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Risks Related to Our Business
−Removed: • Global pandemics, such as the COVID-19 pandemic, may occur which could adversely affect our business, financial condition and results of operations;
−Removed: • 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;
+Added: • The Russia-Ukraine war may adversely affect our business due to the impact on the global economy, including significant market disruptions that may lead to increased volatility in the price of certain commodities;
+Added: • Deterioration in global economic conditions, including the impacts of global pandemics, such as the COVID-19 pandemic, and inflation on our business, 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;
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Risks Related to Our Industry
−Removed: • Our business may suffer from a substantial or extended decline in met coal pricing and demand or other factors beyond our control, which could negatively affect our operating results and cash flows;
−Removed: • Substantially all of our revenues are derived from the sale of met coal.
+Added: • Substantially all of our revenues are derived from the sale of met coal and our business may suffer from a substantial or extended decline in met coal pricing and demand or other factors beyond our control.
This lack of diversification of our business could adversely affect our financial condition, results of operations and cash flows;
• Met coal mining involves many hazards and operating risks, and is dependent upon many factors and conditions beyond our control, which may cause our profitability and financial position to decline;
−Removed: • Negative views with respect to environmental and social matters and related governance considerations could harm the perception of our Company by certain investors and financial institutions, including banks and insurance companies, adversely affecting our ability to obtain financing and insurance coverage, among others;
+Added: • Negative views with respect to environmental and social matters and related governance considerations could harm the perception of our Company by certain investors, environmental and climate change activist groups and financial institutions, including banks and insurance companies, adversely affecting our ability to obtain financing and insurance coverage, among others;
• Our inability to develop met coal reserves in an economically feasible manner or our inability to acquire additional met coal reserves that are economically recoverable may adversely affect our business;
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• The market price of our common stock may fluctuate significantly and investors in our common stock could incur substantial losses;
−Removed: • 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;
−Removed: • Our common stock is subject to the 382 Transfer Restrictions (as defined below) 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 dividends or substantial dilution of the stock ownership, respectively;
+Added: • Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the indenture governing the Notes (the "Indenture"), and will be on the sole discretion of the Board and will also depend on many factors;
+Added: • Our common stock is subject to the 382 Transfer Restrictions (as defined below) under our certificate of incorporation and the Amended Rights Agreement (as defined below) 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 dividends or substantial dilution of the stock ownership, respectively;
• Delaware law and our charter documents may impede or discourage a takeover or change of control, which could adversely affect the price of our common stock.
Risks Related to Our Business
−Removed: Our activities may be adversely affected by global pandemics, including the global outbreak of the novel coronavirus (COVID-19), which may prevent us from meeting our targeted production levels and/or executing our planned development initiatives (including, but not limited to, the development of Blue Creek), negatively impact our customers’ demand for met coal and their ability to honor or renew contracts, adversely affect the health and welfare of Company personnel or prevent our vendors and contractors from performing normal and contracted activities.
−Removed: The outbreak of COVID-19, which was first detected in Wuhan, China in December 2019 and declared a pandemic by the World Health Organization in March 2020, could have a material and adverse effect on our business, financial condition and results of operations.
−Removed: The outbreak has resulted, and may continue to result, in disruptions to economic and industrial activity worldwide.
−Removed: 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.
+Added: The Russia-Ukraine war, and sanctions brought against Russia, may adversely affect our business due to the impact on the global economy, including significant market disruptions that may lead to increased volatility in the price of certain commodities.
+Added: We face risks related to the ongoing Russia-Ukraine war that began in February 2022.
+Added: The extent and duration of the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region.
+Added: Globally, various governments, such as the European Union, have banned imports from Russia including commodities such as natural gas and coal.
+Added: These events significantly impacted coking coal markets by disrupting previously existing trading patterns.
+Added: The resulting volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, may significantly affect prices for our coal or the cost of supplies and equipment.
+Added: The war, trade and monetary sanctions, as well as any escalation of the conflict and future developments, could significantly affect coking coal prices and the demand for our coal.
+Added: This could have a material adverse effect on our business, financial condition and results of operations, along with our operating costs, making it difficult to execute our planned capital expenditure program or the development of Blue Creek.
+Added: Additionally, the geopolitical and macroeconomic consequences of the war and associated sanctions cannot be predicted, but could severely impact the world economy.
+Added: If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for our coal, causing a reduction in our revenues or an increase in our costs, which would materially adversely affect our results of operations, financial condition and cash flows.
+Added: Our activities may be adversely affected by global pandemics, including the ongoing COVID-19 pandemic, which may prevent us from meeting our targeted production levels and/or executing our planned development initiatives (including, but not limited to, the development of Blue Creek), negatively impact our customers’ demand for met coal and their ability to honor or renew contracts, adversely affect the health and welfare of Company personnel or prevent our vendors and contractors from performing normal and contracted activities.
+Added: The extent to which the COVID-19 pandemic, or any other global pandemic, will ultimately affect our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted.
+Added: Such developments may include the geographic spread of the virus, the severity of the disease, the duration of the outbreak, the actions that may be taken by various governmental authorities in response to the outbreak and the impact on the U.S.
