What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-13 compared with 2024-02-14 · 140 added, 125 removed, 412 unchanged (39% of the section changed)

10 unchanged sentences

We are 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.

We are 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 our underground mines based in Alabama, Mine No.

We are a large-scale, low-cost producer and exporter of premium quality steelmaking coal, also known as hard coking coal (“HCC”), operating highly efficient longwall operations in our underground mines based in Alabama, Mine No.

4 and Mine No.

We also are developing our world-class Blue Creek mine based in Alabama.

As of December 31, 2024, Mine No.

4 and Mine No.

7, our two operating mines, had approximately 82.9 million metric tons of recoverable reserves and our undeveloped Blue Creek mine contained 67.6 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves, which total 107.3 million metric tons.

7, our two operating mines, had approximately 82.4 million metric tons of recoverable reserves and our Blue Creek mine contained 69.0 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves.

As a result of our high-quality coal, our Mine No.

7 steelmaking coal realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free-On-Board Australian Index (the "S&P Platts Index").

4 steelmaking coal transitioned in the second half of the year from a Mid Vol to a High Vol A quality that typically trades at a larger discount to the price of coal from Mine No.

4 steelmaking coal is a High Vol A quality that typically trades at a larger discount to the price of coal from Mine No.

We now primarily target the East Coast High Vol A indices price for our Mine No.

8 unchanged sentences

Similarly, if alternative ingredients are used in substitution for steelmaking coal in the integrated steel mill process, the demand for steelmaking coal would materially decrease, which could also materially adversely affect demand for our steelmaking coal.

Update on the Development of Blue Creek

On May 3, 2022, we announced the relaunch of the development of our Blue Creek mine, a strategic growth project that we expect will deliver significant future returns to stockholders.

We believe that Blue Creek represents one of the few remaining untapped reserves of premium High Vol A steelmaking coal in the United States and that it has the potential to provide us with meaningful growth.

We believe that the combination of low production costs and the premium quality of the High Vol A steelmaking coal mined from Blue Creek, assuming we achieve our expected price realizations, will generate some of the highest steelmaking coal margins in the U.S., generate strong investment returns and achieve a rapid payback of our investment across a range of steelmaking coal price environments.

Our third-party reserve report indicates that, once developed, Blue Creek will produce a premium High Vol A steelmaking coal that is characterized by low-sulfur and strong coking properties.

High Vol A steelmaking coal has traditionally priced at a discount to the Australian Premium Low Vol and the U.S.

Low Vol coals;

however, we have observed extended periods in which High Vol A steelmaking coal achieved a premium over these indices.

We expect U.S.

High Vol A coals will

continue to become an important component of global steelmakers' coal blends due to their unique characteristics.

In addition, we also expect that as the decade progresses, overall production and the supply of premium hard coking coals will be outpaced by the growth in demand coming from countries like India, Indonesia and Vietnam.

This trend creates an opportunity for us to take advantage of favorable pricing dynamics driven by the projected tightness in supply and the desirable characteristics of our premium High Vol A steelmaking coal.

We believe that the execution risk of Blue Creek is lower than most projects of this size and nature due to utilizing highly experienced engineers with strong backgrounds in building new mines around the world to manage the project.

The same highly experienced and knowledgeable engineers and familiar contractors who built mine infrastructure in recent years are being leveraged to build Blue Creek.

In 2023, we focused on the slope, return shaft, service shaft, bathhouse, warehouse, and substations.

Also, in 2023, we initiated important and highly beneficial project scope changes that we expect will require incremental capital expenditures over the life of the project while lowering operating costs, increasing flexibility to manage risks, and making better use of multi-channel transportation methods.

While we originally planned on a single channel to transport coal from the Blue Creek mine via an overland belt to a third-party owned and operated barge loadout facility, we are now constructing a belt conveyor system to a railroad loadout to transport the majority of the coal.

We expect this change to de-risk the single channel to market, lower operating costs and move volumes faster to the port.

We are also constructing and will operate a barge loadout ourselves rather than utilizing a third-party provider.

We believe that the potential economic benefits associated with this scope change should provide us with an inherently robust and cost competitive outbound logistics model that will provide additional flexibility to manage alternative transportation methods.

The inclusion of the benefits and incremental capital expenditures relating to these specific scope changes are not expected to have a material impact on the project's economic metrics of net present value and internal rate of return and did not change the project timeline.

In addition, we have experienced inflationary cost increases ranging from 25% to 35%, primarily in relation to labor, construction materials, and certain equipment.

Inflationary pressures are expected to continue during the remainder of the project development period.

While cost inflation has impacted the cost of the project, these inflationary pressures are expected to be offset by an inflationary increase in the long-term price assumption for steelmaking coal.

We continue to expect a total project capital expenditure estimate of $995 million to $1.075 billion.

In 2024, we made significant progress on the major components for seam access, surface infrastructure and coal transportation.

We installed and commissioned the service cage, slope belt, slope car and raw coal belt, which allowed us to begin development of the initial longwall panel with three continuous miner units, producing 190 thousand metric tons during the year.

On the surface infrastructure components, we began construction on the dry slurry processing system and we made significant progress on the construction of the preparation plant, which is projected to be online during the middle of 2025.

All major preparation plant equipment is on-site awaiting installation.

We have also started to take delivery of the longwall shields, and we expect to have all shields on site in the first half of 2025.

On the coal transportation components, the clean coal storage silos at the rail loadout were completed, and the construction of the clean coal belt structure and the rail and barge loadouts remain on schedule.

We are also focused on increasing the headcount at Blue Creek and continue to work closely with contractors and vendors to overcome supply chain and labor shortages in the mining industry.

To date, we have not encountered any significant barriers that have prevented us from achieving our goals.

We have invested approximately $ 350.5 million in 2024 and $716.5 million project-to-date.

