What changed in this filing

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Item 9A. Controls and Procedures

2024-02-14 compared with 2023-02-15 · 247 added, 185 removed, 948 unchanged (31% of the section changed)

10 unchanged sentences

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.

In making this assessment, our management used the criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

In making this assessment, our management used the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

Our management has concluded that, as of December 31, 2023, our internal control over financial reporting is effective based on this assessment and these criteria.

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Other Information

Rule 10b5-1 Trading Arrangements

From time to time, members of the Company's Board of Directors and officers of the Company may enter into Rule 10b5-1 trading plans, which allow for the purchase or sale of common stock under pre-established terms at times when directors and officers might otherwise be prevented from trading under insider trading laws or because of self-imposed blackout periods.

Such trading plans are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act and comply with the Company's insider trading policy.

Other than as described below, during the three months ended December 31, 2023, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

On November 7, 2023 , Jack K.

Richardson , Chief Operating Officer of the Company, adopted a Rule 10b5-1 trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (a “Rule 10b5-1 Plan”).

Richardson’s plan, which provides for the potential sale of up to 88,000 shares of the Company’s common stock, terminates upon the earlier of December 31, 2025 or the date all shares subject to the plan have been sold.

On November 8, 2023 , Walter J.

Scheller, III , Chief Executive Officer and director of the Company, adopted a Rule 10b5-1 Plan.

Scheller’s plan, which provides for the potential sale of up to 150,000 shares of the Company’s common stock, terminates upon the earlier of December 31, 2025 or the date all shares subject to the plan have been sold.

On November 9, 2023 , Kelli K.

Gant , Chief Administrative Officer and Corporate Secretary of the Company, adopted a Rule 10b5-1 Plan.

Gant’s plan, which provides for the potential sale of up to 20,000 shares of the Company’s common stock, terminates upon the earlier of December 31, 2025 or the date all shares subject to the plan have been sold.

On November 15, 2023 , Dale W.

Boyles , Chief Financial Officer of the Company, adopted a Rule 10b5-1 Plan.

Boyles’ plan, which provided for the potential sale of up to 69,000 shares of the Company’s common stock, terminated upon the earlier of December 31, 2025 or the date all shares subject to the plan have been sold.

On November 28, 2023 , Mr.

Boyles terminated the above-referenced Rule 10b5-1 Plan.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The equity compensation plan information as required by Item 201(d) of Regulation S-K is included in Part II, Item 5 of this Annual Report.

Equity Compensation Plans

The following table sets forth certain information relating to our equity compensation plans as of December 31, 2023:

Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants, and Rights Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights (1)

Number of Securities Remaining Available for Future Issuance

Equity compensation plans approved by security holders:

2017 Equity Incentive Plan 650,460 $ — 4,332,083

(1) The weighted-average exercise price does not take into account restricted stock units or phantom units, which do not have an exercise price.

Pursuant to paragraph 3 of General Instruction G to Form 10-K, we incorporate by reference into this Item 12 all other information to be disclosed in our definitive proxy statement, which is to be filed pursuant to Regulation 14A with the SEC within 120 days after the close of the year ended December 31, 2023.

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001-38061) filed with the Commission on April 26, 2022).

Bylaws of Warrior Met Coal, Inc.

Amended and Restated Bylaws of Warrior Met Coal, Inc.

(incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No.

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001-38061) filed with the Commission on March 4, 2022).

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.6 to the Registrant’s Annual Report on Form 10-K (File No.

001-38061) filed with the Commission on February 19, 2020).

Amendment No.

2 to Rights Agreement, dated as of December 8, 2023, between Warrior Met Coal, Inc.

and Computershare Trust Company, N.A., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K (File No.

001-38061) filed with the Commission on December 8, 2023).

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

Second Amended and Restated Asset-Based Revolving Credit Agreement, dated as of December 6, 2021, by and among Warrior Met Coal, Inc.

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Intercreditor Agreement, dated as of December 6, 2021, among Citibank, N.A., initial ABL agent, Wilmington Trust, National Association, initial term agent and initial term representative, and each additional term agent and additional term representative from time to time party thereto.

Registration Rights Agreement, dated as of April 19, 2017, among Warrior Met Coal, Inc.

and certain of its equity holders party thereto (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q (File No.

001-38061) filed with the Commission on August 3, 2017).

Warrior Met Coal, Inc.

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001-38061) filed with the commission on February 21, 2020).

Form of Restricted Stock Unit Award Agreement (for non-employee director grants in 2023) (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No.

001-38061) filed with the commission on May 3, 2023).

Form of Restricted Stock Unit Award Agreement (for non-employee director grants in 2023 with deferral election) (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q (File No.

001-38061) filed with the commission on May 3, 2023).

Warrior Met Coal, Inc.

Transformational Retention/Incentive Award Agreement, dated May 1, 2023, by and between Warrior Met Coal, Inc.

and Walter J.

Scheller, III (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q (File No.

001-38061) filed with the commission on May 3, 2023).

Form of Warrior Met Coal, Inc.

Transformational Retention/Incentive Award Agreement (for non-CEO named executive officers), dated May 1, 2023 (incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q (File No.

001-38061) filed with the commission on May 3, 2023).

List of Subsidiaries of the Company.

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Technical Report Summary for Mine No.

7 - S-K 1300 Report

7 - S-K 1300 Report (incorporated by reference to Exhibit 96.1 to the Registrant's Amendment No.

1 on Form 10-K/A (File No.

001-38061) filed with the commission on May 18, 2023 to the Registrant's Annual Report on Form 10-K (File No.

002-38061) filed with the commission on February 15, 2023)

Technical Report Summary for Mine No.

4 - S-K 1300 Report

4 - S-K 1300 Report (incorporated by reference to Exhibit 96.2 to the Registrant's Amendment No.

1 on Form 10-K/A (File No.

001-38061) filed with the commission on May 18, 2023 to the Registrant's Annual Report on Form 10-K (File No.

002-38061) filed with the commission on February 15, 2023)

Technical Report Summary for Blue Creek - S-K 1300 Report.

Warrior Met Coal, Inc.

Policy for the Recovery of Erroneously Awarded Compensation .

