flows.

Risks Related to Our Industry

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High-quality HCC commands a significant price premium over other forms of coal because of its value in use in blast furnaces for steel production.

High-quality HCC is a

scarce commodity and has specific physical and chemical properties which are necessary for efficient blast furnace operation.

High-quality HCC is a scarce commodity and has specific physical and chemical properties which are necessary for efficient blast furnace operation.

Alternative technologies are continually being investigated and developed with a view to reducing production costs or for other reasons, such as minimizing environmental or social impact.

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At times, the pricing and availability of steel can be volatile due to numerous factors beyond our control.

Recently, the COVID-19 pandemic has adversely affected the economies and financial markets of many countries, including those of our customers, which are primarily located in Europe, South America and Asia.

Recently, the COVID-19 pandemic has adversely affected the economies and financial markets of many countries, including those of our customers, which are primarily located in Europe,

South America and Asia.

Any resulting economic downturn could adversely affect demand for our met coal and contribute to volatile supply and demand conditions affecting prices and volumes.

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As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially, and in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage.

we may not be able to renew our existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all.

As a result, we may not be able to renew our existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all.

In addition, certain environmental, contamination and pollution risks generally are not fully insurable.

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Certain of our subsidiaries are responsible for medical and disability benefits for black lung disease under federal law and are insured beginning April 1, 2016 for claims made by or on behalf of any of our employees.

As a result of our limited operating history as a stand-alone company, the Department of Labor required us to provide insurance coverage rather than be self-insured for these obligations.

As a result of our limited operating history as a stand-alone company, the DOL required us to provide insurance coverage rather than be self-insured for these obligations.

The number and quality of viable financing alternatives available to us may be significantly impacted by unfavorable lending and investment policies by financial institutions associated with concerns about environmental impacts of carbon based fuels.

Negative views with respect to environmental and social matters and related governance considerations could result in a low Environmental, Social, and Corporate Governance ("ESG") or sustainability score and could harm the perception of our Company by certain investors or result in the exclusion of our securities from consideration by those investors.

Negative views with respect to environmental and social matters and related governance considerations could

result in a low Environmental, Social, and Corporate Governance ("ESG") or sustainability score and could harm the perception of our Company by certain investors or result in the exclusion of our securities from consideration by those investors.

In addition, there are fewer insurance companies willing to provide line of business coverages related to ESG concerns which can result in higher company premiums and retained losses.

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• restricting our ability to access capital and financial markets in the future;

• excluding our securities from the portfolios of certain investment funds and investors;

• reducing the demand and price for our equity securities;

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Changes in the estimated claims to be paid or changes in the amount of collateral required by the Department of Labor may have a greater impact on our profitability and cash flows in the future.

We are responsible for medical and disability benefits for black lung disease under the Federal Coal Mine Health and Safety Act of 1969, the Mine Act and the Black Lung Benefits Act, each as amended, and are self-insured for black lung related claims asserted by or on behalf of former employees of Walter Energy and its subsidiaries as assumed in the acquisition of

certain assets of Walter Energy for the period prior to April 1, 2016.

We perform an annual actuarial evaluation of the overall black lung liabilities as of each December 31 st .

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If the number of or severity of successful claims increases, or we are required to accrue or pay additional amounts because the successful claims prove to be more severe than our original assessment, our operating results and cash flows could be negatively impacted.

Our self-insurance program for these legacy liabilities is unique to the industry and was specifically negotiated with the Department of Labor requiring us to post $17.0 million in surety bonds or Treasury bills as collateral in addition to maintaining a black lung trust of $3.0 million that was acquired in the acquisition of certain assets of Walter Energy.

We received a letter from the Department of Labor on February 21, 2020 under its new process for self-insurance renewals that would require us to increase the amount of collateral posted to $39.8 million, but we have appealed such increase.

Our self-insurance program for these legacy liabilities is unique to the industry and was specifically negotiated with the DOL requiring us to post $17.0 million in surety bonds or Treasury bills as collateral in addition to maintaining a black lung trust of $2.6 million that was acquired in the acquisition of certain assets of Walter Energy.