We expect to spend $225 to $250 million in 2025 on the continued development of Blue Creek and the remaining capital expenditures of $54 million to $109 million in 2026.

The project remains on schedule with the longwall scheduled to start up no later than the second quarter of 2026.

We expect to ramp up production through the development of the project.

Specifically, we expect to produce approximately 900 thousand metric tons in 2025, approximately 2.7 million metric tons in 2026 and approximately 4.4 million metric tons in 2027.

We do not expect the tons produced in 2024 and 2025 of approximately 1.1 million metric tons to be sold until the second half of 2025 when the preparation plant comes online.

These are estimates subject to revision and we expect to provide updated financial and operational information on Blue Creek in the near future.

If we are able to successfully develop Blue Creek, we expect that it will be a transformational investment for us.

We expect that the new single longwall mine at Blue Creek will have the capacity to produce an average of 4.4 million metric tons per annum of premium High Vol A met coal over the first ten years of production, thereby increasing our annual production capacity by approximately 60%.

We expect the addition of Blue Creek to enhance our already advantageous position on the

global cost curve, improve our profitability and cash flow generation, and cement our position as a leading pure play steelmaking coal producer.

Recent Developments

inflation remains at 3.4%, driven by increased energy and food costs, supply constraints and strong consumer demand.

High inflation has been driven by growth in the economy as it bounces back from the novel coronavirus ("COVID-19"), powered in part by low interest rates and government stimulus to counter the pandemic's impact.

While we expect inflation to continue to ease in the overall economy during 2024, we have not seen it easing in the coal mining industry and expect that inflation will continue to negatively impact our profitability, as we expect inflation to remain high for steel prices, freight rates, labor and other materials and supplies.

Inflation affects, among others, the costs of belt structure, roof bolts, cable, magnetite, rock dust and other supplies, plus labor and parts on equipment repair and rebuilds.

The continued war in Ukraine, the conflict in the Middle East and the global macroeconomic slowdown in the economy created a volatile year for steel demand and for premium steelmaking coal.

Seaborne steelmaking coal supply continues to be impacted by production cuts, seasonal rainfall in Australia and impacts from cyclones in Australia.

According to WoodMac, for the nine months ended September 30, 2023, seaborne steelmaking coal supply out of Australia was down 6.2% compared to 2022 and 19.2% compared to 2019.

During this period of declining supply, demand for premium

steelmaking coal has increased, led by India and Southeast Asia.

We expect that demand in India and Southeast Asia will continue to increase driven by their increased demand for high-quality steel and due to these countries having limited domestic resources.

Further, we expect the demand for premium high-quality steelmaking coal to increase as steel producers remain focused on reducing carbon emissions in blast furnaces as well as improving yields and steel quality.

Due to the supply constraints described above coupled with the increased demand, we expect premium steelmaking coal price premiums to remain strong in the near term.

inflation is currently at approximately 2.89%, driven by increased energy and food costs, supply constraints and strong consumer demand.

While inflation in the overall economy has eased in the last twelve months, we have not seen it easing significantly in the coal mining industry.

We expect that inflation will continue to negatively impact our profitability, as we expect inflation to remain high for steel prices, freight rates, labor and other materials and supplies.

Specifically, we have experienced inflationary cost increases ranging from 25% to 35%, primarily in relation to labor, construction materials, and certain equipment.

In addition, we have experienced inflation in the costs of belt structure, roof bolts, cable, magnetite, rock dust and other supplies, plus labor and parts on equipment repair and rebuilds.

During the fourth quarter of 2024, high-quality steelmaking coal prices reached levels not seen since 2021 due to a confluence of weaker demand, excess Chinese steel exports into our customers' markets, and ample supply of steelmaking coals.

As of January 21, 2025, the Platts Index price for premium LV coal was $188.00 per metric ton.

Per the Wood Mackenzie global metallurgical coal short-term outlook released in January 2025, premium LV coal is expected to be between $195.00 and $207.00 per metric ton for 2025.

This expectation is in large part driven by supply tightness and increased buying from India due to modest restocking of steelmaking coals.

We believe the pricing environment will remain under pressure due to the persistent weakness in the global steel markets combined with a modest increase in steel growth production in India.

Collective Bargaining Agreement

5 unchanged sentences

4 and Mine No.

7, we incurred idle mine expenses of $12.1 million and $33.9 million for the years ended December 31, 2022 and December 31, 2021, respectively.

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

We 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.

7, we incurred idle mine expense of $12.1 million for the year ended December 31, 2022.

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

We incurred no idle mine expenses for the years ended December 31, 2023 or December 31, 2024.

We incurred business interruption expenses of approximately $0.5 million for the year ended December 31, 2024, which represents ongoing legal expenses associated with the ongoing labor negotiations.

We incurred $8.3 million and $23.5 million for the years ended December 31, 2023 and December 31, 2022, 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.

On February 16, 2023, the labor union representing certain of our 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.

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.

We continue to engage in good faith efforts with the labor union to reach an agreement on a new contract.

46 unchanged sentences

Cash cost of sales should not be considered an alternative to cost of sales or any other measure of financial performance or liquidity presented in accordance with GAAP.

Cash cost of sales excludes some, but not all, items that

affect cost of sales, and our presentation may vary from the presentations of other companies.

Cash cost of sales excludes some, but not all, items that affect cost of sales, and our presentation may vary from the presentations of other companies.

As a result, cash cost of sales as presented below may not be comparable to similarly titled measures of other companies.

30 unchanged sentences

9,114 205 (5,344)

Non-cash mark-to-market loss on gas hedges (4)

Non-cash mark-to-market loss (gain) on gas hedges (4)

1,835 (1,227) 27,708

Loss on early extinguishment of debt (5)

11,699 — 9,678

Business interruption (6)

1 unchanged sentence

Idle mine (7)

— 12,137 33,899

Other expense (income) (8)

4 unchanged sentences

(3) Represents non-cash accretion expense and valuation adjustments associated with our black lung obligations (see Note 10 to our consolidated financial statements).