101INS* XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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Other receivables 4,379 3,637

Income tax receivable 7,833 —

Inventories, net 183,949 154,039

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Total costs and expenses 1,135,219 937,314 815,463

Operating income (loss) 801,424 243,753 ( 27,139 )

Interest expense, net ( 18,995 ) ( 35,389 ) ( 32,310 )

Operating income 541,406 801,424 243,753

Interest expense ( 17,960 ) ( 31,433 ) ( 36,500 )

Interest income 40,699 12,438 1,111

Loss on early extinguishment of debt ( 11,699 ) — ( 9,678 )

Other income 675 1,291 3,544

Income (loss) before income taxes 783,104 199,977 ( 55,905 )

Income tax expense (benefit) 141,806 49,096 ( 20,144 )

Net income (loss) $ 641,298 $ 150,881 $ ( 35,761 )

Basic and diluted net income (loss) per share:

Net income (loss) per share—basic $ 12.42 $ 2.94 $ ( 0.70 )

Net income (loss) per share—diluted $ 12.40 $ 2.93 $ ( 0.70 )

Other (expense) income ( 1,027 ) 675 1,291

Income before income taxes 551,419 783,104 199,977

Income tax expense 72,790 141,806 49,096

Net income $ 478,629 $ 641,298 $ 150,881

Basic and diluted net income per share:

Net income per share—basic $ 9.21 $ 12.42 $ 2.94

Net income per share—diluted $ 9.20 $ 12.40 $ 2.93

Weighted average number of shares outstanding—basic 51,973 51,622 51,382

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Balance at December 31, 2021 $ 537 $ — $ ( 50,576 ) $ 256,059 $ 665,963 $ 871,983

Net loss — — — — 150,881 150,881

Net income — — — — 641,298 641,298

Dividends paid ($ 1.54 per share)

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OPERATING ACTIVITIES

Net income (loss) $ 641,298 $ 150,881 $ ( 35,761 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 478,629 $ 641,298 $ 150,881

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and depletion 127,356 115,279 141,418

Deferred income tax expense (benefit) 141,806 49,096 ( 20,075 )

Deferred income tax expense 52,871 141,806 49,096

Stock-based compensation expense 18,207 17,621 9,370

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Acquisition of leased mineral rights — ( 3,500 ) —

Acquisition of Black Warrior Methane and Black Warrior Transmission, net of $ 2.8 million cash acquired

Acquisitions, net of cash acquired ( 2,421 ) 2,533 —

Proceeds from sale of property, plant and equipment — — 209

Sale of short-term investments — — 14,733

Purchases of short-term investments — — ( 8,500 )

Net cash used in investing activities ( 527,207 ) ( 255,144 ) ( 71,146 )

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Proceeds from issuance of debt — — 347,701

Borrowings under ABL Facility — — 70,000

Repayments under ABL Facility — — ( 40,000 )

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Other ( 9,419 ) ( 3,724 ) ( 3,042 )

Net cash (used in) provided by financing activities ( 153,119 ) ( 96,474 ) 14,096

Net increase in cash and cash equivalents 433,641 183,923 18,533

Net cash used in financing activities ( 265,184 ) ( 153,119 ) ( 96,474 )

Net (decrease) increase in cash and cash equivalents ( 91,283 ) 433,641 183,923

Cash and cash equivalents at beginning of period 829,480 395,839 211,916

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is a U.S.-based, environmentally and socially minded supplier to the global steel industry.

The Company is dedicated entirely to mining non-thermal metallurgical (met) coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia.

The Company is a large-scale, low-cost producer and exporter of premium met coal, also known as hard-coking coal ("HCC"), operating highly efficient longwall operations in its underground mines based in Alabama.

The HCC that the Company produces from the Blue Creek coal seam contains very low sulfur, has strong coking properties and is of a similar quality to coal referred to as the premium HCC produced in Australia.

The premium nature of the Company's HCC makes it ideally suited as a base feed coal for steel makers and results in price realizations near the S&P Platts Index price.

The Company is dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia.

The Company is a large-scale, low-cost producer and exporter of premium steelmaking coal, also known as hard-coking coal ("HCC"), operating highly efficient longwall operations in its underground mines based in Alabama.

The HCC that the Company produces from the Blue Creek coal seam contains very low sulfur and has strong coking properties.

The Company also generates ancillary revenues from the sale of natural gas extracted as a byproduct from the underground coal mines and royalty revenues from leased properties.

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Collective Bargaining Agreement

The Company's Collective Bargaining Agreement (“CBA”) contract with the United Mine Workers of America (“UMWA”) expired on April 1, 2021.

While the Company continues to engage in good faith negotiations with the UMWA, the Company has not reached a new contract and the UMWA is engaging in a strike.

The Company's Collective Bargaining Agreement (“CBA”) contract with the United Mine Workers of America (“UMWA”) expired on April 1, 2021 and the labor union initiated a strike after an agreement on a new contract was not reached.

As a result of the strike, the Company initially idled Mine No.

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These expenses are reported separately in the Statements of Operations and represent expenses incurred while the respective mine is idled or operating below normal capacity, such as electricity, insurance and maintenance labor.

The Company has also incurred approximately $ 23.5 million and $ 21.4 million of business interruption expenses for the years ended December 31, 2022 and December 31, 2021, respectively, which represent non-recurring expenses that are directly attributable to the ongoing UMWA strike for incremental safety and security, labor negotiations and other expenses.

The Company incurred business interruption expenses of approximately $ 8.3 million, $ 23.5 million and $ 21.4 million for the years ended December 31, 2023, December 31, 2022, and December 31, 2021 respectively, which represent non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, labor negotiations and other expenses.

These expenses are also presented separately in the Statements of Operations.

Black Warrior Methane (“BWM”) and Black Warrior Transmission (“BWT”)

On March 1, 2022, the Company acquired the remaining 50 % interest in BWM and BWT for $ 0.3 million.

On February 16, 2023, the labor union representing certain of the Company's hourly employees announced that they were ending the strike and made an unconditional offer to return to work.

The return-to-work process for eligible employees who wished to return to work which began in February has been completed.

The Company continues to engage in good faith efforts with the labor union to reach an agreement on a new contract.

On March 31, 2023, the Company acquired the remaining ownership interest in gas wells owned by an independent third party for $ 2.4 million.

The purchase consideration has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.

The acquisition is not deemed to be material to the financial statements.

On March 1, 2022, the Company acquired the remaining 50 % interest in Black Warrior Methane and Black Warrior Transmission for $ 0.3 million.

The purchase consideration has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.

The acquisition is not deemed to be material to the financial statements.

Note 2— Summary of Significant Accounting Policies

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Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates.

Concentrations of Credit Risk and Major Customers

The Company’s principal line of business is mining and marketing met coal to foreign steel producers.

For the year ended December 31, 2022, approximately 98.2 % of sales were derived from coal shipments to customers, located primarily in Europe, South America and Asia.

At December 31, 2022 approximately 96.9 % of trade receivables were related to these

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2022, the Company's geographic customer mix was 61 % in Europe, 20 % in Asia and 19 % in South America.

Concentrations of Credit Risk and Major Customers

The Company’s principal line of business is mining and marketing steelmaking coal to foreign steel producers.

For the year ended December 31, 2023, approximately 98.3 % of sales were derived from coal shipments to customers, located primarily in Europe, South America and Asia.

At December 31, 2023 approximately 97.8 % of trade receivables were related to these customers.

For the year ended December 31, 2023, the Company's geographic customer mix was 48 % in Europe, 29 % in Asia, 21 % in South America and 2 % in the U.S.

During the year ended December 31, 2023, E-Commodities Holdings Private Limited, Salzgitter Flachstahl GMBH and Exiros BV Sucursal Uruguay accounted for $ 246.4 million, or 14.9 %, $ 205.7 million, or 12.4 %, and $ 195.3 million, or 11.8 % of total revenues, respectively.