+Added: or global economy.
+Added: The COVID-19 pandemic has resulted, and may continue to result, in disruptions to economic and industrial activity worldwide.
+Added: Though the global impact of COVID-19 continues to evolve and remains highly uncertain, COVID-19 may ultimately cause a significant decline in global steel production and, in turn, reduce demand for met coal.
We are highly dependent on the global steel industry.
−Removed: 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.
+Added: Our sales are primarily derived from coal shipments to customers located in regions that are, or may become, heavily affected by the COVID-19 pandemic, particularly Asia and Europe.
Not only is steel production in these regions at risk of decline, but we may also face additional challenges in the event that transportation restrictions are put in place that affect our ability to deliver coal to our customers in these regions.
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Finally, the COVID-19 pandemic has substantially affected national and international financial markets, which could affect our ability to obtain financing for our business and/or pursue our planned development projects, including the development of our Blue Creek mine.
−Removed: The extent to which COVID-19 or any other global pandemic will impact our business and our financial results will depend on future developments, which are highly uncertain and cannot be predicted.
−Removed: Such developments may include the geographic spread of the virus, the severity of the disease, the duration of the outbreak, the actions that may be taken by various governmental authorities in response to the outbreak and the impact on the U.S.
−Removed: or global economy.
Deterioration in global economic conditions as they relate to the steelmaking industry, as well as generally unfavorable global economic, financial and business conditions, may adversely affect our business, results of operations and cash flows.
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As a result, if economic conditions in the global steelmaking industry deteriorate as they have in past years, the demand for met coal may decrease.
−Removed: In addition, the global financial markets have been experiencing volatility and disruption over the last several years and, more recently, due to the COVID-19 pandemic.
+Added: In addition, the global financial markets have been experiencing volatility and disruption over the last several years including, due to the COVID-19 pandemic.
These markets have experienced, among other things, volatility in security prices, commodities and currencies, diminished liquidity and credit availability, rating downgrades and declining valuations of certain investments.
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The ban on Australian coal has significantly impacted the global met coal market in recent years.
+Added: This unofficial ban was lifted in January 2023.
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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In addition, the current level of met coal prices may not be sustainable.
−Removed: We sell most of our met coal under fixed supply contracts primarily with indexed pricing terms that vary and volume terms of one to three years and are therefore exposed to commodity price risk on our sales.
+Added: Our business is subject to the risk of increases or fluctuations in the cost, and delay in the delivery, of raw materials, mining equipment and purchased components.
+Added: Met coal mining consumes large quantities of commodities including steel, copper, rubber products, diesel and other liquid fuels, and requires the use of capital equipment.
+Added: Some commodities, such as steel, are needed to comply with roof control plans required by regulation.
+Added: The cost of roof bolts we use in our mining operations depends on the price of scrap steel.
+Added: The prices we pay for commodities and capital equipment are strongly impacted by the global market.
+Added: A rapid or significant increase in the costs of commodities or capital equipment we use in our operations could impact our mining operations costs because we may have a limited ability to negotiate lower prices and, in some cases, may not have a ready substitute.
+Added: Inflation rates in the U.S.
+Added: have increased to levels not seen in several years, which may result in decreased demand for our products, increases in our operating costs, constrained credit and liquidity, reduced government spending and volatility in financial markets.
+Added: Future increases in costs for supplies that are used directly or indirectly in the normal course of our business and increases in other operating costs, such as increases in steel prices, freight rates, labor and other materials and supplies may negatively impact our profitability.
+Added: 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.
+Added: Some equipment and materials are needed to comply with regulations, such as proximity detection devices on continuous mining machines.
+Added: We procure some of this equipment from a concentrated group of suppliers, and obtaining this equipment often involves long lead times.
+Added: Occasionally, demand for such equipment by mining companies can be high and some types of equipment may be in short supply.
+Added: Delays in receiving or shortages of this equipment, as well as the raw materials used in the manufacturing of supplies and mining equipment, which, in some cases, do not have ready substitutes, or the cancellation of our supply contracts under which we obtain equipment and other consumables, could limit our ability to obtain these supplies or equipment.
+Added: In addition, there continues to be consolidation in the supplier base providing mining materials and equipment, which has resulted in a limited number of suppliers for certain types of equipment and supplies.
+Added: If any of our suppliers experiences an adverse event (including as a result of the COVID-19 pandemic), decides to cease producing products used by the mining industry, or decides to no longer do business with us, we may be unable to obtain sufficient equipment and raw materials in a timely manner or at a reasonable price to allow us to meet our production goals and our revenues may be materially adversely impacted.
+Added: We use considerable quantities of steel in the mining process.
+Added: If the price of steel or other materials increases substantially or if the value of the U.S.
+Added: dollar declines relative to foreign currencies with respect to certain imported supplies or other products, our operating expenses could increase.
+Added: Any of the foregoing events could materially and adversely impact our business, financial condition, results of operations and cash flows.