(4) Represents non-cash mark-market losses recognized on our gas hedges (see Note 17 to our consolidated financial statements).

(4) Represents non-cash mark-to-market losses (gains) recognized on our gas hedges (see Note 17 to our consolidated financial statements).

(5) Represents a loss incurred in connection with the early extinguishment of debt (see Note 13 to our consolidated financial statements).

(6) Represents business interruption expenses associated with the UMWA strike.

(6) For the year ended December 31, 2024, represents ongoing legal expenses associated with the ongoing labor negotiations and for all other periods presented represents non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, labor negotiations and other expenses.

(7) Represents idle mine expenses incurred in connection with reduced operations at Mine No 4 and Mine No.

(8) Represents non-recurring expenses incurred in connection with the ransomware attack discovered by the Company on July 29, 2023, proceeds received upon settlement of a lawsuit, COVID-19 pandemic related expenses and proceeds received upon settlement of a lawsuit and settlement proceeds received for the Shared Services Claim and Hybrid Debt Claim associated with the Walter Canada CCAA and other Walter Claims (each discussed below).

Results of Operations

13 unchanged sentences

Business interruption 524 — % 8,291 0.5 %

Idle mine — — % 12,137 0.7 %

Total costs and expenses 1,270,330 83.3 % 1,135,219 67.7 %

3 unchanged sentences

Loss on early extinguishment of debt — — % (11,699) (0.7) %

Other (expense) income (1,027) (0.1) % 675 — %

Other expense — — % (1,027) (0.1) %

Income before income tax expense 283,666 18.6 % 551,419 32.9 %

12 unchanged sentences

• we achieved strong net income of $250.6 million, or $4.79 per diluted share and adjusted EBITDA of $447.9 million;

• we achieved annual sales volumes of 6.8 million metric tons, a 34% increase compared to the prior year, and production volume of 6.9 million metric tons, a 21% increase compared to the prior year, which represent run rates not seen since 2020;

• we delivered positive cash flows from operations of $701.1 million and free cash flow of $176.3 million while continuing to invest a record high $524.8 million in property, plant and equipment and mine development and retired early approximately 50% of our senior secured notes;

• we maintained a strong balance sheet with total liquidity of $845.6 million, consisting of cash and cash equivalents of $738.2 million and $107.4 million available under our ABL Facility;

• we made excellent progress in developing our world class Blue Creek growth project, which remains on schedule and invested $319.1 million for the year ended December 31, 2023;

• we achieved annual sales volumes of 7.2 million metric tons, a 6% increase compared to the prior year, and production volume of 7.5 million metric tons, a 8% increase compared to the prior year, which represent run rates not seen since 2019 and record high annual production for Mine No.

4 of 2.5 million metric tons;

• we delivered positive cash flows from operations of $367.4 million, enabling the second highest annual amount spent on capital expenditures of $488.3 million for the growth of the business;

• we made excellent progress in developing our world-class Blue Creek growth project, which remains on schedule, and invested $350.5 million in the continued development of Blue Creek, which brings the total project spend to $716.5 million, all self-funded from operating cash flows;

• we began production at Blue Creek on time and on budget;

• we commenced continuous miner development at Blue Creek, producing 190 thousand metric tons;

• we maintained a strong balance sheet with total liquidity of $654.7 million, consisting of cash and cash equivalents of $491.5 million, short-term investments of $5.1 million, net of $9.5 million posted as collateral, long-term investments of $44.6 million, and $113.5 million available under our ABL Facility;

• we achieved a total reportable incidence rate of 1.53, which is 65% lower than the national total reportable incidence rate for all underground coal mines in the United States of 4.36 for the nine months ended September 30, 2024 which represents the latest data available;

• we demonstrated an ongoing commitment to returning capital to our stockholders paying a regular quarterly dividend of $0.07 per share, an increase of approximately 17% compared to the prior year and special dividends of $0.88 per share.

• we demonstrated an ongoing commitment to returning capital to our stockholders paying a regular quarterly dividend of $0.08 per share and special dividends of $0.50 per share.

Sales were $1.5 billion for the year ended December 31, 2024, compared to $1.6 billion for the year ended December 31, 2023.

The $59.6 million decrease in sales was primarily driven by a $635.9 million decrease related to a $93.25 decrease in the average net selling price per metric ton of steelmaking coal offset partially by a $576.3 million increase due to a 34% or 1.7 million metric ton increase in steelmaking coal sales volume.

The $148.0 million or 9.0% decrease in sales was primarily driven by a $248.2 million decrease related to a $34.32 decrease in the average net selling price per metric ton of steelmaking coal offset partially by a $100.3 million increase due to a 6% or 0.4 million metric ton increase in steelmaking coal sales volume.

The 6% increase in sales volumes was driven by increased production due to both Mine No.

4 and Mine No.

7 operating at higher capacity levels combined with improved performance by our rail transportation provider and the McDuffie Terminal.

While we continued to achieve some of the highest prices for our premium Mine No.

7 Low Vol steelmaking coal, our Mine No.

4 steelmaking coal transitioned in the second half of the year from Mid Vol to a High Vol A quality that typically trades at a larger discount to the price of coal from Mine No.

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.

7 operating at higher capacity levels.

The average net selling price of our steelmaking coal decreased $34.32 or 14% from $241.64 per metric ton for the year ended December 31, 2023 to $207.32 per metric ton for the year ended December 31, 2024.

For the year ended December 31, 2024, the Company's geographic customer mix was 42% in Asia, 38% in Europe, 19% in South America and 1% in the U.S.