During the year ended December 31, 2022, Xcoal Energy & Resources, Salzgitter Flachstahl GMBH and Thyssenkrupp Steel Europe AG accounted for $ 330.1 million, or 19.1 %, $ 207.8 million or 12.0 % and $ 187.0 million, or 10.8 % of total revenues, respectively.

During the year ended December 31, 2021, Xcoal Energy & Resources and Salzgitter Flachstahl GMBH accounted for $ 526.2 million, or 51.0 %, and $ 118.1 million, or 11.4 % of total revenues, respectively.

During the year ended December 31, 2020, Xcoal Energy & Resources, Exiros BV Sucursal Uruguay and Iskenderun Demir Ve Celik A.S.

accounted for $ 146.5 million, or 18.7 %, $ 117.7 million, or 15.0 %, and $ 89.1 million, or 11.4 % of total revenues, respectively.

Revenue Recognition

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For coal shipments to international customers via ocean vessel, control is transferred when the vessel is loaded at the Port of Mobile in Alabama.

For all met coal sales under average pricing contracts where pricing is not finalized when revenue is recognized, revenue is recorded based on estimated consideration to be received at the date of the sale.

Occasionally, the Company will sell coal stockpiles at the barge loadout or port upon which control, title and risk of loss transfers when stockpiles are segregated.

For all steelmaking coal sales under average pricing contracts where pricing is not finalized when revenue is recognized, revenue is recorded based on estimated consideration to be received at the date of the sale.

For natural gas sales, control is transferred when the gas has been transferred to the pipeline.

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In order to estimate the allowance for credit losses on trade accounts receivable, the Company utilizes an aging approach in which potential impairment is calculated based on how long a receivable has been outstanding (e.g., current, 1-31, 31-60, etc.).

The Company calculates an expected credit loss rate based on the Company’s historical credit loss rate, the risk characteristics of its customers, and the current metallurgical coal and steel market environments.

The Company calculates an expected credit loss rate based on the Company’s historical credit loss rate, the risk characteristics of its customers, and the current steelmaking coal and steel market environments.

As of December 31, 2023, the estimated allowance for credit losses was immaterial and did not have a material impact on the Company's financial statements.

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Costs incurred to transport coal to the point of sale at the Port of Mobile, Alabama, are included in cost of sales and the gross amounts billed to customers, if any, to cover shipping and handling to the ultimate/final destination are included in sales.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Cash and Cash Equivalents

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The Company purchases United States Treasury bills with maturities ranging from six to twelve months which are classified as held to maturity and are carried at amortized cost, which approximates fair value.

The Company also purchases

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

fixed income securities and certificates of deposits with varying maturities that are classified as available for sale and are carried at fair value.

The Company also purchases fixed income securities and certificates of deposits with varying maturities that are classified as available for sale and are carried at fair value.

Securities classified as held to maturity securities are those securities that management has the intent and ability to hold to maturity.

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Maintenance and repair expenditures are charged to cost of sales as incurred.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Deferred Mine Development

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Costs amortized during the production phase of a mine are capitalized into inventory and expensed to cost of sales as the coal is sold.

Coal sales revenue related to incidental production during the development phase

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

are recorded as sales with an offset to cost of sales based on the estimated cost per ton sold for the mine when the asset is in place for its intended use.

Coal sales revenue related to incidental production during the development phase are recorded as sales with an offset to cost of sales based on the estimated cost per ton sold for the mine when the asset is in place for its intended use.

Owned and Leased Mineral Interests

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When impairment indicators exist, the Company uses an estimate of the future undiscounted cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable.

If the carrying amount of an asset or asset group exceeds its estimated future cash flows, impairment is recognized equal to the amount by which the carrying amount of the asset exceeds the fair value of the asset or asset group.

Fair value is generally determined using market quotes, if available, or a discounted cash flow approach.

The Company’s estimate of future undiscounted cash flows is based on assumptions including long-term met coal pricing forecasts, anticipated production volumes and mine operating costs for the life of the mine or estimated useful life of the asset.

If the carrying amount of an asset or asset group exceeds its estimated future cash flows, impairment is recognized equal to the amount by which the carrying amount of the

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

asset exceeds the fair value of the asset or asset group.

Fair value is generally determined using market quotes, if available, or a discounted cash flow approach.

The Company’s estimate of future undiscounted cash flows is based on assumptions including long-term steelmaking coal pricing forecasts, anticipated production volumes and mine operating costs for the life of the mine or estimated useful life of the asset.

Equity Award Compensation

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The costs to obtain new debt financing or amend existing financing agreements are deferred and amortized to interest expense over the life of the related indebtedness or credit facility using the straight-line method.

As of December 31, 2022 and December 31, 2021, there were $ 4.0 million and $ 5.0 million of unamortized origination fees related to the ABL Facility (as defined in Note 13) in other long-term assets on the accompanying Balance Sheet.

As of December 31, 2023 and December 31, 2022, there were $ 3.0 million and $ 4.0 million, respectively, of unamortized origination fees related to the ABL Facility (as defined in Note 13) in other long-term assets on the accompanying Balance Sheet.

As of December 31, 2023 and December 31, 2022 there were $ 3.5 million and $ 8.0 million, respectively, of unamortized deferred financing costs and debt discount, net, related to the Notes (as defined in Note 13), which is presented as a net deduction from the carrying amount of the related debt recognized in the accompanying Balance Sheet.

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The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Fair Value Measurements

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Hierarchy levels are defined as follows:

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Quoted prices in active markets for identical assets and liabilities.

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Lease expense is recognized on a straight-line basis over the lease term.

New Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM).

The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows or financial condition.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid.

2023-09 requires a public business entity ("PBE") to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented.

The Company early adopted this ASU and the required disclosures are disclosed in Note 7.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note 3— Inventories, net

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Prepaid insurance 1,991 1,424

Prepaid deposits — 49

Current hedge asset — 4,043

Other 7,049 5,143

Total prepaid expenses and other $ 27,553 $ 25,519

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note 5— Mineral Interests and Property, Plant and Equipment, net

Mineral interests totaled $ 147.7 million and $ 144.2 million and the related accumulated depletion totaled $ 59.1 million and $ 51.0 million as of December 31, 2022 and December 31, 2021, respectively.

Mineral interests totaled $ 147.7 million and the related accumulated depletion totaled $ 67.3 million and $ 59.1 million as of December 31, 2023 and December 31, 2022, respectively.

Property, plant and equipment are summarized as follows (in thousands):

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Property, plant and equipment, net $ 1,179,609 $ 738,947

Depreciation and depletion expense was $ 115.3 million, $ 141.4 million, and $ 118.1 million, for the years ended December 31, 2022 and December 31, 2021, and December 31, 2020, respectively.