We received a letter from the DOL on February 21, 2020 under its new process for self-insurance renewals that would require us to increase the amount of collateral posted to $39.8 million, but we have appealed such increase.

We received another letter from the DOL on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL.

In the event that we are not successful with respect to such appeal, we will be required to post additional collateral.

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Business-Environmental and Regulatory Matters-Workers’ Compensation and Black Lung.” Our estimated total black lung liabilities as of December 31, 2021 were $37.1 million (net of the black lung trust).

In future years, the Department of Labor could require us to increase the amount of the collateral which could negatively impact our cash flows.

In future years, the DOL could require us to increase the amount of the collateral which could negatively impact our cash flows.

Our failure to obtain and renew permits necessary for our mining operations could negatively affect our business.

Mining companies must obtain numerous permits that impose strict regulations on various environmental and operational matters in connection with met coal mining.

These include permits issued by various federal, state and local agencies and regulatory bodies.

These include permits issued by various federal, state and local

agencies and regulatory bodies.

The permitting rules, and the interpretations of these rules, are complex, change frequently and are often subject to discretionary interpretations by the regulators, all of which may make compliance more difficult or impractical, and may possibly preclude the continuance of ongoing operations or the development of future mining operations.

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• reclamation and restoration of property;

• environmental laws and regulations, including those related to greenhouse gases and climate change, air quality, water quality, stream and surface water quality and protection, management of materials generated by mining operations, the storage, treatment and disposal of wastes, protection of plant and wildlife such as endangered species, protection of wetlands and remediation of contaminated soil and groundwater.

• environmental laws and regulations, including those related to GHGs and climate change, air quality, water quality, stream and surface water quality and protection, management of materials generated by mining operations, the storage, treatment and disposal of wastes, protection of plant and wildlife such as endangered species, protection of wetlands and remediation of contaminated soil and groundwater.

In addition, the coal industry in the U.S.

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However, the costs and operating restrictions necessary for compliance with safety and environmental laws and regulations, which is a major cost consideration for our operations, may have an adverse effect on our competitive position with regard to foreign producers and operators who may not be required to undertake equivalent costs in their operations.

In addition, the specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, applicable state legislation and its production methods.

In addition, the

specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, applicable state legislation and its production methods.

Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation.

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The Mine Act and the MINER Act impose stringent health and safety standards on mining operations.

Regulations that have been adopted under the Mine Act and MINER Act are comprehensive and affect numerous aspects of mining operations, including training of mining personnel, mining procedure, the equipment used in emergency procedures, and other matters.

Regulations that have been adopted under the Mine Act and the MINER Act are comprehensive and affect numerous aspects of mining operations, including training of mining personnel, mining procedure, the equipment used in emergency procedures, and other matters.

Alabama has a similar program for mine safety and health regulation and enforcement.

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Any of these actions could have a material adverse effect on our business and results of operations.

Increased focus by regulatory authorities on the effects of coal mining on the environment and recent regulatory developments related to coal mining operations could make it more difficult or increase our costs to receive new permits or to comply with our existing permits to mine met coal or otherwise adversely affect us.

Increased focus by regulatory authorities on the effects of coal mining on the environment and recent regulatory developments related to coal mining operations, including the federal leasing program, could increase our costs to receive new permits to mine met coal, make it more difficult to comply with our existing permits to mine coal or to obtain federal land and mineral leases, or otherwise adversely affect us.

Regulatory agencies are increasingly focused on the effects of coal mining on the environment, particularly relating to water quality, which has resulted in more rigorous permitting requirements and enforcement efforts.

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On December 20, 2016, the OSM published a new, finalized “Stream Protection Rule,” setting standards for “material damage to the hydrologic balance outside the permit area” that are applicable to surface and underground mining operations.

However, on February 16, 2017,

former President Trump signed a joint congressional resolution disapproving the Stream Protection Rule pursuant to the Congressional Review Act.

