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What changed in WARRIOR MET COAL, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WARRIOR MET COAL, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+586 added−572 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in WARRIOR MET COAL, INC.'s 2025 10-K

586 paragraphs added · 572 removed · 457 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

114 edited+37 added−30 removed128 unchanged
Biggest changeIn 2024, our commitment to safety remained steadfast across Mine 4, Mine 7 and the newly active world-class Blue Creek mine, which began safety reporting in September 2024. Regularly tracking safety performance is a critical part of our operations, with a clear focus on personal injury and reportable accident data.
Biggest changeRegularly tracking safety performance is a critical part of our operations, with a clear focus on personal injury and reportable accident data. Throughout 2025, we allocated in excess of $4.0 million to safety and security related initiatives. These investments include advanced safety equipment, training and competency programs, enhanced monitoring and communication systems and comprehensive inspection and audit activities.
We are in discussions with potential third-party partners to identify ways to optimize our existing network for capturing coal mine methane ("CMM") as feedstock for the production of hydrogen and to serve as secure geological storage for captured qualified carbon oxide which are products and services incentivized by the credits.
We are in discussions with potential third-party partners to identify ways to optimize our existing network for capturing coal mine methane ("CMM") as feedstock for the potential production of hydrogen and to serve as secure geological storage for captured qualified carbon oxide which are products and services incentivized by the credits.
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.
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 "2025 Final Regulations").
The Patient Protection and Affordable Care Act includes significant changes to the federal black lung program, including an automatic survivor benefit paid upon the death of a miner with an awarded black lung claim and the establishment of a rebuttable presumption with regard to pneumoconiosis among miners with 15 or more years of coal mine employment that are totally disabled by a respiratory condition.
The Patient Protection and Affordable Care Act includes significant changes to the federal black lung 19 program, including an automatic survivor benefit paid upon the death of a miner with an awarded black lung claim and the establishment of a rebuttable presumption with regard to pneumoconiosis among miners with 15 or more years of coal mine employment that are totally disabled by a respiratory condition.
If the EPA were to make an endangerment finding in the future, we may have to further reduce our methane emissions, install additional air pollution controls, pay certain taxes or fees for our 17 emissions, incur costs to purchase credits that permit us to continue operations as they now exist at our underground coal mines or perhaps curtail coal production.
If the EPA were to make an endangerment finding in the future, we may have to further reduce our methane emissions, install additional air pollution controls, pay certain taxes or fees for our emissions, incur costs to purchase credits that permit us to continue operations as they now exist at our underground coal mines or perhaps curtail coal production.
We will seek to preserve our capital structure with low financial leverage that is largely free from legacy liabilities in order to ensure maximum free cash flow generation. Highly experienced leadership team with deep industry expertise . Our Chief Executive Officer (“CEO”), Walter J. Scheller, III, is the former CEO of Walter Energy, Inc.
We will seek to preserve our capital structure with low financial leverage that is largely free from legacy liabilities in order to ensure maximum free cash flow generation. 8 Highly experienced leadership team with deep industry expertise . Our Chief Executive Officer (“CEO”), Walter J. Scheller, III, is the former CEO of Walter Energy, Inc.
Alabama’s version of CERCLA mirrors the federal version with the important difference that there is no joint and several liability. Liability is consistent with one’s contribution to the contamination. In addition, the disposal, release or spilling of some products used by coal companies in operation, such as chemicals, could trigger the liability provisions of CERCLA or similar state laws.
Alabama’s version of CERCLA mirrors the federal version with 24 the important difference that there is no joint and several liability. Liability is consistent with one’s contribution to the contamination. In addition, the disposal, release or spilling of some products used by coal companies in operation, such as chemicals, could trigger the liability provisions of CERCLA or similar state laws.
While the power plant rules do not affect our marketing of our steelmaking coal, the continued regulatory focus could lead to future GHG regulations for the mining industry and its steelmaking customers, which ultimately could make it more difficult or costly for us to conduct our operations or adversely affect demand for our products.
While the power plant rules do not affect our marketing of our steelmaking coal, any continued regulatory focus could lead to future GHG regulations for the mining industry and its steelmaking customers, which ultimately could make it more difficult or costly for us to conduct our operations or adversely affect demand for our products.
For more information regarding our customers, see Note 2 to our consolidated financial statements included elsewhere in this Annual Report. 9 Competition Substantially all of our steelmaking coal sales are exported. Our major competitors sell into our core business areas of Europe, South America and Asia.
For more information regarding our customers, see Note 2 to our consolidated financial statements included elsewhere in this Annual Report. Competition Substantially all of our steelmaking coal sales are exported. Our major competitors sell into our core business areas of Asia, Europe and South America.
The Clean Air Act indirectly affects our mining operations by extensively regulating the air emissions of sulfur dioxide, nitrogen oxides, mercury, ozone and other compounds emitted by steel manufacturers, coke ovens and coal-fired utilities. These 18 laws are constantly evolving and may become more stringent.
The Clean Air Act indirectly affects our mining operations by extensively regulating the air emissions of sulfur dioxide, nitrogen oxides, mercury, ozone and other compounds emitted by steel manufacturers, coke ovens and coal-fired utilities. These laws are constantly evolving and may become more stringent.
Our operations’ high-quality steelmaking coal is considered among the highest quality steelmaking coals in the world and is preferred as a base steelmaking coal in our customers’ blends. Our marketing strategy is to focus on international markets mostly in Europe and South America where we have a shipping time and distance advantage.
Our operations’ high-quality steelmaking coal is considered among the highest quality steelmaking coals in the world and is preferred as a base steelmaking coal in our customers’ blends. Our marketing strategy is to focus on international markets mostly in Europe and 11 South America where we have a shipping time and distance advantage.
Although we do not currently face material costs associated with AMD, there can be no assurance that we will not incur significant costs in the future. 16 Surety Bonds/Financial Assurance We use surety bonds and letters of credit to provide financial assurance for certain transactions and business activities.
Although we do not currently face material costs associated with AMD, there can be no assurance that we will not incur significant costs in the future. Surety Bonds/Financial Assurance We use surety bonds and letters of credit to provide financial assurance for certain transactions and business activities.
Based on our management’s operational experience, we are confident in our ability to continue to produce at or close to capacity in a safe and efficient manner, and with a comparable cost profile to our current costs, should market conditions warrant. Maximize organic growth and profitability.
Based on our management’s operational experience, we are confident in our ability to continue to produce at or close to capacity in a safe and efficient manner, and with a comparable cost profile to our current costs, should market conditions warrant. Maximize strategic organic growth and profitability.
Our highly flexible cost structure provides us with a key competitive advantage relative to our competitors and which we expect should allow us to remain profitable in all coal market conditions. 6 Robust logistics and significant logistical cost advantage to the seaborne market .
Our highly flexible cost structure provides us with a key competitive advantage relative to our competitors and which we expect should allow us to remain profitable in all coal market conditions. Robust logistics and significant logistical cost advantage to the seaborne market .
We intend to disclose on our website any amendments or waivers to our Code of Business Conduct and Ethics that are required to be disclosed pursuant to Item 5.05 of Form 8-K.
We intend to disclose on our website any amendments or waivers to our Code of Business Conduct and Ethics that are required to be disclosed pursuant to Item 5.05 of Form 8-K. 25
Compliance with these laws and regulations may be costly and time-consuming and may delay commencement, continuation or expansion of exploration or production at our operations. These laws are constantly evolving and may become more stringent.
Compliance with these laws and 17 regulations may be costly and time-consuming and may delay commencement, continuation or expansion of exploration or production at our operations. These laws are constantly evolving and may become more stringent.
However, new requirements under the CWA and corresponding state laws may cause us to incur significant additional costs that could adversely affect our operating results.
However, new requirements under the CWA and corresponding state laws may cause us to incur significant additional costs that 23 could adversely affect our operating results.
The improved gas is then sold and used by consumers. This plant operates using a complex system that concentrates the methane by removing other gases such as nitrogen and oxygen. For the full year 2023, we achieved an estimated methane capture rate of 74% through our low-quality gas plant and flaring initiatives.
The improved gas is then sold and used by consumers. This plant operates using a complex system that concentrates the methane by removing other gases such as nitrogen and oxygen. For the full year 2025, we achieved an estimated methane capture rate of 74% through our low-quality gas plant and flaring initiatives.
Our natural gas operations remove and sell natural gas from our owned and leased coal seams by reducing natural gas levels in our mines. We operate as a single reportable segment. See the financial statements beginning on page F-1 of this Annual Report for our consolidated revenues, profit/loss and total assets.
Our natural gas operations remove and sell natural gas from our owned and leased coal seams by reducing natural gas levels in our mines. We operate as a one reportable segment. See the consolidated financial statements beginning on page F-1 of this Annual Report for our consolidated revenues, profit/loss and total assets.
We also continuously work to evaluate and test emerging technologies that can optimize our water usage and successfully achieved a 99.75% compliance record with the EPA National Pollutant Discharge Elimination System ("NPDES") program, which addresses water pollution by regulating point source discharges.
We also continuously work to evaluate and test emerging technologies that can optimize our water usage and successfully achieved a 99.6% compliance record with the EPA National Pollutant Discharge Elimination System ("NPDES") program, which addresses water pollution by regulating point source discharges.
In addition, on May 9, 2024, the EPA published final rules that implement new emission limits and guidelines for carbon dioxide from fossil-fuel-fired electric generating units. The new limits and guidelines require ambitious reductions in carbon dioxide emissions and will significantly reduce GHG emissions from existing coal-fired electric generating units.
In addition, on May 9, 2024, the EPA published final rules that implement new emission limits and guidelines for carbon dioxide from fossil-fuel-fired electric generating units. The new limits and guidelines require ambitious reductions in carbon dioxide emissions and would significantly reduce GHG emissions from existing coal-fired electric generating units.
Item 1. Business Overview Warrior Met Coal, Inc. (together with its subsidiaries, the "Company" or "Warrior") is a U.S.-based, environmentally and socially minded supplier to the global steel industry headquartered in Brookwood, Alabama. 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.
Item 1. B usiness Overview Warrior Met Coal, Inc. (together with its subsidiaries, the "Company" or "Warrior") is a U.S.-based, environmentally and socially minded supplier to the global steel industry headquartered in Brookwood, Alabama. 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.
Our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of our audit committee, compensation committee, nominating and corporate governance committee and sustainability, environmental, health & safety committee are also available on our website and in print free of charge to any stockholder who requests them.
Our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of our audit committee, human resources and compensation committee, nominating and corporate governance committee and sustainability, environmental, health & safety committee are also available on our website and in print free of charge to any stockholder who requests them.
These incentives could accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for, and in turn the prices of, fossil fuel energy products.
The IRA incentives could accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for, and in turn the prices of, fossil fuel energy products.
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 $28.0 million. We appealed this decision.
On July 12, 2022, we received a decision on our appeal from the DCWMC lowering the amount of collateral required to be posted from $39.8 million to $28.0 million. We appealed this decision.
Our safety infrastructure is led by a team of 33 dedicated safety professionals spread across our corporate and mining operations, including two dedicated Mine Rescue teams. These teams, the only mine operated rescue teams in the state apart from the state sponsored groups, exemplify our unwavering commitment to safety and emergency preparedness.
Our safety infrastructure is led by a team of over 30 dedicated safety professionals spread across our corporate and mining operations, including two dedicated Mine Rescue teams. These teams, the only mine operated rescue teams in the state apart from the state sponsored groups, exemplify our unwavering commitment to safety and emergency preparedness.
For four consecutive years we have earned awards demonstrating our commitment to the environment and these efforts reinforce our reputation as a leader in responsible mining and land stewardship, emphasizing our commitment to maintaining 11 ecological balance and ensuring a sustainable future for all of our stakeholders.
For five consecutive years we have earned awards demonstrating our commitment to the environment and these efforts reinforce our reputation as a leader in responsible mining and land stewardship, emphasizing our commitment to maintaining ecological balance and ensuring a sustainable future for all of our stakeholders.
These qualities make our coal ideally suited as a coking coal for the manufacture of steel. As a result of our high-quality coal, our realized price has historically approximated the Platts Premium Low Volatility FOB Australian Index price (the “S&P Platts Index”).
These qualities make our coal ideally suited as a coking coal for the manufacture of steel. As a result of our high-quality coal, our realized price for Mine No. 7 coal has historically approximated the Platts Premium Low Volatility FOB Australian Index price (the “S&P Platts Index”).
We received another letter from the DOL on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL. On February 9, 2022, the DOL held a conference with representatives from the Company related to our appeal.
We received another letter from the DCWMC on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the Department of Labor ("DOL"). On February 9, 2022, the DCWMC held a conference with representatives from the Company related to our appeal.
On December 12, 2008, the OSM finalized rulemaking regarding the interpretation of the stream buffer zone provisions of SMCRA, which confirmed that excess spoil from mining and refuse from coal preparation could be placed in permitted areas of a mine site that constitute waters of the U.S.
On December 12, 2008, the OSM finalized rulemaking regarding the interpretation of the stream buffer zone provisions of SMCRA, which confirmed that excess spoil from mining and refuse from coal preparation could be placed in permitted areas of a mine site that constitute waters of the United States.
We are self-insured for these black lung liabilities and have posted $18.6 million in surety bonds and $9.5 million of collateral recognized as short term investments in addition to maintaining a black lung trust of $1.4 million that was acquired from Walter Energy.
We are self-insured for these black lung liabilities and have posted $18.6 million in surety bonds and $9.9 million of collateral recognized as short term investments in addition to maintaining a black lung trust of $0.9 million that was acquired from Walter Energy.
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 and workers compensation related claim from any of our employees.
From June 1, 2018 to May 31, 2020 and June 1, 2020 to May 31, 2024, we had a deductible policy where we were responsible for the first $0.5 million and $1.0 million, respectively, for each black lung and workers compensation related 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 and workers compensation related claim from any of our employees. We also assumed all of the black lung liabilities of Walter Energy and its U.S. subsidiaries.
Beginning on June 1, 2024, we have a deductible policy where we are responsible for the first $2.0 million for each black lung and workers compensation related claim from any of our employees. We also assumed all of the black lung liabilities of Walter Energy and its U.S. subsidiaries.
The steelmaking coal preparation and blending facilities receive, blend, process and ship steelmaking coal that is produced from the mines. Using these facilities, we are able to ensure a consistent quality and efficiently blend our steelmaking coal to meet our customers’ specifications.
Coal Preparation and Blending Our steelmaking coal mines have preparation and blending facilities convenient to each mine. The steelmaking coal preparation and blending facilities receive, blend, process and ship steelmaking coal that is produced from the mines. Using these facilities, we are able to ensure a consistent quality and efficiently blend our steelmaking coal to meet our customers’ specifications.
Our two operating mines and Blue Creek are located approximately 300 miles from our primary export terminal capacity in Mobile, Alabama. Our proximity to port and the flexibility of our logistics networks underpin our logistical cost advantage compared to other U.S. steelmaking coal producers.
Our three operating mines are located approximately 300 miles from our primary export terminal in Mobile, Alabama. Our proximity to port and the flexibility of our logistics networks underpin our logistical cost advantage compared to other U.S. steelmaking coal producers.
The combination of low sulfur, low-to-medium ash, Low Vol to High Vol A and high coking strength drives our consistently high price realization relative to other U.S. steelmaking coal producers who typically focus on lower rank steelmaking coals. We believe Mine No. 4 and Mine No. 7 are two of the lowest cost steelmaking coal mines in North America.
The combination of low sulfur, low-to-medium ash, Low Vol to High Vol A and high coking strength drives our consistently high price realization relative to other U.S. steelmaking coal producers who typically focus on lower rank steelmaking coals. We believe our mines are some of the lowest cost steelmaking coal mines in North America.
The combination of low sulfur, low-to-medium ash, high CSR, low volatility ("Low Vol") to high volatility ("High Vol"), and other characteristics of our coal, as well as our ability to blend them, makes our HCC product an important component within our customers’ overall coking coal requirements.
The combination of high strength, high fluidity, low sulfur, low-to-medium ash, Low Vol to High Vol, and other characteristics of our coals, as well as our ability to blend them, makes our HCC product an important component within our customers’ overall coking coal requirements.
We are a large-scale, low-cost producer and exporter of premium quality met or 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. 7. Our steelmaking coal production totaled 7.5 million metric tons in 2024.
We are a large-scale, low-cost producer and exporter of premium quality met or steelmaking coal, also known as hard coking coal (“HCC”), operating highly efficient longwall operations in our underground mines based in Alabama, Mine No. 4, Mine No. 7 and Blue Creek. Our steelmaking coal production totaled 9.3 million metric tons in 2025.
We are pleased to report that we reduced our Scope 1 and Scope 2 GHG emissions by 34% from baseline year levels and achieved a 9% decrease in our water consumption. We also operate a low-quality gas plant, which is able to improve the quality of ordinarily unsaleable gas that would otherwise escape to the atmosphere.
We are pleased to report that we reduced our Scope 1 and Scope 2 GHG emissions by 37% from baseline year levels and achieved a 34% water recycling rate in 2025. We also operate a low-quality gas plant, which is able to improve the quality of ordinarily unsaleable gas that would otherwise escape to the atmosphere.
For the year ended December 31, 2024, our sales geographic customer mix was 42% in Asia, 38% in Europe, 19% in South America and 1% in the U.S. This compares to our geographic customer mix for the year ended December 31, 2023 of 48% in Europe, 33% in Asia and 19% in South America.
For the year ended December 31, 2025, our sales geographic customer mix was 48% in Asia, 37% in Europe, 14% in South America and 1% in the U.S. This compares to our geographic customer mix for the year ended December 31, 2024 of 42% in Asia, 38% in Europe, 19% in South America and 1% in the U.S.
We have a shipping time and distance advantage serving our customers throughout the Atlantic Basin relative to competitors located in Australia and Western Canada. Our HCC, mined from the Southern Appalachian region of the United States, is characterized by low-to-high volatile matter (“VM”) and high coke strength after reaction (“CSR”).
We have a shipping time and distance advantage serving our customers throughout the Atlantic Basin relative to competitors located in Australia and Western Canada. Our HCC, mined from the Southern Appalachian region of the United States, is characterized by low-to-high volatile matter, low sulfur, high fluidity, and high strength.
In addition, the Trump Administration may make changes to the regulations on production tax credits and incentives that are currently offered under Sections 45Q and 45V. Social Safety Safety is an essential part of our identity and operations, woven into every aspect of our business.
In addition, the Trump Administration may make changes to the regulations on production tax credits and incentives that are currently offered under Sections 45Q and 45V. 14 Social Safety Safety is an essential part of our identity and operations, woven into every aspect of our business. In 2025, our commitment to safety remained steadfast across our mining operations.
Our key strategies to achieve this objective are described below: Maximize profitable production . In the year ended December 31, 2024, we produced 7.5 million metric tons of steelmaking coal from Mine No. 7, Mine No. 4 and Blue Creek.
Our key strategies to achieve this objective are described below: Maximize profitable production . In the year ended December 31, 2025, we produced a record high 9.3 million metric tons of steelmaking coal from Mine No. 7, Mine No. 4 and Blue Creek.
Of these seven impoundments, five are classified as low hazard facilities and only two of the five are active. Our two high-hazard slurry tailings impoundments are subject to comprehensive risk assessments and third-party inspections to uphold stringent safety standards and regulatory compliance.
Currently, we control seven certified tailings impoundment facilities that are subject to MSHA regulations and certification. Of these seven impoundments, five are classified as low hazard facilities and only two of the five are active. Our two high-hazard slurry tailings impoundments are subject to comprehensive risk assessments and third-party inspections to uphold stringent safety standards and regulatory compliance.
We received a letter from the Department of Labor ("DOL") on February 21, 2020, under its new process for self-insurance renewals, which would require us to increase the amount of collateral posted to $39.8 million, but we appealed such increase.
We received a letter from the Division of Coal Mine Workers' Compensation ("DCWMC") on February 21, 2020, under its new process for self-insurance renewals, which would require us to increase the amount of collateral posted to $39.8 million, but we appealed such increase.
Laws and regulations governing emissions of GHGs have been adopted by foreign governments (including the European Union and member countries), U.S. Congress and regulatory agencies, individual states in the U.S. and regional governmental authorities.
Laws and regulations governing emissions of GHGs have been adopted by foreign governments (including the European Union and member countries), U.S. Congress and regulatory agencies, individual states in the U.S. and regional governmental authorities. Recently, however, U.S. federal policy regarding the regulation of GHGs has shifted.