+Added: We typically sell our met coal under fixed supply contracts primarily with indexed pricing terms that vary and volume terms of one to three years and are therefore exposed to commodity price risk on our sales.
Sales commitments in the met coal market are typically not long-term in nature and are generally no longer than one to three years in duration.
Globally the market is evolving to shorter term pricing.
−Removed: Many of our met coal supply agreements are
−Removed: 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.
+Added: 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.
−Removed: To limit this exposure, and where we can, we have, and will continue to, incorporate economic hardship clauses in our sales contracts.
+Added: To limit this exposure, to the extent we are
+Added: able, we have, and will continue to, incorporate economic hardship clauses in our sales contracts.
However, there can be no assurances we will be able to mitigate such conditions as they arise.
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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.
−Removed: 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
−Removed: 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.
+Added: 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, inflation 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.
−Removed: 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.
−Removed: 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.
+Added: We incurred approximately $47.1 million in spend on the development of Blue Creek in 2022 and expect to invest approximately $225.0 to $250.0 million in 2023.
Our planned development of Blue Creek involves numerous risks, including, but not limited to, 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.
−Removed: If a new business generates
−Removed: insufficient revenue or if we are unable to efficiently manage our expanded operations, our results of operations may be adversely affected.
+Added: 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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Further, delays of ocean vessels could affect our revenues, costs and relative competitiveness compared to the supply of met coal and other products from our competitors.
−Removed: Our business is subject to the risk of increases or fluctuations in the cost, and delay in the delivery, of raw materials, mining equipment and purchased components.
−Removed: Met coal mining consumes large quantities of commodities including steel, copper, rubber products, diesel and other liquid fuels, and requires the use of capital equipment.
−Removed: Some commodities, such as steel, are needed to comply with roof control plans required by regulation.
−Removed: The cost of roof bolts we use in our mining operations depends on the price of scrap steel.
−Removed: The prices we pay for commodities and capital equipment are strongly impacted by the global market.
−Removed: A rapid or significant increase in the costs of commodities or capital equipment we use in our operations could impact our mining operations costs because we may have a limited ability to negotiate lower prices and, in some cases, may not have a ready substitute.
−Removed: 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.
−Removed: Some equipment and materials are needed to comply with regulations, such as proximity detection devices on continuous mining machines.
−Removed: We procure some of this equipment from a concentrated group of suppliers, and obtaining this equipment often involves long lead times.
−Removed: Occasionally, demand for such equipment by mining companies can be high and some types of equipment may be in short supply.
−Removed: Delays in receiving or shortages of this equipment, as well as the raw materials used in the manufacturing of supplies and mining equipment, which, in some cases, do not have ready substitutes, or the cancellation of our supply contracts under which we obtain equipment and other consumables, could limit our ability to obtain these supplies or equipment.
−Removed: In addition, there continues to be consolidation in the supplier base providing mining materials and equipment, which has resulted in a limited number of suppliers for certain types of equipment and supplies.
−Removed: If any of our suppliers experiences an adverse event (including as a result of the COVID-19 pandemic), decides to cease producing products used by the mining industry, or decides to no longer do business with us, we may be unable to obtain sufficient equipment and raw materials in a timely manner or at a reasonable price to allow us to meet our production goals and our revenues may be materially adversely impacted.
−Removed: We use considerable quantities of steel in the mining process.
−Removed: If the price of steel or other materials increases substantially or if the value of the U.S.
−Removed: dollar declines relative to foreign currencies with respect to certain imported supplies or other products, our operating expenses could increase.
−Removed: Any of the foregoing events could materially and adversely impact our business, financial condition, results of operations and cash flows.
+Added: We are currently in the process of testing alternative outbound logistics routes in order to increase transportation and vessel shipping optionality but we cannot provide any assurance that we will be able to reduce our transportation risks.
Our business may require substantial ongoing capital expenditures, and we may not have access to the capital required to reach full productive capacity at our mines.
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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.
−Removed: The production that was idled by our competitors may restart, and in some instances
−Removed: 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.
+Added: 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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Substantially all of our met coal sales consist of sales to international customers and we expect that international sales will continue to account for a substantial portion of our revenue.
−Removed: A number of foreign countries in which we sell our met coal implicate additional risks and uncertainties due to the different economic, cultural and political environments.
+Added: A number of foreign countries in which we sell our met coal
+Added: implicate additional risks and uncertainties due to the different economic, cultural and political environments.
Such risks and uncertainties include, but are not limited to:
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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.
−Removed: While we have been successful at
−Removed: 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.
+Added: While we have historically been successful at managing the impacts of trade barriers on our business, 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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In addition, we have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud applications and services, to operate our businesses, process and record financial and operating data, communicate with our employees and business partners, analyze seismic and drilling information, estimate quantities of met coal reserves, as well as other activities related to our businesses.
+Added: We own and operate some of these systems and applications
+Added: while others are owned and operated by our third-party service providers.
+Added: In the ordinary course of our business, we and our service providers collect, process, transmit and store data, such as proprietary business information and personally identifiable information.