However, on February 16, 2017, former President Trump signed a joint congressional resolution disapproving the Stream Protection Rule pursuant to the Congressional Review Act.

Accordingly, the regulations in effect prior to the Stream Protection Rule now apply, including OSM’s 1983 rule.

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The issuance of permits to construct valley fills and refuse impoundments under Section 404 of the CWA has been the subject of many court cases and increased regulatory oversight, resulting in additional permitting requirements that are expected to delay or even prevent the opening of new mines.

Stringent water quality standards for materials such as selenium have recently been issued.

For example, in recent years, regulators have adopted more stringent water quality standards for materials such as selenium.

We have begun to incorporate these new requirements into our current permit applications;

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On April 23, 2013, the D.C.

Circuit ruled that the EPA has the power under the CWA to retroactively veto a Section 404 dredge and fill permit “whenever” it makes a determination about certain adverse effects, even years after the USACE has granted the permit to an applicant.

Circuit ruled that the EPA has the power under the CWA to retroactively veto a Section 404 dredge and fill permit “whenever” it makes a

determination about certain adverse effects, even years after the USACE has granted the permit to an applicant.

On March 24, 2014, the U.S.

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Recent regulatory actions and court decisions have created some uncertainty over the scope of CWA jurisdiction.

On June 29, 2015, in response to a 2006 Supreme Court decision discussing the scope of CWA jurisdiction, the EPA and the USACE jointly promulgated final rules redefining the scope of waters protected under the CWA, revising regulations that had been in place for more than 25 years.

The new rules could expand the scope of CWA jurisdiction, making more waters subject to the CWA's permitting and other requirements in the case of discharges.

However, on October 22, 2019, the agencies published a final rule to repeal the 2015 rules.

The 2015 rules and the 2019 repeal are subject to several ongoing legal challenges.

Also, on April 21, 2020, the EPA and the USACE published a final rule replacing the 2015 rule, and significantly reducing the waters subject to federal regulation under the Clean Water Act.

Several state and environmental groups have challenged the replacement rule.

As a result of such recent developments, it remains unclear whether and how the rules will be implemented.

On June 29, 2015, in response to Supreme Court decisions discussing the scope of CWA jurisdiction, the EPA and the USACE jointly promulgated final rules redefining the scope of waters protected under the CWA, revising regulations that had been in place for more than 25 years.

The new rules could expand the scope of CWA jurisdiction, making more waters subject to the CWA's permitting and other discharge requirements.

However, on October 22, 2019, the agencies published a final rule to repeal the 2015 rules and then on April 21, 2020, the EPA and the USACE published a replacement rule that would have significantly reduced the scope of waters subject to federal regulation under the CWA.

On August 30, 2021, a federal court struck down the replacement rule and, on December 7, 2021, the EPA and the USACE published a proposed rule that would return to a pre-2015 definition of "waters of the Unites States" while the agencies continue to consult with stakeholders in both the implementation of the rules and future regulatory actions.

Additionally, on January 24, 2022, the Supreme Court agreed to hear a case addressing the proper test for determining whether wetlands are "waters of the United States." This case could provide much needed clarification, as confusion over the scope of CWA jurisdiction has led to significant permitting delays, litigation, and uncertainty in the mining industry.

It is unknown what future changes will be implemented to the permitting review and issuance process or to other aspects of mining operations, but increased regulatory focus, future laws and judicial decisions could materially and adversely affect all coal mining companies.

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In addition, increased public focus on the environmental, health and aesthetic impacts of coal mining could harm our reputation and reduce demand for met coal.

Regulation of greenhouse gas emissions could increase our operating costs and impact the demand for, price of and value of our products.

Climate change continues to attract public and scientific attention, and increasing attention by government as well as private businesses is being paid to reducing GHG emissions.

Regulation of air emissions, including GHG emissions, could increase our operating costs and impact the demand for, price of and value of our products.

The federal Clean Air Act and comparable state laws that regulate air emissions affect coal mining operations both directly and indirectly.