Depreciation and depletion expense was $ 127.4 million, $ 115.3 million, and $ 141.4 million, for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

Construction in progress includes capitalized interest of $ 12.1 million and $ 1.4 million as of December 31, 2023 and December 31, 2022, respectively.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note 6— Other Long-Term Assets

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Note 7— Income Taxes

Income tax expense (benefit) consisted of the following (in thousands):

Income tax expense consisted of the following (in thousands):

For the years ended December 31,

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Total $ 72,790 $ 141,806 $ 49,096

For the year ended December 31, 2023, the Company recognized income tax expense of $ 72.8 million or an effective tax rate of 13.2 %.

The Company's federal income tax payments were $ 27.0 million in 2023 and there were no federal income tax payments in 2022 or 2021.

As of December 31, 2023, the Company has a current income tax receivable of $ 7.8 million, which is expected to be applied to estimated income tax payments in 2024.

Total income tax expense differs from the expected tax expense (computed by multiplying the U.S.

federal statutory rate of 21%) by income before income taxes as a result of the following (in thousands):

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2022, the Company recognized an income tax expense of $ 141.8 million or an effective tax rate of 18.1 %.

Total income tax expense (benefit) differs from the expected tax expense (benefit) (computed by multiplying the U.S.

federal statutory rate of 21% by income (loss) before income taxes) as a result of the following (in thousands):

For the years ended December 31,

2023 2022 2021

Income (loss) before income tax expense (benefit) $ 783,104 $ 199,977 $ ( 55,905 )

Tax expense (benefit) at statutory tax rate $ 164,452 $ 41,995 $ ( 11,740 )

Amount Rate Amount Rate Amount Rate

Income before income tax expense 551,419 $ 783,104 $ 199,977

Tax expense at statutory tax rate 115,798 21.0 % $ 164,452 21.0 % $ 41,995 21.0 %

foreign derived intangible income ( 26,077 ) ( 4.7 ) % — — % — — %

Depletion ( 21,811 ) ( 4.0 ) % ( 23,638 ) ( 3.0 ) % ( 12,227 ) ( 6.1 ) %

1 unchanged sentence

Valuation allowance on deferred tax assets ( 417 ) ( 0.1 ) % ( 4,519 ) ( 0.6 ) % 45,952 23.0 %

IRC Section 451 marginal well credit ( 87 ) ( 4,702 ) ( 3,977 )

Section 45I marginal well credit — — % ( 87 ) — % ( 4,702 ) ( 2.4 ) %

Other 3,372 0.6 % 3,483 0.4 % 465 0.2 %

Tax expense (benefit) recognized $ 141,806 $ 49,096 $ ( 20,144 )

Tax expense recognized $ 72,790 13.2 % $ 141,806 18.1 % $ 49,096 24.6 %

The rates for all periods include a benefit related to depletion and a benefit or expense related to adjustments to the valuation allowance on deferred tax assets and Internal Revenue Code ("IRC") Section 45I marginal well credits.

For the year ended December 31, 2023, the Company recognized an income tax benefit of $ 26.1 million related to a deduction under IRC Section 250:

Foreign-Derived Intangible Income.

The Tax Cuts and Jobs Act was enacted on December 22, 2017 and enacted IRC Section 250:

FDII, which provides for among other things, a deduction of 37.5% with respect to foreign-derived intangible income.

Beginning in 2026, the deduction is reduced from 37.5% to 22.5% of foreign-derived intangible income.

The Company has historically not been eligible to claim the deduction due to the deduction being limited to taxable income and the Company's ability to utilize its net operating losses to offset taxable income.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.

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Deferred income tax liabilities:

Inventory — —

Prepaid expenses ( 6,757 ) ( 8,308 )

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Total deferred income tax liabilities ( 109,397 ) ( 102,142 )

Net deferred income tax (liability) asset $ ( 15,806 ) $ 125,276

The Company has federal net operating loss ("NOL") carryforwards of approximately $ 122.1 million as of December 31, 2022, of which $ 33.7 million are indefinite lived and the remainder expire predominantly on December 31, 2034 through December 31, 2036.

Net deferred income tax liability $ ( 68,677 ) $ ( 15,806 )

During the year ended December 31, 2023, the Company fully utilized all of its federal net operating loss ("NOL") carryforwards and general business credits.

The Company has state NOL carryforwards of approximately $ 928.2 million, which expire predominantly on December 31, 2029 through December 31, 2035.

In addition, the Company has approximately $ 23.4 million of general business credits which begin to expire on December 31, 2026 and fully expire on December 31, 2041.

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

A company’s ability to deduct its NOLs and utilize certain other available tax attributes can be substantially constrained under the general annual limitation rules of Section 382 of the Code if it undergoes an “ownership change” as defined in Section 382 or if similar provisions of state law apply.

A company generally is allowed a deduction for federal and state NOLs against its federal and state taxable income.

If a Company undergoes an “ownership change” as defined in Section 382 of the Code or similar provisions of state law, its ability to deduct federal and state NOLs against its federal or state taxable income and utilize certain other available tax attributes can be limited.

While the Company does not believe an ownership change has occurred since April 1, 2016, because the rules under Section 382 are highly complex and actions of the Company's stockholders which are beyond its control or knowledge could impact whether an ownership change has occurred, the Company cannot give you any assurance that another Section 382 ownership change has not occurred or will not occur in the future.

As a result of the Company qualifying for the aforementioned exception, were the Company to have undergone a subsequent ownership change prior to April 1, 2018, its NOLs would effectively be reduced to zero.

An ownership change after such date would severely limit the Company's ability to utilize its NOLs and other tax attributes.

As a result of the Company qualifying for the aforementioned exception, were the Company to have undergone a subsequent ownership change prior to April 1, 2018, its federal and state NOLs would effectively be reduced to zero.

An ownership change after such date would severely limit the Company's ability to utilize its federal and state NOLs and other tax attributes.

Amended Rights Agreement

On February 14, 2020, the Company adopted the Rights Agreement, which was amended on March 4, 2022 by Amendment No.

1 to the Rights Agreement (the "Rights Agreement", and as amended, the "Amended Rights Agreement"), in an effort to prevent the imposition of significant limitations under Section 382 of the Code on the Company's ability to utilize its current NOLs to reduce its future tax liabilities.

1 to the Rights Agreement and on December 8, 2023 by Amendment No.

2 (the "Rights Agreement", and as amended, the "Amended Rights Agreement"), in an effort to prevent the imposition of significant limitations due to an "ownership change" within the meaning of Section 382 of the Code on the Company's ability to utilize its current federal and state NOLs to reduce its future tax liabilities.

The Company's stockholders ratified the Rights Agreement at the 2020 Annual Meeting of Stockholders and ratified the Amendment No.

1 to the Rights Agreement at the 2022 Annual Meeting of Stockholders.

The Amended Rights Agreement is intended to supplement the 382 Transfer Restrictions and is designed to serve the interests of all stockholders by preserving the availability of the Company's NOLs and is similar to plans adopted by other companies with significant NOLs.