The Company recently released its annual Environmental, Social and Corporate Governance ("ESG") sustainability report that was prepared in accordance with the Sustainability Accounting Standards Board standards for Coal Operations and highlights our goals of becoming an industry leader in environmental stewardship, maintaining a strong environmental compliance record and safety statistics that are better than the industry average, and forming collaborative partnerships focused on workforce development and our communities.
We recently released our annual Environmental, Social and Corporate Governance ("ESG") sustainability report that was prepared in accordance with the Sustainability Accounting Standards Board standards for Coal Operations and highlights our goals of becoming an industry leader in environmental stewardship, maintaining a strong environmental compliance record and safety statistics that are better than the industry average, and forming collaborative partnerships focused on workforce development and our communities. 12 We continually invest in new technologies to lessen our environmental impact and to improve our efficiencies and productivity.
Our policies and practices support diversity and equality. To help achieve this, we engage a broad range of communication channels, tools, and processes to attract highly capable external candidates to generate an experienced and diverse candidate pool.
Talent Attraction: We acknowledge the importance of developing and growing a strong and diverse workforce. Our policies and practices support diversity and equality. To help achieve this, we engage a broad range of communication channels, tools, and processes to attract highly capable external candidates to generate an experienced and diverse candidate pool.
In addition, we must also submit a comprehensive plan for mining and reclamation upon the completion of mining operations. The requirements are costly and time-consuming and may delay commencement or continuation of exploration, production or expansion at our operations. Typically, we submit necessary mining permit applications several months, or even years, before we anticipate mining a new area.
The requirements are costly and time-consuming and may delay commencement or continuation of exploration, production or expansion at our operations. Typically, we submit necessary mining permit applications several months, or even years, before we anticipate mining a new area.
In particular, in December 2009, the EPA published findings that GHG emissions present an endangerment to public health and welfare because, according to the EPA, emissions of such gases contribute to warming of the earth's atmosphere and other climatic changes.
The EPA has historically regulated GHG emissions pursuant to the Agency's December 2009 findings that GHG emissions present an endangerment to public health and welfare because, according to the EPA, emissions of such gases contribute to warming of the earth's atmosphere and other climatic changes.
Description of Our Business Our underground mining operations and our world-class Blue Creek growth project are headquartered in Brookwood, Alabama and as of December 31, 2024, based on a reserve report prepared by Marshall Miller & Associates, Inc., were estimated to have approximately 151.4 million metric tons of recoverable reserves located in west central Alabama between the 8 cities of Birmingham and Tuscaloosa.
Description of Our Business Our underground mining operations are headquartered in Brookwood, Alabama and as of December 31, 2025, based on a reserve report prepared by Marshall Miller & Associates, Inc., were estimated to have approximately 179.3 million metric tons of recoverable reserves located in west central Alabama between the cities of Birmingham and Tuscaloosa.
Any change or reclassification of this exemption could significantly increase our coal mining costs. 19 Comprehensive Environmental Response, Compensation and Liability Act The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state laws affect our steelmaking coal mining operations by, among other things, imposing investigation and cleanup requirements for threatened or actual releases of hazardous substances.
Comprehensive Environmental Response, Compensation and Liability Act The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state laws affect our steelmaking coal mining operations by, among other things, imposing investigation and cleanup requirements for threatened or actual releases of hazardous substances.
Coal Mine Methane and Secure Geological Storage of Carbon Oxide We are evaluating recently issued final regulations on clean hydrogen production and carbon sequestration tax credits offered under Internal Revenue Code Sections 45Q and 45V as amended and introduced by the Inflation Reduction Act of 2022.
Coal Mine Methane and Secure Geological Storage of Carbon Oxide We continue to evaluate current and pending regulations on clean hydrogen production, carbon sequestration and methane capturing tax credits offered under Internal Revenue Code Sections 45Q and 45V as amended and introduced by the Inflation Reduction Act of 2022.
Warrior's Code of Business Conduct and Ethics and Human Rights Policy promote and support diversity by offering a workplace in which people are protected from harassment and discrimination based on gender, race, age, sexual orientation, and other factors.
This includes treating everyone with respect, valuing diversity, and fostering safe and inclusive environments. Warrior's Code of Business Conduct and Ethics and Human Rights Policy promote and support diversity by offering a workplace in which people are protected from harassment and discrimination based on gender, race, age, sexual orientation, and other factors.
Our continued emphasis on enhancing our safety performance has resulted in total reportable incidence rates of 1.21 at Mine No. 4, 1.80 at Mine No. 7 and zero at Blue Creek for the year ended December 31, 2024, 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.
Our continued emphasis on enhancing our safety performance has resulted in total reportable incidence rates of 2.51 at Mine No. 4, 1.64 at Mine No. 7 and 2.01 at Blue Creek for the year ended December 31, 2025, which is 53% lower than the national total reportable incidence rate for all underground coal mines in the United States of 4.20 for the six months ended June 30, 2025, which represents the latest data available.
Our resources are primarily allocated to the mining, transportation and marketing of steelmaking coal. The premium nature of our steelmaking coal makes it ideally suited as a base feed coal for steel makers and our Mine No. 7 steelmaking coal results in price realizations near or above the S&P Global Platts Index (as defined below).
The premium nature of our steelmaking coal makes it ideally suited as a base feed coal for steel makers and our Mine No. 7 steelmaking coal is a low volatility ("Low Vol") coal that results in price realizations near or above the S&P Global Platts Index (as defined below).
We also offer our employees paid time off and an Employee Assistance Program which is a comprehensive network of accredited counselors and other specialized professionals who provide support on several issues, including mental health, relationships, wellbeing, stress and personal finances.
We also offer our employees paid time off and an Employee Assistance Program which is a comprehensive network of accredited counselors and other specialized professionals who provide support on several issues, including mental health, relationships, wellbeing, stress and personal finances. Our Volunteer PTO Program, introduced in 2023, continues to encourage community engagement and fosters a culture of giving back.
The EPA intends to issue a correction notice to address certain errors and needed clarifications in the final rule. As described above, existing and proposed regulations also subject GHG emissions to regulation under the Clean Air Act.
The EPA intends to issue a correction notice to address certain errors and needed clarifications in the final rule and, in the interim, certain compliance deadlines have been extended to April 2027 to allow for EPA's reconsideration. As described above, existing and proposed regulations also subject GHG emissions to regulation under the Clean Air Act.
Our Mine No. 4 steelmaking coal is a High Vol A quality coal that typically trades at a larger discount to the price of coal from Mine No. 7.
Our Mine No. 4 and Blue Creek steelmaking coals are a high volatility ("High Vol") A quality coal that typically trades at a discount to the price of coal from Mine No. 7.
We are required to prepare and present to federal, state and local authorities data pertaining to the effect or impact that any proposed exploration 14 project for production of coal or gas may have on the environment, the public and our employees.
We are required to prepare and present to federal, state and local authorities data pertaining to the effect or impact that any proposed exploration project for production of coal or gas may have on the environment, the public and our employees. In addition, we must also submit a comprehensive plan for mining and reclamation upon the completion of mining operations.
Though President Trump issued an executive order on January 20, 2025, directing the United States Ambassador to the United Nations to immediately withdraw from the Paris Agreement, it is possible that the Paris Agreement and subsequent domestic and international regulations will have adverse effects on the market for steelmaking coal, natural gas, and other fossil fuel products.
Though the United States Ambassador to the United Nations submitted formal notice to withdraw from the Paris Agreement (effective January 27, 2026), it is possible that the Paris Agreement and subsequent domestic and international 22 regulations will have adverse effects on the market for steelmaking coal, natural gas, and other fossil fuel products.
Our Mine No. 4 steelmaking coal is a High Vol A quality coal that typically trades at a larger discount to the price of Mine No. 7 coal. We now primarily target the East Coast High Vol A indices price for our Mine No. 4 coal. Our Blue Creek mine steelmaking coal is also a High Vol A quality coal.
Our Mine No. 4 and Blue Creek steelmaking coals are a High Vol A quality coal that typically trades at a discount to the price of coal from Mine No. 7. We primarily target the East Coast High Vol A index for sales of our Mine No. 4 and Blue Creek coals that are destined for the Atlantic Basin.
We have also elevated our efforts on minority and veteran recruiting by visiting and recruiting from Historically Black Colleges and Universities, growing existing partnerships and seeking new partnerships with groups to provide diverse internships, and attending and recruiting at military job fairs. In 2024, 24% of new employees hired were from diverse backgrounds.
We have also elevated our efforts on minority and veteran recruiting by visiting and recruiting from Historically Black Colleges and Universities, growing existing partnerships and seeking new partnerships with groups to provide diverse internships, and attending and recruiting at military job fairs. We also prioritize veteran recruitment, recognizing the unique skills and leadership qualities veterans bring to our workforce.
We expect to provide updated financial and operational information on Blue Creek in the near future. Highly flexible cost structure protects through-the-cycle profitability . We have “variabilized” our cost structure in our labor, royalties and logistics contracts, increasing the proportion of our cost structure that varies in response to changes in HCC prices based on a variety of indices.
We have “variabilized” our cost structure in our labor, royalties and logistics contracts, increasing the proportion of our cost structure that varies in response to changes in HCC prices based on a variety of indices.
In 2024, our total incidence rate was 1.53, which is a 19% improvement from the prior year's rate of 1.9% and 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.
In 2025, our total incidence rate was 1.96, which is 53% lower than the national total reportable incidence rate for all underground coal mines in the United States of 4.20 for the six months ended June 30, 2025, which represents the latest data available.
The findings by the EPA allowed the agency to proceed with the adoption and implementation of regulations to restrict emissions of GHGs under existing provisions of the Clean Air Act, including rules that regulate emissions of GHGs from motor vehicles and certain large stationary sources of emissions such as power plants or industrial facilities.
On August 1, 2025, the EPA published a proposed rule to rescind the 2009 endangerment findings and repeal the associated regulations to restrict emissions of GHGs under existing provisions of the Clean Air Act, including rules that regulate emissions of GHGs from motor vehicles and certain large stationary sources of emissions such as power plants or industrial facilities.
As of December 31, 2024, we had outstanding surety bonds with parties for post-mining reclamation at all of our mining operations totaling $50.6 million, $18.6 million for black lung liabilities and $7.7 million for miscellaneous purposes.
As of December 31, 2025, we had outstanding surety bonds with parties for post-mining reclamation at all of our mining operations totaling $47.5 million, $18.6 million as collateral for self-insured black lung related claims, $16.0 million for federal coal leases and $6.4 million for miscellaneous purposes.
We recognize water as an essential natural resource and we are committed to responsible usage in support of our facilities. We continuously work to evaluate and test emerging technologies that can optimize our water usage. Freshwater is primarily used for processing coal or sent underground for use in mining operations, such as dust control.
We continuously work to evaluate and test emerging technologies that can optimize our water usage. Freshwater is primarily used for processing coal or sent underground for use in mining operations, such as dust control. This optimizes the performance of our mining machinery and helps create and maintain a safe environment for our workforce.
We believe that can be accomplished with minimal to no incremental capital expenditures. In addition, from the outset of our development of Blue Creek our plans contemplated the ability to potentially add a second longwall should market fundamentals warrant it and the infrastructure of the project has been designed with flexibility for higher volumes.
We believe this optimization can be achieved with minimal to no incremental capital expenditures. From the outset of Blue Creek's development, our plans contemplated the potential to add a second longwall should market fundamentals warrant it, and the project's infrastructure has been designed with the flexibility to support higher volumes. Highly flexible cost structure protects through-the-cycle profitability .
The system uses advanced mechanical and pneumatic technologies to separate the coal from impurities without the heavy reliance on water required by traditional slurry systems.
These systems serve as a foundational component of Warrior's broader strategy to improve water efficiency across our operations. The system uses advanced mechanical and pneumatic technologies to separate the coal from impurities without the heavy reliance on water required by traditional slurry systems.
As of December 31, 2024, we had approximately $654.7 million of available liquidity consisting of $491.5 million of cash and cash equivalents, short-term investments of $5.1 million, net of $9.5 million posted as collateral, long-term investments of $44.6 million and available liquidity under our ABL Facility of $113.5 million.
As of December 31, 2025, we had approximately $483.9 million of available liquidity consisting of $300.0 million of cash and cash equivalents, short-term investments of $43.4 million, net of $9.9 million posted as collateral, and available liquidity under our Amended ABL Facility of $140.5 million.
Drainage flowing from or caused by mining activities can be acidic with elevated levels of dissolved metals, a condition referred to as “acid mine drainage” (“AMD”). Treatment of AMD can be costly.
Still, it remains unclear whether and how additional federal actions could further impact regulatory or enforcement activities pursuant to the SMCRA. 20 Drainage flowing from or caused by mining activities can be acidic with elevated levels of dissolved metals, a condition referred to as “acid mine drainage” (“AMD”). Treatment of AMD can be costly.
Our two operating mines and Blue Creek are located approximately 300 miles from our export terminal at the Port of Mobile in Alabama, which we believe to be the shortest mine-to-port distance of any U.S.-based steelmaking coal producer.
The steelmaking coal within these mines is mined using longwall extraction technology with development support from continuous miners. Our underground mining operations are located approximately 300 miles from our export terminal at the Port of Mobile in Alabama, which we believe to be the shortest mine-to-port distance of any U.S.-based steelmaking coal producer.
Employees have the right and are empowered to report issues via several reporting channels, including our third party-managed confidential employee hotline should they wish to remain anonymous. As of December 31, 2024, our Board was 33% female and 17% racially and/or ethnically diverse and more than 24% of our workforce identified as racially or ethnically diverse.
Employees have the right and are empowered to report issues via several reporting channels, including our third party-managed confidential employee hotline should they wish to remain anonymous. As of December 31, 2025, approximately one-third of our Board was female, an our workforce reflected a mix of backgrounds. Our workforce's diverse composition spans age and experience as well.
Also, in August 2022, President Biden signed the Inflation Reduction Act of 2022 ("IRA") into law. The IRA contains billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure, amongst other provisions.
Also, the Inflation Reduction Act of 2022 ("IRA") which contains billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure, amongst other provisions has been subject to aggressive changes under the Trump Administration, with many IRA programs now halted.
Environmental, Social and Governance The Company takes pride in its environmental record and strives to be an industry leader in environmental stewardship.
Environmental, Social and Governance We take pride in our environmental record and strive to be an industry leader in environmental stewardship.
The system uses advanced mechanical and pneumatic technologies to separate coal from impurities without the heavy reliance on water required by traditional slurry systems. By replacing water-intensive methods, the system significantly reduces water usage, minimizes the generation of coal slurry waste, and eliminates the need for large impoundments for waste storage.
By replacing water-intensive methods, the system significantly reduces water usage, minimizes the generation of coal slurry waste, and eliminates the need for large impoundments for waste storage.
We also have alternative outbound logistics routes to increase transportation and vessel shipping optionality. We also have 69.0 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves at our Blue Creek mine, based on a reserve report prepared by Marshall Miller and Associates, Inc.
We also have alternative outbound logistics routes to increase transportation and vessel shipping optionality. We also have 89.2 million metric tons of recoverable reserves and 54.0 million metric tons of coal resources exclusive of reserves at Blue Creek.
We continually invest in new technologies to lessen our environmental impact and to improve our efficiencies and productivity. Our executive leadership team, from our Board down, is fully committed to being a responsible corporate citizen to our employees, customers, communities, and other stakeholders. Highlights of our sustainability strategies are detailed below.
Our executive leadership team, from our Board down, is fully committed to being a responsible corporate citizen to our employees, customers, communities, and other stakeholders. Highlights of our sustainability strategies are detailed below. Environmental We work to safely and efficiently produce some of the highest quality HCC steelmaking coal for our global customers while minimizing our environmental impact.
As such, the rules could have a material adverse impact on coal-fired power plants and the demand for thermal coal nationally.
As such, the rules could have a material adverse impact on coal-fired power plants and the demand for thermal coal nationally. On June 11, 2025, the EPA issued a proposed rule that would repeal GHG emissions standards for fossil-fuel-fired power plants.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur planned development of Blue Creek involves numerous risks, including, but not limited to, the following: • uncertainties in the national and worldwide economy and the price of steelmaking coal; • our ability to obtain additional debt and/or equity financing to fund the development, permitting, construction and mining activities of Blue Creek on terms that are acceptable to us, or at all; • difficulties or delays in securing federally owned mineral leases within the mine plan; • the diversion of management’s attention from our existing mining operations; • our ability to obtain favorable tax or other incentives; • potential opposition from non-governmental organizations, local groups, or local residents; • the fact that our development, construction, ramp-up and operating costs may be higher than our estimates and further increase our planned capital expenditure and liquidity requirements; • shortages of construction materials and equipment or delays in the delivery of such materials and equipment; • unanticipated facility or equipment malfunctions or breakdowns; • delays from unexpected adverse geological and/or weather conditions, accidents, and other factors beyond our control; • failure to obtain, or delays in obtaining, all necessary governmental and third-party rights-of-way, easements, permits, licenses and approvals; • local infrastructure conditions and other logistical challenges; • the possibility that we may have insufficient expertise to engage in such development activity profitably or without incurring inappropriate amounts of risks; • the fact that the steelmaking coal reserves at Blue Creek may not be as economically recoverable as planned; 26 • difficulties in integrating Blue Creek with our existing mining operations and failure to achieve any estimated economies of scale; and • our ability to hire qualified construction and other personnel.
Biggest changeThe continued development, commissioning, ramp-up and integration of Blue Creek involves numerous risks, including, but not limited to, the following: • uncertainties in the national and worldwide economy and the price of steelmaking coal; • our ability to obtain additional debt and/or equity financing to fund the remaining development, permitting, construction, ramp-up and mining activities on terms acceptable to us, or at all; • delays or challenges in integrating newly acquired federally owned mineral leases into the mine plan and obtaining associated approvals; • the diversion of management’s attention from our existing mining operations; • our ability to obtain favorable tax or other incentives; • potential opposition from non-governmental organizations, local groups, or local residents; • the fact that our development, construction, commissioning and ramp-up costs may be higher than our estimates and could increase our planned capital expenditure and liquidity requirements; • shortages of construction materials, equipment or critical spare parts, and delays in the delivery of such materials and equipment; • unanticipated equipment malfunctions or breakdowns, including longwall equipment, ventilation systems and other critical infrastructure; 32 • delays associated with unexpected adverse geological conditions, geotechnical variability, methane conditions, roof control challenges, or weather-related impacts, as well as accidents and other factors beyond our control; • failure to obtain, or delays in obtaining, all necessary governmental and third-party rights-of-way, easements, permits, licenses and approvals; • local infrastructure conditions and other logistical challenges; including rail, port or workforce availability; • the possibility that we may have insufficient expertise to manage the commissioning and ramp-up phases profitably or without incurring undue operational risk; • the fact that the steelmaking coal reserves at Blue Creek may not be as economically recoverable as planned or may experience quality variability impacting market realizations; • difficulties in integrating Blue Creek with our existing operations, including workforce training, sequencing of longwall moves and coordination of logistics, and failure to achieve estimated economies of scale; and • our ability to hire and retain qualified construction, commissioning, operations and maintenance personnel.
Subject to the limitations of applicable law, our certificate of incorporation, among other things: • permits us to enter into contracts and transactions in which one or more of our officers or directors may be a party to or may be financially or otherwise interested in so long as such contract or transaction is approved by the Board in accordance with the DGCL; • permits any of our stockholders or non-employee directors and their affiliates to engage in a corporate opportunity in the same or similar business activities or lines of business in which we engage or propose to engage, compete with us and to make investments in any kind of property in which we may make investments and will not be deemed to have (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity, (ii) acted in bad faith or in a manner inconsistent with our best interests or (iii) be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that they have engaged in such activities; and • provides that if any of our stockholders, non-employee directors or their affiliates acquire knowledge of a potential business opportunity, transaction or other matter (other than one expressly offered to any non-employee director in writing solely in his or her capacity as our director ), such stockholder, non-employee director or affiliate will have no duty to communicate or offer that opportunity to us, and will be permitted to pursue or acquire such opportunity or offer that opportunity to another person and will not be deemed to have (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity, (ii) acted in bad faith or in a manner inconsistent with our best interests or (iii) be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that they have pursued or acquired such opportunity or offered the opportunity to another person.