Direct impacts on coal mining may occur through permitting requirements and/or emission control requirements relating to particulate matter, such as fugitive dust, or fine particulate matter measuring 2.5 micrometers in diameter or smaller.

The Clean Air Act indirectly affects our mining operations by extensively regulating the air emissions of sulfur dioxide, nitrogen oxides, mercury, ozone and other compounds emitted by steel manufacturers, coke ovens and coal-fired utilities.

Increased regulation of air emissions could increase our operating costs and impact the demand for, price of and value of our products.

Additionally, climate change continues to attract public and scientific attention, and increasing attention by government as well as private businesses is being paid to reducing GHG emissions.

There are three primary sources of GHGs associated with the met coal industry.

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Second, combustion of fuel by equipment used in met coal production and to transport our met coal to our customers is a source of GHGs.

coal mining itself can release methane, which is considered to be a more potent GHG than CO 2 , directly into the atmosphere.

Third, met coal mining itself can release methane, which is considered to be a more potent GHG than CO 2 , directly into the atmosphere.

These emissions from met coal consumption, transportation and production are subject to pending and proposed regulation as part of initiatives to address global climate.

There are many legal and regulatory approaches currently in effect or being considered to address GHGs, including international treaty commitments, new foreign, federal and state legislation that may impose a carbon emissions tax or establish a “cap and trade” program, and regulation by the EPA.

See “Part I, Item 1.

Business—Environmental and Regulatory Matters—Climate Change” for a detailed discussion of these regulations and programs.

There are many legal and regulatory approaches currently in effect or being considered to address GHGs, including international treaty commitments and new foreign, federal and state legislation and regulations, that may impose carbon emissions taxes or fees, incentivize emission reductions, or establish a “cap and trade” program.

In particular, at the

international level, in December 2015, the United States participated in the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change (“Conference of Parties”) in Paris, France.

The resulting Paris Agreement calls for

the parties to undertake “ambitious efforts” to limit the average global temperature, and to conserve and enhance sinks and reservoirs of GHG.

The Paris Agreement went into effect on November 4, 2016.

The Paris Agreement establishes a framework for the parties to cooperate and report actions to reduce GHG emissions.

Although the United States withdrew from the Paris Agreement effective November 4, 2020, President Biden issued an Executive Order on January 20, 2021 to rejoin the Paris Agreement, which went into effect on February 19, 2021.

On April 21, 2021, the United States announced that it was setting an economy-wide target of reducing its GHG emissions by 50-52 percent below 2005 levels in 2030.

In November 2021, in connection with the 26 th session of the Conference of Parties in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce GHGs, including reducing global methane emissions by at least 30% by 2030 and ending the international public finance of new unabated coal power generation abroad by the end of 2021.

The resulting Glasgow Climate Pact calls upon the parties to “accelerate efforts towards the phase-down of unabated coal power and phase-out inefficient fossil fuel subsidies.”

The existing laws and regulations or other current and future efforts to stabilize or reduce GHG emissions could adversely impact the demand for, price of and value of our products and reserves.

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Such environmental activism and initiatives aimed at limiting climate change and reducing air pollution could interfere with our business activities, operations and ability to access capital.

In addition, claims have been made against certain companies alleging that GHG emissions constitute a public nuisance under federal and/or state common law.

Increasing attention to climate change risk has also resulted in a recent trend of governmental investigations and private litigation by local and state government agencies as well as private plaintiffs in an effort to hold companies accountable for the effects of climate change.

Claims have been made against certain companies alleging that GHG emissions constitute a public nuisance under federal and/or state common law.

Private individuals or public entities may seek to enforce environmental laws and regulations against us and could allege personal injury, property damages or other liabilities.

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However, at this time, we are unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting our operations.

The results of the 2020 U.S.

presidential and congressional elections may create regulatory uncertainty for the coal mining industry.

President Biden's regulatory agenda, and a closely divided Congress, creates some regulatory uncertainty for the coal mining industry.