As our dependence on digital technologies has increased, the risk of cyber incidents, including both deliberate attacks and unintentional events, also has increased.
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At times, the pricing and availability of steel can be volatile due to numerous factors beyond our control.
−Removed: 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,
−Removed: South America and Asia.
−Removed: Any resulting economic downturn could adversely affect demand for our met coal and contribute to volatile supply and demand conditions affecting prices and volumes.
+Added: 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.
+Added: Any economic downturn (including any downturn related to the COVID-19 pandemic or another global pandemic) could adversely affect demand for our met coal and contribute to volatile supply and demand conditions affecting prices and volumes.
In addition, the ability of our suppliers' and customers' employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, or as a result of control measures taken by us, other businesses and the government to curtail the spread of the virus, which may significantly affect the demand for met coal.
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All of our mining operations are geographically concentrated in Alabama.
−Removed: As a result of this concentration, we may be disproportionately exposed to the impact of delays or interruptions in production caused by significant governmental regulation, transportation capacity constraints, constraints on the availability of required equipment, facilities, personnel or services, curtailment of production, extreme weather conditions, natural disasters, pandemics (such as COVID-19) or interruption of transportation or other events that impact Alabama or its surrounding areas.
−Removed: If any of these factors were to impact Alabama more than other met coal producing regions, our business, financial condition, results of operations and cash flows will be adversely affected relative to other mining companies with operations in unaffected regions or that have a more geographically diversified asset portfolio.
+Added: As a result of this concentration, we may be disproportionately exposed to the impact of delays or interruptions in production caused by significant governmental regulation, transportation capacity constraints, constraints on the availability of required equipment, facilities, personnel or services, curtailment of production, extreme weather conditions, natural disasters, pandemics (such as the COVID-19 pandemic) or interruption of transportation or other events that impact Alabama or its surrounding areas.
+Added: If any of these factors were to impact Alabama more than other met coal producing regions, our business, financial condition, results of operations and cash
+Added: flows will be adversely affected relative to other mining companies with operations in unaffected regions or that have a more geographically diversified asset portfolio.
Met coal mining involves many hazards and operating risks, and is dependent upon many factors and conditions beyond our control, which may cause our profitability and financial position to decline.
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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.
−Removed: Negative views with respect to environmental and social matters and related governance considerations could
−Removed: 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.
+Added: Negative views with respect to environmental and social matters and related governance considerations could result in a low ESG or sustainability score and could harm the perception of our Company by certain investors and activists 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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Currently, there are no universal standards for such scores or ratings, but the importance of sustainability evaluations is becoming more broadly accepted by investors and stockholders.
−Removed: Further, there have been efforts in recent years by members of the general financial and investment communities, including investment advisors, sovereign wealth funds, public pension funds, universities and other institutional investors, to divest themselves and to promote the divestment of securities issued by companies involved in carbon based fuels or that have low ratings or scores in studies and assessments of the type noted above, including coal producers.
+Added: Further, there have been efforts in recent years by members of the general financial and investment communities, including investment advisors, sovereign wealth funds, public pension funds, universities, other institutional investors and activists, to divest themselves and to promote the divestment of securities issued by companies involved in carbon based fuels or that have low ratings or scores in studies and assessments of the type noted above, including coal producers.
These entities also have been pressuring lenders to limit financing available to such companies.
−Removed: Companies in the energy industry, and in particular those focused on coal, natural gas or petroleum extraction and refining, often perform less well under ESG assessments compared to companies in other industries.
+Added: Companies in the energy industry, and in particular those focused on coal, natural gas or petroleum extraction and
+Added: refining, often perform worse under ESG assessments compared to companies in other industries.
These may have adverse consequences including, but not limited to:
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• limiting our flexibility in business development activities such as the development of Blue Creek, mergers, acquisitions or divestitures.
+Added: Moreover, while we may publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events, or forecasts of expected risks or events, including the costs associated therewith.
+Added: Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved in measuring and reporting on many ESG matters.
Defects in title of any real property or leasehold interests in our properties or associated met coal reserves could limit our ability to mine or develop these properties or result in significant unanticipated costs.
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We assumed certain historical self-insured black lung liabilities of Walter Energy and its subsidiaries incurred prior to April 1, 2016 in connection with the acquisition of certain assets of Walter Energy.
−Removed: We are self-insured for these black lung liabilities and have posted certain collateral with Department of Labor as described below.
+Added: We are self-insured for these black lung liabilities and have posted certain collateral with the Department of Labor as described below.
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.
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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.
−Removed: 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.
+Added: Our self-insurance program for these legacy liabilities is unique to the industry and was specifically negotiated with the DOL.
+Added: As of December 31, 2022, we have posted $18.6 million in surety bonds and $8.6 million of collateral recognized as short term investments in addition to maintaining a black lung trust of $2.1 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.
−Removed: In the event that we are not successful with respect to such appeal, we will be required to post additional collateral.
+Added: On February 9, 2022, the DOL held a conference with representatives from the Company related to our appeal.
+Added: On July 12, 2022, we received a decision on our appeal from the DOL lowering the amount of collateral required to be posted from $39.8 million to $28 million.