Subject to the limitations of applicable law, our certificate of incorporation, among other things: • permits us to enter into contracts and transactions in which one or more of our officers or directors may be a party to or may be financially or otherwise interested in so long as such contract or transaction is approved by the Board in accordance with the DGCL; • permits any of our stockholders or non-employee directors and their affiliates to engage in a corporate opportunity in the same or similar business activities or lines of business in which we engage or propose to engage, compete with us and to make investments in any kind of property in which we may make investments and will not be deemed to have 65 (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity, (ii) acted in bad faith or in a manner inconsistent with our best interests or (iii) be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that they have engaged in such activities; and • provides that if any of our stockholders, non-employee directors or their affiliates acquire knowledge of a potential business opportunity, transaction or other matter (other than one expressly offered to any non-employee director in writing solely in his or her capacity as our director ), such stockholder, non-employee director or affiliate will have no duty to communicate or offer that opportunity to us, and will be permitted to pursue or acquire such opportunity or offer that opportunity to another person and will not be deemed to have (i) acted in a manner inconsistent with his or her fiduciary or other duties to us regarding the opportunity, (ii) acted in bad faith or in a manner inconsistent with our best interests or (iii) be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that they have pursued or acquired such opportunity or offered the opportunity to another person.
These risks, hazards and conditions include, but are not limited to: • variations in geological conditions, such as the thickness of the steelmaking coal seam and amount of rock embedded in the steelmaking coal deposit and variations in rock and other natural materials overlying the steelmaking coal deposit, that could affect the stability of the roof and the side walls of the mine; • mining, process and equipment or mechanical failures, unexpected maintenance problems and delays in moving longwall equipment; • the unavailability of raw materials, equipment (including heavy mobile equipment) or other critical supplies such as tires, explosives, fuel, lubricants and other consumables of the type, quantity and/or size needed to meet production expectations; • adverse weather and natural disasters, such as heavy rains or snow, forest fires, flooding and other natural events, including seismic activities, ground failures, rock bursts or structural cave-ins or slides, affecting our operations or transportation to our customers; • railroad delays or derailments; • environmental hazards, such as subsidence and excess water ingress; • delays and difficulties in acquiring, maintaining or renewing necessary permits or mining rights; • availability of adequate skilled employees and other labor relations matters; • security breaches or terroristic acts; 33 • unexpected mine accidents, including rock-falls and explosions caused by the ignition of met coal dust, natural gas or other explosive sources at our mine sites or fires caused by the spontaneous combustion of steelmaking coal or similar mining accidents; • competition and/or conflicts with other natural resource extraction activities and production within our operating areas, such as natural gas extraction or oil and gas development; and • other hazards that could also result in personal injury and loss of life, pollution and suspension of operations.
These risks, hazards and conditions include, but are not limited to: • variations in geological conditions, such as the thickness of the steelmaking coal seam and amount of rock embedded in the steelmaking coal deposit and variations in rock and other natural materials overlying the steelmaking coal deposit, that could affect the stability of the roof and the side walls of the mine; • mining, process and equipment or mechanical failures, unexpected maintenance problems and delays in moving longwall equipment; • the unavailability of raw materials, equipment (including heavy mobile equipment) or other critical supplies such as tires, explosives, fuel, lubricants and other consumables of the type, quantity and/or size needed to meet production expectations; • adverse weather and natural disasters, such as heavy rains or snow, forest fires, flooding and other natural events, including seismic activities, ground failures, rock bursts or structural cave-ins or slides, affecting our operations or transportation to our customers; • railroad delays or derailments; • environmental hazards, such as subsidence and excess water ingress; • delays and difficulties in acquiring, maintaining or renewing necessary permits or mining rights; 41 • availability of adequate skilled employees and other labor relations matters; • security breaches or terroristic acts; • unexpected mine accidents, including rock-falls and explosions caused by the ignition of met coal dust, natural gas or other explosive sources at our mine sites or fires caused by the spontaneous combustion of steelmaking coal or similar mining accidents; • competition and/or conflicts with other natural resource extraction activities and production within our operating areas, such as natural gas extraction or oil and gas development; and • other hazards that could also result in personal injury and loss of life, pollution and suspension of operations.
For example, it could: • restrict us from making strategic acquisitions, engaging in development activities, introducing new technologies or exploiting business opportunities; • cause us to make non-strategic divestitures; • require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing funds available to us for other purposes, including the payment of quarterly dividends or any special dividends, as well as engaging in any stock repurchases; • limit our flexibility in planning for, or reacting to, changes in our operations or business; • limit our ability to raise additional capital for working capital, capital expenditures, operations, debt service requirements, strategic initiatives or other purposes; • limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets; • prevent us from raising the funds necessary to repurchase all of the Notes tendered to us upon the occurrence of certain changes of control, which failure to repurchase would constitute a default under the Indenture; • make it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the Indenture and the agreements governing other indebtedness; • make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; • make us more vulnerable to downturns in our business or the economy; or • expose us to the risk of increased interest rates, as certain of our borrowings, including borrowings under the ABL Facility, are at variable rates of interest and are based upon benchmarks that are subject to potential change or elimination, including as a result of the FCA Announcement.
For example, it could: • restrict us from making strategic acquisitions, engaging in development activities, introducing new technologies or exploiting business opportunities; • cause us to make non-strategic divestitures; • require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing funds available to us for other purposes, including the payment of quarterly dividends or any special dividends, as well as engaging in any stock repurchases; • limit our flexibility in planning for, or reacting to, changes in our operations or business; 54 • limit our ability to raise additional capital for working capital, capital expenditures, operations, debt service requirements, strategic initiatives or other purposes; • limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets; • prevent us from raising the funds necessary to repurchase all of the Notes tendered to us upon the occurrence of certain changes of control, which failure to repurchase would constitute a default under the Indenture; • make it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the Indenture and the agreements governing other indebtedness; • make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; • make us more vulnerable to downturns in our business or the economy; or • expose us to the risk of increased interest rates, as certain of our borrowings, including borrowings under the Amended ABL Facility, are at variable rates of interest and are based upon benchmarks that are subject to potential change or elimination, including as a result of the FCA Announcement.
Union-represented labor creates an increased risk of work stoppages and higher labor costs; • Significant competition, as well as changes in foreign markets or economies, could harm our sales, profitability and cash flows; • Our sales in foreign jurisdictions are subject to risks and uncertainties, such as new tariffs and other trade measures, which could adversely affect our results of operations, financial position and cash flows; Risks Related to Our Industry • Substantially all of our revenues are derived from the sale of steelmaking coal and our business may suffer from a substantial or extended decline in steelmaking coal pricing and demand or other factors beyond our control.
Union-represented labor creates an increased risk of work stoppages and higher labor costs; • Significant competition, as well as changes in foreign markets or economies, could harm our sales, profitability and cash flows; • Our sales in foreign jurisdictions are subject to risks and uncertainties, such as changes in tariffs and other trade measures, which could adversely affect our results of operations, financial position and cash flows; Risks Related to Our Industry • Substantially all of our revenues are derived from the sale of steelmaking coal and our business may suffer from a substantial or extended decline in steelmaking coal pricing and demand or other factors beyond our control.
This lack of diversification of our business could adversely affect our financial condition, results of operations and cash flows; • Met coal mining involves many hazards and operating risks, and is dependent upon many factors and conditions beyond our control, which may cause our profitability and financial position to decline; • Negative views with respect to environmental and social matters and related governance considerations could harm the perception of our Company by certain investors, environmental and climate change activist groups and financial institutions, including banks and insurance companies, adversely affecting our ability to obtain financing and insurance coverage, and otherwise achieve our strategic priorities; • Our inability to develop steelmaking coal reserves in an economically feasible manner or our inability to acquire additional steelmaking coal reserves that are economically recoverable may adversely affect our business; • Any significant downtime of our major pieces of mining equipment could impair our ability to supply steelmaking coal to our customers and materially and adversely affect our results of operations and cash flows; • We may not recover our investments in our mining, exploration and other assets, which may require us to recognize impairment charges related to those assets; 21 Risks Related to Regulatory Compliance • We are responsible for medical and disability benefits for black lung disease under federal law.
This lack of diversification of our business could adversely affect our financial condition, results of operations and cash flows; • Met coal mining involves many hazards and operating risks, and is dependent upon many factors and conditions beyond our control, which may cause our profitability and financial position to decline; • Negative views with respect to environmental and social matters and related governance considerations could harm the perception of our Company by certain investors, environmental and climate change activist groups and financial institutions, including banks and insurance companies, adversely affecting our ability to obtain financing and insurance coverage, and otherwise achieve our strategic priorities; • Our inability to develop steelmaking coal reserves in an economically feasible manner or our inability to acquire additional steelmaking coal reserves that are economically recoverable may adversely affect our business; 26 • Any significant downtime of our major pieces of mining equipment could impair our ability to supply steelmaking coal to our customers and materially and adversely affect our results of operations and cash flows; • We may not recover our investments in our mining, exploration and other assets, which may require us to recognize impairment charges related to those assets; Risks Related to Regulatory Compliance • We are responsible for medical and disability benefits for black lung disease under federal law.
In addition, federal, state or local regulatory agencies have the authority to order certain of our mines to be temporarily or permanently closed under certain circumstances, which could materially and adversely affect our ability to meet our customers’ demands.” We may be unsuccessful in integrating the operations of any future acquisitions, including acquisitions involving new lines of business, with our existing operations, and in realizing all or any part of the anticipated benefits of any such acquisitions.
In addition, federal, state or local regulatory agencies have the authority to order certain of our mines to be temporarily or permanently closed under certain circumstances, which could materially and adversely affect our ability to meet our customers’ demands.” 33 We may be unsuccessful in integrating the operations of any future acquisitions, including acquisitions involving new lines of business, with our existing operations, and in realizing all or any part of the anticipated benefits of any such acquisitions.
In addition, any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the Indenture, and will be at the sole discretion of the Board and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, borrowing availability under our ABL Facility, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board deems relevant.
In addition, any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our Amended ABL Facility and the Indenture, and will be at the sole discretion of the Board and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, borrowing availability under our Amended ABL Facility, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board deems relevant.
New and existing tariffs as well as other trade measures that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for steelmaking coal, disruptions in our supply chain, material changes in the pricing of steelmaking coal, limits on trade with the United States or other potentially adverse economic outcomes.
New and existing tariffs as well as other trade measures, including retaliatory measures, that may be implemented by the U.S. or other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for steelmaking coal, disruptions in our supply chain, material changes in the pricing of steelmaking coal, limits on trade with the United States or other potentially adverse economic outcomes.
For more information, see “-Risks Related to the Ownership of Our Common Stock-We could engage in or approve transactions involving our common stock that adversely affect significant stockholders and our other stockholders.” Certain U.S. federal income tax provisions currently available, including coal percentage depletion and foreign-derived intangible income, may be eliminated by future legislation.
For more information, see “-Risks Related to the Ownership of Our Common Stock-We could engage in or approve transactions involving our common stock that adversely affect significant stockholders and our other stockholders.” 59 Certain U.S. federal income tax provisions currently available, including coal percentage depletion and foreign-derived intangible income, may be eliminated by future legislation.
Disruption or delays of any of these transportation services due to weather-related problems, which are variable and unpredictable, strikes or lock-outs, accidents, infrastructure damage, governmental regulation, third-party actions, lack of 27 capacity or other events beyond our control could impair our ability to supply our products to our customers and result in lost sales and reduced profitability.
Disruption or delays of any of these transportation services due to weather-related problems, which are variable and unpredictable, strikes or lock-outs, accidents, infrastructure damage, governmental regulation, third-party actions, lack of capacity or other events beyond our control could impair our ability to supply our products to our customers and result in lost sales and reduced profitability.
Such risks and uncertainties include, but are not limited to: • longer sales-cycles and time to collection; • tariffs and international trade barriers and export license requirements, including any that might result from the current global trade uncertainties; 29 • fewer or less certain legal protections for contract rights; • different and changing legal and regulatory requirements; • potential liability under the U.S.
Such risks and uncertainties include, but are not limited to: • longer sales-cycles and time to collection; • tariffs and international trade barriers and export license requirements, including any that might result from the current global trade uncertainties; • fewer or less certain legal protections for contract rights; • different and changing legal and regulatory requirements; • potential liability under the U.S.
If we cannot make scheduled payments on our indebtedness, we will be in default, and holders of the Notes could declare all outstanding principal and interest to be due and payable, the lenders under the ABL Facility could terminate their commitments to loan money, our secured lenders (including the lenders under the ABL Facility and the holders of the Notes) could foreclose against the assets securing their loans and the Notes and we could be forced into bankruptcy or liquidation.
If we cannot make scheduled payments on our indebtedness, we will be in default, and holders of the Notes could declare all outstanding principal and interest to be due and payable, the lenders under the Amended ABL Facility could terminate their commitments to loan money, our secured lenders (including the lenders under the Amended ABL Facility and the holders of the Notes) could foreclose against the assets securing their loans and the Notes and we could be forced into bankruptcy or liquidation.
In addition, we have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud applications and services, to operate our businesses, process and record financial and operating data, communicate with our employees and business partners, analyze seismic and drilling information, estimate quantities of 30 steelmaking coal reserves, as well as other activities related to our businesses.
In addition, we have become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud applications and services, to operate our businesses, process and record financial and operating data, communicate with our employees and business partners, analyze seismic and drilling information, estimate quantities of steelmaking coal reserves, as well as other activities related to our businesses.
Moreover, the possibility exists that new health and safety legislation and/or regulations may be adopted and/or orders may be entered that may materially and adversely affect our mining operations. We must compensate employees for work-related injuries. If we do not make adequate provisions for our workers’ compensation liabilities, it could harm our future operating results.
Moreover, the possibility exists that new health and safety legislation and/or regulations may be adopted and/or orders may be entered that may materially and adversely affect our mining operations. We must compensate employees for 48 work-related injuries. If we do not make adequate provisions for our workers’ compensation liabilities, it could harm our future operating results.
If these challenges are successful, we may have to purchase steelmaking coal from third-party sources, if available, to fulfill these obligations or incur capital expenditures to re-open the mines and/or negotiate settlements with the customers, which may include price reductions, the reduction of commitments, and the extension of time for delivery or the termination of customers’ contracts.
If these challenges are successful, we may have to purchase steelmaking coal from third-party sources, if 49 available, to fulfill these obligations or incur capital expenditures to re-open the mines and/or negotiate settlements with the customers, which may include price reductions, the reduction of commitments, and the extension of time for delivery or the termination of customers’ contracts.
The Amended Rights Agreement also gives discretion to the Board to determine that someone is an Acquiring Person even if they do not own 4.99% or more of the outstanding common stock but do own 4.99% or more in value of the Company’s outstanding 51 stock, as determined pursuant to Section 382 of the Code and the regulations promulgated thereunder.
The Amended Rights Agreement also gives discretion to the Board to determine that someone is an Acquiring Person even if they do not own 4.99% or more of the outstanding common stock but do own 4.99% or more in value of the Company’s outstanding stock, as determined pursuant to Section 382 of the Code and the regulations promulgated thereunder.
Subsequently, on July 19, 2016, the D.C. Circuit affirmed the district 40 court’s further ruling that the EPA’s decision to withdraw approval for disposal sites satisfied administrative requirements. The D.C. Circuit held that the EPA’s ex post withdrawal was a product of its broad veto authority under the CWA, not a procedural defect.
Subsequently, on July 19, 2016, the D.C. Circuit affirmed the district court’s further ruling that the EPA’s decision to withdraw approval for disposal sites satisfied administrative requirements. The D.C. Circuit held that the EPA’s ex post withdrawal was a product of its broad veto authority under the CWA, not a procedural defect.
While our operations are not directly impacted by this ruling, it could be an indication that other surface mining water permits could be subject to more substantial review in the future. Recent regulatory actions and court decisions created some uncertainty over the scope of CWA jurisdiction.
While our operations are not directly impacted by this ruling, it could be an indication that other surface mining water permits could be subject to more substantial review in the future. 50 Recent regulatory actions and court decisions created some uncertainty over the scope of CWA jurisdiction.
In addition, our ABL Facility and the Indenture contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness.
In addition, our Amended ABL Facility and the Indenture contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness.
Risks Related to Our Industry Our business may suffer as a result of a substantial or extended decline in steelmaking coal pricing or the failure of any recovery or stabilization of steelmaking coal prices to endure, as well as any substantial or extended decline in the demand for steelmaking coal and other factors beyond our control, which could negatively affect our operating results and cash flows.
Risks Related to Our Industry Our business may suffer as a result of a substantial or extended decline in steelmaking coal pricing or the failure of any recovery or stabilization of steelmaking coal prices, as well as any substantial or extended decline in the demand for steelmaking coal and other factors beyond our control, which could negatively affect our operating results and cash flows.
In connection with the acquisition of certain assets of Walter Energy, we negotiated the Collective Bargaining Agreement (“CBA”) with the UMWA, which was ratified by the UMWA’s members on February 16, 2016 and had a five-year term. The CBA contract with the UMWA expired on April 1, 2021, and the 28 UMWA initiated a strike.
In connection with the acquisition of certain assets of Walter Energy, we negotiated the Collective Bargaining Agreement (“CBA”) with the UMWA, which was ratified by the UMWA’s members on February 16, 2016 and had a five-year term. The CBA contract with the UMWA expired on April 1, 2021, and the UMWA initiated a strike.
However, at this time, we are unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting our operations. 42 Our operations may impact the environment or cause exposure to hazardous substances and our properties may have environmental contamination, which could result in material liabilities to us.
However, at this time, we are unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting our operations. Our operations may impact the environment or cause exposure to hazardous substances and our properties may have environmental contamination, which could result in material liabilities to us.
There are numerous factors and assumptions inherent in estimating steelmaking coal quantities, qualities and costs to mine, including many factors beyond our control, such as the following: • geological and mining conditions, including faults in the steelmaking coal seam; • historical production from the area compared with production from other producing areas; 36 • the percentage of steelmaking coal ultimately recoverable; • the assumed effects of regulations and taxes and other payments to governmental agencies; • our ability to obtain, maintain and renew all required permits; • future improvements in mining technology; • assumptions concerning the timing of the development of the reserves; and • assumptions concerning equipment and operational productivity, future steelmaking coal prices, operating costs, including those for critical supplies such as fuel, tires and explosives, capital expenditures and development and reclamation costs.
There are numerous factors and assumptions inherent in estimating steelmaking coal quantities, qualities and costs to mine, including many factors beyond our control, such as the following: • geological and mining conditions, including faults in the steelmaking coal seam; • historical production from the area compared with production from other producing areas; • the percentage of steelmaking coal ultimately recoverable; • the assumed effects of regulations and taxes and other payments to governmental agencies; • our ability to obtain, maintain and renew all required permits; • future improvements in mining technology; 45 • assumptions concerning the timing of the development of the reserves; and • assumptions concerning equipment and operational productivity, future steelmaking coal prices, operating costs, including those for critical supplies such as fuel, tires and explosives, capital expenditures and development and reclamation costs.
Any 24 sustained failure to be able to market our coal during such periods would have a material adverse effect on our business, results of operations, cash flows and ability to pay dividends to our stockholders. The failure of our customers to honor or renew contracts could adversely affect our business.
Any sustained failure to be able to market our coal during such periods would have a material adverse effect on our business, results of operations, cash flows and ability to pay dividends to our stockholders. The failure of our customers to honor or renew contracts could adversely affect our business.
Foreign Corrupt Practices Act of 1977, as amended and other applicable anti-corruption laws, as well as import and export controls, economic sanctions laws, customs laws, or comparable foreign regulations; • government currency controls; • fluctuations in foreign currency exchange and interest rates; and • political and economic instability, changes, hostilities and other disruptions, as well as unexpected changes in diplomatic and trade relationships.
Foreign Corrupt Practices Act of 1977, as amended and other applicable anti-corruption laws, as well as import and export controls, economic sanctions laws, customs laws, or comparable foreign regulations; • government currency controls; • fluctuations in foreign currency exchange and interest rates; and • political and economic instability, changes, hostilities and other disruptions, as well as changes in diplomatic and trade relationships.
Since we are heavily dependent on the steelmaking industry, adverse economic conditions in this industry, even in the presence of otherwise favorable economic conditions in the broader coal industry, could have a significantly greater impact on our financial condition and results of operations than if our business were more diversified.
Since we are heavily dependent on the steelmaking industry, 40 adverse economic conditions in this industry, even in the presence of otherwise favorable economic conditions in the broader coal industry, could have a significantly greater impact on our financial condition and results of operations than if our business were more diversified.
Any required changes to mine plans or operations may result in temporary idling of production or addition of costs. 39 Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation.