Changes in mining or environmental laws could increase costs and harm our business, financial condition and results of operations.

Joe Biden’s victory in the U.S.

presidential election, as well as a closely divided Congress, may create regulatory uncertainty in the coal mining industry.

During the election campaign, President Biden made comments suggesting that he was supportive of various programs and initiatives designed to, among other things, curtail climate change, clean up abandoned mines, and “green” the mining industry.

Also, during his first week in office, President Biden issued several executive orders to, among other things, make climate considerations an essential element of U.S.

President Biden’s regulatory agenda, as well as a closely divided Congress, creates some regulatory uncertainty in the coal mining industry.

President Biden has indicated that he is supportive of various programs and initiatives designed to, among other things, curtail climate change, clean up abandoned mines, and “green” the mining industry.

In fact, during his first week in office, President Biden issued several executive orders to, among other things, make climate considerations an essential element of U.S.

However, he has also called for heavy investment in infrastructure projects, many of which require the use of steel.

It remains unclear what actions President Biden will take to implement his policy initiatives, and what support he will have for any potential legislature from Congress.

Indeed, on November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act, which invests billions of dollars in new funding to repair roads and bridges, expand and modernize rail service, and support other

infrastructure projects.

It remains unclear what other actions President Biden will take to implement his policy initiatives, and what support he will have for any potential legislature from Congress.

Further, it is uncertain to what extent any new mining or environmental laws or regulations, or any repeal of existing mining or environmental laws or regulations, may affect our coal mining operations.

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Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations and dividend policy, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments on the Notes.

As of December 31, 2020, we had approximately $418.4 million of outstanding indebtedness (consisting of $343.4 million of Notes, net of $3.5 million in unamortized debt discount, $38.5 million of financing lease obligations and $40.0 million drawn under our ABL Facility), all of which are secured, and $31.6 million of availability under our ABL Facility (subject to meeting the borrowing base and other conditions therein).

As of December 31, 2021, we had approximately $391.9 million of outstanding indebtedness (consisting of $350.0 million of Notes, net of $10.2 million in unamortized debt discount and debt issuance costs and $52.1 million of financing lease obligations), all of which are secured, and $83.2 million of availability under our ABL Facility (subject to meeting the borrowing base and other conditions therein).

Our substantial indebtedness could have important consequences for us.

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Despite our current indebtedness levels, we may still be able to incur substantially more debt, including secured indebtedness.

As of December 31, 2020, we had approximately $418.4 million of total debt outstanding (consisting of $343.4 million of Notes, net of $3.5 million in unamortized debt discount, $38.5 million of financing lease obligations and $40.0 million drawn under our ABL Facility).

As of December 31, 2021, we had approximately $391.9 million of total debt outstanding (consisting of $350.0 million of Notes, net of $10.2 million in unamortized debt discount and debt issuance costs, and $52.1 million of financing lease obligations).

Despite our current indebtedness, we may be able to incur substantial additional debt in the future, including secured indebtedness.

As of December 31, 2020, the Company had an aggregate principal amount of $40.0 million drawn under the ABL Facility and there were $9.4 million of letters of credit issued and outstanding under the ABL Facility.

As of December 31, 2021, the Company had no amounts drawn under the ABL Facility and there were $9.4 million of letters of credit issued and outstanding under the ABL Facility.

At December 31, 2021, the Company had $83.2 million of availability under the ABL Facility (calculated net of $9.4 million of letters of credit issued and outstanding at such time).

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If any of our outstanding indebtedness under the ABL Facility or our other indebtedness, including the Notes, were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full.

The need to maintain capacity for required letters of credit could limit our ability to provide financial assurance for self-insured obligations and negatively impact our ability to fund future working capital, capital expenditure or other general corporate requirements.

Our ABL Facility includes, among other things, provisions that provide for the issuance of letters of credit.

Obligations secured by letters of credit may increase in the future.

If we do not maintain sufficient borrowing capacity under our ABL Facility, we may be unable to provide financial assurance for self-insured obligations and could negatively impact our ability to fund future working capital, capital expenditure or other general corporate requirements.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase.