For the year ended December 31, 2023, the Company's geographic customer mix was 48% in Europe, 33% in Asia and 19% in South America.

1 unchanged sentence

Other revenues are comprised of revenue derived from our natural gas operations, gains and losses on our natural gas hedges and earned royalty revenue.

The $2.5 million decrease in other revenues is primarily driven by a decrease in gas revenues of $26.5 million related to a $4.24 or 60% decrease in the Southern Louisiana natural gas price average partially offset by a $28.9 million loss recognized in the prior year on the fair value adjustment related to our natural gas swap contracts.

The $3.4 million decrease in other revenues is primarily driven by a decrease of $0.44 per Million British Thermal Unit ("MMBtu") or 14% in the Southern Louisiana natural gas price average combined with a decrease in sales volumes for the year ended December 31, 2024 compared to the prior year comparable period.

The current year also includes a mark-to-market loss of approximately $1.8 million on outstanding gas hedges.

Cost of sales (exclusive of items shown separately below) was $1,007.3 million, or 66.0% of total revenues for the year ended December 31, 2024, compared to $910.3 million, or 54.3% of total revenues for the year ended December 31, 2023.

The $199.7 million increase in cost of sales was primarily driven by a $238.1 million increase due to a 34% or 1.7 million metric ton increase in steelmaking coal sales volumes offset partially by a $39.2 million decrease due to a $5.75 per metric ton decrease in the average cash cost of sales per metric ton.

The decrease in average cash cost of sales per metric ton is primarily due to decreased transportation and royalty costs driven by lower average net selling prices and its impact on our transportation and royalty costs partially offset by higher labor costs due to the returning employees from the labor strike.

The $97.0 million increase in cost of sales was primarily driven by a $55.0 million increase due to a 6% or 0.4 million metric ton increase in steelmaking coal sales volumes combined with a $39.8 million increase due to a $5.50 per metric ton increase in the average cash cost of sales per metric ton.

The increase in average cash cost of sales per metric ton is primarily driven by an increase in cost of production from increased labor and supply costs and increased transportation costs due to multiple failures of lock and dam systems that prevented us from barging coal for the majority of the year.

For the year ended December 31, 2024, cost of production represented 64% of cost of sales and transportation and royalties accounted for approximately 36% compared to cost of production of 60% and transportation and royalties of 40% for the year ended December 31, 2023.

Cost of other revenues was $45.4 million for the year ended December 31, 2024, compared to $37.5 million for the year ended December 31, 2023.

The $10.4 million increase is primarily due to an increase in gas compression costs, asset retirement obligation accretion expense and a decrease of approximately of $5.2 million in our black lung obligation valuation adjustment benefit recorded annually in the fourth quarter primarily attributable to changes in discount rates and claims history.

The $8.0 million increase is primarily due to an increase of approximately of $7.3 million in our black lung obligation valuation adjustment recorded annually in the fourth quarter primarily attributable to changes in discount rates.

Depreciation and depletion was $154.0 million, or 10.1% of total revenues, for the year ended December 31, 2024, compared to $127.4 million, or 7.6% of total revenues for the year ended December 31, 2023.

The $12.1 million increase in depreciation and depletion is primarily driven by a 34% or 1.7 million metric ton increase in steelmaking coal sales volumes as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

The $26.6 million increase in depreciation and depletion is primarily driven by additional assets placed in service throughout the year and a 6% or 0.4 million metric ton increase in steelmaking coal sales volumes as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

Selling, general and administrative expenses were $63.1 million, or 4.1% of total revenues for the year ended December 31, 2024 compared to $51.8 million, or 3.1% of total revenues for the year ended December 31, 2023.

The $11.3 million increase in selling, general and administrative expenses is primarily driven by an increase in employee related expenses.

Business interruption expenses were $8.3 million, 0.5% of total revenues for the year ended December 31, 2023, compared to $23.5 million, or 1.3% of total revenues for the year ended December 31, 2022.

These expenses decreased compared to the prior period primarily due to the end of the labor strike in February 2023 and represent non-recurring expenses that are directly attributable to the labor strike for incremental safety and security, legal and labor negotiations and other expenses.

We expect to incur ongoing legal expenses associated with the labor negotiations.

Idle mine expenses were $12.1 million, or 0.7% of total revenues for the year ended December 31, 2022.

These expenses represent idle expenses incurred in connection with the idling of Mine No.

4 and reduced operations at Mine No.

7, such as electricity, insurance and maintenance labor.

Business interruption expenses were $0.5 million for the year ended December 31, 2024, compared to $8.3 million for the year ended December 31, 2023.

These expenses decreased compared to the prior period primarily due to the end of the strike in February 2023 that had been initiated in April 2021 by the labor union representing certain of the Company's hourly employees.

The expenses for the year ended December 31, 2024 represent ongoing legal expenses associated with the labor negotiations and the expenses for the year ended December 31, 2023 represent non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, legal and labor negotiations and other expenses.

Interest expense was $4.3 million, or 0.3%, of total revenues, for the year ended December 31, 2024, compared to $18.0 million, or 1.1% of total revenues, for the year ended December 31, 2023.

The $13.5 million decrease is due to the retirement of debt of $162.4 million.

The $13.7 million decrease is due to the early retirement of our Notes in September 2023, an increase in capitalized interest associated with the Blue Creek project and maturity of financing leases.

Interest income was $33.0 million, or 2.2% of total revenues, for the year ended December 31, 2024, compared to $40.7 million, or 2.4% of total revenues, for the year ended December 31, 2023.

The $28.3 million increase was primarily driven by an increase in yields earned on cash investments.

For the year ended December 31, 2023, we recognized a loss on early extinguishment of debt of $11.7 million upon the extinguishment of $146.1 million of our Notes.