Any required changes to mine plans or operations may result in temporary idling of production or addition of costs. Our mines are subject to stringent federal and state safety regulations that increase our cost of doing business at active operations and may place restrictions on our methods of operation.
A failure to comply with the covenants under the ABL Facility or any of our other future indebtedness could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations.
A failure to comply with the covenants under the Amended ABL Facility or any of our other future indebtedness could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations.
Our efforts to recover inflation-based cost increases from suppliers or customers may be hampered as a result of the structure of our contracts and the contract bidding process as well as competitive pressure in the industry, economic conditions and the countries to which we sell our coal.
Our efforts to recover inflation-based or tariff-based cost increases from suppliers or customers may be hampered as a result of the structure of our contracts and the contract bidding process as well as competitive pressure in the industry, economic conditions and the countries to which we sell our coal.
These aspects of our strategy are subject to numerous risks and uncertainties, including: 25 • an inability to retain or hire experienced crews and other personnel and other labor relations matters; • a lack of customer demand for our mined steelmaking coal; • an inability to secure necessary equipment, raw materials or engineering in a timely manner to successfully execute our expansion plans; • unanticipated delays that could limit or defer the production or expansion of our mining activities and jeopardize our long-term relationships with our existing customers and adversely affect our ability to obtain new customers for our mined steelmaking coal; and • a lack of available cash or access to sufficient debt or equity financing for investment in our expansion .
These aspects of our strategy are subject to numerous risks and uncertainties, including: • an inability to retain or hire experienced crews and other personnel and other labor relations matters; • a lack of customer demand for our mined steelmaking coal; 31 • an inability to secure necessary equipment, raw materials or engineering in a timely manner to successfully execute our expansion plans; • unanticipated delays that could limit or defer the production or expansion of our mining activities and jeopardize our long-term relationships with our existing customers and adversely affect our ability to obtain new customers for our mined steelmaking coal; and • a lack of available cash or access to sufficient debt or equity financing for investment in our expansion .
These may have adverse consequences including, but not limited to: • restricting our ability to access capital and financial markets in the future; • excluding our securities from the portfolios of certain investment funds and investors; • reducing the demand and price for our equity securities; • increasing the cost of borrowing; • causing a decline in our credit ratings; • reducing the availability, and/or increasing the cost of, third-party insurance; • increasing our retention of risk through self-insurance; • making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing; and • limiting our flexibility in business development activities such as the development of Blue Creek, mergers, acquisitions or divestitures.
These may have adverse consequences including, but not limited to: • restricting our ability to access capital and financial markets in the future; 43 • excluding our securities from the portfolios of certain investment funds and investors; • reducing the demand and price for our equity securities; • increasing the cost of borrowing; • causing a decline in our credit ratings; • reducing the availability, and/or increasing the cost of, third-party insurance; • increasing our retention of risk through self-insurance; • making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing; and • limiting our flexibility in business development activities such as the remaining development of Blue Creek, mergers, acquisitions or divestitures.
We cannot assure you that our business will generate cash flow from operations, or that we will be able to draw under the ABL Facility or otherwise, in an amount sufficient to fund our liquidity needs, including the payment of principal and interest on the Notes.
We cannot assure you that our business will generate cash flow from operations, or that we will be able to draw under the Amended ABL Facility or otherwise, in an amount sufficient to fund our liquidity needs, including the payment of principal and interest on the Notes.
Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions, and might adversely affect our business, financial condition, results of operations and cash flows. In addition, actual or alleged violations could damage our reputation and ability 53 to do business.
Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions, and might adversely affect our business, financial condition, results of operations and cash flows. In addition, actual or alleged violations could damage our reputation and ability to do business.
If these accruals are insufficient or our liability in a particular year is greater than currently anticipated, our future operating results could be materially affected. 43 Risks Related to our Financial Results and Finances We have a substantial amount of indebtedness.
If these accruals are insufficient or our liability in a particular year is greater than currently anticipated, our future operating results could be materially affected. Risks Related to our Financial Results and Finances We have a substantial amount of indebtedness.
In addition, our ABL Facility requires us to maintain a minimum fixed charge coverage ratio at any time when the average availability is less than a certain amount at such time. In that event, we must satisfy a minimum fixed charge ratio of 1.0 to 1.0.
In addition, our Amended ABL Facility requires us to maintain a minimum fixed charge coverage ratio at any time when the average availability is less than a certain amount at such time. In that event, we must satisfy a minimum fixed charge ratio of 1.0 to 1.0.
Certain transactions, including public offerings by us or our stockholders and redemptions may cause us to undergo an “owner shift” which by itself or when aggregated with other owner shifts that we have undergone or will undergo could cause 47 us to experience an ownership change.
Certain transactions, including public offerings by us or our stockholders and redemptions may cause us to undergo an “owner shift” which by itself or when aggregated with other owner shifts that we have undergone or will undergo could cause us to experience an ownership change.
Any declaration and payment of future dividends to holders of our common stock or stock repurchases will depend on future financial performance and may be limited by restrictive covenants of our ABL Facility and the Indenture, and will be at the sole discretion of the Board and will also depend on many factors.
Any declaration and payment of future dividends to holders of our common stock or stock repurchases will depend on future financial performance and may be limited by restrictive covenants of our Amended ABL Facility and the Indenture, and will be at the sole discretion of the Board and will also depend on many factors.
Although covenants under the Indenture and the ABL Facility will limit our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial.
Although covenants under the Indenture and the Amended ABL Facility will limit our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial.
Further, subsidiaries that we designate as unrestricted subsidiaries can incur unlimited additional indebtedness that is structurally senior to the Notes. In addition, the Indenture and the ABL Facility will not limit us from incurring obligations that do not constitute indebtedness as defined therein.
Further, subsidiaries that we designate as unrestricted subsidiaries can incur unlimited additional indebtedness that is structurally senior to the Notes. In addition, the Indenture and the Amended ABL Facility will not limit us from incurring obligations that do not constitute indebtedness as defined therein.
In addition, perspectives on ESG considerations continue to evolve, and we cannot currently predict how regulators’, investors’ and other stakeholders’ views on 35 ESG matters may affect the regulatory and investment landscape and affect our business, financial condition, and results of operations.
In addition, perspectives on ESG considerations continue to evolve, and we cannot currently predict how regulators’, investors’ and other stakeholders’ views on ESG matters may affect the regulatory and investment landscape and affect our business, financial condition, and results of operations.
Such ESG matters may also affect our suppliers or customers, which could augment or cause additional impacts to our business or operations. Any future laws, regulations or other policies related to greenhouse gas emissions may adversely impact our business in material ways.
Such ESG matters may also affect our suppliers or customers, which could augment or cause additional impacts to our business or operations. 44 Any future laws, regulations or other policies related to greenhouse gas emissions may adversely impact our business in material ways.
Furthermore, we are permitted under the terms of our ABL Facility and the Indenture to incur additional indebtedness, the terms of which may severely restrict or prohibit the payment of dividends and the associated debt service may impact our ability to satisfy the conditions for paying dividends under our ABL Facility and the Indenture.
Furthermore, we are permitted under the terms of our Amended ABL Facility and the Indenture to incur additional indebtedness, the terms of which may severely restrict or prohibit the payment of dividends and the associated debt service may impact our ability to satisfy the conditions for paying dividends under our Amended ABL Facility and the Indenture.
We received another letter from the DOL on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL. On February 9, 2022, the DOL held a conference call with representatives from the Company related to our appeal.
We received another letter from the DCMWC on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL. On February 9, 2022, the DCMWC held a conference call with representatives from the Company related to our appeal.
Due to certain uncertainties as to whether such exception applies to us, we filed a request for a private letter ruling from the IRS on these points. On September 18, 2017, the IRS issued to us a private letter ruling, which favorably resolved these uncertainties.
Due to certain uncertainties as to whether such exception applies to us, we filed a request for a private letter ruling from the IRS on these points. 58 On September 18, 2017, the IRS issued to us a private letter ruling, which favorably resolved these uncertainties.
Such actions by the lenders under the ABL Facility could also cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the lenders under the ABL Facility could proceed against the collateral granted to them to secure the ABL Facility.
Such actions by the lenders under the Amended ABL Facility could also cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the lenders under the Amended ABL Facility could proceed against the collateral granted to them to secure the Amended ABL Facility.
If any of our outstanding indebtedness under the ABL Facility or our other indebtedness, including the Notes, were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full.
If any of our outstanding indebtedness under the Amended ABL Facility or our other indebtedness, including the Notes, were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full.
If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated; Risks Related to our Financial Results and Finances • Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations and dividend policy, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments on the Notes; • We may be unable to generate sufficient taxable income from future operations, which may limit or eliminate our ability to utilize our significant federal and state tax NOLs or our deferred tax assets; Risks Related to the Ownership of our Common Stock • The market price of our common stock may fluctuate significantly and investors in our common stock could incur substantial losses; • Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the indenture governing the Notes (the "Indenture"), and will be on the sole discretion of the Board and will also depend on many factors; • Our common stock is subject to the 382 Transfer Restrictions (as defined below) under our certificate of incorporation and the Amended Rights Agreement (as defined below) which are intended to prevent a Section 382 "ownership change," which if not complied with, could result in the forfeiture of such stock and related dividends or substantial dilution of the stock ownership, respectively; and • Delaware law and our charter documents may impede or discourage a takeover or change of control, which could adversely affect the price of our common stock. 22 Risks Related to Our Business Our activities may be adversely affected by global pandemics or other widespread illnesses and the related effects on public health, which may prevent us from meeting our targeted production levels and/or executing our planned development initiatives (including, but not limited to, the development of Blue Creek), negatively impact our customers’ demand for steelmaking coal and their ability to honor or renew contracts, adversely affect the health and welfare of Company personnel or prevent our vendors and contractors from performing normal and contracted activities.
If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated; Risks Related to our Financial Results and Finances • Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations and dividend policy, limit our ability to react to changes in the economy or our industry and prevent us from making debt service payments on the Notes; • We may be unable to generate sufficient taxable income from future operations, which may limit or eliminate our ability to utilize our significant federal and state tax NOLs or our deferred tax assets; Risks Related to the Ownership of our Common Stock • The market price of our common stock may fluctuate significantly and investors in our common stock could incur substantial losses; • Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our Amended ABL Facility and the indenture governing the Notes (the "Indenture"), and will be on the sole discretion of the Board and will also depend on many factors; • Our common stock is subject to the 382 Transfer Restrictions (as defined below) under our certificate of incorporation and the Amended Rights Agreement (as defined below) which are intended to prevent a Section 382 "ownership change," which if not complied with, could result in the forfeiture of such stock and related dividends or substantial dilution of the stock ownership, respectively; and • Delaware law and our charter documents may impede or discourage a takeover or change of control, which could adversely affect the price of our common stock. 27 Risks Related to Our Business Our activities may be adversely affected by global pandemics or other widespread illnesses and the related effects on public health, which may prevent us from meeting our targeted production levels and/or executing our planned development initiatives (including, but not limited to, completing the remaining development and ramp-up of Blue Creek), negatively impact our customers’ demand for steelmaking coal and their ability to honor or renew contracts, adversely affect the health and welfare of Company personnel or prevent our vendors and contractors from performing normal and contracted activities.
Our ability to pay principal and interest on the Notes and the ABL Facility and to satisfy our other debt obligations will depend upon, among other things: • our future financial and operating performance (including the realization of any cost savings described herein), which will be affected by prevailing economic, industry and competitive conditions and financial, business, legislative, regulatory and other factors, many of which are beyond our control; and 44 • our future ability to borrow under the ABL Facility, the availability of which depends on, among other things, our complying with the covenants in the ABL Facility.
Our ability to pay principal and interest on the Notes and the Amended ABL Facility and to satisfy our other debt obligations will depend upon, among other things: • our future financial and operating performance (including the realization of any cost savings described herein), which will be affected by prevailing economic, industry and competitive conditions and financial, business, legislative, regulatory and other factors, many of which are beyond our control; and • our future ability to borrow under the Amended ABL Facility, the availability of which depends on, among other things, our complying with the covenants in the Amended ABL Facility.
The terms of our ABL Facility and the Indenture may restrict our ability to pay cash dividends on our common stock. We are prohibited from paying any cash dividend on our common stock unless we satisfy certain conditions.
The terms of our Amended ABL Facility and the Indenture may restrict our ability to pay cash dividends on our common stock. We are prohibited from paying any cash dividend on our common stock unless we satisfy certain conditions.
The ABL Facility and the Indenture contain, and any other existing or future indebtedness of ours would likely contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries' ability to, among other things: • incur additional debt, guarantee indebtedness or issue certain preferred shares; • pay dividends on or make distributions in respect of, or repurchase or redeem, our capital stock or make other restricted payments; 45 • prepay, redeem or repurchase subordinated debt; • make loans or certain investments; • sell certain assets; • grant or assume liens; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; • enter into certain transactions with our affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • designate our subsidiaries as unrestricted subsidiaries.
The Amended ABL Facility and the Indenture contain, and any other existing or future indebtedness of ours would likely contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries' ability to, among other things: • incur additional debt, guarantee indebtedness or issue certain preferred shares; • pay dividends on or make distributions in respect of, or repurchase or redeem, our capital stock or make other restricted payments; • prepay, redeem or repurchase subordinated debt; • make loans or certain investments; 56 • sell certain assets; • grant or assume liens; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; • enter into certain transactions with our affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • designate our subsidiaries as unrestricted subsidiaries.
Business—Environmental and Regulatory Matters.” Failure to obtain or renew surety bonds on acceptable terms could affect our ability to secure reclamation and coal lease obligations and, therefore, our ability to mine or lease steelmaking coal.
Business—Environmental and Regulatory Matters.” 53 Failure to obtain or renew surety bonds on acceptable terms could affect our ability to secure reclamation and coal lease obligations and, therefore, our ability to mine or lease steelmaking coal.
As a public company, we must comply with laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002, related regulations of the SEC and the requirements of the New York Stock 49 Exchange.
As a public company, we must comply with laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002, related regulations of the SEC and the requirements of the New York Stock Exchange.
If we do not make adequate provision for our workers’ compensation and black lung liabilities, or we are pursued for applicable sanctions, costs and liabilities, our operations 34 and profitability could be adversely affected.
If we do not make adequate provision for our workers’ compensation and black lung liabilities, or we are pursued for applicable sanctions, costs and liabilities, our operations and profitability could be adversely affected.
Any economic downturn 32 could adversely affect demand for our steelmaking coal and contribute to volatile supply and demand conditions affecting prices and volumes. In addition, global conditions may significantly affect the demand for steelmaking coal.
Any economic downturn could adversely affect demand for our steelmaking coal and contribute to volatile supply and demand conditions affecting prices and volumes. In addition, global conditions may significantly affect the demand for steelmaking coal.
Issuances of common stock or voting preferred stock would reduce an investor’s influence over matters on which our stockholders vote and, in the case of issuances of preferred stock, likely would result in its interest in us being subject to the prior rights of holders of that preferred stock. 50 We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
Issuances of common stock or voting preferred stock would reduce an investor’s influence over matters on which our stockholders vote and, in the case of issuances of preferred stock, likely would result in its interest in us being subject to the prior rights of holders of that preferred stock. 62 We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
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.
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.
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 has been completed.
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 has been completed.
The number and quality of viable financing alternatives available to us may be significantly impacted by unfavorable lending and investment policies by financial institutions associated with concerns about environmental impacts of carbon based fuels.
The number and quality of viable financing alternatives available to us may be significantly impacted by unfavorable lending and investment policies by financial institutions associated with concerns about environmental impacts of carbon based fuels, including coal.
Pursuant to the first amendment to the certificate of incorporation approved by the Company’s stockholders at the Company’s Annual Meeting of Stockholders held on April 23, 2019, the Company effected a three-year extension of the 382 Transfer Restrictions until April 19, 2023, which became effective on March 18, 2020 upon the filing of a certificate of amendment setting forth such amendment with the Secretary of State of the State of Delaware.
Pursuant to the first amendment to the certificate of incorporation approved by our stockholders at the Company’s Annual Meeting of Stockholders held on April 23, 2019, we effected a three-year extension of the 382 Transfer Restrictions until April 19, 2023, which became effective on March 18, 2020 upon the filing of a certificate of amendment setting forth such amendment with the Secretary of State of the State of Delaware.
We are responsible for assessing the operating effectiveness of internal controls over financial reporting and we may conclude that our internal controls over financial reporting are ineffective. During the course of the preparation of our financial statements, we evaluate our internal controls to identify and correct deficiencies in our internal controls over financial reporting.
We are responsible for assessing the operating effectiveness of internal controls over financial reporting and we may conclude that our internal controls over financial reporting are ineffective. During the course of the preparation of our consolidated financial statements, we evaluate our internal controls to identify and correct deficiencies in our internal controls 61 over financial reporting.
The agreements governing our current and future indebtedness may not permit us to pay dividends on our common stock. Accordingly, the Company cannot make any assurance that future dividends will be paid or future repurchases will be made.
The agreements governing our current and future indebtedness may not permit us to pay dividends on our common stock. Accordingly, we cannot make any assurance that future dividends will be paid or future repurchases will be made.
The need to maintain capacity for required letters of credit could limit our ability to provide financial assurance for self-insured obligations and negatively impact our ability to fund future working capital, capital expenditure or other general corporate requirements. Our ABL Facility includes, among other things, provisions that provide for the issuance of letters of credit.
The need to maintain capacity for required letters of credit could limit our ability to provide financial assurance for self-insured obligations and negatively impact our ability to fund future working capital, capital expenditures or other general corporate requirements. Our Amended ABL Facility includes, among other things, provisions that provide for the issuance of letters of credit.
Implementation of our business strategies, including the development of Blue Creek, could also be affected by a number of factors beyond our control, such as global economic conditions, steelmaking coal prices, domestic and foreign steel demand, inflation and environmental, health and safety laws and regulations.
Implementation of our business strategies, including the remaining development and ramp-up of Blue Creek, could also be affected by a number of factors beyond our control, such as global economic conditions, steelmaking coal prices, domestic and foreign steel demand, inflation and environmental, health and safety laws and regulations.
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. We appealed this decision.
On July 12, 2022, we received a decision on our appeal from the DCMWC lowering the amount of collateral required to be posted from $39.8 million to $28 million. We appealed this decision.
Item 1A. Risk Factors Our business involves substantial risks. Any of the risk factors described below or elsewhere in this Annual Report could significantly and adversely affect our business prospects, financial condition and results of operations. The risks 20 described below are not the only ones facing us.
Item 1A. R isk Factors Our business involves substantial risks. Any of the risk factors described below or elsewhere in this Annual Report could significantly and adversely affect our business prospects, financial condition and results of operations. The risks described below are not the only ones facing us.
Federal and state laws require us to obtain surety bonds or post other financial security to secure performance or payment of certain long-term obligations, such as mine closure or reclamation costs, federal and state workers’ compensation and black lung benefits costs, coal leases and other obligations.
Federal and state laws require us to obtain surety bonds or post other financial security to secure performance or payment of certain long-term obligations, such as mine closure or reclamation costs, coalbed methane well closure and reclamation costs, federal and state workers’ compensation and black lung benefits costs, coal leases and other obligations.
Our businesses are subject to numerous federal, state and local laws and regulations with respect to matters such as: • permitting and licensing requirements; • employee health and safety, including occupational and mine health and safety; • workers’ compensation; • black lung disease; • reclamation and restoration of property; and • environmental laws and regulations, including those related to GHGs and climate change; air quality; water quality; stream and surface water quality and protection; management of materials generated by mining operations; the storage, treatment and disposal of wastes; protection of plants and wildlife such as threatened or endangered species; protection of wetlands; and remediation of contaminated soil and groundwater.
Our businesses are subject to numerous federal, state and local laws and regulations with respect to matters such as: • permitting and licensing requirements; • employee health and safety, including occupational and mine health and safety; • workers’ compensation; • black lung disease; • reclamation and restoration of property; • plugging and abandoning of wells to remove coalbed methane; and • environmental laws and regulations, including those related to GHGs and climate change; air quality; water quality; stream and surface water quality and protection; management of materials generated by mining operations; the storage, treatment and disposal of wastes; protection of plants and wildlife such as threatened or endangered species; protection of wetlands; and remediation of contaminated soil and groundwater.
Additionally, we face risks related to ongoing wars, including the Russia-Ukraine war that began in February 2022 and the Israel-Hamas war that began in October 2023, as well as trade disruptions related to the conflict in the Persian Gulf and Red Sea.