+Added: We appealed this decision.
+Added: In addition, on January 19, 2023, the DOL proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers.
+Added: The proposed rules requires, among other requirements, all self-insured operators to post security of at least 120 percent of their projected black lung liabilities.
For additional information see “Part I, Item 1.
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Mining companies must obtain numerous permits that impose strict regulations on various environmental and operational matters in connection with met coal mining.
−Removed: These include permits issued by various federal, state and local
−Removed: agencies and regulatory bodies.
+Added: 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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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.
−Removed: In addition, the
−Removed: 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.
+Added: 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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Alabama has a similar program for mine safety and health regulation and enforcement.
−Removed: The various requirements mandated by law or regulation can place restrictions on our methods of operations, and potentially lead to fees and civil penalties for the violation of such requirements, creating a significant effect on operating costs and productivity.
+Added: The various requirements
+Added: mandated by law or regulation can place restrictions on our methods of operations, and potentially lead to fees and civil penalties for the violation of such requirements, creating a significant effect on operating costs and productivity.
In addition, federal, state or local regulatory agencies have the authority under certain circumstances following significant health and safety incidents, such as fatalities, to order a mine to be temporarily or permanently closed.
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however, our customers may challenge our issuances of force majeure notices.
−Removed: If these challenges are successful, we may have to purchase met coal from third-party sources, if available, to fulfill these obligations or incur capital expenditures to re-open the mines and/or negotiate settlements with the customers, which may include price reductions, the reduction of commitments, and the extension of time for delivery or terminate customers’ contracts.
+Added: If these challenges are successful, we may have to purchase met coal from third-party sources, if available, to fulfill these obligations or incur capital expenditures to re-open the mines and/or negotiate settlements with the customers, which may include price reductions, the reduction of commitments, and the extension of time for delivery or the termination of customers’ contracts.
Any of these actions could have a material adverse effect on our business and results of operations.
18 unchanged sentences
On April 23, 2013, the D.C.
−Removed: 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
−Removed: determination about certain adverse effects, even years after the USACE has granted the permit to an applicant.
+Added: 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.
5 unchanged sentences
Recent regulatory actions and court decisions have created some uncertainty over the scope of CWA jurisdiction.
−Removed: 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.
−Removed: The new rules could expand the scope of CWA jurisdiction, making more waters subject to the CWA's permitting and other discharge requirements.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: 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 expanding the scope of waters protected under the CWA, revising regulations that had been in place for more than 25 years.
+Added: 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
+Added: of waters subject to federal regulation under the CWA.
+Added: On August 30, 2021, a federal court struck down the replacement rule and, on December 30, 2022, the EPA and the USACE published a final rule that would restore water protections that were in place prior to 2015.
+Added: Meanwhile, in October 2022, the Supreme Court heard oral argument in 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.
16 unchanged sentences
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.
−Removed: In particular, at the
−Removed: 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.
−Removed: The resulting Paris Agreement calls for
−Removed: the parties to undertake “ambitious efforts” to limit the average global temperature, and to conserve and enhance sinks and reservoirs of GHG.
+Added: In particular, in August 2022, President Biden signed the IRA into law.
+Added: The IRA contains billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration, amongst other provisions.
+Added: These incentives could accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives.
+Added: Also, 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.
+Added: 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.
3 unchanged sentences
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.
−Removed: 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.”
+Added: The resulting Glasgow
+Added: 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.
22 unchanged sentences
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.
+Added: Also, in August 2022, he signed into law the IRA, which provides billions of dollars in incentives for the development of renewable energy.
However, he has also called for heavy investment in infrastructure projects, many of which require the use of steel.
−Removed: 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
−Removed: infrastructure projects.
+Added: 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.
44 unchanged sentences
• limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets;
−Removed: • prevent us from raising the funds necessary to repurchase all of the Notes tendered to us upon the occurrence of certain changes of control, which failure to repurchase would constitute a default under the indenture governing the Notes;
−Removed: • make it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the indenture governing the Notes and the agreements governing other indebtedness;
+Added: • prevent us from raising the funds necessary to repurchase all of the Notes tendered to us upon the occurrence of certain changes of control, which failure to repurchase would constitute a default under the Indenture;
+Added: • make it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the Indenture and the agreements governing other indebtedness;
• make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
1 unchanged sentence
• expose us to the risk of increased interest rates, as certain of our borrowings, including borrowings under the 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).
−Removed: In addition, our ABL Facility and the indenture governing the Notes contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest.
+Added: In addition, our ABL Facility and the Indenture contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest.
Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness.
8 unchanged sentences
Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
−Removed: In addition, the terms of existing or future debt agreements, including the ABL Facility and the indenture governing the Notes, may restrict us from adopting some of these alternatives.
+Added: In addition, the terms of existing or future debt agreements, including the ABL Facility and the Indenture, may restrict us from adopting some of these alternatives.
In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.
8 unchanged sentences
At December 31, 2022, the Company had $123.3 million of availability under the ABL Facility (calculated net of $8.7 million of letters of credit issued and outstanding at such time).