The loss on early extinguishment of debt represents a premium paid to retire the debt, fees incurred in connection with the transaction, accelerated amortization of debt discount and debt issuance costs.

Other expense for the year ended December 31, 2023 represents non-recurring expenses incurred in connection with the ransomware attack discovered by the Company on July 29, 2023 and proceeds received from the Chapter 11 Cases (as defined below) from Walter Energy, Inc.

We do not anticipate any additional material expenses in the future related to this ransomware incident.

Other income for the year ended December 31, 2022 represents proceeds received in connection with the settlement of a lawsuit offset partially by COVID-19 pandemic related expenses.

For the year ended December 31, 2023, we recognized income tax expense of $72.8 million or an effective tax rate of 13.2% primarily due to pre-tax income of $551.4 million offset partially by an income tax benefit of $26.1 million due to a deduction under Section 250 of the Code:

Foreign-Derived Intangible Income ("FDII") and $21.8 million of depletion.

For the year ended December 31, 2022, we recognized income tax expense of $141.8 million or an effective tax rate of 18.1% primarily due to pre-tax income of $783.1 million offset partially by an income tax benefit due to $23.6 million of depletion.

The $7.7 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.

Loss on early extinguishment of debt for the year ended December 31, 2023 represents a premium paid for the early retirement $146.1 million of our Notes, accelerated amortization of debt discount and debt issuance costs and fees incurred in connection with the transaction.

Other expense for the year ended December 31, 2023 represents non-recurring expenses incurred in connection with the ransomware attack discovered by the Company on July 29, 2023 offset partially by proceeds received from the chapter 11 cases from Walter Energy, Inc.

For the year ended December 31, 2024, we recognized income tax expense of $33.1 million or an effective tax rate of 11.7% primarily due to pre-tax income of $283.7 million offset partially by an income tax benefit of $14.4 million of depletion and $12.1 million due to a deduction under Section 250 of the Code:

Foreign-Derived Intangible Income ("FDII").

At December 31, 2024, we had state NOLs of approximately $945.2 million.

3 unchanged sentences

Our sources of cash have been steelmaking coal and natural gas sales to customers, proceeds received from the Notes (as defined below) and access to our ABL Facility.

Historically, our primary uses of cash have been for funding the operations of our coal and natural gas production operations, working capital, our capital expenditures, our reclamation obligations, payment of principal and interest on our Notes, professional fees and other non-recurring transaction expenses.

Historically, our primary uses of cash have been for funding the operations of our coal and natural gas production operations, working capital, our capital expenditures, including capital expenditures and mine development for the development of Blue Creek, our reclamation obligations, payment of principal and interest on our Notes, professional fees and other non-recurring transaction expenses.

In addition, we used available cash on hand to repurchase shares of common stock and to pay our quarterly and special dividends, each of which reduces or reduced cash and cash equivalents.

Going forward, we will use cash to fund debt service payments on our Notes, the ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, our reclamation obligations, professional fees and other non-recurring transaction expenses and strategic investments, the development of Blue Creek, and, if declared, to pay our quarterly and/or special dividends.

Going forward, we will use cash to fund debt service payments on our Notes, the ABL Facility and our other indebtedness, to fund operating activities, working capital, the development of Blue Creek, capital expenditures, our

reclamation obligations, our black lung obligations, professional fees and other non-recurring transaction expenses and strategic investments, and, if declared, to pay our quarterly and/or special dividends.

Our ability to fund our capital needs, including the development of Blue Creek, going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the ABL Facility, and, in the case of any future strategic investments, capital needs, the development of Blue Creek, or special dividends financed partially or wholly with debt financing and our ability to access the capital markets to raise additional capital.

Our ability to generate positive cash flow from operations in the future will be, at least in part, dependent on continued stable global economic conditions and a resolution of the CBA contract negotiations with the labor union representing certain of our hourly employees.

Our available liquidity as of December 31, 2023 was $845.6 million, consisting of $738.2 million of cash and cash equivalents and $107.4 million, net of outstanding letters of credit, of availability under our ABL Facility.

Our available liquidity as of December 31, 2024 was $654.7 million, consisting of $491.5 million of cash and cash equivalents, $5.1 million of short-term investments, net of $9.5 million posted as collateral, $44.6 million of long-term investments and $113.5 million available under our ABL Facility, net of outstanding letters of credit.

As of December 31, 2024, no loans were outstanding under the ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the ABL Facility.

During the year ended December 31, 2023 , we repurchased in the open market and extinguished approximately $8.0 million principal amount of our Notes at a discount to par value.

The discounts to par value and the interest expense savings from this open-market purchase is estimated to be approximately $4.0 million through the maturity of our Notes.

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 income (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.

In addition, in the third quarter of 2023, we retired approximately $146.1 million of our Notes and recognized a loss on early extinguishment of debt of $11.7 million, which represents a premium paid to retire the debt, accelerated amortization of debt discount, net, and fees incurred in connection with the transaction.

3 unchanged sentences

Beginning on April 1, 2016 through May 31, 2018, we were insured under a guaranteed cost insurance policy, through a third-party insurance carrier, for black lung claims raised by any employee subsequent to the acquisition of certain assets of Walter Energy.

Beginning on June 1, 2018 through May 31, 2020, we had a deductible policy where we are responsible for the first $0.5 million for each black lung claim.

Since June 1, 2020, we have a deductible policy where we are responsible for the first $1.0 million for each black lung claim.

From June 1, 2018 to May 31, 2020 and June 1, 2020 to May 31, 2024, the Company had a deductible policy where the Company was responsible for the first $0.5 million and $1.0 million, respectively, for each black lung claim from any of our employees.

Beginning on June 1, 2024, the Company has a deductible policy where the Company is responsible for the first $2.0 million for each black lung related claim from any of our employees.