Additionally, we face risks related to ongoing wars, including the Russia-Ukraine war that began in February 2022 and the Israel-Hamas war that began in October 2023, as well as trade disruptions related to the conflicts in the Persian Gulf, the Red Sea and Venezuela.
Pursuant to the second amendment to the certificate of incorporation approved by the Company's stockholders at the Company's Annual Meeting of Stockholders held on April 26, 2022, the Company effected a further extension of the 382 Transfer Restrictions until April 19, 2026.
Pursuant to the second amendment to the certificate of incorporation approved by our stockholders at the Company's Annual Meeting of Stockholders held on April 26, 2022, we effected a further extension of the 382 Transfer Restrictions until April 19, 2026.
Despite our current indebtedness, we may be able to incur substantial additional debt in the future, including secured indebtedness. As of December 31, 2024, the Company had no amounts drawn under the ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the ABL Facility.
Despite our current indebtedness, we may be able to incur substantial additional debt in the future, including secured indebtedness. As of December 31, 2025, we had no amounts drawn under the Amended ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the Amended ABL Facility.
Demand for, and therefore the price of, steelmaking coal is driven by a variety of factors, including, but not limited to, the following: • the domestic and foreign supply and demand for steelmaking coal; 31 • the quantity and quality of steelmaking coal available from competitors; • the demand for and price of steel; • adverse weather, climatic and other natural conditions, including natural disasters; • domestic and foreign economic conditions, including slowdowns in domestic and foreign economies and financial markets; • global and regional political events, including the unknown geopolitical consequences of the wars between Ukraine and Russia and between Israel and Hamas and other events of global unrest; • domestic and foreign legislative, regulatory and judicial developments, environmental regulatory changes and changes in energy policy and energy conservation measures that could adversely affect the steelmaking coal industry, such as legislation further limiting carbon emissions; • widespread acceptance of carbon sequestration and proliferation of improved carbon sequestration technology; • capacity, reliability, availability and cost of transportation and port facilities, and the proximity of available steelmaking coal to such transportation and port facilities; • technological advancements, including those related to electric arc furnaces; and • other factors beyond our control, such as terrorism, war, and pandemics.
Demand for, and therefore the price of, steelmaking coal is driven by a variety of factors, including, but not limited to, the following: • the domestic and foreign supply and demand for steelmaking coal; • the quantity and quality of steelmaking coal available from competitors; • the demand for and price of steel; • adverse weather, climatic and other natural conditions, including natural disasters; • domestic and foreign economic conditions, including slowdowns in domestic and foreign economies and financial markets; • global and regional political events, including the unknown geopolitical consequences of the wars between Ukraine and Russia and between Israel and Hamas, actions between the United States and Venezuela and other events of global unrest; 39 • domestic and foreign legislative, regulatory and judicial developments, environmental regulatory changes and changes in energy policy and energy conservation measures that could adversely affect the steelmaking coal industry, such as legislation further limiting carbon emissions; • changing tariff policies, including retaliatory tariffs; • widespread acceptance of carbon sequestration and proliferation of improved carbon sequestration technology; • capacity, reliability, availability and cost of transportation and port facilities, and the proximity of available steelmaking coal to such transportation and port facilities; • technological advancements, including those related to electric arc furnaces; and • other factors beyond our control, such as terrorism, war, and pandemics.
A cyber-attack may involve persons gaining unauthorized access to our digital systems for purposes of gathering, monitoring, releasing, misappropriating or corrupting proprietary or confidential information, or causing operational disruption.
A cyberattack may involve persons gaining unauthorized access to our digital systems for purposes of gathering, monitoring, releasing, misappropriating or corrupting proprietary or confidential information, or causing operational disruption.
The wars, trade and monetary sanctions, as well as any escalation of the conflicts and future developments, could significantly affect coking coal prices and the demand for our coal.
The wars, sanctions and other trade measures, as well as any escalation of the conflicts and future developments, could significantly affect coking coal prices and the demand for our coal.
As of December 31, 2024, we have utilized all of our federal NOLs and federal general business credit carryforwards and we had state NOLs of approximately $945.2 million. On February 12, 2021, the Alabama Governor signed into law Alabama House Bill 170, now Act 2021-1 (the “Act”). The Act makes several changes to the state’s business tax structure.
As of December 31, 2025, we have utilized all of our federal NOLs and federal general business credit carryforwards and we had state NOLs of approximately $948.9 million. On February 12, 2021, the Alabama Governor signed into law Alabama House Bill 170, now Act 2021-1 (the “Act”). The Act makes several changes to the state’s business tax structure.
For the year ended December 31, 2024, revenues from the sale of steelmaking coal accounted for approximately 98.3% of our total revenues. As noted above, demand for steelmaking coal depends on domestic and foreign steel demand. At times, the pricing and availability of steel can be volatile due to numerous factors beyond our control.
For the year ended December 31, 2025, revenues from the sale of steelmaking coal accounted for approximately 97.5% of our total revenues. As noted above, demand for steelmaking coal depends on domestic and foreign steel demand. At times, the pricing and availability of steel can be volatile due to numerous factors beyond our control.
Inflation rates in the U.S. have increased to levels not seen in several years, and have been and continue to be even higher in the mining sector, which may result in decreased demand for our products, increases in our operating costs, constrained credit and liquidity, reduced government spending and volatility in financial markets.
Inflation rates in the U.S. recently increased to levels not seen in several years, and were even higher in the mining sector, which may result in decreased demand for our products, increases in our operating costs, constrained credit and liquidity, reduced government spending and volatility in financial markets.
Risks Related to Our Business • Deterioration in global economic conditions, including the impacts of global pandemics, conflicts including wars, and inflation on our business, may adversely affect our business, results of operations and cash flows and if we fail to implement our business strategies successfully, our financial performance could be harmed; • We may be unsuccessful or delayed in developing Blue Creek, which could significantly affect our operations and/or limit our long-term growth; • If transportation for our steelmaking coal is disrupted, unavailable or more expensive for our customers, our ability to sell steelmaking coal could suffer; • Work stoppages, labor shortages and other labor relations matters may harm our business.
Risks Related to Our Business • Deterioration in global economic conditions, including the impacts of global pandemics, conflicts including wars, and inflation on our business, may adversely affect our business, results of operations and cash flows and if we fail to implement our business strategies successfully, our financial performance could be harmed; • We may be unsuccessful or experience delays or operational challenges in completing the remaining development and ramp-up of Blue Creek, which could significantly affect our operations and/or limit our long-term growth; • If transportation for our steelmaking coal is disrupted, unavailable or more expensive for our customers, our ability to sell steelmaking coal could suffer; • Work stoppages, labor shortages and other labor relations matters may harm our business.
Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. Item 1B. Unresolved Staff Comments None.
Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. Item 1B. Unr esolved Staff Comments None. 66
The market price of our common stock could fluctuate significantly due to a number of factors, including: • our quarterly or annual earnings, or those of other companies in our industry; • actual or anticipated fluctuations in our operating and financial results, including reserve estimates; • changes in accounting standards, policies, guidance, interpretations or principles; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • announcements by us or our competitors of significant acquisitions, dispositions or innovations; • changes in financial estimates and recommendations by securities analysts following our stock, or the failure of securities analysts to cover our common stock; 48 • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • declaration of bankruptcy by any of our customers or competitors; • general economic conditions, overall market fluctuations, and changes in the price of steelmaking coal, steel or other commodities; • additions or departures of key management personnel; • actions by our stockholders; • the trading volume of our common stock; • sales of our common stock by us or the perception that such sales may occur; and • changes in business, legal or regulatory conditions, or other developments affecting participants in, and publicity regarding, the steelmaking coal mining business, the domestic steel industry or any of our significant customers.
The market price of our common stock could fluctuate significantly due to a number of factors, including: • our quarterly or annual earnings, or those of other companies in our industry; • actual or anticipated fluctuations in our operating and financial results, including reserve estimates; • changes in accounting standards, policies, guidance, interpretations or principles; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • announcements by us or our competitors of significant acquisitions, dispositions or innovations; • changes in financial estimates and recommendations by securities analysts following our stock, or the failure of securities analysts to cover our common stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • declaration of bankruptcy by any of our customers or competitors; • general economic conditions, overall market fluctuations, and changes in the price of steelmaking coal, steel or other commodities; • additions or departures of key management personnel; • actions by our stockholders; • the trading volume of our common stock; • sales of our common stock by us or the perception that such sales may occur; and • changes in business, legal or regulatory conditions, or other developments affecting participants in, and publicity regarding, the steelmaking coal mining business, the domestic steel industry or any of our significant customers. 60 In particular, the realization of any of the risks described in these “Risk Factors” could have a material and adverse impact on the market price of our common stock in the future and cause the price of our stock to decline.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs such, technology failures or cybersecurity breaches could still create system disruptions or unauthorized disclosure or alterations of confidential information and disruptions to the systems of our third-party suppliers and providers. 54 We have been and may be subject to security breaches, which have resulted in and could result in unauthorized access to our facilities or the information that we are trying to protect.
Biggest changeAs such, technology failures or cybersecurity 67 breaches could still create system disruptions or unauthorized disclosure or alterations of confidential information and disruptions to the systems of our third-party suppliers and providers.
Additionally, as part of the Company's Information Technology controls framework, management has established a suite of preventative and detective controls which enhance and strengthen the Company's cybersecurity program. We rely on information systems and networks as well as various other technologies to conduct and support our business.
Additionally, as part of our Information Technology controls framework, management has established a suite of preventative and detective controls which enhance and strengthen the Company's cybersecurity program. We rely on information systems and networks as well as various other technologies to conduct and support our business.
When such reports relating to cybersecurity are delivered to the Audit Committee, the Audit Committee’s review of such reports, and discussions with management, informs the Audit Committee in detail of the material risks facing the Company related to cybersecurity. 55
When such reports relating to cybersecurity are delivered to the Audit Committee, the Audit Committee’s review of such reports, and discussions with management, informs the Audit Committee in detail of the material risks facing the Company related to cybersecurity.
Our Cyber Security Incident Response Plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
Our Cybersecurity Incident Response Plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K.
Item 1C. Cyb ersecurity Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K.
If an incident were to occur, the Company may engage other service providers, where needed, to assist with the collection of forensic artifacts and perform additional procedures necessary to resolve and report any material cybersecurity incidents.
If an incident were to occur, we may engage other service providers, where needed, to assist with the collection of forensic artifacts and perform additional procedures necessary to resolve and report any material cybersecurity incidents.
The Board and committees thereof, including the Audit Committee, regularly receive reports from the Company’s management and the Company’s outside counsel, as appropriate, regarding the risks faced by, or anticipated to be faced by, the Company, including risks from cybersecurity threats.
The Board and committees thereof, including the Audit Committee, regularly receive reports from our management and outside counsel, as appropriate, regarding the risks faced by, or anticipated to be faced by, the Company, including risks from cybersecurity threats.
Pursuant to our ERM process, cybersecurity risk is evaluated based on likelihood, severity, speed of onset and persistence (the duration of time during which the organization could be impacted). The Company also leverages third parties, where needed, in connection with cybersecurity risk management, strategy and incident response.
Pursuant to our ERM process, cybersecurity risk is evaluated based on likelihood, severity, speed of onset and persistence (the duration of time during which the organization could be impacted). We also leverage third parties, where needed, in connection with cybersecurity risk management, strategy and incident response.
Though management is responsible for the day-to-day management of risks the Company faces, including cybersecurity risks, the Board, as a whole and through its committees, has the ultimate responsibility for oversight of the Company’s risks and risk management strategy. The company performs assessments to evaluate its cybersecurity risk as it relates to the organization and assets.
Though management is responsible for the day-to-day management of risks we face, including cybersecurity risks, the Board , as a whole and through its committees, has the ultimate responsibility for oversight of the Company’s risks and risk management strategy. We perform assessments to evaluate our cybersecurity risk as it relates to the organization and assets.
Added
We have been and may be subject to security breaches, which have resulted in and could result in unauthorized access to our facilities or the information that we are trying to protect.

Item 2. Properties

Properties — owned and leased real estate

50 edited+15 added−7 removed50 unchanged
Biggest changeThe Blue Creek mine will be a similar operation to our currently active operations, Mine No. 4 and Mine No. 7. The net book value of property, plant and equipment associated with Blue Creek as of December 31, 2024, was $736.6 million. The mine property is located approximately 33°35’21”N latitude and 87°26’35”W longitude.
Biggest changeThe net book value of property, plant and equipment associated with Blue Creek as of December 31, 2025, was $990.0 million. 78 The mine property is located approximately 33°35’21”N latitude and 87°26’35”W longitude. Access to Blue Creek is by State Route 69, a well-maintained, paved, two-lane road with interstate access in close proximity to both the north and south.
Development for the longwall is conducted by the extraction of coal from the production faces using continuous miners and haulage using shuttle cars to a feeder-breaker located at the tail of the section conveyor belt. The feeder-breaker crushes large pieces of coal and rock and regulates coal feed onto the mine conveyor.
Development for the longwall is conducted by the extraction of coal from the production faces using continuous miners and haulage using shuttle cars to a feeder-breaker located at the tail of the section conveyor belt. The feeder-breaker crushes large pieces of coal and rock and regulates coal feed onto the mine conveyor.
Our controlled reserves are either through direct ownership of the property or through third-party leases. Third-party leases have initial terms extending up to 30 years and generally provide for terms or renewals through the anticipated life of the associated mine. These renewals are conditioned upon the payment of minimum royalties.
Our controlled reserves are either through direct ownership of the property or through third-party leases. Third-party leases have initial terms extending up to 30 years and generally provide for terms or renewals through the anticipated life of the associated mine. These renewals are conditioned upon the payment of minimum royalties.
Under current mining plans, assigned reserves reported will be mined out within the period of existing leases or within the time period of probable lease renewal periods. All recoverable reserves reported are either 100% owned or controlled through lease agreements. There are no significant title encumbrances to the property.
Under current mining plans, assigned reserves reported will be mined out within the period of existing leases or within the time period of probable lease renewal periods. All recoverable reserves reported are either 100% owned or controlled through lease agreements. There are no significant title encumbrances to the property.
Our controlled reserves are either through direct ownership of the property or through third-party leases. Third-party leases have initial terms extending up to 30 years and generally provide for terms or renewals through the anticipated life of the associated mine. These renewals are conditioned upon the payment of minimum royalties.
Our controlled reserves are either through direct ownership of the property or through third-party leases. Third-party leases have initial terms extending up to 30 years and generally provide for terms or renewals through the anticipated life of the associated mine. These renewals are conditioned upon the payment of minimum royalties.
Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites of inspection, sampling and measurement are spaced so closely, and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites 71 of inspection, sampling and measurement are spaced so closely, and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
The estimates of mineral reserves and resources may be materially affected if mining, quality, or infrastructure factors change from those currently anticipated. These estimates are based on engineering, economic and geologic data, coal ownership information and current and proposed mine plans.
The estimates of mineral reserves and resources may be materially affected if mining, quality, or infrastructure factors change from those currently anticipated. 79 These estimates are based on engineering, economic and geologic data, coal ownership information and current and proposed mine plans.
(2) 1 metric ton is equivalent to 1.102311 short tons. 58 (3) Reserves are further categorized as Proven and Probable as defined by subpart 1300 of Regulation S-K under the Modernization of Property Disclosures for Mining Registrants.
(2) 1 metric ton is equivalent to 1.102311 short tons. (3) Reserves are further categorized as Proven and Probable as defined by subpart 1300 of Regulation S-K under the Modernization of Property Disclosures for Mining Registrants.
Portions of the 59 following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, incorporated herein by reference and made a part of this Annual Report on Form 10-K.
Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, incorporated herein by reference and made a part of this Annual Report on Form 10-K.
Mine No. 4, Mine No. 7 and Blue Creek were considered material properties. Our mining operations also consist of other surface steelmaking and thermal coal mines, two of which are currently under lease to third parties and four of which are not operating.
Mine No. 4, Mine No. 7 and Blue Creek are considered material properties. Our mining operations also consist of other surface steelmaking and thermal coal mines, two of which are currently under lease to third parties and four of which are not operating.
As such, you are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Likewise, you are cautioned not to assume that all or any part of measured and indicated mineral resources will ever be converted to mineral reserves.
As such, you are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have 68 demonstrated economic value. Likewise, you are cautioned not to assume that all or any part of measured and indicated mineral resources will ever be converted to mineral reserves.
Other 62 supplemental equipment is used in the production, development and maintenance of the mine such as roof-bolting machines, battery scoops, personnel carriers, supply vehicles, belts, high-voltage cables, transformers, etc. Mine No. 4 has had multiple improvements to the infrastructure by adding new portal facilities in 2019 and 2021. The Mine No. 4 North portal development was completed in 2023.
Other supplemental 75 equipment is used in the production, development and maintenance of the mine such as roof-bolting machines, battery scoops, personnel carriers, supply vehicles, belts, high-voltage cables, transformers, etc. Mine No. 4 has had multiple improvements to the infrastructure by adding new portal facilities in 2019 and 2021. The Mine No. 4 North portal development was completed in 2023.
We update our reserve estimates annually to reflect past coal production, new drilling information and other geological or mining data, and acquisitions or sales of coal properties. 66
We update our reserve estimates annually to reflect past coal production, new drilling information and other geological or mining data, and acquisitions or sales of coal properties.
Mine No. 7, inclusive of depleted mine works and future reserve areas, is composed of approximately 45,000 total acres. Of the 45,000 acres, approximately 12,100 are associated with future mining areas. Future mining areas include approximately 11,850 acres of leased mineral holdings and approximately 75 acres of owned mineral holdings and 175 acres of uncontrolled mineral holdings.
Mine No. 7, inclusive of depleted mine works and future reserve areas, is composed of approximately 45,000 total acres. Of the 45,000 acres, approximately 11,100 are associated with future mining areas. Future mining areas include approximately 10,850 acres of leased mineral holdings and approximately 75 acres of owned mineral holdings and 175 acres of uncontrolled mineral holdings.
The majority of the drilling was accomplished by means of conventional core hole exploration and air rotary drilling with geophysical logging for coalbed methane wells. 63 The following shows the current property and facilities layout of Mine No 7.
The majority of the drilling was accomplished by means of conventional core hole exploration and air rotary drilling with geophysical logging for coalbed methane wells. 76 The following shows the current property and facilities layout of Mine No 7.
Mine No. 7 also uses the No. 5 preparation plant 64 via an overland conveyor. The Mine No. 7 preparation plant has a capacity to process 1,260 raw metric tons per hour and the Mine No. 5 preparation plant has the capacity to process 900 raw metric tons per hour.
Mine No. 7 also uses the No. 5 preparation plant 77 via an overland conveyor. The Mine No. 7 preparation plant has a capacity to process 1,260 raw metric tons per hour and the Mine No. 5 preparation plant has the capacity to process 900 raw metric tons per hour.
Under current mining plans, assigned reserves reported will be mined out within the period of existing leases or within the time period of probable lease renewal periods. All recoverable reserves reported are either 100% owned or controlled through lease agreements. There are no significant title encumbrances to the property.
Under current mining plans, assigned reserves reported will be mined out within the period of existing leases or within the time period of probable lease renewal periods. All recoverable reserves reported are controlled through lease agreements. There are no significant title encumbrances to the property.
Infrastructure in the areas surrounding our operations are very diverse, well established and robust due to the large populations and current industrial activity in the surrounding metropolitan areas of Birmingham and Tuscaloosa. An international airport is located approximately 30 miles to the east of our operations.
The nearest major population centers are Tuscaloosa, Alabama and Birmingham, Alabama. Infrastructure in the areas surrounding our operations are very diverse, well established and robust due to the large populations and current industrial activity in the surrounding metropolitan areas of Birmingham and Tuscaloosa. An international airport is located approximately 30 miles to the east of our operations.
The Company is therefore not filing a new TRS for Mine No. 4 nor Blue Creek in connection with this Annual Report and is incorporating the 2022 Mine No. 4 TRS and 2023 Blue Creek TRS herein by reference.
The Company is therefore not filing a new TRS for Mine No. 7 nor Blue Creek in connection with this Annual Report and is incorporating the 2024 Mine No. 7 TRS and 2023 Blue Creek TRS herein by reference.
Specialized mining service providers including slope, shaft, and preparation plant construction companies are located in the immediate area. 57 The following table provides the production (in thousands of metric tons) for our operating mines for each of the three years ended December 31, 2024, 2023 and 2022: Production Location/Mine 2024 2023 2022 Alabama: Warrior Met Coal Mining, LLC No. 4 2,512 2,272 1,415 No. 7 4,780 4,664 4,314 Blue Creek 190 — — Total Alabama 7,482 6,936 5,729 All mining operations are subject to federal and state laws and must obtain permits to operate mines, coal preparation and related facilities, haul roads, and other incidental surface disturbances necessary for mining to occur.