Borrowings under our ABL Facility are at variable rates of interest and are based upon benchmarks that are subject to potential change or elimination, including as a result of the FCA Announcement (as defined below), and therefore expose us to interest rate risk.

interest rate risk.

If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

The transition from LIBOR to SOFR may affect our financial results.

The United Kingdom Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that the FCA would not compel banks to submit rates for the calculation of LIBOR after 2021 (the “FCA Announcement”).

Following the FCA Announcement, the Alternative Reference Rates Committee (the “ARRC”), the working group backed by the United States Federal Reserve and tasked with recommending a replacement for U.S.

dollar LIBOR, formally recommended the CME Group’s forward-looking Secured Overnight Financing Rate (“SOFR”) term rates (“SOFR Term Rate”) for one-, three- and six-month tenors to replace U.S.

dollar LIBOR as the successor benchmark rate, subject to the spread adjustment recommended by the ARRC.

The transition from LIBOR to SOFR may result in financial market disruptions and increases in benchmark rates, resulting in increased financing costs to us, any of which could negatively impact the interest expenses associated with any future borrowings under the ABL Facility (which borrowings under the ABL Facility are based on SOFR as discussed under “Description of Other Indebtedness—Amendment and Restatement of ABL Facility”), and have an adverse effect on our business, results of operations, financial condition, and the market price of our common stock.

We may be unable to generate sufficient taxable income from future operations, or other circumstances could arise, which may limit or eliminate our ability to utilize our significant tax NOLs or our deferred tax assets.

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A valuation allowance was established on our opening balance sheet at April 1, 2016 because it was more likely than not that a portion of the acquired deferred tax assets would not be realized in the future.

At December 31, 2017, we had a $312.5 million valuation allowance established against our deferred income tax assets, which represented a full

valuation allowance against our net deferred income tax assets.

At December 31, 2017, we had a $312.5 million valuation allowance established against our deferred income tax assets, which represented a full valuation allowance against our net deferred income tax assets.

For 2017, we recorded a pre-tax profit of $416.5 million;

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During 2018, we continued our trend of sustained profitability, recording a pre-tax profit of $471.0 million for the year.

During the fourth quarter of 2018, after considering all relevant factors, we concluded that our deferred income tax assets are more likely than not to be realized.

In evaluating the likelihood of utilizing our net deferred tax assets, the significant relevant factors that we considered are:

During the fourth quarter of 2018, after considering all relevant factors, we concluded that our deferred income tax assets were more likely than not to be realized.

In evaluating the likelihood of utilizing our net deferred tax assets, the significant relevant factors that we considered were:

(1) our recent history of profitability;

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Based on this evaluation, at December 31, 2018, we released our valuation allowance against our net deferred income tax assets, primarily resulting in the $225.8 million benefit in our provision for income taxes.

As of December 31, 2020, we have considered all positive and negative evidence and concluded that our deferred income tax assets remain more likely than not to be realized and a valuation allowance was not required.

As of December 31, 2021, we have considered all positive and negative evidence and concluded that our deferred income tax assets associated with our federal NOLs and general business credit carryforwards remain more likely than not to be realized and a valuation allowance was not required.

On February 12, 2021, the Alabama Governor signed into law Alabama House Bill 170, now Act 2021-1 (the “Act”).

The Act makes several changes to the state’s business tax structure.

Among the provisions of the Act, is the repeal of the so-called corporate income tax “throwback rule.” That rule required all sales originating in Alabama and delivered to a jurisdiction where the seller was not subject to tax, to be included in the seller’s Alabama income tax base.

Thus, prior to repeal of the throwback rule, we had to rely on our Alabama NOL carryforwards to shelter taxes imposed under such throwback rule.

As a result of the now repealed throwback rule, effective January 1, 2021, all such sales should now be excluded from Alabama taxable income without the need to utilize Alabama NOLs.