−Removed: Although covenants under the indenture governing the Notes and the ABL Facility will limit our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial.
+Added: Although covenants under the Indenture and the ABL Facility will limit our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial.
Further, subsidiaries that we designate as unrestricted subsidiaries can incur unlimited additional indebtedness that is structurally senior to the Notes.
−Removed: In addition, the indenture governing the Notes and the ABL Facility will not limit us from incurring obligations that do not constitute indebtedness as defined therein.
+Added: In addition, the Indenture and the ABL Facility will not limit us from incurring obligations that do not constitute indebtedness as defined therein.
If we incur any additional indebtedness secured by liens that rank equally with those securing the Notes, including any additional notes or term loan facilities, the holders of that indebtedness will be entitled to share ratably with the holders in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of our company.
2 unchanged sentences
Our debt agreements contain restrictions that will limit our flexibility in operating our business.
−Removed: The ABL Facility and the indenture governing the Notes contain, and any other existing or future indebtedness of ours would likely contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries ability to, among other things:
+Added: The ABL Facility and the Indenture contain, and any other existing or future indebtedness of ours would likely contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries ability to, among other things:
• incur additional debt, guarantee indebtedness or issue certain preferred shares;
26 unchanged sentences
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase.
−Removed: 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
−Removed: interest rate risk.
+Added: 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, and therefore expose us to 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.
2 unchanged sentences
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.
−Removed: 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.
+Added: dollar LIBOR, formally recommended the CME Group’s forward-looking Secured Overnight Financing Rate (“SOFR”) term rates 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.
16 unchanged sentences
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.
−Removed: 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.
+Added: As of December 31, 2022, 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 to be recorded.
On February 12, 2021, the Alabama Governor signed into law Alabama House Bill 170, now Act 2021-1 (the “Act”).
3 unchanged sentences
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.
−Removed: 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.
+Added: As a result of the repeal of the throwback rule, in the first quarter of 2021, we remeasured our 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.
+Added: At December 31, 2022, we have a valuation allowance against our state deferred income tax assets of approximately $41.4 million.
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.
1 unchanged sentence
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.
−Removed: At December 31, 2021, we
−Removed: had federal and state NOLs of approximately $722.3 million and $992.6 million, respectively.
−Removed: In addition, we have approximately $23.3 million of general business credit carryforwards.
+Added: At December 31, 2022, we had federal and state NOLs of approximately $122.1 million and $951.7 million, respectively.
+Added: In addition, we have
+Added: approximately $23.4 million of general business credit carryforwards.
These NOLs and income tax credit carryforwards collectively represent a deferred tax asset of approximately $57.1 million, net of the valuation allowance.
15 unchanged sentences
Our certificate of incorporation contains transfer restrictions (the “382 Transfer Restrictions”) to minimize the likelihood of an ownership change.
−Removed: 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.
+Added: 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 Amended 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.
−Removed: 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.
−Removed: In addition, on February 14, 2020, we adopted an NOLs rights agreement (the “Rights Agreement”) to supplement the 382 Transfer Restrictions.
+Added: Pursuant to the first 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 382 Transfer Restrictions until April 19, 2023, 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.
+Added: Pursuant to the second amendment to the certificate of incorporation approved by the Company's stockholders at the Company's Annual Meeting of Stockholders held on April 26, 2022, the Company effected a further extension of the 382 Transfer Restrictions until April 19, 2026.
+Added: In addition, on February 14, 2020, we adopted an NOLs rights agreement, which was amended on March 4, 2022 (the “Rights Agreement,” and as amended, the "Amended Rights Agreement"), to supplement the 382 Transfer Restrictions through April 19, 2026.
See “Part II, Item 7.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations-Rights Agreement.” We may engage in transactions or approve waivers of the 382 Transfer Restrictions or the Rights Agreement that may cause an ownership shift.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations-Amended Rights Agreement.” We may engage in transactions or approve waivers of the 382 Transfer Restrictions or the Amended Rights Agreement that may cause an ownership shift.
In doing so, we expect to first perform the calculations necessary to confirm that our ability to use our NOLs and other federal income tax attributes will not be affected or otherwise determine that such transactions or waivers are in our best interests.
−Removed: For example, under certain circumstances, the Board may determine it is in our best interest to exempt certain transactions from the operation of the 382 Transfer Restrictions and the Rights Agreement, if such transaction is determined not to be detrimental to the utilization of our NOLs or otherwise in our best interests.
+Added: For example, under certain circumstances, the Board may determine it is in our best interest to exempt certain transactions from the operation of the 382 Transfer Restrictions and the Amended Rights Agreement, if such transaction is determined not to be detrimental to the utilization of our NOLs or otherwise in our best interests.
These calculations are complex and reflect certain necessary assumptions.
Accordingly, it is possible that we could approve or engage in a transaction involving our common stock that causes an ownership change and impairs the use of our NOLs and other federal income tax attributes.
−Removed: 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.”