Specialized mining service providers including slope, shaft, and preparation plant construction companies are located in the immediate area. 70 The following table provides the production (in thousands of metric tons) for our operating mines for each of the three years ended December 31, 2025, 2024 and 2023: Production Location/Mine 2025 2024 2023 Alabama: Warrior Met Coal Mining, LLC No. 4 2,720 2,512 2,272 No. 7 4,690 4,780 4,664 Blue Creek 1,846 190 — Total Alabama 9,256 7,482 6,936 All mining operations are subject to federal and state laws and must obtain permits to operate mines, coal preparation and related facilities, haul roads, and other incidental surface disturbances necessary for mining to occur.
Coal royalty expense was $123.0 million, $120.5 million, and $138.9 million, for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively. The following table provides the location and quality of our proven and probable mineral reserves as of December 31, 2024.
Coal royalty expense was $81.5 million, $123.0 million, and $120.5 million for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively. The following table provides the location and quality of our proven and probable mineral reserves as of December 31, 2025.
With regard to Blue Creek there have been no material changes in the mineral reserves or resources from the TRS filed as Exhibit 96.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Blue Creek TRS").
With regard to Blue Creek there have been no material changes in the modifying factors from the TRS filed as Exhibit 96.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Blue Creek TRS").
The net book value of property, plant and equipment associated with Mine No. 4 as of December 31, 2024, was $ 225.0 million. As of the filing of this annual report, Mine No. 4 is currently active with three continuous mining sections and one longwall.
The net book value of property, plant and equipment associated with Mine No. 4 as of December 31, 2025, was $213.5 million. As of the filing of this annual report, Mine No. 4 is currently active with three continuous mining sections and one longwall.
The net book value of property, plant and equipment associated with Mine No. 7 as of December 31, 2024, was $ 298.4 million. As of the filing of this annual report Mine No. 7 is currently active with two longwall sections and six continuous mining sections.
The net book value of property, plant and equipment associated with Mine No. 7 as of December 31, 2025, was $268.5 million. As of the filing of this annual report Mine No. 7 is currently active with two longwall sections and six continuous mining sections.
Under current mining plans, Mine No. 4 and Mine No. 7 will be mined out within the period of existing leases or within the time period of probable lease renewal periods. All mineral reserves reported are either 100% owned or controlled through lease agreements.
These renewals are conditioned upon the payment of minimum royalties. Under current mining plans, Mine No. 4 and Mine No. 7 will be mined out within the period of existing leases or within the time period of probable lease renewal periods. All mineral reserves reported are either 100% owned or controlled through lease agreements.
Material Mining Properties The information that follows relating to our individually material properties: Mine No. 4, Mine No. 7 and Blue Creek, is derived, for the most part, from, and in some instances is an extract from, the TRS relating to such properties prepared in compliance with Item 601(b)(96) and subpart 1300 of Regulation S-K by Marshall Miller and Associates, Inc..
(3) The “Status of Operation” for each mine is classified as follows: Production - the mine is actively operating. 72 Material Mining Properties The information that follows relating to our individually material properties: Mine No. 4, Mine No. 7 and Blue Creek, is derived, for the most part, from, and in some instances is an extract from, the TRS relating to such properties prepared in compliance with Item 601(b)(96) and subpart 1300 of Regulation S-K by Marshall Miller and Associates, Inc..
Summary of Mineral Resources Exclusive of Reserves as of December 31, 2024 (1) (in millions of metric tons) (2) Demonstrated Coal Resources (in-place) Quality (Dry Basis) Location/Mine Status of Operation (3) Measured Indicated Measured + Indicated Inferred % Ash % Sulfur % VM Alabama: Blue Creek Development — 39.7 39.7 — 18.8 1.4 31 Total Alabama — 39.7 39.7 — Total Warrior Met Coal — 39.7 39.7 — (1) The price used and the time frame and point of reference used are discussed in the description of Blue Creek below.
Summary of Mineral Resources Exclusive of Reserves as of December 31, 2025 (1) (in millions of metric tons) (2) Demonstrated Coal Resources (in-place) Quality (Dry Basis) Location/Mine Status of Operation (3) Measured Indicated Measured + Indicated Inferred % Ash % Sulfur % VM Alabama: Blue Creek Production — 54.0 54.0 — 18.9 1.5 31 Total Alabama — 54.0 54.0 — Total Warrior Met Coal — 54.0 54.0 — (1) The price used and the time frame and point of reference used are discussed in the description of Blue Creek below.
The following table provides a comparison of our Boue Creek material mineral resources exclusive of reserves as of December 31, 2024 and December 31, 2023: 60 Summary of Material Mineral Resources as of December 31, 2024 as compared to December 31, 2023 (in millions of metric tons) (1) As of December 31, Change Mine 2024 2023 Tons % Blue Creek Mineral Resources Measured — — — — % Indicated 39.7 39.7 — — % Measured + Indicated 39.7 39.7 — — % (1) 1 metric ton is equivalent to 1.102311 short tons.
The following table provides a comparison of our Blue Creek material mineral resources exclusive of reserves as of December 31, 2025 and December 31, 2024: Summary of Material Mineral Resources as of December 31, 2025 as compared to December 31, 2024 (in millions of metric tons) (1) As of December 31, Change Mine 2025 2024 Tons % Blue Creek (2) Mineral Resources Measured — — — — % Indicated 54.0 39.7 14.3 36 % Measured + Indicated 54.0 39.7 14.3 36 % (1) 1 metric ton is equivalent to 1.102311 short tons.
With regard to Mine No. 4 there have been no material changes in the mineral reserves or mineral resources from the TRS filed as Exhibit 96.2 to Amendment No. 1 on Form 10-K/A to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Mine No. 4 TRS").
With regard to Mine No. 7 there have been no material changes in the modifying factors, mineral reserves or mineral resources from the TRS filed as Exhibit 96.1 to Form 10-K to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Mine No. 7 TRS").
Overview and Highlights As of December 31, 2024, and under the SEC's new rules governing mineral reserves, specifically subpart 1300 of Regulation S-K under the Modernization of Property Disclosures for Mining Registrants, we had estimated reserves totaling 157.8 million metric tons and estimated mineral resources exclusive of reserves of 39.7 million metric tons.
Overview and Highlights As of December 31, 2025, and under the SEC's new rules governing mineral reserves, specifically subpart 1300 of Regulation S-K under the Modernization of Property Disclosures for Mining Registrants, we had estimated reserves totaling 186.2 million metric tons and estimated mineral resources exclusive of reserves of 54.0 million metric tons.
As of December 31, 2024, we had outstanding surety bonds with parties for post-mining reclamation at all of our mining operations totaling $50.6 million and $7.7 million for miscellaneous purposes. A substantial amount of the coal that the Company mines is produced from mineral reserves leased from third-party landowners.
As of December 31, 2025, we had outstanding surety bonds with parties for post-mining reclamation at all of our mining operations totaling $47.5 million, $16.0 million for federal coal leases and $6.4 million for miscellaneous purposes. A substantial amount of the coal that we mine is produced from mineral reserves leased from third-party landowners.
The majority of the drilling was accomplished by means of conventional core hole exploration and air rotary drilling with geophysical logging for coalbed methane wells. 61 The following shows the current property and facilities layout of Mine No 4.
Steel, The Pittsburgh & Midway Coal Mining Company and Walter Energy, Inc. The majority of the drilling was accomplished by means of conventional core hole exploration and air rotary drilling with geophysical logging for coalbed methane wells. 74 The following shows the current property and facilities layout of Mine No 4.
Mine No. 4 and Mine No. 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 in-place mineral resources exclusive of reserves. 56 The following map shows the major locations of our mining operations.
Our three operating underground mines had approximately 179.3 million metric tons of recoverable reserves and our Blue Creek mine contained 54.0 million metric tons of in-place mineral resources exclusive of reserves. 69 The following map shows the major locations of our mining operations.
The following table provides a comparison of our material proven and probable mineral reserves as of December 31, 2024 and December 31, 2023: Summary of Material Mineral Reserves as of December 31, 2024 as compared to December 31, 2023 (in millions of metric tons) (1) As of December 31, Change Mine 2024 2023 Tons % No. 4 Material Reserves (2) Proven (3) 32.7 36.0 (3.3) (9) % Probable (3) 0.6 0.5 0.1 20 % Reserves (2) 33.3 36.5 (3.2) (9) % No. 7 Material Reserves (2) Proven (3) 33.3 34.1 (0.8) (2) % Probable (3) 15.8 12.3 3.5 28 % Reserves (2) 49.1 46.4 2.7 6 % Blue Creek Material Reserves (2) Proven (3) 43.6 43.3 0.3 1 % Probable (3) 25.4 24.3 1.1 5 % Reserves (2) 69.0 67.6 1.4 2 % (1) 1 metric ton is equivalent to 1.102311 short tons.
The following table provides a comparison of our material proven and probable mineral reserves as of December 31, 2025 and December 31, 2024: Summary of Material Mineral Reserves as of December 31, 2025 as compared to December 31, 2024 (in millions of metric tons) (1) As of December 31, Change Mine 2025 2024 Tons % No. 4 Material Reserves (2) Proven (3) 37.7 32.7 5.0 15 % Probable (3) 8.1 0.6 7.5 1250 % Reserves (2) 45.8 33.3 12.5 38 % No. 7 Material Reserves (2) Proven (3) 29.7 33.3 (3.6 ) (11 )% Probable (3) 14.6 15.8 (1.2 ) (8 )% Reserves (2) 44.3 49.1 (4.8 ) (10 )% Blue Creek Material Reserves (2) Proven (3) 58.4 43.6 14.8 34 % Probable (3) 30.8 25.4 5.4 21 % Reserves (2) 89.2 69.0 20.2 29 % (1) 1 metric ton is equivalent to 1.102311 short tons.
Mine No. 4, inclusive of depleted mine works and future reserve areas, is composed of approximately 46,000 total acres. Of the 46,000 acres, approximately 7,200 are associated with future mining areas. Future mining areas include approximately 6,100 acres of leased mineral holdings and approximately 1,000 acres of uncontrolled mineral holdings.
Mine No. 4, inclusive of depleted mine works and future reserve areas, is composed of approximately 49,000 total acres. Of the 49,000 acres, approximately 8,900 are associated with future mining areas. Future mining areas include approximately 8,600 acres of leased mineral holdings and approximately 300 acres of uncontrolled mineral holdings.
The Mine No. 4 and Mine No. 7 change in proven and probable mineral reserves and quality is primarily attributable to production, incorporation of additional exploration drilling and associated coal quality data and changes in property control. The Blue Creek change in proven and probable mineral reserves is primarily due to results from additional exploration and changes in property control.
The Mine No. 7 change in proven and probable mineral reserves and quality is primarily attributable to production, incorporation of additional exploration drilling and associated coal quality data and minor changes in our mine plan.
Summary of Mineral Reserves as of December 31, 2024 (1) (in millions of metric tons) (2) Mineral Reserves (3)(5) Quality (Dry Basis) Location/Mine Status of Operation (4) Proven (3) Probable (3) Reserves (3) Owned Leased % Ash % Sulfur % VM Alabama: No. 4 Production 32.7 0.6 33.3 — 33.3 10.2 1.0 30.0 No. 7 Production 33.3 15.8 49.1 0.3 48.8 10.2 0.7 23.0 Blue Creek (6) Production 43.6 25.4 69.0 11.2 57.8 10.0 0.7 32.0 Other (7) Various 6.4 — 6.4 6.3 0.1 3.2 - 23.5 0.7 - 6.01 N/A Total 116.0 41.8 157.8 17.8 140.0 Total Warrior Met Coal 116.0 41.8 157.8 17.8 140.0 (1) The price used and the time frame and point of reference used are discussed in the description of each mine below.
Summary of Mineral Reserves as of December 31, 2025 (1) (in millions of metric tons) (2) Mineral Reserves (3)(5) Quality (Dry Basis) Location/Mine Status of Operation (4) Proven (3) Probable (3) Reserves (3) Owned Leased % Ash % Sulfur % VM Alabama: No. 4 Production 37.7 8.1 45.8 — 45.8 10.2 1.0 30.0 No. 7 Production 29.7 14.6 44.3 0.2 44.1 9.6 0.7 23.0 Blue Creek (6) Production 58.4 30.8 89.2 10.5 78.7 10.0 0.7 32.0 Other (7) Various 6.9 — 6.9 6.7 0.2 3.2 - 23.5 0.7 - 6.01 N/A Total 132.7 53.5 186.2 17.4 168.8 Total Warrior Met Coal 132.7 53.5 186.2 17.4 168.8 (1) The price used and the time frame and point of reference used are discussed in the description of each mine below.
Steel, Tennessee Coal, Iron & Railroad Company, The Pittsburgh & Midway Coal Mining Company/Chevron and Walter Energy. We have performed ongoing exploration since acquiring the property and the data we have acquired is consistent with that of past drilling activities. A life of mine plan was used by the TRS in developing the estimate of proven and probable reserves.
Steel, Tennessee Coal, Iron & Railroad Company, The Pittsburgh & Midway Coal Mining Company/Chevron and Walter Energy. We have performed ongoing exploration since acquiring the property and the data we have acquired is consistent with that of past drilling activities.
Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than for proven reserves, is high enough to assume continuity between points of observation.
Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced.
The property has been extensively explored as early as 1916 by subsurface drilling efforts carried out by numerous entities, the majority of which were completed prior to our acquisition of the assets including: by Tennessee Coal, Iron & Railroad Company, U.S. Steel, The Pittsburgh & Midway Coal Mining Company and Walter Energy, Inc.
Upon our acquisition of Mine No. 4 in April 2016, the mine began production. The property has been extensively explored as early as 1916 by subsurface drilling efforts carried out by numerous entities, the majority of which were completed prior to our acquisition of the assets including: by Tennessee Coal, Iron & Railroad Company, U.S.
Item 2. Properties We operate two underground mines based in Alabama, Mine No. 4 and Mine No. 7 and own property in Alabama for the development of the Blue Creek mine. Mine No 4. and Mine No. 7 are deep underground mines with a long history of operations as discussed in further detail below.
Item 2. Pr operties We operate three underground mines based in Alabama, Mine No. 4, Mine No. 7 and Blue Creek. Mine No 4. and Mine No. 7 are deep underground mines with a long history of operations as discussed in further detail below. We commenced longwall operations at Blue Creek in October 2025.
The range of steelmaking coal sales prices used to assess our Mine No. 4 reserves were based on 98 percent of the average of premium low-vol and mid-vol forecast through 2030 and was held constant beyond that date and varies between $152 to $187 per metric ton.
The range of steelmaking coal sales prices used to assess our Mine No. 4 reserves were based on High Vol A price indices through 2035 and was held constant beyond that date and varies between $168 to $322 per metric ton.
The proven and probable mineral reserves for these properties were prepared by McGehee Engineering Corporation. The following table provides the location and quality of our Blue Creek measured, indicated and inferred mineral resources, exclusive of reserves, as of December 31, 2024.
The following table provides the location and quality of our Blue Creek measured, indicated and inferred mineral resources, exclusive of reserves, as of December 31, 2025.
In addition to our underground and surface mines, we utilize a substantial amount of existing infrastructure which includes administration buildings, a central supply maintenance shop, a central supply warehouse, a training center, a central lab for coal quality testing, and a barge loading facility.
In addition to our underground and surface mines, we utilize a substantial amount of existing infrastructure which includes administration buildings, a central supply maintenance shop, central supply warehouses, a training center and a barge loading facility. Our operations are located in Tuscaloosa County in central Alabama and our headquarters is in the town of Brookwood, Alabama.
(5) See a description of the material mineral reserve estimates for each mine below. Coal reserve tons were estimated at a 10% moisture and represent the saleable product from the property. Our mineral reserves are controlled either through direct ownership of the property or through third-party leases.
Coal reserve tons were estimated at a 10% moisture and represent the saleable product from the property. Our mineral reserves are controlled either through direct ownership of the property or through third-party leases. Third-party leases have initial terms extending up to 30 years and generally provide for terms or renewals through the anticipated life of the associated mine.
(6) Total Blue Creek Mine reserve tonnage includes: 11.2 million owned, 50.8 million leased, and an additional 7.0 million with option to mine. (7) Our other mines consist of other surface steelmaking and thermal coal mines, two of which are currently under lease to third parties and four of which are not operating.
(6) Total Blue Creek Mine reserve tonnage includes: 10.5 million owned, and 78.7 million leased. (7) Our other mines consist of other surface steelmaking and thermal coal mines, two of which are currently under lease to third parties and four of which are not operating. The proven and probable mineral reserves for these properties were prepared by McGehee Engineering Corporation.
Mine No. 4 Mine No. 4 was opened by Jim Walter Resources in 1974 and has been in operation since. In 2015, in connection with the chapter 11 filing by Walter Energy, Mine No. 4 was idled. Upon our acquisition of Mine No. 4 in April 2016, the mine began production.
(2) Changes to Blue Creek's resources (exclusive of mineral reserves) are primarily associated with our recently acquired federal coal leases with the BLM. Mine No. 4 Mine No. 4 was opened by Jim Walter Resources in 1974 and has been in operation since. In 2015, in connection with the chapter 11 filing by Walter Energy, Mine No. 4 was idled.
(4) The “Status of Operation” for each mine is classified as follows: Development - an established commercially mineable deposit (reserves) is being prepared for extraction but that is not yet in production. Production - the mine is actively operating. Various - consists of idle mines and mines that are actively operating under third party leases.
(4) The “Status of Operation” for each mine is classified as follows: Production - the mine is actively operating. Various - consists of idle mines and mines that are actively operating under third party leases. (5) See a description of the material mineral reserve estimates for each mine below.
Information concerning our mining properties in this Annual Report on Form 10-K has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K, which first became applicable to us for the fiscal year ended December 31, 2021. These requirements differ significantly from the previously applicable disclosure requirements of SEC Industry Guide 7.
Information concerning our mining properties in this Annual Report on Form 10-K has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K.
We currently control approximately 28,200 total acres of mining rights associated with the Blue Creek project, approximately 85% of which is leased from various entities and individuals. We have plans to continue to acquire additional leases, which are primarily from private entities and individuals as well as federally owned coal via the Bureau of Land Management.
The rail line and Black Warrior River serves as the primary means of transportation of coal from the mine. Resources inclusive and exclusive of reserve currently encompass approximately 22,000 total acres, approximately 91% of which is leased from various entities and individuals. We have plans to continue to acquire additional leases, which are primarily from private entities and individuals.
Removed
Among other differences, subpart 1300 of Regulation S-K requires us to disclose our mineral resources, in addition to our mineral reserves, as of the end of the most recently completed fiscal year both in the aggregate and for each of our individually material mining properties.
Added
Specifically for Blue Creek, it is important to note that reserves expressed in this 10-K now include approximately 26 million metric tons associated with our recently acquired federal coal leases with the BLM which were not considered as reserves in the 2023 Blue Creek TRS.
Removed
Our operations are located in Tuscaloosa County in central Alabama and our headquarters is in the town of Brookwood, Alabama. The nearest major population centers are Tuscaloosa, Alabama and Birmingham, Alabama.
Added
Additionally, approximately 13 million metric tons of resources exclusive of reserves associated with the BLM leases have been added at Blue Creek. The resource boundaries and mining planning in the 2023 Blue Creek TRS assumed the acquisition of the BLM leases; accordingly, the 2023 Blue Creek TRS continues to support our development plan and remains valid.
Removed
Third-party leases have initial terms extending up to 30 years and generally provide for terms or renewals through the anticipated life of the associated mine. These renewals are conditioned upon the payment of minimum royalties.
Added
Based on our review, dialogue with Marshall Miller and Associates, Inc., and professional judgment, the 2023 Blue Creek TRS remains materially accurate as of the date of this Annual Report.
Removed
(2) 1 metric ton is equivalent to 1.102311 short tons. (3) The “Status of Operation” for each mine is classified as follows: Development - an established commercially mineable deposit (reserves) is being prepared for extraction but that is not yet in production.
Added
The Company plans to file an updated Blue Creek TRS in connection with its 2026 filings, after one full year of production and actual operating cost data are available, to reflect current modifying factors and updated economic assumptions.
Removed
Blue Creek We believe that Blue Creek represents one of the last 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.