In addition, in connection with the acquisition of certain assets of Walter Energy, we assumed all black lung liabilities of Walter Energy and its U.S.

7 unchanged sentences

We appealed this decision.

In addition, on January 19, 2023, the DOL proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers.

The proposed rules requires, among other requirements, all self-insured operators to post security equal to 120 percent of their projected black lung liabilities.

In addition, on January 19, 2023, the DOL proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers, which was then subsequently revised as part of the final rules published on December 12, 2024, which became effective on January 13, 2025.

The final rules require, among other requirements, all self-insured operators to post security of at least 100 percent of their projected black lung liabilities.

The changes in the final rules required by the DOL may have a greater impact on our profitability and cash flows in the future.

In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities.

2 unchanged sentences

We believe that our future cash flows from operations, together with cash on our balance sheet and proceeds from the borrowings under our ABL Facility, will provide adequate resources to fund our debt service payments and planned operating and capital expenditure needs, including the development of Blue Creek, for at least the next twelve months and beyond.

However, we will continue to assess our liquidity needs in light of the ongoing CBA contract negotiations with the labor union representing certain of our hourly employees and the ongoing impact of inflation.

The Company's principal contractual commitments include repayments of long-term debt and related interest, potential minimum throughput payments associated with our rail and port providers, asset retirement obligation payments, black lung obligation payments, payments on various coal and land leases, payments under financing lease obligations and payments

associated with our natural gas swap contracts.

However, we will continue to assess our liquidity needs in light of the current weakness in steelmaking coal prices.

Currently, there are no known trends or expected changes anticipated in future periods that would not be indicative of past results for our contractual commitments.

12 unchanged sentences

Net cash used in investing activities (538,002) (527,207) (255,144)

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

Net cash used in financing activities (68,511) (265,184) (153,119)

Net (decrease) increase in cash and cash equivalents and restricted cash $ (239,065) $ (91,283) $ 433,641

2 unchanged sentences

The timing between the conversion of our billed and unbilled receivables into cash from our customers, production and sale of coal inventory and disbursements to our vendors is the primary driver of changes in our working capital.

Net cash provided by operating activities was $701.1 million for the year ended December 31, 2023, and was primarily attributed to net income of $478.6 million adjusted for depreciation and depletion expense of $127.4 million, deferred income tax expense of $52.9 million, stock-based compensation expense of $18.2 million, loss on early extinguishment of debt of $11.7 million, accretion and valuation adjustment of asset retirement obligations of $4.5 million and amortization of debt issuance costs and debt discount of $2.1 million and a decrease in net working capital of $5.7 million.

Net cash provided by operating activities was $367.4 million for the year ended December 31, 2024, and was primarily attributed to net income of $250.6 million adjusted for depreciation and depletion expense of $154.0 million, stock-based compensation expense of $22.1 million, accretion and valuation adjustment of asset retirement obligations of $5.4 million, deferred income tax benefit of $8.1 million, mark-to-market loss on gas hedges of $1.8 million, amortization of debt issuance costs and debt discount of $1.6 million and an increase in net working capital of $55.2 million.

The increase in our working capital was primarily attributable to increases in trade accounts receivable, inventories and prepaid expenses partially offset by decreases to income tax receivable and other receivables.

The increase in trade accounts receivable is due to the timing of sales and collections combined with a 0.4 million increase in steelmaking coal metric tons sold offset partially by a $34.32 decrease in our steelmaking coal average net selling price per metric ton.

The increase in inventories is due to an increase in production.

costs and debt discount of $2.1 million and a decrease in net working capital of $5.7 million.

The decrease in our working capital was primarily attributable to a decrease in trade accounts receivable offset partially by an increase in inventories, an increase in accrued expenses and other current liabilities and an increase in income tax receivable.

1 unchanged sentence

The increase in inventories is due to an increase in production.

Net cash provided by operating activities was $841.9 million for the year ended December 31, 2022, and was primarily attributed to net income of $641.3 million adjusted for depreciation and depletion expense of $115.3 million, deferred income tax expense of $141.8 million, stock-based compensation expense of $17.6 million, mark-to-market loss on gas hedges of $4.0 million, amortization of debt issuance costs and debt discount of $3.2 million, accretion expense and valuation adjustment of asset retirement obligations of $1.9 million, an increase in other operating activities of $0.8 million and an increase in net

working capital of $84.0 million.

The increase in our working capital was primarily attributable to an increase in inventories and trade accounts receivable offset partially by an increase in accrued expenses and other current liabilities.

Investing Activities

Net cash used in investing activities was $538.0 million for the year ended December 31, 2024, primarily comprised of $457.2 million of purchases of property, plant and equipment, $31.1 million of capitalized mine development costs associated with our Blue Creek development and the purchase of $49.7 million in investments.

We spent approximately $87.0 million in sustaining capital and spent an additional $370.0 million in other discretionary capital, which primarily included capital spent on the development of Blue Creek of $350.5 million, capital spent on the bunker at Mine No.

4 of $17.2 million and capital spent on the Mine No.

7 overland belt of $2.5 million.

Net cash used in investing activities was $527.2 million for the year ended December 31, 2023, primarily comprised of $491.7 million of purchases of property, plant and equipment and $33.1 million of capitalized mine development costs associated with our Blue Creek development.

2 unchanged sentences

The current period also includes $2.4 million cash paid to acquire the remaining ownership interest in gas wells owned by an independent third party.

Net cash used in investing activities was $255.1 million for the year ended December 31, 2022, primarily comprised of $205.2 million of purchases of property, plant and equipment and $48.9 million of capitalized mine development costs associated with our Mine No.

4 and Blue Creek development.