+Added: For more information, see “-Risks Related to the Ownership of Our Common
+Added: Stock-We could engage in or approve transactions involving our common stock that adversely affect significant stockholders and our other stockholders.”
Risks Related to the Ownership of our Common Stock
23 unchanged sentences
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.
−Removed: 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
−Removed: volume to decline.
+Added: 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.
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.
−Removed: Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the indenture governing the Notes, and will be at the sole discretion of the Board and will also depend on many factors.
−Removed: Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the indenture governing the Notes, and will be at the sole discretion of the Board and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, borrowing availability under our ABL Facility, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board deems relevant.
−Removed: The terms of our ABL Facility and the indenture governing the Notes may restrict our ability to pay cash dividends on our common stock.
+Added: Any declaration and payment of future dividends to holders of our common stock or stock repurchases will depend on future financial performance and may be limited by restrictive covenants of our ABL Facility and the Indenture, and will be at the sole discretion of the Board and will also depend on many factors.
+Added: Our ability to declare future dividends and make future share repurchases will depend on our future financial performance, which in turn depends on the successful implementation of our strategy and on financial, competitive, regulatory, technical and other factors, general economic conditions, demand and selling prices for our products and other factors specific to our industry, many of which are beyond our control.
+Added: Therefore, our ability to generate cash depends on the performance of our operations and could be limited by decreases in our profitability or increases in costs, regulatory changes, capital expenditures or debt servicing requirements.
+Added: In addition, any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the Indenture, and will be at the sole discretion of the Board and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, borrowing availability under our ABL Facility, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board deems relevant.
+Added: The terms of our ABL Facility and the Indenture may restrict our ability to pay cash dividends on our common stock.
We are prohibited from paying any cash dividend on our common stock unless we satisfy certain conditions.
−Removed: Furthermore, we are permitted under the terms of our ABL Facility and the indenture governing the Notes to incur additional indebtedness, the terms of which may severely restrict or prohibit the payment of dividends and the associated debt service may impact our ability to satisfy the conditions for paying dividends under our ABL Facility and the indenture governing the Notes.
+Added: Furthermore, we are permitted under the terms of our ABL Facility and the Indenture to incur additional indebtedness, the terms of which may severely restrict or prohibit the payment of dividends and the associated debt service may impact our ability to satisfy the conditions for paying dividends under our ABL Facility and the Indenture.
The agreements governing our current and future indebtedness may not permit us to pay dividends on our common stock.
+Added: Accordingly, the Company cannot make any assurance that future dividends will be paid or future repurchases will be made.
An investor’s percentage ownership in us may be diluted by future issuances of capital stock or securities or instruments that are convertible into our capital stock, which could reduce its influence over matters on which stockholders vote.
7 unchanged sentences
Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.
−Removed: On February 14, 2020, the Company entered into the Rights Agreement.
−Removed: In connection with the adoption of the Rights Agreement, the Board approved a certificate of designations of Series A Junior Participating Preferred Stock designating 140,000 shares of preferred stock, which was filed on February 14, 2020 with the Secretary of State of the State of Delaware and became effective on such date.
+Added: On February 14, 2020, the Company entered into the Rights Agreement, which was amended on March 4, 2022 to extend the expiration date to April 19, 2026 and increase the exercise price to $56.00.
+Added: In connection with the adoption of the Rights Agreement, the Board approved a certificate of designations of Series A Junior Participating Preferred Stock (as defined below) designating 140,000 shares of preferred stock, which was filed on February 14, 2020 with the Secretary of State of the State of Delaware and became effective on such date.
See “Part II, Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations-Designation of Series A Junior Participating Preferred Stock.”
−Removed: 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 dividends or substantial dilution of the stock ownership, respectively.
+Added: Our common stock is subject to the 382 Transfer Restrictions under our certificate of incorporation and the Amended Rights Agreement which are intended to prevent a Section 382 “ownership change,” which if not complied with, could result in the
+Added: forfeiture of such stock and related dividends 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.
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.
−Removed: 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
−Removed: 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.
+Added: In 2022, the 382 Transfer Restrictions were amended to expire on April 19, 2026.
+Added: 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.
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.
1 unchanged sentence
If the Board determines that a Prohibited Transfer (as defined in our certificate of incorporation) has occurred, such Prohibited Transfer shall, to the fullest extent permitted by law, be void ab initio and have no legal effect, and upon written demand by us, the Purported Transferee (as defined in the certificate of incorporation) shall disgorge or cause to be disgorged our securities, together with any dividends or distributions received, with respect to such securities.
−Removed: On February 14, 2020, we adopted the Rights Agreement to supplement the 382 Transfer Restrictions.
−Removed: 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.
−Removed: 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.
−Removed: The Rights Agreement also gives discretion to the Board to determine that someone is an Acquiring Person even if they do not own 4.99% or more of the outstanding common stock but do own 4.99% or more in value of the Company’s outstanding stock, as determined pursuant to Section 382 of the Code and the regulations promulgated thereunder.
−Removed: In addition, the Board has established procedures to consider requests to exempt certain acquisitions of the Company’s securities from the Rights Agreement if the Board determines that doing so would not limit or impair the availability of the NOLs or is otherwise in the best interests of the Company.