The Amended Rights Agreement is intended to supplement the 382 Transfer Restrictions and is designed to serve the interests of all stockholders by preserving the availability of the Company's federal and state NOLs and is similar to plans adopted by other companies with significant federal and state NOLs.

Pursuant to the Amended Rights Agreement, one preferred stock purchase right (a “Right” or the “Rights”) was distributed to stockholders of the Company for each share of common stock of the Company outstanding as of the close of business on February 28, 2020.

Initially, these Rights will not be exercisable and will trade with the shares of common stock.

If the Rights become exercisable, each Right will initially entitle stockholders to buy one one-thousandth of a share of a newly created series of preferred stock designated as “Series A Junior Participating Preferred Stock” at an exercise price of $ 159.00

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

While the Amended Rights Agreement is in effect, any person or group that acquires beneficial ownership of 4.99 % or more of the 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 approval from the Board would be subject to significant dilution in their ownership interest in the Company.

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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 common stock but do own 4.99 % or more in value of the outstanding stock, as determined pursuant to Section 382 of the Code and the regulations promulgated thereunder.

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.

In addition, the Board has established procedures to consider and approve 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 federal and state NOLs or is otherwise in the best interests of the Company and conditioned upon and subject to the satisfaction of certain continuing factual representations and covenants.

The Board may redeem the Rights for $ 0.01 per Right at any time before any person or group triggers the Amended Rights Agreement.

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In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions.

The Company considers, among other things, all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, the overall business environment, its historical financial results, the industry's historically cyclical financial results, its cumulative three-year income or loss position and potential current and future tax planning strategies.

The Company considers, among other things, scheduled reversals of deferred tax liabilities, projected future taxable income, the overall business environment, its historical financial results, the industry's historically cyclical financial results, its cumulative three-year income or loss position and potential current and future tax planning strategies.

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

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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, the Company remeasured its Alabama deferred income tax assets and liabilities and recorded a non-cash income tax benefit of $ 22.4 million.

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

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

At December 31, 2022, we have a valuation allowance against our state deferred income tax assets of approximately $ 41.4 million.

As of December 31, 2022, the Company considered all positive and negative evidence and concluded that its federal deferred income tax assets remain more likely than not to be realized and a valuation allowance was not required.

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 or an adjustment by a tax authority.

Also, certain circumstances, such as the COVID-19 pandemic, the lifting of the Chinese ban on Australian coal, the ongoing UMWA strike and the unknown duration and overall impact on the Company's operations, including its failing to generate sufficient future taxable income from operations, could limit its ability to fully utilize its deferred tax assets before expiration.

As a result of the repeal of the throwback rule, the Company determined that it is not more likely than not that the Company would have sufficient taxable income to utilize all of the Company’s Alabama deferred income tax assets prior to expiration.

Therefore, at December 31, 2023, we have a valuation allowance against our state deferred income tax assets of approximately $ 41.0 million.

The following table shows the balance of the Company's valuation allowance and the associated activity during 2023:

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2023

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Ending balance $ 41,016

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Uncertain Tax Positions

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and in various state and local jurisdictions which are routinely examined by tax authorities in these jurisdictions.

NOLs and carryforwards are subject to adjustments based on examination and the statute of limitations is currently open for all such loss and credit carryforwards.

Federal and state NOLs and carryforwards are subject to adjustments based on examination and the statute of limitations is currently open for all such loss and credit carryforwards.

The Company had no unrecognized tax benefits or accruals for unrecognized tax benefits as of December 31, 2023 and 2022, respectively.

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At December 31, 2023, the Company had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of its mining operations totaling $ 44.3 million, and $ 5.2 million for miscellaneous purposes.

For the year ended December 31, 2022 and December 31, 2021, the change to the liability was primarily attributable to the net impact of changes in discount rates, changes in the timing of scheduled reclamation and current estimates of the costs and scope of remaining reclamation work.

For the years ended December 31, 2022 and December 31, 2021, $ 1.4 million or $ 0.027 per share and $ 0.2 million or $ 0.004 per share, respectively, of the adjustment to the liability was reflected as income and expense, respectively, in the period because there was no asset recorded to offset the adjustment to the respective liability.

For the years ended December 31, 2023 and December 31, 2022, the change to the liability was primarily attributable to the net impact of changes in discount rates, changes in the timing of scheduled reclamation and current estimates of the costs and scope of remaining reclamation work.

For the years ended December 31, 2023 and December 31, 2022, $ 0.3 million or $ 0.01 per share and $ 1.4 million or $ 0.03 per share, respectively, of the adjustment to the liability was reflected as income in the period because there was no asset recorded to offset the adjustment to the respective liability.

This portion of the liability relates to operations that were idle at the time of purchase accounting for the acquisition of certain assets in 2016 and no value was attributed to any asset as an offset for the asset retirement obligation.

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Accrued expenses consisted of the following (in thousands):

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2023 December 31, 2022

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Total accrued expenses $ 81,612 $ 77,435

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note 10— Pneumoconiosis ("Black Lung") Obligations

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

On February 9, 2022, the DOL held a conference with representatives from the Company related to our appeal.

On February 9, 2022, the DOL held a conference call with representatives from the Company related to our appeal.

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.

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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.

As of December 31, 2022 and December 31, 2021, the Company had $ 18.6 million and $ 17.0 million of surety bonds, respectively, and $ 8.6 million and $ 8.5 million of collateral recognized as short term investments, respectively.

As of December 31, 2023 and December 31, 2022, the Company had $ 18.6 million of surety bonds, respectively, and $ 9.0 million and $ 8.6 million of collateral recognized as short term investments, respectively.

There were also $ 1.8 million and $ 2.1 million of assets held in a black lung trust, which is offset against the long-term portion of the black lung obligations within the Balance Sheet as of December 31, 2023 and December 31, 2022, respectively.

The estimated total black lung liabilities (net of black lung trust assets) were $ 28.8 million as of December 31, 2023, of which $ 1.9 million is classified in other current liabilities and the remainder of $ 27.0 million is shown as a long-term liability in a separate line item in the Balance Sheets.

For the year ended December 31, 2021, the estimated black lung liabilities (net of the black lung trust assets) were $ 37.1 million, of which $ 2.6 million is classified in other current liabilities and $ 34.5 million is classified as a long-term liability in a separate line item in the Balance Sheets.

As of December 31, 2022, the estimated black lung liabilities (net of the black lung trust assets) were $ 30.3 million, of which $ 2.8 million is classified in other current liabilities and $ 27.4 million is classified as a long-term liability in a separate line item in the Balance Sheets.

Accretion of the black lung liabilities is included in cost of other revenues on the Statements of Operations.

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Generally, under the terms of the plan, employees make voluntary contributions through payroll deductions and the Company makes matching contributions, as defined by the plan.

Contributions to these defined contribution plans amounted to $ 3.2 million for the year ended December 31, 2022, $ 2.5 million for the year ended December 31, 2021 and $ 3.0 million for the year

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

ended December 31, 2020 accounted for in cost of sales, cost of other revenues and selling, general and administrative costs in the Statements of Operations.