We spent approximately $87.1 million in sustaining capital and spent an additional $118.1 million in other discretionary capital, which primarily included deposits on two extra sets of longwall shields of $55.3 million and capital spent on the development of Blue Creek of $47.1 million and the portal facilities at Mine No.

4 of $15.7 million.

The current period also includes $3.5 million cash payments in connection with the acquisition of leased mineral rights offset partially by $2.5 million net cash acquired in connection with the acquisition of the remaining 50% interest in Black Warrior Methane and Black Warrior Transmission.

Financing Activities

Net cash used in financing activities was $68.5 million for the year ended December 31, 2024, primarily due to the payment of quarterly and special dividends of $43.8 million, principal repayments of financing lease obligations of $17.4 million and payments of tax withholdings on vested equity awards of $11.8 million partially offset by proceeds received from financing lease obligations of $4.5 million.

Net cash used in financing activities was $265.2 million for the year ended December 31, 2023, primarily due to the retirements of debt related to our Notes of $162.4 million, payment of quarterly and special dividends of $61.1 million and principal repayments of financing lease obligations of $32.3 million.

Net cash used in financing activities was $153.1 million for the year ended December 31, 2022, primarily due to the payment of quarterly and special dividends of $79.7 million, retirements of debt related to our Notes of $39.4 million and principal repayments of financing lease obligations of $30.3 million.

Capital Allocation Policy

65 unchanged sentences

The Notes will mature on December 1, 2028.

At any time prior to December 1, 2024, we may redeem the Notes, in whole or in part, at a price equal to 100.00% of the principal amount of the Notes redeemed plus the Applicable Premium (as defined in the Indenture) and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

The Notes are redeemable at our option, in whole or in part, from time to time, on or after December 1, 2024, at redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, to, but excluding the redemption date.

At any time on or prior to December 1, 2024, we may redeem up to 40% of the aggregate principal amount of the Notes with the proceeds of certain equity offerings, at a redemption price of 107.875% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to but excluding the redemption date.

We are also required to make offers to purchase the Notes (i) at a purchase price of 101.00% of the principal amount thereof in the event we experience specific kinds of change of control triggering events, (ii) at a purchase price of 103.00% of the principal amount thereof prior to making certain restricted payments, and (iii) at a purchase price of 100.00% of the principal amount thereof in the event we make certain asset sales or dispositions and do not reinvest the net proceeds therefrom or use such net proceeds to repay certain indebtedness, in each case, plus accrued and unpaid interest, if any, to, but excluding the date of purchase .

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

1 unchanged sentence

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”).

3 unchanged sentences

Pursuant to the terms of the Restricted Payment Offer:

(1) an automatic pro ration factor of 49.5674% was applied to the $0.2 million 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 $0.1 million aggregate principal amount of the Notes (the “RP Pro-Rated Tendered Notes”);

Notes in a principal amount other than in integrals of $1,000), which resulted in $0.1 million aggregate principal amount of the Notes (the “RP Pro-Rated Tendered Notes”);

(2) we accepted all $0.1 million aggregate principal amount of the RP Pro-Rated Tendered Notes for payment of the Restricted Payment Repurchase Price in cash;

11 unchanged sentences

Short-Term Investments

During the year ended December 31, 2023, we had $9.0 million of collateral recognized as short term investments.

As of December 31, 2024, we had $9.5 million of collateral recognized as short term investments.

These investments were posted as collateral for the self-insured black lung related claims asserted by or on behalf of former employees of Walter Energy and its subsidiaries, which were assumed in the acquisition of certain assets of Walter Energy and relate to periods prior to March 31, 2016.

We also had $5.1 million in fixed income securities as of December 31, 2024 with maturities less than twelve months and the Company had no such investments as of December 31, 2023.

Capital Expenditures

3 unchanged sentences

The cost of our capital expenditures are also impacted by inflation and any prolonged inflation could result in higher costs and decreased margins and earnings.

While a significant amount of the capital expenditures required at our mines has been spent, we must continue to invest capital to maintain our production.

While a significant amount of the capital expenditures required at our mines has been spent, we must continue to

invest capital to maintain our production.

In addition, any decisions to increase production at our mines and the development of the high-quality steelmaking coal recoverable reserves at Blue Creek could also affect our capital needs or cause future capital expenditures to be higher than in the past and/or higher than our estimates.

To fund our capital expenditures, we may be required to use cash from our operations, incur debt or sell equity securities.

Our ability to obtain bank financing or our ability to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering and the covenants in our current or future debt agreements, as well as by general economic conditions, contingencies and uncertainties, including as a result of the COVID-19 pandemic, that are beyond our control.

Our capital expenditures were $457.2 million and $491.7 million for the years ended December 31, 2024 and December 31, 2023, respectively.

During 2023, we spent approximately $91.7 million in sustaining capital and an additional $400.0 million in other discretionary capital, which primarily included capital spent on the development of Blue Creek of $319.1 million, final payments on two extra sets of longwall shields of $50.9 million and capital spent on the bunker at Mine No.

4 of $24.5 million.

During 2024, we spent approximately $87.0 million in sustaining capital and an additional $370.0 million in other discretionary capital, which primarily included capital spent on the development of Blue Creek of $350.5 million, capital spent on the bunker at Mine No.

4 of $17.2 million and other discretionary capital of $2.5 million.

Our deferred mine development costs were $31.1 million and $33.1 million for the years ended December 31, 2024 and December 31, 2023, respectively, and primarily relate to the development of Blue Creek and Mine No.

We evaluate our spending on an ongoing basis in connection with our mining plans and the prices of steelmaking coal taking into consideration the funding available to maintain our operations at optimal production levels.

Our capital spending is expected to range from $435.0 million to $500.0 million for the full year 2024, consisting of sustaining capital expenditures of approximately $100.0 to $110.0 million and discretionary capital expenditures of approximately $335.0 to $390.0 million for the development of Blue Creek reserves and Mine No.