+Added: On February 14, 2020, we adopted the Rights Agreement, which was amended on March 4, 2022 to extend the expiration date to April 19, 2026 and increase the exercise price to $56.00, to supplement the 382 Transfer Restrictions.
+Added: In general terms, the Amended 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.
+Added: Under the Amended 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.
+Added: The Amended Rights Agreement also gives discretion to the Board to determine that someone is an Acquiring Person even if they do not own 4.99% or more of the outstanding common stock but do own 4.99% or more in value of the Company’s outstanding stock, as determined pursuant to Section 382 of the Code and the regulations promulgated thereunder.
+Added: In addition, the Board has established procedures to consider requests to exempt certain acquisitions of the Company’s securities from the Amended Rights Agreement if the Board determines that doing so would not limit or impair the availability of the NOLs or is otherwise in the best interests of the Company.
See "Part II, Item 7.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations-Rights Agreement.
−Removed: The 382 Transfer Restrictions and the Rights Agreement may make our stock less attractive to large institutional holders and limit the price that investors might be willing to pay for shares of our common stock and otherwise have an adverse impact on the market for our common stock.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations-Amended Rights Agreement."
+Added: The 382 Transfer Restrictions and the Amended Rights Agreement may make our stock less attractive to large institutional holders and limit the price that investors might be willing to pay for shares of our common stock and otherwise have an adverse impact on the market for our common stock.
In addition, these restrictions could discourage a third party from proposing a change of control or other strategic transaction concerning the Company or otherwise have the effect of delaying or preventing a change of control of the Company that other stockholders may view as beneficial.
1 unchanged sentence
We could engage in or approve transactions involving our common stock that adversely affect significant stockholders and our other stockholders.
−Removed: Under the 382 Transfer Restrictions that are contained in our certificate of incorporation and the Rights Agreement, our 4.99% stockholders will effectively be required to seek the approval of, or a determination by, the Board before they engage in certain transactions involving our common stock.
−Removed: Furthermore, we could engage in or approve transactions involving our common stock that limit our ability to approve future transactions involving our common stock by our 4.99% stockholders without impairing the use of our federal income tax attributes.
+Added: Under the 382 Transfer Restrictions that are contained in our certificate of incorporation and the Amended Rights Agreement, our 4.99% stockholders will effectively be required to seek the approval of, or a determination by, the Board before they engage in certain transactions involving our common stock.
+Added: Furthermore, we could engage in or approve transactions
+Added: involving our common stock that limit our ability to approve future transactions involving our common stock by our 4.99% stockholders without impairing the use of our federal income tax attributes.
In addition, we could engage in or approve transactions involving our common stock that cause stockholders owning less than 4.99% to become 4.99% stockholders, resulting in those stockholders’ having to either disgorge our securities, and any dividends or distributions related to such securities, in accordance with the 382 Transfer Restrictions or seek the approval of, or a determination by, the Board before they could engage in certain future transactions involving our common stock.
−Removed: 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.
−Removed: 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
−Removed: our stockholders.
+Added: Provisions in our certificate of incorporation and bylaws and Delaware law, as well as the Amended 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.
+Added: The existence of some provisions in our certificate of incorporation and bylaws and Delaware corporate law, as well as the Amended Rights Agreement, could delay or prevent a change in control of our company, even if that change would be beneficial to our stockholders.
Our certificate of incorporation and bylaws contain provisions that may make acquiring control of our company difficult, including:
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• permits us to enter into contracts and transactions in which one or more of our officers or directors may be a party to or may be financially or otherwise interested in so long as such contract or transaction is approved by the Board in accordance with the DGCL;
−Removed: • permits any of our stockholders or non-employee directors and their affiliates to engage in a corporate opportunity in the same or similar business activities or lines of business in which we engage or propose to engage, compete with us and to make investments in any kind of property in which we may make investments and will not be deemed to have (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity, (ii) acted in bad faith or in a manner inconsistent with our best interests or (iii) be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that they have engaged in such activities;
+Added: • permits any of our stockholders or non-employee directors and their affiliates to engage in a corporate opportunity in the same or similar business activities or lines of business in which we engage or propose to engage, compete with us and to make investments in any kind of property in which we may make investments and will not be deemed to have
+Added: (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity, (ii) acted in bad faith or in a manner inconsistent with our best interests or (iii) be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that they have engaged in such activities;
• provides that if any of our stockholders, non-employee directors or their affiliates acquire knowledge of a potential business opportunity, transaction or other matter (other than one expressly offered to any non-employee director in writing solely in his or her capacity as our director ), such stockholder, non-employee director or affiliate will have no duty to communicate or offer that opportunity to us, and will be permitted to pursue or acquire such opportunity or offer that opportunity to another person and will not be deemed to have (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity, (ii) acted in bad faith or in a manner inconsistent with our best interests or (iii) be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that they have pursued or acquired such opportunity or offered the opportunity to another person.
4 unchanged sentences
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.