As a result of the repeal of the throwback rule, in the first quarter of 2021, we remeasured its Alabama deferred income tax assets and liabilities and recorded a non-cash income tax benefit of $22.9 million.

Additionally, we determined that it is not more likely than not that we would have sufficient taxable income to utilize all of our Alabama deferred income tax assets prior to expiration.

Therefore, we established a non-cash valuation allowance of $46.0 million against such deferred income tax assets.

Certain factors could change or circumstances could arise that could further limit or eliminate the amount of the available NOLs to the Company, such as an ownership change, an adjustment by a tax authority or changes in state and federal tax legislation.

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Under the Internal Revenue Code of 1986, as amended (the "Code"), a company is generally allowed a deduction for NOLs against its federal taxable income.

At December 31, 2020, we had federal and state NOLs of approximately $920.7 million and $995.8 million, respectively.

In addition,we have approximately $18.6 million of general business credits.

These NOLs and income tax credit carryforwards collectively represent a deferred tax asset of approximately $253.8 million.

At December 31, 2021, we

had federal and state NOLs of approximately $722.3 million and $992.6 million, respectively.

In addition, we have approximately $23.3 million of general business credit carryforwards.

These NOLs and income tax credit carryforwards collectively represent a deferred tax asset of approximately $180.5 million, net of the valuation allowance.

Our NOLs are subject to adjustment on audit by the Internal Revenue Service (the “IRS”) and state authorities.

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Our certificate of incorporation contains transfer restrictions (the “382 Transfer Restrictions”) to minimize the likelihood of an ownership change.

See “-Risks Related to the Ownership of Our Common Stock-Our common stock is subject to the 382 Transfer Restrictions under our certificate of incorporation and the Rights Agreement which are intended to prevent a Section 382 “ownership change,” which if not complied with, could result in the

forfeiture of such stock and related distributions or substantial dilution of the stock ownership, respectively.

Accordingly, this may impact the market price of our common stock and discourage third parties from seeking strategic transactions with us that could be beneficial to our stockholders.” The 382 Transfer Restrictions were originally set to expire in April 2020.

Pursuant to the amendment to the certificate of incorporation approved by the Company’s stockholders at the Company’s Annual Meeting of Stockholders held on April 23, 2019, the Company will effect a three-year extension of the Transfer Restrictions, which became effective on March 18, 2020 upon the filing of a certificate of amendment setting forth such amendment with the Secretary of State of the State of Delaware.

In addition, on February 14, 2020, we adopted a NOLs rights agreement (the “Rights Agreement”) to supplement the 382 Transfer Restrictions.

Pursuant to the amendment to the certificate of incorporation approved by the Company’s stockholders at the Company’s Annual Meeting of Stockholders held on April 23, 2019, the Company effected a three-year extension of the Transfer Restrictions, which became effective on March 18, 2020 upon the filing of a certificate of amendment setting forth such amendment with the Secretary of State of the State of Delaware.

In addition, on February 14, 2020, we adopted an NOLs rights agreement (the “Rights Agreement”) to supplement the 382 Transfer Restrictions.

See “Part II, Item 7.

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For more information, see “-Risks Related to the Ownership of Our Common Stock-We could engage in or approve transactions involving our common stock that adversely affect significant stockholders and our other stockholders.”

Changes in the method pursuant to which LIBOR rates are determined and potential phasing out of LIBOR after 2021 may affect our financial results.

The United Kingdom Financial Conduct Authority (“FCA”), which regulates LIBOR, has recently announced that the FCA intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021 (the “FCA Announcement”).

The FCA Announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021.

Following the implementation of any reforms to LIBOR or the methods pursuant to which LIBOR rates are determined, or other benchmark rates that may be enacted in the United Kingdom or elsewhere, the manner of administration of such benchmarks may change, with the result that such benchmarks may perform differently than in the past, such benchmarks could be eliminated entirely, or there could be other consequences which cannot be predicted.