Our capital spending is expected to range from $315.0 million to $350.0 million for the full year 2025, consisting of sustaining capital expenditures of approximately $90.0 to $100.0 million and discretionary capital expenditures of approximately $225.0 to $250.0 million for the development of Blue Creek.

Our sustaining capital expenditures include expenditures related to longwall operations, continuous miners, new ventilation, and bleeder shafts.

9 unchanged sentences

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 per Right.

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.

In such an event, each Right will entitle its holder to buy, at the exercise price, common stock having a market value of two times the then current exercise price of the Right and the Rights held by such Acquiring Person will become void.

3 unchanged sentences

The distribution of the Rights is not a taxable event for stockholders of the Company and will not affect the Company’s financial condition or results of operations (including earnings per share).

The Rights will expire on the earliest of (i) the close of business on April 19, 2026, (ii) the time at which the Rights are redeemed as provided in the Amended Rights Agreement, (iii) the time at which the Rights are exchanged as provided in the Amended Rights Agreement, (iv) the time at which the Board determines that the NOLs are fully utilized or no longer available under Section 382 of the Code, (v) the effective date of the repeal of Section 382 of the Code if the Board determines that the Amended Rights Agreement is no longer necessary or desirable for the preservation of NOLs, or (vi) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in the Amended Rights Agreement.

under Section 382 of the Code, (v) the effective date of the repeal of Section 382 of the Code if the Board determines that the Amended Rights Agreement is no longer necessary or desirable for the preservation of NOLs, or (vi) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in the Amended Rights Agreement.

Additional details about the Amended Rights Agreement are contained in our Current Reports on Form 8-K filed with the SEC on February 14, 2020, March 4, 2022 and December 8, 2023.

Update on the Development of Blue Creek

More than a year after the relaunch of the Blue Creek mine development in May 2022, Warrior has initiated important and highly beneficial project scope changes that will require incremental capital expenditures over the life of the project while lowering operating costs, increasing flexibility to manage risks, and making better use of multi-channel transportation methods.

Most of these scope changes are transportation and logistics-related, with additional amounts related to inflation for these changes only.

They are expected to increase total capital expenditures for the Blue Creek mine by approximately $120 - $130 million over the remainder of the project development period.

While the Company originally planned on a single channel to transport coal from the Blue Creek mine via an overland belt to a third-party owned and operated barge loadout facility, it now plans to build a belt conveyor system to a railroad loadout to transport the majority of the coal.

We expect this change to de-risk the single channel to market, lower operating cost and move volumes faster to the port.

Warrior will also build and operate a barge loadout itself rather than utilizing a third-party provider.

The Company believes that the potential economic benefits associated with this scope change should provide Warrior with an inherently robust and cost competitive outbound logistics model that will provide additional flexibility to manage alternative transportation methods.

The inclusion of the benefits and incremental capital expenditures relating to these specific scope changes did not have a material impact to the project economic metrics of net present value and internal rate of return.

In addition, the Company has experienced inflationary cost increases ranging from 25 to 35 percent in both operating expenses and capital expenditures for its existing mining operations since late 2021.

The Company is also experiencing inflationary pressures at Blue Creek, especially in relation to labor, construction materials and certain equipment, that is expected to continue during the remainder of the project development period.

As a number of key material contracts are currently being negotiated, and due to uncertainty regarding future inflation rates, the Company is not providing an estimate of the impact of inflation at this time.

However, as the Company negotiates and enters into contracts for the larger project components, the Company expects that more information will become available to allow it to provide revised guidance.

While cost inflation has impacted the cost of the project, these inflationary pressures are expected to be offset by an inflationary increase in the long-term price assumption for steelmaking coal.

The Company is also employing a number of techniques to mitigate the impact of the inflationary costs such as ordering and purchasing equipment earlier, offering earlier payments for additional discounts on both equipment and services and other contract term modifications.

Subject to the considerations discussed above, our revised estimate of capital expenditures in 2024 for the development of the Blue Creek mine is approximately $325 to $375 million and is subject to change.

The Company anticipates that its strong cash flow generation and current available liquidity, as well as ability to finance $120 to $130 million of capital expenditures

through equipment leases, will allow us to be opportunistic as we evaluate funding options for Blue Creek with the goal of maintaining an efficient and low-cost of capital.

The project remains on schedule with the first development tons from continuous miner units expected in the third quarter of 2024 and the longwall scheduled to start up in the second quarter of 2026.

Critical Accounting Policies and Estimates

25 unchanged sentences

Each of these factors may vary considerably from the assumptions used in estimating reserves and resources.

For these reasons, estimates of economically recoverable quantities of coal attributable to a particular group of properties, and

classifications of these reserves and resources based on risk of recovery and estimates of future net cash flows, may vary substantially.

For these reasons, estimates of economically recoverable quantities of coal attributable to a particular group of properties, and classifications of these reserves and resources based on risk of recovery and estimates of future net cash flows, may vary substantially.

Actual production, revenues and expenditures with respect to reserves and resources will likely vary from estimates and these variances may be material.

12 unchanged sentences

In connection with the acquisition of certain assets of Walter Energy consummated on March 31, 2016, we acquired deferred tax assets primarily associated with federal and state NOLs attributable to Walter Energy's write-off of its investment in Walter Energy Canada Holdings, Inc.

As of December 31, 2023, we believe we have utilized all of our federal NOLs and federal general business credit carryforwards, subject to the filing of the 2023 federal income tax return.

As of December 31, 2024, we believe we have utilized all of our federal NOLs and federal general business credit carryforwards.

The Company has state NOL carryforwards of approximately $945.2 million , which expire predominantly on December 31, 2029 through December 31, 2035.

23 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.

What changed 10-K

Item 7. Management’s Discussion and Analysis