Added
Marshall Miller and Associates, Inc. was retained to compute volumetric updates to resources and reserves for Mine No. 7 and Blue Creek. Those estimations are considered in the tabulations of resources and reserves for Mine No. 7 and Blue Creek presented herein.
Removed
Access to the Blue Creek property is by State Route 69, a well-maintained, paved, two-lane road with interstate access in close proximity to both the north and south. The current mine plan allows for three continuous mining sections and a longwall unit to mine simultaneously through the initial stages of mine development.
Added
Specific to Mine No. 4, Marshall Miller and Associates, Inc. completed a full update to the TRS for the year ended December 31, 2025 (the “2025 Mine No. 4 TRS) which is filed as Exhibit 23.2 to this Annual Report on Form 10-K.
Removed
We believe we will have the ability to add a second longwall subsequent to finalization of development. The project includes surface facilities to be constructed at multiple locations in close 65 proximity. Rail transportation for the proposed mine site is a major rail line and river transportation is available on the Black Warrior River.
Added
The previous TRS for Mine No. 4 was filed in May 2023 as an Amendment to the Annual Report for the year ended December 31, 2022 (The “2022 Mine No. 4 TRS”) on Form 10-K/A. The 2022 Mine No. 4 TRS utilized mine planning to support reserves which did not include broad assumptions of the acquisition of BLM leases.
Added
As such, life-of-mine plans in the 2025 Mine No. 4 TRS now include the BLM leases.
Added
(2) 1 metric ton is equivalent to 1.102311 short tons.
Added
The degree of assurance, although lower than for proven reserves, is high enough to assume continuity between points of observation. 73 The Mine No. 4 change in proven and probable mineral reserves is primarily associated with production and the federal coal leases with the BLM.
Added
The Blue Creek change in proven and probable mineral reserves is primarily due to results from additional exploration and the federal coal leases with the BLM.
Added
Blue Creek We commenced longwall operations at the Blue Creek mine in October 2025, eight months ahead of schedule and on budget.
Added
Even in the early stages of production and sales, Blue Creek's contributions to our financial results are having a notable impact, which we expect will only increase as the mine continues to ramp toward full production. The Blue Creek mine is a slope mine but is similar in operation to Mine No. 4 and Mine No. 7.
Added
On site facilities include an administration building, maintenance shop, inventory warehouse and a 9.5 mile overland belt that carries the raw coal from the mine to the preparation plant. Rail transportation for the mine is provided by NS railroad and river transportation will be available on the Black Warrior River when the barge-loadout is completed.
Added
As of the filing of this annual report Blue Creek is currently active with one longwall section and three continuous mining sections. A life of mine plan was used by the TRS in developing the estimate of proven and probable reserves.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are involved in various legal proceedings occurring in the ordinary course of business. It is the opinion of management, after consultation with legal counsel, that these matters will not materially affect our consolidated financial position, results of operations or cash flows.
Biggest changeItem 3. Leg al Proceedings We are involved in various legal proceedings occurring in the ordinary course of business. It is the opinion of management, after consultation with legal counsel, that these matters will not materially affect our consolidated financial position, results of operations or cash flows.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures The information concerning mine safety violations and other regulatory matters is filed as Exhibit 95 to this Annual Report pursuant to the requirements of Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104). 67 Part II
Biggest changeItem 4. Mine Sa fety Disclosures The information concerning mine safety violations and other regulatory matters is filed as Exhibit 95 to this Annual Report pursuant to the requirements of Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104). 80 P art II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following graph shows a comparison from December 31, 2019 through December 31, 2024 of the cumulative total return for our common stock, the S&P Metals and Mining Index and the Russell 3000 Stock Index.
Biggest changeThe following graph shows a comparison from December 31, 2020 through December 31, 2025 of the cumulative total return for our common stock, the S&P Metals and Mining Index and the Russell 3000 Stock Index. The graph assumes that $100 was invested on December 31, 2020 in our common stock and each index and that all dividends were reinvested.
Risk Factors—Risks Related to the Ownership of our Common Stock—Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the Indenture, and will be at the sole discretion of the Board and will also depend on many factors” and “Part II, Item 7.
Risk Factors—Risks Related to the Ownership of our Common Stock—Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our Amended ABL Facility and the Indenture, and will be at the sole discretion of the Board and will also depend on many factors” and “Part II, Item 7.
Our ability to pay dividends on our common stock is limited by covenants in the ABL Facility and the Indenture and may be further restricted by the terms of any future debt or preferred securities. See “Part I, Item 1A.
Our ability to pay dividends on our common stock is limited by covenants in the Amended ABL Facility and the Indenture and may be further restricted by the terms of any future debt or preferred securities. See “Part I, Item 1A.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock began trading on the NYSE under the symbol “HCC” on April 13, 2017. Before then, there was no public market for our common stock.
Item 5. M arket For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock began trading on the NYSE under the symbol “HCC” on April 13, 2017. Before then, there was no public market for our common stock.
Management’s Discussion and Analysis of Financial Conditions and Results of Operation—Liquidity and Capital Resources—ABL Facility” and “—Senior Secured Notes.” During the year ended December 31, 2024, we paid $43.8 million of regular quarterly and special cash dividends under the Capital Allocation Policy. Holders As of January 21, 2025, we had approximately 372 holders of record of our common stock.
Management’s Discussion and Analysis of Financial Conditions and Results of Operation—Liquidity and Capital Resources—Amended ABL Facility” and “—Senior Secured Notes.” During the year ended December 31, 2025, we paid $17.8 million of regular quarterly dividends under the Capital Allocation Policy. Holders As of January 22, 2026, we had approximately 332 holders of record of our common stock.
Stock Performance Graph The performance graph and the information contained in this section is not “soliciting material”, is being “furnished” not “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.
Stock Repurchases There were no share repurchases of our common stock made during the quarter ended December 31, 2025. 81 Stock Performance Graph The performance graph and the information contained in this section is not “soliciting material”, is being “furnished” not “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.
Removed
Stock Repurchases There were no share repurchases of our common stock made during the quarter ended December 31, 2024.
Added
Note that historical stock price performance is not necessarily indicative of future stock price performance. ITE M 6. [Reserved] 82
Removed
The graph assumes that $100 was invested on December 31, 2019 in our common stock and each index and that all dividends were reinvested. 68 Note that historical stock price performance is not necessarily indicative of future stock price performance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the years ended December 31, (in thousands) 2024 % of Total Revenues 2023 % of Total Revenues Revenues: Sales $ 1,499,980 98.3 % $ 1,647,992 98.3 % Other revenues 25,240 1.7 % 28,633 1.7 % Total revenues 1,525,220 100.0 % 1,676,625 100.0 % Costs and expenses: Cost of sales (exclusive of items shown separately below) 1,007,297 66.0 % 910,269 54.3 % Cost of other revenues (exclusive of items shown separately below) 45,449 3.0 % 37,486 2.2 % Depreciation and depletion 153,982 10.1 % 127,356 7.6 % Selling, general and administrative 63,078 4.1 % 51,817 3.1 % Business interruption 524 — % 8,291 0.5 % Total costs and expenses 1,270,330 83.3 % 1,135,219 67.7 % Operating income 254,890 16.7 % 541,406 32.3 % Interest expense (4,271) (0.3) % (17,960) (1.1) % Interest income 33,047 2.2 % 40,699 2.4 % Loss on early extinguishment of debt — — % (11,699) (0.7) % Other expense — — % (1,027) (0.1) % Income before income tax expense 283,666 18.6 % 551,419 32.9 % Income tax expense 33,063 2.2 % 72,790 4.3 % Net income $ 250,603 16.4 % $ 478,629 28.5 % Sales, production and cost of sales components on a per unit basis for the years ended December 31, 2024 and 2023 were as follows: For the years ended December 31, 2024 2023 Steelmaking Coal (metric tons in thousands) Metric tons sold 7,235 6,820 Metric tons produced 7,482 6,936 Average net selling price per metric ton $ 207.32 $ 241.64 Cash cost of sales per metric ton $ 138.10 $ 132.60 Cost of production % 64 % 60 % Transportation and royalties % 36 % 40 % The following list highlights our key accomplishments for the year ended December 31, 2024: • we achieved strong net income of $250.6 million, or $4.79 per diluted share and adjusted EBITDA of $447.9 million; 76 • 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; and • 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.
Biggest changeFor the year ended December 31, (in thousands) 2025 % of Total Revenues 2024 % of Total Revenues Revenues: Sales $ 1,277,024 97.5 % $ 1,499,980 98.3 % Other revenues 33,019 2.5 % 25,240 1.7 % Total revenues 1,310,043 100.0 % 1,525,220 100.0 % Costs and expenses: Cost of sales (exclusive of items shown separately below) 982,401 75.0 % 1,007,297 66.0 % Cost of other revenues (exclusive of items shown separately below) 27,668 2.1 % 45,449 3.0 % Depreciation and depletion 188,565 14.4 % 153,982 10.1 % Selling, general and administrative 65,681 5.0 % 63,078 4.1 % Business interruption 19 — % 524 — % Total costs and expenses 1,264,334 96.5 % 1,270,330 83.3 % Operating income 45,709 3.5 % 254,890 16.7 % Interest expense (9,742 ) (0.7 )% (4,271 ) (0.3 )% Interest income 18,477 1.4 % 33,047 2.2 % Income before income tax (benefit) expense 54,444 4.2 % 283,666 18.6 % Income tax (benefit) expense (2,554 ) (0.2 )% 33,063 2.2 % Net income $ 56,998 4.4 % $ 250,603 16.4 % Sales, production and cost of sales components on a per unit basis for the years ended December 31, 2025 and 2024 were as follows: For the year ended December 31, 2025 2024 Steelmaking Coal (metric tons in thousands) Metric tons sold 8,735 7,235 Metric tons produced 9,256 7,482 Average net selling price per metric ton $ 146.20 $ 207.32 Cash cost of sales per metric ton $ 111.66 $ 138.10 Cost of production % 66 % 64 % Transportation and royalties % 34 % 36 % 89 We delivered strong results for the year ended December 31, 2025 driven by record sales volumes, the commencement of longwall operations at the transformational Blue Creek mine, and continued cost improvements.
The volume of coal we sell is also a function of the pricing environment in the international steelmaking coal markets and the amounts of Low Vol and High Vol A coal that we sell. We evaluate the price we receive for our coal based on our average net selling price per metric ton.
The volume of steelmaking coal we sell is also a function of the pricing environment in the international steelmaking coal markets and the amounts of Low Vol and High Vol A coal that we sell. We evaluate the price we receive for our steelmaking coal based on our average net selling price per metric ton.
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.
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.
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 $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.
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.
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 99 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.
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 85 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.
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.
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 83 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; and (3) the remaining balance of $0.1 million 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.
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”); (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; and (3) the remaining balance of $0.1 million 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.
Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.
Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.
In our evaluation of the need for a valuation allowance on our deferred tax assets, we consider, among other things, all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, the 87 overall business environment, our historical financial results, our industry's historically cyclical financial results, our cumulative three-year income or loss position and potential current and future tax planning strategies.
In our evaluation of the need for a valuation allowance on our deferred tax assets, we consider, among other things, all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, the overall business environment, our historical financial results, our industry's historically cyclical financial results, our cumulative three-year income or loss position and potential current and future tax planning strategies.
Cash cost of sales is based on reported cost of sales and includes items such as freight, royalties, manpower, fuel and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce steelmaking coal and sell it free-on-board at the Port of Mobile in Alabama.
Cash cost of sales is based on reported cost of sales and includes items such as freight, royalties, manpower, fuel and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Consolidated Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce steelmaking coal and sell it free-on-board at the Port of Mobile in Alabama.
These estimates are based upon management’s historical experience and on various other assumptions that we believe reasonable under the circumstances. Changes in estimates used in these and other items could have a material impact on our financial statements. Our significant accounting policies are described in Note 2 to our financial statements included elsewhere in this Annual Report.
These estimates are based upon management’s historical experience and on various other assumptions that we believe reasonable under the circumstances. Changes in estimates used in these and other items could have a material impact on our consolidated financial statements. Our significant accounting policies are described in Note 2 to our consolidated financial statements included elsewhere in this Annual Report.
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, that are beyond our control.
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 and uncertainties, that are beyond our control.
Collective Bargaining Agreement Our 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, we initially idled Mine No. 4 and scaled back operations at Mine No. 7.
Collective Bargaining Agreement Our Collective Bargaining Agreement 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, we initially idled Mine No. 4 and scaled back operations at Mine No. 7.
The reserves may include rent reserves, lower of cost or market reserve, port charges reserves and any other reserves that the Agent determines in its reasonable credit judgment to the extent such reserves relate to conditions that could reasonably be expected to have an adverse effect on the value of the collateral included in the borrowing base.
The reserves may include rent reserves, lower of cost or market reserves, port charges reserves and any other reserves that the Agent determines in its reasonable credit judgment to the extent such reserves relate to conditions that could reasonably be expected to have an adverse effect on the value of the collateral included in the borrowing base.
During the year ended December 31, 2023, we repurchased in the open market and extinguished approximately $8.0 million principal amount 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.
During the year ended December 31, 2023, we repurchased in the open market and extinguished approximately $8.0 million principal amount 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 Consolidated Statements of Operations.
The Company’s repurchases may be executed using open market purchases or privately negotiated transactions in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act and repurchases may be executed pursuant to Rule 10b5-1 under the Exchange Act. Repurchases will be subject to limitations in the ABL Facility and the Indenture.
The Company’s repurchases may be executed using open market purchases or privately negotiated transactions in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act and repurchases may be executed pursuant to Rule 10b5-1 under the Exchange Act. Repurchases will be subject to limitations in the Amended ABL Facility and the Indenture.
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.
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 98 assets of Walter Energy and relate to periods prior to March 31, 2016.
As a result, cash cost of sales as presented below may not be comparable to similarly titled measures of other companies. The following table presents a reconciliation of cash cost of sales to total cost of sales, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.
As a result, cash cost of sales as presented below may not be comparable to similarly titled measures of other companies. 87 The following table presents a reconciliation of cash cost of sales to total cost of sales, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.
In addition to paying interest on the outstanding borrowings under the ABL Facility, we are required to pay a fee in respect of unutilized commitments, which is based on the availability of the commitments under the ABL Facility, ranging from 25 bps to 37.5 bps.
In addition to paying interest on the outstanding borrowings under the Amended ABL Facility, we are required to pay a fee in respect of unutilized commitments, which is based on the availability of the commitments under the Amended ABL Facility, ranging from 25 bps to 37.5 bps.
We are also required to pay a fee on amounts available to be drawn under outstanding letters of credit under the ABL Facility at a rate not in excess of 200 bps, and certain administrative fees.
We are also required to pay a fee on amounts available to be drawn under outstanding letters of credit under the Amended ABL Facility at a rate not in excess of 200 bps, and certain administrative fees.
The Offers expired on September 7, 2023 (the “Expiration Date”). Restricted Payment Offer As of the Expiration Date, $0.2 million aggregate principal amount of the Notes were validly tendered and not validly withdrawn pursuant to the Restricted Payment Offer.
The Offers expired on September 7, 2023 (the “Expiration Date”). 97 Restricted Payment Offer As of the Expiration Date, $0.2 million aggregate principal amount of the Notes were validly tendered and not validly withdrawn pursuant to the Restricted Payment Offer.
Cash cost of sales is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and 73 • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.
Cash cost of sales is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.
The ABL Facility contains customary covenants for asset-based credit agreements of this type, including among other things: (i) requirements to deliver financial statements, other reports and notices; (ii) restrictions on the existence or incurrence of certain indebtedness; (iii) restrictions on the existence or incurrence of certain liens; (iv) restrictions on making certain restricted payments; (v) restrictions on making certain investments; (vi) restrictions on certain mergers, consolidations and asset dispositions; (vii) restrictions on certain transactions with affiliates; and (viii) restrictions on modifications to certain indebtedness.
The Amended ABL Facility contains customary covenants for asset-based credit agreements of this type, including among other things: (i) requirements to deliver consolidated financial statements, other reports and notices; (ii) restrictions on the existence or incurrence of certain indebtedness; (iii) restrictions on the existence or incurrence of certain liens; (iv) restrictions on making certain restricted payments; (v) restrictions on making certain investments; (vi) restrictions on certain mergers, consolidations and asset dispositions; (vii) restrictions on certain transactions with affiliates; and (viii) restrictions on modifications to certain indebtedness.
You should read the following discussion and analysis of our financial condition and results of operations together with our audited financial statements and related notes appearing elsewhere in this Annual Report.
You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes appearing elsewhere in this Annual Report.
Information about our reserves and resources consists of estimates based on engineering, economic and geological data assembled by our internal engineers and geologists or third-party consultants.
Information about our reserves and resources consists of estimates based on engineering, economic and geological data assembled by our internal engineers and geologists 100 or third-party consultants.
Our access to, and the availability of, financing on acceptable terms and conditions in the future will be affected by many factors, including: (i) our credit ratings, (ii) the liquidity of the overall capital markets, (iii) the current state of the global economy and (iv) restrictions in our ABL Facility, the indenture governing the Notes (the "Indenture"), and any other existing or future debt agreements.
Our access to, and the availability of, financing on acceptable terms and conditions in the future will be affected by many factors, including: 93 (i) our credit ratings, (ii) the liquidity of the overall capital markets, (iii) the current state of the global economy and (iv) restrictions in our Amended ABL Facility, the indenture governing the Notes (the "Indenture"), and any other existing or future debt agreements.
Revolving loan (and letter of credit) availability under the ABL Facility is subject to a borrowing base, which at any time is equal to the sum of certain eligible billed and unbilled accounts, certain eligible inventory, certain eligible supplies inventory and qualified cash, in each case, subject to specified advance rates.
Revolving loan (and letter of credit) availability under the Amended ABL Facility is subject to a borrowing base, which at any time is equal to the sum of certain eligible billed and unbilled accounts receivable, certain eligible inventory, certain eligible supplies inventory and qualified cash, in each case, subject to specified advance rates.
Please see “ Forward-Looking Statements. ” For a discussion and analysis of our results of operations and financial condition for the year ended December 31, 2022, please refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Please see “ Forward-Looking Statements. ” For a discussion and analysis of our results of operations and financial condition for the year ended December 31, 2023, please refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
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.
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 "2025 Final Regulations").
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.
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.
Additionally, the ABL Facility contains a springing fixed charge coverage ratio of not less than 1.00 to 1.00, which ratio is tested if availability under the ABL Facility is less than a certain amount. As of December 31, 2024, we were not subject to this covenant.
Additionally, the Amended ABL Facility contains a springing fixed charge coverage ratio of not less than 1.00 to 1.00, which ratio is tested if availability under the Amended ABL Facility is less than a certain amount. As of December 31, 2025, we were not subject to this covenant.
Subject to customary grace periods and notice requirements, the ABL Facility also contains customary events of default. We were in compliance with all applicable covenants under the ABL Facility as of December 31, 2024.
Subject to customary grace periods and notice requirements, the Amended ABL Facility also contains customary events of default. We were in compliance with all applicable covenants under the Amended ABL Facility as of December 31, 2025.
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 fund our capital needs going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the Amended ABL Facility, and, in the case of any future strategic investments, capital needs or special dividends financed partially or wholly with debt financing and our ability to access the capital markets to raise additional capital.
Our sales volume and sales prices are largely dependent upon the terms of our coal sales contracts, for which prices generally are set on daily index averages or a quarterly basis.
Our sales volume and sales prices are largely dependent upon the terms of our annual steelmaking coal sales contracts, for which prices generally are set on daily index averages on a quarterly basis.
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.
From June 1, 2018 to May 31, 2020 and June 1, 2020 to May 31, 2024, we had a deductible policy where the Company was responsible for the first $0.5 million and $1.0 million, respectively, for each black lung and workers compensation related claim from any of our employees.
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.
We incurred $0.5 million and $8.3 million for the years ended December 31, 2024 and December 31, 2023, 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 Consolidated Statements of Operations.
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.
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 and amortization of debt issuance costs and debt discount of $1.6 million, offset partially by deferred income tax benefit of $8.1 million and an increase in net working capital of $55.2 million.
There can be no assurance that we will have or continue to have access to the capital markets on terms acceptable to us or at all. Statements of Cash Flows Cash balances were $491.5 million, $738.2 million and $829.5 million at December 31, 2024, December 31, 2023, and December 31, 2022, respectively.
There can be no assurance that we will have or continue to have access to the capital markets on terms acceptable to us or at all. Consolidated Statements of Cash Flows Cash balances were $300.0 million, $491.5 million and $738.2 million at December 31, 2025, December 31, 2024, and December 31, 2023, respectively.
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.
As of December 31, 2025, we believe we have utilized all of our federal NOLs and federal general business credit carryforwards. The Company has state NOL carryforwards of approximately $948.9 million, which expire predominantly on December 31, 2029 through December 31, 2035.
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.
The increase in our working capital was primarily attributable to an increase in trade accounts receivable, inventories and prepaid expenses offset partially by a decrease in income tax receivable and other receivables.
Short-Term Investments As of December 31, 2024, we had $9.5 million of collateral recognized as short term investments.
Short-Term Investments As of December 31, 2025 and 2024, we had $9.9 million and $9.5 million of collateral recognized as short term investments, respectively.
Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and Low Vol to High Vol. These qualities make our coal ideally suited as a coking coal for the manufacture of steel. We sell substantially all of our steelmaking coal production to steel producers.
Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low-to-high volatile matter, low sulfur, high fluidity, and high strength. These qualities make our coal ideally suited as a coking coal for the manufacture of steel. We sell substantially all of our steelmaking coal production to global steel producers.
The following table sets forth, a summary of the net cash provided by (used in) operating, investing and financing activities for the period (in thousands): For the years ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 367,448 $ 701,108 $ 841,904 Net cash used in investing activities (538,002) (527,207) (255,144) 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 Operating Activities Net cash flows from operating activities consist of net income adjusted for noncash items, such as depreciation and depletion of property, plant and equipment and mineral interests, deferred income tax expense, stock-based compensation, amortization of debt issuance costs and debt discount, accretion expense and valuation adjustment associated with our asset retirement obligations, mark-to-market adjustments on gas hedges, loss on early extinguishment of debt and changes in net working capital.
The following table sets forth, a summary of the net cash provided by (used in) operating, investing and financing activities for the period (in thousands): For the year ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 229,246 $ 367,448 $ 701,108 Net cash used in investing activities (405,150 ) (538,002 ) (527,207 ) Net cash used in financing activities (15,379 ) (68,511 ) (265,184 ) Net decrease in cash and cash equivalents and restricted cash $ (191,283 ) $ (239,065 ) $ (91,283 ) Operating Activities Net cash flows from operating activities consist of net income adjusted for noncash items, such as depreciation and depletion of property, plant and equipment and mineral interests, deferred income tax (benefit) expense, stock-based compensation, amortization of debt issuance costs and debt discount, accretion expense and valuation adjustment associated with our asset retirement obligations, mark-to-market adjustments on gas hedges, loss on early extinguishment of debt and changes in net working capital.
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.
(6) For the years ended December 31, 2025 and 2024, represents ongoing legal expenses associated with the ongoing labor negotiations and for 2023 represents non-recurring expenses that were directly attributable to the labor strike for incremental safety and security, labor negotiations and other expenses.
If our assumptions differ from actual experience, or if changes in the regulatory environment occur, our actual cash expenditures and costs that we incur could be materially different than currently estimated. At December 31, 2024, we had recorded asset retirement obligation liabilities of $85.2 million, including $13.0 million reported as a current liability.
If our assumptions differ from actual experience, or if changes in the regulatory environment occur, our actual cash expenditures and costs that we incur could be 101 materially different than currently estimated. At December 31, 2025, we had recorded asset retirement obligation liabilities of $70.3 million, including $5.5 million reported as a current liability.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides a narrative of our results of operations and financial condition for the years ended December 31, 2024 and December 31, 2023.
ITEM 7. M anagement's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis provides a narrative of our results of operations and financial condition for the years ended December 31, 2025 and December 31, 2024.
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 78 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.
Going forward, we will use cash to fund debt service payments on our Notes, the Amended ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, our reclamation obligations, our finance lease obligations, our black lung obligations, our federal coal lease obligations, professional fees, and other non-recurring transaction expenses and strategic investments, and, if declared, to pay our quarterly and/or special dividends.
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.
The $34.6 million increase in depreciation and depletion is primarily driven by additional assets placed in service throughout the year and a 21% increase in steelmaking coal sales volumes as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.
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 $7.7 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.
Interest income was $18.5 million, or 1.4% of total revenues, for the year ended December 31, 2025, compared to $33.0 million, or 2.2% of total revenues, for the year ended December 31, 2024. The $14.6 million decrease was driven by a decrease in invested cash balances and lower rates of return earned on our investments.
For the years ended December 31, 2024 2023 2022 (in thousands) Cost of sales $ 1,007,297 $ 910,269 $ 710,605 Asset retirement obligation accretion and valuation adjustment (3,243) (2,109) (1,801) Stock compensation expense (4,866) (3,841) (3,379) Cash cost of sales $ 999,188 $ 904,319 $ 705,425 Adjusted EBITDA We define Adjusted EBITDA as net income before net interest (income) expense, income tax expense, depreciation and depletion, non-cash asset retirement obligation accretion and valuation adjustments, non-cash stock compensation expense, other non-cash accretion and valuation adjustments, non-cash mark-to-market (gain) loss on gas hedges, loss on early extinguishment of debt, business interruption expenses, idle mine expenses and other income and expenses.
For the year ended December 31, 2025 2024 2023 (in thousands) Cost of sales $ 982,401 $ 1,007,297 $ 910,269 Asset retirement obligation accretion and valuation adjustment (2,099 ) (3,243 ) (2,109 ) Stock compensation expense (4,918 ) (4,866 ) (3,841 ) Cash cost of sales $ 975,384 $ 999,188 $ 904,319 Adjusted EBITDA We define Adjusted EBITDA as net income before net interest (income) expense, income tax expense (benefit), depreciation and depletion, non-cash asset retirement obligation accretion and valuation adjustments, non-cash stock compensation expense, other non-cash accretion and valuation adjustments, non-cash mark-to-market loss (gain) on gas hedges, loss on early extinguishment of debt, business interruption expenses and other expenses.
Sales were $1.5 billion for the year ended December 31, 2024, compared to $1.6 billion for the year ended December 31, 2023.
Sales were $1.3 billion for the year ended December 31, 2025, compared to $1.5 billion for the year ended December 31, 2024.
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.
For the year ended December 31, 2025, cost of production represented 66% of cost of sales and transportation and royalties accounted for approximately 34% compared to cost of production of 64% and transportation and royalties of 36% for the year ended December 31, 2024.
Therefore, at December 31, 2024, we have a valuation allowance against our state deferred income tax assets of approximately $44.7 million . Recently Adopted Accounting Standards See Note 2 of our consolidated financial statements for disclosures related to new accounting pronouncements. 88
Therefore, at December 31, 2025, we have a valuation allowance against our state deferred income tax assets of approximately $45.0 million. Recently Adopted Accounting Standards See Note 2 of our consolidated financial statements for disclosures related to new or upcoming accounting pronouncements. 102
Critical Accounting Policies and Estimates The financial statements are prepared in conformity with GAAP, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses in the period presented.
GAAP, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses in the period presented.
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.
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.
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. At December 31, 2024, the Company had $113.5 million of availability under the ABL Facility.
As of December 31, 2025, no loans were outstanding under the Amended ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the Amended ABL Facility. At December 31, 2025, we had $140.5 million of availability under the Amended ABL Facility.
Some of the factors and assumptions, which will change from time to time, that impact mineral reserve and resource estimates include, among other factors: • mining activities; • new engineering and geological data; • acquisition or divestiture of reserve holdings; and • modification of mining plans or mining methods. 86 Each of these factors may vary considerably from the assumptions used in estimating reserves and resources.
Some of the factors and assumptions, which will change from time to time, that impact mineral reserve and resource estimates include, among other factors: • mining activities; • new engineering and geological data; • acquisition or divestiture of reserve holdings; and • modification of mining plans or mining methods.
Refer to the respective notes to the financial statements for further information about our credit facilities and long-term debt (Note 13), commitments and contingencies (Note 15), asset retirement obligations (Note 8), black lung obligations (Note 10), lease payment obligations (Note 14), share repurchase programs (Note 16) and derivative instruments (Note 17).
Refer to the respective notes to the consolidated financial statements for further information about our asset retirement obligations (Note 9), black lung obligations (Note 10), financing lease payment obligations (Note 11), federal coal leases (Note 12), credit facilities and long-term debt (Note 13), commitments and contingencies (Note 14), share repurchase programs (Note 17) and derivative instruments (Note 18).
(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 and COVID-19 pandemic related expenses. 75 Results of Operations Year Ended December 31, 2024 and 2023 The following table summarizes certain financial information relating to our operating results that have been derived from our audited financial statements for the years ended December 31, 2024 and 2023.
(7) Represents non-recurring expenses incurred in connection with the ransomware attack discovered by the Company on July 29, 2023. Results of Operations Year Ended December 31, 2025 and 2024 The following table summarizes certain financial information relating to our operating results that have been derived from our audited consolidated financial statements for the years ended December 31, 2025 and 2024.
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").
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 percentage depletion deduction, $12.1 million due to the FDII deduction and $4.9 due to the marginal well tax credit.
As of December 31, 2024, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our mining operations totaling $50.6 million, $18.6 million as collateral for self-insured black lung related claims and $7.7 million for miscellaneous purposes.
As of December 31, 2025, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our mining operations totaling $47.5 million, $18.6 million as collateral for self-insured black lung related claims, $16.0 million for federal coal leases and $6.4 million for miscellaneous purposes.
Liquidity and Capital Resources Overview 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.
See Note 7 of the Notes to the Consolidated Financial Statements for more information. Liquidity and Capital Resources Overview 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 Amended ABL Facility.
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 current year also includes a mark-to-market net gain of $0.2 million on outstanding gas hedges. Cost of sales (exclusive of items shown separately below) was $982.4 million, or 75.0% of total revenues for the year ended December 31, 2025, compared to $1,007.3 million, or 66.0% of total revenues for the year ended December 31, 2024.
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.
Cost of other revenues was $27.7 million for the year ended December 31, 2025, compared to $45.4 million for the year ended December 31, 2024.
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.
We believe that our future cash flows from operations, together with cash on our balance sheet and proceeds from the borrowings under our Amended ABL Facility, will provide adequate resources to fund our debt service payments, asset retirement obligations, finance lease obligations, federal coal lease obligations, black lung obligations and planned operating and capital expenditure needs for at least the next twelve months and beyond.
Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; • the ability of our assets to generate sufficient cash flow to pay distributions; • our ability to incur and service debt and fund capital expenditures; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek.
Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: • our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; • the ability of our assets to generate sufficient cash flow to pay distributions; • our ability to incur and service debt and fund capital expenditures; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities, such as Blue Creek. 86 Sales Volumes and Average Net Selling Price We evaluate our operations based on the volume of coal we can safely produce and sell in compliance with regulatory standards, and the prices we receive for our steelmaking coal.
Borrowings under the ABL Facility bear interest at a rate equal to either (i) SOFR, plus a credit adjustment spread, ranging currently from approximately 11 bps to 43 bps depending on the interest period selected by us, or (ii) an alternate base 82 rate plus, in each case of the foregoing (i) and (ii), an applicable margin, which is determined based on the average availability of the commitments under the ABL Facility, ranging currently from 150 bps to 200 bps or 50 bps to 100 bps, respectively.
Borrowings under the Amended ABL Facility bear interest at a rate equal to either (i) the Secured Overnight Financing Rate ("SOFR"), or (ii) an alternate base rate plus, in each case of the foregoing (i) and (ii), an applicable margin, which is 96 determined based on the average availability of the commitments under the Amended ABL Facility, ranging currently from 150 bps to 200 bps or 50 bps to 100 bps, respectively.
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.
Selling, general and administrative expenses were $65.7 million, or 5.0% of total revenues for the year ended December 31, 2025 compared to $63.1 million, or 4.1% of total revenues for the year ended December 31, 2024. The $2.6 million increase in selling, general and administrative expenses is primarily driven by an increase in employee related expenses.
Our capital expenditures were $457.2 million and $491.7 million for the years ended December 31, 2024 and December 31, 2023, respectively.
Our capital expenditures were $320.3 million and $457.2 million for the years ended December 31, 2025 and December 31, 2024, respectively.
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.
During 2025, we spent approximately $61.3 million in sustaining capital and spent an additional $259.0 million in other discretionary capital, which primarily included capital spent on the development of Blue Creek of $240.3 million and capital spent on the bunker at Mine No. 4 of $17.3 million.
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.
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. Critical Accounting Policies and Estimates The consolidated financial statements are prepared in conformity with U.S.
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 Our mining operations require investments to maintain, expand, upgrade or enhance our operations and to comply with environmental regulations.
We also had $43.4 million and $5.1 million in fixed income securities as of December 31, 2025 and December 31, 2024, respectively, with maturities less than twelve months. Capital Expenditures Our mining operations require investments to maintain, expand, upgrade or enhance our operations and to comply with environmental regulations. Maintaining and expanding mines and related infrastructure is capital intensive.
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. 7. We also are developing our world-class Blue Creek mine based in Alabama.
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. In October 2025, we commenced operations at our transformational Blue Creek mine eight months ahead of schedule.
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.
For the year ended December 31, 2025, the Company's geographic customer mix was 48% in Asia, 37% in Europe, 14% in South America and 1% in the U.S.
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. We appealed this decision.
On July 12, 2022, we received a decision on our appeal from the DCWMC lowering the amount of collateral required to be posted from $39.8 million to $28.0 million. We appealed this decision.
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.
The average net selling price of our steelmaking coal decreased $61.12 from $207.32 per metric ton for the year ended December 31, 2024 to $146.20 per metric ton for the year ended December 31, 2025.
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.
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 have posted $18.6 million in surety bonds and $9.5 million of collateral recognized as short term investments in addition to maintaining a black lung trust of $1.4 million that was acquired from Walter Energy. We received a letter from the U.S.
We are self-insured for these black lung liabilities and have posted $18.6 million in surety bonds and $9.9 million of collateral recognized as short term investments in addition to maintaining a black lung trust of $0.9 million that was acquired from Walter Energy.
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 $7.8 million increase in other revenues is primarily driven by an increase of $1.30 per Million British Thermal Unit ("MMBtu") or 52% in the Southern Louisiana natural gas price average offset partially by a slight decrease in gas sales volumes for the year ended December 31, 2025 compared to the prior year comparable period.
These metrics are significant factors in assessing our operating results and profitability and include: (i) Segment Adjusted EBITDA; (ii) sales volumes and average selling price, which drive coal sales revenue; (iii) cash cost of sales, a non-GAAP financial measure; and (iv) Adjusted EBITDA, a non-GAAP financial measure. 72 For the years ended December 31, 2024 2023 2022 (in thousands) Segment Adjusted EBITDA $ 492,683 $ 737,723 $ 996,974 Metric tons sold 7,235 6,820 5,099 Metric tons produced 7,482 6,936 5,729 Average net selling price per metric ton $ 207.32 $ 241.64 $ 334.89 Cash cost of sales per metric ton $ 138.10 $ 132.60 $ 138.35 Adjusted EBITDA $ 447,850 $ 698,866 $ 994,221 Segment Adjusted EBITDA We define Segment Adjusted EBITDA as net income adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative expenses, business interruption expenses, idle mine expenses, loss on early extinguishment of debt, other (expense) income, net interest (income) expense, income tax expense and certain transactions or adjustments that the CEO, our Chief Operating Decision Maker does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance.
For the year ended December 31, 2025 2024 2023 (in thousands) Segment Adjusted EBITDA $ 294,623 $ 492,683 $ 737,723 Metric tons sold 8,735 7,235 6,820 Metric tons produced 9,256 7,482 6,936 Average net selling price per metric ton $ 146.20 $ 207.32 $ 241.64 Cash cost of sales per metric ton $ 111.66 $ 138.10 $ 132.60 Adjusted EBITDA $ 256,549 $ 447,850 $ 698,866 Segment Adjusted EBITDA We define Segment Adjusted EBITDA as net income adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative expenses, business interruption expenses, loss on early extinguishment of debt, other (expense) income, interest income, interest expense, income tax benefit (expense) and certain transactions or adjustments that the CEO, our Chief Operating Decision Maker does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+0 added−0 removed3 unchanged
Biggest changeWe manage our risk for these items through strategic sourcing contracts in normal quantities with our suppliers. We historically have not entered into any derivative commodity instruments to manage the exposure to changing price risk for supplies. Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist principally of trade receivables.
Biggest changeWe historically have not entered into any derivative commodity instruments to manage the exposure to changing price risk for supplies. Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist principally of trade receivables. We provide our products to customers based on an evaluation of the financial condition of our customers.
These inflationary pressures have contributed to rising costs for us and may continue to do so in the future. We are applying a number of different strategies to mitigate the impact of inflation on our operations, including placing purchase orders earlier, utilizing short term contracts and leveraging our supplier relationships.
These inflationary pressures have contributed to rising costs for us and may continue to do so in the future. We are applying a number of different strategies to mitigate the impact of inflation on our operations, including placing purchase orders earlier, utilizing short term contracts and leveraging our supplier relationships. 103
Our natural gas swap contracts economically hedge certain risk but are not designated as hedges for financial reporting purposes. All changes in the fair value of these derivative instruments are recorded as other revenues in the Statements of Operations. Historically, all of our derivative instruments were entered into for hedging purposes rather than speculative trading.
Our natural gas swap contracts economically hedge certain risk but are not designated as hedges for financial reporting purposes. All changes in the fair value of these derivative instruments are recorded as other revenues in the Consolidated Statements of Operations. Historically, all of our derivative instruments were entered into for hedging purposes rather than speculative trading.
Any debt that we incur under the ABL Facility will expose us to interest rate risk. If interest rates increase significantly in the future, our exposure to interest rate risk will increase.
Any debt that we incur under the Amended ABL Facility will expose us to interest rate risk. If interest rates increase significantly in the future, our exposure to interest rate risk will increase.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Commodity Price Risk We are exposed to commodity price risk on sales of coal. We typically sell our steelmaking coal under contracts primarily with pricing terms of three months and volume terms of one to three years.
Item 7A. Qu antitative and Qualitative Disclosures About Market Risk Commodity Price Risk We are exposed to commodity price risk on sales of coal. We typically sell our steelmaking coal under contracts primarily with pricing terms of three months and volume terms of one to three years.
We monitor the exposure to credit losses and maintain allowances for anticipated losses. For the years ended December 31, 2024 and 2023 we did not have any allowances for credit losses associated with our trade accounts receivables. Interest Rate Risk We are exposed to market risk from changes in interest rates.
For the years ended December 31, 2025 and 2024 we did not have any allowances for credit losses associated with our trade accounts receivables. Interest Rate Risk We are exposed to market risk from changes in interest rates.
As of December 31, 2024, assuming we had $113.5 million outstanding under our ABL Facility, a 100 basis point increase or decrease in interest rates would increase or decrease our annual interest expense under the ABL Facility by approximately $1.1 million.
As of December 31, 2025, assuming we had $140.5 million outstanding under our Amended ABL Facility, a 100 basis point increase or decrease in interest rates would increase or decrease our annual interest expense under the Amended ABL Facility by approximately $1.4 million.
Our ABL Facility bears an interest rate equal to SOFR, plus a credit adjustment spread, ranging currently from 11 bps to 43 bps, 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 currently from 150 bps to 200 bps or 50 bps to 100 bps, respectively.
Our Amended ABL Facility bears an interest rate equal to SOFR, or an alternate base rate plus an applicable margin, which is determined based on the average availability of the commitments under the Amended ABL Facility, ranging currently from 150 bps to 200 bps or 50 bps to 100 bps, respectively.
We provide our products to customers based on an evaluation of the financial condition of our customers. In some instances, we require letters of credit, cash collateral or prepayments from our customers on or before shipment to mitigate the risk of loss. Exposure to losses on receivables is principally dependent on each customer’s financial condition.
In some instances, we require letters of credit, cash collateral or prepayments from our customers on or before shipment to mitigate the risk of loss. Exposure to losses on receivables is principally dependent on each customer’s financial condition. We monitor the exposure to credit losses and maintain allowances for anticipated losses.
As of December 31, 2024, the Company had 5.5 metric million British thermal unit gas contracts outstanding. We have exposure to price risk for supplies that are used directly or indirectly in the normal course of production, such as diesel fuel, steel, explosives and other items.
As of December 31, 2025, the Company had no gas contracts outstanding. We have exposure to price risk for supplies that are used directly or indirectly in the normal course of production, such as diesel fuel, steel, explosives and other items. We manage our risk for these items through strategic sourcing contracts in normal quantities with our suppliers.

Other HCC 10-K year-over-year comparisons