Contributions to these defined contribution plans amounted to $ 4.0 million for the year ended December 31, 2023, $ 3.2 million for the year ended December 31, 2022 and $ 2.5 million for the year ended December 31, 2021 accounted for in cost of sales, cost of other revenues and selling, general and administrative costs in the Statements of Operations.

Collective Bargaining Agreement

The Company's CBA contract with the UMWA expired on April 1, 2021.

While the Company continues to engage in good faith negotiations with the UMWA, the Company has not reached a new contract and the UMWA is engaging in a strike.

As a result of the strike, the Company initially idled Mine No.

4 and scaled back operations at Mine No.

In the first quarter of 2022, the Company restarted operations at Mine No.

4 and increased operations at Mine No.

While the Company continues to engage in good faith negotiations with the UMWA, the Company has not reached a new contract.

On February 16, 2023, the labor union representing certain of the Company's hourly employees announced that they were ending the strike and made an unconditional offer to return to work.

Approximately 21.1 % of the Company's employees were represented by the UMWA as of December 31, 2023.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note 12— Equity Award Plans

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The Company's debt consisted of the following (in thousands):

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2023 December 31, 2022 Weighted Average Interest Rate at December 31, 2023 Final Maturity

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Total long-term debt $ 153,023 $ 302,588

1 Borrowing under the ABL Facility bear interest at a rate equal to Secured Overnight Financing Rate ("SOFR") ranging currently from 1.5 % and 2.0 %, plus a credit adjustment spread, ranging currently from 0.11448 % to 0.42826 %, or an alternate base rate plus an applicable margin, which is determined based on the average availability of the commitments under the ABL Facility, ranging from 0.5 % to 1.0 %.

1 Borrowings under the ABL Facility bear interest at a rate equal to Secured Overnight Financing Rate ("SOFR") ranging currently from 1.5 % and 2.0 %, plus a credit adjustment spread, ranging currently from 0.11448 % to 0.42826 %, or an alternate base rate plus an applicable margin, which is determined based on the average availability of the commitments under the ABL Facility, ranging from 0.5 % to 1.0 %.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

The Company's minimum debt repayment schedule, excluding interest, as of December 31, 2023 is as follows (in thousands):

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and (v) amended certain baskets contained in the covenants to conform to the baskets contained in the indenture governing the Notes (the "Indenture").

The Second Amended and Restated Credit Agreement also allows the Company to borrow up to $ 132.0 million through October 14, 2023, decreasing to $ 116.0 million through November 2026, subject to availability under the borrowing base and other conditions.

The amendment to the ABL Facility in December 2021 was considered to be a debt modification and resulted in incremental debt issuance costs of $ 3.3 million which are reflected as deferred financing costs in other long-term assets on the Balance Sheet.

These costs coupled with the $ 1.7 million of deferred financing costs related to the existing ABL will be amortized to interest expense over the remaining term of the ABL Facility.

The Second Amended and Restated Credit Agreement also allows the Company to borrow up to $ 116.0 million through November 2026, subject to availability under the borrowing base and other conditions.

Under the ABL Facility, up to $ 10.0 million of the commitments may be used to incur swingline loans from Citibank and up to $ 65.0 million of the commitments may be used to issue letters of credit.

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At December 31, 2023, the Company had $ 107.4 million of availability under the ABL Facility.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

includes, among other things, material mining properties, shares of capital stock of the guarantors, intellectual property, as extracted collateral (to the extent not constituting inventory), and certain fixed assets of the Company and the guarantors.

Subject to permitted exceptions, the obligations of the borrowers under the ABL Facility are guaranteed by each of the Company's domestic subsidiaries and secured by (i) first-priority security interests in the ABL Priority Collateral (as defined in the Indenture), which includes, among other things, certain accounts receivables, inventory and cash of the Company and the guarantors, and (ii) second-priority security interests in the Notes Priority Collateral (as defined in the Indenture), which includes, among other things, material mining properties, shares of capital stock of the guarantors, intellectual property, as extracted collateral (to the extent not constituting inventory), and certain fixed assets of the Company and the guarantors.

The ABL Facility contains customary covenants for asset-based credit agreements of this type, including among other things:

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persons in transactions outside the United States in accordance with Regulation S under the Securities Act.

The Company used the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of the Company’s outstanding 8.00 % senior secured notes due 2024 (the “2017 Notes”), including payment of the redemption premium in connection with such redemption.

The Company used

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of the Company’s outstanding 8.00 % senior secured notes due 2024 (the “2017 Notes”), including payment of the redemption premium in connection with such redemption.

As a result, the Company recognized a loss on early extinguishment of debt of $ 9.7 million which represents the write-off of previously capitalized 2017 Notes debt issuance costs and debt discount, along with the redemption premium.

In connection with the issuance of the Notes, the Company incurred debt issuance costs of $ 8.1 million for the year ended December 31, 2022, which consists primarily of structuring fees and legal fees, and is included as a reduction in long-term debt on the Balance Sheet.

The Notes will accrue interest at a rate of 7.875 % per year from December 6, 2021.

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During the year ended December 31, 2023, the Company repurchased in the open market and extinguished approximately $ 8.0 million principal amount of the Notes.

In connection with the extinguishment of our Notes, we recognized a loss on early extinguishment of debt of $ 0.5 million which is included in interest expense, net in the Statements of Operations.

In connection with the extinguishment of our Notes, we recognized a loss on early extinguishment of debt of $ 0.1 million which is included in interest expense in the Statements of Operations.

Offers to Purchase the Notes

On August 9, 2023, we commenced an offer to purchase (the “Restricted Payment Offer”), in cash, up to $ 150.0 million principal amount of its outstanding Notes, at a repurchase price of 103 % of the aggregate principal amount of such Notes, plus accrued and unpaid interest with respect to such Notes to, but not including, the date of repurchase (the “Restricted Payment Repurchase Price”).

Concurrently with, but separate from, the Restricted Payment Offer, we commenced a cash tender offer (the “Tender Offer” and, together with the Restricted Payment Offer, the “Offers”) to purchase up to $ 150.0 million principal amount of the Notes at a repurchase price of 104.25 % of the aggregate principal amount of such Notes, plus accrued and unpaid interest to, but not including, the date of repurchase (the “TO Repurchase Price”).

The Offers expired on September 7, 2023 (the “Expiration Date”).

Restricted Payment Offer

As of the Expiration Date, $ 200,000 aggregate principal amount of the Notes were validly tendered and not validly withdrawn pursuant to the Restricted Payment Offer.

Pursuant to the terms of the Restricted Payment Offer:

(1) an automatic pro ration factor of 49.5674 % was applied to the $ 200,000 aggregate principal amount of the Notes that were validly tendered and not validly withdrawn in the Restricted Payment Offer (rounded down to avoid the purchase of Notes in a principal amount other than in integrals of $1,000), which resulted in $ 99,000 aggregate principal amount of the Notes (the “RP Pro-Rated Tendered Notes”);

(2) we accepted all $ 99,000 aggregate principal amount of the RP Pro-Rated Tendered Notes for payment of the Restricted Payment Repurchase Price in cash;

(3) the remaining balance of $ 101,000 aggregate principal amount of the Notes tendered that were not RP Pro-Rated Tendered Notes were not accepted for payment and were returned to the tendering holder of the Notes.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

We consummated the Restricted Payment Offer on September 8, 2023.

Accordingly, pursuant to the terms of the Indenture, we will have the ability from time to time in the future to make one or more restricted payments (the "Proposed Restricted Payment") in the form of special dividends to holders of our common stock and/or repurchases of our common stock in the aggregate amount of up to $ 299,901,000 consistent with the terms of the Capital Allocation Policy adopted by our Board.

Any future Proposed Restricted Payments will be at the discretion of the Board and subject to a number of factors and there can be no assurance that we will make any Proposed Restricted Payments in the future.

As of the Expiration Date, $ 294,770,000 aggregate principal amount of the Notes were validly tendered and not validly withdrawn pursuant to the Tender Offer.

Pursuant to the terms of the Tender Offer:

(1) an automatic pro ration factor of 49.6 % was applied to the $ 294,770,000 aggregate principal amount of the Notes that were validly tendered and not validly withdrawn in the Tender Offer (rounded down to avoid the purchase of Notes in a principal amount other than in integrals of $1,000), which resulted in $ 146,002,000 aggregate principal amount of the Notes (the “TO Pro-Rated Tendered Notes”);

(2) we accepted all $ 146,002,000 aggregate principal amount of the TO Pro-Rated Tendered Notes for payment of the TO Repurchase Price in cash;

(3) the remaining balance of $ 148,768,000 aggregate principal amount of the Notes tendered that were not TO Pro-Rated Tendered Notes were not accepted for payment and were returned to the tendering holder of the Notes.

We consummated the Tender Offer on September 11, 2023.

In connection with the payments for the RP Pro-Rated Tendered Notes and the TO Pro-Rated Tendered Notes, we recognized a loss on early extinguishment of debt of $ 11.7 million during the year ended December 31, 2023.

Note 14— Leases

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7.02 % 6.96 %

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

(1) Finance lease right-of-use assets, recorded net of accumulated amortization of $ 38.5 million and $ 28.0 million, are included in property, plant and equipment, net in the Balance Sheets as of December 31, 2023 and December 31, 2022, respectively.

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These finance leases will commence during fiscal year 2024 with lease terms between one to two years .

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Supplemental cash flow information related to leases was as follows (in thousands):

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The Company believes that it is in substantial compliance with federal, state and local environmental laws and regulations.

The Company accrues for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and can be reasonably estimated.

The Company accrues for environmental expenses resulting from existing conditions that relate to past operations

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

when the costs are probable and can be reasonably estimated.

As of December 31, 2023 and December 31, 2022, there were no accruals for environmental matters other than asset retirement obligations for mine reclamation.

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Walter Energy deemed these receivables to be uncollectable for the year ended December 31, 2015 and the Company did not assign any value to these receivables in acquisition accounting as collectability was deemed remote.

In March 2020, the Company received approximately $ 1.8 million in settlement proceeds for the Shared Services Claim and

Hybrid Debt Claim and an additional $ 1.7 million in the fourth quarter of 2020, which are reflected as other income in the Statements of Operations.

In March 2022, the Company received approximately $ 0.7 million, which is reflected as other income in the Statements of Operations.

During the year ended December 31, 2023 and December 31, 2022, the Company received approximately $ 0.2 million and $ 0.7 million, respectively, which is reflected as other income in the Statements of Operations.

The collectability of additional amounts, if any, related to the Shared Services Claim and Hybrid Debt Claim depends on the outcome of, and the timing of any resolutions of, the Walter Canada CCAA proceedings and cannot be predicted with certainty.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Commitments and Contingencies—Other

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Royalty Obligations

A substantial amount of the coal that the Company mines is produced from mineral reserves leased from third-party land owners.

These leases convey mining rights to the Company in exchange for royalties to be paid to the land owner as either a fixed amount per ton or as a percentage of the sales price.

A substantial amount of the coal that the Company mines is produced from mineral reserves leased from third-party landowners.

These leases convey mining rights to the Company in exchange for royalties to be paid to the landowner as either a fixed amount per ton or as a percentage of the sales price.

Although coal leases have varying renewal terms and conditions, they generally last for the economic life of the reserves.

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Holders of common shares are entitled to receive dividends when authorized by the Company's Board of Directors (the "Board").

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Stock Repurchase Program

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Any future repurchases of shares of the Company's common stock will be subject to the 1% excise tax under the IRA.

During the year ended December 31, 2020, the Company repurchased the remaining shares authorized under the First Stock Repurchase Program for approximately $ 1.9 million and repurchased 500,000 shares under the New Stock Repurchase Program for approximately $ 10.6 million, leaving $ 59.4 million of share repurchases authorized under the New Stock Repurchase Program.

As of December 31, 2022, the Company has repurchased 500,000 shares for approximately $ 10.6 million, leaving $ 59.4 million of share repurchases authorized under the New Stock Repurchase Program.

The Company declared the following dividends on common shares as of the filing date of this Form 10-K:

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Dividend per Share Dividends Paid Dividend Type Declaration Date Record Date Payable Date

(in millions)

$ 0.06 $ 3.1 Quarterly February 18, 2022 March 3, 2022 March 10, 2022

$ 0.07 $ 3.6 Quarterly February 9, 2023 February 20, 2023 February 27, 2023

$ 0.88 $ 46.4 Special February 13, 2023 February 28, 2023 March 7, 2023

$ 0.07 $ 3.7 Quarterly April 25, 2023 May 5, 2023 May 12, 2023

$ 0.50 $ 25.8

Special May 3, 2022 May 13, 2022 May 20, 2022

$ 0.06 $ 3.1 Quarterly August 1, 2022 August 11, 2022 August 18, 2022

$ 0.80 $ 41.3 Special August 1, 2022 August 22, 2022 August 29, 2022

$ 0.07 $ 3.7 Quarterly July 28, 2023 August 7, 2023 August 14, 2023

$ 0.07 $ 3.7 Quarterly October 24, 2023 November 3, 2023 November 10, 2023

$ 0.08 $ 4.2 Quarterly February 9, 2024 February 20, 2024 February 26, 2024

$ 0.88 $ — Special February 13, 2023 February 28, 2023 March 7, 2023

$ 0.50 $ 26.3 Special February 9, 2024 March 1, 2024 March 7, 2024

Preferred Shares

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future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sales.

As of December 31, 2022, the Company had no natural gas swap contracts outstanding.

As of December 31, 2021, the Company had 6,100,000 metric million British thermal unit natural gas contracts outstanding.

As of December 31, 2023 and December 31, 2022, the Company had no natural gas swap contracts outstanding.

The Company’s natural gas swap contracts economically hedge certain risks but are not designated as hedges for

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All changes in the fair value of these derivative instruments are recorded as other revenues in the

Condensed Statements of Operations.

Statements of Operations.

The Company recognized a loss of $ 1.2 million and $ 27.7 million for the years ended December 31, 2023 and December 31, 2022, respectively.

The Company records all derivative instruments at fair value and had no asset or liability outstanding as of December 31, 2022 and had an asset of $ 4.0 million as of December 31, 2021 in prepaid expenses and other in the accompanying Balance Sheets.

Note 18— Fair Value of Financial Instruments

The following table presents information about the Company’s financial liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair value (in thousands):

Fair Value Measurements as of December 31, 2022 Using:

Level 1 Level 2 Level 3 Total

Natural gas swap contracts $ — $ — $ — $ —

Fair Value Measurements as of December 31, 2021 Using:

Level 1 Level 2 Level 3 Total

Natural gas swap contracts $ — $ 4,043 $ — $ 4,043

During the year ended December 31, 2022, there were no transfers between Level 1, Level 2 and Level 3.

The Company uses quoted dealer prices for similar contracts in active over-the-counter markets for determining fair value of Level 2 assets or liabilities.

The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note 18— Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

Cash and cash equivalents, short-term investments, restricted cash, receivables and accounts payable— The carrying amounts reported in the Balance Sheet approximate fair value due to the short-term nature of these assets and liabilities.

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The estimated fair value of the Notes as of December 31, 2023 is approximately $ 156.0 million based upon observable market data (Level 2).

Note 19— Net Income (Loss) per Share

The computation of basic net income (loss) per share is based on the number of weighted average common shares outstanding during the period.

The computation of diluted net income (loss) per share is based on the weighted average number of shares outstanding plus the incremental shares that would be outstanding assuming issuance of restricted stock.

Note 19— Net Income per Share

The computation of basic net income per share is based on the number of weighted average common shares outstanding during the period.

The computation of diluted net income per share is based on the weighted average number of shares outstanding plus the incremental shares that would be outstanding assuming issuance of restricted stock.

The number of incremental shares is calculated by applying the treasury stock method.

Basic and diluted net income (loss) per share was calculated as follows (in thousands, except per share data):

Basic and diluted net income per share was calculated as follows (in thousands, except per share data):

For the years ended December 31,

2023 2022 2021

Net income (loss) $ 641,298 $ 150,881 $ ( 35,761 )

Weighted-average shares used to compute net income (loss) per share—basic 51,622 51,382 51,168

Net income $ 478,629 $ 641,298 $ 150,881

Weighted-average shares used to compute net income per share—basic 51,973 51,622 51,382

Dilutive restricted stock awards and units

Weighted-average shares used to compute net income (loss) per share—diluted 51,715 51,445 51,168

Net income (loss) per share—basic $ 12.42 $ 2.94 $ ( 0.70 )

Net income (loss) per share—diluted $ 12.40 $ 2.93 $ ( 0.70 )

(1) In periods of net loss, the number of shares used to calculate diluted earnings per share is the same as basic earnings per share;

therefore, the effect of dilutive securities is zero for such periods.

Weighted-average shares used to compute net income per share—diluted 52,045 51,715 51,445

Net income per share—basic $ 9.21 $ 12.42 $ 2.94

Net income per share—diluted $ 9.20 $ 12.40 $ 2.93

As of December 31, 2023, there were 208,735 restricted stock unit awards for which the service-based vesting conditions for these awards were not met as of the measurement date.

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As such, these shares have been excluded from basic and diluted earnings per share.

The Company has $ 0.5 million of restricted stock unit awards under the 2017 Equity Plan that can be settled in shares or in cash at the election of employees.

These awards have certain service-based and performance-based vesting conditions and can be earned no later than December 31, 2024.

If the Company were to settle these awards in shares these awards would represent 14,434 shares based on the Company's closing share price as of December 31, 2022.

These awards also had a 14,434 share impact on dilutive weighted average shares for the year ended December 31, 2022.

Note 20— Segment Information

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The CODM reviews financial information at the operating segment level to allocate resources and to assess the operating results and financial performance for each operating segment.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

Operating segments are aggregated into a reportable segment if the operating segments have similar quantitative economic characteristics and if the operating segments are similar in the following qualitative characteristics:

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and v) if applicable, the nature of the regulatory environment.

WARRIOR MET COAL, INC.

NOTES TO FINANCIAL STATEMENTS (Continued)

The Company has determined that the two operating segments are similar in both quantitative and qualitative characteristics and thus the two operating segments have been aggregated into one reportable segment.

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Total capital expenditures $ 491,674 $ 205,242 $ 57,893

The Company evaluates the performance of its segment based on Segment Adjusted EBITDA, which is defined as net income (loss) adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative, other postretirement benefits, and certain transactions or adjustments that the CODM does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance.

The Company evaluates the performance of its segment based on Segment Adjusted EBITDA, which is defined as net income adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative, other postretirement benefits, and certain transactions or adjustments that the CODM does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance.

Segment Adjusted EBITDA does not represent and should not be considered as an alternative to cost of sales under GAAP and may not be comparable to other similarly titled measures used by other companies.

Below is a reconciliation of Segment Adjusted EBITDA to net income (loss), which is its most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands):

Below is a reconciliation of Segment Adjusted EBITDA to net income, which is its most directly comparable financial measure calculated and presented in accordance with GAAP (in thousands):

WARRIOR MET COAL, INC.

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Loss on early extinguishment of debt ( 11,699 ) — ( 9,678 )

Other income 675 1,291 3,544

Interest expense, net ( 18,995 ) ( 35,389 ) ( 32,310 )

Income tax (expense) benefit ( 141,806 ) ( 49,096 ) 20,144

Net income (loss) $ 641,298 $ 150,881 $ ( 35,761 )

Other (expense) income ( 1,027 ) 675 1,291

Interest income 40,699 12,438 1,111

Interest expense ( 17,960 ) ( 31,433 ) ( 36,500 )

Income tax expense ( 72,790 ) ( 141,806 ) ( 49,096 )

Net income $ 478,629 $ 641,298 $ 150,881

Note 21— Subsequent Events

On February 9, 2024, the Board declared a regular quarterly cash dividend of $ 0.08 per share, which was an increase of 14 % over the regular cash dividend declared by the Board on October 24, 2023, totaling approximately $ 4.2 million, which will be paid on February 26, 2024 to stockholders of record as of the close of business on February 20, 2024.

On February 13, 2023, the Board declared a special cash dividend of $ 0.88 per share, totaling approximately $ 46.3 million, which will be paid on March 7, 2023 to stockholders of record as of the close of business on February 28, 2023.

On February 13, 2024, the Board declared a special cash dividend of $ 0.50 per share, totaling approximately $ 26.3 million, which will be paid on March 7, 2024 to stockholders of record as of the close of business on March 1, 2024.

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 9A. Controls and Procedures