If the Agent under our ABL Facility determines, or the lenders holding more than a majority of the outstanding loans and commitments under the ABL Facility notify the Agent, that (i) adequate and reasonable means do not exist for ascertaining LIBOR for any requested interest period, or (ii) the FCA or any governmental authority having jurisdiction over the Agent has made a public statement identifying a specific date after which LIBOR shall no longer be made available, or used for determining the interest rate of loans, then the Agent and Company may mutually agree to amend the ABL Facility to replace LIBOR with an alternate benchmark rate that has been broadly accepted by the syndicated loan market in the United States in lieu of LIBOR (any such proposed rate, a “LIBOR Successor Rate”).

We can give no assurance that we and the Agent will be able to agree on a LIBOR Successor Rate.

If the Agent and the Company cannot mutually agree on a LIBOR Successor Rate, the obligation of the Lenders to make or maintain LIBOR loans shall be suspended and LIBOR loans incurred under the ABL Facility will be deemed to have converted to loans that bear interest based on the base rate.

Risks Related to the Ownership of our Common Stock

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The trading market for our common stock could be influenced by the research and reports that industry or securities analysts may publish about us or our business.

If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

volume to decline.

Moreover, if one or more of the analysts who cover our company downgrade our stock or if our operating results do not meet their expectations, our stock price could decline.

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Our certificate of incorporation contains certain transfer restrictions on our shares, which we refer to as the “382 Transfer Restrictions.” The 382 Transfer Restrictions are intended to prevent the likelihood that we will be deemed to have an “ownership change” within the meaning of Section 382 of the Code that could limit or eliminate our ability to utilize significant NOLs and other federal income tax attributes under and in accordance with the Code and regulations promulgated by the IRS.

In particular, without the approval of the Board, no person or group of persons treated as a single entity under Treasury Regulation Section 1.382-3 will be permitted to acquire, whether directly, indirectly or constructively, and whether in one transaction or a series of related transactions, any of our common stock or any other instrument treated as stock for purposes of Section 382, to the extent that after giving effect to such purported acquisition (a) the purported acquirer, or any other person by reason of the purported acquirer’s acquisition, would become a Substantial Holder (as defined below), or (b) the percentage of ownership of our common stock by a person that, prior to giving effect to the purported acquisition, is already a Substantial Holder would be increased.

transaction or a series of related transactions, any of our common stock or any other instrument treated as stock for purposes of Section 382, to the extent that after giving effect to such purported acquisition (a) the purported acquirer, or any other person by reason of the purported acquirer’s acquisition, would become a Substantial Holder (as defined below), or (b) the percentage of ownership of our common stock by a person that, prior to giving effect to the purported acquisition, is already a Substantial Holder would be increased.

A “Substantial Holder” is a person that owns (as determined for purposes of Section 382 of the Code) at least 4.99% of the total value of our common stock, including any instrument treated as stock for purposes of Section 382 of the Code.

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On February 14, 2020, we adopted the Rights Agreement to supplement the 382 Transfer Restrictions.

any additional shares of common stock (such person, group or existing stockholder, an "Acquiring Person") without the approval of the Board.

In general terms, the Rights Agreement works by imposing a significant penalty upon any person or group that acquires 4.99% or more of the outstanding common stock or any existing stockholder who currently owns 5.00% or more of the common stock that acquires any additional shares of common stock (such person, group or existing stockholder, an "Acquiring Person") without the approval of the Board.

Under the Rights Agreement, from and after February 28, 2020, each share of our common stock carries with it one preferred share purchase right until the earlier of the date when the preferred share purchase rights become exercisable or expire.

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Provisions in our certificate of incorporation and bylaws and Delaware law, as well as the Rights Agreement, make it more difficult to effect a change in control of the Company, which could adversely affect the price of our common stock.

The existence of some provisions in our certificate of incorporation and bylaws and Delaware corporate law, as well as the Rights Agreement, could delay or prevent a change in control of our company, even if that change would be beneficial to our stockholders.

our stockholders.

Our certificate of incorporation and bylaws contain provisions that may make acquiring control of our company difficult, including:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors